Emerald Lakes Annual Meeting, August 19, 2017
by Kathy Leslie-Whelan
The meeting was called to order at 11:15 am, followed by the pledge of allegiance and board introductions.
Opening comments were made by Diane Caldwell, President. Caldwell read from Roberts Rules of Order and cautioned the membership that inappropriate language would not be tolerated. She stated that after meeting the new board would be going into a closed executive session. She announced that there were two open seats and that anyone running from the floor must register with the judge of elections. Caldwell reiterated her comments from her President’s message at the July open meeting. She stated that she met some good friends and members who have given of themselves. She further stated that she has seen the good, the bad and the ugly. (Editor’s note – in July open meeting this reporter noted that there was no comments for the ugly.)
The good is all of us. The bad is the challenges that we have i.e. falling infrastructure, roads. The ugly is the divide. She stated that it was disheartening that some only see what was done wrong and not recognize what was good.
Caldwell stated that there were challenges and something about integrity. She also stated that the board worked hard and the negative report card that was passed out at the front door was ugly, and she was critical of the negativity.
Caldwell thanked two board members, Bob Lauri and Buz Whelan, who decided not to run at this time.
Caldwell informed membership of major transitions. Judy Kennedy resigned as General Manager and was replaced by Laura Jones. Daryl Gamble was promoted to Chief of operations to keep things on track.
Caldwell stated that a wish list of items is just that. We have a dedicated group of people in community trying to accommodate others. Special events make adults and children happy. Other committees, such as Rules and Regulations, Real Estate and Finance and Planning, have volunteers that give up their time.
Caldwell ended her comments wishing everyone good health and that she will see us next year when she finishes out her term.
At this point in time Pat Galderisi asked if we had quorum and Caldwell stated yes.
Awards were given out as follows:
Steve Kavanagh – for Volunteer of the Year, presented by Buz Whelan. Penny Glassgow for Volunteer of Year, presented by Stephanie Johnson. Eileen Avrich was recognized for Lifetime Achievement, presented by Al Leslie.
Laura Jones was introduced and she stated she was happy to be here. Jones has been a property manager for 12 years, the last 8 at Penn Estates. She further stated that she was a candidate for this position back in 2013, but Preferred Management was hired. She decided to join them, so here she is today. Jones stated that she has driven on all roads in the community. She is a manager and not a miracle worker. Road work will be starting soon and we need a full road assessment. The Community Center needs work inside and out. Jones concluded her statement with that this is a great community, and she is glad to be here. She wants to make this a happy place to be here because it is the right thing to do.
George Hludzik was the first guest speaker to address the membership. Hludzik stated that we had a great fiscal year for collections of uncollected dues and that collections were up from last year. His firm collected close to $365K. Over the past 14 years over $3 million has been collected. Currently we have 22 counts filed in the county courts for members who are not current with dues. Hludzik further stated that last year he joined the Slusser Law firm and that 4 additional attorneys and a number of paralegal will be assisting with the collections of delinquencies. This firm will be identifying and removing all money that is on our books that is uncollectable. Uncollected monies could be from members that have died or moved out of state. Mr. Hludzik concluded with that he will continue to ensure that no delinquency is ignored. He looks forward to another banner year in collections.
Bill Owens, CPA opened up with our financial audit. Corporate reporting should be changed so that is more understandable. He favors a cash rather than accrual system for our revenue side. Our reserve reductions were due to roads, community center work and snow removal.
Owens explained the two resolutions:
Resolution # 1 Disposition of surplus funds. Currently the Association does not have surplus funds, but if we ever do, this resolution will allow our CPA to file our taxes in a way that is beneficial to the Association by taking certain tax breaks.
Resolution # 2 Apportionment of annual assessment. This resolution makes it clear to the IRS that the Association has authorized the board to split the dues assessment between the Operating and Capital budgets. Future invoices for annual dues of $1,000 will state $800 for operating and $200 for reserves. In addition, Owens answered a number of questions that were distributed at the front door.
