ECHO Journal - March 2014 by Echo

2014 ECHO Seminars p.3

Planning and Paying for Major Reconstruction p.8

The Art of Taking Minutes p.16

Serving Community Associations

Road Map to Financing and Project Launch

Truck Injections vs. Foliar Spraying

p.20

An HOA Insurance Survival Kit p.26

Myths of Chairmanship

p.32

March 2014 echo-ca.org

p.8

ECHO 1960 The Alameda STE 195 San Jose, CA 95126 Change Service Requested

PRSRT STD U.S. Postage PAID Modern Litho 210

2014 ECHO educational calendar

ECHO Seminars Now there’s one near you. If you’ve ever wished that ECHO would hold a seminar closer to your association, chances are that we’ll be nearby during 2014. Don’t miss an opportunity to get the education you need with guidance from some of California’s top HOA attorneys and professionals. Take a look and mark your calendar. We can’t wait to see you there!

Santa Rosa

Sacramento

Marin Walnut Creek

Oakland

Online: www.echo-ca.org; By Phone: 408.297.3246

San Francisco

San Jose

March 15

March 22

May 16-17

South Bay Educational Seminar (see page 7)

Wine Country Educational Seminar (see page 13)

ECHO Oakland Seminar & Tradeshow (see page 29)

Campbell Community Center, Campbell

Fountain Grove Inn, Santa Rosa

Oakland Convention Center, Oakland

DATE

EVENT

May 31 June 14 August 22-23 October 4 October 18

Fresno Educational Seminar Sacramento Educational Seminar ECHO San Jose Monterey Educational Seminar Walnut Creek Educational Seminar

Campbell Santa Cruz

Fresno Monterey

March 2014 | ECHO Journal

CONTENTS

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Planning and Paying for Major Reconstruction The road to the successful financing and launch of that much needed construction project has two keys to success: (1) A good preliminary financial analysis utilizing a professional detailed reserve study to determine what viable financing options are available to your association; and (2) an in-depth project analysis with detailed specifications and drawings.

The Art of Taking Minutes Minutes are required at any association or board meeting. They serve as a record of the actions and decisions made at a meeting; however, they are not meant to be a transcript of everything that was said or done at the meeting.

Trunk Injections vs. Foliar Spraying Trunk injections to help protect your trees have been available for many years. These injection methods have helped reduce the amount of control product used, reduced the environmental exposure to chemicals, cut service costs, and the number of applications needed for proper control.

An HOA Insurance Survival Kit

The ECHO Journal is published monthly by the Educational Community for Homeowners. The views of authors expressed in the articles herein do not necessarily reflect the views of ECHO. We assume no responsibility for the statements and opinions advanced by the contributors to the magazine. It is released with the understanding that the publisher is not engaged in rendering legal, accounting or other professional service. If legal advice or other expert assistance is required, the services of a competent professional should be sought. Acceptance of advertising does not constitute any endorsement or recommendation, expressed or implied, of the advertiser or any goods or services offered. We reserve the right to reject any advertising copy. Copyright 2014 Educational Community for Homeowners. All rights reserved. Reproduction, except by written permission of ECHO is prohibited. The ECHO membership list is never released to any outside individual or organization.

Insuring a common interest development certainly involves several elements similar to a survival kit and its various necessary components. Just as you would pack a survival kit at home for you and your family, as a common interest community, you must also prepare for a loss by obtaining the essential insurance coverage.

ECHO 1960 The Alameda, Suite 195 San Jose, CA 95126 408-297-3246 Fax: 408-297-3517 www.echo-ca.org info@echo-ca.org

Myths of Chairmanship

Office Hours Monday-Friday 9:00am to 5:00pm

Whether you are a past president or a newly elected president, you must appreciate the daunting challenge for the person who holds the gavel. How do you apply democratic principles in a fair and efficient way—without messing up too badly?

Board of Directors and Officers President David Hughes Vice President Karl Lofthouse Treasurer Diane Rossi

DEPARTMENTS

2014 ECHO Educational Calendar

News from ECHO

South Bay Educational Seminar — Saturday, March 15th.

Secretary Toni Scurti Directors Jerry L. Bowles Stephanie Hayes Robert Rosenberg Brian Seifert Steven Weil

John Garvic David Levy Kurtis Shenefiel Wanden Treanor

Wine Country Educational Seminar — Saturday, March 22nd.

ECHO Oakland — May 16th and 17th.

ECHO Bookstore

Advertiser Index

ECHO Volunteers

Director of Communications Tyler Coffin

NEW at echo-ca.org

ECHO Event Calendar

Legislative Consultant Government Strategies, Inc.

Legislation at a Glimpse

Executive Director Brian Kidney Director of Marketing & Membership Toni Scurti

Design and Production Design Site ECHO Mission Statement Serving Community Associations

March 2014 | ECHO Journal

news from ECHO

News From ECHO March 2014 ECHO has been serving homeowners association boards of directors for over forty years. We started with a short newsletter and an Annual Seminar, and have grown to hosting two Annual Seminars, eight regional Educational Seminars, three San Francisco Luncheons, over thirty Resource Panel meetings, a full color monthly magazine with a circulation over 7,500, periodic electronic news blasts, and an all-new website filled with content and statutes to answer your burning questions. We have a small staff in San Jose that work to bring you the very best expert advice on matters that affect your communities. We open a new chapter in ECHOâ&#x20AC;&#x2122;s evolution, welcoming our new Director of Marketing and Membership, Toni Scurti. On page 29 you can learn a bit more about Toni. The key message for you is that we are an evolving organization. We try very hard to bring you information and other resources to simplify your volunteer job overseeing, in most cases, millions of dollars of community assets. Itâ&#x20AC;&#x2122;s a daunting responsibility, and we want to make it as easy as possible. Please let us know what we can do to make your ECHO membership experience better. And if you find our magazine, website, seminars and other services valuable, please tell a friend. The more associations that belong to ECHO, the better we can be at delivering quality products and services to you. And, most importantly, the more secure, legally compliant and healthy our California communities will be. Thanks for your support and I look forward to hearing from you. Best,

Brian Kidney Executive Director

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AGENDA TOPICS

IT’S ALL ABOUT THE LAWYERS! Everything you need to know about alternative dispute resolution, a required and powerful tool to solve problems before thing gets out of hand. Learn all about contracting with vendors and for maintenance and repair; a good contract can protect you and a bad one can be a disaster. Finally, our panel of experts will explore collections, a necessary function in running your association; how to avoid foreclosing on your neighbor, but if all else fails, how to do it correctly.

