Quorum was met with Dick Titus, George Bland and John Weidner were in attendance

Magnolia Point Community Association, Inc. Board of Directors Meeting Magnolia Point Clubhouse December 12, 2016 Minutes Dick Titus called the meeting to order at 6 p.m. at the Club Upstairs Committee Members present: Also present: Darren Decker, CAM Lifestyles Realty. Quorum was met with Dick Titus, George Bland and John Weidner were in attendance Approval of Previous Meeting Minutes (October) Dick. Any corrections? With the minor corrections the minutes were approved unanimously. Financial Statement Review (October) Rannel, As of the year-to-date October our income was $959,400 compared to a budget of $957,500 so we are actually over our budget by $1900 October year-to-date basis. Our income for October is down to only $498 this is partly contributed to overspending in the month of October of about $11,000. Of that spending $3000 of it was for power outages and lightning on the back gate another $8000 for tree removal thanks to hurricane Matthew. We did have some favorable offsets to the budget so the net loss of October was $3000 and only leaves us with $498 as of October year-to-date. As of October we have in our operating fund a little over $186,000 because we built on a quarterly basis a lot of our funds come in the first month of the quarter and that s the same thing that happened again in October I do want to commend everybody for paying their dues on time in the month of October 85% of owners out here actually do pay their bills in the month of October that s very good. We are also showing that another 10% paying in November so we only have about 5% of our homes out here that are delinquent and are receivable issues. For the reserve through October remained at $301,000 spending and our reserve fund for October we only spent $159 so that was very small spending in the month of October. The balance of our reserve fund as of October 31 was $306,300 and according to our latest reserve study by the end of the year we need a balance of $409,000 were approximately $103,000 below our year and numbers. Depending on the next two months we will know how far below we are at the end of the year. Any questions? Thank you. Dick, ok thank you Rannel. Committee Reports Access Control Nelson Corby was in attendance. Discussed his report on access software. We can discuss all the options anytime. Architectural Review Open Chair. George. Reported requests are coming in and he picks them up at the guardhouse and we haven t done very many things. Darren did mention to Dick that this committee does have an open chair and with all the people that are here might be a good idea to pitch that open chair to the people who are here. 1

Dick, that s a good comment I will say to everyone here the chair is open if anyone would like to help the board out and chair this committee it would be greatly appreciated just let us know. George, I for sure would greatly appreciate it. Communications Bob Tague was in attendance and reported I do not have anything at this time. Community Liaison Tom Sprott was in attendance and reported in 2016 they ve had five meetings and he is very happy to have the five volunteers and getting the information out on these meetings with the minutes. The group has been very helpful and it has been a difficult year and there s always comments of what we put on the web and what we are discussing with the club. What I like to do at this point is to defer to Trevor to give you an update on what s going on with the club. Trevor, just real briefly because it s, new news if you will there s always a big concern over where we are with the pool. The pool as of has a reported we ve had some problems with the show and we have now discovered we are losing 3 to 4 inches of water in a span of about three days we are having a leak is causing a little bit of our concern part of the concern is one of the pumps fell off the truck and I mentioned that to the contractor and inspected thoroughly in we were assured it was nothing wrong with it and after the fact we have discovered there is a crack also in the pump. So we are going through to see how to rectify that seems to be a bit of a problem. That being said as far as the inspection and operation we can actually operate the pool without that in place but of course were not to spend that kind of money and of a faulty system. Nonetheless we are still pursuing getting the pool and an occupancy status that being said we just found out last week we have to a chemical balance system all in place which wasn t made known to me until last week we have now hired a company to come in and assess that and do that he assures me, I m just pass on the information, he assures me that that will be in place hopefully by the end of this week are the beginning of next week. It is the holiday season and seems like everything is busy. As soon as we get the chemicals in place he s also said to satisfy an inspection we also have to fence the entire pumps area that was unknown to us even though we are prepared to do that anyway but to pass certification we have to do that. With all that being said there is also concern about the occupancy of the pool, but we are working diligently to try to get that up as soon as possible. The longer it goes the more of a headache it is for us and for the community I m sure. This is a priority and it has always been a priority to get this up and running as soon as possible. There has been some concern about the heaters and where they are if the Loggerhead is still part of the program? We have had a conversation with them Thursday last week and confirmed today they are still in play, the heaters they have contracted an outside vendor to come in and install the heaters they are on track and they should be installed as soon as they can. They can t be installed until we get occupancy, if they install them now it would throw off the whole inspection thing so they will be installed as soon as we get the final inspection. So that s where we are. They re going to start their