BOD to add garbage collection and assess cost

Two years ago the BOD proposed using one garbage collection service but failed to obtain the needed turnout of votes at our annual meeting to pass this. The now current president is proposing the BOD consider adding this item to the 2008 budget without a vote. Is this legal?

Thank you for the information. Two years ago it went to a member vote and failed to get the 2/3 approval. Now the BOD President is saying that isn't necessary and the BOD can simply vote it in. Sounds like you are saying that is true. Thank you for the feedback.

What is your present garbage collection situation now? And who is paying for it? If the percent increase to your assessment is more than your state or documents allow, it would certainly have to be approved by your members. Why was it necessary to seek approval from your members two years ago, but not now? Harold

Erika, it is difficult to get 2/3 of all members to return a ballot even when a self addressed stamped envelop is enclosed. One approach could be to provide a mail-in ballot to all owners stating the association is considering including trash collection to be paid within the association budget. Advise on the amount of increase in assessment which would be involved, the pros and cons of doing this, and state "IF YOU CHOSE NOT TO RETURN THIS BALLOT THEN YOUR VOTE WILL BE COUNTED AS AN AFFIRMATIVE VOTE".

Harold, isn't the 2/3 vote you refer to is for changing the Declaration? You are correct when amending the Declaration. Not responding is the same as a no vote and I would never recommend this approach when amending the Declaration.

Meanwhile, the By-laws usually state what is needed to approve the annual budget and amount of the annual assessment. Usually this is allowed by the Board and should be ratified by the members present at the annual meeting. Approval usually only requires a majority vote of the members present and voting. The basis for my suggestion is to allow all members, not just a few, the opportunity to vote.

Harold, I obviously was not clear about getting 2/3 to return a ballot - that referred to my experiences when amending the Declaration. That is totally different than an increase in the annual budget. The procedures for approval of annual budgets is usually defined by the HOA's By-laws. The By-laws may allow the Board to approve the annual budget. Some By-laws require ratification by a majority of the members present at the annual meeting while other By-laws limit the amount of increase the Board can approve. No By-laws, that I am aware of, have ever required approval of budgets by 2/3 of all members; if they did a budget may never get approved.

In regards to your question:
"Shouldn't it be if this budget goes over whatever % increase is allowed by their documents, that a ballot to all members is required for approval, period?"
My answer is no because the HOA needs to operate as a business. But I think limiting the % annual increase which can be approved by only the Board is a good idea. If a large increase in assessment is proposed then those members interested will attend (or be represented at)and present their arguments against increases.

Ericka:

What do your governing docs say? Ours specifically state that the BOD can appoint one single trash company for the neighborhood and impose it with 90 days notice to the residents. We are not required to get 2/3 vote even though the homeowners are responsible for their own.

However, does that make it the wise thing to do? We brought this issue up last spring with all the upsides 1) reduction of about $30 per quarter in trash dues 2)one pick-up date for the neighborhood as opposed to three or four 3) less wear and tear on roads 4) less chance of a kid getting hit by a truck 5) overall beauty of the neighborhood as trash cans will be out only one day instead of the 3-4 we have now.

We have a group of residents who were adamately oppossed to the change and things got really heated. People like to be able to make their own choices, this is something I would be careful with. We even went so far as to tell our community that it will not be mandatory, but if we got a committment from 80% of the residents (that is all the trash company wanted) we would sign a contract and they would save $30 a quarter. We never came close.

ErikaR

After the long dialogue, I believe you have your answer. The board can only authorize a service and assess the cost to the members if the service is specifically authorized in the CC&Rs. One must beware of any provision in the CC&Rs that states the board may, in its sole judgment, authorize some action ... . Developers may write some provisions into the CC&Rs so they can control everything, through the developer's authority to appoint the board while the development is unfinished. With a 2/3 vote for amendment, such provisions are difficult to remove, so the board after transition has such authority. When you bought property subject to the recorded CC&Rs, you agreed to the terms even though you may consider them onerous.

Often the place to start an inquiry into a proposed action is to review the governing documents.

The board has a fiduciary duty to adhere to the governing documents, often called the duty of obedience in the literature. But many boards don't bother to first check the governing documents, and seem to believe they know better. This is a source of many of the conflicts between the board and members. Members' protection from abuse from boards requires obedience to the governing documents.