Changing Our Annual Meeting Date.

Started by JayF1 • 21 replies • 1319 views

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JayF1 (Washington)
Posts: 52

Posted:

Hi Everyone.

Our annual meeting is set for March 11. WA Secretary of State states our nonprofit organization was formed on April 11. Our governing docs don't state any date for annual meeting except we must have one and annual assessments are due on Jan 1st.

Question 1 - Can the Board vote to change the date of Annual meeting? We will like to reflect what the WA Secretary of State formed month April 11 or in November, one month prior to annual dues date (like other HOAs that have their annual dues on the Jan 1st of the year).

Question 2 - Is it normal to have an annual meeting to so spread far apart from the annual dues date? My understanding is we need the annual meeting to determine a budget. From there, justify the annual dues.

It appears we are doing this backward. I am new to this. Any help, greatly appreciated.

TimB4 (Tennessee)
Posts: 21,062

Posted:

I would recommend a Bylaw amendment voted on by the membership vs. the Board simply making this decision on their own.

BenA2 (Texas)
Posts: 1,273

Posted:

If the governing documents and the state law are silent on the issue, I don't see any reason why the board couldn't select the date of the meeting. I think it should be incorporated into the bylaws though.

Our annual meeting is held in March and the assessments are due January 1st, I don't think that is uncommon. Our board approves the budget and presents it at the annual meeting. Also, our assessments are set by the CC&Rs and can only be raised every five years by the board so timing of the meeting isn't an issue.

JayF1 (Washington)
Posts: 52

Posted:

thanks tim for the input. can you give your reasons why you would recommend membership voting vs board? Just want to understand the whole concern. Thx!

JayF1 (Washington)
Posts: 52

Posted:

thanks Ben for your input. I don't know if I am thinking too deep here. Annual meetings are where we look forward to the new year and we will need a budget to do so. By my understanding, we estimate our total expenses (including new high ticket items that need to be fixed/address), & reserves and then divide it by the number of homeowners. This will determine our annual dues.

Since we are in March, that means we already determine our dues on Jan 1st at the beginning of the year. Just looks like we are backward or we have to plan way ahead for next year budget & not know our financial status throughout the current year.

TimB4 (Tennessee)
Posts: 21,062

Posted:

No Problem.

To avoid perception of abusive power and simply wanting to stay in office.

Board elected in Apr to serve 1 yr term.
In March, board changes annual meeting to November.
Board now serves an additional 6 months.

Additionally, the membership is usually more agreeable to these changes if they have a say in it.

Side note: We hold our elections in late Oct.
Organizational meeting and turn over in early Nov.
This gives new board time to become familiar with the procedures.

For us, the outgoing board recommends a budget and the new board approves the budget (with or without changes).
The new board now needs to make notification requirement deadline for informing membership of new assessment
The new board needs to organize any holiday items (for us, it's a Santa visit on a fire truck)
The new board needs to get a newsletter out

Having the election in October provides some breathing room for the new board before hitting the new year.

JayF1 (Washington)
Posts: 52

Posted:

wow. Thanks, Tim. That really helps. You are a great resource for us newbies. That really clears several other questions I have regarding elections and annual dues. Our problem is we must amend our bylaws to separate out the elections from the annual meeting.

So in theory, the budget is not determined on the annual meeting but on a regular meeting prior to the ending of the year?

TimB4 (Tennessee)
Posts: 21,062

Posted:

The main purpose of the annual meeting is to elect directors

AmyA1 (Washington)
Posts: 101

Posted:

I would suggest reading RCW 64.38
The budget needs to be ratified at an Association Meeting. So you can do it during your Annual Association Meeting or at an Special Association Meeting duly called for budget ratification.
We used to have our Annual Meeting and elections in Sept. The Board would adopt a new budget in November, then hold a Special Meeting to ratify the budget in Dec. Not only was this costly (2 mailings) but having a new board work on the budget without the experience of being on the board caused some issues.
Our HOA recently revised our Bylaws and changed the date of our Annual Association Meeting to Jan. and to include elections, budget ratification and other matters concerning the Association.
One thing to remember in WA State is unless at that meeting the owners of a majority of the votes in the association are allocated or any larger percentage specified in the governing documents reject the budget, in person or by proxy, the budget is ratified, whether or not a quorum is present.
To sum it up and not really the best words.. it is very hard for a budget NOT to be ratified, and why spend the extra money on mailing notices to 500 members twice a year.. didn't make sense to us.

