LAKE MOOVALYA KEYS, INC.
Board of Directors
Regular Meeting
APRIL 12, 2010

CALL TO ORDER
President Gary Svider called the regular meeting of the Lake Moovalya Keys Board of Directors to order at 6:10pm.

PRESENT
President:  Gary Svider
Vice President:  Jack Sweeney
Secretary/Treasurer:  Chuck Baker
Board Members:  Blane Coon, Laura Lancaster (By Phone), Joe Price, William “Squeak” Kossnar, Rob Troxler, Shelby Couch and Ryan Shubin (By Phone)
           
ABSENT
Board Members: Chris Chambers

OTHERS PRESENT
Guests:  Carla Faulkner Plunkett Realty
General Manager:  Cheryl Shockley
Legal Counsel:  John C. Churchill
           
INTRODUCTIONS

MINUTES
Joe Price moved to approve the Minutes of the Regular Meeting of March 1, 2010. The motion was seconded and carried unanimously.

Joe Price moved to approve the Executive Session Minutes of March 1, 2010.  The motion was seconded and carried unanimously.

CALL TO PUBLIC
 
FINANCIAL REPORTS
Joe Price moved to approve the March Balance Sheet.  Discussion:  Mr. Price asked if the CD amount was the Association’s Reserve Account.  Mr. Svider replied that it was not.  Mr. Price asked if the Association’s Reserve Account was compliance with the CC&R’s and the state regulations.  Mr. Churchill stated that first he would need to know what exactly the Association was doing with the Reserve account to answer the question properly.  Mr. Price stated that the reserve account money could only be used for what it is designated for.  Mr. Baker replied that the reserve account was designated for the 10-year maintenance for the streets plus a few other maintenance issues.  Mr. Baker stated that the ten-year street maintenance plan needed to be revisited along with some other major maintenance issues that may come up in the future and designate the monies accordingly.  Mr. Couch asked why the Reserve account balance was so high.  Mr. Svider advised Mr. Couch that this issue would be discussed in New Business. The motion was seconded and carried unanimously.

Joe Price moved to approve the March Profit and Loss Statement.  The motion was seconded and carried unanimously.

Jack Sweeney made a motion to approve the Bookkeeper’s Report, March Prepaid Bills and Bills for Approval.  Three bills were presented for approval:  Carpenter, Hazelwood & Delgado (Willoughby review of plans and litigation) $668.99, Mike’s Contracting in the amount of $683.04 for emergency sink hole repair at 8859 Moovalya Drive & Shaffer Welding in the amount of $600.00 for enclosing two columns at the trash area.  Discussion:  Mr. Price questioned the tax liability of $1044; he thought the Association was non-profit, so why are we paying taxes.  Mr. Baker said the some of the liability comes from interest earned.  Mr. Price asked Ms. Shockley to get clarification from Ms. Thompson.  The motion was seconded and carried unanimously.

BOOKKEEPER REPORT
4/5/10
Income tax returns were filed March 15 with a total tax liability of $1,044.

Mr. Meinen (Lot 44) paid the $500 balance on his rental security deposit. 

All but 1 VDMA owner has paid their annual trash assessment.

15 Late Fees were assessed for delinquent dues.

Lisa Dinonno (Lot 138) requested patience on their delinquent dues because of hard times.  I responded in writing that I would pass along her request to the Board but that she should keep her balance under $300 to avoid future letters and/or legal action.  I also said that legal action usually takes some time to accomplish, and in the meantime she should at least make regular monthly payments to show good faith. 

Bob Willoughby (Lot 10) is having a variance hearing on April 8 where he is seeking a 10’ front setback and an increase in lot coverage from 55% to 59%.  I faxed a copy of the County’s letter to Cheryl on March 23.  Mr. Willoughby will be billed an additional $764.50 in legal fees incurred by Carpenter, Hazlewood when approved for payment by the Board.

David Oddo (Lot 226) obtained a building permit for a 2860 sq. ft. commercial structure.  A copy of the permit was sent to us.

No citations were issued this month. 
 
GENERAL MANAGER’S REPORT
Ms. Shockley reported that Mike’s Contracting had dug down approximately 6 feet at 8859 Moovalya Drive (sinkhole).  They located the sewer lateral and found that is was not leaking and there were no broken water lines in the area.  They left the hole open for approximately one week to let the hole dry out and filled with pea gravel and dry dirt.  Mike’s Contracting patched the sinkhole back with black asphalt.

Ms. Shockley reported that Brooke Water had finally patched the street at lot #4.

Mr. Baker asked if Ms. Shockley was having problem with the gardener.  She responded that she had spoken with Danny about what she wanted done before the Annual Meeting and he said he had been busy so that was why things had not been taken care of.  Ms. Shockley stated that Danny had told her that he would start working on the things on her list today 4/12/10.  Mr. Sweeney and Mr. Coon said that he been working all day.

