Make your own free website on

Section A. Annual Budget. The Association's Annual Budget shall contain two parts, an Operating Budget and Capital Budget. Each part shall be itemized as to expenditures, revenues and surplus, following generally accepted accounting principles and AICPA guidelines.

Section B. Budget Development . The Community Manager, in a process overseen by the Finance Committee, shall prepare a draft Budget for the upcoming calendar year to be presented formally by September 1 of each year to the Finance Committee for review, modification and recommendation to the Board of Directors. The draft Budget shall include operating expenses, capital expenses, revenues and reserve funds. Before the draft Budget is formally submitted to the Finance Committee, the Finance Committee shall, in conjunction with the Community Manager, conduct a reasonable number of meetings and hearings on significant elements of the budget, soliciting comments from the members of the Association. The Finance Committee shall then review the draft Budget as submitted by the Community Manager and make changes as the Finance Committee deems necessary. The Finance Committee shall by October 1 of each year submit its preliminary Budget to the Board of Directors with the Committee's recommendations.   The Board shall vote to approve a final Budget for the next year during the month of November.

Section C.  Publication of the Preliminary Budget.  Following the approval and recommendation of the preliminary Budget by the Finance Committee to the Board of Directors, the Finance Committee shall publish the preliminary Budget in the Community Newsletter and post the preliminary Budget at the office of the Association for a thirty (30) day public comment period. All members' comments shall be submitted in writing to the Finance Committee. The posted and published copies of the preliminary Budget shall include the same instructions to the members about making written comments.

Section D. Adoption of Budget.  The Board shall, after publication of the preliminary Budget in the Community newsletter at least 30 days prior to the end of the calendar year, by majority vote adopt the final Budget for the Association. That resolution shall also establish and levy the annual assessments for the next calendar year

Section E. Implementation of Budget. All operating funds spent by the Association may not exceed Budget and no Capital Budget line items may be exceeded at all unless those expenditures are first reviewed by the Finance Committee and approved by two- thirds of the Board. Board shall not transfer funds from one line item to another Budget line item unless the transfer is first reviewed by the Finance Committee and approved by the Board.

Section F.  Surplus.  The Board may appropriate unexpended funds, up to a maximum of ten percent of the current budget, for a Capital Fund which shall be invested prudently, and which shall be withdrawn only upon a majority vote of the Board of Directors in compliance with the Association's Capital Budget, as amended.  Any surplus in the current year's budget not appropriated to the Capital Fund shall be included in the following year's budget as anticipated revenues.

Section G.  Assessments.  Annual common expense assessments shall be set by the Board.  Assessments shall be charged uniformly per lot or unit as described below.  Two adjoining lots which have been legally merged by a recorded subdivision plan shall thereafter be treated as one lot.  Annual assessments are intended to support the annual Budget, after considering all outlays, both operating and capital, non-assessment income, and other available funds.

(1)  The common expense assessment per unimproved lot shall be called the basic assessment, and the assessment per improved lot shall be called the residential assessment. The basic assessment and the residential assessment are established by the Board and shall be equal, unless these Bylaws are later amended by the members. The aggregate sum of all currently collectable assessments and anticipated income must equal the net revenue needed to fund the annual Budget. The owners of Mill Pond units shall also pay an additional assessment related exclusively to the units and common facilities in Mill Pond.

(2) Special assessments may be used with Board approval to cover unbudgeted spending that otherwise is unprovided for in the Budget  including but not limited to approved overspending on budgeted line items, and unusual or non recurring special projects or services. Special assessments shall not exceed five percent of the total Association Budget in any fiscal year without approval of a majority of the members in good standing voting at a meeting called for that purpose.

(3) Annual bills should be mailed to members prior to December 15. Unless otherwise decided by the Board, assessments shall be payable in one installment on January 15. The Board may grant a discount for payments received for assessments earlier than the due date. Assessments shall be delinquent if not paid within 30 days after the due date. The Board may impose a one-time late fee for delinquent assessments, and annual interest of 15 percent per year, which interest shall continue until all charges are paid in full. Interest applies also to any delinquencies by members under special payment schedules. All owners shall remain responsible for payment despite the owners' failure to use the Common Facilities or by abandonment of the lot or unit. The Treasurer shall provide to the Board a Quarterly Delinquency Report listing members delinquent during the prior quarter and current delinquents, plus the status of collection of the delinquent accounts.

Section H.  Delinquent Accounts.  The Association may bring suit to collect any delinquent account and may also enforce the Association's right to foreclose on its' statutory lien on the lot or unit in question.  The Association should also collect all charges for interest, late charges, cost of collection and attorney's fees as permitted by statute.

Section  I.  Accounting Principles.  The Association shall employ accrual accounting. All accounting and controls shall comply with AICPA guidelines and generally accepted accounting principles.  The Association shall segregate accounting duties.  Disbursement by check shall require two authorized signatures for amounts greater than $500.00 other than for payroll, and one signature for payroll checks and for checks of $500.00 or less.  No facsimile shall be used.  The Association shall make no petty cash disbursements in excess of $100.00.

(1) Cash accounts shall not be commingled with others except for joint investments, and then only on the condition that the Association's books shall show each account's contribution to the investment.

