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KCSA Lawyers attack KCSA Members
22 DEC 2015: LeClairRyan, acting as legal counsel for KCSA, today petitioned the Virginia Supreme Court requesting that some of their costs should be charged to the KCSA Members who were sued under the Complaint for Declaratory Judgment filed on August 7, 2014.
It should be noted that these KCSA Members, along with all other Kingsmill residents, are already paying through Association Fees for the hundreds of thousands of dollars charged to KCSA by LeClairRyan for legal fees.
Shouldn’t KCSA Members be allowed to ask questions about the KCSA Board of Directors election process without fear of legal action initiated by the very Board that is supposed to represent all Members’ best interests, even though that Board is actually controlled by a majority of directors appointed by Xanterra? And, despite many erroneous claims made in the initial filing, such as: "the Defendants have challenged multiple aspects of KCSA’s election procedures", there were just straightforward questions. What turns a simple question into a "challenge"?
KCSA, in the initial filing, claimed that: "[The defendants] have stated on multiple occasions that they will bring legal action, including seeking criminal charges, against KCSA and its volunteers if the election occurs under its current format". That is untrue and, unsurprisingly, KCSA has presented no reliable evidence to support this claim.
That initial filing goes on to say: "KCSA’s efforts to address these concerns with the Defendants have been to no avail, making the present action necessary". What efforts? There was never any real effort to address the concerns expressed, and certainly no notice given of the intent to file the lawsuit.
Is it fair that the Members, who took enough interest in the election process to ask whether the proper procedures were being followed, should now be vilified and penalized twice over by the lawyers representing their own Association?
Lawyers win. Kingsmill loses
10 DEC 2015: In a decision on KCSA’s Complaint for Declaratory Judgment announced today, the Supreme Court of Virginia reversed the judgment of the Williamsburg / James City County Circuit Court and ordered the Circuit Court to rehear the case. While this is a victory for the lawyers at LeClairRyan, who likely felt spurned by the Circuit Court’s dismissal of the case, it does nothing to move Kingsmill forward.
We are back where we were more than 16 months ago: waiting for the Circuit Court to set a date for the new hearing — probably many months away, with no more certainty of a resolution at that hearing than there was 16 months ago; two elections have been canceled; no KCSA directors have a current mandate from the members; and no progress has been made on resolving the issues that were the pretext for the lawsuit in the first place.
Imagine that, hypothetically, 25 years ago, Kingsmill Police had announced that they weren’t going to stop anyone driving in Kingsmill at up to 45mph; and that now, some residents want to see the 25mph limit enforced; while other residents argue that, as they have been driving at up to 45mph for the past 25 years, they should be allowed to continue the practice. Who is right? The Police had no authority to change the rules so, technically, the 25mph limit has never been changed.
25 years ago, KCSA President, Harry Knight, announced that Busch Properties, Inc. had expressed willingness to change the rules to allow for an extra homeowner-elected director on the KCSA Board. But, neither he nor BPI had the authority to change the rules, and no attempt was made to formally change the rules to adopt this practice until March 12, 2015. That attempt to change the rules through a Special Vote of the entire Kingsmill community in March of this year failed. So who is right? Should we follow the historical precedent of the past 25 years, as the current KCSA Board proposes, or should we follow the rules as written and voted on by the community?
The community’s rules provide for an independent Election Committee. Wouldn’t it make more sense to appoint a truly independent Election Committee (which could include non-resident experts) and to ask that Committee to set the format for the election, rather than have the current KCSA Board, most of whom are seeking reappointment or reelection, set the rules for the very contest that they hope to win? Failing that, how about appointing an independent mediator — that would cost Kingsmill residents so much less than the huge sums being paid to the lawyers at LeClairRyan to continue pursuing the current action.
The KCSA Board should follow James City County
Meeting documents for the 2015 Board of Supervisors and James City Service Authority Board of Directors are now accessible through NovusAgenda. The system electronically stores all working meeting information – agendas, minutes and attachments. Items can be easily searched using this system. Check it out!
Perhaps it is also time for the KCSA Board to videotape all meetings, as James City County does, and to keep a video archive.
Kingsmill Resort For Sale
29 MAY 2015: In an email sent to Kingsmill Club Members today, the Resort’s General Manager, Wayne Nooe, announced that Xanterra has decided to list the Kingsmill Resort for sale:
Please be advised that the owner of Kingsmill Resort, Xanterra Kingsmill, has made the decision to list the Resort for sale. Despite this news, please be assured that it will remain business as usual at the Resort, which includes the Resort providing all of the services and amenities related to the Club at Kingsmill. Please note that in the event of an ultimate sale of the Resort, the purchaser would acquire title to the Resort subject to the terms and conditions of the existing Membership Plan, the related Rules and Regulations, and that Membership Agreement between you and Xanterra then in effect. If there are any specific concerns you may have, please feel free to contact me directly and I will try and address. In the meantime, please know that the Resort staff will continue to provide all services and meet all obligations that it may have in connection with the Club at Kingsmill notwithstanding the listing of the Resort for sale."
It seems likely that Xanterra would have already held discussions with the relatively small number of potential US buyers of the Resort before listing it for sale, so this may be an attempt to spread the net wider and, perhaps, to seek out a foreign buyer.
Construction begins for Burwell’s Bluff
Clearance of the site for the 31 homes to be built in Burwell’s Bluff has begun.Some 18 months after the plan to build the 31 homes was approved by James City County in November 2013, the project is finally underway.One of the reasons that the project was delayed was the presence of a Bald Eagle nest in a tree that stood in the middle of what is to become the driveway of Lot #5 in Burwell’s Bluff.A Disturbance Permit, which allowed construction to proceed under certain restrictions, was finally granted by the US Fish and Wildlife Service on March 17, 2015. Click here for more photos.
KCSA Appeal to be heard by Supreme Court
16 APR 2015: In a move that seems likely to make KCSA’s Complaint for Declaratory Judgment drag on forever, the Virginia Supreme Court today granted KCSA a writ of appeal, which simply means that the Supreme Court will hear the case. This does not mean a successful outcome for KCSA, but neither is it an outright rejection of the appeal, filed by KCSA attorneys, LeClairRyan. Briefs for the appeal must be filed by May 26, but it could be months before the Supreme Court actually hears the case. The Supreme Court could then send the case back to the Williamsburg / James City County Circuit Court to be heard again, or could dismiss the case.
But will someone tell us what is in this for KCSA Members?
The election, scheduled for September 8, 2014 still hasn’t taken place. Despite KCSA’s claim that there were legal threats to the election, no legal challenges have been filed with the court. The process for the 2015 elections is due to begin in July. Will the 2015 elections be postponed as well? Meanwhile, the only winners are the attorneys of LeClairRyan. It’s no surprise that they want to keep this legal wrangling going — but why does our KCSA Board of Directors allow it?
More confusion follows the failed vote
Despite claims that KCSA Members have "repeatedly alleged the election process is improper and violates Virginia law and KCSA’s controlling Articles of Incorporation", the KCSA Board of Directors has never produced a shred of evidence that any KCSA Member has said that the election for the Board of Directors should not follow Virginia State law and KCSA’s governing documents, or that any threats have been made to challenge the election if it had gone ahead as scheduled on September 8, 2014.
In his ruling dismissing KCSA’s Complaint for Declaratory Judgment on October 20, 2014, Judge Michael McGinty said as much: "while there may be an action that comes in the future, that’s mere speculation".
