MXB Wire; Monthly Update for August 29, 2020

Preamble

• the number of delinquent accounts continues to be a problem;
• the board extends funding for the beach patrol and community patrol through the month of September;
• Treasurer, Steve Larsen, moves the board to engage CAS to make recommendations on the distribution of reserve funds subject to the approval of the president and the budget committee;
• the beach patrol reports a record number of pulls over the Summer of 2020;
• the board receives complaints about a recent mow;
• the property at 30 Dune Road is now marked as a tear down;
• longer hours for the Ocean Air produce stand;
• Throop to develop an organizational chart;
• social distancing in lieu of social activity;
• the board reverses an early decision on the unidirectional flow of common walkways;
• Bill Leconte joins a crowded field of candidates, seeking to unseat Larsen, Shecter and Glasgow;
• On Jay Sella's departure, the board considers engaging CAS to manage the web site; and
• a look at the mail bag.

My name is Greg Pichler with the MXB Wire and you are watching my monthly update for August 29, 2020.

the number of delinquent accounts continues to be a problem

Debbie Read of CAS reported that the property management company sent out late payment notices to sixteen property owners. 6.6% of the members or thereabouts are currently in arrears in paying their assessment, which is higher than in years past. [1]

Budget and finance committee chair, Steve Larsen, reported that there is now 30,000.00 dollars in past due assessments. This represents a reduction of 27,000.00 dollars since Larsen's last budget committee report on July 18, 2020. Larsen reported that the amount of past due assessments was 24,000.00 dollars at the same point of time in 2018.

Larsen also reported that the association's actual expenses are largely tracking to budget. Larsen warned that the labour costs of the facilities staff are 6,000.00 over budget. Larsen also reported that the overage was largely due to Dave Greer's reporting of his overtime. Larsen further reported that save the situation where the delinquent accounts persist, Larsen anticipates that the association will likely finish the fiscal period in the black.

Ellen Throop weigned in saying if the association continues to have ten delinquent accounts on an ongoing basis that the legal cost of handling the outstanding invoices via the resident lawyer could cause the legal expense item to run over budget.

analysis

The percentage of delinquent accounts closely follows the current unemployment rate of 10.2% of the workforce and reflects the impact of the COVID-19 pandemic.

In the event the association continues to see ten or more accounts that are delinquent in paying their assessment, the association will have no choice but to issue a special assessment or raid its reserves account. It would seem prudent to shut down all discretionary spending until the situation with the delinquent accounts resolves.

the board extends funding for the beach patrol and community patrol through the month of September

HOA president, Margie Cyr, stated that the line item budget that addresses storm clean up has already been exhausted and the hurricane season has just gotten underway. Cyr further stated that the HOA will likely see a significant cost overrun in this budget item.

Cyr also stated that given the relaxation of in-class education due to the COVID-19 pandemic, the Summer season may effectively stretch out to the end of September. Cyr stated that as a result the homeowners association should anticipate that both beach patrol as well as community patrol may see an increase in expenditure. Cyr continued, stating that the life guard patrol as well as the community patrol are requesting additional staff for the month of September to accommodate the extended season.

Cyr reported that the neighboring townships, South Bethany and Ocean View, are investigating alternative Internet Service Providers to Mediacom. Cyr stated South Bethany has formed a focus group to look at different issues with the current Mediacom service. Cyr further reported that she is in dialogue with members of the focus group to keep informed about what the municipality is learning.

Cyr also acknowledged both South Bethany and Sea Colony for their cooperation in dealing with vandelism in their respective neighborhoods.

The board later discussed extending the season insofar as extending beach patrol service and community patrol services late into the season. Geoff Sella weighed in, saying that due to the fact that parents will possibly be working remotely over the latter portion of the month of September, that it is important to fund the beach patrol for as many days as possible.

Carol Paul voiced concerns that given the closure of the common walkway at Bridge Road, most people on the beach will be at one end or the other, and it will be difficult to patrol the beach with a skeletal crew.

