Community Association income can often be limited to the collection of owner assessments. It is especially challenging for small communities to generate additional revenue sources such as facility rental or access fees. Community leaders struggle almost annually with the idea of increasing assessments and how much is too much, but of course have obligations to provide services. Many service contracts include stipulations for renewal increases and too often, service contracts are limited in scope with many hidden add on costs, making it difficult to manage expenses. Residents and leaders alike have a vision of enhanced curb appeal and property maintenance, but this too comes with a cost. So, how do you balance it all? How can you manage expenses while maintaining the community, you are so proud to call home?
First, let’s talk about managing expectations. Even in our personal lives, we find ourselves struggling to balance our wants versus our needs. But, a good plan is to start with a budget and proper saving to make those wants become reality.
Second, prioritize, prioritize, prioritize! Develop a multi-year plan for tackling some of those outstanding projects or desired improvements. A 3 to 5 year vision plan can help the current and future Boards implement strategies that not only help those wants become a reality, but provide the Membership with a time frame of when they can expect to see a change. Everyone wants to feel like they are getting something for their money – so start small and work your way up!
Last, manage those service agreements. A strong community manager will advocate on the community’s behalf to negotiate the best deal possible! But remember, you get what you pay for and the lowest bidder is not always the best. A detailed scope of work should be developed and a Request for Proposal issued to a minimum of 3-5 bidders for annual service contracts or large ticket projects. With the proper bidding and contractor vetting practices, a good service provider can be located at reasonable rates. Multi-year agreements are helpful in managing and projected costs, but should never include an auto-renewal provision. And remember, if you have an excellent service provider, but are worried about costs, be candid with them and try to negotiate a reduced rate before simply dumping and running. There is value in long-term relationships and providers that know your expectations.
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Contact our team today to learn more about how Cardinal can help your association at firstname.lastname@example.org.