The board’s fiduciary duties are to protect the assets of the association. Nowhere does it say that the funds of the association should be used as an investment or speculation. In other words, they do not have the duty to seek the highest return on the funds but to preserve the funds.
What you are describing is that your board is using the association’s funds in an attempt to increase their returns.
Let me give you a quick short lesson on bond. Buying bonds is essentially lending money in the hopes that you will then have a return of the principal and earn a percentage on that principal.
But what would happen if the bond market dropped? A strong possibility would be that the principal would be reduced. That means the board has lost some of the association’s money. There is no way that the board can guarantee the return of the principal. Over many years the state has urged boards not to speculate with the members’ funds.
I have found utility rating error was the primary reason for faulty utility billings. I also have found meters that were incorrectly reading the usage. Most utility companies will work with you to confirm that their meters are properly operating and some will provide a representative to discuss lower rate cost.
However, you need to keep in mind that there are two sides to this situation. In one case the electric company found a meter that had been incorrectly reading the electrical use in the common areas. Unfortunately, it was reading a lower usage of electricity for the common area. Their investigation showed that we were under billed for 10 years.
After confirming with the state that they could back-bill for the faulty meter readings, we negotiated to pay for only the last two years. At the same time, the electric company made suggestions to make our condominium more energy efficient. In doing so, we reduced our electrical consumption several thousand dollars, which made up for the errors in the meter reading shortages.
The short answer is that by verifying the information and making energy reviews and inspections, you can reduce your utility bills.
What you need to do is have a qualified roof inspector determine whether a new roof is required. The roof replacement should not be determined by your reserves.
If the reserves do not have enough money then past budgeting was incorrectly calculated. Seventeen years for a tile roof seems a little too soon for replacement. However, it could have been incorrectly installed or maybe damaged in past storms that have caused the roof to deteriorate sooner.
Your board is responsible to make the decision. They need to seek qualified inspectors and what they recommend. Most managers do not have the necessary qualifications to render a final inspection, but they can suggest to the board the action required for common areas and the essential repairs or replacements. If required, the board can use a portion of the reserve for roof and then pass a special assessment for the remaining balance.
Here is a short lesson on how to promulgate rules. There should be a specific need to create a new rule. To make a new rule just because someone thinks that there is a need to pass a rule is not justification. Unnecessary rules create too many complications and result in undue backlash.
The first step is to determine whether we have the power to create the rule. Second step: Define the problem. Step three: Ascertain if a new rule is necessary. Step four: Determine what results are desired. Step five: Determine if a new rule will conflict with an existing rule or other provisions of the association documents and statutes. Step six: Determine that the rule will be reasonable and not arbitrary or capricious. Step seven: Determine whether the rule will be enforceable and what powers will be required to enforce it. Final step: To get the members involved in creating the rule, you must get the members of the community involved in all phases of the rule-making process.
From the information provided, it appears that the board did not have the power to make and enforce this rule. It does not appear to be a problem for the condominium but was a concern of certain board members. If this is true, this was not a valid reason for such a rule.