How to Keep Snow Removal from Plowing Through Your HOA Budget
Snow removal can be one of the trickiest budget items for HOA boards to address. Unlike other line items, you can’t use previous years as a gauge since snowfall can vary significantly from year to year. Even with the season’s unpredictability, snow removal doesn’t have to plow through your budget. Just follow these five tips to help you avoid coming up short.
1. Look at the costs you know.
It’s true that last year’s accumulation won’t tell you much about what you can expect this year. However, reviewing last year’s records will tell you how much you paid per service visit. Find out if those fees have gone up, and then do some comparison shopping. You may be able to get a better rate elsewhere. Your community management company may also be able to use its buying power to negotiate better prices for you.
2. Look for budget surpluses elsewhere.
Are there any areas of your budget for which you overestimated last year? If so, offset your excess snow removal costs with these budget surpluses from the prior year. You may find surpluses in the general operating fund, your working capital or a deferred snow removal fund (if you have one).
You may find positive variances in other expense categories that would enable you to reallocate those funds to snow removal. This may not completely cover your snow removal budget shortfall, but it can help ease an avalanche of budgetary bad news.
4. Make hard choices.
In a particularly tough winter, you simply won’t be able to find the money elsewhere to cover the deficit. If this happens, you will have no other choice but to issue a special assessment or amend the budget for the year. Special assessments can be paid in installments over time. An amendment to the budget can enable you to make up the shortfall within a certain time period as well. Whatever avenue you choose, avoid carrying over the deficit into the next year. A good community management company can help guide, plan and execute your decision.
5. Communicate with residents.
It is crucial that you let your community know about any decision to issue a special assessment or amend the budget, and your reasons for making it, as soon as possible. Time your news right. Your residents will be more understanding if you ask for more money to handle winter weather when there’s still snow on the ground rather than if you make the request on a warm, sunny day.
Winter weather can be hard enough without adding budget woes. Keep these tips in mind so your budget doesn’t also leave you cold. For more information about how a community management company can help you address your budget concerns, contact FirstService Residential, the leading community management company in the greater Kansas City area.