133 | How HOA Boards Can Avoid Election Chaos!

133 | How HOA Boards Can Avoid Election Chaos!

Kurtis Peterson 00:00

We prefer to handle the nomination process by looking at the governing documents and setting forth the, you know, the information and the form that is cohesive with their governing documents. And in most cases, here in California, those are those new election rules you’ve got to have. And so we’d like to look those over, prepare those and put those out when the candidates submissions are coming back in, and especially by the deadline, we’re tracking those. We know exactly when they’re coming in, who they’re coming from.

Announcer 00:33

HOA Insights is brought to you by five companies that care about board members: Association Insights and Marketplace, Association Reserves, Community Financials, Kevin Davis Insurance Services, and the Inspectors of Election. You’ll find links to their website and social media in the show notes.

Robert Nordlund 00:49

Welcome back to HOA Insights: Common Sense for Common Areas. I’m Robert Nordlund, and I’m here today for episode number 133, with a gentleman I’ve known for decades, leading one of the early entries and one of the leaders in the field of online voting, of course, I’m speaking about Kurtis Peterson from The Inspectors of Election. I’ve seen Kurtis at CAI national trade shows for decades. He’s a tall guy, and when I see him from a distance, I just break out in the smile, because I enjoy His company. I enjoy his conversation, I enjoy his expertise, and I’ve known him since the very early days when online voting was novel. Said, Oh, that’s interesting. Yeah, it makes sense. But nowadays, the firm has grown and matured with the industry, and he’s serving clients all across the country with confidence and efficiency, with an entire team supporting all their projects. And so for many of you, getting quorum and handling election ballots, that’s kind of hard or kind of tricky, and companies like the inspectors of election make those problems go away. Well, last week’s episode 132 was another fun and interesting discussion with management consultant Julie adamant, where I always come out feeling like the lucky one, chatting with all these experts we have on the program. So if you missed that episode or any other prior episode, take a moment after today’s program to listen from our podcast website, Hoa insights.org, or watch on our YouTube channel, or, better yet, subscribe from any of the major podcast platforms so you don’t miss any future episodes. Well, those of you watching on YouTube can see the HOA insights mug that I have here. Of course, it features a cartoon about common area deterioration and budgets. I got that mug from our merch store. And you can browse through what we have there from our Hoa insights.org website or the link in our show notes, and you’ll find we have some great free stuff there, like board member zoom backgrounds and some specialty items for sale, like mugs. So go to the merch store, download a free zoom background, take a moment, look around, find the mug you’d like and email me at podcast, at reserve study.com with your name, shipping address, and mug choice, mentioning episode 133 mug giveaway, and if you’re the 10th person to email me, I’ll ship you that mug free of charge. Well, we enjoy hearing from you responding to the issues you’re facing at your association. So if you have a hot topic, a crazy story, or a question you’d like us to address, you can contact us at 805-203-3130, 52033130, or email us at podcast at reserve study.com this episode was prompted by one of those, Elaine from Seattle, who asked, annual meetings and elections always seem like a struggle. We’re doing all we can to run the association. How do we also get quorum and manage an election? So Kurtis, welcome to the program. And obviously this is a real problem, showed shared by associations everywhere. So how would you respond to Elaine

Kurtis Peterson 03:53

struggling with elections? Is not new for for any association, and that’s across the country. I guess, if these associations have been doing it internally for a long time, there’s certainly a lot of companies out there, like ours that can get them through the process, that have a lot of experience with it, if anything you know, educating themselves by joining CEI or another program like that’s in their area and learning more about it and some of the best practices for elections or any topic, really, for their association, whatever that might Be, but education and relying on the experts is what I would suggest.

Robert Nordlund 04:44

Yeah, well, that seems like elections are an easy way for something seemingly simple to become contentious, and you don’t want something that should be, you know, let’s just take a vote, and yes, we counted the votes, and yes, Mr. Smith won, you don’t. Want that to unwind and become a disaster, where you have different people challenging things and saying, well, that’s just because you, like Mr. Smith, you know, all these kinds of things. There’s so many ways it can go south. So we talk about, and you just mentioned it to have experts on your side. We talk about experts in have a good insurance agent, have a good attorney, so many other these fields, I’d love you to have a reserve site professional on your side. But Kurtis, it seems like what’s once a year at Association, right? Or do some associations have multiple elections?

Kurtis Peterson 05:33

Well, you know, usually the annual meeting and election of directors is once a year,

Robert Nordlund 05:38

okay? So once a year. It would be really nice people have a package so someone stands alongside you and helps take care of it for you. So you can just say, Okay, it’s election time. What do we do? And someone manages

Kurtis Peterson 05:54

it, yep, and that’s, that’s the way it should be and can be, and certainly is for for our clientele, act as a, you know, not only as the independent third party, but but in a turnkey fashion. Fantastic.

