MEET THE GOVERNANCE COMMITTEE TO LEARN WHY THINGS MUST CHANGE email to owners 11.20.2018

This email is to all Ocean Sands North owners who have not yet signed the Written Consent to Amend the Declarations. The Meet and Greet weekends have been so successful that we want to offer one last opportunity this year for owners to ask questions of the Governance Committee in person.

This written consent is a legal method under the NC Planned Community Act of 1999 to wrest control of any POA from the Developer. In our case, this process will remove Coastland’s authority to appoint three of the five OSPOA board seats. All Board members will be owner elected. As it stands, because of the Declaration, the developer, Coastland Corporation, has complete decision making over every aspect of our Ocean Sands community.

For the last three years, we have sent numerous emails and letters explaining why the owners should be in control of their own community. Control means having your vote count when deciding significant issues in Ocean Sands. Control means having a say in how your dues money is spent. Control means deciding the priority of the many necessary tasks that could and should improve Ocean Sands.

If you would like to chat one on one with a member of the Governance Committee, we will be available on Saturday, November 24 at the COROLLA PUBLIC LIBRARY from 2:00 pm to 4:00 pm. The Library is the white building on the right on Rt. 12 just north of the lighthouse, 1123 Ocean Trail.  We are providing a free notary. There will be light snacks and refreshments.

Please reply to this email if you can drop by. No formal presentation, just owners talking to owners. If your schedule suddenly changes, come on by anyway. If you would like to speak to a Governance Committee member separately, please reply to this email.

The Governance Committee
Al, Rick, Jeanne, Greg, Robert, Chris, Jim, and Dennis

Copyright © 2018
Home Owners Of Ocean Sands Governance Committee
All rights reserved

Visit our website: http://www.oshoa.org
Send us an email: admin@oshoa.org

Join us on Facebook: Home Owners Of Ocean Sands

Our mailing address is:
P.O. Box 56, Corolla, NC 27927

A Response to Coastland’s Letter to Owners …from an owner

Many of you received a letter from Coastland Corp dated November 22, and full of misinformation and inaccuracies. One owner, shared his response to Coastland on our Home Owners of Ocean Sands Facebook Group. With his permission, we share it with you here.
Thanks to Andy and to all of you who have shown your support and sent in your written consent forms to amend the declaration,
The Home Owners of Ocean Sands Governance Committee

“To Jeanne Marcinko and the Coastland Corporation – (and Home Owners of Ocean Sands)

Your recent communications to the Homeowners of Ocean Sands are deceptive and far off the mark. I am not sure if you are just naive, doing the bidding of your owners, or too recent an employee to know. I would have though 10 years would have educated you.

My wife and I have been “non-resident” owners for over 25 years and fully endorse the efforts of the Governance Committee. There are more non-resident “Dissident Owners” than residents. Up until about 10 years ago we rented during the summer rental season, but then stopped when the headaches became too great. We now get to our house as frequently as we can and will spend more time there after retirement.

Over those 25 years we have never seen evidence that Coastland had any serious interest in the owners, it has always been about what’s best for Coastland. This goes back to the original association by-laws which give Coastland the majority of the Board members until EVERY lot is sold. This is the most restrictive and controlling provision I have ever encountered (and I have served on two other home owner’s boards). The 3 controlling Coastland Board members have continually denied the 2 home owner Board members access to financial information, to the extent the current home owner members have had to go to Court to try to obtain the information necessary to perform their fiduciary responsibilities to the home owners. Contracts are signed with outside management companies, security firms, and others without home owner input. It not clear there is any open solicitation of bids for work to be done or evaluation of proposed contracts as Coastland does not share that information with owners.

As an example, the current Coastland Vice President and local representative’s son holds both the contract for security services ($61,550) as well as the contract for Trash Can Roll back ($24,840). Is this a bit of nepotism or were these contracts put out for bid and fairly competed? We don’t know because Coastland has not shared the information with our Board representatives. I could go on with other examples from over the years. Rick and Al our Board members and the Governance Committee have shared many other examples and reasons why Coastland has clearly demonstrated a disdain for the home owners and treated us as indentured servants.

Coastland tries to make an argument that they have saved us money and it will cost more going forward without them in control. First, I am not convinced that’s true as they have not been open with their books, secondly I am tired of being treated as a child where Coastland knows better, and finally, even if there is some added expense WE the OWNERS will be in control of our Community!

I encourage all owners to return their signed and notarized ballots to enable we the owners to take control of our association and end the patronization of Coastland.

