January 5, 2010
Board of Directors
Sandy Point Improvement Company
Dear Board of Directors,
First I would like to wish you all a happy and prosperous New Year and tell you how much I appreciate the very hard and often frustrating work you are doing for the Sandy Point shareholders. I do not take lightly the difficulty of being a board member for a homeowners association.
Please copy this letter and distribute it to the Board of Directors and put these items on the agenda for the public portion of the January meeting. I would appreciate hearing from you if this is not possible for some reason.
I am writing this letter as follow-up to some questions and issues that came up at the December, 2009 meeting. I have divided the letter into three sections; suggestions, questions and comments. I recognize that we have not lived here as long as others, but there are many issues that seem to come up over and over that other shareholders have shared with me.
Suggestions
My suggestions are for the most part procedural and directed toward improved communication with the shareholders.
It is important that a full agenda (including items that are considered in the “closed session”) be posted at least a week before the meeting so that shareholders can plan to attend if there are issues that are of interest to them. In addition to posting the agenda at the clubhouse it would be most useful to also put it on the website so that those who don’t live here full time can see what is going to come up at the meeting.
If there is not currently a monthly operating budget it would be a simple and useful exercise to institute one in order to keep track of basic expenses and communicate easily to our shareholders what our operating costs are and what is left over of our fees for other approved costs.
The very thorny problem of covenants continues to be a sore point for shareholders. It is brought up at every meeting lately. The issue seems to turn on two things. Firstly; who decides what is for the “good of the whole” and what is a dispute between neighbors and secondly; what, if any, consequences come from infractions of the covenant. The document entitled Sandy Point Improvement Company Fee/Rules & Policies (2004) outlines the procedure to be followed by violators of rules and covenants resulting in a lien on any property that owes money for penalty payments to the Company. In addition it would require violators to pay any attorney’s fees that SPIC might incur through prosecution. Following these rules might encourage offenders to pay the penalty fee while it is still relatively small and if not it would cost us nothing.
The document calls for a committee to be struck with specific guidelines to enforce the rules and covenants and, as paying shareholders of SPIC, we expect these rules to be enforced or, god forbid, they should be completely discarded by vote of the entire company. I have faith that such a committee would be able to discern which complaint hold merit and which do not.
Most people who bought property here did so with the understanding that there are covenants and that they are enforced by SPIC and that these covenants not only protect the homeowner, but enhance the value of their property. I hate to think what some of the empty lots would look like if their owners thought they could keep their lots in whatever condition they chose including trash, stored junk and other assorted rodent attractions.
Questions
I have several questions, some of which are procedural and some of which refer to policy and actions taken by the company in the past and which might occur in the near future. They are quite straightforward and should be able to be easily answered in writing and at the January meeting.
Could you please let me know where in our constitution, by-laws or operation policy document it allows for non-specific in-camera (working) sessions at each meeting? I understand that it would be disruptive to allow for general interaction throughout the meeting and that shareholder questions must be restricted to the “Good of the Order” portion of the agenda. However when decisions are made by the board in closed sessions using shareholders’ funds they have the right to object. Giving shareholders the ability to sit in on the entire board meeting if they want to in order to have a full understanding of the decision making process would alleviate much of the stress and frustration evidenced at the last meeting. Of course, in-camera sessions in order to deal with personnel issues with notice are always appropriate.
At the annual meeting when the financial report was given there was an expense item for a consultant(?) on water issues. Could you please explain again to me and to other interested shareholders what these issues are and how much the cost is?
Evidently there was a water surcharge levied at some point that was specifically collected to pay legal fees connected with the lawsuit with the Lummis. Was this used for these legal fees and if not was there an agreement from the shareholders to put any leftover money into the general revenue account? What is the total cost for legal fees from the time that the lease of the tidelands from the Lummis expired in 1988 to present?
Between 1963 and 1988, a homeowners’ organization leased the tidelands from the Lummi Nation, giving waterfront property
owners the right to erect shore defense structures on the tidelands and I assume to dredge the entrance of the canal. However, once the lease expired, both the organization and the individual homeowners declined to renew the lease. (From the 2009 9th Court decision): The Lummi and homeowners on Sandy Point have long relied on the fact that the Lummi own the tidelands. Until 1988, Homeowners leased the tidelands from the Lummi, with both sides believing that the Lummi owned the tidelands. We see no reason, then, to overturn 90 years of precedent, especially when the supposed title holder has declined to claim ownership. Did the Sandy Point Improvement Company hold and pay for that lease and if so how much was it per year and/or in total?
Comments
Finally, I was amazed when, rather casually, the subject of appealing the decision of the United States Court of Appeals for the 9th Circuit regarding the lawsuit with the Lummis over the tidelands to the Supreme Court of the United States came up. I believe the shareholders made it clear to the Board at the Annual Meeting that they did not want this to happen without further consultation. I would hope that there would be further negotiations with the Lummi in good faith for a mutually beneficial result before there was any legal action. If there are people from SPIC and people from the Lummis who are not able to deal with this in a reasonable, unemotional fashion I would suggest that they be encouraged to bow out of the negotiations.
