Chapter 12 - 2004 Governance Transition
During the latter part of 2003, the Company, through its Developer Directors, announced that it would be initiating a Transition process with the intent of turning more of the POA’s day-to-day governance responsibilities over to the property owners. This result would only occur if adequate protections could be given for the Company to continue its Big Canoe development efforts unhindered.
By January 2004, a Transition Team had been assembled and organized into sub groups to work on differing aspects of the program. The most active such sub group was a Governance Committee charged with recommending a new governance structure as well as designing a new Elected Director candidate selection process. The Core Team for this effort was the board, the Company’s attorney serving as facilitator, plus selected others. This transformed into the board and facilitator only when all sub group input had been received and negotiations began in earnest.
The Governance Committee labored at lengths over the number of Elected Directors to recommend for the board and whether they should continue to be “at large” directors or elected by and representing specific neighborhoods. The final recommendation was for six Elected Directors who would be elected and serve on an “at large” basis. The committee also had extensive discussions regarding the method for selecting candidates to run for Elected Director vacancies. Many members had the perception that the pre-existing Nominating Committee process was somehow defective in that it was too restrictive in offering the opportunity to run. The consensus outcome was to abolish the Nominating Committee, allow property owners to self-nominate, and establish an Elections Committee to qualify self-nominees and oversee the election process.
Even as the Governance Committee was in the final stages of presenting its recommendations, the board was deadlocked over the very important issue of how to protect the Company’s right to develop. The Developer Directors advocated giving the Company the right of “absolute veto” regarding any action taken by the proposed Elected Director controlled Board or by the POA administration. The Elected Directors adamantly opposed this solution on the basis that it would be worse than the existing situation.
The Elected Directors (Linda Greer, Jim Milton, and John Baugus) went into a meeting with the Developer Directors in early July 2004 prepared to terminate the Transition negotiations if no meaningful movement was obtained on the “protection” issue. At that meeting an “11th hour” concept was offered by the facilitator, and within a week the two sides had agreed on an Alternate Dispute Resolution process involving mediation, arbitration, or in some cases, judicial relief. This agreement also included the mutually agreed on condition that the Company would continue to have one Developer Director serve on the Board in order that potential disagreements could be discussed in “real time” rather than after some delay. Following this accomplishment, the Board then proceeded into discussing the myriad of rights and responsibilities held by the Company that could or should transfer to the POA.
By the end of October the board had produced a rewrite of the By-Laws and a comprehensive amendment to the General Declaration that incorporated all of the agreements reached during the negotiations, and these documents had been reviewed by each side’s legal counsel. Approval of the two documents was included on a ballot sent to all members of the POA in November. The Elected Directors categorized the benefits accruing to property owners as follows:
- Upon the approval of these changes, the Developer will immediately give up one of its three board seats, give up another effective January 2006, and agree that board business will be conducted by a simple majority of directors. The property owners will gain one Elected Director seat during 2005, gain another for 2006, and the board will reach its ultimate composition of six Elected Directors and one Developer Director by 2007. Without these changes, the Board will retain its current three-three split and a majority of both sides of the Board will continue to be required to conduct business.
- Upon the approval of these changes, the Developer will, by January 2006, relinquish its “supermajority” vote at the membership level. Currently the Type “D” Member (the Developer) is entitled to the same number of votes as all other members combined, plus one. This vote may be exercised on all membership issues except the vote for Elected Directors.Without these changes, the Developer’s right to exercise its “supermajority” vote will continue as is.
- Upon the approval of these changes, the Developer may contest board decisions that are alleged to affect the Developer’s right to develop or that may constitute a change in the “fundamental character” of Big Canoe only through an Alternative Dispute Resolution process that involves impartial third parties and that has definite timing requirements. Without these changes, the Developer has the right, through its three members on the Board, to defeat any Board resolution on any issue.
- Upon the approval of these changes, the POA will also have the right of submitting questions of a change in the “fundamental character” of Big Canoe to the Alternative Dispute Resolution process.
Without these changes, the POA has no such acknowledged right. - Upon the approval of these changes, the POA will be granted certain total and irrevocable rights and authorities in all neighborhoods except those under development. Foremost among these will be that of Architectural Control. Without these changes, the POA shares many of these rights with the Developer, and in the case of Architectural Control, the POA only performs an administrative function under a delegation from the Developer, and such delegation may be rescinded at any time.
- Upon the approval of these changes, the ultimate size of Big Canoe is capped at 4,750 housing units (including multi-family), and any future lands annexed into Big Canoe will be contiguous with then existing Big Canoe. Without these changes, there is NO CAP on the ultimate size of Big Canoe, and there is no restriction on the location of future annexations. The outcome was announced at the December 4, 2004 Annual Meeting of the POA, and was approved by over 95% of individual property owners.
A very real irony in this entire matter was that the final result was all (and more than) the Elected Directors hoped to obtained through the 1999 Governance Negotiations, and the Company attorney (Wayne Hyatt) who served as the facilitator in 2004 was the POA’s attorney in 1999. In addition, there was no cost to the POA other than the blood, sweat, and tears of the Elected Directors during negotiations and the cost of document legal review.
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About This Site
This site is presented as a resource for use by Big Canoe property owners. Information found on this site will often differ from that which is presented by the POA Board, the current administration, and some of the committees. Much of what you will see here is opinion, but the opinions will be formed from the best available information.
As property owners and users of this site, you are urged to bring attention to the good things you see as well as the bad. You are particularity urged to bring attention to acts by our employees when those actions exceed your expectations.
Property owners have strongly held views and they are encouraged to express their views on this forum. Please refrain from name-calling or attacking individuals. Keep in mind that the goal is to effect change, not create enemies. -
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Recent Comments
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