Notes from 6/15/09 Finance Committee (FC) Meeting

Attendees: Rick Barrett, Austin Godfrey, Lori Denson, John Murray, Bob Yingling, Davor Gjivoje, Terry Dwyer.

Reports from Subcommittees:

Water Company

The goal here is to reduce community�s exposure to long term expenses of operating its own water company. Terry, Rick and Austin met with American Water Co. (AWC) on 6/11. On occasion AWC subsumes the operations of small independent water companies. We�re awaiting response from AWC to see if there is any interest in their assuming operation of the Lakeshore water system, and assessing what effect that might have on our financial planning.

Land

Terry led discussion on several options regarding sale or conservation status of lakeshore properties.� There is still no clear position in group on what options to lay out for the community. It may be possible to avoid sales completely by combination of property tax reductions and transfer fee institution.

Dues, Fees, Assessments

Lori presented information on transfer fees, which are common in NJ home-owner associations. Typically, these fees range from 1% to 3%.

Reserve Analysis

We reviewed Bob�s first draft. Comments included:

o Remove 6 month intervals � go with yearly

o Go out 20 years with a terminal value.

o Combine pumps & blow-off valves as one item(e.g. pumps/valves)

o Include all significant (>= $10K) reserves, including current reserves for roof and chip/seal. Include under funding sources the dues which are devoted to these current reserves.

o Inflation rate to be estimated at 4%.

o Discount rates to be estimated at 5% and 3%

o Transfer fee to be set at 1% (John will get average # of properties sold per year at MKL)

o Hire a firm versed in reserve studies to review our work. Austin, Bob, Davor)

Working Schedule:

- Next meeting July 1 at John�s. This meeting will review next iteration of spreadsheet.

- Mid � August: Austin, Devor and Bob to meet with reserve study firm to review technical details of reserve proposal.

- Mid-September: outpost meetings with subgroup of MKL residents to discuss Mount Kemble Lake Reserve Fund (MKLRF) idea, to go over funding possibilities and get their input. John will outline process for these outpost meetings. Terry will provide a draft of a powerpoint presentation for these meetings.

- Early November : meet with key community influencers to review upcoming inform proposal.

- Mid-November: Community Inform meeting to present findings/proposals to community (having incorporated September discussions/feedback). The proposal will include votable items for upcoming annual meeting.

- December 1: Proposal posted on MKL Web site

- January 2010 : voting on proposals at annual meetings