REQUEST FOR ANSWERS TO SPECIFIC

REQUEST FOR ANSWERS TO SPECIFIC QUESTIONS

RAISED BY THE HOA BOARD MEMBERS

January 5, 2012

Note: These responses are generated by the Crooked River Ranch Community Development Organization and its Board members.

In the last few days, members of the CRR CDO Board have met with the Jefferson County Planner, Heidi Bauer as well as Rich Black from the Building Department. Some of the information provided here comes from that meeting.

1. What is the status of the property being considered for a Community Center and can it be developed without becoming part of the Ranch?

A. There are several large parcels of land within the Ranch borders that are owned by the MacPherson family and the Federal Government, specifically the BLM; but these parcels are not currently a part of the HOA. These parcels pay some taxes to the County but they do not pay dues to the HOA.

B. Regarding the MacPherson property that is being offered as a potential site for the Community Center and a possible master plan with other uses; it has always been the intent of the CDO to make sure when this property is approved for the intended uses proposed that the entire parcel would become part of the HOA. As far as the CDO is concerned, this is non-negotiable for the following reasons:

a. Part of the goal of supporting this master plan is to increase revenue for the HOA.

b. Secondly, we want it to be clearly identified as a part of the HOA since all of the development will be serving and benefiting those who already are members of the HOA.

c. By including this parcel into the HOA there will be consistency regarding how the roads, water and other development on the property is handled.

d. The bottom line regarding this subject is that the property, if approved would become a dues paying part of the Ranch just like every other parcel. The property would also be subject to every other requirement that is placed on any other property that is part of the HOA and each property owner would be a member of the HOA.

C. In talking with the Jefferson County Planner, who is also a Lawyer, she agreed that there is a mechanism for incorporating the new parcel into the HOA. We do not believe “Annexation” is the right term, but rather a formal agreement to be signed by all parties that make this parcel the next Phase of the HOA; would that be Phase 18? Anyway, this legal document would be between the HOA and the MacPherson family and would be part of the agreement or package that would accompany the approval of the master plan by the County, LCDC and any other parties required to approve this plan.

D. Saying it in another way; the CDO is committed to making sure that if the master plan is approved; the approval will benefit the HOA financially and place this property and any roads created under the same rules and regulations that apply to every other property which is already part of the HOA. We do not believe it is legally possible to put more restrictions and financial requirements on the development of this property than any other property on the Ranch.

2. What infrastructure such as sewage, water, etc. would be required for this development and who would be responsible for paying for these improvements?

A. Each property developed would be responsible for its own sewer and water improvements.

B. The residential lots would have standard septic systems with a connection to the CRR Water Company. NOTE: It has yet to be determined if the development of the entire Master Plan would require an on-site water storage tank for adequate water pressure to the development. Most assuredly for the larger buildings such as the community center a water storage tank would need to be built in order to provide adequate water for fire protection. Any and all of these development costs would be borne by the company or individuals that would be developing the property. There would be no cost to the HOA!

C. The larger buildings such as the Community Center would require a hybrid septic system. We have consulted with a sanitation Engineer and the system required for the Community Center could be accommodated on the site with little or no problem, except the expense. This again would be underwritten as part of the development cost of the site and no money would be required of the HOA.

D. The Roads built within the site to serve the master plan development would be built and paid for by the Developer or property owner. The HOA would not be required to pay for any of the new road construction costs. Rich Black of Jefferson County did indicate an interest in looking at making this through road a part of the County system under certain conditions. Of course, no promises other than just talking about various options.

3. Would the cost of traffic surveys, street lighting, and traffic control lights if required be paid for by the Developer?

A. Within the boundaries of the master plan for this site the developer would pay for all traffic studies required by the County or State for approvals. Street lights and other requirements placed on this site by Jefferson County would also be paid for by the developer.

B. There will be many Surveys and Studies required by the County and State before this master plan is approved. Whatever those requirements the developer will pay for those studies and there will be no cost to the HOA.

4. What, if any, type of financial involvement is expected of the CRR HOA?

A. None is expected or required by the CDO.

B. The HOA will have legal expenses as your attorney crafts a document for the inclusion of the property to become part of the HOA.