programs and lessons as soon as we can. That s all we have about the pool. I do want to report that we are having a lot of club activity we appreciate the support in that sense. We did have a very successful golf cart parade we were anticipating somewhere near 25 to 30 we had over 50 and we were very encouraged with all the new families and new support that we have. As for the club operations that s all I want to mention at this time. George, if I could just add to the parade thing. My wife and I were out before you are involved with the parade and what I sort of liked was there were several areas in the community they were put chairs out there and they were out there with the kids waiting for the light a golf course come by over and Elks Path, Oglebay and Shinnecock. It was really great to see. Trevor, Deneen and I went out and tracked the route and most of you got the flyers in your mailbox. We actually tried to avoid that, we had specific instructions not to hang on your mailbox we apologize about that. Sometimes when he asked someone to do that do certain things doesn t quite happen the way you want. But Deneen and I went out early that morning and put the signs out for the route and I think it was very successful I think it s going to be an annual thing and we really are going to do that as an annual thing this point forward. Dick, I thought it was well done and I m pretty sure most of us did everyone that I know enjoyed it. COPS Lindsay, was present and discussed she is still looking for volunteers so we can start this thing. 2

Dick, how many responses back that you get from the blast? Lindsay, I only received one. We can do it if we could do another one that would be awesome. There was much discussion on logistics training and how to do this a couple of hours every night just to make sure everything is okay. This is in response to the vandalism that s going around and we want to try to stop that. The police chief is very intent on helping us with this and is encouraging this community to do that. We need roughly 35 people to get on board with this and to participate, which is two people at night seven nights a week. If you have any interest email Lindsay. Jeff Fleming. There was discussion about 10 years ago a crime watch program that was a volunteer organization that worked well for a while. The comments were regarding everyone s participation in the whole community and trying to encourage everyone to get involved. There was a question about writing tickets and the answer is no, clearly. The intent of the whole process is to be eyes and ears for the property with communication to the city police. Having someone patrol and watch make sense and could help discourage some of those actions. Thank you Lindsay for getting this going. Landscape/Irrigation Mike Hallam was not in attendance and did not send an email so no report there. Roads/Drainage/Waterways Repair Open chair Dick, this chair is still vacant and we are looking for a chair if anyone would like to volunteer. Rules Enforcement Lindsay, Acting chair reported at this time there is nothing new to report. Dick, Lindsay has been the acting chair for a period of time I would like to make a motion that we appoint her full-time acting chair. John, I second that motion. Dick, it s been moved and seconded I call the question. ++++ Motion to have Lindsay be the chair of the rules enforcement committee passed unanimously. ++++ Unfinished Business A. Club Fees There was discussion, in reference to the last board meeting, that was for the budget to set the numbers in place. The board did approve a budget with the understanding that the communication to the club and negotiations had not taken place with the club to determine the amount the club would receive in 2017. There were multiple people from the floor signed up to speak so Dick gave them their three minutes each. Trevor discussed some of the issues with the ponds and with the golf course to clarify some of the miscommunication that was happening. Trevor also declared all the funds that we have received have been made very clear how we spent them and we have provided that information. He indicated that 20% of their total financial situation is funded by the Association. Without that funding this club would not be able to make it. Trevor also discussed the closing of the loans that are in process right now. If there are any changes to their financial situation, any adverse situation, they will not close these loans and we will not be solvent. We have four areas of income that use the HOA funds; golf membership, golf course and the food and beverage department. So everyone who was signed up to speak was allowed to speak and the board actually took some comments from the floor who were not signed up to speak. The board decided to stop the floor comments at this time. Dick, let me go back to the intent of the support. The club support has been around now for many, many years. It came before Trevor and Deneen purchased the club. It came about because of the 3

activeness of the Association members, the actual homeowner s members. They could see the writing on the wall with regard to the golf club not surviving in its present situation. They went and spent roughly a year working the problem of how to create something that makes some sense within the laws and conditions at that time. They came up with a recommendation along with the club. To make it viable, we must have users of the club. The number of users is basically the backbone of the financial input of the club. So based on that they came up with a figure of $37 per house per month as a use fee. And that use fee would show up as an assessment. The assessment was then paid to the club as a use fee for the number of homes having full access to the club. That was the initial structure of the contract. And that was a direct pass-through. There were no changes if we don t get the money it just didn t go through. If we collected the money it went through. And so that is what happened is over the period of that contract. That assessment