Contributed by Tom Krieger

Many articles and books have been written about community association budgeting. While these resources are helpful and informative, they don’t tend to focus on real-world applications.

When my community association develops its annual budget and determines necessary increases in maintenance fees, it’s not just about balancing numbers. Boards must balance financial responsibility, transparency, and resident expectations. It’s about communication and shared decision-making with residents. This process is essential to maintaining our community’s financial health, consistently delivering services, and protecting and enhancing property values.

Our community structure sets us apart from many associations. As dictated in the bylaws of our 53 year-old master association, the community consists of 18 subcorporations, referred to as sections.

Each section is governed by its own board and operates under a unique set of governing documents. The sections are responsible for maintaining and overseeing certain common elements and services. The master association is responsible for large-scale operations including the preparation and adoption of the annual budget. It also establishes each owner’s share of common expenses and manages the upkeep and maintenance of common property.

Our budgeting process officially begins mid-summer with an initial meeting with the management company. This meeting involves a review of the current budget, actual expenditures to date, and identification of future financial needs. These discussions include contract renewals and pricing, capital projects, and major repairs or replacements.

In August, a new master board is elected for the upcoming year. The treasurer then appoints the budget committee consisting of management company representatives, board members, and homeowners with experience with the type of budgeting the master association uses or financial backgrounds. The budget committee meets over a six-week period to discuss and develop a plan to present to the community.

The committee reviews the proposed budget considering HVAC upgrades, pool maintenance, paving roadways, and replacing items the reserve study indicates such as kitchen appliances, computers, clubhouse flooring, ceiling tiles, and carpeting.

The cost of commercial insurance gets the most attention, which has risen 64% over the past two years to become the largest expense item in our budget. To save money, we’ve done away with manned security and reduced security costs by approximately $250,000 annually.

Once an internal budget draft is finalized, it is submitted to the full association board for further evaluation, discussion, and changes. While the cost of living has risen over the past several years, we’ve been able to keep assessment increases to 3% or less each year.

From there, the process is guided by the community’s bylaws, which establish clear timelines and procedures. The proposed budget is presented to the council representing all 18 sections and distributed to homeowners. A 30-day comment period allows for feedback, questions, and final revisions before a final vote by the full board at an open meeting.

The budget process runs from August through November and ensures careful planning and transparent communication. The finalized budget takes effect in January. We feel this process works well with various check points, transparency, and the opportunity for questions.

Ultimately, a well-crafted community budget reflects shared priorities, safeguards essential services, and supports long-term sustainability. Through planning, participation, and transparency, we help ensure Clearbrook continues to be a vibrant, well-maintained place we are proud to call home.

Tom Krieger is the board treasurer of the Clearbrook Community Association in Monroe Township, N.J.

>>Find out how to get your HOA budget started, what goes into the operating and reserves budgets, how to balance the budget, and how to present it to homeowners in CAI’s How to Draft a Budget guide.