Minutes of the LongLakePeninsula Association Annual Discussion Meeting

June 14, 2008

Call to Order and Determination of a Quorum

The meeting was called to order at 9:07 a.m. by LLPA President Nan Horstman. There were approximately 50 members in attendance. (See attached sign-in sheet for partial list). A quorum of the board was present. There was a round of introductions, coffee, and donuts before the business of the meeting began.

Committee Reports

Building and Sites: Jim McCall

Jim McCall reported that only 2 building permits have been issued since last October: one for Ann and Luke Schwartz (for a new construction on Hillside) and one for James Vlk (for a remodel on Outer Drive).

Parks and Rec: Dave Knudsen and Jim Bottoms

Dave Knudsen reported that Jim Bottoms has put the dock and the raft in down at the boat launch (Thank you Jim!). Jim has also been working to replace sections of the dock. Four of the five sections have been replaced in the last two years, with three of those sections being replaced this year. There has also been some maintenance and grooming done to the boat launch area to help alleviate run-off from the road. The launch itself will probably be dredged next year.

Regarding the park, a spring clean-up day was held, during which the ball field was dragged, the volleyball nets were put up, and the tetherball was installed. The tetherball has been a big hit with the kids. Also, the jungle gym is in good shape, but some bolts on the swings may need attention.

Roads and Signs: Jeff Gross and Marian Wyklige

Marian Wyklige briefly summarized the snow plow situation from this past winter. She stated that snow plow bids were requested last fall, and Tom Truckner expressed interest in handling the peninsula account. However, last winter was characterized by a lot of early snow, which resulted in a lot of plowing. By January, the snow plow budget had been depleted and, in an attempt to cut back on plowing expenses, Mr. Truckner was asked to not plow until there was 3.5 to 4 inches of snowfall (as opposed to the original plow level of 1.5 inches of snowfall). The result was the multitude of ruts, which generated numerous complaints, at the end of the season. The roads were not scraped in order to save the asphalt.

Jeff Gross continued, adding that graders place too much weight on the roads. The roads are already in need of repair. The Narrows, in particular, will require some road work soon.The LLPA Board is looking for more inexpensive ways to fix the roads. Jeff stressed the need to take care of the roads.

In terms of snow removal, the bottom line is that there just was not enough money in the budget to handle the amount of snow we had last winter. Ideally, there needs to be more money allocated for snow removal. It would be much better (on the roads) to keep the roads clean with more frequent plowing rather than having to bring in big equipment to clean up the roads in the spring. Finally, President Nan Horstman added that the LLPA Board is looking into moving the small “LongLakePeninsula” sign at the peninsula entrance to the other side of the road so that the sign is easier for drivers to see.

Website: Peter Starkel

Peter Starkel was not in attendance, but Nan Horstman informed everyone that the LLPA website contains the LLPA by-laws, as well as other information people may find interesting and useful.

Treasurer: Chuck Armour

Chuck Armour distributed a copy of the Profit & Loss Budget vs. Actual sheet (August 2007 through April 2008) and a Balance Sheet (as of April 30, 2008) Please see the attached handouts for details. Chuck stated that an updated and full set of financials will be available at the Annual Meeting in August. We were more than $3000 over-budget on snow plow expenses this year, spending $10,390.00, the highest amount ever. However, we have managed to spend very little money on road maintenance this year, so the overall variation in the budget is still slightly favorable. There are still two months left in this fiscal year, though. Chuck also reported that there is now over $80,000 in reserve funds. Most of this is dedicated to the long-term Road Fund. We are hoping to have $110,000 in the Road Fund by 2010 for road repaving, although with the cost of asphalt and gas, we are now looking to do more limited repairs.

Resolution Issue: Nan Horstman

President Nan Horstman introduced the Resolution issue by explaining that the LLPA is currently facing a serious budget issue. According to the bylaws, 50% of the dues each year are set aside forpresent and future road maintenance, not including snow plowing. This year, there was $7,000 budgeted for snowplowing, but over $10,000 was spent, which is a problem. The roads constitute the biggest portion of the budget; this is the area that needs the most money. In addition, the estimated cost of dredging the boat launch is $2,000 - $3,000, and there are trees that need to be cleared, at a cost of $300 each. Since dues are set at only $160 per year (for developed lots), there really isn’t that much money to work with. The poor condition of the roads at the end of this past winter generated numerous calls with complaints and, while many people have suggested an assessment or a dues increase to solve the budget problem, this is complicated, as it requires an election with mailed ballots.