South Bay Educational Seminar Saturday, March 15th, 2014 8:30 AM to 12:30 PM /

Yes, reserve ______spaces for the ECHO South Bay Seminar Amount enclosed: $______(attach additional names) Name:

SPEAKERS Sharon Pratt, Esq. • Rosalia Tapia, Esq. Robert P. Hall, Esq. • Stephanie Hayes, Esq. Matthew P. Harrington, Esq. • Terin Reeder

Email Address:

ADDRESS

HOA or Firm: Address: City: State:

Zip:

Campbell Community Center Orchard City Banquet Hall 1 W Campbell Ave, Campbell, CA 95008

Phone:

Price

Visa/Mastercard No. Exp. Date:

$59 $49 – Members • $69 $59 – Nonmember Prices go up on March 3rd!

Signature:

SPONSORS

March 2014 | ECHO Journal

Formal Approval A vote of the membership is generally required if a special assessment is needed or to obtain approval for a loan; check your governing documents. If so, once you have the bankâ&#x20AC;&#x2122;s proposal in hand, with the aid of your attorney, you will be able to develop and articulate the special assessment and/or bank financing in the official ballot. As soon as membership approval is secured, the bank will proceed with formal approval. The association will trigger this by accepting the proposal and returning it to the bank. The remaining documentation and information required may include: Additional Financial Information Tax Returns Bank Statements Name of all Contractors selected, plus Contract Contractorâ&#x20AC;&#x2122;s license Proof of Workers Compensation Proof of General Liability Insurance Approved ballot & opinion letter from counsel Final budget from construction manager Governing documents Articles of Incorporation CC&Rs ByLaws Other information Board minutes Board member listing Homeowner listing Loan approval and documentation will take 2-3 weeks, and then, you are ready to begin!

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Project Launch

weeks to complete everything needed to actually start the project. If attorneys are required, double this time frame.

Many tasks are required prior to the project launch including signing the contract by both the HOA and the contractor, a Notice to Proceed, preconstruction site review, color choices and final schedule. These tasks are time consuming and involve a lot of different people arranging their schedules. Allow a good 4 to 6

Often boards require more than one member to sign contracts of major expense. This will require getting both parties to sign the contract before it is returned to the construction manager. The construction manager will then contact the chosen contractor to also sign the contract to fully execute the document. Copies are returned to each

party and a Notice to Proceed is issued to the contractor. The Notice to Proceed is an official document telling the contractor he is to start the project and what is required prior to job start. The contractor will have to provide a copy of his current State contractor license with proper designation for the work to perform (i.e. roofing requires a C-39), a current certificate of insurance showing the required coverage, a preliminary schedule, a site map with possible construction yard locations and an emergency contact list naming the project manger and the superintendent in charge of the project as well as 24 hour contacts for emergencies. The construction manager will now schedule a preconstruction site visit to discuss the details of the project. The construction yard location will be chosen determining which location minimizes impact on the residents. Each building will be reviewed to determine access and equipment set up. For instance debris chutes to contain the old material when removed and transported to a disposal vehicle or scaffold locations. How the work flow will affect the ingress and egress of the occupants during the day will be taken into consideration to minimize the impact. What impact will the construction have on existing landscape? Construction workersâ&#x20AC;&#x2122; personal vehicle parking will be reviewed. Often the complex will not have sufficient parking to accommodate the construction techniciansâ&#x20AC;&#x2122; vehicles. The preliminary schedule will be reviewed to determine what building order the work should proceed. This is often determined by the buildings with the greatest needs. The safety of the occupants and workers during

construction will be carefully considered. The final schedule will be discussed and the specification and details reviewed prior to the project launch. Choosing colors can often be the most time consuming portion of the project. Again, using roofing as an example, not only does the roof color have to be chosen, but also gutter, downspout and edge metal colors. This often requires visits to other complexes to get a feel for the colors being chosen. Typically the more people involved with color selection the longer it takes. On one occasion it took an HOA 18 months to finalize colors and in that time they experienced 2 material increases. Imagine choosing multiple paint color schemes. At this point a project is ready to start. Be aware that planning a major reconstruction project is a timely endeavor. For best results it is wise to start the process in the fall and plan on a spring start to take advantage of dry weather. This schedule will allow enough time for both the planning portion of the project and securing the necessary funding. Teresa Powell is the Executive Vice President of Focus Business Bank, a local bank specializing in providing a premier suite of industry specific financial management services. She can be reached at teresa.powell@focusbusinessbank.com and more information available at www. focusbusinessbank.com Brian Seifert is Principal Partner of Cox Seifert Total Construction Management LLC, a construction consulting and management firm specializing in CID reconstruction. He can be reached at bseifert53@gmail.com

March 2014 | ECHO Journal

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THE “ART” OF TAKING MINUTES at YOUR Association’s Meeting BY SANDRA L. GOTTLIEB, Esq.

March 2014 | ECHO Journal

etailed minutes can prove troublesome for your association. Minutes are required at any association or board meeting. They serve as a record of the actions and decisions made at a meeting; however, they are not meant to be a transcript of everything that was said or done at the meeting. The more unnecessary, superfluous detail that is included in board meeting minutes, the more likely the boardâ&#x20AC;&#x2122;s actions will fall under unnecessary scrutiny by homeowners. Certain widely accepted guidelines will help your association take appropriate meeting minutes.

Format of Minutes The minutes should begin with the association name and the date and place of the meeting. It should also state what type of meeting is being held, i.e. whether it is a regular or executive session board meeting, whether it is a special meeting of the board or membership, or whether it is an annual association membership meeting. Those in attendance in an official capacity (such as a board member, manager, guest, attorney, or similar guest) should be noted. The presence of a quorum and the time the meeting was called to order should be included. It is important to note if the associationâ&#x20AC;&#x2122;s attorney was present at an executive session meeting. This will protect the associationâ&#x20AC;&#x2122;s attorney-client privilege that may attach to communications at the meeting that are referenced in the minutes taken during the meeting and help ensure that the minutes are subject to the privilege. 18 echo-ca.org

Timing elements should also be stated. The time the meeting is called to order, any board member who arrives late or leaves early (which may affect any vote taken) and when the meeting is adjourned should be stated.

