HAMMOCK BEACH ESTATES HOME OWNER’S ASSOCIATION, INC.

P.O. Box 350668

Palm Coast, FL 32135

www.hbehoa.com

Thursday, August 2, 2007, Beginning at 3 P.M.

Hammock Community Center, Malacompra Road

The board meeting commenced at 3:00 P.M. The following Board Members were present: President, Paul Zacharias, Secretary, Peggy Steele, Treasurer, Fred Black and Operations Manager, Joe Bowen.

The following members, all invited by an e mail message, by notice enclosed with the minutes and by posting on the community bulletin board, were present: Harold Clarke, Karen Joyce, Frank Carelli, John Bonner, Jim Morelewicz, Bob Rohr, Alicia Anderson, Larry Anderson, Gary Fairley, Bob Hamby, Jean Mattson, Jean Sherwin, Renate Sherwin.

1. Agenda: Paul Zacharias called the meeting to order at 3 PM As noted on the agenda, the concerns and issues of members will take place at the members special meeting at 7 PM.

As we go through the agenda, members may be recognized to ask questions or voice their concerns.

Paul added to the agenda:

· item 3a: Legal action served in error.

· item l2: Board of Directors elections

· item 13: Request from Marineland-Hammock political unity committee

· item 14: Social committee, as related to situations of members in the community

With no other items to be placed on the agenda, the agenda was adopted.

2. Approval of minutes of May 3, 2007: Peggy said that the corrections had been made on the website as requested by Karen Joyce, to say that “she and Mike never wanted to make any money off the HOA. Their only purpose in bringing a lawsuit was to have the HOA board rescind their approval, which was a mistake”. Paul had also corrected item #4 third sentence: “and our C&Rs prohibit a chain link fence in the front yard being visible in the front. There being no other changes or additions, the minutes were approved and adopted.

3. Status of litigation: Paul said that he talked to Mr. Traster, the attorney for our insurance company, and Paul has been advised that the attorneys representing all parties are attempting to negotiate terms for a settlement. The status of the litigation will be reported at the next board meeting. Paul said that the fees incurred will be talked about when the treasurer gives his report.

Paul said that about two weeks ago, HBE was served papers for a litigation being brought by an investors group in Michigan against the Bobby Ginn empire. The investors group was filing against Ginn about a number of violations of security laws and unfair sales practices. Our association was mistakenly included in the list of twenty or more companies that belong to Ginn. Paul sent a letter on July 10 (the day after receiving the notice) explaining that we are not associated with Mr. Ginn’s companies. Paul spoke to the lead attorney and an affidavit will be sent to Paul to have Hammock Beach Estates removed from the litigation. After it is signed it will go to court in Michigan and HBE will be removed from the paperwork. In case this action is published in our newspapers, Paul wants members to be aware that we are not involved in this litigation.

4. Architectural review: Paul said that during this time period the board has issued three approvals for projects: a. Nelson--pool and enclosure b Pavlos pool and fence

c. Cotie roof. Paul asked if there were any questions or concerns about these approvals. Frank Carelli asked if the pool for Pavlos was in dispute until the Joyce/Weiss litigation was settled. Paul said that the pool proposal that was approved was revised so as to be affected by the litigation Paul said that the Board followed the advice of our attorney in approving the fence portion of the proposal.

5. Treasurers report: Fred said that there are 2 lot owners who have not paid their dues for 2007:

Lot 226 (Newgarden) who has recently purchased the lot)

Lot 9 (Brunk)

Letters have been sent to both members. Fred said that there should have been a notice about the dues in the sale closing paperwork for lot 226. Brunk has received 2 letters. The next step will be a certified letter. If no response, a lien will be imposed on the property. Joe said to follow the guidelines that have originally been set. If there is no response by the end of August, further steps will be taken.

As of July 31, $25,535 has been received. $25,725 was budgeted. Fred explained that the figures will be different when all dues have been paid because of delinquency fines

Legal fees were higher than anticipated when the budget was adopted. To date we have spent $3200 in legal fees and $1000 was budgeted.

