FALLS RUN COMMUNITY ASSOCIATION

August 16, 2006 Meeting Minutes

Meeting Minutes:

The Falls Run Community Association, Inc.’s Board of Directors met for a Working Session on August 16, 2006 at the Center.

Bill Nosal, Nancy Arnn, Toni Brown, Jackie Richards, Art Gabler, Dan Owens, and Mal Malo.

Also attending: Robert Koger, CEO and Sylva Southwell, Property Manager both of Koger Management, Marvin Wagner, Parliamentarian, resident, Al Venit of 48 Goosecreek Circle, and Bill Arnst, Traffic Safety and Election Committee..

Nancy Arnn moved, 2^nd by Jackie Richards to approve and suspend reading of minutes of August 2, 2006. Carried unanimously.

Jackie Richards moved that the entire sentence in the design guidelines, Section II, Part 2,d, that states: ”where turf is used within the private area, this shall consist of blue grass blends of 3 or more with no more than a 20 percent mixture of perennial rye or fescue added to the blend” BE DELETED. Motion was 2^nd by Mal Malo. Carried unanimously

Art Gabler moved to ask Robert B. Payne of Fredericksburg, VA to inspect the Desert-Aire system and to provide a quote for a preventative maintenance program (see attached). 2^nd by Nancy Arnn. Carried unanimously.

Art moved that FRCA make a $100 donation to the Stafford County Department of Fire and Rescue station that provided the hoses to refill the pool after cleaning. Dan Owens 2^nd the motion. Carried unanimously.

Mal Malo moved to accept the 3 year contract with no increase in annual contract price proposed by Shenandoah Landscaping subject to editing of XIV Termination as follows: DELETE the last part of the last sentence…”including any amount in excess of the monthly charges paid by the Owner through the date of termination.” In other words end that paragraph with a period after the word profit. (See attached reference from contract)

Nancy Arnn moved to adjourn, 2^nd by Dan Owens. The meeting was adjourned at 12:40 PM.

The Board of Directors conducted a vote via e-mail after the meeting of August 16, 2006, to approve election policy documents submitted by the Election Committee. The documents were approved unanimously.

The Falls Run Community Association, Inc.’s Board of Directors met on August 16, 2006 for a Work Session at the Center.

Bill Nosal, Dan Owens, Nancy Arnn, Jackie Richards, Toni Brown, Art Gabler and Mal Malo.

Nancy Arnn moved, 2^{nd
by} Jackie Richards, to approve and suspend reading of the minutes of August 2, 2006. Carried unanimously.

Bill Nosal welcomed Robert Koger, CEO of Koger Management. Mr. Koger was agreeable to conducting his discussion with the Board in Open Session. Whereupon discussion followed for approximately one hour. Mr. Koger gave an explanation of Koger Management’s new computer program, elaborating on its many features and enhanced information that would now be available to all residents of the community and the Board.

Mr. Koger stated that he has some recommendations regarding the overall operations of the Board and how the Board interacts with Sylva Southwell, our Property Manager. Mr. Koger said that Koger Management is there to assist homeowners with their problems in any way he can. He is looking forward to the August 29^th meeting with the Communications Committee when they travel to the Fairfax office to discuss the Falls Run Information System (FRIS) and its interface with the Koger programs.

Bill Nosal asked if Mr. Koger was aware of the emails and certified letters that had been sent to Jeff Koger expressing various concerns of the Board regarding Koger Management’s performance. Mr. Koger indicated that he was aware of our correspondence and suggested that some of the problems they had addressed resulted from the July 1 conversion to their new computer system.

Mal Malo, Treasurer, questioned whether we will be able to receive reports, such as financial statements as of a certain date, for example, July 31^st since Mr. Koger had said their system operates in “real time”. Mal explained that he had seen 2 different statements for July 31 each reporting different information. Mr. Koger explained that the transition to a new system always has some problems and a great deal of information had been entered into their program manually.

Mal also commented on the lack of oversight by Koger Management citing the example of a large sum of money sitting in an account earning only .03% interest, even after Koger Management through Jeff had been directed to move the funds into an account earning a higher rate of interest.

Mr. Koger’s response was to suggest that we need an investment advisor. Koger Management does not want to act as our financial advisor or to be named a signer on any of our accounts.

Mal asked the status of the December 31, 2005 audit and tax returns. In his answer, Mr. Koger basically pointed the finger at our auditor indicating that they were not on the job as he would have expected and that information had been made ready for them to pick up. He added the auditors felt badgered by the Board. The Board has been told by the auditor that information was not forthcoming from Jeff Koger which had been the subject of our earlier emails and letters to Jeff Koger. Toni Brown pointed out that our experience with Jeff Koger had been frustrated by his lack of response, delayed response, incomplete response and based on our history with him; it was easier to believe that communication problems and transfer of information might stem from him rather than the auditor.

One of Mr. Koger’s suggestions was to have the finance committee approve the coding of all invoices before sending them to Fairfax for input into the system. He also stated that all records should be available at our Center.

Mr. Koger voiced the opinion that the Board and Koger Management were not of the same mind as to how the system should work.