Robert Nordlund 06:08

Okay, so it’s soup to nuts. You come in there and you say, Okay, you got an annual meeting, fine. Do you just say, how many people are you electing? Do you have more candidates and positions. Or do you dive in and read their governing documents and say, Oh, you’re from XYZ state. That means, I imagine there’s more than just what the board potentially tells you, yeah.

Kurtis Peterson 06:35

Or the manager, normally, we would work with management sometimes board, if they’re self manage Association, but that’s that’s not very common. So normally, we work with the manager, and they do provide us governing documents. That’s one of the first things that we really go over, is the governing documents and look at the, you know, controlling statute, or the civil code in the state, whatever that may be, and understand what the real process is for that association, and so that’s, that’s kind of our first step is looking at exactly the information that’s provided from the manager or the board that is in line with their governing documents. Our first step Absolutely.

Robert Nordlund 07:17

Yeah, some clients that you point out, you know, you guys have been doing it wrong for years.

Kurtis Peterson 07:25

Well, you know that happens not not so much for the our associations that we do from year to year to year. I mean, so taking out some new clients, we may see something in their governing documents that is a discrepancy with with how they’ve handled the elections in the past, or, you know, the the state statutes that would govern that that say, no, no, no, this, although you have this in your governing documents due to the hierarchy, you got to be going by this. So, you know, those are different things that that we look at. And, you know, keep in mind all the, all the states, are different. So, you know, it’s, it’s kind of tough to weed through all that stuff. Oh, you know, we work with the manager, we work with the Association of Legal Counsel, if need be. And then, of course, we take a look at history. You know what precedence has been set? If there’s some different things about the election that we find that are interesting, questionable,

Robert Nordlund 08:30

Kurtis your world, I just don’t know your world, and so my head is swimming with questions. So you got to bear with me. And I have a feeling our audience is a lot like this. But I would imagine our board member audience got elected, and they knew what it was like to run. They submitted their candidate statement, and they maybe they talked to some neighbors make sure they get no votes. And indeed, they cross their fingers and they found out that they won. And half of them say, Good, I won. And half of them say, oh my goodness, what have I just done? So, yes, so you’re elected. But then they help, from a board member point of view, run the election the next year, and I would imagine it’s a handoff to hand off, to hand off, whether it’s the manager or the board, they end up doing it their way, which may not be per the governing documents or per ever changing state law. So I’m glad that you are standing there and saying, Hey, folks, per state law, it back in, you know, 2023 back in 2014 or whatever it is, it has to be done this way. So I’m glad that there’s companies like you helping associations do it the right thing?

Kurtis Peterson 09:42

Yeah, you know. And that’s, that’s one of the things that we hear quite a bit when we step in. Oh, well, we’ve never done it that way before. That seems to be one of the other big things. We’ve never done it that way before. What do I say? You know, you’re welcome, or I’m sorry. Right one, you know, I’m sorry, and you’re welcome. Yeah, let’s get you, get you on track here.

Robert Nordlund 10:07

Yeah, because there’s liability, there’s election challenges, there’s a right way in the wrong way. And I think of a real simple thing, like a board who’s not sure what kind of flowers to put in their front entryway by the entry sign, and maybe they have a one of the board members has a favorite flower. They instruct the gardener to put that favorite flower there, and the gardener knows it’s not going to work there because of the way the sun hits in the front or the soil or something like that. There’s so many ways you need to rely on your subject matter experts. And I don’t want to suggest that we’re going to blow the board’s budget because we’re adding experts. But I think you realize that these are the things that make your life easier as a board member and keep you from making mistakes, like buying plants, they’re going to die and you’re gonna have to replace them in three months, and you’re just wasting

Kurtis Peterson 10:56

your money. Yeah, with an election, you know it’s, it is you mentioned it earlier, liability that’s ultimately we’re trying to keep you out of court, do something where it’s not going to be opened up for contest, for your association. You know, because lawyers and going to court is a lot more expensive than contracting with a company like ours.

