JenC1
Posts:0
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| 11/17/2008 6:54 AM |
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What do you think of the volunteer boards of an HOA having dinner out "on the HOA"? The dinner is at the end of the year, and I'm told is paid with "leftover funds". I didn't go last year, b/c morally I thought it was wrong. This year, I am thinking going and paying for my own dinner at the end of the evening, to make a point. But I'm actually concerned about even attending something like this. As far as I know, no one in the community knows this goes on. I have made myself the designated whistle-blower (for better and for worse), and have to pick my battles wisely.
Any thoughts? I cannot imagine that this is even legal to use homeowners' funds this way. |
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RogerB
(Colorado)
Posts:4686
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| 11/17/2008 7:29 AM |
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| Jen, a few HOA Boards have meetings with a meal provided for various reasons. I see nothing illegal about doing this. Perhaps this perk gets members to volunteer to serve on the Board. If you don't want to attend then don't. I would consider asking the Board to disclose this information to the members rather than being a whistle-blower. |
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HeatherJ1
(South Carolina)
Posts:89
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| 11/17/2008 7:34 AM |
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| I would think it has to be disclosed to the members and then it's not illegal (but I have no clue on the legal aspect... just guessing). But, if it happens every single year, maybe the budget isn't high enough and should be revised. You could decrease the HOA dues. Or, the extra could be put into the reserve funds. |
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BruceF1
(Connecticut)
Posts:1510
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| 11/17/2008 7:44 AM |
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Jen,
There may not be anything illegal about it, but I certainly don't think it's a good idea, especially if homeowners don't know about it.
There may be something in your documents or state laws about board members receiving compensation. It may be permitted or it may be prohibited. You'd have to read the documents to see. If compensation for board members is prohibited, then IMO going to dinner is a form of compensation and would not be legal.
Even if compensation for board members is legal, IMO it is not legal for board members to spend any association money for anything without a vote of the board and that vote appearing in the minutes. The cost may not have to appear as a line item in the budget (if it's small enough it could be included under miscellaneous), but it should appear somewhere. For example, the board could pass a resolution authorizing the expenditure of an amount not to exceed $XXX for a year-end dinner for the board members, and that resolution should appear in the minutes. Assuming compensation is legal, then if they get a lot of flack from the homeowners, maybe they should stop doing it. |
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DonnaS
(Tennessee)
Posts:5671
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| 11/17/2008 7:48 AM |
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Heather,
Are those funds listed on the annual budget? How is it listed? As leftover funds, I as an association member would not like seeing it presented that way.
The membership should be made aware that funds are being used that way and it should show up on the budget. I do have some problems with only the Board getting the rewards as there are committees and other members who might be entitled to the same perks. |
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MaryN3
(Virginia)
Posts:8
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| 11/17/2008 7:53 AM |
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Check out your covenants..ours state that the fees can only be used for road repair and maintenance..we've challenged and won..board members were even buying birthday cakes for each other..it was a very small part of our court case..but the judge in both District and Circuit courts have ruled..the covenants, at least in our case, were very explicit.
MaryN3 |
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MaryA1
Posts:0
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| 11/17/2008 10:32 AM |
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Jen,
I don't believe this would be considered illegal, but I do believe it's a bit unethical. Especially if it is being done w/o the knowledge of the members. Board of members of HOAs are generally nonpaid volunteers and using assn funds in this way makes it appear as a "compensation" for their services. And, as another poster observed, it may be a violation of the assn gov. docs. Some docs state explicitely what the assessments are to be used for and treating board members to a dinner out is not included! |
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JeanneK3
(Maryland)
Posts:362
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| 11/17/2008 10:39 AM |
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| It is unethical for a Board to spend money on a dinner or anything else without informing the community. First suggest to the Board they might want to announce this use of money to the community. If there is no community objection then they don't have a problem. However, one has to wonder if there are other examples of money being used under the radar. Openness is always the best policy. |
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MicheleD
(Kentucky)
Posts:4491
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| 11/17/2008 10:45 AM |
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Great answer, guys, especially Bruce.
In our community, it would be an ethical breach, at best.
Our docs do not allow for compensation. And if people feel like their level of volunteerism should garner some sort of "recognition" or stroking through a holiday meal or something, then I think they need to reconsider both their definition of "volunteer" AND their purposes for donating their time and talent on the board as a volunteer.
