Parkwood Neighborhood

Inquiry into Board Bylaws Compliance

Inquiry, September 17, 2006 Board Bylaws Compliance

An Inquiry into the reasons for variance in Board of Director performance per the BYLAWS OF PARKWOOD MAINTENANCE ASSOCIATION, INC.

ARTICLE III

MEETINGS

Section 1. Annual Meetings. The first annual meeting of the Members shall be held within one (1) year from the date of incorporation of the Association, and each subsequent regular annual meeting of the Members shall be held on the same day of the same month of each year thereafter, at the hour of 7:00 o’clock P.M. If the day for the annual meeting of the Members is a legal holiday, the meeting will be held the same hour on the first day following which is not a legal holiday.

Observed Variance: Bylaw stipulates set time and date; last meeting July 30, 2005, bylaws read as not permitting any variance for delays or starting earlier.

Section 5. Quorum. The presence at the meeting of members entitled to cast, or of proxies entitled to cast, one-tenth (1/10th) of the votes of each class of membership shall constitute a quorum for any action except as otherwise provided in the Articles of Incorporation, the Declaration, or these By-laws. If, however, such quorum shall not be present or represented at any meeting, the Members entitled to vote therat shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum as aforesaid shall be present or be represented.

Observed Variance: The proxy statement in its present form does not comport with the implications of these requirements. If the second box on the form is selected, then the proxy holder does not have voting capacity at the meeting, or interpreted another way, the selection of the first box on the form is essentially equivalent to the selection of the second box, but the designating owner is duped to thinking the selection of the second box restricts the proxy holder from voting at all. A proxy holder with the second box selected is unable to vote, thus it is not one of the “proxies entitle to cast….votes” and thus can not be counted to achieve the quorum. How many instances has the quorum for PMA meetings not been met while using proxies which restricted voting, thus could not be considered in the count? If there are any, what can be said about the validity (legality) of the proceedings of the meeting(s)?

Section 6. Proxies. At all meetings of members, each member may vote in person or by proxy. All proxies shall be in writing and filed with the Secretary. Every proxy shall be revocable and shall automatically cease upon conveyance by the Member of his lot or eleven months from the date said proxy is executed.

Observed Variance: The proxy statement in its present form violates these requirements. The proxy statement most likely should not restrict delegation to a specific meeting but meetings for members over the explicitly inclusive period prescribed. Only the designator may constrain the delegation, not the Board in any way, as the bylaws constrain the Board. The proxy statement in its present form essentially can easily be interpreted to be null and void on its face. Thus reaching a legal quorum at this next meeting of the members is jeopardized.

ARTICLE IV
BOARD OF DIRECTORS

Section 1. Management. The business and affairs of the corporation shall be managed by its Board of Directors who may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by the Articles of Incorporation or by these By-laws directed or required to be exercised or done by the Members.

Observed Variance: Still trying to comprehend this ambiguous sentence. This appears to possibly imply that the members can only vote to elect or remove directors; vote to call a special meeting; vote to amend the bylaws/declarations; receive information presented by the chairman, committee chairman, or treasurer at the annual meeting; terminate professional management services; and pay assessments. This likely is completely too narrow an interpretation, as it is the voice of the membership which establishes authority for the Board to act. For example, at a special meeting, can the members vote, or only call one? What previous interpretations about this section have been reduced to writing and to practice?

Section 3. Term of Office. Directors shall serve for the terms specified in Article 20 of the Declaration.

Observed Variance: The Declaration’s Article 20 does not address any term length for directors.

ARTICLE V

NOMINATION AND ELECTION OF DIRECTORS

Section 1. Nomination. Nomination for election to the Board of Directors shall be made by a Nominating Committee. Nominations may also be made from the floor at the annual meeting. The Nominating Committee shall consist of a Chairman, who shall be a member of the Board of Directors, and two or more Members of the Association. The Nominating Committee shall be appointed by the Board of Directors prior to each annual meeting of the Members to serve from the close of such annual meeting until the close of the next annual meeting, and such Nominating Committee shall make as many nominations for election to the Board of Directors as it shall, in its discretion, determine, but not less than the number of vacancies that are to be filled. Such nominations may be made from among Members or Non-Members.

Observed Variance: No evidence can be recalled of the Board documenting and making public this appointment nor the actions of this committee. Is there any newsletter which has addressed the needs or activity of this standing committee? The Committee makes the nominations, yet documents indicate that it is the Board who is making the recommendations.

