10 JUNE 2012 - ANNUAL MEETING

Submitted by valleyhi on Tue, 08/21/2012 - 15:34

Valleyhi Community Club, Inc.
Minutes of June 10, 2012 Annual Membership Meeting
Location: Ingalls Creek Enrichment Center

The meeting was attended by:
Trustees: Danielle Hester, Susan Raley, Don Thomas, Mike Weil, and Jim Wolf
President: Jose Blazquez
Vice President: Larry Hamilton
Treasurer: Robyn Hoffman Smith
Secretary: Peggi Lopez
Guest: Jim Weins, our Accountant and Water Distribution Manager
Members: Julian Gwynne, Herman Raley, Patricia Thomas, Julie Blazquez, Al and Vivian Berg, Kyle and Mikelle
Breaux, Colleen Clark, Don Conrad, Kevin and Jackie Cox, Andrew Disher, Michael and Karen Eadie, Russell and Tammy
Esparsa, Lynitta Foley, Chet Foley, Virginia Hall, Florence Hodges, Brian Izdepski, Jim and Joan Jahr, Devitt Kane, Maura
Laverty, Randy Lucas, Susan Miller, Scott and Icel Milner, Thomas Moreau, Dave and Kimiko Nalle, Mark and Renee
Nelson, Dave and Sue Nobach, Ray O 'Brien, Sr. and Gloria, Ray O 'Brien, Jr., Dave and Lorie Ockey, Craig and Glenda
Prpich, Karl and Denise Ruether, Jack Smith, Rod and Angie Strand, Rita Terry, Renee Tracy, and Brad Williams

Absent board members: None Proper notification of meeting was given.

Before the meeting began, Mary Robinson of Ingalls Creek Enrichment Center gave us an overview of the many services and opportunities available at the ICEC.

Before calling the meeting to order at 2:00 P.M., President, Jose ' Blazquez, asked that Pastor Esparsa lead us in prayer, which he did.

The candidates for this year 's trustee election were introduced at this time. Running for Position 4 was Jim Wolf, and for Position 5 was Larry Hamilton and, write-in candidate, Randy Lucas. Also, at this time an announcement was made stating that if anyone was delinquent in his/her dues, he/she could pay them at this meeting, which would enable them to vote in the election. This prompted Mr. Chet Foley to state that according to Article II, Section 4 of the Club 's By Laws, a majority vote of the trustees is required to expel a member for the non-payment of dues. This was noted by the Chair and the meeting proceeded.

The minutes of the June 2011 Annual Membership Meeting were read and approved with the following correction: The total amount of the Taylor restitution will not be diverted to the dues account. Only 6% of the $250 restitution payment, which represents the dues portion of the restitution, will be credited to the dues account.