From the betterment account $3983 has been spent of the $11,200 budgeted. The tables that were paid for have been returned because they were not acceptable and the money has been returned to HBE account. $3983 is the total spent so far, including the survey fee and grass. There is currently $25233 in the checking account. Paul asked if the director’s expenses have been used up. Fred said that it has , because of all the copies and mailings that have been required so far this year. Paul asked Peggy how much the mailings have been costing--the pool proposal vote that was mailed to all members cost over $400.00 because of special mailing folders and extra postage and printing costs. A regular mailing, (41 cent stamp) usually is little less than $100, including envelopes and printing. ( Note: After checking the mailing cost for the special meeting held Aug 2, 2007, it was found that the mailing cost $123.40--ballots were mailed to all members with a return envelope included. ) Paul said that we will have 4 more mailings before the new budget will be in effect.

Fred recommended that $3200 be taken from betterment account and put in deferred maintenance account because of legal fees. In the future we will need deferred legal fees to maintain our C&Rs and bylaws. By doing this the overall budget will not change. It will reduce the betterment account to $4200. By doing this, the legal fees will be covered and any money leftover will be there for next year. As we move along, line items will be added to the budget reserve accounts. Joe agreed with Fred. Fred said that the money is in the bank, even though we may be in the “red” on some budget items, the money can be moved from one account to another and still keep within the overall budget. At the end of the year, some items may be in the red, but others will be in the black. Fred said that in the past there were 3 reserve accounts. He has been populating those accounts to have funds that are available identified for specific purposes. Larry Anderson interjected--Paul told him he was not recognized from the floor. Paul said that we have to do our reserve funds in a way that makes sense to us. We have put into reserves the amounts that were anticipated necessary for the following year or two. Example: If we had a $7000 item that we knew would be coming up in a couple of years, $3500 would be put into that reserve one year and $3500 put into the reserve fund the following year. Fred said money can be moved from one account to another, that it would go under reserve for replacement accounts.

Fred made a motion to move $3200 to the legal account from betterments. The motion was seconded and approved unanimously.

Paul asked if there were any other questions about the budget. Renate Sherwin asked about maintenance of the ponds. Fred said that that is part of operating expenses. Renate asked what has been done to maintain the ponds. Joe Bowen said that both ponds have been treated twice for unwanted growth. We are under budget on operating expenses. On the dry pond, nothing has been done. Paul said that this will be addressed under another agenda item.

Larry Anderson asked to see copies of legal expenses paid. Paul said that he will get copies to him.

Fred said that he wanted to thank Steve Steele for the bookkeeping work that has been done, not only for him, but for the whole association. The rest of the Board concurred.

Paul reminded the board that the October meeting is the budget approval meeting.

6. Status and next steps for pool area betterment project: Paul thanked Harold Clarke and John Bonner, Frank Carelli, and Bob Hamby for getting the grass established and sprinkler system up and working. The concrete tables were returned. Paul noted that Harold has said his work is done as far as implementing the member-approved proposal for the pool beautification. Paul has also received resignations from the previous committee, consisting of Marlene Zacharias, Steve Steele, and Debbie Clarke. To go forward we need volunteers to form a new committee to lay out a beatification plan now that the grass is in and established. There is about $4000 left in the betterment fund that was budgeted for this year for the next phase of the pool beautification project and we could budget up to $3000 for betterments for 2008. Paul asked for volunteers to come up with a plan before the October meeting when the budget is being done. Renate Sherwin, Jean Mattson and Alicia Anderson volunteered to serve on this committee.

Paul suggested that the new committee members could consider any number of things, including: a parking area needs to be designated, either marked by curbing, timbers, shrubs, or planters (this will keep cars from driving too far on the lot and damaging the sprinkler heads); trees can be planted for shade, something to replace or improve the wood screen in from of the bathroom building;, and any other planting. The committee can also consider replacing the pool fence (which would be funded from the replacement reserve, which could be done in segments if necessary.. Renate Sherwin asked if picnic tables could be included in the plan that the new committee will be working on. Paul said that would be good. Bob Rohr said that at the Naval Air Station in Jacksonville, they have a display of outdoor canopied tables, etc. He invited any member of the board or the committee to go there and have a look at the merchandise, and that he would be glad to arrange it. Paul said that he thought if Bob would work with members of the committee and they bring the information to the Board, it would be great, and perhaps we can get this project nearer to completion.