Robert Nordlund 11:19

You know you said it so doubt about it. You said it so simply. There. My expectation coming into this episode was you saying, we save you time, and maybe we save you anxiety, we save you hassle, but to hear you so clearly say we keep you out of court, that’s as important

Kurtis Peterson 11:37

well, and ultimately, we may or may not keep you out of court, depending on how contentious an election may be and how any individual is going to kind of fight for their opinion in a legal fashion, with the experience that we have Over the decades of doing this, you know, I’d like to say we’ve seen it all, but we haven’t, because we see something new. But we certainly see the writing on the wall with a lot of these elections that we do and we try to put a stop to it, and sometimes the board or management as an as a different idea, you know, and that that may be, but we’re saying, Hey, this is, this is, from our standpoint, a best practice. And if you don’t believe us, you know, contact your associations, legal counsel, yeah,

Robert Nordlund 12:33

or if you don’t believe us, do it yourself. And good luck to you. But at least you’re assuring No monkey business, because it’s going to be clean, and you’re you’re right. Anyone can sue for anything, but at least you’re going to give the association a strong defense, because they can say it was done, right, yeah,

Kurtis Peterson 12:55

and to the best of our ability, yeah? Partiality, you know? Yeah.

Robert Nordlund 12:59

Because you don’t have skin in the game. You’re just counting ballots and making sure

Kurtis Peterson 13:05

that it’s right. I’m just,

Robert Nordlund 13:09

I’m over simplifying. Well, tell me about that. Because does it go every or do you touch candidate statements? Do you touch proxies? Do you how much of this do you get involved with

Kurtis Peterson 13:23

for for an election of directors, all right? And we’re just kind of using that as our as our base model here for an election, we prefer to handle the nomination process okay, by looking at the governing documents and setting forth the, you know, the information and the form that is cohesive with their governing documents. And in most cases, here in California, those are those new election rules you’ve got to have. And so we’d like to look those over, prepare those and put those out when the candidates submissions are coming back in, and especially by the deadline, we’re tracking those. We know exactly when they’re coming in, who they’re coming from, and so we’d like to be part of that process, but we’re not always part of that process. But after that, the candidates are due, that’s when we step in, if we haven’t done it already, and then we take the candidates and we prepare the election package. We send everything out, whether that’s electronically and or via paper, and then all the votes come back to us, whether it’s electronic or paper, and then we tabulate the results as of the close of polls and provide that information to the Board of Directors, ultimately, the membership, and it depends on the state, how we’re doing that, you know, sometimes we close the polls and just provide results for them to announce at their annual meeting here in California. Obviously, the membership gets be able to witness that opening and tabulation. And I’m actually in that room that we do that right now. Nice. So we. Both, for the most part, we do that on camera. Sometimes we do travel and do that in person, and then, of course, we certify those results, and so there’s a professional certification of that entire process. So that’s how usually happens for an election of directors, yeah.

Robert Nordlund 15:18

Well, even your story there, who can be nominated? Are they qualified to be a candidate? Have they submitted their paperwork by the deadline, getting the election going the time period people have to vote, closing the poll and then having results in a timely manner? There’s so many wanna say hurdles to get through that you want to do

Kurtis Peterson 15:41

it wrong? Yeah. And we’re not even scratching the surface when we’re talking about California law, either. Is the because the hurdles start depending on what kind of election you’re going to do. If that’s an election by acclimation, you’re starting that process six months before the actual annual meeting date and election of director. So there’s, there’s a lot of timelines, and this isn’t just in California, but in Nevada and Florida, and in accordance with any of the governing documents that may be light laid out in associations in any state that you have to be on track with those. And so it’s monitoring those and making sure they’re all adhered to. You know, that’s one of those things you got to really track all that stuff. You miss a date, and then you open up the election for for contest,

Robert Nordlund 16:25

and that’s exactly what you strive to avoid. Okay, I’m writing down a whole bunch of stuff here because we’re going to have show notes and six months before is that kind of a general

Kurtis Peterson 16:38

if one style of election in California is just one that I’m talking about. And it’s just a crazy timeline that you have to the nomination period open for a minimum of 90 days. Okay, that’s a minimum. And then you’ve got, what, a pre ballot notice, or a 60 day notice, that has to go out 30 days prior to distributing the ballots. And then, of course, the balloting has to be open for a minimum of 30 days. So if you add all that up, it’s really just five months. But if you’re thinking about contracting with somebody to do that, you know to handle that process for you, you’re looking at starting by looking for a vendor, election vendor at least six months before the annual meeting,

Robert Nordlund 17:22

it takes a month to say we’re going to look for help, then it takes a month to have a list of people, and then another month to vote on it. So, yeah, it stacks up, you

Kurtis Peterson 17:32

know? And those that 9030 30 days, and that’s a minimum. I mean, you got to have some time in between for holidays and weekends and mailing dates and you know, so that’s an absolute minimum. It really stretches out some of these. And now with the electronic voting in California, you’ve got another deadline in there, and it’s kind of crazy making to be honest with you, you just got to really, really keep track of it. Yeah. Well, Kurtis,

