2012 Legends HOA Annual Meeting March 14, 2012

Agenda Introductions –Guests: Summer Lawns and Anvil Fence 2011 Year in Review 2012 Action Plan Membership Participation 2011 Budget Review Planning for the Future Election of Directors Open Discussion

Introductions Board of Directors / Officers –Seat 1: Steve Berch, President and Director –Seat 2: Kelley McGrath, Vice President and Director –Seat 3: Mike Hudson, Secretary and Director –Seat 4: Dana Wardein, Treasurer and Director –Seat 5: Open Neighborhood Manager – Denny Moller (AMI)

Guest: Summer Lawns, Inc. Overall Assessment of Legends landscaping Questions and feedback from membership

2011 Year in Review Expenses at 95% of budget (was 103% in 2010) Did not raise dues for 2012 Improvements/changes: –Added five new trash cans - now at all entrances to common areas –Negotiated favorable, permanent cost for Sharvers Lateral fee –Reinstated National Night Out event as “Legends Night Out” –Second year with new tree/lawn service company (Summer Lawns) Repaired vandalized sprinkler control panel (improved its protection) More sprinkler pipe and head repairs (aging system) Replaced trees Lifted boughs of all Austrian Pines –Safety improvements at back entrance to Lowell Scott

2012 Action Plan What we plan to do this year Repair/replace broken irrigation pump this Spring Establish reserve accounts: –Iron Fence replacement –Wood Fence repair/replacement –Irrigation Pump replacement –Landscape maintenance (replace trees, clear overgrown bushes) –Other (e.g. pathway and Irrigation pipe repair) Investigate use of law firm to collect dues in arrears

Member Participation Need volunteers: –Easter Egg Hunt –Neighborhood Watch –Spring Planting Event –Legends Night Out –Landscaping Committee

2011 Budget Review Revenue Dues $115,591 Transfer Fees, Other $3,906 TOTAL REVENUE $119,497 Expenses Administrative $16,067 AMI$13,871 Insurance, Taxes$2,196 Common Area $89,216 Landscape$41,494 Tree/shrub maintenance$5,133 Sprinkler Maintenance/Repair$11,901 Irrigation (water/ditches)$19,900 Electricity, entry lights, other$10,788 Communication $2,604 Signs, website, mailings$1,659 Events, other$945 Capital Expenses Trash receptacles $2,195 TOTAL EXPENSES $110,082 Net Profit/Loss $9,415

Planning for the Future The situation Legends is 15 years old; maturity brings increased costs. Past budgets were set to just meet the next year’s needs. Current reserves are only about $15,000 (very low). Annual dues were $236 in Dues are now $370 – a 3% increase per year since Must prepare for future costs that will occur for certain: –Replace fencing bordering all common areas and access paths –Continuous replacement of irrigation pumps and pipe repairs –Cost to maintain mature trees and replace dead/dying landscaping –Repair walkways

Planning for the Future Funding reserve accounts (estimates) Replace iron fencing: $182,000 (25 year life) –$23/year (per homeowner) Replace wood fencing: $104,000 (15 year life) –$22/year (per homeowner) Replace pumps: $8,000 (4 year life) –$6/year (per homeowner) Increased landscape & irrigation maintenance: $3,000/yr –$9/year (per homeowner) IMPACT: Dues would increase by $60/year to perpetually fund new reserve accounts ($430/year from current $370/year)

Iron Fence Project History Refurbishment plans started in 2006 Divided into five phases First phase started in 2007 Contractor significantly under-estimated their costs –Honored contracted price for Phase 1; declined to complete work Payment: 50% HOA, 50% each homeowner with iron fence Very time consuming to manage and at time contentious

Option #1 Special assessment One-time assessment to raise $286,000 for fencing Cost to each Lot owner: $905 Requires 2/3 approval of all Lot owners (211 out of 316 lots) Advantages: –Immediately collects necessary funds –One-time expense (until next time needed) Concerns: –Very challenging to gain approval –Major expense during difficult economic times Note: Annual dues would still need to increase to $430 to start funding reserves for subsequent replacements.

Option #1 Special assessment One-time assessment to raise $286,000 for fencing Cost to each Lot owner: $905 Requires 2/3 approval of all Lot owners (211 out of 316 lots) Advantages: –Immediately collects necessary funds –One-time expense (until next time needed) Concerns: –Very challenging to gain approval –Major expense during difficult economic times Note: Annual dues would still need to increase to $430 to start funding reserves for subsequent replacements.

Option #2 Build reserves via fixed annual increase in dues Replace wood fencingReplace iron fencing Decreases to $430 the next year

Option #3 Build reserves via variable annual increase in dues Replace wood fencingReplace iron fencing

Split-cost model Split cost between HOA and each homeowner with fencing. HOA would fund its portion via dues or special assessment funding method. Each homeowner with fencing would pay their portion of the fence at the time of installation (percent to be determined). Pros HOA members pay less Those with fence pay their share for their part ownership Cons 22% homeowners pay 50% for fence that 100% enjoy Homeowner has no choice or control over their fence Difficult to manage (71 separate negotiations)

Your input

Election of Directors Conduct vote for each Director seat (pending quorum) –Seat 1: Steve Berch nominated –Seat 2: Kelley McGrath nominated –Seat 3: Michael Hudson nominated –Seat 4: Dana Wardein nominated –Seat 5: Sharlene Harvey nominated Select Officers and Committee Chairs –To be done at the April 19 Board Meeting

Open Discussion Comments Questions Concerns Ideas