Virginia question for Tim

Tim,

We have a recurring situation where our board gives our grounds committee $20,000 - $30,000 a year. This is budgeted for. But how the committee discusses what to do with that money is rarely an open process, and the board simply takes the grounds committee chairman's report that the committee decided this or that. Most of it is done through email. Nowhere is a homeowner able to witness, listen to, record, or take part in the grounds committee process, meetings or discussions pertaining to how that money is spent.

In your opinion does this violate the open meeting law of Virginia?

CF

Cf,

As you know, section § 55-510.1 of the VPOAA addresses open meetings. Per that section of the statute, it applies to both Board meetings and Committee meetings. That section also specifies that executive sessions may be used to discuss contracts.

One could argue that the landscape committee is discussing contracts. If one were to agree with that argument, then per the statute, The board of directors or any subcommittee or other committee thereof may convene in executive session upon the affirmative vote in an open meeting to assemble in executive session. The motion shall state specifically the purpose for the executive session. Reference to the motion and the stated purpose for the executive session shall be included in the minutes.

Per an attorney's 2010 newsletter, "The rationale is that community association Boards should conduct business in open meetings in much the same manner as the Board of Supervisors or Council for a particular jurisdiction holds its meetings."

In a 2004 newsletter from the same attorney, they discuss the use of e-mail. This issue is summarized as follows:
"In closing, we do counsel our associations to use e-mail communications wisely and to be
aware that e-mail communications could be used against the Board or the Association if
a claim is litigated. Clearly, it is as the Supreme Court in Beck said, “[t]extual
communication has become commonplace around the world.” We caution our clients against using e-mail as a method to: a) avoid an open meeting with the members of your community; or b) deliberate towards a decision or take action on any matter that affects your association’s members."

The attorneys revisited the e-mail issue in 2015 within this newsletter which states "Generally, taking a vote outside of a meeting should be reserved for time sensitive matters or to address an emergent situation. Also, as a practice Board decisions that are controversial, wide sweeping or require a great deal of deliberation and discussion by a Board should always be taken at a meeting."

Based on what you provided and the referenced articles, the answer would be "perhaps". We don't know if the meetings are simply not announced, all work is done by e-mail, there is a time constant requiring an action without meeting, etc.

It's also likely that the committee is not intending to circumvent the open meeting act. Instead, it's more likely that this is the way the committee chose to operate (as it requires less time and is more flexible) and are simply ignorant of the law or honestly believe that the law doesn't apply to their situation.

You could ask for the documentation of the unanimous consent of the committee members for each of the decisions (that should be filed with the Association) or copies of the meeting minutes that backs up the chairman's report to the Board. However, this action will likely offend some as they may see it as you calling the chair untruthful.

My suggestion would be to request from the committee chair to be notified of all meetings (as authorized in VA § 55-510.1) and copy that request to the Board. Then wait to see what sort of reply you receive.

If the reply is that we do not hold meetings, then you have a valid concern to raise at the next board meeting and ask that the members of the committee (who are likely appointed by the Board) be instructed to start holding discussions in meetings that are in compliance with VA law or that the committee members be replaced with individuals who will comply with the law. Be sure to bring other members to that meeting (as it's more likely to be done with the show of membership support). You may want to also consider offering to serve or chair the committee.

Cf,

With the additional information you provided, along with reviewing your previous threads (which I also believe were on the same issue), I agree that they are likely violating the open meeting act.

Options are:

File a complaint with the DPOR Board through the Common Interest Community Ombudsman (the DPOR now has the authority to issue monetary penalties to Associations who, in their eyes, are not compliant). The DPOR can not force the Association to comply with the law - only impose some minor consequences for failing to comply. However, a ruling from them could go a long way if the issue goes to court.

Work to change the Board in order to change the members of the committee.

As an FYI, here are the previous threads CF had on this issue (or I believe were on this issue):

Subject: discussions and decisions through email

Subject: committee procedures

Subject: fiduciary duty and committees

I do clearly recall your previous posts on this issue, CfD. The open meeting question has been answered more than once, as I remember and it was often, but not only, Tim. I think, but may be wrong, this is the 1st time we'v seen the questions your wrote. Who were they addressed to?

But we've had a similar problem here that began last year regarding the Landscape Committee's (LC) budget. They had a $6,000 budget for plant replacement, but they repeatedly exceeded it and begged the Board for more for "necessary" removal of large older plants. The Board went along and approved more. By the end of the year, the $6,000 had ballooned to $17,500.

We upped that line item this year to $12,000 but as a board put more restrictions on the LC. And we tightened their charter. For '16, that line item has been reduced to $7,500. Specifically, the LC must have boar approval to remove large bushes/small trees. Part of the reason is that their replacements adds up fast.

We also found in CA Civil code that Committees with budgets & spending authority must submit meeting minutes to the board detailing their decisions.

Does VA have any such legislation?

I forgot to add that in my HOA a group of homeowners has started a social committee of their own for community functions, which is nice, however they receive $15,000 a year and give absolutely no accounting of how it is to spent in the coming year. We never receive information on what is spent or left over While on the financial committee, reconciling the bank accounts with receipts,I found that the money was put into a private account and spent as needed. NOT kept in the HOA account. When I questioned this practice I was told it "is OK as long as they present receipts to the board." Then I terminated my participation on the committee so I could not be help responsible if there was a suit. The new treasurer has no financial committee reconciling anything.

Yes, as Tim advises, CfD, and as you've been advised in the past, change the Board so that the Committee (chair?) stops doing whatever s/he pleases.

We tightened our LC charter exactly for that reason as we felt the LC was running amok removing healthy mature attractive plants, etc.

Similarly, Karey, our Social Committee (SC) has a $12,000/year budget. Members must turn receipts in to management and then are reimbursed. We directors may review them as we want to. the minutes of both committees now are in our monthly board reports.

The SC, too, now keeps minutes of its votes, as per CA law.

But with both you & CfD outside the board, it seems like it'll be difficult to get your boards to oversee their committees responsibly, yet without micromanaging.

I can frankly say that one reason our SC was not monitored for a few years was that we (the Board) valued their function and were afraid they'd all resign if we required more accountability. In addition, two board members were on the SC and two other board members' spouses. (Board of 7) I did search back & found $300 of questionable expenses at the end of last year, but not illegal expenses, just $$ spent on stupid stuff to justify their budget.

Thank you TIm, just re-read the rules and will remember next time.
You are always helpful!