OPINION: THE BOARD SHOULD NOT PROPOSE A 25% QUORUM FOR AMENDING THE BYLAWS
Governance of Oakmont is controlled by three governing documents, the Oakmont Village Association Articles of Incorporation, the Protective Restrictions (CC&Rs), and the Bylaws. The governing documents are subordinate to applicable state law, including particularly the Davis-Stirling Common Interest Development Act that governs condominium, cooperative and planned unit development communities as codified in the California Civil Code. The governing documents are also subordinate to other State law, such as California real estate law, and to federal law. They are intended expressly to conform with all applicable laws. It is undisputed that OVA’s Bylaws are out-of-date and that numerous amendments are necessary just to bring them into conformance with State law. Even without such amendments, however, applicable law prevails.
To be sure, the Bylaws are not the equivalent of the U.S. Constitution – a particular frame of government which is, in itself, the over-arching supreme law of the land. But within OVA, the Bylaws provisions establish rules, regulations, rights and responsibilities that control, among other areas of operation, Membership, Dues and Assessments (Article II); Meetings of Members (Article III); Voting (Article IV); Board of Directors (Article V); Officers (Article VI); Association Records and Reports (Article VII); Property Rights and Interest (Article VIII); Committees (Article IX). And the By-Laws themselves expressly set forth the requirements for amending them (Article XI). Within the structure of OVA as a corporate entity, the Bylaws are our frame of government.
Frames of Government are Unique
In their essence, frames of government (constitutions, charters, bylaws, and the like) stand above and control the processes of decision-making in an organization. Frames of government are distinguished from the processes of ordinary decision-making – usually by majority voting – that they control. Policies and rules, for example, may be brought into existence, altered, and voted out of existence, by the Board of Directors. But the Bylaws as a frame of government are instituted by or on behalf of the whole membership, and changes to them cannot be made by the Board of Directors but only by the membership. The Bylaws control both OVA members and the elected Board of Directors. Applied consistent with the CC&Rs and the Articles of Incorporation, as they are designed to be, the Bylaws govern OVA with finality except for conflict with law.
Because they stand above and control the actions of organizational entities, frames of government are intended to be enduring in their essence. This is because they represent the broad consensus of the will of the electorate that enacts them for the purpose of providing long term stability in the operation of the organization’s governance.
Amendments Should Be Possible, but Difficult
Nevertheless, frames of government are designed also to be amenable to change in response to new or unanticipated circumstances. But precisely because of their essential durability, amending frames of government is subject to significant and fully intended procedural impediments to changing them easily. The process for amending a frame of government is intentionally difficult. This is to ensure that short-term political, majoritarian impulses cannot over-ride the broad, consensually expressed will of the membership.
Provisions governing the process of changing a frame of government aim to guarantee that, to be adopted, any proposed amendment continues to reflect that broad consensus. A requirement reflecting only the will of that portion of the membership who are present to vote, and at that, just the small plurality of the total membership who constitute a majority of those voting, does not comport with that principle.
Importantly, then, the conclusion is inescapable that deliberately rendering a frame of government easy to change is fundamentally inconsistent with and antithetical to the concept of what a frame of government is intended to be and to accomplish.
The current OVA Bylaws are an example of these principles. Changing the Bylaws requires an affirmative vote of a majority of the total membership. While this assures that at least a majority of the members approve, it is a difficult bar to reach. The total voting membership of OVA is approximately 3200. This means that a proposed amendment requires at least 1601 affirmative votes – not just 1601 members voting – in order to succeed. In practice, attaining 1601 affirmative votes requires an extraordinary turnout as measured by Oakmont’s voting history. The threshold arguably needs to be lower in order for the OVA Bylaws to be difficult, but reasonably possible, to amend.
What Should a New Threshold Be?
Over the course of nearly two years the Bylaws Revision Committee has done yeoman, excellent work by any measure. The Committee analyzed the Bylaws in depth and proposed some “housekeeping” amendments, but also numerous substantive amendments. Some are intended simply to bring the outdated Bylaws into express conformance with the law. Others, some of which likely will be controversial, are substantive changes – for example, to the number of Board members and to the term of office.
