Nominating Committee

Started by NancyM2 • 43 replies • 2829 views

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NancyM2 (California)
Posts: 249

Posted:

Having been a past board member I still maintain a strong interest in our community. I have volunteered for several committee's.
I was recently asked to volunteer for the Nominating Committee. The election will be this May, with three seats available.
One of the nominating commttee volunteers is our HOA's Ombudsman. Since he is dependent on the board for retaining him at a salary of 86K annualy. Would this not be "Conflict of Interest" for him to be involved in selecting possible board members.
Many of our homeowners are against retaining this Ombudsman, therefore having a freindly board is critical to his position. He has done quite well so far keeping his job, as he is the one that finds any of the possible appointee's when there is a vacancy.

NancyM2

RogerB (Colorado)
Posts: 5,067

Posted:

Nancy, it is usually the Board's responsibility to select members of the nominating committee. You can mention to your Board that you view this as a conflict of interest. If there are sufficient volunteers for the committee I would not want the Ombudsman to be on any committee.

MicheleD (Kentucky)
Posts: 4,491

Posted:

. . . .

Am I missing the intent and purpose of Ombudsman?

It seems weird that the community would distrust their ombudsman. . .

DonnaS (Tennessee)
Posts: 5,671

Posted:

Nancy,
Just for our information, how big is your association to warrant 86K annual salary for an ombudsman? I do think that this might be near a conflict as Roger said.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Nancy,

I think it strange that an HOA would want, or even feel the need for an Ombudsman. Can you tell us specifically what his job description is? He's getting quite a hefty salary!

NancyM2 (California)
Posts: 249

Posted:

Michele,
I don't understand the purpose as well, As we have a Mgmt Co to handle these issues. like most HOA's do. This Ombusman was a friend of the board and was out of work, so they created this position for him five years ago. He also does grounds volunteer work as well, but that is a volunteer position that he can't be paid for it. None of the other communities have the need to hire a Ombudsman ~ therefore our homeowners don't like paying the extra $14.00 (each unit) a month for his salary. We are a community of 575 single family homes, with no amemities. And we just had a raise in our ddes of $11.00 a month each unit.

The reason I was questioning the "conflict of interest" issue was that I don't want to be on a committee that I consider unethical. Since we already had enough volunteers for this committee anyway.

NancyM2

NancyM2 (California)
Posts: 249

Posted:

Donna, we are 575 single family homes with no amenities.

NancyM2

JohnB7 (South Carolina)
Posts: 176

Posted:

Quote:

Posted By NancyM2 on 01/12/2009 2:29 PM
Michele,
I don't understand the purpose as well, As we have a Mgmt Co to handle these issues. like most HOA's do. This Ombusman was a friend of the board and was out of work, so they created this position for him five years ago. He also does grounds volunteer work as well, but that is a volunteer position that he can't be paid for it. None of the other communities have the need to hire a Ombudsman ~ therefore our homeowners don't like paying the extra $14.00 (each unit) a month for his salary. We are a community of 575 single family homes, with no amemities. And we just had a raise in our ddes of $11.00 a month each unit.

The reason I was questioning the "conflict of interest" issue was that I don't want to be on a committee that I consider unethical. Since we already had enough volunteers for this committee anyway.

NancyM2

Presumably the HOs voted to approve the budget which contained the salary in question.

NancyM2 (California)
Posts: 249

Posted:

John, like I said I have been on lots of committee's ~~ Our recent Budget committee was one of them. When I suggested cutting back or eliminating the Ombudssman position I spoke to deaf ears. The budget incease of $11.00 a month (per unit) could have been mute had we cut, or eliminated his position.

Perhaps I did not word my question corrrectly. I should have asked if anyone one would consider it "CONFLICT OF INTEREST" to have a paid employee on the Nominating Committee.

NancyM2

NancyM2 (California)
Posts: 249

Posted:

Roger, Thank you for your input. However I should have asked the question different.

would you consider it "Conflict of interest" to have a paid employee on the nominating committee??

NancyM2

RogerB (Colorado)
Posts: 5,067

Posted:

Quote:

Posted By NancyM2 on 01/12/2009 6:25 PM
Roger, Thank you for your input. However I should have asked the question different.

would you consider it "Conflict of interest" to have a paid employee on the nominating committee??

