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Modern Neighborhood

Board Newsletter | Issue 1
April 2023

Business Meeting

Board Meetings Shouldn't Always be an Email

Group Hug

Committees - the Backbone of a Community

Electrican's Tools

Building Smart with Advance CAC

Stacks of Coins

Financials Corner

What's a Balance Sheet?

Board Meeting Shoudn't be an Email

Board Meetings Shouldn’t Always Be an Email
Conducting Community Business with Transparency

Business Meeting

We’ve all heard the viral business saying ‘this meeting could have been an email.’ But when it comes to common interest communities, the meeting matters. Most board members know the difference between a board meeting, member meeting, executive session, and an action outside of a meeting. Or do they? Transparency in how decisions are made has never been more important and it’s critical that board members follow proper meeting procedures to foster a harmonious and informed community.

The elected board conducts association business at board meetings and makes policy decisions.  The board should follow parliamentary procedure and the meetings must be open to all members. Owners have the right to speak on an issue under discussion before the board votes on the matter. Put simply, this is where the board makes decisions - and owners are allowed to attend and provide comment. Minutes are required and must be made available to owners. Notice of board meetings is not required unless specified in the bylaws, but the agendas of board meetings shall be made reasonably available for examination by all members of the association.  Because of this, Advance HOA recommends that meeting dates be posted to the website and regular board meeting agendas be emailed out before the meeting.

How about special board meetings, like work sessions and committee meetings?  These are meetings of the Board and should be handled in the same manner.  Typically, decisions are not made in these meetings, but minutes are required.  These meetings are also open to the membership.

Executive sessions are not open to members, and are reserved for discussion on sensitive legal or personnel issues.  Refer to the Conduct of Meeting Policy which outlines the matters for which a board may meet in executive session. As for the minutes, they should record that an executive session was held and the general subject matter of the session.  Since you are now required to make collections decisions and hold violation hearings in executive session, the minutes should reflect the outcome of the decisions and a brief summary of violation hearings.

 

Actions Outside of Meetings can lead to a perceived lack of transparency. These are decisions made by the board via email and outside of an open board meeting. Owners have a right to speak on issues before the board votes, right? Well, that’s not possible if it’s not discussed in an open meeting. If there are many actions between meetings, consider meeting more frequently. Be sure to refer to the bylaws for authority and procedure and the Not-for-Profit Corporation Act. All written communication of these actions must be maintained by the association, such as emails among, and the votes cast by, the board members.  Board members should always use caution when communicating with fellow board members or management regarding a board action as these writings could be subject to record retention requirements.

The bylaws and Conduct of Meeting Policy will outline the specific procedures that must be followed for your community. It’s imperative that all board members are familiar with these documents (and all other governing documents).

 

You do so much for your community as a volunteer – make sure you showcase your impact in open meetings.

Committees

Committees  - The Backbone of a Community
Accomplishing more with active volunteer groups

To create a beautiful and vibrant community, it can take more than a committed board and strong community management partner. Developing an active, capable volunteer group through the formation of committees can bring a range of benefits to a community. 

What is a committee?
Committees are groups of volunteers who are appointed to focus on specific tasks or issues within the community. They focus on topics ranging from finance to architecture.  

Most associations have two types of committees—standing and ad hoc. Standing committees perform a continuing function and usually deal with specific areas (e.g., architectural, finances, ground maintenance, social functions).  Standing committees operate indefinitely though their membership may change. Ad hoc committees are usually set up to accomplish a specific objective.  For example, a board might authorize an ad hoc committee to investigate alternatives to an assessment increase.  Ad hoc committees function until they have researched and reported their findings and they may be dissolved after just one meeting or after several years.

 

What are the benefits?
Committees add capacity to the community. They can provide specialized knowledge or expertise. They can take on workload from the board or manager, enabling the community to accomplish more together. Importantly, committees build a sense of community and engagement among members. Committee recommendations and reports help the board to make informed decisions.  

Forming committees

A committee's success is affected by the way a committee is structured and the guidelines established for functions and interaction with the board.  Association bylaws and documents provide the board with the authority and, often, the guidelines to establish committees.  

