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HomeMy WebLinkAbout9(B) Sunfish Bay Report Phone 952.447.9800 / Fax 952.447.4245 / www.cityofpriorlake.com 4646 Dakota Street SE Prior Lake, MN 55372 CITY COUNCIL AGENDA REPORT MEETING DATE: MAY 20, 2019 AGENDA #: 9B PREPARED BY: SARAH SCHWARZHOFF, CITY ATTORNEY PRESENTED BY: SARAH SCHWARZHOFF AGENDA ITEM: CONSIDER APPROVAL OF A RESOLUTION APPROVING A DOCK SYSTEM FOR DEDICATED WATERFRONT FOR SUNFISH BAY GOAL AREA AND OBJECTIVE: Public Safety 1. Address threats to community standards through code enforcement. DISCUSSION: Several owners from the Sunfish Bay development have approached the City with a proposal for a dock system on the commonly owned waterfront. The attached April memo provides a summary of the proposal and City staff’s review of the proposal. Since the April memo was provided to the Council, the Postles’ registration action has been completed and a court order issued. The court order terminates the waterfront abutting the Postle property and registers the entire Postle property including the adjacent waterfront. The court order is attached. With the completion of the registration, the back-lot owners are proceeding with the dock system proposal. According to Kelsey Berquam, one of the back-lot property owners who has been spearheading this proposal, the following are the owners involved: • Back-lot owners represented during the Postle registration and planning to join the HOA: Brian and Lindsy Dodge; Jon Roese; Jeremy Baudoin; Mark and Kelsey Berquam; Andrew and Elana Reis; Jon and Suzanne Siskoff. • Back-lot owners planning to join the HOA once it is established: Alan and Marcey Iverson (2 lots); Justin and Monica Nicolay; Troy and Lisa Teske and Mark and Linda Coffman (2 lots). • Back-lot owners not included: Ramsey (3 lots), Space and Chisolm. This would mean 12 of the 17 back lots are included the HOA. See attached map. The back-lot owners have provided a rough draft of bylaws for the HOA. If this proposal is approved the bylaws will need to be updated to be consistent with the resolution approved by the Council. Staff is supporting the dock system proposal and the attached draft resolution. While it does not provide a total solution, it does create a system by which back -lot owners can ensure access to a slip even if the other lakeshore lots have the waterfront abutting their property terminated as the Postles have done. It also provides an HOA to mediate disputes between the parties which have been extensive over the last several years. If the Council is inclined to support the proposal, staff is seeking approval of the draft resolution with any additional revisions or conditions approved by the Council. Additional conditions have been discussed such as limiting the lakeshore lots to two slips and providing alternative enforcement such as fines. The Council may also have additional conditions to add to the resolution. FINANCIAL IMPACT: If this proposal is successful, staff expects a significant reduction in staff and police time needed to address disputes in the Sunfish Bay development. ALTERNATIVES: 1. Motion and second to adopt a resolution approving a dock system for dedicated waterfront for Sunfish Bay. 2. Motion and a second to deny the resolution. RECOMMENDED MOTION: Alternative #1 ATTACHMENTS 1. April Memo 2. Postle Order 3. Map 4. Bylaws Draft 4646 Dakota Street SE Prior Lake, MN 55372 RESOLUTION 19-___ A RESOLUTION GRANTING APPROVAL FOR A DOCK SYSTEM FOR DEDICATED WATERFRONT AT SUNFISH BAY Motion By: Second By: WHEREAS, The Sunfish Bay Development (“Sunfish Bay”) was platted as 31 lots, including 7 lakeshore lots and 24 back-lots. Some of the lots have been combined over the years and there are currently 5 lakeshore lots and 17 back-lots; and WHEREAS, Sunfish Bay includes a street to the west of the lakeshore lots providing access to the lake “access” and a “waterfront” between the lakeshore lots and the lake, which were dedicated for the use of the respective owners of the lots in the plat; and WHEREAS, Sunfish Bay has experienced a long history of disputes between property owners regarding many issues including the use of the access, the use of the waterfront and the placement of docks and boat slips on the waterfront; and WHEREAS, Owners of one of the lakeshore lots filed a registration action and has obtained a Court Order terminating the waterfront abutting their lot. The waterfront abutting the other lakeshore lots and the access currently remain in existence; and WHEREAS, As part of the registration action, numerous lakeshore and back-lot owners became involved in discussions with the goal of reaching consensus on the use of the access and waterfront; and WHEREAS, As a result of those discussions, a proposal was created which would establish a home owners association (“HOA”) with a joint dock system for use of the back -lot owners; and WHEREAS, Any dock system with more than six slips requires a permit from the City; and WHEREAS, The back-lot owners involved in the discussions have requested that the City approve a joint dock system for use of the back-lot owners to be located on the access or waterfront; and WHEREAS, City is willing to grant a dock system approval for the dedicated waterfront, subject to DNR approval, if the conditions set forth in this Resolution are met. NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, MINNESOTA as follows: 1. A dock system for dedicated waterfront is approved for Sunfish Bay subject to all the following conditions: a. The dock system shall not exceed the lesser of: (i) 17 slips; or (ii) one slip per back- lot which is a member of the HOA. b. Upon joining the HOA, the back-lot forfeits any right to install any docks, slips, boatlifts or any other structure on the access or waterfront, except for the approved dock system. Once a back-lot has joined the HOA, whether or not the back-lot has a 2 slip, pays its dues, or later withdraws from the HOA, the back-lot is prohibited from installing any docks, slips, boatlifts or any other structure on the access or waterfront, except for the approved dock system. c. The dock system shall be installed in the configuration set forth in attached Exhibit A. Any change to the configuration of the dock and/or slips must be approved in writing by the Zoning Administrator. d. The dock system shall be located only on the commonly owned access or waterfront and must maintain a minimum separation of 10’ from any riparian lot line as measured at the Ordinary High Water Elevation. The dock system must be installed in a location and manner so as not to interfere with the navigability of the lake. e. An HOA must be established which has the authority to regulate the dock system and slips including use, maintenance and costs. The HOA must provide a reasonable and equitable way for all other property owners in Sunfish Bay to join the HOA in the future. f. All slips in the dock system must be used solely for the personal uses of the property owners. The City is authorized to check boat registrations to confirm personal use. 2. Enforcement and Revocation. a. The HOA shall be responsible for ensuring compliance with this Resolution. b. If this Resolution is violated in the City’s sole discretion, the City may revoke the dock system approval. The City shall not revoke the approval without mailed notice to all the property owners in Sunfish Bay and an opportunity for the property owners to be heard. If the approval is revoked, the dock system must be removed immediately. 3. Effect of Approval a. The number of slips permitted on the waterfront is limited by City Code Subsection 1104.307 (8). Slips on the approved dock system do not count toward this limit. b. This Resolution relates only to the approved dock system and does not relate to the ownership or other uses of the access and/or waterfront. 