was voted on and it was approved. It was voted on with 44 dissenters and I think 460 or 480 ayes in terms of support. And that represented the requirement and met the requirement of having a majority of the homeowners in here to vote for an assessment increase. And that was all, it was an assessment increase. That assessment increase was dictated by the number of $37 times the number of houses that were in there at that particular time. That assessment has been maintained it hasn t changed, however, where we sit now two years later after Trevor and Deneen have purchased the club, is the contract had run out. The initial contract was three years plus another year. That contract then was expiring, so we wanted to write a new contract. The issue for that contract is the direct pass-through really created havoc for the business. They might get $20,000 one month and $5000 the next month and $2K the next month because of the way the bills were paid. So we attempted to write a contract that leveled that out. And that is the figure that showed up in the contract. That number $338k was a number of homes in 2014 times $37, minus the payments for the red nine mowing that is no longer in service, that the Association has taken that over. We also made allowance for those funds that were not able to be collected, meaning they didn t get paid where there are delinquencies that are running about 5%. You can t pay money out that you don t receive. So we don t pay $37 per month per resident we pay $37 per month per resident that pays their fees. That created a little bit of an issue and that s where 5% holdback is. So what we did is go back through all the funding for the length of the contract, we leveled it out so that we could give the club a fixed number of dollars per month and at the end of each year we would reconcile that against how much money we took in, how much money did not show up because of the delinquencies and a much money we paid and we would take a look at that and let them know and we can adjust that the next time around. That s what the 5% is about. The 5% was also built because we knew the number of homeowners were going to increase because of the Dream Finders program and construction. Dream Finders came and we had another meeting of 340 people, I believe in March and Dream Finders stood up and talked to this process and asked if they should continue to keep this assessment alive and the answer was yes. 95% of the 340 people that were at the meeting voted in a mock vote to support this. By the way both of these meetings and votes are the largest participation of everybody in this community on any issue. That kind of support just isn t held anywhere else on the community. And you see the same kind of support here today with all the people that are here now. So the bottom line was Dream Finders felt that we should go ahead and continue this assessment and that s what we did and we continue the contract. But in this contract, rather than just doing a pass-through, we took into account the issues that we just talked about. The number one was the number of homes all times $37 and that is the bucket of money that is available and in today s case that ends up being $414,000. What we suggested initially for the budget was that $346,000 would be paid to the club. That represented pretty much what we did last year which is 36 new homes at $37 for the following year in the budget. Those are the numbers of new homes that are expected to be closed. The intent all the way along was to fund the contract to reflect the number of houses in here minus the delinquencies, that are around 5%, minus the mowing cost of the red nine. That s been the intent. Now when you read the contract there are some issues with the contract and you can say you can plus or minus 5%. Well if we read that today that says we can take it back to $338,000 and leave it there taking away money or we can take it to 5% above the last bill and still be in concert with the contract. The 5% would reflect the number of new houses that are in this community coming online due to Dream Finders building through 2017. There are total of 119 new homes being built by Dream Finders so this whole issue will pop up again next year in terms of reflecting new homes for the 2018 budget. That 5% doesn t say anything about how good or bad the club is performing, all that says is they are now dealing with an increased set of users and we have defined the user fees at the dollars of $37 minus what we 4

don t get per user. So that s the way in which the contract was intended. So that s really the question is on the table; do we go against the intent, going against all of the issues associated with the support of the club in the last two sets of meetings over multiple years and basically penalize the club to the point where we have now done exactly what we re intending not to do; that is to force the club out. The intent was to ensure the club could in fact be solvent and we want to get to the point where they are solvent. They have a five-year plan they have new greens planned, a new pool planned they have new pub being sorted out, and they have new business structure. But it takes time to do that. It takes time to be responsive to the community and to get those things done. By penalizing them today we have pretty much guaranteed that they will not be solvent and we will go the way of the Ravines. I cannot see where that is in anybody s best interest here. I do not think that is the intent. I don t think that s where we ought to be at this time. I have talked to Batey about this from Dream Finders, in fact he was going to be here. But he has had multiple conversations with Trevor over this issue. Again, his point to me is that the community must understand that Green Cove Springs has no property that looks like Magnolia Point. And Magnolia Point looks like it does because of the golf club in terms of desirability they are selling at 4 0r 5 houses 3 to 5 houses a month. Pulling many people into this community and it s not because they re building