Fiscal Year-End Report For the year ending April 30th, 2012, total cash receipts were $83,751.83, and total cash disbursements were $81,988.39, which represents an increase in cash of $1,763.44. Cash at the beginning of the year was $92,168.60. After adding the last monies received from the DWSRF Loan in the amount of $15,350.21 and the increase in cash at year 's end of $1,763.44, the total cash at the end of the year was $109,282.25. The cash breakdown is as follows: Accounts Receivable at ($5,083.77), Checking Accounts at $11,369.95, Dedicated Repayment Account at $1,128.07, Savings Account at $38,722.87, one CD at $53,331.26, and the second CD at $9,813.87. Ms.
Colleen Clark wanted to know if there is a separate water checking account used to make loan payments and a separate regular membership checking account. She also wanted to know if the $18,000.00 that was transferred into checking, as she states it is noted in the March 2011 minutes, was transferred from water into membership or from membership into water. SECRETARY 'S NOTE FOR CLARIFICATION PURPOSES: The amount was $12,000.00, and it was in the April 2011 minutes, which state the following: DOC representative, Jaclyn Woodson, advised that Valleyhi needs to show a $12,000.00 balance in our Water Project Checking account (Dedicated Repayment account) at the end of every quarter, which will reflect on the Quarterly Reports completed each quarter and sent to DOC. Once the reports have been submitted, she advised us to return the $12,000.00 to our savings account, which makes a higher interest rate for our money. It was moved, seconded, and unanimously approved that we move the $12,000.00 from the savings account to the Water Project Checking account/Dedicated Repayment account before the end of each quarter and transfer it back to the savings account once the reports are made to DOC.” These requirements were in effect as long as our project was incomplete. Now that our project is complete and we have closed the project, we must only make our yearly payment by October 1st. Our accountant, Mr. Jim Weins, explained that there is a separate account that is used to pay the DWSRF Loan payment, but that the general operating funds and the annual dues money are both in one account, although they are kept track of in separate journals. The $12,000 was a residual amount left in the loan repayment account, and it was put back into the general fund after all the bills were in and the annual payment was made. Ms. Clark then asked how the general fund is defined. Mr. Weins explained that the general fund is where all of the funds are accumulated with the exception of the Dedicated Repayment Account, which has a couple thousand dollars in it. That is the account the state wants us to use to make the annual payment. It is not interest bearing, so rather than keeping anything but the required minimum in that account, everything is put back into the general fund until it 's time to make the annual payment, at which time, the amount to make that payment is transferred from the general fund to the Dedicated Repayment Account. Ms. Clark then said that she read, in the Cordell, Neher and Co. Audit Report, a recommendation that we pull
some money out to put in the repayment account to make it appear that we had a minimal balance in there for the repayment of such. Mr. Weins explained that the state had required us to keep a balance in the repayment account. We keep a $1000.00 minimum so we won 't be charged any service fees. Until the annual payment amount is needed, that amount is kept in an interest bearing account.

2012/13 Budget Mr. Weins gave an overview of the draft of the proposed budget for the year beginning May 1 st, 2012 and ending th, 2013. It has yet to be finalized after further analysis by the board. April 30 Ms. Clark pointed out that the proposed budget shows the total amount of the Taylor restitution, which is $250.00, going into the total community income, but our accountant said that 6% would go into the dues account and 94% into the water account. Mr. Weins explained that when the analysis was done, we had yet to finish the calculation of what actually was left in residuals, so the actual amount that can go into the dues account from the Taylor restitution this year will have to be adjusted and will be about $1700.00, at which point the 6% will have been reconciled. Thereafter, $15.00 of the
$250.00 restitution check will go to dues, and $235.00 will go to water. The incorrect number on the budget is an error, but it is a draft of a proposed budget, not a final budget. Ms. Clark then wanted to know if the projected community expenses would then be adjusted to reflect the
lesser amount of the Taylor restitution money going into the dues account. Mr. Weins explained that the projected expenses are based on estimates. The board did not query our accountant on how to come up with numbers for the playfield repairs or common area improvements. They were just ball park estimates of what might need to be accomplished. The lesser amount of the Taylor restitution going into community income won 't change the projected expenses, but it will change the total community income by reducing it by about $1,300.00. Also, since the proposed budget was drafted, some more donations to the dues account have come in, so the line for community donations in favor of dues has gone up and may continue to go up as donations are received from members of the community throughout the year.

Water System Report Seven or eight years ago, Jim Weins filled in temporarily as our Water Master in Training. Recently, when the board asked if he would consider that position again, the State was contacted and the State accepted his experience and background. In March, the board was notified by the DOH of his acceptance as Water Distribution Manager. The state gave him 12 months to pass the exam. He passed the first one about two weeks ago and will take the final exam in another couple of weeks. Jim Weins, our new Water Distribution Manager, went on to say that after looking over all of the records for last year, there were no infractions of any kind, the test results were of no significance, and every test mandated by the State was done last year, and they were all satisfactory. The Annual Consumer Confidence and Annual Cross Connection

Report will be completed and available to the board on June 15th, so we will be receiving it soon. It will show that there were no results of any significance as represented by the DOH.

Community Improvement Jose ' thanked all those who donated to the dues account. Members of the community have donated back to the community a total of $1,914.00 as of this meeting. He went on to say that when everyone works together, we can get things done in Valleyhi. One of the priorities for improving our community is the baseball field; another is the basketball court. The board welcomed other ideas for improving our community.

