High Lonesome Ranch Estates

Property Owners Association

1870 West Prince Road, Suite 47, TucsonArizona, 86705

ANNUAL MEMBERSHIP MEETING

Date: January 20 2007

Place: ElfridaCommunity CenterElfrida, Az.

Social Hour: There was a social hour from 12:00until1:00 PM.

Call to Order: Meeting was called to order at 1:06 PM.

Board Members Present:President Green, Vice President Brown,SecretaryBrowning, Treasurer Malone.

Roll Call: Members of the Association present introduced themselves to the gathering.

Quorum: A quorum of members was present.

Approval of Previous Minutes: A motion was made and passed to accept the minutes of the 2006 meeting.

Treasurer’s Report: Attached.

Opening Remarks: President Green made opening remarks to the members.

Legal Update: Terrie Gent read a legal update from the association’s lawyer as to the status of the current legal actions. Attached.

ARC reviews by a Professional Architect: President Green conducted a discussion on the proposal to have architectural reviews conducted by a professional rather than a committee. A synopsis of some of the comments:

Concern over who would pay. Owner would pay. The approximate cost is $150 per submittal.

Who would have final approval? Architect or Board.

Would everything go to the architect or just primary house and guest houses?

Why do it? Primary purpose to insure that personal prejudices and dislikes do not influence ARC reviews.

It appeared to be an extra cost when building.

We should have enough trust in the elected Board Members to fair and impartial.

Note: This was just a discussion and no ruling/decision was made on this matter.

Delinquent Payments of Annual Dues: Whitney Malone conducted a discussion on delinquent association dues and how the members thought we should address them. We currently have $1,240 in delinquent dues. The general consensus was that the association should take an aggressive approach to the delinquencies to include the filing of liens against delinquent owners.

CC&R Survey: Pat Dour conducted a discussion on a survey that the CCR and ARC committees hope to send to all members. The basic purpose of the survey will be to try and identify areas of the CC&R’s that members believe need to be clarified. It also will help to identify areas that might not ever pass a vote. It is costly and time consuming to accomplish a CCR change and requires a 67% yes vote by all lots. The committee hopes to have the survey ready soon and to primarily send and receive it by email in order to save mailing cost.

Current Committees: Current committees are still in place a will continue to function. Anyone desiring to serve on a committee should email the association through the web site. New committees will be officially appointed as soon as possible.

Election of New Board Member: The ballots were collected and verified against the official roster and then counted.

The votes were 38 votes for Pat Dour and 45 votes for Adele Crouch. Adele Crouch was officially elected to replace Jim Browning on the Board.

Adjourn: The meeting was adjourned at 3:20 PM.

Adele M. Crouch

Secretary

ATTACHED:

Financial Report.

Legal Update.

HIGH LONESOME FIRE DEPARTMENT, INC.

REPORT TO

HIGH LONESOME PROPERTY OWNERS ASSOCIATION

JANUARY 20, 2007

Greetings:

I have been given the assignment of updating and informing the High lonesome Membership as to the status of the High lonesome Fire Department. Basically we are still a fledgling and growing organization with much internal structuring and information dissemination to complete.

In 2004 we applied for and received the status of corporation with the State of Arizona. In addition this year 2006 we applied for and received our non profit and charitable organization status with the state and IRS.

What this means is that we are a fully registered Volunteer Fire Department and can accept funds in the means of grants and donations through solicitation. As of the last HLPO Board meeting where I gave a similar report we received two generous donations from High Lonesome Property owners for which we thank them for their generosity and civic duty. We also have an Arts & Craft fair in the planning stage which is tentatively set for March. These funds will be used for informing the public of our existence, which eventually will lead us into a tax based organization. Funds will also be used to purchase equipment and housing. We do and will gladly accept donations in the form of cash or check at any time.

We also have been, for the past three (3) years, working towards obtaining property from the County for its back taxes. This should come to fruition some time in 2007. This property is located in Gleason near to the old abandoned bar. Our President, Adele Crouch is currently in negotiations to have additional property donated to the Fire Department: 1. approximately six (6) acres south of Gleason, 2. In addition, Four (4) acres at Emory Oaks Lane and Gleason Road. We need at least 4 acres to place a fire house.

