A significant amount of time and effort goes into running each HOA and, simply stated, that means every Homeowner pays higher annual HOA fees every year. Each HOA incurs separate Legal fees, Audit fees and Property Management fees, just to name a few redundant expense types that have to be covered by our annual assessments. A primary goal of the merger effort is to enable annual fees to remain flat even while most other everyday expenses are rising. Without a merger we could easily see the annual assessments rising.

Another key goal of the merger is to create a standard set of rules and regulations across both the Village and Countryside neighborhoods. Our initial step is to create a Gap Analysis to identify what differences exist in the legal documents that govern each neighborhood today. As this analysis progresses, the team is also looking for rules that may be outdated and therefore prime targets to be retired. We also believe that the merger will create a more secure environment for managing the HOA’s cash and bills by consolidating down to one bank account and a single bill payment process instead of the three we have today.

Our community is undergoing a demographic change with a transition toward resident ownership, where historically more homes were rentals. This effort is focused on what is best for every Homeowner and we believe this move towards increased residential ownership is a significant development since past attempts. Another key difference is that this current effort is being driven by a separate Merge Committee that is solely focused on doing what is best for all 267 Homeowners. We have been informed that years ago an attorney advised the Board against a merger. Our research indicates that this point of view was based on how complex the effort would be rather than any specific legal impediment. The Committee also recognizes that the question of rental homes versus resident ownership is controversial, however, the creation of new rules is not within the mandate of the Merge Committee, moving that discussion to other venues.

This question, and other similar questions are being analyzed by Committee members representing both the Village and Countryside. The overall concept you raise is one of harmonizing the historical payments, expenses and assets of each HOA and developing an approach that benefits all Tuscan Ridge homeowners equitably.

This question is similar to #5 in that it touches on the concept of assessing prior payments, expenses and assets of each HOA and developing an approach that benefits all Tuscan Ridge homeowners equitably. You are correct that both sides of the Community have paid for certain common expenses. Should the merger be successful this historic practice will be replaced and ALL common expenses will be allocated across ALL Homeowners. An early analysis of assets suggests that while Countryside's Clubhouse expenses exceeded the Village's expenses for the Tennis Courts, the Village brings a larger cash balance to the merger. Looking at these two items together seem to balance each other out in a manner that is fair to Homeowners from both sections.

Currently there are 3 Boards; one each for Village and Countryside and then an overall Master Tuscan Ridge Board. The merger would combine all 3 HOAs and Boards into one HOA and one Board. The Merge Committee must create a "Plan of Merger" which is a legal document that describes the steps that will be taken to legally merge the 3 existing HOAs. This document will be created with the assistance of a law firm after the working groups complete their analysis of the existing Articles of Incorporation, Bylaws, and Covenants & Restrictions; a total of 9 legal documents. The Plan of Merger will include details on the composition and makeup of the post-merger Board. We anticipate recommending that the new Board be made up of no fewer than 5 and no more than 9 Directors. The Master HOA will be the surviving HOA, and we anticipate recommending that ALL Directors in office at the time of the merger (Master, Countryside & Village) continue on in their roles until the end of their existing terms. At that time, as is usual, an election will be held to replace Directors as their previous terms expire.

All of the members of the Merge Committee are volunteers and at this time we have not engaged a law firm. However, an estimate was received back in 2021 that identified merger costs, including statutory filing fees, legal document updating, and legal guidance and interpretations. While the 2021 estimate will have to be refined and brought current once the working groups have identified a more inclusive list of steps necessary to complete the merger, that estimate was for a one-time cost of less than $10,000, which we anticipate will be completely offset by other savings.

The Board has indicated that there are presently no outstanding legal matters against any of the three existing HOAs at this time. As this is a point in time statement, the Merge Committee will assess the status of this question, and any other legal liabilities, throughout the effort. Any legal matters that surface will be included and addressed in the Plan of Merger that will be made available to every Homeowner prior to any voting.

The Articles of Incorporation for the Village requires a two-thirds approval vote. With the Village having 110 households an approval would require 74 votes. The same two-thirds percentage applies to Countryside, and so with 157 households Countryside would need 105 approving votes. However, a higher threshold exists around amending the Articles and Covenants legal documents for Master and Countryside (75%) while the Village threshold is lower ("a majority" or 51%). At the appropriate time the Merge Committee will engage a law firm to articulate each vote and/or each signature required to affect the merger.

The Merge Committee has only recently been formed, and, in fact, we are continuing to seek additional representation from the Village. The working groups are presently developing the scope of their efforts and developing next steps. We expect to communicate our progress on a regular basis throughout 2023. At this time we do not have an estimate on when our analysis will be completed, and this analysis is necessary before we decide to engage outside attorneys. Our timeline will be communicated as it is solidified.

The Merge Committee has created the following Workstreams: ● Neighborhood Rules Analysis ● Financials, Contracts & Liabilities ● Communications & Messaging ● Plan of Merger / Legal liaison

The Merge committee has a working group focused solely on analyzing all of the rules and legal documents that govern the 3 HOAs. This team has members from both the Village and Countryside and they will make their recommendations. Those recommendations will be made available to all Homeowners who will then have an opportunity to provide feedback during a comment period. The working group members are Homeowners themselves and are working towards what they feel is best for all Tuscan Ridge Homeowners.

In short, nothing changes if the merger is not approved by the Homeowners. Without the approval of the Merger Plan, Tuscan Ridge will continue to operate with 3 HOAs and 3 sets of rules and regulations.

The Merge Committee performed an initial financial impact analysis of a merger that showed a first year, one-time Legal cost of approximately $10,000. That analysis also estimated that the savings from consolidating down to one HOA could be double that one-time cost in a full year of operating after a merger. So, depending on the timing of the actual merger during the transition year, the one-time cost may equal or be larger than the savings during that initial year. However, the savings could then continue through subsequent years. The word could was used in the previous sentence because costs tend to rise each year, and so eventually any savings based on historic data may be consumed by rising costs. In any event, the projected savings could be used to negate near-term increases to the annual assessment fees. For context, the annual budget for the 3 HOAs is approximately $180,000. While the Merge Committee has no authority to set the annual assessment, the Board of Directors of the resulting HOA should take this one-time cost and future savings into consideration when establishing future HOA budgets and the resulting annual fees. The Merge Committee’s financial analysis was performed using reasonable diligence and estimations, however, the analysis was not an audit nor was it a forensic analysis of the financial records. As such, the Merge Committee makes no guarantees based on this analysis. Further, while the Merge Committee will discuss our analysis with the Board members, the Committee has not been tasked with making, nor will they make, any recommendations to the Board of Directors regarding actual budget estimates used by the Board to determine future annual fee assessments. As is prudent practice, future budgets will be based on actual contracts and estimates for services to be rendered during the upcoming fiscal year.