Approval of Meeting Minutes by Email The practice of approving minutes by email began in January of 2008. The reason for this was to get minutes of meetings out to E-Notice members as quickly as possible and to save time at meetings. The practice ended as a result of a motion that was made but never passed at the March 31, 2012 Special Members ' Meeting. The motion stated that no motions were to be made by email. In the case of approving minutes, it is being restored now because of the benefits to the membership in that minutes can be posted to the website and dropped in the bulletin board box long before the next meeting when they would normally have been read and approved.

Update on Amending By Laws At the March 31, 2012 Special Members ' Meeting, a motion was made to form a committee to amend our By Laws. In April, the author of the proposed By Laws amendments resigned from that committee saying that our By Laws do not authorize committees. A precedence of forming committees made up of board members to study issues has been established in Valleyhi 's history. One example is the New Water System Committee. However, because the formation of committees is in question, and because our By Laws are antiquated, the board hired an attorney to draft a new By Laws document, upon which a vote of the entire membership will be required.

Members ' Concerns Mr. Randy Lucas was concerned about having an attorney amend our community 's By Laws. He felt that an attorney should not be involved in any decisions on the By Laws. Only the members of our community should be involved. The board explained that no amendments will be made or finalized without a 51% majority vote of the entire membership. Ms. Clark wanted to know if the $3,164.00 payment in May to Ogden, Murphy, and Wallace was for the legal response to the proposed By Laws amendments. The board replied that it was to prepare for the March 31, 2012 Special Members ' Meeting, and that the Legal Response to the Proposed By Laws Amendments that was handed out at the March 31st meeting was part of the $3,164.00 payment. The Secretary said that the name of the attorney was not added to the document because of her concern that certain members would contact the attorney themselves and increase the cost to the community. SECRETARY 'S NOTE FOR CLARIFICATION PURPOSES: Because one of the purposes of the March 31 st meeting was to remove the trustees, the board felt it was necessary for the protection of the entire community to get legal advice. The initial contact with the attorney was for the trustees to see whether or not they had acted illegally in any way. If the name of the attorney had been published, it would have negated the attorney/client privilege. The attorney assured the board that no illegalities had occurred. Also, the proposed amendments to the By Laws, which were written by a member, were given to the attorney for review and opinion. Again, for the attorney/client privilege reason stated above, the name of the attorney was not listed on the legal response to the proposed amendments document that was handed out at the March 31st meeting. The non-disclosure was temporary as is evidenced by the publication of to whom the $3,164.00 payment was made, and also by the fact that the opinion was handed out at the March 31 st meeting albeit without the attorney 's name. The attorney did review our By Laws and Articles of Incorporation. Ms. Clark also wanted to know if we had a report yet from the attorney about the “public creek accesses” (the 10 ' strips of land), and if we have the video yet of the March 31st meeting. The board replied that we should hear from the attorney soon, and that we will have the video this week. The board asked to whom we should give it, and who would be paying the $30.00 cost of copying it. Ms. Clark said she would pay the $30 and to give the copy to her.

