CHICKASAW ASSOCIATION BOARD OF DIRECTORS MEETING MINUTES-DRAFT
January 18, 2014

POA Members Present: 65
Board Members Absent: David Hageman
President Sonny Petty called the meeting to order at 9AM.

The minutes of the October 19, 2013 meeting were approved as presented.

Amenities (David Hageman): In David’s absence, Joel Rexford discussed the plan for the dog park. The park will be adjacent to the covered drydock, which will serve as one side of the run. A survey has been sent out to the community to determine the amount of interest.

Architectural Compliance (Tim McFall): Tim reported that a new home may be started in the near future on Fairway.

Communications & Public Relations (Gene Blair): Gene reported that the most recent electronic Chickasaw Point of View was, once again, very well received. Highlighting business owners who are also Chickasaw property owners in the newsletter is a win-win situation for everyone involved. In addition, the newsletter provides other, more indefinable marketing benefits. For instance, an email was received from an Athens, GA resident recently who had read the online newsletter and was so impressed with the community activity, she was inquiring about property in Chickasaw.

Roads & Long Range Planning (Sandra Jones): Sandra reported that the unspent funds budgeted for roads from 2013 will be rolled over into the 2014 budget and the road work that needs to be done reevaluated and possibly expanded. Lisa Rose reported that she had a conversation with David Hubbard of Hubbard Paving. He would be back in the community in the near future to review the work again, along with the potential additional paving on Laurel, with the intent to complete the work in March or April. There has been no significant activity by the Long Range Planning Committee in the past few months. The dog park was a recommendation from the LRP Committee, so it is good to see that moving forward.

Safety (Lynn Callahan): Lynn reported that speed humps and/or bumps continue to be studied. The speed humps will be installed in conjunction with the paving. There will be plenty of notice regarding the speed humps, along with appropriate signage. The cart path crossings are also being reviewed for appropriate markings. Darragh Geist requested an update on the outcome of the deer hunt. Tim McFall commented that due to the over population of deer in the community and at the recommendation of the Department of Natural Resources, the Board had authorized a bow hunt in the community with a limit of approximately twenty deer. The hunt was completed mid-December. Several comments were received from the audience regarding the continued overpopulation. Rod Fuller, one of the hunters, stated that there are places in the community where bow hunting can occur and other areas where it is not possible. However, for every doe taken there are two to three fawns that won’t be here next year, so that is more like a reduction of sixty deer. Rod also stated that all of the meat was used and one was given to the Wilderness Way Girl’s Camp. Sonny Petty encouraged everyone to obey the speed limits in the community and to stop at the stop signs. If you are caught violating traffic rules in the community, you will be fined.

Golf Course (Tom Davis): Tom reported that green fees were down $15,000 compared to 2011 and 2012 averages. The good news is that $8,000 less was lost this year than in prior years. The loss was lower due to the Grill. The Grill was up $15,000 in net profit compared to previous years. Phase one of the Grill renovation is complete. All of the renovations are being done strictly with donations, both monetary and labor. All of the renovations should be done by early April. The golf course has a new fleet of carts. The number of carts was reduced from fifty to forty, which will reduce the cart lease cost by $6,000 annually.

Finance (Doug Young): Doug reported that overall the POA year end results were on budget. There was a $6,500 shortfall in undeveloped collections, which was taken into account when budgeting for 2014. Expenses were better than budget due mainly to unspent roads funds which will be rolled into 2014. The Utility year end results were slightly short in revenue due mainly to all of the rainfall in 2013, reducing the amount of watering being done by homeowners. This shortage is not reflected in the cost of water due to a major leak that was experienced early in the year that took a couple of months to locate. The leak was found on Sundew off the side of the road. Water and sewer repairs were also below budget. The Golf Course year end income results were short in green fees but the shortfall was picked up in the grill. Expenses for the golf course are in good shape. The operating loss was only $5,000 worse than budget.

Administrative (Sonny Petty): Sonny Petty moved, Gene Blair seconded and the Board approved a motion to pay Jones Law Firm $2,518.50 for legal services related to the Covenant change proposal. Sonny Petty recorded the approval completed January 13, 2014 to pay Cincinnati Insurance Company $8,427.00 for first quarter general liability insurance ($3,087.00 to be paid by Chickasaw Utility).

Sonny Petty reviewed the powers and duties of the Board as outlined by the Bylaws:

ARTICLE VII POWERS AND DUTIES OF THE BOARD OF DIRECTORS

SECTION 1 POWERS. The affairs of the Association shall be managed by the Board of Directors, and it may do all acts and exercise its authority over all matters in concert with the Articles of Incorporation, the Covenants and Restrictions and the Bylaws of the Association.

SECTION 2 DUTIES. Duties of the Board shall include but not be limited to the following:

B. Manage, control, operate, maintain, repair, and improve property owned by the Association or other property for which the Association by rule, regulation, declaration or contract has a right or duty to manage, control or operate.

So there are the powers on one side and the duties on the other side. If the powers are taken away, the duties should be taken away as well. Further, the Bylaws state:

P. The President and Secretary are the authorized officers of the Association to execute deeds, mortgages, contracts and other documents on behalf of the Association unless otherwise designated by the Board by written resolution.

Sonny noted that he, Gene Blair and Tom Davis signed the mortgage for the golf course refinance loan.

The Covenants state that one of the powers that is given to the Board is the power to levy assessments. This is the article that the proposed Covenant change would impact. The three gentlemen who are sponsoring the proposed change, in their last version of the proposal, highlighted the fact that they want to take the power of special assessments away from the Board and give it to all property owners.

