Dear Esteemed Sir, Madame or Miss and Illustrious Original Poster,
What you write is incomplete information for a casual commenter to assess. Some of the financial maneuvers you describe are not illegal but a bit more of a red flag of underlying problems with the finances of your association. They would not be necessary, normally in a well run and well budgeted association.
Perhaps it is time to assert your legal right to review all the meeting records and financial records (ledger) of the association. After that you have a options.
The question seems to be "Is it Ok to use the special assessment process to pay regular reoccuring operating expenses?".
In my humble opinion, yes, but it not desirable. If all the business transactions of the association are in order, there would be certain conditions:
1) The budget would be in order, and being followed,
2) Collections of assessments would be done in a regular and expedient manner
3) income would have been enough to build up a reserve for contingiencies
Now the maneuvers you describe sounds like there may be a problem with the underlying financial situation of the association. You need to look at regular assessment delinquencies, etc.
It is fine to use assessments to replenish reserves in anticipation of an irregular large expense , but it would be better if your association board communicated with you and gave a financial report and the need to raise the regular assessment (maintenance fee). You might start by calling and writing the treasurer/secretary and requesting a review of the offical meeting and financial documents. You might also remind the board that it is their duty to explain at the next regular association meeting all the maneuvers you describe and financial plans to correct any budgetary problems.
Insurance is a major operating expense and should ALWAYS be figured into the budget just as water and electricity is.
How much is in your Reserve Account? How much are your monthly condo fees? Your $30 fee increase was an additional $162,000 a year. Where did it go? You and your fellow owners need to get that Board out of operation if they won't give you answers. Assessments are for unforseen expenditures such as an unforseen roofing issue or snow as we have here in the north. Hire someone to do you budget that knows what they are doing. We have a monthly accountant and a yearly accountant for taxes. We pay the monthly person $50 hourly. She works 4 or 5 hours a month on our statements etc. If you also have a management company with the 450 units, get answers or vote to get a new one who will. They are all being financially irresponsiblle. When is your Annual Meeting? Do you go and voice your opinions? You are going to have to get involved if you want change. That is all part of raising concerns.
One more thing about hearsay from a fellow unit owner,
"Believe nothing you hear, and only one-half of what you see!"
Seek clarification with the board, not gossip mongers!
I can't believe that you hve no reserves. We are a small condo of only 30 units with a $100,000 reserve after ten year of operation. By the time when our first anticipated major roof repair occurs we expect to have close to $250,000 to fund any such replacements.
john mastro is correct on one point and that is not to act on hearsay. You need to get the facts from the Board.
Insurance is an Operating Fund expense as is the water bill. Year to year any HOA budget should be consistent with changes in expenses only reflecting changes in cost for contracted services. Our HOA budget has not changed significantly enough since 2010 to warrant an increase in assessments since then and we may go beyond 2015 before the next assessment increase. Why? Our contributions to our Reserve Fund are reduced year to year as our Operating Fund budget needs more funds and it will continue to be reduced until our Reserve Fund 20 year plan shows that the Reserve Fund needs more funds to support projects 20 years down the road.
Sounds like your HOA needs a financial makeover. Yes, a Reserve Fund is required by your state law.
The Florida Condominium Act:
"FLORIDA STATUTES 718
(2) REQUIRED PROVISIONS.--The bylaws shall provide for the following and, if they do not do so, shall be deemed to include the following:
(f) Annual budget.--
2. In addition to annual operating expenses, the budget shall include reserve accounts for capital expenditures and deferred maintenance. These accounts shall include, but are not limited to, roof replacement, building painting, and pavement resurfacing, regardless of the amount of deferred maintenance expense or replacement cost, and for any other item for which the deferred maintenance expense or replacement cost exceeds $10,000. The amount to be reserved shall be computed by means of a formula which is based upon estimated remaining useful life and estimated replacement cost or deferred maintenance expense of each reserve item. The association may adjust replacement reserve assessments annually to take into account any changes in estimates or extension of the useful life of a reserve item caused by deferred maintenance. ..."
Can the board keep another board member from executive part of meetings?
About lack of reserves:
That is not illegal, but it may be actionable under tort and contract law (failure to do fiduciary duty).
Again you need to get access to your associations financial records and go from there.
1) Not without a court order or
2) , only in some states, not without a resolution of the other board members.
This is a separate question outside of this thread!! But a very interesting one.
"Can the board keep another board member from executive part of meetings?" Yes, if the Board is planning to discuss and/or vote on a private or personal matter that pertains to a particular Board Member, that Board Member can be asked to not be present. Example: The Board Member is sufficiently behind in their monthly assessments that the Board needs to discuss/vote on proceeding to foreclosure. Okay, okay, an extreme example and to respond to those who will say that the Board Member should be fired. Most HOA Bylaws will state that the Board has the power to remove this Board Member from whatever office they are holding but only the owners can remove a Board Member from the Board.
There can also be situations where a conflict of interest is a concern. Then the Board Member can participate in the discussion but MUST abstain from voting. An example: A Board Member is also the HOA's landscaper but does a poor job of cutting the grass. Should the Board Member become belligerent during the discussion, then they would be asked to leave the Executive Session, failure to do so could force the Board to recess to a later date, not inviting that Board Member.
Lack of sufficient Reserve Funds is definitely against Florida law as I quoted above.
I stand corrected in that the OP stated he lives in Florida.
Some of my answers are wrong because I live in another state where it is not illegal by statute to not maintain sufficient reserves. I would edit my responses appropriotely except we have no edit function here.