The letter below was sent to the blog administrator after having been sent to the BOD. The author says that he has not received a response to his inquiry.
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With all due respect to the Board and finance committee who volunteered their time, why are we still having issues with the budget?
"Fully funded reserves" DOES NOT mean collecting all the funds in one year: it means determining the remaining useful life of the assets, how much is already in the bank, and how much is still left to collect. In 2009, the total amount to fully fund reserves was $25.33 per unit per month for the outstanding balance of $1.5 million, of which $103,000 was scheduled to be collected in 2009 to fully fund them that year. Based on the budget we received a few weeks back in the mail, the finance committee is using the same spreadsheets that were created several years ago and have in them the calculations for funding the association reserves.
I am unable to figure out how someone came up with $325 per unit per month, or $1.32 million, for 2011 ....we're not supposed to collect all of the funds in one year. And if an asset is already fully funded we don't have to fund it any further. State law I believe also requires the Board to re-evaluate the reserves every couple of years to correct the amounts and useful life - has this been done?
Your accountants - who may already be subject to disciplinary actions for not transferring 2010 and prior common area and building reserve funds each month to a separate reserve account as required by law and which you were previously notified about - should have corrected or advised you on this.
Please see the attached sheets from the proposed 2009 budget - specifically the Common Area Reserves worksheet that had the calculations from 2009.
I am not that smart, but I am smart enough to know that something is wrong when it took me less than 5 minute to review the old files, and your current spreadsheets you sent to us the other month, to see the mistakes. Our budget could have remained the same as last year and fully funded the reserves at about $23 per month per unit, or about $16 per month more than the first budget notice and $302 per month less than the budget you just sent us.
Who will be addressing this at the meeting on Thursday night? Who will answer the questions about insurance deductibles and were they passed back to all the units in the Association or did just the units in the buildings affected pay the deductible on their insurance claims, such as Building 2 and 31 (by law each building is responsible for their own expenses, including insurance premiums and deductibles)? When will the reserve funds that the Associaton colllected be transferred to the Reserve Accounts per Florida Statutes since Moody never transferred them (board votes don't override the law)?
Thank you.
**************************************
With all due respect to the Board and finance committee who volunteered their time, why are we still having issues with the budget?
"Fully funded reserves" DOES NOT mean collecting all the funds in one year: it means determining the remaining useful life of the assets, how much is already in the bank, and how much is still left to collect. In 2009, the total amount to fully fund reserves was $25.33 per unit per month for the outstanding balance of $1.5 million, of which $103,000 was scheduled to be collected in 2009 to fully fund them that year. Based on the budget we received a few weeks back in the mail, the finance committee is using the same spreadsheets that were created several years ago and have in them the calculations for funding the association reserves.
I am unable to figure out how someone came up with $325 per unit per month, or $1.32 million, for 2011 ....we're not supposed to collect all of the funds in one year. And if an asset is already fully funded we don't have to fund it any further. State law I believe also requires the Board to re-evaluate the reserves every couple of years to correct the amounts and useful life - has this been done?
Your accountants - who may already be subject to disciplinary actions for not transferring 2010 and prior common area and building reserve funds each month to a separate reserve account as required by law and which you were previously notified about - should have corrected or advised you on this.
Please see the attached sheets from the proposed 2009 budget - specifically the Common Area Reserves worksheet that had the calculations from 2009.
I am not that smart, but I am smart enough to know that something is wrong when it took me less than 5 minute to review the old files, and your current spreadsheets you sent to us the other month, to see the mistakes. Our budget could have remained the same as last year and fully funded the reserves at about $23 per month per unit, or about $16 per month more than the first budget notice and $302 per month less than the budget you just sent us.
Who will be addressing this at the meeting on Thursday night? Who will answer the questions about insurance deductibles and were they passed back to all the units in the Association or did just the units in the buildings affected pay the deductible on their insurance claims, such as Building 2 and 31 (by law each building is responsible for their own expenses, including insurance premiums and deductibles)? When will the reserve funds that the Associaton colllected be transferred to the Reserve Accounts per Florida Statutes since Moody never transferred them (board votes don't override the law)?
Thank you.
718.111 (14) - note: we don't have investment funds, and Moody never transferred our reserve funds to our reserve accounts!COMMINGLING.—All funds collected by an association shall be maintained separately in the association’s name. For investment purposes only, reserve funds may be commingled with operating funds of the association. Commingled operating and reserve funds shall be accounted for separately, and a commingled account shall not, at any time, be less than the amount identified as reserve funds. This subsection does not prohibit a multicondominium association from commingling the operating funds of separate condominiums or the reserve funds of separate condominiums. Furthermore, for investment purposes only, a multicondominium association may commingle the operating funds of separate condominiums with the reserve funds of separate condominiums. A manager or business entity required to be licensed or registered under s. 468.432, or an agent, employee, officer, or director of an association, shall not commingle any association funds with his or her funds or with the funds of any other condominium association or the funds of a community association as defined in s. 468.431.
718.111(3)(f) - note: description of how to compute association reserve funds
Annual budget.—
718.111(3)(f) - note: description of how to compute association reserve funds
Annual budget.—
2.In addition to annual operating expenses, the budget shall include reserve accounts for capital expenditures and deferred maintenance. These accounts shall include, but are not limited to, roof replacement, building painting, and pavement resurfacing, regardless of the amount of deferred maintenance expense or replacement cost, and for any other item for which the deferred maintenance expense or replacement cost exceeds $10,000. The amount to be reserved shall be computed by means of a formula which is based upon estimated remaining useful life and estimated replacement cost or deferred maintenance expense of each reserve item. The association may adjust replacement reserve assessments annually to take into account any changes in estimates or extension of the useful life of a reserve item caused by deferred maintenance. This subsection does not apply to an adopted budget in which the members of an association have determined, by a majority vote at a duly called meeting of the association, to provide no reserves or less reserves than required by this subsection. However, prior to turnover of control of an association by a developer to unit owners other than a developer pursuant to s. 718.301, the developer may vote to waive the reserves or reduce the funding of reserves for the first 2 fiscal years of the association’s operation, beginning with the fiscal year in which the initial declaration is recorded, after which time reserves may be waived or reduced only upon the vote of a majority of all nondeveloper voting interests voting in person or by limited proxy at a duly called meeting of the association. If a meeting of the unit owners has been called to determine whether to waive or reduce the funding of reserves, and no such result is achieved or a quorum is not attained, the reserves as included in the budget shall go into effect. After the turnover, the developer may vote its voting interest to waive or reduce the funding of reserves.
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