A Board Member's Fiduciary Duty

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Have you ever heard someone on TV or radio advertising that they're a special someone because they are a "fiduciary?"  The term has come into full vogue.

 So what is a fiduciary, and why would this ever show up on a blog about HOA management?

Because your HOA board members are required to act as fiduciaries, too!

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A "fiduciary," as defined, is, "A person having duty, as created by his [or her] undertaking, to act primarily for another's benefit in matters connected with such undertaking."*

To boil this down, a fiduciary puts the interests of someone they represent above their own interests and desires.  And yes, directors of homeowner associations are required to exercise a fiduciary duty when conducting the business of the HOA.  It's not just written into Villages North's governing documents, it's a state law.  Read it:

With these three simple clauses, the State of Arizona has required that the directors of any non-profit company comply with this, or face liability.  Villages North falls into that camp.

This concept is pervasive all over the state.  I attended a HOA financial management seminar today at the Mustang Library (and I'm not even on the Board), where counselor Beth Mulcahy reminded everyone in attendance of this.  She's been in practice for 2 decades:  it's a deal.

The fiduciary duty can be summarized in these three duties:

1. The Duty of Care.  HOA board members are required to act with due care.  They must act in good faith for the betterment of the HOA, they must review and apply relevant facts, the must possess sound judgement, and make prudent decisions.
2. The Duty of Loyalty.  HOA board members must act in the best interests of the HOA, above their own perceived interests.  They must avoid conflicts of interest, prevent themselves from personal financial gain, act objectively, and within the authority given them.
3. The Duty of Confidentiality.   Board members must respect the private (and sometimes sensitive) information of Owners.  They must safeguard private documents.  And most importantly, they must continue to do so even after they leave a board.

Villages North has even added to this, and in 2021 passed a Code of Conduct Resolution for board members and owners.  It holds board members accountable for dealing fairly and respectably with owners, not enforcing the governing documents unreasonably or inconsistently (ever gotten a violation letter when someone else didn't?), and reinforces the principles of fiduciary duty.

I made a point of asking the Board to re-affirm this Code of Conduct in the two years I was a director.  In reviewing old meeting minutes, and I haven't seen that happen since then.

 

You should have certain ethical expectations of your board members.  They are not just there to fill a space.  They should not be there for their own self-image.  I take the concept of fiduciary duty seriously.  

 

You should too!

 

 

Financial Transparency?

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On February 23, 2026, the president of the board recited some information on a slide show, trying to differentiate myths and facts at Villages North.  While everyone is entitled to their perspective, we'd like to point out some of the realities going on.  What we found is that most of the material presented was, at best, a half-truth.

There is grand financial transparency?  The reader presented a lot of information without confirmation, but to dig deeper, here we go:

A CPA's "Compilation" report is not at all transparent.  Within the scope of CPA work, the compilation is the least rigorous type of independent analysis.  To the extent that the CPA's own cover letter states the following:

"We do not express an opinion, a conclusion, nor provide any assurance on these
financial statements," and "We did not audit or review the financial statements nor were we required to perform any procedures to verify the accuracy or completeness of the
information provided by management."  

That's transparent?  Not only does this not even meet the requirements of Villages North's own Audit Policy, which was created at the request of our lender (does anyone remember we owe a bank $1.5 million?).  Failing to meet the bank's requirements is an event of default.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

So much for accuracy in reporting and completeness, a report that doesn't even meet our own standards, let alone someone else.

 

Even in the most recent Board meeting, they were unable to verify or approve the financial statements for this past January.  We're almost to March and they haven't flushed out any changes that were required.  This prompts the following questions:

• What were the problems?
• Why did no one want to discuss them in an open meeting?
• Is something being hidden?
• Why does no one want to summarize how we perform from time to time.

 

 Anyone remember reading monthly, easy-to-read financial summaries, like this?

 

Given that the recent roofing contract has the potential to drain our reserve fund to less than $1 million, don't you think more information is better than less?

 

Bill and Sara both do! 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

Villages North - Myth vs. Fact

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On February 23, 2026, the president of the board recited some information on a slide show, trying to differentiate myths and facts at Villages North.  While everyone is entitled to their perspective, we'd like to point out some of the realities going on.  What we found is that most of the material presented was, at best, a half-truth.

You'll read about financial transparency in the next post.  Let's take a look at some of the other ones presented by the board president.

Myth #1:  Management companies

The simple fact remains this:  on the day Cornerstone Properties assumed the management duties of the HOA, they charged Villages North $4,200 per month.  Exactly one year later, that amount has skyrocketed to $10,000 per month.

You need to ask yourself one question:  am I getting twice the service for the added expense?  Don't forge the most recent hike in the monthly assessment was due almost exclusively to this 230% increase.