Robert Nordlund 18:03

we’ve had Association reserves for 38 years, and before that, I was a board member. So we’re talking 40 some years ago. I was a board member at my condominium association. And so my memory of the process, my involvement of the process, was very simple. It was just, okay, we need an election. Let’s do an election. Let’s get the ballots, tally the ballots, and that was that. And I don’t know it was all within one month, and that, those are the olden days, and I can see how that just doesn’t work anymore. And so I was again, thinking at as we’re coming into this episode, you’re going to help save people time, and you are one of those other professions that they should be adding to their list of professionals that stand beside them as a once a year type thing. But I’m thinking more that this is almost like a through the year type of thing, almost like an accountant who helps you throughout the year you have post election, and the post election then flows right into pre election for the next

Kurtis Peterson 19:11

year, almost. Yeah, it’s kind of crazy. And you know, we’ve just been talking about an election of directors in that timeline, but we’ve been doing a lot of amendments, a lot of amending governing documents, doing a lot of special assessments. And, you know, insurance rising. You know, that’s all added costs that people weren’t preparing for in these associations, you know, fixing their infrastructure. You know, on Florida kind of spurred a lot of that years ago, with that building coming down, unfortunately, so a lot of special assessments have been going on to cover a lot of these unforeseen costs, you know. And that’s a process as well. It’s not usually as drawn. Out as a normal election of directors, with a nomination and pre balloting and balloting, but you still have preparation. You’ve still got, you know, a minimum timeline for balloting. You know, there’s just a lot of stuff,

Robert Nordlund 20:18

lot of stuff. Well, you’ve laid out basically, you’ve got my head spinning now I’m appreciating the magnitude of the challenge, which is exactly, again, why we have you on the program. And I am hoping our board member audience is thinking, Yeah, boy, have we been doing that right, and those kind of concerns. And so we got them thinking, which is really important, but I’m looking at the clock here. We need to take a sponsor break. So let’s do just that. Let’s take a sponsor break here to hear from one of our generous sponsors, and then we’ll be back with more common sense for common areas, talking about getting Election Assistance.

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Robert Nordlund 21:29

we’re back. Well, during the break, Kurtis and I were having a great conversation about continuing to educate me on what’s going on, and we started talking about the kind of range of services that inspectors of election provides and how that differs from his competitors. I have to admit, I wasn’t aware that there is such a different different things that are being done by different election companies. So Kurtis, can you walk us through that? What’s what types of things do different companies do, and how do they do them differently? Well,

Kurtis Peterson 22:03

as we previously discussed, our business model is more of a turnkey operation, where we will go from the nomination process, preparation of the election package, distribution, receipt and then final tabulation and certification of the results. But there are other inspector companies out there that may just receive the ballots that’s prepared by their management to the board of directors and just tabulate those and provide the results. When we’re talking about online companies. There’s other online there’s other online election companies that will just provide an online voting platform for the management to use, for them to, you know, facilitate their own elections electronically.

Robert Nordlund 22:57

So if the management company has five positions and seven candidates, I got my fingers up now, seven candidates. I’m glad you’re doing elections and not me. They some companies just have the platform so that the election magically happens.

Kurtis Peterson 23:15

Yeah, well, I mean, somebody’s got to facilitate that, whether, whether that’s the manager of the board, whether they, you know, are working with third party platform for online voting to do all that. You know, you know, that’s, that’s them. Our platform is far different because we don’t let anybody else facilitate that. Any of that process, it’s all under us as an independent third party. You know, there’s different, I guess, levels of service that these associations can go after. You know, if you want a turnkey operation, you’d call a company like ours. If you want to just, you know, employ an inspector to come and count your ballots for you that somebody else produced and put out. You know, there’s that level of service. So there’s, you know, all kinds of inspectors out there. You know, ultimately, for us and our business model, it’s all about liability, and we’re not willing to accept the liability of somebody else’s product, especially if it’s flawed, right? And so that’s why we kind of follow that, that business model as a turkey?

Robert Nordlund 24:22

Well, I was going to ask because it sounds like it’s so wise to get help on elections. I want to ask, what ballpark cost, but I’m now imagining it. That’s not a simple answer.

