Building Reserves Ballots for 2016

Posted Notice of Reserves Meeting

Notices of Annual Budget and Reserves

The following are documents that were mailed out over the past month as notification of the annual budget and reserves meeting. Not all of these documents arrived to me at the same time, but I am posting them here all together for convenience. 

I have heard that some people have believed that they did not receive appropriate notice of the annual meeting. Most know that all Board of Director meetings that involve making financial decisions require a fourteen (14) day notice to the unit owners that will be directly affected by those decisions. I cannot speak for everyone, but I know that I got my notice appropriately early. I also know how serious the BOD takes their duty to provide adequate notice. I hope that any confusions and conflicts have been worked out. 

Reserves Meeting January 4th

Every year it is necessary to go through the motions of rejecting the full-funding of building reserves.  You should have received a ballot in the mail to fill out and turn in as your vote to reject, accept, or modify the building reserves.  By default (if you do nothing) your building's reserves are fully funded (a state law dictates that it be done that way).  So if you want to save yourself some money, join in with enough of your building's unit owners to reject full funding.  To see previous years posts on the subject, click here.

Building Reserves Funding

It is time, once again, for each building (each building is an individual condominium) to cast their collective vote regarding the funding of their building's reserve fund. By law, if the building does not vote, the owners will owe the amount that has been estimated by the BOD to fully fund the reserve fund for their building. In the years that I have observed the outcomes of the voting process, it is extremely rare that unit owners want to pay the fully funded amount. The forms below were mailed to unit owners to complete and return by the published date, January 28th at 7:30pm.

Question: Are Directors Trying to Circumvent Unit Owners' Right to Waive Building Reserves? Answer: No.

This year (2007) the current Board of Directors has not sent to unit owners the voting forms to waive building reserves. Is that because they are trying to avoid having buildings waive their reserves? No. I was informed by a member of the Board of Directors that the waiver was to have been included in the packet that was sent out to unit owners. It was not sent out to unit owners, yet. Perhaps there is another packet to be sent out, or supplemental mailing to be done that will include the waiver. Whatever the case, the law allows any building to waive reserves for the following year at any time.

The article below was written by Steve Frahm in the November 2006 issue of the TAJ newsletter. It is being included here to lend clarity to the current situation. [Prior to the December 2006 budget meeting, voting forms were sent out to unit owners so that they could vote on whether to accept or reject the building reserve budget that is proposed by the Board of Directors.]

The November 2006 article:
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Florida Statutes Chapter 718.112(1)(f)2. reads as follows:
“...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…
“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.
“...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.”

On December 12th (2006) the BOD will have a meeting at which unit owners’ votes will be counted regarding the reserves for their buildings. By law, failing to vote is the same as voting yes to significantly higher monthly maintenance payments in 2007. More information is included in the voting packet.
Steve Frahm
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As you can see from the 2006 article above, the budget meeting for the 2007 year was held in December, before the changes to monthly maintenance payments (including building reserves) were due for the following year. This year the Board seems to be running behind schedule a little bit by holding the the budget meeting (and apparently the building reserve vote) on January 7th, after the first payment for the year is actually due (the notice in the mailing said the first payment was due January 1st). However, the coupon for the first monthly payment in 2008 calls for payment of only the existing 2007 amount for the monthly maintenance fee. They have not required unit owners to pay for the new 2008 monthly maintenance amount with the building reserves added. They have properly chosen to wait until after the budget meeting to include the new 2008 amounts.

Anyone who has participated on the Board of Directors understands how difficult it is to get things done in a timely manner. The Board deserves our patience and support as long as they are working on our behalf to do things properly. I (for one) believe that this BOD is doing that very thing.

THE WISDOM OF BUILDING RESERVES
Finally, all unit owners should consider making some sort of contribution to their own building's reserves on a monthly basis. The Property Manager is going to place an emphasis on building maintenance in the coming year, I am told, which will be charged to each particular building's reserve funds. Rather than face a special assessment to pay for those maintenance expenses, it might be more painless to make monthly payments ahead of time.