minutes for the meeting of the board of directors - Running Y Ranch ...

DRAFT MINUTES SUBJECT TO APPROVAL BY BOARD OF DIRECTORSNOT APPROVED FOR DISTRIBUTIONMINUTES FOR THE MEETING OF THE BOARD OF DIRECTORSOF THERUNNING Y RANCH RESORT OWNERS ASSOCIATIONCALL TO ORDERATTENDANCEPRIOR MINUTESOLD BUSINESSMANAGEMENT,OFFICER &COMMITTEEREPORTSOREGONPLANNEDCOMMUNITIESACTFINANCIALREPORTPursuant to call by the President of the Association, the first quarter regular meeting of the Board ofDirectors was called to order on February 27, 2013 at 10:00 A.M. at the Running Y AdministrativeOffice, Klamath Falls, Oregon.Directors present included Don DaSaro, Curt Heimuller and Chris Earnest. Staff members presentincluded Jon Barkee (HOA Manager), Marie Ashford (staff and Asst. Secretary), John Lindsay(HOA Grounds Superintendent), and Mindy Surber (Sports and Fitness Center Mgr). Officerspresent included Spiros Karidis (Asst VP), Gordon Hall (Asst VP), Robin Dowty (Treasurer), andKaren Smith (Secretary). Attendance by telephone connection was accommodated for ChrisEarnest, Curt Heimuller, Gordon Hall, Spiros Karidis, Robin Dowty and Karen Smith. Severalowners were in attendance to observe the board meeting following a pre-meeting commentopportunity. Curt Heimuller, President, presided at the meeting, and Karen Smith, Secretary,recorded the minutes.Following motion duly made, seconded and carried, the reading of the prior meeting minutes for theFebruary 1, 2013 meeting was waived and the minutes were approved as written. Curt announcedthe agenda for the meeting (see attached), directors consented to the agenda, and Curt opened thediscussion of business items.None pending.Karen Smith referred directors to her written report dated February 23, 2013 attached as“Attachment 1”. She briefly reviewed status of the draft HB 2823 that, if passed, would addressmuch of what the collective owner association group was seeking regarding reserve fundinvestments. Karen added the draft bill contains additional proposed amendments that wouldrequire audits for associations with annual revenues exceeding $500,000 as opposed to the currentrequirement for a review of financial statements for associations with revenues exceeding $75,000.The other proposed amendment described by Karen would require associations to carryfidelity/crime insurance even if a management company also carried the insurance. Curtcommented these additions, if passed, would increase costs to this association by $10,000 - $15,000depending mostly on the audit cost. Gordon Hall questioned if the proposed bill contained anescalator on the annual revenue limits; Karen advised it did not.Robin Dowty, Treasurer, opened the report with a review of the executive summary attached as“Attachment 2”, and the insurance claims report (“Attachment 3”). Robin next briefly reviewed thefinancial statements for year ended 12/31/12 for the Master Association, Sports and Fitness Centerand Projects (Neighborhoods) (“Attachment 4”) and related comments included in the executivesummary. Robin highlighted the Neighborhood ending fund balance for Eagles Landing andPelican Springs, specifying the lower actual fund balances as compared to the higher surplusbalances that were projected for the 2013 budget. She confirmed that both Neighborhoods wereimpacted by fourth quarter snow removal expenses that were higher than estimated, as well asrepair/maintenance expenses. Robin also confirmed that neither Neighborhood has enoughcontingency in the 2013 budgets to offset the negative variance in the ending 2012 fund balance.Directors discussed options for addressing the impact of the higher fourth quarter expenses on the2013 operating funds for Eagles Landing and Pelican Springs. Jon Barkee suggested addressing thesituation after the winter/spring snow removal activity ends in early 2013 as that is the biggestvariable expense in the budgets. Jon also suggested the snow removal expense variable will continueto be an issue unless more contingency is built up in the master and neighborhood operating funds.Directors agreed with this concept, noting that a greater contingency in the fund balance wouldreduce the varying impact of the year end surplus or deficits on subsequent year dues. Directors1