Mr. Ray O 'Brien, Jr. asked the board to clarify for the membership what is going on with the “right-of-ways” (the 10 ' strips of land) and why we had to consult an attorney. The board explained that at the May meeting it was agreed that the board would retain the opinion of a land use attorney for all ten of the 10 ' strips of land that are on the original plat map. A member of the board and two community members met with the attorney two weeks ago. The board has yet to hear back from him but will request follow up. The board provided the attorney with the plat map and related documents that they had and asked him to provide an analysis on each individual 10 ' strip of land. As a courtesy, any property owner that is affected because of living next to one of the strips of land will receive something in writing once the attorney has provided a determination. Whether the 10 ' strips of land are easements or public accesses will be determined by the attorney. Ms. Clark then stated she would also like to clarify what the “public accesses” (10 ' strips of land) are for the membership as well, based on her own personal research, and to explain why she got involved with it. She found that there are several 10 ' strips of land and Lots 1 and 18 on the original plat map that were dedicated for public use in 1966 by the developers forever and always. It is her opinion that a lot of members did not know that Lots 1 and 18 were available for public use. Ms. Clark further stated that one of the “accesses” (10 ' strips of land) in particular has been used by many members ' children up until it was encroached upon. According to Ms. Clark 's personal research, it is available to the public up to the high water mark because it 's a navigable creek. To define it as such, she has pictures of kayakers going down it. She said it is a beautiful place for those members that do not live on the creek to experience the creek.
SECRETARY 'S NOTE FOR CLARIFICATION PURPOSES: Ms. Clark was present at the initial meeting with the attorney and did provide him with copies of her research so that he could provide the community with a legal opinion of her conclusions. Mr. Don Conrad also spoke to the issue of that particular “access” (the 10 ' strip of land in question) saying that it has never been used by anyone because it is too steep and rocky and is not accessible as a foot path. He also said that people have actually been accessing the creek through his lot, and he did ask them to stop because he does not want his yard to be a thoroughfare to the creek. To determine the actual legal connotation when he bought the lot, he approached the state attorney about the unlabeled 10 ' strip on the plat map to see if it was county property. He thinks it is very important to determine the actual legal use of the 10 ' strip and supports such action. He then asked that any member wishing to use his yard ask him first. There have been enough people vandalizing his property and using his yard for access to the creek to become a nuisance, so he will call the Sheriff to report trespassers. Ms. Kimiko Nalle then stated that because that 10 ' strip is so inaccessible that people can 't use it, we should clear it to make it accessible so that people do not encroach upon private property to get to the creek. Ms. Susan Miller also spoke to the issue of that particular “public access” (10 ' strip of land) saying that at the March membership meeting, she and her husband stated that if it is public property, they are in favor of allowing public access. They were asked at the membership meeting to consult an attorney, and they have done so. The attorney made a determination, and they presented it to the board. The determination was contested and the board has now contacted a different attorney to get a second opinion. She said that this 10 ' strip of land has trees on it that you cannot walk through, so for years, people have accessed the creek by coming down her private driveway and by walking across the lot that is currently owned by Don Conrad, which at that time was just an overgrown lot, and that 's trespassing. Ms. Miller said that they and Mr. Conrad, the two owners of the lots on either side of the 10 ' strip, just want their privacy and their private property respected. She said they are waiting for a determination from the board 's attorney so they will know if they are going to court or not. At this point, another member asked that if the Millers plan on suing if the board 's attorney comes back with a
determination that it is community property. Ms. Miller then said no and that they would call their attorney again to say that there is a difference of opinion, so let 's get this figured out. Trustee, Danielle Hester, then added that the main reason the board would not take only one easement to an attorney for review is that the board is adamant about not getting involved in what could very well be a private property matter. The board is also adamant about not using community money on only one easement because the lots belonging to the majority of the community property owners do not border one of these easements or 10 ' strips of land. Community money cannot be spent on only one particular area, and the board is very cognizant of that. The board has to be very slow in the way we proceed, and very respectful. Until something is agreed upon, the board 's position is that we are waiting for our attorney. As a board, we would have been wrong to simply say that everybody must abide by a private property owner 's attorney 's determination. With all due respect to Mr. Conrad and the Millers, the board can 't

