Page 8 - November-December Klahanie Magazine

2020

Budgets and Assessments

Creating a budget for a large The committee generated four Option 3 Increased the
HOA is a tedious process options on how to address the assessments to $225 a quarter,
of comparing past financial current and future financial accommodating some expected
experiences, current fiscal needs demands, which included cost increases across all the
and projections of what the a combination of reducing community services, some much
future may hold. This year the expenses and/or adding income needed irrigation system repairs
Budget Committee, consisting would best serve the community. and an earnest effort to replenish
of two Board members Here are the four studied options: the HOA reserve funds. This
including the Board Treasurer, option resulted in a small positive
two community volunteers Option 1 Assessment remains at cash flow of $1,500 at the end of
with corporate budgeting $150 a quarter and balances the the year.
experience, the Association budget by significantly cutting Option 4 Added after analysis
Director and the Association services. This deep dive into of the first three options and
Financial Manager. They were the budget created some very then asking what would the
tasked by the Board to balance difficult decisions, since currently assessment have to be if all the
the budget. All committee much of the budget is not expenses for 2020 were kept at
members met numerous times available for cuts. This proposal the same level as they are for
during September and October would require eliminating all 2019. This does not allow for
to assess and recommend to the Sheriff’s safety & security patrols any increases in labor, materials,
Board comprehensive options for and the NAAK (Natural Areas services or KHOA financial
the best route forward with the Association of Klahanie) services, replenishments. The result is a
2020 KHOA budget. significantly reducing the pool quarterly assessment of $184.
hours, lifeguards and instructors,
Several challenges were made a substantial reduction in After all the options were
clear in the first meeting. For the landscaping services throughout discussed, it was the committee’s
past several years, the various the community and canceling recommendation to the Board
members on the Board had most all of the community social that Option 2 be adopted as the
pushed to hold the assessment events throughout the year. funding level needed for the
income steady and offset the 2020 Annual Budget.
subsequent deficit by using the Option 2 Increased assessments
existing financial surplus (savings) to $200 a quarter (back to where For those who like nearby
to pay for the difference between they were prior to 2013), restored comparisons, the Issaquah
income and expenses. This was all current services and events Highlands current assessment is
done for valid reasons because and added some additional $234 a quarter and they do not
the KHOA had more money in Sheriff safety & security have any swimming pools.
surplus than recommended by coverage to help mitigate the This has been the most difficult
best HOA accounting practices. inevitable traffic increase and budgeting challenge in years.
However, in 2019, the HOA disruption caused by soon to be Every category of expense has
expenses are projected to be road closure activities, as well been meticulously reviewed. The
$301,541 greater than total as considered future service committee believes the increased
income. Because of this the HOA costs increases and inflation. This assessment funds of Option 2 are
surplus funds are now at a point proposal resulted in a balanced adequate to cover expenses and
where current and future deficits budget. the end result will be a balanced
must now be paid by increasing budget.
income, or significantly reducing
services.

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