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March

Meeting

Holly Lake Ranch Association

Board of Directors Open Meeting Summary

Saturday, March 16, 2013

Jeriann Bayley was absent

Rob James, GM present

Vice President Greg Demko chaired the meeting

There were no action items upon which the Board voted. The meeting was informational and provides an opportunity for property owners to discuss items with the board. The following is a summary (not official minutes) of the meeting.

Jeriann’s absence was noted, suggesting that all of our prayers and thoughts are with her at this time.

Greg Demko opened the meeting at 10 welcoming all to the meeting. John Sparks asked all weekenders to stand, explaining that Saturday open meetings were started last year to accommodate those who are weekenders or who work schedules that do not permit them to attend on weekdays. There were 7 who stood in response. A question was asked from the audience about the timing with a morning meeting. James responded stating the idea was to leave more of the day open for other activities.

OPEN MEETING SUMMARY DISCUSSION/REVIEW

1) GOLF COURSE/RESTAURANT PARKING LOT MPROVEMENT GM James offered a report on the landscaping project at the Golf course/Restaurant parking lot. Work on the retaining walls has been completed as well as the concrete curbing to protect the landscaping. Irrigation lines are being installed along with electrical lines. Soon decorative post lights will be installed along the wall and the walkway. Planting of a selection of plants suggested by a Work Group will be planted in mid-to-late April. Steps and a sidewalk are also being installed from the lot to the Pro Shop. Completion date is set for May 1. James said the improvements are a most important step for the Association. Homeowners will be able to show the facility with pride.

RESTAURANT UPDATE GM James reported for Bayley who is the BOD liaison for the Restaurant Work Group. A petition was received by the BOD with the signatures of approximately 275 property owners seeking the return of David Wilson as manager. James had several discussions with Wilson re the possibility. Wilson did not wish to return as a contractor. Wilson offered salary, benefit and other requirements including a 5-year contract and vehicle. It is not in the best interests of the BOD or the property owners to pursue this potential arrangement.

QUESTION:Irene Walker, section 9, Lot 31: What is the current situation with the Restaurant? GM James: The current operator is continuing to conduct business there on a month to month basis. The board extended current contract to June 30 to accommodate food purchases and group bookings. Walker: We have tried contract operators for seven years. We need to subsidize the Restaurant just as we do the golf course.

James indicated that the Association’s cost for the restaurant contract operation is approximately $50,000 per year. Actual operating losses when it was employee-operated was $220,000 a year in addition to the $50,000.

QUESTION: Lady in audience (inaudible identification): We have a group of 20-or-so who have gone to the restaurant only to be embarrassed by food, service and demeanor of the current restaurant operator. The WGA have three major golf tournaments coming up this season and something must be done. GM James responded the board is aware of the operational problems. Demko explained that the BOD is now and has been addressing the issue for eight months, seeking potential operators and engaging in discussions with potential operators. We are continuing to work on at least one option as a result of that continuing search. Bowman commented that nothing will be made public concerning the search until a contract is reached. GM James noted that another prospective operator was the first choice of the BOD when the current contract operator was chosen because of an outpouring from property owners.

QUESTION: Donna Shumate, Section 4-Lot 48: Is it true that certain Alcohol Commission designated funds have been used for other purposes and need to be repaid to the proper fund? Sparks responded that the operation is a private business, but that the operators have been informed of liquor law requirements by Association management and by the TABC. We have had more than on operator over the years that did not meet funding level requirements.

FOLLOW QUESTION: Why would you want someone running our restaurant with that history. GM James: We don’t.

QUESTION: Clyde Johnson, Section 7, Lot 68: Isn’t the current restaurant contract up on March 31? GM James; Yes. FOLLOW: In the Board minutes posted on the web site it states that the contract is extended until June 30? GM James: Yes that is correct. The contract has a provision within it that permits termination with a 30-day notice.

