Planning for Non-Reserve Maintenance Projects in the Operating Budget

Plan After you have gathered and saved all of the pertinent

maintenance information, policies, and records in one easy to find place, use this information to create a list of specific maintenance items that will need to be planned, scheduled, and ultimately budgeted for year after year.

Non-reserve expenses like irrigation repairs, sprinkler system testing, or pest control impact the budget.

— By Caitlin Traub, CMCA, AMS, PCAM — W

hen communities think of maintenance items, they often think of the big shiny objects, the new entrance

monument, perimeter fencing, or all new siding. Fewer owners stop to think about the year after year maintenance projects that aren’t viewed as the “big shiny objects.” We are all familiar with the larger reserve-funded projects but what about the smaller routine maintenance items? In a year those costs can, and do, add up but as non-reserve projects how do you foresee, prepare, and plan for these projects?

As we enter the time of the year when the weather is nice, these smaller projects are in full swing, and we start to enter budget season, it is the ideal time to make sure your routine maintenance is on track and that you’re prepared to properly account for these costs.

Prepare The first step in being prepared for these projects is to

collect all of the maintenance-related information for your association; helping to establish which things within your community require ongoing maintenance. In most associations, this information is scattered and will need to be retrieved from various documents. Save yourself time by finding and saving the following information in the same spot: ` The association’s maintenance policy and/or responsibilities required by governing documents or other jurisdictions such as the fire department, cities, counties, etc.

` Warranty information and maintenance requirements to retain those warranties.

` Vendor and maintenance contracts. ` Maintenance records for work that has already been completed.

Collecting all of this information will allow you to have a complete list of the components, equipment, or areas that need to be included in the next step. You may want to review your reserve study to see if routine, preventative maintenance recommendations for those items are listed as well.

Items like irrigation repairs, sprinkler system testing, or pest control are not reserve expenses but are still costs that can add up quickly and have a large effect on an association’s budget. Creating a yearly maintenance calendar by month prevents items from slipping between the cracks, schedules routine projects on the appropriate dates, and retains continuity if the association switches managers or management companies. Having this yearly maintenance calendar is often the key to proactively addressing the association’s routine maintenance needs.

Budget Now that you have an idea about the yearly projects that will

always need to be budgeted for out of your operational expenses, including those costs in these line items is critical. To accurately budget for these costs remember the following: ` Review and include contractual vendor maintenance costs for these line items.

` Have open, honest, and regular communication with your trusted vendors about upcoming maintenance costs they foresee. For example, does your landscaper think that next year’s irrigation repairs will be more costly because of the age of the systems, materials, etc?

` Consider any additional expenses on already budgeted yearly costs. For example, are you due for a five-year sprinkler test, that is more expensive than a traditional annual test?

Monitor Once you have properly prepared, planned, and budgeted

your job still isn’t complete. Whether you have an on-site maintenance team to be your eyes and ears or you’re your own eyes and ears, remember to make at least monthly, if not more regularly, inspections. Routinely walking the property will give you the familiarity with these components and common areas. Familiarity will help you notice small things that can be fixed before they turn into larger maintenance items, something owners or others might overlook.

By taking the above steps, your association may extend the useful life of various components and better manage their overall maintenance costs. Many associations find out the hard way that deferred maintenance is often much more costly in the long run. By proactively preparing, planning, and budgeting for yearly routine maintenance of your association’s common areas and mechanical components, you’ll keep the property in good working order and looking pristine while keeping the headache of deferred maintenance costs far away. 15

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