THE ROLE OF THE BOARD OF DIRECTORS
The Board of Directors is the elected body of volunteers charged with the fiduciary responsibility of managing the interests and assets of the homeowner's association. How effective a Board is depends in part on how aware its members are of the needs of the association. Board meetings focus on the major areas of need and responsibility, including: finances, contracts, management and legal concerns. Specific duties are outlined in the association's By-laws.
Typically, an association's responsibilities would include:
1. Financial: budget, cash flow, assessment collection and reserves.
2. Contracts: grounds, management security trash removal and maintenance.
3. Legal Responsibilities: enforcing the declarations, rules and regulations, and policies of the association. Taxes and the association's other legal obligations also fall in this category of concern, as would enforcement of the architectural guidelines.
MEETINGS
Prior to each monthly Board meeting, you will receive a "Board Packet" from GRG Management. Each packet contains notice of meeting, agenda, previous Board Minutes, current financial statement (see note), and other correspondence pertinent to the agenda. This is "PRIVATE" Association business and must not be shared with anyone not on the Board.
As each Board member's time is valuable, and there is a charge for overtime, it is recommended that the packet be reviewed before the Board meeting so that each member will be ready to discuss the various agenda items.
Parliamentary procedures will help your meeting be conducted in an efficient and orderly manner. All items of business should be put in the form of a motion, thus requiring some action to be recorded in the Minutes. The Minutes are extremely important; it is a permanent record of the objectives and accomplishments of the Association, a concise and accurate record of business operations.
It is extremely important that all Board members work in a concerted effort for the good of the Association. Differing ideas and discussion are necessary and productive. All items should be covered thoroughly prior to voting as one idea can stimulate other ideas, thus presenting the Board with new considerations. These differing viewpoints should produce a basis to reach the best decision possible and must not be taken personally.
FINANCIAL REPORTING
As the bonded fiduciary agent for the Association, GRG Management provides a monthly financial statement to the Association. Most Associations require a certified audit paid for by the Association, at the end of each fiscal/calendar year. The audit is conducted by an independent accountant/CPA selected by the Board of Directors to verify and account of disbursement and collection of corporate funds. The Association records are available for inspection at our office during normal working hours. We assist your Treasurer in budget preparation and financial reporting to the Board of Directors.
COMMITTEE ACTIVITY
Committees are a valuable tool which can respond to Board assignments to research particular areas of the Association operation and report/recommend back to the Board. Each committee should have a written charter describing its purpose, means of establishing goals and communication with the Board.
DIRECTORS
PRESIDENT: The President is the chairperson of the Board of Directors of the Association. The President's enthusiasm and judgment has a direct impact on the success of the Association. He or she is the one Board member who should maintain close contact with GRG Management for guidance in the proper handling of the Association's affairs. The President is charged with presiding at all meetings of the Board of Directors and/or membership meetings of all owners. It is very important for the President to follow a prepared agenda which GRG Management will prepare for all meetings.
VICE-PRESIDENT: The Vice President presides at meetings from which the President is absent, and takes the chair when the President wishes to participate in a discussion or exercise his or her right to vote. Be sure to check your By-laws; they will specifically and clearly define your role as Vice-President.
TREASURER: The Treasurer oversees all of the Association's financial affairs. Because your Association employs GRG Management, a professional management company, the heavy workload of everyday record keeping and fiduciary transactions is removed from the Treasurer. However, ultimate responsibility is retained by the Treasurer and it is therefore very important that the Treasurer know and understand the bookkeeping procedures of the management company as well as financial responsibilities and procedures outlined in the CC&Rs.
TREASURER'S REPORT: GRG Management will supply the Board Treasurer with a monthly financial report (see note). This report will give all needed information to be reported to the Board of Directors and/or membership. Financial reporting and recommendations are primary responsibilities of the Treasurer.
