What to do? Should I stay or should I go?

Hi. I will try to keep this as short as possible.

I joined the board for my 336 single-family home HOA in November of 2015. At the time I was elected I was put into a member at large position, which suited me just fine. Over the course of the last 7ish months our VP left and our treasurer stepped down due to military commitments. I was moved up into the treasurer spot and a new VP was brought up from another member at large position.

Our HOA is a mess. We are a military community and have over $30,000 in delinquent funds. The board, including me, is not very happy with our management company currently and we are looking at the options of firing them and either get a new management company, self manage, or dissolve the HOA.

In anticipation of the board's favorite by majority (not my favorite option), self managing, the board decided to purchase a computer and related materials for our use for HOA matters.

In order to purchase the computer, the president and secretary went out and used generic checks from the bank. Wrote them to themselves and cashed them. In total $1150.00. The money was spent to buy computer, external hard drive, and printer supplies, and in my opinion money was not spent in a responsible manner. There was about a $50 difference between what they spent and what they took out. The president owes about $50 back to the HOA funds. I told him as much and he became angry that I was asking him to return the money. The VP (with whom I have had a different conflict with recently) stated that he should use the $50 for mileage. I replied back that if the president wanted mileage then he could send me the traveled miles and I would use the government rate to calculate.

I was then told by the VP that I could have my own opinion and state that opinion but "If it comes down to a vote I know which way it will come out so do what you need to do..."

This VP is not the most professional person and in group text messages has made sexually graphic remarks about our management company team. He also has sent pictures via the group message of him giving the finger (somewhat directed at me due to the aforementioned other matter). An on a probably unrelated note, he is drunk most of the time that he is not working in his professional career.

My questions are:
1) If this $50 gets "explained" by the rest of the board and not refunded to accounts, am I any way responsible?
2) I feel like I am part of a sinking ship and I am the only one trying to patch the hole, do I leave the board? I hate to be a quitter and would really have to put a lot of effort in in order to not burn bridges.

What are my options?

Thanks

I will take recommendations on reducing delinquent funds. We are a military community and so a lot of our residents PCS and rent out their house. If they are deployed then they fall under the law that they don't have to pay when they are deployed (the name of that law escapes me). We also have quite a few homes in foreclosure or just vacant.

Want to know the best part. For our 336 homes... the HOA YEARLY dues are $125.

In what regard?

Income 54,525.00

Expenses: 56,650.41

What are your big expense categories? How much do you spend on each?

Elizabeth, you can consider making a motion at the next board meeting to record that the President is taking an extra $50 as compensation for a mere x miles of driving? Note the part of your Bylaws that states that directors may be compensated for expenses, but there is no receipt and you feel nor is there a reasonable justification for this expense. Being transparent takes much of the burden off you as treasurer. After this discussion, prepare to discuss what the governing documents (declaration and bylaws most likely) say are the powers of the Association with respect to collecting past delinquencies. What notices have been sent out to inform members they are delinquent? Can liens be placed on homes? Is interest to be charged? Some HOAs use collections attorneys, but I think the more financially prudent route is to just place a lien on the house (after proper notice). The money will come back in, with any Declaration-authorized interest, over time as houses are sold and purchased.

If both these discussions go poorly, and if I were in your shoes, I would be in conflict over the sexist VP; the embezzling President; and being pressured to join in a coverup of said embezzlement. Such conflict takes a toll in lost hours of sleep, hostility from people you do not even respect, and unhappiness. All for what? Could you make a difference on this board? I think only in the movies does someone so outnumbered by incompetent fools sometimes have a Cinderella moment and all ends up well. After your motion is voted down, I would write a short letter of resignation to the board, stating all of what you say above as reasons why you cannot serve with them, and letting the board know that you think it's important to tell people why you left, if asked. It's possible the greatest service you can do for this board is to leave on these terms. You will then be saving your fine attitude and energy for a board where your talents and integrity have a chance of making a difference.

Else give by sacrificing yourself through service to this board, and you might make some small difference or, over time, a much larger difference. No guarantees.

Your budgets way off.

First off you need to figure out how to reduce your expenses by at least $2k. No way you should be running at a loss even though you have delinquents.

Looks like the only real service you provide is landscaping, and that's just 20% of your budget. 80% on non-services is way out of whack.

