Attendance
Board Members
Present: Scott Webber, Jim McCann, Don Austin, David Decker, Joe Nicoloff.
Excused: Ray Garber, Gary Kluckman
Quorum Present: Yes
Others Present
14 Holishor Members Present
Glenn Dalton and Kellie Crider from Holishor Office
Proceedings
Meeting called to order at 7:30 PM
Pledge of Allegiance Recited
Minutes of January 26, 2011
Action: Jim McCann motions to approve, David Decker seconds
Motion carries
Bills & Salaries
Action: David Decker motions to approve, Joe Nicoloff seconds
Motion Carries
Profit Loss Budget
Action: No action needed
Transfers of Property
Action: Joe Nicoloff motions to approve Don Austin seconds
Motion Carries
Manager’s Report
Presented by Glenn Dalton
Security Report
Presented by Glenn Dalton
Finance Committee Meeting Report
Presented by David Decker
Correspondence
Building Committee Report
Read by Don Austin
Old Business
SB3180 Common Interest Community Association Act Update
Scott Webber: One of the things, before I get into the actual bill its self, everything we say tonight is our own opinion, we do not have the opinion of our attorney back but we are expecting it at the end of February. We were hoping to get packets out to the membership in February but in reality it probably won’t be until March. The way I view it and my apologies to any attorneys in the room but, the Attorneys opinion could be just about anything. I have narrowed it down to three possibilities. What I need is feed back from the board. We continue to do our work on this, regardless of what the opinion is. I would like the board to move on making Covenants changes any way, or that is my suggestion.
David Decker: You might want to clarify that suggestion. In that, one of the potential options is that the Lawyer may come back and tell us that the law does not apply to us. So what you are saying is, if that is his opinion than as a result of all the effort that everyone has put forth to clean up, correct, clarify that we want to go ahead and utilize the work that has been done and pursue those changes.
Scott Webber: Yes, thank you.
Jim McCann: In the working meeting downstairs early tonight we more or less debunked the original attorney’s opinion that the law would not apply to associations that are as old as we are that have their Covenants established and recorded. That opinion cut things off too soon and didn’t go into detail; we pointed that out to the people at the ILAC meeting today at Lake Holiday near Somonauk, Illinois, and the conclusion of everyone at that meeting was that the law is going to apply.
David Decker: My point being, regardless of what the lawyer comes back with, if he came back and says that it did not apply to us that would mean that there really was no impetus for us to put forth this change. Cause that is really what started this whole thing, and as a result of we found that there are some things that definitely need, in our opinion, to be adjusted. What Scott has proposed is regardless of what comes back, if it didn’t apply, do we still want to move forward with making adjustments? From my perspective, I don’t want to throw away the work that has been done and I think there are things that need to be corrected. It’s my Opinion that regardless of whether the lawyer comes back and say we don’t have to do anything we still do something.
Jim McCann; We have all gotten a hard core education here as of late and by getting into the Common Interest Community Association Act there are three other acts we fall under. One of which we are not necessarily in compliance as of right now, which is the Not-for-Profit Act which is unfortunate for us. Some of the changes that we need to make or want to make regardless of whether SB3180 comes into play or not will bring us in line with those other acts as well.
Scott Webber: Do you all agree that we should pursue it?
Jim McCann: Yes.
David Decker: Yes
Joe Nicoloff: Yes
Don Austin: Yes.
Scott Webber: That is what I was looking for, thank you all. We want to start with SB3180 just in general to update everyone, back in July it was passed and signed by Governor Quinn, from what we have been told it came out of a senior living association in Joliet, Illinois, they have 120 members. When you read it you are not really clear on who was mad at who but someone was really upset.
Jim McCann: Someone with pull was certainly upset.
Scott Webber: If you read the different articles that came out after, it was designated as a win for member’s rights. As a board we all agree that it is not necessarily a win for member’s rights. What I mean by that is; if you look at many different associations, Jim attended the ILAC meeting today as I did several weeks ago; you realize that Holiday Shores is different than most home owner associations in the state of Illinois. When I say different I mean that in a good way. The SB3180 bill gives the board of directors the power to set your assessments and increase your assessments by 15% a year without a membership vote or input. If the board at the time were to exceed the 15%, then and only then would the membership have 2 weeks to gather 20% of the membership’s signatures to petition for the board to hold a special meeting. My interpretation of that is it doesn’t necessarily matter. The membership has two weeks to get 20% of the signatures, to call a special meeting, to yell at the board with no potential outcome to it. In Holiday Shores that is a Membership Vote and it is something that all of the Holiday Shore Board members believe very strongly in, that it should remain a membership vote.
