What an Innovative Idea

or

When is a "meeting" not a "meeting under NRS?"

Must you be that proverbial fly on the wall to learn what's really going on behind the Board's "DO NOT ENTER" sign on their conference room door? According to President Favil West, the answer to that question is an unequivocal, "Yes." Yes, that's because admission to the inner workings of the Board is by invitation only and unit owners are not invited to attend those private working sessions that take place just prior to our monthly Board meetings. While the Board may have reasons for wanting to keep us from attending those sessions, are those reasons credible? More to the point, though, can the Board legally keep unit owners from attending? While Favil West says, "Yes," I say, "No."

The Idea. Going back a few weeks, and as I was sitting in on this particular Thursday afternoon meeting of the Current Events Club, this quite perceptive white-haired gentleman sitting opposite me had an innovative idea to share with the members. It occurred to this keen observer that we know so little about how Board decisions are made. Wouldn’t it be nice, he wondered out loud, if we could learn more about not only how decisions are reached by members of the Board, but also about how and what individual Board members think about this or that pending issue or agenda item then under consideration? How else could we as members of the community be able to weigh the contributions of Board member A, compared to member B, or C, etc. If the real work of a Board member is for all practical purposes conducted in meetings behind closed doors, how can we learn from and contribute to that effort? And how can we evaluate individual leadership qualities in guiding and directing the community?

The Problem. More often than not, as was noted, routine monthly Board meetings present the outcome or end results of those pre-Board decision-making meetings, rather than attempting to engage and involve the community in open session. Decisions made at Board meetings on what agenda items need further consideration, investigation, or approval have the appearance of having been already decided well in advance of Board meetings. How could that be? That's because those "decisions" were actually made in advance of the Board meeting. While the Board may wish to save time or attempt to speed up the process of handling the agenda at such regular meetings, the result of this expediting effort is frequently to deny members access to the very process they are presumably entitled to participate in under the law.

While residents are invited to speak on some (but not all) agenda items, the unmistakable impression given is that the Board has already decided behind closed doors what action they are going to take, whether that be to postpone, table, return the item to committee, or approve the item. The proposed language to take a particular course of action has already been decided, and the decision on which Board member will deliver that message has been planned in advance.

Invariably missing from the unit owner's view and earshot is all of the background that went into the process of arriving at this or that Board decision. For example, how was the proposed agenda item evaluated; what weight was given to this or that point and by who; what were the pros and the cons; how did member opinions converge or diverge; what was the level and quality of the discourse, and the like. All of these more substantive issues and discussions are occurring behind closed doors and outside of the ears of unit owners.  

Many of us were quite surprised to learn, as I was, that such pre-Board meetings by Board members were once open meetings, meaning that residents could attend such sessions. This was in the early days of the development. Soon thereafter, though, such meetings gravitated behind closed doors, leaving the impression that non-Board members were not welcome. But as we were subsequently told the following week, non-Board members were never really prohibited from attending these pre-Board meetings in the past, even though such meetings were not publicly announced.

No means No! Apparently in an effort to clarify the matter further of whether such meetings are open or not, Board President Favil West attended the following week's Current Events meeting to announce that such meetings are now closed. Mr. West said this decision was based on legal advice from the Association’s attorney, John Leach, who, we understand, also advised the Association's management company, RMI, LLC, of this opinion. When Mr. West was asked whether members could attend anyway if they wished to, even though access to the meeting could be denied, Mr. West said, “No.”

 While Mr. West and legal counsel may be correct in their interpretation of NRS116, I am led to believe otherwise. What is clear is that Mr. West and legal counsel are not relying on the views of the State’s office charged with responsibility for enforcing NRS116 since their views are diametrically opposed to those of Mr. West.

So what does NRS116 tell us about this matter? There is only one exception provided in the statute that would permit the Board to meet in closed session, that being a meeting in "executive session." And the Board may meet in "executive session" only for specifically designated statutory purposes (see NRS 116.30185(3) below). That being the case, if the Board is not meeting in “executive session,” a unit owner may attend any meeting of the Board. Here is what NRS116.31085(1) states:

“Except as otherwise provided in this section, a unit’s owner may attend any meeting . . . .  of the executive board and speak at any such meeting.”

But what does this mean? The argument of whether a meeting is a “meeting” under the statute is not as clearly defined under the statute as one might prefer. Nevertheless, I believe the following proposition is both reasonable and correct.

If the Board gathers itself together and meets in their capacity as the Association’s executive Board, as our Board does for the purpose of their so called "Board Book Review," that gathering constitutes a "meeting" under the statute if 1) a purpose of the meeting is to discuss business of the Association, or 2) business of the Association is discussed at such meeting.

Clearly, the Board can gather for a meeting and not have that gathering be a meeting under the statute. Examples might include a golf outing, a visit to see a show on the Strip, attending a conference or workshop on common interest communities, etc. But if the meeting that brings the members of the Board together is about the business of the Association, that meeting should be open to unit members, with that one statutory exception mentioned above. It should make absolutely no difference whether any “action” or voting action is or is not taken at such a meeting. What really matters in the determination of whether the gathering of Board members constitutes a meeting that must be open to unit owners is the nature of the meeting. If the meeting is related to the business of the Association, unit owners cannot be excluded.

I believe the Board has very little discretion in holding meetings outside of the unit owner’s view when it comes down to the business of the Association. There is no statutory authority for the Board to hold, in whole or in part, a meeting behind closed doors pertaining to following examples, unless the subject matter of the meeting falls into the well defined exclusionary category of topics reserved for an “executive session” of the Board.

