Keywords: budgeting, sequencing
We just finished painting a large HOA condominium project with twenty-eight separate buildings. The association had prepared well enough. They had reserved sufficient funds to cover the painting proposal. But with a project that large, what always happens? The unexpected. I guess that’s why it became a saying, “Expect the unexpected”.
Take a good look at the above picture. It’s not the usual before and after you see from MTS Painting. Our after pictures always look terrific. This picture is the underside of a concrete poured on steel elevated second floor walkway. The rust was from decades of an unaddressed water penetration issue. Several small sections of this walkway should have been replaced before they were repainted. But replacing parts of a second-floor walkway is expensive. That money wasn’t in the budget. Also, it’s very inconvenient to the second-floor residents to not have easy access to their front door.
The property manager told us to paint it as is. So, we did. It is a problem for another day.
HOA boards and property managers are often faced with compromises because rarely is there enough money to accomplish all the maintenance goals. While reserve fund experts recommend HOA leaders ensure reserves are 100 percent funded, a 2003 survey of 700 associations found that the average level of reserve funds was only 54 percent of current needs.
MTS Painting works with a few dozen HOAs in the Valley. We are impressed with the creative people we are privileged to work with. They have come up with clever solutions and workarounds to resolve the not enough money challenges. I will share a couple of those ideas with you. Perhaps one of them may inspire you.
The standard approach to managing reserve fund spending is budgeting. You can’t spend faster than funds are accumulating. One way we help board members and managers is by providing budgeting bids. We routinely separate the scope of work into bid options to facilitate the board’s ability to prioritize and schedule projects according to maintenance requirements and budgetary constraints. As an example of separating painting projects into manageable pieces, one HOA customer has us out on one occasion to repaint the clubhouse, the next time to paint the perimeter walls, and then again, as the reserve funds are replenished, to paint the gates, utility boxes and curbs. Let us know what you anticipate your painting needs will be for the next two or three years. We will prepare budgeting bids for each project. Armed with that information, you will be able to plan your projects with confidence.
Some HOA neighborhoods require the homeowners to keep their homes properly painted, while other HOAs assume that responsibility. We work with both situations. One particular HOA neighborhood in Scottsdale has a uniform color scheme. Every house has matching body, trim, and pop outs. Several year ago, we sat down with their property manager and divided the neighborhood into six sections. Now, every September, we paint a section with one-sixth of the homes, plus the adjacent common walls. After six years, we start over from the beginning. We paint another neighborhood on an eight-year rotation.
MTS Painting has over forty years of experience helping our customers keep their properties looking good. If you need some budgeting input, or some creative thinking, give us a call. We would be pleased to assist you.