HomeMy WebLinkAboutHOA_Neighborhood Assn review and recommendationsNRO/HOA Working Group Report I. Introduction The Inter Neighborhood Council (INC) and city liaison are agreed that it is desirable to increase the number of recognized Neighborhood Associations (NAs). Home Owner Associations (HOAs) can reasonably be viewed as "ready-made" non-recognized NAs. A working group [Kirk Johnson (MarLinN) and Bob Wall (SENA)] was created to investigate how the INC can facilitate moving HOAs to recognized NA status. Below are our findings. II. Relevant Provisions From the Neighborhood Recognition Ordinance (NRO) [Note: emphases below added by us] Sec. 2.05.1120. - Definitions Item 6. "Recognized neighborhood association" means an organization formed by residents for the purpose of maintaining and/or improving the livability and quality of their neighborhood, formally recognized by the INC and therefore the City of Bozeman and subject to [the NRO]. Item 7. "Non-recognized neighborhood association" means an organization formed by residents for the purpose of maintaining and/or improving the livability and quality of their neighborhood. A non- recognized neighborhood association is one which has not met the minimum standards for recognition set forth in [the NRO]...A non-recognized neighborhood association has no representation on the INC. Sec. 2.05.1150. - Membership Item A. The membership of recognized neighborhood associations shall be open to all residents, property owners, business licensees, and representatives of nonprofit organizations within the defined neighborhood boundaries. Sec. 2.05.1170. - Funding Membership fees shall be voluntary and shall not bar any resident from neighborhood association membership or voting privileges... Sec. 2.05.1190. - Accountability Item C. All meetings of a recognized neighborhood association shall be open to the public; subject to the state's open meeting laws. Sec. 2.05.1210. - Inter Neighborhood Council (INC) Item C. The INC shall provide a forum for recognized neighborhood associations to come together, share information and make recommendations to the city. The INC shall also provide a forum for non- recognized neighborhood associations, neighborhood groups and city agencies to communicate with recognized and non- recognized neighborhood organizations and groups. III. Relevant Provisions From an Example of HOA Bylaws and Covenants [Note: The following provisions are from the Cattail Creek HOA bylaws and covenants; see http://www.cattailcreekhoa.com/.] Article 4: Meetings The Board of Directors, President, and Vice-President must be association members [i.e. owners]; only the Secretary and Treasurer may be non-members. Article 6: Voting & Membership Interest  "Every person, group of persons, partnership, corporation, or association who is a fee owner of real property ...shall be a member of the Association."  "Membership interest shall run with the land...terminating when [ownership] rights are divested."  Voting Interest: 1 vote per lot, or, 1 vote per unit for developed lots. Finally, from the covenants document: Members are required to pay any annual and special assessments levied by the Association. IV. Discussion Based on the HOA charter we reviewed, we believe the following NRO provisions would preclude the HOA from being granted recognized status as a NA under the NRO:  Membership must be open all residents within the boundaries. [We assume this implies that all residents are eligible to be officers in the NA, as well.]  Membership fees are voluntary.  Member voting privileges are in no way dependent on membership fees or other financial considerations.  NA meetings are subject to Montana open meeting laws. V. Options for INC Consideration Based on the information and discussion above, we have identified five options for INC consideration. These are different approaches that INC could take with respect to an HOA interested in participating in the INC but whose charter does not meet the minimum standards of the NRO. The first three options are at the discretion of an HOA; the last two are at the discretion of the INC/City. 1. The HOA creates a separate organization expressly for the purpose of complying with the minimum standards of the NRO. INC could provide a template for creating bylaws that meet those standards. Once the HOA achieves recognized status, it would be able to participate in INC with full voting privileges, like current INC members. 2. The HOA revises or removes the provisions in their charter that prevent the HOA from meeting the minimum standards. 3. The HOA participates in the INC but does not have a voting privilege. This option is based on the "INC is a forum" provision in Sec. 2.05.1210 of the NRO. noted above. 4. The INC/City revises the NRO to explicitly include HOAs as a second type of recognized NA, distinct from the NAs originally created under the NRO. 5. The INC/City revises or removes the provisions in that NRO that will typically prevent an HOA from meeting the minimum standards. We believe the four provisions listed in the Discussion section above are the most likely to be problematic. Prepared by Kirk Johnson (MarLinN) and Bob Wall (SENA), June, 2015.