Tips for Cutting Your Association Budget
Every year all Homeowners Associations and Condominium Associations must review the annual budget. Last year's expenses project for the new year. In this time of economic uncertainty, it is time to reduce operating expenses while keeping the services the owners have come to rely upon.
Review your Legal Fees and Negotiate with your Current VendorsMany Law FIrms have kept strict to tehhourly billing method. The firms have increased revenues, without considering the strain on the Association. Without the lawyers, the Associations often find it difficult to collect deficient accounts. However, the associations cannot afford the legal bill to collect the delinquent fees. For this reason, we defer our collection fees and attempt to collect from the unit owner or third party. Foreclosures are billed at a flat rate thereby allowing the association to properly budget for association foreclosure invoices. We do not have hidden fees and all fees and costs are clearly defined in our Retainer agreements.
Vendors are in the customer service business. The adage "ask and you shall receive: is very effective. Consult with your vendors ands inquire where there places to reduce the invoices. Certainly monthly reoccurring service providers will be willing to discuss a reduction. We suggest starting with your landscapers. See id you can extend "cuts" by a week or whether they will simply take a reduction of the monthly invoice for your loyalty to the company. Also, larger national banks have excessive rates and fees for simply holding your money. Look for a bank that does not "nickel and dime." Smaller , local banks, often offer cost saving alternatives, such as coupon printing and lock-box depositing.
Trash and Cable Consultants and Insurance PremiumsAs far as trash and cable, there are several consultants that will negotiate with the cable and trash companies, Consultants often negotiate wholesale rates. Take a quick review of your previous budgets for the last five years. You may find that the bills are increasing but the services have remained the same. Most consultants will invoice the association by the percentage of reduction taken on the contract. Therefore, the association saves money and does not truly pay for the negotiator unless a reduction is achieved.
Insurance premiums are at an all time high. With the potential for deregulation in the coming months, insurance premiums are expected to skyrocket. Insurance is often the largest expense. Open lines of communications with your Insurance Agent. Your Agent may be able to shop your insurance policy with a new carrier. You can also consult with your bank to see if you qualify for Premium Financing for your insurance premium. With premium financing, you do not pay the entire premium in one lump sum, freeing up funds for other monthly expenses.