Minutes of the Finance Committee (FC) Presentation

at the MKL Annual Meeting

January 28, 2011

Meeting Summary

On January 28, 2011 the Finance Committee�s (FC) presented its revised proposal for funding the next decade�s large-scale maintenance projects. The presentation was conducted as an Inform Session and given as part of the MKL Association Annual Meeting. The Inform session lasted an hour. The presentation slideshow is available on the MKL website.

In summary, the presentation covered a brief history of why the FC was formed, previous work and recommendations, the background on how the current recommendations were developed, how community input was incorporated, the current recommendation and how it compares to the previous recommendation, and associated caveats. The FC indicated that a formal vote on the proposal would be held in the spring. A question and answer and discussion period ensued and was then followed by an impromptu straw poll of the attendees.

Questions/Answers

1. As delinquent dues are putting pressure on the Community finances, how do we monitor sales to assure that we receive the Membership fee? What are the mechanisms of enforcement?

The response was that the seller is required to disclose all associated fees. (The outgoing Treasurer of the MKL Assn reports that in the last 5 years he has always received enquiries from the buyer�s attorneys regarding the amount of dues and/ore fees due by a new resident.) The membership fee would be collected as part of the regular dues collection process. The enforcement mechanisms are the same as are currently in place and would include interest penalties, fees and the possibility of a lien against the home.

2. Is there an issue or conflict between the Membership Fee and Lakeshore stock?

The short answer was �no�. There was a brief discussion that the Lakeshore stock transfer is a transaction between buyer and seller with no involvement of, or revenues to, the Lakeshore company.

3. Are the reserves a capital asset and subject to a 2/3 vote in order to be spent?

The response was that the FC�s intent was to fund a ten-year program of revenues for, and expenditures on, capital maintenance. The program would require a one-time 2/3 vote (at a special meeting) and that in future years expenditures would be detailed and approved as part of the annual budget.

4. What is the timeframe to know the tax reduction amount associated with putting the lots into abatement?

The response explained that it is difficult for the tax assessor to answer the question without definitely knowing what lots are to be abated and that Bob Edgar was working the issue. David Dietz and Chris Allyn said that as the lots currently in abatement do not pay any taxes, we should insist on the same treatment for any additional lots that are put into abatement. Additionally, if this is not the response from the tax assessor, we should go to the Township Committee.

In order for the MKL Board to be able to go to the tax assessor with the backing of the community, a resolution was proposed and passed indicating that the community supports putting all lots, except the ball fields, into full tax abatement status and authorizing the board begin negotiations with the township to get lots fully abated, with final approval subject to a favorable 2/3 vote on the terms and conditions by the community.

Straw Poll (The FC estimates that 40 people voted in this poll)

1. How many people support the Finance Committee recommendation in full, as presented at the Inform Session? Two people did not support the recommendation. This represents a greater than 90% approval.

2. If the components were broken apart, how many people would support a flat fee Membership fee? Three people did not support a flat fee Membership fee. This also represents a greater than 90% approval.

3. If the components were broken apart, how many people would support putting all vacant lots, except the ball fields, into full tax abatement status? All attendees supported this part of the proposal. This represents a unanimous approval.