Our board goes out of its way to ensure that NO board member has even the appearance of special favors or "compensatory" actions, much less to ensure that there is no perception that the entire board is somehow benefiting in any way, shape, or form from their individual board membership.
And there's the key: appearances and perceptions.
If it even gives the perception that the board is getting something for nothing, or enjoying some benefit to which the entire membership is not entitled, then it needs to be shut down.
On the other hand, if the docs allow for it and if this is something that is presented to the entire membership, and the entire membership votes that they will allow to "treat" the board volunteers to one dinner a year in recognition of their tireless work for the community, then go for it.
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SusanW1
(Michigan)
Posts:5202
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| 11/17/2008 12:37 PM |
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H-m-m - Some budgets allow for "Volunteer Development" or other social or goodwill expenditures. As a member, I guess I wouldn't have objection paying for dinner when they are in a work session or late meeting or attending a meeting during treavel, but to just "take themselves out for dinner" doesn't set well with me.
Depends, too, on just "where" they went out to dinner!
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AnnaD2
(Florida)
Posts:924
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| 11/17/2008 2:58 PM |
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| I spend enough time with my fellow board members all year long. I like them, but I certainly don't want to socialize (privately) with them and certainly not on my neighbors' dimes. |
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JenC1
Posts:0
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| 11/17/2008 6:26 PM |
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Thanks for all the responses. Anna, that is exactly the way I feel.
I forget who mentioned this (I think a number of people), but I am going to follow through with the idea of asking at the meeting if this is in the budget or "left over money", and if the community as a whole knows about this expenditure. I know they do not...i didn't know until I volunteered for the board.
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SusanW1
(Michigan)
Posts:5202
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| 11/17/2008 6:47 PM |
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Jen - how much are we talking about here?
What is your annual budget?
Instead of getting rid of this gesture, try to at least get a limit on the amount spent. This sounds like it's been a tradition for a long time.
What do the Members think?
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RobertR1
(South Carolina)
Posts:5164
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| 11/18/2008 6:03 AM |
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Will someoneplease explain to me how it is right to feed the Board or anyone else or provide them with "Perks", I think the word was, and it is not right for the noard to pay the grocery bill of every house number ending in 6. Now you know that is nonsensical. What kind of a Board member would you have if he can be bought with a dinner. You might as well slip him a c note at the dinner table.
Next, I will hear Board members are worth so much/year or month and if you are a special Board Member you can get a Golden Parachute. And it seems I recall recently that an association provided a few Board members with free housing and meals for about 20 years somewhere in Florida.
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DavidW5
(Virginia)
Posts:334
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| 11/18/2008 8:09 AM |
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| If a quorum of the board is present at this meal, then it constitutes an official meeting of the board and must be announced to and open to all members of the association. If that were the case, I doubt the association budget would be used to pay for everyone's dinner. This practice should not be allowed to continue. |
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JonD1
(New York)
Posts:782
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| 11/18/2008 11:26 AM |
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Jen:
First I would agree with Roger. What would make this "illegal" in your mind?
If you don't agree then as suggested do not attend. Because it offends your sensibility that doesn't mean the remainder of the Board is a bunch of crooks.
And as Susan W asked what is the amount of money we are discussing?
Is it even worth discussing?
Did they have dinner or dine at a 5 Star establishment?
Perhaps this might be a way of thanking those serving on the Board for their service? Perhaps after looking over your property and investment for the previous year it would be a SMALL gesture to foot the bill for dinner?
We "gift" several service providers on our property. Post office, garbage removal, and maintenance staff in an effort to thank them in a small way for their services over the year. Maybe if they are "worthy" of this gesture someone who manages your largest asset might deserve a $20 meal?
Maybe a token effort to show some appreciation for those who volunteer their time from those who don't have the time, just might not be a bad thing.
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JenC1
Posts:0
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| 11/18/2008 11:57 AM |
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The reason I was thinking it may be illegal is that we are using members' funds (without their knowledge) for something they are not privy to attend. It's not feasible for our HOA to invite the entire community of 2,000+ units either.
