Meetings: Budget

In this and the following sections, we take you through the agenda of a strata corporation AGM.

Legislation

27—Power to raise money

(1) A strata corporation may raise such funds (including reserve funds for future expenditure of a capital nature) as it thinks necessary.

(2) For the purpose of raising funds the strata corporation may, by resolution, levy contributions against all unit holders.

(3) The contributions—

(a) will be proportional to the unit entitlements of the various units; or

(b) will be determined on such other basis as the strata corporation decides by unanimous resolution.


Budget

BUDGET:
The Chair/Treasurer/Manager circulated and presented the budget estimates proposal, and pointed out that there were various philosophies that could be adopted to establish a budget.
1.         A balanced budget, which does not accrue any funds for future known or unknown events, however predictable expenditures; or
2.         An accrued budget, which sets aside a proportion of regular contributions for the specific purpose of providing for future expenditure eg. driveway maintenance, repainting (known as a Reserve Fund or Sinking Fund).
It was resolved following discussion that the following recommended Budget Estimates be adopted.

Moved____________ / Seconded ____________ Motion carried

******  insert budget here ****** 

CONTRIBUTIONS:
Administration Fund: In accordance with this resolution, the total quarterly contribution to the Administration Fund will increase to $_______   from  ___/___/___ or remain at $_______ .

Sinking/Reserve Fund: In accordance with this resolution, the total quarterly contribution to the Sinking/Reserve Fund will increase to $_______   from  ___/___/___ or remain at $_______ .

Contributions are divisible by unit entitlement, as defined upon the deposited plan.
OR
Contributions are divisible equally rather than by unit entitlement, as defined upon the deposited strata plan. (requires a unanimous resolution if a change in how owners currently pay)

Best Practice

As treasurer:

  • have a draft budget at hand along with copies for all present
  • ensure your group does not go into deficit during any quarter of the coming year
  • do not be afraid to recommend levy changes if you are able to show they are needed

The following is a proforma policy regarding overdue contributions. We strongly suggest all groups adopt this or a similarly policy.

OVERDUE CONTRIBUTIONS INTEREST & FEES:
Policy - Overdue Contributions Interest & Fees: That the payment of the Corporation Account Notice is the responsibility of each unit holder, and accounts must be paid within twenty-eight (28) days of the due date for payment.  If any account is not paid within 28 days of the due date, unit owners are required to pay interest on the overdue amount at the rate of twelve (12%) per annum calculated from the due date until payment. They must pay all expenses incurred in pursuing recovery of overdue amounts including: but not limited to, legal fees, administrative costs, location and service fees and any commission payable to debt recovery consultants or solicitors. If the account is not paid by the due date a reminder notice will be sent with a late payment charge of $11, including GST.

Moved____________ / Seconded ____________ Motion carried

The following allows for the recording of any special levies required. These may be for insurance, painting or other one off payments.

SPECIAL LEVY:

(unit entitlement)
Resolved that a levy totalling $# be charged in accordance with unit entitlement in respect of each unit, to those persons registered as proprietors of a unit at the date of this meeting. This is due on ___/___/___ for the purpose of ________________.


Moved____________ / Seconded ____________ Motion carried

OR (equally)
Resolved that a levy totalling $_______ be charged equally, in respect of each unit, to those persons registered as proprietors of a unit at the date of this meeting and be due on ___/___/___ for the purpose of ________________. (requires a unanimous resolution if owners currently pay by unit entitlement)

Moved____________ / Seconded ____________ Motion carried

Tools

The following may be of assistance.

Budget Pro forma

budget
Click on picture to view & edit

Budget Examplebudget example
Click on picture to view

Levies Explained

levies explained
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Meeting Minutes Pro forma

minutes proforma
Click on picture to view video

Meeting Procedure Rules

meeting rules
Click on picture to view

Three Laws of Meetings

unite group
Click on picture to view


Link to next step - Policies