Due to the ongoing coronavirus pandemic, many homeowners associations have had to quickly try to adjust their expenses to account for potential loss of income. Some members may be facing financial difficulties and need more time to pay dues. Although we have only been dealing with the impact of this novel virus for a few months, the effects will likely be felt for a long time to come. That means the board may need to revamp its budget moving forward.
Consider reprioritizing. There may be repairs or upgrades that were slated to be made that can be put on the back burner. If they’re not critical, they may be able to wait. The board may want to look at prioritizing projects that will have more immediate benefits. For instance, has the crisis made it more apparent that it is time to update communication systems or shift additional processes online? The association may want to vote to make these types of changes first so they are better prepared for any future disruptions.
Adjust funds. The board may also want to shift how it has allocated money. If there is less income coming in, they may need to budget more toward existing expenses and a little less toward reserves. If money was allowed to be borrowed from the reserves, look at how those funds will be paid back and the savings built back up. The HOA may also realize that there are services it can do without or cut back on, thereby reducing costs and enabling more money to be spent on other areas.
Look ahead. Given all that has happened now, start looking ahead to next year and deciding what the HOA’s goals will be. What are the areas that need the most attention? Where are there opportunities for improvement? How can the association set itself up to be able to more effectively handle a crisis, be it a virus, natural disaster, or economic downturn? Figure out how this year’s budget may play out over the next few months and where you want to make changes for next year.
Be transparent. Throughout everything, continue to communicate with members and be open and honest about how the association is faring. Keep them informed about any changes the board is looking to make, and get their feedback and insight. The board wants to do what is in the best interest of the community, and that means ensuring members are involved and educated on what is happening. If projects are going to be delayed, dues are going to increase, or the budget is going to change, let them know as soon as possible.
There is no perfect plan for dealing with the financial impact of the coronavirus, because so much is yet unknown. But the board can do its best to make decisions based on the needs and circumstances of the community. Partnering with a property management company like Kuester can allow HOAs to access resources and insight that can benefit their organization. Talk to your community manager today about how to continue managing association operations during these challenging times.