An excuse has been defined as “the skin of a reason stuffed with a lie”. There are two Boardmember sentiments we hear most frequently expressed: “We can’t afford the Reserve Funding Plan” and “We’ll worry about that next year”. But no matter how many times a Boardmember may repeat these sentences, it doesn’t mean they’re true and it doesn’t mean they’re wise. After we look beneath the skin of these two reasons, it may surprise you how differently you feel about these excuses!
Most of the time difficult situations that arise during a meeting can be resolved on the spot, but occasionally, “fatal flaws” arise: those few errors or situations that arise that cannot be fixed at that meeting.
Does your association have a budget? If it does, how is it prepared? Is it even followed? Here, we provide tips for creating a budget process that works well for nearly all associations.
Know fundamentals first
Start your budget process by understanding why budgeting is important. Aside from the obvious benefit of creating a well-run association, having a solid budgeting process helps protect the value and marketability of your association’s units. Without it, lenders may be unwilling to lend for the purchase of a unit or to the association, and buyers may feel burdened and walk away because they don’t want to assume the fallout of bad decision-making in prior years.