C. It would be a very positive, helpful and beneficial thing if the HOA were to donate some money to the efforts of the CDO to build the Community Center. This would be a donation, not a requirement and would come only after the CDO has acquired the Master Plan approval from the County and the State.

5. Would there be adequate office space for the possibility of the HOA office staff to be able to relocate to the Community Center?

A. Once the Master Plan is approved; then we can begin working on what the Community Center will actually contain or house.

B. It has always been the desire of the CDO to have a section of the Community Center dedicated to office space for a myriad of uses. It is very possible that an agreement could be reached with the HOA for offices to be placed in the Center.

C. All spaces and uses in the Community Center will be revenue generating in order to pay for the ongoing operations of the facility. In short, the HOA would be able to rent space within the building under some type of lease agreement.

The following comments are directed at questions or issued raised by the report offered by Gail Day.

6. The CDO understands the current zoning laws and Comprehensive Plan Map of Jefferson County as it affects this property. We understand that there are many obstacles to overcome and this will not be an easy journey nor a swift one. It will take the combined efforts of all groups on the Ranch in order to make this a success. I hope in the process a respect will grow for the work that is being done by this volunteer group called the CDO. As has been said earlier; this property could be developed by the Owners without the property being included in the HOA however, it was clear at the County level that the County would not be interested in supporting that approach. It could also be developed without the generous donation of 10 acres of land for the Community Center; but the MacPherson family has stated and proven their commitment to this being a win-win situation for all parties. Thus you have the commitment of the CDO that nothing will move forward without this property becoming a part of the HOA.

7. Though the HOA does not have the authority to approve or disapprove of this Master Plan; it goes without saying that we will not get far with the County or the State if the governing body of the HOA does not support the “CONCEPT”. It is important for everyone to understand that we do not have all the answers yet; the process is in its infant stages. Not even the County or State can predict all the things that will arise in the deliberations that follow. So we are not asking for a one time approval that covers all foreseen and unforeseen issues. We are asking for approval of the Master Plan Concept. Your input is invaluable and every concern will be addressed in a timely manner.

8. Gail is referring to the process to bring this property into the Ranch as an “Annexation” but we do not believe that is the correct term. You are not a City or a Township and do not have the power to “Annex” property. Heidi Bauer agreed that the process is simply a legal agreement between the HOA and the property owner to accept this property into the HOA and thereby put it under all the rules, regulations and By-Laws that apply to the HOA. However, the Articles of Incorporation that Gail quoted do call it “annexation”; I would submit that it is a legal question to be determined by lawyers. Whatever the process is called; it will be a part of any approvals and the record of approvals at both the County and State levels.

9. There is a suggestion that the HOA Board might require additional Road Maintenance Agreements, assessments or other requirements which would benefit the HOA in order to give their approval to this plan. We believe this would violate the By-Laws of the HOA and State laws regarding the consistent treatment of all properties included in an HOA. We do not believe you can levy any special assessment, etc. on one property than you have on all the others. Furthermore, you cannot levy any special assessments without the voter approval of 66% of the members of the HOA.

10. The questions as to whether the Macpherson’s and the CDO are being represented by legal counsel. The MacPherson family maintains a relationship with the same attorney that helped do the legal work on the original CRR founding. As for the CDO; we have sought legal advice but have no permanent legal counsel.

11. It is suggested that the developer commonly contributes land for parks, schools, etc. When a major development is seeking approval from the community. We believe the family has done exactly that by giving 10 acres to the Community Center, setting aside another 10 acres for a school. The master plan also contains a park, walking trails and a 50 foot buffer on the east side of the property. It has already been pointed out that the developer will bear the expense of the roads and other infrastructure.

12. There are several trust issues raised; let them be answered under this one heading:

A. The CDO does not have an attorney representing them at this time and does not see the need until we get a reading from the County and State as to the feasibility of this master plan. We would be foolish to spend money on legal counsel when we do not have a green light yet. But the CDO does have people familiar enough with Land Use Laws and the process to feel confident we are operating in a “Safe Zone” for now. Legal counsel will be hired when it is necessary.

