LAKE MOOVALYA KEYS, INC.
Board of Directors
Regular Meeting
APRIL 3, 2006

CALL TO ORDER
President Bill Risen called the regular meeting of the Lake Moovalya Keys Board of Directors to order at 6:00 p.m.

PRESENT
President: Bill Risen
Vice President: Chuck Baker
Secretary/Treasurer: Chris Chambers
Board Members: Jack Sweeney, Gary Svider, William (Squeak) Kossnar, Joe Price, Bob Stroud, Joe Maxwell, Larry St. George, Richard Jaschke

ABSENT

OTHERS PRESENT
Guests: Mike Roberts (R&B Lawn Maintenance), Blane Coon (lot 54), Barbara Risen (lot 184)
General Manager: Ken Woodhouse
Bookkeeper/Recording Secretary: Sue Thomson
Legal Counsel: John C. Churchill (6:12 p.m.)

CALL TO PUBLIC
Mike Roberts, the Association’s gardener, stated he is interested in the General Manager’s position, since Ken Woodhouse no longer wants to serve as General manager. Mr. Roberts stated he was a bouncer for the last nine years. A brief description of the duties was outlined. No action was taken.

MINUTES
Mr. Price made a motion to approve the Minutes of the regular meeting held on March 6, 2006. The motion was seconded and the motion carried.

FINANCIAL REPORTS
Mr. Sweeney made a motion to approve the March Balance Sheet after a correction to the Kenko Repair Liability account. The motion was seconded, and the motion carried.

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

Mr. Sweeney made a motion to approve the prepaid bills and bills for approval. The motion was seconded, and the motion carried.

GENERAL MANAGER’S REPORT
No one was towed from the parking lot this month. One trailer was reported stored in the lot last week without a lot sticker, but it was moved before Mr. Woodhouse checked on it. One white line citation was issued on March 27 to lot 22.

The accident at the mailboxes and the wall was a result of a prescription drug interaction by the driver. The Sheriff questioned him, and the driver was released. A police report will be prepared.

BOOKKEEPER’S REPORT
Ms. Thomson stated that Mr. Woodhouse will continue his duties as General Manager until we find his replacement.

Income tax returns were timely mailed, with a payment of $726 to the IRS and $164 to the ADOR. The 2005 Compilation Report was prepared by the Association’s CPA. Ms. Thomson reported that she has been in contact with Mark Nexsen, a CPA in Lake Havasu City, concerning a quote on an audit. Mr. Nexsen reported there is a new law that requires HOA’s to do only an annual CPA Compilation Report. He stated there are many Associations changing their CC&R’s to do away with the full audits, since the new law merely requires them to have the annual Compilation Report, and he recommended that we attempt to do the same.

Ms. Thomson contacted the three local rental agencies to confirm their rental properties for this year, with a reminder to place their orders for visitor passes and the new weatherized lot stickers.

Ken Ferguson (lot 172) sent a copy of a letter he wrote to Cliff Edey on March 8 expressing his opposition to the replacement (larger) storm drain off Riverside Drive that drains runoff into the canal.

Lot 145 owners responded to our letter requesting they move their trailer back behind their property line. Their response was that the trailer could not be moved back any further, but they would address the matter when they returned to the site in a few weeks. The Board requested that the trailer be red tagged and a follow up letter be sent to the homeowners.

Nine Vista del Monumento owners were billed the annual trash assessments of $144 each.

The lot 22 white line citation was sent to the homeowners, and a fine of $50 was assessed.

Lot changes: 236 in escrow; 225 sold.

Mr. Churchill has not yet sent the follow up letters to delinquent landlords regarding the $1,000 security deposit.

OLD BUSINESS
Mr. Sweeney presented the breakdown of the recent sinkhole repairs, indicating which ones are attributable to the sewer project.

Mr. Svider reported that he spoke with La Paz Insurance Agency subsequent to their review of our insurance policies issued by Beaver Insurance Agency. Since Farm Bureau can’t write us, La Paz suggested we stay with our current carriers for property/general liability, umbrella and directors’ and officers. They would propose coverages with the same companies that we already do business with. There are only a limited number of companies that write this type of insurance. The general consensus of the board is not to change agencies at this time.

The proposed easement agreement with the owner of lot 112 has not been sent yet due to Mr. Churchill needing a couple more pieces of information, and Mr. Sweeney provided the information.

Concerning the lot 202 flooding problem, Mr. Chambers stated he is going to shoot the grades. He will then get with Mr. Svider and compare the information with Mr. Stroud’s records. Mr. Stroud stated there is a new sinkhole on Hopi that is now about 40’ long and runs all the way across the street. The matter was deferred to New Business.

Mr. Sweeney reported that the Army Corp of Engineers could not stop the storm drain project on Riverside Drive, so there’s nothing we can do. It’s installed, and there’s an easement across the lot that was given by the lot owner. We could confirm that the easement actually exists; otherwise, we have no options. Mr. Risen suggested that we monitor and document water flow from the drain into the canal.