The purpose of forming a committee must be easily understood and recognized. When the board of directors commissions a committee, it should provide the committee with a clear purpose and responsibilities. A recommended tool to achieve this task is a committee charter.  A charter sets forth the purpose, responsibilities, and organization of a committee.  By providing a charter, the board of directors clarifies its expectations and ensures that the committee’s efforts will be concentrated on a particular task. The tasks assigned to a committee must be realistic and achievable.  

Committee members should be selected based on their expertise, knowledge, and interest in the committee's purpose. Consider appointing members that may bring diverse perspectives and opinions to the community.

The board should take actions to promote committee success:
•    Ensure clarity on the need and scope of the committee
•    Act on committee recommendations
•    Recognize committee chairs and committee members for their time and efforts

For a committee charter template, please reach out to your community manager.

Please note that it is not Advance HOA Management’s practice (unless negotiated as part of the contract) to attend committee meetings. Advance may, however, support the committees by means of providing documents, samples, etc., as needed.
 

ACAC

Building Smart with Advance CAC
Start to Finish Project Management

Start to Finish Project Management
Boards often commit major funds on behalf of their community to perform major work and deserve the peace of mind and confidence that the project is being completed to industry standards, on time, and within budget. Advance CAC provides just that.

How does the service work?
When your property needs work, such as re-roofs, hail claims and negotiating with adjusters, exterior painting, common area remodels, asphalt replacement, flatwork projects, siding projects etc., our Project Management team will sit down with you and provide you with options for assistance in overseeing the project. We believe in partnership with our communities and we always work with your best interests at the core.

 

The advantage of Project Management
Advance Common Area Construction administers the enforcement needed to enhance the quality of all construction projects. Construction work is becoming progressively more expensive with time. As such, ensuring the highest quality workmanship while maximizing your financial investment is increasingly important. Advance CAC will save you money by enforcing quality standards, reducing contractual conflicts, and minimizing construction failures.

 

Contact your Community Manager to learn more or email jonny@advancecac.com
 

Financials 4-23

Financials Corner
Understanding the Balance Sheet

Accountant

What is a Balance Sheet?

A balance sheet is a snapshot of the HOA’s financial standing at a specific point in time. There are three sections that make up a balance sheet, assets, liabilities, and equity. The balance sheet should balance with a calculation: assets will equal total liabilities and equity (assets = liabilities + equity). Let’s break down each section of the balance sheet.

 

Assets list what is owned by or owed to the association. This may include:

  • Cash in bank (operating or reserve funds)

  • Accounts Receivable

  • Prepaid Expenses

  • PP&E (Property, plant, and equipment). These are items that can be sold by the HOA, such as a vehicle that is owned by the HOA. 

 

Liabilities will list anything owed by the association. This may include: 

  • Accounts Payable

  • Prepaid Assessments

  • Loans

Equity is the assets less liabilities. It reflects the association’s net worth at a point in time. We reflect equity in two parts:

  • Retained Fund Balance represents the starting equity balances at the beginning of the fiscal year. 

  • Net Income represents the current year change in equity. 

 

Understanding the basic parts of a balance sheet will help you as a board member understand the financial state of the association. If there are any questions about balance sheet totals, refer to the general ledger which will contain all financial transactions. 

Board Portal Tip: Board members have increased access to Association information through their Board Portal on Community Link. Advance HOA Management has setup several real-time financial reports that board members can generate at any time by going to Community Link > Board Portal > Board Reporting. 

 

Below is a breakdown of the default financial reports we have set up. Please reach out to your community manager if you are interested in adding additional custom reports.

  • Account Aging Report - Current homeowner aging report as of today

  • Bank Account Balances - All Association bank details to include current bank and general ledger balances, date of last posted reconciliation, and expiration dates if applicable.

  • Check Register - All activity for each bank account for past 90 days.

  • Delinquency Detail - Any delinquency actions taken by Accounts Receivable, sorted by owner name.

 

We hope you take advantage of this increased visibility available to you as board members!

Information contained in this newsletter is general in nature for the purpose of education and is not intended as legal advice.
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