The Balance Sheet reports will tell you how much cash is in the Association's checking and saving(s) account(s) and what is due each reserve account, as well as the member's equity in the Corporation. The income and expense statement reflects a comparison of the income and expenses year to date versus the budgeted year to date figures. This enables the Treasurer to see and report to the Board whether the Association is going over their budgeted amounts. You will also receive a copy of your monthly check register. GRG Management will handle the tasks of writing the checks to pay your Association's bills.
Included in your monthly Board Packet will also be an accounts receivable status.
RESERVES: The Association budgets for amounts to be put aside for improvements, major repairs, and maintenance to the project. These amounts are accrued monthly and are recorded on the financial statement by account. The total amount of all Reserve accounts should be held in savings until such time as funds are expended for improvements, painting, etc. GRG Management will transfer the required amount monthly into Reserves.
CERTIFIED AUDIT: Your CC&Rs and By-laws are explicit as to whether or not your Association must have an annual certified audit. If your CC&Rs state that an audit is necessary, the Treasurer should advise the Board of this fact. Your audit should begin at the end of your fiscal year. The Board may select an accounting firm of their choice to prepare the audit or they may solicit bids from several accounting firms. An audit can cost several hundreds of dollars. GRG Management recommends getting two or three bids well in advance of your fiscal year-end. GRG Management prepares and maintains Association books and records in such a manner that audit and accounting fees are kept to a minimum. A copy of the audit and/or annual financial statement is mailed to the membership each year.
BUDGET: Each fiscal year GRG Management will assist in the preparation of the "Proposed Budget" for the Board's consideration. This proposed budget should be discussed at the Board meeting about three months prior to your fiscal year end. This gives the Board a month to study the proposed budget and make any additions or corrections that are deemed necessary.
Check your CC&Rs and By-laws carefully as to the requirements of adopting a new budget for your Association. In many cases the Board of Directors may accept and institute a new budget without a vote of the membership. However, there may be additional restrictions on the amount of increase the Board of Directors may adopt without homeowner approval.
The budget adopted by the Board of Directors is to be mailed to the membership sixty (60) days prior to the Association year end.
SECRETARY: The Secretary is the official time and record keeper of the Association and as such, is responsible for the keeping accurate minutes of all meetings and filing them in a minutes ledger. The Secretary attests to the authenticity of all corporate documents, certifies all meeting notices and election results and is responsible for all "official" corporate communications with the members.
It is part of GRG Management's contract to take and transcribe the minutes of the Board of Director's meetings. These minutes are then approved and signed at the next Board meeting.
DIRECTOR AT LARGE: Serves in a capacity as appointed by the Board. Directors At Large are often appointed as a liaisons for committees and/or to chair a specific committee(s) or project.
Note: Monthly Financial Reports are prepared after the 15th of each month. If your Board Meeting is before the 15th, your financial report will be mailed separately.
Glossary of Terms
Architectural Review Committee
This ccommittee is usually set up by the board of directors to review plans submitted by an owner requesting to alter some portion of the project. If there is no architectural review committee then the board of directors reviews architectural improvement requests submitted by owners.
Assessment
This is the monetary contribution made by each owner to help maintain the project. Assessments are used by the association to preserve the value of the entire project, which in turn protects the value of the individual homes. The amount of the assessment is set by the board of directors according to a "reserve study" (defined below).
Association
This is the business entity, usually a non-profit corporation, set up to manage the project. The primary function of the association is to preserve the property value of the homes and other property in the project. Also, the association is required by law to have a process to enforce the governing documents, including collecting assessments.
Ballot
A ballot is simply a document for owners to cast a vote, in writing. The election of directors is almost always conducted by ballot. A ballot is different from a proxy (defined below) in that a vote is actually cast on the ballot -- as opposed to a proxy which allows an owner to designate someone else to cast his or her vote.
Board of Directors
The board of directors is the governing body of the association and consists of a committee of volunteers, usually five people. The board of directors sets the policies and procedures for how the project operates, and interprets and enforces the governing documents. Board members are elected by the members (owners) of the association.