Section 2. Election. Election to the Board of Directors shall be by secret, written ballot. At such election, the Members or their proxies may cast, in respect to each vacancy, as many votes as they are entitled to exercise under the provisions of the Declaration. The persons receiving the largest number of votes shall be elected. Cumulative voting is not permitted.

Observed Variance: I note repeated abuse in failing to keep member ballot selections secret. Completed ballots have been left at the pool area, available for other members or employees/visitors (non-members) at the pool to access/review this information. When a proxy designator completes the ballot at the bottom of the proxy statement, secrecy is again violated, especially if the non-voting restriction (second box) has been selected on the form.

ARTICLE VII

POWERS AND DUTIES OF THE BOARD OF DIRECTORS


Section 1. Powers. The Board of Directors shall have power to:

(c) exercise for the Association all powers, duties, and authority vested in, or delegated to, the Association and not reserved to the membership by other provision of these Bylaws, the Articles of Incorporation, or the Declaration;

Observed Variance: This sentence is less ambiguous, but still implies the members have very few rights in their own association, an untenable and unacceptable conclusion.

Section 2. Duties. It shall be the duty of the Board of Directors to do the following or cause the following to be done:

(a) keep a complete record of all its acts and corporate affairs and to present a statement thereof to the Members at the annual meeting of the Members, or at any special meeting when such statement is required in writing by one-fourth (1/4) of the Class A and Class B Members who are entitled to vote;

Observed Variance: At the annual meetings I have attended I only vaguely recall this reporting to be, if ever, “complete” and have not seen the “statement” placed in the minutes. The minutes for the July 30, 2005 meeting is another prime example of incomplete reporting and presentation of information to the membership.



ARTICLE VIII

OFFICERS AND THEIR DUTIES

Section 1. Enumeration of Officers. The officers of this Association shall be a President and Vice President, who shall at all times be members of the Board of Directors, a Secretary, and a Treasurer, and such other officers as the Board may from time to time by resolution create.

Section 2. Election of Officers. The election of officers shall take place at the first meeting of the Board of Directors following each annual meeting of the Members.

Section 3. Term. Each of the officers of the Association shall be elected annually by the Board and each shall hold office for one (1) year unless he shall sooner resign, or shall be removed, or be otherwise disqualified to serve.

Observed Variance: Indicate and clarify current status of association officers as of one year beyond the July 30, 2005 meeting, as the bylaws presume annual meetings occur within the twelve month period. Are there presently no officers of the association?

Section 8. Duties. The duties of the officers are as follows:

Secretary

(c) The Secretary shall record the votes and keep the minutes of all meetings and proceedings of the Board and of the Members, serve notice of meetings of the Board and of the Members; keep appropriate, current records showing the Members of the Association together with their addresses; and shall perform such other duties as required by the Board.

Observed Variance: Votes are taken but the voting results (counts) are not reflected in minutes of meetings. The minutes do not reflect the complete activity of the meeting, such as motions made, their content, and their disposition. Example: The past two annual meeting minutes.

Treasurer

(d) The Treasurer shall do or cause to be done by the person or persons designated by the Board of Directors the following: receive and deposit in appropriate bank accounts, all monies of the Association, and disburse funds; keep proper books of account; cause an annual audit of the Association books to be made by an independent public account at the completion of each fiscal year; prepare an annual budget and a statement of income and expenditures to be presented to the membership at its regular annual meeting, and deliver a copy of each to the Members; and prepare and file such other reports as may be required by law. A copy of each annual audited financial statement shall be furnished to each member and each holder of a first mortgage lien against any of the Lots constituting the Properties within ninety (90) days after the close of each fiscal year of the Association.

Observed Variance: The information presented has been incomplete, untimely, and in non-standard form. Information is customarily presented in standardized income statement and balance sheet formats, but this has been consistently not done appropriately. Example: Presentation of November 2005 data along side July 2006 for a September 30 annual meeting. Comparisons customarily are presented at an end of quarters, common month-to-month and quarter-to-quarter, etc. basis. The data presented is partially unintelligible. The “copy of each annual audited financial statement” [income statement, balance sheet, for example] has not since at least 1999, to include this year, been provided members as here required. During annual meetings when members raise their questions even this information is not explained appropriately or not presented at all. Example: Treasurer refused to disclose to the attending members association balance sheet information when requested at the July 30, 2005 and earlier annual meetings.