It’s budget season! We understand that budgeting is extra challenging right now. Everything seems to be more expensive, especially insurance. Having the right property management partner can make the process run more smoothly. Your budget drives the health and longevity of your association, and it affects every resident in the community.
Remember that, as board members, you have fiduciary duties, or financial responsibilities, to your residents and the association as an entity. Those include duties of care, confidentiality, loyalty and acting within the scope of authority. You agreed to abide by these duties when you took on the board member role.
As you work on the 2025 budget for your Florida association, keep the following principles in mind:
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Don’t defer real costs, including reserves and maintenance.
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Plan proactively, following a timeline.
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Be transparent and communicate with your residents.
“Residents expect homeowners association costs, their dues, to go up, but they also expect good stewardship of those dollars. They want to be kept in the know as to what's driving those costs,” says Brent Reynolds, vice president at FirstService Residential. “That’s why the role of transparency and communication is critical throughout the budgeting process.”
Best practices make budgeting better
Following best practices in the budgeting process can help make it all go more smoothly. We mentioned establishing a timeline. Although this is association budget season, it’s best to start the process well in advance of your annual meeting and budget approval. Allowing plenty of lead time makes the process less stressful. It ensures you have time to look for new vendors that offer the best value for your money if needed or brainstorm ways to generate new revenue for the association.
“Most of the communities that we manage run on a fiscal year of January through December, though it's important to note that your community might be a little bit different,” explains Amy Sanchez, president at FirstService Residential. “So if your association’s fiscal year runs June to May or something along those lines, your timeline might look a little different.”
Review your financials and reserve study that you’ll use as your baseline for planning. Begin this process in July if possible. If you haven’t started yet, don’t panic! There’s still time to get everything done and you can start earlier the next round.
Ask your management team to review trends in costs or rate increases for major components of the budget, including service contracts and utilities. July and August are a great time to do all this homework. Check with your vendors to research potential rate increases or opportunities for savings. Leverage experts when possible, especially in association insurance matters, and lean on your management company for qualified vendors if you need to research new ones.
It’s tempting, when costs are on the rise, to minimize funding of reserves or preventative maintenance. That’s a trap you do not want to fall into. Part of your fiduciary duty is to preserve and maintain the association’s assets, including structures and amenities. Florida law now requires funding of reserves for structurally important parts of your property, including roofs, and more. Deferring maintenance and reserves are no longer an option.
As you’re budgeting, make sure to assess resident expectations on amenities and services. To maintain a harmonious community, you need to make sure that you budget sufficiently to maintain the quality of your community programming, events, amenities access, security, and other resident-facing programs.
Ideally, you’ll have a draft of the budget, ready to workshop if needed, in late August or September before holding your budget adoption meetings. Finally, your budget needs to be submitted for review with messaging to homeowners before November 15.
“We know that some communities like to hold out until they know their exact costs for things, so maybe they'll try to push that into end of November or December. That's a bit risky,” Sanchez says. “It doesn't give homeowners a lot of time to plan. It doesn't give the team a lot of time to ensure that accounts are updated and that homeowners are informed. For example, you don't have to wait for utility providers to share their new rates. Estimate what that is going to be, fold that into your budget and plan accordingly.”
Watch this video to learn how to master your 2025 Florida association budget.
Look out for labor costs
Moves to increase the minimum wage are sweeping most states. In Florida, the minimum wage moved to $13 an hour in September and will increase to $14 in September 2025. Those hourly workers are responsible for the greatest increases in worker income. Your budget needs to account for that wage growth. Salaried positions are expected to increase by 4 to 5% across most markets, as well.
“The old adage remains true, doesn't it? You get what you pay for. Certainly, that holds true for wages and salaries. If you don't pay your people a competitive wage, then don't be surprised if you have high turnover on your staff,” says Anh Nguyen, vice president at FirstService Residential.
Insurance is improving
While insurance costs remain high, there is hope on the horizon. Insurers are beginning to return to Florida, and the days of 20 to 40% increases in premiums are over. The Florida legislature made changes to reduce litigation expenses for insurance companies, which is leading them to return to the market. Of course, increased storm costs remain a factor.
“It's a bit early, but we're all reading the tea leaves. Some of the major brokers are starting to say, ‘The differences that the state legislature has made as recently as 2022 really took a stick to frivolous lawsuits,” Reynolds explains.
Contain costs
Cost containment is key to any good budgeting strategy. Of course, you want to save money wherever possible. What are some ways you can trim costs while maintaining the quality of life your residents deserve?
“Keep in mind, homeowners have an expectation, and more often than not they rarely feel comfortable going back in service,” Sanchez says.
With that in mind, your association may be able to find savings by exploring:
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Cost-benefit analysis – Ask your homeowners if the cost of certain things really are worth the benefit they get from that expense. You might be surprised where you can trim costs.
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Bulk buying/procurement plans – Working with a larger management company may give you access to savings you didn’t anticipate because of the volume of business they provide to vendors.
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Energy audit – You may be able to make a short-term investment in things like better rated windows, energy-efficient common area lighting or new door seals that will save money over the longer term. Often, governments and energy companies provide subsidies or incentives that offset the initial expense.
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Multiple-year vendor discounts – Check with your regular vendors like elevator maintenance, pool cleaning and landscaping. Guaranteeing your business now might get you better pricing down the road.
Raise revenue
The primary source of revenue for most associations is dues, but you may have other revenue sources that can help offset operating costs. Your management team can help you explore creative options to optimize your revenue:
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Fees charged for advertising in your newsletters or sponsorships of events
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Vendor fairs or markets with booth fees paid by the merchants
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Miscellaneous fees (lost keys, guest parking, application fees, insufficient funds, etc.)
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Interest from investment accounts (Your property management partner may have advantageous banking relationships that can help you get better rates and lower fees.)
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Space rental, including unused parking spaces. If you have a high-rise, cell companies might even have interest in your rooftop for a tower.
Communicate clearly
As you master your 2025 budget, keep in mind that being open and transparent with your residents and homeowners is critical to your success as a board. Residents don’t want to feel like the budget process happens in the shadows and their money is being spent in ways they don’t understand.
Don’t rely on one channel to do that!
“Standard forms of communicating with your residents should include text message, voice message email, social media, and your website,” Sanchez says. “Naturally, your board meetings and live town halls are other options. So, consider what you should take advantage of and how to fold that into your overall budget timeline to ensure people stay up to speed and informed throughout the process.”
Budgeting for your community’s future is one of your greatest responsibilities as a board member. Having the right property management partner on your side will help. Contact FirstService Residential today to learn more about building a better budget.