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Part 4 - Expenditures
PART FOUR: EXPENDITURES
RULES OF EXPENDITURES
SECTION 1: The BOARD OF DIRECTORS shall adopt an annual BUDGET as required of it in Article VI, Section 5. Once adopted for the applicable fiscal year, the BUDGET shall be the guideline under which all sources of funds are to be received by the CORPORATION and expenditures made thereby. Nothing shall preclude revisions being made in the budget so long as such revisions are made by the BOARD OF DIRECTORS only and at open and non-executive meetings thereof. The adopted or revised BUDGET shall give the President and Managers authority to spend money for those purposes and those amounts approved. The Fiscal Year of the Association shall begin on the first day of April of each year and shall end on the last day of March of the immediately succeeding year. The Board may adopt a short term fiscal year during the first year in which these Bylaws are in effect in order to effect an orderly transition and to achieve compliance with this Article. This will in no way alter the July 1st dues, fees and assessments collection date.
SECTION 2: The BOARD OF DIRECTORS shall not cause the ASSOCIATION to have outstanding debts unapproved by the ACTIVE MEMBERS in the ASSOCIATION in an amount greater than Ten Percent (10%) of the total income collected during the prior fiscal year.
SECTION 3. Unbudgeted expenses are not authorized. Unbudgeted expenses are defined as:
- (a) Any single item or group of related items which would cause the expenses of a major budget category (as defined by the BUDGET) to exceed the BUDGET approved or revised by the BOARD OF DIRECTORS by the end of the fiscal year.
- (b) In addition, the following items are defined as unbudgeted unless specifically named and authorized in the approved or revised BUDGET.
- (1) The purchase, lease or rental of any equipment where the consideration is greater than 2% of the total of the Major Budget Category from which the expenditure is to be made.
- (2) The hiring of any person in a capacity other than on a casual basis at an hourly rate. The hiring of a person to fill or refill a budgeted position need not be approved again.
SECTION 4. The Amenity Managers and the Chief of Police, with the approval of the General Manager, shall each have authority to make adjustments among minor budget categories within a major budget category as long as the major budget category is not exceeded and any equipment or capital asset budgeted for is purchased or otherwise acquired. Major budget categories shall be those as outlined and designated as such in the BUDGET as initially approved or revised and shall include but not be limited to: general expenses, office operations, roads and grounds, police and security, swimming pools, golf course, country club, yacht club, marina, stables, tennis court, and playgrounds.
SECTION 5. The Amenity Managers and the Chief of Police, with the approval of the General Manager, shall each have the authority to reprogram funds not exceeding, for a given fiscal year, a maximum of 2% of the total of the major budget categories under the jurisdiction of each of them, from or to any major budget category to other budget categories subject to their jurisdiction. Any such reprogramming shall be reported to the BOARD OF DIRECTORS at its next meeting.
SECTION 6. There shall be no waiver nor reduction of any amounts owned the ASSOCIATION, be they dues, assessments, fees, penalties, fines, bills for services or any other sums owed for any other reason, without the approval of the full BOARD.
SECTION 7. Notwithstanding any other provision outlined in this Article XIV, emergency expenditures are authorized to prevent a hazard to life or health or to prevent substantial damage to the AMENITIES, COMMON AREA or other capital assets of the CORPORATION; however, such expenditures shall not exceed the sum necessary to abate or remove the hazard or danger.
SECTION 8. The establishment of reserve funds is essential for the replacement of the ASSOCIATIONâ€™S assets (building, equipment etc.) as defined in the ASSOCIATIONâ€™S Finance and Accounting Policies. Accordingly:
- (a) The BOARD OF DIRECTORS shall establish a Reserve Fund Account to be funded by not less than five percent (5%) of the funds received annually, from only the annual Dues and Assessments, as set by the BOARD OF DIRECTORS. When sufficient funds have been accumulated to cover the projected replacement cost of an asset, accumulation shall no longer be required for that particular asset.
- (b) Such funds shall be allocated annually to each of the ASSOCIATIONâ€™S assets in an amount as designated in the annual budget for reserve purposes and in accordance with a professionally prepared life cycle cost analysis prepared by a professional firm that is certified by the Community Association Institute. Such life cost analysis shall be reviewed annually by the BOARD OF DIRECTORS and, if updated, such update shall be by a professional firm certified by the Community Association Institute. Such asset shall include the ASSOCIATIONâ€™S real property and equipment as identified by the General Manager and as approved by the BOARD OF DIRECTORS.
- (c) The expenditure of funds from the Reserve Fund Account for any purpose other than as defined above shall require approval of not less than two-thirds (2/3) of the seven (7) member BOARD OF DIRECTORS at a regular or special meeting of the BOARD OF DIRECTORS followed by the approval of a simple majority of the votes entitled to be cast by the Active MEMBERS present or represented by proxy at a meeting at which a quorum is present.
- (d) In an emergency involving public health and safety, funds from the Reserve Fund Account may be expended to prevent a hazard to life or health upon unanimous approval of not less than two-thirds (2/3) of the seven (7) member BOARD OF DIRECTORS at a regular or special meeting. However, such funds shall not exceed the sum necessary to abate or remove the hazard.
PROCUREMENT â€“ CONTRACTING/PURCHASING
SECTION 1. STANDARDS OF CONDUCT. Association business shall be conducted in a manner above reproach, with complete impartiality and with no preferential treatment. Transactions relating to the expenditure of Association funds require the highest degree of community trust and an impeccable standard of conduct. The general rule shall be to avoid any conflict of interest, or even the appearance of a conflict of interest, in Association-Contractor relationships.
SECTION 2. POLICY. It is the policy of the AHPOA Board of Directors to promote and provide for full and open competition in all procurements made for the AHPOA. Any contract or purchase order with a total value of five thousand dollars ($5,000.00) or more in goods or services shall be made by using full and open competition.
SECTION 3. ADVERTISING. Any contract or purchase order with a total value five thousand dollars ($5,000.00) or more shall be advertised in two or more methods i.e.: print, electronic, telephonic, to assure full and open competition.
SECTION 4. EXCEPTION. Should less than full and open competition for purchasing be required for a specific procurement, the Board of Directors in open session, shall authorize less than full and open competition only after a complete justification has been presented by the appropriate manager requesting such procurement exception.