4. If the following contingencies have not been completed by August 31, 2019, this Resolution shall automatically be null and void: a. An HOA shall be established and HOA documents consistent with this Resolution shall be adopted by the HOA. b. At least 10 of 17 back-lots shall be members of the HOA. c. This Resolution and the HOA documents shall be recorded against all the properties in Sunfish Bay. 5. This Resolution is subject to DNR approval. Passed and adopted by the Prior Lake City Council this 20th day of May 2019. VOTE Briggs Thompson Burkart Braid Erickson Aye ☐ ☐ ☐ ☐ ☐ Nay ☐ ☐ ☐ ☐ ☐ Abstain ☐ ☐ ☐ ☐ ☐ Absent ☐ ☐ ☐ ☐ ☐ ______________________________ Michael Plante, City Manager Sarah Schwarzhoff | Of Counsel | 952.746.2713 | sschwarzhoff@hoffbarry.com MEMORANDUM To: City Council From: Sarah Schwarzhoff, Casey McCabe Date: April 12, 2019 Re: Sunfish Bay Dock System Attorneys representing several property owners in the Sunfish Bay subdivision have requested the City’s opinion on the issuance of some type of joint/consolidated dock system approval related to a Home Owners Association (“HOA”) which would include some, but not all, property owners within the subdivision. Staff appreciates the progress but has several concerns, in particular: avoiding excessive slips on the lake; not limiting any property owner’s rights without their consent; and the effect of such an approval on the other fifteen dedicated waterfronts on the lake. In order to address these concerns staff proposes an “Approval for Dock System for Dedicated Waterfront”. This would be an approval issued by the City Council by Resolution. It would be available only for dedicated waterfront which can meet all of the conditions set forth by the City Staff acknowledges that the proposed solution is not a total solution. Staff would prefer that all property owners in the subdivision agree to any such solution. However, staff does see this as a step in the right direction. Although all property owners are not currently involved, the approval would leave room for them to join in the future. Staff fears that if the City does not take action until all property owners sign off that a solution may never be reached. In addition, the approval allows the City to impose additional conditions on the waterfront which will benefit the City and other lake users, conditions which the City could not otherwise impose. Staff proposes that an HOA including at least half of the seventeen back lot owners be established before an application is submitted. This would ensure that the property owners have done the work and reached agreement before the City expends time on review and consideration. Once an application is received it would be taken to the Council for consideration. Staff proposes that the approval be in the form of a Council Resolution which would be recorded against all of the properties in the subdivision whether or not a part of the HOA and would include the following conditions:  Number of slips – Number of slips on the dock system shall not exceed (i) 17 slips; or (ii) one slip per back lot member of the HOA, whichever is fewer. This would limit the number of slips currently to those properties which are part of the HOA but would allow slips to be added for each back lot as they join the HOA. Staff proposes a maximum of 17 slips as that is the number of back lots, however, that maximum number could be further limited based on the factors the City considers when reviewing a dock permit such as navigability, water depth, lake traffic, water quality and ecology, and effect of noise, light and fumes. Once a back lot joined the HOA, Hoff Barry, P.A. | 775 Prairie Center Drive, Suite 160 | Eden Prairie, Minnesota 55344 | hoffbarry.com | 952.941.9220 whether or not it later withdraws, the back lot would be prohibited from installing any docks or slips other than the approved dock system.  Lakeshore slips – All lakeshore lots would be limited to a maximum of 2 slips.  Configuration – The approval would include a specific configuration. Any changes to the configuration would need to be approved by Zoning Administrator.  Location – The dock system would need to be located on commonly owned waterfront and maintain a minimum separation of 10’ from any riparian lot line as measured at the Ordinary High Water Elevation. The location could be limited to certain areas or prohibited from certain areas depending on staff’s review of the dock configuration, lakeshore, lake depth and other relevant factors. The approval would not guaranty a specific location as other property owners not included in the HOA would maintain rights to the dedicated waterfront.  Access lot – The subdivision would need to have an access lot of at least 40 feet in width to allow access by back lot owners to the dock system.  HOA – The HOA must include at least 50% of the back lot owners. The HOA must have authority to regulate the dock system and slips including use, maintenance and costs. The HOA must provide a reasonable and equitable way for all other property owners in the subdivision to join the HOA in the future.  Slip use - All slips in the dedicated waterfront must be used solely for the personal uses of the property owners. The City will be authorized to check registrations and the HOA shall enforce this requirement. The City may impose fines or revoke the approval if the slips are not used for personal use.  Ownership/Use – The approval would clearly state the City is taking no position on the ownership or use or rights related to the dedicated waterfront. The approval would also clearly state that the City is not excluding anyone from using the waterfront.  Any other conditions as determined by the City. There is an open question of how the dock system would be counted toward the total number of slips permitted on the waterfront. Before issuing any approval, the City will need to answer this question. The Sunfish Bay waterfront is limited to 24 total slips based on the maximum number of slips allowed (1 slip per 18.75’ of shoreline). The City takes no position on who has a right to those slips, the City only addresses total number. The City could include the approved dock system in the 24-slip limit. This would maintain the current limit but might mean that the dock system could not be installed if others install their slips first. Alternatively, the City could exclude the dock system from the limit, but this could result in more than 24 slips on the waterfront. Staff recommends excluding the dock system from the 24-slip limit. While this does allow for the possibility of excess slips, it ensures that the dock system can be installed regardless of what other slips have been installed. In addition, staff believes that the risk of significant additional slips is limited. First, the lakeshore lot owners will be limited to 2 sips each. Second, several of the back lots are unoccupied or have not had any slips for several years. Third, the cost of installing multiple slips and/or docks will likely limit the number of slips installed. One additional difficulty that remains until all lot owners are part of the HOA is enforcement. The City can include enforcement procedures in the Resolution approving the dock system; however, it would only be effective against those lots that are part of the HOA. If the City proceeds with this idea staff will need to work with the property owners to address enforcement and risks associated with any inability to enforce. Hoff Barry, P.A. | 775 Prairie Center Drive, Suite 160 | Eden Prairie, Minnesota 55344 | hoffbarry.com | 952.941.9220 While staff acknowledges the limitations in the proposed system, staff believes it is a step toward solving the many issues in the Sunfish Bay subdivision. Staff seeks direction from the Council on this matter. 