Questions and Answers

The new lease group has made a lot of progress this past year. We studied prior negotiations and determined that one major fault was the failure to address the rights included in the current subleases under which we all hold our lots. We have been advised by our legal consultants that we cannot force anyone to relinquish their current sublease.

To address this problem, we produced a proposal to create a new lease that runs in parallel with the current lease/subleases. This concept was presented to our Swinomish partners from the Senate and their legal department. This proposal would allow for current sublease holders to stay on their current subleases or move to a new 75-year lease. While a new lease would most likely have higher rates than the current lease, the new lease would be more desirable due to its longer term.

This is a novel concept that required a lot of discussion with our attorney. We finally reached a point where both the Swinomish and Shelter Bay teams thought the parallel lease concept might work. The next hurdle was to discuss the concept with the Bureau of Indian Affairs (BIA).

Our group had an initial meeting with BIA officials in November and presented the parallel lease concept to them. This is a unique proposal, and it isn’t apparent how it fits into their current lease models. By the end of the meeting, we had made enough progress that they wanted to bring the idea to their solicitors (attorneys). We are working to get that meeting scheduled.

If all parties in these negotiations can come to some agreement on the parallel lease idea, then we can move to valuation and operational issues. Our goal is to make a new lease available in 2024. As new information is known, we will update the Shelter Bay residents accordingly.

At the December 20th Board of Directors Meeting, the Board unanimously voted to approve a major remodel of the pool and exterior decking areas. This will include replastering the pool, new tiles, new decking, new pool equipment, relocation of the equipment, new plumbing, new electrical, new fencing, an ADA lift, new exterior patio, new sidewalks, and an ADA compliant ramp for access to the clubhouse. The plan requires securing all of the appropriate permitting. Updates will be provided as we have them as this priority project moves forward. The goal is to have the remodel done by June 1, 2024.

In the meantime, we are diligently looking to secure a temporary operating permit from the Swinomish planning department and hope to have the current pool temporarily operational as soon as possible.

If the meetings are being conducted by the Shelter Bay Community Board, reasons for Executive Sessions will be made public. However, if the Executive Sessions are being conducted by the Shelter Bay Company, which a for-profit organization and therefore governed by different laws than a non-profit organization, there is no requirement for disclosure regarding the agenda.

Every fiscal year (July 1 – June 30), 3 directors are elected to the Board through the established Annual Elections process. If positions on the Board become open, the first Board vacancy of every fiscal year is filled by the Reserve Director from the annual election the prior May. The Reserve Director is the candidate that received the 4th most votes (with a minimum of 50 votes).

Future Board vacancies in a fiscal year, after the Reserve Director has been seated, are appointed by the Board Directors. When there is an open Board position, the Board announces the vacancy, accepts applications, interviews the applicants, votes and an applicant is appointed

Washington Law (RCW 9.73.030) Prohibits recording conversations including private meetings without all attendee consent.

Shelter Bay Company pays a bulk annual lease payment to the Swinomish Indian Tribal Community (SITC) for the leased property within Shelter Bay. Shelter Bay collects rent from the homeowners for the lots that they lease (which is managed through a sublease agreement).

The annual lease payment is adjusted every 10 years, based on the Master Lease agreement with the SITC. Current market values are used for the adjustment. The last adjustment was in 2023 and the rent will not be adjusted again until 2033.

Shelter Bay bills for the following items:
Water Usage + State and Tribal taxes
Water Base Rate + State and Tribal taxes
Sewer Base Rate + State and Tribal taxes
HOA Monthly Assessment (covers day to day operations of the community)
HOA Capital Assessment (capital reserve funding for capital expenditures)
Supplemental Rent Assessment (fixed rate that adjusts every 10 years)
Lease Admin Fee (provides funding for professional fees and shortfalls in Lease payments)

Changes to the HOA fees are approved annually by the Shelter Bay Board and are then provided to the Community for review and approval in the annual budget.

Your lease rent is paid in two parts. There is a monthly amount called “supplemental rent” charged by the Community and an annual fee billed by the Shelter Bay Company. These are adjusted every 10 years according to the Master Lease agreement. The next adjustment will be in 2033.

