Budget Buzz

2004.11.02

The Board has approved the 2005 budget with no changes in Association Fees. By far the biggest budget expense is the cost of the Management Company that helps to run the Association. We contacted other Associations, accountants, lawyers, and other management companies to determine whether it was feasible to take on the responsibilities performed by the Management Company. What we found was that very few homeowners’ associations are run without the assistance of a management company and fewer still have been successful. While we are currently pursuing all of our options, including alternate management companies, the 2005 budget includes the costs associated with employing a Management Company.

The next largest expense is for maintenance of the open spaces. The budgeted amount is based on competitive quotes received to date. The budget also includes Capital Reserve savings, and the costs associated with insuring the open spaces, legal fees, and a required audit. Other than costs associated with the Management Company, our biggest expense in 2004 was insurance at just over $3,000 and nearly $1,200 in legal fees required to collect overdue association fees.

By the end of 2004 we will have nearly $15,000 in Capital Reserve and a surplus of approximately $8,500. The Capital Reserve savings has been a budgeted item to ensure sufficient funds are available for future repairs and periodic overhaul of the retention basins to comply with EPA requirements. The surplus is the result of money budgeted this year for maintenance of the common areas but not spent because the township hasn’t accepted the open spaces from the Developer. The surplus will be rolled into the 2005 budget to help beautify the open spaces once they are turned over by the builder and/or to defray the costs of a sign.