A regular board meeting was held on February 19, 2012

A regular board meeting was held on February 19, 2012

ASOCIACION DE REGULARIZACION DE VECINOS DE LA CHOLLA, A.C.

A regular board meeting was held on February 19, 2012 at the Cholla Community Center.  The meeting was called to order at 9:00 AM by President Mike Dugan with the following members present:  Helen Dahlstrom, Gene Court, Ken Goodin, Bella Howard, Steve Willis, Tavane McComb, Jerry Ketelhut, Jr., Kathy Barnard, Steve Lee, Shirley McDonald, Don Schmidli, Delegate of Vigilance and Valente Cornejo, Mexican Representative.  ABSENT:  Pat Sledge, Pete Pisciotta and Laurie Weber.

MINUTES:                The board had previously received minutes of the January 15, 2012 meeting.  Mr. Dugan asked if there were any corrections or additions and there being none, motion was made, seconded and minutes approved.

TREASURER’S REPORT/FINANCE:                    Treasurer Helen Dahlstrom passed out the report ending January 31, 2012.  After her report, Mr. Dugan asked if there were questions, corrections or additions.  There being none, motion was made, seconded and report approved.

MEMBERSHIP:                   Ms. Dahlstrom reported 685 members paid in full, 195 not current, 4 Mexican members not required to pay, but did0 for a total membership of 884.  There are 18 members whose membership is unclear.

OLD BUSINESS:

            1.        SPEED BUMPS:                   Ms. Howard reported there had been a problem with one of the temporary speed bumps because it was too soft but they are working on it.  Her budget turned in was $4,500 based on Juan Mesa’s estimated per speed bump cost of $500 each not including signage. With the signage, which could need as many as 4 signs per bump coming and going, the cost could be closer to $1,000 per bump.  Her budget would take care of 5 bumps if the existing signs are used with one of the bumps.    Mr. Mesa suggested using asphalt material like the new highway that starts at the convenience store

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on Gus Brown’s road to the highway.  Mr. Mesa also suggested taking advantage of the contractor who is doing the Highway. Cement would be more like $700 and  he suggested the cheaper one because he felt it would be better with the  roads in Cholla.   Mr. Goodin asked what the height of the bumps would be and she said 3 inches at the edges and 26 inches wide.  The first bumps are planned for the temporary ones which need a little more thought on where they should be planned.  There was a short discussion about getting 3 bids for material, etc., but decided it was not necessary.  Mr. Lee made a motion that Ms. Howard proceed with the two bumps at $500 each with a leeway of $100 per bump to make sure they are covered.  Motion seconded and approved.

            2.        MAIN ENTRANCE/SECURITY/TEMPORARY FACILITIES FOR TRIAL PERIOD.  Mr. Ketelhut reported  he met with Joe at JJ’s and in talking with him,  Mr. Ketelhut said Joe is in favor of 24/7 security and  would like to see two guard shacks.  He had some great ideas about presenting some kind of offer to put security in homes.  It wouldn’t have to be monitored but would call attention to the problem.

After meeting with Joe, Mr. Ketelhut realized there was a lot of work to be done before they proceed with the security plan.  He said in his proposal they included the intention to have more business meetings so everyone is on board for the plan.  Joe felt it was a good idea to have a joint business plan and have a meeting with all the business owners.  At the moment they don’t have another plan on the table.  He did get an email from Dawn Marie and she, like Joe, is very leery of that kind of security.   Mr. Ketelhut said he really underestimated the amount of resistance to the plan presented and they needed to do some work on it.

He said he sent out an email to the board and asked them to send him a list of what their objection to the plan was and to the date of the meeting, he had not received one reply.  He also spoke about the location of the proposed edifice in the middle of the road close to the curve and also that Ron Rico was concerned that people wouldn’t stop at his store.  The Vecinos can’t say much about the location as Mr. Brown wants the security shack on his property and not property

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belonging to someone else.  Someone mentioned a small building near Mr. Brown’s office that would be good if it could be rented for a short time.  Mr. Ketelhut said it was suggested at the last meeting that they seek other options for security and he said there are few companies that could meet what is needed.  He said there is also deep rooted thoughts against security in Cholla and feels security should be placed on hold at this time.    The reason was that the board has a lot of other issues that take precedent over some items that need looking into before tackling a situation of this size   He also mentioned the audit of a couple of years ago and his problem with how it was done.  He was questioned what the prior year audits had to do with security and no answer was given.

