Daly compromises on his proposals to gain approval of rest of board of directors

By Greg Ellison

(Feb. 10, 2022) The Ocean Pines Board of Directors approved 31 proposed bylaw revisions, while Director Frank Daly withdrew a number of motions tied to candidate qualifications, during a five-hour special meeting on Monday morning.

Daly offered a slew of changes to bylaws section 5.02A in the wake of the association losing the lawsuit brought by Rick Farr over being disqualified in the midst of the 2021 board election.

“There are a number of changes from me, some from [bylaws] committee suggestions and some from residents,” he said.

Among Daly’s recommendations was instituting a three-year residency requirement for board candidates, with one year service on an advisory committee an acceptable substitute.

“It’s a good way to learn the inner workings of the association,” he said.

Director Doug Parks opposed the measure, noting eligibility and qualifications are separate issues.

“It’s OK to define items for eligibility that can be put into bylaws, but what we can’t define as a board is what somebody perceives as a qualification,” he said.

Based on significant dissent, Daly altered proposals to amend section 5.02A to prohibit board candidates, or their spouses, from seeking election if convicted of a felony in the last 10 years.

“HOA boards in the United States are not well-trusted,” he said. “When you have a felon sitting here on this board that is not going to do anything to build community trust.”

Daly said based on data from the U.S. Department of Justice, recidivism rates drop to under 2 percent a decade after convictions.

“That’s the purpose for 10 years,” he said.

Parks questioned the recommended length of time.

“What additional risk would we incur after five years?” he asked.

Parks said residents should ultimately be the arbitrators if board candidates are suitable to serve based on qualifications.

Director Rick Farr took exception to the inclusion of a passage that prohibited the candidacy of anyone whose spouse had a felony record within 10 years of the filing date.

“I can’t support the spouse piece,” he said.

Association attorney Jeremy Tucker said the proposal to include spouses with felony backgrounds is based on a hypothetical scenario of influencing board votes.

“The concern is if this could be considered arbitrary,” he said.

Daly said the intent was to eliminate the possibility that a convicted spouse of a board member might affect financial management decisions.

“It’s not intended to target a specific member,” he said.

Parks asked how Daly’s scenario would differ from the potential for other family members to exert influence.

“If the premise of this motion is based on influence, we can shoot it down,” he said.

Parks said each board member represents only one of seven votes.

“Even some influence isn’t all seven members,” he said. “I’m more concerned were introducing unnecessary risk for the organization.”

Association President Colette Horn agreed that the probability of spousal influence was unlikely, while also supporting prohibiting felons convicted in the last decade from qualifying for board service.

“It’s not just that your spouse is a felon, it’s your integrity as an individual,” she said. “If my husband committed financial crimes, he wouldn’t be my husband anymore  … but that’s not the kind of person I married.”

Horn said integrity is exhibited through individual choices.

“You want them to have a central core of integrity and ego strength that allows them to make decisions based on facts, data and what’s right,” she said.

In a similar spirit, Daly proposed updating bylaws section 5.12C to include felony convictions, which would also extend to spouses, as a basis for removing a sitting board member.

Director Amy Peck suggested reducing the time limits for convicted felons to qualify as board candidates to five years after restitution and probation are concluded.

The board agreed with the change, while Daly also agreed to drop the spouse portion for both proposals.

Under candidate qualifications, the board agreed to amend bylaws section 5.02B rules for forming an annual Search Committee to solicit board applications.

Approved revisions include restating the committee membership to between three to five members eligible to vote, which also deleting a requirement to have two more candidates than open seats.

Also approved was amending bylaws section 5.02C  to include a new candidate application form that would require full legal names and potentially supporting documents to establish residency.

Peck forwarded a recommendation to amend bylaws section 5.13C to limit board powers to sell, mortgage or encumber real property or assets.

“If over 10 percent of current income from annual charges it would need a referendum approval of members,” she said.

The board also voted in favor of amending the motion to permit a super majority two thirds board vote to approve sums over the 10 percent margin.

In a statement after the meeting, Horn said community input is greatly appreciated.

“I am pleased to announce that we had a total of 82 community participants,” she said.

Horn said  initial steps in the bylaws revision process included a work group formed last year to identify possible language changes with clear rationales for the updates.

“Other changes were proposed by Director Daly in consultation with our corporate counsel, based on review of the findings from the court in the two lawsuits addressing issues related to candidate verification,” she said. “In all, nearly two years’ time was devoted to development of the proposed changes under review today.”

Horn said revisions examined during Monday’s meeting would be forwarded to corporate counsel to develop referendum questions.

“Following that, a town hall meeting will be scheduled that will give the membership the opportunity for additional comments and discussion with the Board on the proposed bylaws changes and the language of the referendum questions,” she said.

Horn said prior to the pending town hall a summary of proposed changes would be available for member review.

“The final step will be for the referendum questions to be put to the membership for a vote,” she said. “The questions that receive a majority vote by the membership will determine the revised version of our bylaws.”