Board Budget Meeting

Hum approve budget, I don't see that on the approved list that ES may be called for unless they are approving contracts but they could go into ES, approve the contract and go into regular session. I don't see any penalties for improper notification, you could sue but chances are the Judge or Referee would simply slap their hands and tell them not to do it again.

Executive Session
Purpose. Executive sessions of the board of directors are provided by statute so boards can address issues involving privileged information and matters of a private nature. As a result, members do not have a right to attend executive sessions. As provided for in Civil Code §4935, boards may go into executive session for the following matters:

1. Legal Issues. Boards may go into executive session “to consider litigation…" Merriam-Webster’s Dictionary defines consider as “to think about something or someone carefully especially in order to make a choice or decision.” Black’s Law Dictionary defines litigation as “A lawsuit. Legal action, including all proceedings.” Based on these definitions both actual and pending litigation fall under the executive session privilege. Meeting in executive session preserves attorney-client privilege, litigation strategy and settlement strategies for current and potential litigation matters. The association's attorney does not need to be present for the board to meet and discuss legal issues.

2. Formation of Contracts. Boards may consider matters relating to the formation of contracts with third parties.

3. Disciplinary Hearings. Boards should meet in executive session for all disciplinary hearings. The accused member is entitled to attend the executive session for that portion of the meeting dealing with member's hearing.

4. Personnel Issues. Personnel matters which include, but are not limited to, hiring, firing, raises, disciplinary matters and performance reviews.

5. Payment Plan. Board may meet with members in executive session to discuss requests by delinquent members for payment plans.

6. Foreclosure. The decision to initiate foreclosure shall be made only by the board of directors of the association and may not be delegated to an agent of the association. The board must approve the decision by a majority vote of the directors in executive session. (Civ. Code §5705(c).)

Form of Meeting. Executive session meetings can be held by any of the following methods:

In Person. Directors can meet in person at a physical location.

Email. Email meetings are prohibited except for emergency meetings.

Telephone-Video. Directors can meet via telephone or video conference. (Corp. Code §7211(a)(6).)

Unanimous Written Consent. A "unanimous written consent" may be used for emergency actions.

Who May Attend. Directors, managers, recording secretaries, association attorneys, members subject to disciplinary action as well as witnesses called by either side (but only for that portion of meeting involving that person), and others invited by the board (such as vendors bidding on a project) may attend executive sessions.

Scheduling the Meeting. Unless otherwise provided in the articles or in the bylaws, executive board meetings may be called by the chairman or president or any vice president or the secretary or any two directors. (Corp. Code §7211(a)1.) An emergency meeting of the board may be called by the president or by any two members of the board other than the president. (Civ. Code §4923) Email discussion of director availability for the meeting as well as the date and time for the meeting is allowed. Scheduling discussions are not deemed "board meetings" and do not violate the Davis-Stirling Act.

Notice to Members. Starting January 1, 2012, members must be given notice of executive session meetings of the board. This is required regardless of anything to the contrary in an association's governing documents.

1. With an Open Meeting. If executive session is held with a scheduled open meeting of the board, it must be included in the open meeting's four-day notice and generally noted in the open meeting agenda.

2. Between Open Meetings. If a meeting is to be held solely in executive session, members must be given notice of the time and place of the meeting at least two days prior to the meeting. Notice must be posted in a prominent place or places in the common areas and by mail to any owner who had requested notice by mail (at the address requested by the owner). In addition, notice may be given by mail, by delivery of the notice to each unit in the development, by newsletter or similar means of communication, or, with the consent of the member, by electronic means. (Civ. Code §4920(b)(2).)

Agenda. Notice of an executive session meeting must contain an agenda for the meeting. (Civ. Code §4920(d).) Because executive sessions are confidential and topics are only generally noted in open meeting minutes (§4935(e)), agenda descriptions should be brief and general in nature. See sample agenda.

Minutes. Boards must keep minutes of their executive session meetings and generally note their sessions in the minutes of the next open meeting of the board.

Violation of Confidentiality. Directors who violate the confidential nature of information gained in executive session are subject to censure, and personal liability for their behavior, i.e., they lose the protections of the Business Judgment Rule.

Read more: Executive Session Defined http://www.davis-stirling.com/tabid/1769/Default.aspx#ixzz3ELG98XPq
from Davis-Stirling.com by Adams Kessler PLC. If your association needs legal assistance, call us at (800) 464-2817.

Thanks for your response. Not approving contracts, simply reviewing numbers and justification for the various categories in the first draft of the operations budget. Not looking to take action such as sue, just smart HOA management. The original example was around the budget meeting but the overall concern is the board member cherry picks which rules, bylaws and policies to follow. The result is the board is often in disagreement and will deadlock. On the flip side, the board member is adamant when a homeowner voices a verbal complaint to put it in writing. Its like I don't have to do this, but you do have you do have to do that. And, we had another concern with how the HOA voting was handled. Again, not in accord with how DS is written.

Hi Kerry,

Thanks for your feedback, very helpful.

Its not really about who called the meeting -- there was collaboration between the other board members on the date set. We're good there. It is the "ES - no homeowner -- will slow things down -- we don't follow all the rules" that raised my concern. I am up to speed on what on what DS states, our bylaws are vague (31 years old with no changes EVER). The only increase under discussion at the budget meeting will be for vendors and suppliers. I inquired here because I wanted to see if others have had a similar experience and if so if they proceeded with the meeting and recorded in the minutes as you've suggested, or if another reminder to the board member was needed.

We are a small HOA -- 21 units, 100% self-managed with 3 board members. As much as it might seem easy to manage due to the size, no PM, no attorney, no mediator, lots of dynamics within groups of homeowners, frequent deadlocks by the board, no transition from one board to the next, and a board member who wants to cherry pick which rules to follow.

She has completely ignored my comments-recommendations on the first draft of the budget. It is a "her way or the highway scenario" in all things. Know I have an opportunity to bring up at the budget meeting and not sign-off until we have a quorum. 3rd board member could sway vote, but he's new, and am guessing he'll do the right thing. He'll be shaken up enough from what he will likely need to record in his first meeting minutes!

There is still discussion on the budget that needs to take place since in the initial sharing phase it is clear the board members are not in agreement. That may be way in part she wants to hold as ES and use tactics. Whereas I view as an opportunity for the homeowners to weigh in and then the board can vote accordingly. She is also bringing in our bookkeeper which is fine as long as the intent is to discuss the budget which is information she is privy to and needs to know.

Thanks also for the "slowing down things" preventive measures. And yes can't please everyone, but if they know why a decision was made, they will generally accept it and there is closure and that can go along way in keeping noise down in the community.