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LAKE
FOREST PROPERTY OWNERS ASSOCIATION Members Present: Sarah Coxwell, Mitch Davis, Dr. John Deloney, Ed Kirby, Michael Threalkeld, Robert Underwood, Jeffrey Sheldon Members Absent: Ken Eslava Staff Present: Jake Bodiford , Steve Jernudd Call to Order 1. The President, Mitch Davis, called the Annual Board Meeting of the Lake Forest Property Owners Association to order at 7:15 p.m. Establishing a Quorum 2. M. Davis confirmed that a quorum had been established for the meeting. Opening Remarks by President Mitch Davis 3. In his opening remarks, M. Davis introduced the Board Members to the audience. Next the President's Report was given in which Davis stated that 2004 has been a good year with surplus revenue of $120,000 year to date. Improvements have been made to the amenities, the scholarship program was increased to five $1,000 scholarships, playground equipment was added to the Montclair pool area. Also, a second swimming pool was made free of charge to all members in good standing, and a teen club provided entertainment and live music over the summer to Lake Forest youth. Davis stated that Lake Forest is in excellent physical and financial condition and the 2003 Auditor's Report was excellent. The year end report for 2003 showed $2 million in revenues with only 39% coming from dues. Davis offered the new developer who will soon begin major construction in Lake Forest the full support of the Board. The new development will breathe new life into Lake Forest and add hundreds of new members to the community. Financial Report by Robert Underwood, Treasurer 4. R. Underwood stated that 43% of the dues is used to pay wages, benefits, and salaries. Golf has a negative cash flow of $102K, Pools $58K, Food and Beverage, $165K, and Tennis, for a total of $351K negative cash flow before depreciation. Underwood discussed the meaning of depreciation stating that it is definitely an expense. Underwood stated that the cash flow of $123K profit before depreciation is $52K shortage after depreciation. Underwood said that some people think that the dues should cover losses while others feel that management and the Board should reduce those losses and the goal of the Board should be to make all the amenities profitable. Underwood said that there has been an improvement in the financial condition of Lake Forest in the last few years. Point of Order A member read from the Covenants that the Treasurer's Report should not contain opinions but rather the actual financial numbers. The President, M. Davis, overruled the statement, saying that we will let Mr. Underwood give his report in full and the members can make their own decision as to the validity of his report. Underwood continues the report stating that last year when the dues increase nomination was made at the Annual Meeting, it was done with the full support of the Board who voted in the increase 9-0 in a prior meeting. Underwood was nominated to present it at the meeting on behalf of the Board as a whole. Underwood reported that we have about $300K in accounts receivable. This amount is for past due accounts for which we write off 25% monthly. There is $172K with the attorney for collections and $158K in clean accounts. A total of $45K is written off annually for bad debts. Underwood stated that liabilities are $732K of which some is for long-term debt and some for the golf cart lease. Revenues are down $130K and expenditures are up $103K. $140K was collected over the past two years from delinquent accounts. Additional money collected includes $100K from Purcell. Underwood said that he has stopped borrowing the $100K yearly and there will be no more assessment. Point of Order A member stated that the Financial Report should include only numbers and not opinions. President M. Davis overruled the issue stating that we should allow Mr. Underwood to finish his report. Underwood continued saying that the General Manager has done a good job and that he recently proposed a motion of confidence for him at a Stated Board Meeting. After a brief discussion on user fees, Underwood concluded the Treasurer's report. Introduction of Candidates for election to the Board of Directors 5. M. Davis introduced the candidates for three minute of remarks. John Barry - Absent Mitch Davis - Davis said that it has been a privilege to serve on the Board of Directors. He has lived in Lake Forest for 28 years and has raised a family here. Davis said he thinks Lake Forest is a great and wonderful place to live and he would do his best to serve if elected again. He stated that any decisions that have been made in the past two years have been made by the majority of the Board not by any single person. Rosemary Howell - Howell stated that she moved here from Montgomery and has found a nice, safe place in Lake Forest. She enjoys the golf, tennis, and pools, and does not want them to become public facilities. She is interested in serving and taking care of the people of Lake Forest. She requested that the membership vote no to the restructuring proposal and no to crime in Lake Forest. BT Cocke - Cocke said that he has lived in Lake Forest since 1986. He said that the property values would go down with the sale of the Yacht Club by $8K. That is based on a 3.2 million-dollar asset divided by the number of members in Lake Forest. He stated that we should work to have the City take over the Lake for proper maintenance. Alvin Jones - Jones stated that he withdraws his name for candidacy due to the arguments and tone of the meetings he has attended. M. Davis said that he understands completely but that it is a noble cause to serve the community. Carl Kauffman - Kauffman stated that he wants to make sure that the value does not diminish from Lake Forest, that there are no secret meetings, that Board vacancies are filled within sixty days, more information is posted on the web site and that it is made more interactive. He said that no one writes a check for depreciation, that it is only an accounting manipulation. He stated that in Spanish Fort his sister pays $200 annually and has no amenities. In LF, he pays $420 annual and has many amenities, "who is getting the better bargain?" He said that we do not need a smaller Board. He said that past Y2K litigation and the appraisal for the Yacht Club was $100K that could have gone to debt. Henry Lawson - Lawson stated that he voted no to the restructuring proposal simply because we should not get rid of the most valuable amenity we have when it is appreciating in value every day. He said that the Board should get the business out in the open. He stated that member comments at Board meetings should be posted in the minutes. Jeffrey Sheldon - Sheldon stated that he has been serving on the Board for three months. He is interested in bringing common sense and civility to the Board. His personal property gives him a vested interest in Lake Forest. Nicolas Smokey - Smokey said that he worked for the government, was in the US army, and is currently retired. He thinks the membership is disinterested in their money as shown in their unwillingness to restructure Lake Forest. Michael Threlkeld - Threlkeld said that he has five pieces of property in Lake Forest and has lived here for six years. He has been serving on the Board for the past six months. Threlkeld said that he voted no, hell no. Written Question and Answer Session 6. Approximately fifty questions were asked and answered on various topics. Questions and answers are on file. Nominations from the Floor 7. M. Davis introduced the write in candidates for a brief presentation. John King - Mr. King said that he has lived in Lake Forest for eight years and voted yes on the restructuring. Voting by Proxy / Ballot 8. Maxi Cooper, a member who formed the Save Lake Forest Committee said that what was presented was not a Restructuring proposal but a proposal to destroy Lake Forest. He said, Vote No, Save Lake Forest, Don't go public. M. Cooper made a motion that Mr. Underwood and Dr. Deloney be removed from the Board immediately for cause. Motion was seconded by Bill Crouch. Cooper discussed the covenant by laws, section 5.8 Removal of Directors that states that a Director can be removed at the Annual Meeting for Cause. Cooper provided cause for his motion:
A member, Judy Sullivan, asked if we still have a quorum. Davis confirmed that a quorum was still present. Point of Order A member stated that we should be able to vote verbally as per the covenant rules. The President, M. Davis overruled the point stated that verbal votes will not work because many people own multiple properties and must be allowed to have one vote per property. The member appealed the ruling. The Parliamentarian stated that due to multiple properties owned by a single member the vote must be by ballot. M. Davis instructed the membership to vote by ballot with a Yes or No to the motion. Adjournment Kirby motioned to adjourn the meeting. Threalkeld seconded the motion. The meeting adjourned at 9:30pm. _________________________________ _____________________________ President Secretary |