OWNERSHIP OF MOUNTAIN SIDE LAKE CONVEYED (SOLD FOR $10.00) TO UNITED WATER AND SANITATION DISTRICT A Quasi Municipal Corpoariton – Water Storage Rights “Appraised Value Estimated At $476,000” in 2011

MANAGER HAS PROVIDED LAKE TRANSFER DOCUMENTS AND IT TURNS OUT THE LAKE DOCUMENT SIGNED IN 2004, FIRST PARAGRAPH UNDATED, WAS NEVER ACTUALLY FILED IN 2004. THE DOCUMENT THAT THE HOA IS CALLING THE “AMENDED AGREEMENT” WAS NOT ACTUALLY FILED UNTIL 2009 AND IS IDENTIFIED BY THE COUNTY AS the ONLY AGREEMENT AND NOT AN AMENDMENT TO AN EXISTING AGREEMENT. THE AGREEMENT FILED IN 2009 WITH A RUDIMENTARY CHANGE WAS DONE POSSIBLY TO COVER THE FACT THAT THE 2004 DOCUMENT WAS NEVER FILED. THAT LEAVES MANY QUESTIONS.

THERE ALSO SEEMS TO BE SOME PROPERTY MARKERS MISSING, SOME MARKERS MOVED AND A PATIO AND ROPE ACROSS THE PEDESTRIAN EASEMENT. ALSO THE FOLLOWING DOCUMENTS HAVE NOT BEEN INCLUDED AND HAVE BEEN PULLED.

These are the documents that were filed by United Water and Sanitation District in 2006 and that predated the first filing of the conveyance agreement which was filed in 2009 and that they now call the “amended agreement”:

921999 10/10/2004 AGM 0 – Agreement Filed in 2009 Conveyed Lake United Water Paid $10.00
86557 8/23/2007 – License to Bromley Companies, LLC $0 + $154.95 per year thereafter – Controlled by Bob Lembke

921999 10/10/2004 AGM 0 – Agreement Filed in 2009 Conveyed Lake MS HOA Paid United Water $20,000
858450 6/19/2007 EAS – License to Theodore Johnson $0 + $154.95 per year thereafter
859129 6/25/2007 EAS – License to Tom and Robin Manteuffel $5,000 + $154.95 per year thereafter
815753 1/31/2006 EAS 0 – License to Dana and Ross Sheely $5,000 + $150 per year thereafter
815752 1/31/2006 EAS 0 – License to Art and Marilynn Burger $3,000 + $150 per year thereafter
815751 1/31/2006 EAS 0 8 – License to Judith and Robert Anderson $2,500 + $150 per year thereafter
15750 1/31/2006 EAS 0 – License to Beverly Cummer $5,000 + $150 per year thereafter
815749 1/31/2006 EAS 0 – License to Richard and Patricia Tucker $2,500 + $150 per year thereafter
815748 2/7/2006 EAS 0 – License to Ben and Karen Little $5,000 + $150 per year thereafter
815747 2/22/2006 EAS 0 – License to Jim Little $5,000 + $150 per year thereafter
829670 08/14/2006 EAS – License to Hugo and Barbara Palacios $5,000 + $150 per year thereafter
86007 08/14/2006 EAS – License to Hugo and Barbara Palacios Amended lot #
771380 10/10/2004 QCD 0 – Quit Claim Deed to United Water
270611 10/1/1983 WD 0 – Original Warranty Deed

A Mountain Side HOA Board Member owns a home that borders the the Mountain Side Lake and is also the President of United Water and Sanitation District. The conveyance of the Mountain Side Lake to United Water and Sanitation District was done for $10.00 and was approved by the Mountain Side HOA Board of Directors. There was an annual meeting vote after the fact in 2009 that included a total of 38 votes. no full HOA membership vote was conducted.

Here is a link to the Colorado State Filings for United Water and Sanitation District: https://dola.colorado.gov/dlg_portal/filings.jsf?id=65107

Here is a link to the Coloroado Division of Water Resources Databases: http://water.state.co.us/DWRDocs/ImagedDocs/Pages/default.aspx

The following is excerpted from past Mountain Side HOA BOD Meeting Minutes and other HOA Documents. Also see comments for additional related information from news sources below.

