BIG BAY RESIDENTIAL ESTATE HOME OWNERS ASSOCIATION

MINUTES OF THE ANNUAL GENERAL MEETING OF THE BIG BAY RESIDENTIAL ESTATE
HOME OWNERS ASSOCIATION HELD AT THE BIG BAY LIFESAVING CLUB,
BLOUBERGSTRAND AT 18H00 ON WEDNESDAY, 27 OCTOBER 2010.

PRESENT:				REPRESENTING:

Edna Bunn (EB)				Chairman/ Finance
Belinda Ketel (BK)			    Trustee : MPOA
Chris Parsons(CP)			    Trustee : Building
Isobel Spence(IS)			    Trustee : Landscaping
Mike Myers(MM)			    Trustee : Maintenance
Charlotte Nuttall	(CN)		Trustee : Marketing

Wayne Louw (WL) 			Estate Manager
Lesley Horne				    Admin Assistant

Cape Classic Property Solutions:

Yvonne Green
Carla Pronk
Diane Smith
Jamie Kleyn

And members present in person or by proxy as per
the attendance register.

1.			ESTABLISHMENT OF A QUORUM

Edna Bunn, in the chair, advised that there were sufficient proxies and property
owners present to constitute a quorum, as per the Special Resolution of 2006,
and that the meeting could proceed.  The meeting was then declared open.

2.			WELCOME BY CHAIRMAN

The Chairman welcomed all present to the meeting, and thanked everybody for
making the effort to attend the AGM.  EB welcomed Wayne Louw, as the new
Estate Manager. EB also introduced the team from Cape Classic Property Solutions
as well as the Board of Trustees, and their portfolios.

3.			APOLOGIES:

There were no apologies.

4.	    	CONFIRMATION OF THE NOTICE CONVENING THE MEETING

The Chairman confirmed that the Notice had been sent with 21 days notice, via
email on the 6 October 2010, and a further 3 reminder emails thereafter. A hard
copy of the documentation was available in the Estate Manager’s office for
collection by owners.

5.			CONSIDERATION OF THE TRUSTEES’ REPORT

The Report was sent out with the Notice. There were no comments or additions to
the Report and it was approved at the meeting.

6.			CONSIDERATION OF THE ANNUAL FINANCIAL STATEMENTS AND AUDITORS
            REPORT OF THE ASSOCIATION FOR THE LAST FINANCIAL YEAR

Edna Bunn, in the Chair, proposed approval of the Annual Financial Statements for
the year 2009/2010.
The Trustees had responded to queries via email from one owner and these were
responded to via the Trustees. An owner queried the cash in the bank and this
was confirmed at R1,2 million.
EB added that the Trustees had promised to build the cash reserves, which they
had done, and would continue to do so.

The Annual Financial Statements and Auditors Report for the year ended 30 June
2010 were approved by the members present.

7.			TO APPROVE THE ANNUAL LEVY BUDGET FOR THE ENSUING YEAR

7.1		OPERATIONAL BUDGET

7.1.1	EB recalled that at the AGM in 2009, there had been a big hike in the levy
from R700 to R1000, as there had not been an increase in the previous 3 years.
It was noted as well that in 2010 there would be a minimum increase of R100
for 2010, because if there was no increase every year, the reserve monies would
be spent. These funds were for unforeseen events and it would be short sighted
if this was not done. The recommendation was to increase the levy incrementally
every year.

7.1.2	One owner was not happy to support the budget. EB stated that the
budget had been calculated without using the reserves which would stay in the
bank and bring interest to the account.
EB informed all present that as owners they could make the decision about the
budget and the reserves. A query was raised why the surplus funds could not
be used instead of the R100 increase, but there were also concerns that if the
reserves were used that they would decrease to under R1 million. It was raised
by an owner that in the previous year the Trustees had used the reserves
for security and this had not been budgeted for.

