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ANNUAL BUDGET AND RESERVE FUNDS
By
Jan Bergemann
Published August 21, 2020
It’s a matter of how
you look at it when answering the question: Is it time to
work on the annual budget?
In my opinion it’s a
little early, considering the uncertainty of financials caused
by the Chinese Virus. Many families are in financial limbo due
to the fact that the Democrats are stalling the COVID-19 Relief
Package in Washington, which will cause more families to fall
behind in paying their maintenance fees. In the moment it should
be really more important to help families and businesses in need
instead of trying to bail out mismanaged cities and states.
We all don’t know
yet how this crisis will influence the income of our community
associations and how to deal with it. We will definitely know
more in November, when it’s time to vote on the budget
proposals.
According to the
comments posted this week the big question in regards to the
budget seems to be the issue of reserve funds. Please disregard
the comments of some folks who think they know it all, just read
the Florida statutes that show in detail how the funding of
reserve funds should be accomplished and what influence the
members can have on the funding of reserves.
Please read
FS 718.112(2)(f) – Annual Budget. It
explains in detail how an annual budget is supposed to be
created and how the membership can vote on how to waive reserve
funding, or only fund the reserves partially.
In my opinion
RESERVES are very important. It’s a lot easier on
owners’ finances if paying in monthly installments instead of
the board having to levy a special assessment telling owners
that a big amount of money is due for necessary maintenance or
repairs within 30 days. Some of you may still remember the many
foreclosures on family’s homes after hurricane Wilma in 2005,
when most associations didn’t have reserves and had to levy big
special assessments just to cover the cost of the insurance
deductibles after the hurricane damage. Many families couldn’t
come up with the money to pay for the special assessment and
lost their homes to foreclosure by the association.
Just follow the
budget guide lines as described in the Florida statutes – and
please allow the reserve funds to be fully funded. Otherwise we
might see again financials disasters and foreclosures in
community associations.
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Jan Bergemann is president of Cyber Citizens For Justice,
Florida
's largest state-wide property owners' advocacy group.
CCFJ works on legislation to help owners living in
community
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associations. He moved to
Florida
in 1995 - hoping to retire. He moved into a HOA, where the
developer cheated the homeowners and used the association dues
for his own purposes. End of retirement!
CCFJ was born in the year 2000, when some owners met in
Tallahassee
- finding out that power is only in numbers. Bergemann was a
member of Governor Jeb Bush's HOA Task force in 2003/2004.
The organization has two websites to inform interested
Florida
homeowners and condo owners:
News Website: http://www.ccfj.net/.
Educational Website: http://www.ccfjfoundation.net/.
We think that only owners can really represent owners, since all
service providers surely have a different interest! We are
trying to create owner-friendly laws, but the best laws are
useless without enforcement. And enforcement is totally lacking
in
Florida
!
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