Ms. Shockley reported that Lot 198 Coykendall had his lot cleaned of weeds, but he was contending that the tree overhanging the BSD pump panel was not on his property.  Mr. Sweeney said he would check into it.

Mr. Price commented on the capped off drain.  Ms. Shockley reported that she had spoken with Mike Byrd of Advance plumbing and he said that his workers reported that the drain was capped off at Moovalya Drive.  Ms. Shockley advised Mr. Byrd that both Squeak and she had seen water draining out of the pipe when it was raining.  Mr. Bryd said he would get with his worker and find out what happened.

COMMITTEE REPORTS
Mr. Sweeney stated that he had received a proposal from Dennis Shaffer to do the remaining columns in metal, including a cap to be placed on top of each column for $5000.00.  Mr. Sweeney said he recommended doing the remaining columns in metal.  Mr. Coon said that Mr. Shaffer had placed the hinges on the outside and the gates were working better.  Mr. Sweeney said by relocating the gate doors it was alleviating the pressure on the block columns, so they will not be knocked off and have to be replaced like they have been doing in the past.  Mr. Churchill said his only criticism was that it looked like the hinges were mounted on the columns with a piece of metal going inside the door that the hinges are on, his only concern was that if they are hit by the trash men with the bins they may be knocked off.  Mr. Sweeney stated the reason that he left the columns coming down the face of the steel was so the doors did not have to be remanufactured.  Mr. Sweeney said the reason for doing it the way Mr. Shaffer was, the Association would not have to buy new doors, there are just being relocated forward.  Mr. Couch suggested that the whole trash area be demolished and steel posts be put in the ground with concrete, put a couple of roll offs in the trash area and do away with all the small bins.  Two gates can be used to access the area.  Mr. Kossnar said that would never work, instead of having the small bins that no one can seem to get trash in, replacing with roll offs with even higher sides, would make it just that much tougher to get trash inside.  Mr. Kossnar proposed that the Board approve Dennis Shaffer’s bid for $5000 to complete the job of enclosing the block columns in steel.  The motion was seconded and carried with 8 in favor 1 opposed.

Mr. Sweeney reported that he had (4) set of plans for approval. 
Lot 203; (Krysko) 8682 Hopi dock repair, replacement of wood and concrete, no structural changes. Mr. Sweeney made a motion to approve the plans.  The motion was seconded and carried unanimously.

Lot 137 (Auman) 8740 Yaqui Loop for the enclosure of a 10 x 10 carport, which is fully under the eves of the house, it makes no structural changes to house. Mr. Sweeney reported that the plans meet all CC&R requirements.  Mr. Sweeney made a motion to approve the plans.  The motion was seconded and carried unanimously.

Lot 226 (Oddo) 8908 Riverside Drive.  The plans call for a 55-foot metal storage building to be constructed on the property.  The plans show a 2 ½ set back from the property line, the project is 45 foot wide and 65 deep.  Mr. Sweeney said that the plans meet the commercial property requirements of the CC&R’s.  Mr. Sweeney made a motion to approve the plans.  Discussion:  Mr. Baker said his only concern was that he hopes that in six months that Mr. Oddo does not bring in plans to convert it the property to residential.  Mr. Sweeney stated that he had spoke with Mr. Oddo that day and told him that if he converted to residential within 6 months, he would demand that he tear down the wall and make it 5 foot.  Mr. Price asked that the stipulation be noted on the plans.  Mr. Sweeney said that he did not agree with putting the stipulations on the plans because the Board did not know what the future of the lot would be and the plans conform to the CC&R’s for commercial properties.  The motion was seconded, with (8) in favor (1) abstained.

Lot 180 (Haney) 8809 Yaqui Loop plans for a 1,780 square foot house.  Mr. Sweeney said the plans are in compliance with the CC&R’s, the plans call for a 5 foot side set back 10 foot set back from the street.  Mr. Sweeney made a motion to approve the plans.  Discussion:  Mr. Kossnar asked if this was the owner that had asked the County for the 5-foot setback and was the Board going to have him survey the lot.  Mr. Price responded that the lot had been surveyed.  The motion was seconded and carried unanimously.

Mr. Price asked Mr. Churchill if the commercial lots had to comply with the Associations CC&R’s and Rules like the residential lots, such as parking and living in motor homes.  Mr. Churchill responded yes the commercial lots have to comply with the same rules and CC&R’s.