BenA2 (Texas)
Posts: 1,273

Posted:

I think what you are saying makes sense. Also, Tim made a very good point, the board should never be voting to extend their own terms. An option would be let the membership vote on it at the meeting in March. You could begin having the annual meetings either this September or next year.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Our Annual Meeting is in April. Due to staggered BOD positions either 2 or 3 of the 5 positions (this year 2) will be up for election. We present the prior years budget (say 2017) and year end actual financials (2017) to show how we did versus what was budgeted. We also present this years budget (say 2018). This is the first time our owners have seen the 2018 budget. Our members do not get to vote/approve the budget. We have not had a dues increase in 7 years so our members have never questioned the budgets.

We have a different procedure to raise dues. The BOD can raise the dues anytime and any amount they desire to as long as we notify our owners on or before 12/01. The owners have 30 days in which to call a Special Meeting to disapprove the presented budget. 51% of all owners (in our case 57 of 112) must disapprove the budget. If disapproved the existing budget is carried forward with an automatic increase of 5%. If 51% of all owners do not disapprove, the new budget becomes effective on 01/01.

Owners rarely get the opportunity to vote on a dues increase. In many cases, like ours, they only get to disapprove it.

Remember I am talking a yearly dues (assessment) increase, not a special assessment.

KerryL1 (California)
Posts: 14,550

Posted:

So, Jay, you did notice tim's remark, right? It followed your statement, "Our problem is we must amend our bylaws to separate out the elections from the annual meeting. " Generally your bylaws would say your annual meeting in, which is a meeting of the members (Owners) is when you conduct your election of directors.

We, too, hold our annual meeting in October. Our boar usually approves the budget in Sept., though sometimes it takes more than one board meeting. And sometimes, the new board must finish the budget. Our fiscal year starts in January.

I agree that if you're going to extend the term of the current board, you want o get Owner's votes. Otherwise the optics are very bad.

Some HOAs' bylaws do, however, permit the Board to change them, still....

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

Posted By TimB4 on 02/06/2018 11:21 PM
The main purpose of the annual meeting is to elect directors

Not always ... sometimes is also for “required budget” approval. Need to look at the State Laws for verification.

AmyA1 (Washington)
Posts: 101

Posted:

I think he is in Washington State. Our state law below. The board adopts the annual budget, then brings to the Association for ratification. Many say this is written badly. You have to mail out notice of meeting but you don't need a quorum so basically the association vote is to reject the budget. Which from my research has only happened once in WA.

Washington State RCW 64.38.025
(3) Within thirty days after adoption by the board of directors of any proposed regular or special budget of the association, the board shall set a date for a meeting of the owners to consider ratification of the budget not less than fourteen nor more than sixty days after mailing of the summary. Unless at that meeting the owners of a majority of the votes in the association are allocated or any larger percentage specified in the governing documents reject the budget, in person or by proxy, the budget is ratified, whether or not a quorum is present. In the event the proposed budget is rejected or the required notice is not given, the periodic budget last ratified by the owners shall be continued until such time as the owners ratify a subsequent budget proposed by the board of directors.

JayF1 (Washington)
Posts: 52

Posted:

wow. thanks everyone for your input. I greatly appreciate. So much to learn.

I decided to stay where it is at. So much research to read to anticipate any liabilities that may occur. So many questions how to change the date from a legal standpoint.

I decided to have a regular board meeting for the ratify the budget and assessment at the end of the year, preferably in November, that gives 30-day notices required by our CCRs if the annual assessment is raised.

I always thought the Annual meeting is where we present the actual budget. But that is not the case for some of you. It makes more sense to separate it out and just leave the Annual meeting for board elections, last years review and look forward to the new year. There will be no budget ratification at the annual meeting.

