KICA Board of Directors Meeting    APPROVED

[FIRST SUBMITTED 3/8/01]

Present: Pete Trees, President                  Joe Bunting, Staff

Townsend Clarkson, Vice President        Norm Shea, Staff

Bill Wert, Secretary                            Teresa Cooper, Staff

Tom Keating, Treasurer                     Tammy McAdory, Staff

                                                        Jessica Schoeffield, Staff

                                                           Casondra Clark, Staff

Others in attendance are listed on the meeting attendance sign-in.

Absent:     Pat McKinney, Director

                Buddy Darby, Director

                Jon Weitz, Director

1.    Call to Order - Verifying quorum, Mr. Trees called the meeting to order at 2:02 p. m..

2.    Approval of January 16, 2001 Minutes - (Previously delivered) Mr. Wert pointed out that a change was needed in the Executive Session section of the minutes. Mr. Wert abstained during approval of Pat Wert as chair of Community Services Committee. Mr. Trees asked for a motion to approve the minutes from the previous month, noting the clarification. Mr. Keating moved approval of the minutes, pending the change. Mr. Wert seconded the motion. This 2-3 vote was carried unanimously by those in attendance.

3.    Administrative Reports

  A.    Joe Bunting, General Manager

        1.    Lake Study Report - (Enclosure) Joe introduced Norm Shea, KICA Lakes Manager, to present a report to the board. Copies of the report, which is several hundred pages long, are available at the Administration and Maintenance departments. The Lakes Study was commissioned in January 1999 in order to identify lakes with poor water and wildlife conditions, to develop solutions for these problems, and to create guidelines for future lake maintenance. The Lakes Department profiled 113 lakes using a Global Positioning System (GPS) and sonar. There are 333 acres of lakes on the island. The shoreline distance of the lakes is 46.5 miles. The overall health of the lakes is good. They are deeper than was previously thought. The study made it clear that the establishment of aquatic vegetation needs to be a high priority. The study revealed that some dredging will be necessary, but it will be done mostly by portable dredges, which will reduce costs. Based on the study, Norm recommended that in the future, surveys should be conducted successively to help determine sedimentation trends. His goal is to survey 25 lakes per year, which means the entire system could be surveyed every five years.

Mr. Trees thanked Norm and congratulated him on the completion of the study. He stressed the importance of Norm and the Lakes Department working closely with the Land Management Advisory Committee and the Covenant Compliance Committee in the future to maintain the health of the lakes. He also asked Norm about his plans for dredging Bass Pond. Norm stated that he is working with the resort on dredging the pond. The resort may be able to use some of the dredged soil for their proposed hotel site.

        3.A.2.    Status of Annual Meeting - (Enclosure 3.A.9.) The new date for the annual meeting is June 3, 2001 from 2:00 p. m. until 6:00 p. m.[Note: the actual starting time of the meeting is 3:30 p. m., with registration opening at 2:30 p. m.]. Nominations will close at 5:00 p. m. on March 29. This is also the deadline for non-advisory motions to be submitted. A new annual meeting packet will be mailed approximately 30 days before the meeting. There will be an election issue of the Digest mailed in mid-April as well as a Meet the Candidates forum, not yet scheduled. The board had approved by mail vote to recommend that the Development Agreement be changed to extend the term of the Developer's fourth seat on the board. The expiring term of Tom Keating is also extended until the new annual meeting.

        3.A.3.    Status of Dennison Royal's proposal to install portion of leisure trail & convey to KICA - (Enclosure) Mr. Royal wants to install a portion of leisure trail to convey to KICA. The trail would be located between Jackstay Court and Royal Beach Drive. It would have a beach access which would extend from Flyway Drive, behind lots 97 & 96 Jackstay Court, and would connect to KICA's existing trail behind 93 & 92 Jackstay. The existing leisure trail goes from the end of Jackstay, between lots 93 and 92, toward Royal Beach and onto the beach. The portion of leisure trail KICA does not have yet is the portion that's between lots 97, 96, and 93. This was provided to the board as information only. Some clearing and surveying work is being done in the area, the ARB is aware of that work, but has not yet received plans.

