MERIDIAN LAKE PARK CORPORATION
P. O. BOX 504 - (970) 349-2002 - CRESTED BUTTE, COLORADO 81224TO: THE MEMBERS OF MLPC HOMEOWNERS ASSOCIATION
FROM: Ron Baker, President, Meridian Lake Park Corporation
DATE: October 1, 2004
RE: SPECIAL ASSESSMENT CAPITAL IMPROVEMENT PROJECTRESPONSE REQUIRED
I am writing to advise you of the upcoming Special Assessment in regard to our Capital Improvement Project (CIP) and to request that you respond to the enclosed Special Assessment Payment Election form.
The Members of MLPC approved the CIP budget of $648,000 at a special meeting held on March 10, 2004. MLPC will pay for the CIP by way of a $3,600 Special Assessment levied on each lot. . Members may pay the Special Assessment to MLPC by either a cash payment of $3,600 per lot or by acceptance of extended payment terms from MLPC. This Special Assessment will be mailed to each Member with the January dues invoice. The due date for the lump sum payment option will be February 28, 2005. The due dates for the extended payment terms option will be quarterly on March 31st, June 30th, September 30th, and December 31st of each year.
Enclosed is a Special Assessment Payment Election form which we would appreciate receiving back from each Member by November 1, 2004 in the stamped, self-addressed envelope. We will assume that you have selected the extended payment terms option if we have not received your response by the deadline.
For those who wish to avail themselves of the extended payment terms, the following is intended to provide some information:
Terms of Financing
o The initial amount must be for $3,600.
o The term will be for 15 years with quarterly payments.
o The interest rate will be variable.
o Interest payments will not be tax deductible.
o Payment dates will be March 31st, June 30th, September 30th, and December 31st, of each year.
o Prepayments of principal are permitted without penalty on any of the payment dates in minimum amounts of $500.
o There will be mandatory payment of outstanding principal and interest at the closing of a lot or home sale.
o Late payments will attract penalty interest at the rate of 18% per annum.
o As with non-payment of dues, MLPC will have the right to place a lien on the affected property and, if appropriate, to foreclose the lien.The amount of the quarterly payment at the outset will be dependent upon:
o Interest rates in the spring of 2005.
o The number of Members who select the extended payment terms option. MLPC has fixed administration costs that will be paid only by Members selecting this option.
o We currently estimate that the quarterly payment will range initially from $105 to $130 and, subsequently, could be either higher or lower depending upon the above factors.In view of the cost of the extended payment terms and the lack of tax deductibility of interest, the Board suggests that Members investigate other financing options from commercial sources, such as home equity loans. As an example, one bank in the valley is currently offering a home equity line of credit along the following lines:
o Interest is at a variable rate of prime plus 1%
o Interest is likely to be tax deductible, but borrowers should check with their accountant
o Closing fees range from approximately $200 to $300 depending upon amount borrowed
o Interest is payable monthly
o Principal can be paid at the borrower's discretion over the five year term and renewed at maturityI encourage any Member who has questions to contact a member of the CIP team. Their names and phone numbers are listed below:
Ron Baker, President,
Filing 2-27, 349-0211Curt Wilker
Filing 3-40, 349-1345Bill Ronai, Secretary/Treasurer
Filing 3-43, 349-2183