3,        BUDGET DISCUSSION:                 Ms. Dahlstrom put together a proposed budget for the coming year which included monies needed for the hiring of Kaizen to handle legal work needed to make the Vecinos compliant in every way and also included monies necessary to hire a company to manage the day to day business of Cholla.  The cost per homeowner was $310 based on 685 members.  

 Mr. Dugan followed with information as to why the dues were going up, and it was mainly due to the necessity of facturas and paying an outside service to handle all the paperwork that is now involved in getting everything done that is now needed.  That would involve someone that is not a Vecinos Member or a board member but an independent company.  Kaisen, who has been doing other necessary work for the Vecinos, was asked to take over the duties and we were given we an amount of $2,000 per month.  However, Kaisen does several other HOAs  and are unable to take us on as a client making it necessary to find another company in town or someone  that is independent of the HOA.  For budgetary purposes the number Kaisen presented  was used to complete the budget that will be sent in the Newsletter for the members to cast their vote at the General Meeting.

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 Mr. Willis asked why it will cost more than it previously did to pay the bills, etc., and was told the management company would totally handle business of the HOA, including what Mr. Dugan previously did as well as all the business  to do with what is now  needed to collect for facturas and Hacienda.   Mr. Dugan said he was not doing everything anymore.  Everyone agreed that with higher dues, several paying homeowners would be lost.

Mr. Ketelhut suggested we stick with the present budget and take the shortfall from monies held as reserves and was told that was ludicrous.  Mr. Ketelhut wanted more time to work on the budget and was told there is not time to do it because it has to be sent in the Newsletter that is mailed to the HOA 31 days prior to the General Meeting. It was suggested that we have the City pick up the trash and was told we tried it one time, brought in Zofomat and it lasted two months.

Mr. Ketelhut quoted paid membership for three years and wanted to know why they are down.  Ms. Koerner told him it was the change in the fee structures based on meters instead of lots, the number of Americans selling to Mexicans and other current members who have purchased from other current members vacant (non-metered) lots and the economy in general.  There were complaints about not having newsletters and the budget not being discussed enough, as well as other complaints. Ms. Dahlstrom made several attempts to keep Mr. Ketelhut focused on the budget in order to get the task accomplished in time to present to the General Assembly.

Mr. Ketelhut had a problem with monies that were budgeted to pay Kaizen and he was told they, or someone, would basically be running Cholla, handling everything that had previously been done by Mr. Dugan plus all the extra work due to the way everything now has to be handled.

Ms. McComb suggested we restructure what we are paying for items we have and was told that could be done, as that is part of the discussion of the budget at this time.  Several Board Chairmen suggested dropping this or that from their budget  and some options were included and the outcome of cutting was the following

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projected budgets which will be sent to membership in the upcoming Newsletter.

Option #1:  $310 based on 685 paid members is the original budget presented at the beginning of the Budget Discussion.  This would include all the current services we have along with the required added expenses of the IVA tax and the accounting firm along with the outside management service to handle the day to day activities of the community.  This would also include the budget for the new security plan.

Option #2:  $200 based on the same amount of paid members. However, there would be no services for the 4 months of summer which would include not grading the roads, picking up the garbage, and eliminating internal security (Arturo)  The new security plan is not included in this option but all required added expense for the IVA tax, accounting firm and management service is included.  There will be an option add of approximately $50 per year for security.

Option #3:  $250 (approximately) based on the same amount of paid members   and would be the same as Option #1 minus the security service.

After a long discussion, Mr. Dugan asked for a motion to approve the budgets.  Motion was made, seconded and approved with two voting against.

4.        TAX ISSUE:               The board had discussed they were previously  not in compliance with Hacienda.  Mr. Dugan and Mr. Lee met with Myriam Hernandez of the Kaizen Group to see if they would work with our organization to get us in compliance.  He also talked to them about management of the organization.  They discussed the possibility of a new HOA and ending many of the problems caused by parts of the old Constitution.  The main problem is the inability to make needed changes due to the amount of people needed at the General Meeting.  They suggested that the old HOA handle the assets and be used as a holding corporation.  They suggested creating a new organization that would have a more modern Constitution in line with the Mexican ways that have changed over the last 20 years.  It would also be a cheaper avenue to take. It was

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suggested that Mr. Peterson’s Death Certificate be filed and that has been done.  Mr. Dugan has to go to Mexicali to go through the process of an electronic signature, which is a new process used in Mexico.

