Virginia City Highlands Property Owners Association
Minutes – Monthly Meeting October 13, 2009
Virginia City Highlands Fire Station Training Room – 7:00 p.m.
Present: Tallent-Stewart, Biederman, Morrow, Flanagan Absent: Robbins/excused
I. Call to order, declaration of a quorum and approval of meeting agenda
Agenda reviewed, motion by Pat Flanagan to approve, second by Mary Tallent-Stewart.
II. Approve minutes of previous monthly meeting
Minutes reviewed, Pat Flanagan would like minutes changed to reflect that Dave
Thomas was not here when it was stated that he would solicit quotes from CPA
firms for the audit of the financial statements. The audio tape will be checked
to confirm that. Motion by Steve Morrow to accept the minutes conditional to
that clarification with a second by Pat Flanagan.
III. Financial Statements
A. Monthly cash report
B. Monthly financial statements
Dave Thomas reviewed the financial statements with the group. Cash summary is $114k which is $11k below budget, income is $3,000 above budget because of dues collected. Other income is lower due to no miscellaneous income for the month. Admin expenses are $866 which is $538 below budget. Insurance is $7800 above budget due to a timing issue as to when it is billed. Road expense is $1100 above budget. Next month’s expenses should be about $3,893, income should be about $1,700. Dave reviewed the balance sheet and profit/loss statements. Timing of the special assessments and dues billings has been moved up. The special assessment portion is added to paid-in capital. Road expenses to date are lower than last year. The cash flow statement was reviewed and shows that more funds have been collected on the billings for dues and assessments. Transfer fees are up from last year due to various reasons. Pat asked what the allocation of due/assessments are. Dave said that the $50 dues are a credit to revenue and the $100 special assessment goes to paid-in capital. Steve Morrow asked what the total budget for the year was and the minutes/financials that were presented at the annual meeting should show that. Motion to approve the financials made by Mary Tallent-Stewart, second by Steve Morrow. All in favor. Passed.
Dave Thomas asked at this point that the agenda item for the annual audit be moved up so he could speak, present his bids and leave. Motion from Pat Flanagan to accept, second by Andy Biederman. Motion approved.
Annual Audit: Dave Thomas reviewed the audit process for the financial statements. When soliciting bids there is audit risk and he gave examples. Giving extensive association information to prospective auditors lessens risk because the more information they have the better job they can do. NRS states that if the annual association budget is in excess of $150k then an annual audit is required. Budgets of $75k-$150k should be audited every four years. Dave received two bids and provided copies to the Board. The CFO Group bid was $6,500. Albright Pershing’s bid was approximately $10,000. Once the bid is awarded, an engagement letter is sent to the HOA. Dave offered to be the interface person with the chosen firm. Pat Flanagan received bids from Martin Jones & Associates for price between $8,800-$9,200 and then from Bullis & Company for $12,000-$19,000. Pat discussed the need for timely review and decision at this meeting as to which company to use and is concerned with the variance in bid prices. Dave is concerned with being compliant with the law. All these companies are licensed. There was extensive discussion regarding each company and its prices and presentations. The CFO Group’s price being the most competitive was attractive to most members. Pat Flanagan does not like their presentation and lack of more formal information. After much discussion Steve Morrow made a motion to accept the bid from The CFO Group. A second was made by Mary Tallent-Stewart. Three in favor, one opposed. Motion passes.
Steve Morrow also made a motion to appoint Dave Thomas as interface person with the CFO Group to coordinate with Lydia, our bookkeeper and draft a letter on behalf of the Board. Andy will also need to sign an engagement letter. Second by Mary Tallent-Stewart. All in favor, motion passes.
IV. Comments by Association Members
Dave Thomas drafted a letter regarding the rural agricultural issue. The Attorney cannot offer assistance and give private counsel to individuals. We also cannot sell the fire station it appears. Dave requested discussion regarding this issue be put on the November agenda. It was discussed that some issues like CC & R changes could possibly be changed by a judge if majority votes could not be obtained for various reasons.
Craig Chancellor, President of the 10-acre association said his group would like a road closure prior to year-end. Other members present stated that the 1-acre association did have one earlier in the year. Steve Morrow suggested checking the minutes to see when the last one was done.
