Report from the Neighborhood Membership Meeting
November 15, 2005

There was a Neighborhood Association Membership Meeting held on Tuesday, November 15, at 7:00 p.m. at St. Alban’s Church. The purpose of the meeting was to ratify the proposed 2006 budget. The meeting was called to order by President Tom Fischer. Treasurer Norm Reid announced that the required notification of homeowners was sent by Abbott Enterprises on November 3, 2005, and met all Association by-laws requirements. A copy of the proposed budget was included with the Abbott notification. Homeowners attending the meeting were provided with a more detailed version of the proposed budget.

Norm Reid read from the Association by-laws explaining the requirements for approval of the budget:

• The budget may be approved by a simple majority of the homeowners in attendance at the Membership Meeting.
• A majority of all Class A voters (homeowners) are required to disapprove the budget. Currently there are 272 Class A voters.

Homeowner Travis Brown questioned the validity of the requirement for disapproval and indicated that he will investigate further through legal counsel.

Carolyn Pozzi from Merrill Lynch made a brief presentation regarding the status of Association investment funds. She recommended that reserve funds continue to be invested in “laddered” CDs. It is anticipated that the return rate will increase after the first of the year.

Tom Fischer explained that the purpose of the meeting was to entertain homeowner questions and suggestions regarding the proposed budget and assessment increases of $72 per year for single family homes and $8 per month for townhomes. Key items contributing to common area increases include: expenditures for SPINN ($2,000), funds for the Garden Club ($2,000), scheduled fountain maintenance ($4,500), and an annual audit ($3,200). With the exception of SPINN, none of these expenditures were included in the 2005 budget.

The following issues and questions regarding the budget were discussed:

• What is the purpose of the special fund request of $2,000 for the Garden Club?  The purpose of the newly formed Garden Club is to enhance the neighborhood in areas not covered by the regular landscape maintenance contract. Garden Club members will provide the labor to maintain and beautify these areas (for example: the butterfly gardens and two new, planned flower beds). The proposed funds will provide plantings and materials for these areas.
• Why are income taxes of $750 being paid?  This is the tax paid on interest income earned on CDs held by the Association.
• Why was there an increase in legal and CPA expenditures?  Association by-laws require an annual audit of finances. Legal costs have increased in part due to lien filing fees for collection of delinquent assessment fees. (NOTE: These fees are recovered when costs are settled and will be reported as income at that time.)
• Why have office expenses increased?  Office expenses have leveled out since the beginning of the year and projected expenses for 2006 are actually lower than 2005.
• Did townhome insurance coverage decrease since the annual premium cost to the Association decreased?  No. The townhome insurance coverage has remained the same. The premium decrease was the result of seeking competitive bids.
• Why have common landscaping costs increased and common utility costs decreased?  Utility costs are lower in part due to building contractors no longer using common power and water. Where applicable (i.e.: street lights), utility costs have been transferred to the Town of Davidson. Maintenance of common areas, excluding town parks, is not the responsibility of the Town of Davidson. The two-year contract with Contemporary Landscapes of Charlotte remained unchanged, but there were some additional costs not covered by that contract (i.e.: irrigation repairs and refreshing of common area mulch).
• What is the explanation of $4,500 for fountain maintenance?  This expenditure includes regular cleaning and maintenance of the fountains, including replacement of parts. The higher cost of maintaining the Clemens Square water feature is due to the additional expense of replacing and maintaining the Koi fish. (NOTE: Recognizing that the Koi fish have died, the Council of Stewards will re-evaluate the maintenance quotes and make a decision on how best to proceed with these funds. A number of different views were expressed by residents at the meeting.)
• What is covered by SPINN budget funds?  Spring Party in New Neighborhood has been largely funded by the Association since its start several years ago. The membership expressed a positive attitude regarding continuation of this concept. The funds cover rental of the chairs, tables, main dish, and other game and miscellaneous costs not covered by donations. It was suggested that (similar to 2005) future SPINN events not be scheduled on a holiday weekend when many residents may not be able to attend.
• Will maintenance fees continue to increase each year?  The budget for 2005 was based on “best estimate” without much history on the fully built-out neighborhood needs. Future budgets can now be better projected and it is less likely that there will be major maintenance fee increases. Any future budget increases will likely be attributable to inflation and re-negotiation of landscape maintenance and management contracts. On a positive note, it was pointed out that the Reserve Study (recently completed) indicated that the Association’s Building Reserve Funds were healthy and future repair and replacement costs will be adequately covered by these funds.

A motion was made to approve the 2006 budget. By a vote of 28 (22 members present and 6 proxy votes) to 9, the budget was ratified and the meeting adjourned.