Jim McCann: They can reject the Budget or Separate assessment.
Scott Webber: Does it say what happens after that?
Jim McCann: It says that as long as it goes under 15% it doesn’t apply.
Scott Webber: The point is that none of these Board Members up here want that kind of authority, nor do we want any future board members to have that authority, we believe it is a membership vote. Jim went to the ILAC meeting today and there are some associations that are set up that way. One association had 9 board members that were appointed for life like the Supreme Court, did not have to supply any financial information whatsoever. They didn’t answer to anyone but themselves, so you can understand there are potential issues. I think Holiday Shores is set up in a manner that controls that to the best of our ability. We are a member driven organization that has a board to oversee the funds, if the board gets out of line there are remedies. This new law talks about member’s rights in a manner that, and they championed this; you now have the right to go to the office and demand all the financial information that the association contributes, income and expenses. Just to let you in on a little secret, you as a member have that right now, the difference is, with the new law, we can charge you a fee for that information. I am trying to figure out how this is a championship for members,
Another piece of this new law is, if you are selling your house and if 30 people come to the office and ask for that information we have 30 days to provide them with it and you the homeowner pays for that information, not the people asking. This might be OK with other associations but it makes me look at the association I am a member of and it makes me proud as far as what people have done with the Bylaws today.
Jim McCann: Another point with this new law is it allows members to come to board meetings and to be notified of when Board meetings exist. That is something that we have had since day one.
Scott Webber: All in all it is not good for Holiday Shores, so what do we do about it? Right now we don’t know. Based on these issues, we have submitted questions to our attorney and ask how we go about this. My opinion is three possible outcomes, (1) It doesn’t apply, (2) Do the membership rights exceed the state rights, (3) You have to follow the law to the letter, and it could even be all three. I think as a board we are prepared for all of those. We have been working on two sets, (1) follow the law to the letter or (2) Members have rights. Let’s get into what we are currently proposing for the Covenants. We have not made any changes to the Bylaws outside of what was specified in the act. So we can skip those for now.
The big changes are to the Covenants. The way Holiday Shores has always operated is the Covenants are what we live by, Bylaws which are voted on by the Membership are extremely important but the Covenants win out, Rules established by the Board and the Association are last, still important but they are not as important as Bylaws and not as important as Covenants. When you read this law it says Community Instruments, we asked for clarification and it puts all three on a level playing field. Our existing Covenants do not do a very good job of tying to our Bylaws. So what we are trying to do is to make sure that our Bylaws have a starting point within the Covenants. For example we are removing the documentation of what the $50 is for and now dues and assessments becomes a Bylaw on its own, and we will outline the assessments in detail in the Bylaw. We added a line to the Covenants, “Member/ purchaser agrees to abide by the declaration of the community instruments of Holishor Association as established by the dually elected Holishor Association Board of Directors and or votes of the membership”. Again you will see this is the Members rights version, we are trying to tie in the member’s ability to pass Bylaws into this which do not exist in today’s Covenants. We also added “Holishor Associations dually elected Board of Directors shall be responsible for financial management of the Association as articulated in the association instruments.”
Jim McCann: We added a statement under the membership Covenants, which I do not feel comfortable discussing right now, because I don’t have it in front of me but, I will have it at the next meeting.
Restriction number one under the Covenants can’t be changed for 99 years so it has to stay as it is written. It establishes the intent of the association to be a single family community. Basically what that does is prevent apartment complexes and duplexes from being built in Holiday Shores and the Covenants dictate that. That restriction is the only restriction that cannot be changed for 99 years. All the other restrictions can be changed or altered as deemed by the membership or by the owners of 2/3 of the lots of the association.
Scott Webber: We then moved the building requirements.
Jim McCann: That Covenants were extremely outdated, when this community was first formed it was a weekend community that was full of club houses, and the square footage was limited at 600sq ft minimum, since then that number has actually gone up and it also talked about the fact that the house had to be constructed of a certain material. The house could not have rolled shingle siding on the outside of it. It covered things in our building and architectural requirements, so instead of having convoluted Covenants that were outdated we reduced the size of that Covenant, and referenced to our specific building codes. The other thing that we did was eliminate verbiage that restricted the number of buildings that can be put on a lot and tied that to the building codes. As it is written now, there can only be one additional out building on a lot and in cases where you own two lots you could not put a storage shed on a second lot that didn’t have a building which meant that people had to join lots if they had two lots. What we found is there are lots in holiday shores that cannot be joined, so rather than have that as a Covenant we are going to add that into the Building and Architectural codes so that when circumstances dictate, variances can be given so that those things can happen. There are cases out here right now that fall into that category that have been here for a while and to be honest with you a lot of lakefront lots are allowed to have an additional storage facility because they have docks, and if you put a storage facility built into a dock, regardless of whether it is on your dock or not it is still another storage facility. So we eliminated that from the Covenants and made it a part of the Building and Architectural rules.
