MINUTES of RIVERVIEW ESTATES II HOMEOWNERS ASSOCIATION BOARD of DIRECTORS WORKSHOP – December 15, 2014
The meeting was held at the home of Steve Halstead and was begun at 7PM.
Since this was a workshop and not a scheduled Board of Directors meeting the minutes from the previous meeting were not read.
Attendees: Directors - Tangie Ulrich, Steve Chantry, Steve Halstead and Treasurer Joanne Sharpe
Purpose of the workshop was to: 1) review the information Steve Halstead learned at the Community Associations Institute (CAI) HOA Board of Directors’ seminar held in Bethany Beach, DE on November 7, 2014, 2) as suggested at the above seminar, review all Covenants and By-Laws of the Riverview Estates HOA, and 3) establish dates for the annual meeting (considering possible locations for future meetings).
Old Business Issues:
Bulletin Board/Cabinet (adjacent to pavilion) – Steve Halstead had additional keys made and now all Board members have a key.
Powell Tree Service has accomplished the removal of the tree(s) overhanging the Common Area pathway.
Snow removal bids have been solicited and finalized. Steve Chantry has written to the business which has been awarded the contract for this year’s snow removal. The awarding letter was posted by the pavilion.
Joanne has nearly finalized the process to allow Members/homeowners to pay their dues electronically. This will be announced in the January letter announcing the 2015 Riverview Estates HOA budget and dues. This letter will clearly spell out the process for late payment penalties, as well as encouragement for members to pay electronically. If payment is made by check, the Board will absorb the $.50 cost but the Members will have to pay the 3.5% fee if they use a credit card to pay.
The 2015 budget needs to be approved and adopted by the board, since Joanne Sharpe, Treasurer, has already put together a tentative budget. A meeting will be held in early January to accomplish this.
The flyer regarding email & address verification has not yet been delivered to homeowners as agreed.
WORKSHOP SUMMARY:
Steve Halstead provided each attendee with an outline of the material covered at the November 7 Community Associations Institute (CAI) seminar. This included the eight chapters in a booklet provided to each person who attended the seminar. Briefly these were: 1) legal issues related to homeowner associations {HOAs} and pertinent laws for both MD and DE [I was given a CD with all DE laws related to subject], 2) the how-to of organizing business matters of the Board of Directors of HOAs – quorums at meetings, eligibility to vote at meetings if in violation of By-Laws or late in paying dues, proxy processes, and dealing with violations, 3) financial reporting and budget issues, 4) solving problems (many were aimed at condo-type association issues), 5) hiring a management team to oversee the HOA, 6) important factors to consider when looking at restrictions (of By-Laws, etc.) and enforcement processes, 7) maintenance issues for HOAs – primarily aimed at those HOAs with clubhouses, swimming pools, etc. (our Common Areas), 8) risk and liability issues.
Steve also gave everyone copies of several documents that were provided at the seminar. The first one, called “The One Hour Board Meeting,” was reviewed with attendees. The leaders of the seminar emphasized that By-Laws relating to meetings* must be followed including the provision of agendas for meetings in advance of the actual meeting. The key points of this document exercise were to: 1) keep the meeting moving, 2) keep to the agenda, and 3) allow for an open forum to take place. It was suggested that the open forum be held at the end of the meeting so that questions Members may have will possibly be answered before that time. If the open forum is held at the beginning, too much time may be taken discussing issues that will come up on the agenda, and the meeting may get “derailed” by those who are opposed to some issue(s). Document #2 was titled “Checklist for Running a Meeting Effectively.” This provided many good tips for better meeting results. The third document was, “Pearls of Wisdom – 130 Cultured Gems for Community Association Living – and Leading.” This list, compiled by CAI leaders over the years, was compared to H. Jackson Brown, Jr.’s Life’s Little Instruction Book and included many effective thoughts on enhancing the community association experience. The group did not discuss either of the last two documents.
We will try to obtain brochures or other information related to a Welcome Package through CAI.
*In a review of our By-Laws, it was noted that the HOA is required to have an annual meeting, and that the date of this meeting must be no sooner than 3 months after the end of the fiscal year, and not later than 5 months after that date. If the BoD does not set a date, the meeting is to be held on the 3rd Wednesday in April.
POINTS TAKEN FROM THE SEMINAR THAT ARE APPROPRIATE TO OUR NEEDS
The Board, must be familiar with the governing documents and must do our utmost to abide by all the governing factors in these documents.
The Covenants of the Association specify that there be Class A and Class B Members; however, after 2012, there will only be Class A Memberships – each getting one vote in the Association. The Owner of the title to each Lot is considered to be a Member in the Association.
