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I appreciate that the reduced quorum decisions take 4 weeks to come into effect. Are you aware that proxy votes count towards determining the quorum? Thus, if you have enough proxy votes, even if not many show for the actually meeting, you might have a quorum and can act on the decisions straight away after the meeting.
While 35(1) says that the EC exercises the functions of the OC, the later parts of that section limit the EC’s power where there are OC resolutions directing the EC or where the Act requires a general meeting to make the decision. Only when the matter does not require a general meeting resolution from a provision of the Act, or it is not subject to a direction to the EC from a general meeting resolution, can the EC exercise a function of the OC as it sees fit.
In this case, I presume that a resolution at the last AGM determined a levy for the financial year. For the EC to now levy an additional amount before another general meeting would be inconsistent with the AGM resolution. So, I think, no, the EC can’t exercise the function of the OC to determine a general funds contribution because the OC at the last AGM already did this.
Strictly speaking the EC should not have overspent the budget. On the other hand, sometimes you would be negligent to not spend the money. If you are under budget on some other line of the budget this is usually not a problem. Just explain openly what happened at the next AGM and people will mostly understand that the spending was wise.
As treasurer, I alway budget to retain about a quarter to a third of our annual budget in the bank. [With a budget of about $150K, I plan to start and end the year with about $50K in the bank.] This gives considerable leeway for some things to go a bit over or for an unexpected expense to come up or whatever. However, the main benefit is for cash-flow. We don’t find ourselves caught short just before a new influx of levies. I also include a margin in some of the more variable budget lines to allow the possibility of spending a bit more than I really expect. That way the approved budget can tolerate some unexpected expenses. It doesn’t need to be a lot more than the realistic expectation, just slightly more to leave the EC some breathing space. Nobody will get upset if you are usually a little bit under budget. If that means you accumulate more funds than you need for comfortable cash fluidity at all times, then you can levy a bit less than the budget next year, but always plan to keep some money in the bank, just in case.
If you make the budget precisely what you expect to spend and not a penny more you are just asking to run into trouble when a few things turn out to cost even a tiny trivial bit more than expected. You don’t need the hassle. Far better to have an approved budget with some leeway and some cash in the bank that would allow small overruns from your realistic expectation or a minor deficit in any particular year without running into problems.
With the AGM only a few weeks away, presumably the multiple but small budget overruns are being disclosed and explained in AGM papers that might be mailed out already. Presumably the 2016/17 levies have been proposed in the AGM papers too with a proposed due date some time after the AGM. Perhaps you could write to owners, explain the problem, and ask people to volunteer to pay their levies early, even before the AGM, to help out. Not everyone will do it but enough owners might be prepared to pay the proposed levy a little early. That would fix the cash flow problem and allow some bills to be paid. The early payment would just put those unit owners in credit for a while until the levy became due.
I also suggest, if you have not already proposed this for the AGM, to levy a bit more than the budget so that the bank balance does not end up at zero again this time next year. Explain that you plan to do that for each of the next few years so that the extra expense is spread out and smaller in any particular year.
Alternatively, if the timing for adequate notice would allow it, put an extra motion for an additional one-off special levy to prevent cashflow problems in future.
If the OC is small enough for this to be feasible, go around and door knock and explain face to face.
I hope that helps!