July 9, 2016
Mt. Index Riversites Community Club, Inc.
Board of Directors Meeting
Board members present: Mark Bollman, Carrie Byrne, Brent Corey, Kathleen EckartLove, Patty Harbaugh, CJ Holmes, Don Larsen, David MacFarlane, Andrew Tuttle, Mat Williams
Absent: Gary Johnson, Mark Haenlein, Rebecca Davis, Earl Van Buskirk
Owners and guests: Ellie Anderson, Phil Reichel, John Sharf, Rita Bovee, Lora Cox, Pete Rainey, Dan Harrison, Gale Williams
Special Guest: Cody Herron from PUD
Opening Remarks
Snohomish County PUD
Cody Herron joined at the start of the meeting to talk about his tree trimming project for PUD powerlines. The tree trimming is intended to help support the safety of residents and reduce the liability for the service PUD provides by clearing 15-20 feet from high voltage powerlines. He wants the project to start before winter sets in.
Owner authorization forms for tree trimming or tree removal were distributed at the meeting. He noted that PUD can trim trees without owner authorization, but cannot remove trees unless there is owner consent to do so. Low voltage lines that bring power to homes or cabins are the homeowner’s responsibility and not covered by PUD’s tree trimming.
Owners who would like to receive a form or consultation are encouraged to contact Cody Herron directly at 425-359-9029.
Phil Reichel also inquired about the PUD poles in the Sunset Falls slide area. Herron said PUD plans to dump 15-20 poles in the slide area, jump across the river where fish hatchery is, and then the bowl will be obsolete.
Committee Reports and Information
Executive Committee
Mark Bollman reported that in the last month, the committee worked with Anderson Hunter Law Firm in the contempt hearing regarding Judge Wynne’s 2009 order, presented in Snohomish County Superior Court on June 10, 2016.
Collections Committee
Mark Bollman said that he and Earl Van Buskirk reviewed Adams & Duncan’s final billing and they were successful in negotiating a reduced fee with Chris Adams. Related to this, the Collections Committee will bring a reduced fee motion for Board approval later in the meeting.
Reminder statements for past due assessments were mailed on July 5. After the meeting, the Board will have breakout meetings to review A-Section and E-Section owners with unpaid accounts for 2015-16.
In September, the Collections Committee will have to consider what to do with 2016-17 invoices that are 90 days old.
Canyon Falls to US-2
Paul Hery fixed the green gate last night and it’s now working again.
John Vos delivered 3 loads of material for the road. Paul Hery worked on a transition from gravel to Hwy 2 pavement by placing and grading a load of material there.
Mark Bollman reported that of the 17 owners who loaned MIR money for the bridge, one has passed away. The family would like to clear up their financial affairs and has asked the Board to repay the loan balance. A motion will be presented to the Board later in the meeting.
Budget & Finance
Earl Van Buskirk was absent at the meeting, so Carrie Byrne reported on the financials for the month. These were the highlights:
Dave MacFarlane reported that the community is doing well by volunteers using piles of gravel to fill potholes. He reported that one wheelbarrow disappeared, however.
Brushing is planned this year, however Paul Hery needs to repair his mower first. Once repair is complete, he plans to brush both E-Section and A-Section and will help keep costs low by doing this.
A-Section Roads and USFS 6020
Mat Williams reported that the road is in great shape since the major road work was completed.
Priority Business
June Meeting Minutes
Carrie Byrne: “Move to approve the May meeting minutes.” Approved: Unanimous
June Expenditures
Carrie Byrne: “Move to approve the Check Detail report for June expenditures.” Approved: Unanimous
Invoices detail
Charges and Invoices to be paid:
Adams & Duncan fee reduction agreement
Adams & Duncan sent a letter to MIR with the status of all cases. After meeting with Bollman and Van Buskirk, they agreed to reduce their fees as some of their professional services were incomplete at the end of Adams & Duncan representing MIRCC.
Collections Committee: “Move to accept Adams & Duncan Fee Reduction Agreement for $2,500 credit and pay balance due = $7,239.45 for final billing on all collection work.” Approved: Unanimous
Estate of Otto Spoerl
Since Spoerl’s passing, Mark Bollman reported that the family contacted the Board to request payment in full on the remaining balance of Spoerl’s bridge loan. By doing so, E-Section will save two years of interest on the loan and help the family settle their financial matters.