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AnnaD2
(Florida)
Posts:924
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| 11/18/2008 12:53 PM |
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JenC...if it's a secret the board is making themselves look very suspicious. I'd certainly discuss it at a meeting and make certain it's recorded in the minutes. If any board members have a problem with disclosing that information they'd start to look pretty guilty of "hiding" something. If its not in the budget (as a line-item) and if there are no minutes from previous meetings showing approval of this then it's WRONG. I'd not be a party to it.
JonD--we (board members) receive "token" gifts of appreciation from members all the time. Thank you notes; baked good; movie tickets; gift cards; etc. But they come from individuals who wish to show their appreciation. I would never DREAM of taking the Association Members' money for a "private" meal. If it's not approved by the entire membership it's THEFT.
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JonD1
(New York)
Posts:782
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| 11/18/2008 1:03 PM |
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So now these people are guilty of "theft"?
Gratitude for their work on your behalf.
Over a meal this makes them thieves................ |
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MicheleD
(Kentucky)
Posts:4491
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| 11/18/2008 1:17 PM |
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Posted By JonD1 on 11/18/2008 1:03 PM
So now these people are guilty of "theft"?
Gratitude for their work on your behalf.
Over a meal this makes them thieves................
PROVIDING ONESELF a treat equals "association gratitude"?!? Since when? Maybe if the membership were snarfing together some pennies and presenting the fundraising to the board for them to go grab a meal on their dime, I might agree with you.
Theft, misappropriation of funds, embezzlement, fraud, swindling, among many other potential synonyms.
I suppose it really depends on the amount and how long they've been doing it.
Just because ALL of the board is participating doesn't make it any less unethical than if ONE member of the board decided to "treat" herself for her "noble volunteerism."
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AnnaD2
(Florida)
Posts:924
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| 11/18/2008 2:26 PM |
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| Very well said, Michelle. |
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RobertR1
(South Carolina)
Posts:5164
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| 11/18/2008 3:46 PM |
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| Of course, this is also one of the prime reasons the Boards should have term limits. Along those lines, it is not unusual to have term limits for directors but we insist in feeding the same management company/manager year after year after year. We are a funny people. Captains' of ships in the Navy are usually on a two year tour and everyone accepts the turnover, but how many times have you heard, "Oh no, we can't replace the manager." One explanation is, "The devil you get may be worse than the devil we got." How's that for logic? |
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JosephW
(Michigan)
Posts:879
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| 11/18/2008 5:17 PM |
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It's been interesting following this thread over the past few days - it sort of follows what's been happening in the country. When I managed associations back in the '70's, every board of the 40 or so we managed got a free dinner on the association at the end of their year in office. It was part of the budget, and if an owner raised a question about it, another owner would quickly point out that it was a way of saying "thank you" for doing a job that he or she wasn't willing to do at that time. The board never had to defend it.
But we've become more divisive and suspicious over the years and the thought of thanking someone for volunteering their time in community associations has become an anathema to others who see any sort of benefit to them as self-serving. I know there are boards or board members who don't deserve anything, and I know there are associations who can't afford it, but when it is earned, it would be nice if owners found a way to say thank you, even if it was just a note in a card.
I'm not disagreeing with anyone's opinion here, I guess I just find it kind of sad that we now seem to find more ways to attack than to unite, and that something that once was a nice gesture, is now often seen as something wrong.
By the way, if they're not discussing association business, it's not a meeting. They're allowed to meet socially without notice and agenda.
Joe |
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SusannaM
(Florida)
Posts:366
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| 11/18/2008 5:55 PM |
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| Joseph, I couldn't agree with you more.....it seems to me that this forum has too may fanatics....... |
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KirkW1
(Texas)
Posts:1665
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| 11/18/2008 6:10 PM |
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Wow, I am glad that the government doesn't view income the way some on this board do. For instance, while there are rules specifically against the use of ham radio for profit the FCC has (fortunately) stated that receiving a t-shirt and/or a meal does not count as compensation.
I would say though that as a Board member, I would be more likely to vote for providing a meal in conjunction with a meeting where business is conducted. I would also be more inclined to vote for a meal recognizing all volunteers then just the Board.
As for the disclosure issue, I suppose I wonder how much was paid. I don't think it need to be put as a separate line item unless the expense is significant. And significant (in my opinion) will vary with the level of dues being paid. (For instance spending $200 on a meal when dues bring in $1000 a year is significant. But for an association that collects more then a million dollars a year it just wouldn't be seen.) |
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MicheleD
(Kentucky)
Posts:4491
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| 11/18/2008 6:38 PM |
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Posted By SusannaM on 11/18/2008 5:55 PM
Joseph, I couldn't agree with you more.....it seems to me that this forum has too may fanatics.......