COMMENT: Pat Rolling, Section 2, Lot 172: I was on a Restaurant Work Group a few years back because we had someone there who did not have knowledge and we lost money. We don’t want anyone running this that doesn’t have experience. We don’t want to lose more money. I think we are very generous in paying for the utilities an offering the building rent-free. GM James: There is currently a Restaurant Work Group with Jeriann serving as liaison that is attempting to assist in the decision.

QUESTION: Butch Willhide, Section 6, Lot 59: Who is obligated for any short fall in liquor license agreement? GM James: There is zero obligation, no financial losses to the Association. This license is acquired by the 19th Hole, not the Association. Those who are members of the 19th Hole Club own the license.

QUESTION:Ron Henry, Section 4, Lot 242: We are new to the community and have gone to the Restaurant quite often. Usually we are there alone. We feel it has good food and decent service. And, the staff has been polite. So, over it has been a good experience. I don’t understand why the Restaurant has so little support. If it doesn’t have customers, a restaurant can’t make money. Again, I don’t know the history is but I just wanted to state my opinion.

QUESTION:Maurine Scritchfield, Section 9 Lot 427: Mr. Bowman was suggesting about having something in the works, but what is the time frame involved and when can we expect to have something done about this? Bowman: The BOD hopes for something by June 1.

LAKES UPDATE: Ouimet said the Association and the Fishing Club split the cost of this year’s restocking of Lake Greenbriar and Holly Lake with 3,000 crappie and 3,000 copper nose blue gill. BOD has approved a contract for the construction of a fishing pier at Lake Point on Lake Greenbriar. Completion date should be around May 1.

We have asked the lake manager to begin chemical spraying operations earlier this year to hopefully get an early start against grass, algae and other growing vegetation. Our maintenance crew and specially equipped boat will also be out on demand to start scooping and removing algae after treatment.

In the past we discussed the lowering of Lake Greenbrier to help with the vegetation problems and to provide property owners with the opportunity to make lake front improvements. That is still a goal, but will not be addressed further in this year’s budget. Hopefully we can accommodate the necessary work to place a working valve in our spillway. This will be a major operation with a dive team performing the work. Specific bids will be submitted.

In 2009 our lakes were clear of all non-native grasses. Since then, Elodea has been introduced to Lake Greenbriar through transmission on a boat or it’s trailer from another lake. This is very expensive to treat. An even greater threat is Giant Salvinia which is not here yet, but has been found on neighboring lakes such as Lake Gilmer, Caddo Lake, Lake of the Pines, and Lake Murvall. This vegetation kills lakes if it is not taken care of. It grows very rapidly, floats to the top of the water cutting off sunlight and oxygen and everything below it dies. It covers lakes in just days. Treatment is expensive and of unproven effectiveness. Prevention is a must for this threat. The BOD and the fishing club are developing a plan to physically inspect every boat and trailer entering our Property. When vegetation is discovered, the boat/trailer owner will be responsible for cleaning before entry is granted. We realize this will be an inconvenience for everyone. But it is the first line of defense for our Lake. We conducted three random inspections on the ramp. On all three trailers we found grass, mostly coontail, but one trailer has elodea on it that obviously was being carried here from another lake.

OUTSIDER GOLF PLAY: Sparks announced that because golf play is down but more importantly because golf membership numbers and income are down, the BOD has decided to open play on the course to the public. This step is necessary to avoid dramatic increases in golf dues and a corresponding increase in overall membership dues to all property owners which the BOD tries to keep at 13 percent. No matter how much play or how many players, golf expenses are not only continuing, but increasing. This step means Holly Lake Golf Course will no longer be a private club. It is hoped this step will not only provide extra outside golf income, but also patronage and income at the long-suffering 19th Hole Restaurant. This is being introduced as a “soft” opening initially, but may be supported by marketing efforts. Every one of those coming in will invest $40 (later corrected to $50) in greens fees. Those coming in will be blended into the shotgun start system.

