1. Forest Ridge HOA Semi-Annual Meeting
March 4, 2019
Forest Ridge HOA Semi-Annual Meeting

2. Agenda Call to Order Review Minutes/Finance from Previous Meeting
Police Report
General Board Overview
Meeting Re-formatting
Assessment 2019 Calculation
Ohio State Law 5312 Review

3. Agenda Committee Reports Communications Maintenance and Green Areas
Activities
Recreation and Pool
Assessment Evaluation Committee
Resident’s Questions and Concerns
Adjournment

4. Meeting Re-formatting
The intention of the new format is to allocate sufficient time for the board to do the necessary business that does not belong in a public format for legal reasons without taking additional time on weekends
Employee/ personnel matters
Contracts
Legal counsel
Private matters from residents/local officials
All these are regulations per Ohio Code B

5. Monthly Meetings
Per the bylaws, there is NO requirement for the monthly BOARD meetings to be public- it’s just “what’s always been done”
We feel that there absolutely needs to be a public forum, but that the time utilization is not efficient nor allocated to allow all interested parties to speak
The overwhelming majority of organizations do not require all business to be transacted in an open forum- we want to best serve the community in an efficient manner without redundancy and in a respectful and productive way.

6. Agenda- Open Meeting (3rd Monday of the month, 7-8 PM)
New policy as of 3/2019
Agenda- Open Meeting (3rd Monday of the month, 7-8 PM)
Review of previous minutes/financials- 5 minutes
Police reports (Dayton/Riverside) minutes
General Board business- 5 minutes
Committee Reports- 15 minutes
Greens
Communications
Recreation/Pool
Activities
Assessment Evaluation
Residents Open Forum- 30 minutes
3 minutes per person
Executive Session (immediately following at 8 PM, limited to Board members and involved parties)

7. General Board Overview-Assessment Calculation, Spring 2019
Memo, published 3/4/19 
PURPOSE: This memorandum outlines the FRA Board of Trustee’s interpretation of how Annual Assessments are determined in accordance with the FRA Amended Code of Regulations dated November 22, 2017.
DISCUSSION:
Article XII Section 3 states that the annual assessments or charges shall be established by the Board of Trustees and that the amount shall be based upon the anticipated operational expense for the ensuing year. Article XII then states in Section 9 subsection (b) subsection 1 and 2 that the board then can apply either CPI (Subsection 1) or above CPI by vote of the members as outlined in Subsection 2. Article XII Section C states that the annual assessment may not be set higher than the maximum.
The Board’s interpretation of Section 3 and Section 9 of Article XII is that the maximum is set by the Board of Trustees when they determine what the operational expenses are for the year as outlined in Section 3. Once the maximum is set, the Board can either apply CPI (to cover the cost of inflation for the year) as outlined in Subsection 1 of Section 9 or if the board wants funding beyond what is needed to meet operational expenses the board must go to the members as outlined in Subsection 2 of Section 9 for approval.
This rules interpretation was reviewed by the FRA Board of Trustee’s attorney, who determined it to be “defensible under FRA’s current Declaration/Code of Regulation and stems from a reasonable interpretation of its language on adjustment of such fees.”

8. Article XII, Section 3
Bylaws Article XII Section 3 states that the annual assessments or charges shall be established by the Board of Trustees and that the amount shall be based upon the ANTICIPATED OPERATIONAL EXPENSE for the ensuing year.

9. Assessment Calculation
2019 Operating Expenses
Assessment Calculation
GENERAL AND ADMINISTRATIVE EXPENSES
$63,340
ACTIVITIES COMMITTEE EXPENSES
$6,000
POOL EXPENSES
$108,290
GREEN AREA MAINTENANCE
$103,175
COMMUNICATIONS
$10,250
Total Operating Expenses
$291,055
TOTAL
Bylaws Article XII Section 3 states that the annual assessments or charges shall be established by the Board of Trustees and that the amount shall be based upon the ANTICIPATED OPERATIONAL EXPENSE for the ensuing year.

