MINUTES OF THE

CAROLINA SHORES HOMEOWNERS ASSOCIATION

September 11, 2010

The annual meeting of the Carolina Shores Homeowners Association was held on September 11, 2010 at the Country Kitchen restaurant, 436 Carteret Street, Bath, NC. Present were Kevin Walker and Gabriel Araos (Lot 10), John Picariello (Lot 12), John and Bunny Donohue (Lot 17); Francis Wayne Winterwerp (Lot 22), Sandra Weiland (Lots 21 and 22), Richard Cea (Lot 25), Ray and June Minter (Lot 26), Kenneth and Phyllis Lumsden (Lots 36 and 37), Heinz and Ulla Stoiser (Lot 87) and Susan Reid (Lot 88). Proxy votes were received from Yvonne Farmer (Lot 6), Ben Cavin (Lot 9), Marian Dean Brown (Lot 14), Daniel McTyre (Lot 16), Berry A. Williams, Jr. (Lot 20), James B. Taylor (Lots 27 and 28), Anthony J. Braun (Lots 30 and 34) (to establish quorum only), Donna Bergin (Lots 31 and 29), Karen M. Smith (Lots 38 and 40), John Taylor (Lot 44), Mike Keating (Lot 48), Simon Stroud (Lot 54), Edward Mihalak (Lot 56), Stan Dodson (Lot 58), Martha Bertsch (Lot 60), Mark Franken (Lot 63), Scott and Cathy Ames (Lot 69), Daniel Jacobs (Lot 72) (to establish quorum only), Byron Fordham (Lot 74), Michael Dunklebarger (Lot 80) and Homer Hungerford (Lot 85) (to establish quorum only).The meeting was called to order at 1:30 p.m. by John Picariello. John Picariello acted as Chairman of the meeting, and the proceedings were recorded by Susan Reid, who acted as Secretary. A quorum was announced by the Secretary and the meeting proceeded.

Upon motion made, duly seconded and unanimously approved, the Minutes from the 2009 annual meeting were approved as written.

The President reported another attempt was made in 2010 to secure approval for the installation of a boat ramp on the common area off of Seaview Court (next to the community pier). He stated that the permit was almost approved, until it was realized the boat ramp had been disapproved in the past. He further stated he was advised that there will be no boat ramp constructed on the common area for the use of the development. The only way a boat ramp might be approved is for an individual lot owner to apply, secure approval and then sell to or trade lots with the Association. It was further reported that this method would work only if the adjacent lot owners agreed to the construction of a boat ramp and the common area being next to their lots. The President advised that the Association will continue to pursue the construction of a boat ramp, but at this time it appears highly unlikely a boat ramp will be constructed. He also stated that the Association will not be pursuing legal action against Timberline due to the wording in the purchase documents signed by all lot owners (i.e., that approval for a boat ramp had not been secured and that the prospective purchaser(s) should not buy if the only reason they were buying was for water access).

1 The President next reported that there was a fire on Lots 21/22, which had spread across Lot 20 to the common area. The owner of the said lots stated that she had a legal burn permit, but the fire spread and she had no water hooked up yet. The fire department was able to extinguish the fire with no major damage to the properties. The owner of the said lots advised that since the fire department had to be called, she is on probation for three (3) years and if there is another fire which requires fire department assistance, she will be cited and fined. This is valuable information for all lot owners who intend to burn debris on their lot(s).

The President further reported that the “new” web site should be up and running within the next two (2) weeks. He has taken over the management of the site and it will include lots of pictures, copies of the Bylaws and Covenants, copies of the Minutes from the annual meetings, links to County offices, links to contractors lot owners have utilized with success and a page to contact the officers. The web site address is: www.cshoa.com. If any lot owner has information they wish to add to the site, please feel free to submit it for inclusion. It was questioned why the Association needed to have a web site, but after discussion it was agreed that the site was a valuable asset to the community.

The President again brought up the issue of maintaining the individual lots. It was stressed that it is important to mow your lot(s) to keep property values up. Additionally, he again stressed the importance of securing a septic permit and getting a septic system installed on each lot as soon as possible. He reported that the rules can change at any time, and any improvements wanted to be made by lot owners (i.e., septic, boat lift, piers, etc.) should be made as soon as possible. It was reiterated that the Health Department is very helpful in working with lot owners to secure their septic permits, and it was again mentioned that lots must be mowed and flagged prior to the Health Department coming out to inspect and re-perk the lots. Additionally, your septic contractor can be very instrumental in helping get your lots re-permitted. A new septic contractor, Hank Elks, has installed septic systems on several lots and his contact information is on the new web site. Mr. Elks is very easy to work with and easy to contact.

