Meeting Notice – June 27, 2022
To: Members of the Board of NSBG, Inc.
Date: June 24, 2022
NOTICE OF BOARD MEETING
Notice is hereby given that a regular meeting of the Board of NSBG, Inc. will be conducted at the following date and time: Monday, June 27 at 9:30 a.m. This is a resumption of the organizational meeting that was started on June 5 but was not concluded. The meeting will be conducted by teleconference and/or Zoom.
NSBG Organizational Meeting Agenda 06.02.22
Minutes
NORTH SHORES BOARD OF GOVERNORS
Organizational Meeting of Board of Directors
June 5, 2022
A special meeting of the Board was held on Sunday June 5, 2022, consistent with the express requirement in the Bylaws to hold an organizational meeting within the 10-day period following the annual meeting of homeowners. The meeting was called to order at 4:31 p.m. and all directors were in attendance, waived notice, and participated in the proceedings. Attending the meeting by teleconference were: President Steven Hollman, Treasurer Helen Hoart, director Bruce Wilson, and newly elected board members David Antonelli and Cyrus Brinn. The Agenda for the meeting is attached as Exhibit A hereto.
The first item on the Agenda was the welcoming of new board members and the configuration of the board. Final results of the election were received by the North Shores office on June 1, 2022. The board engaged in a discussion about the configuration of the board for the next year. Director Helen Hoart moved to nominate director Steven Hollman to continue serving in his role as President, a motion seconded by director Bruce Wilson. All directors voted in favor of the motion.
Director Helen Hoart then moved to nominate director Bruce Wilson to serve as board Secretary, a motion seconded by director Bruce Wilson. All directors voted in favor of the motion.
Director Bruce Wilson then moved to nominate Helen Hoart to serve as Treasurer, a motion seconded by director Cyrus Brinn. All directors voted in favor of the motion.
The board then discussed briefly the new capital reserve study received in draft form, and the need to address a source of funding for future emergency beach repairs and replenishment costs. After discussion, President Hollman nominated Cyrus Brinn to serve as Assistant Treasurer, a motion seconded by Secretary Bruce Wilson. All directors voted in favor of the motion.
The Board then discussed pending matters concerning the Architectural Review Committee, including the case of a homeowner seeking exemption from fees and application requirements. President Hollman asked whether director Antonelli would be prepared to serve as the Chair. Director Antonelli agreed, and was so appointed by acclimation. President Hollman noted that former director Debbie Director was willing to continue serving on the Committee. Secretary Wilson also offered to respond to questions concerning past interpretations of the Architectural Requirements as needed.
After further discussion of the ARC process, and given the schedules of the participants, the chair suggested that the meeting be recessed. All directors agreed, and meeting was recessed sine die, subject to the call of the chair, at 4:58 pm.
After written notice issued on June 20, 2022, the directors reconvened on June 27, 2022 at 9:35 am. All directors were present and participated in the meeting.
Call to Order
In response to questions concerning the application of the Delaware Uniform Common Interest Ownership Act (“DUCIOA”), President Hollman reminded the directors, based on advice of Delaware counsel to the Board, that the notice and other meeting provisions in the community’s documents govern the operation of the Board. The President suggested that he hoped to schedule a session with all Board members with the Board’s outside counsel to review the application of DUCIOA to the community, an item to be addressed later in the meeting.
Because the meeting was accessible by ZOOM audiovisual conference, the Chairman reminded those in attendance that community members were permitted to attend but could not participate unless invited to do so.
Review and Ratification of Votes taken at the Community’s Annual Meeting of Members
President Hollman then turned to the issue of the fee proposals adopted by the community at the annual meeting, observing that following the conclusion of the community vote at the Annual Meeting, both the construction fees and rental fees had been approved by the homeowners and both were now within the Board’s regulatory authority to finalize.
The President requested a motion to implement the new construction/renovation/expansion construction fee of $1.00 per square foot of GFA, not limited to hard costs incurred by the community, with a minimum fee, tentatively set at $1,000, for minor projects that incurred a fee (previously $250), other than de minimus construction projects such as interior-only renovations that have not previously incurred a fee. President Hollman observed that the Board will need to develop specific proposals to address:
- The division between major construction projects subject to the $1.00 PSF fee and “minor” project that will be subject to a minimum fee;
- The level of the minimum fee for minor projects, fences, driveways and other similar minor projects that previously attracted the $250 application fee;
- The terms of grandfathering to be applied to the new fees.