Be Brief Be Concise It takes more thought to reduce a halfhour discussion into a brief statement for the minutes. The minutes should reflect the decision of the board. Extensive debate during a meeting should not be reported; opinions and conclusions of those in attendance should be avoided. Stay away from individual demands to specifically note why a board member voted against a motion and their personal reasons for same, it is irrelevant because all you need to know is what was the decision of the Board. The secretary should instead describe what occurred (the motion that was made for example) and summarize the details and conclusions reached. Once again, minutes should be brief yet accurately reflect the proceedings of the meeting, and in particular the decision of the board so there is a record of that decision. This requires more attention and skill than just simply writing down everything that is said.

Conduct of Meeting It is easier to document decisions made at a well- structured and organized meeting. If the meeting is run with a concise and clearly worded agenda and proper procedures are mandated, the minutes should flow accordingly. An agenda must be prepared and distributed before the meeting as the Code requires that it be part of the notice. The President (or whoever is presiding over the meeting) should follow the agenda. It is also helpful if time estimates are listed next to the agenda items so that the meeting can proceed timely and the Board will not get sidetracked on particular issues. Civil Code Section 4930 describes

exceptions to the requirement that the Board only address the items listed on the agenda:

a member of the Board or a managing agent, or other agent of the Board may:

(a) briefly respond to statements made or questions posed by a person speaking at the meeting or (b) ask a question for clarification, make a brief announcement, or make a brief report on his or her own activities;

a member of the Board or the Board collectively, subject to rules or procedures of the Board, may:

(a) provide a reference to, or provide other resources for factual information to, its managing agent or other agents or staff, (b) request its managing agent or other agents or staff to report to the Board at a subsequent meeting concerning any matter, or take action to direct its managing agent or other agents or staff to place a matter on a future agenda, or (c) direct its managing agent or other agents or staff to perform administrative tasks necessary to carry out the foregoing; or

an emergency situation exists, which means there are circumstances that could not have been reasonably foreseen by the Board, that require immediate attention and possible action by the Board, and that, of necessity, make it impracticable to provide notice.

Motions made and seconded for voting should be repeated clearly so that all in attendance (particularly those who need to vote on the matter) have heard and understand the motion. Specific discussion about the motion is unnecessary. Instead, the motion itself and who made the motion should be stated. Whoever seconded the motion must be stated. Any significant amendment to the motion or points made about the motion can be stated. Also, the vote taken and result obtained should be stated.

A word about motions is appropriate. Issues that will be the subject of a motion during a meeting should be placed on the agenda. A motion is brought by a board member on the specific subject agendized. The motion is usually presented orally, and it must be seconded before discussion is permitted. Any reports regarding the motion should be provided and discussed before a vote is taken. Once a motion is pending, no other motion can be made until the disposition of the previous motion; however, a motion to table a matter (put it on hold for a later date) takes precedence over the earlier motion. The secondary motion must be decided before the principal motion can proceed. Also, a motion to amend or reword a previous motion made must be determined before the final vote taken on the principal motion. Debate during a discussion period on a motion need not be stated. On the other hand, background information on the subject of the motion that is brought before the Board should be stated. A motion must be recorded verbatim in the minutes.

Objectivity of the Minute Taker is Essential The secretary or other person taking minutes must be objective. They must not express personal opinion, criticism or praise on anything recorded. Neither the notes nor any tape recordings by the Secretary of the meeting are official records. Only the approved minutes of the Board meeting is the official record. Notes and tape recordings should be destroyed following the approval of the minutes for that meeting. If any particular Board member wishes more detail, he or she can take their own notes so that they can remember what took place. These notes constitute personal records of the Board member and not official records of the meeting of the Board.

Approval and Retention

Minutes should be prepared as soon as possible after the meeting. The longer the secretary waits to transcribe minutes, the less accurate they tend to be. Minutes should be approved at the next regular Board meeting. Once approved, they are signed by the Secretary of the Board for that meeting and thereafter become the official record of the meeting. Minutes are maintained by the secretary for access by the Board or other members. The fact that a meeting may take several hours to conduct does not mean that the minutes reflecting the business transacted at that meeting should also be equally lengthy. Much of what is discussed during a meeting or that which delays the progress of the meeting is not official business transacted at the meeting that should be reflected in an official record of that meeting Sandra L. Gottlieb is the Managing Partner at SwedelsonGottlieb, specializing in the legal representation of community associations, and a principal of Association Lien Services, Californiaâ&#x20AC;&#x2122;s leader in assessment collections. She can be contacted at slg@sghoalaw.com.

March 2014 | ECHO Journal

TRUNK INJECTIONS VS.

FOLIAR SPRAYING By Marc Dunia

VS.

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March 2014 | ECHO Journal

ECHO OAKLAND 2nd Annual Seminar & Trade Show May 16-17, 2014

Mark ECHO Oakland on your May calendar! ECHO is coming back to the Oakland Convention Center for our 2nd Annual Seminar and Trade Show in the East Bay. We’re carefully selecting speakers who address your needs: from basic board member training to pressing legal questions. Come for answers, and enjoy the camaraderie of your fellow board members and the fun and prizes on the trade show floor. Registration always includes: • Lunch on the trade show floor. • 12 educational sessions addressing a variety of HOA hot topics. • Access to a vibrant exhibit floor and hundreds of prizes. Visit the ECHO website for complete event details: www.echo-ca.org/events

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Location ECHO Oakland is at the Oakland Convention Center. Lodging is available for a special rate at the adjoining Oakland Marriott Hotel. Visit the registration page on the ECHO Website for special link to the reduced rate.

REGISTRATION You may register online, by fax or mail, or by contacting the ECHO office. Please visit ECHO website for the most current event information including speakers, topics, and venue information. Members: $89 Nonmembers: $119

ntegrated Pest Management (IPM) in the tree care industry is an effective and environmentally responsible approach to managing insects and diseases in trees. IPM programs include natural and synthetic ways of managing health issues for trees of all types.

