Annual Meeting Minutes – May 29, 2011

This document is the draft version of the meeting minutes from the 2011 LRAA member meeting as taken by the Secretary and reviewed by the board. This document will be brought to the membership for approval at the 2012 member meeting.

Quorum Established: Yes

Items Discussed:

1.     Welcome to the annual member meeting.  Walt Mauldin, president of the LRAA Board, is honored to serve the members. This meeting is an opportunity to provide the board with critical feedback.  This is also an opportunity to redirect the board as necessary.  Members were urged to fill out the surveys in their packet or provide feedback to the board via the web site www.lostriverairport.com.

2.     Moment of silence to honor Tony Burdo who passed away during the past year.

3.     Introduction of Trustees

•       Walt Mauldin – President
•       Tricia Cook – Vice President
•       Doug Simpson – Treasurer
•       Nina Jahne – Secretary
•       Frank Cech – Water system manager
•       Keith Parker – Airstrip manager
•       Kevin Latorra – Water policy manager
•       Gary Ford – Administration manager
•       Ken Lewis  – Temporary access manager (not elected)

•       Positions to be filled:

·        President
·        Treasurer
·        Water system manager
·        Access Manager

4.     Approve 2010 member meeting minutes

•       Motion to approve the 2010 minutes: David Simpson
•       Seconded:  Leonard (Len) Carlson
•       Unanimously approved.

5.     Introduction of the committee structure of the board.

•       Four traditional roles

•       President
•       Vice President
•       Treasurer
•       Secretary

•       Additional committees to address specific tasks.

•       Communications committee – Tricia Cook.
·        This position is working to improve communications.  Cheryl Groeger (sp?) has helped us a great deal to accomplish this work.
•       Water policy – Kevin Latorra
·        This position is tasked with compliance and permitting issues.  One of our goals is to be able to provide members with some sort of water certificate in the future.
•        Water system – Frank Cech
·        This position manages the physical water system.
•       Airstrip committee – Keith Parker
•       This position manages the airstrip.
•       Access committee – Walt Mauldin and Ken Lewis
·        This position manages everything that allows members to have access to their property. Road Maintenance and snow removal.
•       Administrative committee – Gary Ford
·        This position is tasked with improving LRAA record keeping and documentation.  We are cataloguing and managing the critical information that LRAA needs to keep safe and secure in order to protect LRAA from lawsuits.
·        Delinquency committee – Doug Simpson
·        Temporary committee tasked with working on LRAA collections issues

6.     Committee Reports

•       President – Walt Mauldin.

•       Status of the association:

•       We need to elect three new board members and Walt Mauldin will run again for the fourth open position.
•       We’ve completed the move to the CPA firm J. Bart Bradshaw CPA, PLLC that the previous board began.  This has allowed us to:
•       focus efforts on the delinquent accounts
•       Improve our current and future financial record keeping.

•       Improved Web site.

•       We’ve added a feedback button.  The appropriate board member will respond to your issues promptly.
•       We can increasingly utilize the web site to communicate effectively with the members.  For instance it cost over $400 to mail out the recent information packet to the members.  We’d like to use less expensive postcard mailings to direct members to the web site for specific detailed information.

•       Budget process.

•       The budget was developed by
1.     determining what work needs to be done,
2.     calculating the budget required to get these jobs done,
3.     Then back figuring to establish the membership dues.
•       Noteable drivers of the current budget numbers
·        Fewer members (180 down to 173).
·        Increased access budget
·        Increased attorney and consulting fees
·        Increased insurance costs
·        Increased road maintenance and snow removal costs.

·        Record keeping

·        Utilizing a CPA manages our financial recordkeeping.
·        We must do a better job of recording our bylaws and contracts.
·        We must be able to prove what bylaws were in place at a specific time and who voted to approve them.

·        Reserve funds.

·        $25,000 – recommendation for the general fund
·        $50,000 – recommendation for the water fund

·        Fiscal year.

·        The board is requesting the fiscal year be changed to match the calendar year.

·        Update on the lawsuit regarding water rights.

