Ranch

Information

January

Meeting

Holly Lake Ranch Association (HLRA)

Open B-Board Meeting Summary

Tuesday, January 17, 2012

Note: Members of the Holly Lake Ranch Association B-Board meet with property owners every other month to discuss developments& issues of interest and to hear suggestions & expressions of concern. The B-Board consists of four elected property owners and together with the five members of the A-Board (selected by developer, Silverleaf Resorts) serve as the governing body of HLRA.

Larry Bowman, treasurer of HLRA Board presided at the meeting. Also present John Sparks, secretary & Greg Demko, B-Board representative. Jeanette Sterner, vice-president was absent.

Bowman opened meeting with a review of rules governing interactions at the meeting appealing for respect & patience so meeting can be conducted in a civil & productive manner. He advised that first agenda item would be a presentation of the rationale for a new security building as well as the plans for that facility. Bowman asked that property owners hold questions until after the presentation by Rob James, GM. Questioners must be recognized & wait until portable microphone is delivered, then identify themselves by name & section/lot or address.

New Security Building

Bowman explained security building has been subject of discussion by three different B-Boards over a five-year period. In addition he said several Work Groups considered situation. Need for some action has been recognized for some time, but priorities & finances, which were directed to paying off the restaurant, prohibited replacement of security building. Unfortunately, building costs have continued to increase over period with an increase of estimated $12 per square foot in last 18 months alone. Bidding builders advised the board that they expect this trend to continue.

Bowman turned discussion over to James, who described problems related to current security building, which he said was suffering from disrepair. James said current security building was constructed in mid-1970’s. He reviewed following: a roof leaking with serious shingle wear and loss of granules, underlaid with felt that was improperly installed; guttering that was improperly installed; attic with faulty collar ties & less than adequate insulation; deterioration of siding and walls from poor installation of siding; windows that need corrosion resistant flashing; stairways that present tripping hazard with inconsistent riser heights & improper handrail installations; hot water tank improperly installed with no electrical disconnect; commode is loose & toilet level does not have proper clearance, & there is no hot water to bathroom sink.

James saved his worst condemnation of security building for electrical system which a recent building inspection report insisted A LICENSED & INSURED ELECTRICIAN EVALUATE ALL REPAIRS AS SOON AS POSSIBLE. James enumerated problems: inadequate electrical service capacity with frequent power interruptions; inadequate panel box insulation (FIRE HAZARD); breakers not labeled; poor insulation on bushings; conduit protection needed; anti-oxidant compound needed on aluminum connectors; cable connectors needed; no GFCI protection; cables bundled improperly; visible open splices. James provided cost estimate of $10,000-plus to correct problems with electrical system. Should any major remodel/repair of building be initiated, HLRA would be required to make building ADA compliant. Rough estimate for all needed repairs to the 620 square-foot building: $40,000.

James also reviewed problems related to use of building such as inadequate meeting space for officers, little storage space for required materials & records; little or no privacy of sensitive information, no space for extra uniforms, personal items; lack of shower facility, unreliable electrical service to support growing electronic surveillance & communications demands of security force& no public parking, no space to complete forms or statements & no direct access to Security Chief.

James explained that the Security Building and the officers working there are our most continuously active amenity. 365 days—24 hours each day. He provided a fourth quarter statistical report of the activities revolving around the building and its staff for the quarter ended December 31, 2011: logged in 8,314 workers & residential guests; an average of 15 homes on the house check list; 46 citations issued, eleven of which were warnings; responded to 307 calls for assistance; filed 33 reports.

James then reviewed plans of new security building which is designed for efficiency of operation & use. Building will be 1160 square feet with all new electrical system & service, a shower, storage space, adequate meeting room for force, accommodations for uniform changes & personal storage. James said the building will improve effectiveness, efficiency and moral. Blue prints & elevations were presented.

Bowman presented cost figures for security building at a capital expense of $93,500 with Silverleaf covering $7,000 of that amount. HLRA’s portion of $86,500 is to be financed over sixty months at four percent with HLRA equipment serving as collateral. Divided among the 2,031 property owners, the cost breakdown is 78-cents a month for five years, or $9.42 per year per property owner. This amount was already approved in 2012 budget & has been figured into property owners’ dues. A temporary building, expected to cost $942 for the 3 ½ month construction period, has been budgeted as an operating expense. No money has been budgeted for landscaping as some plants have been pulled & saved. No money is budgeted for road work (expected to be minor & absorbed into road budget). Construction on new Security Building begins later this month.

