Discussion of Proposed Amendments

Dear Fellow Members, 

We would like to explain the board’s position regarding the proxy you have received for the annual general meeting, October 20^th, regarding the proposed by-law changes.

The board has listened to the membership over the past two years as it relates to the membership having control over Lake Forest rather than the developer.  We have worked with the developer, who also wants the property owners to control their own destiny.  To this end, the developer agreed not to vote for the Board of Directors beginning in 2004 and let the membership decide whom they want to elect for the board.

Over the past two (2) years, this board has made good progress in building the financial base for Lake Forest’s future.  Let’s review some of the results:

 1) We have established programs to make Lake Forest fair for all people, not just a select few.

 2) We have aggressively gone after the delinquent members who just won’t pay their dues.  So far   this year we have collected about $97,000.

 3) We have made capital improvements at all of our facilities funded out of the monthly operating funds.

 4) For the past two (2) years we have not borrowed the $100,000 allowed in our by-laws.  Previous boards had borrowed that money for the past 10 years.  We stopped it.

The by-laws were written in 1979 and amended occasionally over the years.  In the early 1980s amendments were made without a vote of the membership that effectively tied the hands of all future boards.  The action made it very difficult to manage the association and honor commitments made to the people who have selected Lake Forest, with its amenities, as their home.

These by-law changes are intended to untie the hands of this and future boards so that they may manage Lake Forest in the best interest of all members. It’s up to you, the members, to elect people to protect and manage your association and its assets.  We also encourage all members to take an active part in the association including running for a position on the board. 

What follows is a brief explanation of the proposed amendments.

Proposed By-law 2.4 Dues, Charges and Assessments: 

There have been no decisions made by the board regarding changes to dues.  However, any reasonable person knows that over the years costs have gone up and dues should have been adjusted from time to time.  Because of the poorly conceived restrictions placed on the board, the only way they could provide needed revenue was by requiring an assessment.  Beginning in 2005 any increase cannot exceed the published Consumer Price Index, which for the past 15 years has averaged about 3% or, as it relates to the monthly dues of $27.50, an increase of approximately $0.82 (82 cents) per month.  The bottom line is when the board prepares future budgets, it can make the necessary adjustment. The proposed amendment does not require any future board to make changes to dues.  However, it does limit dues increases if they become necessary.

Proposed By-law 3.6 Quorum: 

Sadly, we rarely have enough members attend the annual meeting to make a quorum.  As a result, for years we have had to rely on the developer to bring their block of votes to the meeting in order to do business.  If we don’t reduce the 25% then we may never be able to hold a legal meeting.  Without the developer, we would need 705 members to make a quorum. Normally we only have 250 – 300 people participate.  This change provides for a more reasonable quorum.

Proposed By-law 5.25 Re-election: 

Any director that serves three years under the current by-laws cannot run the next year.  A problem that we’ve had for years is finding qualified members to serve on the board.  Why should Lake Forest be different from the U.S. Congress, Senate, City of Fairhope, or City of Daphne.  If someone is doing a good job, why shouldn’t he or she be able to put their name forward to run again?  It is not automatic re-election.  That person must run against other interested parties and be elected by receiving the most votes.  Note the developer will not be voting for board members, so it is truly up to the membership.

Proposed By-law 5.35 Borrowing Money:   

The board should be able to take whatever action possible to protect your assets.  Remember, this board did not borrow the customary $100,000 for the past two years.  However, we do live in a hurricane prone area.  It is possible that we could have an emergency situation arise and the board should have the resources it needs to deal with the problem.  The board has no strong feelings on this particular proposed change.  Some of the comments received so far are reasonable, so it would not be a problem if the loan section remains unchanged.

Proposed By-law 5.10 Nomination of Directors: 

For every vacancy, our by-laws call for two people.  This year, for example, we have four vacant board positions, therefore, we would should have eight people running.  We advertised twice in the Spectrum.  We also put it on the notice boards at each entrance.  We asked people to run.  The bottom line is you can’t force people to run.  We rarely get the number of candidates asked for in the by-laws.  Why have something in the by-laws that for years has been unrealistic?

Proposed By-law 6.6 Amendments: 

This change is nothing more than it was when LFPOA purchased Lake Forest from the developer.  It requires a majority vote of the members, either by voting by proxy or in attendance at such a meeting.  All members can either vote by proxy or attend a meeting.  The Board of Directors must have a majority of all the board to make any changes.  If you are concerned, then elect people who you think would best represent Lake Forest.

We hope this clarifies some areas.  Whatever your choice may be we ask that you vote, regardless, but would prefer you vote YES.