Preparation Is Critical for Annual Meeting
Question: You recently wrote about getting a quorum for the association’s annual meeting. Our annual elections seem to be unorganized. The registration of the owners, the business meeting and election could be more efficient. What advice can you provide?
Answer: An efficient meeting will encourage people to participate in the future. Some owners see the association in operation only at the annual election meeting. Preparation is the key to having an efficient business meeting and a worry-free election. Your manager will be a good resource, but the board should be actively involved in overseeing the preparation.
Planning starts months before the meeting, especially if unusual issues will be on the agenda, such as an amendment to the declaration or bylaws. The board should review the requirements in the association’s legal documents. Failure to comply with the meeting procedures and election requirements in the legal documents may cause an owner to question the validity of an election.
Usually most of the election procedures are contained in the bylaws. About three months before the annual meeting, read the governing documents to find out about board term limits, proper meeting notice, voting percentages, quorum requirements and nominating procedures. Reasonable means of nominating candidates should be established by the board if the legal documents are not specific.
Consult the association’s attorney to ensure that your election procedures comply with the state Corporations Code Sections 7510 through 7517 and 7520 through 7527, as well as the association’s governing documents.
Discuss Internal Revenue Service requirements regarding excess income with the attorney or the association’s certified public accountant. Your nonprofit association must determine how to allocate any excess income that exists at the end of the fiscal year. This is usually an agenda item for the annual meeting.
If the association does not have adequate space for a meeting, choose a nearby location and appoint someone to make the arrangements for room rental and any other essentials such as chairs, podium, microphone and other equipment.
Before confirming the meeting date, determine whether the association’s attorney is available to attend. If you do not have a manager coordinating the meeting, it is especially important to have an attorney present. Legal questions regarding proxies and spoiled ballots can cause controversy.
About two weeks before the mailing of the meeting notice to the owners, the board should review the first draft of the contents of the mailing, including:
* The official notice of meeting with clear information about location, date and time.
* The agenda, which should include all items that will be presented for votes of the owners.
* The proxy form, which should give the owner the option of designating the proxy to be used for quorum purposes only. The proxy form should list slates of candidates and any other action items so that the owner can use it as a directed proxy, much like an absentee ballot.
* A cover letter with pertinent information about the importance of participating in the election and where and when the proxy must be returned. Some associations include a return envelope to encourage proxies.
At least one month before the meeting, or within the time limits stated in the association’s bylaws, the meeting information should be mailed to all owners.
Using the meeting agenda as a guide, the president should remind the officers and the committee chairs to prepare their reports for the meeting. Impartial persons should be designated as the official inspectors of election to verify proxies, oversee the registration of voters and tally the votes. The board should organize a proxy gathering campaign if good attendance seems doubtful.
The secretary should ensure that copies of the previous year’s annual meeting minutes are available to be approved by the members. The board should plan some type of recognition or awards for the volunteers who have served on the board and committees during the year.
One week before the meeting, confirm any special arrangements for the meeting room, remind board members about their proxy gathering duties and assemble the meeting materials, which may include:
* Sign-in sheets listing each unit so that proxies and voters can be registered efficiently.
* Ballots, extra pencils, name tags.
* An official tally sheet for counting the votes.
* Copies of the meeting agenda with supplemental information, as needed, and last year’s annual meeting minutes.
* The oath of the inspectors of election.
* A form or affidavit that the secretary will sign attesting to the number of people voting and the number of proxies registered.
* Awards, if desired.
If your association uses voting percentages, you must prepare ballots with the proper voting percentage on each individual ballot. The owner’s name or unit number can be stapled to the ballot and then removed before the ballot is turned in. This will provide a method for secret ballots.
Owners do not enjoy waiting in a registration line to pick up their ballots. If your association has many members, the sign-in procedures must be well-organized. A helpful crew of volunteers will keep the line moving. Refreshments can be served during the sign-in process so that those who arrive early can chat and mingle until all members are signed in and a quorum has been verified.
Proper planning and organization will make your annual meeting a better experience for everyone. The manager and board members should check the requirements in the association’s legal documents as the preparations progress. Some of my advice may conflict with the specific provisions in your documents. Failure to comply with the state laws and the association’s legal documents could result in a contested election.
If you have questions about the interpretation of the documents, contact an attorney who specializes in community association law. Community association management companies can be consulted if you do not have a professional manager to assist with preparation and administration of the meeting.
Hickenbottom is a community association management consultant and a founding director of the California Assn. of Community Managers. Send questions to: Condo Q&A;, Box 5068, Thousand Oaks, CA 91360.
