Draft minutes not yet accepted by the members of the ... · should read “…that people on the Mountainside have expended $3,000 per unit which precludes LPOA from any additional…”

Draft minutes not yet accepted by the members of the Association

LINDERHOF PROPERTY OWNERS ASSOCIATION

37th ANNUAL MEETING

MAY 28, 2016

MINUTES

Directors/Officers Present: President: Jeff Bailey, Golf Course Vice President: Peter Curro, Golf Course Treasurer: Vacant Secretary: Erik Corbett, Golf Course Directors Present: Chalet: Colin McCarthy, Jack Sullivan, Dave Henry Golf Course: Dawna Dewire, Paula Graham, Mountain Condo: Richard Augustine, Sheldon Kaplan, James Marques Directors Absent: Chalet: Mary Bennett Mountain Condo: Larry Johnson, Ellen Bates Others Present: Christine Conti, Business Manager Joe Russo, Operations Supervisor

Holly Meserve, Recording Secretary

Mr. Bailey welcomed everyone to the 37th Annual LPOA meeting, declared a quorum, and opened the meeting at 10:03 am.

Mr. Bailey asked for a moment of silence to remember those who gave their lives in service to our country and also those who we have lost from the Linderhof community. Mr. Bailey stated that Bill O’Rourke, a longtime Linderhof resident, passed away this year. Mr. Bailey asked if anyone had someone they would like to mention. There was no response from the audience. Mr. Bailey thanked Christine Conti for organizing the meeting, and Lucille Russo, Kathy Vines, and Barbara Sullivan for volunteering for check-in. Mr. Bailey stated that he has been a member of the LPOA Board for 6 years and is now retiring at the close of this meeting. Mr. Bailey introduced the Board members present and thanked them for their service to LPOA. Mr. Bailey stated later today members will be electing new directors to the Board and if you don’t consider running this year please consider it for future years.

Mr. Bailey next introduced Christine Conti, LPOA Business Manager; Joe Russo, Operations Manager; Arlean Day, Night Operations, and Recording Secretary, Holly Meserve.

Mr. Bailey next set forth the ground rules by which the meeting would be run. There were no questions from the members present. NOMINATION AND ELECTION OF DIRECTORS

Draft minutes not yet accepted by the members of the Association Minutes of LPOA 37th Annual Meeting – May 28, 2016 - DRAFT Page 2


Mr. Bailey stated there are two openings available on the Golf course. Mr. Bailey stated Paula Graham has submitted her name for election. Mr. Bailey asked for nominations from the floor. Ms. Graham nominated Ed Kehoe of S10. Mr. Kehoe accepted the nomination. Joe Cooper of H7 nominated himself. Mr. Bailey stated there are three candidates for two openings. Mr. Bailey closed nominations for the Golf Course. Mr. Bailey stated there is one opening for the Mountain Chalets. Mr. Bailey stated one candidate has been nominated: Robert Marston. Mr. Bailey asked for nominations from the floor; there as none. Mr. Bailey closed nominations for Mountain Chalets. Mr. Bailey stated there are two openings for Mountain Condos. Mr. Bailey stated Sheldon Kaplan and James Marques have submitted their names in nomination. Mr. Bailey asked for nominations from the floor; there as none. Mr. Bailey closed nominations for Mountain Condos. Ms. Dewire stated the nominations for Mountain Condominiums and Mountain Chalets are uncontested and elected to the Board. Ms. Dewire stated there needs to be a vote for the Golf Course. Mr. Cooper stated he thought there were three openings and he is ok with Ms. Graham and Mr. Kehoe; Mr. Cooper withdrew his nomination. Ms. Dewire stated that Ms. Graham and Mr. Kehoe have been elected to the Board. ACCEPT MINUTES OF MAY 23, 2015 ANNUAL MEETING

The LPOA Annual Minutes of May 23, 2015 should be amended as follows: page 3, paragraph 3, line 1, should read “…that people on the Mountainside have expended $3,000 per unit which precludes LPOA from any additional…”. Mr. Curro made a motion, seconded by Mr. Henry, to accept the Minutes of the LPOA annual meeting of May 23, 2015 as amended. Motion carried. There was discussion regarding the Annual Meeting minutes being sent out sooner. It was determined that they usually go out in the Fall, but that did not happen this year. REPORT ON THE STATE OF THE ASSOCIATION

