The vast majority of associations have their annual meetings anywhere from September to November. It’s often a trying time for a board of directors. Indeed, if the annual meeting isn’t done properly, it can be a stressful experience for everyone.
As the saying goes, proper planning prevents poor performances. That means bringing a copy of the governing documents (bylaws and CC&Rs) and state statutes to the annual meeting in case an owner questions a matter of policy or procedure. It also means that all officers put their reports in writing and practice making their presentations. Many presidents, treasurers, and secretaries aren’t proficient at public speaking, but when you agree to board service, that’s part of the job. You need to know what you’re going to say to residents.
The annual meeting usually begins with the secretary’s report, which is typically the shortest of the officers presentations, but important nonetheless. As keeper of the association records, the secretary needs to know the quorum requirements for the meeting, and should compile all the sign-in and tally sheets. Then, the secretary reports on whether the quorum has been met.
For example, say the association has 100 units and a 25% quorum requirement, and 20 owners are present and 20 proxies have been received and verified. The secretary’s report could be quite short: “Mr. President, we have 20 owners present with 20 verified proxies, for a total of 40 owners participating. Our quorum requirement is 25 units. We have a legal meeting.”
Although many annual meetings occur at the nine-month mark of the fiscal year, before year-end financial numbers are available, it’s still important to present fiscal information to owners. This could include a summary of year-to-date expenses versus budgeted expenses, as well as some details of problem areas. For example, due to severe weather last winter, our community just experienced a huge snow-budget deficit. While there have been several mentions of the ongoing problem in our newsletter, we’ll present final numbers at the annual meeting and propose modifications to balance the budget by year’s end.
The annual meeting is also an opportunity to discuss budget projects for the upcoming fiscal year. For example: While final budget figures may be virtually impossible to project, to hear that the association is in the second year of existing rubbish-removal, landscaping, and snow-removal contracts and that insurance has been renewed with no increase should indicate another year with stable monthly assessments”.
Finally, owners absolutely need to hear about their reserves-good, bad, or neutral. Explain how much is currently in reserves and at which financial institutions, and stress that the money is completely protected from risk. The treasurer also may choose to explain your community’s long-range plans for capital expenditures, or simply defer that to the president’s report.
The president’s report, like the treasurer’s report, should begin with a summary of the past year, but from an operational perspective. For example: “Owners sometimes forget that six or eight months ago the association re-roofed three buildings, or repaved several parking lots, or completed a major landscaping project”. Hopefully, your association sends our monthly, bimonthly, or at least quarterly newsletters (or has a website) to keep members informed of these and other accomplishments, but it’s essential that the president review the past year’s performance-good and bad.
This is a particularly salient issue for older communities. As physical structures age, there is a better than even chance that something went wrong in the past year that required the board to spend money, perhaps unexpectedly. And those types of factors affect budgets as well as monthly assessments. For example. “This past winter, we had a catch basin in the street collapse. It wasn’t anybody’s fault-it just happened after 40 years. Everyone knew it had happened, because they had to drive around barricades for two days while it was being rebuilt. As this year’s annual meeting, we’ll tell owners how much it cost and remind them how we deal with true emergencies when they happen-we fix the problem as quickly and efficiently as possible. That’s all they can expect.
Operationally we are more fortunate than many associations. We have several board members with more than 10 years of experience We have many events scheduled like clockwork-first spring cleanpup, then sand cleanup, line painting, fertilization, gutter cleaning, and so on –every year. We remind our owners of all that at the annual meeting, not to brag or toot our own horns, but to explain why our property looks as good as it does every year. It’s simply an important part of our operating, and important to tell our fellow owners-whose assessment money pays for all of it”
Always close the president’s report with a look forward. What contracts are expiring in the next 3, 6 and 9 months? What major projects are you planning? There’s nothing more upsetting for residents than to come home one day and find contractors doing major construction that they weren’t aware of in advance.
You often hear that communications is an important part of association governance and management. And that’s true. But the communications generated at the annual meeting should be a continuation of what your association does the other 11 months of the year. Properly done, the meeting can put the finishing touches on a successful year. Be honest, be positive, and you might actually start enjoying your annual meeting.
A well run annual meeting includes detailed reports from your board officers.
Secretary’s report: The secretary reports on whether the quorum has been met
Treasurer’s report: The treasurer presents year-end or year-to-date financial information and budget projections for next year
President’s report: The president summarizes the past year and also offers a look forward