Scott Webber: One Covenant was tied to septic systems, since we no longer have septic systems we kept the line that says “No waste shall be permitted to enter Holiday Lake” and struck everything to do with septic systems and outhouses as well.
Under the noxious and offensive trade we added a line that states “owners, purchasers, members agree to maintain properties in accordance with Association instruments”, again tying the derelict property Bylaw to the Covenants.
“No signs of any kind shall be permitted without written permission of Holishor Inc. or its successors or its assigned,” it was actually part of another Covenants and we separated them.
Jim McCann: We didn’t change Covenants 6, 7 and 8.
Scott Webber; We eliminated the Right of First Refusal Covenants, because it is now a violation of the Civil Rights Act, within the state of Illinois. A number of the Associations that were developed in the 60’s and 70’s all have this same Covenant and they are all going to remove it. Holiday Shores has been under council for years that this needed to go and we are using this opportunity to make it go away. We added two additional Covenants, the first one reads that “Changing of a Bylaw shall be done in accordance with voting procedures established by the board of directors of Holishor Association Inc. and incorporated in the Association Instruments.” Again tying the member’s rights and voting rights into the Covenants and Bylaws. The other change is #10 which is “Class of membership shall be defined by the Bylaws.”
Jim McCann: We need to add a quorum back in here; we need to define a quorum.
Jim McCann: Another thing that is going to be added to our Covenants is a definitions page which is something we don’t have right now. It is something we discovered in doing research on many other associations that was incorporated into each and every one of them. We have instructed our lawyer to go over the Covenants of other associations and add a cover page of definitions so that there is no misunderstanding as to what different words mean. We have found through reading SB3180 that even with the definitions page it is incredibly confusing and we are trying to remove as much confusion as we possibly can.
Scott Webber; Jim and I were discussing the voting rights, when it comes to manner of voting it goes to Bylaws as well, in our Covenants when it goes to manner of voting it is a by-lot vote for a Covenant change, which we are going to pursue. This means one (1) lot equals one (1) vote, which means if you own multiple lots you get multiple votes as stated by our Covenants.
Jim McCann: You also do not have to be a member in good standing to vote on a Covenants change.
Scott Webber; Don’t confuse Bylaw votes with Annual Meeting votes or with Covenants votes. They are completely different. On the Covenants vote you will be allowed to vote by mail. You will be allowed to vote by Proxy. There are 1800+ votes and based on our Covenants we need 1287 Yes votes to pass. It will be a monumental undertaking to say the least.
I am proud to see that there are more than three people attending the meeting tonight and thank you for coming.
Scott Webber; Since our Covenants are By-Lot what we are trying to do is to tie a Bylaw vote back to the Membership, realizing there is no way we could do that if it were a By-Lot vote. Even if the greatest Bylaw was ever written it would be next to impossible. What we are going to do is similar to what it is today; SB3180 refers A-Lot to a 20% number. Our thinking is, since you can vote by mail, possibly with this change to move that to 20% of the membership voting on a topic, that is kind of what we are thinking now. Right now it is a quorum at the Annual Meeting, and we struggle to get 50 people there. I don’t want to pretend that this law is all evil; there are some things that make sense and possibly might be a good change for us. But trying to exceed the law I think 20% of the membership voting on a Bylaw is a good number and is what is in the law. This is just my opinion and can be changed at any time.
Manner of voting specific to this, and I don’t want to confuse the Annual Meeting. I have asked Joe Nicoloff to head up and map it out what this vote is going to entail. I gave him a list of my thoughts, and we will go through them and you let me know if I missed anything. First line is in-sourcing versus out-sourcing and the cost association with that. One of the problems we have is we don’t have a clean picture of the Association by lot. We do on a Membership basis but, since the association has never done a by-lot vote to my knowledge, we do not know for sure that the information we have is 100% accurate and to do a by-lot vote, this needs to be 100% accurate. Questions I had for Joe are, is it legally a CYA, do we out-source it and what is the cost, do we in-source and what is the cost, what date do we want to set the vote knowing that there won’t be an end date for the vote until we reach a quorum, what date do we want to send the packets out to start the voting process, how do we want to count those votes, what is the process around that? Joe what else am I missing?