Andy Bates
Connie Rubler
Columbia, MD”

If you are a homeowner in Ocean Sands North and have not joined our closed, owner-only Facebook Group, search for "Home Owners of Ocean Sands" on Facebook, and ask to join. If we have your contact information, we will approve you as a member of the group. If we do NOT have your contact information, please send it to us at admin@oshoa.org

WRITTEN CONSENT TO AMEND DECLARATION

AFTER 40 YEARS, IT IS TIME FOR OWNERS TO
TAKE CONTROL OF OUR OWN COMMUNITY!

The time has finally come. Attached is the Written Consent Amendment necessary to change the Declarations of Restrictive Covenants to eliminate Coastland’s control of Ocean Sands Property Owners Association (OSPOA).  

For the last two years we have been sending emails to as many owners as possible explaining why the owners should control OSPOA, not Coastland Corp.  In short, the reasons are Coastland has an inherent conflict of interest being both the Developer and running OSPOA, and Coastland is not very good at running OSPOA.

We apologize for the delay in getting this to you, but Coastland filed new Declarations for each Section instead of modifying the existing Declaration. It took an inordinate amount of time and special effort to determine the correct way to write this Amendment.

To successfully wrest control from Coastland, we need two-thirds (2/3rds) of the homeowners to sign and notarize the Written Consent, and return it to the law firm representing us.

There are three forms attached, the only difference being in the Notarial Seal area. These forms are safely hosted on a private server and are no larger than 167 kb in size.

You only need to complete one form, but it must to be the right one based on how title to your Ocean Sands property is held. In short, signatures should follow the deed to the property. To make it easier, see below:

If husband and wife own the lot and are on the deed, both need to sign and date in the presence of a notary.  If multiple individuals own the lot and are on the deed, all need to sign, including any partnership. If it is a hardship for all individuals to be present, individual signed, dated and notarized pages are permitted. Click the link below to retrieve the form for Individuals:
2019 Written Consent Form.Individual


If the property is held by a Corporation (either an LLC or an Inc.), use the form for Corporations and have it signed by the Managing Member or President of the company. Click the link below to retrieve the form for Corporation or LLC
2019 Written Consent Form.Corporate.LLC

If the property is held in a Trust, use the form for Trusts and have it signed by all Trustees. Click the link below to retrieve the form for a Trust:
2019 Written Consent Form.Trust

Again, if it is inconvenient for all owners to sign one piece of paper (perhaps due to distance between owners), you may submit multiple copies as long as, in total, all required signatures are present. Please indicate that there will be multiple forms submitted to the law firm, so the firm does not contact you for missing signatures. If, in the case of multiple owners, all signatures do not fit on one form, you also may use an additional signature page.

Notaries may be found at your bank, most libraries, legal or realty offices, and most UPS Stores (fee). In order to preserve the “chain of custody” please mail the completed form back to:

James H. Slaughter
Black, Slaughter & Black, P.A.
P.O. Box 41027
Greensboro, NC  27404

-PLEASE DO NOT mail it to the Governance Committee PO Box-

We thank you for your cooperation in completing and returning this form to our attorney.  While Coastland has recently taken a couple of small steps in the right direction, it is too little too late and does not solve the Coastland’s unavoidable conflict of interest between Developer and community interests.  We will not be able to optimize the management and maintenance of our development until we take control of the POA like Crown Point recently did.
Governance Committee,
Rick, Al, Dennis, Jeanne, Robert, Chris, Greg and Jim

PS: If you have any questions, either reply to this email or you may call one of the volunteers on the Governance Committee listed below:

Dennis Heffernan 919 518-7482
Rick Kinner 252-453-6059
Jeanne Fitzpatrick 202-256-2823
Al Marzetti –  919-475-4064

Greg Walkup – 757-465-0386

JOIN US TODAY ON FACEBOOKHome Owners of Ocean Sands

The Future Of Ocean Sands – The Planned Community Act Explained, 10/28/16/16

The PCA Explained

Dear Fellow Owners:

We will be responding to the Coastland “Open Letter” dated October, 21 and sent to all owners, in due course.  The following  message was planned for this week, as it is important that you understand the components of our strategy to achieve self-governance, regardless of the Coastland mailing.

When we speak with our fellow owners, it is very clear that they, too, want to remove Coastland Corp’s absolute control over Ocean Sands Property Owners Association (OSPOA), and allow owners to manage our own community.

