Ocean Sands Owner Representative Board Members Recap Annual Meeting

Owner-Representative Board Members Recap May 14, 2016
Annual POA Meeting

The following is a summary of the topics and issues discussed during the Annual Meeting of the Ocean Sands POA. Your Governance Committee wants you to have a sense of the meeting and highlight the key topics and resolutions made by attending owners.  The recap is also provided because we lack confidence in the accuracy or timeliness of the Minutes to be produced by Coastland as you will see below.

 

 

 

 

 

 

 

There were 176 people present, not counting the five Coastland representatives and Jeff Shield of Seaside Management.  It appears attendees represented 117 properties or 12% of ownership. Your governance committee arranged a “free dial-in number” for remote owners to listen to the meeting.  Another 20 owners were on the phone, bringing the attendance to 19% representation.

Bob DeFazio has resigned as President of the POA due to health issues. He does remain on the board but did not attend the meeting.  Coastland appointed Jeanne Marcinko as president.  Jeff Shields of Seaside Management ran the meeting.  It must be pointed out that Jeff Shields is not a board member, property owner, or employee of the POA or Coastland but rather a contractor for Coastland.

MINUTES
The approval of the 2015 minutes was deferred by common consent as the minutes provided by Coastland contained so many errors and omissions that the whole meeting would be devoted to fixing them. The owner representatives agreed to provide Coastland with the numerous corrections.

Al Marzetti asked all owners to advise him of any changes to be made by the end of May. Many people asked when the revised minutes would be available. Dennis Heffernan proposed a motion that the minutes be revised and published on the web site by no later than October 31, 2016. The motion carried unanimously. Jeff Shields of Seaside Management said the Board would address the 2015 minutes at the next Board meeting and publish the 2016 minutes when they had been reviewed and authorized, possibly by 10/31/16, but completely ignored the vote of the owners for a date certain.

WALKWAYS
Owner Chip Wirth spoke on the need to explore handicapped access to the beaches from the different Ocean Sands sections. His goal is to enable elderly and physically challenged individuals the same access we all enjoy. There were questions about the feasibility in general, alternatives such as the Public Access service provided by the Currituck Club, and whether this would open the Association to ADA lawsuits. At the suggestion of Rick Kinner, owner representative on the board, a committee was authorized to investigate all matters related to special access. Several people volunteered, with Chip to be the Chair.

INSURANCE
Jackie Chunn from Southern Insurance Agency explained the insurance coverage for the POA.  Rick asked if Coastland is an “additional insured”. There was some discussion as to why, with Coastland claiming they needed it since they are the property management company as well. Jeff Shields claimed that this is standard for a Developer-controlled Association. Coastland remains in control of OSPOA by virtue of their three appointed board members. Many votes of the Board are 3 to 2 in favor of Coastland’s position.  Rick Kinner suggests that liability limits are too low!

Dennis asked why the open spaces are still in Coastland’s name when it is normal to transfer them to POA. Jeanne Marcinko (Board President/ Coastland Appointee) said Coastland owns, but dedicates use to OSPOA. Follow up question: Will Coastland ever deed to OSPOA?  Coastland Board members refused to answer. POA pays for maintenance and landscaping of open spaces!

PRESIDENT’S REPORT
Jeff Shields presented, although he is neither an officer, board member, nor an employee of OSPOA.

Seaside Management was brought in by Coastland to advise them and to provide professional management. Seaside was founded in 2013 and manages 34 associations on the Outer Banks. Rick raised a Point of Order that Seaside was not hired by OSPOA, but rather by Coastland; that the Owner Board members were not informed of the hire until after the fact (with supporting emails); and that the extra expense of Seaside is one of the larger reasons we were over budget in 2015. The Bylaws require formal Board action to hire them.

Maintenance Report included the rebuilding of many beach access stairs to code, 40 new traffic signs installed, Section D, F, & O tennis courts resurfaced; drainage swales cleared by MNA services, and road repairs. Rollback services have commenced for the season (see below for more info) and Seaside will be monitoring.

