LAKE MOOVALYA KEYS, INC. Property Owners Association
8670 Navajo Lane
Parker, AZ 85344
BOARD OF DIRECTORS ANNUAL MEETING La Paz County Board of Supervisors Meeting Room, Parker, AZ APRIL 11, 2009 at 9:30 A.M.
CALL TO ORDER
President Gary Svider called the annual meeting of the Lake Moovalya Keys Board of Directors to order at 9:30 a.m.
PRESENT
President Gary Svider, Vice-President Jack Sweeney; Secretary/Treasurer Chuck Baker; Board Members: William (Squeak) Kossnar, Larry St. George
ABSENT
Board Members Joe Maxwell, Chris Chambers, Brandon Johnson and Laura Lancaster
OTHERS PRESENT
John Churchill, Legal Counsel; Sue Thomson, Business Manager; Cheryl Shockley, General Manager and Recording Secretary and Carla Faulkner Property Manager, Robert Gory Realty
PROPERTY OWNERS PRESENT
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 20. The number of members who voted either by regular ballot or absentee ballot was 85.
INTRODUCTIONS
The Board members, legal counsel, Business Manager and General Manager introduced themselves to the membership. The owners and meeting guests introduced themselves.
MINUTES
The Minutes of the 2008 Annual Meeting were approved by the Board of Directors, May 5, 2008.
FINANCIAL STATEMENTS
Ms. Thomson reported that the Association made $36,000 in profits and paid $1,800 in income tax on interest earned. Bank balances for each of the six bank accounts were announced, with a collective total of approximately $210,000. Ms. Thomson stated that no major improvements were done in 2008, but that the streets had just been seal coated and striped for the approximate amount of $31,500. Ms. Thomson reported that last year at this time the Association had approximately $195,000 in accumulated funds and this year approximately $216,000, with $20,000 in rental security deposits and $2,500 in construction deposits.
Ms. Astran asked if there were any rental deposits not paid at this time. Ms. Shockley responded that there were quite a few that had not paid, including those involved in the lawsuit.
BALLOT PROPOSITIONS
Mr. Churchill explained the purpose of the rental deposit. He stated that a few years ago that the Membership had adopted a rule which required property owners who rent their homes put up a security deposit of $1,000 to be placed in an interest bearing account. If a homeowner stopped renting their home then their deposit would be returned to them with interest. Mr. Churchill stated that a group of homeowners did not like the rule and sued the Association alleging that the Association members did not adopt that rule. The lawsuit has been going on for some time and the Association Board of Directors agreed to recommend that the rule be rescinded because there had not been any claims against the deposits over the course of the years. So the Board determined that is was unnecessary to have this rule any longer and recommended it be rescinded. That was why the ballots were sent out so that Association could either agree or disagree with the $1,000 security deposit rule.
Ms. Astran asked for a point of clarification on the deposit, asking if it was $1,000 per year and that’s it entirely refundable and if a homeowner does not rent for 6 months out of the year, they are entitled to that $1,000 back. Mr. Churchill responded that the deposit is only required when a homeowners is renting their property and it’s not a yearly deposit, it’s a onetime deposit. It is in essence a security deposit for the Association to protect its property from damaged caused by renters because the Association does not have recourse against renters, only property owners.
Mr. Kossnar said that it was for short-term rentals only not for those who rented for longer than 3 months or long term. Mr. Churchill replied that technically it was for any rental.
A homeowner asked the status of the lawsuit. Mr. Churchill replied that the Board has entered into an agreement with the property owners who have sued the Association and the agreement was to place this matter before the Association members at this meeting and the Board agreed to recommend that the rule be rescinded. The plaintiff’s agreed if the Board placed this matter before the Association members and allowed them vote, then the plaintiffs would dismiss their lawsuit and not refile it again no matter if they won or lost.