7.1.3	An owner queried why the biggest service provider, namely security,
received a 10% increase, instead of an inflationary increase. WL stated that
the annual contract with Recall Security had not been renewed and that
they were currently operating on a month to month basis. WL was checking
the company’s service delivery and had taken them to task. He had also
examined quotes from other security companies should the Estate not be
happy with the service. He was also checking the contract and had introduced
a penalty system for non compliance, where the Estate would get credits
on a monthly basis.
WL added that the 10% increase for the annual contract was negotiable and
could still be changed.
There was a further concern from an owner that it was brought up 2 years
ago at the AGM, that 2 motorbikes were included in the security contract,
and a bakkie was purchased, which were not included in the budget, and
not discussed at the AGM meeting.  He was also concerned about the
attitude of the Recall guards as owners used to be greeted and he would
like this to be done again.

7.1.4	EB explained that the Trustees try to make the best decisions for
the owners with what is at their disposal, and at the time there were a
number of break ins and there was pressure by the Trustees to make
decisions. CN added that when Kevin Condon was the Trustee of Security
and proposed the solution, all the Trustees agreed and the bicycles used
at the time were sold.

7.1.5 	An owner queried what the motorbikes were actually for and the
noise they made was an issue.  WL had queried this when he started and he has
since changed the hours of the patrols with one motorbike stationed outside.
He did not believe that this service was all negative but he was looking at
alternatives like additional guards or an armed response vehicle as options.

7.1.6	Kevin Condon stated that the 10% increase for Recall Security was
not cast in stone and that there was a legislated wage increase of 5% in the
security industry. There was a regulatory body called PSIRA who negotiated
with the unions. An owner added that the Estate was not obliged to pay any
increase to the security company as the Estate did not employ the guards.
A proposal from another owner was to have the same guarding company for
Dune Ridge Estate and Big Bay Estate.
This had been tried in the past with a company called Executive Decisions, but
it had not worked out.

7.1.7 	BK added that the MPOA was negotiating one security company for the
greater Big Bay area.
The problem was that each time new Trustees came on board the security
company was changed.
WL did communicate with other Estates like Dune Ridge, Atlantic Beach and
also attended the local Police Forums.

7.1.8	Kevin Condon informed all that Recall Security’s performance was
measured by a Scorecard and if they scored less than 80% the company could be
fired. This was the tool that WL should be using to asses the company and
owners should have been informed about this. WL agreed with this but the day to
day management was key and it had to be a working relationship for him. He was
monitoring the service and still negotiating the contract. It was requested that
the security budget be reduced but EB stated that it is only a budget and the
Trustees were making every effort to save, and this budget could come in less.

7.1.9	An owner commented that the budget had a 17% increase overall and the
expense growth was out of line and he felt that the budget needed some working
on, and what was being done to reduce the expenses.  He added that there were
some savings on maintenance and the salary of the Estate Manager, but he
requested that the Trustees keep the expenses budget tight and not lose control.

7.1.10	EB noted that the landscaping budget had been cut in the last year but
the Trustees had agreed that more needed to be spent on landscaping in this
budget for the overall benefit of the Estate. EB stated that the Trustees had
delivered on their promise to control costs.

7.1.11	There was a concern about the irrigation and that this had not been
sorted out. WL agreed that there were some maintenance issues and that he was
starting to replace the timers after 6 years. BK added that the Estate uses grey
water which reduced the costs. There was a historical problem with the water
pressure in the Big Bay area, but WL was working on sorting out the irrigation
matters.
CN queried if the owner who complained about the irrigation problem has
reported this to security.
The matter was reported to the guards and Ben Lutumba, the previous Estate
Manager, about 2-3 months ago.  Another resident also had a problem with
the water story as his road was cleaned everyday by estate water that was
being wasted. WL had lowered the sprinkler heads as the wind blew the water
around. It was proposed that the irrigation should be turned off in winter as this
would save 10-20%.

7.1.12	A request was raised by an owner for the next budget to indicate the
% variance between the actual and the budget .

7.2	RESERVE FUND

7.2.1	The reserve fund was currently in R1,2 million but this was initially
around R2 million and the money had been spent in the previous financial year
which reduced the funds to R700 000. The levy had never gone up and the
reserves had been used for operational expenses.
Yvonne Green, from Cape Classic,  added that in the past the income had
included the Endowment Levies as well as the Building Period Penalties, which
over time had reduced as an income. WL had attended a conference recently
where it was noted that to make use of reserves was dangerous should anything
major happen on the Estate.
Some Estates were employing Consultants to check what the correct reserve
should be for the size of the Estate. A resident queried what the risks were and
what monies would be needed for in an emergency. EB confirmed that the Estate
was fully insured which raised a further query that if the reserves were high, was
the Estate not adequately covered. EB continued that as the Estate was almost
fully mature, with less Building Period Penalties, and the less sales due to the
market, the reserves would reduce without even trying. CP added that the
Estate was treading on dangerous ground if the levy income matched the
expenses then the cash flow became a problem.
Any business needed operating capital to be sitting in the bank for eventualities.

