WWS 2010 Preliminary Budget Distribution

The WWS 2010 Preliminary Budget is being prepared for distribution to the owners. Next week the cluster advisers will be delivering the preliminary budgets to each cluster. Out of town owners will receive their packets in the mail.

The 2010 Preliminary Budget shows a reduction over last year's figures. Annual maintenance fees will be approximately $360 ($90 per quarter ) lower than last year if the BOD approves the budget as proposed. The major portion of this reduction comes as a result of a proposed revision in reserve accounting. The Budget Committee has recommended the adoption of a method known as 'pooling' that will combine our multiple reserve line item accounts into one fund.

Once the 2010 Preliminary Budget is accepted with the pooling of reserves, the owners must approve the transfer of existing reserve funds to the new pooled reserve fund. This must happen at a Special Meeting of the Owners. We have scheduled the Special Meeting to convene immediately after the November 23, 2009 BOD meeting.

Look for a voting proxy and return envelope in your budget packet. Each owner must vote to approve the transfer of reserve funds from our current line item accounts into the new pooled fund. Please complete and return your proxy to the office ASAP. This will insure that your vote is counted in the event you cannot attend the Special Meeting on November 23.

The BOD recommends you vote 'YES' on this item.


Director Terms. Déjà vu
I've had some discussion with a few owners about the following statement in my last post:

We have ten remaining Directors who were elected prior to the effective date of this law. Since the law is not retroactive, those ten Directors are allowed to complete their terms.

Some people have read that statement to mean that those 10 Directors are not up for election in March 2010. I included the statement to explain why only 5 Directors were elected in March of 2009 and not all 15. Those 10 Directors were allowed to complete their terms.

As another year passes, 5 of those 10 seats will be up for election in March 2010. Remember that our BOD had staggered 3 year terms until the law changed. So as each year passes, 5 more Director terms come to an end until all 3 year terms are gone.

Consider the following information:

We have 15 Directors on our BOD with the following status:

5 Directors on 3 year terms expiring March 2010
Elected 2007 - prior to the new law

5 Directors on 3 year terms expiring March 2011
Elected 2008 - prior to the new law

5 Directors on 1 year terms expiring March 2010
Elected 2009 - after the new law

A total of 10 Director seats are up for election in March 2010.

So the original statement as it was presented is correct. We have ten remaining Directors who were elected prior to the effective date of this law. Since the law is not retroactive, those ten Directors are allowed to complete their terms. 5 of those director seats will come to their natural term end in March of 2010 and will be open for election.

If nothing else, this highlights how confusing the whole issue can be.

Crunching the Numbers

The budget process will begin in earnest in a few days. It might be helpful to review some frequently asked questions to refresh your memory about how this happens. This entry is devoted to basic budget questions. As we move through the cycle, I will provide additional updates.

WHY do we budget?
It costs money every day, to cut the grass, heat the pools, answer the phone, spray the bugs, clean the gutters, pickup trash, pay for cable and all the other things that keep Wildewood Springs going. The budget process is the formal evaluation and decision process that we use to plan what we believe it will cost to run this community for the coming year.

WHAT is the WWS budget?
The annual budget is the anticipated cost for the coming year. The total dollar amount is allocated by unit size to 558 units as maintenance fees.

The budget is comprised of two main sections.
The first section, Reserves, are monies we accumulate for capital projects such as roof coating, painting and paving.
The second section, Operating Expenses, are the everyday expenses incurred in running Wildewood Springs such as trash, water, sewer, electricity, insurance, administration and cable tv.

WHO creates the WWS budget?
The Budget Committee develops the budget with input from the Property Manager and from service providers. The Board of Directors approves the WWS Budget and the Owners approve the funding level for Reserves.

HOW is this done?
All those costs mentioned above are reported and tracked during the year. When the budget cycle begins, the current year's costs are reviewed and considered to develop the new budget. Anticipated rate increases for items such as insurance, electricity, gas, water and trash are factored into the equation. The schedule for large capital projects such as painting must be reviewed to verify we are accumulating reserve monies at an adequate rate to have funds when the projects are planned to occur.

WHEN does the process occur?
The budget process dates are tentative. Here are the milestones:

April/May
The preliminary Budget Committee meeting. This is generally an overview of the cycle.

August/September/October
There are a series of meetings where the budget components are reviewed and revised.

October
The budget is presented to the BOD tentatively in the October meeting.
The Board gives approval for distribution and budget copies are distributed to all owners.

November
Final Board approval is tentatively planned for the November meeting.


WHERE do the meetings happen?
The first committee meeting is scheduled for Tuesday September 8, 2009 at 9AM in the Wildewood Springs office. Watch for official meeting notices on the office bulletin board and additional notices posted on the cluster bulletin boards, Channel 95 and the reminder email notices. Budget Committee meetings are open to all owners. Additional meetings will follow and be announced in the same fashion.

Looking Up

There's been much activity recently at Wildewood Springs. But unless you're accustomed to looking up, you may have missed it.

