Minutes

Regular Meeting

Heritage Hunt Homeowners Association

Budget and Finance Committee

1:00 PM, January 18, 2006, Garden Room, Marsh Mansion

Committee Members Present: Cook, Hambric, Jenkins, Mack, Maroney, McDowell, Parks

Committee Members Absent: None

CMC Staff Member(s) Present: Williams (Mazzarella absent due to court appearance on behalf of HHHOA on Member Account 2038)

Western Golf Staff Member(s) Present: Hicks

HHHOA Board Member(s) Present: None

Guests: Committee Chairs Love (Golf) and Rocklin (F&G), Residents: Jean Bennett, Carol Black, Arlene Maroney, Bob Moore and Den O’Malley

Call to Order

Chairman Bud Mack called the meeting to order at 1:00 P.M.

Approval of Minutes

The minutes of the Meeting of December 18, 2005 were approved as submitted. The minutes of the Special Meeting of January 4, 2006 were approved subject to two changes suggested by Mr. Hambric.

Chair Updates and Comments

Chairman Mack gave the following updates and comments:

The check was received from Western Golf to cover the expense of the auditors in the fraud case.

HHHOA Attorney Ken Chadwick sent a letter to the Marquee giving those 15 days to stop making any reference that they are part of our development. This included printed material, radio, TV and by any other means. If they do not respond a suit may be appropriate.

Court cases from December 2005:

American Girl postponed by request of both attorneys no date set yet.

Account 2038 postponed till January18, 2006. HHHOA

Attorney Ken Chadwick is contacting a California lawyer to take case on a contingency basis as former resident has moved to California.

Resale Report:

To-Date: 169

Year-To-Date: 59

December: 9

At the conclusion of the Chairman’s Updates Mr. Jenkins advised he would be on vacation in February and unable to attend the February regular meeting.

Members Aging Report

Several individual accounts were discussed in detail, in particular Accounts 1091 (Williams to send to attorney for collection), 5233 (the Committee questioned why charges were still being allowed), 8005 (Chairman Mack spoke to the person on 1/13/06), 9013 (Mazzarrella is to follow up), 9041 and 99FOOD (Hicks to research why not paid). Mr. Jenkins questioned why interest was not being charged on 9054 as well as other accounts, including 1397R. Account 1484R was determined to be correct. Hicks is to check Account 1510R as the numbers do not appear to be consistent. Nick or Marsha of CMC needs to review all overdue accounts for interest accruals. Chairman Mack reminded the Committee that we planned to review all policies and procedures regarding Club Accounts.

Events Aging Report

The Committee reviewed the Events Aging report. There was a continuing discussion on Lennar's outstanding accounts. As noted at the December meeting the collection of these accounts has been more difficult since Jerry Berman's secretary left several months ago. Mr. Hicks notified the Committee that since the Ageing Report had been printed that Lennar had sent payment in full and it would be reflected in next month’s report. Mr. Hicks also noted that Accounts 240934 and SERV1005 were just paid in full and would be reflected in next month’s report.

Investments

Mr. Cook, in his first meeting as the new Investment Coordinator, reviewed the Association’s investments. It was noted that the two operating account balances were in excess of their average needs and excess funds would be transferred to interest bearing accounts. Mr. Cook reported that all reserves had been fully funded for the month, however, some $466,000 of pre-paid golf membership fees had not yet been invested. Mr. Mazzarella was checking on 7-month certificates at The Fauquier Bank for short-term reserve needs. Total cash and investments as of December 31, 2005 were $2,940,494.78 (net). It was noted that a $50,000 CD with First Merit had matured on 1/17/06 and Mr. Mazzarella would be talking with our Morgan-Stanley representative about reinvesting the maturity value in a suitable long term investment.

Financial Statements for December 2005

The Committee was unable to review the Association's financial statements for the period ending December 31, 2005 as they will not be available until the end of the month pending final adjustments by CMC staff, including the ones discussed at our December meeting.

Old Business

As neither Mr. Mazzerella nor Mr. Jansen were present the Committee was not updated on its approval at the December meeting to have two credit cards issued – one to CMC and one to WG.

A copy of the letter to the Board of Directors from the Committee notifying the Board of its approval at the December meeting of a Motion by Mr. Parks to purchase chairs and tables for the Club House restaurant and decks was passed out by Chairman Mack. Chairman Mack also distributed a second letter to the Board requesting the appointment of Committee officers for 2006.

