An independent source of news and commentary concerning Lake Holiday POA in Cross Junction, VA
Aug 2006 – Issue 08/19
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A Candidate's Statement (0819/2006)

The dictionary defines integrity as follows:
1. Steadfast adherence to a strict moral or ethical code.
2. The state of being unimpaired; soundness.
3. The quality or condition of being whole or undivided; completeness.

Honesty and integrity go hand in hand. With that standard in mind a public and open failure of integrity took place at a public meeting by Chris Allison when I asked Allison for documentation of the legal opinion on the vote on new governing documents. This very clear example is contained on Ogunquit's web page as well as my own website. This is typical Allison doubletalk. He has often stated half-truths as facts or answered a question with a question.

How much credibility do people give to any statement when it is made by an unidentified source, person or group? None. Why? Because unsigned statements give the reader no opportunity to associate the statement with a person. Any statement with no name has no credibility and authenticity. Just like an unsigned check, it's worthless!

Since not one person attacking me on this forum had the integrity to put his name to his comment, may I suggest that you talk to me before you judge me, my motives and goals for our community. I can assure you that I am not, nor will I ever be, a puppet for any person, group or developer. I will never favor any developer. NEVER! I can state my position simply. I support holding a special meeting to remove certain directors because I am troubled by this board's conduct. I seek a seat on the board because I believe I can apply my skills to solve some of the problems manufactured by this board. I've never discussed getting anyone free utilities, and I have no plans to do that. This is not a developer takeover of the board, because Ogunquit on its own doesn't have anywhere near enough to remove any board member. It is a shakeup of the board by members who have thought long and hard about the problems we have all witnessed and decided now is the time to act, before this board makes more trouble.

As for my removal from the utility board. Pat Shields and company failed to address major issues that both myself and the then vice-president tried to bring to the attention of both boards. On file is a letter I sent to both boards and the then GM, Karen Northrop. My letter contained documented issues of concern on utility contracts, quality of workmanship, costs and several other issues yet was completely ignored. I believe this failure to address the issues raised by me has cost our community hundreds of thousands of dollars. The company at the center of the issues contained in my letter was dismissed only several years after my removal from the utility board for just some of the issues contained in my letter. My letter is available upon request. What happened to me is typical of what happens to everyone who raises concerns or disagrees with incumbent powers. Despite the seriousness of my concerns, I was removed from the utility board and falsely branded a "troublemaker".

As a prospective board member I will be glad to candidly discuss with anyone these past issues and current topics of concern.

In a meeting held for prospective board candidates on Aug. 12th, I asked Shields and Allison why Dave Ingegneri, our most recent GM, left. Shields suggested that most GM's only last for 12-18 months nationwide. Allison as usual, answered my question with a question (i.e., Why don't you ask him yourself). Harriett Smith said that Dave told her that he left to broaden his experience.

Well, I did call Dave, and I had an interesting conversation that leaves me with more questions than answers. Dave indicated to me he left because there were things taking place he did not feel comfortable with and also felt he was being micro managed. He indicated Harriet Smith's comment was not true When I asked him if he would consider returning as GM, his answer was a qualified yes, stating he would only return if Allison was out of the picture. Can you verify what I have told you? You bet. Call Dave for yourself. Do you think the board has been giving you straight information on important issues, such as why Dave left? That's your call, folks.

Signed,

Bill Masters (owner of the Summit Advisor and Candidate for the board)

It's Two Separate Issues(08/14/2006)

Some may be confused by the flurry of mail regarding the Ogunquit petition. The petition itself does not seek to grant water & sewer expansion to Oqunquit lots at community expense as has been suggested. Instead, it calls for a special meeting at which any of seven board directors may be replaced by community vote. The directors named are ones whose terms expire in 2007 and who are not effected by the Fall election. The proposed replacements are all community residents. Some have run for the board in the past.

The sentiment of the Board and its defendants is that the Ogunquit proposed replacements are pro-expansion and willing to commit community funds ($M's) to that cause. We do not believe that to be an accurate assessment. While we cannot speak for the individuals (nor should the board) we believe their interest is more toward fixing some inherent problems with the board itself. A second major Board supporter concern is over the use of proxies. The Ogunquit proxy allows them to cast your vote for their candidates in any election up to Oct 2006 Annual meeting. That would presume a vote for the replacement of all seven named directors at a special meeting.

Emotions aside, the debate has taken on almost comic proportions. It is reminiscent of the "More taste, Less filling" commercial since neither side responds directly to the other's issues.

The Summit Advisor has been critical of the Board in the belief that casting mistakes in public light encourages forethought in the future. We have also been critical of Ogunquit's lawsuit and consider the $4M claim frivolous. We believe the lawsuit was precipitated by discriminatory treatment when Ogunquit originally inquired about expansion, and that their expectations of who pays for expansion (at least at one time) was out-of-line.

