An independent source of news and commentary
concerning Lake Holiday POA in Cross Junction, VA
May 2006 – Issue 05/28
thesummitadvisor.com
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In This Issue: First Impressions ... Elude, Evade and Confuse ... A
Development Diary
... Fun with Numbers ... Confusion with Numbers ... News
& Stuff
First Impressions (05/04/2006)
The April 2006 Docs appear to more readable than earlier versions, with a nice cover page, uniform margins and paragraph numbering. The Declaration is reduced from 72 pages to 66, partially due to better formatting, but it is still considerably more verbose than the existing Declarations which occupy five or so pages each. The revised Declaration is pursuant to the Development Agreement with LHLLC. The Revised Articles and Bylaws are electives.
In our March 2005 Flyer, the Advisor raised seven issues with the then-proposed Documents. The home advertisement issue is now fixed by use of standardized "for sale" signs issued by the office. Size and format are not specified. Restrictions on boat storage and registration limits appear to be removed. "Additional Land" is defined but is not referenced in the Declaration, and "Withdrawable Land" may now only resort to public or nonresidential use. "Sub-associations" remains defined and justified by reference to the Federal Fair Housing Act. A considerable number of references populate the Declaration. Home sizes in current Declarations remain removed from the new documents, but setbacks are defined. This places home size specifications in the hands of the Covenants Committee, which replaces the Architectural and Compliance Committees.
We were able to identify 24 of the list of 40 "Recommended Changes" as being directly resolved in this version. The remainder are either absent, rendered moot, or unknown. We didn't understand the context of several of the recommendations and could not resolve them one way or the other. Voters with intimate issues among the 40 should researched them on a individual case basis.
Many comparative reviews are possible, e.g.; with the existing documents, with the 40 "Recommended Changes", and between versions on the revised documents. The feasibility and value of such comparisons is questionable, given the complexity and time frames. A unbiased non-comparative critique would definitely be useful. We will endeavor to expand on our First Impressions but cannot promise a comprehensive recommendation at this time.
We do invite participation by other residents, either by e-mail, text document or hyperlink (for lengthy analysis) or BB posting (for specific observations). For reference, the Lake Holiday website has a Documents page with links to new and old Articles, Bylaws and Declaration, as well as related documents such as the Development Agreement. Additional resources may be found on our links page.
Elude, Evade and Confuse (05/24/2006)
At the meeting the May 20th Chris Allison answered questions along with Wayne Poyer. I have always found Chris Allison unable to give an honest direct answer on almost anything, and Saturday’s meeting was no exception.When questioned I found him to be generally evasive and/or unclear in his answers. I think this is in part because Mr. Allison frequently seems to introduce only the facts he wants to answer leaving out information that would lead to a different conclusion. Several times he side stepped the questions by asking a question in response rather then an answering the question asked.
When questioned how the 700 trust lots changed to a voting status from non-voting, it was indicated that it was on advice of “legal counsel”. When questioned what changed voting section by section to at large, Allison repeatedly implied the changes were on the advice of “legal counsel” at the same time suggesting that Judge Whetzel had stated that our community is of one not 17 sections. During Allison’s frequently long winded explanations and often unclear answers he conveniently failed to mention it was just as legal to vote section by section.
It required another battery of questions before Mr. Allison gave up the information that it was NOT “legal counsel” who changed the vote to at large, but the LH Board of Directors. The board’s actions will surly water down a no vote. Now, you have to ask yourself why your board is willing do this.
Since Mr. Allison repeatedly suggested and implied that the revisions and methods for voting were based on” legal counsel” I asked if this was documented in writing by “legal counsel” which Mr. Allison said it was and available to all at the office.
NOT TRUE!!! Today, I went to the office only to be told by the General Manager, Dave Ingegneri that he knew of no documents as suggested by Mr. Allison at the meeting. Dave called me minutes later advising me that Allison said I could not see the documentation referencing Saturday’s meeting by “legal counsel” because it was attorney /client privilege.