Ellen Throop advocated extending the expiry date appearing on the beach passes and parking passes by two weeks and communicating the change to the membership.

Geoff Sella weighed in, stating that if the association were to continue to enforce parking as well as access to the beach for an additional two weeks that that would increase the community patrol expense by as much as 15%. Sella reported that to staff night patrol involves 1,100.00 per week, to staff a body at the guard house involves 1,100.00 dollars per week, and to staff the North and South end involves 1,100.00 dollars per week per end.

Tristan Kruger motioned the board to eliminate night patrol after Sunday, September 13, 2020, the week after labor day weekend, to continue to staff community patrol on the North and South end of the community and to continue to staff the guard shack through Wednesday, September 30, 2020 subject to re-evaluation week by week. Glasgow seconded Kruger's motion. All members voted in favor except Ellen Throop and Alex Sella, who abstained.

Steve Larson motioned the board to extend funding for the beach patrol on the weekend after Labor Day on September 7, 2020 until Wednesday, September 30, 2020 and to revisit the funding decision pending McCulloh's advice with respect to weekday service. Glasgow seconded Larsen's motion. All members voted in favor except Ellen Throop and Alex Sella, who abstained.

analysis

At the time of the vote on the two motions the board had not determined where the monies to fund the extension was going to come from. Again, it would seem prudent to shut down all discretionary spending until the situation with the delinquent accounts resolves.

Treasurer, Steve Larsen, moves the board to engage CAS to make recommendations on the distribution of reserve funds subject to the approval of the president and the budget committee

Treasurer, Steve Larsen, is in discussions with Morgan Stanley to consider engaging the investment firm to manage the liquid assets in reserve. Larsen reported the HOA has over 300,000.00 dollars in reserves and over 200,000.00 in capital reserves. Given the low interest rate being offered, that of less than 1%, Steve Larsen, Marty Shecter and Geoff Sella elected not to engage Morgan Stanley to manage the funds.

Steve Larsen motioned the board to allow CAS to make recommendations as to how the reserve funds is to be managed and that the HOA president and the budget committee would have to approve any changes. Throop seconded Larsen's motion. All board members voted in favor of Larsen's motion.

the beach patrol reports a record number of pulls over the Summer of 2020

Beach Patrol chair, Mark McCulloh, reported that the beach patrol saw a record number of pulls from the ocean this Summer. Similar records were reported in Ocean City, Maryland.

The beach patrol has discussed extending hours to compensate for the extended season due to COVID-19. Unfortunately, the senior patrol staff will not be available to work on the week days as these individuals have training commitments.

The cost of operating six life guards occupying four life guard chairs for the weekends starting on September 19, 2020 through October 3, 2020 would be 5,000.00 dollars.

McCulloh reported that the cost of the beach patrol to date is currently over budget.

the board receives complaints about a recent mow

Nothing brightens your day like good mow. Similarly, nothing ruins your day like bad mow.

Beautification chair, Tristan Kruger, reported that he received a number of complaints about a recent grass cutting. Rupert is the landscaping firm on record. 113 Evergreen Road was particularly hard hit as the landscapers had damaged an enclosure adjacent to the property. Bill Gay owns the property at 113 Evergreen Road. Fortunately, Kruger and Gay agreed to spray a herbicide at the edge of the property, so the landscapers have more wiggle room and will be less likely to disturb the natural beauty of Gay's property. On the event that Kruger contacted the owner of the landscaping firm on a Wednesday and left a pointed message, Rupert immediately sent reinforcements to the homeowners association. Ultimately, a bad mow was mitigated and a good mow prevailed.

Kruger also reported that the landscaping firm, Rupert, had neglected a patch of grass on the median of Route 1 between Addy Road and Evergreen Road.

Kruger further reported that he spent 360.00 dollars out of the beautification budget to pick up limbs and branches from a recent storm. Kruger coordinated the work with facilities chair, Alex Sella.

