Open Board Meeting - 16 September 2010

September's open board meeting had a little bit of drama but, overall, was very quiet, much like August's meeting. The board's treasurer was absent.

Homeowner Forum

There were only three homeowners present for this portion of the meeting during which only one spoke, and that homeowner directed her comments/questions at me. She was particularly concerned with some of the comments I made in regard to a parking permit that was pending issue. Here is some background:

Prior to the August meeting I met with a homeowner to verify his information in connection with issuing a parking permit. During the course of the visit, the homeowner suggested that the association consider issuing a second parking permit to homes in the community. At first I was reticent since parking is always such a touchy subject. However, the homeowner suggested that the cost of the second permit be much higher than the first, something on the order of 3 to 5 times as high. This would discourage people from buying a second permit just because they could afford it (alleviating my concerns about over-parking) and also provide some much needed revenue to the association. I told the homeowner that the idea sounded good to me and that I would take it up with the rest of the board.

At the August meeting, I raised the idea of issuing a second permit to people who were willing to pay $500 or even $1,000 for a yearly permit. I said that because the association had only issued approximately half of it's allotment of 25 permits, the issuance of (what I expected to be) one or two "secondary" permits was something that should be considered in light of the extra money that could be brought in with minimal impact to the parking situation. The idea was quickly rejected by the remaining board members.

Now, back to September's meeting. The homeowner at the meeting had several concerns about this, but they all seemed to revolve around 2 points:

1. That when I spoke to the homeowner again after the board meeting, I would portray the remaining board members in a bad light, e.g. "I really wanted to do this thing, but those mean, old board members just wouldn't go for it."
   
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2. How could I think that this was a good idea? And more to the point, what qualifies me, as a non-resident member of the association and board, to proclaim this a good idea, e.g. why would I care if parking goes to hell in a hand basket subsequent to the adoption of such a policy.

To the first point I replied that I had not spoken with the homeowner again. Since he had intimated to me that he had raised the idea previously to no avail, I didn't feel it necessary to contact him to tell him that nothing was going to change. I further replied, though, that if I did contact him, I would not hesitate to tell him that I liked the idea, but the rest of the board did not. Furthermore, I cannot control what a homeowner thinks about the association's policies and/or the individual members who vote for or against them. I would have (to the best of my ability) related to the homeowner what happened at the meeting, and he would have been free to draw his own conclusion(s).

(I should add, at this point, that the remaining board members came to my defense, explaining that they would have acted similarly when talking with the homeowner who suggested the idea of issuing a second permit. That is, they, too, would have politely listened to the homeowner and brought the issue to the board, i.e. it is generally the M.O. of board members in such situations not to argue with a homeowner. I thanked them for speaking up but made clear to the homeowner at the meeting that I did think that the idea had merit.)

To the second point, I explained that I do not make decisions for the association; the board does. The very reason that five people sit on the board and not one is to prevent one person from instituting whatever policy he or she deems to be a good idea. Sometimes the members of the board agree; sometimes they don't. There is nothing wrong with that disagreement, though. That is just the way things work. I thought issuing a second permit was a good idea; the rest of the board disagreed; and the issue was dropped. (I wish that I had specifically addressed the canard that being a non-resident member somehow diminishes me or the work I do as a board member, but it didn't seem the place, nor does this. I will likely address it in a future post, though.)

Open Board Meeting

The highlights of the meeting are covered in the bullet points that follow. Some points require further explanation/analysis which I will get into in later posts.

• Minutes from the 19 August 2010 meeting were unanimously approved with one change: the approval of the architectural change requested by a homeowner was unanimously carried. (I do not intend to obtain a new copy of the minutes to reflect this change, so the "draft" minutes posted will have to suffice unless someone else obtains the final minutes and provides them.)
• A number of landscaping proposals totaling $563.00 were approved.
• The issue of the rabbit fencing in the tot lot was raised. During the summer there hadn't been any problems, but now apparently kids are using it to give themselves a boost to jump over the fence. The board is looking into adding curved extensions to the top of the fence that would prevent climbing over the fence.
• The board approved the purchase of a temporary speed bump to be placed just inside the Belflora entrance gate as well as two stop signs to be added at two points within the community. If the temporary speed bump alleviates the speeding at the entrance, it will likely be made permanent.
  
