Ballot for budget

We send out a copy of the budget with the election materials in the annual meeting packet. Anyone marking a Y/N ballot for the budget should be able to reference the budget that's right there a foot or two away from them. You can't hold everyone's hand. "Please review the inluded budget before marking your ballot."

We don't need approval for the budget but it can be voted down. If there are 100 owners as long as 51 don't vote no it passes. Since you hardly ever get 100% participation a 33Y - 47N vote is good enough.

In my community, homeowners only vote on the budget if next year's assessment will exceed the current year by 6% or more. We send the new budget in November, as our documents require homeowners to receive it on or before December first, and we usually included a statement explaining what would be changing and why.

I see nothing wrong with how your secretary has drafted the ballot - the homeowners are getting copies of the current budget and the proposed one with an explanation, so they need to do their due diligence and read the dang things. If they have questions, they can always ask about anything they don't understand - in fact, they should do so before casting a vote so they make an informed decision. Otherwise, they prove my mother's saying - the easiest way to keep some people misinformed or completely unaware is to simply write the information down and hand it to them because they'll never read it!

That is logical, however, I failed to mention that I am new on the Board this year. I served for several years up until 2010. Over the last few years the lack of transparency has been bad for members. And documentation was not provided as it should be, alot of questions were raised and we had no idea where the money was going. In the past year the treasurer has provided a budget report for the current year 5 times and her book keeping is inconsistent. When asked for a corrected copy, we don't get one until the next meeting and then it starts all over. Additionally there have been large expenditures in excess of $5000 that suddenly drop off the report. Telling someone to refer to a copy of one of the budget reports is not the best option.

And if the documents are not kept together with the ballot, it would be difficult to prove what was actually voted if there was audit on ballots. So to avoid risk, we (new members of the board) are asking for the budget amount to be on the ballot so there is no gray area. The way our bylaws are written, the dues are based on the budget/total billable lots. So that is an important point. So to prove the dues amount assessed for each year that calculation is key, the budget amount should be clearly stated.

I appreciate the responses. It is interesting seeing how other states laws work and other HOAs manage their processes.

If the treasurer isn’t doing his/her job properly, your options are (1) get her some training so she knows what she’s doing (sloppy bookkeeping is inexcusable) or (2) remove her from the position and put in someone else, preferably one with some accounting, bookkeeping or business background (someone who’s well versed in programs like Quicken or Excel and can design spreadsheets that will crunch the numbers for you could also work).

I understand your concern over lack of transparency due to the behavior of previous reports and you said you are new, so I suspect you’d rather err on the side of providing all the information at once. However, as I said earlier, people need to take responsibility and READ the reports for themselves, especially if that’s been a problem over the previous years. Sadly, people are really lazy and sometimes the more paper you toss at them the less likely they’ll review all of it. Especially if there are no pictures! Columns of numbers can also leave people cold – it’s unfortunate because the devils and angels are all in the details, but that’s how people operate these days

How about having a separate information meeting to discuss the budget and allow people to ask questions? Perhaps someone who’s really good at PowerPoint can put together some slides that can show graphs and other illustrations that explain what’s going on with the budget. You can then schedule another meeting where people can simply vote and they won’t need a bunch of numbers and writing on the ballot. Document the hell out of everything in your meeting minutes along with attaching supporting documents to the minutes and you should be ok.
Encourage homeowners to hold onto the documents – better yet, if you have a website, post this information on it for easy reference. Throughout the year, the board should publish monthly or quarterly financial reports where people can see the income/expense statements and can track line items against the budget.

People should also remember a budget is a guide, but it’s not written completely in stone because things may happen over the year that may throw it out of whack (e.g. a bad storm that wrecks a large part of the common area).

More good advice. A budget is a guideline. It is not cast in concrete.