7o—cv-1a-197 Filed in District Court State of Minnesota April 16,2019 STATE 0F MINNESOTA DISTRICT COURT COUNTY 0F SCOTT FIRST JUDICIAL DISTRICT CASE TYPE:OTHER CIVIL -—TORRENS In the Matter ot‘the Agaplication of Court File No;70-CV-i 8497 Roman Postle and Co , Goracke-Posfle as jails;tenants ORDER AND DEGREE ’’0F REGISTRATION T0 Register Title to Certain Land The abovc~entitled matter came on for hearing on April 10,2019,upon the motion of the Applicants at the Scott County Govcnnnent Center in the City 0f Shakopee.James B.I'Iovland, Esq.appeared cm bchalfof Appiicants.The Court having considered the Application,the Reports of'the Examiner and Surveyor,the evidence adduced by {he Applicants and being fully advised in the premises,finds: 1.The estimated market value of the premises hereinafter described,exclusive of improvements,according to the last official assessment thereof is $365,000; 2.That ail of the requirements of law with respect to the Appiication and any amendments thereto have been compiieti with and that a1}of the Defendants in this proceeding have been served with process as required by law or have cansented t0 the registration; 3.A11 Defendants in this preceeding have been served either by personal service with the Summans herein or by publication. 4.That no Answer 0r Notice oprpearance has been filed in this matter except: a.an Answer and Counterclaim was filed by Defiandants,David F. Calski,Jon Andrew R0333,Jammy M.Baudoin,Mark Berquam, Kelsey Berquam,Joseph K.Kempcr,John K.Siskoff,Suzanne K.Siskof‘f,fik/a/Suzanne K.Q’Regan,Andrew Reis,Eiena Reis,Yorway Custom Home Builders,Ina,Brian Dodge and Lindsy Dodge;and b‘an Answer was fried 0n behalf 0f Aian Iverson and Marcey lvcrson (the parties in this 4.3.and b.hereof shail be referred t0 as the “Answering Parties”; 5.The Answers 0f Defbndantsi David F.Celski,Yomay Custom Homes,Ina,and Joseph K.Kemper have baen withdrawn.The other Answering Parties named in paragraph 4 above have entered into a Stipuiation with the Applicants.Pursuant t0 the Stipuiation,said 70-CV-18-197Electronically Served 4/16/2019 12:42 PM Scott County, MN 70-CV—1 8-1 97 Answering Parties haw?withdrawn their answers,consented t0 the registration of the Applicants’ ntlc‘to the land descnbed m the Appiication and stipulated to certain facts.Said stipulation (“Snpulation”)has been filed with the Court; 6.Defendant,Donald James Space,Jr.served a motion to dismiss this registration proceeding.In a November 2018 Order issued by Judge Stacey,this Court denied the motion and put Defendant Sgace 0n notice that he was required to file an answer but Defendant Space failed to do 30.Defendant Space appeared at the hearing withczut representation and in an Order,dated April 10,2019,Defendant Donald James Space,Jr.was found by the Court to be in default in the action; 7.On June 22,201 8,a pro se response t0 the Application was filed which was signed by the following persons named as defendants in the summans:Mark Steven Coffman,Linda Lee Coffman,Craig R.Chishoim,Melissa A.Chisholm,John B.Ramsey,Iris A.Ramsey and Donaid James Space; a.Mark Steven Coffinm and Linda Lee Coffinan (“Cofihxans”) appeared at the hearing pro 3c and afier negotiations with Applicants,agreed before the Court to be bound by the above. referenced Stipulatien,withdraw their above-refercnccd pm se regponse filed June 22,2018 objecting to the Application,and consented t0 the Applicants proceeding by dcfauit as t0 them. b.Craig R.Chisholm and Melissa H.Chisholm faiied t0 appear at the hearing and the Court aliowed the Applicants to proceed by default as t0 them in an Order dated April 10,2019; c.John B.Ramsey and Iris A‘Ramsey faiicd to appear at the hearing and the Court allowed the Appiicauts t0 {yroceed by defauit as m them in 2m Order dated April 12,201 9;and d.As provided in paragraph 6 above,Donald james Space,Jr.was found t0 be in default herein. 8.During the pendency of this proceeding,Applicants have encumbered the Premises by executing and delivering {o United Wholesale Mortgage,a Mortgage,dated February 22,2018, recorded February 26,2018,as Document A1042632; 9.During the pendency 0f this proceeding,the Applicants satisfied the Mortgage against Lots 2 and 3 and the East 15.0 feet of Lot 4,Sunfish Bay,Scott County,Minnesota,in favor 0f the Riveriand Bank,dated March 1,2017,filed for record March i,201 7 as document A102 l 202.The satisfaction of said Mortgage in favor of Riverland Bank was filed for record on March 9,201 8,as Document A10431‘77. 10.The Mortgage,dated November 13,1975,filed for record cm November 19,1975, as document 17834 in favor of Knutson Mortgage and Financial Computation,as assigned by 70-CV-18-197 70-CV—1 8-197 Assignment,dated December 10,1975,filed for record 0n December 16,1975,as dccument {48129 to the Federai Nationai Mortgage Association (“FNMA”)has been duly satisfied by the Satisfaction made by Knutson Mortgage Corporation,dated December M,1995,filed for record on January 2,1996,as document 363841. 11.The Premises described in this Order and Decree of Registration are occupied by Roman Postie and Cary Goracke~P03tie,husband and wife,as joint tenants; 12.The land that the Applicants seek to register abuts Prior Lake,a navigabie body 0f water in the State 0f Minnesuta; 13.The Court finds that Applicants’property is subject t0 the proprietary and sovereign rights of the State ofMinnesota in all that portion offixc land lying beiow the natural ordinary high watermark 0f Prior Lake;not intending,however,t0 deprive the fee owners of the usual riparian rights that attach to the iand riparian t0 a navigable body ofwatcr incident to the:ownership thereof; 14.Any encroachment by the tile outlet over eastern boundary 0f the land being registered noted in the Repon of the Surveyor exists by suffcmnce; 15.Any encroachment by a utility shed over the western boundary of the land being registered noted in the Report 0f the Surveyor exissts by sufferance; 16.Any encmacinnent by two block retaining walls over the western baundary of the land being registered noted in the Report ofthe Surveyor exists by suffcrancc; 1?.Any encroachment,upon the land being registered by a rock retaining wali extending from the property to the east exists by suffemnce; 18.The plat t0 Sunfish Bay,Scott County,Minnesota dedicates an area along the shore of Prior Lake designated as a Waterfront “far the joint use ofthc respective owners fats of Sunfish Bay.”The dedication creates an easement over the land covered by {he Waterfront; 19.The Applicants seek to register the portion ofthe Waterfmnt that abuts Lots 2 and 3 and the East 15.0 feet 0f Lot 4 in Sunfish Bay,Scott County,Minnesota free and clear 0f the Waterfront easement (the “Strip”).A survey submitted by Applicants estabiishes the legal! description of the Strip as follows: Beginning at the Northeast comer ofLot 2,said plat of Sunfish Bay; thancc northeriy,along the northerly extension ofthc easteriy line of said Lot 2,a diStance 0f 10.00 feet,more or less,to the shoreline of Prior Lake;thence westerly,along said shoreline to itzs intersection with the northerly extension of the westerly line of said East 15.00 feet 0f Lot 4;thence southerly aiong said northerly extgnsion of said westerly Zine,a distance of 8.00 feet,mom or less, to the northwest comer of said East 15.00 feet ofsaid Lot 4;thence 70-CV-18-197 70-CV-1 8—1 97 souflleasteriy along the northerly iine of said Lot 4,said Lot 3 and said Lot 2,t0 the point of beginning; 20x Because the Pasties own the 33nd on one side of said porticm 0f the Waterfront and Prim Lake is on the other side,the Pustles own the fee t0 said portion.Also,the Waterfront has been quit claimed to them by all the descendants of the persons who platted Sunfish Bay.By Stipulation,the Answering Parties and the Coffinans have agreed that Posfles own the fee to the Strip.The easement created by the piat over the Strip has tcnninated by reason of abandonment, destruction ofmost Ofthc scrvient estate by rising watcrg no longer saves its intended purpose, the forty year rule in me Marketable Title Act,the reiocaticm of the boundary of the easement under the doctrine of practical iocation of boundafies so that the boundaries of the easement do not include the Strip.A1303 by the Stipuiation,the