““We just did it because I live on the lake,” Lembke said, citing his personal motive as well as altruistic community values as the reason for his involvement.”

Minutes 9/2/07 – “The Water District has surveyed the land and the property line markers are there showing where the property line is. Condominium owners have unlimited access. It was also noted that the Association can take back possession of the pond at any time. The reason it was given to the Water District was because the insurance company would not insure.”

Of 279 units and homes, “the vote was 28 for and 10 against to affirm the Board’s decision.

“One owner asked if Mountain Side took back the lake, could the HOA make money? The answer is no.”

“the value of the water storage rights and Mountain Side was forced into getting an appraised value (estimated at $476,000).”

“It was explained that Mountain Side deeded the lake to United Water District in order to avoid liability and heavy maintenance expense.”

“Mountain Side will lose their pool coverage through Farmer’s Insurance if they take the lake back. Farmers considers the lake uninsurable. The lake might be able to be insured through another carrier, however, that is unknown at this time. Costs could be excessive and the HOA’s insurance options would be severely limited.”

“Eric Gill stating the pond was a liability to the HOA and transferred to United Water District.”

“As a government entity, United Water District does not have the same liability issues.”

“As far as I am concerned, this matter has been vetted, researched, explained to the owners in a power point presentation in an annual owners meeting two years ago, and processed to save tens maybe hundreds of thousands of dollars spent by government funds instead of homeowners funds for dredging and levee replacement.” – D Scott Ponds

“Taking back the lake has always been an option. Insurance could be a big issue.”

“Martha brought up the issue of taking back the lake. Insurance expense ($3,900) is not the only issue. There are maintenance/upkeep costs to consider.”

“If Mountain Side ever decides to take the lake back, insurance is not as high as once anticipated.”

“Sharon asked if we were doing this just to be a good neighbor – yes.”

“E.J. asked if we were their only option and Bob replied yes. It was decided to appoint a committee comprised of E.J., Bill, and Art to deal with this issue.”

“Scott stated the cost is high and a water rights lawyer needs to be consulted.”

“Due diligence had to be done before it could be decided whether or not to allow Bills Ranch Water District to store water. This was much more complicated than originally thought.”

“If the deal goes through, Bills Ranch will have storage rights for approximately one acre foot of water and this is being done on a “good neighbor” basis. The only money being requested is for reimbursement of monies spent for legal fees and on-gong repairs to the lake.”

“Bob Lembke has not been communicating and needs to do so.”

“Phil was told that Bills Ranch Water District has been trying to contact Bob for months with no response.”

“It appears Bills Ranch Water District is frustrated about the lack of response from Bob.”

“Bob has been waiting for the final decision from the OSE but has not shared this information with Bills Ranch Water District.”

“If OSE prohibits a variable level lake then use for well augmentation would be effectively prohibited. Once plans are approved, negotiations will reopen with Bills Ranch Water District.”

“At this point we don’t know if OSE approved a variable level dam. Bill will e-mail Bob and try to get this information.

“The Condo Association has spent over $30,000 on legal expenses. It was decided at the last meeting that Bob would negotiate with Bills Ranch Water District and require payment of legal fees before entering into any agreement. They have offered $20,000. No one else can effectively negotiate; the lake belongs to United Water District and not to Mountain Side.”

The following is excerpted from past Mountain Side HOA BOD Meeting Minutes and other HOA Documents. Also see comments for additional related information from news sources below.

“In 2008, Lembke’s company (United Water and Sanitation District) worked with Bills Ranch Water Company on allowing them to store 9” of water in the pond. At the annual meeting that year, “John Ginsberg stated the Association originally owned the lake and a $35 million asset owned by everyone was sold for $10 to Mr. Lembke’s development company. There was no vote – He feels the Board is not following the covenants or CIOA. John said according to the covenants, 75% vote is needed to transfer any common elements. He also stated dredging/excavating is not allowed per the covenants – violated clean water act and no permits were pulled by the Town.