Questions & Comments re: Security Building from Property Owners

Shelia Pell 9/315-With Silverleaf donating $7,000 to project, after the building is finished and ready to put into our yearly budget, who owns building? Silverleaf or Holly Lake Ranch? Is there a kitchen on the floor plan? Bowman-Building is no different than any others that we have here, other than our administration building. It is on an easement. It is part of that easement. As far as having title, neither Silverleaf nor HLRA, based upon everything we have checked out to this point. The kitchen consists of a small refrigerator, microwave & small stove to heat lunches.

Clyde Johnson 7/68-Have we not already spent $12,546 on new security building? Is it included in these figures? Was this amount spent in 2011 because it is reflected on the financial statement of 2011 & titled “new security building.” Is it included in contract? Bowman-It was not included in these totals. James-the $12,500 amount was primarily for camera replacement which was budgeted in 2011. It did include about $2,000 in architect fees. Bowman-1/3 of contract amount is due this month, 1/3 when contractor completes 60% of work, & 1/3 upon completion. Total cost for the building including interest is $95,546 for the building and that included the electrical and everything else that goes into that building. The contractor will get $93,500. Johnson-My concern is trying to get around the $100,000 commitment. The statement needs to be corrected to reflect the $12,546 amount. I want to make sure that, I support the board, and I feel it is my right—my duty—to question things I don’t understand. My purpose is to make sure all things come out & be clear. How much can be added to the contract should they get into the building& find things? Bowman-I stated that capital cost is under $100,000 and I stand by my commitment on capital expenditures as I believe all the other directors involved do. Any modifications of contract have to be approved by HLR & contractor. There has to be a signed addendum to that. There is no dollar limit. That will be managed by GM, contractor & B-Board. Johnson-I’m concerned that people won’t get or didn’t get to vote on this.

Glenn Wagner 8-232-I’d like to say same thing. A lot of people think we are opposing this project. I would like to make it clear; we are not against the new Security Building. We are concerned about it being built on property we do not own. You mentioned we have easement rights, but we have lost facilities in the past & there is nothing that guarantees that it can’t happen again. It is unlikely that it would happen, but it is good business sense to take whatever steps necessary to protect our assets. How is the loan being secured and is the insurance coverage in the Association’s name? If there was ever a claim on the building, maybe a tornado, who is the beneficiary? What about the gun range? Wasn’t it lost in the wilderness trade? Bowman-To my knowledge, there has never been any building lost. We did lose wilderness area to Bob Mead, but that had nothing to do with buildings. If we started losing the buildings, that would precipitate a class action suit. The insurance on all buildings throughout Ranch is paid by HLRA. Should there be a claim on these; the money would come back to HLRA—not to Silverleaf. When Mead took property that had the gun range on it, we got stable area in exchange. For what we ended up with, Mead paid for it. I hope that we can go further with that, with one of the work groups this year. Loan is secured with equipment as collateral.

Bob Bulla 2/132-According to your figures you show Silverleaf contributing $7,000. Does board feel that is equitable to the amount we are paying for security building? Bowman-No. But we don’t have a lot of choice. It was based on their percentage of our total annual dues. We have very little leverage to take a stand on anything. We are making efforts to do something about this; we are having conversations with Silverleaf. Everything is negotiable. Silverleaf is more receptive now than with Mead. It will take time.

Danny Ouiment 9-527-How many trees will be lost in the construction? What about roads or landscaping. Is that additional cost? Bowman-Only one tree will be lost. All current landscaping has been retrieved & will be replanted. There may be a little bit of paving. That will come out of the road budget. The remainder of landscaping will be done over time.

LADY (inaudible identification)–Again my request is about cost per property owner for security building. Is the $9.42 just for this year, or is it a fix amount for the remainder? Is it in this year? Bowman-The $9.42 is a fixed amount for the 5 years of the note. It is in 2012 budget.

Sue Mumford 4/E-Is it true, when Silverleaf office is closed, security guards check Silverleaf customers in? Can we charge them additional fee? Bowman-That is correct. A-Board says their dues cover that. That is one of the things we need to continue to talk about. We do have statistics to support this.