The entire disagreement between KCSA Members and the Board relates to questions as to how ambiguities and inconsistencies in the governing documents should be interpreted, and to a hidden document describing an informal agreement made almost a quarter of a century ago, but never revealed to KCSA Members until after the lawsuit was filed!
The KCSA Board of Directors seems to see itself as the only party entitled to interpret these ambiguities and inconsistencies, with no obligation to offer any explanation for its decisions. And we have seen what happens when KCSA Members question the infallibility of the Board’s position on these issues.
It is more than likely that the Virginia Supreme Court will refuse to hear KCSA’s appeal, and we will be back to where we were last July. The 2015 election is less than 6 months away, and we need both the 2014 and 2015 elections to take place in a way that is acceptable to all KCSA Members. For this to happen, the Board must be open to discussion of the ambiguities and inconsistencies in the governing documents, and must be willing to provide a detailed explanation of their interpretation of the rules as they pertain to the election process.
It is understandable that the KCSA Board may be upset, and even a little angry, that their proposals to amend the Declaration of Covenants and Restrictions and KCSA’s Articles of Incorporation were snubbed by more than two thirds of the KCSA Members, but it seems reckless and unconscionable for the Board to intentionally add further ambiguities and inconsistencies to our governing documents. Unfortunately, that is exactly what they have done . . .
- Christine Rose maintained a count of the proxies received, and the Board must have known that the vote on their proposed amendments to the Kingsmill Declaration and to the KCSA Articles of Incorporation was going to fail when they passed amendments to the Bylaws on March 3, just two days before the expected vote. So why do the amended Bylaws now state that "As of the effective date of these Bylaws, the Board of Directors is comprised of four (4) Directors elected by the members and five (5) Directors appointed by the Developer"?
Even after the revelation of the 1990 agreement by Busch Properties, Inc., KCSA admits that six directors are appointed by the Developer. They said as much in the Complaint for Declaratory Judgment, Item #53: "the Class A and B members shall elect three directors for the Board of Directors. The Class C member has the authority to appoint six directors. Among the six Directors appointed by the Class C member, five shall be appointed directly by Xanterra and one shall be appointed based on the result of the election of Class A and B members".
This begs the question: which of the current directors was "appointed based on the result of the election of Class A and B members"? It is an important question because, legally, that director is subject to different terms from those of elected directors.
- The amended Bylaws also now state that: "Members who both own and occupy their Lot and therefore hold both Class A voting status and Class B voting status, shall be entitled to cast a weighted vote equal to two (2) votes and such weighted vote shall be exercised as determined unanimously by the record Owner(s) of such Lot". This change only serves to further confuse the issue as to whether this "double vote" complies with the Virginia Nonstock Corporation Act, § 13.1-856, which states that: "If the articles of incorporation authorize dividing the members into classes, the articles may also authorize the election of all or a specified number of directors by the members of one or more authorized classes. Each class entitled to elect one or more directors is a separate voting group for purposes of the election of directors".
KCSA’s Articles of Incorporation do authorize dividing the members into classes, and the Articles do authorize the election of all or a specified number of directors by the members of one or more authorized classes, so why wouldn’t this Virginia State law require that each class entitled to elect one or more directors is a separate voting group?
- The proposed amendments to the Declaration of Covenants and Restrictions included language to allow Resort properties other than Padgett’s Ordinary Condominiums, Pelham’s Ordinary Condominiums, and Conference Center Condominiums to be excluded from the provisions of Article VI, Section 1, that prohibits short term rentals of less than one year. As we all know, the vote failed.
So why is the Board now adding language to the proposed new Rules and Regulations that makes them inconsisent with the unchanged Declaration?
Page 7, #27 of the proposed new Rules and Regulations includes: "The foregoing shall not apply to those Lots/Living Units owned by the Developer and/or the owner of the Kingsmill Resort, or comprising condominium units located within the condominium regimes of Padgett’s Ordinary Condominium, Pelham’s Ordinary Condominium, and Conference Center Condominium".
We should be removing ambiguities and inconsistencies from our governing documents — not adding more!
Vote on proposed amendments fails
12 MAR 2015: In what some describe as a vote of no confidence in the KCSA Board of Directors, this evening’s Member vote resulted in the Board’s proposed amendments to our governing documents being resoundingly defeated, with less than half of the votes required for passage, even after the Board had continued the meeting from January 14 in order to actively canvass the community to gain more support.
Despite the stinging defeat, president Frank Dooley found reason to further delay the election for new directors, breaking his previous promise to "begin the process by the end of the first quarter".
Continuing the authoritarian trend at KCSA meetings, no Member’s questions were permitted, either verbal or written, at either the Special Membership Meeting or at the Association’s Annual Meeting that followed.
If you would like to watch a video of yesterday evening’s meeting it can be viewed at https://vimeo.com/122104935 with the KCSA password from this page.
So what happens next? The Board seems determined to continue a fight that was never necessary in the first place. Somewhat disingenuously, president Frank Dooley described the ongoing legal measures as being "for the protection of the Members", adding that the election process would not even begin until the Virginia Supreme Court issues a decision as to whether they will hear KCSA’s appeal — that decision expected in April or May.
Regardless of the decision, Mr. Dooley insisted that the election would be held in exactly the way originally proposed, so it is unclear what purpose is served in waiting for the decision.
(It should be noted that, although the proposed amendments were defeated, Xanterra is still bound by the Burwells Bluff Memorandum of Agreement, dated December 3, 2014, and recorded with the James City County court, including the agreement that: "Xanterra shall support and cast its KCSA Board membership and Class C member votes in favor of the amending Section VI of the Articles of Incorporation of KCSA (the “Articles”), as necessary, to add a transition provision in the form set forth on Exhibit D attached hereto that provides for control of the KCSA Board being transferred from Xanterra/Declarant to the KCSA Members upon the occurrence of certain conditions precedent.")
Does KCSA need new legal counsel?
If you had lost $215,951 over the course of 2014, you might be looking for a new broker.
One might also ask what value did KCSA Members receive for the $215,951 spent by the Association on legal fees in 2014? It seems that, on so many occasions, the advice provided to KCSA by its legal counsel, Elizabeth White of LeClairRyan, was not the best.
At the last Budget & Finance Committee meeting, one of the committee members asked whether it would be appropriate to have a legal audit of the services provided by LeClairRyan — in which another firm of lawyers would be asked to look at the advice provided to KCSA by LeClairRyan and to render an opinion as to the quality of that advice.
According to Ron Lynde at the March 3 Board meeting, $14,511 was spent in legal fees defending KCSA against Member complaints. KCSA’s fight to prevent recording of meetings is described in this article published in Quorum magazine. The Common Interest Community Ombudsman ruled against KCSA on all counts. But KCSA’s legal counsel is continuing the fight with a six-page letter to a VA Assistant Attorney General stating that the firm and KCSA disagreed with the ruling and would revert to their own understanding of the law (see KCSA picks another fight below).
Another $52,900 was spent on the negotiation of easements, primarily to allow Xanterra to dig up the bridge on Sir George Percy to install utilities required for their new Burwell’s Bluff development. As this easement was for the sole benefit of Xanterra, one might ask why should KCSA Members be paying for it.