Do you all agree? I understand the board elections. I am just figuring out how and when the budget is decided. From there, we divide our total expenses by the number of homeowners to get our next year annual assessment. Of course, some adjustments to it to preserve your reserves. I want to get my head around this simple process. Wish there was HOA manual for this :>

AmyA1 (Washington)
Posts: 101

Posted:

How many homes are in your HOA? Does your governing docs say anything about assessments?

AmyA1 (Washington)
Posts: 101

Posted:

You might want to read up on Sudden Valley HOA in Bellingham.
http://caselaw.findlaw.com/wa-court-of-appeals/1673572.html

AmyA1 (Washington)
Posts: 101

Posted:

You might want to read up on Sudden Valley HOA in Bellingham.
http://caselaw.findlaw.com/wa-court-of-appeals/1673572.html

AmyA1 (Washington)
Posts: 101

Posted:

You might want to read up on Sudden Valley HOA in Bellingham.
http://caselaw.findlaw.com/wa-court-of-appeals/1673572.html

AmyA1 (Washington)
Posts: 101

Posted:

You might want to read up on Sudden Valley HOA in Bellingham.
http://caselaw.findlaw.com/wa-court-of-appeals/1673572.html

AmyA1 (Washington)
Posts: 101

Posted:

You might want to read up on Sudden Valley HOA in Bellingham.
http://caselaw.findlaw.com/wa-court-of-appeals/1673572.html

JayF1 (Washington)
Posts: 52

Posted:

Thank you Amy! that is a real good example I can study pertaining to WA State. We have 40 homeowners. Any input in regards to my standpoint. Your experience really helps.

I don't bother trying to raise annual assessment over 5% allowance. We are too small for a community and past presidents tried and failed miserably.

CCR:Section Three: Board to Fix Annual or Regular Assessment. The Board of Directors
shall fix the regular or annual assessment at least thirty (30) days prior to the commencement
of the annual or regular assessment period. Written notice of the annual or regular assessment
shall be sent to every Owner. In the event the Board fails to fix an annual or regular
assessment for any assessment period, then the assessment established for the annually or
regular assessment for the prior year shall automatically be continued until such time as the
Board acts. The annual or regular assessment established for the prior year shall automatically
be continued until such time as the Board acts. The annual or regular assessments shall be
sufficient to meet the obligations imposed by the Declaration and any supplementary
declarations, and shall be sufficient to establish an adequate reserve fund for the maintenance,
repair and replacement of those Common Areas which require such actions on a periodic basis.
That in the event there is any increase in the annual or regular assessment of more than five
percent (5%) of the annual or regular assessment for the prior assessment period, then it must
be approved as provided for in the Bylaws of the Association which are incorporated herein
as though fully set forth.

CCR: Section Eight: Annual Assessment. The annual assessment shall be $200.00 per lot
commencing on January l" of each year. Each lot owner purchasing from a Developer shall
pay $125.00 for any sale closed from January to and including September 3 any sale that closes after September 30th through December 31'' shall pay $75.00. Said annual
assessment shall be due on or before January 30th of each year in which the assessment is
made. The above referenced annual assessment and all subsequent annual assessments shall
be paid to the Homeowners Association who shall then pay for the expenses of the Association
as required under the terms of this Declaration. In the event the expenses of the Association
are in excess of the assessments collected, then the Developers who subsequently purchase
from the Declarant shall pay the difference to the Association on a pro rata basis as determined
by the number oflots owned by all such Developers. At such time as there had been sufficient
assessments collected by the Association, then said Developer shall be reimbursed. The
Declarant shall not be responsible or liable for the payment of any assessment against any lot
owned by the Declarant. During the development period, the Declarant shall have the authority
to increase the annual assessment to reflect (1) maintenance costs, (2) repair costs, or (3) plat
management costs. All increases during the development period must directly reflect increase
in the above recited costs. During the development period, the Declarant shall have authority
to reduce the annual assessments as economic data supports such a reduction because of
reduced maintenance costs or other anticipated association expenses. After the development
period expires, the board of directors shall fix the annual assessment in accordance with the
above recited standards.

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