Board of Directors
Annual Meeting
APRIL 15, 2006

President Bill Risen called the annual meeting of the Lake Moovalya Keys Board of Directors to order at 9:30 a.m.

President: Bill Risen
Vice President: Chuck Baker
Joe Price, Bob Stroud, Gary Svider, Joe Maxwell, Jack Sweeney and William (Squeak) Kossnar, Richard Jaschke, Larry St. George

Vice President: Chris Chambers

Bookkeeper and Recording Secretary: Sue Thomson
Legal Counsel: John Churchill, Legal Counsel;
District 2 Supervisor: Cliff Edey
La Paz County Sheriff’s Deputies Gilbert and Haynes

The sign-in sheet of those present at the Annual Meeting is on file with the Association. The number of owners present at the meeting was 85. The number of members who voted either in person or by proxy was 133.

The Board members and the Bookkeeper/Recording Secretary introduced themselves to the membership.

A motion was made to approve the Minutes of the 2005 Annual Meeting. The motion was seconded, and the motion carried.

Mr. Baker reviewed the current Balance Sheet. The members previously received the 2005 financials with their meeting Notice. Mr. Baker reported that the Association has five bank accounts: A general account, a Kenko (repair) account, a capital improvements account, a security deposits account and a reserve account. Total funds on deposit as of March 31, 2006 are approximately $171,000. A motion was made to approve the 2005 financial reports. The motion was seconded, and the motion carried.

Mr. Edey opened discussion on the proposition to increase the building height and what it means for setbacks. He stated that whatever the current footprint of the structure is, the County will honor it, as long as the Association approves it.

Mr. Edey discussed the transient lodging, 25% property tax rate, which is considered Class I. Arizona statutes designate homes used for transient lodging as businesses and are therefore taxed at the commercial rate of 25%. The test as to whether a residential rental property qualifies for Class I has nothing to do with a $1,000 security deposit. He thinks any residence rented more than 90 days is considered transient, but he isn’t sure. Deanna Hutchins (lot 97) stated that her research concluded that short-term residential rentals are a Class IV, pursuant to three other Arizona counties. Mr. Edey stated there are arguments that it may not be a Class IV, and he can provide the statutes, but he is not a lawyer. He stated that most people rent their houses for 20-40 days, and that should be a Class III, which is taxed at 10%. He stated that property owners have the option of filing an annual protest. Ms. Hutchins stated that people have ratted out some rental properties to the Assessor’s Office. Mr. Edey said the County can take that information to make an evaluation, and the Assessor has a process on evaluating it and making a determination. There is a four-level appeal process (1) the Assessor, (2) the Board of Adjudication, (3) the Board of Supervisors, and (4) the Superior Court.

A homeowner questioned how long these classes have been in effect, and Mr. Edey replied a long time. The homeowner asked why the homeowners were not informed, and Mr. Edey said the Assessor can answer that. The homeowner asked what the process is for a non-response by the government, and Mr. Edey said the government has 10 days to respond.

A homeowner stated that Class IV says one can rent their property less than 50% of the time to transient lodgers. Mr. Edey said there is a four-rooms-or-less exemption. Mr. Edey stated that these issues need to be addressed with the Assessor, and he is not able to resolve the problems for that department. A homeowner asked why so many classes changed this year, and Mr. Edey again referred that matter to the Assessor.

Tricia Pollett (lot 43) asked Mr. Edey when it was that he directed someone to report known rental properties, and to whom. Mr. Edey stated he believed it was at last year’s annual meeting. He said people should do the research and take appropriate action, with the appropriate department, which is the same process when issues in the field come up. Ms. Pollett stated that George Nault said that Chuck Baker gave him the rental property information.

Mr. Edey stated that he sees inconsistencies in valuations from one area to another, and each region should be consistently rated. Properties in this area are currently set to be taxed at 71% of full cash value. Ms. Pollett pointed out that the deadline for property tax appeals for this year is Monday.

