BOARD OF DIRECTORS MEETING MINUTES Special Board Meeting. February 9, 2018

Transcription

1 DRAFT BOARD OF DIRECTORS MEETING MINUTES Special Board Meeting February 9, 2018 PRESENT: President and Lake Anne Tall/Oaks District Director Sherri Hebert; Vice President and Apartment Owners Representative David Bobzien; Treasurer and At-Large Director Sridhar Ganesan; Secretary and At- Large Director Michael Sanio; Hunters Woods/Dogwood District Director Victoria White, North Point District Director John Mooney, South Lakes District Director Julie Bitzer; At-Large Director John Bowman; Legal Counsel Ken Chadwick, Esq.; and, Chief Executive Officer Cate L. Fulkerson. A. Call to Order & Opening Remarks President Hebert called the meeting to order at 4:31 pm and established that a quorum of the Board of Directors was present including: President Hebert, Secretary Sanio, Vice President Bobzien, Treasurer Ganesan, and Directors Mooney, White, Bowman, Bitzer and Carr. B. Adoption of Special Meeting Agenda Vice President Bobzien, seconded by Director Carr, moved to approve the February 9, 2018 Special Board Meeting Agenda as written. The motion passed unanimously. C. Member Comments 1. John Pinkman, 2188 Golf Course Drive Topic: Stated he is running for a seat on the Board of Directors in the 2018 election; commented on recent board actions and current issues of discussion amongst the board. 2. Rick Hamilton, Thunder Chase Drive Topic: Commented on the board s ongoing effort to establish a conflict of interest policy; urged the board to unite and act on facts only. 3. Andy Sigle, 2715 Soapstone Drive Topic: Announced he is running for the At-Large seat for a one-year term on the board. D. Code of Ethics & Conflict of Interest Policy (Attached) Director Mooney gave the attached presentation. The Board discussed next steps in the establishment of a conflict of interest policy. Without objection, the Board directed the CEO to put the topic of the Conflict of Interst Policy on the March 22 Board of Directors meeting agenda for further discussion. E. Executive Session to Discuss CEO Performance Evaluation Vice President Bobzien, seconded by Treasurer Ganesan, moved to adjourn into executive session to discuss CEO performance evaluation. The motion passed unanimously. Reston Association Special Board Meeting February 9,

2 DRAFT The Board adjourned into executive session at 6:30 pm and returned to open session at 8:25 pm. Vice President Bobzien, seconded by Director Carr, moved that the Reston Association Board of Directors certifies to the best of each member s knowledge that only those matters (appropriate for executive session of a personnel, contractual, or legal nature) were heard, discussed, or considered by the Board during executive session. The motion passed unanimously. Vice President Bobzien, seconded by Director Carr, moved to remove Item F from the agenda. The motion passed unanimously. Vice President Bobzien, seconded by Director Carr, moved that the Board authorize the president to engage special counsel to advise the Board on issues discussed in executive session. The motion passed unanimously. G. Adjourn Vice President Bobzien, seconded by Secretary Sanio, moved to adjourn. The motion passed unanimously. The meeting adjourned at 8:30 pm. Respectfully Submitted, Mike Sanio Secretary and At-Large Director Attachments: - February 9, 2018 Board Meeting Agenda - Member Comments - Presentation: Code of Ethics & Conflict of Interest Policy Reston Association Special Board Meeting February 9,

3 AGENDA Special Board of Directors Meeting Friday, February 9, 2018, 4:30 pm 8:50 pm NOTE: Times listed for Agenda Items are estimates only. Actual times may vary substantially dependent on circumstances. It is suggested that Members having an interest in a specific Agenda Item be in attendance from the start of the meeting. Item A. 4:30 pm Call to Order & Opening Remarks Sherri Hebert, President Disposition Discussion The purpose of this Special Meeting is for the Board of Directors to: 1) consider a draft proposal for a Code of Ethics and related amendments to the organization s Conflict of Interest Policy; 2) convene in executive session to discuss the CEO s Performance Evaluation; and, 3) establish the CEO s performance goals. B. 4:35 pm Adoption of Special Meeting Agenda Sherri Hebert, President Action C. 4:40 pm Member Comments Discussion D. 5:00 pm Code of Ethics & Conflict of Interest Policy David Bobzien, Vice President John Mooney, North Point District Director Victoria White, Hunters Woods/Dogwood District Director Mike Sanio, Secretary D. 5:30 pm Executive Session to Discuss CEO Performance Evaluation Sherri Hebert, President Discussion Action 7:35 pm BREAK Action E. 7:50 pm Establish the CEO s Performance Goals Sherri Hebert, President F. 8:50 pm Adjourn Sherri Hebert, President Discussion Action VISION Leading the model community where all can Live, Work, Play, and Get Involved. MISSION To preserve and enhance the Reston community through outstanding leadership, service and stewardship of our resources. CORE VALUES Service. Collaboration. Stewardship. Innovation. Leadership.