Security Report was given by Jeff, despite the Owner Board asking for the security contractor Centurion Services to present. He noted lowest break-in rate. Security prevents people from using go-carts, RVs or trailers parked at houses. Paula Pyzik from Corolla Fire & Rescue noted that Sheriff’s Deputies have informed her that most thefts are from unlocked houses and cars, so the low rate is misleading. Al pointed out that while deterrent is good, we still need to get value for our money and the question is how much deterrent are we actually getting for the $62K spent, especially when there is no number at which Security can be contacted?  Al quoted the Survey Monkey (done 5/2) where owners clearly questioned value, asking either for better service or discontinuing completely. Summary results of Survey Monkey here: 

Survey Monkey Summary Results

Owner in audience asked for number to call to reach security for suspicious activity. Coastland refused to provide one.  Owner Susan Taylor (full time resident) says she sees Currituck Sheriff patrolling all the time, but rarely sees Centurion Security. Linda Garczynski said she has seen security asleep in their car on many occasions. Another owner noted that Corolla Light patrols until 2:00 am, while we stop at Midnightperhaps we should consider later start and stop times? 

Chris Markwith made a formal Motion that all contracts should be competitively bid. The motion carried unanimously. Jeanne M. said that contracts are bid competitively, but had no documentation.  This, another example of poor management! ( Note that the security contract is held by Bob DeFazio’s son.)

Jeff noted that it is often difficult to secure three competing bids on the Outer Banks. Typically, Seaside does RFPs and then presents proposals to the Board for selection Don Souter (former Owner Board member) asked whether we might hire off-duty Currituck deputies, as they are trained and this is permissible – this is done by Ocean Hill and Corolla Light.

Owner from the floor asked if we can get rid of Security contract as Crown Point did? Yes, it is cancellable. Motion renewed to cancel Security. Al sought to amend the motion to review Security options. Question from the floor as to whether the Board would take the advice of the Owners. Jeff said Rollback and Security service are matters controlled by board and may be stipulated in Bylaws. There was much noisy outcry from the floor. Woman owner comment: “what more study do you want – have a survey where 61% want to get rid of security, we have fire department (Paula) talking about low break-in rates, even with sleeping security guards, and we have a membership at the meeting who wants to get rid of security – what more facts and input do you want?” Jeff replied that the Board makes all the decisions. As noted earlier, the Board has three Coastland employees appointed and the votes frequently go 3 – 2 in favor of Coastland.   

TREASURER’S REPORT

Jeanne M. presented the 2015 audit and asked for questions. Dennis noted that if you are ten times over Road Repair budget ($147k) in the private sector you get fired. Jeanne said the budget was only double for Road repairs at $40k. Others then pointed out that the financials use inconsistent and misleading labels for accounts from year to year, making comparisons impossible. An automated accounting system, such as QuickBooks was suggested.

Owner questioned if the high cost of repairs was due to heavy construction trucks servicing Section O. Jeanne M. Said there were no reports of damage to the Board, in incredulous gasps all around. Karl Suter (Owner) said there was clear truck damage through HIJO
getting to O.

Roger Green noted that Storm Reserves and General Reserves amounts were flipped from year to year and questioned the inattention to details.

Travel Expenses were questioned. Jeanne M. explained they were gas and hotel costs.  Follow up: Braxton Hill is a Vice President of Coastland and also charges the OSPOA for legal services – do we pay him his hourly rate to attend the Annual Meeting? After a rambling dissertation on Stormwater and wastewater, Braxton finally was compelled to say “yes”. Rick questioned why POA pays for Braxton’s presence as Coastland attorney?

Question: is Association Management Fee too high? Jeff stated it is lowest on Outer banks and too low for size of community. Floor maintained it is a poor value.

Question: $7,000 to mail financials and minutes seems excessive! Jeff acknowledged it could be handled more efficiently. Mary Riley said it should be on web site. Suggestion to email instead. Jeanne M. said Coastland can’t get addresses from owners. NOTE: See GovernanceCommittee report below on email gathering.  Perhaps Coastland needs to actually want to communicate. Jeff promised a better web site experience if Seaside Management is hired full time.

Question: Gatehouse for Section E mentioned in last year’s minutes. No money this year and wanted bike path completed first. Issue for 2017 budget.

From Al: Storm Reserve Fund lacks details to be able to monitor; Bad debt policy is new this year and lacks basis since we put a permanent lien on the property (never uncollectable, just delayed); Multiple expenditures that seem to support Coastland’s interests, not OPSPA; Utilities for office charged to OSPOA; and finally from Rick, we need consistent nomenclature and labeling to enable good governance.

OPSOA was out of cash at 12/31/2015 because, along with road repair budget overruns and the unauthorized Seaside Management expense, Coastland arbitrarily demanded repayment of money lent to fund the Moffatt & Nichols Stormwater study. Disbursements done without consulting Board.

Chris Markwith made a motion that the 2016 audit include comparison numbers from prior year and sufficient line detail that analysis can be done. Vote was unanimous in favor.

No motion to approve the 2015 audit and statements was made because too many open questions

Financial Controls Policy was to be discussed, but was not brought
up by Jeff.