• The board reviewed the association's financial statements and noted that the association is currently running almost $26,000 under budget. This is still less than the amount of outstanding debt that the association is owed by delinquent homeowners, though. Statements for the month of August were approved.
• The board reviewed the delinquency report and found that a number of homeowners have not yet paid the special assessment that was due 1 September. There is optimism that most will pay, though, based on the fact that regular assessments due 1 September were paid.
• The board approved the 2010 reserve study and the budget for 2011. The budget included an increase in the regular assessment of $11 per month. (I will write more about these soon.)
• The board discussed the proposed bylaws amendments. I spoke up saying that I was in favor of all but the change to eliminate cumulative voting. I felt that there is a minority of homeowners who have the best interests of the association in mind but who for one reason or another are unwilling or unable to attend the meetings. I said that I was aware of the possible dangers of cumulative voting but that I felt the probability of those occurring was low. The board president felt that the elimination of cumulative voting would bring us in line with most corporations and every governmental process of holding elections. I reiterated that I understood the rationale, but that I was still not in favor of the amendment.
  
  It was at this point that a "sort of" vote was held. Of the four members present, two voted "aye", I voted "no", and one abstained (admitting to not having read the changes). This should mean that the measure was defeated, having failed to garner a majority of votes. However, at this point, the property manager suggested that the issue be tabled until all five members are present, and the board president agreed to table the issue. I'm not sure of the legality of these actions, but I was not inclined to make a federal case out of it (I expected to be the sole "no" vote against four "ayes").

The meeting was adjourned at approximately 7:50pm.

Analysis/opinion of proposed bylaw amendments

I summarized the proposed bylaw amendments in my previous post, and by and large I agree with them. I would have preferred that the board discuss the amendments prior to involving legal counsel to write said amendments since it would have allowed any changes to be made without incurring a second pass through counsel and thus, a second expense, but that battle was lost a long time ago.

As I said, I agree with all of the proposed changes except two. I understand the rationale for each of them, but neither sits well with me.

Replacement of resigning directors

This isn't actually a change from the way resigning directors are currently replaced within the association. What led me to pick on this amendment, in particular, was the addition of the clause allowing a resigning director to participate in the selection of his/her successor. The addition of that clause made me uneasy. At first reading, it made no sense. Why would a resigning director be allowed to influence future board actions (via participating in the process of selecting a successor)?

As I tried to understand exactly why it is that this amendment makes me uneasy, I realized that my issue isn't so much that the resigning director is participating in the selection of his/her successor as much as that the new director is being elected via a different means than was his/her predecessor. That is, a position, duly filled by the members and now vacated, is being filled by the board.

Ultimately, though, that board, including the resigning director, was elected by the members. Viewed in that light, the board is acting with the membership's (tacit though it may be) approval to replace the resigning director. This course of action actually makes sense, since a full-blown election to fill the vacated position can be both costly and time-consuming, and none of this interferes with the board's ability to consult with the membership or the membership's right to recall any or all of the directors.

In the end, the amendment still doesn't sit well with me, but I don't believe I can articulate any substantive arguments against it.

Use of cumulative voting

This amendment didn't agree with me from the moment I heard the association's president announce it upon presenting the proposed changes to the board. Admittedly, my initial reaction was that this amendment was proposed as a means for the board president to enable himself to exert greater influence over future elections, and while that may not have been his intent, I believe it will be the end result.

The SEC's website has a fairly straightforward explanation of cumulative voting. Using the example from the SEC's website, each member of the association has one share in the association, and when an election occurs, each member has one vote per share per board vacancy. (1 share x 5 vacancies = 5 votes.) Under current association governance, i.e. cumulative voting, a member may cast any number of votes for any number of candidates so long as the total number of votes cast by that member does not exceed the allotted 5 votes. Under the proposed governance, i.e. statutory or straight voting, each member still has five votes; however, a member may not cast more than one vote for any single candidate.