The Board must keep a list of all homeowners including names, addresses, and the name of the mortgage company (if there is a mortgage). It is advisable to have email addresses and phone numbers in today’s world.
Proxy documents can and should be obtained to allow the Board to vote for those who are unable to attend meetings such as absent homeowners who have leased their property to another (or those do not wish to attend). Such proxies do not expire until they are revoked in writing.
Any Member, who is more than 60 days overdue in paying their annual dues, is not eligible to vote (in person or by proxy) on any matters brought up at a meeting of the Association.
A quorum is 10% of the members of the Association who are entitled to vote or their proxy.
NOTE: According to the Covenants, at a meeting held to discuss annual assessments, the quorum shall be 25% of said Members; however, if that quorum is not met, another meeting can be called within 60 days and the quorum becomes 12.5%. If that number is not met, this process continues by reducing the quorum by 50% (i.e. 6.25% then 3.125% etc.) each time until a quorum is met.
The By-Laws provide that the Board may, without a vote of the Members, raise the annual dues assessment by no more than 10% [Based on the Covenants Article IV, Section 3, Part a)]
A vacancy on the Board may be filled by an appointee until the next annual meeting when the Members shall vote on any appointed candidate(s) who wishes to continue in that position.
The procedure for handling late/delinquent homeowner dues must be clearly spelled out and communicated to all Members. (This will be done in our dues announcement letter.)
Since Member apathy seems to be a significant problem, one suggestion is to try to set up a Welcome Committee to greet folks new to the community. This would ensure that they have all the information they need to comply with By-Laws, etc. and make them feel more a member in our community.
The Board must be consistent in holding Members to the provisions of our governing documents. If we are not consistent, we will not be able to achieve compliance on such matters. It is critical that we are effective and fair in all communications with Members and
Since the By-Laws were established by the Developer for his purposes, we may want to review these at our Annual meeting and determine if any need to be changed or discontinued. It is also clear that any Member not in compliance with dues or other restrictions cannot vote on any such issues. It is hoped that this can be communicated in a way that will result in better compliance and more timely payment of dues. A quorum (for the annual meeting) is made up of 10% of Members who may vote, in person or by proxy. If a quorum is present, a 51% majority [of those who may vote] is required to change the By-Laws. The Board will attempt to get as many proxies as possible.
Steve did not investigate how to go about dissolving a homeowners association.
OTHER BUSINESS:
The Board received a letter from RIGHT Property Management – a business located in Rehoboth Beach, DE in regard to HOA Management services. Steve Halstead contacted Ms. Martha Wright with Right Property Man and discussed the needs of Riverview Estate (RE) HOA. Ms. Wright responded in writing with quotes for services the organization could provide. For full service (a two paged detailed scope of services was provided) the cost to RE would be $7.50 per household or $14,220 annually. If financial services are excluded, the cost would be $4 per household or $7,584 annually. In the first instance this would require an increase in homeowner dues of $100 annually and in the second instance approximately $50 annually. We can bring up these options at the annual meeting. It would require a 2/3 vote to allow such a change in dues. Ms. Wright also pointed out that Member dues are based on Lots, not homeowners, and that, if there are still unsold lots in the development, the builder/developer is liable for dues for such Lots. This could have significant financial ramifications for the HOA. Treasurer Joanne Sharpe will investigate this with our lawyer.
Joanne presented the 2014 Profit & Loss statement. For the year ending December 31, there was a net operating loss of $1,651. We also have outstanding Member dues of $8,994.90 as of the end of 2014. With such a backlog of uncollected dues, and with the operating losses in 2014, and 2013 (-$17,410) [primarily due to pond and Common Space maintenance] the Board felt it necessary to consider raising Member dues for 2015. As noted in G. above, the maximum increase in annual assessment is a 10% increase without the vote of the Membership. For informational purposes it was noted that the reserve fund (a contingency fund required by law) was used to cover the operating losses in 2013 & 2014. The Board will consider the need to raise the dues by $15 up to $175 per year for 2015. The reserve (also called the replacement) fund has a year ending balance of $24,498. If the dues are raised but we are in better financial condition at the end of 2015, the Board may decide to reduce the dues to the previous level.
The annual dues announcement letter will go out January 15. This letter will also include the 2015 annual budget that will be adopted by the Board.
The date(s) for the annual meeting were set for May 14, 2015 (Thursday) and a rate date of May 19 (Tuesday). There will be further announcements of these dates and the time of the meeting. It will be held in the Common Area Pavilion. An agenda will be provided on the HOA website prior to the meeting.
Meeting was adjourned at 9PM. Minutes submitted by Steve Halstead