Answering Parties and the Coffinans have released and agreed to transfer to Applicants any interest they may have in the Snip; 21.Through the Stipulation,the Answering Parties and the Cotfinans have set forih facts that establish that any casement over the Strip has terminated; 22.During the pendent)!of this proceeding,the Defendant,Yorway Custom Home Builders,1110.,conveyed its interest in the ?remises to Defendants,Brian Dodge and Lindsy Dodge by a warranty deed,dated June 29,20'!8,which was filed for record on July 16,201 8 as document A1050139;and 23.Applicants have wifiadmwn and waive the request in Paragraph I of the Application to fix and establish the property baundary lines ofthe Premises. NOW,THEREFORE,IT iS HEREBY ORDERED,ADJUDGED AND DECREED,as follaws: 1.That a default as t0 each.Defendant named in the Summons and any amendments or supplements thereto and ail heirs and dcvisces of any of the persons named therein who are deceased and “ail Other persons or pariics unknown,claiming any right,title,estate,lien 0r interest in the real estate hereinafter described:is entered in the above-emitled action;and 2.That the Orders made:by this Court on April 10 and April 12,2019,are hereby amended ab initio m provide that the parties t0 the June 22,20}8 pro se respansc to the Application, Mark Steven Cotfinan,Linda Lee Coffman,Craig R.Chisholm,Melissa A.Chishelm,John 13. Ramsey,Iris A.Ramsey and Donaid James Space,are determined t0 be in default herein,and not dismissed,for the reasons set forth in Findings 6 and 7 above,so as to ailow the Applicants t0 proceed with the final hearing by dcfauit‘ 3.That Roman Postle and Cory Gorackc—Postie,husband and wife,as jaint tenantfi, whose post office address is 4322 Bass Street SE,Prior Lake,County of Scott,State ofMinnesota, are the owners of an estate in fee simpic of land in the County of Scott,State of M§m1csota, described as foliows: 70-CV-18-197 70-CV-1 8-1 97 Lots 2 and 3 and the East 15.00 feet ofLot 4,Sunfish Bay,Scott Cnunty, Minnesota,together with {he part of the Waterfront dedicated,on the plat of Sunfish Bay,Scott County,Minnesota,filed October 6,1925,that abuts (m said Lots 2 and 3 and East 15.00 feet 0f Lot 4 legally described as follows: Beginning at file Northeast comer of Lot 2,said plat of Sunfish Bay;thence northcriy,along the northerly extension 0f the easterly line of said Lot 2,a distance of 10.00 feet, more or less,t0 the shoreline ofPrior Lake;thence westeriy, along said shoreline to its intersection with the northerly extension 0f the westerly line of said East 15.00 feet 0f Lot 4;thence southerly aiong said northerly extension of said westerly line,a distance 0f 8.00 feet,more or less,t0 the northwest corner 0f said East 15.00 feet of said Lot 4;thence southeastcrly aicng the northerly line of said Lot 4,said Lot 3 and said Lot 2,t0 the point of beginning. 4.That the Waterfront easement over the Strip has tenninated. 5.That the interest in land be brought under the provisions and operations ofChapter 508,Minnesota Statutes,and an acts amvendamry thereof,and that the title thereto be confirmed and regismred as provided in and by said act;subject,however t0 the fallowing only: a.T0 any rights or encmnbrances which may be subsisting as Specified in Minnesnta Statutes Section 508.25. b.To the following rights 0r encumbrances: (i)The proprietary and severeign rights of the State of Minnesota in all that portion ofland lying below the natural ordinary high watermark 0f Prior Lake;not intending,however,t0 deprive the fee owners oftheusual riparian rights that attach to the land to a navigable public body 0f water incident t0 the ownarship thereof. (ii)I’elpctual easement for public roadway sanitary sewer, watermain,sierra drain and utility purposes in favor 0f the City 0f Prior Lake,established by Easement,dated March 24,1975,filed for record March 27,1975,as Document 144597. (iii)Perpetual easement fer public roadway,sanitary sewer, watermain,storm drain and utility purposas in favor 0f the City of Prior Lake,established by Easement,dated May 27,1975,filed fer record January 7,1976 as Document 148425. (iv)Perpcmal casement for sanitary sewer and watcrmain purposes in favor of the City 0f Prior Lake,established by Final 70-CV-18-197 6,That,Appiicants 32ml!fife a registered 13nd survey cnncurmnt with the filing of the 70-CV-1 8-1 97 Certificate as to Parcel Nix 93,dated August 13,1976,flied far record August l7,1976,as {Bocumcnt 35 1452. (v)Perpetuai fiasemcni for saniiary sewer,watermain,mom: drain and utiiity purymses in favor of the City of Prim Lake, estabiished by Finai Certificate as 10 Parcef N0.94,dated August 17,1976,as Document 151453 . (vi)?metuai easemwt for pubiic roadway,sanitary sewer, watcnnain,storm drain and utility purposes in favor 0f thg City Cf Prim Lake,cstabl§3hcd by Final Cenificatc as t0 Farm}N0.118, dated Augugt 12,W763,filed for record Augus:1?,1976,as Decumeni 151454“ (vii)Pcz‘petuai easement for roadwaysg sanitary sewer, watennain,storm drain and utiiity purpnscs in favor 0f the City of Prim Lake,egtablifihcd by Partial Certificate 0f Compietiom dated October 133 1983,flied fur ream!May 31,1985,as Dwumcnt 210705. (viii)Mangage in favor of United Wholesaie Marigage,dated February 22,2918,recorded Febmary 26,20m,as document A1042632. Decree 0f Kegistmtiun. ’7.That Roman ?Gsfie and Cory Gorackeui’mila are 18 years 0f age 0r older,and are under no legal disability,are under no iagai incapacity,and are married to each mhen Dated at ghaknpee,Minnesota,(m this W day Ofw n,2019. 04/16/2019 10334208 AM sddg'e of District Court ' ‘ . ' '#5 Décree entered this £9 day 0f W4flq]9 2019,aim o’clock QM. ms LEM?w Dixtrict Calm Administer AP {5103150 mfififiy‘3 a “?QOLL By:am k W ”2‘Dcpufiy UBRYCEDHUEMOELLER Examines 0F “rings 70-CV-18-197 Scott County Date: 4/26/2019 0 60 120 180 24030Feet 1 in = 188 ft Scott County 1 BY-LAWS OF SUNFISH BAY DOCK ASSOCIATION, INCORPORATED Things to add : • Sunfish Bay Property owners cannot rent or lease out their assigned slip to non residents • only the residents of Sunfish bay can have a boat slip. • Sunfish Bay Dock association members will be assigned a slip number by the board. • Vessels must be licensed to the sunfish bay property owner or approved rental dwelling renters. • The HOA cannot lease out a dock slip to any non-resident. • Sunfish Bay Dock Association has an initial assessment / joining fee of approximately $3500 for any lots not grandfathered in with the initial investment. • Lots grandfathered in are as follows 9,10,11,12,13,14,15,20,21,24,25,26,27,28,29,30,31 • Any lots not currently in Sunfish Bay Dock Association can buy in at any time per the initial investment • Annual fee will be determined annually by the board members. • Failure to pay the annual fee will result in loss of use of the s hared dock. o Backpay will be due to gain access again. • Sunfish Bay Dock Association membership entitles you to use the shared dock and have a boat slip. • Lifts are personal property o Installation & removal of personal property will be homeowners responsibility ARTICLE I NAME AND LOCATION The name of the corporation is the Sunfish Bay Dock Association, Incorporated (hereinafter referred to as “Association”). ARTICLE II PURPOSE The purposes of the Association are to own, manage, maintain and preserve certain property adjacent to Prior Lake, Scott County, Minnesota and to own, rent, manage, maintain 2 and preserve personal property including recreational equipment, docks and mooring facilities, and ancillary equipment and facilities, and to own, acquire, and rent equipment and supplies necessary, incidental or desirable for the foregoing purposes, all for the primary benefit of members of the Association. The Association shall have the authority to enter into such contracts, leases or agreements for any legal purpose including the purchase of its own stock as it deems desirable. ARTICLE III DEFINITIONS Section 1. “Association” shall mean and refer