ORCHARD KNOLLS HOMEOWNER’S ASSOCIATION (HOA)

A Self-Managed, All Volunteer Community

WWW.ORCHARDKNOLLS.ORG

Special Meeting of Membership

For Assessment Increase

May 17, 2004

BOARD OF DIRECTORS (BOD): Expires

President	Richard Schinner	301-977-5196	evantage@comcast.net	Nov 2005
VP Detached Homes	Lisa Goodman	301-963-3807	goodgrl@verizon.net	Nov 2005
VP Town Homes	Eileen Solomon	301-330-2876	betamax14@comcast.net	Nov 2007
Treasurer	Mohammad Homaitabar	301-318-8446	homaitabar@yahoo.com	Nov 2004
Secretary	Jerry Way	301-977-0523	jerway@comcast.net	Nov 2005

A. PURPOSE: No rate increase in 5 years has resulted in a negative cash flow, inability to pay bills on time, a

financial shortfall in both replacement reserve funds, and inability to maintain common areas of the community to as

-built standards. In addition, members attending January 12, 2004 Annual Meeting expressed a demand for

resolution of outstanding repairs, upscale community appearance and improved landscape.

A mid year current assessment increase is necessary, greater than maximum Board Directors is allowed to unilaterally impose. Passage requires a “Special Meeting of Membership for Assessment Increase”. (Declaration of Covenants, Article V).

B. LOCATION: Quince Orchard High School, Rooms 221-224

C. DATE/TIME: Monday, May 17, 2004 – 7:30 Pm

D. SEVEN MEETING NOTICES: (Item 2 is legally required notice).

1. WEB PAGE: Notice added to Orchard Knolls web page - early April.

2. MAILED: Written notice, including proxy(s), mailed to owners of assessment record - early April.

3. NEW SIGN: 14 X 20 notice sign installed at community exit stop sign - mid April

4. NEWSLETTER: included notice, purpose and encouragement to attend – early May

5. HOA SIGN: 24 x 36, modified to include meeting notice installed at entrance/exit- May 11.

6. HANDOUTS: BOD members distributed handouts door-to-door May 16 – 17.

7. MINUTES: Notice included in last 3 months minutes posted on web site.

E. SIGN-IN VALIDATION FOR VOTING: A current master list of eligible voters was provided by Associated Bookkeeping Services. Owners were required to sign the master list against their address of assessment record. Proxy(s) were similarly recorded on the master list. One owner per address. A validation card was provided to later exchange for an official ballot if quorum is achieved.

F. CALL TO ORDER: 7:40 p.m. (Delayed until sign-in process complete).

1. DIFFERENT (DIFFICULT) PROCEDURES – REVIEWED/APPROVED BY HOA ATTORNEY: Secretary announced that an assessment increase meeting was a first for Orchard Knolls and was governed by differing and cumbersome covenant procedural rules identified in Article V. Procedures for notices, scheduling, preparation, conduction of assessment increase business and voting tonight, have all been reviewed and approved by our HOA attorney. Secretary noted that the difficult procedures provided membership protection and were necessary to discourage frivolous assessment increase requests - other than at Annual Meetings. He highlighted the following points:

2. NO OTHER BUSINESS: Although common discussions of community interest would naturally occur – no business decision other than that related to assessment increase is allowed – and would not appear in minutes of this meeting.

3. MAY BE DISMISSED. Meeting may be quickly dismissed and rescheduled to June 21 (same time and place) if we did not achieve required 75 owners in attendance (including proxys) achieving a valid quorum for this type meeting.

4. SECOND (FINAL) MEETING (INCLUDING NEW PROXYS) ALREADY SCHEDULED: In event tonight’s meeting is dismissed, a second “Special Meeting for Assessment Increase” is already scheduled for June 21 – same time and place. If a second meeting is required, a new notice would be mailed immediately – including new proxy(s). Secretary noted that no further meetings are allowed after the second meeting – until next scheduled annual meeting currently scheduled for November 2004.

5. BOARD MEMBERS HAVE EQUAL POWER TONIGHT: Board members all have equal powers tonight – therefore President would not preside until after determination if quorum was achieved. Until then, secretary role would be “Facilitator”.

6. BOARD MEMBERS INTRODUCED: Each member introduced themselves including their role on the board.

7. PROCEDURE IF QUORUM ACHIEVED: Secretary explained that President would immediately preside, explain purpose, request 4 volunteers for a ballot committee, handout financial information packets, also handout a recommended revised budget for 2004. After appropriate discussions, questions and answers – one secret ballot vote would be taken to accept or reject revised 2004 budget recommended by board of directors.

8. CPI FACTOR ESTABLISHED: Secretary noted that research on government web sites indicate that December 31, 2003 CPI for Washington DC and Baltimore area was 3.2%. This means BOD can unilaterally impose an immediate 13.2% assessment increase if higher percentages are not approved by membership

9. BOARD EXPECTS MINIMUM 13.2 % INCREASE: Secretary explained that in event of membership rejection of board’s recommended revised 2004 budget, either at this meeting or second meeting in June, board will immediately execute a 13.2% increase effective July 1 – December 31. This minimum increase is specified in Article V as a minimum prerogative of the board of directors with a cap of 10% plus CPI.

10. FURTHER INCREASES LIKELY: Secretary explained that if rejection of recommended budget occurs tonight, or at the second meeting in June, additional rate increases would likely be necessary at the upcoming November annual meeting of membership.

G. QUORUM NOT ACHIEVED: Secretary called upon Treasurer to state results of owner sign-in registration to vote including proxys. Treasurer reported 36 owners present and 9 proxys validated – total 45. A total of 75 (50% of Class A members) is required to proceed with a “Special Meeting of Membership for Assessment Increase”.

H. ADJOURNMENT AND NEXT MEETING: Meeting was adjourned at 8 pm due to failure to achieve required quorum. Next and final meeting on this matter is June 21, 2004 – same time and place.