Owner/Buyer Information on Monthly Billings

The Capital Assessment (Reserve) was recently increased to rebuild the reserve fund. This was based on a reserve study that looked at future infrastructure needs such as roads, water, buildings, amenities, and sewer plant. There was a slight decrease in the Monthly Assessment to offset the operating budget increase.

Williams and Nulle completes our annual audit.  The last one received had not findings or anomalies.  The latest audit (for FY21/22) will be completed by June 2023.

(Board Rep) Contact the Green Committee Secretary – Renata McCauley 546 225 2941 [email protected]  In addition, there is a link under the Green Committee that takes you to three documents about Firewise. https://shelterbay.net/shelter-bay-firewise-information/

(Committee Chair) The Communications Committee is responsible for the signage at the front gate. See Communications Committee under Governance – contact chair or Committee Secretary.

See forms under the Architectural Compliance Committee Click here

Also see Swinomish Permit Requirements at the same location. Click Here

(Board Rep.) Our size of pool allows for an “attendant” rather than a lifeguard.

(Board Rep.) the goal is to open the pool for use by Memorial Day Weekend 2024.
Posted 11/23

(Board Rep) See forms under the Architectural Compliance Committee: https://shelterbay.net/governance/board-of-directors/committees/
Also see Swinomish Permit Requirements at the same location

(Board Pres.) Waiting for a response from the Swinomish Tribe Permit Dept.

(Board Pres.) Contact the Office

Residents/homeowners in Eagle Nest Association are associate members of Shelter Bay, per their contract. They pay two HOA dues, one to each Association. Eagles Nest members pay Shelter Bay HOA dues (Monthly Assessment and Capital Assessment) and the same sewer charges as Shelter Bay residents. Their water fees are billed directly to the Eagles Nest Association which in turn bills the Eagles Nest residents. Eagles Nest residents pay a monthly and capital assessment, same as Shelter Bay residents. Eagle Nest residents have access to Shelter Bay facilities but are not eligible to vote in any election.

(Board)  The upper pool has now been removed and filled in.  The Board is currently evaluating amenities to replace it with.

(Monte Hicks) We have not received 3 bids to upgrade the pool.  We can barely get anyone to even come look at the pool much less bid on fixing it.

Go to Resources/Facilities and Amenities and click on Storage Lot, and then at the bottom is a link to download the form or Click here for the form

To reserve the pavilion, contact the Shelter Bay office at 360-466-3805.

(Board Pres.) Contact the Office

(Board Rep.) Our size of pool allows for an “attendant” rather than a lifeguard.

(Board Rep.) the goal is to open the pool for use by Memorial Day Weekend 2024.
Posted 11/23

Shelter Bay Company was established by the developer as a for-profit company to rent and develop Shelter Bay and sublease the lots to buyers. In conjunction with subleasing, he established the non-profit HOA, the Shelter Bay Community. In 2004, Shelter Bay Community purchased the stock of Shelter Bay Company for $2 million, and became the sole owner of the Company, the Master Lease, and the commercial operation of the Marina. Shelter Bay Company is a wholly owned subsidiary whose only function is a signatory to the Master Lease.

Shelter Bay is governed by a hierarchy of rules and laws. Washington State laws and RCW’s are the overarching guidelines for the HOA. Articles of incorporation allow for the Association (Shelter Bay HOA) to establish their own by-laws and rules/regulations in many situations. Finally, since Shelter Bay community is located on Tribal land, the Swinomish Indian Tribal Community (SITC) may have regulations that supersede federal, state or county laws.

(Board) No, per the Master Lease, Shelter Bay Community is responsible for infrastructure and repairs.

Shelter Bay Company pays a bulk annual lease payment to the Swinomish Indian Tribal Community (SITC) for the leased property within Shelter Bay. Shelter Bay collects rent from the homeowners for the lots that they lease (which is managed through a sublease agreement).

The annual lease payment is adjusted every 10 years, based on the Master Lease agreement with the SITC. Current market values are used for the adjustment. The last adjustment was in 2023 and the rent will not be adjusted again until 2033.

