FEATURE
Preparing Budgets for Security Guard Services in the Future
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By Kimberly Burnett
ne of the challenges boards are facing today are rising costs of security guard services. Most boards are seeing budget shortfalls because, like all of us, we didn’t anticipate California’s minimum wage increases, which, starting in 2017 are a steady eight percent each year. From the years 2008 to 2014, minimum wage was $8.00 an hour. This made budgeting easy to plan. In 2014 there was a 12 percent increase to $9.00 per hour. Each year since then, there has been an increase of $.50 to $1.00 per hour. In 2019, minimum wage is $12.00 for most security guard companies. The rate will increase again in January 2020 to $13.00 per hour – that is a $5.00 per hour increase since 2014. Boards must realize that these minimum wage increases will eventually impact community association assessments. Unfortunately, many boards are still waiting to increase assessments. The longer boards wait, the greater the negative impact will be on association residents. There is no way to avoid these increases and boards need to plan now for how they will impact budgets over the next five years. For example, at a gate that has manned coverage 24 hours a day, seven days a week, we are talking
about an annual increase of approximately $8,700 or $1 for every hour worked. In preparing budgets for security, board members will want to also consider associated cost increases that will be reflected in their bill rates like increased payroll taxes and administration costs. Boards are not just seeing an increase
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Quorum August, 2019
of $1.00 per hour but more like $1.30 to $1.50 an hour. Of course, this assumes the lowest pay for all the officers, which is rarely the case for associations. To keep good officers, there must be upward mobility and monetary incentives to stay with a company. Officers will leave for positions that pay more or even for the same rate if there is less work. Since turnover and quality of officers are among a board’s greatest concern, some officers will likely be paid more than minimum wage. As minimum wages go up, so does the incentive pay. To make sure your dollars are being put to the best use, we recommend that boards who are going out to bid for security services, ask that companies include the pay rates of the officers in their proposals. The pay rate including benefits will directly reflect the caliber of the officers and services provided. Reviewing current and future security budgets should include evaluating the quality of officers, current turnover of officers, bill rates, current pay rates and benefits offered to the officers. It is also important to keep in mind that minimum wage increases will continue to go up by $1 per year until 2023. Raising assessments may be unpopular but for most associations, it is required to keep up with minimum wage increases. Take the time to inform residents clearly and often about the impact of California’s minimum wage increases so they can understand and support your budget decisions. Kimberly Burnett is the Business Development Manager for DSI Security Services. She can be reached at (909) 236-3827 or by email at kburnett@dsisecurity.com.