Mr. Bailey stated it has been a busy year for the Board; newly elected President, Jim Maxon, resigned from the Board in August as did appointed Chalet Director, Magie Driscoll. Mr. Bailey stated a call to the membership resulted in new members, Dave Henry, Richard Augustine, Ellen Bates, Mary Bennett and James Marques. Mr. Bailey stated John Cliffe resigned and Dawna Dewire was appointed to the Board. Mr. Bailey stated there were new plowing contractors this year; with a fairly mild winter, and speaking with Mr. Russo and the Call Center, there does not seem to have been a great deal of problems. Mr. Russo stated there is one more year on their contract before renewal. Mr. Bailey stated that the Architectural Committee has been busy on the Mountainside. Mr. Bailey stated there has been new construction and change submissions. Mr. Bailey stated that Mr. McCarthy has been busy; and the Board has been continuing to work on enforcing the guidelines. Steve Murphy, of 77 Ludwig Strasse stated he was not satisfied with the plowing contractors; the front of his place was jagged with snow sticking out and snow was pushed further in the driveway on either side. Mr. Bailey asked if he notified and/or spoke to Mr. Russo. Mr. Murphy stated he spoke with Mr. Russo once and was told it would be cleared up, but it was not done.



Mr. Bailey turned the meeting over to Ms. Graham, Chair of the Water Committee, for status of our water systems. Ms. Graham stated construction will be coming to an end and they will be starting to put everything back together. Ms. Graham stated they are a hard working crew, kind to the elderly people, and swept the road after. Ms. Graham stated we have not received any complaints. Art Cahalane of 55 Ludwig Strasse stated he has had a bucket in his yard for six months. Ms. Graham stated she would contact Gary Chandler at LBWP Monday morning. Mr. Kaplan asked if they have had a chance to fix lower Linderhof Strasse. Ms. Graham stated she doesn’t believe it is part of this project, but she would contact the Town. Doreen Howell of 21 Graz Place stated she had a water bill that was over $200, but they still don’t have water. Michelle Leahy of 14 Wilhelm Place stated there was a culvert at the end of their driveway that was not put back; they did call LBWP, but their fix is not working. Ms. Graham stated she would speak with them on Tuesday as Monday is a holiday. ELECT ACCOUNTING FIRM

Mr. McCarthy moved, seconded by Kathy Vines, to elect the firm of Leone, McDonnell & Roberts PA as the Association’s accounting firm, to perform an Audit of the Association’s Financial Statements, as recommended by the Board of Directors. Ed Kehoe of Sandtrap Loop stated he thinks an audit is a waste of money. Mr. Kehoe made a motion, seconded by Mr. Collins, to amend the motion to a review and not an audit. Mr. Henry stated no one can remember when the last audit was done; an audit also reviews procedures and makes recommendations. Mr. Henry stated it is important that the recommendations by the accounting firm be followed; you have a fiduciary duty to do what you’re supposed to do. Mr. Henry stated he’s not suggesting an audit every year, but he feels the recommendations from the auditing company are important. Mr. Henry stated we are responsible, and we need to know where the errors are. Mr. Bailey stated there have been no errors in the reviews at all. Mr. Bailey stated what they do put in the review every year is that we have not been putting enough money away for roads, water systems, etc. Mr. Collins asked Mr. Henry if there are any other inconsistencies. Mr. Henry stated that he stands on the recommendations; and he does not recall any off-hand. Carol Eaton of 11 Ludwig Strasse stated she is surprised that our rules do not require an audit. Mr. Bailey stated we do not have any requirement for an audit, only a review by the accounting firm that we elect. Doreen Kaplan of Summit 8-B3 stated Mountain Condominiums Association updated their Bylaws and it was recommended by the Attorney that an audit be done every three years. Ms. Eaton stated it is responsible practice. Ethan Britland of Summit 5-6 asked if there is a $5,000 difference between a review and an audit, or is the audit $5,000 total. Mr. Bailey answered it is the approximate difference. Mr. Britland stated an audit is done by most businesses and just makes sense to have it done on a regular basis. Mr. Augustine stated we don’t have anything to compare it to and it is usually required periodically; since we haven’t had one in so long it should be done so we have a base line. Mr. Bailey read Article 6.5 of the Bylaws. Paul Mayer of S2, S4 and S5 on the Golf Course stated the additional $5,000 should be put in the reserve funds as recommended by the accounting firm rather than conducting an audit. Mr. Bailey stated there is a motion on the table to amend the motion from an audit to a review. Motion to amend was defeated.