Marty Shecter weighed in, saying that many of his constituents had thought that Rupert was not doing a good job at the beginning of the season. However, Shecter reported that the landscaping has since improved.

the property at 30 Dune Road is now marked as a tear down

Geoff Sella reported that he recently received a permit application by the owner of 30 Dune Road to tear down the existing structure and build a new structure in its place. Errett Legacy Properties, LLC owns the property at 30 Dune Road. Sella further reported the owners of 30 Dune Road are asking for a variance on the setback. Sella further reported that he informed the owners that he does not have the authority to approve variances on the setback.

Sella reported that the association received a significant amount of activity insofar as emergency applications to deal with storm damage. Cyr concurred.

analysis

According to the covenants an owner would require 60% of the membership to vote in favor of a variance to the setback requirements for the setback restrictions to be altered or waived.

longer hours for the Ocean Air produce stand

Commercial committee chair, Marty Shecter, reported that the Ocean Air produce stand is negotiating with the property management firm to extend its hours, presumably to take advantage of the extended Summer season. Shecter also reported that the one black trailer that has perpetually been parked on the McDonalds lot is still there. Shecter further reported that the fences that border the commercial lots and Beach Plumb Road are in good condition with the exception of the stretch from Addy Road to Bridge Road; half of it in need of replacement. However, Shecter reported that no progress has been made as there has reportedly been no communication between CAS and Shecter and the owners of the effected commercial lots.

Alex Sella weighed in, saying that the fences behind the Atlantic Shoals and the Ocean Air produce stand were also in disrepair.

Shecter responded to Sella, stating that only minor repairs are needed in that particular patch.

Throop to develop an organizational chart

Legal committee chair, Ellen Throop, reported that she plans to develop an organizational chart over the course of the month of September, complete with a reporting hierarchy, roles and responsibilities.

analysis

As a number of board members have thus far refused to sign onto the code of conduct document I see little hope that these same board members will adhere to an organizational chart that defines a reporting hierarchy, roles and responsibilities. The organizational chart will only have value to board members who respect structure and for that you would need to change up the board members, who disrespect structure with board members who do. The only means for bringing board members who respect structure is through the election process.

social distancing in lieu of social activity

Social committee chair, Nancy Glasgow, quipped that the committee has a lot of social distancing and not necessarily social activities planned in the near term.

the board reverses an early decision on the unidirectional flow of common walkways

Marty Shecter motioned the board in lieu of directional enforcement of the common walkways, all persons must wear a mask, with the exception of the common walkway at Bridge Road which is to remain closed to all but staff. All board members voted in favor. Alex Sella abstained.

Bill Leconte joins a crowded field of candidates, seeking to unseat incumbent candidates, Larsen, Shecter and Glasgow

Given the change to the date of the 2020 Board Elections, the board is resending proxy ballots to all of the members of the association. The election committee chair, Geoff Sella, has added, late entrant, Bill Leconte of 21 Bridge Road, as a candidate for the board. Leconte is strongly opposed to the rental tax as being advanced by incubent candidates, Steve Larsen, Marty Shecter and Nancy Glasgow. In his opposition to the rental tax, Leconte joins incumbent candidate Ellen Throop, candidate Carol Paul, and myself, candidate Greg Pichler, who are all strongly opposed to the rental tax on the grounds that the proposition violates the laws governing homeowners associations in Delaware and would attract litigation on its face. [2]

First time candidates, Nora Alter and Amy Witcover-Sandover, are also running for a position on the board. Both candidates, who are reportedly in support of the rental tax proposition, are seeking to unseat incumbent candidate, Ellen Throop. Again, Throop happens to be in opposition to the rental tax proposition on the grounds that it violates the laws governing homeowners associations in the state of Delaware and would attract unnecessary litigation. Throop happens to be a joint owner of a pine side property that doubles as a vacation rental property.

analysis

What a difference a two year term makes. In their campaign materials for the 2018 election candidates for the board talked about how much they loved the Middlesex Beach community, their neighbor and their dog. Now advance to 2020. In their campaign materials these same candidates, now incumbent candidates, are talking about how much they love the idea of having someone else pay for their utility at the beach. Of course I am speaking of the rental tax proposition. [2]

