What BOD voted, Isn't What Owners Were Told About Increase in Dues

"Does this rise to the level of deceitful communication of the BOD with owners?"

Suppose it does? What will you do about it? These types of issues happen all the time and there are really only two options. Sue, which I don't personally recommend initially, or run for the Board and look for like minded people to join you so that you will have a majority to change the way the HOA is run. To be perfectly blunt I don't see how anyone here can provide you with an answer that will solve your problem. You know the issues and the question really is what will you do about it?

It can be hard to distinguish deceit from incompetence - they often look alike, especially if you're not privy to all of the discussions leading up to a decision.

Routine unexpected events can also make the board appear like they don't know what they're doing. But they don't have crystal balls - and if after they've published something a vendor comes back with a higher quote, then they have to adjust the budget accordingly. Either raise assessments or postpone some spending, there are no other options. This is why we publish our budgets for the upcoming year in December when the projections are as solid as they're going to get.

Budgets are always best guesses and there always will be things that change, sometimes at the last minute.

("It's tough to make predictions, especially about the future." - Yogi Berra)

People often overlook the fire Hazzard of installing a shed. They can not be attached to the home at all. Believe can be as close as 2 feet but should not be attached. I would check with your insurance or homeowners insurance for correct guidance as well as fire Marshall.

People forget many store flammable chemicals in sheds. They can start a chain reaction. Too close to the house or roof and both structure are gone

Something should have been looked into with storage sheds.

I agree with you that in most circumstances one should assume BOD members are acting in good faith even if it appearances suggest ignorance, laziness, etc. Prior to 2019 our BOD was very transparent. Minutes that are a joy to read. There was a willingness to admit they cannot do something because it didn't conform to the by-laws, etc. Minutes that indicated reasonableness. If they made a mistake or violated a law, there was so much transparency that you had confidence it was an oversight or just an Ooops thing. It all changed when the man who had been on the BOD for over a decade serving in several officer positions sold his unit and moved. The current BOD is secretive, hasn't published minutes in 3 years, did not comply with laws and refuses to commit to following the law and on...It's the lack of transparency that fuels suspicions and distrust so when the BOD engages in odd behavior, they haven't earned the trust of owners to believe well of them.

Do you owners, Jeanne, have a copy of the approved budget for 2023? It will state exactly what amount is going to insurance and what amount is going to reserves. You then compare it to the final expenditures for your 2022 budget to see exactly how much each increased.

What % are your reserves funded at the beginning of 2023?

Meanwhile: your insurance increased BY "122,000+ annually How much (yikes!) was if it previously?

time to dig and find out why $63K was spent on.
Also board meetings in NC are requried to be open to membership on a regular basis see lawyers explanation below:

§ 10.02.12. Members' Attendance at Board Meetings
Homeowners associations and condominium associations are not public bodies. As
such, North Carolina’s open meetings laws do not apply to these associations. Nevertheless, board
members for planned communities and condominiums, regardless of when formed have to make
their board meetings open at “regular intervals” to owners.

Further, the executive board meeting
has to provide lot owners an opportunity to attend a portion of an executive board meeting and to
speak to the executive board about their issues or concerns. The executive board may still place
reasonable restrictions on the number of persons who speak on each side of an issue and may place
reasonable time restrictions on persons who speak.

There is no definition of what “regular intervals” means, but it does not necessarily
mean every meeting if the board meets monthly. Rather, it could mean every other meeting or
twice a year. Or, it could mean every monthly meeting, but only for the first 10 minutes of the
meeting. The purpose of the PCA and the Condominium Act in this regard is clearly designed to
facilitate open communications between the owners and their boards. Thus, decisions by the board
on which meetings to make open should be made with this purpose in mind. It is worthy of note
that the statute uses the phrase “regular” intervals. Thus, each board should decide, preferably
at the beginning of the year, which meetings will be open and communicate the schedule to the
membership. The board should stick to this schedule — whether it is every meeting or every other
meeting, etc. The statute provides no guidance as to how members know of when board meetings
are held and which meetings are open. Presumably, any method of communication that is fair
and reasonable would meet the spirit of the law. Since many board meetings are not set a year in
advance, but rather may be set at the end of each meeting, communicating the next board meeting
by emails, website or newsletter would be sufficient in most instances.

