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KPOG
History
written by Thomas U.
Greer
FROM
HOG TO KPOG - AN
HISTORICAL REVIEW
Elected in early
1985, the Sayers
administration quickly
succeeded in
incorporating KRG as a
non-profit organization,
retaining legal counsel
(Young, Clement, Rivers
and Tisdale), and
providing directors’
and officers’ insurance
for its officers. A
committee was formed to
study the club dues
problem in depth and
report to the membership.
(Wally DuBois was
chairman; committee
members were Art Gough,
Tom Nelson, George Boyd,
Bill Burns and Bill
Washburne.) They reviewed
the history of rate
increases. (For example,
for couples golfing,
increases averaged 10% a
year until 1985, when
resident fees increased
46% and non-resident fees
increased 116%.) The
committee surveyed
resorts similar to Kiawah
up and down the east
coast. Kiawah’s 1985
rates were considerably
higher than other
comparable resorts, even
though Kiawah had less to
offer by way of amenities
than did the other
resorts. Over 50% of
non-resident property
owners resigned from the
club as a result of the
increases. The committee
reported to the KRG board
and to the membership.
The Kiawah Island Company
(KIC) management still
refused to meet with the
KRG. Tug Greer, who was
Vice-President of the KRG
but also a newly-elected
property owner director
of the KICA, wearing his
KICA hat was able to set
up a meeting about club
dues on May 8, 1985, with
Saleh Alzouman. The
ground rules were that
Tug and Art Gough would
brief Mr. Alzouman, who
would listen but would
not enter into any kind
of discussion. Using all
of the information
gathered by Wally DuBois’
committee, Greer and
Gough presented the
findings and comparisons
along with a series of
recommendations
concerning both resident
and non-resident club
dues. Mr. Alzouman made
no comment. Some further
discussions were held
later by Greer and Gough
with Mr. Daoust of KIC,
but the company refused
to budge on the ’85
dues structure. KIC did
offer a sports card in
lieu of club membership,
which was of some help to
non-resident property
owners. Though little
impact was made on the
’85 rates, when the ’86
rates came out there was
little or no across the
board increase, where the
famous January 30, 1985
Alzouman letter had
forecast added increases
of up to 300%. Certainly
the efforts put forth by
KRG had their effect.
No sooner had
the Sayers administration
taken the KRG reins than
a second major issue
confronted it. On April
1, 1985, the Kiawah
Island Utility (KIU)
applied to the SC Public
Service Commission (PSC)
for approval of new water
and sewer rate increases.
(The utility had just
received an increase the
previous year.) A
committee composed of
property owners Tom
Nelson, Ralph Proffitt
and Fred Peck
investigated the
situation and reported
their findings to the KRG
board. If approved, water
rates for the average
residential user would
increase 60% and sewer
rates 40%. Kiawah costs
under the new rates would
be more than twice the
costs at Seabrook or the
city of Charleston. As
was the case with the
club dues, utility costs
were outside the purview
of KICA, hence the KRG
was the only voice
property owners had to
resist the increases. The
KRG board made the
decision to officially
intervene, hired a
lawyer, and went to work.
A number of members dug
out information. Four
members - Wally DuBois,
Tom Nelson, Dick Sayers
and Tug Greer - developed
written testimony and
made oral presentations
before the PSC in
Columbia over a three-day
period. Subsequently, on
September 12, 1985, the
PSC conducted a public
hearing on the subject on
Johns Island. The KRG
board organized property
owner participation at
this hearing.
Approximately 250
property owners attended
and 19 KRG members stood
up and made statements,
many using information
provided them by the KRG
committee.
The results of
the KRG intervention were
a huge success. On
September 30th, the PSC
issued its decision,
which denied in total the
requested increases and
made several additional
minor decisions favorable
to property owners. These
decisions saved the
minimum utility user
(usually non-resident
owners) about $126 a year
and the average user
about $166 a year. Tap-in
fees remained at $1000
instead of the $2000
proposed as part of the
increase. Initially, the
KIC requested a rehearing
of the PSC decision, but
eventually withdrew this
request.
