Our budget year starts in January. The outgoing board proposes a budget that is adopted at the annual owners' meeting in February, when the new board is elected. Does the new board have to re-approve line items in the budget before work can be done or money is spent? Is it the budget committee's responsibility to recommend what work needs to be done, such as improvements or enhancements, or is that the responsibility of some other committee? Our treasurer and the head of the buildings and grounds committee have the authority to spend up to $500 without board approval. Where does this right come from?
This is budget time. In most associations the members do not vote on the budget; that is the responsibility of the board of directors. Read your documents. If the board has no power to approve budgets and assessments, it can't fulfill its responsibility to the members to operate and maintain the association and the common areas.
Let's walk through the budget process and timetable.
Condo boards should start by reviewing FS 718.112 and 718.504. Homeowner associations have fewer requirements, but the process should follow similar guidelines. The budget committee reviews the current year's financial report and estimates expenses for the coming year: insurance, utilities and phone, landscaping service, pool maintenance, janitorial service and supplies, staff salary and benefits, office supplies, printing, postage, etc. Check with the service providers with whom you have contracts to learn what increases they anticipate in 2005. Any committees or groups that incur expenses covered by the budget should submit their budget proposals. The budget committee should also seek information from the board and other committees on major projects that will be scheduled for the next year. Is this the year the entry monument needs refacing, or the clubhouse needs refurbishing, or the hurricane-damaged landscaping needs replacing, and where will that money come from?
The committee must hold open meetings, publicized in advance, and must complete a proposed budget, which it presents to the outgoing board for approval. Then a copy should be sent to each member of the association along with the notice of the board meeting at which the board (not the members) will vote final approval. This is the outgoing board's legacy to the new board. The new board you elect at the annual meeting in February does not need to re-approve the budget.
This process takes several months. A typical timetable is to start work in August and seek approval of the proposed budget in October and final approval in November. Many documents require 30 days' notice to members before fees can be increased.
It is very common for boards to authorize the treasurer, grounds committee chair, president, or manager to spend a certain amount of money, such as $500, without prior board approval. That allows them to operate the association on a day-to-day basis, taking care of minor repairs and maintenance jobs without calling a board meeting every time they need to have a lock re-keyed, buy a new pool filter, replace the exterior lightbulbs, or have a door painted or a pane of broken glass replaced.
Get your topic on agenda
May unit owners speak at the annual meeting? I have a proposal to hire a manager for our clubhouse, and I want to take advantage of the opportunity to reach a large number of owners at this meeting by making the proposal before them. The board would discuss it and vote later.
Members may speak, but only on subjects on the agenda. You cannot simply raise your hand and start talking about a subject that is not an agenda item. Send the board a letter several weeks in advance describing the subject on which you would like to speak and asking that it be placed on the agenda for the annual meeting.
Speakers may face limits
Can the board limit the time a member can speak at the annual meeting of our homeowner association? Members are not allowed to speak at board meetings.
The board can establish a reasonable time for members to speak on agenda items only (see the previous question) at the annual meeting. Three minutes is considered reasonable. The board can require that people sign in before the meeting and indicate the topic on which they wish to speak.
Unit owners do have the right to speak at board meetings, but again, the board can establish restrictions. A board meeting is a business meeting for the board, not a gripe session or a rant-fest for unit owners. The board is not obliged to allow unit owners to ramble on or attack and harangue nonstop.
The way to assure that you can speak is to mail the board a letter well in advance of the meeting asking to be put on the agenda to discuss a specific topic.
- Richard White is a licensed community associations manager. Write to him c/o Community Living, St. Petersburg Times, P.O. Box 1121, St. Petersburg, FL 33731. Sorry, he can't take phone calls or provide personal replies by mail, but you can e-mail him at CAMquestions@att.net Please include your name and city. Questions should concern association operations; legal opinions cannot be offered. For specific legal advice, contact an association attorney.
Readers may call the state Division of Condominiums Bureau of Customer Service toll-free at 1-800-226-9101 with questions or requests for materials. Access the Bureau of Condominiums Web site at http://www.state.fl.us/dbpr/lsc/index.shtml or write to Bureau of Customer Service, 1940 N Monroe St., Northwood Centre, Tallahassee, FL 32399-1032.
Please note that this office provides no information about homeowners' associations. The state has no bureau or department covering those associations.