Executive Committee: “Move to pay off the balance due now on four-year $10,000 bridge loan from Estate of Otto Spoerl.” Approved: Unanimous
Discussion Topics
Assessments Due May 31
Dave MacFarlane is interested in exploring the concept of MIR receiving payment of half the annual assessments in February and half in August. MacFarlane suggested it might help with collections if MIR is not competing with other obligations that occur at the same time, such as county property taxes and federal taxes.
Other suggestions included an alternate due date for the annual assessment payment, interest-deferred payments, and an installment plan with transaction fees baked into the payments.
Don Larsen brought up the bylaws concern that Board members need to be in good standing, and there are currently no alternate payment structures.
If there is enough interest in the idea, MacFarlane would like to explore a different payment structure in the next fiscal year.
Liens and Foreclosures
Owners who haven’t paid their 2015-16 assessments and do not currently have a lien on their property will be reviewed by the Board as a potential for lien. Assessments for 2015-16 were due over a year ago.
Mark Bollman said that he is meeting next week with our Collections attorney at Anderson Hunter for next actions to take on liens and foreclosures. When considering collections action, the Board takes into account the attorney fees involved, if the county has a potential for a tax foreclosure, and what the property is worth.
Supplemental Order by Judge Wynne
Carrie Byrne posted the order to the website that resulted from the contempt hearing in Snohomish County Superior Court on June 10, 2016.
The document is the Order Supplementing August 11, 2009 Decree and Denying Motion for an Order to Show Cause re: Contempt. The order was signed by Judge Wynne and filed on July 1, 2016.
The order contains the actual words of the judge and the Board will keep it as part of MIRCC governing documents.
Special Assessment for Litigation Expenses
The topic of the attorney fees for MIRCC defense in the contempt suit brought by Ron Sims was discussed. Anderson Hunter Law Firm was engaged by the Board to respond to the complaint, as they are currently retained for collection matters, have experience with similar cases, and were available to respond in a timely fashion.
The contempt case was costly for MIRCC, as Anderson Hunter’s fees were not covered by the corporation’s Directors and Officers insurance provider. As noted in the June meeting minutes, the insurance provider eventually assigned an attorney in Seattle who was able to collaborate with Anderson Hunter.
The Board is considering a special assessment to property owners to offset the attorney fees for MIRCC defense. These fees were administrative expenses that were not budgeted and they impact both E-Section and A-Section, as the Sims complaint addressed community-wide concerns.
The Board recognizes that reaction to a special assessment could be very negative, especially by owners who aren’t up to speed with Sims’ complaint and the contempt hearing.
Lora Cox said that the community needs to know what kind of repercussions come from spurious lawsuits. She wondered if a special assessment would be defensible if the suit was not directly about the roads, and would it trigger another spurious lawsuit.
Mark Bollman reiterated the issues addressed in the Sims complaint and confirmed that they are suitable for a special assessment.
Dave MacFarlane asked if a special assessment could be calculated using the 80/20 implied easement formula. Because attorney fees are administrative expenses, they must be calculated at a flat per-owner basis per Wynne’s 2009 ruling.
Brent Corey said that we need a letter to go out and explain how the events happened and that the community has to pay for it. He also suggested that people should understand that “when you sue the Board, you’re suing your neighbors.”
The August meeting agenda will review the need for a special assessment to cover attorney fees. Carrie Byrne will share a draft of a cover letter to explain the circumstances to the community that would accompany an invoice.
Falls Place Assessment
Judge Wynne’s recent order supplementing the 2009 decree affords the Board the right to not assess a property if it’s been valued at zero by the county. In March, the Board voted to assess Falls Place owners for the 2016-17 year for administrative costs and for USFS 6020 and Sec 1-2 maintenance for the road distance to the Sunset Falls gate. With the vote, the Board cleared the ambiguity of “good standing” for these owners and assessed them for accessing parts of the A-Section road.
Next month, if any Board members who were on the prevailing side of the March vote changed their mind about assessing Falls Place owners, they may bring it up as a motion to vote. CJ Holmes said that she is interested in readdressing it.
