Annual Meeting Procedures

• Topic: Making Modifcations to Your Unit

• When: Sunday, A, 2022 at 6:00PM

• Host:

• Location: Zoom Meeting ID 933 5 / passcode = (or click here: cvil.us/sunday)

• Format: Informal, no topic order, coffee klatch style -- <40 mins so "share the time"

• Rules: Be prosocial, no public shaming, don't talk over each other

The information and citations below were gathered from active CV members and other cooperatives and other parliamentarians to assist our leadership in creating a public procedures and advice document to help future Corporate Secretaries facilitate open and honest and well-run annual shareholder meetings. Many of the google drive links in this document are available only to participants in the members@ google group (which all members are invited to join).

Summary of Best Practices

The following best practices were developed by consensus from a group of members who have been actively involved in the annual elections in the past, and reviewed and modified by other active members over time:

IDEAL TIMELINE BEFORE THE MEETING

• 75-90 days - Send out a first call for candidates (and organize an annual meeting team or committee)

• 45-60 days - Send out a general first notice of the meeting identifying the third Saturday in January for the meeting, including a second call for candidates

• 30-45 days - Distribute the first batch of candidate resumes and schedule a candidates night

• 20-30 days - Hold a candidate's night event

• 15-20 days - Print the ballot, distribute any remaining additional candidate resumes

• 10-15 days - Send out the ballot and proxy with a more detailed second notice including the agenda (no later than 10 days before the actual meeting date)

CANDIDATES

• The office and a committee should impartially recruit new candidates for the board each year

• A candidates night event should be held about

• Candidate circulars should identify who are members and non-members, and identify the status of both

• Background checks should be run on all candidates

JUST BEFORE THE MEETING

Per the Bylaws

ARTICLE IV. MEETINGS OF MEMBERS (cvil.us/bylaws - page 7 - items in red referenced further below)

Section 1. Place of Meetings. Meetings of the membership shall be held at the principal office or place of business of the Corporation or at such other suitable place convenient to the membership as may be designated by the Board of Directors.

Section 2. Annual Meetings. The first annual meeting of the Corporation shall be held 60 days after the final FHA endorsement of the mortgage note of the Corporation pertaining to the last of the six mortgage areas; provided that in any event such meeting shall be held on or before January 15, 1966, or such later date as may be established by motion of the Board of Directors of the Corporation with the approval of the Federal Housing Administration. Thereafter the annual meeting of the Corporation shall be held on the third Saturday of January of each succeeding year. At such meeting there shall be elected by the ballot of the members a Board of Directors in accordance with the requirements of Section 3 of Article V of these By-laws. The members may also transact such other business of the Corporation as may properly come before them.

Section 4. Notice of Meetings. It shall be the duty of the Secretary to mail a notice of each annual or special meeting, stating the purpose thereof as well as the time and place where it is to be held, to each member of record, at his address as it appears on the membership book of the Corporation, or if no such address appears, at his last known place of address, or at least ten (10) but not more than sixty (60) days prior to such meeting. Service may also be accomplished by the delivery of any such notice to the member at his dwelling unit or last known address. Notice by either such method shall be considered as notice served. Notices of all meetings shall be mailed to the Director of the local insuring office of the Federal Housing Administration.

Section 5. Quorum. The presence, either in person or by proxy, of at least fifteen (15) percent of the members of record of the Corporation shall be requisite for, and shall constitute a quorum for the transaction of business at all meetings of members. If the number of members at a meeting drops below the quorum and the question of a lack of quorum is raised, no business may thereafter be transacted.

Section 6. Adjourned Meetings. If any meeting of members cannot be organized because a quorum has not attended, or a meeting has been ended because the number of members at said meeting has dropped below the quorum, the members who are present, either in person or by proxy, may, except as otherwise provided by law, adjourn the meeting to a time not less than forty-eight (48) hours from the time the original meeting was called, at which subsequent meeting the quorum requirement shall be ten (10) percent.

Section 7. Voting. At every meeting of the regular members, each member present, either in person or by proxy, shall have the right to cast one vote on each question and never more than one vote. The vote of the majority of those present, in person or by proxy, shall decide any question brought before such meeting, unless the question is one upon which, by express provision of statute or of the Articles of Incorporation or of these Bylaws, a different vote is required, in which case such express provision shall govern and control. No member shall be eligible to vote or be elected to the Board of Directors who is shown on the books or management accounts of the Corporation to be more than 30 days delinquent in payments due the Corporation under his/her Occupancy Agreement.