 

Myth #2:  Landscape costs

Again, here's a case of a half-truth.  The board president averred that they HOA wasn't "really" over budget to the tune of $40,000 in tree maintenance costs because it was an invoice left over from a prior year.  Let's take a look at the numbers:

2023:  Tree trimming budget    $100,000     Actual cost    $83,000    (under $17,000)*

2024:  Tree trimming budget    $85,000        Actual cost   $91,100    (over    $6,100)

2025:   Tree trimming budget    $90,000       Actual cost    $131,000  (over   $41,000)

* Bill's final year on the board

So even if you want to play make-believe and move that $40,000 around, it means the current board went over budget in one of these years by $40,000!  And who knows what invoices from Tree Doctors will come in this month from work in the last year?  Until someone brings this cost under control, they will always want to say an invoice is "not from this year."  That's a cop-out.

 

Myth #3:  Legalities 

The board president averred that we will get the full legal settlement due to us, all $4.7 million, with no question.  The truth is:  we don't know that.

It is true that the HOA took SRS Roofing to court an was awarded an arbitration award, except SRS Roofing is no longer in business in Arizona, meaning we would be trying to collect blood from a turnip.  The new strategy to to go after SRS Roofing's insurers, who have denied the insurance claim.  This means taking an insurance company to court.

Have you ever heard of an insurance company just forking over money?  Neither have we.  If an insurance company thinks they have have a case (and it appears they think exactly that), they could drag this process out by years.  In addition, taking the case into court presents the possibility that we may not get everything we demanded.  Civil judges are bound to provide equitable relief to all parties.  Therefore a specific monetary amount is not a guarantee.

It should be noted that even the HOA's insurance defense attorney has said there is no such guarantee.  Optimism is fine in certain instances.  We think here it's time to confront reality.  We certainly haven't gotten any legal updates in quite a while. 

One final note, we will have to pay 1/3 of any settlement to our construction defect attorneys, and additional retainer to the insurance defense attorney out of that remainder.  Assuming that's 1/4, we will probably not cover the costs of the roofing contract. 

 

Myth 4:  Vendors/Contractors

The simple facts are this:

Pool maintenance:  fired two companies, now on the 4th.  This speaks to poor selection.

Landscaping:  fired two companies, and had a respectable third company terminate the contract on us, not wanting to deal with the extant board of directors.  Villages North has never had a contractor cancel a contract on us...until now.

Common area maintenance:  fired the vendor and never thought to hire a replacement. 

So many other service providers and vendors have changed.  Plumbers show up and do not understand the plumbing system, prompting unnecessarily widespread outages.  Pool vendors now clean and maintain fountains (something the in-house maintenance manager Jordan Nuckolls did as part of his schedule).  

Things have changed for the sake of change.  Sara and Bill both believe in building successful relationships, not just throwing someone out at the drop of a hat.  The community had to learn this lesson the hard way.

 

 

There were other items presented which do not seem worth mentioning here.  We think the lesson is:  caveat emptor -- buyer beware. 

 

 

 Meetings

What Are They, And What Is an Owner's Role 

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February 15, 2026 

Over the weekend, Bill and Sara heard a lot from Owners about the conduct of meetings.  We though it might be helpful to provide some background on the meetings, and what are the Owners' roles in them.

As a homeowner association, there are two types of meetings:  meetings of the Owners, and meetings of the Board of Directors. 

Meetings of the Owners

You all most commonly know this as the "Annual Meeting," the next of which will happen on February 28, 2026, 2:30 p.m. at the Horizon Community Center on 100th St.

A meeting of the Owners is the best opportunity for Owners to have input.  Since it's your meeting, the Owners have input on the agenda.  Motions to approve items on the agenda are made and seconded by the Owners, not by the Board members.  The only role of the Board and the manager is to conduct the meeting according to the community's governing documents, and the meeting agenda.  It is not their meeting.

Arizona imposes few actual legal requirements on Owner's meetings, except:  (a) they be held at least once a year, and (b) they be held within the State of Arizona.  Typically, the Annual Meeting will always include the election of the Board members.

 IN FACT, did you know you can call for a special meeting of the Owners?  Yes, you can.  You will need to do is convince forty-six other Owners to do so as well.  It's in the HOA's Bylaws!

***(Bylaws)***

 

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As a quick aside, in HOA legal-speak, Owners are referred to as "Members."  They are the same concept, just a different term.  With 456 Owners, 10% equates to 45.6 Owners, so we round it up for good measure.

 

Meeting of the Board of Directors 

Almost every month, "the board" meets to discuss the business of the HOA and take action when needed.  The board is required to provide at least 48 hours' notice of such a meeting, and to provide an agenda for that meeting.  

Once the meeting is called to order, that agenda cannot change.  This prevents the Board from trying to slip things in without Owners knowing in advance.