In our long-range planning for the Golf Course, we have identified the need for a replacement irrigation system, initially estimated to cost $500,000. Also the cart barn facility will have to be replaced in time and this cost is likely to be in the $100,000 range. Fortunately a group of golfers and volunteers has made some temporary repairs and cosmetic improvements on the current facility which buys us some time.

QUESTION:Man in audience (inaudible identification): What about the 13 percent talked about? Sparks: As a BOD we have tried to maintain a level of support that cost all the property owners 13 percent of our yearly dues. There is also a golf membership fee that has gone up and may well be part of the reason that golf membership numbers are declining. There are a lot of inter-related problems tying into this. Years ago, this was primarily a retirement community with many folks choosing to play golf. Times have changed and there are younger families moving in who do not play golf. The BOD recognizes the golf course as our most visible and valuable asset at HLR. To help address the situation we are introducing outside play.

QUESTION: Man in audience (inaudible identification): Has any thought been given to offering memberships to outsider/non-property owners? Sparks: Yes, this has also been considered.

QUESTION: Lady in audience (inaudible identification): If we have outside folks here to play golf, will we be going back to tee times? Sparks: No, as one of the accommodations, the outsiders will have to work with our shotgun starts. This is a problem we are facing with the outsiders as they are used to having reserved tee times. By viewing this action as a “soft opening”we are hoping the outsiders will adapt to our shotgun system which does allow for more play and players.

QUESTION:Man in audience (inaudible identification): Agreed with the shotgun starts allowing more playing time. Has any consideration been given to “twilight play” since we are now on daylight savings time? Sparks: Yes, we are trying to form a couples 9-hole play once a week. This would start at the conclusion of the second daily shot gun start.

QUESTION:Same gentleman: This would not be generating any new revenue. How about offering twilight play to couples off the Ranch? Sparks: This a thought for consideration.

QUESTION:Clyde Johnson, Section 7, Lot 68: A few years ago when I was on the board with you John, we considered an additional 9-holes to the golf course because of the number of golfers. This was voted down unanimously by the membership so this wasn’t done. So the shotgun was started because at this time there were too many golfers and more people could be moved on the course. So, we’ve gone from too many to now too few. Has any study been made among ex-golfers to find out why they’ve quit playing golf? Sparks: No, there has not been such a survey, but this is a good point for us to consider.

QUESTION: (Johnson) It is also my understanding that when the shotgun was started it had a great impact on the 19thHole, which here again is intertwined with the Restaurant. This point should also be considered. Sparks: Point noted.

COMMENT: Bob Balogh Section 4, Lot 110: This is not only true here at HLR but all over the country. Raising dues will probably not solve the problem. It may just drive the golfers away.

QUESTION: Lady (identification inaudible): We retired here 4 years ago, having built in 1995, so we were weekenders for a long time. Trying to get tee times was absolutely impossible since we lived away from the Ranch. The shotgun starts have been great, as you call in, you are able to play. The people from outside are guaranteed to play if they want to. Is the Ranch going to offer them some type of package to play? Like a timeshare, golf and a meal? Sparks: This the purpose of a soft opening to see what kind of response we get. We may open further options, supported by a marketing program. These is a new market in the Dallas-Fort Worth area now and we are looking to attract them here.

DOG PARK: Demko reported that much of the clearing has been done with the fencing next. We will have a grand opening in a month or so.

RV STORAGE: Bowman said there are four or five spaces still available. Upfront 6-year monies will permit the construction and improvement phase to be completed without budget impact on the Association. Currently there is not enough interest in the outside storage to start that phase of the plan for trailers and boats, etc.

QUESTION:Diane Adams, Section 5, Lot 220: On the outside storage, could someone put a metal storage building in a space to store things? Bowman: No.

