Action taken without a meeting

I may have a different take than most people on this issue. It seems to me that once the budget has been approved, then a designated officer has the authority to place the order without further approvals or authorization from the board.

Why does the board have to approve the order after it approved the budget in the first place?

I think your concern about the need to cut back is appropriate and reasonable, but it should have been expressed prior to the order. I presume that you voted to approve the budget.

Yes, if the approved budget had already approved that amount, then the TIME of the release of the funds is irrelevant.

However, I would think that the Landscape Committee chair would be the person to have this discussion with the landscape company, and order that the check be cut.

P.S. Mostly likely, "Action without a Meeting" would not cover a landscape issue, unless it was an emergency. That power of the board should be used very rarely.

Dwight,

Sorry but I don't agree with the others. Although this was an approved budget line item, you did send emails to all the board members voicing your concerns about this expenditure. In light of that, I don't think any board member should have arbitrarily approved the expenditure. Just because something is budgeted for does not mean a change cannot be made. A budget is really just a "guesstimate" of income & expenses for the year.

With regard to you question regarding the action taken w/o a meeting. It is not valid until the last board member signs the action. Your bylaws doesn't word it that way but does say written approval of all board members is required.

In my mind, implicit in the budget approval is the authorization for a particular expenditure.

By policy, a a board of directors could adopt the Congressional model, implementing a two part process for decision making. The first vote would be to authorize a project or program, then the second vote would be to appropriate funding through the budget. (There are numerous programs that Congress authorizes but never funds.)

Another policy option would be to require reconsideration of any budgeted item that is, say, greater than five percent of the total budget before it can be expended.

In this case, it appears that it is a three member board. Two members endorsed moving forward with the already approved budgeted expenditure after receiving a e-mail expressing the reservations of the third member. Given the externally established deadline to act, it was an appropriate already-approved expenditure with 2-1 consent. Apparently, the majority of board members did not find the written reservation sufficiently convincing to delay the previously budgeted and approved expenditure.

With that said, I think the board does have a duty to reassess the budget at its earliest opportunity in light of economic conditions and the impact it may be having on association members. The wisest course of action may have been, indeed, to delay the purchase of landscaping materials until the expenditure could have been reconsidered.

I don't mind being the odd man out on decisions as long as everyone has had an opportunity to express their views. In this case I don't feel that happened. I expressed my concerns via email and briefly stated why, and asked that the decision be postponed until we could discuss it. There was no discussion beyond one message from one of the others stating "I think we should place the order now". Apparently the other two did get together and decided to move ahead. IMO, that not only cut me out of the loop, but it also prevented the homeowners from having any opportunity to voice their concerns as well.

This isn't something that is going to make me go into the meeting and climb up on a soap box calling down the wrath of [insert deity name here]. But as Mary noted, I will let them know that I would like to be shown a little common courtesy by at least responding to my concerns before they bulldoze ahead.

Dwight, I suggest at the next Board meeting you point out that the action taken by the Board was not in accordance with the Bylaws. This will make all Board members aware the action is not valid; suggest a motion to be made and approved to make it legal.

Yes, George. Reread the posters original post that Bylaws require approval of all Board members. The poster stated "I stated in my message that I did not approve placing a full order at this time." Thus it was not approved by all Board members and therefore is not a valid vote.

Incidently, Colorado has passed a statute on this. Following is an example of an amendment to By-laws I wrote:

6.7 Action Taken Without a Meeting.
The Directors shall have the right to take any action in the absence of a meeting which they could take at a meeting if a notice stating the action to be taken and the time by which a Director must respond is transmitted in writing to each member of the Board and each Director, by the time stated, votes for or against, or abstains or fails to respond; unless a Director demands the action not be taken without a meeting. Any action so approved shall have the same effect as though taken at a meeting of the Directors. Such actions shall be recorded in the minutes of the next Board meeting.

I think you are missing the gist of the issue here. You are making this into something that it is not.

The expenditure had been approved in the budget. Absent a specific bylaw provision to the contrary or a policy of the board, no further board action is required to expend the funds. The necessary action had already been taken.

The two board members were merely moving forward to implement the previously approved action. No new decisions were made by expending the funds.

Just because one board member has second thoughts does not invalidate the previous board decision to approve the expenditure as part of the budget. Nor does it require that the board revisit the propriety of the expenditure or to delay taking action.