Sheila Pell 9/315-Does security cover Silverleaf if they have any domestic problems, or robberies? Is any of that included in the dues that Silverleaf pays us? Bowman-Yes.

End of Questions re: Security Building.

Comparisons Hide-A-Way-Lakes to Holly Lake Ranch

Bowman-I hear a lot of comments about comparisons between Hide-A-Way Lakes & Holly Lake Ranch. We have gathered some figures that should provide some enlightenment for all of us:

Property Owners: HAWL 1,820. HLR 2,031 (includes 90 renters & 174 lots).

Home Values: HAWL $60K-to-$1MM. HLR $50K-to-$1MM.

Average Property Value: HAWL $190K. HLR $160K.

Homes Sold 2011: HAWL 83. HLR 55.

Dues: HAWL $190/month (includes mandatory golf membership). HLR $103/month (golf dues separate).

Golf Cart Fee: HAWL No personal carts. $15/round rental. HLR personal carts. No fee.

Initiation Fee: HAWL $5,900. HLR $2,500.

HAWL has outstanding loans now of more than $4MM. They have indicated they will borrow additional $1MM to repair roads this year.

HLR has outstanding debt of $417,000. With new Security Building it will be $512,700.

Hopefully, this will give you some insight on one of our principal East Texas competitors.

Clyde Johnson 7/68-Any idea why HAWL is selling more houses than HLR? Bowman-Realtors say two things about Hide-A-Way-Lakes they are aware of—closer to I-20 and closer to Tyler.

Pete Tomonto 9/281-Does HAWL own the property that they build capital improvements on? JAMES-Yes, their buildings are titled as Hide-A-Way-Lakes Club. The developer turned the common properties over to their homeowners association some years ago. Bowman I’ve been doing some research, discovering a number of other communities where the developer has not turned common areas over to the property owners. So, we are not totally unique.

Angela Walters4/385-I’m excited about this. It’s going to improve our property values and it will be a lovely new building to see upon approach to the Ranch. We have been property owners here since the early ‘80’s. I think it is wonderful.

Larry Bielak 4/39-Who pays the tax bill on the common property? So whether the developer turns it over to us or not will it still remain the same? Bowman-We do. And, yes, the same.

Dick Latham 9/039-I want to congratulate the previous board, not the current board, for all the work they have done in preparing the material and securing the building and getting the construction moving.

Shonna Mulkey 7/133-I appreciated presentation by Rob and all details and information given to homeowners & clearly the need for it. All the presentations given to us are just really information but we have no say in any of it. Majority of people want this & we should be able to vote for it. When it’s this close to $100,000, I think we should have been able to vote. Being that we don’t have any leverage with the developer, maybe this is point where we do have leverage. It’s a new owner and we could send a message to them. Regardless, they have no interest in giving us up. We could possibly have more leverage if we had a vote from homeowners. If a majority of us want it then yeah, it’s not an argument with developer. This is just going to continue with every issue. Why would they want to hang on to us, if they are not willing to give us benefit? Bowman-If we don’t build security building, is that hurting developer or you? We could vote on everything, but the 3 boards that I have worked with have all agreed that if it went over $100,000, we would go to a vote. We are either going to honor our commitment or not. This is an asset to HLR & it is needed. Input to the board has been very positive. I appreciate the comments. We hear you. We will have another session when it comes time for golf course/restaurant entry improvements. In meantime, we are moving forward. This building will be done in about 3 ½ months.

New Texas Laws-Homeowners Associations, Property Owners Associations

Bowman-Several new laws were enacted by the Texas legislature this past session. Property Owners Associations cannot prohibit display of political signs but can control their size and number. Accordingly, here at HLR property owners can display one sigh per candidate and the signs cannot exceed 2 ft. by 2 ft. in size. Signs can be displayed 90 days before an election and must be taken down within 10 days of election. Another one will affect our collection procedures. If over 90 days, a payment plan which is required to be on file in the county clerks office, will be offered to the delinquent property owner. If it is not honored, it goes back into same process as before into collections and so on. Voting & board memberships-all property owners have the right to vote & anybody can run for board, unless a felon. Foreclosures, have changed a bit, there are a lot more hoops now. We also have to reissue a resale certificate to any buyer that wants it. We’ve had an attorney that deals with property owner’s association’s review this. He has given us his input. Also, Silverleaf’s attorney is currently reviewing this also. We do not have his feedback yet. We are in process of implementing any of these that affect us to be in accordance with the law.