RESERVEEXPENSESOPERATIONSREPORTDRAFT MINUTES SUBJECT TO APPROVAL BY BOARD OF DIRECTORSNOT APPROVED FOR DISTRIBUTIONagreed to discuss further at the regular second quarter board meeting.Other discussion points regarding the financial report and in addition to the written executivesummary included:• Robin confirmed the current period bad debt expense is 2% at this time; bad debt recoveryin 2012 totaled $18,000, offsetting much of the new expense in 2012. Managementcontinues to pursue collection of account balances even after reserving for bad debt,including collection actions in the appropriate court system and using third party collectioncompanies.• Gordon Hall advised he reviewed the road cost sharing calculations provided for 2011 and2012 and he questioned calculations for previous years. He added, by way of example, theyear 1999 reported a higher road cost sharing income to the Association and questionedwhy current periods are lower. Karen advised there was other road cost-sharing income tothe Association in some years related to the adjacent potato farmer being allowed access toroads. Karen advised all road cost sharing calculations could be provided for review.• Jon Barkee noted the 2012 financial results compared to budget for the consolidated fundswere $3,000 better than budget. Don commented these results were good especiallyconsidering a budget of over $2,000,000.• Robin advised the accountants with Williamson & Associates will conduct the financialstatement review at her office the week of April 22 nd .• Jon advised a new water damage insurance claim was reported to the insurance companyfor an Eagles Landing unit. The damage was only recently discovered so limitedinformation is available. Jon confirmed the unit owner will be notified of the $5,000deductible specific to water damage claims.Following discussion and upon motion duly made and seconded, the following resolution wasunanimously approved:RESOLVED, that the financial report and financial statements submitted bymanagement, including “Attachment 2”, “Attachment 3” and “Attachment4” be approved subject to review.Karen briefly reviewed “Attachment 5”, the 2013 reserve expense reports for the MasterAssociation, Sports and Fitness Center and Neighborhoods, noting the reported variances for theSports and Fitness Center. Jon Barkee advised the restroom floor tile replacement exceeded budgetdue to some sub-flooring damage discovered when work commenced, the hot tub replaster bidexceeded the estimate and the hot tub exterior re-tiling with addition of grab rails and hand rail wasadded to the study.Following discussion and upon motion duly made and seconded, the following resolution wasunanimously approved:RESOLVED, that the 2013 reserve expense reports for the MasterAssociation, Sports and Fitness Center and Neighborhoods attached as“Attachment 5” be approved, including the expense variances for the sportsand Fitness Center.Jon Barkee reviewed his written operations report attached as “Attachment 6.” In addition to thewritten report items, the following was discussed:• Jon and Don reported the communications committee decided to have contact informationon its members available at the sports center, as some owners may benefit from printedinformation as opposed to visiting the owner website.• Jon advised, and directors acknowledged, that additional communication work to includeprinted newsletters would require more management company staffing than presentlyincluded in the budget. Curt suggested the communications committee discuss other ideasfor enhancing communications within the association.• Jon advised he is researching the responsibility for tying up gas lines located under certainEagles Landing decks for plumbed barbeques, stating would be Avista or unit owner.• Spiros Karidis advised some street sign posts appear weathered, needing treatment orreplacement. Jon advised that posts are addressed in conjunction with sign replacement2

DRAFT MINUTES SUBJECT TO APPROVAL BY BOARD OF DIRECTORSNOT APPROVED FOR DISTRIBUTIONand that the remainder of the 2012 sign project will be completed in this quarter.OFFICERREPORTSCOMMITTEEREPORTSSCHEDULED 1 stQTR BUSINESSSPORTS CENTERDEHUMIDIFIERFUNDS TRANSFERMindy Surber reviewed her written Sports Center Update attached as “Attachment 7.” In additionto the written report, the following was discussed:• Mindy advised an Adaptive Motion Trainer (AMT) fitness machine was replaced onwarranty.