The Case for the Bylaws Reforms
Updated: Jul 15, 2020
Over the past year, events such as the May 2019 Recall made increasingly evident the need for structural changes in the Foothills Community Association HOA to increase transparency, accountability and responsiveness to the interests of the Association’s members.
Concerned homeowners carefully crafted a package of five amendments to the Association’s Bylaws to begin the reform process. One quarter of the entire membership—more than 1,200 members—signed a petition that required the Association to put these reforms up to a vote.
1) Procurement: Amend Section 3.10.(a)(16) to require a written policy on procurement that conforms with all relevant regulations of Arizona State and local governmental authorities and adheres to industry ‘best practices’ standards.
The FCA had no written procurement policy until September, when it bowed to homeowner pressure and adopted one. While a start, this new policy falls short of what is needed, and it still leaves the FCA vulnerable.
2) Elections: Amend Section 3.10.(a) to add a new paragraph (19) requiring a written policy on elections that includes: i) a meeting of the Members at least 30 days before the election at which candidates may appear and explain their background and goals; and ii) a requirement that candidates disclose whether they reside within the FCA, and any prior bankruptcies, judgments, or felony convictions.
The FCA has no written election policy, and the pitfalls of this were demonstrated in the May Recall election. It needs a formal policy that ensures free and fair elections and affords members an opportunity to know more about the candidates. Note that the disclosure requirements for board candidates closely match the Arizona Corporation Commission requirements that apply to board directors who win a board seat (see https://www.azcc.gov/docs/default-source/corps-files/forms/c003-certificate-of-disclosure.pdf).
3) Electronic Voting: Amend Sections 1.6., 2.4., 2.5. and 3.3. to replace references to proxy voting (banned by Arizona statute) with electronic voting; and amend Section 3.10.(a) to add a new paragraph (20) requiring electronic voting for all elections.
Arizona statues now permit electronic voting, and dozens of HOAs already have adopted this new technology. Electronic voting makes it easier for homeowners to cast their ballots, which can significantly increase participation in elections. Electronic voting does not preclude anyone who wishes to submit a paper ballot from doing so.
4) Bylaws Updates: Amend Section 3.10.(a) to add a new paragraph (21) requiring an annual review of the Bylaws and updating as necessary.
Many Bylaws provisions are obsolete or rendered inoperative by changes to Arizona statutes. The Bylaws need to be updated to reflect the current situation.
5) Term Limits: Amend Section 3.2. to limit Board directors to two consecutive terms.
Some Board directors have served more than a decade. We need fresh faces with new ideas.
In response to homeowner activism, the Board has taken some action on most of these issues, such as adopting its new procurement policy, launching its own Bylaws Amendment Committee, and exploring electronic voting. Nevertheless, Board directors have made clear their opposition to term limits. Term limits are a central element of the reforms; there is a clear need for new blood on the Board if it truly is to transition to a new era of transparency, accountability and responsiveness to the interests of the Members.