Any future decision about assessing Falls Place owners must also consider the conditions for voting at the annual meeting and candidacy for the Board of Directors within the context of the judge’s orders and MIRCC bylaws. The Board would like input from Falls Place property owners on the matter.
Yellow Gate & Fishing at Sunset Falls
John Sharf wanted to discuss accessing the fishing area at Sunset Falls. Presently clickers are used for the new yellow gate at the archway, which blocks MIR community members who don’t own property in A-Section.
Mat Williams said that MIR community members with recreational interests are welcome to call ahead and get a temporary code to the gate. He also mentioned that there is a phone number posted on the gate for people to call.
Williams added that the gate was installed for security purposes and we need to adhere to a strict protocol to accomplish our goal. All property owners will be given access and there will be very few exceptions in terms of universal codes to get through.
It was also mentioned that a commercial establishment that runs a B&B (bed & breakfast) is interested in a commercial code for gate access. The A-Section Road Committee will discuss these needs in a committee meeting.
Closing Remarks
Next meeting scheduled for Saturday, August 13th at 9:00 a.m. at the Index Fire Station.
Respectfully submitted by
Carrie Byrne
MIRCC Secretary
Absent: Gary Johnson, Mark Haenlein, Rebecca Davis, Earl Van Buskirk
Owners and guests: Ellie Anderson, Phil Reichel, John Sharf, Rita Bovee, Lora Cox, Pete Rainey, Dan Harrison, Gale Williams
Special Guest: Cody Herron from PUD
Opening Remarks
Snohomish County PUD
Cody Herron joined at the start of the meeting to talk about his tree trimming project for PUD powerlines. The tree trimming is intended to help support the safety of residents and reduce the liability for the service PUD provides by clearing 15-20 feet from high voltage powerlines. He wants the project to start before winter sets in.
Owner authorization forms for tree trimming or tree removal were distributed at the meeting. He noted that PUD can trim trees without owner authorization, but cannot remove trees unless there is owner consent to do so. Low voltage lines that bring power to homes or cabins are the homeowner’s responsibility and not covered by PUD’s tree trimming.
Owners who would like to receive a form or consultation are encouraged to contact Cody Herron directly at 425-359-9029.
Phil Reichel also inquired about the PUD poles in the Sunset Falls slide area. Herron said PUD plans to dump 15-20 poles in the slide area, jump across the river where fish hatchery is, and then the bowl will be obsolete.
Committee Reports and Information
Executive Committee
Mark Bollman reported that in the last month, the committee worked with Anderson Hunter Law Firm in the contempt hearing regarding Judge Wynne’s 2009 order, presented in Snohomish County Superior Court on June 10, 2016.
Collections Committee
Mark Bollman said that he and Earl Van Buskirk reviewed Adams & Duncan’s final billing and they were successful in negotiating a reduced fee with Chris Adams. Related to this, the Collections Committee will bring a reduced fee motion for Board approval later in the meeting.
Reminder statements for past due assessments were mailed on July 5. After the meeting, the Board will have breakout meetings to review A-Section and E-Section owners with unpaid accounts for 2015-16.
In September, the Collections Committee will have to consider what to do with 2016-17 invoices that are 90 days old.
Canyon Falls to US-2
Paul Hery fixed the green gate last night and it’s now working again.
John Vos delivered 3 loads of material for the road. Paul Hery worked on a transition from gravel to Hwy 2 pavement by placing and grading a load of material there.
Mark Bollman reported that of the 17 owners who loaned MIR money for the bridge, one has passed away. The family would like to clear up their financial affairs and has asked the Board to repay the loan balance. A motion will be presented to the Board later in the meeting.
Budget & Finance
Earl Van Buskirk was absent at the meeting, so Carrie Byrne reported on the financials for the month. These were the highlights:
- Collection rate to date for A-Section is 56%, with an anticipated rate of 70%; collection rate to date for E-Section is 58%, with an anticipated rate of 80%
- For the same period compared to last year, A-Section’s and E-Section’s income is higher—indicating that more owners are paying more promptly
- Administration fees compared to last year are also higher, due to costs associated with legal defense for the contempt hearing, legal counsel for easements, and legal fees for liens and foreclosures which may be recouped
- For the month of June, A-Section collected $8,010 in assessments; E-Section collected $37,466. These amounts reflect only payments that have posted and may not include checks that arrived in the mailbox at the end of the month.
