Discussion of Dues Increase and Covenant Changes

Thank you for your recent comments and feedback via email regarding the increase in dues. In response, I am of the opinion that this is YOUR association and the board members have been appointed to administer any necessary services and uphold the covenants. Those who attended the meeting prior to the elections wanted a commitment from each candidate that we would not
make modifications to the covenants during the first term of the homeowner-run Board and we have strived to meet that commitment despite multiple opportunities to make some rules more reasonable and clear.

Nonetheless, it is within your rights as homeowners to make any changes or modification to the rules that govern the Association provided we have a majority vote in favor of the change. To be clear, by majority I mean at least 50% of the votes to be cast (16 in most cases) must be in favor of the change, abstentions will be counted as part of the total. (For more details on this requirement, see Article 2 of our By-Laws, section 2.2b).

I am glad to see that you are openly discussing these issues and sharing your ideas with each other. To be fair to those who are not on the Lake Five Estates email distribution, I would require that we provide an advance written communication to everyone should the Association chose to move forward with a vote.

To aid in your discussions, I submit to you the following details:

1) The dues this year were adjusted based primarily upon actual fixed costs (electricity, care of common areas, etc). This is one of the main reasons that a vote was not held - those items that would be candidates for removal would not have had a significant impact on the overall budget.

2) The $600 budgeted for administration includes costs to cover postage and printing supplies for mailings, which we try to keep to a minimum. If everyone was willing to rely on electronic communication, that would reduce some of our costs.

3) The administration budget also includes a few hundred dollars to have an attorney review our CCRs and the to-be-developed enforcement procedures. The Board has been very generous with waivers for those who have sought them (to the dismay of some homeowners). The additional money budgeted for an attorney is a direct result of those homeowners who neither follow the rules nor communicate to the Board the reason they need a waiver.

4) In the past year, each member contributed $75 through their dues to replenish the Association's Litigation fund. The fund was depleted as a result of two situations which required legal action to be taken. This cost was despite one case resulting in a court order for the defendent to partially reimburse the Association's legal costs and the other case settling out of court. This demonstrates how costly it can be for all of us when just one member of the Association fails to abide by the CCRs or respond to written notices from the Board. It also demonstrates why it is so critical for us to establish effective enforcement procedures that make litigation a final attempt only.

5) The landscaping contract for the next year reflects a significant cost increase. Many people are under the impression that the contract only covers mowing because that was the only visible work provided under the previous contract. Mowing in the new contract (near weekly mowing of most common areas, rough cut of the larger outlots like the one behind lots 13 - 16 twice a year) is less than 50% of the total cost. The new contract includes the application of 50 yards of mulch, applied fertilizer and weed control products in turf areas and plantings 3 - 4 times per year, hand weeding of planting beds weekly, regular pruning of trees and bushes, winter preparation pruning of trees and bushes, leaf removal and clean-up in the fall, general clean-up and winter damage repair in the spring, and more. These are all things that need to be done with some frequency (I realize that there are wide opinion differences in the mowing requirements). Note that this contract does not include any enhancements to the entrance or any planting or maintenance of annuals, those are services we are "saving up for" with our reserve funds to avoid any special assessments. I feel confident that this contract provides a good compromise between cost and desired services.

6) When comparing our neighborhood to others, please make sure you are making fair comparisons. We have about a 90 acre neighborhood with 30 homes which is an average of three acres per home. A significant portion of our neighborhood is protected natural reserve area, including wetlands and wildlife habitat. This provides for privacy, beautiful scenery and integration with nature that you would not get on a 1/2 acre lot in a neighboring community. Furthermore, their dues are probably lower because of the revenue generated from the public golf courses in their neighborhoods while we have homeowners who don’t even want walking trails passing their property. If you know someone in a neighborhood of similar size with similar features that is paying less for dues, I would be more than happy to contact the president of their association to discuss how they have been able to do it.

7) As a reminder, the Board of Directors consisted of the developers prior to earlier last year. The By-Laws and Covenants have always been the governing documents but I understand that they have not always been upheld or referred to in dealings many of you had with "the Board" in the past. When control was transferred to the homeowners, we assumed control of Lake Five Estates Community Association, Inc. with no information or documentation on any previous agreements made with homeowners. Out of fairness to everyone, the CCRs will prevail when discrepancies are found between actions taken by the previous and current Board members.

I hope these points help you to better understand the challenges facing the Board and how decisions made by individual homeowners can impact the cost to everyone. The books are open for anyone to see and we do try to respond as thoroughly as possible to your questions. I am confident that each board member respects the need to manage your hard earned money with the same care and discernment with which they handle their own.

Warm regards,

Leslie Malotky - President
Lake Five Estates Community Association, Inc.