7.2.2	It was confirmed that the Debit Orders in place brought in the levies but
there was about 10% that were returned monthly, with owners changing bank
accounts or lack of funds.  The current age analysis were majority legal matters,
as non payers were handed over for the legal process to take its course.

7.2.3	In conclusion, EB confirmed that the Estate would consult ARC (the
Association for Residential Communities) that the Estate had joined recently,
to determine a reasonable reserve for Big Bay Residential Estate. This information
would be communicated to owners.

7.3	SPECIAL LEVY

7.3.1	Although he understood that the Trustees were doing their best for all
owners in the Estate, an owner queried why a Special Levy was proposed again
for the capital improvements. EB responded that the AGM was the forum for
owners to decide if they wanted to use the reserves or pay a Special Levy.

7.3.2	WL informed all that although the electric fence was working, it was
starting to deteriorate and security was often getting false alarms as a lot of
the connections were eroding. The budget was being spent on maintenance
when a lot of the fence needed replacing. The fence was 6 years old and
1 km from the sea and it only had a certain life span. WL had several
consultants look at the fence and they came to the same conclusion that a
full replacement was required for Blouberg Hills and sections at Sandown 1
and Sandown 2.  Stainless steel as  an option was very expensive.

7.3.3	The security cameras had problems with the visuals and the wiring
system was not good and needed to be upgraded. The painting of the
boundary walls did include the pillars. The parking bays in Blouberg Hills had
already been started but needed to be paved as they were visible when
entering the Estate.

7.3.4	The proposal to pave the pathways in the parks was queried as there was
no point to this as it was only a small group of residents that had a problem with
the current bark. EB added that the Trustees received many queries from residents
and they had to investigate and follow up on all the matters.

7.3.5	EB proposed that each line item of the Major Improvements budget be
voted for, and the outcome as per the owners present and the proxies held by
the Chairman, was as follows:

7.3.6	The completion of the parking bays at Blouberg Hills were approved as
an additional item for the Major Improvements Budget. WL was to obtain
quotes for approval by the Trustees.

7.3.7	EB confirmed that the items voted for would be paid for out of the
reserve funds and not the Special Levy that was proposed in the Budget.

7.3.8	In order to finalise the budget, EB urged all owners to consider the
R100 increase as it would be a problem in the future to use the reserves. One new
owner proposed the increase and it was then the Trustees job to manage the
finances of the Estate. The Estate should not be in the negative and it would
be on the Trustees shoulders to work within the budget. Another owner did
not want the increase as the reserves could be used and it could then be
evaluated again in the next financial year if an increase in the levy was required.

7.3.9	An owner said that there was a deficit of R240000 and he wanted the
Trustees to tell owners any negative aspects beforehand. The Trustees noted
the point and would work on trying to not increase the levy next year.

7.3.10	EB proposed a vote for either a R50 increase and the use of the reserve
fund, or the proposal of the R100 increase as per the proposed budget.

OUTOME OF VOTE:
NO increase = 18
R50 increase = 5
R100 increase = 79

7.3.11	The levy increase by R100 from R1000(incl VAT) to R1100(incl VAT)
was approved by a majority as per the voting results. EB informed the meeting
that the levy increase was applicable from September 2010, thus R300 would
be backdated for 3 months(September, October and November 2010).
The Building Period Penalty would also be backdated as it was directly linked
to the levy.

8.  	TO APPOINT THE AUDITORS FOR THE ENSUING YEAR

EB proposed that the Auditors, BVD Platinum, continue for the forthcoming
year as they had been appointed at the start of the Estate. This was
approved by all present.

9. 	 ELECTION OF TRUSTEES

9.1	In line with the Constitution, the Board of Trustees of the Association
shall consist of no less that 3 and not more that 7 Trustees.