4 From: Connie Hartke Sent: Thursday, February 08, :42 AM Cc: Elections Committee Subject: Member comments - submit to record for the 2/9/2018 RA Special Board Meeting Dear Board Members, I cannot attend the meeting on Friday but want the following to be recorded in the minutes as a member comment. I hope you will take the time to read and digest my remarks before you go into closed session to discuss CEO performance evaluation. I have copied the elections committee as I think candidates for the upcoming election should also read this please. On the surface the presentation given by Ms. Gallagher and Ms. Callaghan is concerning. I look forward to Cate and her staff's response once they are able to sift through the actual report. Surely you and they have this by now. I hope that Cate's overall accomplishments will not be overshadowed by in depth yet (understandably) incomplete reporting. My reflections as an RA member: Of course you know that the CEO works under the direction of the current RA Board President. Cate was brought in under Ken Kneuven. She took over from Milton Matthews. Who on this board was there prior to fall 2013 to fully comprehend what she stepped in to? Cate is the classic example of an excellent employee who rises through the ranks, experiencing many levels of jobs at an organization, before becoming its leader. Well worth a quick read: Every story like hers include missteps, learnings, corrections. Seems that even GE's Jack Welch had a misstep that almost got him fired. ( Cate and staff immediately reacted quickly to the findings of the StoneTurn report and implemented changes per recommendations. I have been impressed with Cate's professionalism. I have seen no defensiveness, just an attitude of "let's fix this." This past year has seen so much turnover on the board of directors - unprecedented in my 14 years in Reston. Again, Cate stays calm, cool and collected and keeps the mechanics of the RA mission running without a hitch. My impression in interactions with lower level staffers is that Cate is respected and contributes greatly to the positive employee morale that this community has enjoyed. Cate has shown vision and she has worked to evolve projects as she's moved from one boss to another (3 board presidents in 5 years) o Example: The working group model started in 2014 with the Pony Barn project has evolved into a repeatable, positive process. o Example: "Selling" new residential development into joining RA. There are 2 choices, RA or RTCA. If they join RTCA, you bet they will still use our paths and lakes. This is another process that evolves -- as in the technology sales that I used to work in, your very first

5 customers get concessions or special deals for being "early adopters." Then with success, one can pull back to a sustainable long-term model. Cate and her team are steering this in a positive direction. I hope it continues. This is no time to show weakness in RA to the County or to Developers. Show your confidence in your CEO. We may never find another so capable, so willing to continue growing and learning with the passion and popularity of Cate Fulkerson. Connie Hartke 2201 Quartermaster Ln Reston, VA

6 Member Comments by Joe Leighton February 9 th Board Meeting Back in the early 1990 s the CFO left. The Board hired one of the Board members as acting CEO. At the time Cate was working at the athletic Club. She was during a good job increasing membership. I ask for a financial statement for the first three months of the final year of the athletic club staff was unable to find one. If staff had been able to find the financial statement I think I could have proved that or that year it was making money the Board voted to not renew the lease on the athletic club without having the financial information they should have had. Around 1995 RA invested most of their non-operating funds in derivatives without the Board s knowledge this was in violation of the Association s investment policy. This was discovered by the Association s CPA firm when they were during the audit. The Association suffered a big lost on this investment. The CEO fired the CFO.The Board kept CEO and changed the way financial reporting was done. When I first joined the Board we were in a CEO search I looked at about 120 resumes over 100 of them were not qualified for the job.one of them who was qualified for the job thought of it as a 9 to 5 job. Bottom line it is very hard to fill this position Columbia Association has had its problems filling the position of CEO also.about 15 or 20 years ago they hired someone who was supposed to moved to Columbia and lived I think in Georgia she never moved so Columbia had to fire her.one of their most recent hires was a City Manager of Troy Michigan..After five years they fired him and hired Milton Mathews. In 2005 when we conducted interviews for CEO we had the choice of hiring Milton Mathews or starting the process all over again. Milton with Cate s help did a great job with two exceptions the financial reporting was a disaster and he did not do evaluations of senior managers towards the end.without Cate Milton would have had other disasters. I think Cate has taken the proper steps to eliminate the financial reporting disaster.i think the Board as part of Cate s evaluation the Board needs to review her evaluations of senior managers DRB has frequently only had six members at Full DRB meetings Cate has had her staff start taking attendance records so when it comes time for re appointment the Board can take attendance into consideration. As part of Cate s evaluation you need to make succession planning.it would take at least a year for someone to learn the job. Instead of hiring an in house legal counsel.the Board should consider hiring someone who is a reston resident or will move to Reston about ten years younger than Cate plus has legal

7 experience and will be hired as 2 nd in command to the CEO. This would help her do a good job of succession planning.