- The total bank balance as of June 30, 2016 is $121,323
Dave MacFarlane reported that the community is doing well by volunteers using piles of gravel to fill potholes. He reported that one wheelbarrow disappeared, however.
Brushing is planned this year, however Paul Hery needs to repair his mower first. Once repair is complete, he plans to brush both E-Section and A-Section and will help keep costs low by doing this.
A-Section Roads and USFS 6020
Mat Williams reported that the road is in great shape since the major road work was completed.
Priority Business
June Meeting Minutes
Carrie Byrne: “Move to approve the May meeting minutes.” Approved: Unanimous
June Expenditures
Carrie Byrne: “Move to approve the Check Detail report for June expenditures.” Approved: Unanimous
Invoices detail
Charges and Invoices to be paid:
- E-Section Checks:
- $75.57 – Swizznet (accounting software)
- $192.62 – Intuit (office supplies)
- $1,359 – Liberty Mutual Insurance (business insurance)
- $3739.33 – Owners’ loans (bridge loan payments)
- $4736.17 – Acrow (bridge payment)
- $345 – SLK Accounting (monthly bookkeeping)
- $149.20 – Mark Bollman (community development)
- $50.40 – Mark Bollman (PO Box fee)
- $288.75 – John Vos (roads)
- $5,480 – Redmond General (bridge insurance)
- $4,413.46 – Anderson Hunter Law Firm (MIR defense in Sims contempt case)
- $4,254.85 – Anderson Hunter Law Firm (Olson, Manley and Tyler, Dumas, Peterson, Satterlee – collections)
- $184.63 – Scott Highland (refund for overpayment)
- A-Section Checks:
- $50.38 – Swizznet (accounting software)
- $23.45 – O-Reilly (yellow gate)
- $617.19 – Cascade Quarries (road work)
- $3.02 – USPS (postage)
- $98.38 – Paypal/various sellers (yellow gate)
- $944.10 – Snohomish Automotive (equipment maintenance)
- $128.41 – Intuit (office supplies)
- $33.62 – Walmart (yellow gate)
- $210 – SLK Accounting (accounting services)
- $700 – Guy Bennett (road work)
- $630 – John Vos (road work)
- $1,278.50 – Carney Badley Spellman, P.S. (attorney fees)
- $33.60 – Mark Bollman (PO Box fee)
- $2,942.30 – Anderson Hunter Law Firm (MIR defense in Sims contempt case)
- $3,834.12 – Bull of the Woods (road work)
Adams & Duncan fee reduction agreement
Adams & Duncan sent a letter to MIR with the status of all cases. After meeting with Bollman and Van Buskirk, they agreed to reduce their fees as some of their professional services were incomplete at the end of Adams & Duncan representing MIRCC.
Collections Committee: “Move to accept Adams & Duncan Fee Reduction Agreement for $2,500 credit and pay balance due = $7,239.45 for final billing on all collection work.” Approved: Unanimous
Estate of Otto Spoerl
Since Spoerl’s passing, Mark Bollman reported that the family contacted the Board to request payment in full on the remaining balance of Spoerl’s bridge loan. By doing so, E-Section will save two years of interest on the loan and help the family settle their financial matters.
Executive Committee: “Move to pay off the balance due now on four-year $10,000 bridge loan from Estate of Otto Spoerl.” Approved: Unanimous
Discussion Topics
Assessments Due May 31
Dave MacFarlane is interested in exploring the concept of MIR receiving payment of half the annual assessments in February and half in August. MacFarlane suggested it might help with collections if MIR is not competing with other obligations that occur at the same time, such as county property taxes and federal taxes.
Other suggestions included an alternate due date for the annual assessment payment, interest-deferred payments, and an installment plan with transaction fees baked into the payments.
Don Larsen brought up the bylaws concern that Board members need to be in good standing, and there are currently no alternate payment structures.
If there is enough interest in the idea, MacFarlane would like to explore a different payment structure in the next fiscal year.
Liens and Foreclosures
Owners who haven’t paid their 2015-16 assessments and do not currently have a lien on their property will be reviewed by the Board as a potential for lien. Assessments for 2015-16 were due over a year ago.