Coastland wrote the OSPOA ByLaws more than 40 years ago to give themselves absolute control until every last lot has been sold. This provision cannot be amended by the owners, only by Coastland itself. Our attorney tells us this is the most one-sided set of ByLaws he has ever seen, and they would not be legal if written today.

We have found a way to fix this problem!  We know it works, because Crown Point implemented the strategy in the third quarter of this year.  As shared earlier this week, Crown Point was able to remove Coastland as the management entity on 10/22/16.  Regardless of Coastland’s contention, their removal was against their  will, utilizing available legislation.

The 1999 North Carolina Planned Community Act (PCA) defines how POAs are to be governed. But it doesn’t automatically apply to OSPOA because we were founded in 1974. The PCA does provide a way for us to change the ByLaws that Coastland wrote to maintain their domination. To accomplish this change requires the approval of at least 67% of property owners, either in person at a meeting (unlikely) or by written, notarized, consent.

The Governance Committee will eventually be asking you to approve this change by providing the required signed document. The document will stipulate that this is your wish (vote) and will contain just three provisions:

  1. The OSPOA Board will be owners only.
  2. The new Board will be able to amend any section of the ByLaws.
  3. The Declarations may only be amended after that by a 67% vote (so that Coastland cannot change them back to the old style).

We may also ask that you adopt all provisions of the PCA to apply to OSPOA, but will leave that discussion to a future email.

Crown Point has elected a new board and is currently in the process of early housekeeping matters such as opening a new POA bank account and transitioning service providers. They are excited to be able to run their organization in a manner that will enhance the livability and value of their development.

The Governance Committee is taking steps to increase our communication reach to virtually all Ocean Sands North homeowners (currently, we have e-mail addresses representing approximately 80% of the properties in the POA).  We are hoping that, when the time comes, all owners will become engaged enough to send their  written consent. We are currently several months away from sending out that solicitation.

If you have any questions, please respond to this email, at admin@oshoa.org. We will respond to them individually, unless many are the same, in which case we will do a follow up Q & A email to all owners. Further emails will follow as detailed in our email communication dated 10/23, entitled “Crown Point Successful in Deposing Coastland” .

With deep appreciation for your enthusiastic support,
The Governance Committee

Al, Chris, Dennis, Greg, Jeanne, Jim, Rick, and Robert

Crown Point Successfully Deposes Coastland Corp! 10/23/16

Crown Point Successful in Deposing Coastland Corp!

On Saturday, October 22nd, 2016, Crown Point owners voted unanimously to remove Coastland control of their POA board and make critical changes in their By-Laws!  Crown Point homeowners have now taken full control of the POA Board and are in the process of transitioning to self-governance.

Crown Point owners successfully executed the strategy developed by the Governance Committee to use provisions in the North Carolina Planned Community Act of 1999 (PCA) to wrest control of the POA from Coastland Corp and vest it exclusively in the homeowners!

As we are all painfully aware, Coastland had maintained control using By-Laws they drafted over 40 years ago.  Those By-Laws granted Coastland control of Crown Point until Coastland has sold every lot within the POA.  Further, the By-Laws provide that this “control” provision, as well as control of the finances could only be amended by the Developer – i.e., Coastland.

This year, Governance discovered the way out and developed a strategy to implement it.  The PCA provides rules governing planned communities.  However, the PCA generally applies to planned communities formed after 1998, and OSPOA and Crown Point dated to the early 1970’s.  In 2013 the PCA was amended to permit “Pre-1999” POA’s to change their Declaration of Restrictive Covenants (Declarations) by the vote or written consent of 67% of the POA membership.  Because provisions in Declarations take precedence over By-Law provisions this provides a mechanism for homeowners to break the shackles of Developer control and achieve self-governance.

Crown Point secured the favorable written consent of over 90% of their owners in September to amend their Declarations to provide for a Board comprised solely of homeowners.  Coastland refused to file the Declaration Amendment, so our attorney filed it directly with the Register of Deeds.  Coastland dragged their heels in calling the required Special Meeting, but it was finally arranged for October 22 and the rest is now pleasant history.

The owners of Ocean Sands and Crown Point have now defeated Coastland Corp. on three separate issues:

  • Coastland was against building the bike path unless families and children crossed Rte. 12 to get to it.  Common sense prevailed;
  • Coastland opposed the creation of the Storm Water Service district whose purpose is to solve flood problems. The County and OS owners felt differently;
  • Now 27 years of Coastland control of the Crown Point community is at an end!