Kurtis Peterson 24:34

It is not. It’s not a simple answer, just strictly for us, what’s, what’s our ballpark cost, and I can’t answer for any other service level that an association would choose. And for us, it’s, you know, all about the number of units, and it’s all about the actual service that we’re going to provide, whether it’s an election of directors in an agency fashion, or whether we’re going to go. Go after amending governing documents. Rant of exclusive use a special assessment. You know, I don’t know, IRS revenue ruling, voting improvement. You know, any, any voting measure that needs to go to the membership, so we, you know, they’re all handled a little bit differently. And you know, if we’re doing paper balloting, if we’re doing online voting, if we’re doing a hybrid of both of those, whether that’s a full hybrid or a partial hybrid. And when I say full hybrid, everybody gets a mailed ballot, everybody can vote online or a partial hybrid, where we’re only mailing to those members that have either not consented to electronic voting and communication or have opted out those people would get a paper ballot only. So it’s, you know, it’s just a really wide range across the board when it comes to the service level, fantastic.

Robert Nordlund 25:54

Okay, so my recommendation is, if you as a board member are thinking, Boy, it would be nice to get some help. Your first thing to do is start speculating. Okay, how could we use some help? What do we need help on? And then you need to contact an inspection company, like the inspection of election, and they will walk you through how many units, what type of election, what state are you in? All those kinds of things. And they can then get you a price, and then you can get to a decision point. Absolutely fantastic. Okay, well, tease me, what is your smallest client and your largest client that you’ve helped with, Community Association?

Kurtis Peterson 26:35

Client? Well, you know, I one of the smallest, I would say is, A, I would say was four unit Association, but actually it’s two unit associations side by side. Oh, gee. So they have two sets of governing documents, so we’re running two side by side, which is actually four. So we handled it like a four unit Association, where it’s like two separate elections. Yikes. And our largest client is approximately 40,000

Robert Nordlund 27:05

okay, there’s no way you can do that by hand. No way.

Kurtis Peterson 27:10

Well, we do to some degree. That’s a, that’s an online hybrid election, okay, but yeah, a certain, you know, number of ballots, a certain percentage of ballots that have to be hand. You know, we don’t hand tabulate as we get a scannable ballot. But you know, they all have to be open, they have to be reviewed, they have to be run through and tabulated. And then we add the online voting to that for a final tabulation. It’s, there’s some hands on. And then there you go, with your with your pricing structure differential, you know, there’s no ballpark. Where do you ballpark that?

Robert Nordlund 27:47

That’s that’s a very good point, yeah. And now you got me thinking, this is what we do in elections in our country. I have a choice of doing my mail in ballot, which I check I do in the convenience of my home, and then it goes somewhere, and they they scan it, and we have everything. Yeah, simple elections here, when we come to community associations and you need a vote for a special assessment, a vote for governing documents, a vote for this or that or the other thing. And there’s lots of ways that you can step in and lower the blood pressure, lower the anxiety, and just help the board get back to their role as decision makers, and not the actual task doers at the association,

Kurtis Peterson 28:32

right? And, you know, kind of defer any any of that contention. You know, they’re not the ones being pointed at, you know? Well, what did you do with that ballot? How are you handling this? Hey, whoa. We, you know, we contracted with a professional election company. You got a question. You talk to them. They’re the ones that are in charge of this. You need a replacement ballot. Don’t go to the manager, don’t don’t come to me. I don’t have those. Just the inspectors. Do. Yeah, that’s so that relieves a lot of that, you know, maybe distrust, perhaps that there may be in some of these elections where people say, you know, I don’t, I don’t trust the board and I don’t trust management. Well, you can certainly trust us. I

Robert Nordlund 29:19

like that. You can certainly trust us. Kurtis, that just brings peace to my heart to have someone that can say no worries. Can certainly trust us. And so many problems go away and you realize that, well, there’s so many what you said it earlier. You thought you’ve seen everything, but there’s always something new around there. And you want to try to build a peaceful community. And when you follow the attorney’s advice on how to handle a difficult homeowner and you do the right thing, life goes smoother. And when you follow the election. Advice on how to run a clean election, things go smoother, and we keep coming back to the same story, that when you have good professionals on your side, life is better. Kurtis, it’s great having you here, having you on the program, talking with you. Any closing thoughts to add at this time?

Kurtis Peterson 30:15

Well, I guess I would say that in our industry, what I see, and I’m sure it’s true in every industry, that things are changing, yeah, and you want to keep up on it, and you want to keep educated, and you do want to rely on those professionals that service your your association, to help you get through all these crazy changes that are going on. Yeah, it’s

Robert Nordlund 30:39

hard being a board member. You don’t need to make it harder. Get help. If you’d like to get in touch with Kurtis or learn more about online voting, you can go to their website simply enough at the inspectors of election all spelled out.com, well, we hope you learned some HOA insights from our discussion today that helps you bring common sense to your common areas. We look forward to having you join us for another great episode next week.

Announcer 31:07

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