The Master Lease is the agreement between Shelter Bay Company and the Swinomish Indian Tribal Community (SITC). The sublease is the agreement signed by the homeowner and grants that homeowner the right to lease the property. The sublease remains with the lot and is transferred upon the sale of the home. Both the Master Lease and the subleases expire in 2044.

(Board Pres.) Realistically in 2024

(Board Pres.) 1. Now at the stage of involving the BIA who must approve any new lease. They will consult with their attorneys now about our complex lease structure and get back to the Negotiating Group.
2. At this point the Tribe’s and the Communities Lease Negotiating Committees have agreed upon a “framework”.

The Supplemental rent is included in the budget and billed monthly.  This is voted on by the Community.

Wendy Poulton, Louise Kari, Jack Galbraith, and Rod Proctor.

(Board) At some point, if the negotiations have stalled and we don’t see a way forward, we will need to start discussing the transition to the end of the lease.

(Board Rep) The Green Committee Secretary – Renata McCauley 546 225 2941 [email protected]

On the Shelter Bay Community Website under documents, there is a tab labeled Budgets and there you will find all the details for our current year as well as information on prior years. There is a separate schedule for the Marina. Click here for the budget page – Members only access

Budgeted revenues for FY2023-24 are $1,309,3211 and the expenses are $674,590, leaving a before tax profit and principal debt repayment of approximately $635,000. Included in the expenses is a payment of $220,000 of the annual lease expense, as determined by the Board. Out of the net income, there will be approximately $50,000 of debt repayment and a $300,000 deposit into the capital reserves. This will leave a surplus of approximately $275,000. In past years, any surplus has been added to the capital reserves.

The dredging was a big project and was not considered routine maintenance. Associated expenses were charged to the capital reserve.

The moorage fees are competitive with other marinas. The Shelter Bay marina is considered slightly less desirable than LA Conner (no internet, no laundry, unable to walk to grocery stores, less security) and thus our rates are approximately 5% lower for uncovered moorage. Community members get a 10% discount.

(Pat McGarry) The Marina and access to Shelter Bay needed dredging.  It was financed by a loan through Peoples Bank and will be paid off in a maximum of five years with funds generated by the Marina.

(Pat McGarry)  We never had to pay TERO tax on earlier marina projects, so it was not specifically included in the budget for this project.  The Board approved the budget and we were able to absorb the additional cost and remain within budget.

Yes. If you believe the valuation is substantially incorrect, dispute your assessed property value, you must preserve your right to dispute by mailing a written Notice of Appeal to the Swinomish Tax Authority. The notice must be postmarked no more than 60 calendar days from the date of your Valuation Notice. Send your appeals VIA MAIL to:

Alicia Neely, Tax Administrator
Swinomish Tax Authority
P.O. Box 679
La Conner, WA 98257

Specific instructions can be found on the valuation notice mailed to you.

No. At this time, under the terms of the existing Master Lease, improvements and maintenance to the community infrastructure is the responsibility of the HOA.

Property is assessed at 100 percent of its true and fair market value in money, according to the highest and best use of the property. Fair market value or true value is the amount that a willing and unobligated buyer is willing to pay a willing and unobligated seller.

Please direct your questions to the Appraiser at (206) 909-1046.

The taxation situation between Shelter Bay and the Swinomish Tribal Community resulted from a court decision in 2013.
“2013 The United States Court of Appeals for the Ninth Circuit determined in Confederated Tribes of the Chehalis Reservation v. Thurston County Board of Equalization, 724 F.3d 1153 (9th Cir. 2013) that where the United States owns land covered by 25 U.S.C. § 465 and holds it in trust for the use of a tribe or tribal member, permanent improvements on that land are exempt from state and local property taxation. This is true without regard to the ownership of the improvements.”

Also known as “The Great Wolf Lodge decision.”

State and local property taxes on permanent improvements built on land owned by the United States and held in trust for an Indian tribe or tribal member are preempted by § 465. This is true without regard to the ownership of the improvements. Thus, state and local governments cannot assess property tax on permanent improvements built on trust land.

As a result of this decision, in 2014 Shelter Bay was removed from the Skagit County tax roll. At that time Shelter Bay property was no longer assessed by the county and residents no longer paid county taxes.