It is BIG NEWS that Crown Point was successful without having to file a lawsuit!   This shows that this mechanism works. It will work for Ocean Sands North as well!   Your understanding of the issues and process, support during the two upcoming votes and completion of necessary documents in a few months are all that is required! We look forward to continuing our dialog with all owners and controlling our own future.

If you are aware of any fellow owners who have not furnished their email address(es) to the Home Owners of Ocean Sands, at admin@oshoa.org,
please encourage them to do so. It is critical that we have 100% engagement !
And, as always stay updated on our website, http://www.oshoa.org!

CROWN POINT DID IT. OCEAN SANDS IS NEXT!

Coastland Mandates Increase in Annual Dues

Mandated Dues Increase

On February 2, 2016 the Ocean Sands Property Owners Board met. There were four outcomes from the meeting.

Initially there were discussions concerning the 2015 budget shortfall and the proposed 2016 budget. A number of the line items were dissected and challenged by the owner representatives as being inappropriate, not expenses of the POA. Coastland strongly insisted on a substantial dues increase primarily because of cost overruns in 2015. Seaside Management surmises there will not be enough operating funds to cover necessary expenses.

The following 4 part motion was made by Rick Kinner, with the intent that the dues increase be contingent upon the other three components of the motion.

a) Formal Reserve study to be completed by Miller Dodson prior to the Annual Meeting.
b) A $38 dues increase (10% increase) to be made part of the 2016 invoice.
c) The amount of dues increase to be allocated $19 to the Emergency Reserve fund and the other $19 allocated to road capital projects.
d) 2016 budget be amended to remove $82,178 from the soft costs to generate surplus; the other $19 allocated to road capital projects.
     1) Reduce line item for Legal Fees to $3,000 from $14,000
     2) Drop $12,000 for Stormwater analysis, these are costs developed by        Coastland to create and defend the Coastland position.
     3) Remove $25,600 of Seaside management item, addressing Coastland      needs.
     4) Remove $31,178 GAW engineering work, not ready to spend at this          point. 

This motion was voted down 3/2 with Sara Duling, Bob DeFazio and Jeanne Marchinco voting nay and Al Marzetti and Rick Kinner voting yes.

The next motion was made by Sara Duling.

Motion to increase dues by $100, (26.4% increase) allocating the additional funds to $19 for the Road projects, $19 for Emergency Reserve and $62 for the operating accounts.

This motion passed, 3/2 with Coastland employees voting for it and owner reps voting no! There was a total disregard of the objections to the line items described in our motion.

Owner Representatives then made this motion which was amended in discussion as follows:

A formal Reserve Study to be completed by Miller Dodson prior to the annual meeting, costs not to exceed $4,000.

Motion was passed 4/1, with Jeanne Marchinco seeking to review the contract.

The last item decided was the date of the 2016 Annual Meeting. Coastland employees stated that the April date was only a trial for one year and that with only 65 attendees they wanted to go back to May. It turns out that several weeks ago Mr. DeFazio arranged the May 14 date with the Fire Department. The only consolation is that this is not Mother’s Day weekend.

Please mark your calendar and make every effort to attend the 5/14 meeting, we need your input. Meeting starts at 9 AM and lasts about two and half hours. As usual it will be at the Firehouse in Whalehead – 827 Whalehead Drive (at the intersection with Dolphin Street) in Corolla.

For more information about our Ocean Sands community please visit our web site, www.oshoa.org.

Coastland Seeking a Dues Increase!

Coastland Seeking a Dues Increase!

Currently the members of the Ocean Sands Property Owners Association pay $380.00 annually.

This sum is invoiced by Coastland early in the first quarter and due for payment by March 30.  The dues were $350.00 per annum for several years until 2014.   Prior to the 2013 Annual Meeting, the owner members of the POA board agreed to a Coastland proposal for $30 increase, with the express proviso, however, that all additional monies generated by the increase would go directly into the “Reserve Fund for Storm Repairs”.  At the 2013 Annual Meeting, the membership ratified this proposal and the increase assessment commenced in 2014.  This fund is a type of capital maintenance reserve designed to cover significant damage sustained to the infrastructure (roads, walkways, cross overs) from a natural disaster such as hurricane, nor’easter, tornado, flooding etc.

Coastland is currently proposing a $100 increase in annual dues.  This represents a 26.4% increase.

