Definition
The annual plan for an HOA's recurring income and expenses, used to set dues and guide day-to-day spending.
The operating budget is the association's yearly financial plan for its recurring income and expenses — the routine cost of running the community, separate from long-term reserve funding.
It projects costs like landscaping, utilities, insurance, management, and repairs, then sets the dues needed to cover them plus reserve contributions. A good budget starts from last year's actuals, funds reserves as a required line, and includes a contingency. Boards should track actuals against the budget throughout the year to catch overruns early.