What Changed Since Last Year? The Question That Should Open Every Budget Workshop

Most budget workshops in Tampa Bay start the same way. Someone opens last year's spreadsheet, adds a percentage to the lines that feel like they are going up, and the board spends an hour discussing the total at the bottom.

There is a better opening question, and it takes about a minute to ask.

What is materially different from the assumptions we used a year ago?

Doug Jenkins put that question first for a reason. Last year's budget was built on a set of beliefs about what things would cost. Some of those beliefs held. Some did not. Until a board knows which is which, it is adjusting numbers without knowing what it is adjusting.

What "materially different" actually means

Not every change matters. A twelve dollar swing in office supplies is not worth board time. The question is aimed at the handful of lines where a change moves the total or changes what the association can do.

For most condominium associations in this market, that short list looks like:

Insurance, which has moved more than any other line in recent years
Utilities, particularly water and sewer, where municipal rates have been climbing
Contracted services where a multi-year agreement has ended or is ending
Anything tied to a building inspection or reserve study finding
Labor, if your vendors have repriced since the last cycle

Five or six lines usually account for most of the movement. The rest of the budget is noise by comparison, and treating it as equally important is how workshops run three hours and still end without clarity.

Ask it line by line, not in the aggregate

"Costs went up" is not an answer a board can record. "Our water and sewer rate increased by nine percent in March, which adds roughly eleven thousand dollars across the year" is.

The difference matters at the owner meeting. One of those statements invites an argument about whether the board is spending too much. The other explains itself.

When a manager or treasurer can walk the board through each material line and say what moved, by how much, and on what basis, the budget stops being a negotiation about a total and becomes a set of decisions the board made on purpose.

What to do with the answers

Write them down. Not in the budget itself, but in the minutes or a short memo attached to the budget packet.

A board that records "insurance increased seventeen percent based on the agent's preliminary indication, final renewal expected in November" has done something useful for every future board. Next year's directors will know exactly what this year's assumed and why. So will any owner who asks.

This is also the record that protects you. A board that can show it identified what changed, documented the basis, and voted with that information in front of it is in a different position than one that simply approved a number.

Start here

Your next workshop does not need a new process. It needs one question asked before anyone opens a spreadsheet.

Doug Jenkins of Association Training Hub walks through all five of his budget questions in a thirty minute session we were proud to sponsor. The recording is available here: https://youtu.be/SqRdisKmOx8

If your board wants help identifying which assumptions deserve scrutiny before your vote, that is a conversation our management team has every fall. Reach out.

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