Mr. Edey gave an update on the Business 95 renovation. He stated the County has attacked the drainage problems by Sandpiper. A 3’ culvert, which replaces the old 12” line, has been installed from Circle K to the first canal in the Keys. The County is seeking a drainage easement by Arizona Shores, which is the last piece of the puzzle before road renovations begin. The public boat ramp will be the only wet part of the road, once the road renovations are complete, which will also include shoulder work and beautification.

Concerning projects further up Business 95, Sundance has been shut down due to continual deterioration, which would require multi-millions to fix. There are two opinions as to what to do with the property, one being a linear park area with a walking and bike path, with benches. Nighttime is a problem with boulders often falling onto the road.

Ken Beard (lot 108) asked the board to respond to the prior comment about Mr. Baker informing George Nault about the rental properties. Mr. Baker said that three years ago Mr. Nault found a list of rental properties on the Internet, to which some folks protested, and won. Last year, George Nault asked for a list of renters. Mr. Beard asked why Mr. Baker thought it was in the Board’s interest to rat on the owners of rental properties, and Mr. Hutchins asked why those homeowners were not notified. Mr. Baker stated that he did talk to a couple of tenants, and this matter was probably in the minutes of regular board meetings. A homeowner stated that these rental property owners found out by getting a 3x5 card from the Assessor’s Office, and they didn’t adjust them three years ago. Ms. Pollett stated that on 9/26/05 she got a list of board members checking on status of properties. Mr. Hutchins told Mr. Risen that Mr. Risen was one who checked. Mr. Risen confirmed that he did check on Mr. Hutchins’ property, and only his property, because Mr. Hutchins sued the Association over a towing charge, and the research was needed to prepare for the Association’s case against him.

Mr. Edey advised that those who want to appeal their assessments do so by Monday, as there’s still time.

Mr. Churchill interjected by stating that there is a misconception on the Board’s obligation in this matter. There is no duty to keep it secret, or rat them out. In his 23 years representing the Board, the single largest source of complaint is the renters. Being on the Board is a thankless job. They are volunteers, they are not paid, and they have to follow the CC&R’s.

There were homeowner inquires as to the legality of creating the $1,000 security deposit requirement for short-term rental properties, and where in the CC&R’s does it state this security deposit must be made. Mr. Churchill replied that in June 2004, there was a legally noticed general membership meeting called specifically for the purpose of establishing rules, fines and deposits. The meeting was open to all members for the specific purpose of the members, not the Board, voting on these issues.

Deputy Gilbert spoke about their responsibilities in the Keys. A homeowner questioned whether laws are enforced by the Sheriff’s Office or the security guards. Deputy Gilbert stated that state laws are not enforced in the Keys, with the exception of reckless driving and DUI, which they can enforce. If minors are operating golf carts and quads in a reckless manner, they can be dealt with as such. They deal with lots of fireworks. Action will be taken on calls by homeowners in the Keys. Mr. Churchill advised that any type of vehicle, ATV or golf cart operated by anyone under the influence can result in a DUI charge. He has defended several people on DUI charges while driving a golf cart in the Keys.

Deputy Gilbert stated the Sheriff’s Office will enforce golf cart DUI, as well as DUI on off-road vehicles in the desert, and on private property. They will go out if called, the same as for these occurrences on waterways. A homeowner asked if they still patrol without a phone call complaint, and Deputy Gilbert stated yes, they have the right to enter. He said they don’t get a lot of calls within the Keys unless it’s a holiday when reckless driving and fireworks are on the rise. He thanked the installation of the gate cameras to aid in identifying perpetrators. Mr. Risen stated that $9,800 in gate damage was done this past year. Jennifer Baerg (lot 62) inquired about the recent accident at the mailboxes, and could we extend the brick wall and include reflective stop signs on the gates to help cut down these types of accidents.