The petition for a special meeting can only survive if sufficient signatures are acquired. Article X of the Bylaws requires written request of 1/3 of the members. If a meeting is warranted, the board is obligated to hold one and conduct the vote as requested. An "impeachment" meeting has never been done before, and no doubt causes anxiety for many. One BB poster expresses it thusly:

"...Frankly, this is a rare opportunity for the community to admit that one or more of the (largely LHLLC appointed) directors are not acting in the community interest and fix the problem. Ignore it now and you have another year of liberal spending and increased debt. This board does not respond to criticism, constructive or otherwise, and simply does what it (and LHLLC) wants. Do not expect things to get better by themselves..."

Considering the growing polarization of the community, such a vote may not be such a bad thing. While five new directors will be installed this Fall, some believe that a suitable direction can only occur with the removal of one or more of the current directors. A special vote would put to rest the relevance of many of the board criticisms through the democratic process.

Election Strategies (07/26/06)

Thinking about running for the Board? Here's some factors for consideration...

Lake Holiday turnout typically varies from about 200 to 400 voters depending on prevailing issues. The Developer has about 60 votes or more depending on the current interpretation of the governing documents.

It is impossible to predict the number of candidates prior to the cut-off date. Many choose to wait until the last day to register. Existing Board members may encourage preferred individuals to run if the slate looks sparse. You may be a shoe-in if five or less candidates run, or face uncertainty if many run as was the case in 2005. Preparations and expectations should be tailored for either eventuality.

It is wise to project a neutral or indifferent position on development in order to avoid alienation of either the Developer or the unsympathetic resident base. Historically the Developer has voted for candidates who appear to be naive and trusting. When resident votes are diluted by a larger candidate base, the Developer block vote becomes the determining factor.

Your resume is your most important advertisement, and possibly the only source of information about you that most voters will see. Tailor it to the resident audience and not to a corporate human resources director. Avoid elaborating on superfluous credentials or work experience which are unrelated to the board position. Highlight experiences which are transferable and applicable to current issues. Voters are mostly concerned about your vision for Lake Holiday and what usable talents and connections you bring to the table. Don't be afraid to honk your horn.

The Meet-the-Candidates meeting is usually attended by about 50 or so people. While this may represent the minority of voters, important gains (or losses) can be achieved by knowing the material. Brush up on the governing documents, rules and regulations and current events and issues. You should do this anyway if you plan to be effective on the Board.

Assume the voter base is about 50:50 Liberal:Conservative and avoid partisanship issues. The board makeup has traditionally been liberal and could use some balance in its decision making. Above all, common sense and whimsical vision are desirable qualities.

The Board is a serious responsibility. It is not a club you join for fun. You will be required to become familiar with a wide variety of issues and participate in decision making from an informed position. Showing up unprepared is an insult to your voters and fellow directors. Plan on a minimum of several hours reading prior to meetings.

As with any organization, 80% of the work is done by 20% of the workers. Assertive willing individuals usually end up as the executives and do most of the work. It may be worthwhile to do some self assessment as to where you stand with spare time. It is probably safe to say that no director will be allowed to cruise through the month between meetings without some extracurricular duties. If you aspire to an executive position, demonstrate your willingness early as officers are elected at the first meeting.

A director is a people-person and a representative of the community. You may be called upon to seek out and interface with representatives from other governmental and commercial organizations, and maintain a positive relationship. You need self-confidence and ability to communicate on an even level with those in authority.

It is not a good idea to run for the board position because of a personal agenda. The board consists of eleven directors who (ideally) act on behalf of the community's interest in a wide variety of issues. If you get two minutes to promote your personal issues you will be lucky. The community agenda is (or at least should be) the highest priority.

If you choose to run (after reading all this) you are doing a great service for your community. Participation in the democratic process if primary - winning is secondary. There are no losers in elections - only willing volunteers. Either way the community appreciates your spirit. Good luck to the 2006 candidates!

Doing the Math (06/29/06)

The revised Development Agreement is now available on the Lake Holiday website. Gone are the references to LHLLC's "contribution" to the clubhouse in exchange for section 7, and in its place is a $300k commitment to the clubhouse, if it is renovated. This lavish and generous contribution pales in comparison to the soon to be discovered cost estimate, which we guess to be about $2M.

Since the Developer had a major hand in the planning, numerous features are to their specification. The front facade is dressed up and stucco'd like the picture on the M&S website. The side door and stairway are removed, and the deck is extended to the front with a catwalk. This removes the outside stairs to the picnic area and beach, requiring use of the rear deck stairs to access the ground level. A new side door opens from the upper level to the catwalk. Inside, new stairs and an elevator are cut into the slab floor just to the East of the front door. Many of the plan improvements are to satisfy ADA requirements. Several unnecessary features were rejected by the task force, but the plan still calls for major work to be done.

