Call to Order
Board Pres. Marvin McNabb, lot 28, called the meeting to order, held in the upper level of the Clubhouse at 2:00 pm. Board members present were: Troy Lesan lot 576, Doug Winter lot 46, Mike Booth lot 2380, George Eshnaur lot 505, Celeste Armanees lot 62. Not present was Allan Slavin lot 181. Marvin McNabb led in prayer. Mike Booth led the Pledge of Allegiance.

Instructions for Special Meeting
Board Pres. Marvin McNabb explained: There are two proposals to vote on today, to fund Campground infrastructure—both are already approved by the Finance Committee & by the Board. However, if both proposals fail to pass today’s vote, there is one last option: Any member from the floor can make a motion, another member can second that motion, then today’s group must vote on it. If it passes, then it still must be approved by VVA membership at the Annual Meeting in March.

Mike Booth presented on the need to replace the electrical grid in CG#1 & CG#2: Mike introduced himself as a Board member & he’s had a spot in the Campground for 11 years. The CG electrical infrastructure is outdated & failing, due to wear & tear. Back in the 1960s when our current system was installed, campsites were built for 30-amp campers. Today, about half of our campsites have a 50-amp camper plugged into a 30-amp post. Some meters have up to 4 campers on the same meter. One meter even has 5 campers on it & all 5 are 50-amp campers. Hence, failures. In July or August, CG#1 had a failure where a wire to an electrical panel “shorted out”. Farmers Electric said this would be the “final Band-Aid” possible, because our outdated system simply cannot accommodate any more temporary Band-Aids or patches. So the entire system needs replaced—the underground wires, electrical panels, posts, receptacles, breakers are all worn out. In 2018, the Strategic Plan listed a Campground electrical upgrade as a needed objective. A few months ago, we mailed out an RFP to 5 electrical companies, of which 3 bids came back ranging from $420,000 to $700,000 pricetag. We’ve vetted & selected the company that bid $420,000 for the job. Since that price may go up depending on supply chain availability, we’ll plan on a $450,000 pricetag. However, the job cannot begin until we secure the funding.

George Eshnaur presented on funding the $450,000 electrical upgrade: George introduced himself as a Board member, and he teaches Finance at a University. These options were developed by the Board with input from the Campground Committee, the Campground Manager, and Lake Dir. Jeff Ferguson. Two options were approved by the Finance Committee to vote on today. Both are a fund transfer (loan) of $450,000 from the VVA Association to the Campground line item, to then be repaid by the Campground line item (using CG fees) back to VVA over the next 6 years:
• Option A: loan @ 6.0% interest.
• Option B: loan @ 4.7% interest.
Difference: The 4.7% option is “break-even”, since these funds otherwise invested in a Money Market account would net a 4.7% return. So 4.7% is “a wash” with no profit for VVA. Versus the 6% is a small (1.3%) profit for VVA. The difference between the two options is approx $20,000 in interest over the course of the 6-year payback. It’s called a “fund transfer” because funds would be transferred from the VVA general budget over to the Campground line item, for Campground fees to then repay the amount back to VVA over the next 6 years.

Following the 30-min presentation was Q&A from attendees w/ very energetic discussion. Whenever the person speaking from the floor announced his/her name & lot #, it is included below. Responses are from Board members.

• Why is the CG its own line item? Celeste Armanees responded: The Board approved about 2 years ago (see BOD meeting minutes Jan. & Feb. ’21) that the Campground is a separate self-sustaining line item within the overall VVA budget, that is all-inclusive of all short-term & long-term future needs of the Campground. This “self-sustaining all-inclusive” requirement is partly why the Finance Committee approved these 2 Campground-funded options to pay for Campground infrastructure.

• Why are Campers expected to pay for this infrastructure, not VVA pay for it? Response: Because the Finance Committee realized that the chances of getting either of these 2 options (where CG fees pay for CG infrastructure) is very likely to pass by vote @ Annual Meeting. Versus, an alternative option of VVA members paying for it is much less likely to pass @ Annual Meeting. So the Finance Committee approved the 2 options that are most likely to actually secure the funding & get the project started ASAP after the Annual Meeting in March.

• So what’s the point? We the Campground are still part of VVA as our HOA, right? Response: Funding a $450,000 spend must be approved by VVA membership at the Annual Meeting. That’s because any large expenditure is part of the annual VVA budget which must be approved at every Annual Meeting. Troy Lesan added, “I see 77 attendees here at the Special Meeting. The Annual Meeting usually has 150 or more attendees. A simple majority vote will determine if VVA members (incl. Campground members) are willing to pay a one-time new $300 in VVA Dues & Assessments x 1,519ea VVA members … to pay for $450,000 Campground electrical. The Annual Meeting is the final say-so to approve each year’s Annual Budget.”