Mr. Maxwell reminded everyone that golf carts on the road, even to Circle K, or nearby restaurants, are not legal (unless they are legally licensed and insured), and those operators can be stopped by the authorities. They will not be stopped if they are driving safely on the easement, off the asphalt. Charlie Ward (lot 227) asked Deputy Gilbert if 35 MPH is a legal speed for a legal street cart, and the deputy stated he was not sure; he would have to research that. He did say that a quad or golf cart that is 10’ off the roadway that is going slow and driving reasonably is allowed. A homeowner reported that his 15-year-old daughter was busted, and she was off the roadway 10’. Deputy Gilbert stated that it’s basically a safety issue, and he typically issues warnings. In answer to a double yellow line question, Deputy Gilbert stated it is legal to turn left into the Keys and into Circle K over the double yellow line, but it is not legal to pass.

A homeowner asked for an explanation of the no-insurance card penalty. Deputy Gilbert stated that all drivers must have proof of insurance in their vehicles, and the minimum fine starts at $923. There is an uninsured motorist problem in Arizona, so the fines are going up. He also stated that OUI (operating watercraft while under the influence) in Arizona does not yet affect one’s driving record.

Another question about minors driving carts being legal or not, Deputy Gilbert stated that if they are outside the Keys, they will stop and talk to them. Inside the Keys, it’s a parental matter. There have been near-fatal golf cart accidents at Havasu Springs.

Deputy Gilbert stated that once one is cited for no proof of insurance, and proof of insurance can’t be proved in court, a driver can lose his or her license, and license plates, for three months.

He also stated that the minimum boating age in Arizona is 12. In California it’s 16, and San Bernardino County authorities can stop kids on the river if they are under 16, even if they are on the Arizona side, and issue a citation. He further stated that there are no horsepower limits, so it doesn’t matter if a kid is driving a PWC or a big boat.

Deputy Haynes stated that the maximum decibels for boat noise are 86, even when the boat is trying to get on plane. There is a state law that mufflers are to be installed on boats, and water is not a muffler. The judge determines the fines, and there is no bond schedule, since boat noise is considered a petty offense. He stated the Sheriff’s Office will work with boat operators, testing the noise level and just talking to them about it. Boat operators can call the Sheriff’s Office to get a decibel check. As far as speed at night, reasonable and prudent is the law, taking into account ambient lighting and the driver’s experience.

Deputy Gilbert reported that the Sheriff’s Office is in transition, in that they lost nine officers, and hired them back. There will be five new deputies on the road soon, and they may likely take things to the letter of the law over the summer months, so drivers beware. The new deputies are in training, so the Sheriff’s Office will be fully staffed after August.

Mr. Risen stated he was caught driving his ATV across Riverside Drive. He stated you can push it across the street, just don’t drive it. The deputies confirmed this.

Mr. Risen reported on the continual occurrences of gate repairs and sinkholes in the streets. The sinkholes are the result of improper compaction of soil when the sewers were installed, and no one is taking responsibility, and we can expect more sinkholes in the future.

Mr. Risen reported that our security service was terminated due to reporting problems. The guards did a good job, and we hope to have them back by summer.

Ms. Pollett asked about the address placard project status, and Mr. Risen stated that the delay is due partly to coordinating installation and lack of time and manpower to meet with the homeowners to do the installation. Preferred installation is on the right side of the house (from the canal), above the seawall so that a parked boat does not block it. Ms. Pollett suggested that this information be passed on to homeowners via e-mail and in the minutes so homeowners will know where to install the plates.

There was a homeowner inquiry about the distribution of certain gate codes resulting in a lack of security. A solution would be to do away with the keypads and go to cards and remotes only. There was also concern that unauthorized persons can follow an authorized person in the gate. Mr. Risen stated that there has to be a delay in the closing of the gate, also, people can walk in through the walk around. In addition, we don’t have control of the canals, and unauthorized persons have been known to climb docks and steal patio furniture.

Mr. Hutchins made a motion to have a homeowner discussion before a vote on whether or not to increase the building height maximum. The motion was seconded, and the motion was carried.

It was explained to the membership that the Board’s vote on whether or not to present this matter to the membership was split.

