Budget Box: Annual Budget Process

By Shari Haldeman - sharih@landings.org
General Manager/COO

The annual budget for The Landings Association is approved in December by the Board of Directors for the upcoming fiscal year beginning January 1. The groundwork for an approved budget begins months in advance and is currently underway for the 2020 budget. This process is inclusive of TLA staff consisting of department directors and other staff, as well as community volunteers with industry-specific backgrounds who serve on committees to heighten fiscal responsibility.

The first part of the budget process begins with the review of the Capital Asset Management Plan (CAMP). Staff (and consultants, including engineering firms, as required) review useful life and estimated costs for the assets under their purview and make necessary changes each year. The CAMP provides the basis for funding the Capital Reserve, which increases in importance as our community nears the 50-year mark. If you would like additional information regarding the CAMP process, please review the June Budget Box in The Landings Journal.

While the CAMP review process is underway, operating budgets are thoroughly reviewed by department directors along with general management and finance staff. There are many factors that are vetted during the budget review process. Programs and services are evaluated based on cost/benefit, obligation, need, and/or expectation.

Part of the budgetary review includes appointing Budget Liaisons. These Budget Liaisons are members of the Finance Committee, appointed by the Treasurer to work with an individual department during the budget process. Department directors meet with their assigned Budget Liaison to review each line item in their annual operating budget and Capital Asset Management Plan. At the conclusion of the department budget process, each Budget Liaison will present the budget information for their respective department to the Finance Committee.

Reviewing budgets at a department level is only one part of the budget process. The Reserves Subcommittee is also heavily involved in the budget process. Members are appointed by the Treasurer and are members of the Finance Committee. This subcommittee looks at cash flow documents that are produced as a result of the proposed operating budgets and capital asset plans to evaluate available cash for not only one year but also for an additional five years, for a short-term view, as well as a total 25-year term, for a long-term view. TLA has a minimum cash floor balance of $5M per board policy that is to be maintained in the reserves account. As previously noted, during the next five years, at least $11M is estimated to be required to replace and maintain community assets.

Following months of review, edits, and deletions, based on committee and Board input, the annual budget is presented and voted on by the Finance Committee and Board of Directors at their December meetings. Budgets are voted and approved for one operating year (January-December). You can view the budget online at www.landings.org/resources > Governing Documents.