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Wilbur Haines's picture
Joined: 08/07/2007
Posts: 474
Freedom of Choice - Amending the Bylaws to make cable TV a voluntary choice

Now that the new petition and proxy drive is underway - this time calling for a BINDING vote of the members, it seems appropriate to create a Forum dedicated to that debate. George has asked me to write a narrative of how this NEW petition andNEW election process will work. It got rather lengthy, so I'm going tobreak it up into chapters and post it one piece at a time, both here and as comments to George Roper's blog.

Chapter 1
THE ADVISORY VOTE THE BOARD IS IGNORING
(or, why we’re doing this again)

Last October the committee presented the Board with a petition signed
by 23 percent of the membership calling for an advisory vote on whether
participation in RMA cable TV should become voluntary.
/node/2506

The hope was that the Board would respond to the desires of the
membership expressed by that nonbinding referendum. The Inspector of
Elections' count revealed a landslide: 78 percent for optional, 22
percent for keep it as it is. In total 44% of the memberships voted, a
VERY large response rate

78-22 is a blowout. The Board is not responding to that clear
expression of the will of the membership, offering various excuses.
Director Dick Cox is reported as saying to ranchomurieta.com: "I think
it's great that this committee got together and is going to do this and
force this board to do something," Cox said, “there aren't enough votes
on the board to make the cable system optional. This board is not going
to do anything about making this cable optional, in my opinion, so I'm
glad to see you guys are taking the action you're taking. It's too bad
you have to. I think the membership has spoken on this issue.”

806 households - more votes than most directors received when elected -
voted for Freedom of Choice. That's over 1/3 of the total membership.
If those 806 "yes" votes are joined by another 365 like-minded members,
the MEMBERS can set corporate policy and deny the Board the power to
include TV charges in your involuntary dues BY AMENDING the BYLAWS.

In the next post I will lay out how the special meeting and proxy voting processes work. Meanwhile, you can vote via your golden proxy by stopping by the Plaza Foods this week through Sunday May 4th.

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Wilbur Haines's picture
Joined: 08/07/2007
Posts: 474
FREEDOM OF CHOICE - THE BYLAWS AMENDMENT

Chapter 2
THE BYLAWS AMENDMENT
(or, how it all works)

THE SPECIAL MEMBERSHIP MEETING

The RMA Bylaws spell out procedures by which the members - NOT just the Board - can call a special meeting of the membership and initiate an election on proposed amendments to the Bylaws, analogous to how initiatives are placed on the California ballot by petition. Saturday morning we started circulating a petition to do just that. Our Bylaws require the signatures of 5% of the total membership of 2,340 (117 memberships) to demand a special meeting and a vote. We have already met that goal and gathered more than enough signatures to call the meeting. So there WILL be a special membership meeting. The next step is to get at least 1,171 yes votes on our golden proxies.

The powers of the corporation (RMA) over you, your land and your pocketbook are derived from the CC&Rs, which say the Board's governance powers are those stated in the Bylaws. Corporations Code section 7210 says the powers of the Board to make corporate decisions are "Subject to...any limitations in the articles or bylaws relating to action required to be approved by the members (Section 5034), or by a majority of all members (Section 5033)."

THE BYLAWS AMENDMENT

The proposed amendment, quoted below, exercises that legal power of the membership to require specified actions to be approved by a vote of a majority of all members before the Board can take the specified action. It would add to the Bylaws section which states the Board's general powers the following two sentences:

"Effective January 1, 2009 The Association may provide television service to its members solely on an optional, voluntary basis. All costs of providing television service, including maintenance and equipment must be borne solely by user fees paid by voluntary subscribers, and may not be subsidized with regular assessment revenue unless approved by the members by the affirmative vote by written ballot of a majority of the Voting Power of the Association."

To fit the Corporations Code provision allowing the members to limit the Board's discretion, the limitation is phrased in terms of a requirement that the Board obtain the membership's approval before it can ever again use dues money to operate the TV system, thus requiring them to operate it, if at all, with VOLUNTARY subscription revenues. It will take a majority of the entire membership, not just a majority of those voting, to adopt this Bylaws change. The Board can undo it at any time by obtaining a similar majority vote of the entire membership to either approve the action or remove this provision from the Bylaws.

The amendment does NOT require RMA to shut the system down. That decision is left to the discretion of the Board. They are free to adopt any business plan which does not depend upon subsidizing cable TV's operations by sucking dues out of members who don't want to buy TV from RMA.

The amendment also does not interfere with the Board's discretion to maintain this purported "asset," nor to reserve for it, nor to expend its existing reserve account allotment on ongoing replacement of failing aged components. This deliberately accommodates their insistence that they are legally obliged to do those things and that those things are necessary to the effort to unload the system to some other TV provider. The amendment merely restricts their discretion to keep pumping YOUR DUES into its OPERATION unless they can persuade a majority of the membership to restore that power to them.

The amendment does not mandate that dues be reduced. Civil Code section 1366 protects the Board's power to raise dues up to 20 percent per year on their own no matter what the Bylaws say, so it is impossible for the members to mandate and enforce a dues decrease in the Bylaws. What the Board does about the fact the dues are thirty-something too high is a political and business decision for the Board to make, and there will be director elections this fall.

The amendment does not take effect until January 2009 so that the Board won't have to make this adjustment in the middle of a budget year. We are starting the process early in the year so that the outcome of the vote will be known in time for the Board to have that knowledge when it starts preparing next year's budget in the next few months.

More to come in Chapter 3, “The VOTE” or what that golden Proxy does, meanwhile, John and George are at the Plaza with plenty of Proxies available to sign.

