Posted by IKO Community Management on March 6, 2014 at 3:42 AM
This winter is quickly melting away HOA snow removal budgets if not already having them in the red. Your HOA concerns are not alone as communities in many states are having the same issues. IKO Community Management is with you, wishing that Old Man Winter would just give up! Let us help you set your HOA snow removal budget for the next winter with these tips
Review your current budget now. It is a good time to put your current contract out for bid. Shopping around to get a few quotes now with a sculpted plan just for your neighborhood will ensure better service when the time comes. Waiting only leads to desperation, which means you’ll get what you pay for. Don’t let it get to the panic stage.
- With depleted funds for this winter’s budget, it may not be uncommon for HOA’s to access a one-time fee directly for snow removal for the following year. No one wants their HOA fees to increase, but everyone wants the snow removed.
- Revisit your spring community plans to see if the budget can be cut anywhere to save money towards snow removal. Minor conservation efforts can make a big difference in your budget. If you’ve got timer-controlled sprinklers that run for 30 minutes each morning, cut them back to 25 minutes for a month to see if the plants still get enough water and you save any money on your water bill.
- Your HOA Board may want to explore adding flexibility to the association’s snow removal policy, such as allocating extra resources and budget when needed. Then, the Board can modify the policy to meet association needs when quick action is critical.
- Communication is important for homeowners such as contacts and knowing areas of responsibilities helps to reduce this stress. When your Board has a solid action plan, your community can get back to normal quickly. It’s a good idea to communicate areas of responsibility and contact information to all homeowners at the beginning of winter.
Know what you are paying for:
- Budgets: Community association must carefully budget for snow removal. When creating budgets, community associations should take into consideration the amount budgeted for snow removal the previous year and anticipated snow removal for the current year. If necessary, try to offset any snow removal budget deficit by determining if there was any snow removal surplus from the previous year. Likewise, the association should consider how it would like to be billed by its snow removal contractor. The contract may allow for the association to be billed by the hour, by the event, by the inches of snow and ice, or by a pre-determined contract amount. Knowing the method of billing beforehand will greatly assist the association with budgeting for snow removal. Moreover, since community associations cannot predict weather to come, to help minimize the unexpected, community associations should consider setting aside money in their reserve operating account for above-average snow and ice occurrences.
- Standard of Care: In addition to budgeting for snow removal, community associations should take measures to ensure that the snow removal contractor is competent and responsive. Make an effort to check the contractor’s references and reputation in the community, as well as consulting legal counsel for review of the snow removal contract. When it comes to liability for slip-and-fall accidents, community associations cannot solely rely on a snow removal contractor to clear ice and snow. If a contractor is negligent in failing to clear common areas, parking lots and sidewalks, the association can be held liable for that negligence.
Likewise, associations must also make an effort to clear away snow and ice if a contractor fails to do so. It isn’t enough to rely just on your contractor. Depending on the maintenance responsibilities set forth in the governing documents, association employees or owners may need to shovel and salt the common areas around their units or lots. In addition, the Board of Directors and management need to keep an eye on conditions throughout the property. Community associations should document efforts to clean up hazardous conditions such as when and where areas were cleared of ice and snow, how salt or sand was applied, and other pertinent information regarding weather conditions. While it is impossible to guarantee that the association will never be sued for a slip and fall accident, with a little bit of care and attention, the association may have a better chance of defending against any lawsuit that may be filed.
- Discounts: You can often get a better deal if you sign a plowing contract before the snow season begins.
If your budget is still in the red after all of your trimming efforts, you may have to take more drastic measures—like raising assessments. Before you do, however, consider whether you can generate income. For example, your governing documents may permit you to rent your clubhouse to nonresidents for a fee. Or if your state allows you to earn money on reserves (some don’t), consider putting a lump sum that you don’t expect to use immediately in a safe investment with a higher return than a savings account.
It’s easy for the Board to overlook the topic of snow removal when light winters have been the norm for several years. But, there’s a lot of confusion among HOA homeowners about snow removal. IKO Community Management wants you to be prepared by reviewing your snow removal budget now. Soon the warmer weather will be upon us and the snow and bitter cold winter will be an afterthought. Don’t let your HOA be caught in the cold scrambling without a plan for next winter!
Topics: HOA Board