Money from reserves

MariaD5 (Arizona)
Posts: 13

Posted:

I recently resigned from our HOA Board due to the controlling Board president who is not flexible. The Board consists of 3 members, two are very good friends and vote in lockstep no matter what the homeowners want. Last month, there was a vote to upgrade our gate/intercom system which included stickers to affix on our windshields, the stickers allow automatic entry to our subdivision. The money to pay for the upgrade came from our reserve which is funded by 25 homeowners, some homeowners already have 3-4 vehicles that would need stickers. The stickers that were purchased with our reserve cost 764.00 for 100 stickers (7.64 each). The Board, mainly the president, is handing out two stickers per family and wants the homeowners to pay 25.00 for the extra stickers. This means, she would keep 50 stickers and manage the process of keeping track of the money and the stickers. I emailed the Board and told them what they are doing is unethical and could even be illegal, they are asking the homeowners not only to pay more for the stickers than what they purchased the stickers for, but paying twice. I believe they should hand out 4 stickers per family (25 x 4 = 100) and if replacements are needed after the 4 stickers, I understand and agree that there should be a charge.

I would appreciate any feedback.

MariaD5 (Arizona)
Posts: 13

Posted:

I am not in California, I am in Arizona.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

This kind of sounds like a "you" problem if the majority isn't with you on this. Now that you gave up your position, you lost any vote you may have had to make changes.

The HOA has every right to get reimbursed for it's expenses. It is a non-profit. If it cost them $25 for a ticket, then the HOA can charge $25 to it's members. There may be a processing fee involved if they are mailed as an example. Just as long as what is spent on the item is the starting point of getting paid back.

Former HOA President

MariaD5 (Arizona)
Posts: 13

Posted:

That doesn't make sense. Perhaps you didn't understand my comment. The money is coming from the reserve, which the homeowners fund, and that funding paid for the original stickers which is replacing clickers. I agree once they provide the stickers the homeowners already paid for then a charge should be required.

When there are 3 people on the Board and two vote the same, it doesn't matter whether or not I am on the Board, the last Treasure quit as well. In addition, a homeowner who happens to be on the Board should not be holding on the the stickers, it should be the responsibility of the management company not a homeowner who has the power to do what they want with it. Not ethical whatsoever!!

MelissaP1 (Alabama)
Posts: 13,836

Posted:

So are the board member not homeowners? If they are, then why are they so different than any other member other than being on the board?

Former HOA President

VC (Florida(FS 720))
Posts: 118

Posted:

I am a new board member, so I may be wrong on that.

I am not sure you can even pay for new items from the reserve fund. The fund is supposed to be used for existing capital items only specified in your reserve study. Now, Arizona law may be different...

MariaD5 (Arizona)
Posts: 13

Posted:

You are correct in your statement. Because the intercom was not working, the two other Board members voted to fix the intercom as a repair, and instead of using clickers the decision was made to go to stickers, which the homeowners agreed to get rid of the clickers for stickers. I have no issue with that, the issue I have is the cost of the stickers are built in the repair estimate, and the cost was 100 stickers for 764.00 which is 7.64 a sticker, so giving 4 sticker per family instead of two makes sense. Most people have 3-4 cars already, so to charge them 25.00 for the extra one or two is not ethical in my thinking.

MariaD5 (Arizona)
Posts: 13

Posted:

You are correct in your statement. Because the intercom was not working, the two other Board members voted to fix the intercom as a repair, and instead of using clickers the decision was made to go to stickers, which the homeowners agreed to get rid of the clickers for stickers. I have no issue with that, the issue I have is the cost of the stickers are built in the repair estimate, and the cost was 100 stickers for 764.00 which is 7.64 a sticker, so giving 4 sticker per family instead of two makes sense. Most people have 3-4 cars already, so to charge them 25.00 for the extra one or two is not ethical in my thinking.

MariaD5 (Arizona)
Posts: 13

Posted:

Being on the Board and having access to something that can be mishandled is not ethical. She is the same person who had the irrigation repaired on her property and charged our HOA for the work, so no, I don't want her keeping track of the stickers and collecting 25.00 for each additional. It needs to be managed by the property manager and a line item should be added to the budget, it should be considered income.

TimB4 (Tennessee)
Posts: 21,062

Posted:

Quote:

Posted By MariaD5 on 05/09/2023 4:01 PM

It needs to be managed by the property manager and a line item should be added to the budget, it should be considered income.

I agree that a Line item be identified and inventory controls on the stickers created, regardless of who is in charge of them.

CathyA3 (Ohio)
Posts: 6,299

Posted:

The sad fact is that board members *always* have access to things that can be mishandled - it goes with the job. The good ones just don't do it. Board members can always make a mistake in good faith - that's not unethical. Having a different opinion on how things should have been handled doesn't make you right and them wrong - or vice versa. Many long-serving board members look back on decisions they made early on in their tenure that they would decide differently today. This also goes with the territory.