Ray McPartlin had previous sent an e-mail to the Board in September and had not received a response from anyone. He had read the By-Laws, CC & R’s and Architectural Guidelines. He thinks that he has found an issue wherein there are several items in the Guidelines that are in direct conflict with the other two documents. He believes that the Guidelines are well written. It appears that there were revisions approved by the Board in August 2006 but the minutes make no reference to the Guidelines being presented or approved. Ray’s opinion is that The Association could be at risk if a property owner would challenge the current Architectural Guidelines in court because they appear to be incorrectly constituted and he would like the Board to review the issue.
V: Committee Reports
A. Architectural Committee
There was one application for a detached garage and preliminary plans for a log house.
B. Road Report
Bob Moore reported that it was a slow month. He worked on the three plow trucks and did maintenance. Tom Peevers and Bob cleaned out several culverts. The one on Cartwright and Delta need to be replaced. A sign on Empire and Agate was repaired. Because of rain Steve Morrow suggested that Bob do road inventory to assess any damage. Steve also thought it a good idea to have a roads committee meeting after the storm and Bob’s report of any damage.
C. Park Report
Karlyn McPartlin gave a review of the park funds situation. In 2006 after the well was taken out there were $50k in park funds available. The County now says there is $20k on the books so where did the money go? It appears that our association’s park file is missing. Karlyn is manually going through records to tally up funds being allocated to our bottom line from 1984. As soon as she retrieves this information she will go the the County Commissioners with it. She explained that all Storey County parks like Lockwood, Miners Park and even Lyon County parks are given all their allocation the same way and have lots more amenities that we do at this park. She would also like to find a way to stop the ATVs from coming into the park. large boulders were mentioned as an option. It also may be possible to negotiate with Mike Nevin for the work. Steve Morrow asked if the work was done with the $22k we have now, are we stuck with that or can we fight to get more money. Karlyn said that if we start improvements with that then that is what we will have to spend. There are four county departments working on the problem. A park file was found with invoices in it. The park fee on new builds in the county is $200 per house. Steve Morrow suggested that correspondence regarding this issue be copied to the Board and the letter to the Commissioners be signed by the Board as well. Karlyn said that the likelihood of receiving our funds back is high.
VI. Unfinshed Business
A. Ombudsman’s Program
Pat Flanagan brought and made a proposed motion in writing to file papers to opt out of the Ombudsman Program (see insert).
There was discussion regarding a previous issue with a complaint filed by former board member Debra Gravenstein. Karlyn McPartlin shared with the group her experiences with the Ombudsman Program. Steve Morrow made a motion to send Dave Thomas’ letter to the Ombudsman office (see insert for letter). Check audio for second to this motion as recording secretary did not note it.
B. Sale of Firehouse
Dave Thomas has spoken to the group that this cannot be done. Pat Flanagan proposed a motion (see insert) regarding policy regarding the sales proceeds from real property. Rita Lumos made the response that it would be fiscally irresponsible to sell the firehouse and tie up any funds received for a long period of time, such as an endowment would. Any policy changes have to be written into the Bylaws. Pat Flanagan stated that in the reserve study there was no mention of the firehouse being held as an asset. Andy Biederman indicated that Rob Fourney, who did the study, said there was no need to amend the study because the County takes care of the station and rental house and amendment would cost the association additional funds. Good faith on the part of the County can be interpreted as part of the study and the individual who performed the study was a certified specialist. Pat said that if the County walked out that costs of maintenance would be an issue.
C. Audio Recording of Meeting
Jed Margolin will transfer the recording to a file and send the Board the link to it. He has two microphones recording and this is a work in progress experimenting with the sound and what works the best. Thanks to Jed for his participation in help us with this requirement.
D. Requirements for Public Comment Periods
It was discussed that the NRS dictate that Boards can determine their own time limits for public comment periods. We need two comment periods in the agenda.
VII. New Business
It was discussed that no action can be taken on unspecified items on the agenda.
VIII. Any Other Matters
Steve Morrow indicated that there is nothing in the CC & R’s that deals with damage to roads caused by homeowners plugged culverts for which they are responsible. It was discussed that deficiencies would be addressed by asking homeowners to take care of the problem and if they do not then the association will do it for costs. Andy Biederman also talked about the water filteration systems that backflush and waste water in our community. Will agenda for another meeting.
