of the Agent's Base Fee, all of which payments are subject to the limitations of this Agreement. From funds collected, Agent will cause to be paid the expenses, utilities, bills and other necessary expenditures for the operation of Association in accordance with the approved budget or as otherwise authorized by the Association's Board of Directors. Any service fees charged for banking services or account maintenance by the bank shall be the responsibility of the Association and shall be a charge against Association’s operating and/or money market accounts. 2.3 Delinquent Accounts. Agent is authorized to take reasonable steps for collection of delinquent Assessments due to the Association. In the event such efforts fail, Agent will have authority to record a lien against the delinquent owner's unit in accordance with the Declarations and the approved collection policy. The Agent is authorized to assess the delinquent account a late charge and a delinquent processing charge, along with other charges for collection & lien fees, if applicable, reflective of the costs of collection, accounting, payment plan monitoring and legal proceedings. All such assessments are to be deposited into the account of the Association. Agent shall be paid 50% of any late charges charged to homeowners. Statutory interest may be charged commencing 30 days after any due date. Reasonable costs of collection, including attorney's fees, are authorized to be charged and collected per Exhibit A. 2.4 Disbursement Authorization. Agent is authorized and shall make all disbursements from Association funds for liabilities incurred on behalf of Association. Association acknowledges Agent’s role as Paymaster; accordingly, such disbursements may be made via paper drafts or electronically at the discretion of Agent. Agent is authorized to utilize all fraud control systems and methods available to Agent for the protection of Association’s funds. Agent is hereby granted authority to make any reasonable and necessary non-budget expenditures as provided in this section at its own discretion up to $One Thousand and Five Hundred Dollars ($1,500.00) In addition, Agent shall have the authority to make normal and usual expenditures as prescribed by the Board of Directors and/or by the Association’s approved operating budget. Agent will obtain approval for any extraordinary expenses of the Association as needed. Emergency repairs involving imminent danger to life or property, or immediately necessary for the preservation and safety of the property, or for the safety of the Members, or required to avoid the suspension of any necessary service to the Property, may be made by the Agent irrespective of the cost limitation imposed by this section. Agent will establish Association's reserve accounts at Association's direction; however, Association is required to have a Reserve Account at Agent’s sole choice to allow for Agent to disperse Reserve Funds as needed . Agent makes no warranty or representations regarding the security or yield of any reserve investment. Except for the disbursements provided for above, all reserve account disbursements will be signed by two members of the Board of Directors.
2.5 Accounting and Financial Statements. Agent will maintain a set of accounting records in accordance with generally accepted industry standards.
a. Agent will distribute monthly to all members of the Board of Directors a financial statement for the previous month, including copies of the Balance Sheet, Statement of Income and Expenses, Schedules of Cash Investments, reserve allocations, and a check register of disbursements.
b. Agent shall reconcile all bank statements received by Agent and shall provide to the Board copies of both statements and reconciliations.
c. Agent will cooperate with auditors in their performance of audits and reviews of Association's records and their preparation of applicable tax returns in accordance with Exhibit A.
d. Agent will, upon direction from the Board of Directors, distribute to all members, at the Association ’s expense, copies of the Annual Budget Report and Annual Policy Statement in accordance with Civil Code Sections 5300 and 5310 respectively, and all other publications and reports required by the Board of Directors and applicable laws. 2.6 Budget Preparation. Agent will prepare and submit to the Board of Directors a proposed budget. Any budget draft will be subject to final approval by the Board of Directors and the Board shall retain full responsibility for the appropriateness of data contained in the budget. Any decision to adopt Agent's proposed budget, or to amend it for adoption will be reserved to and exercised solely by the Association's Board of Directors.
Professional Management Agreement Village Racquet Club Association and Prime Association Services, Inc. Page 3 of 14
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