Trustee, Mike Weil, called the meeting to order at approximately 6:30 P.M. The minutes of the January meeting were approved via email prior to the meeting.
The meeting was attended by: Trustees: Danielle Hester, Susan Raley, Don Thomas, and Mike Weil President: Vice President: Treasurer: Robyn Hoffman Smith Secretary: Peggi Lopez Members: Craig Prpich, Colleen Clark, Randy and Dorothy Adsit, Brad and Brett Williams, Richard Saunders, Jose Blazquez, Dave and Kimiko Nalle, Jackie and Kevin Cox, Dave Rueth, Kyle and Mikelle Breaux, Salvador and Carmen Camargo, John Storey, and Ted and Julie Grinolds
Treasurer's Report The Summary of Checking and Cash/Asset Accounts for February 2012 shows a checking account balance brought forward of$14,214.46. After accounting for all deposits and checks, the balance as of 16 February, 2012 is $11,945.28. The Repair and Renovation Account was closed, so that balance of $215.77 went into the regular checking account. The Water Project Checking Account balance is $1,127.39. The savings account balance is $38,678.61. The two CD balances are $53,278.13 and $9,808.98. The total of these balances leaves our total cash for all accounts at $115,054.16. After adding the accounts receivable of $4, 015.14, our total assets as of February 2012 are $119,069.30. The Community Dues income for January was $250.00 from the Taylor restitution; expenses were $35.93. The Water System Operating income for January was $146.39; expenses were $2,186.51. The Aging Summary balance is $4,015.14. A motion to accept the Treasurer's Report was made, seconded, and approved by all.
Member's Concerns Because so many members were in attendance with some concerns, we moved on to Member's Concerns ahead of the other agenda items. They and the board's responses are as follows: Randy Adsit wanted to know where the $600/year/lot owner is going. He also wanted to know why we put meters in if we are not going to use them. The board explained that the money goes into the water maintenance. Valleyhi has a $750,000.00 loan to pay back. This is the money that we borrowed from the State to pay for the water system. The annual payment is $47,000.00. Also, if a pump were to go down, it would cost $10 - $15,000.00 to replace it. As for the water meters, they were a requirement to get the loan from the State. Valleyhi's water system is under the scrutiny of the Dept. of Health of the state of WA. They control how we operate. Because of this, in the future, we may have to begin charging for the amount of water we use. But right now, we do not because our By-Laws state that we pay a certain amount for an unlimited amount of water. The only way that will change, is if the By-Laws change. Randy still did not understand where the money is going because the water maintenance fee has tripled since he moved here in 2006. Dave Rueth claimed that the board padded the fee in order to get the grant with the promise that it would go back down once the grant was obtained. (It was a loan, not a grant) He also wanted to know where the money is going, but went on to claim that the board is skimming money off the water maintenance fee to fund improvements such as repairing the gazebos.
The board refuted this accusation and explained that the cabanas were refurbished and repaired with volunteer labor and private donations. We run two separate accounts. We had a CPA audit because we must report all of our income to the State of WA. We are not allowed to comingle funds. We cannot use water money for any improvements. The board can pull reports to prove that we do not have any water money in the cabanas. Brad Williams asked to be shown where it shows that the cabanas were not paid for with water money in the financial statement, and he and other members claimed that there is no way that $12.00/year/lot owner could pay for the improvements the board has made. The board showed him where to find the dues account on the financial statement and then added that the Taylor restitution of $250/month also goes into that account. The money had built up so the board decided to make some improvements, especially to the gazebos because they were becoming dangerous to the community. Ted Grinolds wanted to know who changes the By-Laws. The board explained that the By-Laws cannot be changed without a vote of the membership. Colleen Clark and other members wanted to know how the board can sell property without a vote. The board responded by saying the By-Laws say the board can sell property. As they were preparing to read the By-Laws and Articles of Incorporation, they were interrupted, and over the course of the meeting neither the By-Laws nor the Articles were read. Dave Rueth was concerned that he wanted to volunteer to mow but was told by the board that to volunteer he had to be a contractor. The board responded by saying that none on this board had said Dave could not mow unless he was a contractor, and that it must have been a previous board. The board also passed around a sign-up tablet for anyone that wanted to volunteer to mow. Jose' Blazquez was the only one to sign it, and Ted Grinolds later said he would volunteer. Another member was concerned because she heard that the water fees were going up. The board responded by saying that it is not its intention to raise water fees, and then reiterated that it cannot meter water without a change in the By-Laws, which would involve a vote of the membership. Ted Grinolds wanted to know why the members shouldn't be allowed to vote on the sale of community property when they would have a monetary interest in said property if it were sold. The board responded by trying to explain ownership vs. membership, but with all the shouting over one another it was not completed. The bottom line was that you cannot divide community property because it is owned by the non-profit community organization. The board went on to say that there are open meetings every month in which members are invited to come and be a part of what the board is doing on their behalf. Another member wanted to know why the property was being sold in the first place, and if it was for the betterment of the community. Would it be going back into the water fund, or would it be lowering the water maintenance fee? He also said he thinks it should be voted on. The board responded by saying that it would be earmarked