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7/4/2024 2:44:01 PM
 
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Section 5: OPA Board Subject: Holy fantastical leak, Batman! Msg# 1207036
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Joe:
This is my understanding of the By-laws as they relate to the Pines Progress Southgate fire station article and some of you comments. The 5,13(f) provision applies when the proposed debt transaction plus any outstanding debt exceeds 50% of the current income from the annual charges. In that case, a referendum on the proposed debt is required, without regard to the amount (%) of annual charges the proposed debt may be. If 5.13(f) is not applicable, then 5.13(c), copied below, must be considered. If the proposed debt exceeds 10% of the current annual charges, a referendum is required. The 2022 By-laws referendum amended the prior 20% to the current 10% (c) The Board may sell, mortgage, encumber, develop or donate any of the Association’s real or personal property or assets, with the affirmative vote of two-thirds(2/3) of the entire Board of Directors, but in the event the value of any such transaction exceeds ten percent (10%) of the current income derived from annual charges, it shall require approval of the members by a referendum. Debt service approach: If OPA is committed by contract, not necessarily only to a building contractor, to a complete project for a replacement of a station that it owns, the project cost is a single capital expenditure under under 5,13(d),sub a (copied below) the debt service approach is not available. If the project cost exceeds the $1,000,000 limit a referendum is required. a. If the total estimated cost, capitalized in accordance with generally accepted accounting principles, of any single capital expenditure exceeds One Million Dollars ($1,000,000.00), the proposed single capital expenditure SHALL require approval of the members by a referendum. Jim Trummel |
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For reference, the above message is a reply to a message where: Here is some additional background for those interested in the gritty details. According to Stauss' sources, Bright's idea of borrowing to avoid a referendum is that any dollar value project could be accomplished if the yearly principle and interest payment was under $1 million. Stauss writes his "source" asks why hold a referendum when it would pass anyway because everyone wants a new firehouse. That might well be the case. However, the devil is always in the details. Stauss overlooks the details. Under the new bylaws approved by the membership, a stand-alone referendum requires that 40% of eligible voters cast a vote. So..... if 39% of all eligible voters cast their vote to approve a $3 million expenditure and every one of them voted to approve the referendum question, the referendum would fail. Yep. That is exactly what association members voted to approve. The exception would be if the vote on the referendum was held as a part of the Board of Directors election ballot. Of course, that is too late for this year. The fear of now holding a referendum is not that a majority of voters would vote NO. The fear is that less than 40% of eligible voters would vote. The bylaws also place a limit on the maximum the board can borrow: (f) The Board may borrow money, but in the event that any transaction would increase the total of all outstanding debt of the Association to an amount exceeding fifty percent (50%) of the current income derived from annual charges, it shall require approval of the members by a referendum. That maximum might be in the range of $4 million, assuming bulkhead fees are not a part of the annual income derived from charges. |
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