Mr. Curro made a motion, seconded by Ms. Graham, to accept the audit and a recommendation to the board as to a policy on an audit versus a review. Motion carried. REPORT ON THE FINANCIAL STATUS OF THE ASSOCIATION

Peter Curro, Vice President, stated the current situation of the LPOA financials is in good shape; third quarter has a small surplus and we are running near or on target for expenses, and $11,000 from surplus were transferred over to general reserves. Mr. Curro stated cash is a bit lower than previous years, but Ms. Conti has assured him that it is not a concern at the moment. Mr. Curro reviewed the Income Statement and stated that other income is about $12,000 higher, and Administration is running on target. Mr. Curro stated Trash Collection has increased due to ongoing violations, and the Board has wrestled with this. Mr. Curro stated there is a significant increase for water testing on the Golf Course side to make sure the water was usable and drinkable. Mr. Curro stated the financials are in good shape. Joe Fitzpatrick of Sandtrap Loop asked, in regard to the enforcement on trash, if there were any photos taken. Mr. McCarthy stated we have, and we have been successful in prosecuting in small claims court. Mr. McCarthy stated there has been a lot of turnover in Chalet and Condo ownership, which has increased the usage of the dumpsters. Mr. McCarthy stated they are putting the burden on the Association instead of driving to the Transfer Station. Mr. McCarthy stated if you are cleaning out a unit or have bulky items you wish to get rid of, it is free through the Transfer Station; however, there is a fee for couches and televisions. Mr. McCarthy stated if you are trying to get rid of a truck load, take it up to the transfer station rather than to the dumpster. Mr. McCarthy also congratulated Mr. Russo for negotiating the contract price down with Waste Management. Mr. McCarthy stated if there is something other than household trash in the dumpster, Waste Management stops the dumping, puts on a Tyvek suit to remove whatever is not household trash, and charges us for hazardous waste. Meredith Atwood of Bunker Lane stated the Transfer Station is very user friendly, and asked if obtaining a permit from the Transfer Station has been mentioned in the newsletter. Mr. McCarthy stated it has been done in the past, but we can do it again. Mr. McCarthy stated we send Welcome Packets to new owners and there is information regarding the Transfer Station in it. Ms. Atwood suggested asking Building Presidents to remind residents. Mr. McCarthy agreed. Mr. Shagory of 53 Ludwig asked if a balance sheet could be sent so we can see the reserves and know the gross amount in reserves for water, roads, etc. APPROVE AN EXPENSE BUDGET IN THE AMOUNT OF $368,550

Mr. Curro stated this agenda item proposes a $368,550 annual assessment for fiscal year July 1, 2016 thru June 30, 2017 with the main increase being in the reserves. Mr. Curro stated that roads were increased to $23,000; looked at the annual cost for crack sealing and seal coating, which would be $20,000 over four years. Mr. Curro stated the cost was estimated out for 20 years for the road around the golf course and the roads on Mountainside. Mr. Curro stated the road around the loop on the Golf Course is in good shape and does not require reconstruction if we keep up with seal, shim and over coating. Mr. Curro stated the roads for the Mountainside would require a total reconstruction at about $200 a foot; he used $100 a linear foot for 20 years.