A homeowner asked assuming that the vote to be counted today favors the plaintiff’s, what we do if some damage occurs. Do we go to court again and he asked how we recover in the matter of damage caused. Mr. Churchill replied that the CC&R’s contemplate any damage caused by a renter will be recovered from the property owner that rents their property. Mr. Churchill stated that if a renter does not comply with the Associations CC&R’s which require for example not damaging the Association’s property then we have an argument that we can go after the property owners themselves. The homeowner said he thought the Association was not being successful at this point and wondered why we don’t peruse the suit and settle it period. Mr. Churchill responded that if this matter does not pass, the suit will be dismissed and the Association will still have its rule. The homeowner then asked if the lawsuit isn’t dismissed does that threatened the Board. Mr. Sweeney responded that the Board is not threatened by the lawsuit; the point is that the deposits have been placed in the account since 2004 and there has never been a claim against it. The Association has held this money for five years and fought over the money for five years and the Association has never used a penny of the money in any direction whatsoever other than to leave it in the bank. Mr. Sweeney stated he views it as a penalty to the people who rent their property and makes them second-class citizens.
Ms. Astran asked if the homeowners who rent their properties charge a rental deposit and the Board responded “yes”. Ms. Astran stated that perhaps the reason why the monies have not been used is because of the fact that most renters have been responsible. She said that she knows in the past there have been irresponsible renters and considering its $400 to $450 a night to rent these properties, to regard it as a penalty is wrong, the homeowner is making money. Mr. Sweeney responded by saying that the deposit was not put in place to protect the homeowners from damages caused by a renter, it was to cover any damages to Association property.
A homeowner asked who was responsible for the attorneys fees for this lawsuit and how much. Mr. Sweeney responded that each party had agreed to pay their own fees no matter the outcome and he did not know the exact amount but it was in the excess of $5000.
A homeowner asked that if the money deposited has been drawing interest and the interest is being credited to depositor. The Board replied “yes”
Ms. Astran asked if there were any plaintiff’s at the meeting that could explain why they think the security deposit is unfair, she wanted to know if it was merely a matter of principal for not wanting the deposit, as for putting forth the $1,000 deposit, she felt that is was a demonstration of good faith. Mr. Anslyn asked if Ms. Astran was a homeowner and she replied that she was. He then asked if she had guests and why she did not put up a $1,000 deposit in the event that they caused damage. Ms. Astran replied that it was a whole different issue, she did not charge her guests $400 per night. Mr. Ansyln stated that he has seen homeowners who have guests that have done damage to property and these homeowners don’t have to put up a $1,000 deposit.
A homeowner responded that there was a lot of difference between a homeowner who had guest’s verses a homeowner who rents to unsupervised renters.
Mr. Anslyn said the security deposit is redundant as far as he is concerned, the homeowner is already responsible for the action of the renters, it is just a matter of the Board going to a little bit more trouble to collect than if they just take out of the security deposit account.
Mr. Price asked if the lawsuit was going to be dropped, no matter the outcome of the vote and Mr. Churchill responded “yes” that the plaintiff’s had agreed to dismiss the lawsuit no matter the outcome as long as the matter was put to a vote for the membership at this meeting. Mr. Churchill said that the Board is recommending that the rule be rescinded, but back in 2004 when the rule was adopted by the membership, there were numerous complaints about renters to the Board, the homeowners said that something needed to be done and when the Board came up with the rule for a much lower amount the membership voted to increase the amount. Mr. Churchill stated that since the passage of the rule there has been a dramatic decrease in complaints.
Mr. Svider asked if there were any homeowners present wishing to run for a seat on the Board of Directors. He stated there was one vacancy available and there maybe second vacancy available after the May meeting.
Ms. Shockley stated that anyone thinking of running for the Board needed to be aware that they required to be available for all the meetings that are held once a month and if they could not commit to being at all meetings then they should not consider running. She stated that two write in candidates, did not even have the time to show up at the annual meeting.
DISCUSSION OF 2008 PROJECTS
Mr. Svider reported that the Common Lot (boat/trailer parking area had been graded and regraveled.
Mr. Svider stated that a Landscape Committee had been formed to look into improving the front entrance area. At this time the project is on hold to do drainage and property line issues. Mr. Svider said that the committee is looking into taking out the oleanders and grass area and putting up a wall and natural landscape.
DISCUSSION OF PROPOSED PROJECTS
Mr. Svider reported that all three bridges are being refaced with new wood. The project is estimated to cost approximately $20,000.
A homeowner asked if the big rock at the back tunnel could be removed. Mr. Sweeney replied that there is no way to remove the rock and that the Corp. of Engineers will not let any equipment in the canal to do so.