In past years the main method of controlling the damaging effects of insects or leaf disorders was to spray trees with high pressure applications of chemicals (Foliar Spraying). This method is extremely inefficient, can drift to neighboring yards, and becomes an environmental disaster, if not done responsibly. Imagine spraying your 40 foot tree in your back yard to get rid of Aphids. Yes the tree gets wet with the chemical, but so does the Pool, lawn, BBQ, neighborsâ&#x20AC;&#x2122; fruit trees and any pets that did not get the spray notice. Spray applications canâ&#x20AC;&#x2122;t be done during windy conditions or if rain is in the forecast. In most cases multiple spray applications are required for effective control of the problem. This adds to annual maintenance costs, makes people frustrated or mad, and harms beneficial insects. Now that we are past the DDT era and have new technology being implemented, more cost effective and environmentally conscious methods are available. Trunk injections to help protect your trees have been available for many years. It has helped prevent problems such as Dutch Elm Disease, Sudden Oak Decline, Fire Blight, Oak Wilt, Anthracnose, Aphid, Thrip or Beetle infestations, as well as tree nutrient deficiencies. These injection methods have helped reduce the amount of control product used, reduced the environmental exposure to chemicals, cut service costs, and the number of applications needed for proper control. Trunk injections can be applied in environmentally sensitive areas: such as playgrounds, rivers, creeks and even schools. Trees that were impossible to spray can now be March 2014 | ECHO Journal

protected in as little as 5-10 minutes. Most people wonâ&#x20AC;&#x2122;t even know your IPM technician was there. Timing of injections is important. In order for the trees to translocate the product you have injected they should be out of dormancy, which means not in winter. The tree needs to be active so the product is delivered to where it is needed. Injecting trees during cold weather or when it has no leaves will be a waste of your time and money. Injections usually take place from April thru September depending on what you are treating. Some products work best if done just before leaf drop so the product overwinters in the stem. The leaves will then be protected during the vulnerable bud break stage and several months after. Spring injections are best to help control leaf feeding insects. Depending on the size of the tree it could take several weeks to translocate to the tree tops.

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Applying products too early or late will give poor results; it is helpful to get on a program and have your calendar marked. Some tree companies will remind you when it is time to review for treatment. Usually scheduling should not be a problem as long as you are in a 4-6 week window. If you missed the appropriate time of year, there are still options out there for you, so remember to ask if there are any new products available or if the product being applied is within the application window of time. The cost of removing a tree can be disturbing financially as well as aesthetically; when your shade tree is missing it is upsetting. To avoid this drastic measure trunk injections can cost as little as $25 per tree, depending on how many trees and how big. Make sure you have a Certified Arborist correctly identify the problem and the type of control needed. Insect infestations and diseases tend to vary from year to year, so once you get control of the problem an annual free inspection may be all that is needed. In order for your Arborist be successful solving your trees problems, before recommending any Injections, Fertilizing, Soil Drenching, pruning or even spraying, get as much history about your trees as you can. This will include past infestations or diseases, construction or development around the treeâ&#x20AC;&#x2122;s root system, changes in irrigation, landscaping or things you may have noticed like early leaf-drop or Bug feeding activity. Also, be aware that if your Arborist does not have a state regulated pesticide applicators license they may not be able to make recommendations for this type of service and just tell you to have your tree removed. Trees take many years to grow, add value to your property, are a big part of any landscape which leads us to grow attached to them. Conversely please remember treating a dying tree is unproductive, frustrating and can give you the wrong impression of the many good products available for the valued trees that provide shade, privacy and increased home values. Marc Dunia. North Bay Tree Care Manager Certified Arborist #WE-3975-A, Cagwin & Dorward Landscape Contractors. March 2014 | ECHO Journal

AN HOA INSURANCE SURVIVAL KIT By Charlotte Allen

HOA

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+++++++++++++++++++++++++++++

W W

ith talks of the next big quake just around the corner and in the wake of several natith talks of the next big quake just around ural numerous thedisasters corner andaffecting in the wake of severalparts nat- of the World, many us findaffecting comfortnumerous in feelingparts prepared. ural of disasters of the World, ofof uswater, find comfort in feeling prepared. Whether it bemany plenty a stash of money or extra Whether it be plenty of water, a stash of money or extra canned goods, being prepared means (hopefully) not havcanned goods, being prepared means (hopefully) not having to worry about the essentials when disaster strikes. ing to worry about the essentials when disaster strikes.

Insuring a common development certainly Insuring a commoninterest interest development certainly involves several elements survival kit and involves several elements similar similar totoa asurvival kit and its various necessarycomponents. components. Just you would its various necessary Justasas you would a survival kit at home for you and your family, as packpack a survival kit at home for you and your family, as a common interest community, you must also prepare a common interest community, you must also prepare for a loss by obtaining the essential insurance coverage. for aVisualize, loss by obtaining the essential coverage. for a moment, what yourinsurance home survival kit Visualize, for like. a moment, what your home survival might look What is absolutely mandatory that you kit have packed to withstand a foreseeable disaster? might look like. What is absolutely mandatory that you there many thingsayou may want to include haveCertainly, packed toare withstand foreseeable disaster? but the bare essentials are truly the most important Certainly, there are many things you may want to include and more likely the first to be used. but the bare essentials are truly the most important and more likely the first to be used.

+++++++++++++++++++++++++++++

March 2014 | ECHO Journal

typical home survival kit may last one week, the same way an insurance policy typically offers a one year term. A community needs to make certain adequate coverage exists during that year long term. Experts suggest a survival kit include one gallon of water per person per day. Let’s think of “water” as Property Coverage for your community. In order to make certain you always have an ample supply, verify that the replacement cost reported is in fact adequate; Make certain the policy includes Building Ordinance coverage as well as Sewer Drain Back Up.

Property Value/ Replacement Cost: Insuring the property accurately can prevent the potential for hefty out of pocket expense to unit owners at the time of a major property loss. Additionally, most mortgage lenders now require that properties be insured at appropriate replacement cost limits, in order to fund loans. Building value calculations can be provided through Marshall Swift Boeckh (www.marshallswift.com), an industry wide program. Information rated should be based on research and accurate square footage your broker has obtained.