Mr. Curro stated the game plan is in 20 years we will have the money to do the roads for Mountainside and the roads on the Golf Course side. Mr. Curro stated they would narrow down what actually needs to be done in 10 years, and once we get close to the date we would have an engineer review to determine how much money would be needed in 3 to 5 years. Mr. Curro stated that is the plan for the money in the reserve budget for 2016-2017. Ms. Conti stated to clarify, LPOA owns very few Mountainside roads. Mr. Curro stated the roads we all see, 99% of them are public roads; there is approximately 2,000 linear feet that LPOA is responsible for. Mr. Russo reviewed the roads owned by LPOA. John Jakutis of F9 on the Golf Course asked if there was any kind of plan for the parking lot by the dumpsters. Mr. Bailey stated the parking lot belongs to the Country Club. Mr. Jakutis stated the resurfacing of that area should be an LPOA expense and not an LCC expense. Mr. Bailey stated we have already been over this. Mr. Curro stated there is no money in the reserves for the parking lot area. Ms. Dewire moved to accept the budget as presented. There was no second. Mr. Augustine moved, seconded by Mr. Kaplan, to delay voting on the budget amount until after the vote on agenda item #8 (assessment for unimproved lots). Mr. Augustine stated item #8 can affect income coming in and can affect the budget. Ms. Dewire stated item #8 does not affect the budget expenses. Mr. Curro stated the items following the budget do not affect the budget; you are voting on an operating budget and the items coming after are separate articles for assessment only and has nothing to do with the operating budget. Shawn Collins of Bunker Lane stated item #7 (water usage fee) is not in the budget; if voted down it does not have an effect. Mr. Augustine stated if it goes into the budget it impacts the budget. Mr. Collins stated his thought is if it passes you will add that amount to the budget. Ms. Dewire asked isn’t that what item #7 already says. Ms. Kaplan stated you’re saying operating budget, but talking about reserves, and it would still be part of the budget. Mr. Curro stated the $208 is not a part of the operating budget; the reserves for restricted water are part of the general assessments. Mr. Curro stated if item #7 passes an additional amount of money will be asked. Mr. Cooper stated there are other issues that will impact the budget. Mr. Curro stated the budget asked to be voted on is for $368,550; if item #7 passes it is an assessment and does not change the budget to operate LPOA. Mr. Collins asked if item #8 is an income projection of $100 for unimproved lots. Mr. Curro answered in the affirmative. Mr. Collins asked if it is built into the budget. Mr. Curro answered in the affirmative. Ms. Kaplan stated if the $208 water usage fee passes, it will be additional revenue. Ms. Dewire stated this is an operational budget that is divided equally among all members; item #7 indicates it will be added as appropriate. Motion carried. APPROVE AN ANNUAL WATER USAGE FEE OF $208 FOR GOLF COURSE CONDOS Mr. Bailey stated this is an annual usage fee for golf members. Mr. Augustine moved, seconded by Mr. Kaplan, to amend item #7 (water usage fee) from $208 to $540. Mr. Augustine clarified that he was speaking as an owner and not a Board member and read a statement (which is included as Exhibit A). Mr. Collins stated to clarify past practice, at least in the last number of years the Board made the change, we have been paying different assessment amounts whether you lived on the Mountainside or on the



Golf Course side. Mr. Collins stated the difference in those assessment amounts were the items Mr. Augustine referred to in his statement. Mr. Collins stated an effort was made by past boards to create some equity and provide a solution. Mr. Collins stated it appears that the Board has chosen to go back to an equal assessment so people on the Mountainside pay the same assessment amount as on the Golf Course side. Mr. Collins stated Mr. Augustine’s statement that the Board has been making no effort is not true with respect to recent years. Mr. Collins asked Mr. Augustine if he realized last year that he paid an assessment that was less than the golf course; and included in that assessment were direct expenses for things like street lights on the Mountainside. Mr. Collins stated the Golf Course owners, in fact, contrary to your statement, paid for the testing of the water system, the electricity for the water system and paid for the contract with FX Lyons on their own. Mr. Augustine stated he was aware of the fact that there are some items they have paid for. Mr. Kaplan stated he lives on Mountainside and in previous years the $57 extra is what each member on the Golf Course paid for testing of the water and the electricity. Mr. Kaplan stated two years ago a pipe broke on the Golf Course, which cost $20,000 to fix and we all paid that money to fix the pipe. Mr. Kaplan stated we are paying $600 per year for water on one side and $57 per year on the other side. Mr. Kaplan stated last year we put $10,000 in reserves and now it’s $5,000 for maintenance, $5,000 for unrestricted reserves, and $10,000 for reserves; that’s $20,000. (Note of clarification, last year’s budget also included $5,000 for maintenance and $5,000 for unrestricted reserves as well as $10,000 in restricted reserves. The budgeted amounts were the same for 2015-2016 as proposed for 2016-2017.) Mr. Kaplan stated every member pays a portion of that $20,000 so if you want to be fair and equitable, how is $57 versus $600 fair and equitable. Mr. Kaplan stated the $210 annually paid for water as part of the assessment of on a mountainside property, that doesn’t go to the Town that goes to Lower Bartlett to fix pipes and to run their operation. Mr. Kaplan stated where else can you get a service and pay almost nothing for it. Mr. McCarthy stated as an Association we have issues; we have an issue with reserves and we have to come up with a solution collectively. Mr. McCarthy stated we have not had enough reserves to do the roads; every time we go to seal coat you get an extra $50 in your assessment. Mr. McCarthy stated we should have that money in reserves. Mr. McCarthy stated the water system is a 35-year, contractor grade system; it’s not cast iron, but PVC and the pipes are not down in the ground six-feet. Mr. McCarthy stated it cost $15 million on the Mountainside to put in legitimate piping, fire hydrants, a new water tank and fire suppression; we also need to do the same on the Golf Course. Mr. McCarthy stated we need to do something for the Golf Course water system, as Lower Bartlett Water Precinct will never buy another water system, for the safety and wellbeing of everyone. Ms. Graham read from a letter she had received from Gary Chandler of Lower Bartlett Water Precinct which states they would never buy another water system to support Mr. McCarthy’s statement. (See Exhibit B) Mr. McCarthy stated we continue to have violations on the Golf Course water system; the system is dying and we need to start replacing it. Mr. McCarthy stated we are about $1 million shy of replacing that whole water system. Mr. McCarthy stated we are trying to do grant writing to receive money from the State of New Hampshire and the Federal Government, just like the Mountainside, to come up with a plan to replace the water system on the Golf Course and off-set costs. Mr. McCarthy stated we have $30,000 in the bank right now to cover the golf course water system, but it would cost approximately $1.2 Million if it had to be replaced tomorrow, which he understands it is not going to be replaced all at once. Mr. McCarthy stated we need a game plan, we have to come up with a solution, and there is no right for wrong answer other than doing nothing.



