The August 20, 2011 meeting of the Board of Directors was opened at 8:10 AM with the Pledge of Allegiance.  All members were present, with the exception of Gina Florio.  In addition, General Manager, John Carney and George McMullin, representing the Advisory Board, were also present.

 

A moment of silence was observed for Lee Colligan.

 

The July minutes were reviewed.  A motion was made by Al Cucciniello, and seconded by Dan Braun, to accept the minutes as read with only typographical corrections.  The motion passed unanimously.

 

Treasurer’s Report – Dan Braun

 

Monthly Report as of July 31, 2011

WLE POA Cash in Bank Accounts Totaling:   $2,011,597.83

WLE POA Equity (Cash Basis):  $3,114,198.67

Dues Assessments Collection Rate (Cash Basis):  99.6% on a Budget Year-to-Date Basis (excluding $51,080.20 in pre-paids); $63,410.80 in cumulative annual prior dues (less than one year in arrears); 22 civil complaints were filed and 2 were reinstated, 9 civil complaints were settled with collections totaling $10,204.17. 

 

Significant individual line item actual-to-budget, cash-basis negative variances as of July 31, 2011: 

·     Due to the increased price of motor and heating fuels, a total annual cumulative negative variance of approximately $7,500 was realized across multiple departments (holding steady from prior month).

·     Maintenance expense in excess of $7,000 in Pools/Recreation pertaining primarily to Beaver Pool.

·     Increased frequency of water testing as mandated by the EPA resulted in an approximate $9,750 excess cost.

 

Studies and Projects: 

·     Finance Committee reviewed monthly financial statements and received clarification of questions.

·     Treasurer and Finance Committee have continued an assessment of alternate investment strategies from commercial investment sources that could yield a better return on WLE POA funds.  The two proposals received have been evaluated.  Presentations of these proposals will be made to the BOD and representatives of the Finance Committee during the August 2011 BOD meeting.

·     Treasurer and Finance Committee is conducting an ongoing investigation of alternative revenue sources to assist in the funding of our community.

·     The food service inspection report was received from George Bombar, an independent food service manager/inspector, and has been made available and used internally by the BOD, General Manager, and food service vendors to improve standards and enhance food service operations. 

·     An extensive investigation into the “flows” of the Sewer Treatment Plant (domestic and inflow/infiltration) and the Water System as it relates to projected capacity requirements is ongoing.  An information Meeting for the community on this topic was held August 19^th at 6:30 PM in the MCH.

·     Treasurer continues to develop options and pricing for all projects on the “Wish List” to convert it to a Five-Year Plan for New Capital Projects.

 

      General Manager’s Report – John Carney

 

1.      The USDA has completed the installation of the pond leveler at the lake in section 6. Since the installation both the USDA and WLE have been monitoring it. We have had some significant rain since the installation and the leveler has remained unobstructed and flowing freely. We will still be fine tuning the eventual depth of the lake by the adjusting height of the outlet pipe. We will need to watch for any obstruction of the leveler from the beavers and should the beavers start to build a new dam behind the existing dam.

 

2.   On August 17 our attorney Howard Terreri was in to review Public Safety and Citation     Dispute Procedures and collection procedures. We first started with the PSD and CDC in attendance were Marge Kenny, Secretary of CDC, Peggy Kostyshyn, Board Member and liaison to the CDC, Board President Jerry Beskovoyne, Public Safety Director Rocky Kizer, Board of Director and Treasurer Dan Braun and General Manager John Carney. Howard reviewed with us practices that we should be using to maintain a safe community and keep harmony among the members. The most important objective of the PSD and the CDC is to enforce WLE rules and regulations and goal is compliance. When a PA state law is broken the state police will be called or if it can be handled in-house all proper procedures need to be followed by us as the state would do.