Mark Bollman said that he is meeting next week with our Collections attorney at Anderson Hunter for next actions to take on liens and foreclosures. When considering collections action, the Board takes into account the attorney fees involved, if the county has a potential for a tax foreclosure, and what the property is worth.
Supplemental Order by Judge Wynne
Carrie Byrne posted the order to the website that resulted from the contempt hearing in Snohomish County Superior Court on June 10, 2016.
The document is the Order Supplementing August 11, 2009 Decree and Denying Motion for an Order to Show Cause re: Contempt. The order was signed by Judge Wynne and filed on July 1, 2016.
The order contains the actual words of the judge and the Board will keep it as part of MIRCC governing documents.
Special Assessment for Litigation Expenses
The topic of the attorney fees for MIRCC defense in the contempt suit brought by Ron Sims was discussed. Anderson Hunter Law Firm was engaged by the Board to respond to the complaint, as they are currently retained for collection matters, have experience with similar cases, and were available to respond in a timely fashion.
The contempt case was costly for MIRCC, as Anderson Hunter’s fees were not covered by the corporation’s Directors and Officers insurance provider. As noted in the June meeting minutes, the insurance provider eventually assigned an attorney in Seattle who was able to collaborate with Anderson Hunter.
The Board is considering a special assessment to property owners to offset the attorney fees for MIRCC defense. These fees were administrative expenses that were not budgeted and they impact both E-Section and A-Section, as the Sims complaint addressed community-wide concerns.
The Board recognizes that reaction to a special assessment could be very negative, especially by owners who aren’t up to speed with Sims’ complaint and the contempt hearing.
Lora Cox said that the community needs to know what kind of repercussions come from spurious lawsuits. She wondered if a special assessment would be defensible if the suit was not directly about the roads, and would it trigger another spurious lawsuit.
Mark Bollman reiterated the issues addressed in the Sims complaint and confirmed that they are suitable for a special assessment.
Dave MacFarlane asked if a special assessment could be calculated using the 80/20 implied easement formula. Because attorney fees are administrative expenses, they must be calculated at a flat per-owner basis per Wynne’s 2009 ruling.
Brent Corey said that we need a letter to go out and explain how the events happened and that the community has to pay for it. He also suggested that people should understand that “when you sue the Board, you’re suing your neighbors.”
The August meeting agenda will review the need for a special assessment to cover attorney fees. Carrie Byrne will share a draft of a cover letter to explain the circumstances to the community that would accompany an invoice.
Falls Place Assessment
Judge Wynne’s recent order supplementing the 2009 decree affords the Board the right to not assess a property if it’s been valued at zero by the county. In March, the Board voted to assess Falls Place owners for the 2016-17 year for administrative costs and for USFS 6020 and Sec 1-2 maintenance for the road distance to the Sunset Falls gate. With the vote, the Board cleared the ambiguity of “good standing” for these owners and assessed them for accessing parts of the A-Section road.
Next month, if any Board members who were on the prevailing side of the March vote changed their mind about assessing Falls Place owners, they may bring it up as a motion to vote. CJ Holmes said that she is interested in readdressing it.
Any future decision about assessing Falls Place owners must also consider the conditions for voting at the annual meeting and candidacy for the Board of Directors within the context of the judge’s orders and MIRCC bylaws. The Board would like input from Falls Place property owners on the matter.
Yellow Gate & Fishing at Sunset Falls
John Sharf wanted to discuss accessing the fishing area at Sunset Falls. Presently clickers are used for the new yellow gate at the archway, which blocks MIR community members who don’t own property in A-Section.
Mat Williams said that MIR community members with recreational interests are welcome to call ahead and get a temporary code to the gate. He also mentioned that there is a phone number posted on the gate for people to call.
Williams added that the gate was installed for security purposes and we need to adhere to a strict protocol to accomplish our goal. All property owners will be given access and there will be very few exceptions in terms of universal codes to get through.
It was also mentioned that a commercial establishment that runs a B&B (bed & breakfast) is interested in a commercial code for gate access. The A-Section Road Committee will discuss these needs in a committee meeting.
Closing Remarks
Next meeting scheduled for Saturday, August 13th at 9:00 a.m. at the Index Fire Station.
Respectfully submitted by
Carrie Byrne
MIRCC Secretary