Minutes of the Woodland Valley Ranch Board Meeting

St. Johns, Arizona

November 5, 2016

  1. Call to Order

President Dean Rachwitz called the meeting to order at 10:02 a.m. A quorum of directors was present, and each introduced themselves.

Directors in Attendance: Dean Rachwitz, President; Gary Bowers, Treasurer; Zolin Moses, Vice-President; Jo Whitehouse, Secretary.

Property owners present: 3

  1. Reading/Approval of the Minutes

Secretary Jo Whitehouse summarized the minutes of the August 13 Woodland Valley Ranch Board meeting. A motion to approve the minutes as submitted was made, seconded and adopted.

  1. Financial Report

Treasurer Gary Bowers gave the Financial Report through September 30, 2016. He explained that the Board receives each month’s financial report from TRT around the 15th of the month for the preceding month. Therefore, the latest complete report we have is for September 30.

Primary Checking Account balance is $92,200.13

Emergency Reserve Account balance is $25,015.64

Total Operating Capital Balance of $117,215.77

Reserve Fund at the End of December, 2015 was $43,073.81.

Income/Expense: The total income received from Association Dues, Late Fees, and Bank Interest was $175,547. The total projected was $171,150.00 and puts us $4,390 ahead of this time last year, so we have already exceeded expectations. With the last three months of the year still to come, we hope we will increase this surplus. Gary explained his budgeting philosophy which is to project income conservatively and project expenses a little higher, so there are no surprises at the fiscal year-end.

WVR Road Expenses – Six categories of expenses are included in the WVR Road Expenses.

1. Annual Grading Contract

2.General Repairs – If a repair doesn’t fall into the other categories it is classified “General”.

3. Culvert Installation/Repairs.

4. Gate/Cattle Guard Maintenance.

5. Emergency/Washout Repairs (Monsoon)

6. Long-term Improvements

WVR Road Expense budgeted for the year was $148,250. Each year Road Maintenance Expenses constitutes 85-90% of the total Woodland Valley Ranch Budget. The emphasis has to be on road maintenance as this is essential for accessing our properties. Actual expenditures for road maintenance year-to-date is $90,617. The difference between budget and actual can be accounted for by the work done on the Mag Hill project which has produced good results already. We were spending many thousands of dollars every year fixing this Rincon Valley area problem and this year we made it a priority on the long-term project list. Total expenses for this project account for over one-third of the total road maintenance expenses. However, since the Mag Hill project was completed, no further repairs have been necessary to this section of the roads.

The annual grading contract of $76,750 accounts for a little over half of the total budget for road expenses. Expenses through September are only $31,309. The reason for the difference of $45,441 is due to the new grading cycle that began November 1 last year.In 2015, we changed the dates of the contract from a calendar year to November 1 – October 31 to accommodate the condition of the roads; November and December are prime grading months and the roads, soil and terrain are in prime condition at that time of the year. The new contract also allows the contractor more opportunityto perform other needed work. There are three phases to this contract. A one-thirdpayment is made up front; a further one-third when half of the miles to be graded iscomplete. The final payment is madewhen all the roads have been graded and the contract complete. One-half of the $76,750 will be paid in the next two months.

The long-term improvements category was the second highest budgeted expense after the grading contract, however, as of September 30, we have only spent $500 due to the moderate monsoon period, which is much less than in prior years. The long-term improvements already made will eventually reduce the expenses as the previous problem areas will require less to no maintenance. One of the major trouble spots was the Ahauje on Anasazi. This was a long-term project in 2013 and since it has been repairedhas required no further repairs.

A motion was made, seconded and approved to approve the Financial Report as submitted.

DISCUSSION TOPICS

  1. List of Free Services Provided by Heltzel and Sons.

President Dean Rachwitz presented a list of services that have been routinely performed by the road contractor free of charge; services hehad provided for some years. If the contractor sees problem areas when he is traveling the roads, he takes care of them immediately, and this often prevents issues becoming more serious.These services are only possible because the contractor lives on the ranch and his equipment is already there. The board asked the contractor to put a list of such services in writing each month, and the list is available to any landowner upon request.

  1. Update on the WVR Well, Entrance Signs and Road Signs

Vice-presidentZolin Moses reported that the new signs are up on the well and look very good. The signs clearly state that the limit is 500 gallons per week. Since Memorial Day the well has been half to two-thirds full. It appears that wordof the reduced allocation has filtered through, and people are responding. Zolin clarified that there is no carry over from week to week; if you do not take your full allocation one week, you are not entitled to make

well has been surveyed, and the level has dropped a lot over prior surveys.

There was a lock on the well, which someone decided to cut off with a bolt cutter. We elected not to replace the lock at that time. However, we have now decided to put the lock back on the box, using one that is much more sturdy than before. We are trying to find a sturdy lock that the old keys will fit, and we will need more keys for all WVR members.

The valve on the well is fairly weak, and there is a leak. The tank will have to be emptiedto repair the valve which poses a problem as the tank holds10,000-gallons and we do not want to waste that water. These repairs will be more of a plumber’s job, and one of the members has offered to work on the valve.

Entrance signs have been received and will be put up before the end of the year. The first one-third of the Board-named road signs are up, and Zolin recommended that we order the next one-third of the signs by December 1. That will mean we will have two-thirds of the signs completed and up by early in the New Year.