There is nothing inappropriate or contrary to bylaws (that we know about) of two board members consulting informally to move ahead with an approved expenditure. It does not constitute to an action taken without a meeting.

As I have said, I side with the original poster. I do not think it was a wise move by the board, but it clearly and absolutely does not rise to the level of a bylaws violation.

that would never fly in any organization I have worked for. In fact, twice I have had approval in a budget to purchase a new server and then never received authorization for said purchase. Being in a budget is not always implicit authorization for an expense.

Now having said this, if two of three members approved the action, then the action would have passed a vote at the meeting.

I also think that the time to discuss cutting back was back when you approved the budget. The tightening of the financial belt started far enough back that the idea of cutting back would have already been on the horizon.

I would suggest that you work to build a coalition with your fellow BOD members on the idea of trying to cut back expenses and how you might be able to save some money.

I'm going to toss a red flag and ask the referee to review the play because as if often the case, Team HOATalk is involved in multiple issues.

1. Was an ATWM properly held?
2. Was an ATWM necessary to buy the seeds?
3. SHOULD the seed purchase have been discussed despite it being in the budget?
4. WAS the purchase nonetheless not in violation of the docs/budget?

I would say No, No, Yes and Yes.

And now we'll go to a commercial break while things get sorted out.

Sorry I haven't been terribly involved in this discussion, even though I started it. At work we're losing 70% of our team today, so it's been a rather intense week trying to figure out who is going to cover what and then doing the necessary training.

At any rate, at our Board meeting two days ago I brought up that I wasn't happy with the way this had gone down. It probably wasn't a violation of the ATWAM clause, but it was close. Yes I probably would have lost the vote anyway, but IMO, the purpose of the ATWAM clause (and the requirement that ALL directors sign off on the action) is that it gives any director the opportunity to discuss an issue and try to change the minds of the others. In this case I don't think I had that opportunity.

The other two agreed that they should have at least responded to my concerns before placing the order. In the future they will try to do a better job of communicating.

Dwight,

Glad to hear the issue has been resolved amicably. That's the best we can all hope for, right?

Regarding your work situation. Glad to hear you are not one of the ones going. My husband faced yearly layoff's for the last 23 years of his career. Finally, last year he decided to take the "early" retirement. His boss asked why then added, "you weren't on the list to be let go". This year his former boss got the axe! Some company's just don't understand what they put their employees through.

Thanks for the support for the job issue. It's not all good though. Even though I'm one of the ones who will be staying, we've had our hours cut to 32 hours/week, which means a 20% cut in pay. That's better than a complete cut though.

I've been in this industry for, lets just say longer than Mary's husband was at that job. I've survived several layoffs, and been hit by several. Over the last 4 years alone I've been nailed by two small businesses going under and one large one being bought out and doing a major re-org. Go through it enough times and you learn to expect it and how to deal with it (reserve planning anyone?).

As to the flower issue, we don't have a Landscape Committee. Hasn't really been a need for one. Our landscaper is probably the best in the valley and can pretty much take care of everything without committee overhead. Normally anything that comes up can be decided by the Board at the next meeting (or through ATWAM when all are in agreement). There was only an issue this time because he needed to get his seed order in and the other two didn't want to miss out on buying the flowers through him, while I wanted the opportunity to discuss it further. My feeling was that even if we missed his order deadline we could have bought our flowers from somewhere else, so there was no need to rush.

Looks like the issue isn't completely dead yet though. In the meeting minutes that the Secretary sent out yesterday, he included this:
"The purchase of 100 flats of flowers (annuals) from XXXXXXX Landscaping Co. was
approved by a vote of 2 to 1, with Dwight voting ‘No’."

That's fine. I asked that my position be included. However later on there is a section that starts with:
"There was a discussion between the Board Members regarding the need to look at reducing costs thru out the finical year 2009."
And then goes on to include info about what was discussed. No definitive decisions. When I pointed out that the minutes should only have the actual decisions made during the meeting, he responded with "owners need to know what we are doing......"

Ok, minutes aren't really the place to do that, but if that info IS going to be in there, then I want the reasons behind my "No" vote to be included also.

Maybe with everything else going on I'm just being paranoid, but now I'm starting to wonder if he's mad at me and is trying to make me look bad.

Dwight,

No reason why you can't have the minutes "corrected" when presented to the board for approval at the next meeting.