March 1, 2021
Dear Members of the Association,
Perhaps it is a function of our recent national Presidential campaign and election, or of heightened interest in political affairs, but the Board and I have devoted a good portion of the past year to issues surrounding our Association elections, membership voting, and the rules which govern the process. I’d like to summarize for you four important items which have recently come before me or the Board and which could have a significant impact on our future as a self-managed and governing Association.
First, you are probably aware of the just-approved revision of our bylaws – a move which was prompted by the passage and signing into law of California Senate Bill 323. This new law created a nightmare for all HOAs, but especially for timeshares, by complicating and extending the election process, and by setting out many new requirements that either seemed irrelevant to timeshares or burdened them unduly. Our “new” bylaws have freed us from the most egregious of these requirements and restored to us our simpler election procedures. The changeover, however, was not easy. First, the Association had to adopt SB 323’s new rules by a vote, had to conduct last year’s Board election according to them, and then had to replace them through revamped bylaws, again needing the Association’s approval through another election. The Board thanks the membership for trusting us as we wended our way through the process and for approving the revised bylaws by a vote of 337 to 7. Let’s hope our newly adopted bylaws with new/old election rules will serve us well, without revisions, for a long time – unless the state intervenes once again.
Even with the new/old election rules, the process remains complicated and fraught with the potential for error. Even one mistake could render an election invalid or subject the Association to a lawsuit. (You may recall that a Board election in 2019 had to be postponed and rescheduled at considerable expense because of a mistake in the voting instructions.) As you may have noticed, the Board has employed an outside agency to conduct the last two elections. In both instances, the agency we hired guarantees the integrity of the process and takes over the more onerous aspects of conducting an election, for example, photocopying instructions and ballots, stuffing envelopes, addressing the same, validating and counting ballots, providing a bonded inspector, and so on – all at a cost not much higher than our own in-house expenses to do the same. I believe strongly that contracting with an outside agency to oversee and conduct our elections is the safest, most efficient, and practical way to go forward in these litigious times.
According to California law, when an Association “owns” properties that have been deeded back to it or returned to it after foreclosure, those properties’ shares can be cast in an election. Currently, our Association owns 17 shares with an equivalent 51 votes, a considerable number if one remembers that in the most recent election only 344 members voted.
The same California law states that the votes accruing to these properties may be cast for various purposes: to ensure a quorum in an election, to help the passage of a resolution before the membership, such as the question to deposit surplus funds into reserves, or – and this is the problematic one – to support candidates running for the Board. Moreover, the President of the Board has sole discretion to distribute these votes as he or she wishes.
Since I have been President, I have cast the Association-owned votes in favor of the revised CC & Rs, the new election rules, the restated bylaws, and of course, the surplus funds resolution, believing that passage of the above measures benefits the whole Association. However, I have not cast any Association votes for any candidates for the Board, a stance that surprisingly does not have the full support of the Board.
There are obvious reasons for me not to do so. I would not want to give the impression that the Board is a self-perpetuating body, protecting itself by favoring only incumbents and not voting for those candidates who are new to us or often critical of its work. And I certainly want the selection of the Board decided by the owners, not by the Board itself or Board President. Finally, I do not want to create a precedent that future, less honest Board Presidents might abuse. My view is that the Board President or the Board should not influence the election. Although my casting Association-owned shares for candidates that I or the Board prefers would be legal, to my way of thinking it would not be ethical.
The last matter I would like to raise here is again related to Davis-Stirling, California’s law governing HOAs, including timeshares. You recently received a campaign letter from a member of our Association in which she publicly endorsed three candidates for the Board. This may have struck you as unusual, unseemly, or even intrusive. However, this member was completely within her rights to contact you and advocate for or against candidates. Be assured that your email addresses were not disclosed to her or to other members. As the disclaimer states, her views are hers alone and do not represent those of the Board, the Association, or the management. The exciting thing is her letter provides the membership with a perspective outside of the ones offered by the candidates’ own statements, and one that can be countered by any other member who wishes to add to the discussion by submitting his or her own campaign message.
Elections, voting, and campaigning may not seem to be the primary foci of the Board’s work, but in this time of bitterly fought campaigns, alleged voter fraud, and challenged election results, I can assure you that as long as I am President of this Board, our elections will be conducted legally and transparently, and always aimed towards helping the Association select the best candidates or improve its governance.
President of the Board
San Francisco Suites