9.2	All the Trustees had worked well together and had the Estate at heart,
and appreciated the thanks that they received from owners. All the current
Trustees were willing to stand again for the forthcoming year.

9.3	BK informed all owners, however, that as EB was not available as a
Trustee in the long term the Trustees were looking for a suitable Trustee
of Finance, with the relevant expertise.

9.4	EB confirmed that the following Trustees were appointed and approved
at the AGM for 2010/2011:

Edna Bunn
Belinda Ketel
Chris Parsons
Isabel Spence
Mike Myers
Charlotte Nuttall

10.	GENERAL

10.1	SPEED BUMPS

There were ongoing complaints about speeding in the Estate especially at
Milkwood Crescent, and this was very dangerous for kids in the Estate.
Speed bumps did assist in slowing motorists down but parents also had
to take responsibility for their children. WL would investigate the need
for speed bumps and any action that was required, and requested that the
owner email the details to the Estate office.

10.2	VANDALISM IN PARKS

WL stated that he spent a lot of time on small issues in the Estate like the
lights that were being damaged  in the parks and this spiked over the school
holidays. He had increased security patrols in the parks.

10.3	BARKING DOGS

An owner complained that dogs were continually barking due to the security
lights. WL stated that barking dogs was not a unique problem as it occurred
in all Estates. WL encouraged residents talking to each other to try and
resolve the problems.

10.4	DEBIT ORDERS

EB informed the meeting that Nedbank Third Party payments had increased
the monthly cost for the Debit Orders from R9 to R20 per transaction.
They had been processing the debit orders for the monthly levy since 2004,
and the Trustees had investigated alternative options. Netcash was a third
party company who provided this type of service at a much lower price but
there were surety issues that needed to be approved. The members present
were happy in principle to agree to a change, as a cost saving was required,
but the Trustees had to confirm any outstanding issues and update the
residents of a decision before any implementation.

10.5	ESTATE MANAGER INVESTIGATION

10.5.1	EB stated that Kevin Condon had seen irregularities regarding the
previous Estate Manager, Mr Ben Lutumba, and thanked him for this action
and before it had gone any further, Ben had resigned.
With these allegations a case file had been opened and this was taken to the
SAP in Tableview by the Trustees.
It was established that there was no substantial and concrete evidence in
the file with the supposed fraud allegations. The SAP needed something more
concrete e.g. a monetary amount. EB then spoke to the Estate gardeners and
received their affidavits that the Estate had been invoiced by Sharp Services
for jobs done on the Estate, but only 3 gardeners had been used instead of
4 gardeners.
The Trustees then calculated and demanded +/- R14000 as per the affidavits,
and have gone to Sharp Services and Ben (as  Director of Sharp) and
demanded the money back. Sharp was not allowed back on the Estate and
the Trustees had received no feedback to date. The Trustees had since
approached VGV attorneys who had since forwarded a letter of demand for
the R14000.
The Trustees felt that as Ben had gone, and they had employed a new Estate
Manager, a “new broom would sweep clean.”

10.5.2	The Trustees went through a long HR process to find a new Estate
Manager and they chose the best candidate with a fresh outlook who they
believed would continue to run the Estate smoothly.
The Board of Trustees did not want to waste owners’ money on something
that was not concrete.

10.5.3	CN added that she had been to the police station 10 times and she
wanted to get rid of all this negative energy. The issue was what the charges
were going to be and someone had to lay the charge once it had been defined.
furthermore, a court date could come up in 2 years time and then she would
have to go to court. She proposed that the Estate looked forward and let go
of the past.

10.5.4	Kevin then stated that the Trustees did not have the right to not go
ahead with the investigation and his personal integrity was at stake. EB said
that the Trustees did not have an issue with Kevin  and neither did she
personally. The files were available for all residents to see.
Kevin chose to resign and the Trustees did what they felt they had to do.

10.5.5	Cape Classic had been fantastic during this stage and any updates were
communicated via email to owners. The Trustees followed due process but
Kevin had Ben’s laptop for 2 months, and  they continually asked for the list
of allegations from Kevin  but never got it and he then resigned.

