SALT POND HOMEOWNERS ASSOCIATION
ANNUAL MEETING
OCEAN CITY RECREATION CENTER
JUNE 7, 2008
(Revised June 17, 2008)
President Bill Kester called the meeting to order at 2:00PM. He welcomed everyone, introduced the Board of Directors (BOD) and thanked the many volunteers who shared their time and talents this year to make the Salt Pond the “best community at the beach”
Bill K. then asked for the approval of the June 2007 Annual Meeting minutes. Michael Headman made a motion to approve the minutes and Chuck Gularson seconded the motion. All approved.
Treasurer Chuck Gularson then gave an overview regarding revenues, expenses and changes in fund balances for the year ending in December 2007. At the close of the year, there was a total of $510,886 in revenues. Our expenses were $477,805, and we were able to place an additional $36,000 into the reserve account. Chuck singled out the assistance of Noel Tuck for his expertise in setting up the accounts and providing financial analysis, and to Wendy Parker, the Finance Manager for the golf course. Chuck addressed the issue of those homeowners (2) who have not paid the special golf course assessment and the homeowners (8) who have not paid their annual dues. He stated that it is not fair to the majority of homeowners who have paid their dues on time, and that the BOD and the community need to address this issue. He stressed the need to build up the reserves and mentioned that the developer did not do us any favors by keeping our annual dues so low for so many years. In the year 2012-2013, we will need to pave all the roads in the community, and at this time we appear to have two options to pay the bill: (a) increase the annual assessment at a higher percentage each year, or (b) have an estimated special assessment of about nine hundred to one thousand dollars per household/lot to cover the expense. Chuck was asked the question as to how much money he thought we need in reserves to cover the cost of the roads; his response was approximately $500,000. The question was raised as to the $290,000 extra money acquired through the one-time golf course special assessment. Technically, this belongs to SPHA; but, since we have only an estimate of what the course expenses will be we need to keep this money in the golf course fund for the time being. The golf course is designed to be self sufficient; but, we need at least one year of experience. In September or October, Chuck is planning a special meeting on the reserve study. Questions were raised as to what penalties are issued for those two homeowners who have not paid the golf course special assessment. There is a $250.00 late charge a 9.5%interest surcharge and, after a reasonable time and warning, a lien can be placed on the property. Another question was asked as to whether or not the SPHA can publish the names of those in arrears. Our lawyer, Bob Valihura, stated that it is legal to do so. Chuck also explained that some of the monies that were invested in CD’s are coming due. Since the new interest rate is around 2.5%, and we are paying the developer 4.5% interest on the golf course loan, we will be pre-paying a large part of the note this month. Chuck stated that the plan is to operate the golf course with a positive cash flow, and a negative depreciation, which should result in no taxes. He was questioned as to how many full memberships we now have in the golf course. The 2008 plan is 140; and we now have 111, which is twelve more than last year at this time. Art Whaley, Golf Course Pro for the course, reported that Memorial Day weekend broke all records. There was $29,000 collected over the three days.
Bill K. gave the timeline of the golf course purchase. In May 2007, the common grounds were transitioned to the homeowners with the offer to purchase the golf course. In July and August, information was given to the homeowners regarding the purchase and members voted to exercise the option to purchase. From August to October, the Board studied the feasibility of the purchase, and the last week of October, exercised the option to purchase. Negotiations between the lawyers took place in November and December; on January 3, 2008 the Salt Pond Golf Club became the property of the SPHA. A new, for profit corporation was
created and named The Salt Pond Golf Course Operations, and a Board of Directors was established. The clubhouse was completely renovated by volunteers, as was the snack bar. A catering service was contracted to run the snack bar during the summer months.
The Salt Pond Plaza development has seen some action. On May 28, 2008 a plan for the storm water management was submitted to DNREC. Construction of the storm water management system is slated to begin on July 1, 2008, with completion by May 31, 2009. The Salt Pond work group is vigilant in assessing what the impact of this development will have on the community. So far, there has been no cooperation from Mr. Zimmerman, the developer.
Bill then spoke of a meeting held on May 6, 2008 with Rick Judge, the developer of Bethany Woods. He presented the following proposal to the BOD:
1. Membership in Salt Pond amenities (pools and exercise center) as an option to those purchasing in the Bethany Woods development;
2. Family membership would be $5,000 non-transferable;
3. The developer would guarantee a minimum of 10 memberships within 18 months or $50,000 to SPHA;
4. Membership would be for owners and guests (no renters);
5. An initial $500 annual fee would be assessed to continue membership per family;
6. Bethany Woods members would pay a pro rata share in any special assessments for amenities.
Many questions and much discussion followed this proposal. Bill mentioned that a decision by the BOD will be made in the next few months as the developer will be starting construction, and would like to use this as an incentive. Jan Schaffer stated that if we open our pool to an outside community, under Delaware law, we become public, and would be required to have a certified life guard on duty at all times. The issues of the use of our roads, the overcrowding of the pool, and the fact that we have very little idea what this community will look like, were concerns. A straw vote was taken of those in attendance at the meeting. The result was overwhelmingly against this proposal.
The BOD passed the following resolution unanimously at the May meeting:
Resolved that the SPHA Board of Directors will recommend that Section 4 of the SPHA Declaration of Covenants, Conditions and Restrictions be amended to require that any future sale or offer for the sale, either in whole or in part of the golf course may be completed only after a favorable vote of two-thirds of the Association members. In the interim, the SPHA BOD will act as if this provision has been officially inserted in the covenants.
Since there was a quorum three members were elected to the BOD. They are Gary Clipp, Chuck Gularson, and Jim Kennedy.
Bill announced the Family Pool Party in mid-July for all homeowners and their families. More information will be forthcoming.
The meeting adjourned at 3:00PM
Gerry Buckley, Secretary
June 8, 2008