Building Ordinance Coverage A, B and C: Building Ordinance Coverage A (Contingent Liability) provides coverage for undamaged portions of property. For example, if half of a building burns

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down, the Property Insurance Coverage will replace the half of the building that is damaged. However, a majority of the cities and counties in California have ordinances that would require the Association to demolish the remaining 50% or less and rebuild as a whole. Since the unburned portion of the building is undamaged, the Property insurance section does not provide coverage unless Building Ordinance Coverage A is included. Coverage B (Demolition) provides coverage for demolition. This coverage is self-explanatory; however, demolition can become costly if heavy machinery is needed. Coverage C (Increased Cost of Construction) provides coverage for building code upgrades (local ordinances) and/or increased cost of construction. For example, assume that a building was to burn down and local ordinance requires that the reconstructed building include updated fire sprinklers and hard wired fire alarm system. Building Ordinance C will provide this coverage to the Association.

Sewer Drain Back-Up coverage This coverage is quite literally what it states. Below are examples of common instances where this policy would provide coverage for the Association;

If someone flushes an object(s) down a toilet that should not be flushed, causing back-up and property damage.

Laundry soap can build up in common area lines causing back-up and possible property damage.

Foreign objects from outside the Association can end up in Association lines and cause back-up.

An essential part of any survival kit is a first aid supply. One should be prepared for bodily injury, after all. Commercial General Liability is typically a very broad policy and includes coverage for loss exposure such as third party property damage, bodily injury, libel, and slander. The Davis Stirling Act requires at least two million dollars ($2,000,000) in Commercial General Liability limits if the common interest development consists of 100 or fewer separate interests and at least three million dollars ($3,000,000) if the common interest development consists of more than 100 separate interests. As board members and association managers, you are charged with making day to day decisions in the best interest of the community. It is imperative that you are protected and Davis Stirling requirements call for at least $1,000,000 in Directors and Officers (D & O) coverage limits. A broad stand-alone D & O policy should include coverage for Duty to Defend (which guarantees money for defense even if the loss itself isn’t covered), coverage for non-monetary claims and should additionally insure Management.

Umbrella Liability policies are meant to extend coverage beyond its underlying limits. A broad Umbrella policy will offer coverage for both General Liability and Directors and Officers coverage.

Fidelity Bonds offer coverage for employee dishonesty. It is basically an amount of money set aside taken a board of director or Management Company steals association funds. Although typically difficult to do so, there is still a possibility for theft and therefore the policy your association purchases should offer coverage in the event one or both of the aforementioned parties gets away with association funds. Make certain your policy includes coverage for non-compensated employees (Board Members) as well as Management. In the event of emergency we typically rely on media outlets for valuable information and updates. You should expect that same dependability from

Welcome Toni Scurti

Toni Scurti is ECHOâ&#x20AC;&#x2122;s new Director of Marketing and Membership. Toni comes to us with a diverse career in sales, most recently as regional sales manager for a large landscape firm that serves many homeowners associations. Having walked through numerous communities with board members and managers to determine how best to provide landscaping services, Toni understands the real life issues that confront all of you who oversee your communities. And having made presentations and participated in many HOA Board Meetings, Toni knows about functional and dysfunctional Board Meetings. Toniâ&#x20AC;&#x2122;s goal is to make ECHO membership a valuable tool in assisting HOA board members to perform your duties and make your HOAs happy and healthy communities. We give you

the information and resources to ensure your meetings are productive, your budgets and reserves are adequate, your service providers are qualified, your neighbors are happy, and your association flourishes. For our professional members, Toni will engage you to identify how we can better serve the ecosystem, and involve you in our programs so your can more easily reach and better serve HOAs. With over 1,300 HOA members and 400 professional members, we can facilitate better understanding and best practice sharing through our website, magazine, and seminars. Toni is here to help, so please reach out to her. She can be reached at tscurti@echo-ca.org, or on (408) 297-3246, extension 4.

We welcome Toni, and we welcome your involvement with us.

March 2014 | ECHO Journal

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your Insurance Broker. After all, besides yourself and property manager, your insurance broker probably knows or should know the most about your community and what needs to be protected. Ask your broker to attend a board meeting here or there. This will give you a chance to ask questions about insurance but also gives you face time with the person you pay to protect your community year after year. Depend on your broker for market updates, policy language interpretation and assistance with claims or potential claims. They will be the middle man between you and a potential loss. Ask for their opinions. This is, after all, their specialty. You should not only feel protected by your insurance coverage but also comfortable with the hands youâ&#x20AC;&#x2122;ve placed your coverage in. Charlotte Allen is a licensed insurance agent/broker with Socher Insurance Agency. She is dedicated to helping common interest developments find value in their insurance. You may visit Socher Insurance Agency online at www.hoainsurance.net.â&#x20AC;?

March 2014 | ECHO Journal

MYTHS OF

CHAIRMANSHIP By Kim Goldsworthy

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Have you ever had to chair a meeting? Scary, isn’t it?

hether you are a past president or a newly elected president, you must appreciate the daunting challenge for the person who holds the gavel. How do you apply democratic principles in a fair and efficient way—without messing up too badly? It’s a tough job, and the job is tougher if you do not have a firm grasp of “parliamentary procedure,” often called “Robert’s Rules of Order” after the popular manual on the subject. Over the years, I have compiled a list of the most popular misunderstandings, or “myths,” that some people hold regarding proper parliamentary procedure, particularly, myths that conflict with the current edition of Robert’s Rules, namely, “Robert’s Rules of Order Newly Revised” (10th edition, 2000, published by Perseus Publishing). For this article, I have edited my master list of parliamentary myths down to four myths that explicitly involve the presiding officer or chairman.

March 2014 | ECHO Journal

elow is a list of statements that are all “false.” That is, each statement is my paraphrase of a “myth” that some people hold regarding what they think Robert’s Rules of Order has to say on the subject. Beware: A superior rule (e.g., state law, articles of incorporation or bylaws) always supersedes the rule in a parliamentary authority such as Robert’s Rules of Order. So if your organization has a written customized rule that says otherwise, or if your state’s corporate code has a rule that applies, then that rule must be obeyed. The rules in one’s parliamentary authority only apply if your superior rules are silent or not in conflict. Here are my list of myths and my commentary.