During the collection portion of the meeting Paul Kuhn, Accounting Administrator, and Janet Havet, Collection Administrator, were in attendance, along with Dan Braun and myself.  We reviewed the collection process from the first reminder letter to foreclosing on a property. We reviewed the process necessary to handle bank foreclosures and bankruptcies, both Chapter 7 and 13. We have a good system for collecting delinquencies, but the review with our attorney gave us some further methods of collecting and brought us up to date with some changes in the bankruptcy laws. There are procedures to take when we are notified of a bankruptcy that we must do in a timely fashion and then monitor the bankruptcy.  Once filed we are able then to invoice for post-bankruptcy amounts, which we have always done, but Howard was able to make us aware what we should be watching for during the process.

 

3.   Sam Wilmot is finishing on the work he was contracted to do on the Memorial. The installation of the pavers and the retaining wall is near completion. Soon we will be expecting the monuments to be placed and then some final detail work to be completed.

We continue to work on drainage situations that we have experienced this year mainly due to the hard rains that we have had. Many are nuisance situations that we can deal with, with our own machine and manpower, but we do have a certain few that possibly will take heavier equipment to rectify.

 

Jerry Beskovoyne brought to the Board’s attention a request for touch-up painting of the Fitness Center, due to spackle spots and marks on the wall.  Dan then mentioned a conversation he had with Joe regarding a request from property owners to reduce the age limit on children allowed to utilize the equipment down to 10 years of age if the parent is present.  Dan mentioned that the current rule is no children under 12, but on the entry door it says 16.  Joe has advised Dan that as long as there is adult supervision, he is okay with younger children.  The Board discussed that operation of the facility is at Joe’s discretion and if he is okay with younger children that is fine, but that Joe himself has to be present, not just a supervising adult.  Joe will be advised of the Board’s opinion.

 

Committees and Reports

 

Marina – Al Cucciniello

 

We have had a busy season in the marina.  The Maintenance Department has been busy with several boats taking on water.  The new lights are very helpful in leading you into the marina area.  Due to heavy rains, a whole ramp was washed out, and recently replaced pavement has already washed away, so after the season is over, that pavement area will be redone again but with concrete.

 

Building – Al Cucciniello

 

The Building Committee feels that due to impending water issues, it might be a good idea to get Fran to do an inspection upon the sale of homes to verify that no sump pumps or water spouts are tied into our water system.  Also to enforce other general rules and regulations, such as if split rail fences are present, they must be removed prior to sale, and water regulators being installed and operational.  She can make a quick five-minute inspection to ensure compliance.  Also discussed by the Committee was whether there should be a fee for that inspection.

 

The Board’s opinion was no fee is necessary; we are more interested in just obtaining the compliance information, which is for our benefit. During a further discussion amongst the Board members, it was noted where we are already aware of violations, we should not wait for the sale of a home to bring the issue to the attention of the property owner.  It was stated it is already part of our rules that we can take action for noncompliance with anything that is mandated, and if we think there is a violation, a letter should be going out immediately to that property owner.  It is then up to the property owner to either comply or prove to the Board that there has been no violation. It was further suggested it be mentioned in the minutes that the Building Committee is currently reviewing potential violations regarding sump pumps and drains with the intent to notify those offending property owners via letter, so that everyone is on notice ahead of time that this is being done.  Also discussed was the informational meeting held on August 19^th for all property owners regarding the flows of the sewer treatment plant and the water system, during which several of these items were discussed.  And it was further suggested that specific details regarding sewer and water regulations be made a part of the WLE packet given to new property owners when purchasing their homes, so that they both know what is expected of them and are aware there can be inspections at any time if violations are suspected.

 

Also discussed by the Building Committee was the subject of requiring smoke detectors and fire extinguishers as safety issues, but currently there is no state law mandating them except for new construction. So, therefore, the Building Committee is asking only for an answer from the Board regarding the institution of inspections upon the sale of a home, with or without an inspection fee.  John Carney noted that on the sale of new homes, we already have access during construction to do inspections; that what we are dealing with here is the inspection of existing homes being resold, where we do not have access.  After further discussion, it was the decision of the Board to postpone their answer to the Building Committee on this issue pending further investigation.

