Board of Directors Quarterly Meeting

Minutes

The meeting was called to order at 10:05. The meeting was held at the Reinhart’s house in Beachside Village – 3815 Periwinkle. Board members in attendance were Harvey Michaels, Fred Wagner, John Price, Al Browning, Rick Burke, Ben Westcott and Kim Reuse. Also in attendance were Debbie Reinhart, Bruce Reinhart and Austin Reinhart. The HOA attorney, Steve Schulz and City Councilwoman Marie Robb were also in attendance. In addition, there were 14 property owners at the meeting. There was a quorum. Debbie asked the board members to introduce themselves and asked the owners in attendance to do the same. Debbie also reminded everyone in attendance that neither she, Bruce or Austin are board members. They are the paid property managers that are contracted to manage the day-to-day operations of the HOA.

The Board reviewed the minutes from the November meeting. Harvey Michaels moved to approve the minutes and Rick Burke seconded the motion. The minutes were approved.

Marie Robb

Marie is the City Councilwoman for the west end. She reported on the following:

• Marie reminded us that the design and engineering for beach renourishment had been approved during the recent CEPRA cycle. This will happen in coordination with the Texas General land Office and the city of Galveston. The cost will be covered by FEMA which means that once the beach renourishment is built, it will be eligible for up to 70% reimbursement from FEMA if it’s damaged.
• In the past, the “beneficial use of dredge material” has been assigned to Babe’s Beach which is the beach in front of the Seawall from 61st Street towards the west. The beneficial use of dredge material is the concept of using dredge material from the routine dredging of the Houston ship channel in a beneficial way – instead of dropping it offshore as has been the strategy in prior decades. The beneficial use is relocating the dredge material to neighboring beaches to build those beaches for public use. The ‘next’ use of this dredge material will place the material on the west end. The area on the west end that is most in need of renourishment is the beach in front of the 3 condominiums to the west of Beachside Village.
• In the next 2-3 months, there will be a FEMA project renourishing from the end of the Seawall to Delanera Park (the RV park just west of the end of the Seawall). Marie has met recently with the Colonel at the US Army Corps of Engineers with the goal of getting his support for a broader use of the dredge material connecting the end of the Seawall renourishment project to beyond the condominiums.
• The city of Galveston collects and silo’s some of the sales tax income into a silo for beach projects. In the past, that silo of money has been directed to the Parks Board that manages the city beaches. Marie reported that those funds are now being directed to the city to be used to be the matching funds for beach renourishment projects.
• Marie reminded us that the renourishment of the beach seaward of Beachside Village is important because in order for Beachside Village to secure a permit to install a geotube in the dune area in front of Sections 4, 5 & 6 – there must be 200’ of beach between the line of vegetation and the water. Beachside Village will need the renourishment to achieve that depth of beach.
• Marie reported that she is seeing an average of geotube construction costs between $175-$200 per linear foot. Sections 4, 5 & 6 total 750 linear feet in length.
• Marie reported that the city is in great financial shape. The city is required to have a 90-day reserve of funds to be able to operate in case of an emergency. She reported that the city has 120 days in reserve.
• District 6 (the west end) comprises 46-47% of the city’s tax base yet the west end does not get a proportionate amount of the city budget. Marie reminded us to use the Galveston Police Department non-emergency contact number to report any issues deemed not worthy of placing a call to 911. That phone number is 409.765.3702.
• Marie shared that she meets weekly with CenterPoint with the goal of strengthening the power infrastructure. She also reported that AT&T is installing a new cell tower this year and will add another tower next year – hoping to achieve better cell service on the island.
• You can reach Marie at marie@marierobb.com or on her cell – 409.256.4518. She encourages her constituents to reach out to her via text if they are having any concerns that she may be able to help them with.

Financial Reports

The financial statements and cash accounts were reviewed. Ben Westcott moved to approve the financial statements and cash accounts and Harvey Michaels seconded the motion. The financials were approved. Debbie reviewed the Budget vs. 4th Quarter Expenses with the board. She noted that the HOA had received 90% of the projected income. She also pointed out that a couple of expense budgets were over-budget:

• The dune repair project budget was over budget caused primarily by the increased costs of trucking, sand and the labor to shape the new dune.
• The contract labor budget category was also over budget because the cost of the Truly Nolen mosquito spraying was not originally in the budget and the costs of that service pushed the category over budget.
• The HOA Grounds category was slightly over budget due to the work that needed to be done in the common areas after the freeze in February.
• Lastly, the sign category was over budget because the HOA needed new signage at the entrance to the dune walkovers telling people to watch where they are going and to cross at their own risk.

At this time, Melissa Rundle asked for some clarification on the signs that were placed in the walkover area in her view corridor. Austin explained that the city installed those signs and that he will work with Marie to get the signs lowered and level. Marie also said that she would work with the city to remove the portion of the signs that indicate that the mat-style walkovers are handicap-accessible which they clearly are not.

