CAI-NJ Aug.2018 (w)

PRESIDENT’S CORNER LISA VITIELLO, CPA CAI-NJ 2018 PRESIDENT | TOWNE & COUNTRY MANAGEMENT, INC.

A s you read this August issue of Community Trends ® , we are more than half way through the year. August is the best time for your community to ask, “Are You Hitting Your Marks?” Your “marks” are the goals you set at the beginning of the year. To meet goals, you need to have a blueprint. The bible for a community’s goals is a comprehensive and realistic annual operating budget. That budget should include not only annual needs but a schedule of short term projects (cyclical such as painting) and long term projects (think a current Long Term Replacement Reserve Study). All three documents set the benchmark to measure if you are “hitting your marks”. It’s time to drill down on each line item in the documents noted above to see if you are “on target” or if any unforeseen expenditure has disrupted your plan. August is the time to make adjustments so you stay on course with your goals. As a management firm, we have noted several of our new clients are under-funded in their replacement reserves and cannot perform major projects (roofing, siding, pav- ing, etc.) without exploring other financing options (loans or special assessments). When we drill down on the issue, their current income and savings do not match their needs and goals. Many communities feel holding fees the same year after year is a positive goal. By holding fees, the same year after year, long term planning is short changed by inflation (i.e. rise in oil prices effects the cost of roof shingles, asphalt, etc.).

"Our communities are micro-cities. Like NYC, we have our share of security issues." Codes and laws also change. Compulsory changes often affect the budget of your community. Recent examples are the new pool regulations and towing signs required in the last decade. It is much more palatable for owners to adjust to a small monthly increase each year than to have a large assess- ment due to the fact no increases were approved during an extended time frame.

“By holding fees, the same year after year, long term planning is short changed by inflation...”

The ultimate objective ought to be maintaining the com- munity to preserve value. It is not merely long-term reserve projects but routine upkeep such as power washing, mulch- ing, healthy landscaping that help keep the community pristine. It is a well-known fact that homes that are well main- tained, meticulous inside and out, sell for more. The com- munity’s board can do its part by taking care of the exterior and grounds. Read on for more details from our experts on how to “meet your marks.” Enjoy Your Summer !!! n

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