Section 8. Proxies. A member may appoint as his/her proxy only a member of his/her immediate family (as defined by the Board of Directors) except that an unmarried member may appoint any other member as his/her proxy. In no case may a member cast more than one vote by proxy in addition to his/her own vote. Any proxy must be filed with the Secretary before the appointed time of each meeting.

Section 9. Order of Business. The order of business at all regularly scheduled meetings of the regular members shall be as follows: (a) Roll Call.
(b) Proof of notice of meeting or waiver of notice.
(c) Reading of minutes of preceding meeting.
(d) Reports of officers.
(e) Reports of committees.
(f) Report of manager or managing agent.
(g) Election of inspectors of election.
(h) Election of directors.
(i) Unfinished business.
(j) New business.

In the case of special meetings, items (a) through (d) shall be applicable and thereafter the agenda shall consist of the items specified in the notice of meeting. If present, a representative of the Administration will be given an opportunity to address any regular or special meeting.

ARTICLE V. DIRECTORS

Section 1. Number and qualifications. The affairs of the Corporation shall be governed by a Board of Directors composed of five (5) persons, a majority of whom shall be members of the Corporation.

Section 3. Election and Term of Office. The term of the Directors named in the Articles of Incorporation shall expire when their successors have been elected at the first annual meeting or any special meeting called for that purpose. Provided, that any such special meetings to be held prior to the first annual meeting shall be called only as directed by resolution of the Board of Directors or by the Federal Housing Commissioner or his duly authorized representative. At the first annual meeting of the members their term of office of two Directors shall be fixed for three (3) years. The term of office of two Directors shall be fixed at two (2) years, and the term of office of one Director hall be fixed at one (1) year. At the expiration of the initial term of office of each respective Director, his successor shall be elected to serve a term of three (3) years. The Directors shall hold office until their successors have been elected and hold their first meeting.

Section 4. Vacancies. Vacancies in the Board of Directors caused by any reason other than the removal of a Director by a vote of the membership shall be filled by vote of the majority of the remaining Directors, even though they may constitute less than a quorum, and each person so elected shall be a Director until a successor is elected by the members at the next annual meeting to serve out the unexpected portion of the term.

Section 5. Removal of Directors. At any regular or special meeting duly called, any Director elected by the members may be removed with or without cause by the affirmative vote of the majority of the entire regular membership of record and a successor may then and there be elected to fill the vacancy thus created. Any Director whose removal has been proposed by the members shall be given an opportunity to be heard at the meeting. The term of any Director who becomes more than 30 days delinquent in payment of his carrying charges shall be automatically terminated and the remaining Directors shall appoint his successor as provided in Section 4, above

Annual Meeting Committee

There is no current procedure for establishing an Annual Meeting Committee, but because this is a shareholder meeting and not a board meeting, and because any new leadership might not be familiar with how to organize and facilitate the meeting, it might be a good idea to establish a committee several months ahead of the meeting as many other cooperatives tend to do. Of particular value on this committee would be past secretaries and past meeting officiants who were actively involved in prior meetings.

Call for Candidates

As a general guideline, we send out two calls for candidates, the first as early as 90 days before the election and the second asking for resumes to be submitted 30-45 days before the election. No deadline set in these notices should be hard and fast deadline, as anybody should be able to add themselves up to the very last minute before the vote. Below are some example call for candidates documents:

• 2015-11-15 - https://drive.google.com/drive/u/0/folders/12vv0q09vkJ5PTDpkyH24IhYu3rZYCRsX

• 2016-11-04 - https://drive.google.com/file/d/1CTj2jE3YFaBHMNG1Hf9N6-f2pik5ICh-/

Nominations & Applications

We do not have a formal procedure for nominating people to run for office, nor is there an application. Anyone can nominate themselves to run for a board position simply by responding to the call for candidates.

Some coops have "Nominating Committees" as described in the National Association of Housing Cooperatives board training manual provided as part of our onsite NAHC training in 2010.

Some of our sister coops have application forms

Candidate Requirements

Deadlines - There is no specification about when a candidate must submit a resume. If a candidate submits before the ballot is printed and they meet all other requirements, they should probably be included on the ballot, regardless of any arbitrary deadline created by anyone in leadership. This has been a very thorny issue in the past, because leaders have frequently been accused of creating arbitrary deadlines which they extend to allow some individuals and close tightly to block others, and there should never be even a whisper of such an accusation. At the same time, other leaders (or even the same leaders) move to add people to the official ballot at the annual meeting and redo the ballots just minutes before the vote (https://drive.google.com/file/d/17tbNa2cCgKALwBG0caGjGW94jISZaBAH/). Adding people to the ballot "at the meeting" is a fairly long-standing tradition that should probably be continued, by the very least, not setting ANY arbitrary deadlines on adding candidates.