AUDIT: Bowman: We again used an outside independent audit firm to provide input on our financial records, bookkeeping and funds handling practices. It was not a full audit like the one we had done two-or-three years ago. It was about a 50 percent audit which produced a few issues that came to light such as timing issues on payroll which was resolved by moving funds from one account to another. Journal issues: the GM was not signing off on some, which has been corrected. Credit card reconciliation charges were billed without supporting receipts. This too, has been resolved. We had an adjustment of timing problem with the accounts receivable in the general ledger and some items did not match up of accounts payable, which has been reconciled. Some figures from our tax reconciliation firm were not being posted in the general ledger in a timely manner. Again, this has been addressed. The pro shop was responsible for the golf club membership payments which is now a sequential numbered ledger system submitted weekly to accounting. Some time sheets were not being signed by the respective department manager. This has been corrected.

Of course collections are big issue in a number of ways. At the end of February there was $304,000 outstanding in various delinquencies, some of which will never be collectable because of state law. In this area the detail ledger is not balancing with the general ledger. We are trying to see if the accounting system can or will generate this automatically. Our accounting system that we got through Silverleaf was designed for another business model. So, we are working on modifying this, along with the procedures.

Several years ago Garland Ford suggested logging or tracking of guidelines or procedures for various entities. That had not been setup, but is currently being established and under way so it can be looked up and any new revisions added.

CAUTION LIGHT AT FRONT ENTRANCE: GM James again addressed the issue of a caution blinker at the front entrance of the Ranch on 2869. We have approached TxDOT several times asking for a flashing yellow light. They advised us that they have a formula denoting the number of accidents and deaths occurring at a specific location before consideration is made. So, a light is not coming in the near future.

REVISED RENTER RULES: With the approval of the new Rules and Regulations some revisions were adopted concerning rules for renters and landlords. All of this rules have gone into effect, but people are being given a six month grace period to catch up. Notification about the new Rules and Regulations has been in the Holly Herald and are on the HLRA website. Hard copies are also available in the Association office. There aren’t any drastic new renter rules, but now, when a new rental or lease is made, there is a new rental form which has to be completed and retained at the Association office denoting the names and number of people in the house and number of cars to be parked on the premises.

SHREDDING UPDATE: Recently we contracted with a firm to provide document shredding services for property owners. This was very well received and will probably be continued in the future.

GAMBLING EVENTS: The person submitting questions on this subject was satisfied to receive the answers privately.

FINANCIAL COMMITTEE: The members are Don Temple, Larry LeCocq, Herb Dunnavant and Sherrill Johnson with BOD liaisons Danny Ouimet and Larry Bowman. There have been a couple of preliminary meetings. We are putting together a list of long-term projects for them to consider for funding possibilities.

RULES & REGULATIONS: We have approved and adopted the new Rules and Regulations as developed by the R&R Work Group. We are finding that some amendments should be adopted.

INITIATION FEES: Bowman: There has been a suggestion of lowering the initiation fees to $500 for the purchase of a lot and then collecting the remaining $2,000 when owner files for a building permit. This will not help our collections issues and we continue to feel it best to collect the entire fee upon transfer of a deed up front. At Hide-a-Way, the initial fee is $5,900 collected up front. We will continue our practice with the exception of Section 3, which has a $250 fee as those lots are lower in value than those in the other sections.

QUESTION:Peter Craine, Section 09, Lot 441: As a realtor I get more questions about how cheap and how expensive the $2,500 initiation fee is. On average, individual lots that are neither on the golf course nor the lakes have been selling for around $3,000. There are also 100 individual lots for sale here at Holly Lake. There are over 30 years of lots on inventory here and even some folks wanting to list their lot but haven’t because of all that are on the market. My suggestion is the BOD look at the lots for the $500 fee and that may start some revenue which may generate some house sales.

DEER HARVEST: Bowman: Working with the TPWS we determined in early Fall that a minimum of 75 deer needed to be removed from the Ranch this year. Unfortunately due to communications between us, the deer harvesting contractor and the TPWS, things were misinterpreted and the given time allowance passed. So, this will be postponed until later in the year.

The meeting was adjourned.

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

Summary by: John Sparks

Board Secretary