8/29/02, 7:45 A.M.

Pursuant to the e-mail notification dated August 17, 2002, the August Heartland Apartment Association Board of Directors meeting was held at the above stated date and time at the offices of Oddo Development Co., 8460 Nieman Road, Overland Park, KS.

Board members present were: Bill Charcut, Ken Riedemann, Brent Blake, Doug Price, Rick Oddo, Ralph Lewis, and Nick Moos. Also present were: Bob Wise, Jim Adams, Dennis Watts, and Sam Alpert. (Lee Harris, Jerry Miller, Ward Katz, Ron Nolan, and Chris Erdley were absent.)

Bill Charcut called the meeting to order.

The minutes of the last meeting on 07/25/02, which had been previously circulated, were reviewed and approved by those present.

Sam Alpert recommended that a universal resident voter registration program should be institutionalized and administered jointly by the AAKC and HAA. Alpert suggested convening a committee of on-site staff to work on creating a registration procedure that could be facilitated by respective county election commissions. He commented that in some cases a local election board might be willing to come to several properties at a designated time to register residents, while in some jurisdictions registration could be handled through the mail. It was agreed that this would be a worthwhile project to pursue.

Sam Alpert reported on current legislative activities (see attached) including:

Kansas City, MO-

Elevators- On August 7^th, Sam Alpert testified before the KCMO City Council Operations Committee about owner reservations regarding KCMO performing state codes inspections in conjunction with the local inspections. As a result of HAA’s testimony the Committee instructed the KCMO Department of Codes Administration (DCA) to draft a letter (see attached) to the State Elevator Safety Board urging a recognition that KCMO’s standards meet the state "equality" requirement. Meanwhile, the Committee and the DCA requested that HAA and BOMA appear with legal counsel at the August 21^st meeting of the Operations Committee to set out our liability concerns. On behalf of the HAA and BOMA, Paul Sinclair appeared with Sam Alpert to present a legal perspective to the Committee. In doing so we succeeded in insisting that an owner will have the option of whether to accept KCMO's offer to perform a state elevator inspection without the fear of any notation that the owner "declines" if he should so choose. If an owner does choose to have city inspectors perform a state inspection, the inspector will note items as "differences in interpretation" rather than "deficiencies". Once a "difference in interpretation" notation is submitted to the state, an owner would have the option of bringing the item into compliance with the state code or applying to the State Elevator Safety Board for a variance. One or the other would be necessary to obtain a state certificate, and in the event of state mandated corrective work being performed, the owner would be charged an additional $56.00 reinspection fee for the city to certify the correction. Owners will be advised of their options by KCMO when the regular city inspection is scheduled. This will enable owners to make an informed decision as to whether they wish to subject their respective properties to the state inspection, which could result in what the city would otherwise consider unnecessary changes to their elevator systems.

Overland Park-

Storm Water Utility- We are requesting that each of you who have property in OP to submit copies of your storm water utility assessment and provide us with a rentable square foot expense allocation, as well as impervious square footage ratios (relative to rentable square footage). A committee comprised of Jim Beverlin., Rick Oddo, and Doug Price has been convened and is working on gathering data and creating a cost impact comparison model to be taken before the Overland Park City Council.

Johnson County-

Waste Water Assessment- On July 11^th the Johnson County Board of Commissioners voted unanimously to adopt the previously proposed water consumption based method of assessing system O&M charges. Owners will realize an off-setting savings on the previous Waste Water O&M portion of their property tax bill (this line item will be eliminated). There will be some disparity in expense accounting between properties that sub-meter water and those that don’t. County Commissioner Doug Wood has raised questions with the Waste Water District as to the reliability of their water usage assumptions and has suggested to Sam Alpert that some temporary relief may be available to owners who do not pass through the cost of water to their residents.

Property Taxes- Barring any significant organized opposition, the Johnson County Board of Commissioners was poised to pass a one mill levy property tax increase on August 22^nd as part of the Board’s acceptance of the County Budget. Revenues generated would have been used to acquire additional park land. The increase would have resulted in an average $6.00 - $7.00 per unit in additional taxes. Various news articles appearing in both the Star and the Sun indicated that recent public communication to the Board had given them pause with regard to rubber stamping the county budget. Largely as the result of public testimony on August 8^th and other calls and letters many of our members generated, we were able to orchestrate a campaign, which appears to have succeeded in derailing the mill levy increase to fund park land acquisition. Instead the Commission adopted an alternative staff recommendation to debt finance any park land acquisition the County deems necessary. It was simply unrealistic to expect property owners to appreciate the need for a tax increase during difficult economic times. This reversal of the Commission's long standing practice of accepting budget recommendations without much public discussion is a notable event. It should be recognized that HAA, through its efforts, played a major role in saving Johnson County apartment owners hundreds of thousands of dollars in new taxes for 2003.

HUD / FHEO- We are still needing your help in assembling frivolous claims case histories. Please understand that if you are currently under investigation, the current case will not be subject to discussion. We need to establish a pattern of frivolous claims that were either dismissed or unreasonably settled with prejudice to avoid a costly defense.

MO Retainage- Sam Alpert reported that the recently enacted Mo Retainage Law, which requires that an owner hold retainage in an "acceptable" form "in trust", is far more onerous than originally thought.. The broad implication is that owners now solely bear the burden of justifying withheld retainage. Failure to justify this withholding may now result in an owner having to pay interest and attorneys’ fees in an action brought by any sub-contractor of supplier (throughout the contract chain).

Bob Wise reported on the progress of the University of Missouri study on alternatives to MO property taxation.

Doug Price reported that new land use development planning about to be adopted in Overland Park will make it difficult to build economically feasible muti-family projects within the city limits for some time to come.

Doug Price recommended to the HAA Board that three (3) representatives from the AAKC Board be invited to fill the newly created vacant seats on the HAA Board of Directors. In addition, Bob Wise would be invited to serve in an advisory capacity. This action is intended to enhance the industry’s overall advocacy effectiveness. In lieu of the prevailing HAA membership dues requirement of $4.10 per unit (owned or managed), Price proposed that the AAKC, as an organization, contribute $10,000.00 to fund the first year admission of their representatives to the HAA Board. It was agreed by those in attendance that a formal letter of invitation to the AAKC Board be drafted by Sam Alpert and Doug Price.

The next regularly scheduled meeting of the HAA Board of Directors is to be held on Thursday, September 26, 2002, 7:45 a.m. at the offices of Oddo Development Co., 8460 Nieman Road, Overland Park, KS.

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