2022 Budget

Debbie presented the proposed 2022 HOA Budget which showed additional income due to the new lots in the development. She also explained that she added the Mosquito Control budget category and reinstated the Splash Day neighborhood party, scheduled for June 11th. A deposit has been paid to Pappas catering for the event. Several property owners wanted additional information about the offer from Truly Nolen to provide mosquito control within their fence lines. Debbie will send an email to all of the property owners with that info. Harvey asked Debbie to show the budget vs. actual and the proposed budget without the storm repair expense and the special assessment so he could better compare the year over year budgets. Rick Burke reported that while the board understood that the dune repair project was intentionally underfunded, the goal was that the beach and dune fund would be funded with $100,000 by the beginning of storm season. Fred Wagner made a motion to approve the proposed budget and Kim Reuse seconded the motion. The 2022 proposed budget was approved.

Security Report

The neighborhood security officer, Craig Dickey with Ranger Guard, was able to attend the meeting. Debbie provided his 4th quarter pie chart showing the number and types of incidents he responded to during the quarter and also a pie chart showing the incidents for the entire year. As this report was for the third quarter, it’s not surprising that most of the incidents had to do with parking. Craig reported that he has noticed better renter behavior lately but that there has been an increase in cars driving on the beach and an increase in incidents involving golf carts in Beachside Village. His hours in the neighborhood are typically Friday from 2-10pm and Saturdays & Sundays from 10-10pm. Property owners are encouraged to contact him with any security issues/questions while he is on duty. His cell phone number is 713.865.0704.

Old Business:

Storm Damage

Debbie reported that the majority of the dune reconstruction project has been completed except for the rebuilding of the sand fence which is seaward of the newly constructed dune. The material is on hand to build that and the work should be started soon. The dune repair budget will end slightly over budget (by 7%, approximately $20,000). This was caused by higher fuel prices which increased the trucking cost, higher labor costs to shape the dune and the additional walkover repair that was caused by the additional damage caused by the late season tropical storms. The reconstruction began in late November and should be completed in February. The Special Assessment was invoiced to all property owners on December 1st and by the end of 2021 the HOA had received $42,250 (60%) of the $70,000 Special Assessment budget.

Short Term Rentals

As usual at the quarterly board meetings, there was an ongoing and lively discussion about short term rentals. At the November meeting, Steve Schulz recommended that the Board approve language for an amendment to the deed restrictions that better defined a “commercial business” and to limit the number of such business that could be owned by an owner or by one or more related or affiliated parties or entities. There was a great deal of discussion at the November meeting and the board approved the language of the amendment and instructed Debbie to send the amendment to all property owners. Debbie sent the amendment out with an explanation of the intent of the board and the benefits and consequences if the amendment passes. Debbie reported at this meeting that to date, she had received the support of 159 property owners that had returned their executed amendment. She had heard from 3 owners that they were not in support and would not be executing the amendment. Debbie had asked Steve to research the number (percentage) of owners that needed to execute their amendment for the amendment to pass and to be filed. Steve sent a Memo to the board with his answer to this question stating that there must be owners representing 67% of the properties supporting the amendment by executing them and returning them to Debbie. There are 259 residential properties in Beachside Village and 67% would be 173 returned, executed amendment. The tally is 14 property owners shy of what’s needed and the board asked Debbie to reach out to those she hadn’t heard from and ask them one more time to execute the amendment or to let her know that they don’t intend to execute the amendment. This will give the board a better understanding of those who haven’t responded – have they not responded but support the amendment, are they not really interest in HOA business so they don’t have an opinion of the amendment and don’t intend to execute it or do they disagree with the amendment. Debbie will reach out to those folks and report back to the board with her findings.

At this time there was discussion among the board and from some of the property owners who were in attendance. Al Browning reported that he has gotten feedback from fellow renters who are unhappy with the limit of one rental per owner/affiliated entity. Al reported that he had heard that there are owners who are planning to sue the HOA. One owner questioned Schulz’s conclusion that the amendment would hold up in court and there was discussion between Schulz and this owner that was not sufficiently resolved. Schulz stated his opinion as did the property owner. During the conversation, Marie Robb reported that 5 neighborhoods on the island had worked through the process to change the zoning of the neighborhoods to ‘R-0’ which disallows rentals all together. While changing the zoning has not been the intent of the board, it’s a solution that is available to the neighborhood if the owners wanted to take that path. Regardless of whether the current amendment passes or if property owners decided to pursue the zoning change, neither would cause any owner to discontinue renting his/her property. Any deed restriction change only impacts property moving forward, not back in time. All current owners could continue to rent their homes.