Dan Owens made the point that the request for quality control and cross checking were lacking at the Fairfax office. Mr. Koger agreed that he was not satisfied himself. He has hired a CPA to improve conditions at his office. Dan asked what kind of assurances we can rely on in the future that things, such as the financial reporting would improve. Mr. Koger admitted that Jeff has too much on his plate at this time. Koger Management and the Board need to agree on a change in procedures.

Art Gabler asked why our funds are in a bank in Arizona and asked whether we are required to keep our money in the Arizona bank. Art’s questions brought up the subject of investment management again with Mr. Koger stating once more they do not want to manage investments.

Toni Brown pointed out with that being the case Jeff should have advised us in this regard instead of ignoring our repeated requests or only partially fulfilling them. Mr. Koger said that he would look into it. He could not answer for Jeff Koger.

Jackie Richards asked why some invoices had been paid late which had incurred fines. Mr. Koger will research late payments as it is definitely Koger Management’s policy to pay all invoices in a timely manner.

Jackie also wanted to know why the aging reports did not seem to show any interest or penalties. Mr. Koger said he would look into it.

Nancy Arnn asked for reassurance that Villas statements were being properly recorded as many homeowners were unaware of new account numbers when submitting their dues. Mr. Koger assured her all of that has been taken care of.

Bill Nosal thanked Mr. Koger for meeting with us. Stating that we have always pointed out to Jeff that we wanted this relationship to work, but overall performance has been less than satisfactory.

Resident Al Venit introduced a representative from a company that produces Milky Spore to eliminate Japanese beetle grubs. The representative gave the Board a presentation and an explanation of how Japanese Beetles spread and increase, stressing the benefits of using Milky Spore to eliminate that spread. Mr. Venit requested that the Board approve the treatment of the common areas that surround the Goosecreek Circle area in order to recognize and support the efforts of those residents who have agreed to apply Milky Spore.

There followed a discussion regarding cost per acre, the unscheduled impact on the budget, and the fact that the Board could not approve treating certain common areas without doing them all. The Board understands there are approximately 26 acres of common area through out the community (that does not include the Villas which it must) at an approximate cost of $500/acre. The Board could not be convinced to take action at this time.

Sylva prepared a list of action items she has performed since our last meeting (see attached).

In addition to the list Sylva provided, Toni Brown inquired about several items left open from previous sessions.

2. Unauthorized towing of vehicle. All information still not available. Pending.

3. Status of legal review of proposed changes to CC&R’s. Sylva will check with attorney.

4. Cost information re outsourcing the mailing of CC&R package. Prices have been forwarded to Margie Kramer.

5. Sprinkler at Legend gates belongs to Falls Run and adjoining property is benefiting.

8. Positioning of trash containers along Bridgewater? Waste containers on a pole with doggie bags available - $450/each.

9. Sylva has provided auditor with all information previously requested of her. All information was sent within 2 days of auditor’s request.

All sprinklers have been repaired around the Community Center. Del Webb broke the valve control box when the final home was built in the area behind the dumpster. Sylva will pursue payment from them for cost to repair.

Jackie noted if the Board approves of the motion, the community will be advised in an insert to the September 1 Gazette to strike through this sentence in the current Design Guidelines dated July, 2006.

Please see attached complete report regarding pool, fitness equipment, cleaning contract, and electronics closet.

Art moved to ask Robert B. Payne of Fredericksburg, VA to inspect the Desert-Aire system and to provide a quote for a preventative maintenance program (see attached). 2^nd by Nancy Arnn. Carried unanimously.

Mal moved to accept the 3 year contract with no increase in annual contract price proposed by Shenandoah Landscaping subject to editing of XIV Termination as follows: DELETE the last part of the last sentence…”including any amount in excess of the monthly charges paid by the Owner through the date of termination.” In other words end that paragraph with a period after the word profit. (See attached reference from contract)

Bill Nosal met with Dennis Ouellette and presented him the full report of action items requested by the Property and Grounds committee. Dennis promised to get back to Bill by Friday, August 18, 2006 indicating what they will do and won’t do.

Resident Bill Smith expressed concern that changing from Breeden Collier to Robert Payne to maintain the Desert-Aire systems might negate Pulte’s obligation to bring the unit to full operating and satisfactory condition.

He also asked that the BOD respond to his ideas for a Strategic Planning Committee.

Members of the committee will each monitor streets between now and August 28 and return individual reports regarding their observations of traffic violations. They want to start with an intensive educational campaign. They already know that Smithfield and Harborton is an accident waiting to happen and will recommend that a 3 way stop be implemented there.

Bill Arnst also asked the Board to approve the election procedures submitted by the Election committee. Since not all of the board members were aware of the documents, it was decided to vote electronically as approved by the parliamentarian, Marvin Wagner.

Villas had a 2 hour briefing with Mason & Mason and would like the FRCA to be a part of a briefing.

Dr. Herrera was able to bring an environmental specialist to inspect Storm Water Management Pond #5 (by the Villas). The inspection and the report will be made at no cost to the community. Thank you, Dr. Herrera!

Activities Director’s job description needs to be reviewed in order to complete the RFP going out for property manager’s proposals.

Nancy Arnn moved to adjourn, 2^nd by Dan Owens. The meeting was adjourned at 12:40 PM.

The following attachments are available for viewing in the binder that is maintained in the Center.