When you stepped down from the board, you lost your most effective tool in determining board actions. I get it, I've been the odd man out on my board, it isn't fun. And one of the hardest things for a former board member to do is to watch what they believe to be mistakes and to pick which battles are worth fighting and which ones aren't.

Once you're on the outside, you're limited to questioning the board's decisions or, if they're really stinkers and are doing something particularly bad, either taking legal action or else joining your neighbors in an effect to remove and replace the current board members with more effective ones. Neither of these last two options is particularly fast or easy.

Board members tend to circle the wagons when feel like they're under attack from homeowners - especially if the criticism is accompanied by quotes from the governing documents showing that the criticism is valid. In other words, questioning the decision may not work since they won't be receptive. So you're left with doing things the hard way. Or just deciding that this particular battle isn't worth pursuing.

MariaD5 (Arizona)
Posts: 13

Posted:

You are correct in all aspects. Our bylaws are very clear to ethical people. I believe in transparency and shed does not! I would have stayed on the Board if I felt I could make an impact, the last treasurer also quit because he was afraid the Board would get sued, and he was a lawyer. Sadly, most of our neighbors are snowbirds and own homes in different states so they are not active participants; out of 25 homes no more than 4 join the Board meetings. The Board president banks on no one showing up so she can make the changes she wants. In January we had 6 homeowners who joined the Board meeting, which never happens, bylaw changes were discussed and feedback from the homeowners was encouraged, 4 homeowners said no that they did not want to move forward with changing the bylaw since it cost money and was not necessary, but she wants to change the bylaw which will give her more control. After the homeowners expressed their desire not to move forward, she reintroduced it as "unfinished business" in the second Board meeting and since there were only 2 homeowners on that call, she moved forward to change the bylaw. Our bylaw clearly states that we need at least 16 homeowners to agree to bylaw changes.

It's unfortunate that one person has such control. I think if all the homeowners were paying attention they would have recalled the Board long ago. When I joined, I noticed that they had voted to make landscaping improvements that were not budgeted and used the reserve to pay for it which depleted the reserve by 1/2. In addition, they made this decision without the vote of the homeowners which is required per our bylaws. Half of the reserve was used for landscaping improvements in a gated 3 year old community that was already landscaped beautifully. When she realized what they did, instead of taking responsibility she threw the other two members and the management company under the bus... Since I was the treasurer, I worked with the old management company, which she ended up firing) to replenish the reserve. I requested a revised reserve study and cutting some of the unnecessary costs.

MariaD5 (Arizona)
Posts: 13

Posted:

You are correct in all aspects. Our bylaws are very clear to ethical people. I believe in transparency and shed does not! I would have stayed on the Board if I felt I could make an impact, the last treasurer also quit because he was afraid the Board would get sued, and he was a lawyer. Sadly, most of our neighbors are snowbirds and own homes in different states so they are not active participants; out of 25 homes no more than 4 join the Board meetings. The Board president banks on no one showing up so she can make the changes she wants. In January we had 6 homeowners who joined the Board meeting, which never happens, bylaw changes were discussed and feedback from the homeowners was encouraged, 4 homeowners said no that they did not want to move forward with changing the bylaw since it cost money and was not necessary, but she wants to change the bylaw which will give her more control. After the homeowners expressed their desire not to move forward, she reintroduced it as "unfinished business" in the second Board meeting and since there were only 2 homeowners on that call, she moved forward to change the bylaw. Our bylaw clearly states that we need at least 16 homeowners to agree to bylaw changes.

It's unfortunate that one person has such control. I think if all the homeowners were paying attention they would have recalled the Board long ago. When I joined, I noticed that they had voted to make landscaping improvements that were not budgeted and used the reserve to pay for it which depleted the reserve by 1/2. In addition, they made this decision without the vote of the homeowners which is required per our bylaws. Half of the reserve was used for landscaping improvements in a gated 3 year old community that was already landscaped beautifully. When she realized what they did, instead of taking responsibility she threw the other two members and the management company under the bus... Since I was the treasurer, I worked with the old management company, which she ended up firing) to replenish the reserve. I requested a revised reserve study and cutting some of the unnecessary costs.

MariaD5 (Arizona)
Posts: 13

Posted:

You are correct in all aspects. Our bylaws are very clear to ethical people. I believe in transparency and shed does not! I would have stayed on the Board if I felt I could make an impact, the last treasurer also quit because he was afraid the Board would get sued, and he was a lawyer. Sadly, most of our neighbors are snowbirds and own homes in different states so they are not active participants; out of 25 homes no more than 4 join the Board meetings. The Board president banks on no one showing up so she can make the changes she wants. In January we had 6 homeowners who joined the Board meeting, which never happens, bylaw changes were discussed and feedback from the homeowners was encouraged, 4 homeowners said no that they did not want to move forward with changing the bylaw since it cost money and was not necessary, but she wants to change the bylaw which will give her more control. After the homeowners expressed their desire not to move forward, she reintroduced it as "unfinished business" in the second Board meeting and since there were only 2 homeowners on that call, she moved forward to change the bylaw. Our bylaw clearly states that we need at least 16 homeowners to agree to bylaw changes.