NancyM2

IMO YES. However, isn't this person an independent contractor rather than an employee? If so there is still at a minimum the appearance of a conflict of interest. And would be a conflict of interest if this person was involved in helping elect anyone who would be involved in any decisions related to using that person's services.

NancyM2 (California)
Posts: 249

Posted:

Yes Roger , He is a independent contractor, however we are his only customer. He is frindly with the board, and usually sits in on Executive meetings, even when they don't involve him. So having the board in his corner deffinetly is job security. Since many homeowners have complainrd about paying his salary of 86K anually.

NancyM2

JoanneD1 (Arizona)
Posts: 447

Posted:

Sorry to be so stupid but what is an ombudsman? I have never heard of this. In our HOA, the nominating committee only puts up the same number of candidtates that there are vacancies for. When asked why other names are not posted, the response was that they didn't want anyone to feel bad if they weren't elected!! I can hardly stand it. So please ombudsman deinition. Thanks

MaryA1 (Arizona)
Posts: 7,043

Posted:

Joanne,

I can't believe I'm reading what you just wrote! So, do they just place candidates on the slate that they like? So the same people get elected each year? What about other people who've volunteered to be a candidate but haven't been put on the slate? Hasn't anyone ever complained?

SusanW1 (Michigan)
Posts: 5,202

Posted:

If your nominating committee is manipulating the election, then you have bigger problems than what you stated.

The board needs to determine if this committee is able to do its job of finding qualified candiates - PLUS there should be opportunity for outside nominations and even write-ins, if your documents or statutes allow.

The Members elect the board, not the nomination committee.

NancyM2 (California)
Posts: 249

Posted:

Joanne, They tell me a Ombudsman's job description is to be a non partial party to mediate between two parties. i.e. neighbor disputes.

I have always questioned how a person could be non partial when he is paid by the HOA, and is a homeowner.

This was a created position ~~ to accomidate a friend of the board, and pay him a salary. Most Mgmt co's handle these's kind of problems.

Since he is dependent on the board to hire/fire him I would imagine his appointment to the Nominating committee is "Conflict"

FYI ~~ I did contact another HOA attorney with this question. He replies in an e-mail to me that he considers it "conflict" Since the board choose to ignore this response from my attorney, and have kept this person on the nominating committee ~ I am not sure what my next step should be.

NancyM2
hope that answeres your question.

SusanW1 (Michigan)
Posts: 5,202

Posted:

The strict definition of "conflict" is if this person has an advantage not available to other members or could gain monetarily as a result of his/her vote.

Since he is simply on a committee where willing candidates are identified, I don't see the conflict.

Your big issue should be looking at this position itself. Apparently he has shown his worth or value in this role of mediator for all kinds of conflicts that would have to be settled by the board. Some would consider that worth his weight in gold.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Not knowing what this guy is supposed to do for 85K I can't see how anyone can decree all is well inside the tepee, if he is part of the Nominating committee. Why the question anyway. We have an HOA with 2000 homes and pay a CEO over 100K (I think) and she is worth the money by I doubt she does the Boards work and runs or serves on a nominating committee. We also have developer still around and has great responsibilities but I doubt he serves on the Nominating committee. I personally would like to think the Board is the best people for the nominating committee but can see that a committee would also serve the purpose, if there were provisions for open nominations from the members.
Isn't it counter something to have someone nominate anyone for anything and they can't vote for them? Something wrong there somewhere and it just might be old conflict of interest.

NancyM2 (California)
Posts: 249

Posted:

Susan,

In the past he has found all the appointee's when ever their was a vacancy. Then he reccomends them to the board.(without exception) Only the homeowners that are friendly to him, Others don't have a chance. I know of two homeowners that have applied for a vacant position's ~ that were 86ed.

There are many of our homeowners that don't understand why we pay 86K a year for a job that our Mgmt Co could and should handle. Especally when we pay more than double for our present Mgmt Co. than what we were paying. His Ombudsman duties are few (if any)

The main reason he wants to be on the nominating committee is to control who will run for the three positions open this next election.

