West Beach Road Association

Present:

Members Absent and Not Represented by Proxy: Brad and Shelli Trumbull, Judy Graham, Jim Brix, Earl Darst, Dave and Kathy Steckman, Ken Weichel, Tom and Catherine Stewart, Shannon and Denise Buys, Jim Brix, Bob and Cindy Bush, Dr. and Mrs. Lycell

Proxies: Bill, Loretta, and Miles Hamburg, Jim and Kaaren McElroy, Mike and Jean Nunn, Jeanne-Ming Hayes.

The meeting was called to order at 12:10 p.m. in the Conference Room at Whidbey General Hospital, by the President, Rudy Deck, who noted a quorum was not present to conduct the business of the Association.

A motion to waive the reading of the Minutes of the April 3, 2010 Annual Meeting and approve as submitted was made by Jim Patton, second by Mike Nun. Motion passed 14 - 0.

President's Report:

Before proceeding with the order of business of the association, the President provided an update of the legal issues relating to Earl Darst and his violation of the 1997 Court Order regarding use of the shack at 1004 North Seacliff Lane. At the hearing, Vivian Darst appeared claiming to be the legal owner of the property. Earl Darst contended ownership of the property was in the name of the Darst Bulb Farm, Inc. It is noted Darst Bulb Farm is not a corporation under the laws of Washington State. Vivian Darst is continuing to contest the ownership issue of the property.

Judge Hancock ruled the 1997 Court Order remains valid and Earl Darst is in contempt of court. He issued a ceased and desist order which should have been done 13 years ago. Mr. Darst was ordered to remove all personal supplies and equipment from the shack, board up the windows and padlock the door as previously ordered by the Court. This was accomplished with help from Vivian Darst by November 11, 2010. As of this meeting, the President has the key to the padlock and physically reviewed the inside ensuring all materials and equipment are removed.

Further, the Court Ordered Earl Darst to pay West Beach Road Association $5,000 for attorney fees with an interest rate of 12% per annum until this award is paid. Although the Association has not seen any of these monies as yet, the recording of the Court Order with the Island County Auditor will alert any prospective buyer of a lien against the property for the $5,000. (The President has a certified copy of the Court Order and recorded it with the Island County Auditor.)

Unfortunately, the legal costs incurred were more than originally estimated as a result of the research into the legal ownership of the property and who should be listed on the lawsuit. Further complicating matters for the Association attorney was the fact Mr. Doug Kelly notified Mr. Roundy he was not Mr. Darst attorney of record. Mr. Darst evaded process servers at every turn. Mr. Roundy’s bill was over $10,000.00. But after the President discussed the circumstances, Mr. Roundy reduced his fee to $5,000.00, the amount awarded by the Court. Previous payments to Mr. Roundy amounted to $1700 for earlier work on the case and as the last bill was due in a week, the Board of Directors concluded it was in the best interest of the Association to pay the bill in a timely manner to avoid any late fee charges.

As the General Fund did not have sufficient funds to pay the attorney fees, it was deemed appropriate by the Board of Directors to "borrow" the $5,000 from the Road Fund until such time as the $5,000 Court award was paid by Earl Darst or whomever should be deemed the appropriate owner of the 1004 North Seacliff property at the time of sale. Other avenues for replacing the monies in the Road Account are being reviewed by the Board of Directors.

Treasurer's Report:

Belinda Hawkins presented the Financial Reports as of November 17, 2010 (copies of the reports are attached as Addendum A). The water account is in the black after the increase in usage fees. Unfortunately, water usage is down from projected amounts (currently running at around 81% of projections), and therefore, continues to be a concern.

The President noted several alternatives to address Budget shortfalls in the future and to cover unexpected emergencies:

• Initiate a $150 assessment per home owner to replace funds borrowed from the Road Fund to pay attorney fees;
• Not replace the borrowed monies from the Road Fund;
• Raise annual dues to the 2000 fee level of $100 per home owner until such time as the General Fund is replenished (as a CC&Rs Compliance Fund for future emergencies):
• Move money out of the water capitalization fund;

Water Manager's Report:

Mr. Alley noted the water system is operating normally with no undue problems or any anticipated or expected. The recent power outages have not caused any problems and the system was restarted without incident.

Road Manager's Report:

No report. Mr. McElroy has patched the gravel area of Seacliff Road and will patch the holes on American Way when he returns from California.

Architectural Control Committee Report:

No activity to report.

WBRA Website Needed:

Robert Elphick indicated a need for an Association website. Normally such a site does not cost much money. Whidbey Telecom usually offers a website with their Internet service. Anyone having an email service with Whidbey Telecom would have access to a website for as little as $7/mo. Anita Dragoo inquired about the risk involved with allowing her web site to be used for this purpose. The issue of insurance for the individual who serves as webmaster for the Association was a concern as well. The President can designate this individual and offer coverage via a letter from him. (See Article 5, Section 10)

A concern was expressed about the insurance coverage for Board members as well for such things as a website. It was noted by Jim Paton that an "errors and omission" clause was in effect when he served on the Board. He also noted there is some coverage by the state for those who serve on Association Boards. Rudy Deck will check out the Association insurance status and report to the membership and Board members.

A website is an advantage in dispersing information to the membership and providing information to realtors showing properties in the Association offering easy access to the CC&Rs.

2011 Elections of Officers

The President reminded the members present of election of officers is due at the Annual Meeting in the spring. Elections will include 4 WBRA Officers (President, Vice President, Secretary, and Treasurer), 1 Director, and 1 ACC Member. A Nominating Committee will be formed early in 2011 to develop a list of candidates per the CC&Rs, Section V-11.

New Business:

Robert Elphick suggested a change in Article 3, Section 1, of the CC&Rs to provide for owners of more than one property in the West Beach Association be allotted votes equal to their holdings. At the present, Mike and Jenny Nunn own two properties in the association (parcels #320-3500 and 316-2310). They are paying two road fees and two association dues and, therefore, believe they should have two votes on issues presented to the board. As a quorum was not present, this discussion was tabled until the Annual Meeting.

New Business:

There being no further business the President called for adjournment, second by Jim Patton, the meeting adjourned at 1:35 p.m.

Respectfully submitted,

Gabrielle A. Thurman, Secretary

The orignal contains the following attachments:

1. Statement of revenue & Expenses by Category & Bank Balances;
2. WBRA Road Savings, Financial Statement;
3. WBRA Water Capitalization Saving Account, Financial Statement;
4. WBRA Water Checking, Financial Statement; and,
5. WBRA General Checking Financial Statement