The LLPA bylaws were originally written to state that only a majority of members voting is required to pass a dues increase or levy a special assessment. However, in 2005, after our bylaws were established, the state legislature passed a law directed at summer resort organizations which states that a majority of members must approve a resolution to allow a majority of voters to approve an assessment or dues increase. In other words, the state has trumped our bylaws, and we now need a super majority to reach the point where we don’t need a super majority to conduct the business we need to do. The resolution needs to get passed, but this is a formidable task, since the LLPA has over 300 members, and less than 50% of those members even vote, much less vote yes, in the Association elections each year.

Nan then distributed a handout containing general information regarding the resolution and the wording of the resolution itself (see attachment). She thanked Bob Doerr and Allen Horstman for their help in assembling this information. The top portion of the handout is a reproduction of Article VIII of the Long Lake Peninsula Association bylaws, which states that “All matters shall be decided by a majority of votes cast by members of the Corporation”. The bottom portion of the handout, which contains the wording of the resolution, is the issue we would be voting on.

Diane Chrestensen then asked for clarification, because Section E of the LLPA bylaws contains a clause which seems to already make provisions for snow removal. Nan agreed, but reiterated that the state law, which was enacted later, nullifies that. The state law supersedes our bylaws, and we need to pass this resolution to make our bylaws, as written, compliant with the state and, thus, legal. As things currently stand, we can’t legally raise dues or pass an assessment without approval from a majority of members. If the resolution issue gets passed, in the future, duescould be increased and assessments levied with only approval from a majority of those voting.

A question was then directed to Treasurer Chuck Armour: If every property owner is a member, how do you ensure compliance with dues payments? Chuck replied that liens are placed on properties with past dues, and that the LLPA will be placing more liens on properties in the next few months. This gives the LLPA legal recourse to recoup unpaid dues; the LLPA holds all of the powers of the township in terms of property ownership. Chuck stated that, currently, there are over 14 property owners that owe past dues and late fees. With the liens in place, these owners will not be able to refinance their mortgage or transfer their property deeds without paying their dues. President Nan Horstman stated that, in general, most people do pay their dues, but Jim McCall pointed out that the unpaid dues amounts to a significant amount of money. According to Chuck Armour, this figure is in excess of $4000. Diane Zirnhelt then suggested restricting privileges for those that don’t pay their dues, such as not issuing a boat launch key.

Past LLPA President Ernie Able then stated that the last time the resolution issue went to a vote, the majority of those voting voted yes. However, less than 50% of the members even voted. Somehow, we need to find a way to get those non-voters to vote. Ernie felt that, in the past,it wasn’t clear to people that mail-in ballots are used and that people don’t have to be present to vote.

President Nan Horstman then stated that the current LLPA Board of Trustees is recommending that both the resolution issue and a dues increase be included on the ballot for the August Annual Meeting. If the resolution issue passes, the votes for the increase in dues can then be counted without further delay. Diane Chrestensen asked why the LLPA is considered a summer resort organization, and Nananswered that it was set up that way when the LLPA was first established. She also reported that, in comparison to other Home Owner Associations, our dues are cheap. For example, people who are members of an OldMissionPeninsulahome owners association pay $800 a year in dues. So, our dues are very reasonable for what we are trying to do. Mr. Bryan then asked if the resolution, if passed, would empower the LLPA Board of Trustees to pass other rules, too, such as dictating the color of trim on homes, but Nan said no; the resolution would only relate to increases dues and assessments, and would still require approval, by mail-in ballot, of a majority of voters. Nan reiterated that it was very important for people to talk to and inform their neighbors about this and encourage them to vote. In particular, many of our members are seasonal residents who may feel that this issue does not concern them. Thus, they may not vote or may vote no. However, seasonal residents still have to pay for a portion of the asphalt repaving if the roads deteriorate, and the roads need to be accessible to emergency vehicles. ResidentKarenLake also pointed out that a key issue is safety. There are a lot of children on the peninsula. Without a bigger budget for road maintenance and snow removal, there is a chance that the roads will always be dangerous in the winter. An accident, and a subsequent lawsuit against the LLPA, would cost even more money than we are talking about now.