  1. New Grading Contract and Long-term Improvements Projects.

New Grading Contract – The new grading contract was approved and signed by the board. The contractor has already graded about 60 miles of the 210 miles of roads to be graded. The amount of the contract is less than last year as the State has said that they will no longer tax the grading of roads for a non-profit corporation. This has saved us four percent which translates intoseveral thousand dollars that we can retain for other needs. 210 miles will be graded a minimum of once a year. WVR started out with 214 milesof roads and over the course of several years, certain roads have been abandoned, most of themdead ends which were unnecessary as owners had another route to reach their property.One section of Rosie Road is an example.

Main Street, the main entrance to the ranchhas been and will continue to be graded quarterly. This is five miles from the corner of Anasazi and Main west all the way to the Cattle Guard at the WVR border with Bonito. The first grading is in November, the second in March, the third in June and fourth in September. Also, there will be a one-time grading of 5.3 miles of roads lying within Bonito Valley Ranch from the WVR border on Main Street, West to Bonito Way, North to Mountain View and West to Highway 191. We just spent $1,000 in repairs to Mountain View Road and received a $500 contribution from Bonito Ranch. First United Realty was willing to chip in, and with the improved finances of Bonito Ranch, we should be reimbursed going forward. WVR owners use this road quite a bit so it is only fair that we contribute.

The stretches of road that will continue to be graded twice a year are five miles ofAnasazi and Deer Valley (two sections on Anasazi and three on Deer Valley). New grading plan – Over the years, wehave had complaints about Holly Lane. We are going to grade the troublesome two mile stretch on Holly Lanefour times a year. This is more than Anasazi and Deer Valley. Hopefully, this will mean a better road throughout the year, but the contractor has promised to do whatever he can to improve water run-off. This will be

better than putting $25,000 worth of gravel down. We did this on Main about six years ago, and that stretch needs doing again.Long-term Projects –From our list of long-term projects, the Board has selected two for consideration in 2017.We will need a rough estimate from the contractor within +/- 10 percent and will not spend the money until we have an idea of the expense to be incurred.

i)Constructing culverts on Anasazi near the south portion of the ranch. Also, replacing the culverts on another section of Anasazi which are too smallto handle the flow of water.

ii)Build a new road from Homestead to the two-track road that Travis Johnson has allowed us to use where the Carrizowashes out seasonally. This will benefit both the rancher and the property owners.

Anasazi will likely be the most expensive project.

The question was asked as to whether some of the unused funds budgeted for repairs this year could be movedover to long-term projects. We will have $16,500 from the emergency washout budget that we could use next year and it was agreed that both projects listed have merit and the board should move forward with both. There was money left over in both 2015 and 2016 and while we may not have enough to do both of the expensive projects listed we could look at one of the cheaper projects further down and move that up to the top of the list.

  1. Progress Report on Easement Violations

Secretary Jo Whitehouse reported that Board members have been handling a total of nine violations. Letters were sent out, with the result that threeviolationshave been corrected and are complete. Of the remaining six, letters were sent out with the following results:

  • Two owners have not responded at all.
  • One haspartially resolved the problem
  • One has promised to correct the violation.
  • One has requested an extension to the deadline until October 21, which was granted.
  • One owner has requested an extension until April/May. Due to extenuating circumstances, a very rare extended extension was granted.

Discussion took place regarding the inordinate amount of time and money spent on trying to resolve easement violations. The board agreed to undertake a review of the CC&Rs policies as a whole and the policy on easement violations in particular. This could and probably will involve consulation with an attorney firm.

5. Competitive Bids for Road Grading – We were unable to send out requests for bids from other contractors before renewing the current grading contract. The Request for Bids will be sent out in June 2017 so that companies have 90 days to respond and the Board to compare. This will allow for a fully informed decision to be madebefore November 1.

6. Meeting with Chris York of TRT.

Late Fees - Gary Bowers met with Chris York regarding reducing the number of delinquent POA dues accounts. There are 50 parcels (approximately 38-40 owners) where owners have paid their dues but not the late fees. Delinquent late fees total more than $1,000. Some have paid their dues just one or two days late and have been charged late fees, and it does cause irritation. A statement has been sent out to the land owners requesting payment by the end of 2016. There was a one-time waiver of late fees in 2014, and Gary asked the board to consider again waiving late fees at the end of February 2017. It is at this time that the first half of 2017 association payments are due. The suggestion of a waiver was tabled to allow board members to give full consideration to this request.

All Other Delinquencies – In 2013, we adopted a plan whereby TRT would send a series of three letters to landowners who are delinquent in paying POA fees. Each letter will contain stronger languagethan the previous letter. This plan had some success when used on that previous occasion. After the third letter, the delinquencies are sent to a law firm for legal recovery. Once that happens, TRT can no longer be involved in the collection process.

The plan for 2017 is to send three letters requesting payment. One will be sent in March, one in April, and one in May. The third letter to homeowners who are in arrears of $1,000 and above will indicate that a lien will be filed and delinquent funds will be claimed when the property is sold. Currently, there are 27 parcels falling into this category.

It was suggested that liens would only be filed on those owners living outside the state of Arizona. This suggestion did not receive approval as all owners should be treated equally.

7. Serving on the WVR Board

Most non-profit associations, including Homeowners Associations, have a Board Member Job Description and have set minimum standards for board service. A document outlining the requirements necessary for WVR Board service is being drafted and will be made available to all members once it has been finalized and approved by the board.

OPEN FORUM

The meeting was then opened up for landowners’ questions and comments.

Some do not have Microsoft Office/Word and cannot open the minutes as posted on the website. Dean suggested that those who do not have access to Microsoft Office visit Opensourcewindows.org. This website has two options Libre Office and Abi Word both of which provide software compatible with Microsoft Word.

ADJOURNMENT: Meeting was adjourned at 1:35 PM.

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