to Sunfish Bay Dock Association, Incorporated. Section 2. “Properties” shall mean and refer to that certain real property described as: [Include legal descriptions for all lots in Sunfish Bay] Section 3. “Common Area” shall mean and refer to all real property acquired by the Association for the common use and enjoyment of the members. Section 4. “Lot” shall mean and refer to any lot shown upon any recorded plat of survey of the Properties. Section 5. “Owner” shall mean and refer to the record owner, whether one or more persons or entities, of the fee simple title to any lot, including contract purchasers, but excluding those having such interest merely as security for the performance of an obligation. Section 6. “Registered Office” shall mean the office of the Association located at Edina, Minnesota, and such other office as the Board of Directors may from time to time determine. Section 7. “Member” shall mean and refer to those persons who are shareholders of stock in the Association, and in accordance with the Articles are thereby members of the 3 Association. Members not current with respect to assessments or dues are subject to forfeiture of membership in accordance with the By-Laws. ARTICLE IV MEMBERSHIP Section 1. Eligibility for Membership. Application for voting membership shall be open to any current Property owner. Membership is granted after completion and receipt of a membership application and annual dues. All memberships shall be granted upon a majority vote of the Board. Section 2. Annual Dues. The amount required for annual dues shall be $100 each year, unless changed by a majority vote of the members at an annual meeting of the full membership. Continued membership is contingent upon being up-to-date on membership dues. Section 3. Rights of Members. Each Member shall be eligible to appoint one voting representative to cast the Member’s vote in association elections. Section 4. Resignation and Termination. Any Member may resign by filing a written resignation with the Secretary. Resignation shall not relieve a Member of unpaid dues, or other charges previously accrued. A Member can have their membership terminated by a majority vote of the membership. Section 5. Non-voting Membership. The Board shall have the authority to establish and define non-voting categories of membership. ARTICLE V MEETINGS OF MEMBERS 4 Section 1. Regular Meetings. Regular meetings of the Members shall be held quarterly, at a time and place designated by the President. Section 2. Annual Meeting. The first Annual Meeting of the members and election of Directors shall be held on the second Thursday of February in 2019 at 7:00 p.m. Each subsequent regular annual meeting of members shall be held on the second Thursday of February in each year thereafter at 7:00 p.m. If the day for the annual meeting of the members is a legal holiday, the meeting will be held on the first day following which is not a legal holiday. Section 3. Special Meetings. Special Meetings of the members may be called at any time by the President or by the Board of Directors, or upon written request of the members who are entitled to vote one-third (1/3) of all the votes and shall be held at 7:00 p.m. Section 4. Notice of Meetings. Written notice of each meeting of the members shall be given by, or at the direction of, the Secretary or person authorized to call the meeting, by delivering written notice either personally or by mail at least 10 days before such meeting to each voting member entitled to vote thereat, at the address last appearing on the books of the Association for the purpose of notice. Such notice shall specify place, day and hour of the meeting, and in the case of a special meeting, the purpose of the meeting. Section 5. Quorum. The presence at the meeting of a majority of members entitled to cast, or of proxies entitled to cast votes, shall constitute a quorum for any action except as otherwise provided in the Articles of Incorporation, or these By-Laws. If, however, such quorum shall not be present or represented at any meeting, the members entitled to vote thereat shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum as aforesaid shall be present or be represented. 5 Section 6. Proxies. At all meetings of Association shareholders, each shareholder member may vote in person or by proxy. All proxies shall be in writing and filed with the Secretary. Every proxy shall be revocable. ARTICLE VI BOARD OF DIRECTORS Section 1. Number. The affairs of this Association shall be managed by a Board of at least three (3) but not more than seven (7) directors, who must be members of the Association. Section 2. Terms. All Board members shall serve two-year terms, but are eligible for re-election for up to five consecutive terms. Section 3. Meetings and Notice. The Board shall meet at least quarterly, at an agreed upon time and place. An official Board meeting requires that each Board member have written notice at least two (2) weeks in advance. Section 4. Board Elections. New directors and current directors shall be elected or re- elected by the voting representatives of Members at the annual meeting. Directors will be elected by a simple majority of Members present at the annual meeting. Section 5. Election Procedures. A Board Development Committee shall be responsible for nominating a slate of prospective Board members representing the Association’s diverse constituency. In addition, any member can nominate a candidate to the slate of nominees. All members will be eligible to send one representative to vote for each candidate, for up to ten (10) available positions each year. Section 6. Quorum. A quorum must be attended by at least forty percent (40%) of Board members for business transactions to take place and motions to pass. 6 Section 7. Removal. Any director may be removed from the Board, with or without cause, by a seventy-five percent (75%) vote of the members of the Association entitled to vote. In the event of death, resignation or removal of a director, their successor shall be selected by the remaining members of the Board and shall serve for the unexpired term of their predecessor. Section 8. Compensation. No director shall receive compensation for any service he or she may render to the Association. However, any director may be reimbursed for actual expenses incurred in the performance of the duties of such director. Section 9. Action Taken Without a Meeting. The directors shall have the right to take any action in the absence of a meeting which they could take at a meeting by obtaining the written approval of all of the directors. Any action so approved shall have the same effect as though taken at a meeting of the directors. ARTICLE VII NOMINATION AND ELECTION OF DIRECTORS Section 1. Nomination. Nomination for election to the Board of Directors shall be made by a Board Development Committee. Nominations may also be made from the floor at the annual meeting. The Board Development Committee shall be appointed by the Board of Directors prior to each annual meeting of the members, to serve from the close of such annual meeting until the close of the next annual meeting. The Board Development Committee shall make as many nominations for election to the Board of Directors as it shall in its discretion determine, but not less than the number of vacancies that are to be filled. Such nominations may be made only from among members. Section 2. Election. Election to the Board of Directors shall be by secret written ballot. At such election the members or their proxies may cast, in respect to any vacancy, as many votes 7 as they are entitled to exercise. The person receiving the largest number of votes shall be elected. ARTICLE VIII MEETING OF DIRECTORS Section 1. Regular Meetings. Regular meetings of the Board of Directors shall be held when called by the President of the Association or by any two directors, after not less than three (3) days’ notice to each director. Section 2. Quorum. A majority