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10 RA Code of Ethics and COI Policy DECISIONS NEEDED TO MOVE FORWARD Reston Association (RA) Board Governance Committee, Special Board of Directors Meeting, February 9, 2018

11 Present Status of Drafts & Comments Full 12/26/17 draft submitted to BOD for (cancelled) Jan. 25 work session Included John Mooney s 1-page summary of major changes since previous draft. Proposed 6 parts 1. Preface 2. Ethical Norms 3. Strengthening Our Ethical Culture (including enforcement) 4. COI Policy and Annual Statement of Interests 5. Annual Pledge for Directors and Officers 6. Interpretative Appendix: Historical and Conceptual Framework Comments received: Ed Abbott, Steve Canner, Irwin Flashman 2

12 BGC Recommended Path Forward Focus tonight only on the Conflict of Interest Policy and Annual Statement of Interests. The requested BOD approvals sought tonight: 1. Give BGC guidance on the key points needed to revise and complete the COI documents. 2. Approve initially structuring the Code of Ethics and the COI documents as two separate but cross-referencing documents. 3. Tentatively plan to adopt the COI documents at the March 22 BOD meeting, after a public hearing at the February 22 BOD meeting. A very tight schedule. 4. Defer consideration of the balance of the Code of Ethics. Does the BOD agree on this? 3

13 Key Guidance Needed on COI Docs (1) Specific Questions: 1. The draft revision defines both Economic Interests (Policy, A.12) and Affiliation Interests (Policy, A.1), collectively called Personal Interests (Policy, A.20) and requires disclosure of both in the draft Statement of Interests. RA s current Conflict of Interest Statement requires (with poor clarity) disclosure of both, but the current COI Policy is unclear. Should we require disclosure of both? Should we more clearly define Affiliation Interest ; if so, how? 2. The draft revision distinguishes between Family Member (Policy, A.13) and Immediate Relative (Policy, A 16) and then applies those terms in the definition of Indirect interests (Policy, A.14) and in the draft Statement of Interests. The VA State and Local Government COI makes and applies those distinctions similarly. RA s current COI docs does not make that distinction, resulting (in the BGC s view) in onerous requirements in the current annual COI Statement. Does the new draft version get it right? 4

14 Key Guidance Needed on COI Docs (2) Specific Questions (continued): 3. The draft revision defines Close Economic Associate (Policy, A.6) and applies it in the definition of Indirect Interest (Policy, A.14). Do you agree with the definition and application of this term? 4. The draft revision retains the current Statement of Conflict of Interest s $500 threshold for Material and Immaterial Economic Interests (Policy, A.17 and A.15). The draft Annual Statement of Interests twice uses the same $500 threshold. Is that limit still correct? 5. Sections B.1-B5 are proposed new additions to how COI disclosures are handled at BOD meetings, to promote greater transparency and more accurately governing state law and RA governing documents. Do you agree with them? 6. Section B.9 contains the proposed rules for handling failures to disclose a COI prior to a BOD vote, whether an economic COI (Subsection B.9.a) or an affiliative COI (Subsection B.9.b). Do you agree with this? 5

15 Key Guidance Needed on COI Docs (3) Specific Questions (continued): 7. Section C proposes new rules for disclosure of COIs in Official Actions (as defined in Section A.19) other than votes at BOD meetings. Do you agree with these? 8. Section D clarifies the requirements for filing and updating the Annual Statement of Key Economic and Affiliation Interests, plus the penalties for failure to do so. Do you agree with them? 9. Addendum A is the proposed amendments to our current Conflict of Interest Statement, now proposed to be called the Annual Statement of Key Economic and Affiliation Interests. Do you agree with them? 10. Section c in Attachment sets a minimum threshold (xx%) for reportable business ownership. VA State & Local COI regulations have a $5,000 threshold. What should that percentage be, or should we have a dollar threshold instead? 6

16 General Questions: 1. Is the over-all organization ok? 2. Are any critical points left out? 3. Are any unnecessary points included? 4. Is it clear? 5. Is it too long? If so, how should we shorten it? 7