10.5.6	The Trustees felt that they couldn’t substantiate a case if there was
no concrete evidence.
They were also not sure about the affidavits that Kevin had mentioned. The
Trustees did not think that owners would want to spend about R100 000 of
their money on such a case. The Trustees also asked why Kevin, after having
the file for so long, had never gone himself to lay a charge.  Kevin was then
told that he was welcome to lay a Charge against Ben in his personal capacity
if he so wished.

10.5.7	EB continued that the Estate Manager runs the Estate, and reports to
the Trustees who do not run it physically, and are not paid for their time.
All the Trustees agreed to the same issues and were now awaiting the outcome
from the attorneys as to the recovery of the monies.

10.5.8	An owner queried why the Trustees did not communicate the matter
with the owners.
There was no openness and by not allowing Kevin to send out his letter
created skepticism amongst residents.
He felt that there were some bad things going on and residents were not
aware. It was further stated by an owner that the case should be investigated
and prosecuted and the Trustees must go through a lawyer as police don’t
just deal with such matters.

10.5.9	CN stated that when she got the file from Kevin she called some of the
estate suppliers. One of the suppliers confirmed verbally that there was
R10 000 involved but he was not prepared to put this down in writing. She
queried why Kevin did not collate all the evidence and lay a charge as this was
his profession. Kevin stated that there were issues with Ben and allegations
against him by Ben, which affected his integrity and he wanted these cleared.
The laptop belonged to the Estate so this was not an issue and Kevin was of
the opinion that what Ben did will not be uncovered. Kevin said Ben had
written a letter to his friend on Big Bay stationery. Kevin queried if this was
not the Managing Agents job to discover this, then whose was it.
EB stated that Cape Classic had been in place as the administrators since
2004 and delivered more service than any other Managing Agents that she
had dealt with.

10.5.10	A resident then queried what the purpose was of this discussion
and requested that the Trustees make a call. WL added that as the Estate
Manager it was easy to abuse the system when it came to procurement.
In the future he would negotiate with service providers and get invoices
clarified with management. It was easy to get kick backs from suppliers and
the Estate ended up paying for it which was not good.

10.5.11	EB continued that the files were available for any resident to peruse
and Kevin could lay a charge in his personal capacity against Ben if he so chose.
The Trustees believed that the due process was followed and that it was not a
personal vendetta between 2 parties.  As Ben had left the employ of the estate
and the matter had been dealt with according to what SAP had required, it
was not seen to be in the interest of the residents to use any of their levy
monies and trustees’ time on a matter that was currently being dealt with by
the attorneys to recover the +/- R14,000. The decision to take money from
the budget for an ongoing investigation that had no concrete evidence was
put to a vote.   The majority of residents at the meeting then agreed that the
matter was closed and they did not want their levies spent on a continued
investigation.   EB confirmed that the matter of the investigation of the
ex-estate manager was now considered closed.

10.6	BUILDING PERIOD PENALTIES

10.6.1	The owner of Erf 471 was concerned about the increase of the Building
Period Penalty.  In 2009 with the R300 levy increase the Building Period
Penalties increased by 40% to R5000 a month. He understood that residents
wanted the Estate completed but the process was unfair and would hit him
financially. He proposed a penalty ‘breather” for 8 months.

10.6.2	EB responded that the Estate had been built up quickly and during this
time all other owners had to pay the Building Period Penalties until their homes
were complete. There were currently 17 plots left on the Estate. The owner
had been living on the Estate since inception and he did not know when he
bought the plot that it would be such a big increase. He stated that the
remaining plots were not being built, and Dune Ridge Estate had agreed to
a penalty break in 2010, and why was Big Bay Estate the only one that
had not considered this. It was a concern that there was no compromise.
EB noted that a solution was that the seller should pay the levies and this
must be negotiated between the seller and the buyer  and was not the
Estate’s problem. It was voted by the members present not to change the
Building Period Penalties as existing owners had all paid the penalties in the
past.

10.7	MOLES ON THE ESTATE

An owner was concerned about the moles on the Estate and WL was
requested to investigate and forward a solution to owners.

With nothing further to discuss the Chairman thanked the Trustees and
Cape Classic, who assisted with everything and attended all meetings,
as well as all present for attending and closed the meeting at 8:30pm.