Membership Requirement - Per the bylaws, two board positions can technically be held by people who are not listed on the stock certificate and who do not even live in the village ("Board of Directors composed of five (5) persons, a majority of whom shall be members of the Corporation"). Many corporations do this in order to allow their attorney and cpa and bankers to sit on the board and advise board members as part of their service contracts (or they sometimes serve as Assistant Secretary, Assistant Treasurer, etc). In our case, it also allows for family members on the occupancy agreement to run, but even that is fraught with problems because some households are allowed to have children and others on their membership certificates, while others are not, based upon the bias of leadership at the time they completed their certificates. In general, this is a very thorny issue when someone from outside who is not our attorney or cpa runs, in part because voters are frequently not told whether a candidate is a member or not, and then what they do later can also appears arbitrary. Additionally, because we have done background checks on all residents, and not on outsiders running for the board, there is some concern about a potential criminal history or financial mismanagement that we may not know about. And lastly, board members have been removed by their fellow board members in the past solely because they moved away, while wishing to continue to serve, which is a questionable decision considering that they are neither delinquent and that we allow non-residents to serve on the board (https://drive.google.com/file/d/1My4nwnECt4UYVIeSr0cKAwiareDyFCcK/)

Delinquency Issues - Additionally, board members have been "automatically removed" from the board for getting behind on their carrying charges (V.5. ...Director who becomes more than 30 days delinquent in payment of his carrying charges shall be automatically terminated).

Background Checks - Another sticky issue here is that candidates who are not residents do not have to pass background checks and have not agreed to abide by our rules, so they are sometimes accused of liberally violating those rules while campaigning and after being elected (ie. use of the clips, etc). Some have proposed that we do updated background checks on all candidates, and that we do background checks on all newly elected board members. This might resolve problems we have seen in the past where a member who recently filed for bankruptcy was voted onto the board without disclosing that information to the members, and then elected President without disclosing it to the other board members (https://drive.google.com/file/d/1JkrRBQ3KH-utVZ6gDo-ZBLPHH_CxovJp/).

Arbitrary Removal - Also, another recent board candidate said her resume was either lost or rejected because she was accused of living in the village but did not appear on an occupancy agreement.

Distributing Candidates Resumes

Candidate resumes are usually shared about a month before the election. Here are some examples:

• 2016-12-16 - https://drive.google.com/file/d/1CeHYwi5ZcLHcwfrUqeiC70RiEy11xZCf/

• 2017-12-05 - https://drive.google.com/file/d/14bnsI5L1JhkrOXqVeLK6shTt1o7-By_I/

Sometimes, leaders intervene in this process trying to game the elections, and choose to distribute resumes as late as possible to avoid campaigning and networking by people they do not want on the board (a decision that tends to benefit incumbents who remain up front and center during the process).

Notice of Meeting

A notice of meeting must be sent between 10 and 60 days before the meeting. Here are some examples:

• 2018-01-18 - https://drive.google.com/file/d/14qqjlorGs6ah-UDMm4FGbdz91dj8_CQH/

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Electronic Voting

This is another thorny issue. During the pandemic, when the board decided to not hold in-person meetings, they moved to email voting and submitting ballots to the office before the election. At the same time, the US was afire with debates about mail-in ballots and election fraud, which caused many feel like the new system was designed to eliminate the selction of candidates who don't come forward till the last minute. In fact, some of the people in office at the time were actually added to the ballots AT THE MEETING where they were elected, which brings up the bylaws language about "At such meeting there shall be elected by the ballot of the members a Board of Directors..." While many people are fans of electronic voting, so far, it has not resulted in greater voter participation, and there is no way to validate that the person who submitted the ballot is actually the person who is entitled to do so. With proxies and other votes, signatures are required. Also, our current electronic voting process is controlled entirely by the one person who has personal control to the gmail address used for registration. There is also some concern that if the process (and thus the outcome) is disputed by a majority of those in attendance, a new vote could be instantly done with those in attendance "at such meeting." This is often done in congress where they do a voice vote followed by a roll call vote if the outcome of the voice vote is disputed.

It looks as if the state law supports the idea that all ballots count toward quorum (including proxy votes, votes submitted before the election, verified electronic votes), at least as far as that single vote is concerned. It is less clear whether any other business can be transacted and the annual meeting actually held without a "real" quorum, however.

