By Nathan Peirce / Published April 2021
One of the most critical tasks for any business or organization is its annual budget. As part of an overall financial plan, this budget must include line items for things like estimated revenue and expenses, as well as reserve fund contributions. For homeowners associations (HOAs), budget planning involves a lot of projections, but it is much better to get accurate numbers. To accomplish this, HOAs look at their vendor contracts and send out requests for proposals (RFPs) to determine how much they plan on charging for their services within the coming year.
Preparing the annual budget is the most important task HOAs accomplish all year. Your community’s landscape budget is undoubtedly one of your highest costs, with the average HOA in Florida spending anywhere from 10 to 50 percent of its budget on landscaping services. As the largest line item of your budget is discussed and decided, or as RFPs and bids are voted on, there probably is not a single landscape professional in the room. With many community professionals basing their landscaping and enhancement budget on previous contracts, decision-makers do not even know what they are paying for. Without becoming a landscape professional overnight, here are some tips to keep your landscape budget built for battle.
After 2020, it is clear that each year is unpredictable. While previous annual budgets may or may not have gotten you through those years, they should never be reused. Not only do a variety of costs fluctuate year by year, but your association’s needed repairs and replacements will also be variable. While special attention should be given to building your initial annual budget, you also will need to pay just as much attention to revisions. You are already aware of what renovations are needed or planned for the upcoming year. As the year progresses, begin making changes to your budget and to your reserve funds to prepare for those upcoming changes and projects.
While those voting on the final budget may not be landscape professionals or have spent time in the industry, they should all understand some of the minimum requirements and standards for the green industry. The largest cost for a landscaping vendor, regardless of anything, is labor. Labor itself is highly volatile, with changes in the minimum wage affecting how much that labor costs the vendor. Recently passed Florida legislation has put in place a gradual increase in the minimum wage. That cost will increase for vendors and, ultimately, HOAs as well. As we get closer to a $15 minimum wage, your budget will need to expand to match.
In the same vein, understanding how landscape vendors calculate what this labor will cost is invaluable to you as a community professional. The more green spaces and vegetation your property has, the more time and person-hours are necessary to properly maintain them. Similarly, areas of your property may be more difficult to maintain or have exceptional circumstances, such as slopes or waterways, which will take extra time and safety precautions. Landscape professionals, regardless of the company, are trained to value safety more than anything else. The precautions that are taken to uphold this safety, including insurance, protective equipment, and training, add up to affect the labor and time needed to make your property perfect.
Why are landscape budgets one of the HOA’s largest expenses? The quality of your landscape and the effort used to maintain it have real and lasting effects on property values and the satisfaction of your residents. While residents never like an increase in HOA fees, the one thing they like less is shoddy work. Living in an HOA community carries with it the knowledge that a homeowner is paying extra for the inherent benefits of your community, the most important of which is aesthetic. To maintain or even elevate the beauty of your community and its value, special attention must be given to curb appeal, aesthetics, and overall design. While you may save money by only having a quick mow and trim as your maintenance, angry residents will make you think twice about cutting debris removal from the budget.
Previous budgets and solicited RFPs can help give you an idea of prices and costs, but nothing can replace a trusted professional. Having someone willing to give you advice without you signing a contract is typically someone to keep around, even if you do not intend to use their company.
Utilizing a landscape professional, whether it’s a business developer or a horticulturist, means having a point of reference for line items, extraordinary circumstances, and planning for future projects and renovations. When you begin soliciting RFPs and speaking with vendors, having a landscape professional to refer to can help you sort through the fluff and get down to the practical details of what you need and what the vendors are offering.
Landscape companies that are confident in their work will always be willing to share advice without needing a formal RFP or verbal agreement. While there will be the odd person who is more concerned with prospecting than providing compassionate help, the best landscape professionals care for your property as if it were their own.
If you want to properly prepare an HOA budget, you must consider all possible factors. Be sure to enlist the help of professionals when it comes to budgeting for landscape services, one of the most expensive line items in your annual budget. Also, understanding the scope of work and any changes to past contracts are key to successful budgets and thus happy homeowners.
Business Development Manager, Down to Earth Landscape & Irrigation
As an accomplished landscape professional, Nathan Peirce brings more than 10 years of green industry experience to Down To Earth. As Business Development Manager, he has helped countless community associations make a difference on their property and has fostered meaningful relationships with his clients. He frequently participates in and presents at community events in the Sarasota-Bradenton area. You can reach Nathan at (813) 597-4419 or via email at firstname.lastname@example.org.