Tim our roof specialist has been working on the most recent round of roof cleaning. As you may recall, Tim was hired to provide a constant monitor on the new roof coating that was completed in 2007. Under his watchful eye, potential problem areas are identified and given appropriate remedial attention on a proactive basis. The result; we've had no billable roof maintenance since Tim has taken over this task. Plus the incidence of plugged gutters and has fallen virtually to zero.

The palm tree trimming has recently been completed. This is done each year in the mid summer. Removal of the dead fronds, flowers and seed pods eliminates debris that fall on the sidewalks, stairs and roof and may become projectiles during any high wind. The tree contractor also removed a number of dead trees and trimmed a a few problem trees on the grounds. The grounds look beautiful.




Special Meeting Information

We've finally been able to establish a date for the Special Meeting for the Documents Revision Mini Project. The Special Meeting is set for November 10, 2009 at 2PM. The location is not yet established.

We've also set aside two dates for workshops on the two amendments we'll be voting on.

• October 12, 2009 9AM Workshop Bylaws 4.3 Director Terms
• October 19, 2009 9AM Workshop Article X Insurance.

These workshops are established to help owners understand each amendment and ask related questions. More information will be published regarding these meetings as the dates approach.

Setting the Record Straight Part 2

or Everything you wanted to know about the Insurance Amendment

The Board of Directors has voted to submit two proposals to the members for a vote. The purpose of this entry is to discuss the reasons why the Board of Directors felt that the adoption of those two proposals would be in the best interests of the community.

This entry will also rebut and reject certain erroneous statements made by an anonymous author in the July 2009 Owners to Owners Community Newsletter.

This is part 2 on the upcoming Documents Revision. This article deals with the proposed Insurance Amendment.

Insurance Amendment

This is a difficult subject. The WWS Association Attorney recommended that we amend the Declaration to better address insurance. Excerpted at this link is a portion of WWS Attorney's Letter of January 14, 2009. That excerpt explains the risk associated with staying with the current Documents and the reason for the change to our current Documents.

The following section will address the OTO errors in regard to the insurance article.

Excerpts from the July 2009 OTO Newsletter will be in “italics”:

The OTO Newsletter article states that ”condo owner insurance is now the responsibility of the condo owners. The Association is not responsible for buying condo insurance for owners that do not have coverage”.

This statement is true. See Section 10.2(a) of the proposed amendment that lists the specific items that must be insured by each unit owner. The type of property insurance policy issued to a unit owner is typically referred to in the insurance industry as an HO6 policy. The Association has no intention of buying a property insurance policy of the contents of any unit if an owner fails to do so.

The OTO Newsletter article also states that “If in our documents we just say “per the 718 statute” we could not have to change our documents every time the state of Florida changes the law”.

This gross oversimplification misses the point entirely as to the significant underlying reasons why we want to rewrite our insurance provision. The statute does not supersede a poorly conceived documentary provision that requires the use of an insurance trustee, or approval of a mortgage holder to the insurer or settlement of a claim. We need to amend our Declaration to get rid of these undesirable provisions. Further, we need to be consistent with the many complex statutory requirements. Simply citing to a statute is not going to provide the necessary direction to management, board members and owners and there are some discretionary issues under the statute that will be determined by our documents, not the statute.

Now let's consider a scenario. Assume that for 558 units, there are 50 banks represented as mortgage holders. Assume we have taken the OTO advice and voted 'no' on Article X. In September 2010, Hurricane Pistachio blows Oakview Village into Palm Tree Village. 15 of the 50 banks challenge our current Documents because we don't have pre-approval by mortgage holders for the Insurance proceeds distribution. From this point we can expect a lengthy court process as 15 banks and their lawyers demand an Insurance Trustee to protect their interests before any reconstruction effort begins. Is this what you want?

If you vote 'no' based upon the erroneous OTO advice consider the following:

A 'no' vote on Article X gives control of our Insurance Proceeds in the event of a catastrophe to bankers and bank lawyers not WWS BOD and owners. A 'no' vote is shortsighted, irresponsible, and dangerous.

Aside from the fact that the anonymous OTO author has clearly made a number of inflammatory and false remarks with intent to damage my integrity or question my motives, the anonymous OTO author's material regarding the Documents change is inaccurate and misleads, misinforms, and misguides the readers.

The source material for FS718 is readily available online. We have reviewed both Articles in open WWS Committee and Board meetings within the last four months. What excuse explains the inclusion of such blatantly inaccurate material as the basis for the OTO recommendation?

You be the judge.

If you wish to vote 'no' on these items, make a well informed decision based upon the correct information, not the OTO propaganda. Understand clearly, the ramifications of your choice. Since the Special Meeting is not yet scheduled and voting materials have not been distributed, ask OTO Leadership why they have intentionally provided erroneous information about FS718 in lieu of waiting for the official materials and explanations.

The Special Meeting (date TBA) devoted to these Documents items will include a presentation about the two items to be voted upon. At least two weeks in advance of that meeting, voting materials will be provided to all owners regarding the two items. There will be ample opportunity for owners to ask questions.