But, as most know by now, the lion’s share of our 2014 legal expenses was consumed in the 61 secret, closed sessions between the Board and legal counsel, lasting a total of 140 hours ($46,469) and in the futile legal action taken by KCSA against its own Members because of questions they asked about the proposed election process ($54,408). The initial action, a Complaint for Declaratory Judgment, was filed on August 7, 2014 (In fact, Liz White was so anxious to file the complaint that it was filed before the Board had even authorized the action!). It didn’t take Judge Michael McGinty long to dismiss that action because he saw no threats of any kind made by the defendants. But, unperturbed by that dismissal on October 20, LeClairRyan pressed ahead on November 10 with a Motion for Reconsideration. That too went nowhere. One might expect that to be the end of it … but no, LeClairRyan then brought out their big guns to file an appeal with the Virginia Supreme Court. We have to remind ourselves what this is all about — a few questions concerning the election process.
And, what about those questions? Despite the hundreds of thousands of dollars paid in legal fees in 2014, we saw Liz White herself ask one of the questions at her "informational presentations": "Can co-Owners split Class Votes (with Fred voting the Class A vote for x and Mary voting the Class B vote for y)?" — but she didn’t provide the answer. At the March 3 Board meeting, Frank Dooley stated that an opinion received from a licensed attorney is that "you can’t split the vote". (See the recording of the meeting at https://vimeo.com/121304825, beginning at time 0:56:45. You’ll need the KCSA password here). But, for all those $$$$, we still don’t have an explanation from legal counsel as to why The Virginia Nonstock Corporation Act, § 13.1-856 is not applicable in this case:
If the articles of incorporation authorize dividing the members into classes, the articles may also authorize the election of all or a specified number of directors by the members of one or more authorized classes. Each class entitled to elect one or more directors is a separate voting group for purposes of the election of directors.
Is it that:
- The Nonstock Corporation Act, or this section of it, is not applicable to KCSA?
- That KCSA’s Articles of Incorporation don’t authorize dividing the members into classes?
- That KCSA’s Articles of Incorporation don’t authorize the election of all or a specified number of directors by the members of one or more authorized classes?
- Or . . . that each class entitled to elect one or more directors is not a separate voting group for purposes of the election of directors?
With many KCSA Members expressing a lack of confidence in KCSA’s current legal counsel, perhaps it is time for KCSA to think about a change?
Communications Committee resign en masse
3 MAR 2015: Presiding over today’s KCSA Board meeting, Frank Dooley announced that all members of the Communications Committee "have decided that they no longer want to serve as volunteers . . . for a variety of reasons". Charlotte Jones is heading up a group that is going to reconstitute that committee, and hopefully, there will be better news at the next meeting.
The Communications Committee is responsible for the design and content of the new official community website, and for editing of the KCSA monthly Bulletin. According to minutes of the January 22, 2015 Board meeting: "The website is being worked on, and the Committee should have it to the Board by March". In the meantime, KCSA staff will fulfill those responsibilities.
KCSA Bylaws amended
3 MAR 2015: The KCSA Board of Directors voted today to amend the KCSA Bylaws, despite the fact that a Special Member Vote is due to take place in 2 days to determine whether or not the Declaration and the Articles of Incorporation should be amended.
The Board voted 3-6 against their originally drafted amendments, with only Charlotte Jones, Christine Rose and Kevin Kolda voting in favor. The originally proposed amendments included language that would have amended Article VI-2 to disqualify candidates for the Board of Directors if they are "involved in a dispute with the Association", effective July 1, 2015. It was pointed out that this provision took no account of the nature of the dispute, or of which side actually initiated the dispute.
The Board then voted unanimously to approve amendments as drafted, but excluding the second paragraph of Article VI, Section 2.
In making these amendments to the KCSA Bylaws, the Board invoked Article XIII-1(a) of the current Bylaws, which states that: "These Bylaws may be amended at any meeting or special meeting of the Board of Directors duly called for that purpose, by a vote of two-thirds (2/3) of the Board of Directors".
The changes approved will:
- Amend Article V-4 and Article VI to make the same change in rules for the election that would be made by the not-yet-approved amendments to the Articles of Incorporation. (Whichever way the vote on March 5 goes, these amendments will conflict with the Articles of Incorporation — either because the amended Bylaws call for Class B members to have a vote, which would be eliminated if the Articles of Incorporation are amended — or because the amended Bylaws call for the election of 4 directors, while the current Articles of Incorporation call for the election of 3 directors. But it should be noted that Article XIII-2 states that the Articles of Incorporation would prevail over the Bylaws).
- Amend Article IV-2 to allow the Board of Directors to hold the annual meeting at any date of their choosing, instead of the current requirement that it be held on the second Monday of September.
- Eliminate Article III-6, which currently states that: "“Common Area” shall mean and refer to those areas of land now or hereafter conveyed to the Association or shown on any recorded subdivision plat of the Properties and improvements thereon, which are intended to be devoted to the common use and enjoyment of the Members".
- . . . and numerous other changes.
KCSA picks another fight
9 FEB 2015: The latest fight picked by KCSA is with the Common Interest Community Ombudsman, whose role is to issue unbiassed explanations of laws and regulations governing Associations such as KCSA.
In a 6-page letter written by Eric Page, a partner at LeClairRyan, to James Flaherty, an Assistant Attorney General, Mr. Page complains about the Ombudsman’s determination that KCSA’s Rules for Recording Meetings violate the Virginia Property Owners Act §55-510.1(B). He questions the intent of the legislators in passing the statute and provides his own interpretation of the statute.
In spite of the KCSA Board’s recent attacks on Member views that do not accord with their own, Mr. Page insists that “Member participation in the Association’s affairs should be encouraged rather than discouraged. Maximizing participation in the process should be one of the main goals of the Board”. He argues that Members “will be chilled if they learn, as they stand up to speak with no advance notice, that they are being recorded”.
With regard to KCSA’s rule that copies of any recording must be provided to KCSA, Mr. Page asserts that “a significant financial burden would be placed on KCSA to record all of its meetings”. Really? He goes on to say that “requiring that a copy of the recording be provided to KCSA shortly after the meeting helps ensure the integrity of the process”. But this is only true if KCSA is willing to listen to every recording provided and to certify the accuracy of the recording in each case. And, if KCSA is really concerned about the integrity of the process, shouldn’t KCSA be making its own official recordings of all Board meetings and posting them to the community website? Then there would be no reason for Member recordings and no questions about the integrity of the recordings.
Mr. Page concludes with the statement that, in spite of the Ombudsman’s ruling of October 22, 2014, KCSA intends to reinstate the previous Rules for Recording Meetings at the Board’s next meeting on February 26, 2015 (although that meeting has now been postponed until March 3, 2015).
A Community Reconciliation Charter
Our community is divided and needs healing. Below are some thoughts for a Community Reconciliation Charter that aims to heal current divisions and to prevent future recurrences. Comments for changes and/or additions are welcome:
- The recent conflict between the KCSA Board and Members is entirely due to inconsistencies and ambiguities in the KCSA governing documents. Without those inconsistencies and ambiguities, Members would have had no reason to question the Board’s interpretation of the governing documents, and the Board would have had no reason to file a lawsuit against Members for posing those questions. That lawsuit has been extremely costly to KCSA and Members, not only in terms of the extraordinary cost of legal fees forcing cutbacks in other expenditures, but also in terms of the disruption of KCSA operations and the postponement of the 2014 election.