On motion duly made and seconded, the directors discussed the motion. Messrs. Antonelli and Brinn indicated that they would not support a motion confirming the Board’s adoption of the construction fees without first resolving the open issues concerning grandfathering as to current homeowners and the definitions of major and minor construction. Messrs. Antonelli and Brinn also expressed the view that the vote at the Annual Meeting may not accurately reflect community sentiment, arguing that the Board did not provide information regarding the proposed fees in the Annual Memo dated April 14, 2022, or the attached Proxy form, or the Ballot at the Annual Meeting. In response to questions from other Board members, Messrs. Antonelli and Brinn acknowledged that information about the fees was contained in the Board’s letter to the community of May 14, 2022.
President Hollman and Director Wilson disagreed with Directors Antonelli and Brinn, expressing the view that the community was fully aware of and voted in favor of the fees and expected to see their implementation. Directors Wilson and Hollman pointed to prior exchanges and debate about the fee issues since April 2021, numerous extensive emails to the community, and remarks (and separate community owner votes) at both the 2021 and 2022 Annual Meetings. Treasurer Hoart suggested that the Board set a specific date for completion of the open details, and Director Brinn agreed, suggesting that the Board could communicate to the community that the fees have not yet been adopted pending resolution of the open implementation details, and suggesting that a Labor Day deadline for implementation be confirmed.
President Hollman noted that he was working on drafting a conflict policy for Board members and that, in light of concerns about self-interested Board behavior expressed in connection with the debate on the fee issues, each director should disclose construction plans and rental activities before voting on resolutions relating to construction and rental fees. President Hollman disclosed that he is undertaking certain landscaping work on his property, which was permitted under the old fee structure. After this disclosure and further discussion, the vote on the motion was called, with Treasurer Hoart and Director Wilson supporting adoption of the motion to implement the construction fees, and Directors Antonelli and Brinn voting against. President Hollman cast the deciding vote in favor, and the Construction Fee Proposal was adopted, subject to determination of the open issues noted above.
On motion duly made and seconded, the Board then turned to a discussion of the Rental Amenity Fee Proposal, also approved by the homeowners at the Annual Meeting. Director Antonelli disclosed that he rents his property during the summer to one tenant.
Directors Antonelli and Brinn sought to postpone the implementation of the fees until it could be determined that the collection of such fees for the 2023 summer season was feasible. President Hollman replied that he was open to other methods of determining the fees, but that the timing of adoption of the new fees was important, so that homeowners seeking to rent their properties could include the rental amenity fee obligations in their tenancy agreements being confirmed during the autumn.
After further discussion, the vote on the motion to implement the rental fees was called, with Treasurer Hoart and Director Wilson supporting adoption of the motion to implement the fees, and Directors Antonelli and Brinn voting against. President Hollman cast the deciding vote in favor, and the Rental Amenity Fee Proposal was adopted, subject to final determination of the feasibility costs of administering the fees.
Director Wilson left the meeting at 10:30 am, and Treasurer Hoart recorded the remaining minutes of the meeting.
Annual Meeting Items for Further Discussion
President Hollman turned to the Capital Reserve Study and asked Director Brinn whether he had any further revisions to propose. Director Brinn will review and report back to the board on the Capital Reserve Study within 10 days.
President Hollman shared that he was assembling a board packet with governing documents for the new board members. He intends to also set up an informational meeting with Bob Valihura , outside counsel to the Board, for Board members to discuss our obligations under DUCOIA and other issues of concern to the Board.
President Hollman then outlined the requirement for two regular meetings during the year and added that the Board schedules additional meetings as needed.
The Board then discussed the proposed “conflict of interest” document that President Hollman intends to have executed by Board members. President Hollman reported that he had decided to have a conflict of interest statement for the Board after the allegations of self-interest were raised by some homeowners in letters opposing the fees.
Director Antonelli raised a question about how directors are protected. President Hollman reported that the community carries directors’ and officers’ liability insurance, and noted in addition that the State of Delaware offers statutory legal protections to uncompensated directors and officers of a Delaware non-profit entities such as the North Shores Board of Governors. Insurance documents will be included in the board packet distributed to new members.
Director Antonelli then asked questions about the ARC. President Hollman then outlined the process, and Director Antonelli suggested it would be helpful to have a community member who is an architect be a member of the ARC. President Hollman confirmed that the Board has power to appoint non-board members to the ARC and referred to the benefit of having Paul Salditt, an architect and community member, provided to the community when he was serving on the Board and on the ARC.
The meeting was adjourned at 10:45 am.
Respectfully submitted,
Bruce S Wilson — Secretary