Joe Nicoloff: I think that is about it, right now, Scott.
Scott Webber: So is there something that around the voting that you guys think?
David Decker: You were talking about the out-sourcing versus in-sourcing and I think you were focused on the lot clean up of the list of lot owners.
Scott Webber; Yes and I would add to that the actual balloting of counts and collections.
David Decker; One of the things we have discussed is, is it worthwhile to look at an out-source solution in handling that ballot, receipt and calculation? That is going to be a challenge.
Joe Nicoloff: Are you are talking about both receipt and tallying?
Scott Webber: We need to map out, so let’s do a hypothetical. We have our Covenants & we have our Bylaws & we are ready to go. We know based on a law the proposed budget for 2012 has to be sent out 30 days in advance of the annual meeting so in an effort to save the Association money we put both the rough draft of the covenants with the budget for discussion purposes to get it out there so people can start to review it. That is certainly something that the office can handle. The next thing is when we establish the voting date to start, how does the ballot look?
I.e. If Jim McCann has five votes; 1) we need to verify that, 2) what is that ballot going to look like? If Jim says, I own six lots, what’s the remedy there? How do we handle that? Does that ballot hypothetically go to the office, somehow the ballot needs to be sent to the office so that the office can verify that Jim Voted and it gets put in a lock box and gets sent to the auditor.
David Decker; I think what you are asking him to do is figure out what that procedure should be?
Scott Webber; Yes
David Decker: Then you just told him what it should be.
Scott Webber: I said hypothetically, I am just an idea guy.
Joe Nicoloff; That is where my thoughts were going too, because we need some way of verifying these votes. The office right now is going through the list with Madison County and double checking all of the properties so that we have a good list. At that point we should know when we send out a ballot that the ballot should be for whatever amount of properties owned.
Glenn Dalton: One of the things I would recommend, Scott, for the validity of the election and who owns what lot in Madison County, so it has to be checked against Maps and Plats and in Madison County to ensure that it is either a joined or not joined lot.
Scott Webber; And who owns that, Madison County?
Glenn Dalton: Madison County does, and that is one of the things the office is doing, we are currently going through maps and plats for that validation.
David Decker: Your question is who comes up with the list? Or what is the source we are checking against?
Scott Webber: I think we have the list, how do you validate that the information we have is accurate?
David Decker: From the way you asked the question, I though you were asking if we would send the vote to Madison County and have them send us a list.
Scott Webber; No
Gerry Theodor 1346: Is a joined lot going to be 1 vote or 2 votes?
Scott Webber: One vote.
Joe Nicoloff: Are you agreeing with the thinking that going by Madison County maps and plats is the way we should be verifying?
Scott Webber; I would look to you for that. The only other way is to contact each member, should be less cost and less time consuming going to Madison County.
Joe Nicoloff: Going to Madison County gives us a legal footing and a legal document.
Scott Webber: Makes good sense to me.
David Decker: The challenge is getting all that validation done and keeping it up to date. One of the things that have to be established is what the date of record for the vote is. I am just going to make up a date for fun, so if April 1st is the voting date of record, do we establish that the people voting in that are the lot owners as of March 15th? Regardless we are going to have to come up with a policy or a procedure to do it, because you can’t say those on record as of April 1st, you can’t hit that moving date. That is something we are going to have to figure out.
Joe Nicoloff: How do we know when a property through Madison County changes hands?
Kellie Crider: Madison County doesn’t but the title companies usually do and the members selling it, because they have to pay their dues and we have to collect assessments from the new members. The title companies are supposed to contact us, but sometimes we have to find out ourselves.
David Decker; As we are doing this research we are going to have to establish a date to check and see all properties that have transferred and you almost have to start doing that from the time you start doing your research till the time you start the voting.
Kay Slayden 1785: So I guess I just want some clarification. We have 1800 members?
Scott Webber: Votes.
Kay Slayden 1785: Votes, how do you know?
Scott Webber; 1800+ voting lots
David Decker: your question was how many members does the association have?
Kay Slayden 1785: How many lots are out here?
Scott Webber; Currently owned is over 1800, between 1800-1900.
Kay Slayden 1785: How many does the association own?
Scott Webber: 54 lots
Kay Slayden 1785: So with this new Covenants am I understanding that if you have 50 lots you get 50 votes?
Scott Webber; Not on the new Covenants, in the existing Covenants, if you have 50 lots if you have 1 lot you get the number of votes per the lots you own.
David Decker: For a Change in the Covenants
Kay Slayden 1785: So you are going change it so that if you have 50 lots out here you get one vote?
Jim McCann: No, we can’t do that.