1. Chairs cannot vote. False, but with a grain of truth.

A chair who is a true member of the body that is meeting never loses the ordinary rights of membership merely by acting as the presiding officer. However, while acting as the presiding officer, the duties of chairmanship demand that the chair establish an air impartiality, even if the chair does not feel impartial regarding the pending motion. Impartiality demands that the chair not debate while acting as the presiding officer. But note that a chair, when voting, may always vote by ballot, since a secret ballot preserves the impartiality of the chair. When voting by voice or by hand or by rising, the chair

34 echo-ca.org

votes last or not at all, and then only if his single vote will make a difference in the outcome, like changing a tie into a one vote majority (i.e., to change a motion’s loss into an adoption) or to change a one vote majority into a tie (i.e., to change a motion’s adoption into a loss). This rule of the chair’s voting is relaxed for small boards (less than a dozen members or so) and committees, where the chair is often the most vocal debater and who will likely vote along with the rest of the members.

For this article, I have edited my master list of parliamentary myths down to four myths that explicitly involve the presiding officer or chairman.

2. Chairs may vote a second time to break a tie. False. The principle is: one man, one

vote. A tie is a loss for most ordinary motions; so, technically, there is nothing to break. An exception to this “tie = loss” equation would be an election, where a tie results in no winner. But still there is never a second vote for the chair.

3. A chair, after asking for the ayes and the nays, should ask for the abstentions. False. Abstentions are never called for. Abstentions are treated like so much

scrap paper and are never counted toward the ayes nor the nays. The exception would be a custom rule or law that demands that all decisions made have a certain number of voters participating or a certain percentage of votes. Absent any such rule, abstentions count neither toward the affirmative nor the negative. Here is an extreme example: In a meeting of 100 members entitled to vote, if 99 members abstain, then a vote may be recorded, properly, as 1-0 (adoption) or 0 1 (rejection) and is just as binding as a vote of 100 0 or 0 100.

4. The chair controls the agenda. False. Certainly, the creation of the

agenda must be done by someone, and typically this duty falls to the president or to the secretary. Ultimately, the agenda is the property and responsibility of the sitting body itself, to tailor its own agenda to suit its needs. Ordinarily, items of business may be added, deleted, and moved around by a majority vote, or by general consent, prior to adoption of the agenda. After adoption of the agenda, to amend the agenda takes a two-thirds vote. Even easier, if your agenda includes the standard order of business as recommended by Robert’s Rules of Order, then there will be a class of business called “new business.” If this class of business is in your agenda, then there is no need to modify the agenda at the top of the meeting. The chair may simply prompt the members for their business when the meeting reaches “new business.” Those are the common myths that I have logged over the years regarding presiding officers and chairmanship. To repeat my warning: If you have a law or a rule that applies, then that law/rule always overrules a rule in one’s parliamentary manual.

“Kim Goldsworthy is a professional registered parliamentarian and a certified parliamentarian.”

March 2014 | ECHO Journal

Beyond Privatopia Member Price: Non-Member Price:

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The rise of residential private governance may be the most extensive and dramatic privatization of public life in U.S. history. In Beyond Privatopia, attorney and political science scholar Evan McKenzie explores emerging trends in private governments and competing schools of thought on how to operate them, frm state oversight to laissez-faire libertarianism.

Condominium Bluebook 2014 Edition Member Price: Non-Member Price:

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This well-known compact guide for operation of common interest developments in California now includes a comprehensive index of the book and a chapter containing more than 200 frequently-asked questions about associations, along with succinct answers.

In this essay, attorney Tyler Berding confronts the growing financial problems for community associations. Mr. Berding addresses board members who are struggling to balance their duty to protect both individual owners and the corporation, and gives answers to associations trying to avoid a funding crisis.

2014 Condominium Greenbook Member Price: Non-Member Price:

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This companion to the Condominium Bluebook is an in-depth guide to all aspects of association finances, including accounting methods, financial statements, reserves, audits, taxes, investments and much more. Not for the accounting novice, this is a tool for the treasurer or professional looking for specific information about association finances.

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To make these a sustainable investment, new buyers, owners and board members need to understand “best practices basics” of how this form of housing works and have more realistic expectations of this form of “carefree, maintenance free” living.

For 12 years, Jan Hickenbottom answered homeowners’ questions in her Los Angeles Times column on community associations. Now collected in one volume, readers can find answers to almost any question about CIDs.

Community Association Statute Book—2014 Edition

Board Member Handbook

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Contains the current version of the Davis-Stirling Common Interest Development Act, the Civil Code sections that apply to common interest developments and selected provisions from other codes important to associations.

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Construction defect litigation can be confusing, expensive and fraught with legal pitfalls. This eye-opening guide, written by accomplished construction-defect attorneys, is an essential tool for board members who need to understand the legal process.

Robert’s Rules of Order Member Price: Non-Member Price:

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A step-by-step guide to the rules for meetings of your association, the current and official manual adopted by most organizations to govern their meetings. This guide will provide many meeting procedures not covered by the association bylaws or other governing documents.

36 echo-ca.org

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This book is an easy to read, must-have guide for anyone who wants a clear, thorough explanation of reserve studies and their indispensable role in effective HOA planning. The author gives tips to help board members mold their reserve study into a useful financial tool.

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This report is a guide for directors and managers to use for interviews with prospective service contractors. Questions to find out capabilities and willingness of contractors to provide the services being sought are included for most of the contractor skills that associations use.

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This guide for use by boards for conducting complete and effective interviews with prosp ective managers takes the guesswork out of the interview process. Over 80 questions covering every management duty and includes answer sheets matched to the questions.

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March 2014 | ECHO Journal

directory updates

All current listings may be found in our Professionals Directory available online at www.echo-ca.org.