say thank you to them for spending money to hire an attorney to provide us with a determination, because they, not the board, have retained the attorney. The board cannot report to the membership that that determination is the correct one, because the club did not pay for that attorney. The board practiced due diligence by retaining an attorney to do the homework and provide the club with some feedback. Once the board gets that feedback, we will not behave in a reactionary way. The board has to have the facts, and right now, we don 't have all the facts. Things move slowly, and the board will keep everyone updated and will provide the attorney 's assessment of the situation in writing to those folks personally affected by it. Until the club can come to a conclusion on specific 10 ' strips of land, the board is encouraging everyone to use Lot 18 and Lot 1 to access the creek. Another member asked if these lots and strips are marked for community access. Currently, they are not physically marked, but they are marked on the plat map. Lot 18 has a trail down to the creek with a nice beach area. Mrs. Miller expressed concern about trespassers. She said that the plat map shows a boundary line running down the center of the creek as the property line for all properties on the creek. She then explained the changes in the creek since her husband purchased the property in 1987. In 1990 it flooded. During the high water seasons from '87 to '94, the creek carried away 40 feet of the Miller 's front yard. In 1990, it flooded. Today there is just 25 feet to where the water was in '94 because the creek changed course to run closer to their house. About 5 years ago, the creek changed course again to run to the opposite bank leaving a sandbar where the water used to run. Mrs. Miller stated that legally, the sandbar is the Millers ' property. She asked that people please do not come and sit and trespass in her front yard. She stated that adults that live on the creek are doing that, and the Millers are now taking it personally, because it has become a personal insult, and they will file harassment charges if it continues. Ms. Clark then stated that there are State laws pertaining to the beaches, streams and rivers that make them accessible to the public. She said rivers that are navigable by canoe, kayak, and raft are defined as being legally navigable. Because they are legally navigable, such rivers are held in trust for the public by the State for navigation, recreation, and fisheries. The land among them is public land up to the ordinary high water mark, which can be quite a distance from the water. It 's the land where the vegetation and soil show the effects of water. The public can use this for walking, fishing, resting, camping, and other non-distressing visits. She said she is sorry that the property has been lost by the river, but the State has determined that our river ways and waterways are to be accessible to the public. Mr. Conrad then clarified the State 's position on property ownership amongst waterways. He said that property ownership along non-navigable rivers is normally to the center of the creek, which is exactly what is there in black and white on our plat map. For navigable water ways, it is the high water mark which is currently under water because of the annual high water event. The high water mark can be determined by geological experts. It is currently under water, so Mr. Conrad said that anyone that is on his bank at this point, is well above the high water mark and a long way from the center of the creek. SECRETARY 'S NOTE FOR CLARIFICATION PURPOSES: Members have differing opinions on whether or not Peshastin Creek is navigable or non-navigable and the location of the high water mark. Mr. Brad Williams stated that, according to a Sergeant with the Sheriff 's Department, the Chelan County Prosecuting Attorney has determined that where the public is walking is within the high water mark and, therefore, completely legal. He said that the public 's access to the river is being disregarded, and that it wouldn 't be an issue if the 10 foot, publicly owned property were opened up for community access. Ms. Hester then reminded the members that the legal use of the 10 foot strips is still in question, is a very important topic, and deserves air time, but it is clear that at this point an agreement will not be reached without some additional legal advice. She then asked that we move on to another topic. Mrs. Jackie Cox asked that, before we move on, the entire membership be informed of the findings from the land use attorney. The board heartily agreed saying it would certainly notify the entire membership of the findings of the attorney, especially because the club has retained the attorney. Mr. Craig Prpich was concerned as to why the membership was paying legal fees to get involved in this in the first place, and if the board was representing Valleyhi at the land use attorney 's office or just four of the board members. Ms. Hester said she was there to represent Valleyhi Community Club and the trustees, and that a breakdown on all 10 of the easements on the plat map was requested. Ms. Clark then asked if Ms. Hester made a statement to the attorney that she was there to represent the interests of the trustees that had property bordering the 10 community easements, of which there are four that are bordered by members and current board members. Ms. Hester restated that she was there to represent Valleyhi Community Club and the trustees, and that she took the plat map showing all 10 easements.