- Is Association being audited by IRS? Not aware
- Is our current audit disclaimed or qualified? Unqualified
- What advice was given to Board through the Management Advisory Letter? Is this letter available to membership? – Board of Directors is already working on recommendations and it is up to Board as whether to release.
- In past fiscal years have there been any surplus funds and how were they handled? Cannot say since he was not our auditor at the time.
- In the past year what were the surplus funds? None
- What would be average refund from surplus funds? None
- Are surplus funds profits from rental income and not generated from over payments? Is the Association trying to hide profits from IRS? Is Association asking membership to sanction action? No on all counts.
- Regarding resolution # 1, do you intend to file form 1120 which allows an Association to defer taxes? No need, no tax consequences.
- Why is Association asking membership to permit Board to fund capital reserves when IRS prohibits this action? This rule deals with Condos.
- If membership chooses refund of their overpayment, how would it be handled? Complex issue. Funds would be better going toward capital since if it were to be distributed, members who didn’t pay their dues would receive a refund.
- If membership allowed Board to carryover surplus to next fiscal year, doesn’t this have an effect on being a pre-payment assessment? Will membership see a reduction in dues bill? Yes. It would show on statement
- How will Association prove that surplus funds are being carried over? Will we see if reflected on the assessment billing as a deduction? Not an issue this year.
- Must the Association ask the membership every year for their choice regarding surplus funds? No, it should not be necessary.
Pat Galderisi thanked Owens for being transparent.
(Editor’s note – Some questions above are not exactly how worded on hand out)
Stephania Johnson went on to Treasurer’s Report. Good news is that operations up from last year due to the collections of previously uncollected dues. Administration was over budget, Public Safety under budget, Maintenance over budget (due to storm) and Community Center under budget. Bar and Grill were over budget under CC.
Candidate speeches commenced at this point of the meeting. Three candidates spoke and the tallies will be reported at the end of this article. There were no candidates that ran from the floor.
While the votes were being tallied, questions that were submitted via index card and from the floor were addressed by Laura Jones.
One member asked if the Association would pay for car repairs since roads are in bad shape. Jones stated no, just like she will not be reimbursed if any damage to her car. Someone wanted to know about the financials and was told to look on website. One member requested that Saturday night bingo be moved so that the bingo room could be rented out. Another member inquired about the outside bathroom facility at the outdoor pool and what were the plans for replacing the structure. Jones stated that it depended on whether we have the money. Facility is still there since it houses all the filters, etc.
A question came up on a snow plan and will there be a person that will answer the phones. Jones stated that this was the biggest storm in 19 years and most HOA’s had problems with removal. She further stated that there was someone answering the public safety line. A question was posed on the POS system and what were the plans to get it operational, why weren’t proper permits obtained during renovations of the Community Center and why didn’t we follow ADA act. Jones stated she wasn’t here at the time so she could not answer so Brad Jones responded that at the time we were told that no permits were needed and that we only need an ADA facility at the maintenance area. A member stated that for storm prep a listing of members that are elderly and disabled should be identified and a list of pot holes should be maintained. Laura Jones stated that the pot holes change daily so it would be impossible to maintain list. One member stated that Classic Home Design does not pay dues or transfer fees, they build on wet lands and we give them free land. Jones stated that she believes they are paying. Paperwork has crossed her desk stating so. It was also bought to the attention of the membership that Classic Home Design advertises that ELA has no dues. Another member requested that the broken stop signs be repaired or replaced and finally a member stated that everyone should have a right to vote; please bring absentee voting back for a vote. (Editor’s note no Board member responded to the questions posed by its membership).
Voting was announced by Bill Owens our current CPA, rather than by the Judge of Elections, which has been a past practice. The results are as follows:
Board of Directors (2 open seats) – 109 valid votes cast
Dave Borsos 77
Jake Bower 67
Iretha Nalls 51
Resolutions – 102 valid votes cast
#1 65 yes 37 no (passed)
#2 71 yes 31 no (passed)