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Treasurer


Tammy
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We are a small, very rural (frontier) New Mexico landowner's association.  7 board members.  The majority of directors are new to the board - elected by the membership in September 2018 at the annual meeting.
The annual meeting was a bit heated, with several landowners asking the same 'years old' questions and demanding answers.  "Why are we paying the full electric bill for a well that is owned by the developer own and isn't listed as the association's responsibility in governing docs?"  "Why are our revenues less than they were 12 years ago when the developer released control?"  "Why bother to show up when our votes don't count?".

It was discovered that:
Revenues had fallen below our governing docs 2007 'viable income' levels because the Treasurer allowed the developer to return to the reduced 'unsold' assessment fee (1/5 of the 'normal' fee) on all their repossessed properties.   The process of researching the associations losses was time consuming because our out-of-state Treasurer was also the Registered Agent and the Principal Office (in violation of state statute), and the records were not 'available for review/inspection'.  Every single document required a written request and was sent electronically.   A letter was eventually issued to the developer requesting correct assessments or an explanation.  Full assessment for all developer 'sold' properties for 2018 and 2019 was forthcoming, increasing the associations revenues by over 12%.   The board took further steps toward compliance, and the Registered Agent & Principal office are now located in NM, but the records from the Treasurer (requested Jan 31) have not been forthcoming.  The Treasurer asks:  "What records do you want?"  "What do you mean by all the records?"

The Treasurer is unable to provide any documentation that dictates the association is responsible for the electric she pays monthly for the developer owned well.  The Treasurer also created a map to include with disclosure that indicates a location of a 'community well', although the membership never voted and the well isn't mentioned in any document.  The only people served by the well are the developer.  The association cannot afford well repairs and continue to maintain the roads (as dictated in docs). The Board believes the ignorance of the treasurer has put the association at risk on several issues.

The Board now understands how the out of state President and out of state Treasurer retained their positions for over a decade.  The election of 'officers' was held by the membership during the annual meeting.  The developer holds a majority of votes and simply voted to elect the same president and treasurer, saving the developer 80% in assessment fees (in 2018 alone) on 18 lots!   The Board discovered that our governing documents and statute requires the directors to elect the officers at the first BoD meeting after the annual meeting.  This was corrected. {{fireworks}}  The former president stated that she 'disagrees' with the statute.

The former president now records every meeting (citing: one party consent state) and is insisting on corrections to minutes that include out of context quotes.  Recently she submitted 'code' the Board was violating when conducting meetings.  Unfortunately, it was California code for 'public entities'.   

Throughout these processes, the Board also discovered that the former president (now member at large) and the (still) treasurer were the (only) signers on the association's out of state bank account.  The treasurer is unable to visit the subdivision due to health concerns, but when the Board originally discussed opening an accessible 'national bank' account, the treasurer responded "Just try it.".   

The Agenda went out.  The treasurer was a no-show at the meeting (she attends via phone).  The board approved the motion on Thursday to move the account to a national bank, so in the event of any emergency, the board has access to the account without taking an 8 hour drive in an attempt to access an account they aren't 'signers' on!

The treasurer is not responding to requests.   We have another meeting on Thursday.   We are new directors/officers, and we have made the majority vote holder (developer) angry.  The former president carries the developer's proxies to the annual meetings.  Our steps must be sure-footed. 

What actions would you propose that our Board consider regarding the Treasurer?   

Would 'censure' for the past activity of improperly imposed assessment fees &/or improper voting procedure be in order?

Your patience and guidance are sincerely appreciated.

Tammy

 

  

 

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One option is to order the treasurer to make periodic reports to the executive board on the matters that are of concern. The order can be drafted carefully in such a way that the report presents the data necessary to ensure correct compliance with the relevant statutes and contracts while increasing the accountability of the treasurer to the landowners. These kinds of periodic reports are mentioned briefly in RONR (11th Ed.), p. 461.

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8 hours ago, Tammy said:

What actions would you propose that our Board consider regarding the Treasurer?   

Removal from office.

8 hours ago, Tammy said:

Would 'censure' for the past activity of improperly imposed assessment fees &/or improper voting procedure be in order?

Yes.

Also, consult an attorney.

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