Shelter Bay board sanctions fellow board members

Shelter Bay Community board of directors Judy Kontos and Dan McCaughan were sanctioned by their board Feb. 15 based on findings of an ethics committee appointed by the board. Kontos and McCaughan were provided “Board Sanction” memorandums by Board President Wendy Poulton Feb. 16. Shelter Bay residents were informed of the temporarily restricted roles for the two in a community Board Member Update email Feb. 17.

The two were elected by Shelter Bay residents to the board in May on reform platforms critical of the board leadership.

McCaughan’s sanction is a “Public reprimand for violations of Chapter 40.020.010 (4) ‘Failure to support the decisions of the Board of Directors’ as agreed to in Board documents, along with a 90-day suspension from Board committee duties.”

Kontos was suspended “pending a recall vote of the community for four (4) violations of Chapter 40.020 including ‘Failure to support the decisions of the Board of Directors’ and ‘dissemination of information’ that is deemed confidential, for example, attorney client privilege.”

The ethics committee ruled that Kontos and McCaughan’s support of Shelter Bay resident Roberta Fontenot’s November emergency restraining order and preliminary injunction against “five fellow Board Directors [that] were accused of intending ‘further embezzlement’ and Director Kontos’ subsequent sworn declaration alleging that ‘financial malfeasance may have taken place’ against fellow Directors violated their oath of office.”

The community update does not provide details of the violations brought by the ethics committee. Kontos had signed, “under penalty of perjury,” a nine page, 26-point declaration in support of Roberta and Wesley Fontenot’s petition for the restraining order and injunctive relief, alleging financial mismanagement against fellow board members Poulton, Joseph Hurley, Monte Hicks, Louise Kari and Elaine Dixon in Skagit County Superior Court Nov. 15, 2022.

The Court then found the Fontenots demonstrated a need for preliminary injunctive relief. It scheduled a Dec. 2 hearing on the merits while ordering the board members and staff “shall not transfer any funds or change financial institutions without following all procedures required in the bylaws of SBC, Inc. (or/and Rules and Regulations)."

Defense attorney Kyle Retkofke sought a motion to dismiss the restraining order with prejudice, but the judge permitted it to be withdrawn without prejudice, which allows a future refiling. When the case was dismissed Dec. 15, Retkofke again sought dismissal with prejudice and again, the judge declined to grant that.

Kontos points out that none of her sworn statements, “that the following facts are true and correct” have been challenged for perjury by board members.

McCaughan appeared in court to confirm Kontos statement that he asked for “Company Insurance policies to review the coverage for Directors and Officers and employee theft and dishonesty” and he “attempted to revise the agenda to discuss the potential violation of RCW and the lack of mailing of the budget.”

Poulton’s community update states that Kontos’ “Declaration was so lacking in merit that it violated the Court’s Rules.” That is not true. Courts sanction attorneys for improper filings. Kontos was not cited for her declaration, which is not named by the court.

On Feb. 3 Judge Elizabeth Neidzwski granted “proper CR 11 sanction is to award defendants' all reasonable attorney fees and costs incurred in opposing” the Fontenots’ emergency order and preliminary injunction to the Shelter Bay attorney. The attorney was paid for by the board’s directors and officers insurance policy.

The 730 word community update cites the board’s documenting “Kontos and McCaughan deviating from established organizational authority that have led to disruption of business, harm to the community, and hindrance of progress for community priorities.”

Kontos faces a recall election. Poulton told residents “the Board of Directors no longer has confidence that Director Kontos is fit to serve on the Board. However, the final decision will be up to the membership, to make the final determination by a recall vote, as outlined in the Shelter Bay By-laws.”

The board, however, is not following Regulation 40.030.030, which states: “Board of Directors may suspend a Board member and immediately call for a Special Meeting/Election of the membership to remove the board member.” Poulton’s letter does not call for that meeting/election.

Poulton’s four sentence sanction memorandum to Kontos states she is “suspended from the Board of Directors pending a recall vote of the community,” but no date is set.

The community update states “the ratification of the vote was unanimous” but does not provide a roll call of the sanctions vote against either director. This ratification is only board confirmation of the executive session report.

Kontos accuses the board of refusing to follow the bylaws. “They say I am mistaken. One of us is mistaken and it is not me,” she said. “Advanced gaslighting, (level) 301, 401” is taking place, she says. Forbes defines gaslighting as “a form of psychological manipulation that hinges on creating self-doubt.”

She believes she is being retaliated against and intimidated for her consistent criticism of legacy board members. She has repeatedly brought up the lack of a properly ratified 2022-2023 budget and warned of the liability exposure to the association.

Shelter Bay resident Steve Klein points out that four of the nine board members serve by appointment, including three executive committee officers. “This ratio has set the stage for the unprecedented and unwarranted actions the board has taken under the guise of ethics,” he writes in a letter on page 2.

Resident Dick Hasslinger met Kontos when she first moved to the area. He notes that Kontos, McCaughan and Nancy Shimeall campaigned criticizing actions, or inactions of the board around the Rainbow Park clearcut, the subsequent large fine imposed by the Swinomish Planning Commission, the two pools being out of use without a plan, the costs and payment of dredging the marina and negotiating the master lease with the Tribe. “The main thrust of this is there are lots of citizens concerned about the expenses of Shelter Bay and now we have a board that is in turmoil and not because of suspended board members but legacy board members and their antics. That is why people are concerned,” he believes.

Kontos has often criticized board leadership and now some ethics committee members for calling Roberta Fontenot the “enemy.” “Anything you did in support of the lawsuit in their view makes you conspiring with an enemy,” she said, “but I have no Shelter Bay enemies. I represent everyone whether you like me or not. My intent is to do the best thing I can by asking questions that have never been answered.”

McCaughan declined to speak on the record except to reiterate his consistency since his campaign for the board. “I wanted to see more transparency and accountability. I want to have that foundation of knowing what the rules are,” he repeated.

Board President Poulin did not respond by press time.

A Shelter Bay town hall is scheduled for Feb. 26.