It would make a great deal of sense to eliminate those inconsistencies and ambiguities. Specifically, the governing documents should be amended to incorporate the agreement made by Busch Properties, Inc. at the 1990 Annual Meeting which, it is claimed, has been ratified by Members at every Annual Meeting since (although not mentioned in the minutes), and has been agreed to by Xanterra. And the governing documents should also be amended to ensure compliance with the Virginia Nonstock Corporation Act, §13.1-856 with regard to the “double vote” procedure. These changes should be put to a vote by the Members without any additional amendments that would otherwise obscure the sole purpose of eliminating inconsistencies and ambiguities.
In the meantime, the Board should recognize that adding further inconsistencies through the proposed amendment of the Bylaws makes little sense and can only be a recipe for future disputes. In any case, it is clearly inappropriate to amend the Bylaws two days before Members vote on amendments to the Declaration and to the Articles of Incorporation since the result of that Member vote will determine which Bylaws would then need to be amended to ensure compliance with the Declaration and with the Articles of Incorporation, which always prevail over the Bylaws.
- The homeowner-elected directors should recognize that their responsibility is to represent the interests of the homeowners, and not those of Xanterra. The interests of Xanterra are well represented by the appointed directors, who will hold a majority of seats on the Board for the foreseeable future. Where the interests of Xanterra and homeowners diverge, the elected directors should exclusively represent the interests of the homeowners in order to provide a proper balance of representation. This, in no way, suggests that the community should not work with Xanterra to the best interests of both Xanterra and the residents, but simply recognizes that the residents have a right to be heard, even though the Xanterra-appointed directors can always prevail.
- There should be an immediate end to all ongoing legal actions between KCSA and its members. The costs to KCSA of these actions have been enormous, and there is little that either side can gain from continuing the action. All of the issues raised by the legal action have been added to the Special Member Vote, and it would be entirely disingenuous to continue the legal action after the Members have voted.
- All parties should accept that the result of the upcoming March 5 vote is final. The community will have spoken, and there is no reason for any further delay in holding the election for the Board of Directors, originally scheduled for September 8, 2014. The Board should set the rules for the election in strict accordance with KCSA’s prevailing Articles of Incorporation and Bylaws, recognizing that the Articles of Incorporation always take precedence.
Should the March 5 vote fail to support proposed amendments to the Articles of Incorporation, the Board should provide a detailed, written explanation of their interpretation of the rules that have been questioned by Members, specifically relating to KCSA’s assertion in the Complaint for Declaratory Judgment (Item #53):
"The Class A and B members shall elect three directors for the Board of Directors. The Class C member has the authority to appoint six directors. Among the six Directors appointed by the Class C member, five shall be appointed directly by Xanterra and one shall be appointed based on the result of the election of Class A and B members."
and to the question raised by counsel, Elizabeth White:
"Can co-Owners split Class Votes (with Fred voting the Class A vote for x and Mary voting the Class B vote for y)?"
Once the Board has provided this explanation, it should be accepted by all Members, without further questions.
Due to the fact that the “director appointed by Xanterra based on the result of the election” will be subject to terms that differ from those of elected directors, this director must be clearly identified by KCSA. According to Article VI(a), this director will serve a one-year term and not a two-year term as for elected directors. Moreover, the provisions of Article VI(d), allowing any elected director to be removed from the Board by a majority vote of the members of the Association, would not apply to this director.
- Elected directors who may consider standing for reelection should recognize that it is a conflict of interest for any of them to be involved in discussions or votes related to homeowner elections, particularly if such discussions relate to the eligibility of candidates with whom they may find themselves competing in any future election.
- Similarly, Xanterra-appointed Directors should recognize that it is not appropriate for them to be involved in discussions or votes on matters relating to homeowner elections.
- A charter should be created for the Election Committee (the only Committee that currently operates without a charter), giving the Committee responsibility to manage elections, proxies and other issues related to the elections, and for maintaining secrecy and integrity of the ballot. For each election or special vote, a new Election Committee should be created, consisting of respected, independent Members, who are neither Board members nor current or future candidates.
- KCSA needs to have eligibility rules for candidates for the Board and for committees. However, such rules must be reasonable and in the best interests of the Association, and not simply designed to force concurrence with the current Board. Crushing dissent and squashing new ideas is no way to run an Association in the 21st century. In the case of elections for the Board of Directors, where current rules do not require a candidate to be a Member of KCSA, to be a resident of Kingsmill, or to undergo a background check, the voters should be allowed to determine whether a candidate is qualified.
- All Statements of Interest for committees should be discussed and voted on at open Board meetings, and decisions recorded in the minutes. Committees are advisory and their recommendations are not binding on the Board, but Committees should not be prevented from openly disagreeing with current Board policies as this would effectively remove all incentive for change. Moreover, Board members frequently do not have the knowledge to understand the detailed technical issues considered by Committees and should make every possible effort to add committee members who are technically qualified.
- The Board should make every effort to be open and transparent in its deliberations and, where questions concerning community rules are raised, to provide public explanations of their interpretation of those rules. Members should recognize that the Board is responsible for applying the community’s rules and, provided an adequate public explanation of the Board’s interpretation of the rules is forthcoming, members should accept the decisions of the Board.
“The very word secrecy is repugnant in a free and open society”
(JFK’s speech on “Secrecy”, delivered at the Waldorf-Astoria Hotel, New York City April 27, 1961.)
- KCSA should encourage a broad dialog between Members and the Association, and among Members, as required by the Virginia Property Owners’ Act §55-510.2. This would be best achieved through the addition of a Forums section to the new community website. Access will be limited to Members through the KCSA login procedure but, beyond that, all Members should be free to express themselves in any way they choose. Anonymous comments should not be permitted.
- There should be an online "Ask KCSA" section and, wherever reasonable, answers to questions raised should be promptly provided by the Association, and available for all Members to view. Statistics should be maintained and published of the number of questions asked and the time taken to respond.
- The use of the dispute resolution procedure by the Virginia Common Interest Community Board, where applicable, should be encouraged as a cost-free, non-partisan way to resolve many differences.
The Governing Documents explained
Some readers have asked us to explain the differences between the various governing documents. Numerous explanations of the differences can be found on the internet, but the following is a condensed summary of the various documents. These are shown in order of priority for our governing documents, although the state statutes and local ordinances, described at the bottom, always take precedence:
The Declaration of Covenants and Restrictions
(first created on September 18, 1973. Amended Nov 20, 1973, April 1, 1976, May 1, 1981,
Oct 28, 2004, May 15, 2009)
The Declaration of Covenants and Restrictions sets the rules of the Kingsmill community. This is a legal document, recorded with the County. The goal of the Declaration is to protect, preserve, and enhance property values in the community. It is the document that, among other things, establishes the Kingsmill Community Services Association, contains the use restrictions, the maintenance requirements, and defines the common elements. The Declaration includes Articles defining the Common Area, Assessments, Architectural Control and Use and Maintenance of Property.
According to Virginia Code § 55-515.1D, amendment to the Declaration requires a two-thirds vote of all owners.
The Articles of Incorporation
(October 3, 1973)
The Articles of Incorporation is a legal document, that must be filed with the County, in order to establish the existence of the Kingsmill Community Services Association. In many HOAs, the Articles of Incorporation is a short document, containing general information about the corporation, such as the name and location of the business.
KCSA’s Articles also provide definitions of Membership, Voting Rights, and Composition, Election and Removal of members of the Board of Directors.
According to Virginia Code § 13.1-886, amendment to the Articles requires approval by each voting group entitled to vote on the amendment by more than two-thirds of all the votes cast by that voting group.
