Budgeting is never easy, not for a family of four and certainly not for a co-op  or condo community of hundreds or thousands of residents. That fact is made all  the more difficult by the lingering effects of the recession, which continues  to wreak havoc with our confidence as well as our overall bottom line. For many  boards, trying to balance a budget these days requires making difficult  choices. If the budget is falling short, what is the solution? Raise more  revenue by raising fees? Or reduce costs by cutting back on services and  amenities? For residents, neither option is likely to win a popularity contest.  

 So how does a board determine the best ways to keep their bottom lines in the  black? And if unpopular choices must be made, what is the best way to break the  news to residents?  

 What’s Flexible, What’s Not

 For co-op and condo communities of all sizes, a budget is not necessarily a  highly flexible entity. In the past, says Richard Apell, a controller at Argo  Real Estate, LLC, a Manhattan-based management firm, “I’ve pointed out to shareholders that up to 93 percent of expenses are  non-controllable. Within that 93 percent is the mortgage, insurance, taxes and  payroll.” For the most part, those prices are fixed from year to year with very little  room for maneuvering unless a mortgage is up for refinancing or it is a new  contract year for unionized staff. Otherwise, the prices that are locked in at  the beginning of the year will still be the same at the end and likely for  several years after that, he explains.  

 Jeff Stillman, CPA, vice president of Stillman Management Inc., based in  Mamaroneck, New York, agrees, defining the major pieces of most budgets as “inflexible.”  

 And the pieces that are moveable usually offer very little in the area of  control either. Fuel costs are a prime example, says Floyd Brigman, an account  executive at Stillman Management. He recalled that the year before they were  working on a fuel budget of a little over a dollar a gallon and this year, it’s more than three dollars. “That’s a $250,000 shortfall,” he says. “You can’t make that up in the blink of an eye.”