In this newsletter from the Davis-Stirling newsletter archive, the author lists some of the pros and cons of cumulative voting. He describes how cumulative voting is used to give homeowners a voice in association governance while a developer still has control of said association. He further opines that cumulative voting is not necessary once the developer is out of the picture and can even be detrimental to the management of the association. This latter opinion is premised on the idea that cumulative voting can lead to the election of "disruptive, fringe, and single-issue candidates" that can be "almost impossible ... to remove." Furthermore, a "conventional voting system" requires candidates to "seek a broader base of support" which presumably leads to the election of "more moderate, business-like candidates."

While I'm not going to dispute the notion that cumulative voting can lead to the election of dysfunctional candidates, I do not believe that it has been responsible for it, in this association, yet. In fact, while I have no proof, I believe my election this past year to be a positive result of cumulative voting. (By the way, I think that last sentence should serve as proof that the labeling of candidates as "disruptive, fringe, and single-issue" is very subjective. Furthermore, "disruptive" does have its place.)

So, let me bring this home. It is my opinion that the removal of the cumulative voting option is not necessary and may be detrimental in the particular case of Park Lane, and here is why (all of which is entirely my opinion):

1. The majority of the members within Park Lane are largely oblivious or indifferent to the issues surrounding the management of the association beyond their narrow, specific problems/needs/desires (e.g. speeding, parking, landscaping, noise).
2. The majority of those members that do take an interest in association matters are predisposed to vote for the candidates who will cater to those desires.
3. The candidates, and subsequent directors, willing to cater to those desires have done so at the expense of the long-term health of the association, particularly financially.
4. In spite of this decline in the long-term health of the association, the majority of members will continue to vote for those same candidates because of a lack of transparency on the board's part and/or the aforementioned obliviousness and/or indifference on the members' part.

While I will admit to being a disruptive member of the board, I do not believe that my tenure can be described as dysfunctional. If anything, I believe it has had a net positive effect on the association. That is, the board is taking association finances far more seriously and acting to preserve them more vigorously than they have since I last served on the board. Furthermore, there is no specific problem that is currently being created by the use of cumulative voting. At this time and for this particular association, I believe that the move to statutory voting is a "solution" in search of a problem.

Proposed bylaw amendments

I mentioned in my last post that the association's president presented a set of amendments to the association's bylaws following last month's meeting. Here is a synopsis of the proposed changes:

• Section 4.01:
  
  • References to the Declarant have been removed.
  • The requirements for serving on the board are that the candidate be a member of the association and in good standing.
• Section 4.02
  
  • Two directors will be elected in even numbered years, and three directors will be elected in odd numbered years. All will serve two year terms (with the exception of directors elected in the first year after this amendment's adoption).
  • Terms limits are explicitly enjoined.
• Section 4.03
  
  • The need for and job of a Nominating Committee is removed.
  • Any member in good standing may be nominated by him/herself or anyone else.
• Section 4.04
  
  • References to the Declarant have been removed.
  • The use of cumulative voting is forbidden/removed.
• Section 4.05
  
  • Current rules for removal of a director are removed.
  • The board may, by majority vote, remove a director that it has appointed or declare vacant the office of a director who is of unsound mind, convicted of a felony, absent for three consecutive meetings, or no longer a member of the association. The board may replace this director. Members may replace this director if the board fails to do so.
  • Members may remove a board member by simple majority vote of an established quorum. Members may replace this board member.
  • A director may resign at any time, and that vacancy may be filled by the board. If resignation is to take effect in the future, the resigning director may participate in the appointment of the new director. Members may fill the empty board position if the board fails to do so.

Open Board Meeting - 19 August 2010

August's regular board meeting was uneventful, as these meetings go. Here are (some of) the highlights:

• Reserves are headed in a positive direction. The board has been doing its best to spend money out of the association's operating budget where possible to avoid depleting the reserves. The CD which held the bulk of the reserve monies rolled over recently, and the association received approximately $2,000 in interest. The board's vice president was able to secure a 2% rate for the new account.
  
  Reserve contributions continue as budgeted. I suggested that we look into making up January's contribution (which was missed) since we appear to be doing better financially. This will most likely need to be brought up again next month.
  
