Board of Directors
Regular Meeting
FEBRUARY 6, 2006

President: Bill Risen
Vice President: Chuck Baker
Secretary/Treasurer: Chris Chambers
Board Members: Jack Sweeney, Gary Svider, Squeak, Joe Price, Bob Stroud, Joe Maxwell, Richard Jaschke

Board Member: Larry St. George

Guests: Blane Coon (lot 54); Rob Troxler (lot 160); Barbara Risen (lot 184)
Bookkeeper/Recording Secretary: Sue Thomson
General Manager: John Currie
Legal Counsel: John C. Churchill

Mr. Coon and Mr. Troxler indicated they are here to observe the meeting.

Mr. Price made a motion to approve the Minutes of the regular meeting held on January 9, 2006. The motion was seconded, and the motion carried.

Mr. Price made a motion to approve the January Profit & Loss Statement. The motion was seconded, and the motion carried.

Mr. Price made a motion to approve the January Balance Sheet. Mr. Svider inquired whether the sinkhole repairs were paid from the General Account or the Kenko Account. Ms. Thomson stated the check was written from the General Account, but she can transfer funds. Mr. Baker made a motion to transfer funds from the Kenko Account to the General Account to cover the $10,894.17 sinkhole repair expense. The motion was seconded, and the motion carried. Mr. Sweeney inquired about the negative accounts receivable, and Ms. Thomson stated she would check it out and get back to him. The motion to approve the January Balance Sheet was seconded, and the motion carried.

Ms. Sweeney made a motion to approve the accounts payable and bills for approval. The motion was seconded, and the motion carried.

Mr. Currie reported that Mr. Lucero (lot 204) will reimburse the Association for the new exit gate as a result of damage he caused on January 6. The new gate is expected to be installed this Wednesday.

R&B Security has been called three times regarding citations and photographs that need to be submitted, with no response. Mr. Currie still has not received a photo for a recent citation issued at lot 196. He also called them this morning to remind them about the meeting tonight.

Mr. Currie reported that the Sheriff's boathouse was booked on April 15, but he was able to procure the Board of Supervisor's meeting room for the Annual Meeting.

Deanna Hutchins (lot 97) called the Sheriff's Office regarding a claim that we sent a letter about curfew and golf carts drivers requiring a driver's license. Mr. Currie reported that he told Ms. Hutchins that was not true, pursuant to his conversation with Ms. Thomson about her claim.

Mrs. Bern's trailer (lot 27) was towed from the lot for no sticker. A contractor working for the owner parked the trailer there.

Ms. Thomson reported that she received a brief log report from R&B Security for the first two weekends in January, and since no photo was submitted on the lot 196 violation, no formal citation was issued. Ms. Thomson is working on the Annual Meeting documents and the 2006 budget. She stated Mr. Churchill sent follow up "urgent request" letters on 1/15 to 11 owners who have not paid their rental security deposits. He also advised the landlords that our CC&R's restrict rentals to single families.

Delinquent dues' letters were sent to lot 45, 70, 93 and 163.

Mr. Sweeney reported that rentals were up this past weekend because of the races. There were a lot vehicles parked over the line on Apache that were blocking traffic. Mr. Currie stated that he called R&B Security about this, and Mr. Currie contacted three people who were parked over the line.

Mr. Churchill reminded the Board of the requirement to do its bi-annual audit of the Association's books. Also, a new law requires HOA's to do an annual audit, which does not have to be done by a CPA. Ms. Thomson stated that she has had difficulty finding a CPA in the area who will do an audit. It was suggested that Parker Accounting be contacted for the annual non-CPA audit pursuant to the new law. Mr. Chambers suggested that Porter & Porter in Bullhead City be contacted about the bi-annual CPA audit.

Ms. Thomson reported that a final demand letter to lot 10 was sent by Mr. Churchill's office on 2/2/06.