Interestingly, in the currently proposed vote, this may mean that, as long as sufficient ballots are cast to make a quorum, the proposed changes to the Articles of Incorporation will automatically be passed, since the ballot only allows for a “YES” vote! There appears to be nothing in the proxy that would prevent the amendments being made to the Articles of Incorporation even if the proposed amendments to the Declaration, which does require a two-thirds vote of all owners, are not approved.
(June 26, 2008)
The Bylaws govern how KCSA operates and contains the information needed to run KCSA as a business. It is a private document that does not have to be recorded with the County. The KCSA Bylaws sets out the requirements for Meetings, Quorums for Votes, Powers and Duties of the Board of Directors, Officers and Committees, and rules for the Environmental Preservation Board.
According to Article XIII-2, the Bylaws can be amended by a two-thirds vote of the Board of Directors OR by a majority vote of Members with the consent of the Developer.
In the case of any conflict between the Articles of Incorporation and the Bylaws, the Articles take precedence, and in the case of any conflict between the Declaration and the Bylaws, the Declaration takes precedence.
Environmental Preservation Board (“EPB”) Policies and Procedures
(October 15, 2008)
The EPB Policies and Procedures is an extension of the Declaration, and sets out rules to establish compatibility of architecture, landscaping and planning. Through systematic, uniform review procedures, the goal is to encourage design excellence, preserve and enhance property values, and foster owner pride and satisfaction. The intent of the Policies and Procedures is to protect overall appearance, maintain the values of the community, and retain a good neighbor relationship.
The EPB Policies and Procedures are set by the Board of Directors.
The Rules and Regulations
(October 15, 2008)
The Rules and Regulations is an extension of the Bylaws, and sets out all the detailed requirements by which Kingsmill homeowners must abide, and which are not otherwise covered in the Declaration or the Bylaws. This covers everything, from control of pets to mowing of lawns.
The Rules and Regulations are set by the Board of Directors.
Other legal requirements are established by:
The Virginia Nonstock Corporation Act, to which KCSA is bound, provides the rules to be followed where the governing documents are silent.
The Virginia Property Owners’ Association Act sets out rules for all homeowner associations in Virginia.
James City County Ordinances, that set out rules for living in James City County, such as allowable noise.
Think before you vote . . .
The March 5 date for the postponed Special Membership Meeting and vote is fast approaching. Have you received a call from a neighbor urging you to vote for the proposed amendments? Members of the KCSA Board of Directors have been contacting neighborhood volunteers and asking them to canvass their neighborhood.
It is important that the sanctity of a secret membership vote should be preserved. While KCSA should do all it can to provide relevant information to members to allow them to make an informed decision, KCSA, its officers and counsel, should all take a neutral stance with regard to a member vote and should not seek to influence member votes.
The proposed "UNIFORM COMMON INTEREST OWNERS BILL OF RIGHTS ACT", Section 14(d)(3) (Voting; Proxies; Ballots) states that: "The ballot must set forth each proposed action and provide an opportunity to vote for or against the action". The KCSA proxy sent to all members does not allow members to vote against the proposed amendments.
Moreover, the proxies are being collected by KCSA Vice-President, Christine Rose, who is not a neutral party. Not only is the tally of proxies received being provided to supporters of the amendment, but they are also being advised as to how individual neighborhoods have voted. Because the proxy only allows a "YES" vote, this could be considered to be a violation of privacy in a secret ballot.
What is this vote about? There are really three different measures being voted on, but members are being asked to vote for all or none, without the option to vote for some and against others. KCSA President, Frank Dooley, in his letter of November 25, 2014, announcing the proposed vote, used the phrase: "To simplify this process as much as possible for our members". Are we really not capable of deciding each issue for ourselves?
Firstly, the proposed amendments include changes to the rules for the election for the Board of Directors, that should have taken place on September 8, 2014. Ironically, the two changes proposed would result in the same votes for each Lot as if the election simply followed the current rules! The Board wants to formalize the election of a fourth director, that currently depends on an appointment by Xanterra, and to eliminate the Class B vote. Under current rules, if strictly followed, the vote would be for a single vacancy (as defined in Article VI(c) of KCSA’s Articles of Incorporation) with separate votes for Class A and Class B, as required by Virginia Code § 13.1-856. That means that each Lot would have two votes. Under the proposed new rules, the vote would be for two vacancies but, with the elimination of the Class B vote, each Lot would still have two votes!
Secondly, the proposed amendments allow for the eventual election of six of the nine directors, conditional on Xanterra being able to proceed with substantial additional development within the community. But, as pointed out in the second paragraph of Frank Dooley’s letter of November 25, 2014, Xanterra has already committed to this change in the Memorandum of Agreement for Burwell’s Bluff, page 2, Agreement #2, dated November 5, 2014. We don’t need any changes to the governing documents to preserve this commitment.
Thirdly and, perhaps most importantly, the proposed amendments would allow Xanterra to develop new units within the defined resort area that would not be subject to the provisions of the Declaration of Covenants and Restrictions, Article VI, Section 1(g) which states that: "No Lot or Living Unit, or portion thereof, shall be subjected to or used for any timesharing, cooperative, licensing or similar arrangement". Some members view this proposed amendment as one of the few points of leverage that homeowners have in the community, and that it should not be relinquished without first seeing Xanterra’s plans for the proposed new construction.
If the proposed amendments are approved now, there is no way for homeowners to undo the changes without Xanterra’s approval. However, if they are not approved at this time, there is no reason why they could not be proposed individually at a later date when more information is available to allow members to make a more informed decision.
If you have already signed and sent in your proxy and would like to change your mind, you can call the KCSA office at 757-645-3454 and ask them to return your signed proxy form to you.
10 FEB 2015: The James City County Board of Supervisors tonight approved the replacement of ± 7,000 linear feet of a 36-inch sanitary sewer force main between the Wareham’s Pond Recreation Center and the HRSD Williamsburg Treatment Plant. The proposed route for the 36-inch pipe will entail the digging of a trench in front of the Recreation Center parking lot and through the play area, along with the removal of mature vegetation between the Recreation Center and Wareham’s Pond Road.
Several speakers suggested that, although Kingsmill residents had voted to favor the proposed route over one other alternative, it would be preferable to locate the new sewer force main behind the Recreation Center. Mr. Eddie M. Abisaab, responding for HRSD, said that six different routes had been considered by HRSD, although only two choices had been presented to Kingsmill residents. He referred to the two choices presented to Kingsmill residents and said that a third route, behind the Rec Center, had been rejected because it would pass through a conservation easement. He made no mention of three other routes considered.
When asked by Supervisor, John McGlennon, whether the proposed route would still pass through conservation easements in other locations, Mr. Abisaab replied that it would, but that the length of pipe through the other conservation easements would be shorter than that behind the Rec Center.
Mr. Abisaab said that work within Kingsmill would be completed by December 2016 and assured the Supervisors that no construction would take place between Memorial Day and Labor Day. He agreed that this meant that the construction would not begin until after Labor Day, 2015. Supervisor, Mary Jones, asked whether the Rec Center was used after Labor Day and was assured by members of the public that the Rec Center was used regularly throughout the year. Mr Abisaab acknowledged that there would be disruption to both users of the Rec Center and to traffic along Wareham’s Pond Road, although efforts would be made to minimize disruption to both groups.