 

The Building Committee is also in need of a new member, due to the passing of Lee Colligan. George Greig will serve in his capacity as Alternate until a new member is approved.  Anyone interested in serving on this committee should submit their resume for consideration.

 

Next up for consideration by the Board were two investment proposals offered by Scott Clements of Merrill Lynch, and John Donohue of Morgan Stanley that could potentially yield a better return on WLE POA funds, during which time both Mark Scher and Pat Brown from the WLE Finance Committee joined the meeting.

 

Merrill Lynch – Scott Clements

 

Scott first gave an overview of himself and his team, and then a proposal based on the history and overview of WLE’s initial investment objectives as given to him by Dan Braun and John Carney.  He noted that protection of assets in this economy is certainly priority number one, but if there is any opportunity for some type of slow and steady growth as well, that is also something that should be looked at.  Since 2008, this county has gone from a massive overspending credit-based economy to a massive saving economy.  Mortgages are at an all-time low, but the chance for investment growth is slim.

 

Recommendations for WLE are in four areas.  The first is there is a certain portion of our assets that needs to remain 100 percent liquid at all times; expenses, check writing, etc.  For that, Scott is recommending a Bank of America Business Advantage Account.  There are no fees or costs for a minimum balance of $25,000.  The second area involves those assets that may be needed on a yearly basis, for which the recommendation is 6-month and 3-month CDs selected from an available basket of approximately 16 individual securities, allowing for some return rather than a pure cash position. 

 

Scott asked if WLE has a written investment policy, and John Carney advised him that we do and that he would provide that information to Scott, which Scott noted was a requirement for any Merrill Lynch investors, to be sure they were following explicitly all policy guidelines.  Within that framework, Scott stated that Merrill firmly believes in a diversified portfolio, and he suggested that we start any program slowly and spread it out over time.  A conservative investment program right now would be about 20 to 25 percent in cash joined with market-linked investments.  The market-linked investments guarantee a certain percentage of return, together with protection of the principal, but further, through the investment strategies of Merrill Lynch, can yield an even higher return.  If the investments made by Merrill do well, the investor can receive anywhere from 5.5 to 9.5 percent interest, but at a minimum, .5 percent per year, plus 100 percent protection of the principal investment is guaranteed.  Currently, the investment period for this type of account is six years.  The investor is purchasing a CD, Merrill is then taking the money represented by this CD and reinvesting it in various equity market growth opportunities. The minimum investment amount in this type of program is $10,000. 

 

Currently, conservative investors are maintaining 40 to 50 percent of their portfolios in bonds and fixed income.  Scott’s concern with this pattern is that bonds are currently very expensive because everybody wants them, and they are cautioning their clients to be very selective as to what bonds are being purchased, due to overinflated values, and they are not recommending them for investors looking for a high percentage of protection of their principal or their yield.  Further noted was the fact that with the market-linked investments, there is the added protection of HSBC insurance, and on the CD side, FDIC insurance covering investment principal, but caution should be exercised in keeping the amount of money invested in each account below the program limitations to ensure 100 percent protection.

 

Morgan Stanley – John Donohue

 

John has been with Morgan Stanley in their Scranton office for 16 years.  His specialty is working with very conservative non-profit organizations.  He is also the treasurer of his volunteer fire department in Jenkins Township and manages their finances, as well as investments for several other volunteer fire departments and ambulance companies in Pennsylvania.  He works very conservatively with a lot of fixed income, which is CDs and government securities.  The needs of WLE seem to be the same as his other investors; safety, liquidity, and the ability to generate at least some cash flow from available funds.

 

There are two types of investments and two types of banking accounts that John recommends at this time.  The investments are CDs and Treasuries.  All CDs offered by John are FDIC insured and are available from approximately 100 different banks around the country.  Treasuries right now are almost a negative return due to current government conditions.  Federal Securities are also available with a better return, but the investment term is five years, so John is not recommending those at this time. 

