Budget submitted late

Our budget includes a doubling of cost for security because of the increase in hours of guards, which was never discussed with homeowners. In addition, the new budget was sent 30 days before the fiscal year was to begin even though the Rules state that it should be sent no less than 60 days before. Because this has resulted in a substantial increase in HOA dues, we're wondering if we can contest the entire budget. Our complex has 180 units in California.

JoanL,
If at the annual meeting this bidget has not been approved and I would believe that is one of the purposes of the annual meeting. When you say our budget, do you mean the proposed buget. If the Board is saying here is the budget we approved and you all have to live with it, and your documents don't specify the budget has to be approved by the members, I would call a "point of order" at the start of the meeting and question the board approving the budget without members approval and also question the board not abiding by the documents.

You will not to be able to be effective unless you have some support there, especially to second any thing you put in a motion, such as rejecting the budget as written and approved.

Californis is different in many wayss but I don't knoww California rules.
I also can not approve or understand how this budget can be approved without members vote. That an elections are the main reason for an Annual meeting. Something goofy somewhere.

Members can contest anything the Board does and if you have enough votes the board can not act. Seldom happens, but members are more like to racall the Board or any member on it. See documents. Also, look at Community Associatioms Newwork ad, just to the left of this postings.
Also research "Budgets" on search feature on Discussion Topic page, top right.

Hi Joan,

Are there regulations in your HOA's controlling documents, CC&Rs etc, which limit the percentage that the Board can raise the annual budget and dues without a vote of approval from the membership? For example, in my HOA the maximum increase without a vote of approvals is 10% each year.

If you have this restriction and the budget increase exceeds it, then the Board acted improperly by approving it without a vote of the members. If you don't have that restriction, or the increase didn't exceed that percentage, or your controlling documents don't require a vote of approval by the members, then the Board acted withing ther guidelines.

Do you know if the memebers have voted every year in the past to approve the new budget? That should give you some insight as to whether a vote is required.

Regarding the 60 day notice, it is a rule that sometimes can't be adhered to. My HOA has that 60 day notice and I was the Treasurer for six years, so I personally know how tough it can be to get everything done and out the door 60 days in advance.

You can certainly question the fact that the budget wasn't sent on time, but what are you really trying to do? Is your goal to cut back on the amount of money spent on the guards? That can be done by renegotiating the security contract without blowing the entire budget out of the water and starting all over.

Well the board is within the guidelines of 10% and they don't need the approval for the budget, the only thing they didn't adhere to is the time to submit it to the homeowners. The problem is that they have doubled the cost of security and increased our dues way over what other complexes are charging, plus the membership has other priorities the board is ignoring. One of the influential board members is a former cop and his main concern is security.
Thanks for your input.

Joan,
I hope a lot of people are reading this thread. Maybe we can get an answer to how many HOA's do not submit the budget for approval at the annual meeting.
Seems to work in California, so maybe I am offbase about approving the budget annually. I am not saying that the budget as listed is wrong, I don't know, and it appears your board can do 10% a year. What if the budget exceeds that due to special needs. Then I suppose the Board goes to the members. Who said 10% was correct for each year. We have what is called a Contingency fund in our budget. Each year it is always $99+.00
never over tenK. I have fought this for years. The reason are obvious, the amount is some ones idea of what they don't want to put into the contingency fund. Each year, fill it up as long as it don't exceed 10K.
That is not how you handle someone else's money, and neither is a built in 10%. It is just a bad practice. All Boards in HOA's have all the power in their documents to act independently if they see the need is there. They of course, won't use that power because they have to justify it to the people, so they pass some amendum to set a built in increase they don't have to justify. I don't know if any board is quilty or not, but I would have strong feeling if I was paying my 4K a year for dues and telling the Board you can do what you want with 10% of it.
It is not their money, is is not your money, it belongs to the association
for care of the real property.

JoanL: I don't think it would be out of line for you and/or other members to raise the question of WHY? the cost for security is being doubled due to increased guards on duty. You can raise a Question from the Floor and offer a Motion for discussion of this issue (have someone else second the motion to allow the discussion to begin). If they can prove there is a need due to vandalism, break-ins, or that reports have been filed with the local police, then there may be a substantial need which would answer your concerns over the increase. It would be well to bring it up at the meeting since the discussion and the Board's 'justification for the increase' should be written/accepted as part of the minutes.

If they can't sufficiently prove the need for increased security, then I would seriously question them and their manner of increasing the budget without adequate justification. I don't think the matter of 30 days instead of 60 days in which you received the 'proposed budget' is an issue. You have a greater issue here to deal with.

Usually, a budget is a 'proposed budget' until it is voted upon by the membership and passed/approved by members according to the official documents--association and state.

Thanks for your support. Our open meeting is this Thursday, Nov 6th so I'll let you know what happens. I have posted an argument against the increase and will get as many people as possible to come to the meeting.
thanks again to you and Paul,
Joan

This sounds like a job for SuperHoaer. Where did she go anyway? Never around when we need her. Donna has said she may have to go out there and knock some heads together. We better find SuperHoaer fast, Someone ask Roger if she is up there on the slopes.

JoanL: The fact that you state..."Well the board is within the guidelines of 10% and they don't need the approval for the budget,...", ALLOWS the Board to do what they did, but it does not necessarily make what they did RIGHT or for it to be determined a RESPONSIBLE ACT (the increase in funds for security) for your community.

To increase an expense because they CAN without member vote does not excuse their fudiciary duty and responsibility to act wisely when spending
assn. funds. Therefore, you and others are still within YOUR RIGHT to question the Board's reasoning and justification for the increase. Please keep us updated.