New Members Union Bank 200 Pringle Avenue Suite 260 Walnut Creek, CA 94596 Contact: Karl Lofthouse Tel: (866) 689.9905 Fax: (925) 947.3050

California Sub-Meters 5858 Mt. Alifan Drive #110 San Diego, CA 92111 Contact: Greta Guyer Tel: (858) 571.8999 Fax: (858) 205.3630

David P Kuivanen Architect. PC 1054 East Palm Avenue Burbank, CA 91501 Contact: David P. Kuivanen Tel: (818) 571.7711

Fenton Grant Mayfield Kaneda & Litt LLP 18101 Von Karman Avenue #1900 Irvine, CA 92612 Contact: Allison Andersen Tel: (949) 435.3800 Fax: (949) 435.3801

DLC Construction Management 1350 Hayes Street #C13 Benicia, CA 94510 Contact: Israel De La Cruz Tel: (707) 750.5115

Become an ECHO Professional Member and receive the benefits of membership. To learn more, visit our membership page at www.echo-ca.org 38 echo-ca.org

advertiser index

about ECHO

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Eugene Burger Management Co.........15 www.ebmc.com

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Neighborhood Association Management.........................................24

Association Reserves...........................35 www.reservestudy.com

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Benjamin Moore Paint & Company...25 www.benjaminmoore.com

PGS; Professional Gutter Service, Inc. ..........................................24 www.guttercleaning.com

Berding|Weil .........................Back Cover www.berding-weil.com

PML Management................................23 www.pmlmanagement.com

Collins Management............................14 www.collins-mgmt.com

R.E. Broocker Co...................................23 www.rebroockerco.com

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Community Management Services....19 www.communitymanagement.com

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WHAT IS ECHO? Serving Homeowners to Build Strong Community Associations The Educational Community for Homeowners (ECHO) is a nonprofit membership corporation dedicated to assisting California homeowner associations. ECHO provides help to homeowner associations on many fronts: finances, legal issues, insurance, maintenance and management. Members receive help through conferences, trade shows, seminars, online education, a monthly full-color magazine and discounted publications.

Who Should Join ECHO? If your association manages condominiums or a planned development, it can become a member of ECHO and receive all of the benefits designated for homeowner associations.

Benefits of Association Membership • Subscription to monthly magazine • Access to members-only online education • Updates to the Association Statute Book • Frequent educational seminars • Special prices for CID publications • Legislative advocacy in Sacramento

ECHO Membership Dues

Office 1960 The Alameda, Suite 195 San Jose, CA 95126-2308

Association Membership HOA 2 to 25 units...........................$130 HOA 26 to 50 units.........................$180 HOA 51 to 100 units.......................$275 HOA 101 to 150 units.....................$375 HOA 151 to 200 units.....................$450 HOA 201 or more units..................$575 Professional Membership.................$499 Association Management Membership.......................................$499 Individual Membership.......................$75

How Do You Join ECHO? Over 1,700 members benefit each year from their membership in ECHO. Find out what they’ve known for years by joining ECHO today. To apply for the membership, sign up online at www. echo-ca.org. For more information about membership and ECHO, call us at 408-297-3246 or visit the ECHO website.

August 2013 || ECHO ECHO Journal Journal February March 2014 2014

39 39

ECHO honor roll

ECHO HONORS VOLUNTEERS ECHO Resource Panels Accountant Panel Marco Lara, CPA 650-632-4211 Central Coast Panel John Allanson 831-685-0101 East Bay Panel Beth Grimm, Esq. 925-746-7177 Cindy Wall, PCAM, CCAM 925-830-4580 Legal Panel Mark Wleklinski, Esq. 925-280-1191 Maintenance Panel Brian Seifert 831-708-2916 North Bay Panel Diane Kay, CCAM 415-846-7579 Stephany Charles, CCAM 415-458-3537 South Bay Panel George Engurasoff 408-295-7767 Wine Country Panel Pam Marsh 415-686-9342

Regional Seminar Speakers Wine Country Carra Clampitt Bill Gillis, Esq. David Hughes Ken Kosloff Tom O’Neill Steve Weil, Esq. South Bay Derek Eckert Stephanie Hayes, Esq. Robert P. Hall Jr., Esq. Fresno Geri Kennedy David Levy, CPA Michael J. Hughes, Esq. Walnut Creek Stephanie Hayes, Esq. Lisa Esposito, CCAM Rob Rosenberg, CCAM Beth Grimm, Esq. Monterey John Allanson Diane Rossi, PCAM, CCAM Sandra Bonato, Esq. Sacramento Ian Brown, CCAM Bill Erlanger, CPA Don Haney, CPA Deon Stein, Esq.

Legislative Committee

ECHO San Jose Speakers September 24, 2013

Paul Atkins Jeffrey Barnett, Esq. Sandra Bonato, Esq. Jerry Bowles Oliver Burford Joelyn Carr-Fingerle, CPA Chet Fitzell, CCAM John Garvic, Esq., Chair Geri Kennedy, CCAM Wanden Treanor, Esq.

Board Essentials Tyler Coffin Lisa Esposito, CCAM Pat Falconio Brian Kidney Mike Muilenberg Rob Rosenberg, CCAM Brian Seifert Wanden Treanor, Esq.

40 echo-ca.org

Hot Topics Anton Bayer Ian Brown, CCAM Don Danmeier Glenn Kenes Nico March Steve Saarman Steve Weil, Esq.

Legal Tyler Berding, JD, PhD John Garvic, Esq. Michael Hughes, Esq. Julia Hunting, JD, SE Kerry Mazzoni Alex Noland, Esq. Paul Windust, Esq. Recent Contributing Authors September 2013 Kevin Canty, Esq. Beth Grimm, Esq. Judy O’Shaughnessy Diane Rossi, PCAM, CCAM Steve Saarman October 2013 Beth Grimm, Esq. Debra A. Warren, PCAM, CCAM Richard Tippett Sharon Glenn Pratt, Esq. Geri Kennedy November 2013 Tyler Berding, JD, PhD John R. Schneider James H. Ernst, CPA, MS-Tax Tom Fier, Esq. Burt Dean December 2013 Sandra M. Bonato, Esq. Katherine Naegele Derek Eckert Ann Rankin, Esq. Burt Dean January 2014 Douglas Christison, PCAM Barbara Ellen William S. Erlanger, CPA Joelyn K. Carr-Fingerle, CPA Tyler P. Berding, JD, PhD February 2014 Jeffrey A. Barnett, Esq. David Kuivanen, AIA Elizabeth Lanham Sharon Glenn Pratt, Esq.