  
• The board approved a large number of landscaping items including turf replacement, installation of new hedges, and the like.
  
  
• Various items around the pool need work/repair/replacement: tile(s) on the bathroom roof need replacing; bathrooms need new timers for the lights; new drains are being considered in a couple of areas to keep run-off (specifically, the chlorine in it) from killing the landscape.
  
  
• The issue of speeding was raised, and the board is looking into installing a temporary speed bump at or near the Belflora entrance gate. If successful, the speed bump would be replaced with something permanent.
  
  
• The board president presented the other board members with proposed amendments to the bylaws. The reason given for the changes was to remove the possibility of cumulative voting in board elections; however, there are other changes as well. The proposed amendments will be on the September agenda, presumably for a board vote, after which, if successful, the amendments will be presented to the membership where they require a majority vote to be passed.
  
  [I have not had time to review the proposed amendments, yet. I plan to do so in the near future and will write about it once I have, though. Any member who wishes to write about the proposed changes and have their writing posted on this site should submit their writing to me by email. I would prefer not to publish anything anonymously; however I will consider any requests to do so.]
  

Unauthorized expenditures

During the past few months, it has come to my attention that our board president and/or other board members have been expending association funds without the approval of the association's board of directors. This first came to my attention back in March when the president admitted that he had consulted an attorney regarding the special meeting that was requested to veto the rules. This action (the consultation with an attorney) was never authorized by the board. I wrote at the time, and still believe, that this constitutes an ultra vires act by the board's president. In light of this evidence, I combed March's financial statements prior to April's open board meeting. If you follow that previous link or review April's meeting minutes, you'll see that the approval of March's financial statements was tabled by the board until "internal board matters could be discussed during executive session". (The board's president was notably and unfortunately absent from April's meeting.) The motion to table the approval was made by me, and the "internal board matters" concerned the issue of association funds being expended without the authority of the board.

In March, I noted the following expenses that were not approved by the board and of which there are no records in the association's meeting minutes:

• $1,614.00 to Artistic Maintenance: $382.00 went to "plants at belflora park" and $1,232.00 went to "CLEAN UP BACK LOT 40" (I believe this refers to the brush behind the homes, to the North of Milano Way.)
• $2,205.60 to QPM: $1,440.00 went to "RMV & RPLC FENCE POSTS" and $765.60 went to "RPR FENCE ABV POCKET PARK". All of this money was charged to our reserve account(s).
• $247.50 to Epsten, Grinnell, & Howell: I'm not at liberty to divulge the purpose of this expenditure; however, no board member has been able to justify its necessity, and it was never approved by the board.
  

Both regular and reserve funds totaling at least $4,067.10 were expended without board approval in the month of March. In April's financial statement, I find the following unapproved expenses:

• $1091.41 to Artistic Maintenance: The entire amount went to "IRRIGATION REPAIR".
• $562.95 to Access Professional Systems (APS): $181.00 went to "ENTRY SYSTEM SVC/RPR" and $381.95 to "QTRLY MAINT SVC". I believe this second charge is probably part of a service contract; however, I don't have the minutes (since they would likely be part of an executive session) or contract to verify that.
• $797.50 to Epsten, Grinnell, & Howell: This is mostly the cost of the aforementioned consultation with legal counsel regarding the rules veto.
• $3,716.95 to QPM: $731.91 for "FENCE RPRS 220&500VENETIA", $1,570.00 for "FENCE RPR BACK 4620MILANO", and $1,494.24 for "FENCE RPRS VENTIA&BELFLRA". This entire amount was taken from the association's reserve account(s).

Unapproved regular and reserve spending for the month of April totals at least $5,866.06, excluding the $381.95 that is likely part of a contract with APS. That means that in March and April, alone, the association has paid out nearly $10,000 in unauthorized expenditures. As I alluded to earlier, I brought the issue of unauthorized expenses up to the other board members during April's executive session. As is evident from April's financial statements, though, nothing has changed.