• Jon passed on that he receives positive feedback from owners regarding Mindy and hermanagement of the sports center. Directors complimented Mindy on this recognition.Marie Ashford reviewed her written ARC/HOA Update report attached as “Attachment 8.” Marieadded that she continues to address having garbage cans taken back into enclosures within theprescribed policy schedule.Gordon Hall referred to his proposed discussion and action items previously distributed to directors.Each proposal was discussed as follows:• Schedule for distribution of board meeting minutes: Gordon recommended a schedule forapproval of board meeting minutes within 5 business days. Directors discussed therequirement to approve minutes in a board meeting, but agreed draft minutes clearlymarked as such could be made available for director and owner review on the website.Directors asked Karen Smith, Secretary, to make draft meeting minutes, marked clearly asDRAFT, available to directors and for owner website within two business weeks followinga meeting.• Fee structure to promote lower administrative efforts and costs for dues collections:Gordon proposed that a fee be added for a paper mailed statement paid by a check, whichwould encourage owners to select the available no-fee, auto withdrawal option. Directorsand management discussed different approaches to incentivize participation in autowithdrawal. Directors asked Robin to consider what options may increase auto withdrawalparticipation and reduce administrative time with statement and check handling.• Request to post the Association and Running Y Management, LLC management agreementon the owner website: Curt commented that no contracts of any kind are posted on theowner website. He added the owner website is not secure, not password protected, plusthat books and records, including agreements, are available to owners by following therecords examination and request policy recently adopted by the Board. Request formsavailable. No director action taken.• Revise policy on voting suspension and right to use sports center for delinquent dues:Emphasizing the interest in minimizing delinquent dues, Gordon recommended givingnotice of delinquency at 5 days past due and instituting restrictions at 15 days past due.Robin confirmed access to the sports center is restricted at 30 days past due under thecurrent policy. Directors confirmed this 30 day access restriction and agreed to address thevoting right restriction specific to each member voting situation.Spiros Karidis advised he had no report for the Board at this time.Don DaSaro referred directors to the minutes of the January 28, 2013 meeting of theCommunications Committee (“Attachment 9”), adding that the committee also met just prior to thisBoard meeting. In today’s meeting, the committee discussed apparent confusion regarding itspurpose and membership. Don suggested the Board consider revising the committee member termof service so it has a time frame rather than be open-ended. No action was taken at this meeting.Jon Barkee reviewed the background on this annual requirement pursuant to a February 2010 boardresolution to identify utility cost savings in the prior period related to the new ventilation systempurchased and installed in 2010. He summarized the board resolution as requiring $66,250 to betransferred from the operating to reserve fund over a 10 year period, but that the resolution alsoreferred to a goal of a $10,000 annual transfer. Jon recommended a transfer of $4,000 to representthe estimated 2012 savings, noting that rate increases may continue to offset some of the originalsavings.3

DRAFT MINUTES SUBJECT TO APPROVAL BY BOARD OF DIRECTORSNOT APPROVED FOR DISTRIBUTIONFollowing discussion and upon motion duly made and seconded, the following resolution wasunanimously approved:UNFINISHEDBUSINESSD&O INSURANCERENEWALPUBLIC TRAILEXTENSIONREQUESTWILDFIRE RISKREDUCTIONPOLICYNEW BUSINESSRECYCLING AREAPAVINGRESOLVED, that the Board approves the transfer of $4,000 from the Sportsand Fitness Center operating fund to the Sports and Fitness Center reservefund to represent the estimated utility cost savings in 2012 related to the earlydehumidifier replacement as prescribed by Board resolution in February2010.Karen Smith referred directors to the written report regarding the renewal of the Directors andOfficers Liability insurance policy effective January 24, 2013 and the president request to ratify therenewal action (“Attachment 10”). Following discussion and upon motion duly made and seconded,the following resolution was unanimously approved:RESOLVED, that the action of the President to bind the Directors andOfficers Liability Insurance with the RSUI Group effective January 24, 2013at an annual premium of $7,640 be hereby ratified.Jon referred directors to his written summary of status on this extension request and new materialregarding a state statute limiting liability in connection with public trail access over private property(“Attachment 11”). Don and Spiros shared concerns regarding the