Further, when members do address the board, the members cannot do so without any
limitations. Rather, the board has the right to set time limitations on the people speaking. If a board
meeting is scheduled for one hour and there are 10 people who want to speak, then the board can set
two minute limits on the members speaking and cut off speaking in 20 minutes. The board should
try to be as accommodating as possible and give as many people as possible an opportunity to
speak. However, the board need not hold a meeting for hours on end or entertain lengthy, repetitious
comments from members to the detriment of the board’s other business that it has to conduct during
the meeting. After all members have had a chance to speak, the members may be required to leave
the board meeting. While the PCA and Condominium Act allow and encourage owners to address
the board about their issues and concerns, members do not have the right to participate in the
meetings through making and seconding motions and debating on motions before the board.

Allowing members to address the board on a consistent basis and communicating
the board’s desire for input from its members can be an effective tool against membership apathy. It
can also go a long way to dispel suspicions about the board and their intentions. Making meetings
open also allows the board to learn about specific situations in the community they may not be
aware of at all or knew little about. Many owners do not understand the way in which business gets
done in an association and making board meetings open for at least a portion of the meeting can be
educational to both the board and the members.

Do you owners, Jeanne, have a copy of the approved budget for 2023? It will state exactly what amount is going to insurance and what amount is going to reserves. You then compare it to the final expenditures for your 2022 budget to see exactly how much each increased.

What % are your reserves funded at the beginning of 2023?

Meanwhile: your insurance increased BY $122,000+ annually How much was if it previously?

Reserves are used to fund maintenance, repairs & replacements of existing components in an assn. that are listed in the reserve study. They are not to be used for new things like sheds.

Did I read it right that NC requires owners to be able to attend a meeting to ratify the budget? Has such a meeting occurred in your HOA, Jeanne? Wendy?

I also see, Jeanne, that all NC assn. meetings of members or boards require public notice AND an agenda. So Owners would be unable to add anything at the annual meeting (despite Robert's rules).

One reasonable expectation that all boards should have as a goal, is how to build trust with the owners. In my opinion, by having trust with the owners, a board can function much better, with the support of the members of the association. Our association has built its own website that has all of the information that an owner should and would need. Our communications committee produces a monthly newsletter that has both Board information and social events. Our board meetings are by zoom and as a result we have more members attending than ever before. Build trust and be strong on the fiduciary responsibilities.

>I also see, Jeanne, that all NC assn. meetings of members or boards require public notice AND an agenda. So Owners would be unable to add anything at the annual meeting (despite Robert's rules).

The above caught my eye, and I wonder if there are states that require HOAs to give notice to members prior to the annual meeting about adding agenda items beforehand. Our HOA has always, or at least as long as I can remember, followed the same script of reports from the president, treasurer, and committees, presentation of the next year's budget, and election of directors. Anything a member wants to add to the agenda would not meet the notice requirement and would have to be held until the next meeting of members.

2023 Budget has reserve funded at 12%. However, the 2019 Reserve Study strongly recommended increasing that amount this year by $139K otherwise by 2025 the reserve fund will be in the red and by 2029 there will be a need for a million dollar assessment from the owners.

2022 Budget for insurance was $198K, the end of year financial statement has not come out yet but as of November 30, the actual spent on insurance was $270K. The 2023 budget is $301K for insurance.

Actually it's $135,896.92 that was taken from the Reserve Genral and Reserve Capitol Repair Funds in April 2022. Looking at the 2022 budget versus actual, $147,500.00 is budgeted for pool, elevator, building maintenance, as of November 30, $116, 339.00 was spent out of operating expenses.