John T. Weatherford's picture
Joined: 08/06/2007
Posts: 66
Cast your vote for Freedom

We will be at the Plaza Foods from 10:00 AM to 6:30 PM now through Sunday May 4th to collect signatures for the Freedom of Choice vote. Please stop by and cast your vote. If you signed the last petition for Freedom of Choice you need to resign the Golden Proxy to cast your vote. We are sorry that you have to do this twice but nothing is gained without a little effort.

John T Weatherford

Wilbur Haines's picture
Joined: 08/07/2007
Posts: 474
The Vote (Or, what does that golden proxy do?)


Chapter 3
THE VOTE
(Or, what does that golden proxy do?)

Our Bylaws permit voting by proxy. Changes in the election laws applying to homeowners' associations now require the voting to be by sealed anonymous written ballots, but state that "An association may use proxies if permitted or required by the bylaws of the association and if those proxies meet the requirements of this article, other laws, and the association's governing documents, but the association shall not be required to prepare or distribute proxies pursuant to this section." So it is up to the proponent of a proxy to distribute and gather the proxies. We are gathering signatures on proxies now to be exchanged for ballots to cast as votes on your behalf at the special members meeting. At the same time we have been gathering signatures for the petition calling for the special meeting at which the proxies will be exercised. Consistent with the requirements of our Bylaws, the proxy states the subject upon which the proxy can be voted, and specifies whether the proxy is to be voted "YES" or "NO" and that the proxy must be voted in accordance with those instructions. Although NOT required by the Bylaws or law, the actual text of the amendment is printed on the proxy so there will be no question that the members knew precisely what they were directing the proxy holder to vote for. As required by the statute, the instructions portion is designed to be separated from the proxy itself to protect the voter's privacy as to how they voted, yet retained to prove if necessary to the Inspector of Elections how many proxies were instructed to vote "yes." The new HOA voting statute, which is rather involved and confusing, says the proxies are not themselves ballots, so they must be exchanged with the Inspector of Elections for ballots which the proxy holder will then cast consistent with the voter's instructions, which will be also be available to the Inspector to verify the count of "yes" vote instructions. If a member gives us a proxy instructing us to vote "NO," that instruction will also be obeyed. The proxy also allows the proxy holder to vote the member's interest on procedural motions at the special meeting, such as electing a chairperson and a motion to adjourn and extend the voting period if necessary. But it is deliberately NOT a "blank check" general proxy to vote on any other matter.

The "form of proxy" has been submitted to the Secretary of RMA for filing as required by the Bylaws, but thus far RMA has not responded. RMA's new election rules state "In exercising the proxy, the proxy holder will vote by secret ballot," but don't specify exactly how and when proxies are to be exchanged for ballots to cast. Other associations do this at the meeting, where the Inspector of Elections counts the ballots, so the Inspector can integrate the verification of the proxies with the verification and count of ballots received by mail, We have requested guidance from the Inspector of Elections on what procedure he prefers, and submitted a suggested procedure, with citations to other associations' rules and a prominent HOA law firm's website as to how it is done elsewhere

( http://www.davis-stirling.com/ds/pages/proxy_defined.htm ). RMA has also not yet responded to that inquiry either. But We are confident that RMA's Bylaws and the statutes guarantee your right to vote by proxy on this amendment, and that RMA will eventually acknowledge that it must permit you to do so and will cooperate in allowing your vote to be cast. It seems unlikely that an elected board would attempt to disenfranchise over half the voters.

Meanwhile we will continue gathering proxy signatures until the requisite majority of "yes" votes has been gathered, and THEN submit the petition calling for the special member meeting. This should avoid any need to have to extend the meeting and voting period to scare up another 50 or 100 votes, as the Board so often has to do in the elections it conducts (including the current election to amend the quorum requirement in the Bylaws, which they just extended, despite the receipt of enough votes to make a quorum, to give them more time to gather more "yes" votes).

When we turn in the petition, the Bylaws say the Board then gives notice to the membership that the special membership meeting (which is not a board meeting) will be held in a minimum of 35 days, or a maximum of 90 days. They'll send out their own normal ballots, but if you've signed the Golden Proxy you won't need to mail back a ballot, we will cast one for you. If we all work together, allowing time for the Board and staff to take their steps the meeting and election could occur in as little as two months from submission of the petition. The Board COULD, if they chose, slow things down and make it take over four months. If they did so, they would only harm their own ability to adapt the business plan and budget to the inevitable outcome prior to the new fiscal year. Hopefully they will realize that it is in their own interest, as well as that of the membership, to help this process move as swiftly and cooperatively as possible upon receipt of the members' petition.

Come on by the Plaza and sign the Golden Proxy to vote for Freedom of Choice.

John T. Weatherford's picture
Joined: 08/06/2007
Posts: 66
VOTE TODAY

Today, Sunday May 4th, we will be at the Plaza Foods from 10:00 AM til 6:00 PM. Remember we are starting over since the Board decided to ignore the October 2007 petition. They can't ignore this one.

See you at the Plaza!

John T Weatherford

John T. Weatherford's picture
Joined: 08/06/2007
Posts: 66
Good news, we are half way there!

Good news, we are half way there! That’s right we have already collected half the signatures we need to amend the bylaws. Just to let you know, you can vote for or against the bylaws change and so far we have 2 no votes. We took a couple of days off but we are back at the Plaza Foods starting tomorrow morning, May 7th at 10:00 AM.

 

If you are a RMA dues paying member we urge you to come down and cast your vote. Cool

John T Weatherford

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