The $16,000 cost
of the intervention,
which was the cost of the
lawyer’s fees (all
volunteers paid their own
expenses), pretty well
depleted the KRG
treasury. An appeal for
voluntary contributions
went out to the
membership and the
generous response quickly
replenished the treasury.
A disturbing
development arose from
the utility rate increase
exercise. The KRG
committee noted that the
Kiawah Property Report,
prepared by KIC under
federal regulation and
required to be presented
to each prospective buyer
of newly offered Kiawah
property, clearly stated
that KIC would construct
and pay for the central
water and sewer systems
and facilities. The
committee determined that
KIC was routinely
transferring these water
and sewer costs to its
wholly-owned Kiawah
Island Utility in return
for an interest-bearing
promissory note made out
to KIC. Thus KIU’s
operating profitability
was being reduced by
depreciation and interest
charges, which in turn
increased KIU’s
justification for a rate
increase. Simply stated,
KIC was attempting to
recover, through
increased rates charged
by the utility to
property owners, the
construction costs it
promised to pay This
started a "running
gun battle" between
KRG and KIC which began
in late 1985 and lasted
for three years, and
which was known as the
"property report
issue."
KRG appealed to
the US Department of
Housing and Urban
Development (HUD) which
oversees property
reports. HUD passed the
complaint to KIC, which
took no action. HUD,
which is not an
enforcement agency, said
KRG's only recourse was
to bring suit against KIC
under the Interstate Land
Sales Full Disclosure
Act. KRG's lawyer advised
a class action suit
against KIC.
Concurrently, in August
of 1986, KIU filed a
notice of intent to apply
again to the SC Public
Service Commission for
increased rates and fees.
In October of 1986, the
KRG board laid out two
issues in a referendum
mailed to its members and
asked them to vote: 1)
Should KRG initiate a
class-action suit against
KIC on the property
report issue? and 2)
Should KRG intervene in
the latest KIU rate
increase application if a
designated committee
determined the requested
increases were unfair and
unjustified? The
responses overwhelmingly
favored the class-action
suit (394 for, 4 against)
and intervention in the
rate increase if found to
be appropriate (397 for,
2 against).
The class action
suit was initiated, was
very complex, and was
hindered by a statute of
limitations on the length
of time within which to
take action after land is
purchased. KIC went to
the courts for a summary
judgment to have the KRG
case dismissed, but was
unsuccessful. In July of
1986 KIC changed the
wording of its latest
property report to read
that the Kiawah Island
Utility would pay all of
the construction costs to
complete the central
water and sewer systems
and that the costs would
be amortized and repaid
from utility user charges
- an accurate portrayal
of the situation. The
case was still working
when Kiawah, including
the utility, was sold by
KIC in 1988. Since KRG's
intent with the suit was
to favorably influence
future rate increase
requests, there was no
longer any reason to take
action against KIC, so
the suit was terminated.
Two significant
benefits came out of this
effort. First, KRG
learned a great deal
concerning the operation
of KIU from all the
documents KIU was
required to file as part
of the suit. Second,
although KIU, in August,
1986, had filed a notice
of intent to apply for a
rate increase, it never
did apply, and still had
not done so when the
utility changed hands in
1988. What effect the
class action suit had on
the failure to apply can
only be surmised. [We
would not see another
rate increase request
until May of 1990, when
Kiawah Resorts Associates
(KRA), the new owner,
initiated the action.
More on that later.]
Back now to the
1985-86 time frame. One
of the first consequences
of KRG's decision to
intervene in the water
rate issue was KIC’s
refusal to let KRG use
its conference rooms any
longer for holding KRG
quarterly meetings.