Other than those regular open Board meetings, it seems self evident that members of our Board may not gather together as a Board in private out of a unit owner’s earshot for the purpose of holding:  

Guidance meetings;
            Strategy meetings;
            Planning meetings;
            Agenda meetings;
            Board Book Review meetings; or any meeting, to the extent

that such meeting pertains to the business of the Association over which Board members have a leadership and fiduciary responsibility to the unit owners. To suggest otherwise would make a mockery out of the statutory language and intent of the law that such discussions be open to unit members. The community is in no way harmed or unduly burdened by permitting unit owners at attend so called "working" meetings of the Board, however such meetings may be called. In fact, I would suggest just the opposite, that the community is irrevocably harmed and placed in jeopardy by not allowing unit owners to be present at such meetings.

What are the counter arguments?

The Association may proffer certain counter arguments in support their position that the Board may hold certain meetings in private, alleging that the statutory language is unclear, the terms are ill-defined, or that there are acceptable alternative interpretations to what the terms "meeting" or "any meeting" means in the phrase "a unit's owner may attend any meeting . . . of the executive board." Some of these arguments include:  

One can argue that “any” refers only to those regularly scheduled monthly meetings of the Board, leaving the impression that the Board is free to meet anywhere, at any time, for any purpose, to discuss anything, without being burdened by member scrutiny. Response: Such a restrictive construction is unreasonable and would seem to deny the intent of the statute as well as common sense.

This idea suggests that when the Board meets to decide what to do at the upcoming scheduled Board meeting, they are not really in a “meeting.” Along this line of thinking, there are “meetings” and then there are “meetings.” The NRS use of the term “meeting,” as the argument might go, refers only to those general, regularly scheduled meetings of the Board, whether held semi-monthly, monthly, quarterly, etc., and does not refer to preparatory, pre-Board work sessions to decide what to do and how to proceed at such regularly scheduled Board meetings. Response: The statute being our guide recognizes only two types of gatherings for Board members, one is a "meeting" and the other is a meeting in executive session. If the legislature wanted to identify other types of meetings that are closed to unit members, they could have done so. They did not do so. It is senseless to argue that since the legislature did not address other types of "meetings" that could be closed to unit owners, that omission gives permission to Boards to exclude unit owners from attending these other types of meetings.

This idea would limit unit owners to attending only regular Board meetings since, technically, the Board can take an "action" to approve or disapprove this or that item only at those meetings required to be held periodically under the statute. Along this line of thinking, if at a pre-Board meeting no "Board decision action" is contemplated or taken, then this particular “meeting” is NOT a “meeting” under the statute. Response: This line of thinking is deceptive in its simplicity. I see a number of problems with this line of thinking. First, there is nothing in the statute that necessarily ties a gathering of Board members (a meeting) to only "action" events. Second, while one can argue that the intent of the statute was to restrict unit owner attendance ONLY to meetings where the Board takes an "action," the plain reading of the statute does not support this interpretation. Third, if the legislature wanted to restrict the attendance of unit owners to action event meetings, they could have so stated, but they did not do so. And finally, the simple intent of the statute is to enlighten and educate unit owners in the business of the Association, not to keep them in the dark while the Board goes about their business behind closed doors.

Ron Johnson, 18 August 2006

NRS 116.31085  Right of units’ owners to speak at certain meetings; limitations on right; limitations on power of executive board to meet in executive session; procedure governing hearings on alleged violations; requirements concerning minutes of certain meetings.
      1.  Except as otherwise provided in this section, a unit’s owner may attend any meeting of the units’ owners or of the executive board and speak at any such meeting. The executive board may establish reasonable limitations on the time a unit’s owner may speak at such a meeting.
      2.  An executive board may not meet in executive session to enter into, renew, modify, terminate or take any other action regarding a contract, unless it is a contract between the association and an attorney.
      3.  An executive board may meet in executive session only to:
      (a) Consult with the attorney for the association on matters relating to proposed or pending litigation if the contents of the discussion would otherwise be governed by the privilege set forth in NRS 49.035 to 49.115, inclusive, or to enter into, renew, modify, terminate or take any other action regarding a contract between the association and the attorney.
      (b) Discuss the character, alleged misconduct, professional competence, or physical or mental health of a community manager or an employee of the association.
      (c) Except as otherwise provided in subsection 4, discuss a violation of the governing documents, including, without limitation, the failure to pay an assessment.
      (d) Discuss the alleged failure of a unit’s owner to adhere to a schedule required pursuant to NRS 116.310305 if the alleged failure may subject the unit’s owner to a construction penalty.
      4.  An executive board shall meet in executive session to hold a hearing on an alleged violation of the governing documents unless the person who may be sanctioned for the alleged violation requests in writing that an open hearing be conducted by the executive board. If the person who may be sanctioned for the alleged violation requests in writing that an open hearing be conducted, the person:
      (a) Is entitled to attend all portions of the hearing related to the alleged violation, including, without limitation, the presentation of evidence and the testimony of witnesses; and
      (b) Is not entitled to attend the deliberations of the executive board.
      5.  Except as otherwise provided in this subsection, any matter discussed by the executive board when it meets in executive session must be generally noted in the minutes of the meeting of the executive board. The executive board shall maintain minutes of any decision made pursuant to subsection 4 concerning an alleged violation and, upon request, provide a copy of the decision to the person who was subject to being sanctioned at the hearing or to his designated representative.
      6.  Except as otherwise provided in subsection 4, a unit’s owner is not entitled to attend or speak at a meeting of the executive board held in executive session.
      (Added to NRS by 1997, 3111; A 1999, 3005; 2003, 2236, 2271; 2005, 2602)

The Consent Agenda: Beware of what you do not know

We are told that Consent Agendas are intended as a type of expediting procedure that is designed to move things along in a more timely manner.