Bob Hamby asked why the proposal that was approved by the membership was not being implemented. Fred said that the proposal for bahia grass and concrete tables was fully implemented. However, once the concrete tables were in, they proved to be unsafe because they were unstable and with a lot of rough edges. Harold said that they could be returned for a full refund and thought that was a good idea. Paul approved the return on behalf of the Board. Bob said that he helped put the tables up and agreed that they were not stable on the ground, but with a little work they could have been used. Harold said that another reason was that people suggested that they be put inside the pool area and he thought that this was not a good idea as they were so heavy to move when necessary and would damage the pool deck.

Joe said that we live in a community that’s rather unique, having million dollar homes and homes costing much less . There are people who “want” and people who don’t “want”. A lot of these members do not live here and look at the dollar sign, not wanting dues to increase. Joe wants the budget committee to keep in mind the cost of projects, and that the membership will never totally agree on any proposal that is submitted. He felt that with the proposal that was voted in for the pool area beautification, the membership was looking for the cheapest way out. Paul said that we have that, now the question is what do we want to do from here on as we still do not have anything other than grass.

7. Operations: Joe asked how much was allocated for beach walkover maintenance. . Fred said $500. Joe said he was contacted by a neighbor complaining that some boards were loose on the walkover, so he repaired the ones that he found were loose. Joe asked how much was spent last year to mulch the path and repair the walkover. Paul said that the mulch was about $250 to $300 and less that $200 was spent for boards, nails, etc.. Paul said that we should be OK with what was budgeted. There is still $1000 left in deferred maintenance that can be used if necessary for more significant maintenance.

Joe had a call from Lou Ciasulli about replacing some boards on the walkover. Lou is willing to get a work party together to repair the walkover. Paul suggested that we wait until after hurricane season is over which would be into November, as the season is officially over Dec. 1. Paul asked Joe to talk to Lou about waiting until November until the work is done. Frank Carelli suggested that we have another barbeque to coordinate with a “work “ day. Joe will help schedule a date for the barbeque and work day.

Joe said that the trees around the pool had been trimmed at a lesser cost than last year and felt that a good job had been done. The ponds have been treated twice for unwanted grass and algae growth and are now looking pretty good. Joe said that he thinks he is under budget for this project. Joe said that he was able to replace some fish in the ponds and this should help with keeping the ponds cleaner.

8. Status of actions on canal drainage concerns, Lots 70-71 and dry pond: Paul said that the Board has not heard of any action in respect to the status of Lots 70 and 71. He asked if any one had heard about any further progress and no one had. Paul said that the County has dredged the canal along Malacompra road and it has not made any difference to the condition of the N-S canal running through Hammock Beach Estates.

Paul said that our association owns the backs of lots 88 and 89,(dry pond) deeded as part of the drainage system. The Rosenbaums now own Lots 88 and 89 and wants the association to convert its ownership of the dry pond to an easement that he will maintain. In this way the dry pond area would be included in determining the size of lots 88 and 89/ Stan Rosenbaum will pay for any legal fees that incur pertaining to the ownership of this land. Our attorney is researching ownership and history of this dry pond and is consulting with St. Johns Water Management and will give us advice on proceeding with any proposal that is presented. Paul said that our interests in going forward will be protected and any commitments that are made will transfer to new ownership if Rosenbaums sell those two parcels. Paul said we should have a proposal to consider at our October meeting. Bob Rohr asked how HBE can transfer land, he does not think it can be done. Fred Black asked about consideration if a transfer is made. Paul said we are exchanging an ownership for an easement. that’s why we are having an attorney look at it. Bob Rohr asked about what authority we are acting upon. Paul said that he thought that under the C&Rs, that this area is not considered to be a recreational area. A transfer of a recreation are has to be done with a vote of 75% of the membership. Our attorney will advise us as how we should proceed with this proposal

Larry Anderson said that he thinks that the Board does not have authority to do this. Fred said that this is not a board issue , its an association issue All issues will be considered as we progress through this proposal. Larry asked why we would want to go through with this proposal. Larry asked why we would not consult the homeowners…Paul said that this is what we are doing right now in this discussion. Paul said that we are going to find out what we are supposed to do and then the issue will be brought before the homeowners.