·        Some years ago a member purchased six water rights for $40 per right.  This member never paid the annual fee for these rights.  LRAA has always maintained that a member owes these fees whether the water is connected or not.  LRAA liened these properties and the member sued LRAA to quiet the liens.  We spent a year going through the discovery phase.  The plaintiff then moved forward for a summary judgment from the Okanogan County Superior court.  In April 2011 we argued the case.  The finding of the court was that LRAA was in the right.  Our attorney has been tasked by the judge with writing a settlement agreement.  Our insurance company, Travelers Insurance, requested that we settle with the plaintiff and not request repayment of the $55,000 in attorney fees that have already accrued to Travelers Insurance.    We are currently preparing this agreement.  We anticipate the possibility of wrapping this up in the next 90 days.
·        As a result of this suit, our Director’s and Officer’s insurance rate will double and the deductible will triple.  The fact of the suit, not the outcome or cost of the suit is what drives the insurance rate. While we will shop for other insurance, we may not find better coverage.
·        Good bylaws and good record keeping will alleviate these issues in the future.

·        Report on the status of collections work.

·        Last year the board was tasked with collecting $95,000 from past due accounts.
·        Past due accounts fall into three categories.
·        Those that haven’t yet paid this year.  No action other than past due fees anticipated.
·        Those that have valid issues with their balances. No action is planned until these issues have been resolved.
·        Those that were paying their dues and have since stopped.
·   The board sent letters from Walt (President of LRAA) and Tim Krell (Attorney)
·   Liens have been placed on 10 properties.
·   3 future options:
1.     Lien and hold
2.     Foreclosure.
a.     Start with one property as a test case and later move to foreclosure on other similar accounts.
b.     Move to foreclosure on all properties that have current liens.
3.     Collections with an attorney.

·        The fire over the winter at Lost River and the Fire Department requests for roads maintenance.

·        A winter fire brought two concerns from the fire department.
·        Width of the roads
·        Roy did a great job plowing the road and is plowing them to the desired width.   There had just been a large snow and the road had yet to be completely cleared.
·        Fire department needs 22 feet to operate adequately.  They got the truck down the road, but could not open the side compartments of the fire truck.
·        Street signage.
·        Ken Lewis is working to improve the signage in Lost River.
·        The Fire department in Mazama is staffed by volunteers.  Therefore, the Twisp and Winthrop fire department will always respond to a fire at Lost River.  The Mazama volunteers will also respond as soon as the volunteers can.

·        Association work priorities.

·        Members are always welcome at the board meetings and their input is welcome and requested.  Current priorities are:
·        Final settlement of lawsuit
·        Communications
·        Delinquencies & Collections – Doug Simpson is leaving the board, but has graciously offered to continue the process that we have begun.
·        Water system strategic plan – Frank Cech is also leaving the board , but had also graciously offered to continue to manage the development of a water system strategic plan.
·        Reposting street signage
·        Tree trimming
·        Emergency preparedness.
·        The Board asked the membership if they agree with these priorities.  The membership agreed.

•       Vice President – Tricia Cook

•       Communications.

•       Cheryl Groeger (sp?) has redesigned the user friendly web site www.lostriverairport.com and moved it to a current platform.
•       We have added a system to tag items on the web site for easy search capabilities.
•       Policies and procedures are available on the web site.
•       The homepage shows whatever information is most critical to members.  There are links to local services, burn ban update etc.
•       Members should check the website every month for new postings.  Including
•       Budgeted expenses vs. actual expenses
•       Board and Member Meeting minutes
•       Other communications
•       There is a contact us form to allow members to send email to the board.
•       The web site is being used as a tool for realtors.

•       Outgoing Communications Project.

•       In an effort to communicate effectively and in a timely manner we are implementing a secure, private email mailing list.
•       Members may give their email address to Cheryl Groeger to sign up for this list.  We hope that everyone will participate, but for those who don’t, we will continue to send traditional mail for the annual billing and annual membership meeting notice.
•       When items of interest to the community should be communicated, a private email will be sent to each person on the mailing list.
•       This will only be utilized for LRAA business.  I.e. The Tussok Moth spraying that took place in 2010.
•       Members may sign up for this mailing list after the member meeting, or via the web site www.lostriverairport.com.