In response to other questions from Supervisors, he promised that all trees removed from the area between the Rec Center and Wareham’s Pond Road would be replaced with trees of a similar maturity.
See http://www.jamescitycountyva.gov/news/jcctv/video-on-demand.html to view video of the meeting
The new owners of the Country Road east of Grove Creek want to make sure that nobody from Kingsmill sets foot on their property. Carters Grove Associates, LLC, based at 70 West Madison in Chicago, purchased the 76 acre property surrounding the HRSD Williamsburg Treatment Plant, along with the adjacent 401 acre Carter’s Grove property (regained from the bankrupt Carters Grove LLC in July 2014), for $7.25 million from the Colonial Williamsburg Foundation in September 2014.
The newly erected gate spans the Country Road and includes fencing reaching far out into the creek on both sides, along with a warning notice to trespassers.
The 76 acre property, known as Martin’s Beach includes 2,000 feet of waterfront along the James River and stretches from Grove Creek to Ron Springs Drive.
And, in case anyone thinks of scaling the gates, three rows of barbed wire have been added at the top for good measure!
How much is KCSA’s lawsuit costing us?
(Click here for more details about the lawsuit)
For the month of December 2014 alone, KCSA’s legal fees were $58,263. That’s 560% over budget. For the full 2014 year, KCSA’s legal fees were a whopping $90,951 over budget. And it’s quite possible that the cost of the lawsuit is considerably more than that as other legal proceedings may have been cut back to compensate for the cost of the lawsuit.
And it doesn’t end there. An appeal to the Virginia Supreme Court, even if it never gets a hearing, is a very expensive exercise. It is beyond the scope of LeClairRyan’s local attorneys, so they have called in Kevin Oddo and Joseph Rainsbury from LeClairRyan’s Roanoke office. In 2015, we will be paying for the big guns plus all of their travel at $$$$$/hour.
Fortunately(?), KCSA was able to cut back on other expenses in 2014 (see the Financial page on this site). Of the $10,000 budgeted in 2014 for the attractive new street signs, only $1,418 was spent. KCSA spent less than $50,000 of the $84,000 budgeted for Engineering. Less than $65,000 was spent of the $88,000 budgeted for Landscape Maintenance. Recreation spending was 14% below budget, Tree Service was 87% below budget, Lighting Maintenance 26% below budget, Pond Maintenance 86% below budget, and maintenance of Sidewalks & Trails was 71% below budget.
In fact, apart from Legal Expenses, the only 2014 expenses that exceeded the annual budget by more than $800 were Insurance ($12,092 over) and Bank Fees ($1,793 over).
Are we being blackmailed?
The January 26 letter from KCSA President, Frank Dooley, implores us to vote for the amendments that he wants to be made to the KCSA governing documents, or else . . .
The "or else" is the appeal to the Virginia Supreme Court of the twice-dismissed Complaint for Declaratory Judgment, costing us additional tens of thousands of dollars and further postponing the Board of Directors election until who knows when.
Yet this appeal makes even less sense than the original Complaint for Declaratory Judgment that was dismissed by the James City County/Williamsburg Circuit Court last October.
There are two ways to view this lawsuit:
One is in the form of an injunction to prevent any of the named defendants from challenging the way the election is being organized. But, there would be nothing to prevent challenges from any of the other 2000+ members. Moreover, if that were the intent, why not file for a simple injunction that would have been much easier and less costly.
The second way to view the lawsuit is as a request to the court to tell KCSA how to run an election conforming to KCSA’s own rules. But, if that is the case, why are we paying KCSA’s legal counsel hundreds of thousands of dollars a year to give us legal advice? Surely they should be able to tell KCSA how to run an election according to its rules in such a way as to avoid any legal challenges.
Of course, this assumes that KCSA wants to run the election according to the rules. What if it doesn’t? What if KCSA wants to run the election in a way that doesn’t conform to the rules?
Then it might make sense that the lawyers don’t want to put themselves in the firing line by supporting a practice that wouldn’t stand up to legal challenges.
Then it might make sense to ask a judge to declare that the proposed method of running the election is legally acceptable.
Judge Michael McGinty was quick to dismiss both the initial Complaint for Declaratory Judgment and the subsequent Motion for Reconsideration.
Is the Supreme Court really likely to reach a different conclusion? Perhaps it doesn’t matter.
The appeal to the Supreme Court provides cover for the Board to postpone the election seemingly indefinitely, leaving president Frank Dooley and director Jim Zinn on the Board well beyond their two-year terms that expired in September 2014.
What every Kingsmill renter should know
If you are renting in Kingsmill, you probably know that the proposed amendments to be voted on March 5 will eliminate the Class B vote, thereby leaving you with no vote on what goes on in your community. It also means that you and other renters will no longer be members of KCSA and therefore ineligible to attend KCSA member-only meetings.
You may have been led to believe that you currently do not have the right to vote on the proposed amendments, and you probably did not receive the directed proxy that was supposedly sent to all KCSA members, including eligible renters. But this is wrong.
The KCSA Bylaws, Article III, Section 12 states:
"Member" shall mean any Owner and any lessee of a Living Unit constructed on any Lot who holds a written lease having an initial term of at least twelve months and provides notification of tenancy to the Association in writing.
Both the Declaration (Article I, Section 16) and the Articles of Incorporation (Article III) include similar language. "Notification of tenancy to the Association in writing" does not imply that any specific request must be included, that any permission from your landlord is required, or that the notification must in any way be related to the election. Nowhere in the governing documents are there any further restrictions on a renter’s eligibility for membership.
If you have, at any time during your current tenancy, written to KCSA, either an email or a letter, and have in that email or letter notified KCSA of your tenancy, then you are a Class B member of KCSA and entitled to vote in all elections.
(And, although the rules in the Declaration, Article VI -1g, say that the landlord must "provide to the Association a completed tenant information form containing, without limitation, tenant name(s), tenant contact information and the term of lease, within five (5) days of entering into a lease of their Lot/Living Unit", you should not be denied KCSA membership just because your landlord fails to do this).
The notification of tenancy need be no more than an email saying something of the kind: "I am a tenant at [address] and I have a question about ….".
If you have any evidence that, at any time during your tenancy, you have written to KCSA and, somewhere in that email or letter, you have said that you are a tenant at a Kingsmill address, then you should contact KCSA and ask them to add your name to the list of Class B members entitled to vote.
There is no controversy about the election
Since the release of the minutes of the September 10, 1990 KCSA Annual Meeting, there has been no real controversy surrounding the election that should have been held on September 8, 2014 — more than four months ago. For most current KCSA members, those minutes were first made available on August 7, 2014 — as an exhibit to the filing of the Motion for Declaratory Judgment.
It is true that both KCSA and the Developer have probably skipped over some formalities but, if we assume that the informal agreement made by Busch Properties in 1990 was carried over year after year, and has been adopted by Xanterra, then there is no dispute to the fact that four KCSA directors are elected by the homeowners, in one way or another.
A few questions remain, but they are just questions — and are most appropriately answered by KCSA’s legal team.
KCSA attorney, Liz White, in her recent presentations, posed the question: "Can co-Owners split Class Votes (with Fred voting the Class A vote for x and Mary voting the Class B vote for y)?" Liz — please give us the legally correct answer to the question that you posed.
