Building an Annual Fiscal Year Budget:


A Treasurer’s Perspective


Richard Williamson, Citrus Square Community Homeowners Corporation and Sean Andersen, RS, Association Reserves Orange County


A well-planned calendar of events with tasks, actions,


and milestones is required to ensure an association’s annual budget is developed to comply with the law. An association’s annual budget


should be developed with research that


provides a solid basis of estimates for planned operating costs. Associations are required by California’s Davis-Stirling Common Interest Development Act to deliver a balanced budget, which can only be achieved when the projected expenses equal the assessments levied.


For an association’s treasurer and community manager, the easiest component of an annual operating budget to complete may be the reserve funding element. A professionally-developed reserve study with all components meeting CAI’s new Reserve Study Standards serves as the basis of an


association’s reserve funding budget


plan. Synchronizing the reserve study process with the operating budget development is essential to creating the best estimate of the next fi scal year assessment requirement.


Milestones for a January to December Fiscal Year


The majority of community associations have a December 31st fi scal year end, therefore we will be using milestones in accordance with a December 31st fi scal year end.


Next January’s budget development should begin in the fi rst week of July (or earlier) under optimal circumstances to allow plenty of time for research and discussion by the board prior to approval. To accomplish this, preparations should be made to begin the reserve study in a timely manner. Bids for the reserve study should be presented to the board of directors in April or May. This will allow the reserve analyst to begin work and produce a draft to the board of directors in July. The community management team and board treasurer begin pulling together elements of the annual budget using six months of actual data from the June 30th end of month fi nancials. The process of capturing and analyzing the cost data takes time.


28 July | August 2025


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