An Anne Arundel County Council member introduced a bill this week intended to hold the governing bodies of a common, but little-known type of special tax district more accountable to the public.

Council member Lisa Rodvien, an Annapolis Democrat, said her Bill 32-25 would increase transparency between these governing bodies, such as Special Community Benefit Districts (SCBDs), and their communities. It could also reduce unnecessary taxpayer expenditures on SCBDs.

“It’s a mini government,” Rodvien said. “So, transparency will make sure people can participate and there’s nothing going on behind closed doors.”

SCBDs, Shore Erosion Control Districts (SECDs) and Waterway Improvement Districts (WIDs), of which there are more than 90 across Anne Arundel County, are established by legislation to provide public benefits to properties. Many communities are waterfront properties with various assets, like public pools and marinas, that need regular maintenance.

The districts and their governing bodies aren’t subject to the Maryland Open Meetings Act, which requires many state and local public bodies to hold their meetings in public, give adequate notice of those meetings and provide access to minutes. This bill would change that.

This is Rodvien’s third attempt to pass legislation intended to check the powers of SCBD boards.

“It’s requiring transparency, a little bit of due process and making sure that when people are giving their dollars to their SCBD, there’s some level of accountability to make sure things are spent in accordance with the rules,” Rodvien said.

Some boards and associations that oversee SCBDs have been accused of — and charged with — criminal or otherwise dubious behavior.

The former president of the community association of Oyster Harbor, an Annapolis beachfront neighborhood, was sentenced Monday to two years’ probation for using nearly $20,000 from the association’s bank accounts to pay his home internet and veterinary bills.

Eric Epstein, the former Oyster Harbor Citizens Association president, entered an Alford plea, a type of guilty plea in which the defendant does not admit guilt, but acknowledges there is enough evidence to obtain a conviction. He paid $18,344 in restitution and will serve two years of supervised probation, said Heather Stone, spokesperson for the Anne Arundel County State’s Attorney’s Office.

Oyster Harbor has roughly 378 households with $420,000 in annual tax levies, or about $1,200 per household, according to Peter Vail, an Oyster Harbor resident. But Rodvien said not all associations are taking advantage of the lack of oversight.

“Some of them operate really well,” she said. “But the bottom line is — and this isn’t just for one community — to make sure that residents have a level of transparency from their board members.”

While special community tax districts seem similar to homeowners’ associations, they lack the proper legal classification to be defined as such. Vail points to the resulting abundance of legal trouble within the associations.

“They will say ‘We’re not an HOA,’ ” Vail said, referring to the associations overseeing SCBDs. “Well, you walk like a duck, you quack like a duck, you do everything an HOA does. You collect funds for members and spend it on community assets. You’re an HOA, and you should act like it.”

Vail said Epstein’s embezzlement plea isn’t the main concern driving his nearly two-year attempt to help Rodvien pass legislation.

Rather, he said he’s most concerned about the actions of the Oyster Harbor Citizens Association board from 2022 through 2024 to “mislead, misinform and stifle involvement of community members” in pursuit of a legal agenda. Vail estimates that the board’s legal fees to pursue Epstein and others exceeded $200,000 while community assets went without improvement and maintenance.

Forced Transparency

If passed, the bill would require the civic or community associations that administer a special community benefits district to comply with certain provisions of the Maryland Open Meetings Act and the Maryland Homeowners Association Act.

The bill would also require at least one officer on each board to complete a training program on the Maryland Open Meetings Act, a free online training that takes about an hour, Rodvien said.

“I actually tried it out myself to make sure I knew what I was assigning,” Rodvien said. “It’s not really burdensome. It’s good information to understand where your boundaries are.”

The bill also requires officers working on behalf of SCBDs to have designated email addresses to streamline access to community members.

Under the bill, the boards could meet in a closed session once one member completes Open Meetings Act training to ensure compliance.

Undercharging

Each year, residents of special tax districts pay an additional tax alongside their property taxes to fund their exclusive benefits, like maintenance of community property and private roads, special security or special police protection and pest control.

Each special community benefit district that receives tax funds during a fiscal year or holds tax funds from a prior year must file annual financial reports.

Rodvien said the county auditor found the county was losing money in its operation of SCBDs. Taxpayers covered the extra cost, she said.

“That means, the rest of the taxpayers — people who don’t live in an SCBD and can’t access their resources — have actually been paying for the county to provide services. And [SCBDs] tend to be in wealthier, elite communities.”

Rodvien said the fee structure for the special tax districts has not been modified in nearly 20 years. To cope, she included an administrative charge of 5% to be placed in the county’s general fund.

The additional tax would go into effect in 2027 and adjust for inflation.

“I was glad to add that addition because fair is fair,” Rodvien said. “You can’t ask the county to provide the service for you and then not be fully compensated.”

Not representative?

Oyster Harbor and Hillsmere Shores residents — both special tax districts — have voiced concerns about poor management of community finances, possible backroom deals and unauthorized communication, weaponization of community funds, closed or secret executive meetings and withholding documents from other board members, among other issues.

Sharon Blugis, a Hillsmere Shore resident since 2019, says the governing body of her SCBD is not representative of the community’s wishes. The board has also refused to allow the meetings to be recorded for the public, she said.

Blugis and other residents created a separate Facebook group in response, “Hillsmere Happenings.” The private group is intended to hold the association officials accountable and replace the board, she said.

“What we’re trying to do with Hillsmere Happenings is create a new kind of community,” Blugis said. “One that’s transparent, that leadership is accountable and it is kind.”

Hillsmere Shores, a private Annapolis waterfront community, is overseen by the Hillsmere Shores Improvement Association. The board consists of 11 members, each serving a two-year term.

Residents of Hillsmere Shores pay about $250 per year for the SCBD charge. Additional marina and swimming fees are optional.

A list of penalties for not complying with the Open Meetings Act or Homeowners Association Act, like withholding of funds or a total dissolution of an association, is included in the bill.

Stacy Korbelak, president of Epping Forest Incorporated, says she appreciates Rodvien’s inclusion of the Open Meetings Act. But she said her community is primarily concerned about the additional tax as they were already acting transparently.

“People definitely come out,” Korbelak said of community involvement in Epping Forest Incorporated. “They want to be informed, they want to make a decision, and they want to weigh-in. We’re lucky in that way, but we’ve created a culture of openness.”

Epping Forest, a waterfront community located on the Severn River near Annapolis, has about 300 homes. The next Epping Forest Incorporated board meeting will take place in May; the board will be discussing preparation for the potential tax increase.

Korbelak, Blugis and Vail say the bill is a step in the right direction in clarifying the functions of SCBDs, but more work needs to be done.

“If Eric [Epstein] was guilty of embezzlement because we didn’t have the proper controls in place, those controls still don’t exist today in our association,” Vail said of the issues affecting Oyster Harbor residents. “This legislation takes us a step in that direction but still falls short of members being able to hold our board accountable and for the board to feel accountable to its members. That’s a typical HOA problem.”

The bill will be heard at the County Council meeting on May 19. If passed, it would take effect 45 days later.

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