During the past few years I have made presentations explaining how the drainage system works. I mentioned that some of the structures are on common ground owned by the POA and some are on golf course property owned by the developer. This system is the drainage system for the entire property in Seminole Lakes, including streets, homes, golf course, tennis courts, clubhouse and adjoining parking lot.

There is a city ordinance and it is also in our covenants that state the permit and maintenance responsibilities will be turned over to the POA. It does not state when, nor does it address the issue of the POA not owning parts of the system. An engineering study funded by the POA in 2003 investigated the history of the permit and concluded that some type of shared responsibility agreement for the maintenance between the developer and the POA should be written. Although the board in 2003 gave a copy of the study to the developer and requested a meeting between our engineering firms, board, and the developer, the developer never responded to our request.

The engineering study pointed out that because some of the system is owned by the developer, the POA could not accept responsibility for the permit and maintenance without some type of agreement. SWFWMD rules also state you must own the property that the system is on to have the permit in your name. You must also have the resources to maintain the system before the permit can be in your name. The POA does not have those resources to maintain the complete system.

Since 2002, the POA has spent approximately $200,000 to repair damaged shorelines and headwalls, including rip-rapping three shorelines on property owned by the POA. This was necessary due to serious erosion on those shorelines, creating a danger of land being lost if not repaired. It is possible that without these repairs, the shoreline would erode into residents’ backyards.

This past summer some shorelines and lakes owned by the developer ended up with weed and algae problems. The board received many complaints from residents. I wrote the developer a letter on August 31, 2009 requesting they take steps to clean up the lakes. This was after our management company issued a similar letter on July 24, 2009 and received an unacceptable response. I also requested that they recertify the permit per SWFWMD request because they may be in violation of the permit requirements. The developer did have an engineering company recertify the system. Again, I explained the reasons in my letter why the POA could not accept the permit or perform repairs on their property.

I received a letter from the developer’s attorney dated December 9, 2009 stating that Seminole Lakes, Inc. was not responsible for the maintenance because at turn-over they gave us $343,093 and said this was to be used for the maintenance of the system.

The letter also stated that if they were pursued by SWFWMD or any other party for a violation of the Permit or any other maintenance, repair, damages, costs or other claims in any way associated with the System, Seminole Lakes, Inc. intended to seek recourse from the POA through the enforcement of the Declaration and any other available legal and equitable remedies. Basically this means they would sue the POA.

We have met with our attorneys and requested they research the dispute and provide us with a written opinion on how to proceed. Yes, this will cost us money but nothing in comparison to the cost of repairs and possible flooding of homes if an underground pipe breaks on golf course property and the developer refuses to repair it.

This dispute should have been settled many years ago, but each and every board since 2001 has not considered this issue to be important enough to spend the money on legal fees to get it resolved. We now have no choice but to seek legal aid towards resolving this dispute. This board and the next one will be involved in trying to settle the dispute. It has to be settled and settling it on a cooperative basis is the best resolution.

Obviously until this issue is resolved, it does not make any sense to consider renting the clubhouse. I mention this because a small group has started a petition favoring renting the clubhouse, which appears to be due to concerns of a casino opening there. As I will discuss later on in the meeting, there will not be a casino in the clubhouse. If the permit dispute is resolved to both parties’ satisfaction, and if enough residents show an interest in renting the clubhouse, a new board would consider this seriously. A new survey would probably be issued giving additional information so residents could have a better understanding of the pros and cons. It would go out by registered letter to ensure we are aware of those that do not receive the survey.

The survey results would have to show a large majority of the owners in favor of renting the clubhouse. In the recent survey, only 123.5 responses were in favor (out of a total of 488.5) parcels which was not sufficient to proceed. With 103.5 responses in the negative, it did not meet the "business judgment rule" to rent the clubhouse: thus leaving the board open to lawsuits. The board would not be covered by the POA liability insurance.

The decision to not move forward was based on a "low confidence level" of the survey results and was only made after consulting with our management company, attorney and three presidents of other HOA’s in the county. This decision does meet the "business judgment rule" This board is being guided by our attorneys towards resolving the permit dispute, and we ask our residents to respect the decisions of the board since there are numerous complicated issues that have to be resolved.

The board will try and answer questions that you might have; however, there may be some we can’t answer due to the legal issues involved.

Thank You
Bob Toth