The homeowners of SunBird Golf Resort will be asked to vote on amendments to the CC&Rs in January 2015. Each amendment will be voted on separately.
In order to ensure everyone has an opportunity to understand the issues, a different amendment is being addressed each month in the SunBird News. This month we will discuss how much money the board can spend without consulting the membership.
The current spending limitations policy requires membership approval of a SunBird project that would cost more than $190,000, but only if the funds were not already in the bank. Policy can be changed by a vote of the Board of Directors whereas the CC&Rs can only be changed by a vote of the membership.
In 2010 the HOA Board of Directors revised Policy No. 21, “Spending Limitations Policy,” to state as follows:
Whenever the Board of Directors is considering an immediate capital improvement that is not currently funded from the capital improvement account and is greater than 10 percent of the previous year’s audited annual revenue, the project shall be submitted to the entire membership for vote by mail in ballot. The Board of Directors shall be committed to follow the majority vote for at least three (3) years.
Homeowners at the focus groups proposed that this policy be added to the CC&Rs with two changes.
Funding for capital improvements comes from a $750 fee charged to every home buyer new to SunBird (Policy No. 9).
As of February 2014 the balance in the Capital Improvement Fund was $203,209. So you can see that the Board could spend those monies without any vote from the membership because, “it is currently funded.”
Therefore, it was recommended that the words “not currently funded” be deleted from the policy written for the CC&Rs.
There was much discussion about the dollar amount of spending limitations but the majority favored something in the $200,000 range. This can be arrived at in two ways:
a). Ten percent of audited revenue (which includes HOA assessments, interest, Food and Beverage Sales and Other). In 2012 that amounted to $1.9 million so 10 percent equals $190,000. However, this amount would have some fluctuation corresponding to Food and Beverage sales or interest rates.
b). Fifteen percent of HOA assessments. In 2013 that amounted to $1.3 million so 15 percent equals $195,000. This would be a more stable amount because HOA assessments are predictable.
The Board preferred the more stable amount. Therefore, the proposed amendment reads:
6.3(B) Spending Limitations
Any proposed expenditure for capital improvements (versus maintenance, repair or replacement budgeted through operating expenses or reserves) that exceeds 15 percent (in the aggregate) of the prior year’s audited annual assessments must be approved by the owners by a majority of the votes cast (in person or be absentee ballot) on the proposal.
A yes vote means:
1. Homeowners should have the opportunity to vote on a capital project expenditure that exceeds 15 percent of the prior year’s audited annual assessments ($195,000).
2. This clause in no way applies to replacement, repair or maintenance expenditures.
3. Homeowners should have the opportunity to vote even when the project is fully funded.
A no vote means:
1. The HOA Board should have authority for unlimited, funded capital expenditures.
2. The HOA Board can change this policy at any time.
View this amendment in Section 6.3 of the Amended, Restated and Consolidated Declaration of Restrictions for SunBird Golf Resort Homeowners Association, Inc. on the website at www.sunbirdhoa.com.