Preparing the HOA’s Landscape Budget

By Down To Earth / Published August 2022

If you are responsible for managing a property, chances are landscaping is an important factor to consider. So, what landscaping is needed? It’s all about an understanding of the property, what landscaping services are necessary for maintaining the property, the health of the plants, and choosing how to invest in the right areas that will make the property stand out. 

Preparing For Budget Season

     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 30–60 percent of its budget on landscaping services. As one of the largest line items in the budget, often boards are voting simply on price versus meeting with and understanding who the association may be partnering with. Many community professionals base their landscaping and enhancement budget on previous contracts, while key decision-makers may not know what they are paying for exactly. Without becoming a landscape professional overnight, here are some important items to understand while you prepare your landscape budget.

This Year’s Impact

     After 2020, it is clear that each year is unpredictable. While previous annual budgets may or may not have gotten the HOA through those years, they should never be reused. Not only do a variety of costs fluctuate year by year, but property needs such as repairs and replacements will also be variable. While special attention should be given to building the initial annual budget, the HOA will also need to pay just as much attention to revisions.

     According to the Wall Street Journal, as of May 2022, landscape costs are up over 22.4 percent compared to the same time last year. There are many factors impacting this increase as landscape companies work diligently to absorb costs. When challenges have occurred such as rising costs for fuel, labor, plants, and equipment, communities must understand how this can impact their current and future costs for services.

     What can the HOA expect when reaching out to landscaping companies for quotes? Pricing could increase from 10–20 percent depending on the services requested. The driving factors that are causing this increase of prices include the following: fertilizer costs have increased more than 20 percent, gas is up by more than 50 percent, and equipment is up by 15 percent. Also, most landscape companies are now incorporating fuel surcharges in agreements; this shouldn’t come as a surprise. Typically, it will be a percentage of the contract value or monthly invoice, and it can be expected to be anywhere from two to eight percent, depending on the cost of fuel. 

Use A Trusted Professional

     Previous budgets and solicited RFPs can help give the HOA an idea of prices and costs, but nothing can replace a trusted professional. Having someone willing to give the association advice is typically someone to keep around, even if the HOA does 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 the association begins soliciting RFPs and speaking with potential partners, having a landscape professional to refer to can help sort through the fluff and get down to the practical details of what the community needs and what the providers 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 may be the odd person who is more concerned with prospecting than providing compassionate help, the best landscape professionals care for the association property as if it were their own. 

Red Flags to Look for When Choosing a Landscaping Company 

• Pricing—Making sure it’s realistic. There might be a company who can cut down their prices, but it is important to not take the low-ball price, and ask if cutting down the price is worth cutting corners on the services provided.
• Clients/References—Check them! When a landscaping company provides their references, it is important to look into how long their references have been a client. Looking for any signs of a high turnover rate of references or employees is crucial.
• Experience—Who will be overseeing and performing the services? What types of certificates, training, or experience do they have? Did the board meet with them? How did they communicate? How do they manage their partnerships? Who is the contact person(s) for the association? Make sure the board knows who they’re partnering with!
• Contract Terms & Insurance—Confirm they are properly insured so as to protect your property, and have a clear understanding of the termination clause just in case things don’t work out. This is essential.

     If the board wants to properly prepare an HOA budget, they 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 the annual budget. Also, understanding the scope of work and any changes to past contracts is key to successful budgets and thus happy homeowners. Boards of directors and management carry a lot of responsibility, especially when it comes to the care of the community. Take the time to carefully consider the HOA’s partners and how the overall changes in the current economy can directly impact the community while preparing budgets this year. 

Conclusion

     Budgeting for this year is just as important as every year previously, but this year does have increasing prices that do need to be considered when preparing an annual budget. If you are looking for a professional landscape quote from a team who cares, please contact us today!

Down To Earth Landscape & Irrigation

     Down To Earth Landscape & Irrigation approaches each project with the same business strategy and principles that have made us successful for 30 years: surround yourself with personnel that care and offer services that exceed client expectation. We strive to build long-term customer relationships by delivering value through superior work.
     As a leading full-service landscape, irrigation, and landscape construction company proudly serving multiple regions across Florida, we specialize in large-scale commercial, residential, and resort services. From design and installation to ongoing maintenance, we can enhance any property. Contact us today at (321) 263-2700 or dtelandscape.com.