Short on funds? When committees are looking for somewhere to make some savings, one of the easiest places to look can be at maintenance. Committees may believe saving is good and spending is bad, or vice versa, and it is often tempting to forego basic maintenance for the sake of cutting spending, saving a $100 here, $2000 there. However, one of the simplest ways to save money is to correctly budget maintenance for the upcoming year. The following are general principles which bodies corporate may consider when preparing their budgets, which in turn can save huge amounts of money.
Budgeting for maintenance means considering day-to-day expenses and what the caretaker or the onsite manager has observed in terms of conditions. Is there a leaky tap? Is the barbeque working?
Some maintenance issues can be delayed. Worn or faded paving or interior carpets may not look as good after two or three years, but they do not affect the functioning of the building, provided there are no hazards to residents. While the carpet might look a bit faded or torn, the committee should ask whether was this something which was budgeted for? If it wasn’t, what was the effect on the budget and is there enough left to do critical maintenance and repairs, such as a damaged fire door which cannot be opened, or a pool gate which will not close.
Maintenance considers more long term items. Ask contracted work suppliers to tell you what is coming up in terms of maintenance. For example, for fire equipment maintenance, every 10 years all the fire extinguishers and hoses might need to be replaced or tested. Asking these questions ensures critical items can be covered when the needs arises, and will not leave you short of cash.
An easy tip for budgeting for basic repair items is to look at what has happened in past budgets. If last year you used 1200 light bulbs – it would probably be a fair indication you would want to budget for the similar sort of amount in the next budget.
Poorly organised maintenance can bleed money, especially where Committees get quotes without or prior to formulating scopes of work. Particularly for large scale remedial work, maintenance requires attacking the root cause of the issue and looking at the entire picture of the issue. If water damage has occurred downstairs as a result of a water leak in a unit from the top floor, there is no point fixing the water damage if the leak from the top floor has not been rectified.
It is vital to have a good understanding of money needs to be spent on, how much it will cost, and whether it can be properly funded. If important items are not budgeted for maintenance or repairs, jobs will not get done, or an exorbitant amount of money can be wasted.
Budgeting can be a easy process, and requires a simple but reasonable amount of background as to why repairs or maintenance are needed. If the pool fence needs to be replaced, go through the process, not just throwing money at the issue. Ask what the scope of the works is – is the fence just old, or do there have to be groundworks to ensure the fence stays up in the future? How much will it cost to take the old one out and replace it? How much will it cost for temporary fencing while this is happening? Show photos of the new options for a fence, as well as two or three quotes.
All fences do the exact same thing, but some could look just as good for much less than the cost of others.
The above information is general advice on how to approach formation of a budget and saving your property money. If you require assistance or advice on preparation of a detailed budget for your strata scheme, talk to SSKB. Our experienced Community Managers provide strategies to deliver positive results to your body corporate.