272 Hartley Avenue
Princeton, NJ 08540
October 3, 2013
Dear Evans Cottage LLC Members,
We look forward to seeing many of you at Haversham next weekend, where we’ll surely be discussing the future of our wonderful summer retreat while attending to its closing-up chores. This letter was written to provide some advance notice of things that need to be discussed, and it should be especially useful to those who can’t be there.
As you already know, we as an LLC have been remiss in not paying an annual fee and filing certain annual papers with the state of Rhode Island. At our annual meeting last May we authorized Beth to engage a lawyer to help get us back into the state’s good graces. It turns out that our back fees amount to $5,500 — $250 per year starting in 2000, and $500/year since 2004. Legal fees have so far amounted to $2,600; probably there will be one more bill, so the final amount will be somewhat higher.
At the annual meeting we also authorized Jim to engage an agent to appeal our property assessment. Recent sales of nearby comparable properties suggest that we have a good case for significant reduction in our asstssment and taxes. Results of the first stage of the appeal should be available fairly soon. Necessarily there will be some costs associated with this appeal.
In an effort to get the LLC business matters into better shape and maintain them that way, we are attaching several documents that we hope you will find informative:
- Evans Cottage LLC Operating Agreement Executive Summary, a document prepared by our in-house lawyer, Amy Brooks. It strips the legalese out of our lengthy Operating Agreement and tells you nearly everything you need to know about our LLC. Amy has also included some “LLC Member Q&As” such as “How do I become a member?”, “What benefits do I gain from being an LLC member?”, “What can I do with my Membership if I do not want it?”, and so on.
- Notes on Evans Cottage LLC Capital Accounting. This describes how our capital accounts are kept, including the annual recalculation of fractional ownership in the Haversham property. It has been updated slightly since its original distribution in June 2011.
- ECLLC Capital Account Summaries for 2011, 2012, and 2013
- Step-by-Step Guide to Reading the ECLLC Capital Account Summaries
The accounting spreadsheet for 2013 is necessarily incomplete because a few bills of unknown amounts remain to be paid. However, it’s already clear that we have a significant cash flow problem, mostly as a result of putting the LLC back into good shape. The final column of the 2013 spreadsheet therefore has suggested “Extra Assessments” for all LLC members. These were computed by proportionally allocating the present 2013 shortfall of $12,879 according to the fractional ownership shares of members. The actual amount needed will likely be larger by perhaps ten percent.
As always, payment of these “assessments” is optional. If you can contribute, we suggest adjusting the number (preferably upward) to a convenient round number and sending Beth a check as soon as you can. If you are not in a position to contribute, or don’t wish to, that’s OK too. Others of us will do our best make up the difference, and proper accounting will be done as described in Notes on Evans Cottage LLC Capital Accounting.
Most of you know that Nancy Post wants to divest her ownership share in Haversham, and we will need formally to approve this change. By agreement with Nancy, we will be seeking funds from other members in the amount of $130,272 to pay her in return for her fractional ownership. (This amount was computed by using as precedent the 1/6 share of Haversham purchased from Faith Blakeley on 1/23/1996, adjusting that sale price ($87,500) to 2013 dollars by using the official US consumer price index.) If you have an interest in acquiring some portion of Nancy Post’s share, please make your wishes known!
The above considerations inevitably mean that we will once again need to discuss whether we can continue affording to keep Haversham and enjoying all the family benefits that it brings. If you have feelings about this, one way or another — and especially if you won’t be with us there over the October 5-6 weekend, please share your views with the rest of us!
With all best wishes and lots of love,
Joe and Marietta Taylor