Park Lane's bylaws, in section 4.13(e), grant the board of directors the authority to "Contract for goods and/or services in accordance with the provisions of the Planned Development Documents". Furthermore, Corporations Code 7211(a)(8) states that "...an act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present is the act of the board. The articles or bylaws may not provide that a lesser vote than a majority of the directors present at a meeting is the act of the board". In light of these two statutes, it is my opinion that every one of the previously described expenditures constitutes an ultra vires act on the part(s) of the signer(s) of the checks to the vendors providing the services as they were not approved by the board of directors.

[For reference (and completeness), Corporations Code 7214 states that "any [...] instrument in writing [...] executed or entered into between any corporation and any other person, when signed by any one of the chairman of the board, the president or any vice president and by any one of the secretary, any assistant secretary, the chief financial officer or any assistant treasurer of such corporation, is not invalidated as to the corporation by any lack of authority of the signing officers in the absence of actual knowledge on the part of the other person that the signing officers had no authority to execute the same."

While this would appear to allow two board members (in the proper configuration) to execute a contract on behalf of the association (without approval of the board), what it is actually saying is that if the third party does not know that the two board members are acting beyond their authority, the contract cannot be invalidated due to that lack of authority. Essentially, this statute protects the third party in the absence of knowledge of the ulta vires act. In fact, this statute implies that the authority to execute contracts does not lie solely with the two signers.]

As such, I will be voting "no" on the approval of the financial statements for the months of March, April, and any other month in which I find such expenses so as not to give credibility to these illegal acts after the fact. Members of the association should be questioning not only why such expenditures are taking place but why other board members are approving them.

Finally, let me be clear that I do not necessarily object to these expenditures but rather the lack of authority with which these expenditures are taking place. The board, in approving expenditures after the fact, would be acting as a "rubber stamp" for one (two, in the case of reserve expenditures) of its board members and would essentially be vesting its fiduciary duties entirely in that member (or members). Given that two of our board members have expressed unequivocal support for Park Lane's board president, our board president has a majority to push through whatever items he so desires. One has to ask the question, then, why not follow the legally prescribed methods for spending the association's money?

Quorum requirements for special meeting

[While originally writing this post, I did not have, for reference, the letter that was mailed to the homeowners with the ballots this last month. After re-reading it, it appears that the board president has positioned the handling of this vote and the upcoming special meeting in such a way that the meeting will be for vote counting purposes, only. As such, the entire matter is controlled by Corporations Code 7513, contrary to what I wrote below. This is not what I had intended when I agreed to set a date and time for a special meeting; however, it appears that little can be done about it now.

There is still the issue, as described below, of whether the measure fails or whether the vote is invalid if quorum is not met (which I'm still pursuing). I have been told (third-hand, unfortunately) that legal counsel has advised the board that a vote of this nature does not carry the same "weight" as an annual election; and therefore, if quorum is not met, the measure fails. If you truly care about this matter, please do your best to see to that quorum is met before the 20 May 2010 deadline.]

A little over a month ago, a number of homeowners requested a special meeting to reverse the rule changes adopted by the board of directors at the regular meeting on 21 January 2010. In response to a question from one of our board members about how to proceed on the matter, I sent an email to the board of directors outlining what I believed to be the required course of action. At the most recent regular board meeting and in an email to a number of homeowners, the board president expressed his (opposing) opinion that if the quorum requirement of 51% is not met, then the effort to reverse the rule changes simply fails without a reduction of the quorum requirement as applies with annual elections. What follows is what I found after further researching the relevant laws.

A reversal or "veto" of rule changes by an association's membership is governed by Civil Code 1357.140. According to subsection (a), 5% of the members are required to call a meeting; and according to subsection (b), they must do so within 30 days of the notification of adoption of the rules. Subsection (b) also requires the board to hold a special meeting and give notice of it in accordance with Corporations Code 7511 or alternatively, according to subsection (c), hold a vote of the membership by mail in accordance with Corporations Code 7513. If a meeting is held, then according to subsection (e), said meeting is governed by Corporations Code 7510.

Subsection (d) of Corporations Code 7510 reads, in part:

The votes represented, either in person (or, if proxies are allowed, by proxy), at a meeting called or by written ballot ordered pursuant to subdivision (c), and entitled to be cast on the business to be transacted shall constitute a quorum, notwithstanding any provision of the articles or bylaws or in this part to the contrary. [...]