John cited the letter from Eric Gill stating the pond was a liability to the HOA and transferred to United Water District. Lembke is now selling off water rights to the lake. John further stated that Defenders of Miners Creek want to buy water rights. Lembke is a water developer and “duped us into selling the lake.” John went on with EPA violations (excavating), and alleged violations of the covenants. Eric asked that this be speeded up since there was still a whole meeting to get through and John was now over 8 minutes. He stated all documents are available if owners wish to look at them. It was pointed out that all information had been sent to the District Attorney who said there was no case.

John continued by saying Larry Feldman (developer) says we were exposed to a form of fraud; rights unjustly enrich the Board. He also said the value of his home has decreased $200,000. A motion was made to terminate the discussion – motion seconded and passed with one opposed’ May 30,2009 “Jon expressed his frustration and displeasure regarding the Board getting rid of the pond as an asset. This has been discussed in the past and the Board stands by its previous decision. It was pointed out that all owners still have access to the pond.”

“Dave also asked about outside contributions for lake maintenance. Bob stated that several owners (outside Mountain Side) have contributed and in return, they are permitted to use the lake through a lease agreement. If they stop their contributions, they would no longer be able to use the lake. Art noted that without these outside contributions, the lake would now be a marsh.”

Minutes 08/2009

“A discussion was held regarding the granting of water storage rights to Bill’s Ranch. Felice Huntley sent an agreement to retain a water attorney to be signed by Jim Whiteley on behalf of the Board. The cost was estimated at $3,000. Bob stated we do not have water rights and he does not think the HOA needs to spend the $3,000. He stated that although United Water District has the right to grant the water storage rights to Bill’s Ranch he did not want to do so without input from the Board. Bob also noted that nothing should probably be done until the Ginsberg issue is resolved.

Bob recommended that Jim not sign the letter and the Board agreed. Jim said he understood that they only wanted to use the top one (1) foot of water in the lake. It was determined that a water level would need to be established, a marker of some sort installed, and levels monitored. It was also decided that six (6) inches would probably be the maximum allowable drop in the water level to preserve current uses of the lake. Sharon asked if we were doing this just to be a good neighbor – yes. E.J. asked if we were their only option and Bob replied yes. It was decided to appoint a committee comprised of E.J., Bill, and Art to deal with this issue.

It was also decided to have Felice revise the United Water agreement based on the issues raised by Dave Chadsey.”

Annual Meeting Minutes September 5, 2009

As a government entity, it does not face the same insurance/liability issues as the Association and was willing to take title to the Lake. Bob Lembke is an elected official on the Board of United Water District. Mountain Side paid $20,000 towards dredging of the lake with private donations paying for the rest. These donations continue to help defray maintenance costs (dredging and cleaning).

Jon Ginsberg questioned the decision and stated it cost the HOA money. He also questioned United Water District’s monetary gain, sale of water rights, etc. Scott Ponds replied that he’s very unhappy with the amount of time and money being spent on refuting Jon’s accusations. This resulted in much applause from
the membership. Bob Lembke stated that United Water District has not profited in any way and there are no sales of water rights from the Lake. The Water District’s financials reflect this. Jon continued to talk about “secret wells” and selling water rights. He also questioned maintenance costs. One owner stated
he had been at the 2004 Annual meeting where pictures of the lake were shown.

Questions on insurance were brought up and it was noted that Mountain Side will lose their pool coverage through Farmer’s Insurance if they take the lake back. Farmers considers the lake uninsurable. The lake might be able to be insured through another carrier, however, that is unknown at this time. Costs could be
excessive and the HOA’s insurance options would be severely limited.

One owner stated the lake looks like a marsh and is hard to walk around. She would like to get rid of the lake and the expense. Owners need to look at the big picture – all would like to keep dues from going up! She feels owners need to be aware and suggested they Google United Water District on the Denver Post.
Everyone needs to educate themselves. There have been repeated concerns and everyone’s patience is tried.
A motion was made on whether to continue discussion on the lake issue. A vote was taken with the majority voting to continue discussion. A second motion was made to call for a vote to affirm the Board’s past decision (proxies were not used in this vote). The vote was 28 for and 10 against to affirm the Board’s decision. Bill Meek stated that the Board welcomes owner input – they need to know what owners think about issues. Everyone is in this together and owner comments are taken seriously. It was also noted that Board contact information is listed on the website. Jon stated that not all documents are posted (Mountain Managers has posted all governing documents and is not aware that any are missing).

