Email Response from Board, December 23

To: James Nunn, Plantation Springs Resident
From: 2009 PSHOA Board
Date: 12/23/09
Subject: PSHOA Board response to James Nunn re: Request for Special HOA Meeting (Quarterly Payments Amendments)

James,

The board is in receipt of your petition dated December 19, 2009 that has been signed by you and one other homeowner requesting a Special Meeting to consider an amendment to the CCR's and an amendment to the By-Laws. Your petition does satisfy the requirement stated in the By-Laws, specifically Article IV, Section 4.4, Special Meetings. This article states that the board shall call a Special Meeting of the owners within 30 days of receipt of a petition signed by at least (2) of the owners and presented to the Secretary.

Prior to the receipt of your petition, you did bring your request and amendment to the board's attention on December 8, 2009. The board reviewed your request and responded by asking that you table your proposal in light of the fact that the board has always been willing to work with our fellow homeowners by offering an approved payment plan for homeowner's who need special consideration. Additionally, the board explained in their response that this request would place undue costs on the Association related to collections and attorney fees. Please note that the board still believes that this amendment is not needed and would place undue costs to the Association.

One of the most important items that we would like to address first is that you have stated that if the proposed amendment is approved "before January 30, 2009 it would permit homeowners to make the choice of paying with this coming year's assessments". Please note that this is not the case. Article II, Section 3 (a), states that the board must give the owner's 30 days notice of the assessment for a given year. The board has already completed this; therefore if the amendment was to pass, it would not take effect until the 2011 assessment cycle. This is another reason the board did not believe this should be a rushed process. The board would like to survey the community first to see if this is even something that is of interest to the community prior to spending Association funds on an issue that the community may or may not really be interested in.

What will the costs consist of for the HOA on this matter? One, while you have prepared an amendment; the board believes it is their fiduciary duty to have the HOA attorney review the governing documents to ensure that an amendment and ballot are drafted that are in accordance with the governing documents and state law. This will be costly since the attorney bills at 250.00 per hour. Additionally, there will be the costs associated with copies and mailing out the Special Meeting Notice, the ballot, the proxy for quorum only and proxy for the amendment.

Please note that in order to hold the Special Meeting, we must have a quorum of 25% (or 44) of the homeowner's in person or by proxy at the Special Meeting. Additionally, if quorum is met, then at least 51% (or 89 homeowners) of the community must vote in favor, either by ballot or in person to approve the amendment. Unfortunately, we have difficulty achieving quorum at the Annual Meetings, so it is possible that this would be another obstacle for the amendment process. However, in the event the amendment passes, the document will need to be filed with the county and a copy of the amendment will have to be sent to all homeowners.

Long-term costs that will be associated with this amendment will be the accounting and collections of all homeowner accounts. If you are going to have quarterly billing as an option, then this will increase the assessment statements by three mailings. Instead of only sending one assessment invoice, three more will be needed to be sent out. This will increase the collection efforts for accounts. For each time a quarterly payment is missed, a collection must take place. Additionally, when you have 4 collection events instead of one it not only effects the collection and causes more bad debt and late payments it jeopardizes the HOA budget. There are no issues with the HOA receivables so once again there does not seem to be evidence of change required. If this request is to address a specific need for a homeowner they can contact Principal Management Group to request one of the approved payment plans.

In light of the above, the board believes the amendment is not needed and the costs associated with the process would not be beneficial to the community. As stated above, the board is willing to explore this with the community as a whole in 2010, via a survey, to evaluate whether this would be of interest to the community or not. Once again, the board requests that for the benefit of the community as a whole that you withdraw your petition at this time.

Sincerely,

The Board of Directors