 

So the main recommendation at this time is short-term CDs that are tied into WLE’s cash flow needs.  Constant contact between John and a representative of WLE who can make decisions immediately will be necessary to keep rolling these CDs efficiently and can result in a difference of .7 or .5 percent with active management, and an increase of several thousand dollars in interest.  And that percentage difference goes entirely to WLE.  John’s commission is paid by the issuing party, not the purchaser.  The only risk on CDs is market value.  The risk becomes higher closer to maturity, should we want to sell a CD prior to its maturity date.  If rates have gone up in the interim, the likelihood of a buyer for that CD goes down.  Likewise, if rates have gone down, the buyer pool for that CD goes up.

 

The two types of banking accounts being recommended are Business Scape and Triple A Business.  Business Scape has a $25/month maintenance fee with up to nine credit cards.  If remote deposit is requested, the maintenance fee goes to $50/month, plus $1.00 per deposit (up to 100 checks).  Triple A Business has a $150 annual fee, no remote deposit, three free checks a month, and a per-check charge of $1.00 starting with Check #4.  John was asked how we would handle payments if we still want to maintain our local bank instead of either of the above two methods, and he said an electronic transfer from our local bank would be the best way to go.

 

John was asked if there are other principal-protected products that would make sense for WLE other than CDs.  He stated there are other products issued from Morgan Stanley directly, but they are not FDIC insured, so he doesn’t recommend them for us.  There are also fixed-rate annuties, but he doesn’t recommend them for us either. The organization can own the annuity, but the annuitant/beneficiary must be a person.  Step-up bonds used with credit unions do give a better long-term yield, as the interest rate increases during the investment period, but they require a much longer term commitment, plus if the bond is “called” prior to its maturity date, it must be relinquished at that time for the amount of the principal investment plus whatever interest has been earned up to that date, not the full-term rate.  That would be the only other product John would suggest for us under our current investment strategy, but any of the options he is offering would give us a better yield than we are currently receiving.

 

At the conclusion of the presentations above, there was further discussion amongst the Board regarding the programs offered, and Dan stated that the two presenters today were the best of all the options given to WLE and that the community would be better served going with either of these options than where we are now.  John Carney commented that where we are now is keeping more of our capital liquid due to only very low interest rates being available in the current marketplace.  Prior to that, we had a nice system of laddering and we did better.  We got away from that, and that was a mistake, and we need to restructure something new.  Mark Scher stated either presenter can give us a conservative CD product, we just need to decide which portfolio we prefer, conservative or less conservative, and that possibly the Merrill product gives us more functionality.  Mark will also check account fees with Wells Fargo, with whom he has a business relationship, to see how they compare to the fees being proposed by Merrill Lynch and Morgan Stanley.  We also need to consider is there an initial commission fee we get hit with up front for either of these programs and what is our total investment.  There will be further discussion after Mark does his research and the Board is comfortable they are aware of the totality of the expenses involved with both programs.

 

Mark Scher and Pat Brown leave the Board Meeting.

 

Sewer & Water and Maintenance – Ted Couillou

 

The Sewer & Water Department is still working on the conservation of water, checking infiltration and inflow, I&I. It was noted that sump pumps are not allowed to be tied into the sewer system and this is a violation of WLE rules and regulations.

 

Maintenance is doing the normally great job that they do, even more so this week with getting ready for the 40^th Anniversary celebration.

 

Public Safety – Jerry LaStella

 

Jerry called again about the radar-enabled sign that had been requested several months ago on a trial basis.  There was a form that needed to be sent to the company that had apparently not been received by them that had caused the delay.  It has now been delivered to Rocky.  It is scheduled to be put up next Tuesday on Wallenpaupack Drive and tested.  It is computerized and it has to be calibrated and secured so no one can tamper with it.  Peggy asked if Indian Drive could also be monitored for a while as there is speeding there, too.  Jerry was asked how long we can keep the sign and he said he was not sure, but hopefully at least as long as it took them to deliver it to us.