Karen Joyce asked if this area affected our drainage system. Jean Sherwin said that the dry pond is there to help protect the area from flooding. Paul explained that the association would have an easement to the dry pond, regardless of ownership. Karen asked why we would need an easement if the owners of the lots maintain the ponds. Paul said there is maintenance of appearance and maintenance of functionality. There are pipes that go under the roads..We need to know if the maintenance of the pipes will also be taken over by the owners or does the association need an easement to maintain the pipes. The owners will be responsible for appearance. Fred said that we get consideration and in return they are required legally from now on to maintain the operation. Paul said that he is not for nor against this proposal, he just wants to explore all options before any decision is made.

Jim Morelewicz said that he thinks that this whole discussion is premature, the attorney should look at it and then it could be better discussed.

Jean Sherwin said that he is involved in this issue because it abuts his back yard. He feels that it is a fire hazard because of little or no maintenance.

John Bonner asked who picked the lawyer for the association. Paul said that this is the lawyer that we have used for other matters. Stan is paying for lawyer fees for this issue.

Harold asked why we do not get money for any land transfer. Fred said that this is what consideration is.

Paul said hopefully we will have some answers to address these concerns at the October meeting.

9. Status of by law amendment and C&R review project: Paul said that there will be a vote tonight on approving the changes that were made to the by laws and C&Rs.

Bob Rohr said that Amendment 9 says that it is not a legal vote, there should also be a vote by proxy, not just an absentee ballot. Paul said that the there was an amendment to the by laws . Bob Rohr read amendment 9, saying that proxy votes must be considered and proxy forms were not sent along with the ballot, therefore making the vote illegal. Paul said he will address Bob’s concerns when he explains the voting requirements at the start of tonight’s membership special meeting. Paul asked to have the board vote to formally approve the by law changes. Paul said that board members were asked for any concerns about the amendments that are being voted upon. There were no questions or concerns about the amendments being made, so the ballots were sent out. Each proposal was voted upon and all three proposals were approved unanimously. Fred said that his committee has met several times to review and propose changes that are needed in the C&Rs and by laws. He will try to hold a meeting around the middle of August to proceed with this project.

10. Discussion of need to contact members regarding C&R compliance: Paul said that the grass at 42 Cottonwood Trail has been cut. There is a dispute regarding ownership of the property since the death of Carl Haas. Paul said that he will try to work with the estate to have the grass mowed regularly until the dispute is settled

Paul has spoken with the occupants of the property on S Mahoe regarding the truck parked on the lot next door. Paul was advised that the police were called but a towing certificate must be signed before it can be towed away. Paul said that the truck has not been declared abandoned as the owner has not responded to calls. Joe Bowen said that a photo should be taken and the owner of the lot be notified and the owner should call the towing company. Joe feels that HBE should not be responsible for towing. Joe recommends that the owner of the vacant lot be contacted and a photo sent The majority of the truck is on the vacant lot and the owner of the other lot is in China. Paul will try to contact the owner of the vacant lot. Note: The next day Paul met with the police and spoke with code enforcement and the towing company and confirmed that because the vehicle is legally tagged and on private property only the owner of the lots or the vehicle owner can authorize the towing company to remove it. A letter has been sent to the owner of lot 113.

Jean Sherwin asked who maintains the swales in Hammock Beach Estates. Paul said that the company that HBE uses to cut common grounds is also cutting the swales.

Paul noted that Debbie Clark has sent letters to owners regarding rust on fences and garage doors and asked the Board members if they had identified any property owners that needed to be contacted regarding C&R compliance matters. None were identified although there was agreement that a few residents could be doing a better job of not letting the grass grow so high before they cut and trim it.

Paul said that as part of his C&R review, Fred should look into our pool rules with respect to who can use the pool. We have had a couple of cases of members giving their pool keys to neighbors who are not association members so the neighbor could go to the pool by themselves. This goes beyond how the Board has interpreted the concept of guest users. Guests are renters, people who are temporarily staying at your home (houseguests), or short time visitors, such as if you host a party. Members should remember that they are responsible for the conduct of their guests at the pool even if the member has not accompanied them. If you are a member and do not have a pool key, contact Paul- 445 8507 or Peggy-446 9094.