The latter part of the quoted section turns over requirements for quorum to the association's bylaws which in section 3.03 state, in part:

The presence at any meeting, either in person or proxy, of Members entitled to cast at least fifty-one (51%) percent of the total voting power of the Association shall constitute a quorum for any action except as otherwise provided in the Planned Development Documents. If, however, such quorum shall not be present or represented at any meeting, a majority of the Members entitled to vote thereat shall have the power to adjourn the meeting to date not less than five (5) days nor more than thirty (30) days from the meeting date, at which meeting the quorum requirements shall be one-third (1/3) of the total voting power. [...]

The assertion that the measure would fail if quorum is not met on the first attempt appears to be predicated on subsection (b) of Corporations Code 7513 which states, in part:

Approval by written ballot pursuant to this section shall be valid only when the number of votes cast by ballot within the time period specified equals or exceeds the quorum required to be present at a meeting authorizing the action, [...]

The language here is not clear as to whether the measure "fails" or if approval is simply not valid, in which case the matter is not actually resolved and the association needs to find another or additional means by which to come to a final resolution.

It is my opinion that scheduling a special meeting as the board did at the regular March meeting makes Corporations Code 7513 irrelevant, however. Because a special meeting has been scheduled, Corporations Code 7510 is the controlling law on the matter which, in turn, gives control of the quorum requirements to the association's bylaws which are quoted above.

It is also worth noting (again) that this entire exercise may be academic as the rules may be unenforceable due to the fact that the board did not provide proper notice of their adoption in accordance with Civil Code 1357.130(c).

Agenda mailings

You may have noticed that, for the last two months, you've been receiving the regular meeting agenda in the mail as opposed to having it delivered to your door as part of Tom Crowder's (the board president) newsletter. I was told by Tom after last month's (March) meeting that he was no longer distributing the newsletter (he did not give the reason(s) why) and that that was the reason that the agenda was now being mailed. I explained to him, at that time, that the board was only required to post notice of the meeting and its agenda in the common area and that a mailing was only required to homeowners who had explicitly requested it.

After receiving the agenda in the mail again this month, I sent the following to Tom:

Is there a reason that the agenda was mailed out again this month instead of just placing it on the bulletin board?

After a day of waiting, I received no response, so I sent the following to the entire board (including Tom):

Does anyone know the answer to this? I didn't get a response from Tom.

According to Civil Code 1363.05(f), all that is really required is posting notice at the pool (unless I'm missing something). Considering that this mailing alone probably runs $150-$200, it seems it would be prudent to do that instead.

http://www.davis-stirling.com/MainMenu/Statutes/CivilCode136305/tabid/879/Default.aspx

I have received no response.

[Update: The other directors, at the April meeting, agreed that stopping the mailing was a good idea, and future agendas will be posted at the pool rather than mailed to homeowners.]

Veto of rules changes

A request by 5% of the homeowners in Park Lane has been delivered to the board of directors requesting a special meeting to reverse the rule changes that took effect in February. This has generated some internal discussion among board members about how best to respond. Below is my reply to the rest of the board and our property manager.

According to Civil Code 1357.140, it takes 5% of the owners to call a special meeting, and they must make the request within 30 days of notification of the rule change. Since we have 159 homes, it takes 8 homeowners to call a special election, and since notice of the rule change was not delivered to the homeowners until 14 Feb, it appears that they are within the 30 day time limit.

The Civil Code does not give a time frame for scheduling of the meeting, but section 3.02 of our bylaws states that it must be scheduled "promptly". I would take this to mean within 30 days.

The bylaws require 51% of the homeowners (81, 82 to be absolutely sure) to constitute a quorum at which time a simple majority vote is sufficient to settle the matter. Based on my understanding, the same rules for the annual meeting regarding quorum apply to special meetings.

So, in answer to your question, I believe we are now bound to hold a special meeting in accordance with Corporations Code 7511 and deliver ballots according to Civil Code 1363.03. (1363.03 states that ballots must be sent 30 days in advance of the vote, which means we probably can't reasonably schedule a meeting in less than 45 days.)

Watch this space for updates.