It is to his advantage to keep a friendly board to secure his job.

NancyM2

SusanW1 (Michigan)
Posts: 5,202

Posted:

Ah - ha: now we are able to see the MAIN issue.

SusanW1 (Michigan)
Posts: 5,202

Posted:

Nancy - the place to start about the REAL issue is with the budget committee, or finance committee, if you have one.

Get on this committee. Look over the numbers and suggest some hard recommendations about paid staff. This committee makes recommendations to the Board for the board to vote on. If the committee recommends dropping this position, reducing the salary, or eliminating the position in total, at least this will be in the minutes and open for all to see and discuss. The board can either accept the recommendations or just hear the report and file it.

Your post sounds like this guy has control over the board. But I really doubt it.

NancyM2 (California)
Posts: 249

Posted:

Dear Susan

"YEP" we do have a finance committee, in previous posts I stated where I was on the finance committee, but to no avail. I reccomended putting the Ombudsman and "in house" attorney on billable hours, and just paying for their time as needed, not salares. (the "in house" attorney get's 162K+ annualy) with NO pending litigation outstanding.

The board member that was heading our finance committee said that cutting our "in house" counsel was not an option, however he suggested to the board we cut the Ombudsman. Since the Ombudsman also has the in house attorneys "back", as they are buddies. The "in house" counsel advised the board against that decision. So it didn't happen. ~~ She runs the board

In fact ~ in an e-mail that board member wrote me that he felt responsible for the attorneys and Ombudsman's livelihood, and didn't feel confortable cutting them ~~ I wrote back and reminded him that it was his FIDUCARY DUTY to protect the homeowners, not the people we hire. That made him mad, he got very sarcastic with me and my husband made me quite the finance committee.

Now you can understand why I am so concerned and wanted to be on the nominating committee to try to strighten some of this out.

Thank you for your input.
NancyM2

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Ah - ha: now we are able to see the MAIN issue.

Susan,
With the kind of salaries these folks are able to generate, I wonder how they get the water bill paid. How do they generate all the assessments. 85k plus, 160K, plus, management company, they keep going like this, we will be reading they are applying for a "Bailout."

NancyM2 (California)
Posts: 249

Posted:

Susan
FYI ~ When I was on the finance committee I spent several weeks preparing a budget analysis ~ collecting budgets from several of our neighboring communities. I made up a "budget report" comparing seven other budget's to ours. I had bar charts, and percentage tables. It clearly showed where we are "top heavy"

When I presented this to the board member that was heading our finance committee he got sarcastic and mad at me. I'm sure the board never got to see my report.

P.S. He was the one who suggested I do this report.

NancyM2

NancyM2 (California)
Posts: 249

Posted:

Robert
Very cute

NancyM2

MicheleD (Kentucky)
Posts: 4,491

Posted:

And don't forget the deep-rooted budget mentality: Use it or lose it.

So if you were showing you budget as being too "heavy," with clear fat that could be trimmed (which I would say an in-house attorney and an ombudsman would be trimmable fat), then that would mean you would have a huge surplus after cutting. . . .

And people may want some refunds....

We had this issue come up in our measly budget.

One year we had about $7K "left over," which I wanted to put into a reserve.

We do not currently have one, nor are we required to by either state law or by our governing docs.

This was years ago.

Another member wanted to return it to the residents.

He accused me of wanting to "spend" it to keep from lowering the assessments next year.

pfffft.

It was a fluke, and we've never had a "surplus" since, and we still don't have a reserve. . .

NancyM2 (California)
Posts: 249

Posted:

Michele
I would be in hopes we could reduce our dues by $30.00 to $40.00 dollars monthly (per unit) come the next budget. In the mean time we are negative every month with our operating contingency, even though we just had a dues increase of $11.00 per monthh (per unit)We do have a resurve, and the interest from that resurve is subisidizing the operating contingency.

There is hope

NancyM2

MaryA1 (Arizona)
Posts: 7,043

Posted:

Quote:

Posted By NancyM2 on 01/19/2009 12:04 PM
Michele
I would be in hopes we could reduce our dues by $30.00 to $40.00 dollars monthly (per unit) come the next budget. In the mean time we are negative every month with our operating contingency, even though we just had a dues increase of $11.00 per monthh (per unit)We do have a resurve, and the interest from that resurve is subisidizing the operating contingency.

