October 11, 2006 BOD Meeting Minutes

LAKES HOMEOWNERS ASSOCIATION #3

Board of Directors Meeting Minutes

October 11, 2006

Board members present were Duane Pontek, Judith Weaver, Wayne Divoky, Chuck Sloan, and Bob Deken. The meeting was held in the Oakwood Clubhouse ballroom. Ken Flynn, General Manager, and Karen Jorgensen, recorder, also attended.

Call to Order: The meeting was called to order by the President at approximately 6:40 PM.

Meeting Protocol: Mr. Sloan read the Board's meeting protocol.

Adoption of Agenda: The agenda was adopted as written.

Approval of Meeting Minutes: Ms. Weaver moved to approve the minutes from the October 4, 2006 meeting. Mr. Sloan was the second. The motion passed.

Board Member Reports:

Transition Status - Mr. Divoky

Mr. Divoky, Mr. Pontek, and HOA outside counsel met with Mr. Poulos, the RCI representative, on August 2nd and 21st. The next meeting is scheduled for October 23. The following items have been agreed to:

Storm drain in Ironwood Estates on west end of addressStreetCherrywood Drive was

replaced

Drainage washes that lead to the golf courses will have access restriction posts

installed so someone does not inadvertently drive down them

Restrictions will be installed to eliminate cut-thru access from the golf course

maintenance yard to the community

Repair drainage at the Mossy Rock entrance so that water does not drain onto the ball

field

Provide new signage at the EJ Robson gate, HOA to provide design

Trees at the EJ Robson gate will either be replaced or a warranty will be given to

replace them if they die.

Mill and overlay Arrowvale and Hercules Drives and slurry seal

addressStreetRibbonwood Drive in Ironwood

Correct the drainage problem at the Glenburn gate

Complete the greenbelt walking path sidewalks along addressStreetNacoma Drive

Replace concrete collars around the Pima water valves in the Villas 37

Repair the damaged drainage ditches in Unit 35

RCI will warranty the perimeter block wall along addressStreetSun Lakes Boulevard

RCI will warranty the low spot in the sanitary sewer in the Oakwood Clubhouse lobby

The following are still being negotiated:

Install a pedestrian gate at North Dobson

Fix the sanitary sewer in the Oakwood Clubhouse kitchen

Enclose community along addressStreetRiggs Road by the EJ Robson gate area.

Provide office and maintenance work space

Build golf cart path to Safeway shopping center

Replace block walls that do not meet ALC standards

Treasurer's Report - Mr. Deken

The surplus of $621,000 listed on the Treasurer's Report dated 10/11/2006 shows that the HOA is in a very good position. This amount is the result of increased interest income, the transition team not spending what was allotted, road work that is not complete, the road consulting fee coming in under budget, facilities maintenance being close to budget, and the restaurants performing better than the budgeted deficit amount.

Secretary's Report - Ms. Weaver

Items covered since the September Board meeting:

9/7 - reviewed collapse of wall in Ironwood, determined this was not a construction

defect

Approve chair of Image Committee, Nancy Bunce

Scheduled an appeal from a homeowner

Scheduled meetings for every other week

9/25 - discussed the AAM management contract

Voted not to fix the addressStreetRiggs Road waterfall due to replacement and

operating costs.

Scheduled meetings with committee chairs to review committee charters

Discussed employee manual

Affirmed Community Image Fee (Disclosure fee)

Approved the Diamond Lake Holiday Walk in 36C which will be done in conjunction

and with some financial support from the Association

All of the meeting minutes are posted on the website and a computer terminal is

available in the clubhouse

Insurance Update - Mr. Sloan

The General Manager and Risk Management Committee, working with the HOA insurance broker, have secured renewal of the property and casualty coverage for 2007 at a cost of $92,000. Separate policies for liquor liability and D&O totaled $7,000. The buildings remain insured for over seven million dollars and there is a million three hundred thousand in contents coverage. The HOA will secure an increase on employee fidelity coverage up to one million to protect against loss of fees and reserve funds. An insurance fund will be set up in the budget to cover small losses.

General Manager's Report - Ken Flynn

The Risk Management Committee saved close to $21,000 this year

Mike Pena has resigned to take another position. Resumes are being reviewed in order

to hire a replacement

Property tax refunds have been received for 2003, '04, '05, and '06

Overseeding is complete except for the ball field

Irrigation pumps have been replaced in Ironwood and the Price Lake area and in the

one of the spas in Ironwood

This month there will be new menus in the restaurants

Channel 5 and 3 were at Poolside to do interviews regarding the new gratuity policy

Action Items:

Appeals Rules Revision- Ms. Weaver/Joe D'Amore

The appeal process change is covered in Article XX of the Rules and Regulations, Sections 1 and 2. There is a ten-day time frame to appeal a citation. There is a form to make a request for an appeal and it can be downloaded from the website, picked up at the Oakwood reception desk, at the Patrol office, or from mobile Patrol. A prerequisite to having an appeal heard is to pay the fine; if the ruling is in favor of the homeowner, the fine will be refunded. One change in date and time of a scheduled hearing is allowed. The procedure at the hearing is as follows: Patrol will give the reason for the citation; the homeowner will state their case as to the reasons why they should not have to pay the fine; the Committee will deliberate and will notify the homeowner of the decision via email or post within 10 days from the hearing date. If a homeowner does not agree with the finding of the Appeals Committee they may appeal to the Board of Directors. Ms. Weaver made a motion to approve the revisions to Article XX of the Rules and Regulations. Mr. Divoky was the second. After discussion and some clarification, the motion passed.

Vendor Access Policy - Mr. Sloan

This is a policy proposal for allowing vendors to use HOA facilities for promotional activities. RESOLVED: placePlaceNameSun PlaceTypeLakes Homeowners Association III will, at the discretion of the General Manager, allow vendors to display products and/or market services that are deemed useful and appropriate for the community under the following circumstances:

The vendor will offer homeowners an opportunity to try out their services and/or

products in an entertainment type setting

Arrange and pay for display space booked through the catering or activities staff

Coordinate access and safety issues through the Patrol office and Meet HOA minimum

charges for food and beverage in order to utilize Association space.

Mr. Sloan made a motion to approve the Vendor Access Policy. Ms. Weaver was the second. Discussion: Mr. Deken suggested the title be Vendor Activity Access Policy. Homeowner suggested vendors supply a current certificate of insurance if they use the facility. The motion, with the change to the title as Mr. Deken proposed, passed.

Approval of 1st National Bank of AZ for Lock Box - Mr. Deken

The motion was made by Ms. Weaver and seconded by Mr. Pontek to approve 1st National Bank of placeStateArizona as the Association's lock box. Mr. Deken requested that the motion be tabled until Wells Fargo can provide assurance to the HOA that they can perform this function. Mr. Divoky suggested that Wells Fargo be required to provide such evidence by October 25th due to the tight timeframe that exists for sending out homeowner statements. Ms. Weaver: After discussion from the homeowners, the motion was tabled until no later than October 25th.

Approval for AAM to send Uncollected Community Image Fee Letters - Ms. Weaver

Six resales were processed without being assessed the community image fee. Ms. Weaver made a motion to direct AAM send letters to the people involved in those six resale closings explaining this and requesting payment of the fees from the appropriate party or parties. Mr. Divoky was the second. After Board and homeowner discussion, the motion passed.

Due to the time, Mr. Pontek suggested the meeting be adjourned. Mr. Divoky made a motion to adjourn the meeting. Mr. Sloan was the second. The meeting was adjourned at 8:40 PM.

Submitted by,

Karen Jorgensen

Recorder

Judith Weaver

Vice-President & Sec'y