Betty Stasatis 8-228-What is a resale certificate? James-This is a form stating that you agreed you would pay all the dues and that you understand our bylaws. It is a guideline of what you are buying into when you enter an association.

Work Groups

Bowman-We are forming several work groups for 2012. The groups are Fitness with Greg as board liaison; Rules and Regulations with John as liaison; Legal which I will serve as liaison; Evacuation & Recovery-Greg; Gun Range-Bowman & recreation-Gregg. Anyone interested in serving on one of these Work Groups should so advise Rob James.

Open B-Board Meetings on Saturday

Bowman-A number of you have requested that we schedule some of our Open B-Board meetings on Saturday. In response, for 2012 we have determined that two meetings will be on Saturday. These are tentatively scheduled for March 17 & September 22. (Due to a conflict with an already scheduled event, we have been asked to change the March date to March 24. The B-Board will discuss and announce date.)

Profit & Loss Statement Availability

Bowman-If you want a condensed copy of 2011 Profit and Loss statement, you can contact me at lfbo@aol.com. Please include your name, section number and lot number in your request. There is also a detailed one that is 15 pages.

Golf Course & Fore Seasons Entry Improvement Project

A drawing presentation will be made later in year as this project gets a little closer. It will provide same information as was done on security building.

Boat Shelter

We are seeking a more appropriate location for storage of security boat. We hope to have it closer to lake. Nothing decided yet.

Response Time of Wood County Sheriff’s Department

James-Sheriff’s department comes whenever they are called, but they have to be asked to come. Since we have a security force, deputies from the sheriff’s department focus their attention to other areas such as Lake Fork. The response time is around 30-to-40 minutes for us. This is not an automatic response from Sheriff’s department. They have to be requested to come out.

Additional Golf Membership Packages

James-A question was turned in just before the meeting & I have not had time to get with board to go over suggestion that we consider adding weekend package for those that don’t want to play during the week. There have also been questions of why a family pack expires at end of year. The answer is policy is set up that way.

Charlie Corbin4/735-I had brought this issue up several times & there are a lot of good reasons why that should not expire during the calendar year. It’s only right if you pay for something, you should be able to access it, unless illness, death, bad weather, unforeseen plans which I have experienced all of these. I think that it is wrong to have it expire. It has been argued that some people would take unfair advantage of this, this is no case. Policy is something that is made & it needs to be looked at again. James-Thank you Charlie for speaking up the way you did. Whole board heard it & now it will be talked about more. The board did approve, if you are just starting to get back into golf again, a package of 12 rounds of golf for $300. But this is only available to people who have not been golf members or who have not been members for two years.

Realtor Signs

James-Someone mentioned a home currently had 3 realtor signs on it. There is no “rule” that limits the number of signs you can have on the house. This is not a violation as of now. Those with the names of realtors or builders are owned by them.

Bob Bulla2/32-What about realtor signs in vacant lots. Is this legal? James-no realtor signs in vacant lots is a rule. Your name can be on a vacant lot, but no “for sale” realtor signs on a vacant lot. There is a realtor who has his name on his lots, but it does not state they are for sale.

Margo Dowell 8/122-Can I put sign in my lot to sell? I don’t have to give it to realtor? James-No “For Sale” signs on vacant lots, but you can put your name on your vacant lot.

Box Lift

James-Association is considering the acquisition of a box lift to cut trees. Question is whether to purchase, lease or rent such equipment. More research & deliberations of these options will be considered by Board.

Fitness Center Exercise Equipment

James-Currently we have two broken treadmills that will be replaced by end of this week or early next week. Two new machines have been purchased. Incumbent bike should be fixed next week also with everything done in the fitness center by the end of next week.

An estimated 150-to-175 people attended the meeting at Holly Hall

Meeting Adjourned At 3:13 p.m.

(Note: items in red have been added since conclusion of meeting)

Please note: These are “summaries” provided to us  not meeting minutes