Squeak was asked about the status of Mr. Chambers' towing protest. Squeak reported that a Traffic Committee meeting was not set up, as he believed the matter should be discussed by the Board, since there is no established procedure for towing protests, and the tow was done several months ago beyond the citation protest period anyway. The Board decided to proceed immediately with the matter. Mr. Chambers presented his case by stating that he parked his trailer in the 7-day lot on Friday of Memorial weekend, the first weekend towing was initiated. He said he didn't think it would be towed if there was no ID tag, and he didn't expect it to be towed or cited. Mr. Risen asked Mr. Currie how long before Memorial weekend were the temporary signs put up, and Mr. Currie replied a few weeks. Mr. Chambers stated he added the language "or you will be towed" after "all vehicles and trailers must have lot ID" onto the temporary signs, two days after he was towed. Rebuttal to Mr. Chambers' presentation included comments that a similar protest was brought before the Small Claims Court, and the judge ruled in favor of the Association. Proof was shown that proper notices were sent to homeowners in advance. In addition, Robbie of A Toe Truck was at the May Board meeting, in which Mr. Chambers was present, where upcoming towing procedures were discussed. Mr. Risen called for a vote on whether or not to uphold the validity of the towing of Mr. Chambers' trailer, and the Board unanimously voted to uphold the towing.

Ms. Thomson stated that she has not yet had time to investigate new sources for mass-production ID stickers that do not have to be produced by the consecutively numbered method.

Mr. Risen mentioned a wandering truck in the parking lot that is being moved every 7 days. He reminded us that the lot rules also include a maximum 14-day-per-month parking restriction. Mr. Currie stated the vehicle is the cleaning lady for lot 249, and he will tell her to get a sticker from the owner and also that she should not block the drive.

Ms. Thomson stated that a resumé is forthcoming from a Tina Rose for the General Manager's position. Mr. Maxwell stated that he is interested in the position, and Mr. Risen told him he needed to submit his paperwork. Mr. Baker advised that we need to review the General Manager's job description.

Mr. Svider stated he is seeking an insurance quote from the Farm Bureau for Keys II, and Ms. Thomson gave Squeak a copy of our policies pursuant to his request last month. Because Squeak will be out of town, the copies were given to Mr. Svider, and he will pursue the quote for us.

Mr. Svider requested that we put on the annual meeting agenda the possibility of putting in a clubhouse, with a kitchen, which we could rent out for functions, on either the parking lot or the grass area. Mr. Price stated there might be a zoning problem. Mr. Baker reported that he brought up this matter before, and it was voted down. He stated that the matter could be brought up at the annual meeting as a concept, along with the concept of putting in a basketball/tennis court in the parking lot area.

Mr. Chambers is also interested in putting on the annual meeting agenda a proposal to increase the building height regulation to accommodate two-story houses. He stated that La Paz County will allow a 35' residential structure height. He also believes that a two-story structure will allow an 800 square foot garage to be built, generating more available parking. This would also increase property values. Mr. Sweeney replied that there are already two-story structures in the Keys, that are built 3-5' below street level, and they comply with the current height restriction. Mr. Sweeney stated that his own two-story house is 1' above 100-year flood level (368' above sea level). The current requirement is 369' above sea level, and he's about 6" above that. Mr. Chambers also stated that a two-story house would not be blocking any views, because the houses are already sandwiched in. Mr. Churchill reported that when attempting to change CC&R's regarding building height in the past, there was a near riot, and a compromise was reached. The compromise was that two levels would be allowed, but not two stories, and the height limit was set at 18'. He also advised that the Board would need to approve any proposed changes to the CC&R's before being put to the homeowners for a general membership vote. A show of hands regarding the Board's desire to change the building height restrictions resulted in all but Mr. Svider against a change.

Mr. Sweeney reported that new construction on one of the Vista del Monumento lots is at a height of 19', and people are up in arms about the loft/view deck at the top of the structure. Vista del Monumento properties are not subject to our CC&R's.

