07/27/06, 8:00 A.M.

Pursuant to the e-mail notification dated July 11, 2006, the July Heartland Apartment Association Board of Directors meeting was held at the above stated date and time at the HAA offices, 2405 Grand, Suite 106, Kansas City, MO 64108.

Board members present were: Doug Price, Lee Harris, Chris Erdley, Scott Buescher, Jim Adams, Ralph Lewis, and Jim Bowers. Also present were KCMO Councilwoman Becky Nace, Jay Paussa, Jim Beverlin, and Sam Alpert. (Jerry Miller, Ken Riedemann, Bill Charcut, Rick Oddo; Ward Katz, and Dennis Watts were absent.)

DISCUSSION WITH COUNCILWOMAN BECKY NACE (KCMO MAYORAL CANDIDATE)- Attendees engaged Councilwoman Nace in a discussion on city policy issues. The candidate's stated goal if elected mayor is to challenge the status quo through creating a more "tax friendly" business and residential environment. She cited her experience as an "independent" city council member for the past seven years. There was a great deal of time spent discussing a contentious rental unit regulatory committee substitute now before the KCMO City Council Finance and Audit Committee. The open and informal discussion with those present continued until approximately 9:00 a.m., at which time Ms. Nace departed the meeting.

The minutes of the last meeting on 05/25/06, which had been previously circulated, were reviewed and approved by those present.

KCMO BUSINESS LICENSE- Jim Bowers had reported in May that of three separate lawsuits apartment owners had filed, two in 2005 and the latest one in 2006, the city was seeking to remove the 2006 case from the state court (Jackson County Circuit Court), to federal court on the grounds that it contains a claim involving U.S. Constitutional consequences by way of our attempt to recover associated attorneys' fees. Mr. Bowers advised the Board that despite arguments to thwart the city's efforts, the federal court refused to return the case to the state, and consequently the HAA could be faced with simultaneous cases pending in both state and federal court. Depending on whether or not the federal charges are ultimately dismissed, the possibility of future recovery of attorneys' fees will remain questionable even if the HAA prevails at the state level.

KCMO FIRE INSPECTION FEES - Sam Alpert reported that the city had filed its brief with the state Court of Appeals contesting all counts of the Jackson County Circuit Court's decision. The Plaintiffs' response will be due within a number of weeks.

COST OF LITIGATION - Sam Alpert led a discussion on the growing cost of the litigation now pending regarding various matters on which the HAA has taken aggressive legal action. A number of fund raising measures were discussed and Mr. Alpert was asked to provide as much "per unit" cost impact data as possible to assist in eliciting dedicated legal defense funds from various industry sources. Mr. Alpert urged prompt action in order to sustain the momentum of the various pending cases.

2006 / 2007 SLATE OF OFFICERS AND DIRECTORS- Sam Alpert circulated an official elected slate of HAA officers and directors for the coming year.

The next regularly scheduled meeting of the HAA Board of Directors will be August 31, 2006.

There being no further business to come before the Board, the meeting was adjourned at 9:45 a.m.