Attorney /client privilege information? Are we on the same page, the same information that Allison told us he used to change the voting rules? Strange Mr. Allison is unwilling to produce in writing what he says in a meeting. But then, note the following first sentence response when I asked him several questions via e-mail:
"Bill ...I will be glad to respond to all of the below verbally...".
Protect your interest and rights. A "No" vote is the only good vote.
A Development Diary (05/24/2006)
Miller & Smith buys 720 defaulted trust lots
for $1.2M and forms LHLLC. Contortion of the intent of a
prior settlement agreement tap credit provision is used as
leverage to coerce numerous concessions from the POA. The LHLLC
crafted Development Agreement is signed by the POA board
president. Provisions include signage package in violation of
existing Declaration and a dozen giveaways. (Recall our analysis)
Designated Section 7 lots are sold to LHLLC without prerequisite
construction of the Clubhouse in breach of the Agreement.
Collected $450k is alleged to be in the bank. Clubhouse design
proceeds with a reckless "cost is no object" philosophy.
Various funding ventures involving the golf course and expansion
areas are investigated. The POA Board Treasurer quits.
Adopting Goldberg's rules, any unchallenged presidential motion
automatically becomes a unanimous board resolution. Totalitarian
Democracy is invented. Fearing litigation, the Board refunds all
builder conformance fines imposed by the Architectural Committee.
A revised Enforcement Guideline is created detailing every
conceivable construction infraction and remedy. An ex-board
president (who signed the Development Agreement) and a favored
Builder are installed by the Board on the Architectural Committee
without customary apprenticeship. The third Construction
Supervisor and ArchComm liaison in a year quits along with a long
standing ArchComm member.
Per the Development Agreement, the community is deluged with
multiple rounds of revised governing documents. Numerous changes
are proposed. Board terms are lengthened to reduce the number of
bad apples voted out per year. Signs are legalized. Pets are
limited to three per household. Simple one-sentence rules are
expanded to multiple paragraphs detailing every envisioned
variation. The Declaration grows from 7 pages to 66. Enough
verbiage is included to interpret any future situation to a
favorable position.
Approx. 658 unassessed LHLLC lots were non-votable in November.
They are now deemed votable for approval of the self-serving
governing documents by the Totalitarian Democratic Board. May 1
is designated as the record date for Eligible Members (i.e.;
those in good standing). All private owners are potentially
eliminated from voting by late billing on May 2 by LHEUC. Free
food is available at the annual barbeque in exchange for good
will and votes. Watch out for the Kool-Aid.
The voting criteria for the new docs poses some interesting eventualities. Each of the three has different criteria, which says that in the extreme, almost any combination of pass-or-fail is possible. This appears to have been anticipated, as strategic foot-in-the-door provisions have been installed accordingly. Using reverse engineering, one can ascertain what advocates really want; In short - Control - but details will have to be deferred to a more comprehensive analysis.
As for numbers, the new Articles require a 67% Eligible Members present or represented at a 35% quorum to pass. As little as 24% of lot owners (.67 x .35) are thus required to pass the document which defines a Covenants Committee (but doesn't establish or populate it with LLC assignees), sets director terms at three years and resets the amendment criteria of itself to the majority (>50%) of Eligible Members present. That pretty much empowers the Board to do as they please (or are told). Currently, Eligible Members are defined as lot owners not in default - which easily includes non-assessed owners. The term is more rigidly defined in the new documents as an assessment paying member.
The new Bylaws require a majority (>50%) of Eligible Members at a 10% quorum to pass, and therefore as little as 5% of Eligible Members (by current definition) to pass. The new Bylaws establishes the Covenants Committee but does not populate it. The new Bylaws resets the quorum to 20% Eligible Members (by new definition) and provides for a reconvening with a 15% quorum. A similar provision has been used (and possibly abused) under current rules. The new Bylaws are amended similar to the Articles, with a majority of Eligible Members present.
The new Declaration requires a 67% of owners (paying or not) to pass. The Declaration defines the makeup of the Covenants Committee to include two LHLLC assigned members. The Declaration is loaded with other goodies too numerous to outline here. Self amendment criteria is a 67% Eligible members (the new Super Majority definition) with a unilateral Board clause to satisfy governmental requirements. This is likely to receive some loose interpretation.