Minutes 10/2009

“The agreement between United Water and Bill’s Ranch for water storage rights was discussed. It was made clear that Mountain Side’s use rights are to be maintained and no one else is to be granted any right of use. Water levels must be maintained to permit traditional uses of the lake and no pump stations or structures are to be allowed on the shoreline.

Only Bills Ranch is using water and owners donate money for maintenance.

Questions were asked on why Mountain Side is getting involved in this. They have transferred ownership to United Water District but have the option of taking the lake back anytime.

All agreed a better understanding of this issue is needed. Bill will continue to research and report back to the Board. Phil noted that the HOA should get legal fees paid. Bill doesn’t think we will need to pay legal fees and this should be put into the agreement. Sharon does not want to pay for this. It was decided to include payment of Mountain Side’s legal fees as part of any agreement.”

Minutes 02/2010

“Jon Ginsberg asked permission to speak for 5 minutes and then leave the meeting. A motion was made, seconded, and passed to approve the request provided Jon agreed to leave after speaking. He agreed. Jon recorded the proceedings and stated the police had requested a copy of the tape.

Jon reiterated his concerns/complaints regarding Mountain Side deeding the lake to United Water District. He feels it was illegally “given away for free”. He also stated it was in violation of the covenants to do any dredging and that the HOA is now responsible for contaminating the water with “nuclear waste”. He presented a bunch of documents including the 2004 letter sent to owners regarding the transfer of the pond, the agreement regarding the transfer, maintenance, and renovation of the pond, the quit claim deed signed by Jim Whiteley, financial statements of United Water District, the independent auditor’s report on United Water District, and newspaper articles dealing with land transfers without a permit.”

Minutes 05/2010

“Lake project update. The Water Committee has been working with the attorney on the granting of water storage rights to Bill’s Ranch. At this point they are unwilling to proceed since important reports and information have not been forthcoming (i.e. impact study, value, etc.) They have stated that if we say yes to the agreement they pay legal fees but if the agreement is denied, we pay all legal fees. Phil noted that it’s important to state we did not gain any money. Bob Lembke has not been communicating and needs to do so. Bill advised letting the attorney continue with trying to obtain needed information. We are still waiting on two reports and have agreed to pay for these. It’s extremely important that value given is at least equal to value received.

Taking back the lake has always been an option. Insurance could be a big issue. Farmers Insurance (Bob Strong) has stated that they will not insure the lake and if it’s insured through another insurance company, Farmers will drop Mountain Side from Mountain Managers’ blanket insurance policy. Phil contacted Farmers Insurance again and found out they had been under the assumption that the lake was open for public access. Bob Strong is going back to the underwriter and will let us know what decision is made.”

Minutes 05/2010

“Lake Project: This is still in negotiation. Phil stated he received a call yesterday at few minutes after 5:00 p.m. from Charlotte Clark. Mountain Managers has not yet gotten back to her. Apparently she has some documents she wants to deliver to Mountain Managers. Phil was under the impression that she did not want to meet with the Board. He believes she may have the study we have been waiting for about how much water will have to be let out of the lake. It seems this issue is no longer on their back burner which is good. It will give the HOA the opportunity to recoup some of the legal expenses already incurred. Additional discussion on the contract negotiations will take place during an executive session at the end of the meeting. B. Insurance for the lake: To be discussed at the executive session at the end of the meeting”

Minutes 08/2010

“The purpose of this executive session was to discuss legal issues and contract terms. General subject matter:

The negotiations with Bills Ranch Water Company and United Water District were discussed. The issue was whether or not to proceed with negotiations and the stipulations to the terms of the agreement. No binding decision was made during executive session. When the regular Board meeting reconvened, a motion was duly made, seconded, and passed authorizing Phil Wells to coordinate continued negotiations with Bills Ranch Water Company provided certain conditions are met. The motion is recorded in the regular Board meeting minutes. The pros and cons of lake ownership were also discussed. No decision was made during the executive session.”

