Annual Meeting Minutes

Minutes of the Special Meeting of June 28th

South Ferry Hills Association (SFHA).

The current Board of Directors are as follows: David Lichtenstein, Mike Chanin, Brian McGrath, Jeanne Woods, Ennio Stacchetti, Carolyn Topp, Les Wallin, Jane Palasek, Liza Casey

Attended or represented by proxy:

  1. Appignani
  2. Bebon
  3. Berg
  4. Camp
  5. Casey
  6. Chanin
  7. Cugliani
  8. Dalton
  9. Dhlopolsky
  10. Farrugia
  11. Fisher
  12. Hidalgo
  13. Holmes
  14. Lichtenstein
  15. Manuella
  16. McGrath
  17. Palasek
  18. Raszek
  19. Sanders
  20. Stacchetti
  21. Wallin, A.
  22. Wallin, L
  23. Whipple
  24. Woods

The meeting was opened at 11:00 by David Lichtenstein. It was determined that the above list of attendees and proxies made up a legitimate quorum of SFHA and business could be conducted.

David explained that this is a special meeting according to the By-laws in which only the matter announced as the purpose for that meeting can be voted on. Other things can be discussed but not voted on. This special meeting was announced in the letter of April 30th 2015 and the purpose was to vote on the special dues plan developed by the board and sent to the membership. The floor was opened for discussion.

David gave the history of the plan:

Last August we had general meeting in which a plan for the rebuilding of the bulkhead was presented and the membership voted to go ahead and initiate the project and then see if we could get the financing. Without other volunteers, the SFHA board decided to be the finance committee. A series of board meetings over the winter led to the proposal that everyone received.

Brian McGrath gave the status of the reconstruction:

The voting last August included hiring an engineer to create a design and start the permitting process. Ian Crowley out of Greenport came in with the lowest price. We looked into his work and he seemed responsible. Crowley agreed to start the permitting process with the “after permit” work contingent on us getting the funding. We paid $1,000 to start the process. Crowley’s price was $170K. The existing surveys were updated and Crowley expects that the permit should be available to us in late fall or early winter which would allow a replacement next spring. This work can only be done in certain windows – May/June or September/October.  Once we have the permit we have a 5 year period to replace the bulkhead. If the bulkhead collapses in the meantime having applied for the permit may help with that situation since the DEC will see having applied for the permit as an act of good faith.

David read the proposal [attached below].

The estimated cost for the bulkhead is $170K. If we assume a down payment of $20K that would require borrowing and paying interest on $150K which with other fees would bring us up to a total of $200K.

In an effort to reduce the amount of interest SFHA would have to pay the plan is designed with a reduction of 15% for those who want to pay in advance. If we can raise more up front and could have less debt and less interest we have to pay and would allow us to save money.

David went on to say that there was a long and difficult discussion by the Board on whether the funding would be voluntary or whether the SFHA could enforce payment through dues. The board decided that to understand what SFHA’s options were we needed to consult a lawyer. The board talked to Eric Bregman, an attorney from Water Mill, who has previously done work with homeowners associations. He advised the board that SFHA could enforce a formal dues structure rather than making it voluntary. The feeling of the board was that if it was voluntary there would be people who didn’t pay and SFHA would have no recourse, making difficult the ability to collect the total needed and giving those who did pay a sense of unfairness.

David explained that the board recognized that different people have different levels of benefit and created the financial plan in order to acknowledge and conform to that reality. The board tweaked the numbers in the plan until the entire board unanimously agreed. We then distributed the plan and asked that members review it and make a pledge if they supported it. This was not a binding vote but just a way to assess how viable the plan was. On the basis of approx. 30 pledges, the board decided that enough members responded positively that we could move forward with this day’s special meeting.

Tom C. wanted to confirm that this is a onetime only special dues and not an increase going forward. David confirmed that this was a onetime special dues for replacing the bulkhead and that was it.

Marie thanked David for all the work on this.

Hil and Norma questioned some of the recommendations – their main objection is that the amounts are high are for people who have no apparent benefits. Hil thinks many of the docks are in possession of people who assume it is part of their home and therefore are of no community benefit. The Camps don’t think this is fair. In fact, they had a dock and gave it up to another member of the community not thinking that docks were part of any member’s property.  At this point they do not see any personal benefit from the docks.

David said that the Camps have a good question and that one of the big unsettled questions is the management of the docks and the docking privileges.  How can docks be made available to more of the homeowners? The Board is very aware of this. Several board members do not have docks namely, Jeanne, Ennio and David.  Because of the immediacy of the bulkhead issue what the Board is asking is can we move forward with the bulkhead question and leave the issue of the docks as something that will be addressed down the line, with a promise from the Board that it will be our next order of business.

Marie suggested that perhaps members could send in the amount that they think is there value/benefit. Sort of – pay what you feel.

David said that is open to discussion but the expectation of the dues plan is that everyone would pay their assigned dues. If the payment for the bulkhead is tied to dues what we are saying is that we are going to be more active in enforcing the dues. The community will hereby make an effort to raise the money as dues. What the consequences of non-payment of dues would be is in discussion by the Board and has included the idea that loss of docking privileges might then be appropriate.

Steve brought up several premises: first, the fact is that everyone actually benefits from the bulkhead, just like the bridge, these are assets that belong to the whole community of the SFHA. The entire community owns the beaches and the access to the lagoon. His second premise was that SFHA may not come to a completely unanimous agreement in how to move forward. His third premise is that we are unanimous that the bulkhead is going to collapse – which is a physical fact. He also pointed out that typically a bulkhead would not last the 30-40 years that this one has and we should have been putting money away for this.