Andrew Dewire of D-12 on the Golf Course stated he is not a customer of the water system, but an owner; and how can you charge him for something he already owns. Ms. Graham read from the 1979 bankruptcy document (Exhibit C) stating that LPOA was granted the infrastructure, the water rights and the water. Mr. Augustine replied that Mr. Dewire was not being charged for water per se, but for delivery to his unit and pointed out that the $580 was going solely into restricted water reserves for system replacement. Mr. Kaplan stated we own the water too, but cannot use it. Ms. Graham stated on the Golf Course side our assessment paid for the road work on Mountainside and we could have voted not to contribute. Ms. Graham stated we applied for a grant this year to find the location of the pipes; we did not get it because we did not have as-built plans as the State of New Hampshire did not approve the layout. Ms. Kaplan referred to a copy of a preliminary opinion given to them by Gary Chandler of the Lower Bartlett Water Precinct yesterday. Ms. Kaplan stated it is the probable cost if you hook up to Lower Bartlett Water Precinct; $1,410 instead of worrying about wells going bad and this way you would be part of the water system. Ms. Kaplan stated it should be given serious consideration. Mr. Shagory stated when Mountainside had to replace the pipes, we on the Mountainside paid for it only. (Point of clarification, all LPOA members paid to replace pipes on the Mountainside prior to their water system being sold to LBWP) Mr. Shagory asked if the Golf Course water system fails, who is responsible for paying for it. Mr. McCarthy stated if the water system fails on the Golf Course and there are no reserves, everyone will pay to repair it. Mr. Shagory stated but it is on the Golf Course side and they did not run to us when we had an issue. Mr. McCarthy stated it is an asset owned by all of us. Mr. Shagory stated the Golf Course side did not rush to our aid. Mr. McCarthy stated the wells on Mountainside had many issues; and we as a collective group decided to sell it for a $1. Mr. Shagory stated on Mountainside we exclusively paid for it. Mr. McCarthy stated we are trying to find a solution to a problem we have right now. Mr. Shagory stated the proposal should be if we paid for Mountainside ourselves then the Golf Course should pay for the Golf Course themselves. Mr. McCarthy stated that is what Mr. Augustine is suggesting. Mr. Curro asked if back then, when the decision and discussion regarding water on Mountainside took place, the decision was to dig two wells who would have paid at the time. Mr. McCarthy answered all of us. Mr. Curro stated Mountainside contracts its water with a public entity, and Articles of the Association deal with assets owned by LPOA. Mr. Curro stated in fairness this issue is an LPOA issue because the water system on the Golf Course is an asset that is owned and operated by the Association. Mr. Curro stated Mountainside members have a contract with Lower Bartlett Water Precinct; and that aquifer is protected by the State, you cannot give it away to Lower Bartlett Water Precinct. Mr. McCarthy stated the State of New Hampshire and the Federal Government do not like private water systems; and it will become more difficult as the years go on for us to maintain those wells. Mr. McCarthy stated we will probably have to hook up to Lower Bartlett Water Precinct; they will sell us water, hook up to our pipes and pump us water. Mr. Kehoe stated they have no intention of ever doing that. Mr. McCarthy stated they will and we have it in writing. Mr. McCarthy stated we need to upgrade the system, we need cast iron pipes and we need fire hydrants. Mr. McCarthy stated we have leaks; the pipes are not down six-feet. Mr. McCarthy asked how are we going to raise a million dollars to replace the system; we should divide every water bill equally as they are going to go up on the Golf Course side. Mr. McCarthy asked if there were any other solutions. Irma Zarinsky, Golf Course condo stated she has lived here since 1983 and over the years everyone on the Golf Course paid for the water system through our dues. Ms. Zarinsky stated there is an unfairness with the system and we have all operated on paying for everything here.