As a practical matter, under the current Bylaws it is extraordinarily difficult to have any of these proposed changes adopted when that result requires 1601 affirmative votes of the membership. As a result, the Committee recommended that the Board place the Bylaws amendment issues before the membership in two phases, with the first phase being a change in the requirements for amending the Bylaws. The impulse to change this provision to make it easier to adopt future Bylaws amendments – here for the specific purpose of clearing the way for phase two (or more) and the real possibility of enacting the needed, recommended reforms – is honest, palpable, and fully understandable.
The Committee recommended changing the Bylaws to provide that to be adopted, a proposed amendment must be approved by majority vote of a quorum of 25% of the membership, or 800 of 3200 voting members.
The Board of Directors considered the recommendations of the Bylaws Revision Committee and vetted them with OVA’s lawyers, who support a 25% quorum. At its March 17, 2020 meeting the Board unanimously enacted a resolution approving the recommendation to propose an amendment to the Bylaws providing that they may be amended by majority vote of those voting as long as a quorum of 25% of the membership votes. Recently the Board has indicated an intention to decide, perhaps in the near future, to put that proposed amendment to a vote of the OVA membership.
The Proposed Threshold is a Drastic Change and Too Low
The proposed amendment would effect a permanent change in OVA’s frame of government. The change proposed is drastic in its own right but especially drastic compared with the current threshold for adopting amendments, a threshold that, by definition and design, reflects the broad consensus will of the membership.
Simply, as a permanent change to the OVA frame of government, a quorum of just 25% of the membership (800 of 3200), and an affirmative vote by simple majority of those voting (as few as 401) to adopt an amendment, is self-evidently too drastic a change and too low. It produces an amendment threshold that no longer guarantees that the frame of government is difficult to amend. Permanently changing the Bylaws in a way that makes them easy to amend in the future undermines the very durability, stability and broad acceptability that the Bylaws as our frame of government is intended to provide.
It is important to note that this drastic, permanent change from the current amendment requirements is being justified by legitimate – but essentially utilitarian – reasons. The proposition is that the change is necessary in order to pave the way for the possible adoption of the other recommended changes. Such a drastic and enduring substantive change should not be made for short-term utilitarian purposes when its effect in the Bylaws is long-term.
The Problem of Voter Indifference
Undisputedly, voter indifference is a problem of our age in virtually all elections and referenda, not just in Oakmont. It is a very real issue that is particular to any given electorate and demands being taken into account. At the same time, it is important to realize, as President Spanier asserts in his most recent President’s Message, that each member of the Board of Directors has a pre-eminent duty to act solely “based on what she/he believes is best for the community.”
It is not “best for the community” to make a drastic substantive change in the frame of government that makes it easy to amend the Bylaws as a utilitarian response to what may be too high a bar, for Oakmont, in the current OVA governing document.
Permanent changes to the frame of government should require demonstration of broad consensus approval of the membership. As President Spanier observes in his recent Message: “A community’s silent majority, who may think differently from the hundred people, but don’t wish to participate in the conflict, should not be disenfranchised by the community’s vocal minority.” As much a problem as electoral indifference may be, the fact is that choosing not to vote arguably voices member satisfaction with the status quo.
Therefore, when it comes to proposing a change in the Bylaws, the Board should both have to make its best, strongest argument in support of the amendment and persuade a reasonably representative number of members that the proposed change is important enough to motivate them to vote.
Acceptable, Achievable, Wiser Threshold Choices
Active discussions on social media, communications from members to the Board, and most speakers at the recent Bylaws Town Hall have demonstrated that there are reasonable, widely acceptable alternatives. These alternatives can advance the prospect of having many of the needed proposed Bylaws changes adopted without requiring such an extreme, permanent change to the amendment provisions.
Alternatives like a 50% quorum (1600 of 3200 members) with a simple majority for passage (801), or perhaps a 40% quorum (1280 of 3200 members) with a 60% super majority for passage (768) will put the prospects for a supporting vote on the other changes within practical political reach. OVA voting history demonstrates that securing turnouts of 1600 or 1280 voters has been achieved and is, demonstrably, achievable.
Such alternative thresholds preserve the principle that a frame of government should be possible, but difficult, to amend. They recognize that in an age where indifference is a serious problem in elections of all kinds, our Bylaws need to be modernized while still guaranteeing that any proposed amendment demonstrates acceptability to a broad consensus of the membership in order to be adopted.