specifically for a new reservoir for our community, and it is stated so in our minutes, which are on file. The board went on to say that there are no grant moneys available, and the reservoir will have to be replaced at some point. Another member was concerned that it was never delegated to the board to take the community's property, of which we all own a certain share, and sell it. He also said he appreciates whatever it is the board does every month, but the members cannot make it to all the meetings. But when the board tries to cut a backdoor deal to sell the community's property, they all feel the necessity to show up. That's why all these members are here. Another member wanted to know why we were sitting on $115,000.00 if we are so hard up for a reservoir. The board explained that it had a CPA run a traditional cash flow analysis based on the debt that we have incurred with the new system. We have $740,000.00 in debt. We cannot carry that level of debt without some assets. The only assets we have are the $115,000.00. It's like going and applying for a loan to buy property. Nobody is going to do business with you if all you have is $740,000.00 in debt and no asset. Brad Williams asked to have the floor and made a motion to rescind all previous motions relating to transfer and sale of community property. He also made a motion to have all records relating to these issues to be made available at the upcoming Special Meeting of the members of the corporation to be called by the Secretary. The motion was seconded. He went on to say that the members are calling for a Special Meeting so they could eliminate all this argument out here in open and alleviate a lot of the board's time and get it all worked out in one place with the members of the meeting. He then said he would like to file with the secretary a petition of 17 signatures. He added that only 15 signatures were required for the membership to call a special meeting. Brad Williams then said that they are taking this deal out of the hands of the board and putting it back into the hands of the members because they don't agree with what the board is doing. He then stated that he had an RCW stating that the board cannot sell community property without a majority vote of the membership. Jose Blazquez pointed out the reason the property was given to the community in the first place. It was so the community would have a way out of Valleyhi across the creek just in case we ever had a problem and the bridge was inaccessible. The board responded by saying that is a valid concern. Brad then said that he does not know what's going on with this board of directors and that it is a run-away board, and it's got to come to a stop. The board responded by saying that they would be happy to entertain Brad's motion and put it on the books, but they would not stand for being told in a room full of people that they are not transparent. The entire board has worked very hard to make sure they were transparent. Another member then asked if we posted the minutes. The board responded that it does not post the minutes because it has minutes at every meeting for anyone that wants to have a copy. But then they went on to say that they would do what they could to get the minutes posted for everyone to view. Another member, concerned that the board would latch onto another piece of property and try to sell it as well, asked if the community had anymore property. The board responded that there was another piece across the street from this meeting place. Colleen Clark wanted to know if we got the loan before we had the $115,000.00 in assets. If so, why are we trying to beef up our assets? The board responded that they don't think our assets need to be beefed up. They just want to preserve them. The board just wanted to turn a valuable asset into a reservoir. Another member said that all the people that have worked in construction could volunteer to help build the reservoir and get it done for $115,000.00 and not lose the rights to the community property. Kimiko Nalle said she would like to hear the RCW. Colleen Clark then read a portion of RCW 24.03.215. Sale, Lease, or Other Disposition of Assets Not in the Ordinary Course of Business. (1) Where there are members having voting rights with regard to the question, the board of directors shall adopt a resolution recommending such sale, lease, exchange, or other disposition and directing that it be submitted to a vote at a meeting of members having voting rights, which may be either an annual or a special meeting. Notice in the form of a record stating that the purpose, or one of the purposes, of such meeting is to consider the sale, lease, exchange, or other disposition of all, or substantially all, the property and assets of the corporation shall be given to each member entitled to vote at such meeting, within the time and in the manner provided by this chapter for the giving of notice of meetings of members. At such meeting the members may authorize such sale, lease, exchange, or other disposition and may fix, or may authorize the board of directors to fix, any or all of the terms and conditions thereof and the consideration to be received by the corporation therefor. The board responded by noting the number of the RCW and stating that it would check on its relevance. Another member asked what other assets we have in reserve aside form land in the event that the community needs to fix something. The board responded by pointing out the cash assets that are shown on the financial statement. Another member asked for what, exactly, is the board trying to accumulate funds. The board explained that when Valleyhi first applied for the loan, a 100,000 gallon reservoir was part of the loan. The bids came in higher than we could afford, so the board took the reservoir out. We concentrated on the distribution lines first with the plan in mind to purchase the reservoir at a later date. The member then asked if anyone was forcing the board's hand to purchase a reservoir right now. The board responded by saying that the reservoir is an issue now because the Dept. of Health controls how many water connections Valleyhi can have. The DOH is restricting the number of connections, so we do not have enough connections for all the properties in Valleyhi. A member then asked if the lots without water are vacant.
