sec.110Budgets [ SM, s 160 ]

sec.110 Budgets [ SM, s 160 ]

The body corporate must, by ordinary resolution, adopt the following 2 budgets for each financial year— the administrative fund budget; the sinking fund budget. See section 117 . The administrative fund budget must— contain estimates for the financial year of necessary and reasonable spending from the administrative fund to cover— the cost of maintaining common property and body corporate assets; and the cost of insurance; and other expenditure of a recurrent nature; and fix the amount to be raised by way of contribution to cover the estimated recurrent expenditure mentioned in paragraph (a) . The sinking fund budget must— allow for raising a reasonable capital amount both to provide for necessary and reasonable spending from the sinking fund for the financial year, and also to reserve an appropriate proportional share of amounts necessary to be accumulated to meet anticipated major expenditure over at least the next 9 years after the financial year, having regard to— anticipated expenditure of a capital or non-recurrent nature; and the periodic replacement of items of a major capital nature; and other expenditure that should reasonably be met from capital; and fix the amount to be raised by way of contribution to cover the capital amount mentioned in paragraph (a) . Painting of the common property is anticipated to be necessary in 3 years time at a cost currently estimated at $12,000. The contribution amount for the sinking fund in the budget for the financial year must therefore include the annual proportional share for painting of $4,000. Next year, the estimated cost has increased to $12,400 and so the second year levy will be $4,200. The estimated cost in the third year is $12,800, so with the $8,200 accumulated, a levy of $4,600 is necessary to meet the cost. In larger community titles schemes, the sinking fund will have several projects being funded for various future times. The body corporate may, by ordinary resolution, adopt a promotion fund budget that— contains estimates for the financial year of necessary and reasonable spending from the promotion fund to cover the cost of promoting the community titles scheme including, for example, by leasing, installing, maintaining and operating advertising signs; and fixes the amount to be raised by way of contribution, from the owners of lots who have agreed to make contributions, to cover the estimated expenditure. If the community titles scheme is a lot included in another community titles scheme, the administrative fund budget must also include an estimate of the total amount the body corporate may reasonably be expected to be required to contribute to the administrative and sinking funds for the other scheme, and any other fund provided for in the regulation module applying to the other scheme. The original owner must prepare proposed budgets for adoption by the body corporate at its first annual general meeting, and the committee must prepare proposed budgets for adoption by the body corporate at each later annual general meeting. Copies of the proposed budgets must accompany the notice of an annual general meeting. To remove any doubt, it is declared that the inclusion of an item of expenditure in a budget adopted by the body corporate is not, of itself, authority for the expenditure. (sec.110-ssec.1) The body corporate must, by ordinary resolution, adopt the following 2 budgets for each financial year— the administrative fund budget; the sinking fund budget. See section 117 . (sec.110-ssec.2) The administrative fund budget must— contain estimates for the financial year of necessary and reasonable spending from the administrative fund to cover— the cost of maintaining common property and body corporate assets; and the cost of insurance; and other expenditure of a recurrent nature; and fix the amount to be raised by way of contribution to cover the estimated recurrent expenditure mentioned in paragraph (a) . (sec.110-ssec.3) The sinking fund budget must— allow for raising a reasonable capital amount both to provide for necessary and reasonable spending from the sinking fund for the financial year, and also to reserve an appropriate proportional share of amounts necessary to be accumulated to meet anticipated major expenditure over at least the next 9 years after the financial year, having regard to— anticipated expenditure of a capital or non-recurrent nature; and the periodic replacement of items of a major capital nature; and other expenditure that should reasonably be met from capital; and fix the amount to be raised by way of contribution to cover the capital amount mentioned in paragraph (a) . Painting of the common property is anticipated to be necessary in 3 years time at a cost currently estimated at $12,000. The contribution amount for the sinking fund in the budget for the financial year must therefore include the annual proportional share for painting of $4,000. Next year, the estimated cost has increased to $12,400 and so the second year levy will be $4,200. The estimated cost in the third year is $12,800, so with the $8,200 accumulated, a levy of $4,600 is necessary to meet the cost. In larger community titles schemes, the sinking fund will have several projects being funded for various future times. (sec.110-ssec.4) The body corporate may, by ordinary resolution, adopt a promotion fund budget that— contains estimates for the financial year of necessary and reasonable spending from the promotion fund to cover the cost of promoting the community titles scheme including, for example, by leasing, installing, maintaining and operating advertising signs; and fixes the amount to be raised by way of contribution, from the owners of lots who have agreed to make contributions, to cover the estimated expenditure. (sec.110-ssec.5) If the community titles scheme is a lot included in another community titles scheme, the administrative fund budget must also include an estimate of the total amount the body corporate may reasonably be expected to be required to contribute to the administrative and sinking funds for the other scheme, and any other fund provided for in the regulation module applying to the other scheme. (sec.110-ssec.6) The original owner must prepare proposed budgets for adoption by the body corporate at its first annual general meeting, and the committee must prepare proposed budgets for adoption by the body corporate at each later annual general meeting. (sec.110-ssec.7) Copies of the proposed budgets must accompany the notice of an annual general meeting. (sec.110-ssec.8) To remove any doubt, it is declared that the inclusion of an item of expenditure in a budget adopted by the body corporate is not, of itself, authority for the expenditure.