• Why the Annual Meeting? Doug Winter (Board contact on Finance Committee) responded: These 2 funding (loan) options already have the approval of the Finance Committee & the Board. Doug cautioned attendees that you take a big risk if today’s meeting votes down these 2 pre-approved options, in favor of a new 3rd option. That’s because a 3rd option may or may not get approved at the Annual Meeting in March. It’s risky. If not approved at this Annual Meeting, then your next chance to even try to get a more passable version approved is at the following year’s 2024 Annual Meeting. What happens in the interim 12 months with a faulty electrical system? So you’re taking a big chance if decide to vote down these 2 pre-approved proposals, in hopes that VVA membership will vote for all VVA members (not just Campground members) to pay for Campground electrical.

• Doesn’t this qualify as an urgent Rainy Day issue, to be paid by whomever already has enough $ to pay for it (VVA Association)? Response: Only if VVA membership @ the Annual Meeting approves it.

• Why isn’t there an option where VVA pays ½ and Campground pays ½? Response: That option was presented to the Finance Committee, but was not approved by the Finance Committee. That’s just the process we have to follow.

• Why is the Campground being treated different than any other amenity? The CG is the same as the pool, the clubhouse, the airstrip amenities. We all, Campers included, paid for dredging even though dredging out a certain cove doesn’t benefit us. So why doesn’t VVA pay for the Campground electrical, where all VVA members pay for it, since it’s for the greater good of the entire VVA community? Applause. Doug Winter responded: You are welcome to make that motion from the floor today to vote today. But it still must get membership’s approval @ the Annual Meeting. If it’s not approved at the Annual Meeting, you still don’t have electrical and it’s already March. Then you have nothing ‘til the next year’s Annual Meeting can possibly even vote on it.

• But the Campground is a VVA “amenity” that benefits the entire VVA Association, so the Association should pay for it! This point was echoed many, many times by attendees at the Special Meeting. Applause.

• Tom Johanson, lot 240, asked: Why is this not treated as a VVA capital expenditure, since the CG is an amenity for the benefit of the entire lake? Response: Because VVA members may or may not vote to pay for it @ the Annual Meeting.

• Michelle Sullivan, lot 1826, asked: I’ve been in the Campground for 25+ years, and we’ve already been hit by new CG fees in the past 2 years like never before. Why the 9% increase in CG fees for next year? Mike Booth responded: The 9% increase for next year is the CPI inflation index of 9% higher cost on gravel, electricity, trash and all expenses in the CG.

• Why were the surplus funds from Campground in the past 20+ years, not rolled over into the separate CG line item—why did VVA keep the CG surplus funds? Where is the audit? Why did the “CG line item” start with $0? Applause. Troy Lesan (was Board Contact on Finance Committee for 7 years) responded: In years prior to the separate CG line item, there was no money leftover—it only looked like a profit because not all Campground expenses were included. That’s because expenses were hidden (not separated out) in all different line items of VVA’s overall budget. It was a mess. So none of that could be accurately calculated, even if you tried. The proof of that is now with a “separate CG line item” starting 2 years ago, where the Campground Manager presents to the Finance Committee a balanced budget that includes ALL expenses, all of a sudden your CG fees went way up. Why was that? That means prior to the separate line item, all the expenses weren’t included. But now it’s all cleaned up & much easier to do an accurate calculation. And now with the “separate CG line item” the Finance Committee must approve the CG budget for completeness & accuracy, before calculating the next year’s CG fees.

• Kathy Price, lot 154, asked: I was on the Campground Study 3 years ago, which showed the CG actually did make a profit in the years we studied, yet we started with $0—where’s our CG profit from the prior years? See above.

• Jennifer Kiley, lot 3024, asked: I’ve been in the Campground for 22 years now. In 2008, a buried electrical line was arc-ing in front of my trailer & I heard it. The next day, it caught fire. So we have a major electrical problem. It is not our burden as campers to fix an electrical problem that has needed fixed for years. Now, VVA conveniently waits until it’s a separate CG line item when we start with a $0 budget, to now finally fix the electrical system. Why are we starting with $0? Applause.

