Cites “legal vulnerabilities”
[ By Katherine Nettles ]
Crested Butte South will have to go through another vote among property owners in order to update and modernize its covenants, despite what at first seemed like a straightforward election to do just that in the fall of 2021. After considering a series of issues with its November membership vote to change several aspects of its covenants, the Crested Butte South Property Owners Association (POA) board of directors announced Monday that it will nullify the vote primarily due to how votes were allocated among property owners. The goal is to make the process more straightforward and legally robust with one vote per property deed, and the board says it will need strong voter participation once more but does not expect drastically different results.
Although it appeared that CB South property owners had spoken overwhelmingly in favor of four amendments to limit short-term rentals, allow campers to be parked and even occupied on a temporary basis as well as myriad other updates contained within one general ballot question, a handful of concerned property owners called into question the POA’s covenant voting process soon after results were released.
That group of owners, self described as the “Record Review Team,” including property owner/spokesperson Deborah Tutnauer, made a records request of all election documents and related meeting minutes and shared their findings and concerns in writing with the POA board during the January 12 board meeting. Tutnauer read the specific findings of the team during public comment, and later shared the letter with the Crested Butte News. It essentially calls for invalidating the election.
The POA board has since agreed and the POA will try for another vote with more fine-tuning in the future. In a letter sent to all CB South homeowners on Monday, January 17, the board stated, “As many of you know, a group of dedicated homeowners submitted a records request for the documents from our recent Covenant vote. Through that process, they brought some issues to the Board we cannot ignore. For that reason, we have decided that we will nullify the November Covenant vote and work to run another vote on amendments to the Covenants as soon as possible.”
In a follow up letter to homeowners the next day, the POA board offered more information on its decision.
“While it is unlikely that the outcome of the vote would change with a recount, the process had one critical flaw. The Board sought two separate legal opinions on our voting process. Both came back with the advice that the way in which votes have historically been allocated left our vote vulnerable to a legal challenge.”
The POA’s historic practice of giving two votes to a main structure with an auxillary structure instead of just one per deed was the main issue, and the letter states that the Covenants are vague on the matter of vote allocation and conflicts with language in the Bylaws.
“This confusing language is likely the reason for the POA’s past practice. We have been told by our legal counsel that Covenants rule over Bylaws and therefore past practice is out of compliance with our Covenants,” according to the letter.
The POA board stated that the next vote would align with the current covenants, allocating votes by deed.
“By fixing our voting process we can enact the changes that the community wants so that they will hold up to future legal challenges. We owe it to the community to get this right. We want the hard work done by the CASC (Covenant Amendments Steering Committee), staff and community members to last the test of time, and legal pressures.”
The POA board also stated that the inconsistent allocations of votes was not discovered until after the vote was held, and that no one associated with the vote was aware of the inconsistency.
“There was never mal-intent in the running of this process, it is simply an example of how our old practices are not sufficient for the rapid change our community is undergoing. The Board is committed to working in the interest of the community with transparency being paramount. We would ask that you, the community members, engage in this process by voting again so that we as a Board can bring the changes you want for our community’s future,” read the follow-up letter on Tuesday.
The Record Review Team raised issues with transparency, procedure, legalities and the ballot count involved in the vote. The team called for both the POA and Gunnison County to invalidate the vote and refrain from adopting the new covenants in any part, and also asked the POA board to revisit all minutes and adjust new covenants to reflect committee decisions and public input, review various related laws and ultimately plan to have another vote in the fall of 2022.
“Our review was not directed at any one person or one ballot issue. As a matter of fact, each member of the team voted differently on the election issues,” explained team member Maggie Dethloff. “We were hearing about a lot of inconsistencies and wanted to make sure the election process was transparent and done right. We found that it wasn’t. Our goal is to look forward and make sure the issues are corrected. The POA is doing a good job but it only works if there is an active membership. The focus now is on helping the POA move forward.”
The group also challenged how the POA vetted (or failed to do so) the details within the general Restated Declaration of Protective Covenants ballot question. This included the removal of an annual cap of 10 percent on dues increases that was not expressly noted on the ballot but was contained within the Restated Declaration ballot question.
The Record Review Team stated, “It was the opposite of what CASC [Covenant Amendment Steering Committee] decided and agreed upon. No minutes show a decision to remove the cap.” The team also noted that the decision was not shared specifically with the community in public meetings when discussing major changes to the covenants, or highlighted on the ballot as a change to take note of.
The team’s letter continued, “Taken as a whole, it is obvious that this process was seriously flawed and arbitrary with regards to the most important topics. This vote was the most important vote in Crested Butte South history, with the power to change our community in many ways. It should have been handled with deep regard for legality, transparency and integrity. That is far from what happened.”
Board president Andrew Sandstrom said that while not all of the Record Review Team’s findings and concerns carried equal weight with the board and their legal counsel, there were enough issues to justify a redo.
The POA had reported a historically rare voter turnout for the community of 86 percent with 851 out of 989 possible ballots cast. The board says the process has not been entirely futile, however.
“The work done to date through the [CASC], the election process and the records request group is not a loss. We have learned through this process and now can move forward with a process that is in the best interests of the community,” according to the board’s statement.
“We have learned that the old way of doing things is not perfect and we can do better. Our 1970s Covenants and Bylaws leave much to interpretation. We are moving forward with legal counsel on the best steps forward. Our outdated governing documents are no longer sufficient for the growing needs of our community. We plan to button up the proposed amended Covenants so that this is not an issue moving forward. Once we can work on these issues, we will present this to the community and then bring the updated document to vote by membership.”
Sandstrom said the board’s decision would not involve ramifications for former POA compliance coordinator/election coordinator Sue Wallace and former POA manager Dom Eymere, both of who have resigned from their positions since the election.
“There was certainly no mal-intent by any of the staff or board. And we didn’t discover this discrepancy until after the vote,” he reiterated. Sandstrom could not confirm how long it will take to adjust the number of ballots issued to reflect the correct covenant allocations, or if any other changes such as the dues cap or 90-day limit to short-term rentals will be on the new ballots. But he said the board is committed to transparency.
“We owe it to all the work that’s been done…to get it right so it has longevity,” he said.
Sandstrom said a new vote will be scheduled as soon as possible, but there is no date yet.