super houses, it s not because anything else other than the community. It is exactly what we have dealt with in the past. This was the intent of all the community work that was done over a period of a year, back in 2010. It was to encourage the community to grow from the outside and that s all were doing. Batey s point to me was, if there is no Club in Green Cove Springs, then in fact there will be no Green Cove Springs in terms of new marketplaces. That s not desirable for them or anyone. In addition to that, yes we the board have authority to take money away per the contract. But that s not the intent, the intent was to reward the club with new users to give them a better base for the future and so with that, that is in fact a good summary of where we stand. Now, back to the decisions that are on the block right now. My recommendation is a pretty clear recommendation and that is we would pay 5% increase that takes into account the new homes up through 2017. That really represents about 46 homes I think, minus 5% being held back for delinquencies. And we pay for the red nine per the agreement. What that means is the club fee would be $363k as opposed to the $338k. That will be my recommendation. To clarify the 5% is the amount of money paid directly to the club that is over the payment from last year. So it s the $348k plus 5% so turns it out to be $363k. Vicky Allen, Question from the floor about the red nine and the club owning the red nine and why we re paying for it. Dick, I apologize I intended to go back to the red nine. The initial contract was unwieldy with respect to dealing with the money flows, the cash flow was terrible. We told the club that the homeowners association could mow the red nine with our standard mowing company that mows everything else in here, all the common areas. So we get an estimate for that and that estimate was attractive to the club and so they said yes will do that. So during the first contract we would pay the Club all the money we got in and they would turn around and write us a check for the money necessary to cover the mowing of the red nine. Oh by the way the money that we gave them is taxable and so this became a real issue. So what we choose to do was to take over the mowing of the red nine for them and reduced that amount of money from the assessments that we received for them, so the net result is exactly the same dollar figure but it s handled differently and it got out every one of the loop of having to write checks to and from and the tax issue for the club. I m sure I haven t covered everything and all the gory detail all I was trying to do is pick the high points and pick the logic of where were going and where we stand. Question from the floor Mike Wisenger, asked about the red nine and making it a green way where you walk the course and greens and things like that suggestion is to turn into a Greenway turn into something like walking and riding a bike s. Dick, as a point of clarification they have already said that it is available to walk and ride and so on and so forth so it s already there. Unfortunately, it is not maintained to the same standard as the golf course, that s not here or there. That s sort of are out of order as far as where we stand. Rannel, asked a question about the numbers and making sure if we change numbers that we get the right numbers on the percentage and make sure they are correct. The Red 9 did go up some so we have to take all of the numbers together for the budget. Dick, so having said that I ll make a motion. 5

John, before you make that motion I still have questions. Are you saying, remember now we are supposed to review this thing in June and November so are you going to give them the whole enchilada now that is the whole 5% at this juncture, or do you want to give them 2 12% now and then in June given them other 2 ½%. Dick, the numbers are set up so that they reflect the 36 homes as they go across monthly in the budget and all we are trying do is level load the bills so they get the same dollar figure per month. So that s all were really saying. John, so there s really no purpose to go back over this in June? Dick, the only purpose in June is to make sure that we are not running into a shortfall. The reason for June was to make sure we don t end up with a negative cash flow on our side, that was the only reason. The community was really worried about spending community money to give to the club outside assessment so that was the purpose for that was the review time. John, so we also have to add the three ponds that were adding that will add another approximately $12,000 to our side of the equation. So you have to add that in with the addition of the red nine right. Dick, but that s not the clubs anymore, that s ours. So in fact, that has nothing to do with the club. So all of these are negatives to our side of the equation but the only thing that belongs to the club is the red nine. Darren, this was going to be ours regardless of how the contract worked or what the developer did. Dick, Batey s comment is we have hundred and 19 new homes being built on property so the new maintenance fee pays for that. And so that solves that problem right there. Especially when you look at the roads and everything that is also associated with the new money coming in. Okay so I have a motion I don t have a second. George, I second. Dick, okay it s been moved and seconded all in favor? ++++ Dick and George vote aye. John will vote nay.