And such alternatives also make it much less likely that the entire effort to modernize and reform the Bylaws fails because securing the required 1601 affirmative votes may be impossible in the face of strong opposition to the 25% quorum.
Choosing one of the alternatives is, in short, a wiser course of action. Getting needed Bylaws changes before the membership for a vote is a genuine political problem for the Board. But permanently changing the Bylaws so that they are easily amended in the future, as the means of getting the other proposed changes before the membership, is unwise. A 25% quorum is a bad idea in principle. Proposing it to the membership is a political risk that encourages failure to meet what is otherwise a widely acceptable objective.
The Board should reconsider its announced intention and instead propose to the membership a reasonable, principled, prudent, defensible, and therefore, widely acceptable change to the amendment requirements of the current Bylaws.
Finally, it is important to keep in mind what this Bylaws amendment threshold issue is about. Changing the frame of government is serious business. This is not about preventing some plot to hijack Oakmont’s decision-making, or about imagining some disaster created by a leadership cabal. It is about not having even to imagine such circumstances because the Bylaws, wisely, preclude them. This also is not about trusting or not trusting the community. It is about choosing the right measure of the community’s will, and about guaranteeing that when the community needs to decide whether the frame of government should be changed, its determination will be accomplished decently and in order.
Urgent: Communicate Your View to the Board
The Board of Directors could decide whether to conduct a vote on a 25% quorum for amending the Bylaws soon, as early as its next meeting.
If you want the opportunity to consider and vote on the proposed Bylaws revisions, but agree that a 25% quorum for changing the Bylaws is too low, it’s important that you communicate your view to the Board now.
Email the Board that you oppose a 25% quorum but support a reasonable alternative such as 50% quorum, or a 40% quorum plus 60% super majority, for amending the Bylaws. Send your email to both:
email@example.com and firstname.lastname@example.org
Thanks again for another clear and concise article intended to inform as much as convince. Two thumbs up seems an inadequate reward but there it is.
However, I will part company with you on where the goal posts should be placed. Two standards here: One, our bylaws should be amendable from a practical standpoint. The current standard is difficult, too difficult in the opinion of most people I’ve talked to. Two, any bylaw amendment should enjoy widespread community support from those who participate in the affairs of the Association. The latter stipulation is simply a recognition that we have a significant number of absentee owners who typically do not participate and also it appears that many people of advanced age lose interest as well. This lack of participation makes the current standard too difficult.
So, what should the number be? The current requirement of 1600+ votes is almost unattainable. The board’s proposal of 400+ votes swings the pendulum wildly in the opposite direction. Let’s use our board elections as a fair measure of the percentage of people who are active participants in OVA affairs. In my 13 years here and from recollection only at this early hour, turnout at contested board elections regularly exceeds 50% and the winning candidate receives roughly 800 or so votes. It seems to me that any proposed bylaw amendment should enjoy at least as much community support as it takes to be elected to a board seat. Less is unthinkable. Actually, bylaw amendments almost always require a higher level of support than that of an ordinary ballot measure. So, I’d keep the quorum at 50%–it’s not a problem–and require a vote of 60% in the affirmative, or about 960 votes.
Easy? Maybe not, but it shouldn’t be easy. Much could also be said about the potential danger of adopting a standard that would permit a small minority of amend our bylaws, but I’ve gone on too long now.
Thanks again for making the Oakmont Observer a must read.
I agree with Lyn that Don’s article is excellent, and it makes the argument far better than I could that the 25% quorum is too low. Personally, I would have no problem with any of the quorum levels proposed by Don or Lyn, and I agree that Lyn’s higher suggested requirement for amending our Bylaws is more ideal, though it might be argued that it would make it too difficult to amend Bylaws. My understanding is that there have been Board elections with with as few as 1400 ballots returned, and some Bylaws amendments might simply seem boring, depressing the turnout.