This budget that we are talking about would be the new corporation’s budget, whichever one is approved from those discussed today.  He was told all this could be done and recorded by March 31.  The new corporation would be $2,000 and $5,000 to update the existing corporation making all the necessary changes with Hacienda and public registry, etc.  Myriam explained that to transfer assets, the capital gains and tax would have to be paid which could be an enormous amount of money. They suggest keeping the old corporation that has things everyone wants to change and let it hold the assets so no taxes have to be paid, create a new corporation with an updated constitution that is more modern.    It would eliminate the problems of voting and the proxies and allow people, that can’t physically be present, vote. Myriam is of the opinion that the two issues can be  separated, and move forward.

There would two boards.  He and Ms. Dahlstrom worked on some figures to cover the new corporation’s need of funds such as paying taxes on the building and insurance   He brought up the rent paid by the OBSC and the CBSC which is $1500 each per year to use the building.  There is also miscellaneous rentals and the interest on the assets and it comes to about $3700. This amount would take care of expenses on the old corporation.  Current members would have a percentage ownership according to their length of ownership.  This corporation will be self- sustaining and would solve the issues with Hacienda and the registry which will be done by March 31.

Mr. Ketelhut asked a question about keeping the old corporation and was told that Kaisen recommended the Vecinos do exactly what he had just told the board because it would be too expensive to transfer and much less to maintain the old one.  Mr. Ketelhut said he was told by Myriam that Hacienda could come back to the association, not the homeowners, but go after the assets of the association and also said the venders could come back on the association regarding facturas

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and that is why she suggested the new corporation.  Mr. Dugan said apparently from the time Mr. Ketelhut talked to her and the time she sent the letter he was referring to, her analysis had changed because she did not address it.  Myriam  had already talked to Hacienda, evidently from the time Mr. Ketelhut met and she was in contact with Mr. Dugan.  Mr. Ketelhut brought up the reports that were done in October for the last several years saying there was zero income on water. He wanted clarification of that and was told Myriam was rectifying it.

 At an earlier meeting, Mr. Sledge reminded everyone that the old HOA had an obligation to secure water and sewer because that is part of our Deed of Trust and should be maintained. 

Mr. Ketelhut again brought up the hacienda problem and Mr. Lee told him a mistake was made and he was right, but it is being worked on and Myriam, who worked several years for Hacienda, knows the people and can take care of the problem.   After more questions, Mr. Lee said there was a vote to hire them to handle the problems and we should let them proceed.  Ms. McComb asked if the board was going to register as the officers for the Hacienda and was told the Executive Board was to go in and sign on Friday but she was out of town.

Mr. Ketelhut asked who the officers would be in the new corporation and was told they would be elected. Mr. Dugan said his understanding was that a group of people applied and started the process of a new corporation, had a first meeting and had a vote for officers of that corporation and those officers went on until the present.  He thinks that the five people who went in are not necessarily the the five people on the board but someone has to get it started and they have an election for that board.  He hoped to get that done by the General Meeting and have one ballot for the new corporation and start with the budget of Option 1, 2, or 3.  In this way they could work on a Constitution and make the changes that would fit the modern corporation.  Mr. Ketelhut was concerned about getting everything started and a new Constitution and Mr. Dugan asked Miriam to get him a copy of what is used in Mexico.

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To make everything legal, Mr. Dugan asked for a motion to approve $2,000 to for the new corporation and $5,000 to update the existing Corporation, making all the necessary changes with Hacienda and the Public Registry, etc. Motion was made and seconded.  Ms. Howard wanted everyone to be able to go to meetings together so every word was the same and that was impossible.  She was concerned about the haste in forming a new corporation and Mr. Lee told her that could be done at any time and at least one thing would get done and out of the way.  Then we form a new corporation if the board thinks that is in the best interest of the Vecinos.  Mr. Lee said we need to vote on what is needed for Kaisan and since  there was a motion and second  on the floor, it needed to be voted on.  The motion was voted on and passed with two members abstaining.

5.       CANDIDATES/RESUMES/NEWSLETTER:          Ms Dahlstrom wanted everyone to be aware that anyone planning to run for the board must have their resumes in  one week from the meeting, which would be February 26 so they can be inserted in the Newsletter that must be sent to the HOA 31 days prior to the General Meeting on Saturday, April 2l, 2012. In answer to who was running, Secretary read the list.  It included Vice President, Secretary, Gene Court, Ken Goodin, Jerry Ketelhut, Jr., Steve Willis, and Delegate of Vigilance, Don Schmidli.

