Validity of May 28th Vote and proposed annual assessment increase

[MikeNBren]

Good Morning,
I am playing devil’s advocate and asking for information in regards to 2 of the 100’s of questions I have gotten.
1. Could the BOD explain how/why the May 28th vote is valid. There is a process for calling for a vote and what the vote can be about. It is “perceived” that this vote is called for by the Finance Committee and the BOD is illegally and repeatedly voting on a topic that’s been voted down prior. Is this a legal vote and how?
2. Can the Annual Assessment be broken up into 2 (non special assessment) payment amounts the way it is being proposed? Is the additional monies even legal to collect per covenants and bylaws, if so how?

I realize that we’re trying to stay above water, but precedents are being set which means RR should have a legal basis for covenant and bylaw deviations that preclude liability from litigation.
Any information from a BOD member would be greatly appreciated.
Thank You

[PamelaRaymond]

I apologize for the delay in response but was hoping for a board member with more tenure would have provided some information regarding your questions. I will do my best to answer them with the knowledge that I have. My thoughts are in blue below:

1. Could the BOD explain how/why the May 28th vote is valid. There is a process for calling for a vote and what the vote can be about. It is “perceived” that this vote is called for by the Finance Committee and the BOD is illegally and repeatedly voting on a topic that’s been voted down prior. Is this a legal vote and how?  The Budget Committee made recommendations to the Board when it presented the Budget for the 2022-2023 year, The Board accepted the budget and recommendations, so it is not being called by the Finance Committee. The Finance Committee, formerly called the Budget Committee, was made a standing committee based on those same recommendations in order to provide accountability to the POs on a monthly basis regarding how money is being spent. The Finance Committee is working on its Standard Operating Procedures to present to the Board in June for acceptance. This is a legal vote as provided in the covenants and bylaws. This is not a subsequent vote due to a quorum not being met for the original vote. This is a separate vote as stated on the ballot and notice.  I cannot speak to whether it is "legal" as I am not an attorney, but I have not found any additional information in our covenants and bylaws that would indicate it is not.
2. Can the Annual Assessment be broken up into 2 (non special assessment) payment amounts the way it is being proposed? Is the additional monies even legal to collect per covenants and bylaws, if so how? 
I believe that this question is being posed based on Article V Section 7 stating annual assessments are due May 1 and considered paid in advance, they cannot be adjusted or prorated. My logical response would be that this is relating to requests for a PO that paid dues May 1 and then sells lot 3 months later - the PO would not have the assessment prorated and/or adjusted back from the Association. Again, I am not an attorney, but my response is based on previous experience with 'paid in advance' assessments. The current assessment rate is due May 1. 
As far as additional monies go, you could use our covenants and by-laws to argue either way. But when does common sense prevail with a true understanding of what it takes to realistically run the Association? For example, I have heard numerous times that we have been running on $250 for all these years. What did we get for $250 in 2021-2022? Wages for Office, Security, Pool and Maintenance was budgeted for $405,783. $250 x 1516 lots is $379,000. That is a loss of $26,783. just for the staff that keeps up running. User Fee 1 for the $60 totaling $75960 is not for paying operations but for sewer and water which is why I did not include it.  The Rec Center/Pool expenses were $13400 with an income of 20,876 for a profit of $7406. But let's go back and now pay our FICA $36995 - again another loss of $29519. We do have other revenue and other expenses, but to say that we can operate annually on $250 without having to give up something is not realistic. Article 2 of the bylaws states that the BOD shall manage the affairs of the Association. If we cannot meet our financial obligations, the BOD had a responsibility to do what is necessary to meet those needs.

Again, these are my responses based on my research. I am a numbers person, not an attorney. I hope though that it will help. Thank you so much for giving me the opportunity to share.

[PamelaRaymond]

I did not completely answer part of your 2nd question - can the Annual Assessment be broken up into 2 payment amounts? We are not trying to " break up" the assessment into 2 payment amounts. The current annual assessment is $250 due on May 1 and a budget was created at that amount. Operating within that budget does include additional revenue and expenses, but we know that it will still not be enough to get us through this fiscal year. This is an emergency measure for the difference between $250 and $850, due August 1 for this year with the new annual assessment rate of $850 starting May 1, 2023.

[MikeNBren]

Thank you for replying. I understand what you are saying and was asking the questions in an attempt to have an official answer in regards to a lot of misinformation I see on FB posts about this subject. It is a fiduciary obligation of the BOD to keep RR operating, but not being a lawyer myself, I’m not sure that obligation supersedes our Covenants. I 100% agree an increase is needed, but I would expect the board to know the legality of their ability to step outside the covenants and that at least 1 of them be able to speak to their rights to do so.
Again, Thank you for the information it is very appreciated.

[lgastonlover]

I agree, thank you Pamela for your insight!!

[PamelaRaymond]

You are very welcome.

[Toniatwo]

Hi, I have a question since vote did not pass. I understand if I am reading correctly. Once enough votes have failed and the park cannot run. The board will then ask the court to change our annual assessment. How long will that take to get completed? I am very sad that it did not pass and a little scared about my property value. So would like to know how soon we can get back on track with pool open and full time office staff. Thank you for your time.

[AnneSingleton]

Hello,

The BOD will be seeking legal advice on what options we may have. As far as a timeline, we do not know this information yet. Sorry we can't provide any more details at this time.

Thank you,

Anne

[Toniatwo]

Anne thank you very much.

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