SECTION 19. ASSESSMENTS. Each owner of any lot or lots shall be required to pay assessments as may be assessed by the Association pursuant to the powers granted to it in its articles and bylaws. The Association is hereby expressly authorized and empowered to levy annual base assessments, special assessments, capital improvement assessments, and construction assessments against all lots in the subdivision or as may be subject to these Covenants and restrictions.

Everyone needs to understand that they have a right to propose this change and to pursue it as outlined in Article III, Section 6 of the Bylaws:

ARTICLE III MEMBERSHIP AND VOTING PROVISIONS

SECTION 6 POWERS OF REFERENDUM

A. Proposed Amendments to the Covenants Denied by the Board. Lot Owners may have any proposed change to the Covenants, that was not approved by the Board, placed on the ballot of the Annual Meeting by presenting a signed petition to the Board Secretary prior to July 1. The petition shall be signed by lot owners representing a number of lots equal to 30% of the eligible votes cast in the last annual election.

Furthermore, the Covenants state in Part VII. Remedies:

(E) CHALLENGES. Any person who brings an action challenging these Covenants, the assessments, or any provision of the Bylaws shall pay the legal fees and costs of the Association in defending the action, if such person is not successful in obtaining a judgment or ruling in his favor.

The proposed change makes provisions for paying the loans on the utility and golf course but leave out the special assessment on the operation funds for the golf course. The POA is paying an attorney to review all of this because in the golf course loan documents that were recently signed, the bank has the right to do a lot of things to protect their interests, including take over the golf course and operate and manage it. As part of the loan closing, the bank required a professional appraisal. They looked at the golf course and the community. One of the things the appraiser stated is that the best use of the land that the golf course occupies is as a golf course. There is no other viable use for that land. It took the bank six months to perfect their lien and satisfy themselves that the loan should be renewed. Therefore, since the Board does not have a practicing attorney in its makeup, the guidance of an attorney is essential through this process. The Board is prepared to go to court if necessary to protect a million dollar investment.

Questions and comments were then taken from the audience as follows:

Gerry Large: Are there any other assets other than the golf course in jeopardy?

Sonny Petty: The loan document has the POA tied up lock, stock and barrel. They have an assignment of assessments on all of the assessments.

Tom Acerbo: The proposal doesn’t affect the loan payment does it?

Sonny Petty: That is correct. However if you lose the operations special assessment, the golf course would close and the POA would be in default on the loan.

Lois Meseroll: You are working under the premise that the reason why they want the special assessment to be approved is that they feel it won’t be approved by the people?

Sonny Petty/Doug Young: If their Covenant change proposal were approved, the golf course operations assessment would have to be approved by the property owners and if approved, voted on again in three years.

Lois Meseroll: So do they think it would not be approved?

Doug Young: We don’t know.

Cole Yache: My understanding is that 60% of the people have to vote to approve special assessments. That means that if 41% vote not to have it, and 59% vote to have it; you can’t have it.

Gene Blair: Let me explain where our issue is: The bank loan requires us to have a continual flow of funding to keep the golf course running. The loan payment is not the issue as that has been excluded. The issue is the special assessment. If the bank sees that we have lost the ability to have a continuous flow of funding, then we could be considered in default. At that point, the loan documents state that the bank can seize all funding, including the POA regular operating assessments.

Lois Meseroll: When you explained this to the people who are proposing this change, what was their response.

Sandra Jones/Sonny Petty: It made no difference.

Lois Meseroll: Do you have any idea what they want to do with the golf course?

Sonny Petty: Ralph Trentham is here and he is one of the three gentlemen proposing the change. We will give him the opportunity to speak if he so chooses.

Jim Herd: That was my suggestion if any of them are here. Let them answer the questions on their proposal rather than you trying to answer for them.

Ralph Trentham: First of all, I have to thank Robert French. He made a statement at the December budget meeting that if nothing else, we have the people of Chickasaw excited and coming back to meetings. I’m not a full time golfer. I may play three or four times a year when I have friends here who play golf. Since I’m not a golfer, I don’t have a lot of interest in the golf course, other than it certainly adds to the value of Chickasaw, and I think it certainly adds value to some of the property, especially if you live on the golf course. If you’re not on the golf course, I’m not sure how much value it adds, certainly not as much as the lake does. So I did some investigating on how much money had gone into the golf course. I think back in June I approached Lisa and asked to sit down with the Board. I put together a little presentation on my feelings and voiced my concern to the Board about how much money was being spent on the golf course. I don’t have all the figures with me. I know the Board had diverted funds from roads to spend on other POA operations, and I wondered if any of those funds were going to the golf course. I don’t think they were, but it was a concern. One of the recommendations I made to the Board was to set an amount of $250 or $300 for operations of the golf course and let that be for a number of years before it’s raised again. After that meeting, I was approached by some other people who had the same concerns that I had about the golf course and that was how this got started. There are some other people who haven’t been listed who are included in this. It was our feeling that we as property owners should have the right to say either yes or no: do we want to fund the golf course. If the proposal passed, and the golf course needed $500 a year from each property owner, and 60% of the property owners voted to fund the golf course to that extent, that’s good for three years. They wouldn’t have to vote on it every year. Not only the golf course, but it would certainly affect all of the other assessments as well. Say we had to replace a mile of pipe and it was going to cost $40-50,000 to do that, the property owners would have the right to say yes or no on whether or not it was funded.