•       Garbage & Recycle

•       We have reduced dumpster use by two dumpsters per year with the addition of recycling.  Therefore it’s costing us just over $5 per person annually to recycle.
•       We’re limited in what can be recycled by the requirements of the Twisp recycling facility.  These include
•       Plastics: #1 & #2 only
•       Cardboard: clean, corrugated and flattened
•       Guidelines for the recycle and garbage are posted on the web site www.lostriverairport.com.
•       Members should fill one dumpster, before filling the second.
•       Members should not leave items in the swap area for more than 30 days.
•       Members may not place building materials in the dumpsters.
•       If the recycle bins are full, – excess recycle must go in the dumpsters, or be personally recycled.
•       Only Lost River homes garbage and recycling is allowed in the Lost River bins.

•       Member requests:

•       A member wanted to know if it would be possible to have a classifieds section on the LRAA web site.
•       While this is technically possible, we are trying to keep the web site for LR business.
•       We recommend putting this on the survey sheet so the board can look into this next year.

•       Treasurer – Doug Simpson

•       Collections

•       Last year there were 45 members past due for a total of $95,000.
•       This was reduced to 16 members owing $77,000.
•       14 additional members are past due from 2011 only.
•       Total past due today $88,000.
•       Membership bills are mailed January 1st and are due March 31st.
•       A few members requested the membership due date be moved to the annual membership meeting.  It is felt that the original three months (January – March) is sufficient time to pay.  Also, it is important to have an accurate accounting for the membership meeting, which is not possible if dues are routinely collected in May.
•       Report from attorney regarding options for collections. – Tim Krell
•       Based upon the research done, and what other courts in similar cases have held, we have the legal right to collect dues.  Courts have held that if one is getting a benefit from an association, you have a legal responsibility to pay for that benefit.  Therefore, if you take title to a property within an association, then you also take on the responsibility to pay for the benefits of the association.  When a member doesn’t pay, the association has the right to place a lien on the property and eventually foreclose upon that property.
•       Lien and hold.
•       This method will get the delinquent dues paid upon sale of the property whenever that sale occurs.
•       Judicial Foreclosure
•       steps:
1.     Lien the property – The lien must be in place four months prior to beginning a judicial foreclosure
2.     LRAA files a complaint with the county and notifies the property owner of the amount due.
3.     The property owner has the right to respond.
4.     The court determines if the association or the property owner is in the right.
5.     If the association is found to be in the right, the court moves forward and starts the sale of the property.
6.     The sheriff puts the property up for sale and the property is bid upon.
7.     The winner of the bidding gets a certificate of purchase.  If no one bids, the certificate of purchase goes to the association.
8.     The property owner has one year to pay the past due amounts, and purchase back their property.
•       Cost:  About $1,500 per property.  This is added to the amount that is sought in a foreclosure action.
•       All fees due are added to the minimum bid amount.
•       If no one purchases the property, the association would then own the property, and the taxes would also be owed by the association.
•       Entire process may take 1 ½ years to complete, but it is faster than the lien & hold method.
•       An option is to utilize a collection service through our corporate attorney’s in Portland.  This is not the recommended method.
•       Liens are in place now.
•       If we go to a lien or foreclosure – interest will continue to accrue per our bylaws.
•       Every effort has been made to communicate with the delinquent members by both this and previous boards.
•       Most past due amounts are not from water fees.
•       The boards’ recommendation is to go forward with one foreclosure to exercise our legal rights.  If there is resistance, the court can decide the issues.
•       The board is not currently prepared to act in any way on those accounts which have issues pertaining to the validity of the claim.

•       Airstrip Committee – Keith Parker

•       Tree trimming on the west end of the airport will be completed after June 1st.
•       New wind socks have been installed.
•       Mowing has been reduced from 8 hours to 4 hours.
•       The electric company wanted to put in a pedestal at the west end of the runway.  We have requested that they move the pedestal due to safety concerns.  They have agreed.
•       A sign up sheet for taxiway mowing has been proposed by Keith Parker to be added to the website.
•       Letters will soon be mailed to property owners on the east end of the runway concerning tree trimming needs.
•       The committee continues work to
•       Insure the road ways are clearly marked.
•       Plant appropriate grass seed.
•       Work on the run up pad.
•       Add three airplane tie downs at the west end of the runway.