Some brush has been piled near Association property, but not directly on it. The owner of the property has been notified that the brush has been there for too long. Mr. Trees asked that Joe notify the owners again.

Joe stated that he would come back to the board for the final conveyance, since it is a third-party developer.

        3.A.4.    Long Range Plan Status Report - (Enclosure) There had been no changes to the status of the 25 remaining items that are underway. Committee chairs met with facilitator Rick Lamothe on February 15 to further refine the mission and vision of the Association and to develop goals and objectives. There will be another facilitated session on March 1.

        3.A.5.    Status Report: Hotel Drainage - The Maintenance Department received the hotel site's storm drainage master plan on February 22. The plans had not yet been approved by the ARB. Maintenance has asked for another set of plans once the project has been ARB approved.

        3.A.6.    KICA's Ability to be Involved in a Legal Challenge of the County's Tax Cap - (Enclosure) Non-resident members had asked if KICA would get involved in challenging the county's tax cap and wanted legal counsel's opinion released to them. Counsel Trenholm Walker advised KICA that it should not get involved for several reasons: KICA would not be undertaking the battle to obtain a more favorable tax for its own property and would thus have no stake in the controversy; KICA would be pitting one segment of the membership against another segment and the KICA board owes a duty of loyalty to all members; the Covenants do not authorize or approve the spending of money to fight a tax battle on behalf of some of the members; the Covenants specify that assessments of the Association shall be spent exclusively for the common properties or the services that KICA is authorized to provide. As the Association is not authorized to provide the service of advancing the legal position of a group of its members against the county, assessment revenues cannot be spent to further the cause. KICA non-resident member Steve Lapp had asked the board to consider including a new proposal on the annual meeting ballot, stating that KICA could send a special assessment not to exceed $100 to all non-resident property owners to fund the legal bills associated with the tax cap. Legal counsel advised against it, citing that the Covenants only specify four purposes for special assessments, and the service of furthering a portion of the membership's legal position is not one of the four purposes. Joe stated that perhaps a notice about the tax cap and the KICA members battling against it could be included in the annual meeting packet. Board consensus was to not include such information in the annual meeting packet because this would set a precedent for other charities or causes to swamp the membership with information in the annual meeting packet. Mr. Clarkson suggested that Joe offer Mr. Lapp a table at the annual meeting to promote his cause, but he agreed with counsel's advice. Mr. Wert also agreed with counsel's opinion and then suggested that the Communications Advisory Committee interview Mr. Lapp for a Digest article so that the membership could receive the information prior to the annual meeting. Mr. Trees asked if the Association needed to make the legal opinion available. One KICA member wanted a photocopy, although Joe had provided him with counsel's advice, verbatim, in letter form. Mr. Clarkson moved that the board not release a photocopy of counsel's legal opinion, since the information provided by Joe was adequate. Mr. Keating seconded the motion. This 2-3 vote was carried unanimously by those in attendance.

        3.A.7.    Security Department

                    3.A.7.a.    Routine Report - (Enclosure) Joe reviewed the summary of the Security report. Hootie and the Blowfish will perform at a charity golf event on April 9. Security expects about the same number of people that attended the MUSC celebrity event last year.

                    3.A.7.b.    Recommendation on Charging for False Alarm Responses - (Enclosure, Exhibit III) Rod James, chair of the Security and Safety Advisory Committee presented the SSAC's recommendation not to charge for false alarm responses. Responding to approximately two false alarms per day is not a burden for the Security officers.

        3.A.8.    Recreation Department

                    3.A.8.a.    Routine Report - (Enclosure) Joe reviewed Recreation activities.

                    3.A.8.b.    Boat Storage Plan presented by Vagn Andersen - (see 3.B.3.a. below) Mr. Andersen presented a plan in which additional boat storage would be located on the property adjacent to KICA's Maintenance Department on Kestral Court. He reviewed site considerations such as trees, fencing, slip size, and surface material. If approved soon, this project could possibly be completed by June. After some discussion, it was decided that a gravel surface was more desirable than a paved surface. Mr. Clarkson moved that Mr. Keating and Joe negotiate a lease agreement with KRA on behalf of the Association. Mr. Wert seconded the motion. This 2-3 vote was carried unanimously by those in attendance.