There is hope

NancyM2

Nancy,

How can you hope to reduce the assessment $20-$30/mo with a monthly negative balance plus having to rely on the reserve fund interest to subsidize the operating fund? Just curious!

I've never thought it wise to reduce assessments; IMO, it's a much better goal to keep them stable. I know of assn's that reduced assessments only to have to raise them in a few years after they depleted the contingency reserve because of the reduction!

NancyM2 (California)
Posts: 249

Posted:

Good question Mary
I can understand where you would be confused. If you take 162K annual salary for counsel = $13,500 monthly. Put her on retainer @ 2 to 3k monthly (like oter assn our size pay) eliminate our Ombudsman position, allow the Mgmt Co to do their job (which is what he does) Reduce our Mgmt costs by 1/2 about 5K monthly.~Plus another line item "litigation expenses" @ 3,860 monthly (used by our counsel)

PRESENT FY2009 MONTHLY BUDGET
13,000 Counsel
7,500 ombudsman
12,957 Mgmt Co (with extras)
3,860 Litigation expenses

$37,817 monthly total on 2009 budget 575 units = $65.77 (per unit)

POSSABLE REDUCTION
5,000 retainer, plus billable hours for counsel
8,000 Mgmt Co, with extras

$13,000 monthly total 575 units = $22.61 (per unit)savings amount to over 40.00 a month (per unit)

I agree we will need a healthy operating contingency in case of emergancy's If we reduce these costs starting now in 2009 we will have a heatlhy contingency by the time we have to do the 2010 budget, where we can reduce the dues.

Hope this makes sense to you

NancyM2

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Nancy,
Maybe semantics but it caught my eye (contingency), why not Reserve Fund?

And if you can swing it and I am only speaking as an outsider, but my reaction to your figures: What in the world has this management company been doing. I really don't think I am wrong to believe all these figues serve as a scorecard and evaluation on the skill of the M/C. The M/C is hired to not let this kind of thing happen, I believe that is their job.

We have a 2000 unit POA (our umbrella assoc) and our CEO (CAM, plus a bunch of other qualifications) would be all over a budget like you presented, IMHO. Got any reasons I would appear to be off base about this, I would sure welcome them.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Nancy,

I still think the more prudent thing to do would be to put the savings into the contingency or the reserve fund. As I said earlier, I am not a strong proponent of reducing the assessments. In many instances it only comes back to bite you, and more often than not a different board is faced with the problem.

NancyM2 (California)
Posts: 249

Posted:

Robert~ Perhaps there are a few things I didn't explain ~ Firstly the M/C was recommended by our attorney (they were old collage friends)at a cost over double of what we were paying. The M/C is smart enough to know that she (the attorney)is the goose that laid the golden egg. Why would they recommend anything that would upset her. Therefore we have bad M/C advise. Our Attorney runs the show.

We do have a healthy reserve fund contingency. However we are upside down every month in our operating cash by several thousand dollars each month. (paycheck to paycheck type of thing going on)So we use the interest from our reserve monies to make up the shortfall.

NancyM2

NancyM2 (California)
Posts: 249

Posted:

Mary, Normally I would agree with you. However what you don't know is back in 19?? we had to raise our dues from 114.00 monthly to 171.00 because of a "Class Action" suit with heavy legal costs. ~ The promise was to reduce the dues back to where we were once te "Class" attorneys were all paid. That as been over six years now, with continuing heavy dues.

NancyM2

MaryA1 (Arizona)
Posts: 7,043

Posted:

Quote:

Posted By NancyM2 on 01/20/2009 2:56 PM
Mary, Normally I would agree with you. However what you don't know is back in 19?? we had to raise our dues from 114.00 monthly to 171.00 because of a "Class Action" suit with heavy legal costs. ~ The promise was to reduce the dues back to where we were once te "Class" attorneys were all paid. That as been over six years now, with continuing heavy dues.