Mr. Augustine stated that he conducted a study of the assessed values of golf course and mountainside units using town tax records. Gary Chandler provided him with the LBWP formula. Using that formula, the current average annual water cost for per mountainside property is $668 (collectively $156,204). If the Golf course members received their water from LBWP, it would be $561 annually ($65,018 collectively). Mr. Augustine stated he dropped it to $540 as it was easily divisible by four. Mr. Augustine stated Mr. Chandler has said he would deliver water to the 118 properties, and there wouldn’t be a bulk charge. Mr. Augustine stated there is a $1,410 hook up charge, and they would use the same formula to charge them. Mr. Augustine stated they are never going to buy the piping system; the pipes will always be LPOA responsibility. Mr. Augustine stated Mr. Dewire has stated we own the system, but if we all own the system what gives you the right to give my portion away for free. Mr. Augustine stated it is not as simple as I own it I get it. Mr. Collins stated item #7 (water usage fee) is a flat fee to be assessed to the Golf Course members that will be added to a budget shared by LPOA; the operational budget of $368,550 which results in an assessment of $1,020 to each and includes money for restricted and unrestricted water. Mr. Corbett left at this time. Mr. Collins stated that he wants to be clear on what we are being asked to vote on. Mr. Augustine stated the $208 is not part of the budget, it is a common fee for the Golf Course side. Mr. Collins stated the budget has contributions to the Golf Course water system for both restricted and unrestricted. Mr. Collins stated if the $208 passes everyone is paying an equal share of the total operation of LPOA. Mr. Collins stated if something happens to that water system tomorrow all owners will be given a special assessment. Ms. Graham stated just this year. Mr. Augustine stated of $540, yes, while we look into it and try to resolve for next year. Ms. Graham stated it would be a special assessment. Ms. Graham stated we need to work together for a solution. Mr. Kaplan stated to clarify, Mr. McCarthy has worked very hard on this and we agree something needs to be done, but the question is who is going to pay for it. Mr. Cooper stated that it says “annual”. Mr. Cooper stated we pay an additional $24,000 for plowing on the Mountainside, and the Golf Course helps to pay that additional money; we have been helping the Mountainside with plowing for years. Mr. Cooper stated if you want to build up the reserves, spread it out equally. Mr. Bailey stated we are not talking as though it will fail tomorrow, we might have to replace pipes and such, but we are talking like it’s going to implode. Mr. Bailey stated the Board has been dealing with this over the past year, and he would direct the new Board to look at the equitable distribution of cost for LPOA and come up with something for next year’s annual meeting. Mr. Bailey called for a vote. Mr. Augustine stated the motion is to approve an annual usage water charge of $540 for the golf course condominiums to be added to the annual fee and to be paid quarterly or annually with the same late payment fees. Mr. Curro stated this went from a one-time fee to an annual fee. Mr. Augustine stated this figure is to approve the $540 charge only for the 2016-2017 budget. Ms. Kaplan stated that it states annual, not one-time. Mr. Cooper asked if it would then require a special meeting and re-notification as the general membership is under the impression that it is an annual fee of $208 which is now proposed to be a $540 annual fee. Mr. Cooper stated the proxies believe they are voting on an annual $208 fee. Mr. Collins stated if there is a motion to amend, and not a whole



replacement of the item as that is not allowed, a motion to change some of the language, then it can be voted on first and everyone present with a voting card or proxy can vote because the item has been amended. Mr. Collins stated we have to clarify so that it is not ambiguous. Mr. Collins stated he shares Mr. Cooper’s concern as there has been a lot of last minute scrambling to get a handle on this, and it is awkward to digest without any notification. Mr. Augustine stated the motion is for annual; the only change would be from $208 to $540. Mr. Collins stated just so everyone knows what they are voting on, you vote on the motion to amend first, if that passes you then vote on the amended motion. The motion to amend carried. There was concern on how the motion passed when there appeared to be more votes in the negative then the positive; it was determined that Mr. Augustine held 94 proxies and was voting in the positive. Mr. Augustine moved, seconded by Ms. Kaplan, to approve an annual water usage fee of $540 for Golf Course Condominium owners, payable in full or quarterly and is subject to the same late payment penalties as item #10 on the agenda. The Motion passed. APPROVE ANNUAL ASSESSMENT FOR ALL UNIMPROVED LOTS

Mr. McCarthy moved, seconded by Ms. Dewire, to approve an annual assessment for $100 for all unimproved lots of $100 to be billed in the first fiscal quarter with late penalties to be the same as improved lot owners. Motion passed. APPROVE AN EXPENSE BUDGET IN THE AMOUNT OF $368,550 CONTINUED