Consequently, KRG held
meetings in June and
November of 1985 and in
February of 1986 in the
Sea Island Academy
gymnasium. In August of
’86, meetings were
moved to the new Church
of Our Saviour, where
they remained until May
of 1989 when the new
amenity owner, Landmark,
welcomed KRG's use of its
conference rooms.
Early in the
Sayers regime it became
evident that Kiawah
needed to establish
committees to look into
hurricane preparedness
and to study the
potential threat of
annexation of Kiawah by
the City of Charleston.
The KRG board discussed
whether KRG should
establish and control
these committees, or
whether they should be
established under KICA.
The board decided KRG
should not try to
encroach on KICA's
responsibilities or
compete with KICA, so the
plan was to establish
these committees as part
of KICA. The board even
decided to pass Bob
Zeller’s Bohicket Road
Improvement Committee to
KICA. Consequently, in
July of 1985 Jean Howe,
Don White and Tug Greer,
property owner directors
on the KICA board,
established a number of
these committees,
recruited volunteers to
serve on them, prepared
their charters, and
convinced the KICA board
to make them a part of
that organization.
Early in 1986,
the company directors on
the KICA board stated
that all committees had
expired on 31 December
1985 and only the Pool
Operations Committee
would be renewed and
continue to operate. (All
committees had been
formed to serve until the
end of the calendar
year.) KRG then agreed to
sponsor the following
committees because of the
demonstrated need for
what they were doing:
-
Bohicket
Road Improvement
Committee - This
committee came back to
KRG, where it started. In
addition to chairman Bob
Zeller, members included
Bo Turner, Doris Teti,
Jane Blackmond and George
Boyd.
-
Annexation/Incorporation
Committee - This
committee, headed by Buzz
Sniffen, studied the pros
and cons of annexation
and incorporation.
Committee member were Bob
Degenhart, Sarah Rhodes,
Ernie Middleton, Nancy Schuette and Russell Long. At this time Charleston was
busy annexing across the Stono River onto Johns Island, and Seabrook Island was
considering incorporation.
-
Hurricane Preparedness Committee - Property owner directors had tried to
establish this committee on the KICA board. The KIC members resisted because KIC
already had a plan for Kiawah, which called for appropriate flags to be flown at
the main gate when there was hurricane warning and when the governor ordered an
evacuation. Security was to drive around Kiawah and use hand-held bull horns to
alert people of the evacuation order. This plan was woefully inadequate by any
standards, so KRG decided to address the problem and established its own
committee. It was retained under KRG auspices until Kiawah incorporated and
became a town, at which time (1988) it passed to the town.
-
Security Committee - The KICA Security Committee which monitored island security
problems and kept property owners informed was retained by KRG. Ben Matthesen
was chairman of this committee, which included Art Naylor, Frank Cook, Marianne
Nelson, Eileen Burton, Pat Peck and Jim Nance.
-
Budget Advisory Committee - This committee had been formed to help the KICA
board. It was determined that KRG should retain this committee composed of
property owners with financial background in order to assist property owner
directors of the KICA board. Wally DuBois, Bob McBrier, BudFretz, Tom Hayes, Bob
Zeller and Bob Butts were on this committee. (Wally DuBois continues as its
chairman today.) Over the succeeding years each of these committees made major
contribution to our island, as will be reported below.
On a cold night
in February, 1986, the
fifth annual meeting of
KRG was held at Sea
Island Academy. Over 200
members attended.
President Dick Sayers
announced that in the
past year association
membership had grown from
300 to 742 families,
almost 600 of which were
non-resident property
families. Dues were
raised to $40.00 a year,
with $10 of that going to
a contribution to
capital. (This became the
source of funds for the
"war chest," to
be available when major
actions requiring legal
assistance came about.)
New officers and
directors were elected
for the 1986-87 year.