(2) All funds of the Association shall be kept in depositories approved by the Board and insured by the Federal Deposit Insurance Corporation. No changes of depository shall be made without the approval of the Board. All funds in any depository in excess of the statutory insurance limit set by the Federal Deposit Insurance Corporation, or funds not needed for immediate use by the Association, or in excess of Association's cash flow requirements shall be invested by the Treasurer in investments as shall be approved by the Board. The investments shall only be made in (a) United States Treasury or Agency instruments guaranteed by the full faith and credit of the United States Government or
(b) in money market accounts or similar investments that substantially (1) are invested in U.S. Treasury and U.S. Government Agency instruments and securities or (2) are directly secured by U.S. Treasury and U.S. Government Agency instruments and securities. Investment funds or other investments vehicles shall be controlled or managed by banks chosen by the Board of Directors of the Association.

Section  J.  Annual Reports.  Before the end of each fiscal year, the Board shall engage an independent CPA firm as auditor to audit the books and records, prepare tax returns and certified financial statements, and submit written comments and suggestions for improving Association financial practices.  Audited financial statements, with footnotes and auditor's opinion shall be available to the members as required by law.

Section  K.  Contracts.

(1) Unless the action follows a thirty (30) day notice to the members, the Board may not contract with a third person to furnish goods or services for a term greater than one year, except for:

(a) A management contract;

(b) A contract with a public utility for the shortest term available at the regulated rates;

(c) Prepaid casualty or liability insurance policies effective for under three years provided they allow unrestricted cancellation by the insured.

(2) All purchases of goods or services or projects costing over $10,000.00 shall be advertised for public bid and awarded to the lowest responsible bidder as determined by the Board.

(a) Requests for proposals must be advertised in public notices appearing at least once in two newspapers of general circulation in Monroe and Pike Counties, published no later than thirty (30) days before the announced due date for the bids. The request shall require sealed bids that comply with stated terms and specifications. The request shall describe what is sought, tell where and when bids are due, and contain detailed specifications. At the time a bid is due, the Secretary shall unseal the bids, record their contents and transmit them to the Community Manager. The specifications shall detail, using reasonable industry practices, the nature and amount of the work to be performed or the goods or services to be provided, and the form of contract to be executed. A performance bond shall be delivered to the Association by each successful bidder for construction contracts in excess of $25,000.00.

(3) The Association may purchase goods or services without public advertising for bids under the follows circumstances:

(a) Professional services and related costs.

(b) Services of Association employees.

(c) Election expenses of the Association.

(d) Actual emergency affecting member health, safety, or security.

(e) Contract award after review by the Community Manager and Finance Committee, and approval by the Board if no bids have been received pursuant to any
Advertisement for proposals.

(4) In any contract requiring bidding and an initial advance of funds by the Association on awarding the contract, each bid submitted to the Association shall be accompanied by a bid bond in an amount no less than the amount of funds to be advanced by the Association. In contracts extending beyond a single fiscal year, the bids security shall be equal to ten (10%) percent of the first year's contract amount. Bid bonds shall be issued by a surety acceptable to the Association and qualified to do business in the Commonwealth of Pennsylvania. The Community Manager shall deliver all bids received with comments and recommendations to the Board as for award.

(5) If all bids received are deemed to be unreasonable to price or terms, no contact or purchase may be entered into unless the Association notifies each prior bidder of its intention to negotiate; each bidder has a reasonable opportunity to negotiate with the Association; and the negotiated price is lower than the lowest rejected bid price. The Board by a two-thirds vote may elect to waive the bid and performance bond requirements if those requirements are deemed to be inappropriate for  a particular industry and if the payment for goods and services is held until after complying deliver and full performance.

(6) In applying rules regarding dollar limits, Association expenditures must reflect the total project cost, and those costs may not be divided into smaller projects or service segments in order to fall technically below the dollar threshold.

Section L. Borrowing.  The Board is authorized to borrow for operating expenses in an amount up to fifteen (15%) percent of the net Operating Budget for cash flow purposes, provided the debt can be liquidated by anticipated receipts during the current fiscal year.

Section M. Inspection of Books and Records.

(1) The Covenants, Bylaws, membership register, books of account and minutes of member meetings, Board of Director meetings, and committee meetings shall be made available for inspection and copying by any members in good standing at any reasonable time during normal business hours and for a proper, noncommercial purpose related to the member's interest in the Association, at the office or other places the Board may prescribe. Association documents may not be removed from their normal locations. Members must submit a written request under oath on a form provided by the Association in compliance with state law to inspect records.

(2) The Board shall establish reasonable rules governing:

(a) Notice to be given to the records custodian.
(b) Hours and days of the week when inspection may be made.
(c) Payment of the cost of reproducing the records.

(3) A director shall have the right at any reasonable time to inspect books, records, documents and Association physical property, including the right to make extra copies at the Association's expense, if the inspection is related to Association affairs, and so long as the director has no personal conflict of interest regarding the materials to be viewed.

Section N.  Contracts with Other Associations.  With the approval of all directors, the Association may enter into common management, operational, or other agreements with trusts, condominiums, cooperatives, planned communities, or other neighborhood homeowners' or residents' associations, both within and without the Community.

Section  O. Miscellaneous.  Directors and employees may be reimbursed for valid and exclusively Association-related expenditures incurred for the benefit of the Association, subject to compliance with generally accepted accounting principles and approval by the Treasurer.