B. Regarding the issue of “Conflict of Interest”; following are sections of the By-Laws of the CDO. An opinion from the Attorney General confirms that though doing business with a Board member is maybe not the best choice; it is not strictly forbidden by law. More specifically let us here address Frank Wood and his role with the CDO now and in the future. Frank Wood is an invaluable part of the CDO, especially in its current work developing a Community Center. Frank has over 30 years of experience in developing similar properties and working with government agencies to gain the necessary approvals. His work has been exemplary and without reservation. His years of community work on the HOA Board, Long Range Planning Committee and Ranch Chapel prove his desire to use his skills and time for the benefit of the community. Frank owns a construction company and has valuable knowledge in this field as well. At one point Frank allowed his company to be used as the “Contractor of Record” so that Jefferson County would allow the HOA to remodel and add onto the Pro Golf Shop. Frank neither charged for this service nor received any benefit financially from this year long process. The CDO Board understands its legal limitations and its commitment to the community to operate at all times with integrity. We will move forward under the law and if the occasion arises to take advantage of skills and expertise that our Board members have; we will, with due diligence, hire the best man or woman for the job.

Section 8.01: Compensation of Directors

No director shall be compensated for service provided the corporation as a board member, except that the board may authorize the expenditure of funds to pay for reasonable expenses incurred by the directors or officers in the performance of the duties and purposes of the corporation upon submittal of a written request for reimbursement with appropriate receipts of expenditures.

Section 8:02: Contracts with Directors or Officers

No part of the net earnings of the corporation shall inure to the benefit of its directors or officers except that the corporation shall be authorized to pay reasonable compensation for services rendered.

Section 8.03: Compensation of Employees and Consultants

The Board of Directors shall fix the salary or other compensation of the employees or consultants of the corporation.

Section 8.04: Conflicts of Interest

In accordance with ORS 54.361, no director or officer of the corporation shall benefit financially, either directly or indirectly, in any contract or transaction relating to the operations conducted by it, nor in any contract for furnishing services or supplies to it, unless: (a) such contract shall be authorized by a majority of directors present and voting at a meeting at which the presence of such director is not necessary to constitute a quorum and the vote of such director is not necessary for such authorization, and (b) the fact and nature of such financial benefit shall have been fully discussed and known to the directors present at the meeting at which such contract is so authorized.

Section 8:02: Contracts with Directors or Officers

13. As to whether or not other sites have been considered; this has been rehearsed many times during many public meetings. After extensive research and consideration the CDO agreed that the best location for the Community Center was on the MacPherson property. We were pleased that the County also agreed that this is the premiere site available.

14. The Water Company has had a representative in at least one of our public meetings. Until we know what the scope of the master plan is we cannot predict the water needs or how we might propose to address them. Water is available on Quail and we are certain that either through an on-site pressure tank or other means we can provide water to the various developments.

15. We know that the road system on the Ranch is of high priority to all property owners. We also know that the development of this property may very well lessen traffic rather than increase it. Because there will be services provided that now are only available in Terrebonne or Redmond there truly could be a reduction of traffic rather than an increase use of the road system. This thinking was proposed by Rich Black of Jefferson County. As for charging some type of development fee for the roads; our belief is that you cannot do that unless you do it to all properties on the Ranch and you cannot do that without voter approval.

16. Regarding the balance of questions; they will be answered in due time. If HOA Board members wish to become involved in the discussions related to the development and details of the master plan, you are welcome to attend future planning discussions. We regret that most of the HOA Board has not attended previous public meetings.

In conclusion the CRR CDO wants to thank the HOA Board for their interest in this project and their desire to make sure we have thought through the issues. With all due respect we ask for your trust in our efforts and your support of the concept knowing that there will be opportunity for getting the devil out of the details. There will be opportunity for you to explore the process for including this property into the HOA and their will be many meetings, planning sessions, conferences, and meetings with attorneys to hammer out the details. The question is; do you want this community to have an opportunity to have a Community Center built on donated land with government and private grants with NO COST to the HOA?

We will plan to have representatives at your January 23^rd meeting. We hope you will give us a place on the Agenda to address any further questions you may have. We will also be able to report on a meeting we will have with the State LCDC person assigned to this project which will take place on the 12^th of January.

Respectfully provided,

CRR CDO Board

Hope Johnson, Chair