We have retained a Fire Chief who has over 20 years experience as a fire fighter and presently holds the rank of Captain and is also a Paramedic. In addition we have a highly trained individual who has front line service on an emergency ambulance with a big city fire department and is a Captain Paramedic.

We have finalized the boundaries of the area for which we will service but they will be subject to change once we meet with different fire departments on those boundaries. Just to give you some idea of the area, using Gleason as the center our north boundary is 10 mi, to the east 6 miles, to the south 9 miles and to the west 6 miles. Keep in mind these are approximate measurements.

I would like to take this opportunity to inform you that we are always looking for volunteers. We will need fire fighters (who will be trained) and it goes without saying volunteers to help with fundraising. If you have an idea to help raise funds, please let us know.

In closing, I am sure you will have questions and will be happy to provide answers.

Submitted on behalf of the Board of Directors:

Adele Crouch, President; Leon Stack, Vice President; Sue Browning, Director; Jack Telles, Director and Myself, Harry Huffman, Secretary Treasurer.

Monroe and McDonough P.C.

ATTORNEYS AT LAW

January 19, 2007

Via E-mail Only:

Jo Green and the

High Lonesome Ranch Board of Directors

Re: High Lonesome Ranch Estates

Ladies and Gentlemen:

I write this letter to provide you with a status update in this matter since my last letter to you of May 5,2006.

I told you previously that a settlement concept had been proposed by the Huffmans and Lou Christiansen’s lawyers wherein the mobile home on the Huffmans’ property would stay in High Lonesome Ranch with modifications, which would bring the home within the definition of a “Modular Home” as that term is defined by the Covenants, Conditions & Restrictions (“CC&Rs”). The Board did give the settlement concept consideration but soon thereafter denied approval of same.

In July 2006, the Huffmans submitted for approval what they considered to be a modular home pursuant to the CC&Rs. After much discussion amongst the Board Members, the Architectural Review Committee, and the lawyers representing all parties, the parties agreed to pursue the construction of a site built home on the Huffmans’ property. At the moment, the lawyers, Tanis Duncan who represents the Huffinans, Jon Saffer who represents Lou Christiansen, and myself along with the Board of Directors and Architectural Review Committee are working through the details to craft a settlement for the Huffmans’ site built home. All sides hope for and are working very hard toward a satisfactory resolution.

In order to keep the parties moving toward resolution, the Honorable Charles A. Irwin, our new Judge, has ordered that the parties present themselves to the Court on or after Thursday, March 15, 2007, for a Settlement Conference. The parties hope to have the Huffman matter resolved prior to March 15, 2007. At the moment, no trial date has been set but there is a further conference scheduled with the Court on Friday, April 13, 2007, at 9 a.m. This conference will be telephonic.

With respect to the Buckley matter, the Buckley’s property was purchased by Lazarus Resources, Inc. Brian Wygle, was named as a party to the current lawsuit but will be

Jo Green and the

High Lonesome Ranch

Board of Directors

dismissed in his personal capacity. However, his company, Lazarus Resources, Inc., will be named as a Defendant. At the moment, the Architectural Review Committee has been corresponding with Mr. Wygle about the improvements and corrections he intends to make to his property. In order to bring this matter to closure once and for all, I have sent a letter to Mr. Wygle’s attorney asking that he allow the Board, the Architectural Review Committee, and an architect to be hired by the Board to inspect the Buckley residence to develop a list of issues so that all parties are on the same page while working toward a resolution. Again, it is our desire to have the inspection and come up with an agreed upon list prior to March 15, 2007.

I would like to commend Jo Green for her tireless efforts in working to bring both of these matters toward a conclusion. In my opinion, she and the other Board Members have worked very hard in an effort to see that High Lonesome Ranch remains a terrific place to live.

Sincerely,

MONROE & McDONOUGH, P.C.

Jeffrey T. Brei

JTB:blh