DISCUSSIONS FROM HOMEOWNERS
Mr. Braun asked if anything had been discussed on the proposed 2009 budget. He inquired about the accounting services for 2008-2009 and the increase from $350 (2008) to $2150.00 (2009). Mr. Sweeney replied that every two years the Association’s CC&Rs require that a Review be prepared. The accountant will be doing the Review for 2008 financial year this year and in 2008 the accountant only did a compilation report for the year 2007 which is less time consuming so therefore less expense.
Mr. Braun also inquired about the fuel increase from 2008 to 2009. He asked if we were going to be doing something more than before. Mr. Sweeney explained that the financials he was looking at reflects an actual expense for 2008 and a budgeted amount for 2009. The proposed budget is just a guideline to work with.
Mr. Braun also inquired about the General Manager, he said in 2008 it was $21,700 and in 2009 it is going up to $26,400. Mr. Sweeney explained that the General Manager has taken on a lot more of the accounting responsibilities and the Bookkeeper has taken on less, so part of the money that was budgeted for the Bookkeeper was given to the General Manager. He then asked if that meant that homeowners would see more of the General Manager on site. Mr. Sweeney said that means that the General Manager would spend more time in her office doing work.
Mr. Braun expressed his feeling that the General Manager needed to be more on site during busy holiday weekends than in an office. Mr. Sweeney stated that the General Manager lives within the Keys and spends a lot of time on the property. Mr. Braun said that was not correct, she lives outside the Keys and is not exposed to a lot of stuff that takes place inside. Mr. Svider stated that the General Manager is easily reached by phone and spends a lot time on major holidays at the guard shack and on the property. Mr. Braun said he would like to see more of the General Manager on site. Ms. Shockley said he was probably the only homeowner wanted to see more of her. Ms. Shockley also stated that she spends more time on the property in the summer than she does in the winter.
Ms. Astram said that any time she had called the General Manager she had received immediate response and that she was readily available. Mr. Sweeney stated that Ms. Shockley is required to submit a monthly report to the Board of her activities and that she is in the Keys at least 2-3 times a day. Mr. Churchill stated that he’s the one who gets to read the letters from homeowners complaining about the General Manager being too much a pest, harassing people because she’s there too much, she’s day and night from what the Association has had in the past.
Ms. Northcutt stated that she thinks Ms. Shockley is doing a good job and feels that she is part of the reason there are less problems in the Keys concerning the rental properties.
Mr. Braun asked if there was something being done with the trash area and if there were any plans to put lids on the trash containers. Mr. Coon stated that some people drive up to the enclosure and just throw their trash over the top and if is lids were installed the problem would be worse. Mr. Svider reported that at the last Board meeting it was discussed using one container for just recycling.
A homeowner complained about the vehicles such as rhinos and golf carts racing up and down the streets. The Board replied that these incidents should be reported to either the General Manager or the Sheriff’s Department.
A homeowner asked if any thing could be done about the sediment in the canals. He said he saw a process on TV that was environmentally safe that could remove the silt and trash but leave the rock and dirt. The Board asked this homeowner to research this process and come to the next meeting and to discuss this issue.
Mr. Svider reported that Phase 2 & 3 were underway for the new sewer system up river. He advised that a construction schedule was posted on the Buckskin Sanitary District website.
ELECTION RESULTS
Mr. Svider announced that 57 votes were needed to rescind the renter’s security deposit proposal. 50 votes were cast to rescind and 35 votes to retain the deposit for a total of 85 votes cast. 2/3 thirds of the vote were needed to pass. The proposal did not pass and the renter’s security deposit remains.
Mr. Svider announced the election results with the following persons being elected to the Board:
JACK SWEENEY, CHRIS CHAMBERS, CHUCK BAKER, JOE MAXWELL, WILLIAM KOSSNAR, LARRY ST. GEORGE, GARY SVIDER, LAURA LANCASTER, BRANDON JOHNSON, & BLANE COON and new Board Member Joe Price.
ADJOURNMENT
The meeting adjourned at 10:45a.m.
Submitted by Cheryl Shockley, Recording Secretary APPROVED BY THE BOARD OF DIRECTORS, NOVEMBER 2, 2009
