BALLENA BAY TOWNHOUSE ASSOCIATION
Annual Membership Meetings of
October 3, 2006 and December 7, 2006
MINUTES

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ANNUAL MEETING OF OCTOBER 3 -ROLL CALL/CALL TO ORDER

Board Members Present: Elise Hall, Mike Brownlee, Bev Partridge, Audrey Kramer, and Shelley Bliss

Absent: none

Also Present: Ric Perez of Massingham and Associates and Ric Fong of Fong & Fong, Various Homeowners

The meeting was called to order at 7:10pm upon verification of quorum (41 homes represented in person and by proxy).

President's Remarks

E. Hall commented on allegations of misconduct by the Board and introduced attorney R. Fong.

R. Fong noted that he represented the association and made comments regarding his position on the above allegations as well as other matters including: a charge of illegal renting of a boat slip; to which he replied that this is a property right and that the rule covering this was promulgated in the 1'990s. Fong found no infraction. The owner has a lease agreement for the vessel and is thus entitled to the slip use.

Another charge brought forth was leveled at a current Board member for allegedly advising a tenant to defy the HOA rules regarding parking of an RV in a driveway. A declaration disputing the claim, under threat of perjury was signed by the Board member, another charged leveled against a different Board member was that she would not enforce the CC&R's allegedly due to some vested interest. Reportedly a revocable license to use a 2nd slip under a previous Board's watch was provided by the then management company rep (Rich Noble).

Neighbors reportedly agreed that no problem existed with the arrangement.

A charge was leveled about a possible $ 43,000 worth of fines were assessed during the dock reconstruction project, for failure to obtain permits before work commenced. R. Fong opined that such an action would represent negligence by the previous Board.

The fines were paid for by a loan taken out in the form of interest at @ $ 500 per household. A claim is to be tendered/submitted under the D&O Liability insurance, to recoup these fine payments,

R. Fong reported no misconduct found on the parts of Board members Kramer, Hall and Brownlee and that they could if they so chose, to take civil action on their own, against their accusers.

Waterside Report: S. Bliss reported that the Wave Maze amendment was completed to address the special requirements of the BCDC requiring reporting every year before winter now changed to once every 10 years. It was also noted that the maze is sinking and maintenance is needed as well. Diver Ted Buhl is to perform an inspection in the near future.

Property at the fence line was noted as being damaged as a result of the 2005 winter storms, and the fence must be replaced (it cannot be repaired). Debris removal (at piers) has been bid and there is a $ 3200 bid on the table for Board consideration.

Landside/Architectural-A. Kramer reported that a new reserve study was recently engaged and that 12 of the homes were fixed this past year.

M. Brownlee reported that eight (8) architectural modification applications were submitted and approved this past year.

Landscaping-B. Partridge reported that owner Nancy Moore performed a lot of work towards water management and that newly hired landscapers Cagwin and Dorward came in "light," at a reduced price.

Treasurer's Report-M. Brownlee predicted a 78.5k reserve fund at the beginning of the upcoming year. Currently the reserve stands at 105-1 07k.

E. Hall acknowledged various Board members for their efforts and successes. She also recognized new management (Massingham) hired to help "right the ship."

Communications-A. Kramer reported that the annual picnic is to be held on Oct 21 or 22.

13 different owners announced their candidacy for the upcoming election to the Board.

Management explained the IRS Revenue Ruling 70-604 (a voting issue for members) to those present, and that cumulative voting would not be allowed (by virtue of an amendment).

The annual meeting (for election of Board members) was announced as scheduled for the 1st Tuesday in December.

CLOSURE

The motion was made and seconded to close the meeting at 8:30 pm. The motion carried unanimously.

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ELECTION MEETING OF DECEMBER 7 -ROLL CALL/CALL TO ORDER

Board Members Present: Elise Hall, Mike Brownlee, Bev Partridge, and Shelley Bliss

Absent: Audrey Kramer

Also Present: Ric Perez of Massingham and Associates and Ric Fong of Fong & Fong, Various Homeowners

The meeting was called to order at 7: 15 pm upon verification of quorum.

50 ballots were received via mail, 12 ballots were submitted at the meeting, and 5 ballots were issued to members wishing to vote in person.

Election Issues

The Election Inspector (R. Perez) recruited owner Jim Ehrlich and attorney R. Fong to assist with tabulation of votes. Owners Jeff Frankel and Erik Coker observed the proceedings.

Election results were announced as follows

Dick Bacigalupi-41 votes

Terry Klaus-37 votes

Jim Nations-36 votes

Gary Flanagan-30 votes

Mike Brownlee-30 votes (these five candidates won election).

Others receiving votes were

Andy Schmidt-27, Elise Hall-26, Patricia Faustman-26, Diedre Dixon-22, Jay Cherrie-21, Joan Robinson-7, Lou Ann Roth-16

An Open Forum was held during the tabulation.

CLOSURE

The motion was made and seconded to close the meeting at 9:00 pm. The motion carried unanimously.