Raise Dues outside of By-laws?

I see 2 issues here:

1) The bylaws say that the bylaw vote is to be taken at an Annual Meeting - BUT is does not say ONLY at the Annual Meeting. So, yes, they could ask for a vote at a Special Meeting. But there must be due Notice to the Members of the meeting and the amendment stated in the Notice of the Meeting.

2) You talked about some procedures for amending or adding a bylaw. Are these some required "readings" of the bylaws before the actual vote? If this procedure is in your bylaws, it MUST be followed, no mater when or where the final vote takes place. If the readings and input from the residents was not done, the vote is illegal and/or null and void.

The Board MUST follow the bylaws for the procedure to amend them.

Barbara,
I am not aware of State decriptions of what constitutes a "special meeting" in your State or in your own articles of Inc. What can be done at a "special meeting" will be the answer. Assessments were not addressed at the annual meeting but that is what your bylaws require. Special meetings do allow for emergency votes by members and Boards so I would venture a guess at YES, they can do the assessments.

When is your budget addressed? That is when this sort of thing should be presented to the membership and voted upon by the Board or membership, according to your documents.

I agree, "What can be done at a 'Special Meeting' WILL be the answer. That is also the problem. We can't find the answer!

They discussed at the annual meeting that we needed to raise the dues. They setup a Finance Committee to look into it and get back to the membership with the amount. No vote was taken.

Our By-laws allow for "Assessments" to be done at a Special Meeting by a vote of the majority of the membership. We are not dealing with an assesment, per se. What they voted on was a "DUES" increase, which the By-laws state shall be fixed at the annual meeting. They didn't fix them at that time. In affect, it looks like an assessment, but they have called it a Dues Increase.

The bigger problem in this, is that they claim that they can "do whatever they want" if we vote to do it at a Special Meeting. Is there no limit to what can be done at a Special Meeting if the By-laws don't specifically say "you can't do ??? at a Special Meeting?" The precedent that is being set has rather large implications. Somewhat alarming implications to me, I would say!

Just for clarification, since the term "assessments" keeps popping up in this thread, here is what the By-laws say about them:

"Special assessments may be levied on the general membership of this corporation only by a vote of the majority of all members of the corporation."

We are dealing with an Annual Dues increase, though.

I see. The average layperson usually stumbles on the terminology in a specialized area such as this (legal)!

At the annual meeting, there was some finger pointing going on and it was decided that we should form a Finance Committee to look into how much the dues should be increased by. It was a very informal decision at the Annual Meeting, and no formal vote was taken pertaining to any of this at that time.

I agree that this "should" be handled at the Annual Meeting. The Board's claim is that they didn't have enough information at the Annual Meeting. They needed to form a Finance Committee to come up with the information. I agree with you on what "should" have been done. I am curious about what to do about what was "already" done at the Special Meeting. The Finance Committee did indeed followed the expenses and income and made a recommendation as to the amount to increase the dues. But...the Board then decided that they could call a Special Meeting of the membership to raise the dues this year instead of following the By-laws which state that this is to be done during the Annual Meeting.

I feel like "I" am missing something in this whole thing. The Board called a Special Meeting of the membership and voted to raise the annual dues. The by-laws say that the annual dues shall be fixed by a vote at the Annual Meeting. Am I simply not seeing the forest for the trees?

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Barbara,

Since you state a Finance Committee was appointed at the annual meeting to determine the rate of increase of the (dues) assessments, don't you agree this is why the issue was not voted on at that time? For whatever reason, the board was not prepared to call a vote on the assessment increase at the annual meeting. This doesn't necessarily mean the bylaws were purposely violated; just that the board was not prepared to carry out that requirement. Frankly, I think the board is to be commended for asking that a Finance Committee be formed to study the issue, although they really should have done this at a board meeting a number of months earlier so the vote could have been taken at the annual meeting. But's that water over the bridge and really not worth getting upset over!