 

Recreation and CDC – Peggy Kostyshyn

 

Music Under The Stars is going very well, being held inside the Adult Lodge if it is raining.  The Flea Market was great, Bree brought in a profit of $340.  There was a discussion of the 40^th Anniversary Party and what was scheduled. Family Bingo is going well, with the last session being held on the Tuesday before Labor Day, and making a nice profit.  WLE Games are being taken care of by the Navarra girls. April Mainly was at the meeting.  She has her committee of volunteers set up and Al Cucciniello will be assisting her.  There was a dance for the younger children last week which went very well and the Fishing Derby is coming up on August 27^th at Deer Lake.  The Boat Building Contest will be today, and the boats will be raced on Deer Lake tomorrow, with prizes awarded for both.

 

Minutes from the CDC meeting are attached and can be read through.  Dan mentioned that one of Howard Terreri’s comments at the meeting with him on August 17^th was that he preferred that we not use the term guilty, but rather someone violated a rule or violated a regulation.  Peggy mentioned there were property owners who had tickets issued for not having stickers on golf carts and it was discussed that there had been no stickers available in January when the carts were registered, so those property owners had their violations suspended.  There were other situations where property owners had complained there was no warning issued, nor contact from Security personally to let them know they were in violation prior to a ticket being issued, and that those tickets just arrived in the mail.  It was discussed by the Board there had been a warning system in the past, but only for non-moving violations, and it was decided to try that system again. Peggy suggested one warning per calendar year and 24 hours to correct it.  John will discuss implementing the warning system and how violations will be worded with Rocky.

 

 

Neighborhood Watch

 

John Carney mentioned that there had been a request to give Neighborhood Watch the building formerly occupied by the Craft Shop.  After discussion, it was decided while there is no current use for the space, there may be in the future, and it will be left vacant for now.

 

The Blood Drive had to be cancelled because the Red Cross already had another event scheduled for the same date.

 

John Rechinda has encouraged everyone to check their state vehicle registrations to be sure they are current.

 

Regarding citations, it was discussed that in years past, the Security Officer who issued a ticket had to appear before the Citation Review Committee as well as the violator, so that the property owner could face their accuser.  Since only disputes are now being heard under CDC, that is no longer a requirement, but there was a discussion as to whether that should be reinstated, and also if a citation is issued because of a tip from Neighborhood Watch, whether the person responsible for that tip should also be required to attend.

 

Correspondence

 

1. POA to Carney – Request for reimbursement for damage caused by flooding from beaver dam.  John Carney’s recommendation is to give him the equivalent of what we gave to other property owners in the past under similar circumstances.  He was asked if we own the property where the beaver dam is located and he said yes.  John will correspond and offer the same reimbursement given to other property owners.

2.   POA to Beskovoyne – Jerry will respond to property owner formally.  John was asked if the First Right of Refusal had been accepted and he replied that it had.

 

Unfinished Business

 

1. Terracing Rockledge – no bids yet. The optimum time of year is coming up to deal with it and we will get three bids.
2. Given the activities in the summer and movies in the winter and our annual meeting, we need a good big projection screen.
3. Joe has asked for replacement of an old broken treadmill in the Fitness Center; and could the funds be taken out of the 2012 Budget, but get the equipment sooner.  The decision was no, the request will have to be put into the prospective 2012 Budget and acted on at that time.
4. Beaver Pool still has leaks. The winter covers will be replaced for $1,000 less than the initial cost. Pressure testing, plus a visual inspection when the pool is closed and drained, would give us another shot at determining where the leaks might be and an opportunity to reseal again.  The comment was made that the water lines are shut off during the off season, so the leaks must be coming from either the pool itself or the liner, since leaking is still being detected during that time of year. It was a unanimous decision to allow the additional pressure testing and a further visual inspection.

 

New Business

 

Due to the length of today’s meeting and the 40^th Anniversary celebration beginning early this afternoon, any new business was tabled until the next meeting.

 

A motion to adjourn the meeting was made by Al Cucciniello and seconded by Jerry LaStella, and the meeting was adjourned at 11:32 AM.

 

The next meeting is September 17^th at the Administration Building at 8:00 AM.

 

 

Respectfully submitted,

 

Marge Kenny

Recording Secretary