• What does “self-sustaining line item” mean? Troy Lesan responded: Self-sustaining means that all income & expenses are included in the same line item to pay for itself. That means money in = money out. So for any given year, if expenses go up, then CG rental fees must go up to cover that. The same calculation is done every year for VVA membership’s annual Dues & Assessments. If costs go up, then income must go up to cover it.

• Mike Rudder, lot 1907, asked: Is this a capital improvement, or is this actually to resolve a Safety issue?

• Joe Hughes, lot 1125, asked: What’s more important than safety? That is the overriding concern here. The only thing that matters to me is the safety of my children & grandchildren—knowing they won’t get hurt in the Campground. It has nothing to do with money, but with safety. Applause.

• James Funk, lot 2904, spoke in front of the group: I’m on the Campground Committee, so I can address much of this.
–The 9% fee increase for next year was proposed by the Campground Committee to cover inflation increases e,g. on electricity, that we know will hit us in next year’s costs. And yes, any extra income that is leftover after paying expenses does stay in the CG line item for the next year. So our goal is just to break even, with a little left over to stay in the black & not go in the red.
–Safety issue: This $450,000 fix is to resolve the major safety risk that the outdated electrical is today. We’ve had issues with “fires in the box” twice in the past 2 years. And the CG had a gentleman’s camper burn down a year ago.
–Regarding the delay: When I was on the Board of Directors back in 2018, we wanted to get the CG electrical upgrade done at that time. But we, the Board, knew that the membership vote @ the Annual Meeting would not approve it. At all. We knew it wouldn’t pass, so we put it on the back burner. So that’s why nothing has been done.
–Regarding the 2 options to vote on today: We are renters. A capital improvement is paid for by the owner (VVA), not the renter (Campers). This Campground is a major benefit to VVA—the Campground is a draw, to attract new VVA members to “try out” lake life. I propose that we vote down the 2 options today, and we instead offer a 3rd option that presents the Campground as a true amenity that all VVA benefits from, so VVA members will want to pay to cover the electrical upgrade @ the Annual Meeting in March.

• I’m a landlord, and as a landlord, you don’t ask the renter to pay for a capital expenditure. Applause.

• Tony Southwick, lot 1594, commented: I agree it needs to be done, but I don’t believe an option where the VVA membership bears the entire cost of a Campground upgrade will pass @ Annual Meeting. Multi-lot owners will turn out to vote, since they’d be hit with not $300 but 2 or 3 times that ($300 per lot). Doug Winter responded: That’s why the Board worked very hard to come up with these options that we knew could pass @ Annual Meeting in March. Also, there’s another major expense coming up in the Campground which is Septic, that today’s vote doesn’t even address. So there are other major expenses on the horizon to get the Campground to where it needs to be.

• Mike Rudder, lot 1907, asked: If this was an emergency road issue, or a dam leak issue, there’d be swift action to fix it. What if some safety accident happens before the March meeting approves it, or before the work is actually done? Troy Lesan responded: Well, you’re exactly right. If the road is damaged, they put up barricades & close the road.

A motion was made from the floor by Michelle Sullivan, lot 1826, that the $450,000 cost to replace the Campground electrical system be paid by VVA membership. Seconded by Mike Rudder, lot 1907. Motion passed. This will be voted on today as Option C.

Marvin McNabb explained that today’s vote would be done by a show of hands, for simplicity. After some comments, however, it was deemed simpler to just do a voice vote. The drawback of a voice vote is that we don’t know the # voters who abstained—i.e. remained silent, voting neither yes or no. Marvin called for the vote:
Option A: $450,000 loan to the CG @ 6.0% interest. Yes, 0. No, overwhelming majority.
Option B: $450,000 loan to the CG @ 4.7% interest (“break-even”). Yes, 0. No, overwhelming majority.
Option C: $450,000 to be paid by VVA members in Annual Dues as a “Campground Assessment”. Yes, overwhelming majority. No, 1.
Marvin summarized the results of the voice vote: Options A and B are voted down by unanimous vote.
Option C passes by near-unanimous vote at the Special Meeting, and will be voted up or down by VVA membership @ Annual Meeting in March. Thank you everyone for coming today.

George Eshnaur moved to adjourn at 3:10pm. Mike Booth seconded; motion passed.

There were 77 voting members who attended the Special Meeting, too many to list here. A sign-in Attendance Sheet is on record at the Office for reference.

Let the record show that these minutes are a record of the business transacted at this meeting and are a sampling of the discussions. Comments and discussions are not reflected in whole or as actual quotations in the minutes, nor do they reflect all comments by members.

Respectfully submitted,
Celeste Armanees
Secretary, Board of Directors
Viking Valley Association