OLD BUSINESS
Mr. Svider asked if an easement had been filed for the lift station that was put in by Buckskin Sanitation District.  Mr. Sweeney said that when Mr. Coykendall lot 198 had wanted to tie his seawall into the bridge and he claimed that he claimed that he did not own the small strip of land adjacent to the bridge.  Mr. Sweeney said he would look into the claim about the tree not being on Mr. Coykendall’s lot.

NEW BUSINESS
Mr. Svider said he had received a report back from Terry at T&C Sealcoat concerning the streets and a new 10-year maintenance plan.  Terry said the Association’s streets were in good shape and nothing needed to be done to them until the year 2012.  In 2012, Terry recommended that a crack fill and seal coat be done.  Mr. Baker suggested that a crack fill be done this year, he feels that there are allot of cracks.  Mr. Baker said he did not want water to get in the cracks and do damage by not maintaining them.  Mr. Baker asked Mr. Svider to speak with Terry again about the cracks and the issue the Board is having with the preparation before applying the rubber. 

Mr. Svider stated that Terry said he could not give an accurate estimate for 10 years maintenance because of oil price increases, so he (Mr. Svider) had factored in a 5% increase of the cost of the 2009.   Mr. Sweeney said at some time slurry should be done to the streets.  The approximate cost of slurry would be double the cost of a seal coat.  Mr. Svider said his figures are for two more seal coats them slurry of the streets.  Mr. Sweeney said if the Association continues maintaining the streets with the crack fills and seal coats, slurry might not even be necessary.   Mr. Sweeney said that a slurry coat is basically to fill in what you have missed in a 5 to 10 year period of not maintaining the streets.  Basically it’s a ½ inch overlay of asphalt like material that fills in the cracks between the rocks and the fact that the streets have not been maintained.  Mr. Price said he came up with the figure of approximately $135,000 in the next ten years.

Mr. Price commented on the CC&R’s where it says if the Association runs short on funds it can borrow money.  He wanted to know the limitation of the amount that could be borrowed.  Mr. Sweeney commented on how there is a law in California for Reserve accounts and most Boards he has sat on in California elect to have what is called a reserve analysis which addresses each item and its useful life and its replacement cost.  Then the amount is placed in a reserve account each year according to the analysis.  Mr. Price said that he did not think there was such a law in the state of Arizona.  Mr. Price said he just wanted to make sure that the Association is staying in compliance with what is needed to be held in reserves.

Mr. Baker said that in the past the Associations has built up some reserves, but in the last few years the Associations income and expenses are running pretty much the same and we are not adding to that reserve.  That is why a 10 year plan needs to be formulated so that the Association knows exactly where the money is going to go to and make sure that the Association does not have to borrow the money needed to maintain the streets and other things in the next ten years.

Mr. Churchill commented that the reserve provision in the CC&R’s is pretty basic, it says the Board shall provide for such reserves the Board in good faith deems reasonable.

Mr. Sweeney said that the Board did not capitalize the bridges or the streets in 2008 & 2009. 

Mr. Svider advised the Board that the Association had $107,630 in a CD and $53,900 in the reserve account, which is a money market account.

Mr. Price reported that he had researched the idea of dredging the canals, as it had come up again at the annual meeting.  He said that the Association can get a permit to dredge the canals from the Army Corp of Engineers, but there was no way the Association could afford it.  Mr. Baker said that we had nowhere to put the material if they did do a dredge.  Mr. Price also made the comment that there was nowhere to store the water.  Mr. Price said his only concern was that in case of an emergency, that the Association would be able to dredge the canals if it became necessary and that the Association could borrow the money to do it.

Mr. Churchill advised the Board that they do not even consider dredging the canals unless they hire an hydraulics engineer to evaluate what exactly is going to be done and how its going to be done because there have been problems in the past when they had tried to dredge the canals.

Mr. Churchill commented that the Association has a right to borrow money on behalf of the Association as noted in section 6.15 of the CC&R’s.  The Association can pledge an assessment as security as long as it has the majority written consent of the members, but it cannot pledge in excess of 25% of the regular annual assessment.

OPEN COMMENTS
Mr. Baker asked that the Board go into Executive Session before the election of officers.

Regular meeting adjourned to executive session at 7:40pm.

ACTIONS TAKEN FROM THE EXECUTIVE SESSION
Mr. Baker made a motion to lien Grybowski lot 201 for non-payment of reckless driving citations and attorney fess in the amount of $847.50.  The motion was seconded and carried unanimously.

At this time in the meeting there was a malfunction of the tape machine.

Results of the Election for Officers:
Jack Sweeney was nominated and elected as President.  Chuck Baker was nominated and elected as Vice President.  Secretary/Treasurer: To Be Determined

ADJOURNMENT
The meeting adjourned at approximately 8:40pm
Submitted by Recording Secretary, Cheryl Shockley
APPROVED BY THE BOARD OF DIRECTORS, MAY 3, 2010