Development Process is Underway
The Issaquah Highlands Community Association (IHCA) and Finance Committee are preparing the IHCA 2021/2022 budget. The budget will be presented to the IHCA Board of Directors for approval in late February, published in April’s issue of Connections, and ratified at a scheduled community meeting in late April.
Finance Committee members are Issaquah Highlands homeowners who volunteer their time to serve on the committee. Committee members are appointed by the IHCA board and work directly with IHCA staff to develop a budget recommendation to present to the board. With financial expertise, knowledge of the community and legal requirements, and a commitment to maintaining the communitywide standards, the budget is developed using a proactive group effort.
Once the budget is reviewed and approved by the Finance Committee, the committee presents the budget to the IHCA board for approval. After the board approves the budget, an open meeting is scheduled to publicly ratify it. In accordance with state law and the IHCA Covenants, Conditions, and Restrictions (CC&Rs), ratification is automatic unless 75% of all members (not just those in attendance) vote to reject the budget.
The Finance Committee must consider many factors when developing the community budget. These driving factors include:
- Protecting the integrity of every homeowner’s investment within Issaquah Highlands.
- Maintaining the standard of care and safety of community property and common areas.
- Ensuring efficient planning for future community needs.
The Finance Committee reviews the funds needed for the daily operation of the community, such as common electricity and irrigation water, grounds maintenance, management, insurance, and general maintenance. These expenses are either contractual or can be reasonably estimated based on past experience.
The Finance Committee also reviews the income needed to maintain the reserve fund at sufficient levels. Reserve funds provide money for the repair and replacement of the community’s assets, such as playground equipment, drainage infrastructure, and irrigation equipment.
Prepared with this knowledge, the committee will estimate total expenses for the coming year and compare that sum to the IHCA’s potential revenue (assessments, interest on investments, and shared costs revenue). The committee will look for ways to lower expenses without compromising service, and address areas where operating efficiencies may be realized.
The annual budget must also meet all federal, state, and county legal requirements regarding operating a nonprofit association and address any economical and operational challenges that may lie ahead.
Do you have questions about the IHCA budget development process? Email Kristyn McKinnon, IHCA Accounting Manager.