The board responded in the affirmative but pointed out that those lots cannot be sold without water. Colleen Clark wanted to know if any board members owned any of these vacant lots, and if so is that not a conflict of interest? The board answered yes, they do own vacant lots, but did not see how that would be a conflict of interest. The board also said that the bottom line that they were obviously getting was that there were a significant number of people in the room that feel that the board is trying to do something behind their back. A number of people then accused the board of holding secret meetings and making motions and voting by email, saying that it is not constituted in our By-Laws, so any motion made by email is null and void. Brad Williams then stated that the property donated to Valleyhi by the Raley's is a liability to the community because it is a protected wetland. He also said that it would be an easement right next to his house. He went on to accuse Susan Raley of failing to mention that it is a tax write off, and that is the reason it was donated. The board responded by saying that they wanted to put a bridge on it, not a driveway Brad Williams also said that the board is a run-away board, and that the reason they called the Special Meeting of the members was to eliminate the board altogether, period. Brad Williams then said that the secretary is not providing an updated list of the members as is her duty. The board responded that the secretary does have an updated list, and invited Brad to look at it himself. Kimiko Nalle was wondering if the board had entertained the idea of raising money in any way other than the sale of property. The board answered yes; an assessment, to which a member said that an assessment can't be done without 51% majority vote. The board replied that it is only 25% of the entire membership, which would be only 33 people. The board also read Article IX, Section 3: “Any Special assessments determined to be necessary by the board of Trustees to carry out the purposes and intent of the Articles of Incorporation or these By-Laws shall be submitted to the membership at a special or annual meeting, for a vote by written ballot as to whether such proposal for special assessment will be accepted or not…it shall take a majority vote of the members present at such meeting, but not less than 25% of the membership in existence, to approve the same.” The board then went on to say that it will be expensive to fund a reservoir. That's why they thought to sell Lot 18. That is a way to raise $100,00.00 towards a reservoir without doing an assessment. The board also read from the minutes of the 2011 annual meeting in order to clarify why it is important to have cash reserves. It said the following: “Mr. Chapin asked why we have $92,168.60 in cash and why we don't use it to pay off the loan. Jim explained that it is our total cash reserve. It represents a low to modest amount of cash reserves for maintenance and repair of a community water system. We have a water system that is valued well over a million dollars, and we are running roughly 9% reserves. A reserve is needed to cover a catastrophe, so that we don't cause an undue burden by asking community members for money to cover an unexpected and major emergency repair. Even with the 9%, if we were to have a major catastrophe, in the reservoir for example, we would be hard pressed to do the repairs because our reserves are low. Another example would be earthquake damage. Jim's perspective as an accountant is that 9% is a modest to low amount for reserves. Under normal circumstances we might expect to have a larger reserve, but the 9% represents, in Jim's opinion, a prudent attitude about being prepared for what's unknown.” Brad Williams then asked whether or not we were going to vote on his motion. The board said we would discuss it further at the Special Meeting. Jose' Blazquez said that when he was on the board they did not have any money to speak of, so he is glad that the board is doing the right thing to ensure that Vallehi has money. He knows what the board is going through, and said that the board is doing a good job. Colleen Clark wanted to know if the accountant had recommended a specific percentage or amount of money that Valleyhi should have in cash reserves for an emergency. The board responded that Jim just said that 9% was low. Brad Williams said that Dan Riblett told him that Valleyhi was losing 10,000 gallons per day with the old system, and that with the new system and the capacity of its pipes, we don't need an expansion of our water system. He went on to ask why we are spending $50,000.00 on this water system. (The secretary does not know to what the $50k refers.) The board responded by explaining that when Valleyhi was developed, there were 153 lots, and the Dept. of Ecology gave us the water rights for 153 lots. Somewhere along the line, Tom Justus from the Dept. of Health said we could have only 134. He dropped the ball there. He didn't have the right to take away the 153 water rights that we had. So we are not really trying to expand the system, we are trying to restore the system; trying to correct. Another member then asked why the board was letting the DOH put an undue burden on Valleyhi and why we haven't tried to fight back in court. The board responded by saying that would cost a lot of money. They also said that they were looking into correcting the number of lots right now. Mike Weil said that he was not going to run for re-election last year, but nobody else would step up and put his/her name on the ballot. So, he ran again. He went on to make it official at this meeting that he was resigning as of May 17th. He said he has done his