The Secretary advised that she had a request from a lot owner who was not able to be present to reduce the annual dues. Discussion ensued concerning the amount of funds currently held in Carolina Shores’ accounts, expected and unexpected long term liabilities, road maintenance and building (i.e., club house, picnic pavilion, playground, etc.) which might be authorized in future years as the community develops. The subject of whether or not the amount of the dues is a deterrent to prospective purchasers was also discussed at length, as well as what the lot owners are “getting for their money” at this time. The President brought up the fact that road repairs are going to be very expensive, and the county is not going to come in and fix the roads that the school bus tears up or which develop pot holes. It was discussed that the Association will not want to take out loans for future expenses unless absolutely necessary, nor does the Association want to have to ask for a special assessment to cover expenses. Discussion also ensued as to the difficulty in raising dues in the future, should it become necessary, after lowering them

2 now. The lot owners present also discussed the possibility of reimbursing lot owners in the future should the private roads in the community be taken over by the County. It was further discussed that the Association is solvent, which is very important as to its viability. A motion was duly made that the dues be reduced to $150.00 annually, seconded and voted upon. The vote was six (6) in favor of the reduction and twenty six (26) against. The annual dues for Carolina Shores lot owners will remain at $250.00 for 2011, and it was agreed that the issue will be revisited at next year’s annual meeting.

Acting as Treasurer, Susan Reid advised that as of the 2010 meeting date, there were five (5) arrearages in the payment of annual dues for calendar year 2009. She further advised that the Association had retained the services of a new attorney in Washington, NC to assist with the enforcement of liens on the delinquent properties. The former attorney had been the attorney utilized by Timberline, and it had been decided that there might be somewhat a conflict of interest. Additionally, the new attorney has much more reasonable fees. As always, she reported that all attorneys’ fees incurred in the enforcement of property liens will be added to the recorded lien so the Association will be reimbursed upon sale of the properties.

The issue of street lights was brought up. John Donohue (Lot 17) advised that he had contacted the County, and the only type of light they would install is the type at the top of a telephone pole. Discussion ensued and it was agreed that the Board would look into an environmentally friendly, attractive type of lights to possibly be installed at the locations of the three (3) Carolina Shores signs and possibly at the entrance to Seaview Court. It was requested by the owners of Lot 26 that if we decide to install any street lights, that they be environmentally friendly (i.e., no light pollution) and shaded so that they would not interfere with bird migration.

Susan Reid, as Chairman of the Architectural Control Committee, advised that no house plans had been submitted for approval since the last meeting. However, she advised that the owner of a lot on Breakwater Drive (Lot 82) had informed her he intended to submit his plans for building. She stated that she thought the Committee would receive the plans within the next month or so. It was also reiterated that the Architectural Control Committee is a committee of four (4) lot owners, including the Chairman.

Kenneth Lumsden (Lots 36 and 37) advised that he had been told bear cubs damaged some of the bushes around the Carolina Shores sign at Tarpon Point and he is going to work to cut them back to make them more attractive. Discussion ensued concerning the condition of the signs and the overgrowth of the shrubbery around the signs which make them difficult to see. It was agreed that Ken Lumsden will remove the bushes in the middle of all signs (directly below the words “Carolina Shores”) so the signs will be more easily seen. The Secretary advised that the sign at the Tarpon Point entrance has been destroyed and must be replaced. She advised that she will take down the sign at the Breakwater Drive entrance to have a replacement sign manufactured.

3 Discussion again ensued concerning the condition of the boat on a lift on Lot 85. As discussed at the meetings in past years, in addition to being an eyesore and having a negative impact on property values, there is concern that the boat lift is about to collapse, which will create an environmental hazard for the creek. If the boat and lift are allowed to fall into the creek, it may cost more to remove them than the lot is worth. As Secretary, Susan Reid advised that she had written a letter to the lot owner asking that the boat be removed, including an offer that the Association would possibly help pay for the removal. She reported that the owner had replied he would “try to find someone to fix the boat”. She reported that in reading the Bylaws and Covenants, she did not see that the Association had a legal right to force the removal of the boat. The lot owners present discussed whether or not the boat might be considered abandoned property. The Secretary further advised she would speak to the Association’s attorney to determine what legal rights the Association might have in forcing the removal of the boat, and that she would work with him to ensure that legal wording was in place to keep this problem from happening in the future. Bunny Donohue (Lot 17) offered to call the Department of Fisheries and such other offices as may be necessary to see if she could find some avenue to get the boat removed, and was to report to the Secretary on her findings.

The Chairman then called for election of officers of the Association. John Picariello (Lot 12) was nominated for President; Simon Stroud (Lot 54) was nominated for Vice President; Susan Reid (Lot 88) was nominated for Secretary and Susan Reid (Lot 88) was nominated for Treasurer. Upon motions duly made, seconded and unanimously approved, the aforesaid individuals were duly elected as officers by unanimous vote.

A question was asked about Lot 69, which has been denied a permit for septic installation. The Secretary advised that the owners of said lot are still pursuing a law suit, but they have been advised of a possible substitute system which might be approved which they are pursuing. She further advised that she has been in close communication with the owners of Lot 69 and has spoken to the County herself concerning possible solutions. The Secretary further advised that as of this time, nothing concrete was in place concerning the installation of a system, but it is still being pursued.

There being no further business to come before the meeting, upon motion duly made, seconded and unanimously approved, the meeting adjourned.

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Susan K. Reid, Secretary of the Meeting

Dated: September 24, 2010

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