Monday, July 14, 2014
ON THE UCO BUDGET SHORTFALL
Whether Florida Statute 718 requires an entity such as UCO to have reserves or not, it still makes every bit of sense for UCO to have reserves, and it makes sense to fund them adequately.
In considering our situation, it might be well to first keep in the back of our minds that well-meaning treasurers may differ in their calculations. That is almost a given in the financial field, I think.
Our new treasurer, Howard O’Brien, feels our UCO reserves have been underfunded, and that this needs correction starting in 2015. He suggests a 5-year plan wherein the shortfall will be made up over five years.
The shortfall, as Howard calculates it, projects to be about $1,152, 561 at the end of 2014. For this amount to be made up over five years would mean collecting an additional $230,512 for each of the five years. Dividing this by the number of months in a year (12) means that $19,209 would need to be made up each month. Dividing this by 7800, the approximate number of units in the Village means that each unit would have to pay $2.46 more a month to make up the deficit.
Is that so much?
UCO dues would go up more than this, but that is because of other increased UCO expenses--NOT failure to have budgeted enough for the UCO reserves. Our total condo dues will undoubtedly go up still more because of the effect of inflation on other expenses; and WPRF dues will probably increase a little, too.
The overall increase may be considerable, a tough bullet to bite, and this might well be the time to put off some purchases we would like to have made. Our officers and the Finance Committee will be considering this.
Let’s not blame the underfunding of UCO’s reserves for more than its share, though. At the most, if my figures are right, this would be responsible for less than $2.50 per month per unit to be made up over five years.