HOA

I have to work on the assumption that information being sent to me by a reader is accurate. Most of the time, I do not know who the actual parties are that may be involved in any disputes, disagreements or why a reader is asking the question or how the reader will use my article.

There have been many times that I will ask for clarification by email before responding to the question. There have been many times when I have to research a topic, and often I will have experts such as attorneys, accountants and insurance specialist to review my columns for accuracy before they are published. I do understand that too often there are two sides to a story, but unfortunately, most of the time, I am unaware of the other side.

I will summarize the contents of this reader’s email. He indicated the original budget was a result of an eight-month process before it was presented. The board had reviewed its 2012 reserve study, received evaluations from three major roofing companies, along with evaluations for landscape and roads, all of which are major components of the community. The budget that had been originally presented met the reserve study recommendations regarding its funding.

The board found that the reserves were under-funded by $500,000. The reserve study had only $15,000 for roof replacements where the underlayment on the roofs were 28 years old and from the evaluations needed to be replaced within two years at the latest. The bids from certified roofing experts to replace the roofs ranged from $300,000 to $400,000.

The reader states the three resigned board members took their fiduciary responsibility seriously, that they had carefully followed the Nevada Revised Statutes in developing the original budget and had conversations with the state ombudsman. They took the time to obtain accurate facts about the conditions of the common elements, reviewed the funding and verified it was inaccurate. Based upon a new reserve study of 2014, the board presented a budget and followed the recommended funding plan as advised by the reserve specialist. The increase in assessments and the five years of recommended assessments were based on the funding plan in the new reserve study.

This reader was concerned that we did not edit the comments made by the original reader who used the following words, “adjust the assessment scheme that was derived from a new reserve study” which may have been “influenced” by the resigned treasurer. In my read of this sentence, I did not interpret the word, “scheme” to be derogatory. An assessment scheme meant to me a “large-scale systematic plan for attaining some particular object or putting a particular idea into effect.” (That is the definition of the word when used as a noun.)

In this case, the budget was based on a funding plan for 2015 and for the next five years. As to a budget being influenced by the treasurer, I would expect a treasurer to influence his or her board to approve a budget. The treasurer’s job is to have a handle on the operating funds of the association and the treasurer should be one of the best persons on a board to give good financial advice as to the operations of the association.

I appreciate receiving the reader’s email and hope that this article clearly states that the three board members who resigned took their fiduciary responsibilities seriously and believed that the original budget being presented was in the best interest of the membership.

Barbara Holland, certified property manager, broker and supervisory certified association manager, is president and owner of H&L Realty and Management Co. Questions may be sent to the Association Q&A, P.O. Box 80360, Las Vegas, NV 89180. Fax is 702-385-3759, email is support@hlrealty.com.