Bill Barnard, PCHOA General Manager
It’s that time of year again…budget season! The budgeting process is a complex activity with many working parts. It is also one of the most important aspects of our operation. An HOA operating budget is a projection of the money needed by the association to cover its operating expenses and provide adequate reserves for repair and replacement of the assets that the HOA owns and maintains. Arizona law and our governing documents require that the PebbleCreek HOA approve and adopt an operating budget every year. The importance of a budget cannot be overstated and it is our yearly road map for operational success. It drives our maintenance plan, our social activities, capital improvements, pricing and much more; all items that affect the property values, sales potential and lifestyles of the residents of PebbleCreek.
The budget process starts at the beginning of August with labor planning and scheduling operating hours for the upcoming year. We then gather together all of the data and information that is needed to form our expense budget. Finally, we look at projecting the repair or replacement of reserve funded assets to update our Long-Range Plan. Knowledge is power for the budgeting process. The more knowledge and information we can gather prior to starting the budgeting process, the easier and more accurate the process will be. Each department director puts together their portion of the budget. Luckily, we have a great staff of experienced managers and department directors that I will be working closely with to put together the comprehensive draft of the 2019 budget. Some components of this data that we gather at the start of this process are listed below.
• Review this year’s current income and expenses and comparison of past years’ budget trends. We will take note of line items that are higher or lower than previous and/or current years and provide explanation for any changes.
• Contact vendors and contractors to inquire about materials or labor pricing increases that may be forecasted for the upcoming year. These contractors/vendors include landscapers, insurance, pool maintenance, gate maintenance, fuel providers, etc. We also will be contacting vendors to get estimates for projects that we plan on fulfilling over the next fiscal year.
• Contact our local utility providers to inquire about any pricing increases scheduled over the next fiscal year. Utilities are one of the expenses that we have to pay special attention to, as their rates can shift dramatically from year to year. Utilities include items such as water, sewer, garbage, natural gas and electricity.
• Examine all sources of income for the HOA. These include HOA dues, interest on investments, golf, food and beverage, recreation and activities revenue, along with any other types of miscellaneous income.
• Review the Long-Range Plan and determine which items are set to be repaired or replaced during the next fiscal year.
Having current financials, comparative budgets and a clear understanding of the operations will allow us to prepare the most accurate budget as possible for the next fiscal year. The staff will create a final working draft of the budget which will be presented to the homeowners and board for final approval. We will host two homeowner meetings to go over a summary of the draft budget prior to presenting it to the PCHOA Board of Directors for final approval. Those meetings will be held in early November and the board will vote on approval during the November HOA monthly meeting. Having a balanced budget is the key to the financial health of our community and, in turn, ensuring that property values and the resort lifestyle that we enjoy are protected.