Colleton Skeptic

This post is adapted from an email that I sent to 75 friends and neighbors last night. The bottom line is that it's easier and safer to simply vote in favor of: (a) changing the Club's name (Ballot Item #1); (b) the Flynn proposal (Ballot Item #27); and (c) the Rattacasa proposal (Ballot Item #28) and against everything else . There's no reason to rush through changes to the governing documents. Make the Board come back with a power-grab free ballot to make the housekeeping changes. There are three major issues facing our club:   The outstanding ballot on governance issues. The amenities project. The seawall dispute.   The Governance Ballot   The governance ballot contains quite a few issues that are actually “housekeeping” in nature, but it contains at least six issues that are significant. Please note that the ballot is designed to be a trap for the unwary.  You must first vote “do not approve slate” in Ballot Item #2, and then vote individually on Ballot Items # 3...

The Board has issued another missive this afternoon in an effort to set the Owners straight on the governance ballot. Apparently this Blog and Jim and Marcie Flynn's meetings with Owners to discuss governance issues have made too many of the natives restless. I feel like David against Goliath as the Flynns and I pretty much singlehandedly attempt to debate the Board, the Governance Committee, and the Club's attorneys. I also feel like I'm playing whack-a-mole in clarifying the misleading impressions left by the Board in its communications. But first, it's important to remember that under our governing documents (at least the currently effective ones), the Owners--not the Board--make the major decisions around here. And the governing documents--like our country's constitution--are in place to restrain the Board: Now let's go through today's missive point-by-point to put it into perspective (here's a link to the Board's missive , in case you want to ve...

While the Board has been focused on trying to push through unwise changes to the governing documents , the seawall lot owners have filed suit. Here's a  copy of the complaint  if you're interested. I prepared a summary of the seawall issues  a couple of months ago. Just how big an issue is this? In its most basic form, the replacement cost of the seawall is probably about $12 million, of which $2 million is attributable to the 17th hole and community dock (which are the responsibility of the Club). So the question is how the potential replacement cost of $10 million is shared between the seawall lot owners and the Club. The 32 seawall lot owners would have an exposure of about $300,000 if they were solely responsible and the 565 owners of the Club would have an exposure of about $18,000 each if the Club was solely responsible. Stay tuned. At least this dispute is out in the open now where all of the Owners can follow the dispute. 

I just mustered up the energy to print out the governance ballot that was sent out yesterday. There are 94 pages to read, so it will take me a while to wade through the verbiage. Winston Churchill said that: "in war, truth is so precious that she should always be attended by a bodyguard of lies." The Board is using a bodyguard of banal changes that do affect the Owners one way or another to cram through some power grabs that are not in the best interest of the Owners (see first bullet point below). Here are some initial thoughts: While there's always room for improvement, there's little wrong with our current governing documents. More importantly, the proposed changes do not address some of the needed changes ( e.g. , a requirement that a third party be used to count the ballots (the Board has used a third party to count ballots--but they don't have to--the Board can count the ballots themselves if they feel like it). If you vote no to each and every proposed chan...

There are many important issues facing our club. But perhaps the most important issue is what kind of club our members want. While there are many variations on each theme, we need to choose between: An exclusive upscale golf-centric community with easy access to superior golf courses and other amenities on offer. This model would have about 550-600 members. A vibrant country club that offers many amenities, among which would be golf. We would have 700-750 members and would closely resemble Belfair.  Three years ago, the Board revisited our strategy. In March 2019, there were 29 lots for sale (including 13 so-called "dollar lots") and 30 houses for sale (half of which had asking prices of less than $1 million). About 400 houses had been built in the Club. The media published article upon article about the death of the gated golf community and, indeed, the decline of golf. Based upon those facts, the Board adopted a strategy of: Controlling our destiny (i.e., buying out the dev...

According to "our Board President," a ballot will be sent to each Owner tomorrow to vote on several changes to the governing documents. The ballot has not been posted and it's anyone's guess what it will look like. I'll explain in this post how the Board puts its thumb on elections and why Owners should just say no to every proposed amendment except the amendment requiring open Board meetings . Here's how the Board approaches such ballots (this is based upon my experience as a Board member and is consistent with the experience of another recent Board member): Publish the ballot along with a list of self-serving "frequently asked questions." Enlist the Board's supporters to repeatedly call and nag their friends and neighbors to vote as the Board wishes. The Board and its acolytes meet and review a list of the Owners and chat about how people are likely to vote (makes you feel kind of warm and fuzzy, doesn't it?) Pester those Owners who are per...