Minutes 08/2010

“Lake Project Update: Bob Lembke was not at the meeting. Phil has been talking to Bob and stated that Bills Ranch Lake Water Company made an offer of $20,000. Bob asked for $20,000 in legal fees and $20,000 towards rebuilding the dam. Phil thinks Bob is planning to go back to Bills Ranch and tell them more money is needed or the agreement will not be finalized. The Board felt that they either “pay or go away”. Phil noted that if $10,000 is received for legal fees it’s better than nothing. If the HOA chooses not to negotiate, you get nothing. That’s the position that Bills Ranch seems to be operating from. The Board agreed that the HOA is in a position to absorb legal fees but Bills Ranch is not in a position to go elsewhere for water. The water storage agreement is a favor to them. They should pay or no agreement will be forthcoming.

United Water is responsible for the dam repair. Mountain Side is not contributing. Phil suggested letting Bob do what he can with negotiations and present what he gets to the Board. The Board will have the final say on acceptance or rejection of the agreement. Bill stated that owners have been told that legal fees will be recouped if the agreement goes through. He feels the Board needs to stand firm on this issue. Phil will e-mail Bob and let him know that the Board’s decision is if they do not pay, no agreement will be done. Questions were asked on whether or not legal fees were still reimbursable if the agreement did not go through. Phil explained that Bills Ranch would not pay and there’s no way to enforce/collect. They contend that they did not force Mountain Side to incur legal fees and it was not necessary in order to finalize the deal. The HOA did its due diligence and incurring the legal fees was definitely in the best interest of the HOA. Proper procedure was followed in the hopes of getting all legal fees paid. It was noted that if any similar situation arises in the future (for anything, not just the lake) a clear understand of what’s being spent and why needs to be obtained. Phil stated that water rights are extremely complicated and that every answer received created a whole new set of questions. Nothing improper was done but it did get expensive. The Board agreed but stated some kind of agreement should have been obtained up front stating Bills Ranch would pay legal fees. When Jon Ginsberg raised the “value” issue, it was necessary to determine the value of water storage rights. This contributed substantially to the overall legal expense. This was extremely time consuming and expensive.”

Annual Meeting Minutes September 4, 2010

Martha brought up the issue of taking back the lake. It was explained that Mountain Side can reclaim the lake but cost is an issue. Insurance expense ($3,900) is not the only issue. There are maintenance/upkeep costs to consider. Dredging and bollards have been paid for by United Water. Bob noted that dredging, tree removal, etc. are on-going maintenance issues currently absorbed by United. Neighbors have been donating to offset part of the maintenance costs. There was an initial donation of $3,000-$5,000 and annual payments are now a couple of hundred dollars. Additional problems this year included muskrats (lake had to be dropped). Algae moss was terrible – had not been maintained prior to United receiving deed to the lake.

Bob also noted that United does not own water rights and has never, ever sold water. Financials are available for review.

One owner asked if Mountain Side took back the lake, could the HOA make money? The answer is no. It was also noted that if Mountain Side takes back the lake, they would be at risk for condemnation. As a government entity, United is exempt from condemnation. Bills Ranch is currently negotiating with United regarding water storage. This was discussed earlier in the meeting and no agreement will be signed until all conditions are met. Bills Ranch has appraised the value at $80,000. (Jon Ginsberg stated it’s worth millions). There is certainly an aesthetic value but would it be an even trade if Bills Ranch is granted storage rights? In exchange for allowing Bills Ranch to store water, water flow would be increased and Bills Ranch would be responsible for any costs associated with monitoring water flow, etc. Scott stated the cost is high and a water rights lawyer needs to be consulted. Bills Ranch needs to pay Mountain Side for legal fees before this proceeds any further. Bob has personally spent about $20,000 in legal fees.