Braxton Hill, VP of Coastland, began suggesting the need for a dues increase as early as August.  Since then Coastland has taken every opportunity when there is a request for service, information or meeting participation to point out the associated costs and the need for more money.  Basically, Coastland explains the need for a dues increase based on the following factors:

  1. Ocean Sands POA has one of the lowest annual dues among homeowner associations on the Outer Banks.
  2. The activities of the Stormwater Committee are putting a strain on the resources (time, staff, legal advice) of Coastland.  They charged the POA in 2015 and claim to need money for 2016 to respond to the actual requests of the Stormwater Committee, including attending monthly meetings.  We would note that a Coastland representative calls in to the meetings and is maybe on the phone for an hour.  Coastland has provided no information in response to numerous requests, so it does not appear they have spent any time collecting information for the Committee.
  3. Coastland has, yet again, sued Currituck County.  This litigation has associated costs and Coastland has postured a need to “protect” Ocean Sands owners from the consequences of its suit against the county by proposing hiring lawyers for the POA.  The POA has neither standing to participate nor exposure to any liability from this suit.
  4. Coastland’s proposed 2016 budget contains a 40% increase in total management expenses due to Coastland hiring Seaside Management (which has never been approved by the POA Board).
  5. Finally, Coastland informed POA Board as of 12/31/15 the Operating Account contains only $1,469.  Coastland feels that a shortage of funds to cover 2015 expenses against the 2015 budget would be resolved by increasing dues for 2016.

The owner representatives to the board, Al Marzetti and Rick Kinner are challenging this dues increase.  We feel the amount is too much and without rationale.  Having the lowest dues on the Outer Banks is not a sound basis for determining a dues increase. We are not categorically against a moderate dues increase for 2016, say $25-$40.  However, additional dues must be specifically allocated to the already established needs that owners have been discussing and requesting for years and not just used to pay more “allocated overhead” expenses of Coastland.

These would be:

  1. There have been continuous requests to have a formal independent reserve study completed, so we have a scientific basis for understanding future capital maintenance needs.         
  2. Adding more dollars to the existing storm repair reserve fund, which is clearly underfunded.
  3. Expenditures that prudently advance the solution for storm water flooding.
  4. Re-establishment of the drainage easements that should have been maintained (might help reduce flooding impact).
  5. Better quality road repair and maintenance.

Latest Lawsuit filed by Coastland

Latest Lawsuit Filed by Coastland

You may have already received your letter from Coastland Corp. regarding its most recent litigation with the County, and how none of the homeowner board members from Ocean Sands or Crown Point would sign the form they wanted us to sign.  Simply, we believe that this ploy is another attempt by Coastland Corp. to get the POAs to help fund their litigation activities.  Both Ocean Sands and Crown Point informed them on numerous occasions that we did not agree with their plans to hire an attorney for the POA’s … but none of us were going to sign a document that Coastland foisted in front of us.  We would also note that Coastland discourteously e-mailed us this request at 5:30 p.m. on Christmas Eve.

In its letter, Coastland acts like it is being magnanimous by covering, at its own expense, the cost of objecting to the OSWSD inclusion in the lawsuit.  Well, Coastland was the party that instigated the lawsuit!  We can surmise that, if the POAs had hired lawyers, the cost of this upcoming hearing would have likely been charged to the POAs.  It is a certainty that the cost of Coastland’s mailing this letter to you – ostensibly to disparage your homeowner representatives – will be another significant cost that the POAs will be burdened with.

Also note that Coastland has created a new e-mail address that appears to be for the POA.  Your homeowner representatives do not have access to this e-mail, so it is really just another Coastland e-mail address.  However, if you agree with us that Coastland will be the sole party responsible should water rates go up, or object to the expense incurred associated with the mailing of this letter, feel free to provide that feedback to that e-mail address.

As always, you may contact your homeowner representatives (and the Governance Committee as a whole), at the following address: admin@OSHOA.org

  • Coastland sues Currituck County for monetary damages yet again on issues stemming from 1980’s vintage Settlement Agreement between the parties.
  • As the lawsuit involves the water & sewer assets, OSWSD may be brought into the litigation; a money judgement against OSWSD would trigger higher water & sewer bills.  OSWSD has independent counsel.
  • Coastland informs Ocean Sands and Crown Point POA’s that Coastland intends to hire an attorney for the POA’s.  Owner board members push back as POA’s don’t have a dog in this race and it is sensed that Coastland might use this as a way to push some of its legal expenses to the POA’s.

On June 17, 2015, Coastland filed another one of a long line of lawsuits against Currituck County and other communities in Corolla.  In brief, Coastland alleges that the County used water-related assets to provide “city water” to Corolla developments other than Ocean Sands in contravention of various Settlement Agreements between Coastland and the county and that this took away Coastland’s competitive advantage and resulted in the diminution in value of its remaining parcels in Ocean Sands.