Mr. Augustine stated the new budget amount would add $540 times 118 owners equals $63,720, which comes to $432,270. Mr. Augustine moved, seconded by Mr. Shagory, to amend the budget to $387,248. Mr. Augustine stated placing a lot of money in reserves puts it in great. He added that the Mountainside owners are in such disapproval of LPOA and understand that there is a NH regulation that states that only 25% or 90 members are needed to submit a motion to Superior Court to dissolve the LPOA. Mr. Augustine stated that Mountainside should not be putting money into reserves. He would be surprised if LPOA was in existence in a year. Mr. Collins asked if he is making a motion to change the aggregate amount without detailed reductions. Mr. Kaplan stated there is a lot of dissatisfaction, and if we are not going to be here why put money into reserves. Mr. Collins stated we just voted to charge the Golf Course members $540 and those dollars have to go somewhere; how can you reduce amount. Mr. Augustine stated he is suggesting removing $45,000. Mr. Collins asked if the amount of people in the room have an impact on Mr. Augustine’s proxies; if he himself has more votes than what is in the room than this is a moot point. Mr. Augustine withdrew his motion. Mr. Augustine moved to amend the budget to $407,270. Mr. Augustine stated it reduces it by $25,000 in road reserves. Mr. Collins stated as a Director you have one vote and you have an individual vote, but he owns enough proxies to do whatever he wants. Mr. Collins stated you don’t want money in reserves, but you voted for restricted water reserves. There was no second. Mr. Augustine moved, seconded by Ms. Graham, to amend the budget to $432,270. Motion carried.



APPROVE AN ANNUALASSESSMENT AS DETERMINED BYTHE BUDGET APPROVED FOR ALL IMPROVED LOT OWNERS Mr. McCarthy moved, seconded by Ms. Vines, to approve an annual assessment of $1,020 as determined by the budget in item 6 for all improved lot owners, for the fiscal/operational year, payable in full or quarterly. Motion carried. APPROVE A LATE PAYMENT PENALTY OF $25

Mr. McCarthy moved, seconded by Mr. Kaplan, to approve a late payment penalty of $25 per quarterly billing after 30 days and 1 ½ % interest compounded monthly after 60 days (18% per annum) to be assessed on unpaid balance. Motion carried. ANNOUNCEMENT OF ELECTION RESULTS

There were no contested races; Paula Graham and Ed Kehoe were elected as Directors for the Golf Course; Robert Marston was elected as a Director for Mountain Chalets; and Sheldon Kaplan and James Marques were elected as Directors for Mountainside Condominiums. OLD BUSINESS

There was no old business discussed. NEW BUSINESS

Mr. Bailey stated Andy Dewire has submitted a request to the Board to determine if the water usage fee is legal and, feeling that the LPOA is not effective, the member wanted to know if and if so how LPOA could be reorganized. Mr. Bailey stated he is instructing the new Board to form a committee to look into these items and come up with recommendations to present at the annual meeting next year. ADOURNMENT At 1:31 p.m., Mr. Curro moved, seconded by Ms. Dewire, to conclude the meeting. Motion carried. Respectfully submitted, Holly Meserve Recording Secretary



Exhibit A Statement read by Richard Augustine (referenced on page 5)

Water Billing

I wish to clarify that I’m speaking to you as an owner and not as a Board Member.

This agenda item is an attempt to begin dealing with a long standing, unfair, inequitable ‘Water Cost Issue’. Unfortunately, it has become an emotional one.

Discussion & decision should be based upon fact, fairness, equity and reason.

It should not be based upon what any member, group, or for that matter what all members want. It should be based upon what our Articles of Association and our By-Laws require. Either that or these documents should be amended, but not illegally ignored.

FACTS

So let us first look at the facts surrounding the Water Issue.

Association Article II, entitled PURPOSE, states that purpose to be “. . . to promote the health, safety and welfare of owners of property . . .” located within the Linderhof resorts.

Sub-Article (b) thereunder allows the LPOA: “To provide or cause to be provided to its members such services as the members may request, including but not limited to: security; garbage and trash collection; maintenance and plowing streets, parking lots and driveways; and water, sewage and other utility services (not prohibited by law).

Sub-Article (i) thereafter authorizes the LPOA: “To make & collect assessments against members to defray the cost, expenses & losses of effectuating and accomplishing the services set forth . . .”.

Sub-Article (j) however, limits LPOA’s authority by stating LPOA actions:

Must be permitted by law, and that they

Will promote the common benefits & enjoyment of the residents of Linderhof Resorts.

