The primary responsibility for the Board is to protect the association’s assests – comprise of the buildings. The only way to dothis is to have a plan and set goals. Enclosed is a sample of a typical operating budget and reserve analysis that should be completed for your association. Condominium Management strongly believes that the industry in the past has not provided adequate leadership in the reserve process. With rising values and associated cost to preserve those values, we feel the need to plan for the future is more important than ever. Condominium Management is committed to developing a comprehensive financial plan that incorporates the annual operating budget and reserve study by providing leadership to the Board in engaging with a third party to perform a long term reserve study for every association we manage.


Operating Budget:

The operating budget list all expenses planned for the current year that are considered “operating” expenses. Operating expenses are thoseexpenses that accrue each year and remain fairly constant from year to year. The operating budget should not increase significantly from year to year unless the association adds a new service or utilities increase significantly.


Variance Sheet:

Compares annual expenses with budgeted expenses and explains the reason for any significant variances.


Maintenance Calendar:

Annual calendar that list all the important maintenance or administrative items planned for the year with vendor information, when the work will be scheduled, and cost.


Monthly Breakdown:

Each line item is broken down and inputted by month by month vs. spreading the annual number evenly each month. This allows us to take into account seasonal variances and matching up billing frequencies – monthly, bi-monthly, and annual expenses. The net result is the “Year to Date” numbers are accurate and variances between “Budget” and Actual” expenses are reduced.


Reserve Study:

All properties should engage in hiring a professional reserve study company to perform a 20 year reserve study. The study identifies each building component, remaining useful life, present cost to replace, future cost to replace, and a schedule showing the recommended reserve contribution and projected reserve expense for the 20 years. Enclosed is a sample spreadsheet. The supporting information is not included with this material. Additional information is available uponrequest.


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