It’s that time of the year again when many village professionals will be commencing their planning for annual village budgets.
You many be responsible for developing or providing input in budgets for:
- Village operations – funded mostly by resident contributions.
- Long term maintenance – funded via the operating budget, as a contribution upon exit or as a surplus of operation funds.
- Capital expenditure – the funding of this can vary from being funded as a contribution via contract terms typically upon exit, funded by the operator or a combination of both.
In my experience, much of the discontentment or complaints that come around budget time are down to a lack of communication, poor processes, or operators not fully understanding the legislative and contractual requirements of village financial management.
Therefore, it’s imperative that your budget process:
- Starts early ideally around February or March
- Takes into account whether multiple meetings are required
- Caters for time needed for stakeholder feedback, approvals and sign off
- Understands legislative and contractual requirements
- Has a sound communication strategy
I’ve always found the following points helpful in budget planning:
- Develop a budget worksheet (organisation is key, so make sure you keep tabs for line items and assumption details for full transparency)
- Be proactive in checking increases from utilities, service contracts
- Consider contract expiry plans/renewal costs
- Consult the continuous improvement program
- Consider cash flow management
- See if larger service contracts can be smoothed over a year
- Have a policy for recovering and/or apportioning deficits/surpluses
- Make sure you’re following legislative steps
- Understand contractual/policy obligations
- Make allowances for legislation changes (not just the RV Act)
- Keep up with market trends and consumer expectations
- Have a firm checking process in place
The key thing to remember as a village professional is most residents are on fixed incomes, regardless of whether they are pensioners or self-funded retirees.
This means their capacity to increase income or assets, match inflation or large village budget increase is diminished.
Planning and good processes are the best way to minimise nasty surprises.
DCMI Institute has developed a Budget Planning Guide to help village professionals manage their budgets.
You can download your guide here.