Alternative Chain of Command?

Started by MelindaW1 • 5 replies • 1673 views

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MelindaW1 (California)
Posts: 2

Posted:

I'm new to this forum and you seem like a very helpful, informed group. So here goes:

Our community has 2000+ homes in California. I serve on several committees, we have 5 board members whose terms are staggered every two years and a General Mgr. and a staff of 100. As some of my fellow committee members and I get more involved it is becoming obvious there are some serious management issues. But the way we are structured, committees make recommendations to the BOD, the BOD makes a decision but the GM can refuse to do it if he wants to. He has final say. And there is almost no oversight or accountability about spending money - if the staff wants it, they get it. Our annual budget is now a whopping $11.5 million, up 10.5% from last year. What is happening is that committees have good ideas that just die because the GM doesn't want to work on it. Right now it's what's easiest for the staff rather than what's best for the residents.

We have been looking for ways to solve the oversight/accountability problem. One person suggested a restructuring of the chain of management decision making so the Board is obligated to represent the committees suggestions but we don't know if it's legal or how to do it. So we are looking for suggestions. Thanks for any help.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Melinda,

The GM should not be in charge. Don't your gov. docs. state the BOD is resp. for managing the assn? I would be very surprised to learn that it's stated that the GM has this authority. IMO, the BOD needs to get rid of this GM and hire someone who understands that they are not the controlling entity, the BOD is. Once the board is in control, hopefully things will change dramatically; possibly even including the amount of your budget. BTW, why do you need 100 employees? What type of amenities do you have?

SusanW1 (Michigan)
Posts: 5,202

Posted:

Some Boards have the power to hire Executive Directors, CEOs, and that person handles the day to day operations of the corporation, hires and fires all staff, etc, BUT they must abide by the annual budget AND their duty is to implement the directions of the board.

So I am not sure what kind of administrative set-up you have, but clearly the tail is wagging the dog.

Or the dog does not know it has a tail.

KirkW1 (Texas)
Posts: 1,665

Posted:

Um, the GM serves the BOD. The BOD should fire the person if they decide to kill off ideas as you describe.

MelindaW1 (California)
Posts: 2

Posted:

Thanks for the replies. I agree the GM should be replaced but the board always defers to him.

There's a real combination of issues based on many things; history, bad management, bad boards. I would fire the GM but the history has always been the GM runs things how he feels best. He asks for money and they say yes. No questions asked. So if the residents want the office open all day and the staff wants to close it for lunch, it gets closed. If he wants new vehicles every two years because the warranties have expired he gets them - forklifts, mowers, security vehicles, maintenance vehicles - several hundred thousand per year!

Employees are another issue. We don't feel we need 100, but he wants more. It's incredibly expensive and they refuse to outsource. Everything's in house. We have a golf course, olympic pool, rec center, 24/7 security and 400 acres of grounds that are heavily maintained.

Can we put more board members, say 7 or does it have to be 5? We are thinking maybe each committee has one board member mandated to represent that groups concerns and suggestions. Can we change the rules to do that or is the system structured by law? Right now, if they don't want to hear it, they ignore it.

Do you know how I can find out how other HOAs of this size are managed?

Thanks again.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Melinda,

I would say the first step is to get a board who realizes that THEY are the controlling entity not the PM. If you can't accomplish that then nothing will ever change no matter how many board members there are.

You bylaws should specify how many members make up the board. Unless it says 5, but not more than 7, you cannot increase the number w/o an amendment to the bylaws. Some bylaws allow the board to amend w/o a vote of the members, others require a vote of the members. But, b/4 considering this change make certain the additional 2 board members would have a specific job to do, i.e. committee chairmen.

I agree that it's a good idea to have a board member on each committee. In many cases the board member serves as the chairman and reports back to the board each month.

Since your assn is so large and has big-ticket amenities, employees may be the best way to go. However it certainly wouldn't hurt to do a study on "employees vs contractors". You might find there is a big savings by hiring a contractor for some of the duties now performed by an employee. One big savings would be payroll expenses, i.e. employers share of fica, med ins, and any other benefits provided by the assn. Also, if you were to contract with a landscaping business you'd have a big savings on vehicle purchases and maint.

If you know of another large HOA with the same type of amenities you may want to visit with a board member or the PM.

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