Owners are legally entitle to speak in certain portions of a Board meeting.  The Board violated the law if it has ever made their motions and immediately voted without inviting questions or comments on an action item, literally, 

The board may place reasonable time restrictions on those persons speaking during the meeting but shall allow a member or a member's designated representative to speak once after the board has discussed a specific agenda item but before the board takes formal action on that item in addition to any other opportunities to speak. The board shall provide for a reasonable number of persons to speak on each side of an issue. 

(link:   https://www.azleg.gov/ars/33/01248.htm, refer to Section A)

In addition, Villages North's meetings have typically included an open forum for you to speak on other issues in the community.  While it is right for the board to gently steer these into respectful discussion of appropriate lengths, a manager or board member should not insult you, denigrate you, or cut you off mid-sentence.

The Board is required to act according to a Code of Conduct which has been around since 2021.  Bill made a point to re-affirm this the two years he was on the Board.  It has not shown up once since that time. 

The current manager is very intent on adhering to Roberts Rules of Order, a universally-accepted publication on the conduct of meetings in almost any formal body.  Unfortunately, the Owners never really get to know exactly what a specific motion is.  Why can't a motion be read aloud as it has exactly been proposed?  Why are Dollar amounts often excluded?  This does not speak towards transparency. 

 

 

 

 

Do You Know You Pay A Manager $120,000 A Year?

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It's true.  In January of 2025, when the current HOA board switched managers, they contracted with Cornerstone Management at a rate of $4,200 a month.

Just 1 year later, that rate has risen 230% in 12 short months to $10,000 per month.  Not including the various other fees they charge all the time.

Cornerstone never bothered to disclose to the HOA that they were in the process of selling their company to a much larger entity, Inframark.  

And what does Inframark do 98% of the time.  They help municipalities manage their water infrastructure.  Community management is almost an afterthought to them.  So it should come as little surprise that they seem to value metrics of cost and pass them on to HOA communities that are under increasing pressure from all fronts.

It's true.  Find their website www.inframark.com.

 As Owners, Sara and I suggest you ask the following questions:

1.  Am I getting two times the level of service from the current management company, now that they charge twice as much?

2.  Am I twice as informed about what happens in my community? 

3.  Was this rate increase worth the added monthly assessment fees I pay?

4.  Are there any checks on how much this company can charge?

 

We agree that Tri-City had fallen down in their duties in 2024--it was time for them to go.  Honestly, we weren't on the board and most of the work was done in secret.

There are dozens of better options than Inframark and their outrageous fees.  When Bill Hoeman called the director of community management at a locally owned company in Phoenix and asked if this amount was common, the response included the term "insane."

 

Better Decisions Come From A

Combination of Experience and New Faces

Sara and Bill are that combination 

 Is a CDARS a Tree?

🌳

You can probably guess the answer is "no."  😅

But it's been touted around here lately as some sort of magical revenue source that someone found. 

 I'm sorry to disappoint, but Villages has been doing this for years.  

CDARS is an acronym for "Certificate Of Deposit Account Registry Service."  It is a program offered by a company called IntraFi which allows entities to purchase certificates of deposit when the amount would exceed one bank's FDIC insurance limit of $250,000.

Villages North used to utilize the same service under another acronym ICS ("Insured Cash Sweep").  The main difference between CDARS and ICS lies in the availability of funds.  CD's in the U.S. require a time commitment, where ICS deposits do not.  They pay roughly the same amount, and they both appeared on Villages North's balance sheet when I was the Treasurer of the board (we haven't had a Treasurer for over 2 years now).

 

So the concept of "bank deposit alternatives" has been around a long time.  I even championed ways to gain even more return on our reserve through the purchase of U.S. Treasury Bills.  I have attached a memo I wrote to the Board about this long ago.  Don't worry, it's public information.  

Talk about the financial skills that Sara and I can bring to the table.

In some months, we earned a substantial premium on our reserve funds, sometimes over 5%!  

 Yes, some of this financial information feels obscure.

So who do you want minding the store?  

With an unknown timing or amount of a legal settlement, the board embarked on a $2.6 million roofing project that will take the HOA's reserve below $1 million.  I know that sounds like a lot, but divide that amount by 456 front doors.

And yet the current HOA president pushed to spend over $100,000 to turn a tennis court into some vague "gathering space?"  Don't we already have pools, BBQ grills, and gazebos which have accommodated public gatherings for years?  

Never mind their push to spend another $150,000 on new pool furniture.  Don't get me wrong, I'd love to do it.  But we have never saved for it, and it will take away from major projects coming in the next 5 years.  Not to mention that many projects that have remained incomplete for years.

Neither Sara nor I are rubes, as portrayed by the current HOA president.  We are not scared by large numbers, and we know how money functions.  After all, the money of the HOA comes from you, the individual owners.