One SPIC Board member rhetorically asked the attendees if they would rather pay $3000.00 a year (this figure admittedly was not based on any facts) to the Lummis than go to the Supreme Court. I, for one would rather pay a known amount for a specific use than pay lawyers for a shot in the dark, but more importantly I certainly want to have the choice of how my money is used. I cannot imagine that any of our shareholders would disagree.
I have read the 9th Circuit Court decision in its entirety. There are two parts of the decision which make it quite apparent that we could be wasting a considerable amount of our time and money to go to the Supreme Court. They are:
1. From Roman Law which basically says nature gives and takes and when it gives you get more, but when it takes you lose! The actual decision on this reads:
(“[T]he boundary line of an owner’s land bordering upon the sea varies with the gradual increase or diminution of quantity by the addition of alluvion, or by the encroachments of the water upon the land, the line of the shore varying accordingly.”).
[8] Importantly, the upland owner’s right to accretions is a vested right and “rests in the law of nature.” County of St. 14476 UNITED STATES v. NICHOLSON Clair, 90 U.S. at 68. It is justified in large part because the upland owner’s land is subject to erosion. As the Supreme Court stated in County of St. Clair, The riparian right to future alluvion is a vested right. It is an inherent and essential attribute of the original property. The title to the increment rests in the law of nature. It is the same with that of the owner of a tree to its fruits, and of the owner of flocks and herds to their natural increase. The right is a natural, not a civil one. The maxim ‘qui sentit onus debet sentire commodum’ [‘he who enjoys the benefit ought also to bear the burdens’] lies at its foundation. The owner takes the chances of injury and of benefit arising from the situation of the property. If there be a gradual loss, he must bear it; if, a gradual gain, it is his Id. at 68-69; see also Nebraska v. Iowa, 143 U.S. 359, 360-61 (1892) (“Every proprietor whose land is thus bounded [by water] is subject to loss by the same means which may add to his territory; and, as he is without remedy for his loss in this way, he cannot be held accountable for his gain.” (quoting New Orleans v. United States, 35 U.S. (10 Pet.) 662, 717 (1836))); Bonelli Cattle Co. v. Arizona, 414 U.S. 313, 326 (1973) (“Since a riparian owner is subject to losing land by erosion beyond his control, he should benefit from any addition to his lands by the accretions thereto which are equally beyond his control.”), overruled on other grounds by Oregon
ex rel. State Land Board v. Corvallis Sand & Gravel Co., 429 U.S. 363 (1977).
[9] By this logic, both the tideland owner and the upland owner have a right to an ambulatory boundary, and each has a vested right in the potential gains that accrue from the movement of the boundary line. The relationship between the tideland and upland owners is reciprocal: any loss experienced by one is a gain made by the other, and it would be UNITED STATES v. NICHOLSON 14477 inherently unfair to the tideland owner to privilege the forces of accretion over those of erosion. Indeed, the fairness rationale underlying courts’ adoption of the rule of accretion assumes that uplands already are subject to erosion for which the owner otherwise has no remedy.
2. The court was very clear on the other issue when it says:
“Although this particular dispute has been ongoing for some years now, for an even longer period of time, the Homeowners on Sandy Point had an agreement with the Lummi Nation to lease the tidelands. This allowed the upland owners to construct and maintain bulkheads, rip rap, and other shore defense structures on the tidelands in order to protect their property. The Sandy Point Homeowners had an opportunity to renew the lease for an additional 25 years, the maximum lease term allowed for Indian trust lands. 25 U.S.C. § 415. Additionally, throughout this litigation the Lummi have expressed a desire to negotiate a new agreement, and at least before commencement of this suit, the United States indicated that its concerns would be satisfied if the Homeowners entered into agreements with the Lummi.
This action was avoidable. Perhaps the parties still will be able to reach an amicable settlement. However, because the Homeowners have so far been unable or unwilling to negotiate an agreement with the Lummi, we must pass on the merits UNITED STATES v. NICHOLSON 14493 of the dispute. “
Additionally, there is a high probability that there would be interveners should we decide to go to the Supreme Court. Should we lose the case (which we have a 50-50 chance of doing at best) we would incur all of the legal costs on both sides including those of the interveners. This could come to millions of dollars out of your pockets and mine in addition to the many thousands we have already spent on a lost case.
I know there is a possible procedural error on the part of the Bureau of Indian Affairs that could have an effect on this case, but is it truly strong enough to outweigh the latest court decision? Is it worth it? Or, should we stop now and focus our efforts on negotiating a lease with the Lummis, which can’t possibly cost more than going to the Supreme Court of the United States.
Lastly, in all common sense, this action cannot be taken without the explicit consent by vote of the shareholders, having been fully informed of the action and the financial consequences, at a well advertized special meeting with the same legal counsel who would take this to the court. The legal counsel would have to bring an estimate of the legal costs of such an action to the special meeting. I fear to not do so could leave the Board of Directors liable for misuse of shareholders funds which none of us would want.
Thank you again for taking the time to listen to my questions and comments. I promise not to send such a missive every month!
Sincerely,
Dimity Hammon