Some owners are apprehensive about having to use the easement going through Jon Ginsberg’s property. It was also noted that Jon’s property is not being kept up. He should be required to keep his property up to the standards imposed on all owners. Scott noted that Jon should not be encouraged. At the last Board meeting, the Board ignored many of his outbursts and continued the meeting over his loud protests. With regards to Jon’s property, pictures can be taken and warning letters sent. Documentation may be needed at a later date.

Dave Chadsey noted that while Jon’s tirades may be difficult to take, there could be some valid issues. He stated that the Association can continue to ignore Jon but should make sure any factual issues (if any) are dealt with

Minutes 02/2011

“Lake project update: Bob stated the water level is down and will be kept down in order to do the scheduled improvements. Work will begin after the run off at an estimated cost of $25,000. The lake account is about $20,000 in the hole – United Water has funded the deficit.

The Bills Ranch storage rights issue was discussed. This has been dragging on for a long time and no actual solution has been agreed to. Bills Ranch was requested to pay the legal fees incurred by Mountain Side but they have been reluctant to do so. They offered 20 cents on the dollar – that offer was rejected. The Board still holds the position that if they do not pay the full amount, no deal on water storage should be done. It was also stated that they should pay for ½ the repair work since they will also benefit. This would bring the total to about $42,500 with $20,000 (or what ever the actual legal costs were) to be paid immediately and the rest over time. Phil asked if the Board would entertain accepting payment over time stating if Bills Ranch is able to make a deal with the County on storage, the HOA would get nothing. It was also pointed out that much of the legal work was done to defend against charges made by Jon Ginsberg. No one is profiting from water storage. If the deal goes through, Bills Ranch will have storage rights for approximately one acre foot of water and this is being done on a “good neighbor” basis. The only money being requested is for reimbursement of monies spent for legal fees and on-gong repairs to the lake.

Bills Ranch people will not have access to the lake except for the few who have lakefront property and a license agreement.”

Minutes 05/2011

“Bob was unable to be at the meeting but Bill talked to him yesterday. The application for improvement of the dam structure was submitted to the Office of the State Engineer (OSE) last fall. Revised plans were submitted last month.

Bob has been informed that plans are being reviewed for final approval and OSE has indicated approval within the next couple of weeks. Once approval is received, construction will begin immediately. The goal is to have it completed by November of this year. The estimated cost of $77,000 to $96,000 has been budgeted by United. Bills Ranch Water District has been informed that the potential to use the lake for storage will be subject to approval. If OSE prohibits a variable level lake then use for well augmentation would be effectively prohibited. Once plans are approved, negotiations will reopen with Bills Ranch Water District.

Phil stated he received a call from one of the new Bills Ranch Water District Board members. They really want to get this done but stated if they have to divert their water to another storage area, they think the Mountain Side lake will dry up. Phil was told that Bills Ranch Water District has been trying to contact Bob for months with no response. They need information. They have purchased water rights and have no place to store them. The Condo Association has spent over $30,000 on legal expenses. It was decided at the last meeting that Bob would negotiate with Bills Ranch Water District and require payment of legal fees before entering into any agreement. They have offered $20,000. No one else can effectively negotiate; the lake belongs to United Water District and not to Mountain Side.

Whether or not to share Bob’s latest e-mail information with Bills Ranch Water District was discussed. It was felt that this would be a step in the right direction but the Board was hesitant to do so without Bob’s approval. Bill will contact Bob after the meeting.

Taking back the lake was briefly discussed. If this is done, Mountain Side would be responsible for the dam repairs and for insurance. In addition, if Mountain Side owns the lake, Bills Ranch Water District could take it by eminent domain. There isn’t much doubt that this could be accomplished – it happens all the time. It can’t be done as long as United owns the lake since eminent domain can’t be exercised against another public district.

It appears Bills Ranch Water District is frustrated about the lack of response from Bob.

Bob has been waiting for the final decision from the OSE but has not shared this information with Bills Ranch Water District. It was noted that the possibility exists that the OSE will not permit a variable level lake. If that’s the case, Bills Ranch Water District will be out of luck. So, unfortunately will Mountain Side since Bills Ranch Water District would then have no reason to pay Mountain Side’s legal fees.