Open Board Meeting - 18 February 2010

The open meeting of Park Lane's board of directors began at 6:30pm with all board members and about 8 homeowners present. Three issues were raised by homeowners during the open forum portion of the meeting:

• A homeowner spoke up to say that [s]he felt that the newsletter circulated by Tom Crowder explaining that basketball hoops and such were going to be allowed in the cul-de-sacs so long as they didn't block the ingress/egress of vehicles was confusing and would lead homeowners to believe that these items would not need to be stowed out of sight when not in use. The board's president explained that the very next rule in the "rulebook", although not shown in the newsletter, stated that these items must be stowed out of sight. A discussion then ensued for another 5-10 minutes about the (in)ability of people to read, understand, and follow the rules.
  
  
• A second homeowner raised the issue of registering dogs with the association or proving their registration to the association. [S]he felt that it would be better for the association to simply reference the city ordinance requiring animals to be licensed and otherwise stay out of it. (This homeowner seemed to be aware that the board did not intend to pursue the enforcement of this rule with any real vigor.) The homeowner further felt that the non-enforcement of this rule could lead to liability for the association in the sense that the association, by passing this rule, is assuming responsibility for policing the dogs living in the neighborhood but not actually following through on that responsibility. The board's president replied that the rule was intended as a means to force people to properly license their animals. (He never actually said that the board did not intend to enforce this rule, but given his previous statements on the matter, I think the inference of such is reasonable.)
  
  
• Finally, the issue of a loud, threatening resident was brought to the board. The president stated that the board was already aware of the issue and is addressing it via the association's rules enforcement policy/procedures.

The regular open board meeting then began with approval of minutes. Minutes from the 21 January 2010 regular board meeting were approved with one abstention (mine, I wasn't present for the entire meeting and could not approve of items that I don't even remember happening). Minutes from the 21 January 2010 annual meeting were approved with one abstention (mine, I didn't feel that the annual minutes could be approved at a regular meeting. The property manager explained that the board could approve the minutes, but that the membership would also [have to] approve of them at the next annual meeting. I wasn't convinced, and voting "no" would have legitimized the vote, so I abstained.) Minutes from the 21 January 2010 organizational meeting of the board of directors were unanimously approved.

The board received no (new) applications or interest from members to serve on any committees. The current landscape and social committee members were reappointed to their positions. Two homeowners who were present also expressed interest in these committees and were appointed to them. The committee reports were of little, if any, consequence.

The board tabled the issue of the financial statement and bank reconciliation. One director (me) had questions about it, and the treasurer had not had time to review the documents, yet. It was my understanding that the board would come back to these documents near the end of the meeting during the budget/reserve agenda item, but it never happened.

The board voted to write off approximately $2,000 in bad debt. In this case, it was explained that the debt to the association remained after either a bankruptcy or a lender foreclosure. The only recourse open to the association is to sue the homeowner, likely in small claims court, but in many cases (these, in particular) the costs coupled with the unlikelihood of recovery outweigh the loss. Also of note here is that the 2010 budget calls for $4,500 in bad debt. It is February, and half of that is already used.

Nothing worthy of note was contained in either the management report or work order list.

The board briefly discussed the wood fence repair/replacement necessary in the community. The board has been advised by legal counsel that it is (entirely) responsible for the fences facing common areas and that individual homeowners do not bear half of the responsibility for this cost as is traditional. This is going to be a huge expense to the association, and the board is going to look for volunteers to join a "work party" to do the replacement of some/all of the fences.

Finally, the board discussed the budget/reserves. (Interestingly, every homeowner got up and left at this point in the meeting.) I presented the comparison of the 2008 and 2010 budget that I wrote about previously. There was some back and forth among the board members and a mild amount of finger pointing. In the end, though, using the comparison spreadsheet, I was able to show that even though prior boards had been able to cut contract costs (landscape, management, janitorial, etc.), those savings were not translating into money in the association's pockets. Instead, the savings is simply being diverted elsewhere in the budget to other costs. At this point, the treasurer spoke up and said that there are a number of "discretionary" costs in our budget, and like any other business or government entity, we need to cut costs/services. Much to my surprise, there was very little resistance to this. The remainder of the board was very amenable to the idea, and a committee was formed to look at the budget and recommend how to make cuts.

