The Willows at Twin Cove Marina Homeowners Association

The Willows at Twin Cove Marina Homeowners Association Annual Homeowners Meeting May 19, 2012 AGENDA 1. Call to Order and Introduction of Board Members Mark Kahanic opened the meeting and welcomed the Association members. There were 36 Members present in person or by proxy. Additional Guests: Walt Winchester Attorney for the Association Bryan Miller, Carol Miller and Jim McClary of Spider Cove Marina (Rental) Joe LaFica and Paul Kratzer of US Bank Rob Greene Marina Manager Mark introduced the new Board of Directors to the Membership: Mark Kahanic President Keebler Williams Vice President James VanDeVelde Treasurer Chuck Clark Secretary RJ Riegler At Large 2. Annual Report from the Board Mark Kahanic a. Short history of transition to resident control on August 5, 2011 Mark Kahanic reported that when the Board took over the association from the Developer, they discovered that several of the accounts like the trash bill and telephone bill were past due. Some of the Board members pre-paid their dues in order to get the accounts current. The Association records or lack thereof were not clear and therefore it has taken a considerable amount of time to figure out the Association s financial condition. b. Project completions and accomplishments from August 2011 to present: Negotiated and implemented the contract with HOA Management Negotiated and implemented a new insurance policy Negotiated a new security contact with a competent security company with qualified security guards Completed a major clean up of the grounds Negotiated a new common ground landscaping contract Presser washed the Condo building Made significant repairs to the fire alarms and installed the required phone lines Made code compliant Elevator repairs

Made major drainage repairs to the common property to control the water c. Current Infrastructure Issues/Challenges Broadleaf hill- TDEC violation: Mark reported that the road is currently in litigation and cannot be completed until the litigation is completed. Broadleaf Drive and Willows Lane has considerable mud and water runoff that the Board is working with the County to correct. As a result the Culvert below the large pool is causing the road to collapse The hill behind the small pool is collapsing The hill behind the basketball court is also collapsing. The property needs a major tree and trash removal There will need to be several repairs on the pool in order to open this year. Jim VanDeVelde reported that Campbell s Pool and Spa is currently working on getting the pool open. They completed the first phase of the repairs today. He reported that the actual opening date is still unknown. Mark Kahanic reported that the small pool will not be opened this year due to the Bank foreclosures and current litigation with the bank. Mark Kahanic reported that the board is in the process of hiring a full time maintenance person to maintaining the grounds on a day to day basis. 3. 2011-12 Financial Report and 2013 Budget Presentation 1. Jim VanDeVelde presented the 2011-12 Financials a. Net income of $22K b. Total cash on hand as of 4/30/12 is $30k c. With few exceptions all owners are paying their dues currently. He did report that there are a few units that are in foreclosure at this time. d. Liens have been placed on those units that are not paying their assessment which accounts for $17K e. There were some Unanticipated expenses in 2011-12 i. Legal fees of $8,460 ii. Unpaid developer bills Potential unknowns for 2012-13 Legal fees estimated at $12K Pool repair expenses Laborer/equipment costs Potential Insurance premium increase

Jim VanDeVelde reported that the Board has been working on setting up separate reserve accounts for each of the different type properties. The Budgeted addition to the reserve accounts for 2012-13 is $22k Jim VanDeVelde reported that a formal Reserve Study is planned for 2013 to make sure we are putting aside the proper amounts for future improvements. Chuck Clark reported that he is meeting with the insurance agent and is going to do a study of the values of each units to makes sure the insurance is covering the full insured value. Jim VanDeVelde reported that the most significant budget expense items for 2012-13: Insurance 23k Grass cutting/ munching 35K Security 29K Employees/ repairs 25K Utilities/trash 19K Jim VanDeVelde reported that the Monthly Dues will remain the same for 2012-13. Jim VanDeVelde reported that staring June 1, 2012 late fees will be charges on payments that are more than 15 days past the due date. Property Foreclosures and Related HOA Appurtenant Right Claims Bank/Financial Institutions with property interests Walt Winchester, attorney for the Association, spoke on the Bank and Association Property Rights. He started by stating that the Board has done an excellent job under the circumstances. US BANK (Formerly BANK EAST) Foreclosed on Twin Cove Acquisitions and owns the Marina and several lots in the development First Trust Savings foreclosed on the small pool, basketball court and clubhouse property. Heritage Bank owns vacant lots in the Woods and is currently paying their Assessment fees Citizens Bank owns 3 Townhome Units Tennessee State Bank has scheduled foreclosure sale two weeks from last Thursday. Walt reported that once the foreclosure sales happened, the bank will take over the property along with the Association. This includes the property that the main pool is on. He noted that once the foreclosure is complete the Association and the Bank will have an interest in the common property, subject to the Master Deed. He warned the membership that Tennessee State Bank will want to close the pool to limit their liability. He noted that we will not know

