At the semi-annual board meeting May 8, 2018 the question came up as to whether it was legitimate for the board to spend more than $5,000 on equipment without a legal vote of the members of the association. This was prompted by one of the provisions in the By-Laws under Article V- Corporate Powers. During 2017 a road maintenance vehicle was purchased by the board for $17,400, so this was a valid question, although presented in such a way as to disrupt the proceedings of the meeting. Being the auditor, I had just verified to the members present that all expenses were examined and found to be legitimate with receipts and authorizations from Board members or the road committee chair. My reference to the CC&Rs didn’t satisfy the questioner.
One must look at both the By-Laws and CC&Rs together to gain an understanding of this apparent discrepancy. The By-Laws read “should any variance exist between the By-Laws and the covenants recorded, the covenants shall take precedence”. And also “the board shall exercise all the powers of the association”
In the CC&Rs in Article II Section 3 it reads,
“the board shall have the power and obligation to take all steps necessary to provide for the public health, welfare and safety of its members”.
My understanding therefore, is that the board acted within its powers and obligations to purchase the vehicle to keep the roads open and safe for all during 2017.
With the meager association dues that we pay that make it unaffordable to buy even used vehicles other than at auction, the board did what was reasonable and necessary. There was a need for this vehicle! Perhaps back in 1978 when the By-Laws were adopted, a useful road vehicle could be had for $5,000.?
The two documents – the By-Laws and CC&Rs – were put in place to allow the Board to accomplish the business of the members. They were not put in place to tie the hands of those who voluntarily work for YOU without pay. All those who volunteer deserve thanks and encouragement for keeping Spirit Lake East an awesome place to live together peacefully.
The full Auditor Report for 2017 is available in the Reports section of this website for anyone who would like to review it.
Trudy Shrigley, Auditor