Smart Planning Starts in Summer
Even though the year is only halfway through, June is the ideal time for HOA boards to begin preparing for HOA budget season. Proactive planning not only helps your association stay financially sound, but also gives your board the time and flexibility to address potential increases and adjust priorities before the fall crunch.
In this post, we’ll break down the key questions board members should be thinking about now, the most common contract areas where increases are expected, and how your management team can support a smooth, informed budget process.
Key Questions to Ask for HOA Budget Season
Here are a few questions that can help guide early budget discussions:
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What large expenses are expected in the next fiscal year?
Are there any planned projects, reserve-funded improvements, or delayed maintenance that will require funding? -
Are assessment levels sufficient?
If costs are going up, will current assessments still cover the operating budget? Has inflation been factored in? -
Is the reserve study current?
An updated reserve study can help you understand whether your long-term funding plan is on track or needs to be adjusted. -
What feedback have we received from residents?
Homeowner expectations around services, maintenance, or amenities can help shape priorities. -
Have we reviewed year-to-date actuals vs. budget?
Looking at where your budget has over or under-performed can help you better forecast next year’s needs.
Common Contract Increases
It’s no secret that service costs continue to climb. As you plan ahead, be prepared for the following common areas of increase:
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Landscaping & Tree Care: Factors like fuel and material costs may result in higher bids or renewal rates.
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Insurance Premiums: Many Arizona communities are seeing significant increases in insurance premiums.
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Utilities: Water and electricity costs continue to rise, especially during high-usage summer months.
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Janitorial and Pool Services: Vendors in these industries may adjust pricing to reflect increased materials and wage requirements.
How Your Local Management Team Can Help
Whether your community is self-managed or supported by a management company, your professional partners are a key resource in budget season. Here’s how they typically support the process:
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Vendor Bid Coordination: Gathering competitive proposals for key contracts
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Historical Reporting: Providing year-to-date reports and comparisons to help spot trends
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Draft Budget Preparation: Building a working draft based on actuals and projected increases
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Board Meeting Support: Guiding the board through budget reviews and helping to communicate changes to residents
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Reserve Planning: Working with reserve analysts or engineers to integrate long-term funding goals
Final Thought
Starting early allows your board to make informed decisions, avoid last-minute surprises, and communicate clearly with homeowners. Budget planning isn’t just about numbers—it’s about making sure your community remains well-maintained, financially secure, and aligned with resident needs.
Look out for our next post in the HOA Horizon series, where we’ll explore real-world examples of how boards are adapting to changing contract costs and budget challenges across Arizona.
