In order to keep the operations of your Association running smoothly, it is a good idea to put together a calendar that includes your Association's deadlines for various disclosure statements and other maintenance schedules. According to Civil Codes, your budget disclosure package needs to be mailed out at least 30 days prior to the end of your fiscal year, unless your Governing Documents are more stringent.
Most Associations are on a calendar year. If this is true for your Association, according to Civil Code, you would then need to mail your budget disclosure package no later than December 1st. The best way to handle your budget process is to start early to give yourselves ample time to really focus on the figures.
In order to determine a schedule for your budgets, you can your way backwards:
1. December 1st deadline to mail out budget and all disclosure statements.
2. Approval of the budget by the Board of Directors in an Open Session Meeting (preferably no later than the middle of November in order to provide ample time to mail the package to your members).
3. Final approval of the drafted budget to be completed by the budget/finance Committee, designated Board Members and/or community manager by the beginning of November.
4. Obtain copies of the completed reserve study and financials to commence the budget drafting process by mid to late-September. Note: in order to keep the budgeting fresh in your mind, weekly or bi-weekly budget meetings is in order until it is completed. Also, each budget meeting can be used to focus on specific categories of the budget (i.e. income, utilities, etc.).
5. In order to get your drafted reserve study, you will need to approve the proposal from your reserve study company. Most reserve study companies base their fees on your required turnaround time. Usually, the cheapest fee schedule is offered when you give the reserve study company at least 8 weeks. That means that you should select the company to conduct your reserve study and approve the proposal by mid-July.
All in all, the process needs to start around 6 months before your fiscal year-end in order to avoid higher fees with your reserve study and also make sure that you have enough time to look at cost-cutting solutions for the various line items in your budget. If you are not on a calendar year, you can still apply these timelines to fit your community.
If you have any questions about budgets, feel free to contact me.
Sincerely,
Neda Firouz
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1 comment:
Very informative and to the point...It is important to stay true to the schedule because time flies by once you start getting into late July or early August. It is also very important to keep your Board on track as well because they have a tendency to be side tracked with other issues.
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