The meeting was adjourned at approximately 8:15pm.

Organizational Meeting - 21 Jan 2010

The 2010 board of directors met briefly to assign officer positions. All positions were by unanimous vote, and they are as follows:

President: Tom Crowder
Vice President: Evert Gerritsen
Treasurer: Tom Bebrin
Secretary: Mark Abbott
Member/Director-at-Large: John Tyner

The meeting was then adjourned without further discussion.

Annual Meeting - 21 Jan 2010

The 2009 board convened Park Lane's annual meeting at 6pm. At the time, only about 5 homeowners were present (by the end, it was no more than 10). Two inspectors of election were chosen from the audience and began counting ballots; the association met quorum with a total of 85 ballots [it may have been 84, I don't recall exactly]. While ballots were being counted, the board president gave a statement about the association's financial situation. In short, the association is about $22,000 behind in collections; has about $10,000 in operating funds; $70,000 in the bank; and about $10,000 more in reserve. [It was unclear to me how much of this is allocated to the "reserves," and I don't have the most recent reserve study handy while I write this.] The board went on to say that it did not raise rates this year, nor does it intend to raise rates before the end of 2010. [In light of the fact that the board made no mention of cutting services, I can only assume that the $90,000 that the association currently has will only shrink over time.]

The reading of last year's annual meeting minutes was waived following a motion by yours truly, and the minutes were approved. At this point, an introduction of the candidates was made (no nominations were made from the floor). Candidates agreed to decline to make statements since ballots were already being counted and the statements would therefore not sway any opinions.

After the counting, Mark Abbott, Tom Bebrin, Tom Crowder, Evert Gerritsen, and I (John Tyner) were elected to serve as Park Lane's 2010 Board of Directors. (There was little interest in hearing vote tallies among those present, and so they were not announced.) The annual meeting was adjourned at approximately 7pm.

Open Board Meeting - 21 Jan 2010

The 2009 board met prior to the 2010 annual meeting for the final open board meeting of its term at 5pm. I arrived about 10 minutes late and missed the "homeowner forum" portion of the meeting; the board was discussing regular business when I arrived. After general board business and discussion of delinquencies and liens, the board moved on to adoption of the rules.

Prior to making a motion to adopt its new rules, the board distributed a two page piece of paper to the members present detailing comments made by homeowners regarding the rules changes. It appeared that only about 6 total homeowners had made comments regarding about 10 different rules. (Not all homeowners commented on all rules.) Many of the rules that drew comments had been part of the association's rules since at least 2003 and were not actually being changed. For this reason, the board elected to adopt those rules as distributed to the membership. [I, personally, agreed with many of the comments made by homeowners regarding the rules in question, though, I had a hard time arguing with the board's position that these same homeowners did not complain about these rules when they were previously adopted and re-adopted.]

I did speak up against the adoption of a rule that homeowners must notify the association of all dogs kept in homes and prove that they are licensed. I explained that keeping an unlicensed animal was already illegal, and there was no reason for the board to interject itself by demanding proof from members. The board felt that it was protecting itself from legal liability and that the threat of fines from the association would provide further incentive to members to properly license and care for their animals. The board said that it did not intend to go door to door enforcing this rule but rather would only use it as a tool against members who do not properly care for or restrain their animals. At this point, I asked about the wisdom of having rules that were not intended to be enforced and also raised the issue of legal liability for unequal enforcement.

At this point, another homeowner spoke up, made some references about how the association is not a "gestapo" [funny how Nazi references seem to go hand in hand with HOA's], and explained that the board was using its rules to notify people of their obligations and not necessarily for punishment. I again raised the issues of unenforced rules and unequal enforcement but eventually had to cede that the board was going to adopt the rule regardless of my arguments.

Finally, the board did relax the rule regarding play equipment so that it could be used in cul-de-sacs so long as it does not interfere with traffic. (See actual verbiage in the forthcoming notification of adoption of the rules.) The board then adopted the rules, as amended.

The board adjourned at approximately 5:50pm.