Budget Process In the fall of each year the Management Team works with the Club’s Business Manager to prepare a projection of the current year’s operations. This is based on the year to date numbers as of August 31 and projected results for the balance of the year. The Finance Committee uses this projection to provide management with assumptions, such as the estimated number of new members and continuing membership numbers to use in building the next years numbers. Any estimated shortfall for the current year is included as an operating expense in the next year. Based on these assumptions, management prepares a preliminary budget of revenues and operating expenses for the upcoming year. A dues structure is created which will ensure that projected revenue equals the total of operating expenses. This budget draft is presented to Finance in early October for a detailed review and modification. Finance is most concerned about maintaining the proper balance between dues increases and services to our Members.
In late October, a joint meeting is held between Finance, the Board of Governors and the Board of Trustees, at which time Finance presents the Operating Budget, the Capital Replacement Reserves Budget and The Capital Enhancement Budget for discussion and approval. Once approved, modifications may be made based on actual results during the months of September through December. Any estimating process is extremely difficult and subject to errors beyond the control of the estimators. As you can see by the above process, many involved and experienced people participate in development of the budget in an attempt to mitigate these errors. It is not unusual to review six or more budget drafts before the final budgets are approved. - Page 18 -