Regarding the recent sinkhole repairs, the Board requested Mr. Sweeney to break down Steve Stanton's invoice to itemize the sewer-related repairs so that Ms. Thomson can send a letter to Buckskin Sanitary District requesting reimbursement. Mr. Churchill stated that he heard Kenko no longer exists, further stating that a lawyer for Buckskin Sanitary District said Kenko had project financial troubles and essentially disbanded. He stated that they had to go after the bonding company in that case.

Mr. Risen presented a proposal from Steve Stanton Construction to install the drain box and drain line in front of the Green residence, lot 112 for $1,868.57. He proposes to do the work at his convenience, when he's in and out of the Keys on other projects. Mr. Price recommended that we obtain an agreement with the owner of lot 112, whose drain line we would tie into for the runoff, requiring the property owner to keep the line open for continued drainage of street runoff through his property. Mr. Baker concurred that a maintenance agreement would be wise so that it would carry to future property owners if the property were sold. Mr. Baker made a motion that Mr. Churchill prepare a maintenance agreement with the owner of lot 112 whereby property owner agrees to provide the Association with continual use of owner's drain line for street water runoff through the property. Mr. Price seconded the motion. The motion was carried.

Mr. Price received a faxed copy of the title policy on the street; he has not received the original copy yet.

Mr. Sweeney presented a revised plan from Dennis Smith, lot 214, for the construction of a 36" high wrought-iron fence, which he proposes to construct over his existing retaining wall. The top of the proposed fence would be about 3.5' high from street level. Mr. Price stated there is a 36" height requirement. Mr. Chambers stated there are gates at 5' high at the side yards, and there are many of those around, and he wondered if a gate across a driveway is considered a fence. Mr. Churchill referred to section 12.2.8 of the CC&R's that says no solid wall over 2.5' high is allowed, taking into account street level. He stated that if the fence is not a solid fence, then it is probably okay, as the idea was to be able to see through the fence. Mr. Sweeney made a motion to approve Dennis Smith's resubmitted fence plan for lot 214. The motion was seconded. There being no further discussion, the motion was approved, with Mr. Price opposing the motion.

Mr. Sweeney presented a construction plan from David Smisek, lot 90, for the construction of an enclosure to his upper, existing deck. Upon review of the plan, Mr. Sweeney made a motion to approve David Smisek's plan to enclose his upper, existing deck on lot 90. The motion was seconded, and the motion carried.

Mr. Jaschke presented a panoramic photo of three lots on Riverside Drive that need clean up on the canal edge. Overgrown vegetation letters will be sent to the owners of lots 225, 226 and 228.

Mr. Baker opened discussion on our security/general manager needs. Mr. Price made a motion that we terminate R&B Security effective immediately. Mr. Baker seconded the motion. There was discussion about the cost of the monthly service, the absence of security personnel at board meetings, the lack of photos, reports not timely submitted, as well as the poor service over the recent race weekend where several vehicles were reported over the line, without any reports or citations being presented by R&B to the Association. There being no further discussion, the motion was unanimously carried. Ms. Thomson was instructed to send the termination letter to R&B Security.

Mr. Baker suggested a work session be scheduled this month to determine how the General Manager should be involved in security, now that we have terminated the security service. We need extra patrolling on summer weekends and major holidays. It was decided that the work session be set for Tuesday, 2/21 at 6 p.m. in this room to discuss the General Manager's duties. Prospective applicants for the General Manager's position will be interviewed at 7 p.m. following the work session.

Mr. Churchill advised of a new law that went into effect on 1/5/06 wherein the Supreme Court will look to the intent of CC&R's. Meaning if CC&R's don't specifically state their intent on a matter, the court will uphold the matter if the intent was clearly implied in the CC&R's; i.e., the matter does not have to be specific to be valid.

The meeting adjourned at 7:25 p.m.
Submitted by Recording Secretary, Sue Thomson