A brief synopsis of the history follows.  In the 1970’s, Currituck County adopted the “Currituck Plan” which was hailed as a “model for future coastal development that includes respect for natural surroundings.”  This Plan contemplated centralized water and sewer service throughout the Currituck Outer Banks.  Coastland states that, while it agreed to comply with this Plan, the county did not force other developers to comply with it.  Coastland built a water treatment plant, wastewater treatment plant and associated underground piping to provide centralized water and sewer to Ocean Sands.  The water processed in the plant came from freshwater shallow-water wells.   Water that comes from deep-water wells is brackish and must be run through a reverse osmosis plant for “desalinization.”

As part of a 1987 Settlement Agreement between the parties, the County acquired the Ocean Sands’ water assets from Coastland and established a service district, Ocean Sands Water and Sewer District (OSWSD), to provide water and sewer service to Ocean Sands.  Under this Agreement, the County, through OSWSD, was obligated to obtain additional water capacity to the extent necessary to service Ocean Sands as it grew.

In 2002, the County formed SOBWS and acquired the assets of OSWSD, including $1.8 million in cash.  The water plant initially constructed by Coastland was demolished and a new, larger plant was constructed on the west side of Route 12 between the Currituck Club and TimBuck II.  This facility has both a conventional water treatment plant (used for Ocean Sands’ shallow water wells) and a reverse osmosis plant (used for SOBWS’ deep water wells).   In other words, there is one “line” in the plant that serves OSWSD and another “RO” line that serves customers outside of Ocean Sands & Crown Point. The 1987 Settlement Agreement was amended, with one of the new provisions that Coastland would not block an ocean outfall pipe.  An ocean outfall pipe is necessary to the reverse osmosis plant so that the saltwater can be flowed to the ocean.  

The ocean outfall pipe was laid through Ocean Sands (buried underground) and the RO line in the plant was completed in 2005.  In April, 2005, SOBWS commenced providing centrally-treated water to Ocean Hill, Whalehead, Corolla Village and Spindrift with water coming from the RO line.  This water comes from the reverse osmosis plant.  Ocean Sands water is provided primarily from the conventional water plant.  The parties disagree as to whether Ocean Sands water supply has ever been supplemented with reverse osmosis water.

Coastland has filed a claim for Inverse Condemnation, alleging that its natural resources – i.e., shallow-well water and the land on which the ocean outfall pipe was laid – were taken by the county without just compensation and that Coastland was also damaged by the resulting diminution in value of its Ocean Sands property.  Coastland’s complaint states that it never gave permission for the construction of the ocean outfall pipe.   Inverse Condemnation is a legal theory relating to taking of property by a governmental agency which so greatly damages the use of a parcel of real property that it is the equivalent of condemnation of the entire property.   Coastland had previously brought an Inverse Condemnation action against the county in 1984 claiming that the County’s land use regulations constituted a “taking” of Coastland’s property.  The U.S. Fourth Circuit Court of Appeals found that Coastland had not established the material facts necessary to establish that there was a taking of property without just compensation and dismissed Coastland’s motion for summary judgement.  This led to the 1987 Settlement Agreement.  As an editorial comment (solely the view of the author), it appears that anytime someone looks so much as sideways at any of Coastland’s property, Coastland claims that their property rights were infringed and so they must be compensated.

In the current suit, Coastland also alleges a breach of the 1987 Settlement Agreement in that the County agreed not to impair Coastland’s natural resources and that in laying the ocean outfall pipe and other actions the County breached this obligation.  The County believes that Coastland is incorrect in its reading of the 1987 Settlement Agreement.

The County’s Answer to the Complaint basically states that:

  1. Coastland’s allegation that Ocean Sands did not need the RO plant to supplement potable water requirements is incorrect;  
  2. Coastland’s interpretation of the 1987 Settlement Agreement is off base;
  3. Coastland’s allegations don’t satisfy the requirements for an Inverse Condemnation action;;
  4. Coastland failed to join a Necessary Party, the OSWSD, which owns and manages the assets which are the subject matter of Coastland’s claims; and
  5. Coastland’s action barred by the Statute of Limitations and other legal defenses all roughly noting that the facts have existed for 15 years and Coastland unreasonably delayed its suit.

Based on the various Settlement Agreements between the parties, arbitration is required before the case goes to trial.   We have heard that the selection of an arbitrator has been unduly delayed due to Coastland’s recalcitrance.  In addition, the county has filed a motion to join OSWSD into the lawsuit so that the matter can be settled with all parties involved for once and for all.  This motion will be heard at the end of January.