Ms. Clark then said that she wanted to acknowledge that it was nice that the board was finally looking into this, and that the subject of easements was noted in the minutes of 2007 and then again in 2009. She said that in 2007, it was tabled for a month and never brought up again. SECRETARY 'S NOTE FOR CLARIFICATION PURPOSES: The minutes of July 2007 say the following: “We have two community lots on the creek to provide access to the creek. People are trespassing on private property to get to the creek. A suggestion was made to put up signs on these lots and/or something put in the newsletter indicating such so that residents know how to get to the creek. Lengthy discussion about easements ensued. A motion was made, seconded, and approved that we table the matter for one month.” Mr. Williams was part of this discussion at the July 2007 meeting, but he was not at the next month 's meeting, and the topic was not discussed. He did not attend another meeting until September 2010, October 2010, and February 2012. The issue of easements was not discussed again until February 2012, and this was in relation to the donated lot next to Mr. Williams ' lot. He was concerned that the donated lot would become an easement right next to his property. Easements were also mentioned as part of Mr. Williams ' petition that he presented to the board at the February 2012 meeting. The minutes of January 2009 say the following: “There is a property dispute here in Valleyhi involving property lines, a gated driveway, and easements. Members were wondering if this concerns the community of Valleyhi. It does not.” This was a property dispute/civil issue between Mr. Brad Williams and Mr. Carson Stitt over a driveway easement. Mr. Ray O 'Brien was concerned about going by the opinion of either land use attorney. He said that he received unsound advice from one of the attorneys mentioned. He also stated that this will end up in court with a Judge having to make the decision, and we need to accept that fact. The community cannot go with the decision of one attorney over another because each will have opposing opinions on one point or another. SECRETARY 'S NOTE FOR CLARIFICATION PURPOSES: Mr. O 'Brien later stated that the advice he sought was not a land use issue. Mr. Randy Lucas said that the easements should be flagged. He respects privacy and property rights, but these easements should have been marked 40 years ago. He has a forestry easement on his property, and an easement is set in stone until a Judge annuls it. Another member asked if the large swing set was ever going to be put back up. Trustee, Mike Weil, asked the member to talk to him after the meeting about adding it to our Community Projects List. Ms. Clark then acknowledged our community 's volunteer firefighters saying how appreciative she is to have them on call in our neighborhood for whatever emergencies may come up, and then she thanked them. The membership applauded our firefighters. Mrs. Miller was concerned about getting upset and apologized to the membership. She said that she has given a lot of her time to serving the community as a board member, and her husband served on the volunteer fire department. They are peaceful people, and right now they are being attacked, and it 's really uncomfortable. They are trying to do what 's right for the club and for them. They want to work together, so she asked the club to please work with them and be respectful.

At this point, to bring the Members ' Concerns to a close, Trustee, Danielle Hester, acknowledged that the subject matter was very difficult and thanked everyone for being respectful. She invited all to join in a meal while waiting for the casting and tallying of votes. She also invited anyone interested in looking at the options for a ball field, to meet at the ball field after the meeting.

Public Acknowledgment: President, Jose ' Blazquez, publically thanked Mr. Ray O 'Brien, Sr. for keeping Lot 18 clean and useable for the community for the past 30 years. He also pointed out that Mr. O 'Brien did this of his own volition and without being compensated in any way. Everyone applauded Mr. O 'Brien.

Before the voting began, each candidate made a brief statement about himself and why he is running. Mr. Randy Lucas . Pos. 5: The main reason he is running is because when he joined, he was told by his realtor and he read in all the paperwork that this was a community in which everyone could enjoy themselves and have fun without having the bureaucracy coming in and taking over. He said it seems like we 're getting a little more bureaucracy taking over, and he wants it back to the way it was when he bought his place 20 years ago. He doesn 't want to be run by a bureaucrat, and he 's afraid we 're getting bureaucrats in the system. Mr. Jim Wolf . Pos. 4: He bought his home in 1984 and rented his home to his daughter until he retired. He has lived in the community for 12 years. He 's been on the board for the last three years. He said that a lot of stuff has

happened in that time. He was thinking of not running for another term, but there are a lot of loose ends. He chooses to run again because he wants to live here the rest of his life. He wants it to be a nice place to live. He said it would be nice to go back to the old days, but we are part of Chelan County, and they set the laws, and we can 't live without a certain amount of laws. There has to be some give and take. He just wants to spend the next three years bringing us all together to find some common ground without going backwards. Mr. Larry Hamilton . Pos. 5: This is his third or fourth go-around. He 's been President, Vice President, and a Trustee. He took care of our water system when it was in really bad shape. He said that we now have a good water system, and he wants to see that it remains good. He also said that we 're in desperate need of a new tank. He 's lived here for 26 years, and he also wants to retire here.

At this point in the meeting, everyone had lunch while each member was called to cast his/her vote and those votes were tallied. The tally was: Trustee Position 4: Jim Wolf . 76, Icel Milner (write-in) . 1 Trustee Position 5: Larry Hamilton . 67, Randy Lucas (write-in) . 15

The meeting adjourned at 4:41 P.M.