Editorial: Officer Removal - A Year Late, and Many Dollars Short

Fi·du·ci·ar·y  -   /fəˈdo͞oSHēˌerē
involving trust, especially with regard to the relationship between a trustee and a beneficiary.

Last year in January, I co-authored and delivered to Tony H, Fort Clark Springs Association Secretary, a request for the resignation of President Lisa Vale for fiduciary failures. She is the elected trustee, and we, the FCSA members, are the beneficiaries. There is no record of this letter in the approved meeting minutes and no action was taken. Well I should say, there was no action to address the failures listed in the request at least. There was plenty of grandstanding and browbeating from behind the director’s “altar”, but that doesn’t pay our bills and hasn’t done much to advance the interest of the association.  This is the normal course at this point. A request for our HOA president’s resignation may seem harsh and heavy handed, but it came after months of email correspondence and meetings with directors to answer questions and identify areas of concern that lead to very little movement. Questions were asked, then condensed, then placed into an easily digestible presentation all at the patronizing request of our board. They were hoping we’d just give up. Where has that document gone? It most likely ended up in the trash. I asked if it had been passed on to our new general manager, and at the time, she had never seen it.

Fast forward to 2025, the FCSA board is finally  going to discuss “Board member breach of fiduciary duty” and “Removal of an officer” at the upcoming association business meeting on January 18th. Is this the action we requested in the letter a year ago? Doubtful. It’s unclear as to why they are hiding the name of the officer they are trying to remove. Probably because it’s harder for supporters of the officer to show up if members don’t know. Although a year has passed, many of the concerns around fiduciary duties still remain. We have spent more money in the last year than we have in any year in the last decade based on figures produced by FCSA. All without the required documentation.

The basis of the resignation request was failure in the following areas:

Failure to obtain an annual independent audit:
Jan 2024 - Fail
Jan 2025 - Fail
Violation of policy resolution FCSA Capital Budget starting fiscal year 2023-2024
Jan 2024 - Fail
Jan 2025 - Fail
Violation of policy resolution FCSA Capital List and Net Revenue Allocation:
Jan 2024 - Fail
Jan 2025 - Fail
Failure to pay taxes and assessments that would otherwise be a lien upon common property
Jan 2024 - ?
Jan 2025 - ?

Here we are 12 months later, we don’t have an audit to evaluate if we are following procedures that ensure we are operating securely, effectively, and efficiently. The policy resolution meant to plan and account for large maintenance and improvements has yet to be adopted. Directors have stated they have no intention of adhering to the reinvestment policy. Last but not least, our current reports make it impossible to determine if we have paid the proper sales and occupancy tax. Yet we are entertaining bids to repair the motel? Normally I’d say this is great! Let’s invest in something that produces revenue, but we’ve already been told we are using the motel income to cover operating expenses. Look at the figure below. Without a capital budget we can’t be sure we have the funds to do this, and because this is not planned maintenance on a commercial property we stand to pay taxes on these motel repairs. Check out Texas Tax Code § 151.0047. 

Two of the four items listed as failures are FCSA policy resolutions. This means they were adopted and filed at the courthouse by a board who thought they were necessary at the time. They are meant to be revisited and revised as the needs of the association change over time. In fact several policies have been removed in the last few years. So why doesn’t Lisa Vale, as President, produce an agenda item to remove these policy resolutions if the board isn’t going to follow them? At that point, there would be no validity to two of the four fiduciary claims in the resignation request. I guess they haven’t been removed because the directors would have to look members in the eye and tell them these financial guidelines no longer fit the needs of the association. That the resolutions are no longer necessary to guide and protect the member’s money. That would be an interesting conversation. I’m not sure what’s worse, FCSA leaving the policies in place and thumbing their noses at the members by not adhering to them, or telling members we don’t deserve the financial guidance and transparency afforded by following the policies.

The motel is a building that contributes to the Fort Clark Historic District. Does this make these motel repairs eligible to be approved for the Texas Historic Preservation Tax Credit Program? That could mean significant savings, but we need to do some research and we need a plan, i.e. a capital budget. In February 2024, I wrote to the general manager, Lisa Vale, and our directors to inform them of this program, but I did not receive a response. Since then, I’ve sought out members of the Fort Clark Springs Historical Society and our Preservation Committee to make them aware of the program, but it is unclear whether or not FCSA has sought their advice on this project. I guess we will find out during the upcoming business meeting. 

We talk about grants, programs, and plans to fund improvements at FCSA. However, we don’t follow our own guidelines and requirements in preparation for capital projects. What makes us think we will ever pay for these projects with anything other than FCSA money? We can’t even report how much FCSA money is spent each month. If a director or member can show me a report with the totals of money in and money out on a monthly basis, I’ll print a correction. Challenge accepted? Either our well paid financial consulting can't produce it, or the board doesn't want to share it. Hint: not all FCSA funds are accounted for in the monthly operating budget profit and loss statement. 

I had high hopes for our new general manager and her gusto for process and procedure. She was promised help from our consultant, but with the number of errors in the first edition of the budget, it’s hard to believe she was given any help at all. It appears she was pushed into the deep end of our beloved spring feed pool. I held out that she would stick to her guns and demand we follow our governing documents and the resolutions put in place to protect and guide our finances. At this point though, it seems she has fallen under the director’s spell of cognitive dissonance when it comes to fiduciary responsibility. FCSA members must follow rules and pay assessments, but don’t you dare ask us, almighty FCSA, to follow rules or to tell you how your assessments are spent. The directors have flat out told us we don’t have the funds to reinvest, yet here we are a few months later reinvesting in the motel. I’d shake my head, but I fear I’m the insane one here because I’m expecting different results out of the same system we put up with year after year. Maybe it’s our fault.