Under the Larsen, Shecter, Glasgow plan 48 property owners (or 20% of the membership) would underwrite over 50% of the general operating expense of the association (or 300,000.00 dollars, which breaks down to 240,000.00 in rental taxes, the other 60,000.00 in assessment fees). As Larsen, Shecter, and Glasgow are all pine side property owners, who do not offer their respective properties as vacation rental properties, they would be amongst the 80% of owners, who would contribute to less than 50% of the general operating expense of the association (or 270,000.00 dollars). If successful, these candidates will watch their assessment fall to 1,450.00 per year while ocean front, vacation rental property owners, of which I happen to be one, will be required to contribute over 10,000.00 per year. In other words these individuals including myself, will be required to contribute in excess of eight dollars for every one dollar Larsen, Shecter and Glasgow contribute with no rental specific services being offered in exchange. That is the "great idea" that Glasgow served up during the informational session on February 10, 2018. [3]

There has never been a more clear choice in an MBA election as the one now scheduled for September 19, 2020. Do we go down a rabbit hole in imposing taxes on one set of neighbors to the benefit of another, or do we opt to stay clear of civil litigation, respect the fact that no cost justification exists to support such taxes and/or fees and keep our insurance premiums as low as possible?

As a candidate for the board I am asking for your vote. [4] However, I also need you to vote for members of the community I can work with, members who can restore sanity to the board, including Ellen Throop, Carol Paul and Bill LeConte. Unfortunately, there are five open positions and only four of us to fill the positions. Therefore, I need you to write in David Wiecking of 15 Dune Road. Wiecking has expressed in interest in rejoining the board as recently as April, 2019 when he asked Sharon Adams to step off the board so that he could replace her.

On Jay Sella's departure, the board considers engaging CAS to manage the web site

HOA president, Margie Cyr, assembled a task force to perform vendor selection for the ongoing maintenance of the assocation web site at the URL, www.middlesexbeach.org. The task force is scheduled to meet with the staff of CAS, the property management firm, to discuss transfering the management of the web site to the property management firm.

Jay Sella, who authored the site on Word Press, is stepping down as web master of the site this Fall.

Mail Bag

Paul Witcover

In response to a broaddcast YouTube video, dated August 16, 2020, entitled, MXB 2020 Voter Compass - Nancy Glasgow, Paul Witcover at 34 East Bayberry Road comments on the video saying:

Paul Witcover is a relative of Amy Witcover-Sandover, who is currently running for a board position.

In response to my reply, dated August 16, 2020, stating that all the broadcast e-mail messages from the MXB Wire include a link to unsubscribe, Paul Witcover responds saying:

Editor's Response

When you provide the MXB your contact information for publication in the directory, you are in effect giving permission for any member to contact you. The directory of opt in contact information is available to all members on the site, www.middlesexbeach.org  so that we may communicate with each other. If that is not your intention, you need to contact the Middlesex Beach Association, the governing body, and tell the homeowners association you want to opt out.

Perhaps Witcover would like to retain the Norman Law Firm and pursue civil remedies. When it is all over Witcover can report to the community how things went with the Norman Law firm.

Anonymous

In response to a broaddcast e-mail message, dated August 4, 2020, an owner of a property on the ocean side, who wishes to stay anonymous, writes in saying:

Editor's Response

Starting in the Fall of 2018, a number of politically active residents who happen to live on the pine side, decided they were not taking the word, no, for an answer on the petition to effect an 8% rental tax and are now determined more than ever to have someone else underwrite their utility of the beach. Their motive is greed. The proponents do not appreciate that two-thirds of the homeowners association is situated on a natural swamp, which requires considerable drainage infrastructure. So, one cannot compare the cost of the assessment of a property in MXB with that of a property in Cotton Patch. Cotton Patch is entirely an ocean side community situated at a higher elevation.

In fact the pine side property owners are getting a good deal as one-third of the community is underwriting the cost of the drainage infrastructure on the pine side.

References