Cohousing-L Mailing List: Re: budgets post-development

[Deborah Mensch (deborah-04]

At Pleasant Hill Cohousing (Pleasant Hill, CA), our annual budget
process goes like this:

Our financial team, with help from other community members, gathers
estimates for mandatory items (such as utilities, insurance, essential
maintenance and landscaping needs, etc.) starting in August. The
mandatory items also include our reserves contribution, which is
determined based on our reserve study (currently we fund our reserves
at 100% of the estimated need based on the study). The financial team
also estimates fee income (for things like laundry and copier use).
This information goes to all community members.

For "enrichment" items (including most of our committee budgets,
satellite TV, etc.), we use a virtual budget fair. First, committees
submit budget requests. Most committees include some details on how
they would spend the money they are requesting. Items such as
satellite TV that don't fall under a committee's purview have point
people who submit requests.

In the first stage of our virtual budget fair, each community member
is asked whether they wish to participate. Those who say yes receive a
packet containing all the enrichment budget requests, some alternate
scenarios showing the effect of different funding levels on dues, the
total amount of enrichment funding requested, and the amount of that
community member's "share" of requested funding. Each member then has
the opportunity to allocate his or her share to any or all enrichment
funding requests, and/or to reducing dues.

The people running the budget fair tally all the allocations from
participating members. If a committee receives more funding than it
requested, the excess is converted to funds available for stage two of
the virtual budget fair. If, as occurred last fall, no committee is
overfunded, then there is no stage two. But if there is, the people
running the budget fair go to each participating community member in
turn (in a randomly determined order) and ask them to allocate their
share of the stage two funds to enrichment requests that are not yet
fully funded, and/or to dues reduction.

The financial team combines all this information into a draft budget.
They calculate the amount of revenue needed from homeowners' dues to
fund the budget. They then calculate the amount of dues for each unit,
using a formula based partly on an equal division among our 32
households and partly on unit size, with separate dues for garages and
carports (which not all units have).

The draft budget then goes to the community for final consensus. I
moved in after things had been going for a few years, but I haven't
heard of any major problems coming to consensus at this stage in the
past. By law, we have to have a budget approved by a date certain in
November, and we do.

-Deborah Mensch
Pleasant Hill Cohousing
Pleasant Hill, California

On 6/5/06, Fleck <foam4u [at] worldnet.att.net> wrote:
> Hi All,
>
> I'm interested in how people put together their annual budgets after
> move-in. (I only found one response in the archives from 2002.)
>
> When do you start your budget process? How long does it take?
>
> Does your finance team put it together? Do the teams/committees put it
> together? Other? How is it presented to the members?
>
> Have you had members actively oppose/block projected budgets?
> How have you handled this?