•       Access Committee – (Ken Lewis & Walt Mauldin)

•       Update on roads:
•       The Sewer association put two truckloads of gravel on Mercer.
•       The Unimog was serviced last summer.  It required some maintenance, but it is in good condition and it is now possible to add a back hoe to it which will help us to dig down and repair water leaks.
•       Snow removal:
•       We plow to 20 feet because in some areas there isn’t any more room.  The fire department requests 22 feet.
•       Biggest challenge to snow removal is cars parked in the road.
•       We overspent the snow removal budget because we had a lot of snow this year.
•       Thank you to Roy Myers for fantastic snow removal services.

•       Administrative Committee – Gary Ford

•       Overview of the goals of the committee
•       Inventory and appropriately store all association records.  Meeting minutes, financial records, bylaws, easements etc.
•       File all association records appropriately
•       Make sure LRAA can meet all documentation legal requirements.
•       Work accomplished
•       Posted an inventory of all materials in the filing cabinet.
•       Operational guidelines have been written.  These detail:
•       Timeline for writing and posting board meeting minutes
•       Process for board voting between board meetings.
•       Future goals of this committee.
•       Post operational guidelines on the web site.
•       Read, catalogue and file all materials in boxes labeled Misc.

•       Water System Committee – Frank Cech

•       Dick Carver is our onsite water manager.  He oversees emergencies, water testing and special projects.
•       The goal is to provide safe and reliable water to all the home sites.
•       Strategic Plan
•       A roadmap of what we are trying to accomplish.  It is primarily project related from 2008 – 2020.  There are 22 steps, 9 of which have already been accomplished.  The plan attacks freezing issues, then leak detection and then moving the well.
•       Freezing issues – The majority of these have been handled with the possible exception of Skyline.
•       Misty Circle update
•       Last fall we hired Jerry Palm to retrench the water line on Misty Circle.  This has been completed.
•       The original plan was to connect the two dead ends.  However, we may not do this as the system appears to be working well with no freezing issues.  There is no need to spend the additional $11,000
•       The road is a little soft which is to be expected.
•       Leak detection and valve operation is the next big project
•       Movement of the well from the lower level.
•       We will move the well from the low land to higher ground.
•       We can add another well, and leave the two lower wells, but we can’t increase capacity.
•       This plan is closely linked to the reserve fund.
•       Municipal water ruling.
•       The WA state ruling doesn’t effect LRAA yet, but it will when we exceed 25 full time residents.
•       This would protect water rights for the community more clearly
•       It would require a written water policy
•       It would require water meters by 2017

•       Water Policy – Kevin Latorra

•       Water policy was mailed to all members in the packet.
•       The board recommends that this policy be ratified in its intent.
•       We are trying to map the water system, and are requesting help from the membership to accomplish this.
•       We have 200 water rights and we will not acquire anymore.
•       182 water rights are currently assigned.
•        2 water rights were repurchased from LRAA by members this year.

7.     Special Guest – Fire Chief Don Waller

•       Brian MacCaulif – Division Chief
•       John Owens – Station Captain & volunteer
•       Courtney Kreeten – Volunteer.
•       There are 4 stations: Carlton, Twisp, Winthrop & Mazama.  These work together and go wherever they are needed.
•       There are 32 volunteers and 4 paid staff in the system.
•       Fire department needs
•       Volunteers:
•       18 years old and in good physical condition.
•       Training is 40 hours to start with potentially an additional 100 hours.
•       Access to your home:
•       10 feet high
•       Road widths of at least 16 feet with clearance of 22 feet.
•       Good road and house signage so they can find your house.
•       At least 3” high letters
•       Reflective typeface
•       Signs are available from the department.
•       Recommended height is 4’ – 7’ high above ground

8.     Voting

•       The Budget

•       Discussion/Vote to approve transition to a calendar fiscal year.
•       We have provided a full budget for 2012 and a 7 month budget for the remainder of 2011
•       The calendar year will work better for reporting
•       Motion to approve changing the fiscal year to match the calendar year: Ken Lewis
•       Seconded:  Mike Soreng
•       Unanimously approved

•       Discussion/Vote to approve the collections strategy

•       Choice points are:
•       Lien & Hold
•       Foreclosure on one property or many
•        Motion to Foreclose on one property as a test case, and provides the board with approval to pursue more if the first one works OK.:  Annette Day
•       Seconded:  Kevin Jahne
•       Amendment:  Only foreclose on an account owing over $2,000 because this constitutes more then three years of dues.
•       Annette Day prefers to leave the selection of the test foreclosure property to the boards’ discretion.
•       Amendment withdrawn
•       Unanimously approved.