According to the table published on the Lake Holiday website, the following totals exist. Privately owned lots = 1709, LHCC owned lots = 223, LHEUC owned lots = 7, LHLLC owned lots = 768. The mail enclosure indicates the eligible votes to exclude the Association lots (presumably per court order) so the total votable lots would appear to be 2477. Also indicated are 658 "non-voting" LHLLC lots of the 768, leaving 110. The enclosure definition however, suggests all 768 are eligible. The question on everyone's mind is (or not) - Can the community control it's own destiny?
If our interpretation is correct, the new Articles require a quorum of 35% (867) of which of 67% (580) vote "yes". Since LHLLC is likely to cast 768 "yes" votes, the Articles are a shoe-in, assuming at least 99 private owners vote and make up the quorum. The new Bylaws require a 10% (248) quorum of which 50% (125) vote "yes". LHLLC easily controls this document, unless at least 769 private owners vote otherwise. Historically, turnout has been less than half this number. The new Declaration requires 67% (1660) "yes" votes, or 892 private owners plus LHLLC voting their 768 votes affirmative. Somehow, this seems unlikely unless a revelation strikes universally and compels the silent to speak.
We predict private owner turnout to be between 100 and 300, with a mixed response. As such, the Articles quorum will be satisfied, with insufficient "no" votes to counter the LHLLC's 768 "yes" votes. A total turnout of 1146 would be required with all 378 private owners voting "no" (67% of 1146 = 768) to overturn the Articles. The new Bylaws will pass, failing to muster 769 "no" votes, and the new Declaration will fail, falling short of the 1660 "yes" votes required. With the new Articles and Bylaws in place, the Declaration, like a bent penny, will return another day under revised voting rules.
Note: There are indications that the published lot numbers are out-of-date and that the LHLLC lots number about 700. This skews the above analysis somewhat, but results in the same general conclusions and predictions. We will rework the numbers if new actuals are published.
Confusion with Numbers (05/28/2006)
We are informed of late (05/27) that the 700 or so LHLLC votes will only apply to the Declaration and that about 60 or less paid-for lot votes apply to the Articles and Bylaws. This DOES skew our analysis and prediction above significantly, and as such the new documents outcome is up to the will of the resident population. It is very important that everyone get out and vote so that that will is recognized! We trust the rules and number requirements will be fully solidified prior to the count.
The 4/22 pot luck dinner was attended by about 40 people, who enjoyed a variety of tasty dishes and good conversation. A surprise appearance by Uncle Willie followed dinner, who provided musical entertainment.
A thrust to install a resident builder on the Architectural Committee has been voted down for the second time this year. The committee unanimously declined the applicant noting conflict of interest and an unwarranted competitive advantage among the reasons. The Board advocates cite technical expertise as beneficial to the committee, even though the committee has functioned on an aesthetical level for years. The Architectural Committee continues to seek new members, particular those who can find time during the week to organize and perform site inspections.
Completed clubhouse plans from the Architect are expected shortly. Of current concern is the installation of an ADA mandated lift and stairway to the left of the main entrance. The installation requires removal of part of the prestressed slab floor in that area, which also supports some load bearing walls. This part of the project needs very careful engineering and execution. An alternative external stair and lift tower plan has been abandoned as the only viable placement is too far from the entrance and common area.
The Clubhouse Task Force was asked to recommend placement of three barbecue grills in the picnic area behind the clubhouse. A contingent of members decided on a cluster arrangement in a clearing, to facilitate easy ash cleanup and minimize the danger of a tree fire from flare-ups.
Ogunquit Development LLC (aka Mr. Murray) has developed a website to convey its perspective of the leadership of Lake Holiday. It may be accessed at www.lakeholidaynews.com
Communications in Lake Holiday have improved dramatically in past Months. The May Newsletter is chock full of news and information as is the LHCC website. Kudos to the Communications Committee and contributors for making our job easier!
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