Budget & Finance FAQs
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+Q. How is the annual budget determined?
Management and committees make budget requests to the Budget & Finance Committee starting in August. Budget & Finance assembles the requests and determines whether any modifications or HOA fee adjustments are needed. After Budget & Finance approves the draft budget, they recommend this to the board. Management sends the budget out to residents in a formal mailing in November prior to the Annual HOA meeting in early December. At that meeting the board approves the budget. Any Request for Proposals (RFP’s) for competitive service contracts must be started early in the year.
+Q. What is the 2018 budget?
The Approved 2018 budget and previous year budgets are posted on the Governance web page.
+Q. Who reviews our expenditures?
Every month, the Budget & Finance Committee receives a detailed financial report prepared by our Management company, Procom. This report shows any monthly or year to date variances from the budget. This allows the committee to spot any trends that might need correction in order to meet our approved budget. Management presents a summary of our finances at every board meeting.
+Q. Do we always have a balanced budget?
Yes, the approved budget is always balanced in terms of projected income and expenditures for the year being equal.
+Q. What happens if we have a deficit for the year?
In the event that expenditures exceed income for the year, our accumulated surpluses known as Home Owner Equity pay the bills. This would be the case before any special assessment is levied; a special assessment has never occurred in Symphony Village.
+Q. How often do we have deficits?
In the 10 years of audited budget history, we have only had one deficit (2015). This was primarily due to snow removal and irrigation repairs that exceeded the budget.
+Q. Who determines our monthly HOA fees?
The Budget & Finance Committee evaluates the HOA fee every year as part of the budgeting process. It passes the HOA fee recommendation to the board and community for approval at the December Annual HOA meeting.
+Q. How long has our monthly HOA fees remained constant?
The HOA fee has remained at $230 per month since January 2014. Prior to that, the HOA fee was $249 per month for at least 5 years. The goal of the Budget & Finance Committee and the board are to have a balanced budget with no HOA fee increase.
+Q. How much can the HOA fee increase?
Our governing legal document Declaration of Covenants, Conditions, and Restrictions allows the HOA fees to increase up to 10% per year without a community vote.
+Q. Who manages our investments?
The Investment sub-committee of Budget & Finance makes investment recommendations to the board. These are primarily low risk Certificates of Deposits that are laddered in due dates. The Investment sub-committee recommends purchase of these CD’s from banks with the highest rate of interest and keeps the CD’s below the FDIC limit. Our investment policy is Appendix B in the Terms of Reference.
+Q. Do we have a Reserve fund?
Yes, we have a fully funded Reserve fund.
+Q. What guides our Reserve fund contributions?
The latest (2016) Replacement Reserve Study is based upon the anticipated life expectancy and expected replacement cost of our assets. The study recommends a yearly funding level so that we always have sufficient funds for replacement of expensive items over a 40 year study period. We contribute to the Reserve fund on a monthly basis just like any other budgeted expense.
+Q. Do we update the Reserve fund study?
We have had three Reserve Studies with updates every three to four years. The study is done by a professional organization that specializes in this. They review our assets and assess item remaining useful life and expected cost of replacement over the study period. This establishes a new contribution and expenditure baseline with a recommended annual Reserve fund contribution.
+Q. How do items get charged to the Reserve fund?
The board votes whether a replacement expenditure is to be charged to the Reserve fund. The study lists items that were included in the study and this provides guidance to the board. The Replacement Reserve Study is not a legal document but is designed to provide long term contribution and expenditure guidance. The study organization can supply guidance, if requested.
+Q. Do we get financial audits?
Yes, we get annual audits from a professional audit firm. The audit report is generally received in May. The Budget & Finance Committee makes recommendations to the board whether to accept the audit report.
+Q. Does the HOA pay taxes?
Yes, the HOA pays income tax primarily on investment interest. Our tax consultant makes an annual recommendation of the most advantageous method to file. The HOA does not pay real estate tax.
+Q. How do I get reimbursed for an expenditure?
Management can reimburse you for valid HOA expenses. You must submit receipts for management approval and reimbursement. It is thus advisable to get management approval before you personally purchase any item or service. Reimbursement will be by check and may take over a week for the check to be issued by our management company. The HOA office does not have any cash nor does it directly write checks. Many purchases require committee and board approval and/or an RFP before commitment. Reimbursements would normally be for small items that many organizations would consider payment from petty cash.