        3.A.9.    Summary of Mail Votes - (Enclosure) The first mail vote taken by the board was to approve the annual meeting date change to an unspecified date, to change voting to accommodate cumulative voting, to amend the By-Laws for 2001 only (allowing extension of the meeting beyond the first three months of the calendar year), to recommend that the Town and KRA to revise the Development Agreement provision requiring election of a property owner director to KRA's fourth seat to occur in March 2001 (revision is to extend this date to the new annual meeting date), to send a special mailing to the membership informing them of the date change, and to fund related printing and postage costs. The vote passed unanimously.

The second mail vote taken was to approve the new annual meeting date of Sunday, June 3, 2001. This vote also passed unanimously.

        3.A.10.    Member Comments and Questions from January 16 Meeting - There were no questions requiring responses.

  3.B.    Teresa Cooper, Controller

        1.    Year End 2000 Variance Report - (Enclosure) Teresa summarized the variance report for the year 2000.

        3.B.2.    Status Report of Independent Audit - Field work on the audit was completed on February 13. A complete report of the independent audit will be available within a week or two. The auditors will be making recommendations soon to improve efficiency and operations.

        3.B.3.    FAC Requests for Funding (Enclosures for each):

                3.B.3.a.    Additional Boat Storage - Based on the 55 new spaces projected by Vagn Andersen, KICA will be able to use revenue collected from boat storage to make the payments on the lease by the end of the third year. Mr. Trees had recommended that an interest rate of 7% be added in. Mr. Clarkson did not think it was fair to charge interest. The FAC recommended that the price for boat storage spaces (Kestral Court) and the proposed new storage area be raised from $350 to $400. No vote was taken on how to fund the proposed new boat storage. A mail vote will be taken on how to fund the new storage after Mr. Keating and Joe negotiate a contract.

                3.B.3.b.    Additional Security Personnel for improved enforcement of short-term visitor issues - The FAC requested $36,672 to hire two new employees to begin in the spring. Teresa had submitted an ATAX application to the Town. Mr. Wert moved approval of hiring two additional security employees. Mr. Clarkson seconded the motion. This 2-3 vote was carried unanimously by those in attendance. Mr. Wert suggested that someone report to the board on ATAX and what it can be used for. After further discussion, board consensus was to submit the ATAX application by the deadline of March 1 and ask the FAC to find a way to fund the new positions if ATAX money is not approved.

                3.B.3.c.    New Time Clock System for Four Departments - At the recommendation of the auditor, the FAC suggested that a new time clock system be purchased. Currently, each of the four departments uses a different method for calculating hours. A lot of time is being spent calculating time cards and sign-in sheets. Total monthly cost would be $388 with a one-time setup and training cost of $2750 to be funded from time clocks that are fully depreciated and the general and administrative budget for software upgrades and seminars. The $388 and $2750 are increases to the existing budget. Mr. Clarkson suggested finding the money within the existing budget. Mr. Wert moved approval of purchasing the time clock system. Mr. Keating seconded the motion. This 2-3 vote was carried unanimously by those in attendance.

4.    New Business - Ratification of votes taken in January 16 executive session. This procedure was suggested by legal counsel. At the January 16 executive session, the board appointed Fred Peterson as Vice Chair of Communications Advisory Committee, appointed Carol Fishman as Chair of Covenant Compliance following Bill Gamble's resignation, added Tom Shealy to Governance, added Ted Kautz to Human Resources Committee and appointed Ralph Edwards as Chair, added Dwight Freeburg to Recreation Advisory Committee, added Doug Percy and Bill Baker to the Finance Advisory Committee, appointed Jerry Wilson as Vice Chair of Land Management Advisory Committee, and added David Wallace to Security and Safety Committee. Mr. Clarkson moved for the ratification of the above appointments and additions. Mr. Wert seconded the motion. This 2-3 vote was carried unanimously by those in attendance. Pat Wert was also appointed Chair of the new Community Services Committee at the January 16 executive session. Mr. Keating moved approval of the ratification appointing Pat Wert as Chair of Community Services Committee. Mr. Clarkson seconded the motion. This 2-3 vote passed as follows: in favor - Mr. Keating, Mr. Clarkson, Mr. Trees; abstained - Mr. Wert.