Frank asked if the Community Center was open for the whole day when rented. Paul said it was, and that’s why both regular board meetings and special membership meetings are held on the same day.

10. Status: Records management and website management: Paul has all available records now in the file cabinet that was purchased, A folder has been set up for each individual lot. We also have all of the financial, governance, and other files required by Florida law, except for one possible exception. Although this still needs to be checked out, it appears that we should have in our files a copy of the signed statement confirming that the owner was notified when they acquired their lot that they belong to the homeowners association. We have none of these. Bob Rohr said that there is a state disclosure form that realtors are legally required to include in the package when the closing of the property takes place. Paul asked what happens if the property is sold by the owner. Paul concurred that this could be gap. Paul said that we know that there is a disclosure form and it is a matter of what we need to have in our records that is now of concern. Fred suggested that a form be sent out to members, but Paul wants to research this issue further before steps are taken. On the positive side, Fred noted that everyone ( except one new owner) knows that they are part of the association because dues have been paid. One member is delinquent, but has paid dues in the past.

Paul said that he is working on enhancing the website. We need to make decisions on how to handle electronic records. He will develop a policy for the Board to review on handling of electronic and paper records. .

Finally, Paul asked that Board members make a list of the responsibilities of their particular job on the board to be passed on to the new board members as there will be 4 new board members next year.

12. Board of Directors election: Paul has received a resignation from Vice President, Debbie Clark, effective at the end of this year’s term. There are also 3 members of the Board whose terms are up: Paul, Peggy and Joe. They all confirmed that they will not seek reelection. Fred Black will continue and finish his two-year term. Therefore a minimum of 4 volunteers are needed to run for the Board-- 3 for a two year term and 1 for a 1 year term.

If you are interested in volunteering to serve on the board of directors, please contact Peggy, either by e mail: mfs618@aol.com or by phone 446 9094.

There is no longer a nominating committee soliciting volunteers to serve on the board. You must nominate yourself or someone must nominate you.

The membership elects the board and the new board members decide among themselves the office that each will occupy for the next year. You are not running for a specific office--only for serving on the board.( this is a state law)

Peggy will look at our nomination procedures and voting procedures to see if there should be any changes made before the election process.

Frank Carelli asked for a copy of the by law changes that were made and put into effect a couple of years ago. Paul will get a copy to him.

13. Marineland annexation: Paul said that Marineland -Hammock Political Unity Committee is attempting to bring about a referendum vote on whether to have the Hammock annexed to Marineland. They need to have affidavits signed by property owners saying that they have property and support the calling for a referendum. Our association owns the ponds and the pool area. Paul was asked if we would sign for the association as the owner of these common grounds. This is not voting on any issue, only a step to have a referendum vote.

Joe asked why this is so much of a concern to the committee Paul said they have to have agreement of 50% of the owners of the land in order to have a referendum. The area in question for us contains about 3 ½ acres between Armand Beach Estates and Hammock Beach Estates. Joe asked if they were also trying to get individual lot owners to also sign. Paul said that they were and he has the forms. Forms can also be obtained at Hammock hardware. Paul asked for a motion authorizing him to sign the necessary forms. A motion was made, seconded and approved by the Board members unanimously. affirmative. Paul will sign the documents and give them to the committee.

14. Social committee: Paul acknowledged those who helped out the Wilcox family with arrangements following Pat’s sudden death. Several members took food to the family or attended the service and flowers were sent on behalf of the Association. Thanks to all those who offered support to Lyle and his family during this difficult time.

Paul said that Betty Hamby had previously indicated an interest in being a coordinator for needs such as this. We, as a board, neglected to follow up with her on this offer to volunteer. Paul asked Bob Hamby if Betty might still be interested and Bob recommended that a board member talk with her. Paul will contact Betty to see if she is still interested. Note: After the evening membership meeting Paul spoke with Betty and she said she would not be able to take on this responsibility at this time.

The next meeting is scheduled for WEDNESDAY, October 3, 2007 at 3 PM at the Community Center.

The meeting was adjourned at 4:45 PM.

Respectfully submitted,

Peggy Steele, Sec, HBEHOA

Augbodmeet2007