Survey Results #2 Response – Issues Summary

Second Survey Response Email
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ISSUES THAT MAKE

CHANGE NECESSARY

This is the second of three emails in response to the recent owner survey. The first email may be found here.

Several survey respondents suggested that we provide a concise summary of the Ocean Sands POA issues driving the need to remove Coastland Corp.’s control of the POA.  Below is our attempt to do this.

Some of these examples of Coastland’s poor management of Ocean Sands have been recently rectified, but they nonetheless exemplify Coastland’s neglect and mismanagement over the long-term.  All are included here to help you understand the serious need for change.

Control of the OSPOA Board is guaranteed to Coastland by the Restrictive Covenants and By Laws created in 1974.  Coastland appoints 3 of the 5 seats on the POA Board of Directors through these documents.

  • The three Coastland appointees are employees of Coastland! They do not live, own or work in Ocean Sands.  Since 1974, they have always been Coastland employees with no skills or training that would qualify them for board service. Please see this link for Governance Committee qualifications.
  • Although Coastland has 100% control of OSPOA, Coastland only owns 8.5% of real estate in Ocean Sands (by assessed value). Ocean Sands is a mature and fully developed community not needing developer administration.
  • The Open Spaces are landscaped and maintained with your dues even though Coastland owns the Open Space and refuses to deed it to the POA, which is standard process as a development is completed and matures.

Flooding within Oceans Sands has been increasing in both frequency and severity.  Coastland has never made an effort to correct the problem.  One of the causes of the flooding is the continual increase in density (more and smaller lots) as each section was developed. As the Developer, Coastland should have been anticipating and addressing the groundwater issues.

  • The owner community itself took on the flooding situation by creating a Stormwater Committee with 30 people/owners with a variety of business, government, and engineering backgrounds.  When Coastland continued to stonewall, the Committee worked with the county to create a flood abatement service district.  Coastland contested formation of the service district process and sued the County to invalidate the service district.  It lost.  Coastland also sued for damages and to have its undeveloped properties excluded from the district.  It has recently dismissed this suit.
  • Now that the Stormwater Service District exists, Coastland continues to impede solutions. In 2017 Coastland refused to allow small measuring devices to be placed temporarily in the Open Spaces and its undeveloped sections to collect data on groundwater levels and behavior.
  • While preliminary design of a groundwater lowering system has been completed, the stormwater district is unable to move forward with construction of the flood mitigation system because Coastland refuses to provide access to the Open Space, which is necessary for laying undergrounddrainage pipes and pump stations.
  • The bottom line is that Coastland has fought the process all the way despite the fact that a “global” flood mitigation system would benefit it’s development of Section G.

Manangement Coastland named itself the manager of the POA for the past 40 years.  They annually collected a payment up to $65,000 for this role. Coastland is a land developer and never secured expertise in community management even though this job became increasingly complex over the years. 

  • The OSPOA financials were not audited from 1974 until 2010. Only the demands of the Owner Representatives on the OSPOA Board caused this to happen. When owners finally received CPA audits, they cited the need to establish a Capital Reserve Fund for capital expenditures (roads and dune crossovers) as well as numerous adjustments to correct bad accounting.
  • Until 2017, the OSPOA did not have a Capital Reserve fund!  It was a quirk in NC law that a Reserve Fund was not required.  This has placed Ocean Sands in a compromised financial position.  Coastland did not want to allocate funds from dues because they sought a marketing advantage of lower dues when making land sales.
  • There was a “sense of the meeting” vote by owners at 2015 Annual Meeting to require all unbudgeted expenditures over $5,000 to have prior approval (notification) from Owner Representatives on the Board.  Coastland has never complied with this!
  • Ocean Sands POA Board kept the dues artificially low for the first 35 years, initially $100 then $300. This resulted in no community improvements or enhancements and minimal corrective actions.  Since 2013, there have been four significant increases, over 57% growth. The increases were an attempt to address the long-neglected needs.
  • For years Owner Board members pushed for a website, Coastland finally spent $6,000 to design and build the POA web site.  No owners use it! Why? because (a) Coastland put so many controls on the website that owners couldn’t use it, (b) the content posted on the website is minimal and mostly out-of-date (c) Coastland refused to use most of the website functions and (d) Coastland avoids answering questions and sharing information.  There was an annual budget item for this site of $1,200 for maintenance of this unused site.  Nonetheless, Coastland has forced a $7,500 budget item to redo the site.
  • Your Owner Representatives for years have suggested/demanded that Coastland hire a professional Association management company.  Even with Coastland’s acceptance in 2017, Coastland continues to take a $44,000 annual “Administrative” fee.
  • Currituck County, at the behest of the Corolla community, wanted to construct a bike/pedestrian path to keep people (renters and owners) safely off Rte. 12.  Coastland delayed construction for almost two years (and three deaths) with their insistence on using Coastland-owned land on the west side of Rte. 12. It made no sense to have users cross Rte. 12 to use a “safer” walkway.  Coastland continues to block the southern extension of the Corolla Greenway south of Section A (“Primrose Beach”).
  • When the bike path was in planning stages there was the opportunity to pull back and widen three of the community’s entry ways to enhance safety.  Coastland refused to provide the easements of 20 ft by 40 ft adjacent Open Space.
  • Owner representatives on the board have been asking for information about delinquent dues for over 10 years.  Coastland always stated it was a small amount, under $30,000.  We recently uncovered evidence that delinquencies totaled as high as $200,000.  Now, over $160,000 has been recovered with professional processes via Signature Touch.

The Governance Committee was formed at the 2015 Annual Meeting at the eloquent suggestion of an out-going Owner Representative.  The purpose was to determine the best way to manage Ocean Sands.  After extensive research and consultation with experts in community management, it became clear that continued management of the OSPOA by Coastland was not in the best interest of individual property owners and the future of our community.

  • The Governance Committee has endeavored to provide continuous communication to all owners.  The committee undertook a three-year effort to secure email addresses for 850 owners.  Coastland has steadfastly said they cannot secure owner emails and will not use this modern, cost effective communications method to provide info to owners.
  • The Governance Committee created and operates a Facebook Group to make it easy for owners to contact one another, as well as the websitewww.oshoa.org.
  • The Ocean Sands POA board has two members elected by the owners.  Only those owners in attendance at the Annual Meeting are allowed to vote on representatives or issues.  Proxy or remote voting is not allowed!
  • Coastland appoints the other three board members without consultation from owners or consideration of community needs.
  • During the 2016 Annual Meeting the Governance Committee offered six amendments to the By-Laws designed to bring the document current and reflective of community needs. The “sense of meeting” vote was unanimous, but Coastland ignored these recommendations and the property owner’s votes.

The above is the abbreviated list of how Coastland has dealt poorly with owners and not considered owner interests and needs.  If you would like more detail on any item, please reply to this email.  So far, we have secured signed Written Consent to Amend forms from 58% of all owners.  A clear demonstration that this is a community-wide effort.  We have 76 % of the signed forms necessary to change the By-Laws and remove Coastland’s control of Ocean Sands.  Please make the effort to complete, notarize, and mail your form this week.

The Governance Committee, and more importantly your fellow property owners, sincerely appreciate you taking the time to join this cause moving our community association forward.

The final survey email answering How Ocean Sands Should be Governed when Coastland is gone will be sent shortly.
The Governance Committee

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