of the number of directors shall constitute a quorum for the transaction of business. Every act or decision done or made by a majority of the directors present at a duly held meeting at which a quorum is present shall be regarded as the act of the Board. ARTICLE IX POWERS AND DUTIES OF THE BOARD OF DIRECTORS Section 1. Powers. The Board of Directors shall have power to: (a) adopt and publish rules and regulations governing the use of the Common Area and facilities, and the personal conduct of the members and their guests thereon, and to establish penalties for the infraction thereof; (b) suspend the voting rights and right to use of the recreational facilities of a member during any period in which such member shall be in default in the payment of any assessment levied by the Association. Such rights may also be suspended after notice and hearing, for a period not to exceed sixty (60) days for infraction of published rules and regulations; (c) exercise for the Association all powers, duties and authorities vested in or delegated to this Association and not reserved to the membership by other provisions of these By-Laws, or the Articles of Incorporation; 8 (d) to do all lawful acts necessary and expedient to the conduct of the business of this Association that are not conferred upon the shareholders by these By-Laws, or by the Articles of Incorporation, or by Statute; (e) employ a manager, an independent contractor, or such other employees or firms as they deem necessary, and to prescribe their duties. Section 2. Duties. It shall be the duty of the Board of Directors to: (a) cause to be kept a complete record of all its acts and corporate affairs and to present a statement thereof to members at the annual meeting of the members, or at any special meeting when such statement is requested in writing by one-third (1/3) of the members who are entitled to vote: (b) supervise all officers, agents and employees of this Association, and to see that their duties are properly performed; (c) with respect to assessments to: (1) fix the amount of the annual assessment against each member at least thirty (30) days in advance of each assessment period; and (2) send written notice of each assessment to every member subject thereto at least thirty (30) days in advance of each annual assessment period; and (d) issue, or to cause of office to issue, upon demand by any person a certificate setting forth whether or not any assessment has been paid. A reasonable charge may be made by the Board for the issuance of these certificates. If a certificate states an assessment has been paid, such certificate shall be conclusive evidence of such payment; (e) procure and maintain adequate liability insurance on property owned by the Association; (f) cause all officers or employees having fiscal responsibilities to be bonded, as it may deem appropriate; (g) cause the common areas, and amenities to be maintained; 9 (h) charge, in its discretion, reasonable fees for the use of any facility situated upon the common area, including but not limited to docking fees and recreation fees. Section 3. Issuance of Shares. The Board of Directors are authorized and directed to issue shares of the Corporation only as hereinafter set forth: (a) the shares of stock of this corporation will be evidenced by certificates of common stock, and the number of shares authorized to be issued shall be 1,000. (b) Each owner of a lot described in Article II, Section 2, shall have the right, but shall not be required to, purchase one (1) share of common stock of the Association. Owners of two (2) or more lots may, but shall not be required to, purchase two (2) or more shares. (c) The initial price of each share of stock shall be $100 for a period of thirty (30) days from the date when all lot owners have been notified of the formation of the Association by letter or posted notice at a location determined by the Board of Directors. The initial assessment per member shall be $_______; the minimum annual assessment shall be $________. (d) Following the thirty (30) day period specified in Paragraph 3(c), the price of each share of stock shall be $500. (e) No share of stock shall at any time be allowed to be sold except by or to the Association. Section 4. Transfer of Shares. The stock of this corporation is non-transferable. If any shareholder herein shall sell his lot or dwelling, such share of stock shall revert back to and become the property of the corporation as treasury stock, held by such corporation for resale to the successor purchaser of that particular lot or dwelling. The corporation shall not be obligated to pay the previous owner of said reverted certificate of stock any purchase price since sale of his or her lot or dwelling by an owner extinguishes his or her right of membership. ARTICLE X OFFICERS AND THEIR DUTIES 10 Section 1. Enumeration of Offices. The officers of the Association shall be a president and vice-president, who shall at all times be members of the Board of Directors, a secretary, and a treasurer, and such other officers as the Board may from time to time be by resolution created. Section 2. Election of Officers. The election of officers shall take place at the first meeting of the Board of Directors following each annual meeting of the members. Section 3. Term. The officers of this Association shall be elected annually by the Board and each shall hold office for one (1) year unless he or she shall sooner resign, or shall be removed, or otherwise disqualified to serve. Section 4. Special Appointments. The Board may elect such other officers as the affairs of the Association may require, each of who shall hold office for such period, have such authority, and perform such duties as the Board may, from time to time determine. Section 5. Resignation and Removal. Any officer may be removed from office with or without cause by the Board. Any officer may resign at any time by giving written notice to the Board, the President or the Secretary. Such resignation shall take effect on the date of receipt of notice or at a later time specified therein, and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Section 6. Vacancies. A vacancy in any office may be filled by appointment by the Board. The officer appointed to such vacancy shall serve for the remainder of the term of the officer he or she replaces. Section 7. Multiple Offices. The offices of the Secretary and Treasurer may be held by the same person. No person shall simultaneously hold more than one of any of the other offices except in the case of special offices created pursuant to Section 4 of this Article. Section 8. Duties. The duties of the officers are as follows: 11 (a) President. The President shall preside at all meetings of the Board of Directors; shall see that orders and resolutions of the Board are carried out; shall sign all leases, mortgages and deeds. (b) Vice-President. The Vice-President shall act in the place and stead of the President in the event of his or her absence, inability or refusal to act, and shall exercise and discharge such other duties that may be required of him or her by the Board. (c) Secretary. The Secretary shall record the votes and keep the minutes of all meetings and proceedings of the Board and of the members; keep the corporate seal if any of the Association and affix it on all papers requiring said seal; serve notice of meetings of the Board and of the members; keep appropriate current records showing the members of the Association together with their addresses, and shall perform such other duties as required by the Board. (d) Treasurer. The Treasurer shall receive and deposit in appropriate bank accounts all monies of the Association and shall disburse such funds as directed by resolution of the Board of Directors; shall sign all checks of the Association; keep proper books of account; cause an annual audit of the Association books to be made at the completion of each fiscal year; and shall prepare an annual budget and a statement of income and expenditures to be represented to the membership at its regular annual meeting, and deliver a copy of each to the members. Section 9. None of the officers of the Association shall sign any notes or bonds for others without first securing the written consent of other officers of this Association, or pursuant to corporate resolution. ARTICLE XI COMMITTEES Section 1. Committee Formation. The Board may create committees as needed, such as fundraising, housing, public relations, data collection, etc. The Board chair appoints all committee chairs. 