+++++++ ++++ Motion to increase club payment to $363K approved++++ <<<<<Much clapping>>>>> Darren, I would like to say one thing if I could, there were questions about the 5% and the increase this and increase that. I just want you to know that these guys up here have worked very hard to keep your dollar amount where it is without any changes to your assessments going into my fourth year at this property. With all the discussion we ve had I just want to make it clear that the dollar amount that is expensed to you is not going to change. The nuances that were talking about are what we have in the budget and how were going to disperse that money, it s already income and no one s assessments are going to change in 2017. Dick, the golf cart registration was not on the old business and will and needed to be so Tom had some things you want to discuss about the continuation of the golf cart registration. Tom, we laid out a proposal for last month to dovetail with the club s golf cart registration so the question before the board is would you support as a board asking everyone in the community to register their golf carts and we will then supply with them with a decal for all the golf carts in the community that are not registered with Trevor. When I came before November we talked about putting a letter then rich and I will put out a letter at no cost to the community. Maybe $200 worth of copy cost, the idea is the registration will not cost anybody with a golf cart anything. The whole point of this is to make sure that all golf carts have liability that are driving on the roads that the purpose. The club is going ahead with their reregistration all the carts that are involved with the club regardless of what the board s decision as it would help if we had the board support to do the entire community all at one time. John, Darren to confirm with our insurance company that were covered we have the umbrella and the insurance what was it up to $1 million and then there was a million-dollar umbrella? Darren, yes that s pretty much it. John, so it s pretty much a moot point if we need to go through a separate thing for a handful of golf carts. Tom, unfortunately it s become more than a handful of golf carts that those a handful of golf carts I would be appear talking to you. It s much closer to 50 now that are not going to be registered to the club. Much discussion 6

Darren, Tom how we can work this is going to have what information when information is going to be shared who s going to be covered all the bases with the data tracking? Tom, Rich and I can work with a golf club to put out the notices and make sure they got the notices and got the stickers. So we would make sure they have everything and we would wind up with a database that we can get to the border to you at the end of this thing, it ll take three months to get this thing done. Dick, I have all the support for that in the world for the club and Trevor to get this thing done so that he knows who s on his golf course. If this is just part of that then I don t have any problem with it whatsoever. I think it helps him more than it helps us but so be it if that s where we are at. So I would say give them our support as long as it doesn t cost anything and will make use of it put in our database. Trevor, it s just a recognition thing for us there s basically three levels that were going to be looking at. The first is a full trail fee, partial trail fee and all the rest of the residents. More discussion George, okay I make a motion that we go ahead and throw our support behind the golf cart initiative and that Trevor and the club and any of course will take care of the registration. Tom and Rich will be part of that helping the club get everything together. John, I second that motion. Dick, I have a motion and a second all in favor? ++++ Motion to assist/allow/support the club in registering all golf carts on the community passed unanimously+++++ New Business A. Board Members 2017 Dick, I think I just need to summarize where were going with this. It has been recommended you to use the new bylaws to increase the board to 3 to 5 members. So the question is a motion to either do that or not to that and we can get that taken care of. George, I would make a motion that we stay with three board members for 2017. Dick, I second that motion. Any discussion on this? Some discussion Dick, okay so I have a motion and a second all in favor? ++++ Motion to keep the board at three members for 2017 passed unanimously. +++++ B. Aquatic Pond 3 Water Testing Darren, there s a proposal to just test the ponds. There have been some issues with the pond. To figure out what we are going to do with it we have to test the water. The ph has everything to do with whether or not fish and other aquatic life will live in it so we need to test it to see where it is to see what we need to do with it. We are talking about $342. George, this is the pond it s over on the side of what used to be red 9, though one they are using for the golf Academy. Behind winged foot. I make a motion we test the water for $342. John, I second it. Dick, it s been moved and seconded all in favor? ++++ Motion to have pond number three chemically tested approved unanimously. ++++ C. Advanced Electric LED Ground Lights George, I meant to ask earlier where are these lights located. Darren, there are approximately 14 ground lights in one post light out at this time. The Board decided to go to LEDs but to replace them as they fail so that s the purpose for this proposal to get those 14 replaced with LEDs at a cost of $3030. Discussion on lighting 7

George, I go ahead and make a motion to replace these 14 lights. John, I second the motion. Dick, there has been a motion and seconded all in favor? ++++ Motion to replace the 14 lights was unanimously approved. ++++ Comment From The Floor Bob Page, to questions question number one is the guard shack complete? George, we are working on the punch list at this time. Bob, what is the cost at this time? George, we are withholding a little over $2000 at this time so we are at $48,000. Bob, second question, where are we on the colonial drainage issue? Dick, colonial is exactly the same place it was last month. Although we ve had three or four conversations with the owners and our attorneys and I think were close to getting his signature, but we need to provide a survey. All of that is in work at this time. Adjournment With no further business to discuss, John made a motion to adjourn George sec the meeting at 7:18 p.m. was made, seconded and passed. Next meeting Board meeting Monday January 9 th at 1:30pm. 79 people including board and staff. 8