 Two of the proposed governance document changes near and dear to the Board's heart are establishing a  "code of conduct"  for Board members and depriving Board members of their "absolute right" to review  "sensitive personnel information" . The "code of conduct" is a transparent attempt to be able to silence Board members who refuse to "go along and get along" with the Board majority. The effort to limit Board members' access to "sensitive personnel information" is intended to create an environment where not only the Owners of the Club, but also a majority of the Board, would be kept ignorant of the compensation and objectives of  management . But each of these proposed changes may have legal consequences. It would be quite reckless to propose these changes without taking legal advice on the possible consequences of these changes. If the Board (and individual Board members) haven't received such advice, perhaps th...

I get it. The membership model is complicated. It's complicated because it is a compromise that balances a number of competing priorities. In legal appeals, the "question presented" to the court frequently determines the answer the court provides. In fact, the Supreme Court frequently states the "question presented" that the Court wishes to answer. Here are two versions of the "question presented" to the Owners: Do you believe that every lot sold should have an absolute guarantee that a golf membership will be immediately available to the buyer? Do you favor a cap on golf memberships that will ensure that tee times at our club will be readily available and that we won't turn into Belfair or Long Cove? I suspect that one Owner may give two different answers if presented with the two questions. Unintended consequences abound and this complicated issue can't be reduced to a sound bite. The problem de jour is that we could theoretically have more O...

Here's the deal. Under our governing documents, we are a strong-Owner, weak-Board, powerless-President organization. The Owners have the final say on all important decisions. As much as the Board may wish that it has the right to stop Owners from lobbying other Owners about Club matters, it simply doesn't. Under South Carolina law, each Owner has a right to obtain and use the Club's membership list as long as the membership list is not used to solicit money, for a commercial purpose, or sold to a third party. Any Owner has a right to communicate with any other Owner about club matters. And the Club has a duty to make available to each Owner the membership list. The Valentine's Day Communique included a "reminder" that the Club's "Member Directory is for exclusive personal social use and convenience of Colleton River Club Members" and included links to two Club policies that purport to limit the use of the Member Directory. The Member Information ...

 We, as Owners of the Club, elect Board members to represent us in governing the Club. In order to represent us, each Board member must comply with a "duty of care," which requires them to become informed about Club issues. Each Board member must decide what information he/she needs to become well enough informed to make good decisions.  The Board has proposed amending the By-Laws to forbid any other Board member not on the Board Compensation Committee to inspect "sensitive personnel information, including but not limited to staff compensation information." I can only speak for myself, but I want all of the Board members to have the right to examine any corporate document--including "sensitive personnel information"--as they discharge their duty of care. JUST SAY NO TO THIS POWER GRAB.   The current By-Laws provide the "[e]very director shall have the absolute right at any reasonable time to inspect all Club books, records, and documents and the physi...

Perhaps the most egregious power grab in the package of amendments to the governing documents proposed by the Board is authorizing the Board to: establish a "code of conduct" for Board members and remove Board members for violating that code of conduct.  Why should you care? Because the Owners elect Board members. Permitting the Board to remove Board members who refuse to kowtow to the majority of the Board usurps the power of the Owners to determine who should represent them on the Board. The current situation: South Carolina law requires that Board members act: In good faith With the care an ordinarily prudent person would exercise in similar circumstances. In a manner that the Board member reasonably believes to be in the best interests of the corporation.  South Carolina law and our By-Laws permit the Owners may remove a Board member at any time for any reason by a simple majority vote. South Carolina law does not permit the Board to remove a Board member elected by the O...

"If you do not take an interest in the affairs of your government, then you are doomed to live under the rule of fools." Plato, circa 375 B.C.  Governance is boring. But Colleton River is our home and how we're governed is important. I don't care whether you agree with my views--but I care very much that you take enough of an interest in the affairs of our community to make an informed choice about the future of our Club. In a nutshell: There's no reason for the Board to rush through a vote on changes to our Club's governing documents (particularly since those final changes have not yet been disclosed). The changes proposed by the Board include substantive changes that will shift power from the Club's Owners to the Board. Based upon past performance, the Board will likely continue with its practice of stacking the deck to improve the chances of the Owners approving their power grab.  The Board has promised two things about a vote to amend the Club's go...