12 Section 2. Executive Committee. The four officers serve as the members of the Executive Committee. Except for the power to amend the Articles of Incorporation and By- Laws, the Executive Committee shall have all the powers and authority of the Board of Director s in the intervals between meetings of the Board of Directors, and is subject to the direction and control of the full Board. Section 3. Finance Committee. The Treasurer is the chair of the Finance Committee, which includes three other Board members. The Finance Committee is responsible for developing and reviewing fiscal procedures, fundraising plans, and the annual budget with staff and other Board members. The Board must approve the budget and all expenditures must be within budget. Any major change in the budget must be approved by the Board or the Executive Committee. The fiscal year shall be the calendar year. Annual reports are required to be submitted to the Board showing income, expenditures, and pending income. The financial records of the organization are public information and shall be made available to the membership, Board members, and the public. Section 4. Board Development Committee. A Board Development Committee shall have the duties as provided in these By-Laws. ARTICLE XII BOOKS AND RECORDS The books, records and papers of the Association shall at all times, during reasonable business hours and subject to reasonable notice, be subject to inspection by any member. The Articles of Incorporation and the By-Laws of the Association shall be available for inspection by any member at the principal office of the Association, where copies may be purchased at reasonable cost. 13 ARTICLE XIII SHARE CERTIFICATES The share certificates of the Association shall be in a form approved by the Directors in accordance with the statute and shall be registered on the books of the Association as they are issued – they shall exhibit the holder’s name, number of shares and shall be signed by the President or Vice-President and the Secretary. ARTICLE XIV ASSESSMENTS Each member is obligated to pay to the Association annual and special assessments. Annual assessments shall be determined by the Board of Directors, and shall be posted as of February 15th of each year. Annual assessments shall be due and payable as of March 15th. Annual assessments unpaid by members on April 15th, shall be delinquent and the membership of the member in the Association shall automatically terminate, and his or her share of stock shall be automatically cancelled. An owner whose membership has been cancelled may apply again for membership under the same rules as for other applicants. Undeveloped lots shall be assessed at ten percent (10%) of the assessment for a lot with a dwelling. A dwelling situated upon two (2) lots shall be assessed as one improved lot. Special assessments which are not paid when due shall become delinquent, and result in cancellation of membership as in the case of annual assessments if unpaid within sixty (60) days after posting. Before assessment, special assessments shall be recommended by the Board to the membership authorized to vote, and upon approval by a majority of such membership, shall then be assessed. 14 No Association member may waive or otherwise escape liability for the assessments provided for herein by non-use of the Common Area. Assessments are not pro-rata with respect to periods of use but must be paid in full. Each new member shall pay the assessments due at the time of purchase of the share of stock in the Association. ARTICLE XV AMENDMENTS Section 1. These By-Laws may be amended, at a regular or special meeting of the members, by a vote of four-fifths (4/5) of all members in person or by proxy, except that with respect to deleting any lot, amendment shall require one hundred percent (100%) assent of all members for such deletion. Section 2. In the case of any conflict between the Articles of Incorporation and these By- Laws, the Articles shall control. ARTICLE XVI BOAT AND DOCKING FACILITIES Section 1. At the Directors’ annual meeting after the shareholders’ annual meeting, said Directors shall appoint a Dock Committee for one (1) year terms, designating one as Chairman, one as Vice-Chairman. The number on said committee shall be determined by the Dir ectors. The Directors shall only appoint to this committee those members of the Corporation who pay annual slip rental fees. The acquisition, installation and maintenance of boat docking facilities and all matters relating to type of boats, lifts, locati ons, priorities and other matters relating to boats and docking, shall be governed by the Dock Committee, subject to approval of the Board 15 of Directors, and the Board of Directors’ decision shall be final. The Dock Committee shall not take any action which will impair other shareholders’ enjoyment of the beach area. Said Dock Committee may make rules and regulations governing the installation, rental and maintenance of the dock facilities. Slips will be rented to shareholders in serial order determined as follows: Applicants for dock or slip rental shall be numbered in the order of their application for available dock or slip space. In the event that the number of applicants exceed the number of dock or slip spaces, the first applying applicants not receiving dock or slip spaces shall be ranked in the order in which they applied, and shall become entitled to dock or slip space in the order as the dock or slip spaces become available. In the event of a tie, the tie shall be broken by awarding the dock or slip space to the person having first purchased his or her lot, or in any other manner deemed equitable by the Dock Committee. The rental price for dock and slip space shall be an amount sufficient to pay for present or future facilities, plus amounts required to provide needed maintenance and a reasonable cash reserve. These rentals will be determined annually by the Dock Committee based upon operating results for the prior season and financial status at that time. The rental charge shall be for one year from April 1 to March 31. A minimum dock rental of $_________ per year is hereby established. The rental for 2019 is $___________/slip. Any slip rental not paid by May 1 shall terminate docking rights absolutely. Rentals will be stated in terms of a minimum per slip, plus a given amount per foot for craft in excess of a determined length. The original installation cost of dock or other facilities may be obtained by the Corporation borrowing said funds from a bank or other financial institutions or from shareholders themselves. The funds paid for rental and for use of the dock or other facilities shall be maintained in a bank account of an Accounting Fund separate and apart from the other funds of the Corporation. If the 16 Corporation constructs a main dock, not including branch docks and boat docking facilities, which main dock will be used for the general activities of all shareholders, said main dock will be purchased with funds of the Corporation; the cost of acquisition, installation and maintenance of boat docking facilities that benefit boat owners only shall be borne by those who rent such facilities. Section 2. Salaries. There shall be no salary paid to any officer, director, or any member of any committee. ARTICLE XVII INDEMNIFICATION Section 1. Definitions. (a) For purposes of this Article, the terms