The Edinburgh Board of Directors is planning to scrap our current bylaws and replace them with a new set of bylaws at our meeting on Sunday, January 26th.
The new bylaws give the board much more power, especially with regard to spending, and reduce transparency and financial restraints we worked so hard to ensure with the current bylaws.
Below are the main changes between our current bylaws and those being voted on at the upcoming meeting.
New Capital Expenditures by the Board (Section 6.6 of current bylaws)
- Allows board to make additions, improvements, and alterations to the Common Area with no restrictions
- Except as set forth in the budget for the current fiscal year, the Board of Directors cannot spend any money on any new capital improvements or enhance existing capital improvements without the vote of the Homeowners
- Board cannot spend on new capital projects unless the Reserves are adequately funded
- Before any capital improvement a summary of the proposal must be sent to homeowners
Reserve Funds for ongoing maintenance of Edinburgh (Section 9.4 of current bylaws)
- Proposed bylaws are silent on Reserve Fund requirements
- New Reserve Study and review required every 5 years as outlined in the Bylaws
- The Reserve Fund must be adequately funded
- Monies for the Reserve Fund shall be handled, accounted for, and reported separately from operating expenses.
- No Co-mingling of Funds in Operating Accounts and Reserve Fund and monies in the Reserve Fund shall be used only for the purposes set forth in the Reserve Study.
Adherence to the Budget (Section 6.7(d) of current bylaws)
- Proposed bylaws are silent on budget modification by the board
- The Board of Directors shall not change the operating budget without the affirmative vote of a majority of the members of the Association.
Audits (Section 6.7(a) of current bylaws)
- An audit may be made annually if the Board of Directors vote for it
- The Board shall cause a financial audit to be prepared every 3 years by an independent accountant.
Transparency (Section 6.7(b) of current bylaws)
- Proposed bylaws are silent on any transparency requirement
- The Board shall post or cause to be posted on the Association’s website the following information:
- Board meeting minutes
- Yearly Operating Budget with side by side comparison to previous year’s budget (updated yearly)
- Current Reserve Study Summary
- Reserve Balance and year to date actual (updated semi-annually)
- Operating Fund balances (updated semi-annually)
Compliance Check (Section 6.7.1 of current bylaws)
- Proposed bylaws do not mention any required checks
- Each year, the Board of Directors shall elect an auditor (usually a homeowner) who shall perform the following:
- Verify no conflicts of interest and no appearance of these conflicts.
- Review Board and management company decisions for conflicts of interest
- Verify the proper management of reserve funds ensuring separation of and adequacy of accounts and that the reserve study is current, sound and properly applied
- Verify that Bylaws limits on Board are followed on loans, spending limits and budget
Bidding process (Section 6.9 of current bylaws)
- Proposed bylaws are silent on bid requirements
- Bid request shall be sent to all homeowners
- Bids received shall be ‘blind’
- Bylaws can be changed only with a 2/3 vote of ALL HOMEOWNERS. (Very difficult to change bylaws going forward)
- Bylaws can be changed with 2/3 of the votes cast at such meeting called to modify the Bylaws.
Board Member Qualifications
- Owner of a lot
- Owner of lot who has not been convicted of a felony
Executive session of Board of Directors (Section 6.5(b) of current Bylaws)
- No requirements to state reason for executive session
- The nature of any and all business to be considered in executive session shall first be announced in open session.