Mr. St. George, in Mr. Chambers’ absence (who was the author of the original motion) presented the pro’s on this proposal by stating that voting yes on this matter represents progress for the Keys. Increasing the building height to 23’ with a minimum 800 square foot garage will alleviate parking problems, and taxes will not increase just because an owner builds a two-story house. This would also give owners more garage space, thus getting more cars, trailers and boats off the streets. County height regulations, and Keys II HOA limits are much higher than 18’.

Mr. Sweeney presented the con’s of this proposal by stating that it would not resolve parking problems. As the proposal is written, there would be no variances, so it would be administered with no special provisions. Homeowners would still have to comply with the 10’ front setback, so those with an old zero setback would lose it with new construction. The rule was not well thought out. Also, the garage could cut into the house space, and the CC&R’s require that a house contain a minimum of 1,400 square feet. It’s just a bad rule the way it’s written.

Mr. Edey stated that those with a 3’ setback are grandfathered in. New construction is a 10’ setback. The County would let an owner go 3’ on a second story if the Board approved such a rule.

Ms. Baerg asked why we are voting on this the way it’s written. Mr. Churchill stated we are bound by the CC&R’s, which is a contract with the homeowners—it binds us. The CC&R’s can be stricter than the County requirements, and ours are. Maintaining the 10’ setback requirement is the way the proposal was worded. Ms. Baerg asked how we fix the language. Mr. Churchill said that an amendment in writing must be passed by 2/3’s of all members either without a meeting, or at an annual meeting. Another homeowner asked if it says 1,400 square feet on “floor level”. Mr. Sweeney stated that section 12.2.2 says, “less than 1,400 square feet on ground floor level” (is not permitted). As for the 10’ setback, Mr. Stroud stated that we have always had a 10’ setback. Mr. Churchill stated that the issue of two-story houses in the Keys is not new; there has always been a group in favor of it. In 1995 there was a group that got an amendment passed that created the ability to build a split-level house, not a two-story house, with an 18’ restriction, and that passage was a compromise to a more liberal, initial proposal. Ms. Baerg stated that was 11 years ago, and there is a new generation paying increased prices.

Mr. Ward stated in the last 4-5 years he has seen zero lot lines to 3’ setbacks on commercial properties go up, with converted garages and fences going up. It seems the Board is taking a stance that they would take away the 10’ setback. Mr. Sweeney stated, yes, that’s why the rule is bad. Mr. St. George stated that the majority of the Board voted to present it to you today; it was rushed out. Mr. Sweeney deferred to Mr. Churchill regarding the rules’ interpretation. Mr. Churchill advised that the proposal contemplates the 10’ setback, and that’s what it has been. The Board didn’t vote to approve the rule, it just voted to put the proposal before the homeowners. It’s what we were given by Mr. Chambers. A homeowner asked how we can amend it here? Mr. Churchill suggested a committee be formed to re-write the proposal and present it again at either an annual meeting, or it can be passed by a 2/3’s written vote of the members without a meeting.

Don Braun (lot 243) inquired whether this is a sewer district issue as well; would additional bathrooms present a problem. Al McPherson (lot 70) inquired what the impact would be on utilities and infrastructure, and he suggested that the Board create an independent committee to research the issue. Ms. Pollett made a motion that the committee be formed to study the impact of two-story houses with Buckskin Sanitary District, other utility companies and other necessary consultants. Another homeowner inquired about the lack of environmental studies and what kind of wind tunnels would be created. Ms. McPherson stated that we can resubmit the proposal if it doesn’t pass today. Russ Derby (lot 85) stated that there’s a new split-level, 18’ house at the end of Yaqui, and it looks like a box, and everyone is welcome to view it. It’s a huge garage with 14’ doors. Mr. Risen concurred that a committee would be formed to study the matter further.

