BOARD RECOMMENDATIONS!
| Congratulations again and as your organizational meeting approaches I ask you to consider the following; 1.ELECTIONS I have always advocated that elections be administered by a third party vendor to ensure the integrity of the election. Volunteers are wonderful but the community is better served by there being no under current. Apparently there was a glitch this time during the count causing an announcement to be made. Clearly they got it worked out but imagine. 2.ORGANIZATIONAL STRUCTURE Hiring a COO with a contract that runs everything with absolute control over everything was and is a bad idea. Perhaps it was necessary at the beginning for the conversion to self management but as time went on it proved that absolute power created significant dysfunction and abuse of power. Rather the board should consider making three positions report individually to the board. A. COMMUNITY MANAGER to manage all of the administrative functions including the Administrative front office, back office( including employee fringe benefit and routine legal), Communications ( including Spirit), Clubs, , Board Board, minutes and Policy Regulations and be responsible for all interactions with homeowners including dispute resolution and compliance. I would search for a new employee replacing current CM. B. A second position should oversee operations from maintenance, capital projects, landscaping, fitness, IT, Activities, Restaurant, Insurance and lead strategic planning. C. CONTROLLER responsible for all accounting, finance and treasury functions. 3.SURPLUS FUNDS from 2023- $633,000 The last board voted to apply the surplus funds to 2024 operating expenses anticipated deficit of 2024 that exceeds 2024 Budget. I would apply it as a credit against 2025 operating expenses and I believe that is what NRS116 intended. There was not an April 2024 projection showing the likely need as there were 8 months to go. It was conjecture about restaurant deficits and insurance. Do the math. No way do those potential increases consume $633,000. Homeowners are better served by applying the funds to 2025 operating expenses as they receive benefit of lowering the 2025 annual homeowner assessment calculation. The do not receive that benefit if applied to 2024.The reason they do not receive full benefit in 2024 is because the excess of funds not used to offset further restaurant deficits and insurance in 2024 are then declared as surplus funds for 2024. As a result, the homeowners neither receive a check nor credit towards 2025 payments And what happens to 2025 Budget?. In addition the 2024 year is distorted accounting wise. The 2025 Budget is a better vehicle to account for the surplus funds of 2023 for transparency and ease of understanding. The ultimate 2024 loss can actually be estimated and possibly accounted for in the 2025 budget. In addition we don’t know what events will take place in 2024. For example Sandy Seddon resigned after the March 25 Board Meeting where surplus funds were dealt with. She now leaves June 19th and SCA saves a chunk of money offsetting some 2024 losses. Other 2024 events and activity will happen.I urge the board to reverse the action from the April Board of Directors meeting and benefit the homeowners for the 2025 annual assessment calculation. To date 17 homeowners have agreed to attend an organizational meeting with me to file complaints( not just one) with NRED against SCA to reverse the board’s action. We should wait and allow the board time to sort through its priorities through end of June to hopefully vote to reverse that April Surplus Funds decision and benefit homeowners in 2025. Will the board actually incur legal expenses to defend an action, if filed, that actually benefits homeowners? Hopefully not because reversal does not hurt HOA in anyway .Again congratulations to the new board and may your new challenges be met with great governance decisions benefitting homeowners best interests .Until next time….Robert |