The Issaquah Highlands Community Association (IHCA) and Finance Committee has started to prepare the IHCA 2022-23 budget. The Finance Committee will present the budget to the IHCA Board of Directors for approval in late February. We will publish the budget in April Connections, with ratification scheduled at a community meeting in late April.
Finance Committee members are Issaquah Highlands homeowners who volunteer their time to serve on the committee. The IHCA board appoints committee members who work directly with IHCA staff to develop a budget recommendation to present to the board. Using a proactive group effort, the Finance Committee develops the budget using financial expertise, knowledge of the community and legal requirements, and a commitment to maintaining the community-wide standards.
Once the Finance Committee reviews and approves the budget, the committee presents the budget to the IHCA Board for approval. After approval, the board schedules an open meeting to publicly ratify the budget. Per 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.
There are many factors the Finance Committee must consider when developing the community budget. These driving factors include:
- Protecting the integrity of the investment of every homeowner 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 experience. The Finance Committee also reviews the income needed to maintain the reserve fund at sufficient levels. Reserve funds provide funding for the repair and replacement of the community’s assets, such as playground equipment, drainage infrastructure, and irrigation equipment. Armed with this knowledge, the committee estimates total expenses for the coming year and compares that sum to the IHCA’s potential revenue (assessments, interest on investments, and shared costs revenue). The committee looks for ways to lower expenses without compromising service and addresses areas where operating efficiencies may be realized.
The annual budget must also meet all federal, state, and county legal requirements regarding nonprofit association operation and addresses any economical and operational challenges that may lie ahead.
Kristyn McKinnon is the IHCA accounting manager. Get additional IHCA updates on the IHCA mobile app.