BUDGET
Question: Why is Coastland still being paid the same if we are also paying Seaside to manage? Jeff said there will be an adjustment when the revised 2016 budget comes to the board. Note that the Board has not had a meeting since the Annual Meeting, so the POA Budget is budget-less more than half-way through year, which is unconscionable. Can this be retroactive to September 2015? Jeff said he can’t promise.

Braxton said there would be less of his charges now that Stormwater and Wastewater are resolved. Rick asserts that the Braxton law firm billings for these items in 2015 were for Coastland’s benefit. Barb Marzetti pointed out that the Stormwater district is a County function, not a POA function, and Braxton is appointed and compensated by the County, so there should be no further charges to the POA.

Mary Reilly asked that final budget be posted to the web site. Al noted that the preliminary budget was $98k for boardwalks, tennis, and roads. The presented budget is $120k, with no notice to the board of this change. How and why did this happen? No answer from Coastland.

Al explained that the Storm Repair Reserve is to fix our infrastructure damaged by storms. Not part of the Stormwater District effort to mitigate flooding impacts to start with.

Comment from Rick: Going to continue to protest hiring of Seaside by Coastland. When Owner Board raises questions, Coastland Board members say, “it is because we say so”. Many votes are decided along 3 to 2 lines in favor of Coastland’s position. The By Laws permit Coastland to forever appoint 3 board members. And prohibit the By Laws form being amended in a meaningful way.

Comment from Rick: There should be a Conflict of Interest Policy, as required under the NC Non-profit law.

2016 budget was not approved due to revisions. As noted, this is still not done at July 9, 2016.

COMMITTEE REPORTS:

Architectural Review: Jeff explained supposed process, but members are all Coastland employees: Bob, Jeanne M, and Sara Duling (who resigned from Coastland, but not replaced). There were 12 review applications in 2015. Review fee is scaled on scope of project. Goal is 30-day response. Rick notes that three owner members were elected by the owners at the 2015 meeting. Jeff said appointments are by Board only. Rick noted that the designated owners are a designer, real estate agent and an architect, and all are highly qualified. Minutes should reflect that owners are not happy with current arrangement.

Stormwater Committee:  Ed Pence gave history of the committee: authorized two years ago; Moffatt & Nichols study presented last year; Coastland not supportive! Committee held monthly or more-frequent meetings, initiated communication plan with owners; created a video to explain the process and goals; conducted a Survey Monkey to gain authorization from owners; and petitioned Currituck County to form a Stormwater District. The District was approved on May 2, 2016. Advisory Board of owners and Coastland will advise County. Control of funds and actions will be with elected County officials, not Coastland, with owners serving on Advisory Board, and so there will be transparency as to use of funds. After planning stage, physical work should commence in about three years.

Governance Committee:
Rick explained committee was created at previous Annual Meeting due to a rousing speech by Don Souter about planning for our own future. Committee created a web site for better owner communication; worked tirelessly to gather owner’s email address, including a postcard campaign, contacting property management companies for access, using a paid email look-up site, and personal shoe leather. Nearly 800 properties now receive regular monthly communications. All at the expense of governance committee.

Examining the By Laws was our first priority. Greg Walkup gave a detailed description of the 42 most serious faults in the largely undemocratic By Laws.  Five specific motions were made to correct the worst faults. These focused on better procedures and tighter management. Discussion ensued as to “why bother?” when Coastland is going to vote them down by the usual 3 to 2 margin. Mary asked if these changes would make OSPOA compliant with the NC Planned Community Act?  Al said no, these are just the key provisions that would get OSPOA more in line with “best practices.”  To adopt the NC PCA we would either need Declarant (i.e., Coastland) to do so or obtain written consents from 67% of the owners.

Jeff noted that most POAs just ratify a budget, not approve it.

Vote was unanimous to adopt the recommended changes in the Bylaws. However, the vote is non binding on the Board and currently only the Board can change the Bylaws. We anticipate the Board vote will be 3 Coastland Nays and 2 Owner Yeas. Again.

ELECTION
Jeff ran the election. No nominations from the floor, so only candidates were Rick and Al. Overwhelming applause. Re-elected by acclamation.

MEETING DATE
Rick polled the owners if they would prefer the meeting be in April. Asked the meeting participants if they would prefer the meeting be in April? Jeff noted By Laws say May, but Rick pointed out specifically the SecondTuesday in May, and this never happens. there is clearly an established administrative practice to disregard this provision. Consensus was to hold in April, since many member’s houses are rented by mid-May.