Question: When will the $400 dues increase used to fund road improvements terminate?

Answer: The Mount Kemble Lake Association (MKLA) held a special meeting on August 16, 2007 to discuss and vote on several proposals regarding the repair of community roads. The meeting notice distributed to residents for this meeting can be viewed by clicking here: meeting notice. At this meeting a $400 annual dues increase (two semi-annual payments of $200) was proposed and approved by a two thirds vote, as required by the MKLA By-Laws. To see the MKLA’s secretary’s minutes of this meeting (which were not distributed to residents, but which were put on the MKL web site), click here: meeting minutes. Subsequently, residents were informed by a mailbox notice of the results of the meeting. To see the meeting results notice delivered to residents click here: meeting results notice. In order to reduce the actual amount to be borrowed, residents were subsequently given the option of paying $2,000 (5 years of dues increase) in advance, in return for a discount. The $400 annual dues increase began in October 2007 and, although a discussion regarding a “sunset clause” was held at the special meeting, the funding proposal was passed at the meeting as originally presented, with no expiration date (see meeting minutes). With a dues increase in effect, the MKLA was able to secure a $200,000 line of credit. It made an initial $100,000 loan draw against this credit line in December 2007, after the completion of phase one of the road project. From this initial credit draw (loan) to the completion of phase two, the MKLA paid only interest (no principal) on the $100,000 borrowed.  With the completion of the road project in October 2008, the MKLA made its final loan draw of $50,000 against the credit line. Thus, the total amount borrowed from the bank was $150,000. In October 2008 the MKLA began paying off the loan (principal of $150,000 and interest) over five years. The loan will be paid off on 10/1/2013.

Because the “sunset clause” motion had no publicity prior to the meeting, and in order to assure the lending bank of the MKLA’s ability to meet its loan obligation, no time limit was place on the $400 dues increase (see meeting minutes).  As of January 2010, the MKLA anticipates that the $400 dues increase will only be needed for five years. Those paying $400 yearly will thus be “paid up” with the Spring 2012 payment of $200, and will have matched the amount (less discount) of the “$2,000 pre-payers”. (Note that because the dues increase started before the payment of the loan, the MKLA association will actually be paying the loan with $400-dues-increase-funds until 10/1/2013). It is the intention of the board of the MKLA to bring to the community a discussion and vote on the necessary level of dues, including the disposition of the $400 increase, at the January 2012 annual meeting.