Establish a long term capital budget including evaluating long term funding options
A business’s strategy is the key to its success. Corporations spend huge sums on assuring that executives take time to annually plan strategy including functions such as corporate retreats. Strategy needs to be spawned, then nurtured, with continued and periodic attention. Your Board is charged with the responsibility for strategy and you may be focused on the concept. But as the Boards are made up of volunteers, Board meetings tend to follow the same recurring agenda of dealing with the issues of the present, while strategy seems to be lost along the way. Then, when action is required for major repair and replacement, options become limited. With the tightening of lending practices, refinancing to obtain funding is much more limited than in the past. Many boards find it helpful to schedule strategy meetings separately from regular monthly meetings several times each year to ensure focus on longer term issues.
The Board is administering an association whose sole purpose is to operate and maintain the property. The largest issue for long term strategy is funding for major repairs and replacements of the property. Unlike a for-profit business which can build a new factory across town, the structure(s) of your property must be maintained. Rebuilding is an unlikely option. So long term budget planning, including the utilization of long term funding vehicles are not luxuries but necessities. But in an age of limiting of costs, such requirements tend to move to the bottom of the list. But that is precisely the time they need to be maintained. Otherwise, when funds are required to fund major repairs, reserves may be inadequate.
What vehicle is your property using for its long term funding ?