It's unfortunate that one person has such control. I think if all the homeowners were paying attention they would have recalled the Board long ago. When I joined, I noticed that they had voted to make landscaping improvements that were not budgeted and used the reserve to pay for it which depleted the reserve by 1/2. In addition, they made this decision without the vote of the homeowners which is required per our bylaws. Half of the reserve was used for landscaping improvements in a gated 3 year old community that was already landscaped beautifully. When she realized what they did, instead of taking responsibility she threw the other two members and the management company under the bus... Since I was the treasurer, I worked with the old management company, which she ended up firing) to replenish the reserve. I requested a revised reserve study and cutting some of the unnecessary costs.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By MariaD5 on 05/09/2023 2:07 PM
some homeowners already have 3-4 vehicles that would need stickers... The Board, mainly the president, is handing out two stickers per family... I believe they should hand out 4 stickers per family (25 x 4 = 100)

I believe each family should have the number of stickers that equals the number of vehicles they have registered with the association.

The purpose of a gated community is to keep non-residents (be they owners or tenants) out. At my last condo, some owners gave gate cards to friends and vendors, in violation of the rules. Owners/tenants should not have extra stickers.

Keep reading here, and you will see that controlling parking and entry to HOAs and condo associations is a hot and difficult topic.

I am not entirely happy with what the President did, but respectfully, if I had to choose between the President's plan and yours, I would choose the President's.

MariaD5 (Arizona)
Posts: 13

Posted:

The 4 stickers are for the homeowners that paid for the stickers, not for other people. Most of us have 3-4 vehicles and need the stickers for our cars and motorcycles, in some cases. I would agree if the homeowners only have 2 vehicles, it would make sense to give them 2, now the residence who paid for the stickers already have to pay again for the extra stickers for their additional vehicle. We can't give the stickers to anyone else since the stickers are assigned to the license plate we provide which they will have on file.

MariaD5 (Arizona)
Posts: 13

Posted:

I am curious, is it because of the experience you had with your condo association? For our vendors and friends, we have a gate code that they punch in the system to open the gate, each homeowner assigns their own code. So that would be a moot point for us.

MariaD5 (Arizona)
Posts: 13

Posted:

I am curious, is it because of the experience you had with your condo association? For our vendors and friends, we have a gate code that they punch in the system to open the gate, each homeowner assigns their own code. So that would be a moot point for us.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By MariaD5 on 05/10/2023 10:50 AM
We can't give the stickers to anyone else since the stickers are assigned to the license plate we provide which they will have on file.

Do you mean owners/tenants are not allowed to give the stickers to someone else? If so, is there something that technologically prevents non-owners and non-tenants, who have a sticker (courtesy of a rule-breaking owner or tenant) to gain entrance?

At my former condo, some owners gave either their gate code or their magnetic card to friends and vendors to use, in violation of the rules.

LoriM15 (Florida)
Posts: 1,009

Posted:

We are implmenting an RFID (sticker) access program to our community in the next few months. Our policy is that we will provide two free stickers to each homeowner if they can show that they have two cars registered to their address. If not, they get only one. They can have additional stickers if they can prove they have additional vehicles registered to their home address, but they have to pay for the additional stickers. The cost is pretty low so it's not a big deal.

We are not just handing out the stickers. They have to make an appointment and come to the clubhouse. They have to hand us the registration form that shows the vehicle is registered to their community address. The PM or an assistant will actually install the sticker on the car.

This seems like a strict policy, but we had previous boards and managers that didn't put restrictions on clickers or white access cards. We now have 11,000 entries in our gate access database in a community with 820 doors. Obviously many of those probably aren't valid anymore, but we don't know. We will still have the white access cards, but we are now turning off old cards as houses are sold and the new owner has to come in to get their two free cards. Any additional cards we have to have proof there is another resident (like a school-age child) living in the home.

MariaD5 (Arizona)
Posts: 13

Posted:

You at least have a system in place. There are 25 homes in our community and most of us have 3 to 4 registered cars with the association. We did get 2 clickers when we purchased our home 6 years ago but the difference is the clickers can be moved from one vehicle to another, but with the stickers we can no longer do that. All we are asking for is to have enough stickers for all of our registered vehicles, and since 100 stickers were purchased, we should be able to get stickers to cover all of our vehicles, the stickers cost 7.60 each and the Board is charging 25.00 for additional stickers after the 2. Our visitors and vendors use a code associated with our house number, so our situation is difference from yours. In your case, I completely understand why you would not hand out more than what the homeowners need.