Looking at the period 1982 to 2006, LPOA operated within the confines of the foregoing.

All members received household water directly from LPOA; o Golf Side Members from a well(s) located nearby, and o Mountain Side Members from a well(s) on the opposing hillside along Route 16.

Costs to operate both systems were shared equally via dues assessment of all members.

Unfortunately, Boards of Directors failed to responsibly fund reserves to cover depreciation and to ultimately replace either of the two water systems.

Between 2000 – 2004, the Mountainside System began failing. With inadequate reserves, an inability to borrow & pressure from New Hampshire Governmental entities, LPOA sold the Mountainside Water System to the Lower Bartlett Water Precinct (LBWP) for $1.

In 2004, after each Mountainside member agreed to pay a $3,000 connection fee (total cost for our current 234 members was $702,000); these members began receiving water from the LBWP.

The average cost to each of these Mountainside members (consumers) is over $600 annually and has



risen since initial billing. The average, annual cost this year for each Mountainside member will be $668 & the gross cost of water for these same members will total $156,204.

Summing up the 2006 – 2016, 10-year cost for Mountainside water, using an average, annual cost of $600 per member & adding the $3,000 connection fee, the current 234 LPOA Mountainside members have paid the LBWP a total of $2,106,000 for water!

Since 2006, 10 Boards of Directors failed to change the formula used to fund the remaining LPOA water system, serving only 118 members. They failed to differentiate between Member / Owner rights and consumer responsibilities. Ownership or membership does not entitle anyone to free water. Think it does? Where does it state that in our Articles of Association or our By-Laws? It does not!

Because of Board action or inaction, the 118 Golf Side consumers have never received a water bill. Hence, AS CONSUMERS, they paid NOTHING FOR WATER SERVICE.

Now some say that is not true. Well, let’s explore that claim!

Yes, they did pay a small amount for water, but as LPOA Members, not consumers. This past year, each of the 118 payed $57 as part of their Association dues, but each of the 234 Mountainside Members also paid $57. Given the numbers (234 vs. 118), the Mountainside paid 2/3 of the operating costs for a service they did not and more importantly cannot receive. I submit that this charge and past costs levied upon Mountainside Members violated Sub-Articles (i) & (j) of our Articles of Association, once again because LPOA water service is not available to these members. It is a service not offered to them and one that they cannot use!

During this same 10 year period, each of the 118 Golf Side Members paid less than $1,000 in total for water. Mountainside Members each paid an average of over $7,500 for water (over $6,000 in fees, $1,000 or more in prorated connection fees, and exactly the same dues assessments paid by Golf Side Members).

If anyone believes that Mountainside members can be properly charged for operation of a water system, the product of which they cannot use, pursuant to the LPOA’s Sub-Article II (i) authority, their logic escapes me. That Sub-Article authorizes the LPOA “To make & collect assessments against members to defray the cost, expenses & losses of effectuating and accomplishing the services set forth . . .”, not to make & collect assessments against members for services not offered to them and services that are impossible for them to receive!

If anyone believes the foregoing portrays equity & fairness, that it meets our Articles of Association, Article II (j) requirement that all LPOA actions must promote the common benefits and enjoyment of the residents of Linderhof Resorts, I would like them to explain to me just how the requirement that paying an average $725 this past year for water ($668 + $57) contributes to my benefit and enjoyment while Golf Side Members payed only $57 and as consumers literally nothing for an equal water service!

Simply put, LPOA is literally running a de facto water utility. As such, it should be run in a businesslike manner.

Consumers using the system should be provided a water bill that mirrors the State of New Hampshire approved formula that is levied upon ‘Mountainside’ water users.



Said water bill should provide for the payments to cover: o Costs of providing water

Contract costs Water testing Power requirements

o Scheduled maintenance o Unscheduled maintenance o Upgrades o Reserves to cover depreciation & replacement of over 1 mile of 35 year old, cast iron,

underground water pipes

If you believe the foregoing was and legal, fair and equitable under our Articles of Association, then vote against this agenda item. But if you were on the other side of the coin, I don’t believe you would like it at all. Hence, I respectfully ask you to vote in favor of this motion / agenda item.



Exhibit B Letter from Lower Bartlett Water Precinct (referenced on page 6)



Exhibit C 1979 Bankruptcy Document (referenced on page 7)

Documents

Draft minutes not yet accepted by the members of the ... · should read “…that people on the Mountainside have expended $3,000 per unit which precludes LPOA from any additional…”