10. CPI
Bylaws Article XII then states in Section 9 subsection (b) subsection 1 and 2 that the board then can apply either CPI (Subsection 1) or above CPI by vote of the members as outlined in Subsection 2
December %

11. Calculation $291,055 Operating Expenses Add CPI @ 2.5% $7,276
Total Expenses with CPI addition=
$298, 331

12. Final Assessment- 2019
1123 Homes in the Ridge
$298, = $265.66
1123

13. “ I believe a 15% raise of the Association fees is defensible under FRA’s current Declaration/Code of Regulations and stems from a reasonable interpretation of its language on adjustment of such fees.”
Donald Rineer
Auman, Mahan & Furry, Attorneys on Retainer

14. Ohio (A)
(A) Unless otherwise provided in the declaration or bylaws, the owners association, through its board of directors, shall do both of the following:
(1) Annually adopt and amend an estimated budget for revenues and expenditures. ANY BUDGET SHALL INCLUDE RESERVES IN AN AMOUNT ADEQUATE TO REPAIR AND REPLACE MAJOR CAPITAL ITEMS IN THE NORMAL COURSE OF OPERATIONS WITHOUT THE NECESSITY OF SPECIAL ASSESSMENTS, unless the owners, exercising not less than a majority of the voting power of the owners association, waive the reserve requirement annually.
Effective 9/10/2010

15. Required Voting
A majority of the ownership’s voting power is necessary to waive the “fully funded reserve” requirement, and the vote for waiver must be taken each year.

16. Using Ohio Revised Code Section 5311.081(A)(1) as an example
(A) Unless otherwise provided in the declaration or bylaws, the unit owners association, through the board of directors, shall. . .
(1) Adopt and amend budgets for revenues, expenditures, and reserves in an amount adequate to repair and replace major capital items in the normal course of operations without the necessity of special assessments, provided that the AMOUNT SET ASIDE ANNUALLY FOR RESERVES SHALL NOT BE LESS THAN TEN PERCENT OF THE BUDGET FOR THAT YEAR unless the reserve requirement is waived annually by the unit owners exercising not less than a majority of the voting power of the unit owners association;

17. Using 5311 as an example for the 10% minimum requirement
“provided that the amount set aside annually for reserves shall not be less than ten percent of the budget for that year.”  
THIS LANGUAGE DOES NOT STATE THAT A BOARD WILL BE IN COMPLIANCE WITH THE LAW IF IT BUDGETS TEN PERCENT (10%) OF ITS TOTAL BUDGET FOR RESERVES.  
Rather, the law sets the minimum reserve as “an amount adequate to repair and replace major capital items in the normal course of operations without the necessity of special assessments.”  
The ten percent (10%) language applies only when the “adequate” amount is less than ten percent (10%) of the association’s total budget.
Source:

18. Using 2019 and the 10% requirement from as an example, the operating expenses were $291,055 before applying CPI
$29,106 per year into reserve fund
The 2019 Budget allocated $6500 into the reserve. **HAD WE TAKEN THIS 10% REQUIREMENT and put the full $29106 , THE ASSESSMENT WOULD HAVE BEEN
$279.31

19. Reserve Studies
The recommendation for determining the required amount to be maintained in the reserve fund is for a reserve study to be commissioned (ours was done in 2017)
“Compliance with the law means avoiding liability.  The easiest way for the board to avoid liability is to obtain a professional reserve study; immediately share the results of the reserve study with all owners and either: 1) adopt a budget that is in accordance with the reserve study recommendations or 2) obtain a majority vote of the ownership waiving the reserves requirement for that particular year.”

20. The Decision to Remain “Underfunded”
“Under-funded” reserves exist when the budgeted amount for reserves is not enough to accumulate enough money over time to cover the cost to repair or replace an item without the necessity of a special assessment.  In this circumstance, owner votes waiving the reserve requirement must be taken.… if the unit owners are voting each year to “under-fund” the reserves, a special assessment will be no surprise. 
Source:

21. Committee Reports Communications Maintenance and Green Areas
Activities
Recreation and Pool
Assessment Evaluation Committee

22. 2019 Activities Calendar Spring Easter Egg Hunt 4/13/19 (Sheds)
Easter Egg Hunt 4/13/19 (Sheds)
Memorial Day Pool Opening/ Food Truck Rally 5/27/19 (Pool field)
Garage Sale 6/22/19 (Boulevard)
Summer
July 4th Party 7/4/19 (Pool)
Pool Raft Party 8/10/19 (Pool)
Labor Day Party/ Pool Movie Night 9/3/19 (Pool)

23. 2019 Activities Calendar Autumn
Halloween Hayrides 10/21/19-10/23/19 (Sheds)
Fright Night 10/25/19 (Sheds)
Halloween Parade 10/26/19 (Gazebo)
Give Back Thanks 11/10/19-11/17/19 (TBD)
Winter
Christmas Light Fight Preliminary Judging 12/16-12/18, Online judging 12/20-12/22 (TBD)
Christmas Party 12/14/19 (Sheds)

24. Questions and Concerns
Resident’s
Questions and Concerns
Ask away!