The Importance of Professional Guidance in Community Association Budgeting: Trestle’s Process

As the fiscal year approaches for many communities with a January 1^st start, the importance of working with a professional management company like Trestle cannot be overstated. Accurate financials and informed decision-making are the foundation of successful community association management. Budgeting plays a crucial role in ensuring that essential services and maintenance are properly funded, while also planning for future projects. If your community’s fiscal year begins on January 1st, then your budget season is likely underway, with budget ratification meetings scheduled in the coming months.

Here is a closer look at how professional management and Trestle’s process ensure a seamless community association budgeting process:

What is the Budgeting Process?

Budgeting begins with an Association Manager from Trestle working closely with the community’s Board of Directors to build a framework for the next year’s financial plan. One of the first and most critical steps in this process is an updated reserve study. This study, typically conducted by an independent reserve specialist, assesses the condition and remaining life of the community’s common elements (such as roofs, pools, or parking areas) and estimates the future costs for maintaining or replacing them. This is crucial for long-term planning and ensuring the community’s financial health.

Once the reserve study is completed and approved by the Board, the real work begins. Trestle’s expertise ensures that the budget planning session with the Board focuses on the most pressing financial needs of the community, considering not only day-to-day expenses but also long-term projects. Most associations, particularly in Washington State, are non-profit corporations, which means their budgets are structured to match projected income with anticipated expenses.

For example, if expected expenses are $100,000, the association must plan to generate $100,000 in income, typically through Homeowner assessments. This is where a professional management company like Trestle proves invaluable—ensuring accurate financials and expert forecasting based on experience and historical trends.

Factors Considered During Budgeting

During the budget planning process, several key factors are evaluated to ensure the community’s financial responsibilities are met:

• Recurring Expenses: Predictable costs such as utilities, insurance, and regular maintenance,
• Project Costs: Financial projections for upcoming projects like landscaping improvements or building maintenance,
• Historical Spending Trends: Reviewing past expenses to create an accurate and realistic budget for the future, and
• Reserve Contributions: Ensuring that sufficient funds are set aside to maintain common areas in the long term.

A professional management company helps the Board navigate these complexities, advising on discretionary spending versus essential expenditures. While communities may want to reduce costs, an experienced management partner knows that wishing for lower expenses does not override historical trends and current realities. This expertise ensures the community maintains sufficient funds to meet its obligations year-round.

Budget Ratification

The Association must hold a meeting of the Homeowners to ratify the proposed budget. This meeting can be part of the Association’s annual meeting or a separate, specially scheduled meeting.

In Washington State, the proposed budget is automatically ratified unless a majority of the total voting power of the Association vote to reject the budget. If the budget is rejected, the Association will continue to operate under the previous year’s budget until a new budget is ratified.

The Association budget and ratification process in Washington State is designed to promote transparency, fiscal responsibility, and Homeowner involvement in the financial management of Associations. By adhering to the state’s legal requirements and engaging Homeowners in the budgeting process, Associations can foster trust, ensure financial stability, and maintain the long-term value and appeal of their communities.

Why Work with a Professional Management Company?

Trestle’s detailed and structured approach ensures that your community association’s budgeting process runs smoothly and on time. Here’s a breakdown of the Trestle Budgeting Process Timeline:

• By August 15^th: The manager and Board meet to discuss the budget strategy and schedule meetings.
• By September 30^th: Trestle delivers the draft budget to the Board for review.
• By October 31^st: Any necessary revisions to the draft budget are completed.
• By November 1^st: The Board approves the final draft and schedules the Budget Ratification Meeting.
• By November 10^th: Homeowners are notified about the upcoming Budget Ratification Meeting.
• By November 30^th: The Budget Ratification Meeting is held.
• By December 5^th: Homeowners receive confirmation of the ratified budget and the new assessment schedule.
• By December 20^th: Trestle sends out January billing statements to Homeowners.

By working with a professional management company like Trestle, your community can ensure that each step of the budgeting process is handled with precision, transparency, and expertise. Trestle’s team provides the financial accuracy and professional advice that allows Board Members to make informed decisions about both short-term needs and long-term goals.

Final Thoughts

Effective budgeting is not just about balancing income and expenses—it is about ensuring the long-term financial health of your community. By partnering with Trestle, your community benefits from a streamlined, transparent, and professional budgeting process, so you can focus on the important aspects of community life.

If you have any questions or want to review your community’s budget, you can visit Trestle’s My-Community Web Portal or contact your Association Manager directly.

Being engaged in this process ensures transparency, financial responsibility, and the continued success of your community. Working with a professional management company like Trestle provides the support, knowledge, and resources needed to navigate this critical time of year.

Connecting with Trestle In addition to visiting Trestle’s website, you can stay connected via LinkedIn and Facebook for more insights and updates