One way of looking at the quorum issue is from a statistical perspective: the goal is for the decision made by a plurality of the electorate to match the decision that would have been made by the full electorate, had everyone been informed and voted. In this, as in statistics in general, the larger the sample size (number of votes returned) the more likely it is to match the population (the total membership, had they all voted) and the less likely it is for some sort of bias to distort the result. For smaller sample sizes, random variation increases the likelihood of a mismatch, but much worse are biases that may come into play with smaller samples. This is particularly true in the tricky area of politics, and is the primary reason that polls often get it wrong when predicting elections. Biases occur when the sample (i.e. the set of people actually voting) are not fully representative of the population (all those eligible to vote).
Also, the suggestions for super majorities are based on the common sense principle that it is better to do nothing than to do the wrong thing, especially when it comes to modifying key governing documents, and the fact that the resulting decision is more likely to be representative of the whole population if the measure passes with a super majority. If it fails to achieve the required super majority, it may be defeating an amendment that should have passed, but that is better than passing an amendment that should have failed.
One thing to add: The OVA Board member meeting packet came out last night, and scheduling a vote on the proposed Bylaws amendment is not on the agenda, which means, barring the Board calling a special meeting in the interim, it will not be on the agenda until at least the October meeting. This does NOT lessen the importance of contacting them with your thoughts on the subject, but it gives us all more time to do so.
A 25% quorum sounds rather undemocratic or “Trumpian” in my opinion.
Thanks again Don for your efforts to be comprehensive in dealing with the Phase 1 By-Law changes. I too agree that Lyn’s alternative criteria for an amended voting power minimum limit of 960 affirmative votes is bottom line to any negotiation.
I want to stress the fact that the revised By-Law change to Article XI totally drops the term “quorum” and simply focuses on the “voting power” criteria. This is a Davis-Stirling move, and I don’t agree that this is in the interest of our governing documents.
Also note that revision 10.2 doesn’t require any vote on By-Law changes that are impacted by California Law changes. Yet it also doesn’t, in it wordage, require that it stick solely to what State Law requires.
Gee, I wonder why turnout at the last two board elections didn’t exceed 50% turnout. The last election was uncontested and the previous one had a single candidate running against 5 incumbents. I’m assuming this won’t become normal. If it does, we have a larger problem.
Bottom line, HOAs need to be able to govern. The appropriate quorum depends on the particular circumstances of an HOA. We know that some Oakmont maintained HOAs have a significant problem because of the high percentage of renters and very elderly. Under those circumstances the quorum needs to be lowered, unfortunately. That is not true of the OVA, at least not yet. I would favor adjusting the quorum downward if we had a problem getting 50% of members to vote. The turnout for the proposed dues increase exceeded 80% if my memory is right. The underlying principle should be to ensure that the quorum and vote necessary accurately reflect a community’s active participants. A quorum of 25% with only a majority vote in the affirmative required to pass an amendment sets the bar low based on Oakmont’s history of participation in elections.
Why? There is no demonstrated need to set the bar that low. None. If this or future boards had a history of proposing bylaw amendments, only to see them fail for lack of a quorum, OK, you’d have an argument. But you don’t.
In your two comments, you’ve nailed it. The quorum and/or margin of majority for amending governing documents should be fit to the experience of the particular electorate. For Oakmont, there is NO reason of principle – zero – why a 25% quorum is appropriate for changing the Bylaws. None has been offered. It is too low on its face. The utilitarian reasons offered are legitimate reasons, but not grounded in principle in the context of durable Bylaws. They are legitimate and understandable, but not apropos to either the issue or the community and therefore thoroughly unpersuasive.
(And it also is not persuasive that 25% has been recommended by expert lawyers, or that it is use in some other HOAs, including even HOAs of similar size. What’s key is what is appropriate for changing OUR Bylaws is what fits OUR electorate.)
The concept of requiring a majority of homeowners to approve of any change in the by laws is to prevent any board from easily altering the restrictions on their personal agendas that might negatively impact the community in general. This restriction has been in place to restrict any group of citizens in our community from acquiring debt, or property, or changes that are not shared by the majority of homeowners.
It is paramount to the present and the future of our community to not remove this judicious , and common sense restriction placed on any HOA leadership.
I agree with Mr. Mcphearson’s analysis and comments.
Typically, Rules and Regulations can be changed by a vote of the Board or Directors, but the Declaration and Bylaws require a vote of the homeowners—often a significant percentage, such as 2/3 or 3/4 by all home owners.