NEW

at echo-ca.org

New legislation, quick tips, and fresh insights - we’re adding new information to our website every day.

Articles Electronic Recordings During Board Meetings

In times past, placing a tape recorder on the table during a board meeting would be perceived as an act of aggression. Many boards forbid recording. But now, with current technology, recording is available to anyone with a smart phone. How should boards view recording in light of modern technology, and what policies should they adopt? Educational Topic: Board Meetings

Does Your Board Make these 8 Management Mistakes? Managing “as a group” is a difficult task. Not only do you have to deal with external pressures, you may also encounter competing interests within the board. Managing effectively requires that you first identify and overcome these common problems. Educational Topic: Board of Directors

Legislation New Bills Introduced on February 21st

February 21st was California’s deadline for introducing new legislation. Unsurprisingly, the Legislature isn’t immune from procrastination and most Assembly and Senate members wait until the last minute to submit their bills. This means that you won’t find the most current legislative information in these pages, but you will find it online. Head over to our website and see what’s brewing in Sacramento. Find in: echo-ca.org/hoa-advocacy

Facebook Join Our Facebook Community Can a new noise cancelling technology reduce noise complaints? What celebrity’s neighbors are (wrongly) threatening to withhold their assessment payments as a form of protest? Share your experiences, read important and amusing HOA news, and connect with your fellow HOA owners on ECHO’s Facebook page. facebook.com/echoorg

Blog HOA Life: What’s Your Story? You are a member of an HOA, and of a community of HOAs all struggling with the same problems. Why not share your story with that community? How did you stop that vandalism problem? Or the squirrel infestation? Or create transparency in your association? Your neighbors want to know, and so do we. Log in to comment on our blog, visit our Facebook page, or send us a tweet. Find in: echo-ca.org/blogs

ECHO Journal Did you know that the most recent ECHO Journal is always accessible online? We usually post the latest issue on or before the beginning of each month. Log in to browse the latest articles, or read from a huge library of past issues Find in: echo-ca.org/journal March 2014 | ECHO Journal

ECHO event calendar

RESOURCE PANEL CALENDAR Thursday, March 6 North Bay Resource Panel 11:45 a.m. Contempo Marin Clubhouse, 400 Yosemite Dr, San Rafael

Wednesday, April 9 South Bay Resource Panel 12:00 Noon Buca Di Beppo 1875 S. Bascom Ave., Campbell

Thursday, May 1 North Bay Resource Panel 11:45 a.m. Contempo Marin Clubhouse, 400 Yosemite Dr, San Rafael

Tuesday, March 11 Central Coast Resource Panel 12:00 Noon Michael’s On Main, 2591 S Main St., Soquel

Friday, April 11 East Bay Resource Panel 12:00 Noon Massimo Restaurant, 1603 Locust St., Walnut Creek

Monday, May 12 Accountants Resource Panel 6:00 p.m. Scott’s Seafood Restaurant 2 Broadway, Oakland

Wednesday, March 19 Wine Country Resource Panel 11:45 a.m. Serv-Pro, 373 Blodgett St., Cotati

Wednesday, April 16 Wine Country Resource Panel 11:45 a.m. Serv-Pro, 373 Blodgett St., Cotati

Tuesday, May 13 Central Coast Resource Panel 12:00 Noon Michael’s On Main, 2591 S Main St., Soquel

Wednesday, April 2 Maintenance Resource Panel 12:00 Noon ECHO Office, 1960 The Alameda, Suite 195, San Jose

Wednesday, April 16 Legal Resource Panel 6:30 p.m. Porterhouse, 60 E. Third Ave., San Mateo

Wednesday, May 21 Wine Country Resource Panel 11:45 a.m. Serv-Pro, 373 Blodgett St., Cotati

REGULARLY SCHEDULED RESOURCE PANEL MEETINGS Panel

MEETING

location

Maintenance

First Wednesday, Even Months

ECHO Office, San Jose

North Bay

First Thursday, Odd Months

Contempo Marin Clubhouse, San Rafael

East Bay

Second Friday, Even Months

Massimo Restaurant, Walnut Creek

Accountants

Second Monday, Odd months

Scott’s Seafood Restaurant, Oakland

Central Coast

Second Tuesday, Odd months

Michael’s On Main, Soquel

South Bay

Second Wednesday, Even Months

Buca Di Beppo, Campbell

Wine Country

Third Wednesday, Monthly

Serv-Pro, Cotati

Legal

Quarterly

Varies

42 echo-ca.org

legislation at a glimpse

Current Bills Bill Information

Summary

AB 968 Support

Elections in Small Associations

Passed Assembly. In Senate Transportation and Housing Committee

AB 1360 Support if Amended Passed Assembly. In Senate Judiciary Committee.

SB 391 Passed Senate. In Assembly Appropriations Committee.

This bill seeks to carve out specific exemptions for small associations from existing law governing CID elections. In certain cases, the bill would allow small CIDs to forego the mailing of ballots, and permit both nominations and voting at the election meeting. The size of a “small” association changed several times, and currently stands at 15 units. While the bill moved through the Legislature with bipartisan support, concerns from the Senate Housing and Transportation committee pushed the bill into a two-year process. ECHO is working with the author to refine the bill and address some lingering concerns.

Electronic Voting in CIDs This bill authorizes an association to conduct elections or other membership balloting by electronic voting. It also requires an association to provide each member with an opportunity to indicate that he or she will be voting electronically and to provide a member who did not indicate so with a paper ballot. ECHO is seeking additional clarification, including a definition of an “electronic balloting service provider.”

Document Recording Fees In order to fund affordable housing, this bill would impose a fee for all documents that must be recorded in California, including governing documents. This bill poses several concerns for associations. While it is dead for 2013, it may return in another form next year.

Learn More Online Review the latest in-depth information. On the ECHO website, we publish frequent bill updates, analysis, links, and even a few bills that don’t make the cut for the ECHO Journal. If you enjoy research and advocacy, you’ll find everything you need online. Get caught up on past legislation. Did you miss what happened in 2013? That’s ok, we’ve got you covered. Go online to review ECHO’s work on past bills, or to acquaint yourself with recently enacted legislation. www.echo-ca.org/hoa-advocacy.

February 2014 | ECHO Journal