2016 Annual Meeting

October 18, 2016; 8:00 pm – 10:00 pm
Green Acres Community Center

Members of the Board Present:

• Bruce Bernhardt, President
• Chuck Stewart, Vice President
• Dante Gilmer, Member at Large
• Don Lobeda, Common Areas
• Vanessa Franck, Neighborhood Watch
• Kirk Randall, Member at Large
• Brian Roethlisberger, Architectural Control Committee (ACC) Chairperson
• Ed Wagner, Secretary

Opening, Welcome and Introductions

Bruce Bernhardt welcomed the Members to the Annual Meeting and thanked them for attending.

He introduced the members of the Board of Directors.

Quorum Verification

Forty two (42) Members of the Hickory Farms Community Association (HFCA) were present, with eighteen (18) Members represented via proxy.

This provided a total of 60 Members represented, which provided the quorum required for the meeting.

Board Member and Officer Reports

Secretary

Bruce asked the Members if they had any adjustments, clarifications, or other comments about the minutes from last year’s Annual Meeting; none were offered.

A motion to approve the 2015 Annual Meeting minutes was made, seconded and approved.

Subsequent Newsletter articles will include Standing Reports for 2016 when new Position volunteers are identified.

Budget

2016 Budget/Actual Expenses

• Bruce noted that our year-to-date expenses are slightly lower than anticipated, with an expectation that expenses would be on track by the end of the year.
• He noted that the HFCA strives to maintain a reserve fund equal to one year of annual assessments, which has not yet been achieved.

2017 Budget

• Bruce reviewed the budget for 2017 that had been earlier approved by the Board.
• Members in attendance raised no questions about the 2017.
• The Members affirmed the budget.

Newsletter

Newsletter advertising generally produces sufficient income to cover printing expenses; it is therefore an important source of income.

We need a replacement newsletter editor given Kirk’s resignation in October after nearly a decade of service.

Architectural Control Committee

Given recent resignations from the ACC, we need additional volunteers to review applications.

Neighborhood Watch

• We need volunteers to conduct the watches, which occur on Friday and Saturday evenings.
• We also need a coordinator to replace Vanessa, who is stepping down from the Board.
• If a member from every household in Hickory Farms volunteers for Neighborhood Watch, they would only have to conduct the watch once a year.  
• Lack of volunteers is resulting in open dates along with existing volunteers having more frequent assignments.

Rules and Regulations

Bruce provided an overview of the documents that govern the HFCA for purposes of facilitating a discussion on options to address compliance issues.

HFCA operates based on a series of documents as outlined below.

• Articles of Incorporation
• Deed of Dedication, Declaration of Covenants, Conditions and Restrictions (Declaration)
• By-Laws
• Rules and Regulations

The Virginia Property Owners’ Association Act (VPOAA) establishes legal requirements related to the authority of homeowner associations (HOAs).  The VPOAA, as interpreted by District and Virginia Supreme Court decisions, establishes a requirement that the HOA’s authority to act must be based on express language found in the legal documents that founded each HOA, specifically the Declaration.

• The District Court states that a HOA’s ability to levy fines is limited to cases where the founding documents “expressly” authorize the imposition of such fines.
• The Supreme Court affirmed that the HOA’s authority is limited to what is defined in the founding documents.

Based on Bruce’s review of the HFCA’s founding documents, it does not appear that they include “express” language that would authorize the use of monetary fines to address noncompliance with the Declaration and the Rules and Regulations.  HFCA’s lawyers recently reaffirmed this interpretation.

A Member raised a question about whether some language in the Dedication might be sufficient to authorize such fines.  Given the general language, it’s not clear that this would meet the level of specificity indicated by the legal requirement for “expressly” defined authorization.  The president agreed to obtain an Opinion Letter from HFCA’s lawyers to reaffirm that they agree that the founding documents are mute on specific language that authorizes the HFCA to implement fines to resolve compliance issues.

