Thank you to all present at today’s meeting. Before we update you on the status of the lake dredging and cleanup project lets quickly review the events of last September’s general meeting as it pertains to the project. As you may recall the membership overwhelmingly approved a Two Hundred Dollar ($200.00) assessment for the specific purpose of building a fund to enable the association to have at its disposal enough capital to initiate the project. In addition a motion was carried to set aside a final vote on the loan payback assessment until the final figures were in from the State of New Jersey, and the individual assessments were calculated.

We have successfully obtained from the State of New Jersey a low interest loan in the amount of Five Hundred and Twenty Thousand Dollars ($520,000.00) for the dredging and clean-up of our lake. The terms of the loan are Two Percent (2%) annual interest to be paid back over a twenty year (20) period. Upon acceptance of the loan by our association and The Township of Hardyston we will need to assess each property owner an annual cost of One Hundred Seventy Five Dollars ($175.00) for the first year & One Hundred Fifty ($150.00) for the balance of the loan. The annual assessments should be billed in October of each year and be payable no later than February of the next year to allow for adequate fund balances, please refer to the fund flow sheet attached.

The following is an explanation of the what’s, where’s and how’s of the restoration work schedule and how the money already collected via the October 2005 assessment ($200.00) will to be used.

1) The Two Hundred Dollar assessment has yielded us approximately Forty Seven Thousand Dollars ($47,000.00), which is being held in an interest bearing account at the Wachovia Bank in Stockholm. From this account we will need to distribute funds to cover costs related to the restoration that would be considered start-up costs. These costs are itemized here but are not limited to the following:

a) Escrow account for the benefit of Hardyston.

b) Various permits and licenses.

c) Deposits to contractors.

d) New lake surveys.

2) Over the last two years we have segregated one half of all initiation fees that we collected at closings, and placed them into a separate savings account also held at the Wachovia Bank in Stockholm. The current balance is approximately Ten Thousand Five Hundred Dollars ($10,500.00). This money is available to cover any shortfall in the money market account, and will be used as needed during the loan payback period. The combination of both accounts at this point is about Fifty Eight Thousand Dollars ($58,000.00), as you reference the flow sheet it should be clear that the reserve should be closer to One Hundred Thousand Dollars ($100,000.00), to accommodate all the disbursements that will occur over the next eighteen months while still maintaining a contingency fund.

At this point in time we have approximately 50 members who have not paid the $200.00 October 2005 assessment. Letters have been sent to all members with an outstanding balance indicating what actions are necessary for them to avoid late fees and eventual legal actions.

Every effort by our board will be made to collect the outstanding balances as quickly as possible or if we are unsuccessful every legal option will be employed. Volunteers to help in the collections area would be greatly appreciated.

In regard to the work element, the following represents the best estimate of how and when various parts of the project will happen based upon our conversations with Canete Contracting and Aquatic Analysts, Inc. We are currently in discussion with the Executive Director of the Highlands Coalition regarding any permits that have may be required and have not been factored into our project, assuming that we do not run into any problems with compliance regarding The Highlands Preservation Act, we would then suggest the following:

1) In October of this year will lower the lake water enough to allow a full inspection of the lake bed by the contractors and Mr. Kovar from Aquatic Analysts Inc., this will allow them to evaluate what equipment will and will not work on the job, and will also help determine the best and most economical sources of the staging areas and entrance/exit points of the lake. A lake lowering permit has been obtained and we strongly suggest that all lakeside residents take advantage of the low water to do some shoreline maintenance during this brief period.

2) We will then allow the lake to refill to normal height as soon as the inspections are done.

3) During this same time period we will be seeking the permits and licenses that will allow the work to be done in the timeliest fashion (possible time frame is 12 to 18 months). In addition to the permits a new lake survey will be ordered to comply with the licensing requirements.

4) Depending on when we actually get the permits we will make plans to lower the lake again (hopefully in late September or early October of 2007). This will be the actual start of the dredging and clean-up, which should be completed by late November of 2007.

5) Once the construction equipment is out of the lake the company will clean up and repair the entrance and exit sources of the project, at which point we will allow our now deeper lake to fill. We should be able to go about our normal swimming and boating activities by the start of the 2008 swim season.

If the process to obtain a permit is slowed down do to the Highlands Act we will apply to New Jersey DEP for an extension of the loan distribution start date, which will probably extend the above mentioned job description schedule out one full year allowing us to plan for normal lake activities by the 2009 swim season. The recommended assessments would not change enabling us to accumulate additional contingency funds to offset any inflation or energy increases in the project estimates or any unforeseen cost overruns during the job.

To compliment our project, Hardyston will need to implement a plan to stop storm waters from dumping foreign material into the lake. They have been looking into the engineering and costs but have not yet come to a final plan. We therefore have prepared petition to the township council to get off the sidelines and get it done. Please sign the petition and we could use some help in getting all the members to sign.

In regard to the actual assessment billing to the membership, we propose the following schedule, create a separate billing for $175.00 this year to go out on or about October 15^th 2006 to be payable by February 15^th 2007 this would be the preferred method as the funds would be available sooner and the segregation of the funds is easier to identify for accounting purposes. Future annual assessments would follow the same timeline but would be billed at $150.00. Any unpaid assessments would be charged a late fee as of February 16^th of the year following the assessment.

In addition, everyone should be aware that nonpayment of any assessment is reason for the board to hold back the distribution of badges and cause a member to lose his/her ability to use the lake beaches (Article IV Section 7).

In closing, thanks to all who have worked on the restoration sub-committee and all past and present board members who have helped in getting us to this point. Thanks to all of the general membership for your concern, patience, and support.

Lake Stockholm CC & CA Board of Trustees