The addition of a fourth "appointed elected director" — i.e. a director chosen by the homeowners but appointed by the Developer, began in 1990 and, barring irregularities, has been repeated every two years. So, for the even years, one director was an "elected director" according to KCSA’s Article of Incorporation (Article VI-a), while the other director, although chosen by homeowners in the election, was technically an "appointed director". In the odd years, both directors were strictly "elected directors".
In 2012, Jim Zinn received more votes than Frank Dooley. From this, one can deduce that Jim Zinn is the "elected director", while Frank Dooley is technically an "appointed director", appointed by the Developer and subject to the terms and conditions of appointed directors.
Since, in 2014, there was technically only one vacancy among the strictly "elected directors", another question exists as to whether we should be voting for that one vacancy, or we should vote for both the replacement for the one vacancy and for the director to be appointed by the Developer. Again, this is a question requiring legal interpretation of our governing documents and is most appropriately answered by KCSA’s legal team.
To sum up, KCSA’s legal team should provide the legally correct answers to the above two questions, and then there is nothing to stop the election from going forward — and certainly there is no need to wait for the delayed vote on the proposed amendments before having the election that should have taken place on September 8, 2014.
Who is driving the "controversy" within KCSA?
We all know that KCSA filed a Complaint for Declaratory Judgment against its own members on August 7, 2014. But who made the decision to file the Complaint?
The Complaint was filed on August 7, 2014 at 3:57pm, as shown by the timestamp here from Betsy Woolridge’s office in the Williamsburg / James City County courthouse.
But, at that time, according to the minutes, the Board was still in closed executive session, along with attorneys Elizabeth White and Brian Muse, at LeClairRyan’s offices.
It wasn’t until 4:30pm that the Board reconvened in open session and then took a vote to direct legal counsel "to pursue the resolution of the legal issues in the manner discussed with legal counsel in executive session" but, by then, the 42-page Complaint had already been drafted and filed!
The Virginia Property Owners’ Association Act § 55-510.1C states that:
" No contract, motion or other action adopted, passed or agreed to in executive session shall become effective unless the board of directors or subcommittee or other committee thereof, following the executive session, reconvenes in open meeting and takes a vote on such contract, motion or other action which shall have its substance reasonably identified in the open meeting."
So, did someone jump the gun and, not only draft this lawsuit, but also file it before they were legally directed to do either? Does this tell us anything about who is really driving this skirmish between KCSA and its own members? (Which is costing us all a fortune in legal fees).
What about the election?
Regardless of whether we should have 3 or 4 elected directors on the KCSA Board, the very long delay in holding the election may create more serious issues that will not easily be resolved, whatever the outcome of the proposal to amend the KCSA governing documents.
The legal issues are complex, but the following is an attempt to explain them in as simple a form as possible:
Article VI(a) of the KCSA Articles of Incorporation states that: "Appointed directors shall serve a term of one year,and … all elected directors shall serve for a term of two years". The two-year terms of Frank Dooley and Jim Zinn expired in September 2014. A provision in the Virginia Nonstock Corporation Act §13.1-857F was used to justify the extension of their terms: "Except in the case of ex-officio directors, despite the expiration of a director’s term, a director continues to serve until his successor is elected and qualifies or until there is a decrease in the number of directors, if any".
However, there is no provision for foreshortening the terms of the next directors to be elected, so whenever the election takes place, the newly appointed directors will still have a term of two years (as long as elected directors’ terms are staggered).
The two-year terms of directors Rose and Lynde will expire in September 2015. So, will we have two "Annual meetings" and elections in 2015? Or, will we have to wait until September and have one annual meeting in 2015, at which the terms of all elected directors will expire?
If that happens, would we then have a problem with the Virginia Nonstock Corporation Act §13.1-857C which states that: "The terms of all other directors expire at the next annual meeting of members following the directors’ election unless their terms are staggered under §13.1-858"? State law taking precedence over KCSA’s Articles of Incorporation, would we then have to re-elect all elected directors every year?
Moreover, we now know that the issue as to whether we should have 3 or 4 elected directors stems from the 1990 Annual Meeting at which Busch Properties agreed to appoint one director based on the results of the election. (It’s moot now, but had this information been made public before the filing of the lawsuit, all questions about the election could probably have been resolved). Assuming that BPI’s 1990 proposal carries forward throughout the intervening years, that means that one of the 4 "elected directors" is actually an "appointed director" and, therefore, has a term of one year and not two years. This wouldn’t matter if the election had been held on time as we have to assume that Xanterra reappointed all "appointed directors" for a further one year term in September, 2014. It wasn’t necessary for the election to be held for Xanterra to reappoint its directors, but there is no provision for Xanterra to appoint directors for less than a one-year term, so all will continue to serve until September 2015. So, if we assume that either Frank Dooley or Jim Zinn (whichever received the fewer votes in 2012) is an "appointed director" — 2014 was an even number of years from 1990 — that director’s term will continue until September 2015 regardless of whether an election is held before September!
Either way, if the election is held before September, it can be for only one director (unless the "appointed director" resigns from the Board).
So, we have a mess on our hands. It is likely that our governing documents will have to be changed to resolve all these issues and it will certainly entail more than the changes currently proposed.
Based on the above, we should probably scrap the current proposals to amend the governing documents — there is nothing in them that can’t wait. We should immediately proceed with the election of one director. The above explains why we can only elect one director at this time, regardless of the question as to whether there should be 3 or 4 elected directors.
Then, after the September 2015 annual meeting at which 2 or 3 directors will be elected, the new Board can decide what changes need to be made to the governing documents to restore order to KCSA.
(Note: The KCSA Bylaws, Article IV Section 2 states: "An annual meeting of the Members of the Association shall be held on the second Monday in September of each year". The Virginia Nonstock Corporation Act §13.1-838A also states that "A corporation shall hold annually at a time stated in or fixed in accordance with the bylaws a meeting of the members", although §13.1-838C states that: "The failure to hold an annual meeting at the time stated in or fixed in accordance with a corporation’s bylaws does not affect the validity of any corporate action". The legality of not holding the annual meeting in 2014 remains in doubt.)
Special Meeting Continued to March 5 Without a Vote
14 JAN 2015: Tonight’s Special Membership Meeting lasted all of 39 seconds. KCSA Vice President, Christine Rose, opened the meeting and announced a continuation until March 5 with no voting to take place this evening, and then closed the meeting. She was apparently the only elected director at the meeting. She said that Frank Dooley was unable to make the meeting (that he called on November 25, 2014) and that Jim Zinn was going to try to come to the meeting, but had been delayed. Christine announced that attorney, Liz White, would follow with another informational presentation, and asked for a show of hands among the 80 or so attendees to see who had attended the informational meetings on January 8. Many had not, while others had, and decided to leave. Christine acknowledged that, as of two days ago, only 600 signed proxies had been received of the 1,553 needed for the vote to pass. Some members had asked to revoke their proxies and the proxies have been returned to those members.
Liz White repeated much of what she said at the January 8 meetings, and in the webinar that followed. She pleaded with members to vote in favor of the amendments citing, as one of the reasons, that passing the amendments would put an end to the litigation that KCSA initiated against its own members on August 7, 2014. The lawsuit, in which two of the five defendants cited are candidates for the KCSA Board election, was dismissed by the court on October 20 because there was “no judiciable matter over which the court has jurisdiction”. Ms. White said that the case was dismissed because "the candidates" denied that there was a controversy and added: “if any of you have checked your mail lately, you know that there is still a controversy” – an obvious reference to recent mailings distributed by two of the candidates. Of course, one could question whether the attorney representing KCSA in the ongoing action should be urging the members, from whose Association funds she is paid, to provide a face-saving solution to the legal action in which her firm has twice failed to prevail.