Based on the current assessment that the legal requirements and associated constraints established by the VPOAA and subsequent court rulings, HFCA appears to have three options, which are:

1. Amend the Declaration, which would require written approval by 75% of the 198 Members (150 votes to amend).
2. Remove language authorizing monetary fines from the Rules and Regulations, since HFCA’s founding documents, if left unchanged, provide no basis or authority for imposing them.
3. File civil lawsuits against Members to enforce compliance with the Declaration and Rules and Regulation.  Implementing this option would mean that HFCA would have initial responsibility for the costs of litigation which would be recouped from the Member only if the HFCA prevails.  Bruce noted that any Member may also initiate a lawsuit. 

The HFCA Board recommends pursuing Options 1 and 2, with Option 2 as a contingency if Option 1 is unsuccessful.

An extensive discussion about various issues throughout the community has held.  Concerns included lack of appropriate yard care (including edging of sidewalks and curbs), worn or broken shutters, mold on the side of homes, sidewalks requiring repair, etc.   A walkthrough by some members of the Board and Architectural Control Committee conducted over the past year identified 85 homes (out of 198) that had some type of violation, with most considered minor.  The Board has issued letters to two Members identifying major issues in an effort to bring their properties into compliance.

After a discussion during which Members raised questions and key points, a motion to pursue Option 1 was made, seconded and approved.  Pursuit of Option 1 would include the following steps.

1. Have the HFCA’s lawyer draft appropriate language to update the Declaration as necessary to provide the authorization to levy fines as necessary to resolve compliance issues.
2. Establish a committee to develop a plan for obtaining the signatures of the 150 Members needed to approve the change.  This committee will develop a:
   • Communication approach to explain the purpose and benefits of changing the language in the Declaration to gain Members’ cooperation; and
   • A plan outlining an organized effort to personally contact Members to obtain their signature indicating approval of the amendment(s). 
3. The objective would be to have this plan implemented within six (6) months of the Annual Meeting (April 18, 2017) so that the results are available in time for the Annual Meeting in October 2017. If Option 1 is not successful by that date the Board would then proceed with Option 2 to so that the Rules and Regulations are consistent with recent Court decisions.
4. Bruce asked for volunteers to work on this committee to sign up following the meeting.
5. In parallel with Option 1, the Board will form a sub-committee to recommend changes to the HFCA Rules and Regulations to remove the violations charging text. If Option 1 fails to move forward in the next six months, the Board will move forward with Option 2.

External Inspection

Bruce reviewed the feedback (through the HFCA’s email Listserv and delivered to ACC Chairperson Brian) received on a Board proposal to contract with an external firm to conduct house-by-house reviews for compliance with the Declaration and Rules and Regulations. Initial feedback to the proposal as described in recent Newsletters and online by Brian was mixed, although the majority of respondents opposed the idea.

The discussion at the Annual Meeting identified some misunderstandings about the proposal. Specifically, the Board clarified that the responsibility for addressing violations identified by the outside contractor would remain with the Board. The intent of using a company to do the reviews was suggested in recognition of the amount of time required and the challenges with getting volunteers to do this type of community walkthrough on a timely basis. Using an external firm might provide a more objective and unbiased approach for property reviews.

After an extensive discussion, the Members voted to:

• Conduct of a pilot using a commercial firm during the next year to inspect individual homes against the specific requirements against the Restrictive Covenants; and
• Notification of individual homeowners by the Board about any compliance issues identified through the property inspections.

The pilot will be used to determine whether to continue with the use of an external firm, including the frequency for conducting inspections.

The Board also agreed to provide more information about compliance issues in upcoming Newsletters, including a checklist of typical home maintenance responsibilities that are linked directly to the specific items in the Restrictive Covenants. The intent of this checklist is to provide Members with information so that they can proactively address issues.

Election

A motion was made, seconded and approved to elect the following Members to the Board.

• Bruce Bernhardt
• Chuck Stewart
• Don Lobeda
• Kirk Randall
• Brian Roethlisberger
• Debbi Buchanan
• John Kitzmiller

Volunteer Recognition

Bruce thanked the members of the community who have volunteered over the past year. Note was made of the HFCA Board members retiring and resigning this year. Also noted were new volunteers stepping forward to serve our community. A few key volunteer positions remain vacant, including Newsletter Editor, ACC members, and Neighborhood Watch Coordinator. A call for more volunteers will be included in coming Newsletter and List Serve articles. Every homeowner is encouraged to volunteer in some capacity.

Adjournment

The meeting was adjourned at 10:00 pm.