In Mr. Mazzarella’s absence, Mr. Hambric made a report on the status of obtaining local banking services in lieu of the services provided by CCB, including the addition of a daily sweep account and a lock box. We are still awaiting proposals from Chevy Chase and Wachovia, however, SunTrust Bank has expressed an interest and will give a definitive answer by 1/27/06 if we can provide all information by 1/20/06. Mr. Mazzarella had indicated to Mr. Hambric he would be able to meet that deadline. Mr. Hambric also indicated that CCB would be willing to renegotiate their present arrangement.

The discussion of deposits and collecting for events and the handling of member accounts was tabled until February until Mr. Mazzarella could be present.

A brief discussion of the county tax on retention ponds followed. Mr. Hicks advised that we would not have to pay the county tax (as per our discussion at the December meeting and decision to retain funds for all years not billed) as long as we paid an engineer to inspect all ponds annually and forwarded a copy of the engineering report to the county. The Committee agreed to use an engineer and not pay the county tax.

New Business

The Committee had tabled until this meeting the balance of the F&G Committee budget request for furniture and furnishings for the club house not approved at the December meeting. Chairman Mack and Chairwoman Rocklin had traded a series of Emails prior to this meeting about what would be requested and a revised request was presented to the Committee based upon this exchange.

Chairman Mack raised three issues: (1) the request combined replacement furniture with new furniture and the two needed to be separated for budgetary purposes (replacements are charged against reserves while new items would have to be requested as unbudgeted expenditures); (2) Chairman Mack questioned whether some of the lounge furniture requested was in fact lounge furniture and should be classified as Billiards Room furniture, and (3) in reading up on commercial grades of carpet had concluded that a polypropylene carpeting was better suited than the nylon polyester carpet recommended by the Interior Designer as it lasted longer and was easier to clean. He also questioned Chairwoman Rocklin as to what guarantee came with the carpet and the weight of the padding. Mr. Maroney questioned whether the carpet needed replacing. Guest Carol Black, a member of the F&G Committee, spoke in opposition to her Committee’s decision to replace the carpet and disagreed with the color scheme. Chairman Mack noted it was not our Committee’s responsibility to make decisions on the color and that was the joint responsibility of the F&G and F&B Committees.

Several Committee members noted that the confusion about Lounge furniture versus Billiards Room furniture could be clarified by simply labeling the request for Club House furniture without identifying the exact room. Several Committee members also noted that some items were priced lower by a vendor whose overall bid was higher and would it be possible to split purchases between vendors based upon unit prices rather than total prices. It was also questioned whether the pub tables needed to be replaced or could they be refurbished.

Chairman Mack tabled the request.

The proposal by Parks for monthly articles in The Horn and having Committee members act as liaisons with certain other Committees, such as F&G, F&B and Golf was tabled until February. Chairman Mack expressed a concern if B&F members would be expected to attend all other committee meetings rather than occasional meetings.

Resident Comments

Would like to see articles on the budget. Noted lack of attendance by residents at 2006 budget hearings – never more than 5 at any hearing.

Love: would like to see occasional articles focusing on a subject.

Love and Bennett: What is status of Long Range Budget Plan. McDowell commented for the past two years projections never completed as it was like “pulling teeth” to get data from WG. Presently only planning projections to 2011.

McDowell also commented on checks for club house accounts being posted but not deposited in a timely manner.

Hambric questioned why a 2003 Charity Golf Classic accounts receivable suddenly appeared in 2005. Hicks explained it was an error and would be reversed.

Love: Does Lennar intend to assign Comcast contract, including an 11% rebate, to HHHOA? The Committee noted that the possible assignment was not within the scope of its authority and suggested that Mr. Love request Resident Board members to investigate the issue.

Love: Golf Committee needs to understand the HHHOA “philosophy” regarding the golfing operation, e.g. is it to be run as a “break even”? Would like to see $200,000 projected 2005 loss documented. Noted that the Golf Committee was not involved in the budget process until 2005. The Committee noted that the Board, not the Committee, should determine what the philosophy should be.

Chairman Mack noted that the community needs a “vision” as to where it is going budget wise after Lennar leaves and that is preparing the annual budgets our Committee and the Board needs “bottom up” feedback from the community.

The next meeting will be on February 15, 2006

The meeting was adjourned at approximately 3:00 PM

Submitted February 15, 2006

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By: William J. Parks, Jr., Secretary

Committee Approved as Submitted February 15, 2006

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By: Bud Mack, Chairperson