Scott Webber: In a Covenants change, in our existing documents, Bylaws are separate and are done by membership at an annual meeting currently today in our instruments. In order to change the Covenants we have to do a by lot vote which means if you own 50 lots you have 50 votes.
Kay Slayden 1785: But they only pay one set of assessments?
Scott Webber: Currently today, yes they pay one set of assessments.
Kay Slayden 1785: And there is no where in this where that is going to change?
Scott Webber: Currently in what we call the members rights, we are leaving it up to the membership to have that vote, if the membership so chooses to go by lot, in the members rights they may choose.
Kay Slayden 1785: So when will the members vote on this?
Scott Webber: What is this?
Kay Slayden 1785: This new way you are trying to set it up now,
Scott Webber: That is what we are talking to Joe about; we haven’t released the start date of the voting. We are waiting for legal counsel to get back to us so we can understand and sit down with them on their opinion, how they came to that opinion, and then look at it from a number of different levels, have the discussion. We will then submit, to the membership, the Covenants and Bylaws changes as requested. If an attorney came to me and said you have to do it this way or you are personally liable, I didn’t sign up for that so I would vote to submit something.
Kay Slayden 1785: Well it’s always been my intention that if everybody paid their fair part out here you would be, I mean, I have never been able to get a count of how many people own multiple lots. I have been told that there are more people that own multiple lots then there are people who don’t. I remember Jim said that there are some lots that cannot be joined, why is that?
Jim McCann: Because they fall across two different taxing districts, whether it is a school tax, or a township line, whatever. When I was in the recorders office researching this, I spoke with the Assessor, who handles Holiday Shores; about our Covenants and we require members to join lots in certain circumstances. She informed me that there are lots in Holiday Shores that cannot be joined. She had run into this in the past when a member said the association says that I have to join my lots or I can’t do this or that, she informed them that the association does not control who’s lots are joined. That County does and you cannot join lots that exist in different taxing districts. She also informed me that there is at least one house out here that is in two school districts and depending on where the children sleep in that house determines where they go to school. There were a lot of crazy things I found out that day.
David Decker: In addition to that one is the taxing district, the other thing is that joining two lots the different utilities have easements between lots, and before you join those two lots you have to get those utilities to release those easements and if they don’t you cannot join those lots. There are multiple reasons as to why you can’t join lots.
Kay Slayden 1785: When I called the recorders office, I guess I just want to get some clarifications, I went to get some copies of these, she asked which ones do you want, she said there are 13 additions. Is that correct?
Jim McCann: There are 13 sub divisions in Holiday Shores all of them fall under the same set of Covenants as they exist.
Kay Slayden 1785: Is it recorded in the court house that it is By-lot?
Scott Webber: The only thing that is recorded at the court house is the Covenants that we read earlier. It references only By-lot in Voting to Change Covenants. One of the issues that Associations are facing is they were never required to record their Bylaws, so they recorded a set of Covenants and you may have had a set of Bylaws but you were not required to record them. This new law states that you have to record everything including rules. So you’re looking at a document that in my opinion is half there, because there were a set of Bylaws that went along with it. I can tell you on July 11, 1970, and this is the whole idea around the membership rights edition, the Membership called a special meeting and changed it from a By-Lot to a Membership based association. For 41 years it has been that way, the point is The Membership called that meeting and chose to go that direction.
Kay Slayden 1785: That was in the 70’s.
Scott Webber: July 11, 1970, for whatever reason, I don’t know, I was one year old. The membership made that decision, what we are attempting to do, in the Membership Right version, and the attorney may tell us something different, we are trying to continue with that, to continue to let the association make those decisions to go by lot, stay membership it is up to the association by a vote using these documents to tie that vote. This I my opinion, the by laws are not recorded so there is nothing in the Covenants tying those together, what we are attempting to do is tie them together so if the association does make that decision, they have teeth in that because the Covenants are recorded with the Bylaws. That is in a nutshell, our opinion. Now I must say not all of us agree and I must say that the attorney might blow us out of the water. We don’t know.
Kay Slayden 1785: But he could very well come back with his answer at the end of March, and you are trying to push this through to the May meeting.
Scott Webber: We are attempting, we have to set a date because there is a reason that changes to the Covenants have never taken place, with all due respect to past board members, they are volunteers and it takes an incredible amount of time to do it. I like putting dates on things because I want people moving, if we didn’t’ put a date on it then pretty soon we would be pushing it out, the lawyer committed to me February 15th. As far as I am concerned it is February 15th they should get back to us. I fully intend to get our draft to the membership in March. If I don’t I will put it in the Holiday Times Presidents Corner.