NancyM2

Nancy,

With that added explanation, I can more easily understand where you're coming from. If the attorneys have been paid in full and you can convince the board to eliminate the attorney from a salaried position and the ombudsman altogether, then perhaps a small reduction might be feasible. Frankly, I cannot fathom justifying $250,000 in salaries for an attorney and an ombudsman. Does your assn have that much legal work going on, not to mention disputes that can't be handled by the BOD? If I were a member there I surely would be thinking there might be some gross mismanagement going on.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Mary,
I have no problem with your conclusion and what shows here is the pointed finger. What do we suggest Nancy do, frankly, I am not comfortable with some kind of revolution? I would suggest that with considerarion you and maybe the rest here could lay down some procedural suggestions.

First step, find out if Nancy has any real support to help her.

Let me be clear, I agree totally with your post Mary.

EllenS1 (Florida)
Posts: 1,148

Posted:

Nancy,

This sounds odd to me. Reserve funds should be there for specified items not to bail out a low bank balance.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Ellen,

I was under the impression Nancy was talking about using the interest earned on a contingency fund not the reserve fund. And she did say they were only taking the interest to subsidize the operating fund.

EllenS1 (Florida)
Posts: 1,148

Posted:

Mary,

Nancy said in her 1/20 post "interest from our reserve monies to make up the shortfall". Whether it is the resrve fund or interest from it is the same thing. What's a contingency fund?

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Mary and Ellen,
On Nancy 20 Jan post she references her Contingency fund as a fund for emergencies.

A contingency fund, if memory serves came into being as a better way of saying "Slush", which associations used to use for anything the the "Manager or M/C or BOD" decided they needed money for, to do what ever they wanted. Some now also call it the Discretionary Fund (in our place is has been used to pay Bonus to Management types, so I believe. I will find out one of these days but, I could be wrong, I doubt it.) In any event it is not an emergency fund and is not set aside to meet emergencies unless the BOD wants to declare an emergency. I honestly believe the name Discretionary and Contingency was just a descriptive effort to made the monies come under such a wide umbrella, who could question the expenditure. Pretty wide ranging words, don't you think, where as Reserve seems more restrictive.

NancyM2 (California)
Posts: 249

Posted:

Sorry Mary ~ If I didn't make myself clear. Since we are upside down every month on our operating account (more monies going out than coming in)They are using the interest earned from our Reserve account to subidize the operating fund. I do understnad we can only use reserve monies for which it has been assigned.

NancyM2

NancyM2 (California)
Posts: 249

Posted:

Robert, ( Hey guy's Thanks for all your help)Perhaps I used the word "emergency" wrongly. What I meant by emergency was extra monies in the operating fund for thing's that pop up in every month's expenses, that were not expected. Right now we are barely able to pay for things like the water bill, and we have allowed for those in our budget.

Finances ain't pretty with our HOA

NancyM2

NancyM2 (California)
Posts: 249

Posted:

Mary, Robert, Roger & all other HOATalk members
Thank you so much for being there when I need you. I was only the treasurer on our BOD for a year, so I don't have the experience you all have. My husband made me quit he was worried about my health. Whenever I get frustrated and don't know what to do, I can always depend on all of you. You guys are awesome

Many of our owners want to see me back on the board, I had a good reputation.

**Many years of watching them screw up.
**Paying for salaries we don't need
**Board Pres yelling at me, threatening to sue me.
**Hearing the lies, but can't do anyting
**Paying to much in dues
**Seeing the look on the atotrneys and ombudsman faces when they get fired
"PRICELESS"

I may just throw my hat in the ring (husband willing)

NancyM2

NancyM2 (California)
Posts: 249

Posted:

Sorry about the mis spelled word (attorneys) You need spell check on your site
NancyM2

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Nancy,
Without spell check, when I remember to use, I make much less sense than I do normally.

Here's what I did:
If you use IE as your browers, open window there. Look up top for Tools, open and select options. Look for IE spell, select. Now if you don't have IE spell just go to IE home site and download it, takes 1 nnute or so, then do above. I think that is how I did it.

Then when you are replying or posting, when finished, go to above tools, and select IOSpell,

CAUTION, Once you select IOspell and you hit OK then scroll down and post your message

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