Can special assessments be used for routine maintenance?

Adrienne,

From the statute you cited, I would say that SA can be used for the maintenance, repair and replacement of capital components. Typically, this money would come from the Reserves. However, if the reserves are under funded, then SA will be used to address this shortage when the time comes for the maintenance, repair or replacement of capital components.

Yes.

Per your citation [emphasis added]:

(iii) Special assessments shall be for the purpose of paying the costs of, and any loans related
to, capital improvements and repair and other Association purposes.

AdrienneP, by any chance do your governing documents prohibit a mid-year regular assessment increase? If so, this would possibly be because the annual budget was approved some months ago, and changing the budget, and so the regular assessment, would require an expensive special vote of the members. This could explain why the Board chose to impose a Special Assessment to help pay for operational expenses.

I think your bylaws clearly allow it as long as it does not conflict with your CC&Rs. If they conflict, you would have to follow the CC&Rs because they are superior in the hierarchy of documents.

Even though it may be allowed, special assessments should be used for unforseen costs and not as a funding tool for routine maintenance, which should be in the budget.

To be fair, it may be the membership that is underfunding the Reserves.

For example: after our reserve study was completed, we needed to raise assessments by 20% to fully fund the Reserves. That amount was beyond the amount the Board had authority to raise assessments by. Had our membership not supported the increase, our Reserves would be underfunded as inflation (for our area) runs about 4% and the Board can only increase by 5%. Hence, my Association would be facing the same need for special assessments as the OP's Association is facing.

Translation: It might not be the Boards fault.

Thank you all for your feedback!

Yes, our reserves are definitely extremely underfunded, there is no doubt about that. We are a large, aging HOA; we have reserve studies and they do not make for encouraging reading.

Just to clarify also, there is no restriction on submitting a dues increase for a vote of the membership between AGMs. What is more, the membership approval process is identical for increases in regular assessments (annual dues) and special assessments.

The proponents of the 5-year special assessment have decided to do it this way because they believe that only special assessment revenues can be placed in a separate account and tracked - ie. used for no other purpose than the one on the ballot. This is a very fair concern. The results of past dues increases and special assessments have been mixed, to say the least.

However, given that the plan is to fund basic operations for the recreational amenities in our communities, it would seem far more reasonable to me (and others) to propose a permanent dues increase rather than just five years of funding that will then leave the community scrabbling for a plan in the sixth year. (Unsurprisingly there are other points of discord, but this is the one I am focused on.) I am wondering if perhaps the same restrictions (separate account, tracked) could be placed on an annual dues increase.

That said, it seems from your responses that you all understand "other Association purposes" to relate to any purpose at all, including operations. I thought it needed to be interpreted in the context of capital spending. It was always so in the past in our community, but the wording of the bylaw was changed a couple of years ago (from "proper" purposes to "Association" purposes). This would be the first time a time-bound special assessment has been used for ongoing operations.

Any further discussion welcome, thank you!

If you are an HOA as you stated your state statute (http://app.leg.wa.gov/rcw/default.aspx?cite=64.38) notes:

RCW 64.38.025
Board of directors—Standard of care—Restrictions—Budget—Removal from board.
(1) Except as provided in the association's governing documents or this chapter, the board of directors shall act in all instances on behalf of the association. In the performance of their duties, the officers and members of the board of directors shall exercise the degree of care and loyalty required of an officer or director of a corporation organized under chapter 24.03 RCW.
(2) The board of directors shall not act on behalf of the association to amend the articles of incorporation, to take any action that requires the vote or approval of the owners, to terminate the association, to elect members of the board of directors, or to determine the qualifications, powers, and duties, or terms of office of members of the board of directors; but the board of directors may fill vacancies in its membership of the unexpired portion of any term.
(3) Within thirty days after adoption by the board of directors of any proposed regular or special budget of the association, the board shall set a date for a meeting of the owners to consider ratification of the budget not less than fourteen nor more than sixty days after mailing of the summary. Unless at that meeting the owners of a majority of the votes in the association are allocated or any larger percentage specified in the governing documents reject the budget, in person or by proxy, the budget is ratified, whether or not a quorum is present. In the event the proposed budget is rejected or the required notice is not given, the periodic budget last ratified by the owners shall be continued until such time as the owners ratify a subsequent budget proposed by the board of directors.
(4) As part of the summary of the budget provided to all owners, the board of directors shall disclose to the owners:
(a) The current amount of regular assessments budgeted for contribution to the reserve account, the recommended contribution rate from the reserve study, and the funding plan upon which the recommended contribution rate is based;
(b) If additional regular or special assessments are scheduled to be imposed, the date the assessments are due, the amount of the assessments per each owner per month or year, and the purpose of the assessments;
(c) Based upon the most recent reserve study and other information, whether currently projected reserve account balances will be sufficient at the end of each year to meet the association's obligation for major maintenance, repair, or replacement of reserve components during the next thirty years;
(d) If reserve account balances are not projected to be sufficient, what additional assessments may be necessary to ensure that sufficient reserve account funds will be available each year during the next thirty years, the approximate dates assessments may be due, and the amount of the assessments per owner per month or year;
(e) The estimated amount recommended in the reserve account at the end of the current fiscal year based on the most recent reserve study, the projected reserve account cash balance at the end of the current fiscal year, and the percent funded at the date of the latest reserve study;
(f) The estimated amount recommended in the reserve account based upon the most recent reserve study at the end of each of the next five budget years, the projected reserve account cash balance in each of those years, and the projected percent funded for each of those years; and
(g) If the funding plan approved by the association is implemented, the projected reserve account cash balance in each of the next five budget years and the percent funded for each of those years.
(5) The owners by a majority vote of the voting power in the association present, in person or by proxy, and entitled to vote at any meeting of the owners at which a quorum is present, may remove any member of the board of directors with or without cause.
[ 2011 c 189 § 8; 1995 c 283 § 5.]

Note what is needed to be provided as stated above under section (4)(d) in answer to some of your other concerns. Sounds almost like your HOA is not addressing the real problem of proper reserve account and proper dues to cover current expenses and fund the reserve.