Many homeowner associations find it difficult to hold the line on expenses. Simply keeping even with inflation calls for a annual increase in revenue. Fortunately, there are ways to reduce costs without cutting services. First, take a look at large expense line items such as:

Utilities     Compare utility costs with similar properties by asking your utility company for data. For example, track monthly water consumption for the last 24 months to detect large variations. There may be an undetected leak somewhere. If the association pays for all water, consider getting owners to cooperate with installation of interior faucet water restrictors.

Insurance     Raising deductibles will reduce the annual premium. Going to a $2500 or higher deductible will often reduce the premium significantly. A caution about this strategy. The deductible you bargain for is also called "self insurance." Any claim filed will assume that the HOA pays the deductible portion before the balance is covered by insurance. So, rather than ignore this possibility, the HOA should include a line item in the Operating Budget called "Insurance Deductible" that's at least equivalent to the amount of the deductible. An alternative, if the HOA has few claims, is to include this component in your Reserve Plan and spread the deductible amount over 2 or 3 years. If the money isn't spent, it can be rolled forward to the next two or three year period.

Landscaping     Save on water and maintenance costs by replacing your lawn sprinklers with drought-tolerant ground covers where possible. Consider adjusting the sprinkler clocks to water one less time a week or better still, install a rain override detector.

Pools     Check heater temperature and pump cycle times, and adjust for savings. Swimmers may not notice a two degree drop in temperature, but lower temperatures significantly decrease the electric bill. Install a solar, water heating system if the location and availability of sun permits. These systems are not cheap, but can often pay for themselves in several years and thereafter drastically reduce water heating bills.

Lighting     Convert to high lumen, low energy lighting like compact fluorescents (CF). Though there is an initial expense, the payback period is often only one to two years due to significantly reduced power costs. Since CFs last ten times longer than incandescents, labor cost savings are significant as well.

Postage & Mailing     Many meeting notices and information can be distributed to residents by way of flyer boxes like the ones used by real estate agents. Even better, most HOA residents now use email and would welcome email communications. Save stamps, envelopes, and time.

Preventive Maintenance     HUGE savings here. Catch problems when they are small enough to resolve cheaply. Requires periodic property review with a maintenance checklist follow up.

Keep looking for other ways to trim costs. If you play your cards right, costs will go down and service effectiveness will go up. It can be done.