You posted the article addressing assessments but did not post the article addressing special meetings, so unless your bylaws are specific about what topics can be discussed at a special meeting, I would think one can be held to discuss whatever is deemed necessary by whomever is calling the meeting. In this case, the issue of raising the assessments. My bylaws state: "A special meeting of the members, for any purpose or purposes, unless otherwise prescribed by statute or by the articles, may be called. . . ."

Are you not seeing the forest for the trees? I think so! However, I'm not criticizing. It's good to be concerned when the gov. docs. are not followed properly. But, sometimes it just happens with no malicious intent, which, IMO, applies in this instance. Humans make mistakes! The board erred in not being prepared to conduct the prescribed business of the annual meeting. They corrected their error by forming a finance comm to study the issue and called a special meeting to carry out the vote. I would suggest putting this issue to rest -- no harm done.

Well, if that is the problem, I would be more concerned if it was a board member who made the remark. Oftentimes board members don't understand the gov. docs, but there are generally even more members who don't understand them! A special meeting usually requires that the topic of discussion be noted on the notice. If the topic is to discuss something that is contrary to the gov. docs it would be up to the board to notify the member requesting the meeting that they cannot hold a meeting for that purpose.

Yes, GlenL, you are correct! While I am still not convinced that the dues need to be increased by the amount we voted on, I am more alarmed by the statement that we can "do whatever we want at a Special Meeting."

Yes, I agree that the best interests of the neighborhood are the primary concern. I am glad that we formed a Finance Committee to look into the matter. Yes, it should have been done before the Annual Meeting so that we couldn've voted on it then, as per the By-laws. So far, it has pretty much been a "no harm, no foul" situation.

Here are the facts:
1. We voted to increase the dues at a Special Meeting, instead of at the Annual Meeting, as per the By-laws.
2. It was stated "we can do whatever we want at a Special Meeting"

The person who stated the above comment is not a Board member, but is a spouse of a Board member. He is also a pushy type of person who is used to getting his way, no matter HOW much money he has to throw at it. This supposed power of the Special Meeting doesn't sound right. That is why I mentioned the part about the 3-meeting process that is written in the By-laws for how to amend the by-laws. We have NOT attempted to amend the By-laws. BUT...could they DO that at a single Special Meeting, if the notice was properly published as to that being their intent?

This same person also was touting that the State statutes allow this, but we have read them and don't find this power mentioned in there anywhere! The State statute (NE Nonprofit Corporation Act) simply states that you can't talk about anything else than what was advertised in the notice as to the purpose of the Membership Special Meeting.

The Board called this Special Meeting of the membership, not an individual. Our by-laws are not so specific as to limit what can be done at a Special Meeting. As far as we can tell, the NE Nonprofit Corp Act doesn't address what can be talked about either. Both simply state the how & when the members must be notified.

Sorry for the long post. I DO really appreciate all of the insight and opinions. Can a Board circumvent the by-laws if the properly notify everyone that they intend to do that at a Special Meeting?

Not a legal opinion here Barbara but IMO while they could use a special meeting to vote on a change in the by-laws they would still have to have the required meetings first or they could call three special meetings for the purpose of changing them but not one SM to change them.

Dana,
The original budget wasn't wrong, per se. We had a large project to do/fund in the neighborhood, and then another project came up to fund also. This stretched the budget, and now we need more money. It is really a pretty complicated situation, but I don't really want to get into the details. Suffice it to say, it is really an opinion as to when and if we will need to reaccomplish this project at some point in the future. The Board says that we will need to do it, and is pushing to aggressively save for it before hand. It sounds somewhat noble, but several of us don't think that we need to save THAT aggressively. We would rather save less, and then do a Special Assessment at the time of the project, if needed. That way people aren't paying for the project that potentially won't even be here.

Glen & Mary,
I think you both agree that it would require 3 meetings to amend the by-laws, as per the current by-laws. So...you can't do "whatever you want" in a Special Meeting of the membership. There are limits. Why is it, then, that you can have a meeting and vote to raise the dues any other time than the Annual Meeting if the by-laws state that?