5.    Committee Reports

  A.    Covenant Compliance - Status Report: Rental Agreement     Bill Gamble

Mr. Gamble stated that the Covenant Compliance Committee is waiting for a revised copy of the Memorandum of Understanding to return from counsel. It will be distributed to the rental agencies. Progress has been made on the short-term visitor issue. KICA now has 24-hour contact information for the commercial rental agencies and has better contact with homeowners who privately rent their homes. People who rent out single family homes are complying with requests to provide storage space for visitors to keep their beach chairs and bicycles so that visitors will be less inclined to leave such items on driveways and lawns. A bumper sticker with printed information on it has been developed which will be placed on the trash cans of rental properties. This will serve to identify a home as a rental property and will give reinforcement of when and where trash pickup occurs. A parking survey is being completed by the commercial rental agencies to determine a limit on overnight parking available at each rental property. Once completed, renters will know in advance how many cars they will be able to park at a particular unit. Passes for overnight guests of visitors will be limited. Day passes will remain unlimited. Rental agencies will also assist KICA in collecting money from violation tickets. The guest guide is currently being distributed at the main gate and it has been distributed to the commercial rental agencies, who are including it in their rental packets. It is also available to individuals who rent their homes privately. There is still a need for increased visibility of Security officers for rules enforcement. KINHC has recently completed a video geared to visitors that will be placed in commercial rental units. Guests will be able to buy the tapes from their rental agency. It might be possible to run the film on KRA's cable channel. Mr. Gamble and the Covenant Compliance Committee feel strongly that they are headed in the right direction for the good of the community. An MOU for those who rent homes individually will follow the completed MOU for those renting commercially. The full board will need to approve those two MOU's, but will hopefully be able to do so by mail vote.

6.    Other Unfinished Business - There was no other unfinished business to conduct.

7.    Other New Business

  A.    Pete Trees

            1.    Schedule Board Meetings - The next board meetings will be held on Tuesday, April 10, 2001, 2 p. m. at the Sandcastle and on Thursday, May 17, 2001, 2 p. m. at the Sandcastle.

            7.A.2.    Ratify Resolution Revising By-Laws to Allow Annual Meeting in June - Mr. Clarkson moved approval of ratifying this resolution. Mr. Keating seconded the motion. This 2-3 vote was carried unanimously by those in attendance.

            7.A.3.    Ratify Resolution Formally Adopting Governance Committee's Election Policy Guidelines - The Governance Committee's election policy was approved by the board in November 1999, but was not formally ratified. Mr. Wert moved approval of ratifying the resolution. Mr. Keating seconded the motion. This 2-3 vote was carried unanimously by those in attendance.

8.    Adjournment - With no further business to conduct, the meeting was adjourned on motions duly made and seconded.

Submitted by:                                         Approved at the 4/10/01 Meeting

Jessica Schoeffield                                 William G. Wert
March 8, 2001                                       Secretary

__________________________________________________________

Wendy Kulick, 38 Marsh Edge Lane - Mrs. Kulick stated that there were two questions from the last board meeting that remained unanswered. She had asked if the old "No Concealable Weapons" sign could be posted on the gate house until the new one was installed. She had also asked if the board could install lighting at the main gate message boards so that those coming onto the island after dark could read them.

She then asked what the cost was to print and mail the letter notifying the membership of the change in the annual meeting date. She asked what the cost will be for printing and mailing a new annual meeting packet. She asked at which board meeting was it discussed that improperly completed proxies would default to the current KICA President and not returned to the member who had filled the proxy out incorrectly. She asked at which board meeting it was discussed that absentee ballots would be used. She asked what the difference was between absentee ballots and proxies. She asked if the board would consider hiring an outside agency to collect incoming proxies and inform the board of quorum-related numbers so that no one at KICA would have access to them.