Kay Slayden 1785: I feel that if everyone paid their fair share out here it would be better for everybody in the Association. That my personal opinion.
David Decker: The thing you need to understand is with us here talking about these Covenants has nothing to do with the point you just made. All of the changes we are talking about with these Covenants are to try to clean it up to pull out the things that are illegal.
Kay Slayden: What is Illegal?
Scott Webber: The right of First refusal.
David Decker: To take the items that are obsolete and pull them out. Since we are doing that, we also want to make sure we are doing all the rest of it at the same time to build what Scott talked about. I use the analogy of the Tree; the Covenants are the base of that tree. It takes 2/3 of the lot owners to change the Covenants, no matter what. That is what the Covenants say. If we are going through the trouble to take out the things that are obsolete and illegal, we need to clean it up. We can build these Covenants so that they are in a structure that we can build on for the future. The Bylaws, Scott uses the term that with both of these, we are trying to make them strong for the membership to allow the membership to do what is the best for the Association. If that decision is what you are proposing, then hopefully this structure that we are talking about putting into place give you the capability to do that.
Kay Slayden 1785: But there is no way I can do that by the May meeting?
Scott Webber: This will not close by the May meeting; this is not a one day vote. It took one Association four years to change the Covenants.
Kay Slayden 1785: But your goal is to get them all changed by the May meeting?
David Decker: No, our goal as we stated at the last meeting is to try to get this out to get the vote started before the May meeting. We don’t know when we are going to be done with that vote because before the vote can even possibly be closed, we have to get 2/3 of the votes in and we don’t know how long its going to take to get people to fill out the form to either send it back to say they agree or disagree. One of the things that we are proposing it to allow people to mail them in, we are going to allow a proxy. All of these are in an effort to come to a conclusion as quickly as we possibly can. Is that going to be a week, a month, we don’t know. Are we going to be able to have the annual meeting and present it to them there? We don’t’ even have a facility that all the membership could come to and get that vote, our goal is to try to figure out how to get this thing done, and that is what we are going to get done. Is the vote going to be closed by the Annual meeting? I don’t think there is any person involved with this that believes that.
Scott Webber: If we can get this done by the fall we would be the seven happiest people in southern Illinois. That is aggressive, let me ask you this, because we have not heard from the members, I just went into board powers, what are your feelings about having us control your assessments without your input.
Kay Slayden 1785: I think I want the members to have their votes, but ever since I came out here I feel like financially if everyone carried their load it would be better for the whole association. That is my push and I am still not sure that won’t be our push and there is a group of us.
David Decker: That is well within your right.
Kay Slayden 1785: I think if you have 50 votes you should have 50 assessments. I would like to get a count as to how many multiple owners we have out here.
Scott Webber: Rough numbers based on an excel spreadsheet, 870 single lot votes and 1100 multi lot votes. There are some that own multiple properties that are improved properties that pay on the house they own though they are renting them out.
Kay Slayden 1785: So if it has a house on it?
David Decker: Every occupied house pays assessments
Scott Webber; They still get a vote on that lot, but they are paying.
Kay Slayden 1785: So it is the empty lots?
Scott Webber: Correct
Kay Slayden 1785: So how many empty lots do we have?
Scott Webber: That we have not been able to determine.
Glenn Dalton: That is part of the validation process that we are doing Scott.
Scott Webber: It is still improved or not they still get one vote per lot per the Covenants for the Covenants.
Gerry Theodor 1346: Is there a possibility that the law SB3180 as it is written today could be interpreted that it is a per lot assessment, could the lawyer come back and say that, which would make all this a moot issue that we just talked about.
Scott Webber: It is a possibility and we are ready for that.
Gerry Theodor 1346: Also when you talk about the lots, they are not recorded in the county but there should be encumbrances that they have to be in compliance with the Covenants and Bylaws in the association.
Scott Webber: Yes
Michael Colyott 40: I wanted to thank Glenn and his crew for doing a great job this winter. I have heard from many of the board members about how they are not hearing feed back from the community and the internet provides a great tool and I would like to bring up the issue of increasing communications. Is there something we can do to help increase the communication? My knowledge of people, being a retired Manager, is usually everyone complains and that is all you hear. I want to know how to increase the communication.
David Decker: I think we would ask you what can you think of that we can do to help with the communication?
Michael Colyott 40: I think that Obama started all this with his Crusade of Volunteerism, I am one of the first to step up and offer to volunteer. I am handicapped and disabled and my scheduling isn’t always written in concrete but knowing what is going on, how can we vote or have an opinion if we don’t know? Quite often we reach a point that we get just enough information to be ignorant. The park issue for the ball field that was the perfect example of that, I would volunteer to make phone calls, if possible I will walk door to door.