A note of particular relevance to Ocean Sands homeowners — Because there is the possibility of a money judgement against OSWSD Coastland sent an e-mail to the owner members of the Ocean Sands and Crown Point POAs which said Coastland believes the POAs need representation in this matter so Coastland was going to hire a lawyer to represent the POA’s and sit in on OSWSD Advisory Board meetings and conference calls, among other things.   This stemmed from the fact that the County Attorney had started joining regular OSWSD conference calls; however, the County Attorney was participating solely to instruct County employees participating the calls on matters of attorney-client privilege.  OSWSD has retained independent counsel.

Your owner members strenuously objected to this on the following grounds:  (1) POA’s will never be a party to this lawsuit and would have no standing to get involved; (2)  as such, while individual homeowners would suffer higher water rates should Coastland get a money judgement against OSWSD, the POA’s will never suffer a liability; and (3) Coastland’s announcement that it was going to hire counsel for the POAs appeared to be nothing more than a ruse to foist a portion of its litigation expenses on the POAs.   Separately, we have expressed the view that if Coastland does manage to extract a “pound of flesh” from OSWSD people won’t view the county as the “bad guy”; rather, homeowners will be looking at the party that extracted the money.  

News from the Ocean Sands Stormwater Committee!

Ocean Sands & Crown Point Stormwater Committee

visit us on Facebook at Corolla Stormwater

FINANCING ISSUES TO ADDRESS STORMWATER FLOODING

Background
The Storm Water Committee of Ocean Sands and Crown Point is evaluating the best resolution to the flooding situation in our community. There are aspects of the potential technical engineering solutions that need to be further investigated, validated and confirmed.  The Committee is also studying a number of issues in the administrative, legal and financial areas.

Of paramount importance is recognizing and understanding that our two communities have ongoing pervasive flooding problems, to which none of us is totally immune.  Even if your house hasn’t directly experienced flooding, perhaps your yard, your street or your immediate neighborhood has been flooded. This then harms your (or your renters’) ability to access the property.  The impact on property values, rental opportunities, and hassle of repeated cleanup and repairs and potentially your health is significant and costly.  There is also the standing and reputation of the community: when potential renters/visitors (or buyers) hear about ‘flooding in Ocean Sands’, they likely don’t know where it is and won’t bother to investigate further whether a particular property has flooding issues, but will simply look at another community in which to rent or buy.

Creation of a Special Service District
Regardless of the ultimate technical solution, there will be an associated cost for the needed improvements and consequently the need to figure out how to fund it. One way to fund the improvements is to create a Special Service District (more info below*) which gives the community the ability to pay for the studies, design, construction, and ongoing operation and maintenance of the chosen flood control solution.

What is a Special Service District? In brief, a special service tax district is created at the request of affected property owners and administered publicly by the County Commissioners sitting as the Board of the Service District, with guidance and input from an advisory board consisting of property owners. This is the same way the Ocean Sands Water & Sewer District operates.

How a Special Service District is Funded
Service district taxes are set annually at a rate by the service district board (on the recommendation of the advisory board) to fund the activities of the special district.  Rates are typically low in the early years when the engineering work takes place, increase during the construction phases and then decrease markedly when funds are only needed for operation and maintenance of the stormwater system.  The early years are sometimes used to build up capital to better level out rates during the construction period.  Service district taxes are fully tax deductible to the property owners.  This Service District (through County professionals) manages the long term operation and maintenance of the flood control system.  This approach was successfully utilized by our neighbors in Whalehead to fund and implement their stormwater system.  Whalehead’s system performed exceptionally well during the recent flooding events.

Moffatt &Nichol (M&N), the engineering firm that designed Whalehead’s system, did a preliminary feasibility study for Ocean Sands.  M&N also investigated potential funding streams from federal agencies but nearly all of them require costly detailed economic studies and benefit/cost analyses to receive funding.  As the project progresses, the issue of federal subsidies will be revisited.   NC Department of Transportation will also be approached for assistance with flooding problems on NC 12.

Information from the County tax office shows that the tax value of the study area (including Ocean Sands North, Coastland’s undeveloped Sections G & T, and Crown Point) is $499,323,104. Each $0.01 tax per $100 valuation would provide $49,810 per year in revenue.

