Preparing for 2025: An Overview of SDCEA’s Budget Development Process
SDCEA is gearing up for the 2025 budget season and inviting members to join the Budget Development Committee to participate in discussions on operating, reserve, and capital budgets, guiding future financial decisions.
Believe it or not, the 2025 budget season is approaching. Please look for requests to apply to the 2025 Budget Development Committee in the Valley News. Serving on the committee allows members to meet with all the Managers to discuss their business areas. Meetings with SDCEA Managers, the Board of Directors, and the Budget Development Committee are scheduled for the week of September 23rd through September 27th.
SDCEA has three budgets: operating, reserves, and capital. These budgets are planning tools that drive decisions about whether homeowners’ assessments need to be increased.
- Operating Budget: Covers all general day-to-day operations, including all cost centers and revenue and expenses for SDCEA amenities. This includes costs such as payroll, insurance, facility maintenance, compliance, landscaping, utilities, etc.
- Reserve Budget: Includes any replacement expenditures over $5,000 and renovation projects. A portion of the monthly assessment goes into the reserves account to fund allocations not only for the current year but for future years. The reserve funding percentage guides the Board of Directors' decision-making when approving the budget. It changes yearly based on the needs of the replacement allocations and their useful life. We are projected to be 16% funded at the end of 2025, but decisions may be made to defer maintenance or increase contributions. Over the next five years, the funding percentage is projected to be 46%. At 46% funded, SDCEA will have over 5 million dollars in its Reserve bank account. If SDCEA aims for 60% funding, it will have over 11 million. This is homeowner money that SDCEA will be earning interest on. While 46% may seem low, reserve allocations can be managed as needed.
- Capital Budget: Covers any new improvement projects or items over $5,000. Any capital expenditure then goes into the reserves as a component.
We are currently working on the budget to present it to the Board of Directors and Budget Development Committee in September. The General Manager and I are available to meet with any homeowners who have questions about the budget or its process.
Respectfully submitted,
Juli Elliott