Scott Webber; I will tell you that this Covenants change is the biggest thing that will take place in holiday shores in quite some time. We are going to need an army of people to get 1900+ votes. The quicker we get it done the cheaper the cost. If you agree we will proxy your vote to the board and if we get 300 proxy that is 300 less packets to send out, we are going to need volunteers, we are going to need people like Laura Scatturo, Mr. Mad Facebook over here, we need lots of different things and we really appreciate you offering and we will call you.
Joe Roth 1030: The reason you guys are proposing this is to keep our tax exempt status?
Scott Webber: That is part of the reason; the law also grants the board without your approval to make all the changes we are talking about outside of the Covenants. In the law we don’t have to send it out to the membership for a vote, we have elected to do that. Part of it makes sense since we are doing that to change the Covenants that needed to be changed to stay in compliance with the Not for Profit Act.
Jim McCann: That is one of the three. That is the one that hits everyone’s pocket books. Keep in mind these are Civil Laws; people won’t go to jail, people will get sued, and everyone gets hurt when that happens because the only ones that’s going to make out in that lawsuit will be the attorneys. Parts of the Bylaws stipulate the Board of Directors protect the assets of the association, and that includes keeping us out of a position that opens us up to litigation. We have to do everything we possibly can to become compliant with all the laws out there. Maintain our tax exempt status, because if we don’t, our assessments will go up 35%. If we are not tax exempt we are going to pay 28% Federal and 7% State because the Business State tax just went up in Illinois. There are other things that come along with not being covered under the Not-for-Profit Act. We don’t want that to happen. Those are reasons why this started.
Joe Roth: I just wanted to say that & thank you for such and enlightening statement, because I think it is important that we as a body know why we are doing this, this is why the board is doing this, to keep the tax exempt status and not get sued.
Conversation Ensues
Scott Webber: We eliminated the Water Covenants because the Association sold the water usage. It no longer applies.
New Business
Jim McCann: Glenn and I drove up to Lake Holiday near Somonauk, Illinois to a meeting about SB3180. We discussed the ramifications on other communities; we further discussed the hiring of a lobbyist to go to the legislature to try to get changes to this law because the first bullet point that came up in the discussion was that it is a stupid law. Obviously we can’t put that to the lobbyist to take to the legislation. This law was passed in five months, without debate, without consideration, with two amendments and passed unanimously in both houses without decent. It got bulldozed through because Senator Wilhelmie has a lot of pull. We also decided that we urge all of our membership to contact the Representatives and the Senators that passed this bill and tell them how displeased we are about the passing of this bill. The first thing we did was we supplied them with every item we found in every aspect of this bill line by line. As the lobbyists said, we have your catalog and I can’t take that in, I need a one pager to take to Senator Wilhelmie. We are attempting to go to Senator Wilhelmie and have exemptions put into place for Associations that are Larger than 500 members and that were formed prior January 1, 1993. The stated reason for that was because of the long standing success with most of those communities and the fact that their instruments have been in place for a long time. This law was originally created because of a problem with a developer that still had control of an association. That doesn’t’ fit us, that doesn’t’ fit anyone in the Lake Association. When this law was passed it was with the intent to take care of a very minute group of people and it blew up into a point where it covered millions of people, not just 120 people in one retirement home that were upset with a developer. So, we gave them specific incidences in the act that led us to believe we should be exempt from this law. One is that we operate under members rights and that this law took away members rights and we sited specific instances like section 145 of the finance section which gives the board the right to increase assessments 15% without membership vote. We felt like that was not correct. There are inconsistencies between this bill and the Not-for-Profit Act (NFPA), this bill on the other hand references that it covers associations covered by the NFPA. The NFPA definition of a quorum is considerable different from this bills representation of a quorum so you have laws that you have to follow but they are different. We came up with a set of five bullet points that we gave to the lobbyist that he is going to take to Senator Wilhelmie and fast track changes to this bill and get them through. Another thing that we put in was, this law did not allow for a transition period, it became effective in July of 2010 and it became effective on date of passage. There’s not a home owners association out there that could comply with that law as of the date of passage. And most of us are covered under the NFPA which put us in jeopardy of losing our NFPA status. They have a legal term for it but in essence it is just not right. We are hoping that we can get an exemption from the law, barring that we are hoping we can get a phase in period between 24-48 months to get our instruments to comply with the law.