anything until the foreclosure happens. The Association will have to wait to work with the bank until after the foreclosure. Walt Winchester reported that he is working with all the banks to determine who owns what and who is responsible for what. He also reported that this is going to be a long drawn out process and encouraged the homeowners to be patient. He also reported that this situation is much more difficult than most because so many banks are involved. Usually you only have to deal with one bank. We have to deal with 6 different banks. Mr. Clark asked why the bank can pad lock the pool when the property is clearly common property. Walt Winchester told the Member that the reason they pad locked the pool is to limit their liability. Walt noted that the bank and the Association have Appurtenant Rights to the Property. This means you have a Right to Use the Property as a Member of the Association. Walt did report that he was not sure why the Bank took the position to pad lock the pool. The question was asked as to what will happen to the dirt road. Keebler Williams reported that the Developer built the road through a lot owned by the Bank. Walt reported that this issue might have to come to a lawsuit in order to resolve every issue and make it clear. Walt reported that none of this can be solved until Tennessee State Bank forecloses on the property. A Question was asked as to whom the Declarant is and who was responsible for maintenance. Walt reported that there is no formal statement as to the responsibility of the Declarant, however if they pad lock the pool, they will be responsible for the maintenance of the pool. Representatives from US Bank, Joe LaFica and Paul Kratzer were introduced and reported that after a four (4) hour meeting with the Title Company he discovered that this situation is very convoluted. They reported that they are about 60 days away from knowing all the problems that they inherited with this Property. The Bank reported that once all of the legal issues are cleared up, the Bank plans on meeting with the Board of Directors and the Associations legal counsel to solve all the issues. The Bank reported that they have spent close to $300k on the Marina currently and will probably spend another $100K to make the marina profitable. The Bank brought in Great American Hotel Group to run the marina and thinks they are doing a great job to date. The question was asked if the Marina was profitable. The Bank reported that the records that the bank received were slim to none. They still have several slips that they still do not know who they are leased to. Once they are able to determine who has slips leased, they will then offer the slips to the homeowners first. The Bank reported that they have 141 slips but only 118 have leases. Rob Greene from the Marina Management reported

that all the leases expire April 30, 2012 so they will start the process to execute leases on all 141 slips. They did confirm that Association members will have priority over the 141 slips. He also stated that there will be an increase in the leasing fees for the slips. The question was asked if the Bank had plans to expand the Marina to the total 300 planned slips. The Bank reported that they are not a developer so they will not expand the Marina. Great American Hotel Group has been hired to help fix up the marina and make it profitable so the Bank can sell the Asset. The question was asked if the Bank had a price for the Marina. The Bank said the price is $5,000,000. Mark Troutman addressed the issue with First Trust Savings putting a pad lock on the small pool. He reported that the Association has filed a lawsuit to protect our right to use the common areas including the pool and basketball court. We filed the lawsuit because the Bank has not communicated with us. The Bank is taking the hard line so we felt we had no choice but to file the lawsuit. Mark reported that we have a legal opinion that we have appurtenant rights to the common property including the small pool and basketball court. Mark reported that we made a $2,000 offer to purchase their rights, but they turned down the offer. Outlying properties (Reserve, Court, Pointe) Mark Kahanic reported that The Reserve, The Court and The Point are off property neighborhoods that have been made part of the Association. At some point the Association needs to decide if it is in the best interest of the Association to maintain these properties as part of the master Association 4. General Administrative/Operational Issues Coupon Books Mark Kahanic reported that the board has implementation the use of Coupon booklets with mailing labels attached. Jim Racek reported that HOA Management offered ACH Debit which automatically Debits your account between the 5 th an d 10 th of each month for the amount of your assessment. If you are interested, call the office and they will send you the form. Garbage/Waste Management Mark Kahanic reported that this is going to continue as it always has. There will be 2 dumpsters on the lot for residential trash. Each homeowner is responsible for taking their trash to the dumpster. If it is not residential trash ( ie. chairs and furniture) do not put it in the dumpster. Mark reported that there has been a major cost savings measure for trash, Fire Safety, Comcast and Phones HOA website

The Board is in the process of implementing an Association Web site. He stated he hoped to have the site up in 60 days. The site will include pictures of the property, the Governing Documents, Financials, Minutes and Directory. Comcast bulk contract The Board has been working with the developer and Comcast to negotiate the contact with Comcast. They finally came to an agreement and all the information was emailed to the homeowners. The Board and or Comcast will be sending out a request for information. They will need to get the serial numbers off your equipment. The service includes Digital Cable and Internet. If you want to upgrade call 1-800-comcast. The homeowners will be responsible for the boxes and modems. Anyone who currently is under contract with Comcast will be rolled into the new contract. It includes 2 boxes and a modem. If the owners have any questions please call 1-800-comcast. You will be billed $50.00 per month with your monthly assessment fee. You will need to make payment to The Willows HOA and send to HOA Management. Insurance replacement cost study/review The Board is planning a major insurance review to make sure we are adequately covered. General Laborer Position(s) The Board has been interviewing people for a full time maintenance position. They have decided on an applicant and have authorized HOA Management to process his application. He is to only do Association work while he is on the clock, but can be available for Homeowners repairs after hours. Pet control and waste issues, fireworks and other quality of life issues The Board is stepping up enforcement issues. We will be installing FIDO STATIONS in the near future. Please keep the property clean. Outside of 4 th of July the cut off for Fireworks is 10pm. Mark Kahanic reported that the Security hours are 11:00 PM to 4:00 AM with licensed security guards. Architectural Review Committee The Board has formed an Architectural Control Committee (ARC) and appointed Nancy Magnon and the Committee Chairman. They have also set up forms for new construction and alterations. If you have an ARC project contact HOA Management. Draft HOA Handbook Nancy Magnon is working with the Board to complete a Property Handbook. The Handbook will include the Resort Rules and Regulations Rental program interrelationship with the HOA Mark Kahanic reported that Bill and Carol Miller as well as Jim McClary have been working well with the association and looked forward to our relationship with them.

5. General Discussion Trailer parking US bank reported that they would be asking people to move the trailers to open land because the trailers are taking up too many parking spots for Marina customers. They reported that they would work out an arrangement for offsite parking of the trailers. There was a question asked if the Board makes a deal with the bank to purchase their rights for the pool, would the Board need the Memberships approval. Jim VanDeVelde responded that if the settlement is in excess of $5,000, then Membership approval would be required. A Member publicly thanked Board for all they have done and for their efforts in the future. Everyone agreed with applause. There being no further business to discuss, the meeting was adjourned at 3:24 PM Respectfully Submitted Tina Racek Recording secretary