Association’s liability and forpublic use of trail sections that are close to residential properties. Directors concluded researchwould be needed on the state law and the liability issue as well as the feasibility of the trailextension project in general. Directors asked the management company to work with the trailsalliance group to formulate a specific proposal for Board consideration.Jon advised there has been confusion, mostly for lots without structures, with regard to the differentOregon Department of Forestry (ODF) ratings within the Running Y and the resulting differentstandards for the fire fuel reduction. The “Extreme” rating assigned by ODF requires differenttreatment of grasses as compared to lower risk ODF ratings. Jon offered one option for reducingpotential confusion would be to have the Association policy revised to apply the standardsassociated with an Extreme ODF rating to all lots without structures regardless of the actual ODFrating. Spiros and Curt expressed concern for increasing standards and costs beyond that requiredby ODF. Jon confirmed the ODF training provided to the management company is to certify toexisting ODF standards only. Directors concluded no change in current policy.Jon referred directors to his written summary on this potential project and the three construction bidsfor paving the current recycling area ranging from approximately $13,000 - $21,000. He confirmedthis information is provided as requested by the Communication Committee, for Boardconsideration. Directors discussed concern for availability of operating funds to make thisimprovement. Following discussion of various options, directors requested the managementcompany to summarize cost estimates or cost savings, as applicable, for the following options inaddition to the paving cost already provided:• Only add gravel on road/apron in current location• Addition of gate at the driveway entrance to current location to close facility from dusk todawn to reduce illicit dumping (estimated reduced Waste Management fees)• Relocate the facility to the previous (former pole barn) location with existing asphalt apronand dumpsters located on gravel pad• Close the recycling facility (no improvement cost; reduced Waste Management fees)Directors agreed to address as an unfinished business item at the next regular board meeting.SPA LEASEAGREEMENTJon summarized the proposed change in the spa lease with Running Y Hospitality, LLC is to reducethe leased area by the amount of space in the salon, but to leave the monthly payment to theAssociation unchanged; therefore, Running Y Hospitality, LLC would no longer sublease the salon4

ADJACENT LANDOWNER ACCESSREQUESTOTHER NEWBUSINESSADJOURNMENTDRAFT MINUTES SUBJECT TO APPROVAL BY BOARD OF DIRECTORSNOT APPROVED FOR DISTRIBUTIONspace to that operator. The salon space rent of $375 would be paid directly to the Associationpursuant to a direct lease agreement between salon operator and Association. Jon referred directorsto a draft spa lease agreement with revised leased space. Gordon noted a typo error on a sectionnumbering reference. Jon also passed on owner comments questioning the use of the space as a spaversus other possible uses for owners. Directors discussed other options such as meeting space oradded fitness room space; Curt commented if the lease revenue and labor offset for the Associationwere to be cancelled, the lost revenue would equal about $2/month per lot.Following discussion and upon motion duly made and seconded, the following resolution wasunanimously approved:RESOLVED, to approve the proposed terms and conditions for the 2013 spalease agreement as presented, with the one section reference correction, anddirect the management company to present the agreement to Running YHospitality, LLC, the concessionaire in the agreement, for approval andsignature.Directors asked Jon to prepare a similar agreement for the salon space, but without labor offsetfactor.Jon summarized the request received from the adjacent land owner, specifically to grant access overRunning Y Road and a portion of Coopers Hawk Road. Directors shared concern for impact onroads and related maintenance costs, concluding no benefit to the Association by granting theaccess. Directors requested management advise the adjacent land owner of no interest by theAssociation to grant this access.Directors set the date and time for the second quarter regular board meeting as May 22, 2013 at10:00 AM.There being no further business, the meeting was adjourned.___________________________________________Secretary to the Association5