•       Discussion/Vote to approve reserve fund target levels

•       Water fund – $50,000
•       General fund – $25,000
•       The use of these funds is discussed in the fiscal and water policies.
•       There is some concern that these targets are too low due to any possible legal fees.
•       We will have approximately $50,000 in reserve funds, not allocated to water or general at the end of May.  If the reserve funds are approved, this money will be split up and placed in specific reserve funds.
•       Motion to approve target levels for reserve funds:  Mike Soreng
•       Seconded: Ron Morcom
•       Unanimously approved.

•       Discussion/Vote to approve the 2012 proposed budget.

•       The budget received by the membership in the mail has been amended  to:
•       Increase D&O insurance
•       Increase annual dues by $15 to cover the increased insurance.
•       Water budget
•       Annual Water Fee $265 per water connection.
•       Moved some legal budget to the general fund, thus reducing  the annual water fee

•       General budget.

•       Interim budget June 2011 – December 2011 contains prorated amounts from the 2012 annual budget.
•       Interim and annual budget both show full insurance expenses.  Insurance is paid in the latter half of the year.
•       Memberships have decreased, causing dues per member to increase.
•       Membership is not tied to parcels of land.  This has been a discussion in past years.  If members want this investigated, they must let the board know.
•       Road Access members are not members of LRAA, but they utilize LRAA roads to access their properties.  Per LRAA bylaws, these fees must be equal to LRAA dues.
•       By approving the budget, we’re approving increasing dues for 2012, but not for 2011
•       Motion to approve the budget:  Leonard (Len) Carlson
•       Seconded: Robbie Liechty
•       Unanimously approved

•       The Policies

•       Discussion/Vote to approve the draft Financial and Water Policies
•       Ron Suter does not feel these documents should be approved.  His objections revolve around issues with terminology and consistency and clarity of language.  He does not have a problem with the intention of the documents, but feels that as they are written, they should not be ratified.
•       The board agrees with Ron Suter’s comments regarding terminology, consistency and clarity, but would still like these ratified to provide direction to the board and intent to the membership
•       The board is proposing the membership ratify the documents with a direction to the board to work with our lawyers and bring back a newer version next year that meets legal standards.
•       If there is a difference between a policy and the bylaws, the bylaws will rule.
•       Motion to ratify the financial and water policies as written with the direction to the board that they must work with LRAA lawyers to clarify the language and bring back newer versions next year that meet legal scrutiny:  Dave Simpson
•       Seconded: Ken Lewis
•       Opposed:  Ron Suter via proxy – Gary Ford
•       Approved:

•       Elections:

•       Nominations for Trustees
•       Bylaws require a minimum of 5 board members and a maximum of 9.
•       If we don’t refill the current positions the board will take on less work next year.
•       Walt Mauldin:
•       Nominated by Gary Ford for President
•       Seconded:  Nina Jahne
•       Gloria:  Nominated and declined.
•       Bob Christianson:
•       Nominated / Volunteered for Water manager
•       Seconded:  Joanne Hufnagel
•       Jerry Daniels:
•       Nominated / Volunteered for Access manager
•       Seconded:  Kevin Jahne
•       Robbie  Liechty
•       Nominated / Volunteered for Treasurer
•       Seconded: Mike Soring
•       Motion to approve all nominations to the board:  Randy Nelson
•       Seconded:  Ken Lewis
•       Unanimously approved.

9.     New Business:

•       None

10.  Old Business:

•       None

11.  Adjourn

•       Motion to adjourn:  Walt Mauldin
•       Seconded: Kevin Jahne
•       Unanimously approved.
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