There were questions about where it would be kept, who would have access to it, what security issues would need to be addressed, and the heat factor in storing it. The cost is between $1,000 and $1,300. Mr. Svider reported that the first six minutes after a heart attack are the most critical ones, and emergency units can’t respond that quickly. A minimum of five people would need to be certified to use it. A homeowner asked about liability issues. Mr. Svider stated that he is supposed to receive a fax next week regarding the heat factor on the storage issue. A homeowner stated that their use increases life expectancy; the pads are replaced on a replacement cycle, and there are already a number of persons upriver trained to use one. The cost of the unit includes training. The high end of its cost is $5,000, depending on training options chosen. It has a keyless code, and people who use it are certified to operate it. There was a question about when a panic situation arises, where do you find the list of people to call, and is there liability if someone who is not certified uses it. It was reported there is a Good Samaritan law that protects people trying to save another’s life. A fireman stated that everyone has to be able to use it, but the instructions are foolproof, and it shouldn’t be limited to just five people. One homeowner stated that one doesn’t need to be certified. Mr. Svider stated that operators are also certified in CPR. A homeowner stated that it’s better to get CPR by a non-certified person than to die.

Mr. Risen reviewed the ballot issues:

1. YES or NO guidance vote to investigate getting a defibrillator.

2. YES or NO guidance vote to investigate installation of basketball/tennis court at the parking lot. William Maeck (lot 249), who lives adjacent to the lot, stated that people drive too fast, and it’s not the proper place for kids to play.

3. YES or NO guidance vote on the feasibility of constructing a clubhouse near the entrance. Mr. Svider stated the purpose of the clubhouse would be multi-fold, and it could serve as place for the Board to meet; it could serve as an office, and it could be used for homeowner events. It could be located either on the grass area or in the parking lot. Mr. Sweeney opposed the issue by stating that the Association has street issues to address, and there’s not a lot of money available to build a clubhouse.

4. YES or NO for permanent stickers for vehicles and trailers parked in the parking lot. Currently there is a concern about misuse of the parking lot by unauthorized users. The Association would like to make it mandatory to have a permanent, official ID sticker as opposed to allowing a piece of tape marked with a Sharpie pen. Ms. Thomson now has the means with which to manufacture weatherized, and individualized, lot stickers from her computer. These stickers and the yellow visitor passes can also be given to the rental property agents.

Mr. Derby stated that the Association needs a full-time manager available at any time to protect us.

Mr. Beard expressed his concern about a decrease in property values with more restrictions.

Mr. Hutchins expressed his displeasure about the Board allowing Squeak to be on the Board for a year and a half without being an official property owner; he felt Squeak was deceptive about his qualifications to serve on the Board, and he would like to see his legal name referenced in the minutes. Concerning the rental security deposit assessment, he has not been informed as to what is done with the money, what happens if damage exceeds $1,000 and what happens if the property is not rented 12 months out of the year. Concerning the lawsuit he filed, and lost, against the Association, what rule did he break.

Ms. Pollett addressed the Profit & Loss Statement and thanked the Board for the time and energy they have expended serving on the Board. She stated that the Association has collected only $450 in fines and yet has hired security for a good amount of security service, as well as attorney’s fees, which may or may not be reimbursable. Only $2,000 was spent on repairs and maintenance, but we are holding $18,000 in security deposits, and there is no sign that any of these deposits have had to be used for damage claims.

Pete Becker (lot 115) stated that the Board is taking a lot of abuse, and they are doing a good job.

Jim Leek (lot 114) thanked the Board members. He feels like a target because of his renters, as well as on the tax and parking lot issues. If renters went away, there would still be problems. He would appreciate more give and take with the rental situation.

Dale Smet (lot 166) stated that more parking, paved parking, is needed, provided there is more property available.

Rich Tozer (lot 194), a resident for 31 years, asked if there is a master plan for dredging. Mr. Sweeney stated a homeowner contacted the County about this, in conjunction with the new 3’ culvert the County recently installed, and he was told there is no dredging plan. Mr. Edey stated that in the 1960’s, drainage came out of the hills, before Bud Graham developed the Keys. You can’t change the natural flow of water. The canals are silting up, as the water comes in one way at an accelerated rate, then the flow splits three ways, causing a decrease in flow and the deposit of silt. Mr. Edey stated that no silt is coming into the canal from the new culvert; silt was occurring before the Keys were built. He also stated there are huge fines for dredging without a permit. Mr. Baker reported that 15 years ago, we spent $15,000 on dredging ideas. There was no place for the dirt then, and there’s even less now, as there’s less vacant land and no feasible way or place to pump it.