Dick Sayers and Tug Greer
were re-elected as
President and Vice
President. Jan Gantman
stayed on as Secretary
with Arnold Isenburg as
her assistant, and Lib
Melvin was retained as
Treasurer. Directors
elected were Bill Widmer,
Bob Zeller, Chet Barrand,
Joan Burns and Ginny
Heinrich. Ginny Beck, Pat
Welch and Dave Sullivan
were appointed to the
Audit Committee.
Reports were
given on the golf and
tennis club dues problems
and the latest water and
sewer rate matters. Dick
reported that a Regime
Coordinating Committee
had been established,
under the chairmanship of
Bill Burns, to better
understand regime
problems and involve
regime members in KRG
activities.
Buzz Sniffen of
the
Annexation/Incorporation
Committee alerted the
membership to the threat
of annexation by the City
of Charleston, which had
its eyes on our tax base,
and recounted the
disadvantages of such an
event. Johns Island was
fighting annexation of
portions of their island
by Charleston. Buzz
indicated the only sure
way to avoid annexation
was for Kiawah to
incorporate. At this
meeting the membership
voted to contribute $2500
to assist Johns Island in
their resistance to
annexation. Johns Island
was a buffer to Kiawah.
To gain proximity to
Kiawah, necessary for
annexation, parts of
Johns Island would have
to be annexed first by
Charleston.
Bob Zeller
reported on improvements
made to Bohicket Road in
1985. Road shoulders had
been improved and
drainage ditches along
the road dug and/or
cleaned out. Reflectors
had been attached to all
the trees close to the
road surface, and at last
the roadway had been
resurfaced. Bob told of
further improvements
which were planned. (By
the end of the year white
lines would be added on
the road edges and raised
markers would be
installed along the
center line.)
At this meeting
a report was given on the
first POPs (Property
Owner Parties) party, a
Valentine's Day dance.
During the previous year,
the KRG board had
determined there were
many advantages to
forming a social
committee of some sort.
It was decided, however,
that such a committee
should be completely
apolitical, hence it
should be kept totally
separate from KRG. KRG
put together a committee
with Art Gough as its
first chairman, helped it
organize and then cut it
loose to operate
separately. POPS
activities were reported
on at KRG meetings and
POPs happenings were
always given space in
KRG's Overview. The
success of this
organization which is
still very active on
Kiawah speaks for itself,
and is due to the efforts
of many effective
volunteers over the
years. Most folks aren't
aware, however, that POPs
was KRG conceived and
initiated.
Ben Matthesen,
chairman of the Security
Committee, told of his
people meeting with KIC
representatives about the
need to improve the
quality of the security
guards, most of whom were
contract (rent-a-cop)
personnel.
President Dick
Sayers reminded the
assemblage that, "We
must continue to reach
out to all levels of the
company in the spirit of
our by-laws, which state
that we will ‘create
and maintain a liaison
with the management of
the Kiawah Island Company
to he benefit of all
concerned groups.’"
Throughout the
Sayers regime, Overview
was published quarterly,
serving to keep KRG
members informed of
Kiawah happenings. Major
issues mentioned above
were covered in detail. A
perusal of copies of Overview
for this period showed
that readers were also
kept current on such
timely items of interest
as when the new on-island
fire station would be
built, when the new
bridge over the Kiawah
River would be
constructed, progress on
the construction of the
Osprey Point golf course,
efforts (supported by KRG)
being made to relocate an
EMS station on Bohicket
Road close to the
entrance to Kiawah,
progress in expanding
cable TV to portions of
the island yet to have
it, update on KICA
affairs to include
statistics on security
problem areas, KIC news
to include planned
modifications in the
Straw Market and KIC's
policy on the use of the
Inn swimming pool by
property owners, and
finally, current
information on POPs
activities. Another
interesting report talked
about a KICA committee
formed to look into the
possibilities of
expanding the newly
acquired swim pool
complex. The committee
reported that it was
premature to do any
expansion, considering
the limited number of
property owners at that
time. Now, 10 years later
in 1996, we should have
the expanded complex!)
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