Discussion then reverted back to the snow plow problem from this past winter. Somebody asked if the plower hired did a bad job or if the wrong equipment was used. However, Jim McCall said no, that was not the issue. Apparently, unbeknownst to the LLPA, Mr. Truckner was dropping a load of salt every time he plowed. Essentially, he salted too much, and the subsequent plow bill was very high. The LLPA then told Mr. Truckner to stop salting when he plowed, and they disputed the portion of his plow bill that had to do with the excess salting. While the bill was in dispute, the bill was not paid, and Mr. Truckner stopped plowing for awhile. He did plow when he was specifically called to do so, but, by that time, the snow had built up and had gotten packed down on the roads. President Nan Horstman added that, since we are obligated to keep the separate Road Fund, the LLPA was restricted in terms of financial avenues with which to pay the excessive snow plow bill.

Diane Chrestensen then stated that the LLPA should be obligated to maintain the roads to the same level as the main roads, and she stated that graders have been used in the past, and the roads were okay. Nan replied that, in order to maintain the roads to that level, a lot more money is needed, and Jeff Gross added that, this past winter, the LLPA received a plow bill for $3000 for just one day of plowing. There was definitely no money in the budget to pay a bill of that size and, yes, graders do wreck the road. Another resident then asked why the LLPA didn’t just pay the $3000 plow bill, especially since the LLPA is liable for any accidents which occur on peninsula roads? Treasurer Chuck Armour responded that all but $400 of the ($5000 total) bill was immediately paid, and the LLPA indicated to Mr. Truckner, in writing, that the number of saltings was being disputed. The disputed portion of the bill was also eventually paid. Again, Mr. Truckner did still keep plowing, just not at the frequency he did originally, and he had a practice of dropping salt behind the truck every time he plowed. The saltings were not included in his original bid, and the LLPA did not initially know he was doing this, and did not want him to do this, since salt is bad for the roads. President Nan Horstman then commented that it sounds like people want us to plow the roads more in the winter. However, in order to do that, there needs to be an increase in the snow removal budget and, thus, the resolution needs to get passed.

Resident Ted Mintus then asked if it would be possible to establish an Emergency Fund as a budget line item. If dues are increased, the amount of the increase could be deposited into this fund. This would provide a natural buffer in the budget. The diversion of dues monies into this fund could always be suspended if the fund grows to a sizeable amount. To this, Treasurer Chuck Armour replied that the LLPA is authorized to spend up to $5000 over budget without membership approval. While we can dip into the road fund if necessary, we don’t want to do this. Instead, we’d rather solve the problem the right way, which is to increase dues. The Board is recommending a $30 increase for developed lots (from $160 to $190) and a $10 increase for undeveloped lots (from $40 to $50). A special assessment is a last resort because it is a lot of work.

Ernie Abel then summarized the budget problem: for each $160 dues payment, $80 must be deposited into the Road Fund. This leaves only $80 from each dues payment with which to maintain the neighborhood. He then suggested recruiting people to be block captains and knock on doors to request/ensure/verify that people vote on the resolution issue.

President Nan Horstman added that two summers ago we also had the big wind storm, the clean-up of which took a huge chunk of money out of the budget. When asked how the winds affected the roads, Nan explained that trees fell over the roads and had to be removed. The clean-up bill from that storm was in the area of $8000. Mr. Bryan then commented that, while the LLPA is responsible for keeping the peninsula roads open, property owners are responsible for clean-up on their own properties, and the LLPA should not be paying Elmers to remove trees on private property. Nan agreed, stating that this was not the case; the large bill resulted from the need to remove a large number of trees that fell into the roads, thus making them impassible.

ResidentKarenLake then asked howthe $30 figure for the dues increase was decided upon. Nan Horstman replied that, if the increase was too large, it would be unlikely to pass, and Jim McCall added that an additional $30 per developed lot should be enough excess revenue. Another resident asked if, with the high cost of gas today, a $30 increase would really be enough. He stated that he would rather approve a larger dues increase once instead ofsmaller increases multiple times. To this, Chuck Armour, Jim McCall, and Jeff Gross all replied that the $30 figure was an educated guess. Dues increases are hard sell, and it is possible that the dues may need to be raised again in the future. It was emphasized that the increase in dues would be allocated to the snow removal budget and that an additional assessment would not be levied, as the LLPA does not want to assess. President Nan Horstman reiterated that, with the passage of the resolution, the LLPA will have the flexibility to raise dues. The suggestion was then made to put a crisis sticker on the ballot envelope as a means to raise the alarm and entice those non-voters to vote. Bob Doerr added that, when the roads were redone back in 1980-81, approval from a majority of the members was required. To get enough people to vote, telephone committees had to be set up and everyone was called. He suggested that something like this might be tried again. Nan then called for volunteers for block captains and telephone crews, and a sign-up sheet was sent around. Resident Al Hatch concluded the issue with the terse summary “No money, no plow. Let’s move on”.