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Mar 29 2016

Kiawah Island Community Association’s 2016 Annual Meeting

By Gregg Bragg, The Island Connection Staff Writer

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The Kiawah Island Community Association broke with tradition earlier in March. Results of its board elections were announced in advance of the annual meeting for the first time, allowing candidates the option of attending the meeting in the wake of the first contested election in years.

David Singer led the field with 3,361 votes, Rajan Govindan 2,428 votes and Lynn Morgenstern, 2,376 votes, were selected to fill the three available seats on the board (all three endorsed by the nominating committee). They were followed closely by Diana Mezzanotte, 2,148 votes, Chris Dahlstrom with 1,940 and David DeStefano, 1,242. Topping the list of issues in the hotly contested race were infrastructure and amenities. KICA has repeatedly queried residents regarding improvements to the island.

The idea of “more stuff” generally resonates well, while paying for it garners less enthusiasm. Adding “new” things in the face of 40 year old infrastructure produces a collision of priorities.

Consequently, income becomes an issue for the community organization. KICA gets most of its funding from two primary sources:

1. Annual Assessments, which are directed to operations and are capped, by covenant, at a 5 percent increase per year.

2. Contributions to Reserves (CTR), a 0.5 percent fee levied at closing on the sale of property, which is applied to infrastructure. The Great Recession (2008) didn’t help real estate sales and began to impact CTR along with repair schedules. Three years ago, KICA responded to the growing shortfall with a somewhat controversial solution; the maximum 5 percent annual increase would be collected separately (as an additional assessment) and placed in a “bucket” earmarked for infrastructure. The move was consistent with covenants and residents swallowed the jagged pill as being necessary. However, it may have infected sentiment toward other additional assessments required to add amenities.

Two years ago KICA began floating the idea of new recreational facilities for members. $16 million would be needed to both embellish the Sandcastle and build new facilities on community property at Rhetts Bluff. Feedback on the proposal was plentiful and at times, strident. KICA responded by winnowing down the request in a phased approach that included only The Sandcastle. The vote held in 2015 on “Phase I” requesting $8.6 Million ($245/property owner) failed in a 57 percent to 43 percent vote of membership. KICA board chairman David Schoenholz spoke directly to the matter in his address to attendees of the annual meeting.

“… The board understood all along that our recommendation was far reaching and controversial and the membership would very possibly reject it. I would not say we were terribly surprised by the outcome [of the vote on amenities]. I would say we were taken aback, however, by the vitriol and personal attacks by some of those close to it [the issue]… which carried over to some degree to this board election,” Schoenholz said.

He concluded his remarks by expressing his gratitude to everyone he had worked with and was rewarded with enthusiastic applause.

Bruce Stemerman drew the task of sharing KICA’s financial report, promising to take less than two hours “No longer” to complete. His comment elicited appreciative chortles from the crowd. Then he dropped the bomb about KICA’s own version of a financial crises. Deborah Retalis, head of KICA’s accounting department for the past ten years resigned two weeks earlier. She is leaving to be the Financial Director of the Hall Restaurant Group and “can walk to work,” said Stemerman before continuing with his report.

The organization was $8,000 short on budgeted assessments for the previous year, said Stemerman, but received $159,000 more than anticipated from CTR, $125,000 extra from commercial activity, and an additional $250,000 from a collection of miscellaneous categories, for a total of $527,000 above projections.

KICA had spent $57,000 more than anticipated attributable, at least in part, to October’s historic flooding. Stemerman characterized KICA’s overall financial condition as “strong apart from the $500 assessment discount we’re about to give away,” he shrugged to more laughs.

KICA COO James Bailey also reported on the state of the association with a retrospective of recent events. The reserve fund, according to Bailey, has emerged from “dire straits,” after being out of compliance with covenants for a time.

Since then, the reserve fund has stabilized to the point future boards might be able to consider reducing the additional assessments. He was circumspect about its elimination, however.

We have replaced 75 percent of the drainage system in the last three years but more needs to be done,” Bailey said.

The floor was then opened to general comments with Kiawah resident Wendy Kulick leading the way. “What a surprise,” said Bailey to more laughs in a display of his own humor.

Kulick thought abolishing member participation in KICA committees was a lost opportunity to groom future board candidates, gain input from members and created a barrier to communications with residents. She asked the new board to consider reversing the decision and to consider eliminating the use of executive sessions for all but legal, personnel and contractual matters.

Mary Lou Barter, a member of the Boat Landing Preservation Committee asked for “a copy of the board meeting [minutes] where they voted to sue [their] members.”

Additional questions about the dates and times the rest of the existing municipal building might be available to KICA, once the Town of Kiawah moves to its new building, couldn’t be answered because too many of the details are still unknown.

There were no other questions “so before you all run to the bar, [the Outgoing Directors Reception was open to all this year] we have some new business to attend to,” said Bailey. He announced Bruce Stemerman had been elected KICA Chair, Marilyn Olson the new Vice Chair, newcomer Rajan Govindan as the new Treasurer and Carrie Newbern (KICA staff) will serve as Secretary. The Island Connection followed up with Bailey in the days after the meeting.

Responding to questions about the nominating committee, Bailey said “The intent of the nominating committee is to ensure there are candidates committed to running. Year after year there were people waffling with literally minutes to go before the filing deadline. There were times where we didn’t know if we would have enough candidates right up to the deadline. The members of the nominating committee are: Brendan Burke, David Tharpe, Glenn Brown, Linda Wilson, Theresa Widuch, and John Connolly.”

However, there were six candidates for three open positions in 2016, so the harvest may have improved and the shiny side to all of the activity is awareness. The 63 percent of KICA members voting in this election is an improvement over recent years. Bailey would like to continue the trend which suggests more involvement from membership.

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