Bylaws
For incorporated associations this is the document that contains the primary set of guidelines that the association is required to follow to conduct business. It includes rules about board meetings, meetings of the members, qualifications to serve on the board, voting procedures, etc.
Common Area
The common area is generally everything in the project except the individual homes. The association typically has the exclusive responsibility and authority to control and maintain the common area.
Condominium
In a condominium project the "condominium" refers to each owner's entire interest in the project. It typically includes the air-space inside the home and the right to use exclusive use common areas that go with the home (such as a balcony or patio, or both), as well as the non-exclusive right to use the general common areas.
CC&Rs (Declaration of Covenants, Conditions & Restrictions)
For most associations this is the document that contains the primary set of guidelines that governs the project, and which all owners, and the association, are required to follow at all times. In some instances the CC&Rs are very specific; in other instances the provisions are general in nature and open to interpretation by the board of directors and the members.
Declarant
The person or organization that enacted the CC&Rs is the declarant. Usually, the developer of the project is the declarant.
Directors
Each individual member of the board of directors is a director. Each director has the same rights and obligations as the
other directors. Also, each director has the same voting power; however, the law requires the board to act as a single unit, voting on all matters. Therefore, no director has any individual authority.
Governing Documents
This is the general term that refers to the group of documents that contain the guidelines for operation of the project. The governing documents include (depending on the type of association) the CC&Rs, bylaws, articles of incorporation, the condominium plan, the planned unit development permit and rules and regulations enacted by the board. The association is required by law to enforce the governing documents.
Guests
Anyone who is in the project but who is not a resident (including owners, if the owner has rented or leased his or her home).
Member/Owner
In a community association these terms almost always mean the same thing; every owner of a home is a member of the association. The sole qualification to be a member is to own a home in the project. Only owners have the right to vote, and only owners are obligated to pay assessments.
Officers
The officers are the president, vice president, treasurer (or chief financial officer) and secretary (and there may be more than one vice president). In a community association the officer positions are usually not hierarchical. Instead, the officer positions simply designate responsibility. The officers' positions are separate and distinct from the role of a director, but directors can, and usually do, serve in the officer position as well.
Professional Manager
The professional manager acts on behalf of the board of directors to help carry out the day-to-day activities of the association, including helping to enforce the governing documents and maintaining the project. Some associations have "on-site" managers who are actually employees of the association, but most hire an outside management company.
Pro Forma Budget
A planned budget, as opposed to a final budget.
Project
This is the general term used to refer to the entire complex, including the common area and all of the homes.
Proxy
A proxy is a way for an owner to designate another person (or the board of directors) to cast a vote on his or her behalf. For example, if a proxy designates the board to cast an owner's vote at the annual election, the board can cast the vote in any way it deems fit.
Quorum
A quorum is the minimum number of members of an organization that must be present at a meeting to conduct business; it is usually a simple majority. For example, with a five-member board of directors, one or two board members cannot simply decide to have a meeting and make decisions--there must be a quorum of board members present to make decisions.
Reserve Accounts
Not actually separate "accounts," the reserve accounts are line-item designations for each of the common area components and other expenses of the association. A list of reserve accounts may include designations for items such as fences, monument signs, walls, pools, roofs, etc.
Reserve Study
This is a review of the project to evaluate the remaining useful life of the common area components, and to estimate the cost of repair or replacement. For example, the reserve study professional may determine that common area fences must be painted every five years, and that it will cost $5,000 to do so. The Board would then know to set aside $1,000 per year in the "reserve account" for fences for five years. The reserve study is the basis for the association's budget and, therefore, the amount of the assessments.
Resident
The people who actually live in the project are the residents, regardless of whether they own their home.
Rules and Regulations
The rules adopted by the association that interpret and supplement the governing documents.
Tenant
Residents of the project who are renting or leasing a home. | 
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