As for the NC law about owners attending BOD meetings "at regular intervals", have you ever read the NC case law on this? "Regular interval" has been interpreted by judges to be once a year. It sucks.

In general, in the red means a negative balance (as it was typically written with red ink), while in the black means a positive balance.

see: https://www.investopedia.com/terms/r/red.asp

In this case, I expect what the meaning is that the funds put into reserves is less then the reserve study says should have been put away by the end of the year

This is an example of why I think Jeanne is not up to speed on the vocabulary and metrics used to determine the health of a reserve fund. I agree with the importance of the question Kerry is asking. I just have doubts Jeanne understands the question. I am not sure Jeanne knows enough to ask what Kerry means.

Percent funded refers to the percentage of the annual budget that is contributed to the reserve fund. FHA and Fannie Mae require condominiums to contribute a minimum of 10% of the annual budget to the reserve as a requirement to obtain conventional loans. FHA certification can be denied for falling under this 10% threshold. One NC law firm blog reported seeing condominium associations lose FHA certification for the reserve funds being underfunded by as little as $247.00. Since this pertains solely to Condominium associations, perhaps you were not aware of this.

"In the red" refers to the reserve fund being underfunded per the Reserve Study's Analysis or the budget. For example, our HOA's 2023 budget funds the reserve at 12.3% of the total annual budget. However, per 2019 Reserve Study it was supposed to increase to 23% to avoid a $1M special assessment about 7 years from now. If the budget says XXXX amount of money is planned to be contributed to the reserve but the actual amount is less, it shows up on the financial statement as being "in the red". And to demonstrate that I did not pull the phrase out of my backside, it appears in this article https://condominiumassociates.com/blog/tips-to-allocate-reserve-funds as well as others.

Thank you for responding. What you wrote is not even close to what "percent funded" means with regard to reserve funding. But at least you explained what you did mean when you wrote "2023 Budget has reserve funded at 12% [of the budget]." And you also explained what you meant when you wrote "the reserve fund will be in the red." Which helps.

As for financial statements showing that the actual amount contributed to reserves is less than that budgeted: Yes, but I still you are jumping all over this when there might be good explanations for why less is being contributed. If you think assessments need to go up so that reserve funding is appropriate, well okay. But it's also possible that the "Percent Funded" figure for the reserve account is still healthy.

I just don't think you have enough facts or command of the financial vocabulary to make your case with the board and others.

Granted if you are making proper records requests, and the board is not cooperating in providing these records, that's a large part of the problem.

I will withdraw, as my comments undoubtedly have the taste of vinegar. I suspect others will have some honey to offer.

I'll repeat... there is no statutory requirement in North Carolina that requires the BOD to announce a notice of their BOD meeting and agenda prior to the meeting. The burden of proof falls on you to find the NC statute that supports your statement that ALL NC association meetings of members or boards require public notice and an agenda. Yes, special meetings of members, annual meeting require a public notice and agenda.

The above is incorrect. At any given point in time, "fully funded" means that the reserve account holds the amount that the reserve study has projected should be in the account // at this point in time //. Example: Suppose the only maintenance responsibility an association has is for the roofs of the units. Assume no inflation. The estimated cost of replacement of the roofs is $100,000. The estimated life of the roofs is 20 years. The reserve study will direct that the association // each year // contribute $5000 ( = $100,000 / 20 years). This spreads the costs of the new roofs over all owners over all the years. If at the end of year eight, the reserve account holds $40,000 ( = 8 x $5000), then the reserves are considered 100% funded (or "fully funded"). If instead at the end of year eight, the reserve account holds only $30,000, then the reserves are 75% funded ( = $30,000 / $40,000 ) at this point in time. Percent funded = (actual amount in reserve account at time X) / (amount the reserve study says should be in the reserve account at time X)