Cohousing-L Mailing List: Re: Annual budget increases & capital improvements

[Holly McNutt (holly.mcnutt]

Hi Peter,
Here at Nyland, our financial folks (FINBOD) have done a great job with the 
budget process.  I can put you in touch with one of them.  The CI question 
interests me and I hope other people will reply.  Our community is 20 years old 
and puts money every year into a Cap Imp fund.  In the early days, I am told, 
there were so many cool projects that people wanted to do that early in each 
year, people were asked to come up with ideas and the community would decide 
early in the year which ones to focus on.  That system fell by the wayside, and 
now we have a lot of money and a rather unclear and challenging process to tap 
into it.  And because of that, people who would like to bring an idea forward 
are often hesitant to do so because it is so hard to pass a proposal that uses 
Cap Imp money.  One can end up putting a lot of time and energy into something 
only to have it blocked all too easily IMO by a very small minority.  Attempts 
have been made to streamline the process, but in the end it comes down to 
having a really good decision-making process that allows projects to move 
forward without 100% consensus.  So we continue to put about $3000 per year for 
our annual budget into this account and my hope is that someday we will be able 
to move forward on some really cool projects.  My advice would be, if and when 
you set up a Cap Imp fund, have a really clear and simple process in place 
first to determine who to use that money to fund proposals.  
- Holly


On Feb 17, 2012, at 2:46 PM, Peter Orbeton wrote:

> 
> Nubanusit Neighborhood & Farm is a relatively young cohousing community,
> and is looking to tweak the budget process. We've heard first-hand from
> residents of other coho communities who have passed through about less
> meeting-intensive processes than we have now, pre-determined annual budget
> increases (tied to the CPI), and capital improvement funding not
> necessarily earmarked to a project. The number of meetings (and time) spent
> with our current process is probably, we've learned, directly related to
> our newness. And because we still have development projects, we've
> experienced annual budget increases that are not sustainable.
> 
> As the Treasurer, I've volunteered to gather information on other
> communities, and have plumbed the C-L archives. While suggestions on how to
> achieve a short and painless budget process are certainly welcome, I'd like
> to hear how annual budget increases are determined so we can model ours for
> more predictability. Do you base it on the Consumer Price Index, establish
> a fixed dollar figure ceiling annually, or by some other means?
> 
> We have operating reserves and a reserve fund (replacement/replenishment),
> and would like to also establish a capital improvement (CI) 'account.' Our
> budgets to date have been line-item specific, and up until 2012, were for
> the most part not funding multi-year projects. We've heard of other
> communities with CI accounts that are tapped when a team/committee brings a
> proposal forward, and are funded annually based on a pre-determined amount.
> So, my questions on this topic are do you have a CI account, how is that
> account funded, what is the process for withdrawing from it.
> 
> I'll take responses directly if you would prefer. Based on the responses, I
> may post a summary as well.
> 
> Thanks in advance.
> 
> Regards,
> Peter Orbeton
> Treasurer, Nubanusit Neighborhood & Farm
> http://www.peterboroughcohousing.org
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