IX. Adjourn – 10:00 p.m.
Mary Tallent-Stewart, acting Secretary
Proposed Motion to File Papers to “Opt-Out” of the Ombudsman Program
Date: Regular Monthly Meeting – October 13th, 2009
Whereas the Board of the Virginia City Highlands Property Owners’ Association has discovered conflicting language in the By-Laws that it was “created as a rural agricultural residential common-interest community pursuant to NRS 116.1201” and that this needs clarification, specifically whether we are subject to the Ombudsman Program or not under NRS 116,
And whereas the Ombudsman Program is costing the Association $3,507.00 or more per year which could be better served to go to maintenance of roads and public safety,
And whereas the Ombudsman Program is burdening the Association’s operational costs in additional paperwork to comply with the Program,
And whereas the Ombudsman Program was originally to help in reducing litigation costs through arbitration, but its record has not reduced costs because it is “non-binding” arbitration,
And whereas the Association was able to operate for many years without the Ombudsman Program without these additional costs,
And whereas the formal complaint process of the Ombudsman Program is taking an unduly amount of time before resolution,
And whereas exemption from the Ombudsman Program is allowed under AB207, Sec. 1 – 2009 Nevada Legislation Session, upon submission of application and ruling from the Nevada Attorney General,
Therefore Be It Resolved that the Board of the Virginia City Highlands Property Owners’ Association takes the necessary steps to submit a request to “Opt-Out” of the Ombudsman Program and to get clarification from the Attorney General as to whether we qualify as a “rural agricultural residential common-interest community pursuant to NRS 116.1201”.
And Further Be It Resolved that the By-Laws will be changed to be consistent with the Attorney General’s ruling when decided or left as is in the event that the existing description is correct,
And Further Be It Resolved that the Board of the Virginia City Highlands Property Owners’ Association will commit and continue to adhere and follow the requirements and procedures under NRS 116 as being in the best interests of all homeowners in common interest.
Proposed Motion on Policy Regarding the Sales Proceeds from Real Property
Date: Regular Monthly Meeting – October 13th, 2009
Whereas the founders of the Virginia City Highlands Property Owners’ Association took very seriously the importance of real estate and particularly common areas such as the roads and adjoining appurtanences,
And Whereas the CC&R’s in paragraph 8, Ownership of Streets, and the By-laws, Article II, Section A require a 2/3rds vote to approve any disposition of such real property,
And Whereas the Board of Directors recognizes its duty and responsibilities to maintain and enhance such real property and common areas for the benefit and enjoyment of all homeowners,
And Whereas the Board of Directors adopts this policy to include all roads, building structures, appurtanences and any other form of real property in order to stay in compliance with and in the intent of the CC&R’s and By-laws of the Association,
And Whereas the preservation of such assets of the Association improves the value and stability of the homeowners’ interests,
Therefore be it Resolved that the duly elected Board of the Virginia City Highlands Property Owners’ Association reaffirms and supports the need to preserve and maintain such assets of the Association and,
Further be it Resolved that in order to accomplish such a priority, the Board of the Virginia City Highlands Property Owners’ Association hereby adopts the policy that all proceeds received from the sale of any real property be preserved and maintained in an endowment fund for the Association,
And Further be it Resolved that the income from such endowment fund can to be used for the Reserve Fund or Operational Funds of the Association, but in no way allow the depletion of the principal of such fund unless approved by 2/3rds vote of the Association’s homeowners’ vote at a properly noticed regular or special meeting of the Association and that such funds may not be comingled except as specifically allowed in this policy.
3) Request that the Board place on the agenda for the November 10 monthly meeting the following topic: “Contacting the Association’s Attorney regarding the possibility of requesting that the First Judicial Court issue a court ruling modifying the CC&R’s as follows:
To provide that the $50 annual dues be adjusted commencing 1972 to
reflect the change in the consumer price index. $266.89
To replace the phrase
“Every residence, dwelling and/or summer cabin constructed on the lot shall be constructed so that a least fifty percent (50%) of the exterior finish is unpainted natural wood”
with the phrase
“Every residence, dwelling and/or summer cabin constructed on the lot shall be constructed with exterior finish materials approved by the Architectural Control and Planning Committee”