Bill stated that he believes Bob is working to make the best deal for United but is also trying to protect the interests of Mountain Side. It was made a part of the conveyance agreement that no lake related decisions would be made without approval of the Mountain Side Board.”

Minutes 08/2011

“Bills Ranch Lake Negotiations: Bob Lembke was unable to attend the meeting due to a death in the family. He e-mailed the Board that they have the approvals to do the work on the lake and will open the overflow channel before the winter (to ease pressure on the dam during the runoff). The dam repairs will be done next summer since the state approvals for work arrived too late to bid the work and get a contractor in place for the entire dam repair.

Bob’s e-mail did not state whether or not the lake would be allowed to operate as a water storage facility. Bob was to start negotiations again with Bills Ranch Water District but he’s probably waiting for total cost and approval. The Board is still concerned about the reimbursement of legal costs but there isn’t much that can be done until negotiations are re-opened. It does not appear that Bob is making much progress. Bill suggested that someone contact Bob via e-mail on a regular basis for status updates and keep asking for time lines. Bill was “elected” to take on this project and will follow up with Bob and report to the Board.”

Annual Meeting Minutes September 3, 2011

Questions on legal expenses were asked. It was explained that most of this expense is related to the lake and the on-going negotiations to allow Bills Ranch Water District to store water in the lake. Mountain Side deeded the lake to United Water District but the agreement stipulates that no agreements affecting the lake would be entered into without consulting with the Board. Mountain Side would be bound by any agreement entered into by United Water District if they ever decided to take back the lake. Due diligence had to be done before it could be decided whether or not to allow Bills Ranch Water District to store water. This was much more complicated than originally thought.

Approximately $30,000 has been spent to date but no more legal costs with regards to the lake will be incurred. The HOA will be reimbursed for legal costs provided Bills Ranch Water District is granted storage rights. Bills Ranch Water District has been asked to pay the legal costs as a condition of being allowed to store water. It was necessary to determine the value of the water storage rights and Mountain Side was forced into getting an appraised value (estimated at $476,000). It was explained that Mountain Side deeded the lake to United Water District in order to avoid liability and heavy maintenance expense.

At that time, the lake was considered uninsurable. As a government entity, United Water District does not have the same liability issues. Mountain Side can take back the lake at any time within 15 years (changed from 10 years last year). Whether or not the lake is worth keeping was brought up. There are wetlands in the area. In order to sell the land, the wetlands would have to be replaced somewhere else. The lake serves as an amenity for Mountain Side owners. United Water District is doing a great job of maintaining the lake at their expense ($90,000 to $100,000 to replace the dam plus on-going maintenance costs). It is very unlikely the area could ever be developed even if a wetlands exchange was approved.

A few owners do not find the lake appealing but many like it and find it to be an asset to the complex.

If Mountain Side ever decides to take the lake back, insurance is not as high as once anticipated. However, all maintenance costs would then fall back on Mountain Side. It was also explained that United Water District cannot be sued and eminent domain does not become an issue so long as United Water District holds title.

Most of the shoreline is owned by individual owners with at 10’ walking easement marked by green stakes. It shouldn’t be a problem if someone wants to put in a bench and ice skating, and fishing are not issues. Owners noted that it was difficult to walk around the lake and asked about building a walkway. The HOA does not have the funds to do this. Owners also asked how to get to the lake. The walkway is off Hunter Circle and there is a wooden sign pointing towards the lake. Mountain Side HOA has other areas where money needs to be spent other than on the trail.

Questions were asked on why United Water District was spending so much on the lake when they get no financial benefit from it. United does not own or sell water rights. The owner is a also a Mountain Side owner who lives on the lake. The lake is an amenity for him as well as all other Mountain Side owners. He has contributed personally to the lake upkeep and so have other owners. All Mountain Side owners have access to the lake. Owners would like maps/directions to get to the lake and also an estimate of cost if Mountain Side takes the lake back.

Jim Whiteley suggested a committee to look into this. “Those interested in doing something can put something together to be sent to the rest of the homeowners.”