 

Bill Hoeman & Sara Meshulam

Sensible Candidates for the

Villages North Board of Directors

Dear Villages North Owners,

The 2026 Annual Members’ Meeting is coming up this month, February 28, 2026 at 2:00 p.m., to be exact.  Now is the time for your voice to be heard, heard when some current board members have tried to silence it.  We sincerely ask for your vote to serve the community as board members.

Who We Are

Bill Hoeman has been an owner since 2020.  He previously served as the President and Treasurer of Villages North for two years.  During that time, he oversaw a road construction project which was completed on budget and on time.  He oversaw the resurfacing of the pool decks in a similar manner.  Bill has held prior positions in HOA management.  His work centers on investment management, commercial banking, and credit analysis.

Sara Meshulam has owned her Unit since 2022.  With a doctoral degree, Sara’s work in medical sales, both here and abroad, requires skill in contract management, budgeting, and building relationships.  Sara believes strongly in an open-minded HOA board which makes smart, cost-efficient decisions.

What Has Happened at Villages North In the Past Two Years?

1. Expenses have unnecessarily gone up.

• For the first time, the HOA’s tree care bill exceeded $130,000, nearly $41,000 over budget.  

• In late 2025, the Board approved a management contract which will pay Inframark Management $120,000 per year.  This is more than double the original contract they signed just 10 months earlier.  By contrast, the HOA’s final year with the prior management service cost just $65,000.  When we mentioned this rate to other property managers, they labeled it “insane.” 

• We pay more for pool maintenance services than two years ago, but have churned through multiple maintenance companies because of poor work and inattention.

• We now pay more for maintenance personnel who are on site, on average, of only 3 hours a day.   

• Amenities have fallen through the cracks. There was very slow movement with the tennis courts.
                                                                        

2.  Financial management has gone missing.

• The current board failed to produce a CPA financial report for 2024 by the legal deadline of June 30, 2025.  This omission left the HOA in violation of Arizona law, and susceptible to civil lawsuits.  To make matters worse, the report they finally prepared last December was below the level required by Village’s own accounting policies, and more importantly, as required by our loan agreements, leaving us potentially in default of over $1.5 million in debt.

• Numerous projects went un-completed over the past two years which require tens of thousands of Dollars. 

• The current HOA president has access to make purchases on behalf of the community without consulting anyone on the board for prior authorization on spending decisions. Even if unintentional, this can open the door for abuse and unwarranted spending.

• When discussing topics in open community meetings, it has been clear that concerns from community members are not fairly evaluated and treated as more of a nuisance.

3.  Legal questions.  No one is sure when, or how much, the HOA stands to recover from its lawsuit.  

What Does All This Mean For Us, the Owners?

As you probably have noticed, your HOA fees have gone up yet again.  While neither Sara or Bill can promise to stop that, we never get a decent explanation why or for what services?  Transparency and honesty should be the hallmark.  For owners who live on site, the higher fees add to your cost of living.  For property lessors, higher rents become unattractive to prospective lessees, and that eats into your income margins.

It also means that some new thoughts and eyes should come back to the Board and solve some of these issues.

 

This Is What Sara and Bill Pledge to You

It would be unwise to promise that Project A or B will happen, because no one can predict the future.  But our goals include:

• A return to board meetings free of denigration and insults.  While meetings need reasonable time limits, snapping at someone to be quiet is inacceptable.  We will also try and return to in-person meetings, in addition to web conferencing.  Zoom is a great tool, but we place a lot of value in looking at another person face-to-face.

• Better financial management.  Villages North takes in over $2 million per year in your assessments.  We believe a lot more financial candor is due to the Owners.  We bring experience in finance and budgeting.  We need to treat our finances more professionally.

• Careful contract management.  The past two years have seen a half dozen HOA contractors and service providers replaced for no apparent reason.  In addition, the HOA is venturing into the largest contract (re-roofing) that it has ever signed.  We need individuals who can prudently protect our interests in these large projects.

• We want to develop both a short and long-term plan for Villages North.  Other large projects will be coming up in a few years.  We need to understand what and when, and be prepared for them, sometimes years in advance.

We humbly ask for your support in bringing new and experienced eyes to Villages North.  To learn more, please visit our online blog ourvillagesnorth.blogspot.com or scan the QR code at the bottom of this page.  We hope to serve you in the future.

Sincerely, 

Bill Hoeman

Sara Meshulam 

Meet Sara and Bill

 Pool 3 (by the tennis court)

February 15th, from 12:30pm - 2:00pm

Hello & Welcome to

Our Villages North

A resource for you to find our more about issues which affect Villages North,

your community in North Scottsdale. 

 

This resource is presented in coordination with the a group of Owners who are concerned about the current track of this community.  We believe we present a compelling combination of experience, background, and commitment to sound community management.