RSF Association Finances

Author: Phil Trubey

Date: May 13, 2025

Hello, Phil Trubey, RSFA Board member sending an occasional email about RSF.

I'd like to clear up some confusion some Members have about Board responsibilities, finances, etc.

Some RSFA Members seem to think that the RSFA Board reports to them, and must listen to them and do their bidding. While this isn't even true for publicly elected officials, it certainly isn't true for corporate Board members, which is what RSFA Board members are.

RSFA Board members owe a fiduciary responsibility to the corporation, not directly to the Members. Even if a majority of Members thought we should do X and the Board, in correctly discharging their fiduciary responsibilities, thought and did Y instead since that would be the correct course of action to benefit the corporation (and X would hurt it), then they would be in the right to do Y. And courts would back them up should Members challenge them on that.

Now before some of you blow a gasket, there are limitations on Board actions. These are outlined in the California Corporate Code, and the California Davis Stirling Act, then in the Association Bylaws, then in the Covenant. 

For instance, in our Bylaws there is a section (Article IV, Section 6) entitled Limitations of Board of Director's Powers. A well functioning Board led by a competent Association Manager ensures they follow all these laws and documents to the letter when the Board attempts to do anything. 

I mention all this because there is some confusion about the Association's erstwhile Open Space Fund. 

There is a bedrock principle in corporate law that a Board cannot bind the hands of a future Board when discharging their responsibilities. ie. A Board resolution enacted today can be undone by a future Board or even by the same Board. 

The Open Space Fund was created a long time ago and accumulated assessment money into a fund to buy non pre selected properties. And while the then Board put the creation of the fund to an advisory member vote, there is nothing in any of the aforementioned legal documents that says a Board is forced to continue spending money on such a special project.

Buying fallow land isn't a core responsibility of our HOA. It isn't specifically mentioned in our own governing documents, nor, of course, in general HOA law. So while a Board may be allowed to spend assessment money on something like this, it isn't required to, even if Members at some time in the past voted to do so.

Note that if the Open Space Fund was funded via yearly Special Assessments, then that would be different since Special Assessment monies must be used for the stated purpose that they were collected under.

But Open Space funds were collected using regular assessments. Each year, each new Board gets to decide what to spend assessment money on (within normal fiduciary limits of course, no Hawaii retreats). Thus in 2017 or so when the then Board decided to use accumulated Open Space funds to partially finance the Internet fiber project, they were acting within their powers to do so, and likewise a subsequent Board was acting within its powers to eliminate the Fiber Fund at an appropriate time.

For more information on RSFA finances, assessments, etc., read my article RSF Association Finances.

"I went down to the demonstration to get my fair share of abuse" - Rolling Stones, You Can't Always Get What You Want

It's even worse when the abuse comes to you via anonymous writers who are so scurrilous to not even stand behind what they wrote like recent letters in the RSF Post. Consider yourself lucky if you're not on the Post's email list anymore.

The RSF Post used to have a policy such that all letters needed to be signed and also no personal attacks were allowed. Obviously no longer.

If you hear of something that doesn't seem quite right to you, I urge you to contact a Board member and ask them questions. It's the best way to get accurate information. All Board member email contact info is located on this page, and all Board members would be happy to discuss things with you.

By the way, my new website (MyRSF.net) has tons of current and historical information about Rancho Santa Fe. 

Someone the other day asked me for a list of home technology integration companies, that's listed as the 4th link on this page. 

The RSF Post used to be an incredible repository of Association history and luckily I was able to preserve its archives before I lost control of the domain name. You can search through the article archive here, and read about various major events in recent RSF history here.