Week 4: FirstService Residentials Closes National Preparedness Month with Budgeting Tips to Help Communities Save for an Emergency
North America’s leading residential property manager concludes month-long disaster planning and preparedness expertise series to begin repairsDANIA BEACH, Fla. (September 28, 2018) – FirstService Residential – North America’s top property management company – draws to a close its expertise series for National Preparedness Month with financial advice to help managed communities conserve funds for emergencies.
“Budget and financial planning are not just about the here and now, but about the
future and the unexpected. The concept of saving for a rainy day holds true for managed communities in the form of reserve funds,” said Chuck Fallon, CEO of FirstService Residential. “Accumulating reserve funds, which are specifically earmarked for large capital improvements outside of the annual budget, including unforeseen repairs from a disaster, must be a shared priority for a community’s leadership board and manager.”
For the final week of National Preparedness Month, the FirstService Residential team turned to its financial services affiliate, FirstService Financial, for essential advice to help community associations take the final theme to heart and “Save for an Emergency.”
- Know the difference between an annual budget and reserve funds A community’s annual budget is meant to cover operational costs with the goal of breaking even or better. Reserve funds are designed to save for planned future or emergency-based repairs, replacements and improvements of a community’s infrastructure when the time comes. Reserve funds are not meant to cover budget deficits and shortfalls—an action which is illegal in most states.
- Prioritize preventive maintenance A critical step to protect reserve funds is to budget sufficiently for routine and preventive maintenance costs of critical common operations in the annual budget. Properly estimating for expenditures related to HVAC systems, roofing, landscaping and pool maintenance help conserve the liquidity and balance of a community’s reserve funds, so the board can avoid dipping into its savings.
- Conduct a reserve study to predict the right amount of reserve funds Proper reserve fund planning is based on hard data and an accurate assessment, which is why hiring a reputable reserve study firm is recommended. A reserve study should be used as a strategic planning tool for associations. By predicting when capital expenditures may need to occur and using statistical models to account for the emergencies, the study will analyze and detail long-term needs at a property to minimize surprise expenses that can lead to underfunding.
- Consider an asset management program The physical structure or structures that define a community are valuable assets that determine its worth. A comprehensive asset management program, administered by management and engineering experts, can protect the community’s infrastructure, saving the property in repair and replacement costs. Understanding how long infrastructure components should last, and making sure they meet these goals, will keep a community’s reserve funds intact for their intended purposes.
For free disaster preparedness publications from the Federal Emergency Management Agency, visit: https://www.ready.gov/publications.
About FirstService Residential
FirstService Residential is North America's largest manager of residential communities and the preferred partner of HOAs, community associations and strata corporations in the U.S. and Canada. FirstService Residential’s managed communities include low-, mid- and high-rise condominiums and cooperatives, single-family homes, master-planned, lifestyle and active adult communities, and rental and commercial properties.
With an unmatched combination of deep industry experience, local market expertise and personalized attention, FirstService Residential delivers proven solutions and exceptional service that add value, enhance lifestyles and make a difference, every day, for every resident and community it manages. FirstService Residential is a subsidiary of FirstService Corporation, a North American leader in the property services sector. For more information, visit www.fsresidential.com.