I think we need to respond to the email received by Ponds regarding the need for us to do ‘research’, nothing argumentative or make allegations but simply make inquiries again for documents that are not made available in the records.

Minutes 10/2011

“Bob Lembke was unable to attend the meeting but sent an e-mail stating approval from the OSE didn’t come in until about 3 weeks prior to the end of the construction season. United issued an expedited bid request but due to short notice only received one bid which was well above the engineer’s estimate of costs. United obtained approval from the State Engineer to defer work until after the spring runoff.

The project will be re-bid in the spring. He also stated returning the lake to Mountain Side was OK but if this decision is made, he recommended holding off until a year after repairs are made.

Bob had previously stated that no further negotiations with Bills Ranch Water District would take place until after the dam work is completed. At this point we don’t know if OSE approved a variable level dam. Bill will e-mail Bob and try to get this information.

It was noted that the area cannot be developed and is not worth the appraised value. The appraisal was for water storage. If Bills Ranch Water District ends up going elsewhere and diverting water, the lake could dry up. After the dam work is done, there will still be liability costs, tree replacement, maintenance, etc. Mountain Side does not own the lake at this point and it is up to United to proceed with any negotiations. As long as United owns the lake, there is no danger of Eminent Domain coming into play. The original agreement stated United “may” deed back the lake. The agreement was amended to allow Mountain Side to take the lake back on demand. Mountain Managers will contact Felice (attorney) for a copy of the amended agreement and forward to the Board. There’s not much more to do except wait until the dam work is done.”

Minutes 5/2012

“Hugo Palacios has lot #28 by the lake under contract and the potential buyer has some questions. He has a list of questions and asked the Board to appoint someone to work with him.

The buyer’s biggest concerns are whether or not the lake will remain full and whether or not it would be conceivable that United would not turn the lake back over to Mountain Side without payment for work done. Bob Lembke stated United has put a tremendous amount of time, effort, and money into the lake and he’s tired of questions that have been addressed before. He felt the implication that United might not give the lake back was offensive. Bill went through the steps that were taken when the lake was deeded to United. Mr. Palacios was familiar with this from reading the minutes but felt the minutes were not detailed enough to give a complete picture.”

Minutes 8/2013

“The need for a lake access bridge was brought up. When the new dam went in, partial access was cut off. Ted’s bridge is not long enough and is not built for this kind of traffic. It’s unknown if the bridge would need to be ADA complaint. Bill noted that in the agreement with the United Water, they maintain access, etc. We have to see how to address that and whether it’s legal for Mountain Side to proceed. There is no money in the budget to do a bridge at this time. This issue will need to be discussed with Bob Lembke prior to doing anything.”

Annual HOA Minutes September, 2013

A. Questions were asked on lake access. Bob Lembke noted that Art has been working on options for a bridge. When lake work was done, part of the access was lost. It’s no longer possible to walk all the way around the lake. Art stated that Don is also working on this issue and looking for options to span the gap area. A question was also raised as to when the construction area would be re-seeded. Bob said it has been re-seeded once. He also stated that Willow trees are prohibited near the dam.

Minutes 9/2013

“Lake Access: One owner noted that he has lived here for years and doesn’t know how to walk around the lake. Having a map would be very helpful to avoid trespassing on another owner’s property. There is a map outside the clubhouse showing lake access. When United took over the lake, the property line was marked with green bollards. The road off of Hunter Circle is the only legal access to the lake. It has never been possible to walk all the way around the lake. A bridge has been discussed to make it possible to walk most of the way around the lake, but there are no immediate plans.

When dredging was done by United, there was a Lake Association formed. Non Mountain Side homeowners made donations to help with maintenance in exchange for being able to use the lake. Mountain Side owners all have access and do not have to be part of this Association.”

“Bill’s Ranch Water Board owns some water rights and is working to get these funneled through the lake which would increase flow. They also purportedly have some storage rights but never got an easement to store water. They therefore have no right to change the water level on the lake. The storage rights have been decreed but until an easement is obtained, the owner of the decree cannot use any storage rights. Bill’s Ranch declined to pay any of Mountain Side’s expenses but most legal fees were from other issues.”

 

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