share and invited anyone to put his/her name on the ballot. He also said that that way they would no longer be in the dark. Jose' Blazquez said that everyone seems to be barking from the back but that nobody wants to go forward. Mike Weil then said that this board has done quite a bit. They brought the community out of the hole to where we're at now with $120,000.00. They spent countless hours putting together the information necessary to get the loan for the new water system. Colleen Clark was concerned about the animosity she has felt from the board in the 16 years she has live in Valleyhi towards all property owners that were not involved with the board. She was also concerned about the sense of antagonism she has felt from past newsletters. The board responded by saying that the next newsletter coming out has a list of small projects that can be done for relatively low cost, and that we are looking for volunteer labor. Those are the kinds of things we can do together to tear down these walls. We can work on the list together. Kimiko Nalle thought it would be nice if the board had an official website that we could log onto, because right now the only thing she sees on valleyhicommuityclub.com is negative. It would be nice if you guys had something official out there, so that we wouldn't be in the dark. We feel like we're in the dark. The board responded by saying thank you for noting that it is an unofficial website, and that it would be awesome to have an official website. We do have registered domain names. We would be happy to do it. Right now our man power is shot. If anybody knows anybody that wants to do the official website, we have the domain name. Another member said that we should have not only a board of fiscal members, but also a board of improvement members. (The secretary is unclear as to what he means by this.) Colleen Clark wanted to know if there was any reason why we couldn't put the minutes on the existing unofficial webpage. The board's response was that it was something to consider. Ted Grinolds said that he and his wife have sat and listened to this meeting, and they are going to do what everybody should do, which is to come to every monthly meeting as often as they can. Then if something is going on that they don't like, they can do something about it, such as call a Special Meeting. Dave Rueth said that the community trusted the board to take care of our community property, and it's not working, so we'll see what happens. Kyle Breaux said that his wife asked him to remove her name from the petition.
Treasurer's Report continued. The insurance company said they would drop us on renewal if we got a water trampoline because it's a liability. Another member asked how we could go about getting more play equipment such as a Castle out in the community park area. He wanted to know whether a private person could pay for it, or whether the community could pay for it. Once again, it is a liability issue. The board explained that if the old merry-go-round were to be taken out, we would not be able to replace it because of the liability. The only reason we still have it is because it was grandfathered in. More information on the Castle was asked for in order to find out if it would actually be a liability issue. As to whether or not the club's insurance can be reduced now that we are no longer in the midst of construction of our water system, our agent that there is no reduction, but that our she would check into it further and get back to us. The board will research the possibility of a new insurance company. The board will file a waiver with the state for our donated property. The Repair and Renovation account was closed, and the $217.00 was transferred into our normal checking account. The Fout's property did not go into bankruptcy, it went into foreclosure. There will be an auction on it on May 4th. The board will check into this to find out how Valleyhi can recover the $1800.00 that the Fout's owe for their water maintenance fee. The board was shown a document that shows all the entities that are owed money from the auction of this property. Valleyhi is not listed. The board will contact Jim Weins to get Valleyhi added to the list.
Committee Reports Water: Our Water Master, Dan Riblett, said that one of the things Valleyhi would be required to do is to be able to state what the daily consumption of water is. The only way to do it right now is by physically going in and looking. There is an instrument on which Dan will give us some specifics. He thinks it will cost from $800.00 - $1000.00. It would be placed directly in the vault, and then, because it is computerized, it could be read from anywhere, and the daily consumption could be recorded without having to physically go in and look at it. The board will ask Dan for more information. Dan was hoping that Valleyhi would consider this as a worthy expense. Kyle Breaux said he may be able to obtain a used instrument of this type. The board will give Kyle's phone number to Dan Riblett for Dan to contact him directly. Cleanup: The only person to write their name on the volunteer list for the Community Projects that was passed out at this meeting was Jose' Blazquez. Ted Grinolds later said he would volunteer as well. The board is still working on the Tire Drive.
Unfinished Business The board is still working on the Verizon/Claim. It may be ready to send by tomorrow. The board is still working on the liens.
New Business The only new business was the auction of the Fout's property. This was covered in the Treasurer's report.
Announcements Ted Grinolds commended Kyle Breaux for working on the dock even though he was injured.
A motion to adjourn was made, seconded, and approved by all.