. . . once again, "thanks, mom." |
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DwightT
(Idaho)
Posts:653
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| 11/18/2008 7:09 PM |
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Posted By SusannaM on 11/18/2008 5:55 PM
Joseph, I couldn't agree with you more.....it seems to me that this forum has too may fanatics.......
Or just some people who refuse to accept that others may have opinions that differ from their own. Doesn't mean those opinions are wrong. Just different.
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RobertR1
(South Carolina)
Posts:5164
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| 11/18/2008 7:36 PM |
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Susanna,
I really can't say I qould label any posting here regular as a "fanatic." Also agree as most point out we issue opinions.
This is not relevant, juat a event in my daily life. I belong to the non-equity club here on the island owned by developer. They hold a Club Asvisory Board meeting and have open session for member to talk. The meeting was and is help in a large room over club restaurant. Board consist of volunteer members and resort management appointees. Big horseshoe table. and guests are seated at open end of table. During the meeting the restaurant staff is serving lunch to Board members and in the open area of Horseshoe there is a table set up with ice water on it. Got all that? Try formulating a complaint to a developer heavy board and watch them and the rest of the Board members chomp on BLT, fries and a salad. Then make some remark with their mouth full. They defend this protocol by saying they should get a little free lunch because they volunteer.
People are really strange and do strange thoughtless acts, much to their detriment.
I honestly would not mind going up against any that post here. And several, I know I might not agree with but they would give you a fair shake. How many of us have won every battle? |
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JonD1
(New York)
Posts:782
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| 11/18/2008 9:13 PM |
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JosephW:
I could not agree with you more.
We have nine Board members out of 132 unit owners. At times you have to beg people to get them to serve on the Board to protect their own property.
We attend at minimum 13 meetings, we attend seminars, just tonight I met with our VP and Treasurer for several hours to draft a notice going out to the unit owners, if you are more than a "once a month" Board member the time and effort required to do your job properly can be quite demanding.
One point Board members are also owners and members they don't give up that position when they join the Board. Seems like some like to put the Board members in some other group.
And in the case mentioned we have a Board that goes to dinner and some of those commenting make accusations of theft or other criminal actions. Perhaps they lack any understanding of the laws or what is criminal versus what they disagree with.
Someone volunteers their time to oversee your most valuable asset and you then begrudge them a meal. Gratitude and appreciation where has that gone?
In my world if someone worked to protect my property to the best of their ability and did in fact an acceptable job in the event they had dinner on me I would offer them a sincere thank you and go on my way hoping they would continue to do so in the future. I certainly would not label them thieves....
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MicheleD
(Kentucky)
Posts:4491
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| 11/18/2008 9:31 PM |
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Sorry you feel that way, but rationalization doesn't make the bottom line any less palatable.
The fact is, there is the potential that they are using HOA funds improperly and for their own benefit.
And it's possible that there is no formal or official record of it.
If I were to take it upon myself to buy myself a very nice wreath for my door with HOA money, because, well, I worked hard all year for the HOA! And I'd like to have a nice new wreath for my door!
It's not much, maybe $30, so it's probably not even enough to properly "thank me" for the sweat equity I put into this organization. . .
And Donnie, the president, well, he takes all SORTS of grief from the residents throughout the year. He's a real lightening rod for complaints! I think it's a great idea to spring for a new welcome mat for his home.
Shelley, the treasurer, heck get her a keen fountain pen!
All with HOA funds. All without telling anyone. . . all without ASKING first if the residents would like to thank the board in this manner.
I just can't see that this isn't somehow unethical at best, potentially illegal at worst.
Board members just CAN'T redirect HOA funds for ANY purpose in ANY amount outside of what is approved or directed in their documents.
ESPECIALLY if the docs state "no compensation."
I realize on that Giant Ethics Continuum In The Sky, a holiday dinner once a year on someone else's dime isn't a huge blip. . . but still. . .
Again, THANKING volunteers is one thing, and if the HOA wants to do it, it should be formalized and come from the residents to the board.
THANKING oneself, with someone else's money, without permission, just isn't kosher.
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