This is a joint report from Director Arthur and your faithful scribe.
What? You all weren’t invited to a secret and private Board party paid for by an HOA vendor? Here’s the flyer you didn’t get:
When Arthur received this invitation, he immediately realized its impropriety and sent his fellow board members and the property manager the following email on October 7, 2022:
This lunch for Directors only and sponsored by Hotwire, a current HOA vendor, is illegal. This is a perk, a thing of value, a financial benefit being conferred upon directors exclusively, to the exclusion of the membership, from a current HOA vendor. You cannot do this.
This directly violates the Florida Statute 720.303, subsection 12, which states in pertinent part (with emphasis supplied in red):
“12) COMPENSATION PROHIBITED. - A director, officer, or committee member of the association may not directly receive any salary or compensation from the association for the performance of duties as a director, officer, or committee member and may not in any other way benefit financially from service to the association…”
Having a current HOA vendor “sponsor” this event and lunch, which costs money, is a financial benefit that you are intending to confer exclusively from service to the association as a director. This is strictly forbidden, and I strongly suggest that you immediately inform the vendor that this planned event is cancelled and the reason therefor.
In addition, while it is claimed that board business will not be discussed, the fact that a current HOA vendor is sponsoring the event, and presumably will have its logo and possibly its representative on hand, necessarily involves board business, and therefore it would be considered an illegal closed board meeting contrary to 720.303, subsection (2) the moment four of you are in the ballroom for this illegal event.
While it was a lovely gesture, kindly cancel the event and confirm same.
Arthur reports that he was immediately rebuffed and told he could “stay home” while the others enjoyed the largess of the vendors and to “feel free to report us to Tallahassee.” That comment wreaked of arrogance, didn’t it?
Per Arthur, this same Board member stated that up to $25 was allowed per Florida statute 720.3033, but that refers to “business” meetings which would be required to be an open Board meeting with notice to the members.
That Board member also compared this to the New Year’s Eve party where presumably more than a quorum of Board members might be present. Arthur also learned that this Board Appreciation Luncheon is a yearly event.
Arthur’s response to the Board and property manager was as follows:
“1. The section you quoted to me below says for a “business” meeting. If it’s a business lunch, then it’s board business and has to be open to the community. So set up the Zoom program so the community can watch you eat and watch the vendor pay tribute to you and your buddies on the board.
2. This is a vendor paying in appreciation of the board signing their contract. Why are they doing this? They do it to stay in your good graces. Other potential vendors who might want to bid for the contract rights in the future are now at a disadvantage; perhaps they should be contacted to provide caviar for you.
3. Your New Year’s Eve comparison is absurd because that’s open to the entire community.
4. What occurred previously is irrelevant from this point forward because the community was not advised of it and had no knowledge of it. I am on the board now, and this crap that you’re doing is illegal, and your snideness and nastiness are just a cover for your illegal activities and abuses of power.
The sentence referenced in the email was for a business meeting, but this section is actually much more expansive. Florida Statute 720.3033 calls for the REMOVAL of any officer or director who violates subsection 3. Here is subsection 3, and you can read it yourselves; it’s in plain English. We have underlined the critical sentences:
“(3) An officer, director, or manager may not solicit, offer to accept, or accept any good or service of value for which consideration has not been provided for his or her benefit or for the benefit of a member of his or her immediate family from any person providing or proposing to provide goods or services to the association. If the board finds that an officer or director has violated this subsection, the board shall immediately remove the officer or director from office. The vacancy shall be filled according to law until the end of the director’s term of office. However, an officer, director, or manager may accept food to be consumed at a business meeting with a value of less than $25 per individual or a service or good received in connection with trade fairs or education programs.”
Florida statute 1.01 defines person as follows:
1.01 Definitions.—In construing these statutes and each and every word, phrase, or part hereof, where the context will permit:
(1) The singular includes the plural and vice versa.
(2) Gender-specific language includes the other gender and neuter.
(3) The word “person” includes individuals, children, firms, associations, joint adventures, partnerships, estates, trusts, business trusts, syndicates, fiduciaries, corporations, and all other groups or combinations.
So up to $25 is allowed for business meetings, but if this is a vendor-sponsored party, which it appears to be, and not a business meeting, then the first two sentences of 720.3033 apply. Any director who attends this vendor-sponsored party should be removed from the board. If that means all six of them, so be it. Of course, the likelihood of them admitting to violating this section is virtually nonexistent.
At press time, Arthur was the only Board member who disavowed this indulgence which has apparently been going on for years in secret with the sponsoring vendor rotating among current HOA vendors. He will not be attending.
Two vendors schmoozing the board to make sure there’s no competitive bidding or to sweeten their relationship with the Board is, in our opinion, antithetical to the Board members’ fiduciary and financial responsibility to the HOA membership. You may actually end up potentially paying more if these vendors’ contracts are renewed because of this cozy relationship.
If anything, it should be an “HOA Members Appreciation Lunch,” not a “Board Appreciation Lunch.” After all, YOU are the client.
By the way, does this lunch include doggie bags? How about leftovers for you measly residents?
So remember to come on down and peek through the windows and see what you’re not invited to. Mark your calendars for noon on November 18, 2022 for your sneak peek.
And remember, this is shortly before the holidays, when holiday bonuses will be given out. Per FirstService Residential’s contract with the HOA, under paragraph 12.4, bonuses may be given at the HOA’s discretion (i.e., Board’s discretion) for FSR’s personnel.
Section 12.4 states: “Bonuses requested by the Association. Bonuses requested by the Association, if any, will be at Association’s discretion and expense and will be paid in such amount as determined by the Association plus labor rate as stipulated in Schedule 1.”
These discretionary bonuses are perfectly permissible and perhaps deserved, but that’s not the issue. The timing of this luncheon is questionable.
And these bonuses, since they are part of the FSR contract, need to be voted on at an open Board meeting. These are FSR employees, not HOA personnel, so this has to be done at an open meeting. Even the FSR contract acknowledges and makes clear that these are their employees, not the HOA’s employees.
Paragraph 10.7 of the current FSR contract, last sentence, states: “It is agreed by the parties hereto that all persons, personal [sic] and staff provided to Association by FirstService pursuant to this Contract will be deemed employees of First Service and not employees of the Association.”
It seems to Director Arthur that the majority of the Board is unconcerned about what we believe is the lack of propriety of this luncheon as well as the optics of it, although the optics were not supposed to be a factor because this was a closely guarded secret apparently for years.
It also appears to Arthur that the majority of the Board has some type of elitist chip on their shoulders and that the Board members genuinely believe that they deserve this adulation and indulgence.