Serrano Park Community The two amendments for consideration are as follows:
- Create Staggered Board Terms: This will amend a current Bylaw to MAINTAIN CONTINUITY with our Board of Directors from year to year. It changes a one-year term for all board members to two-year staggered terms. We must stop turning our entire board over year after year. This will ensure greater continuity and consistency in the governance of our association.
- Remove Cumulative Voting: This will amend the current Bylaw to “Traditional Voting”. It converts “Cumulative voting”, the ability to vote five votes for one candidate, to “Traditional voting” MAJORITY RULE, one vote per candidate. This will replicate every City, County, State, and Federal election to one vote per candidate, based on the number of positions open.
These amendments are the same as were voted on during the Special Election earlier this year. The reason the amendments are being voted on a second time are:
- This past spring, both amendments were placed on the Ballot as one “Vote” for two “amendments”. There was significant feedback indicating that homeowners should be provided the opportunity to vote on each amendment separately. For that reason, the two amendments are separate to provide the opportunity for each to be considered and voted on based on their own merit.
- Other considerations: The results of the spring election were close and either one of the two may have had the opportunity to pass independently. The results were:
251 Yes Votes – for the amendments
51 No Votes – against the amendments
Many homeowners have asked why they did not pass when 83% of the voters voted Yes? The reason is, a “Bylaw Change” requires a yes vote by more than 50% of the 593 “homes/ homeowners”, not just the people who voted. This is required by the Davis-Stirling Act, which provides the laws for HOA management in the State of California. For the 593 homes within Serrano Park more than 50% would be “297” yes votes. To our knowledge, only two Serrano Park elections have received over 297 votes in total. This is why, no bylaw has changed by the vote of the Serrano Park homeowners in 46 years.
We need to UPDATE AND AMEND 46 year old Bylaws. These amendments are endorsed by our HOA attorney, the Davis Stirling Act, the Adam Stirling Professional Law Corporation, all present and many of our past HOA Board Members and your Governing Documents Committee.
To pass these important and popular amendments, we need all our homeowners to VOTE.
Serrano Park Community Association
Amendments Proposed for Governing Documents:
Remove Cumulative Voting
What is Cumulative voting?
If more than one director is being elected to the Board, a member has the number of votes equivalent to the number of directors to be elected and may cumulate his or her votes. In other words, if there are three directors to be elected, a member has three votes and may give a candidate more than one vote (so long as no more than a total of three votes are cast).
What is the reason for Cumulative voting?
Cumulative voting is governed by California’s Corporations Code and is intended for use by stock corporations so small shareholders can have a voice. Otherwise, companies would be completely dominated by large shareholders. Cumulative voting was included in the Association’s bylaws so as to give owners a voice when the Association was controlled by the developer. In the case of Serrano Park, the developer no longer controls the Association.
What is Conventional voting (One Vote per Lot, per Director)
If more than one director is being elected to the Board, a member has the number of votes equivalent to the number of directors to be elected and may cast one vote per director. In other words, if there are three directors to be elected, a member has three votes and may distribute his/her three votes as he/she chooses (so long as no more than one vote is cast per candidate and no more than three votes are cast in total). This is best observed when voting for school board members in a public election when multiple seats are open.
What is the Reason for Conventional Voting?
Conventional voting is a majority voting system, similar to municipal, county, state, and federal election procedures and will allow an owner to cast one vote per candidate. In a conventional (non-cumulative) voting system there is no accumulation of votes. The result is that the “majority” of owners will elect the board of directors. In essence, the majority rules.
References: Adams Stirling Professional Law Corporation, accessed August 17, 2021
Staggered Two-Year Terms to replace One-Year Terms of Service
What is a one-year term election?
A one-year term election is where all elected members of the Board of Directors serve a one year term of service and an election is performed every year. Board members may repeat their service in multiple and consecutive years but are required to run for office and receive the adequate number of votes to be elected each year.
Why do HOA board members have one-year terms?
When an HOA is formed, original bylaws from developers often set the term of office at one year, which requires all directors to stand for election every year. Most associations eventually amend this provision to establish two-year staggered terms to create stability and continuity on the board. California allows for staggered terms under Corporations Code §7220(a).
What is a staggered term board election?
Elections for the directors of staggered boards occur as terms expire. At each election, homeowners are asked to vote to fill the seats on the board that are vacant or up for reelection. Terms of service for elected directors vary, but terms of one, three, and five years are common.
Why do HOA board members have staggered terms?
Most bylaws provide for staggered terms for board members to avoid a change of 100 percent of board members and officers in any given year. With staggered terms, there is minimal disruption in workflow because some veteran members still serve on the board and the newer members still have adequate time to learn from what was done in the past.
Proposal for Serrano Park Association Board of Directors staggered terms of office.
A five-member board of directors will be elected annually by the homeowners to staggered two-year terms. In any given year either two or three positions will be open depending on the previous vacancies. In order to establish these staggered terms, the next election will have 5 director positions open. The total votes given to each person running for office will determine what their term of office will be that year. The candidates with the top 3 vote counts will serve a two-year term and the following two candidates with the 4th & 5th highest vote counts will serve a one-year term. The next year, 2 positions will be open for a two-year term and the following year, 3 positions will be open for a two-year term etc.
Staggered terms are allowed under Corporations Code §7220(a):
The bylaws may provide for staggering the terms of directors by dividing the total number of directors into groups of one or more directors. The terms of office of the several groups and the number of directors in each group need not be uniform.
Original bylaws from developers often set the term of office at one year, which requires all directors to stand for election every year. Most associations eventually amend this provision to establish two-year staggered terms so as to create stability and continuity on the board.
References: Adams Stirling Professional Law Corporation.
Prepared by:
The Governing Documents Committee with legal advice and assistance of David Cane of Cane, Walker & Harkins LLP