Mr. Chambers brought up the setback condition attached to his proposed CC&R height increase amendment. The matter was deferred to Executive Session.

NEW BUSINESS
It was reported that the Association is responsible for damage repairs to the mailboxes damaged in the recent incident inside the gate. Since the Berge property has now been sold, and access issues have been resolved via Riverside Drive, the Association is now free to make new improvements to the front area. Mr. Risen asked that the General Manager obtain estimates to put the area back the way it was before the accident, and also obtain estimates for a block wall from the mailboxes to the trash area or from the oleanders. Mr. Chambers inquired as to where the property line is, and Mr. Risen stated it’s the cable behind the oleanders. Mr. Churchill stated that Lemme Engineering identified the property line in its survey. Squeak and Mr. Stroud suggested that perhaps we should look into removing the oleanders and putting up a wall. Mr. Baker suggested we look at the survey map. Mr. Price stated the County doesn’t recognize the easement; that the tract map doesn’t show we own the parcel. Mr. Churchill replied that we have a quitclaim deed. Mr. Risen stated that a wall of that length would cost a lot of money.

Mr. Chambers stated he could get with Doug Peters on the block wall (material) costs, and the General Manager could get an installation bid. Mr. Risen stated any bids have to be from a licensed contractor. Mr. Chambers asked if there’s a plot plan we can give the General Manager, and Mr. Price said we need another survey. Mr. Churchill stated that the General Manager should be able to find the property markers. Ms. Thomson was asked to look for the map that was reviewed by the board at its on-site meeting that took place at the subject area a year ago.

Mr. Sweeney confirmed the sinkhole in front of Mr. Stroud’s house on Hopi Drive that runs to the other side of the street. He also stated there’s a large crack in front of lot 61 on Apache Loop. He stated the rubberized sealer is not the problem, and it’s not Steve Stanton’s patch that’s failing. The streets are sinking everywhere. Mr. Baker stated that the Association should not have to pay for the repair of these sinkholes. The Association paid for the paving; the sewer district was to do the compaction. Mr. Risen advised that the first thing we should do is determine the cost of repair and send Buckskin Sanitary District a demand. Mr. Sweeney stated that we did that two months ago; now there’s more sinking. Mr. Baker inquired whether or not we should hire a soils engineer to find out what’s going on. Mr. Price stated that Geo Technical did corings when we did the bridges. Mr. Baker will try to come up with some names and make contact with them.

Mr. Stroud discussed the NPG cable repair near the first bridge, and they finally put it underground. We need to make sure they do the patch with black concrete.

Mr. Churchill opened discussion on the interpretation of new laws regarding audits. The new law states an annual CPA Compilation Report is all the State of Arizona now requires. Our CC&R’s refer to a “certified CPA audit”. Mr. Risen advised that state law is more restrictive as to when audits are to be performed. Mr. Churchill advised that the CC&R’s are more restrictive as to the audit type. Mr. Baker recommended that the annual CPA compilation report meet the needs of a certified CPA audit, and that the wording of the CC&R’s on the subject be proposed for change at next year’s annual meeting to comply with the new state law.

Mr. Stroud recommended that we put down more gravel on the common lot, since it has been four or five years. This would cut down on the dust. Mr. Baker made a motion that we contact Colorado River Sand & Rock to deliver up to two truckloads of gravel to the parking lot. The motion was seconded, and the motion carried. This improvement will be delayed until after the annual meeting to see what interest there is in the basketball/tennis court suggestion.

Mr. Svider stated there is a strobe light out on the canal buoy off lot 102. He suggested that we remove the buoy from the channel to avoid liability, and Mr. Sweeney stated that the buoy is plastic and shouldn’t cause any damage. Mr. Sweeney stated that the Board previously decided not to replace the strobes in the channel, only the one’s by the river. The buoy would have to be replaced if parts are broken; you can’t dismantle it. The other channel buoy doesn’t have a light. Mr. Svider asked what our liability is if someone hits an unlighted buoy. Mr. Churchill said he doesn’t think we’re required to have lighted buoys. Mr. Chambers stated that the buoys on rock island upriver do not have lights on them.

Mr. St. George reported two boys on wave runners yesterday going about 50 MPH, almost running into a house, and he wondered if anyone can identify these boys. The two PWC’s are brand new, blue and white in color. The boys are about 17 or 18 years old, both with short, dark hair. They were going too fast for Mr. St. George to read the call letters.

Mr. Chambers suggested that we install full-size reflective stop signs for each gate. Mr. Sweeney made a motion to buy two legal, reflective stop signs to mount on the entrance gate and the exit gate. The motion was seconded, and the motion carried.

Mr. Woodhouse asked about the consequences of removing the weeds on the bank at lot 198. Mr. Churchill stated that some of the brush should stay to keep the bank intact. Mr. Risen suggested that the vegetation be trimmed instead of removed.

ADJOURNMENT
The meeting adjourned to Executive Session at 7:15 p.m.

Submitted by Recording Secretary, Sue Thomson

APPROVED BY BOARD OF DIRECTORS MAY 1, 2006