In the Question and Answer session that followed, again allowing only questions submitted in writing, Ms White incorrectly attributed many inconvenient questions to “the candidates”. Again, one might question whether it is appropriate for the attorney representing the Association to make disparaging remarks that could be deemed to be criticism of candidates for the Board of Directors election.
KCSA Holds "Informational Meetings" for Jan 14 Special Vote
8 JAN 2015: KCSA held two "informational meetings" at 3pm and 7pm today in an attempt to rally support for the vote to approve proposed amendments to the KCSA governing documents at the January 14 Special Membership Meeting. The 3pm session was very well attended, will a full room at Mounts Bay Recreation Center, in spite of the sub-freezing weather. The meetings were opened with an announcement that recording would not be permitted, in spite of the Common Interest Community Ombudsman’s ruling on October 22, 2014. Most of the meetings were taken up with a presentation by KCSA attorney, Liz White, with questions only permitted by handing in a card to be read out by KCSA Vice President, Christine Rose. Inevitably, this resulted in some duplication of questions and Ms Rose took it upon herself to summarize questions, often omitting critical parts of the submitted questions. Rather than provide impartial advice to KCSA Members to help them make an informed choice, Ms White made no effort to disguise her fervent desire to see the proposed amendments passed.
Ms White repeatedly emphasized the benefit to Members of Xanterra’s agreement to subject new construction on resort property to KCSA’s covenants and restrictions, while quickly skipping over inconvenient questions, such as why the three amendments to the Declaration do not include repeal of Article VII, Section 5, known as the "gag rule". This "gag rule" prohibits KCSA from using any resources or taking a public position opposed to Xanterra’s development plans and would remain in place even if the Board comprises a majority of elected Directors. She admitted that KCSA had asked to have this section repealed but that Xanterra had refused. She also acknowledged that KCSA had sought a definite time at which the Board could transition to an elected majority, based on federal guidelines that this should occur when 75% of total community lots have been sold, but Xanterra had refused this too, insisting that this could not occur until they received a "final, non-appealable approval" from James City County for at least 147 new residential units, or the construction and sale of at least 100 units on by-right lots.
Referring to KCSA’s decision to sue its own Members before proceeding with the 2014 annual meeting and election, Ms White insisted that the proposed amendments provided the “most expeditious, least adversarial and most cost effective way” of resolving the issues. KCSA’s Articles of Incorporation, Article VI(a) only allows for the election of three directors ((2329+1878)/1500=2.8, which can be rounded up to 3), but Ms. White explained that an informal agreement made by Busch Properties, Inc in 1990 had resulted in four directors being elected since then. She discussed a question regarding the separation of Class A and Class B votes and, in her words, asked whether it would be possible for “co-owners Fred and Mary to agree that Fred would cast the Class A vote and Mary would cast the Class B vote”, but didn’t answer her own question.
In response to a question as to how the vote would be audited, Ms Rose said that she and KCSA staff were responsible for verifying signatures on proxies. 450 signed proxies have been received to-date. She announced that there are 2,329 Class A Members and 1878 Class B Members so, for the proposed amendments to pass, a minimum of 1,553 Class A and 1,253 Class B proxies must be received or votes cast at the January 14 meeting.
Board of Directors Election will take place in February
17 DEC 2014: According to an email that Director, Jim Zinn, shared with KCSA members today: “Whether the [January 14] vote carries or not, the director elections will take place in February for either 2 or perhaps 1 open seat, if we revert back to the original Articles”. (Note that, insofar as elections are concerned, the “original Articles” have not been amended and are therefore current — although, in his email, Jim seems to question whether they are “authoritative”).
In his email, Jim labels those who questioned KCSA’s adherence to the Articles of Incorporation as “anti‑development types” although the questions that were raised about the Board election, originally scheduled for September 8, 2014, had little to do with support for, or opposition to, development of any kind. Most of the KCSA members who have expressed opposition to the proposed amendments to the Articles of Incorporation are actually in favor of sensible development within Kingsmill.
Jim also says: “If you complete and return your proxy there is no reason to go to the January 14 meeting unless you want to change your vote or witness craziness”. He appears to be trying to discourage KCSA members from attending this Special Membership Meeting, which has been called by the KCSA President, and for which a very large room has been reserved at the DoubleTree Hotel.
Special Membership Meeting Called for Jan 14, 2015
25 NOV 2014: The KCSA Board of Directors has called for a Special Membership Meeting to be held at 7:00pm on Wednesday, January 14, 2015 at the DoubleTree Hotel, 50 Kingsmill Road.
The purpose of the meeting is to seek KCSA Member approval of amendments proposed to the Kingsmill Declaration of Covenants and Restrictions and to the KCSA Articles of Incorporation.
The full text of the announcement can be read here, and some Frequently Asked Questions and Answers can be viewed at www.kcsanews.com/FAQs.
You should not sign and return your proxy form until you have heard the case for AND the case against amending our governing documents.
If you plan to attend the meeting, you do not need to return the form at all.
Even if you will not attend the meeting, the deadline for return of the forms is not until 5:00pm on January 13, 2015.
2. What is the real reason for proposing these amendments at this time, even before the election that was postponed from September 8? Two of the issues, described in 6 & 7 below, will have no immediate effect and may have no effect for many years, if ever. There is no good reason to vote on them at this time, as there will be ample time to consider these amendments later, and voting in favor of them now could have unexpected consequences for the community in the future.
3. The only issue with immediate effect is a proposal to change the rules for the election that was postponed from September 8. The Board, including two members who are themselves candidates in the election, failed to win support from the court in their lawsuit, and are now seeking Member approval to change the rules for the election.
4. The Directed Proxy, Consent & Ratification Form only allows you to vote “YES” to all of the proposed amendments. You cannot use this form to vote “NO”. There is no clear directive as to how to vote “NO”, or how to revoke a “YES” vote after you have signed and submitted the form. If in doubt, you should not sign or return the proxy form.
5. The proxy form states that: “The Association may accept forms after the [deadline] and/or may extend the date for accepting forms, as may be determined by the Board of Directors“. It would appear that the Board reserves the option to continue the vote indefinitely if there are insufficient “YES” votes for the amendments to pass.
6. Another issue in the proposed amendments concerns the “concession” by Xanterra to allow a majority of homeowner elected Directors on the Board only when certain conditions, which are very favorable to Xanterra, are met. It could be many years before these conditions are met, if ever, and there is no good reason for Members to agree to changes in the governing documents until those conditions are actually met.
7. A third issue is entirely for the benefit of Xanterra and offers no benefit to the Members at all. That is, to allow Xanterra to offer short-term rentals of additional properties that Xanterra may construct, while maintaining all restrictions on rentals of properties owned by Members outside the resort.
8. The three amendments to the Declaration do not include removal of the "gag rule" – Article VII, Section 5, that prohibits KCSA from using its resources or taking a public position in opposition to changes to the Kingsmill Master Plan proposed by Xanterra. While this "gag rule" is in place, the KCSA Board is powerless to oppose Xanterra, regardless of the composition of the Board of Directors.
9. The proposed amendments reduce the voting power of owner/occupiers to be the same as that of owner/landlords while, previously, owner/occupiers had two votes to every one of an owner/landlord.