Scott Webber; We will be hosting the ILAC meeting in October it is an open meeting. From the Association you were in, they had nice paved roads, a 2 million dollar budget and no reserves right?
Jim McCann: They did not have reserves for their roads, they also did not allow members to vote on their assessments, and they were passed by the board of directors. Their members are not allowed to vote on Bylaws, Bylaws were established by the Board of Directors.
Open Floor
Laura Scatturo 1716: What’s the cost for this Lobbyist?
Jim McCann: $6500 for the first year, $6500 for the second and if we determine to keep him it will be $10,000 for each additional year, our portion of that is $300 because we belong to the Illinois Lake Association. The first year of the Lobbyist was paid by one of the larger more flush associations up north, next year they are going to take it out of the coffers of the Illinois Lake Association; currently they have $7400 in the bank and it will wipe it out. $300 is our annual dues per association and the lobbyist is going to be paid out of the Dues.
Laura Scatturo: How many hours do you think you guys have put in just going through all this? When did you find out about it? When did you start on it?
Scott Webber: We found out about it in Mid December which is when we started working on it that was when the Illinois Lake Association found out about it. Collectively it has been hundreds of hours.
Conversation Ensues
Brian Sciranko 356: Earlier on treasurer’s report where you said that maybe the assessments ought to increase about $100 in order to keep pace with where we are at and my question is the last increases, is that a pretty normal increase or is that pretty sizeable?
David Decker: It is the same as the last increase was in 07.
Brian Sciranko: Prior to that?
David Decker: Honestly I don’t recall but it was in that area.
Conversation Ensues
Brian Sciranko: Where are we on the monies that should be coming in that are not coming in, delinquent lots etc?
David Decker: You see the names in the Holiday Times every month that is the list of folks not paying their dues and assessments. I would tell you that some of the most significant highest amounts that were owed to the association have been resolved in the last few years, I want to say that the average of what most owe is pretty minimal, you are saying about $2000-$5000, part of our methodology is when folks get behind, the office has been working with people to get others on payment plans and in addition we put liens on their properties. In the short term it doesn’t do us a whole lot of good but in the long term when they try to sell that is when the liens come into play and we get collections at that time.
Brian Sciranko: The list hasn’t seemed to get smaller, has our ability to collect increased in the past couple years?
Glenn Dalton: The methodology from a strictly financial perspective is better received if you look at our budget to see what our projected amount to receive is; we are exceeding that by double.
David Decker: Last year in late fees we collected $17,000.
Conversation Ensues
Gerry Theodore: The people on the payment plans are not posted in the times but they cannot get their boat stickers till they are paid off. Some things are easier today because the procedures have been improved; a few years ago we didn’t do so well. You folks probably realize this but; I would be derelict in my responsibilities with the building committee if I didn’t point this out. One is you talked about making in the Covenants that puts the decision making away from the Covenants and puts them in the building rules and that is fine, and I can see where it streamlines. However, the one thing that bothers me is that you gentlemen I trust pretty well up to a point to make some reasonable fair and just decisions, but I have also seen boards out here and even started in my young career on the board, involved with some board members that I wouldn’t have trusted them any farther than I could have thrown them. When it comes to such things such as how many out buildings you are going to allow on a lot and on a property that is not improved. That works fine if you go through the variance process and you have a good sensible sane board. But what if you get 4 or 5 Yah whos and if they but 2 garages and 4 sheds on a lot, my concern is when you do allow freedoms you allow for the ability to go south. Like I said you probably already thought about that but I want to make sure that you consider what could happen if you get the wrong people in a position of authority.
Jim McCann: That goes right back to the membership rights, it extends to electing those 4 or 5 Yah whos who are going to sit on the board and make those decisions. And if the members determine that they want 4 or 5 in making those decisions then so be it. And there are procedures in place to remove those people if that is so needed.
David Decker: That specific point ate up a significant amount of time in our debate.
Scott Webber: On the sheds, you can park and enclosed trailer on your property and use it as a shed. You can park 6 or 7, do you want that or some sheds?
Gerry Theodore: I can see both sides, I just always have a problem when you start freeing things up. If you want to compare under our old guidelines the difference between a Covenants and a Bylaw it takes a lot of time to get it changed. So there is good and bad in all of this and I know as long as you keep good people on the board these problems shouldn’t pop up. But I can see that you could have a lot of bad things happen.
Conversation Ensues
Gerry Theodore: I appreciate what you did tonight by telling us some of the things you are proposing.
David Decker Motions to adjourn, Joe Nicoloff seconds
Meeting Adjourns at 9:31pm
Minute submitted by Don Austin, Secretary, and Kellie Crider. |