            6.        FREDRICK’S PROPERTIES:           Mr. Ketelhut said several years ago it was talked about charging for structures etc., and came up with the plan that we would charge by meters.  One meter meant they would be charged for one membership.  He said it stated very clearly in the minutes that was what would be done.  He didn’t agree with that but that is what was decided.  Ms. Dahlstrom said what is sent out with the invoice for memberships and down at the bottom it states:  (1) Single family residence = 1 membership, (2) One vacant lot (primary) = 1 membership, (3) One lot with multiple houses – 1membership for each house, (4)  Additional lot with electric meter – 1 membership, (5) Additional lot with NO electric meter – NO additional membership.  Ms. Dahlstrom said if something was wrong with it, now is not the time to bring it up.  She also pointed out that the meter issue was strictly for “additional” lots only.  Susie Flinn was asked by Ms.

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Dahlstrom if she recalled the amount due from Mr. Fredricks and she thought it was about $4,000.  Mr. Lee made a motion to charge $2,000 or one half of the amount due and it was seconded and approved.  Ms. Koerner will take care of getting the bill to Mr. Fredricks.  Mr. Willis suggested clarifying the dues structure.  He said he had to pay two dues now because he has a house he rents. 

ARCHITECTURAL:              Nothing to report.

CLUBHOUSE:           In the absence of Mr. Sledge, Mr. Dugan mentioned the installation of two warmers.  Ms. Dahlstrom mentioned that two more were in bad shape and were going to be ordered and installed.

EXECUTIVE COMMITTEE:                        Nothing to report.

GARBAGE:               Nothing new to report.

ROADS:                     Mr. Dugan reported things are going pretty good with the roads.

PARKS/ENVIRONMENT:             Chairman Gene Court reported the trees are growing.  He would not be seeking his board seat and wanted to make sure that we got someone on the board to maintain the park.

SECURITY:                Mr. Dugan reported the city moved the old police and brought in new police.  One of them is Juan Pedro who is in charge and a very nice man.  The new man wanted to paint the building, asked RP to buy the paint, and was told Cholla members can pay for it since it’s in Cholla Bay.

WATER/SEWER:                 Nothing to report.

NEW BUSINESS:                 Mr. Willis had asked about voting if you are paying two memberships and was told he could vote twice.                                                                   

Ms. McComb asked about proxie voting and brought up that you only needed 25% of members in attendance to make changes.  She was told that what she was talking about never passed.  Mr. Lee suggested that Mr. Dugan talk to her after

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the meeting.

There being no further business to discuss, Mr. Dugan asked for a motion to adjourn.  Motion made, seconded and meeting adjourned at 11:15 AM.

AUDIENCE PARTICIPATION:

Someone brought up who has authorization to make decisions and he was told the President has full authorization and is the legal representative to handle situation for the Vecinos.  

Jerry McClung asked a question about getting bids for speed bumps.  Ms. Howard I said there are not many people in Mexico who know how to do that. He also commented on getting 3 bids.  He was told there was a $5,000 limit before you had to have a bid  but must be approved by the president. It becomes necessary to get 2 bids between $5,001and $10,000 and approved by the Board. Over $10,001 requires 3 bids and approval of the Board.

Someone asked who owned the Clubhouse and was told it belonged to the Vecinos.  The two clubs rent from them for their activities.  He also thought if the dues were being raised, we should increase the rentals. Mr. Dugan said he was just showing that the clubs would cover costs of the building which makes it self-sufficient.

Ray Flinn said Cholla is a real town now and he thinks a full time manager is needed.  He suggested Mr. Ketelhut.be hired.

A lady in the audience said she lived on a primary road and it has never been fixed after the storm.  It still has deep ruts and the gully part of the road makes it necessary to go across the hump to get into the garage but no one has fixed it.  Ms. Howard suggested they discuss the matter after the meeting.  That way she can see what needs to be done and contact the Company to take care of it.

Sue Kathe said she would really like to see signage on our roads that signify no outlet/dead end.   People get in that area and have to turn around causing

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damage at times.  Mr. Dugan said he thought that was a good idea and that suggestion would be passed on to Mr. Pisciotta.

Jerry McClung brought up proxies he had last year and could not vote.  Secretary suggested that proxies voters fill in their name, vote for who they want and  leave the top blank( which says I hereby give my vote to)   with no name because you can vote one proxy membership.  Mr. Dugan said the new Corporation is the member’s opportunity to correct that kind of problem that everyone is talking about.

Respectfully submitted,

Shirley McDonald, Secretary