By Robert “Bob” O. Jester
Finance Advisory Committee Chair
As published in The View, September 2022:
Question of the month: How is the Association Budget for 2023 created?
It would be an understatement, if I said it was anything but a complex process, but I think that you should be pleased that a great deal of time and effort goes into creating each yearly Association Budget. It starts with the General Manager meeting with each department head and reviewing the past year’s budget and how the department succeeded or failed in meeting that budget and then the discussion turns to the coming year. Questions like what are your department’s needs in 2023 and then the obvious inquiry: “is that something that is really needed in the coming year?” After those series of meetings and discussions, a draft budget is prepared and then the real work begins. It is said that every $40,000 increase in the budget raises your monthly assessment by $1, or $12 a year. Now you see why this process is complex and really calls for complete and accurate reviews with a little prayer thrown in for good measure.
The draft budget is sent to each department for further review, and it is presented to the Finance Advisory Committee (FAC). The FAC, by Charter, is assigned the responsibility to assist the Board in the review, evaluation, and preparation of the budget(s). I say budget(s) as we are not discussing just one budget but a budget for the Association’s Annual Operating Fund and a Replacement Fund budget, as well. The FAC is also to work with all the other Advisory Committees who have requested budget allocations and it must carefully review each such request for its level of need and necessity and report to and make recommendations to the Board.
Once a draft budget has been created and reviewed and revised extensively, it is time to open it up to public inspection and review by our residents. There are three public meeting held each year in which the budget is displayed for the residents and comments are taken for further review. This year those meetings are at 10 am on August 24, September 21, and October 19 in the Montecito Ballroom. This will not be a normal year in which to create a budget because the US economy is experiencing inflation in the area of 8 to 12% and the investments of the Association funds have been affected as well by a weak financial market. Please join the FAC members and attend the public meetings and help the Association create our budget for 2023.
See you in the next scheduled Budget Meeting at 10 am in the Montecito Ballroom.
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