On December 30, 2021, board member Al Browning sent an email to the other board members and to owners of rental properties in Beachside Village. Al stated that his email was his opinion and not that of the board of directors. He provided updates on the amendment and the recent changes to the HOA rental rules. Al was complimentary of the current board stating that the board members had the best interest of the neighborhood and owners in mind in creating the new regulations and the amendment to the deed restrictions. He said that the board members take their positions seriously and he encouraged owners let the board members know their opinions by providing feedback to the board. Al also encouraged owners to attend the board meetings and to become board members themselves if that interested them. Al also suggested that the amendment to the declaration could disallow owners from working remotely from their homes. When Debbie received a copy of this email, she forwarded it to Steve Schulz and asked him to research Al’s opinion and to prepare a Memo to the board either agreeing with Al or stating why Al’s opinion was incorrect. Debbie provided Al’s email and Steve’s Memo to the board. Steve’s Memo stated that Al was incorrect – the amendment would not prevent owners from working remotely in their beach house. In summary, Steve explained that zoning exists to prevent incompatible land uses from existing within the same zone. Working remotely is not inconsistent (incompatible) with the residential zoning of Beachside Village. Steve also explained the intent of the developer was never to prohibit working remotely and that the original intent would be an important consideration if anyone chose to contest the use of a home in this manner. One of the homeowners who rents out her home said that she was fine with the updated rental regulations but was concerned about this becoming a ‘slippery slope’ and was worried about what regulations could come in the future. Debbie responded that the rental regulations were written and occasionally updated in response to rental issues, usually expressed by neighboring owners. At this time, there aren’t any issues that haven’t been addressed by the rental regulations. Another owner asked if the rental registration fee of $100 is allowable and Steve Schulz responded that in the boards capacity to craft rules, the fee is allowable. Ben Westcott made a motion to authorize Schulz to talk with residents with legal concerns about the amendment and/or the rental regulations. Fred Wagner seconded the motion. Harvey Michaels suggested that those conversations be limited to 30 minutes so that the HOA didn’t incur large legal bills. The motion carried with Al Browning voting no to the time limit.

Concerning the Amended and Restated Beachside Village Rules and Regulations Regarding Rental of Dwellings, Debbie reported that the documents was signed by the Secretary of the Board and it was filed on November 9, 2021. There are 32 rental units in Beachside Village and 22 have returned the registration form and paid the registration fee. She reported that to date, all of the registrations she has received have indicated that the homes are being advertised either at the calculated occupancy limit or less. Debbie will continue to follow up on the outstanding registrations and begin monitoring the rental advertisements to confirm compliance.

New Business:

Demand Letter

Debbie reported that she and Steve Schulz received a demand letter from an attorney representing two LLC’s that each own a home in Beachside Village that they rent out. The demand letter called into question the boards authority to issue the Amended and Restated Beachside Village Rules and Regulations Regarding Rental of Dwellings, questions the boards authority to levy a registration fee and suggested that the board took this action without holding a meeting. Steve Schulz submitted a proposed response letter to the attorney representing the LLC’s. Rick Burke made a motion to authorize Steve to send the response letter and Fred Wagner seconded the motion. The motion passed unanimously. Steve will send the response early the next week.

General Discussion:

• Debbie reported that Board Member Gary Barber has resigned his position on the board – he has sold his home in the neighborhood. In an attempt to achieve a balance of owner types on the board (beachfront owner, non-beachfront owner, rental property owner, homeowner, lot owner) Debbie reminded the board that Gary was a homeowner and a rental owner. She suggested that he be replaced with another rental owner. The board asked Debbie to send an email to the property owners and to see if anyone else might be interested in serving.
• Debbie reported that the board might consider changing the date for the annual meeting because the posted date is the first weekend of spring break. The board asked Debbie to poll the board members and see what dates would work best for everyone.
• It was also suggested that Debbie try to find a speaker who can make a presentation and answer questions about property insurance – she said she would try to do so and Ben Westcott said that he would provide some suggestions about who to reach out to.
• Several owners have asked about holding the meetings via some sort of ZOOM format. Al Browning said that he would report back to the board with some options that would fit the setting.
• One of the property owners asked if there was any progress on the community pool design. Austin reported that he has the pool layout completed and that the surrounding structure is being designed by Stan Culwell. Stan is running behind schedule because he is dealing with an ailing parent. As soon as Stan is able to complete the design Austin will first run the concept by the board of directors and with their approval will submit the renderings to the property owners. The pool concept is consistent with the style and quality of Beachside Village and membership will be compulsory, requiring an amendment to the declarations.
• Debbie reported that Splash Day has been scheduled for June 11th.

There being no other business, the meeting was adjourned at 1pm.

Future Events:

Please note that some of the following dates have changed:

• Board Meetings 2022
  April 16th, July 30th, October 15th
• Annual Meeting
  March 12th – location TBD
• Splash Day
  June 11th