David said that as a community – the proposal is not perfect but a good starting point. Members are being asked to pay even if they don’t use the beach – it is a shared asset and does add value to all of our properties whether or not we use the beaches. Need to find a consensus but it may not be good for everyone.

David pointed out that the expenses are not the same for people who are not using the docks and that the beach adds a value to every property. Norma and Hil had previously sent a memo to David in which they proposed a slightly different allocation of the dues. To move forward with that we would have to re-examine the pledges and prepare a new proposal.

Ann pointed out that we have a consensus about a differential special dues structure with 3 tiers as a funding plan for the bulkhead so the only differences to be resolved are about the particular dues allocations.

Steve said that even those who don’t use the docks now do have access to the beaches and could have dock access as we are working to free up access to the existing docks that aren’t used. No one outside the association can have access but a prospective buyer could.

Marie said that this is part of a bigger plan. The association is taking care of what we have. We are an association with plans and one is to maximize access to the docks for everyone.

It was pointed out that going back 20 years people were asked to give unused spaces. We need to have a list of what is available on a seasonal basis and some kind of signup sheet.

Mike B said the point is the bulkhead will collapse and we might be liable as an Association if we leave it there to obstruct the entrance.  There is no benefit to anyone by not doing something and a benefit to everyone if we do. We are all sitting on a potential liability. The board has done a masterful job – we can’t kick this can down the road.

David pointed out that our plan is based on 100% participation. If we get close and we have a gap there are some members who care deeply that the bulkhead get replaced and have said off the record they may grant additional funds to the association if needed. Perhaps, we can’t expect an absolute 100% participation but the idea is to get the funding plan in action, see how much we can raise immediately, how much we need from the bank, and then work to include as many members of the community as we can.

Hil asked what kind of security the bank wants. David explained that the bank wants personal guarantees and the bank would like to have fewer but would agree to go up to ten guarantors and each would guarantee up to 10% of the loan. Ten people would guarantee 10% against default. David has talked to BridgeHampton National Bank and Chase. These banks want to be seen as good public citizens who are helping the community. David pointed out that the numbers for the loan are still rough at this point since we don’t know how much will be paid by members immediately and how much will have to be borrowed.

Mike B. asked if we have a contingency on the contractor’s price or are we dollar for dollar since the numbers were from last summer and could have escalated – a 2 year hiatus is still considerable and once you start digging you find bodies. David said we were originally talking about 200K for all fees and consultants which is what the plan covers. This is $30K over Crowley’s price so as to give us a little leeway.

Hil asked why we can’t work something out where people could pay the association to keep boats inside the cove during storms. It was pointed out that Jeff Lightcap, who owns a dock on Smith Cove, brings his workboat in during storms, and his floating dock during the winter, and ties them to SFHA property. He is aware of the bulkhead project, and has offered to contribute to it.

The ideas and concerns that arose out of this:

  • If Mr. Lightcap brings his workboat in and ties it up are we liable in some way? Do we want him to have our permission? If we ask him for a contribution are we conferring some kind of rights to him, if so we should proceed with caution. Even if it is voluntary what does that mean in terms of liability?
  • f we get the canal dredged to 7 feet we could really bring bigger boats into the cove during a hurricane. That this could be a strong argument to the town for contributing. Changing the existing bulkhead permit would be a major complication to our current permit request status and would not likely get permitted. We have said we are replacing in kind.
  • Charging to bring boats into the cove would likely result in going to court with the town to see who owns the sea bottom in the channel.
  • Regarding the dredging, we know the problem is the bar outside the channel but is that state or town water? (David thinks it is the town’s responsibility.)

Hil asked if we can just do part of it at a time. It was pointed out that doing it in phases will cost more money and will be riskier. We probably don’t need the corner on the west side but to get the permit we need to replace in kind.  All of these issues have come up previously and the board has looked into them including putting the new bulkhead in front of the old but we would not be able to get it permitted.

The question came up whether by accepting higher dues from the dock owners are we confirming additional rights – does it mean they own the land and can do whatever they want? David pointed out that we have charged different dues for dock owners and non-dock owners in the past so there is precedence for doing this and the board is going to work to better define the rights.

David said that he had drafted an addendum to the proposed dues plan as a ‘friendly amendment’, as follows:

Special dues payments that are at the ‘tier two’ level reflect only current docking privileges. Guidelines for the future of these privileges will be clarified by the next general meeting.

There was not unanimous support for the amendment.

Marie said that she doesn’t feel that we need the amendment because it is implied by the plan and our discussion.

Ann said we should leave the ambiguity about future administration of the docks as it is until the board can address this but we should certainly agree on not letting those outside SFHA use the docks.

Because the addendum was not included in the notice to the shareholders, it was determined that we could not include the addendum in the voting. David made assurances that the Board would try to address the outstanding issues by the next annual meeting.

Regarding the voting David said each household has two votes per dues-paying residence. Only those with current dues can vote. Current dues are those paid by the last annual meeting.

It was also noted that we had received 30 pledges in favor of the special dues.

Ann made the motion to accept the financial plan as distributed to the membership on April 15th. Tom C. seconded it.

The motion passed and the results of the voting are below. The meeting was adjourned at 1:00pm.

  Yay Nay Abstain
Present and represented by proxie:

(List at the top of the minutes)

44

 

2

 

2

 

Pledges recorded as 2 Yay votes each:

Chernoff
Cresto
Gradischer
Hudon
Marsh

Rando

 

12

 

 

 

 

Checks received and recorded as 2 Yay votes each:

Pontone
Sweigart
Russekoff
Hopper

Bleigh

10    
TOTAL 66 2 2

 

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The new bulkhead looking from the west beach. Photo by Jill Moser