The next phase of the project which includes data gathering and master plan completion is estimated to cost $220,000.  This work needs to be done before a solid cost projection for constructing a system can be developed.  Additionally, there is a near-term solution which could be put in place and used in an emergency to lower the lake and wastewater treatment system’s moats, at an estimated cost of $50,000.  Using the revenue assumptions above for these two projects would yield a stormwater district tax rate of $0.054/per hundred valuation.  On a property valued at $350,000 this would mean an additional $189 in taxes per year or roughly $0.50/day.

As noted above, rates would increase during the construction phase.  It is likely, however, that the construction of the system can be accomplished in phases, which would allow for system implementation over time. Whalehead subdivision followed this approach and has two loans that will sunset at various times. They began with a $0.02-0.03 assessment many years ago to begin studying the issue and are currently paying an assessment of $0.155 that will drop by $0.047 in 2019 and another $0.08 in 2023.

It should be recognized that there will be a $0.02-0.03 tax needed for operations and maintenance (County staff operation of system, pump replacements, system maintenance, etc.) in perpetuity for the Whalehead system. The same can be said for Ocean Sands if a similar system is chosen.  This is a cost of enhancing and maintaining property values and peace of mind.

Currituck County has experience with special districts such as the Ocean Sands Water and Sewer District (OSWSD) http://www.co.currituck.nc.us/Ocean-Sands-Water-Sewer-District.cfm as well as 5 existing stormwater service districts.

The county will create a Stormwater Service District for Ocean Sands and Crown Point when we are able to obtain support for the concept from our property owners.  Our goal is to demonstrate this by May of 2016.  This will allow for the tax component to be issued with the July tax bill; it would be listed as a separate line item like, e.g., OWSWD fees and trash collection fees.  .

All property owners within the boundaries of Ocean Sands North and Crown Point, including Coastland owned lots and undeveloped sections would share in the cost.

Other Options
We have prepared a spreadsheet comparing two different funding mechanisms:  POA special assessment vs. the Service District option.  Coastland is in favor of the private bank loan/POA special assessment funding mechanism, while the Ocean Sands Stormwater Committee and the four owner representatives on the two POA boards feel strongly that the Special District financing method is the option in the best interests of individual property owners.  You can view the spreadsheet here:  https://dl.dropboxusercontent.com/u/23058515/FINAL%20Service%20District%20vs.%20POA%20Assessments2.pdf


*OVERVIEW OF SPECIAL SERVICE DISTRICTS:
In 2008 there were 39,000 Special Purpose Districts in the US.  Currently there are nearly 300 in North Carolina.  So this is not something unique or different.  The reason for them is the reality of inadequate tax bases and competing demands for existing taxes which make it hard for cities and counties to provide all the services their citizens desire or need. When residents or landowners want new services or higher levels of existing services, they form a district to pay for them.

Service districts are allowed and defined under state law.  In North Carolina they are authorized by NCGS Chapter 130A; articles 2 or 12; Chapter 153A; Article 16; and Chapter 162A; articles 4 and 5.  In plain language, a special district is a separate local governmental entity that delivers a specific public service within defined boundaries.  Fire districts, drainage districts, sewage and waste water and pest abatement districts exist today because taxpayers are willing to pay for services they needed.

Special districts enjoy many of the same governing powers as municipalities and counties. They can enter into contracts, employ workers, and acquire real property through purchase or eminent domain.  Special districts have both corporate power and tax power.  The corporate power is the ability to “do things,” like constructing public works projects such as dams and sewers or “ground water leveling systems”.  The tax power is the authority to raise money to pay for these projects and services.  Raising funds is a primary objective of service districts and is accomplished by levying incremental tax or issuing bonds.


The Flooding & Stormwater Feasibility Study by Moffatt and Nichol is available here:
https://www.dropbox.com/s/jj7hit87knz84o6/20150615%20OCEAN%20SANDS%20FINAL%20REPORT.pdf?dl=0

OR

on the “Corolla Stormwater” closed Facebook page which you are invited to join.  The Fb page has other stormwater related information as well as our previous mailings to the community.


Ocean Sands & Crown Point Flooding Pictures are here:

ERNESTOhttps://www.dropbox.com/sh/bwo7tcs79uxj0hv/AAAwi0QiSu3xFZiBT-ePPrnea?dl=0

APRIL 2015https://www.dropbox.com/sh/jncpxc92ckzru51/AABDiOCAL-KqiP7dm8OCqnNta?dl=0

OCT. 2015 Nor’easter & Joaquinhttps://www.dropbox.com/sh/hvqpf0uq0q1qnam/AADVk-2YqFMoJC7RS0biRv8la?dl=0