defined in this section have the meaning given to them. (b) “Corporation” includes a domestic or foreign corporation that was the predecessor of the corporation referred to in this Article in a merger or other transaction in which the predecessor’s existence ceased upon consummation of the transaction. (c) “Official capacity” means (1) with respect to a director, the position of director in the corporation, (2) with respect to a person other than a director, the elective or appointive office or position held by an officer, member of a committee of the Board, or the employment or agency relationship undertaken by an employee or agent of the corporation, and (3) with respect to a director, officer, employee, or agent or the corporation who, while a director, officer, employee, or agent of the corporation, is or was serving at the request of the corporation or whose duties in that position involve or involved service as a director, officer, partner, trustee, or agent of another organization or employee benefit plan, the position of that person as a director, officer, partner, trustee, employee, or agent, as the case may be, of the other organization or employee benefit plan. 17 (d) “Proceeding” means a threatened, pending, or completed civil, criminal, administrative, arbitration, or investigative proceeding, including a proceeding by or in the right of the corporation. (e) “Special legal counsel” means counsel who has not represented the corporation or a related corporation, or a director, officer, employee, or agent whose indemnification is in issue. Section 2. Indemnification Mandatory; Standard. (a) No corporation shall indemnify a person made or threatened to be made a party to a proceeding by reason of the former or present official capacity of the person against judgments, penalties, fines including, without limitation, excise taxes assessed against the person with respect to an employee benefit plan, settlements, and reasonable expenses, including attorneys’ fees and disbursements, incurred by the person in connection with the proceeding, if, with respect to the acts or omissions of the person complained of in the proceeding, the person: (1) Has not been indemnified by another organization or employee benefit plan for the same expenses with respect to the same acts or omissions; (2) Acted in good faith; (3) Received no improper personal benefit; (4) In the case of a criminal proceeding, had no reasonable cause to believe the conduct was unlawful; and (5) In the case of acts or omissions occurring in the official capacity described in Section 1, paragraph (c), clause (1) or (2), reasonably believed that the conduct was in the best interests of the corporation, or in the case of acts or omissions occurring in the official capacity described in Section 1, paragraph (c), clause (3), reasonably believed that the conduct was not opposed to the best interests of the corporation. If the person’s acts or omissions complained of in the proceeding relate to conduct as a director, officer, trustee, employee, or agent of an employee benefit plan, the conduct is not considered to be opposed to the best interests of the corporation if the person reasonably believed that the conduct was in the best interests of the participants or beneficiaries of the employee benefit plan. 18 (b) The termination of a proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent does not, of itself, establish that the person did not meet the criteria set forth in this Section 2. Section 3. Advances. If a person is made or threatened to be made a party to a proceeding, the person is entitled, upon written request to the corporation, to payment or reimbursement by the corporation of reasonable expenses, including attorneys’ fees and disbursements, incurred by the person in advance of the final disposition of the proceeding, (a) upon receipt by the corporation of a written affirmation by the person of a good faith belief that the criteria for indemnification set forth in Section 2 have been satisfied and a written undertaking by the person to repay all amounts so paid or reimbursed by the corporation, if it is ultimately determined that the criteria for indemnification have not been satisfied, and (b) after a determination that the facts then known to those making the determination would not preclude indemnification under this section. The written undertaking required by clause (a) is an unlimited general obligation of the person making it, but need not be secured and shall be accepted without reference to financial ability to make the repayment. Section 4. Reimbursement to Witnesses. This section does not require, or limit the ability of, the corporation to reimburse expenses, including attorneys’ fees and disbursements, incurred by a person in connection with an appearance as a witness in a proceeding at a time when the person has not been made or threatened to be made a party to a proceeding. Section 5. Determination of Eligibility. All determinations whether indemnification of a person is required because the criteria set forth in Section 2 have been satisfied and whether a person is entitled to payment or reimbursement of expenses in advance of the final disposition of a proceeding as provided in subdivision 3 shall be made: 19 (a) By the Board by a majority of a quorum. Directors who are at the time parties to the proceeding shall not be counted for determining either a majority or the presence of a quorum; (b) If a quorum under clause (a) cannot be obtained, by a majority of a committee of the Board, consisting solely of two or more directors not at the time parties to the proceeding, duly designated to act in the matter by a majority of the full Board including directors who are parties; (c) If a determination is not made under clause (a) or (b), by special legal counsel, selected either by a majority of the Board or a committee by vote pursuant to clause (a) or (b), if the requisite quorum of the full Board cannot be obtained and the committee cannot be established, by a majority of the full Board including directors who are parties; (d) If a determination is not made under clauses (a) to (c), by the shareholders, excluding the votes of shares held by parties to the proceeding; or (e) If an adverse determination is made under clauses (a) to (d), or if no determination is made under clauses (a) to (d) within sixty (60) days after the termination of a proceeding or after a request for an advance of expenses, as the case may be, by a court in this state, which may be the same court in which the proceeding involving the person’s liability took place, upon application of the person and any notice the court requires. Section 6. Insurance. The corporation may purchase and maintain insurance on behalf of a person in that person’s official capacity against any liability asserted against and incurred by the person in or arising from that capacity, whether or not the corporation would have been required to indemnify the person against the liability under the provisions of this section. Section 7. Disclosure. The corporation that indemnifies or advances expenses to a person in accordance with this Article in connection with a proceeding by or on behalf of the corporation shall report the amount of the indemnification or advance and to whom and on whose behalf it was paid as part of any annual financial statements furnished to its shareholders 20 covering the period when the indemnification or advance was paid or accrued under the accounting method of the corporation reflected in the financial statements. ARTICLE XVIII MISCELLANEOUS The fiscal year of the Association shall begin on the first day of January and end on the last day of December of every year, except that the first fiscal year shall b egin on the date of incorporation. IN WITNESS WHEREOF, we, being all the Directors of Sunfish Bay Dock Association, Incorporated, have hereunder set our hands this ________ day of _________________, 201____.