Proxy Collection

In some elections, there have been claims that candidates or others went door-to-door collecting proxies just before or on the day of the election. In one case, a member said they were told by someone they knew who knocked on their door that the board feared there would not be a quorum, so they needed their proxy urgently if they were not going to attend. The member gave it, and was disappointed looking at the minutes later to see that names were added to the ballot in the meeting, and so people they would have never voted for were voted into office.

Proxy collection and other ruses to garner votes unwittingly or by deception should be discouraged, because elections results can be invalidated when they are uncovered.

Proxy Validation

It seems like every board validates proxies differently. Some just ascribe to the one proxy per attendee rule. Others rule out proxies because they don't come from immediate family members. The challenging language here is "immediate family (as defined by the Board of Directors)" which means that immediate family can be redefined every year during every election based upon the arbitrary determination of the board. This is especially true since the new definition of "immediate family" adopted by the board is basically "any group who self-identifies and presents themselves as family, regardless of their actual relationship." In my opinion, this says anyone can hold a proxy, and that denying a proxy is tantamount to familiar discrimination.

Quorum Requirement

15% Quorum -

Quorum Issue Raised -

10% Subsequent Quorum -

Zoom Participation -

Counting a Quorum - In the 2022 annual meeting (https://drive.google.com/file/d/1Y7y7Veuy6p2snn1hq7NpShNbwoOrQyDJ/), proxies do not appear to have been counted or recognized at all, and electronic ballots and ballots submitted to the office before the meeting were included in the total for constituting a quorum. In the opinion of many, this meeting did not meet the quorum requirement.

Members Leaving - Our 2019 election (https://drive.google.com/file/d/1-zw9DNH6r47RrfpKWmj0ZUQu0IdbL_ow/) presented a number of declining quorum problems illustrated by the following quotes from the minutes:

• "One caveat explained - one member may have left and if so could very well represent a member in person with a proxy which might bring us below the quorum. Once ballots are distributed to all members present in person or by proxy we will know officially and respond at that time."

• "We had to take the additional time, from the 2pm deadline for registration of election, to call on several members to come out to register to vote, due to not having a quorum by which to have an official and legal meeting for the purposes of Elections of Board of Directors. Once we got these members to the registration and validated they were Members in Good Standing we then moved to the Meeting/Election."

• "Jacque Colegrove called the Annual Election officially closed at 4:08pm total of 10 members remained till the end of the election process."

Minutes of Meeting

Minutes should be created by the Secretary, usually from a recording of the meeting. Here are some examples:

• 2018-01-20 - https://drive.google.com/file/d/11KwJCV8uPFQh5DSvXSnnOqAveeuQxOBP/

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Filling Empty Board Seats

How we fill empty board seats can also turn into a problem, especially around elections. To be clear, when a board seat is vacated during the year, the board can usually chose a temporary fill-in, but any remaining term of that board seat should be put up to the membership vote at the next annual meeting ("each person so elected shall be a Director until a successor is elected by the members at the next annual meeting to serve out the unexpected portion of the term").

In the past, when a board member left, a notice was sent out to all members about the vacancy, and members were encouraged to send resumes to the board ("Mary will advertise for resumes for the open Board position" - https://drive.google.com/file/d/1My4nwnECt4UYVIeSr0cKAwiareDyFCcK/). In more recent years, this hasn't been done, and so some believe that whomever was chosen was selected because of favoritism or cronyism or nepotism or just to better position that friend to run as an incumbent in the next election. We should avoid any appearance of "insider" decision making regarding board make-up or candidacy.

Another issue boards face is gamesmanship, where a board member waits to resign till just after the election so that their friends on the board can appoint their replacement rather than have a membership vote. This desire for control and "appearance of evil" should be avoided. Also in the past, board seats that were vacated during the election process or where shareholders were notified just before or at the meeting appear to have been filled with board choices for a full year rather than being put to a vote (Sally Shulte - https://drive.google.com/file/d/1KzwWm50oybSQIseRyM2e9yySkY8HcjcN/).

Hearing All Member Voices

A great deal of problems can dealt with by actively listening to members, and putting yourself in their shoes. The President of the National Association of Housing Cooperatives wrote about the consequences of failing to hear member's voices in his 2022 newsletter column, which he says, "results in members feeling left out of the governing process and creates what many have termed “rogue” members, who form alliances with other disenfranchised members with the intention of subverting the agenda of those who they recognize as bullies. The result is constant conflict and an impediment to good governance simply because their voices were never heard."
https://coophousing.org/wp-content/uploads/2022/10/CHQfallOct22-3linked.pdf