Asst. Controller Discussed 2025 Budget – Rising Costs

Phyllis Shaddix presented 2025 Budget

At the November 20, 2024 Board Meeting, Assistant Controller Phyllis Shaddix presented the proposed HSVPOA 2025 Budget, expressing concerns about rising costs. Below are some of the highlights mentioned. To view the proposed budget, members can go here > ExploretheVillage.

Shaddix stated, “The Directors of all of our departments were heavily involved in building this budget, which we feel is one of the most accurate in recent years.” An in-depth analysis of revenue and expenses was made across all areas. Assessment increases and fees are modest, and there is a current plan to boost marketing and marketing efforts to attract new residents and visitors. “We’ve thoroughly explored the strategies to control costs without compromising the service quality.”

The Village offers services comparable to surrounding municipalities, including police, fire, water, sewer, and streets without the advantage of tax revenue. “We are aligning our revenue strains, including assessments, utilities, golf, and recreation, with the industry standards to sustain these services effectively.”

A large portion of operational expenses is comprised of staffing and payroll. Salaries, wages, benefits, and payroll taxes represent over 50% of the total budget. Our workforce is an integral part of our community’s success. Our efforts to attract, retain, and motivate employees enable the POA to deliver consistent and outstanding service to the Hot Springs Village Community.

Rising operational costs

“Healthcare costs continue to rise nationwide.” This expense directly impacts our self-funded health insurance program. A 15% to 17% increase over 2024 has been budgeted for this category.

A 20% increase in general insurance costs for 2025 is also anticipated.

Electricity rates have increased, affecting all departments.

While the above increases are not avoidable, cost-saving measures have been implemented to help balance the expanding expenses.

Issues and concerns

The costs of essential commodities, including fuel, electricity, and chemicals, are concerning. These expenses will be monitored and adjusted if necessary.

Severe weather events in recent years have also affected operations and financial outcomes. “To address this, we have allocated additional money for potential weather-related incidents and the ongoing restoration efforts following the March 2024 tornado.”

New calculations and projections

“The 2025 projections were developed using various methodologies, including forecasting based on 2024 trends, escalation factors provided by our vendors, and projected increases for specific commodities like fuel and electricity.”

“Revenue projections are largely based on planned rate increases and anticipated 2025 [indecipherable]. Targets for certain activities such as new home constructions and golf rounds were established based on projected volumes and activity rate.”

“This balanced approach that we are putting forward ensures that we remain responsive to rising costs and the commitment to our financial stability and service excellent to our community.”

Staffing

“The [2025] staffing plan reflects a net increase of 13 employees compared to this year. Notable key changes are reduction of 18 full-time positions.” Roles that are no longer necessary are being eliminated. Part-time positions have increased by 31, which helps with flexibility. For efficient staff use, the part-time employees are moved to different areas when needed. Lower benefits are paid out to part-time employees.

2025 Budget will be voted on in December.

By Cheryl Dowden