CAI-NJ July 2022

IT’S GONNA BLOW... from page 14.

rences, as well as the relative severity of each event. As no one can predict the future, the best way of doing this is to use historical trends. A quick search on the internet will provide you with detailed historical snowfall information for your county. This information can then be used to project the anticipated snow events for the upcoming year. When it comes to winter weather line items, there is always going to be a level of uncertainty. However, focus ing on the information that is known can help HOAs make informed estimates. Utilities: Similar to snowfall, utility usage can be a difficult line item to budget for, as it is also dependent on weather patterns. Water for irrigation systems, gas for heating, and electricity for HVAC units all fluctuate based on weather patterns Two main approaches that are commonly used when it comes to estimating these costs. The first approach is historical trend budgeting. This approach requires a budget prepar er to gather information on actual costs incurred in recent years. Typically, looking back two to three years provides sufficient data. Once this information is gathered, the cur CONT I NU E S ON PAGE 18

Weather patterns are extremely difficult to predict. Even the best weather professionals get it wrong. This uncertainty can be a major thorn in the side of any budget preparer. However, when dealing with line items such as this, we always recommend focusing on what is known, rather than the unknown. This starts with the snow contract itself. Most snow removal contracts consist of “pricing brack ets.” For example, rather than provide a flat cost to provide snow removal services for a season, vendors will provide “per occurrence” pricing. This pricing will be broken out by the severity of the storm (usually in inches). The number of inches that fall will then determine the price to remove snow for that specific snowfall. One thing that is important to check is whether ice treatments are included in the “per inch” removal cost. If not, it is important to account for these in your budget as well. Once all of the cost components have been identified, the next step is to anticipate the number of snowfall occur

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