Postage is a crazy number. Copying too. So is misc office.

You're a single family development. Looks like you have no amenities. Just grounds to take care of.

Don't understand why you're insurance is so high. Can you break it down into its components.

Forget about the 50 bucks.

You've got a ton of money going down the drain.

You could probably run your place for about 60% of what you're spending.

You could also start to put money toward reserves.

Get control of your expenses first. Fire the MC if you have to.

Delinquencies not your biggest problem. Plenty of time to deal with that once you've got your operations under control financially.

There are some ways to reduce your expenses. First off, reduce the legal and collections. Your HOA needs to make a few policies in this area to reduce the expense. The collections your HOA should have a policy of when it starts collecting. Our HOA we do monthly dues. The policy is that at 6 months behind we lien and at 1 year we CONSIDER foreclosure. As Tim mentioned, Active Military can be exempt from these actions while deployed/active. Foreclosure decision is the last resort and no reason a HOA can't just keep a lien going.

Once your HOA puts in a solid collections deadline/policy it should help reducing many of the expenses your HOA incurs. Liens are to include the legal expenses the HOA incurs in filing. Which in our case, it was about $400 to file a lien. Why would we do that until the dues owed equal or exceeded that amount? Plus it allows for some negotiation room in collections like sans interest/late fees if paid etc...

Legal costs? What is your HOA actually spending and getting for this? Do you have just one source that works with the lawyer? Only the President in our HOA can communicate to the lawyer but ONLY after approval of the board. Limiting who contacts the lawyer can reduce expenses. Plus using the right lawyer for your needs helps. You don't need a "Real Estate" lawyer in a HOA. A lawyer familiar with business or collections will do. Legal services can also help.

A HOA should spend as much as it collects. It is a non-profit. Don't get ahead of yourselves and try to run it like your home budget. Remember the money in the HOA is NOT your money.. It is EVERYONE's money. So treat it as such where everyone has a say so in how it is spent.

Apologies if I messed it, Elizabeth, but what is the breakdown of the $10,000 legal fees?

We were self managed from 2010 to 2013 it was a nightmare. A few months ago when the VP came to me suggesting we go to self management again I told him if we do I will not be on the Board. Unlike the original poster we currently have (in my opinion) good Board Members who would be capable of self management. But who knows in the future what will happen as we elect new Board members.

I know it was our Secretary who suggested self management to the VP.

But I agree the OP should not resign at this time. But I would suggest he document any and all problems he has with the Board Members.

When I was treasurer there was a VP who did not even want me to see the bank statement. When I mentioned it she said something to the effect that I don't trust anyone. Now all Board members who want can have internet access to our read only bank account. So things can change.

Landscaping 9500 - Could be fair.
Insurance: 2000 - Could be fair.
Legal: 10,000 - Outrageous.
Management: 12,300 - Could be fair.
Website: 3,000 - Outrageous.
copy: 2400 - Borders on outrageous.
Postage: 3700 - Borders on outrageous.
Misc Office: 3764 - Borders on outrageous.
BadDebt/ Collection: 6,250 - Do not know understand who/where spent on.

Legal: 10,000 - Outrageous. Depends what the work is for. If for collections, that could be the amount just for 10 delinquencies (and the OP stated that there were several).

Website: 3,000 - Outrageous. Depends what level of service they are getting. Full service websites can cost as much as 3K. Simple domain registration and hosting for a site you administrate yourself can be as little as $85 per year (which is what we pay).

copy: 2400 - Borders on outrageous. Again it depends on quantity, if the Association is taking advantage of discount cards, if the MC is copying or if the Association owns and maintains a copier. It seems high but if there are newsletters printed and mailed every other month, it could account for the cost.

Postage: 3700 - Borders on outrageous Totally agree. at 49 cents a letter (less if stamps are purchased when the price reduced) that's over 7500 letters being mailed. With 336 lots, that equates to 22 letters a year. If monthly statements are being mailed for assessments, then perhaps this cost is high. However, it could be reduced by utilizing payment books vs. monthly statements.

Thank you NPS, however my perspective has nothing to do with money. The OP needs is considering resigning, and that was my perspective thank you.

Resigning and MOVING to a non HOA home is the best path.

As it would for MOST OF US.

I, however, am a glutton for punishment and stay put.

Circling the drain in my wonderful 55+ gated and walled prison.