Christie May (lot 227) said ours is a unique HOA; there are lots of generations, including old timers, retirees; a new generation of people, younger people. People need to keep an open mind and be mindful of each other’s opinions.

Mr. Maeck, living adjacent to the parking lot, said that he has no problem with trailers in the lot; the problem lies with using it as a thoroughfare.

Mr. Braun stated that we need additional parking, and we should convert the lawn area to parking.

Robert Spangler (lot 34) asked if the boat ramp will be redesigned. Mr. Churchill stated that we don’t own the ramp (the north ramp), but we have exclusive use of it. After a period of 10 years, we can claim the right to improve it, but that won’t be the case for several more years.

Mr. Green stated that lots of issues have been covered today. Local revenues have been increased due to renters. There are multiple generations in the Keys. He doesn’t rent his house a lot, and the comments in his guest book indicate that his guests love it; they don’t tear up his place, and they spend their money here in Parker.

Mrs. Vander Schaaf (lot 165) stated they have no problems with renters. She is concerned if there is no dredging, will the canals fill up. Mr. Baker replied that they haven’t had hardly any buildup in 15 years.

Mr. Derby inquired as to how Mr. Smet obtained everyone’s mailing address, and it was reported that he acquired them from County public records.

Mr. Baker wanted the members to know that the Board is not against tenants. The issue is that there are more people now in the Keys, and renters have threatened him. He feels we need fines, so he is personally against the security deposit requirement. The potato-gun incident by a renter damaged four houses, and homeowners complained. That’s how it came about at the June 2004 meeting. He said the Board members don’t agree with a lot of the rules; that we’re here to do what you want us to do. Mr. Baker said he is also against the 23’ height increase, because it needed more thought.

Jerry Pilato (lot 63) stated that meetings during the week are not conducive for homeowners to vote. Mr. Baker stated that CC&R changes can be done via mail, and because they haven’t been amended since 1995, they are getting out of date again.

Bruce Pollett made a motion to allow everyone to vote on issues via e-mail and that a system be developed to make it easier for all to vote; that the members be allowed to give the Board direction on more issues; that some meetings be scheduled for weekends to allow owners from out of town to attend meetings more often.

Mrs. Beard felt that the Board should be better informed before voting on matters that affect the homeowners.

Mr. Churchill advised that the Board must enforce the rules voted on; that the members can change the rules. The voting process is not intended to exclude anyone, and members can vote by proxy. Regular meetings are open to the public.

Several out-of-town owners expressed an interest in Saturday meetings.

Mr. McPherson stated that the rules can be changed only within the context of the existing CC&R’s.


Beverley Thompson (lot 52) nominated the following persons to serve on the Board:

Tricia Pollett, Dale Smet, Bob Spangler, Jim Leek, Steve Green, Gary Vesely, Al McPherson.

Ms. Pollett nominated the following persons to serve on the Board:

Kim Klecan, Charles Hutchins

A motion was made to close the nominations. The motion was seconded and carried.


Joe Maxwell
Joe Price
Jack Sweeney
Larry St. George
Chuch Baker
Chris Chambers
Bob Stroud
Gary Svider
Bill Risen
William (Squeak) Kossnar
Richard Jaschke
Trichia Pollett
Dale Smet
Jim Leek
Robert Spangler
Kim Klecan
Steve Green
Gerald Vesely
Al McPherson
Charles Hutchins
Deanna Hutchins
Norm Hutchins



Building Height Increase:
Guidance Votes:
Basketball/Tennis Court
Permanent Stickers
31 Yes

37 Yes
  9 Yes
10 Yes
86 Yes
  98 No

  72 No
111 No
  99 No
  20 No

The meeting adjourned at 1:15 p.m.

Submitted by Sue Thomson, Recording Secretary