President's Message WWW.CAINE.ORG YEAR-END PLANNING A s I settle in to write my last message as 2019 CAI-NE chapter president, I am reminded that much of what we do as managers is plan for the coming year. We typically begin this process as early as August, getting our property budget in a basic draft form that can then be modified over the next few months as our year-end numbers begin to solidify. Planning goes well beyond just the annual budget. Condominiums need to be forward-thinking as far out as 20 years to know what their financial needs will be down the road. A condominium is made up of many physical components and a reserve study or long-term equivalent capital plan should be part of the fiduciary responsibility of each board. Capital or long-term planning is usually done by a third-party reserve company or an independent engineering firm. The management firm will then incorporate the financial needs calculated in the study into the annual budget each year in the form of reserve funding. Each annual budget should also include an anticipated capital budget or cash flow for the upcoming year as well. The long-term capital plan is a living document and can and should change each year. Third-party preparers of these useful tools do their best to predict replacement of capital components based on the expected end of their useful life. Things rarely go according to such a forecast as capital items can require replacement unexpectedly due to unforeseen failure or they simply continue to work well and their life can be extended by several years beyond the study's estimate as a result of good preventative maintenance. Proper planning just makes good business sense. Deviating from good planning practices can lead to the unplanned and unfunded project or maintenance item which results in a reactionary response which typically is simply harder to execute successfully. Proactive planning and funding will result in the calming phrase, "We got this". Stay calm and plan on. Sincerely, Nicholas B. Boit, CMCA 2019 CAI-NE Chapter President 2 CONDOMEDIA December 2019http://WWW.CAINE.ORG