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--- board_handbook:budget [2025/05/19 18:44] – wip awhetter
+++ board_handbook:budget [2025/05/22 01:29] (current) – Move note about vanacy losses to appropriate line item awhetter
@@ Line 6: / Line 6: @@
 The budget process changes a bit every year, but an example timeline is given below based on a previous year's timeline.
-  * **7th February**: CLT and COHO communicate the budget process for the year, including a timeline of key dates.
-  * **5th February - 28th March**: CLT budget preparation.
-  * **31st March**: CLT internally approves their budget.
-  * **1st - 4th April**: Budget packages sent to COHO management company in preparation of budget meeting with each individual co-op. Budget presentation meeting invitation will be sent.
-  * **15th - 18th April**: COHO management company completes each co-op budget and sends draft to CLT for review and comment.  Should include:
-    * Details of any income testing (if required)
-    * Recommended rent roll for housing charges to take effect 1st August
-    * Anything else that is specific to the project
-  * **21st - 28th April**: CLT to provide final comments and recommendations for co-op boards to approve budget.
-  * **5th - 9th May**: Budget presentation from CLT and COHO to co-op boards.
-  * **12th - 16th May**: Co-ops to provide a copy and confirmation of approved budget to CLT.
-  * **23rd May**: CLT to send out rent schedules.
 ^ **Date**  ^ **Activity**  ^
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 Our financial year begins in August. We aim to give members two months notice for changes to their housing charge, and therefore the budget process must complete before the end of May.
 ===== Our Role =====
 The Board works with COHO to draft the Co-op's budget.
 Drafting the budget involves:
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   * Reviewing CLT's and COHO's budgets. We identify changes in the budget by comparing it to the previous year's budget, and then consult with CLT and COHO to understand the changes.
   * Performing [[annual_income_verification|Annual Income Verification]] so that we understand which units have housing charges that are fixed and what those charges are.
-  * Adjusting members' housing charges so that the Co-op has enough income to pay for the year's upcoming charges as outlined in the CLT and COHO budgets.
+  * Adjusting members' housing charges so that the Co-op has enough income to pay for the year's upcoming charges as outlined in the CLT and COHO budgets. On the budget, this means that the COHO budget's total revenue needs to match onto the "rent" in CLT's budget.
+    * Note that we can also adjust other sources of income like charges for parking spaces and storage lockers, but adjustments to housing charges make up the lions share of our income.
+The budget should be an accurate reflection of what we expect to happen in the year. So we may request tweaks to the budget, not to save money, but to bring the budget in line with realities.
 This draft budget is sent to CLT, and includes the following information:
-    * The details of Annual Income Verification.
+  * The details of Annual Income Verification.
-    * Recommended rent roll for housing charges to take effect 1st August.
+  * Recommended rent roll for housing charges to take effect 1st August.
-    * Anything else that is specific to the project.
+  * Anything else that is specific to the project.
 ===== Understanding the CLT and COHO Budgets =====
+The budgets have three columns:
+  * This year: What the budget was for this year.
+  * Projections: The end of year cost will be for this year. This is calculated based on where we are in the year, projected to the end of the year. For example, if the budget was written when we are 7 months into the financial year, the projection would be calculated as: ''(current cost) / 7 x 12''
+  * Next year: The budget for next year. We can compare this with the "this year" column to identify changes in charges.
+==== Line Items ====
+This section describes what each line in the CLT and COHO budgets are for.
+=== CLT ===
+  * Rent: This is the rent that we pay to the CLT. The number on this line should match the "Current Surplus(Deficit)" line in the COHO budget. When the numbers match, it means that we've set our various revenues (namely housing charges) appropriately to cover both the budgeted expenses that are noted in the rest of the COHO budget and our rent to CLT.
+  * Other income
+    * Interest income
+    * Miscellaneous revenue
+    * Laundry income
+    * Other Revenue
+  * Contract Services
+    * Cleaning/Janitorial
+    * Garbage/recycling
+    * Landscaping
+    * Elevator
+    * Pest control
+    * Security
+    * Snow removal
+    * Fire & safety
+  * Repairs and maintenance
+    * Tools/supplies: This is for recurring operational expenses, primarily made up of routine maintenance items such as LED lights, plugs, counter plates, taps, moisture meters, and dishwashers.
+    * General Maintenance: Includes some technician costs, and more unspecified costs (FIXME: what are these costs?).
+    * Maintenance - units
+    * Maintenance - exterior
+    * Maintenance - common areas
+    * R&M - Units - Painting: Covers the repainting of units after members move out.
+  * Utilities
+    * Hydro/Electricity
+    * Water/Sewage
+    * Gas/Neighbour energy utility: Covers the neighbourhood energy utility ([[https://vancouver.ca/home-property-development/southeast-false-creek-neighbourhood-energy-utility.aspx|NEU]]) billed from the City of Vancouver. This does not cover gas usage in the building, because there is no gas in the building (FIXME: Needs confirmation).
+  * Administrative Expenses
+    * Bank charges: These are primarily incurred due to the use of Electronic Funds Transfers (EFT) for vendor payments made from the operating account.
+    * Business licenses and permits
+    * Insurance - General Liabilities
+    * Office supplies
+    * Property taxes
+    * Telecommunications: Covers a range of services, such as internet, office phone, elevator phone line, fire connection phone, security internet, and enterphone line.
+    * Co-op Sustainability Fund
+  * Professional Services
+    * Legal
+    * Audit/accounting
+    * Management fees
+    * Professional fees
+    * Professional Services
+  * GST Expense
+=== COHO ===
+  * 4000 Housing Charges
+  * 4050 Vacancy Loss: Losses due to vacancies (a unit being empty for a month and therefore there being no rent charge for that unit that month) are tracked as losses in the budgets to make them more visible. We aim to have less than $15,000 of vacancy losses in a year.
+  * 4400 Parking Income
+  * 4450 Storage/Locker Income
+  * 4475 FOB - Non Refundable
+  * 4700-1 Interest Income
+  * 4875 QMC reimbursement for AW
+  * 4900 Miscellaneous Income
+  * Operating Expenses:
+    * 5700 Insurance
+    * 5900 GST Expense: CLT takes care of the Co-op’s GST expenses. Therefore we should expect to see no GST budget for the Co-op in COHO's budget. We might see expenses for the current year, but we expect CLT to be taking care of those (FIXME How?).
+  * Repairs and Maintenance Expenses: CLT takes care of the Co-op's repair and maintenance. Therefore we should expect to see no repair and maintenance expense or budget for the Co-op in COHO's budget.
+    * 6000-1-0 Repairs/Maintenance - Units - General
+    * 6000-3-0 Repairs/Maintenance - Common Areas - General
+  * Administration Expenses:
+    * 7000-1 Telephone/Fax
+    * 7100-0 Office Expenses - General
+    * 7100-1 Postage/Courier
+    * 7100-2 Print & Copying
+    * 7100-3 Office Supplies
+    * 7100-4 Credit Checks
+    * 7200 Legal Fees
+    * 7400 Audit
+    * 7500 Management Contract
+    * 7550 Bank Charges
+    * 7600 Education
+    * 7700 Membership Dues
+    * 7775 Travel/Meetings/Conferences
+  * Committee Expenses:
+    * 8000-01 Membership/Applications Committee
+    * 8000-07 Landscaping/Grounds Committee
+    * 8000-09 Other Committee Expenses