Assuming $2M is in the ballpark, the community contribution is $1.7M (85%). It is unclear whether the Developer's $300k has already been rendered, since at one point there was supposed to be $450K in the clubhouse account. This would have included $150k for the original contribution-for-lots plus another $300k. Since the POA publishes budgets, but not balance sheets, the bottom line actuals are unknown except to a select few.

Also in the revised Development Agreement is a provision whereby LHLLC will help secure a loan for clubhouse construction. You can see where this is going. Assuming the board hasn't frittered away the $300k already, we would borrow $1.7M to complete the clubhouse. Speaking of frittered, this could be why the low cost design concept (See our Nov 2005 issue) was dismissed last year. Missing cash could be camouflaged by the more expensive alternative.

In any new development the Developer would incur the total costs of such amenities (along with roads and infrastructure) and would recover the expense via the sale of lots. Amenities are normally employed to attract buyers to the development. Instead, we the residents are contributing a disproportionate share to these capital improvements such as the clubhouse, gatehouse and bus stop. Ever get the feeling that...(never mind).

For argument's sake, assume a $1.7M hypothetical 5% loan over 30 years, wherein the payments are $9,126 monthly or $109,511 annually. Spread over 1709 owners, that comes to $64 each. That alone is a 5% increase for residents dues and a 11% increase for members - for 30 years. All this says nothing of the dam spillway cost, which is estimated at $4M in a couple of years. That will likely require another loan - assuming we can quality for it. All totaled, that's a $214 increase in dues per lot for $5.7M in loans.

Some of the costs may be defrayed by the utility sale to Aqua. The sale presumes to bring in $800k plus reimbursement for capital expenses, but the 15 yearly payments of $78k are contingent on an aggressive new connection quota! In a declining housing market, we can probably kiss that $1.17M goodbye. We understand that interim hookup fees are also deducted from the $800k. At $8686* each, if 92 lots are connected, the utility company is a give-away. Free! Some deal!

*We're told that the tariff components add up to $8868. The $8686 amount on the Lake Holiday website is apparently a typo and 90 lots is the actual crossover. See Ogunquit's website July 30 article for more details on the Utility Sale.

An open letter to John Conrad and Miller and Smith (08/01/2006)

While I agree with many of the points made in your recent letter to the Lake Holiday Property Owners, I would like to correct the record on a couple of things. Your companies weren't involved with "The Summit" prior to 2004 and there are inaccuracies in your perception of what the Board did and how the Board acted from 1999 to 2004.

I was a member of the Board from January 1999 to November 2004. At various times, I filled the positions of President, Vice President, Secretary and Treasurer as well as Director at Large. During that period, I attended all but one or two Board meetings and I observed no infighting.

The Board had one primary objective; to bring the community from the edge of bankruptcy to financial stability. In December 1998, our Home Owner's Association had about $3,000.00 in the bank, not even enough to meet our payroll. Thousands of dollars in dues and utility bills were unpaid, we had no computers and we had a brand new staff to be trained. Purchases had to be made on a cash only basis because area merchants would not grant us credit. They'd been stiffed too many times by the previous manager. Some Board members resorted to using their personal credit cards to purchase office supplies. One actually bought 2 computers for the office with his credit card. In point of fact, the Board all pulled together to avoid bankruptcy.

In 1999, under Court supervision, the Board rewrote the Governing Documents and the Articles of Incorporation and began legal proceedings to collect the unpaid dues and utility fees. We developed office protocols and trained the staff in them. Of course, there were property owners who disagreed with some of our actions. Nobody wanted a raise in dues or special assessments but they were necessary in order for the community to survive. We had a 2 year building moratorium placed on us and we were required by the court to expand the waste water treatment plant. This expense was borne by the people who were resident at the time. Existing homes were selling at a fairly brisk pace, though. Old bank loans were renegotiated and better terms were obtained. The community began to come back from the brink.

When I left the Board in 2004, there was almost two million dollars in the bank. Today, the treasurer is predicting that we will be broke by September if we can't get a loan or a line of credit. Where did all that money go? Maybe the changes that Heisey and Allison made in the way business is conducted weren't so good for the community after all.

I think that replacing the entire Board would be a grave error. We would lose what little corporate memory we have. However, when new people are elected, there must be training to acquaint all the members with exactly what their responsibilities actually are. This isn't a social position! Some of the present Board members seem to think that all they have to do is show up for the meetings. They don't do their homework. They don't understand the issues nor do they know how they want to vote on them. This irresponsible attitude is very discouraging.

I've attended every Board meeting this year. Sometimes, I've been the only one in the audience. The people who are railing against the Board have no first hand knowledge of what goes on at a Board meeting. So, where are they getting their information?

I would suggest to you that one reason you bought those 722 lots is, in a large part, because this is a desirable community in which to build and it is so desirable largely because of all the hard work done by those early Boards.

Respectfully,
Louis R Einstman

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