Rams Horn Village Owners Association Board of Managers Meeting Wednesday, March 25, 2015 Minutes of the Meeting

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1 Rams Horn Village Owners Association Board of Managers Meeting Wednesday, March 25, 2015 Minutes of the Meeting 1. Call to Order President Dave Mohr called the Meeting to 5:03 PM MT by teleconference. 2. Roll Call Board of Managers Board members present: Angie Barrett; Denise Bulat, Vice President; Sally Langston, Treasurer; Ed Miller; Dave Mohr, President and Scott Zieske. Absent Rick Girnius. Governance Committee members present: Harry Yosten Staff Present: Deb Gibson Guest Present: Alex Gibson 3. Approval of Minutes of Meeting of January 14, (noted as January 12 on draft Agenda) Scott moved and Ed seconded a motion to accept the minutes as prepared. Dave called the motion. The motion passed unanimously. Approval of Minutes of Teleconference Meeting on 10/30/14 as reconvened on 11/24/14 Dave advised that Rick Girnius, Secretary of the Board, has been severely affected by a family situation, so the minutes of this extended and reconvened Board Meeting will again be deferred. Dave named Harry Yosten as secretary for this meeting only for the purpose of taking minutes, but not as a Board member. 4. Treasurers Report Sally asked to defer the report to closer to the end of the meeting. The report then consisted of the YTD financials, and comments in regards to her ongoing work with Erin Dahlby and Dave to change from cash basis accounting to accrual based accounting.

2 5. Financial Statement(s) Review Dave reviewed December, financial data. Sally then presented the preliminary February 28, 2015 financial information. The change to accrual accounting has required some changes to the Quickbooks report that is utilized. However 2014 financial data is now ready to be sent to the tax return preparer and for the auditors. Dave noted that 2014 resulted in an Operating Fund loss of $61,524 excluding gains of $98,790 in Reserves, Home Stretch and miscellaneous income. For all Funds, 2014 produced Net Income of $29,363 before taxes. He attributed part of the Operating Fund loss to the admitted over-aggressive 2014 budget for rental income. While 2014 rentals set an all-time record by far, they did not meet the budgeted amount. An additional factor in the Operating Fund loss was due to the lack of having a listing agreement for the major part of the 2014 selling season which led to only 1 sale of an HOA-owned week in It would have taken the sale of only 9 weeks to balance the Operating Fund bottom line. 6. Audit Report Dave noted that audit expenditures in 2014 were only $5800 against a budget of $10k. After the auditors receive the year end 2014 information, it is expected that a preliminary report will be received by the board prior to the May board meeting, with the final audited statement in-hand by mid-summer Tax Return Status As noted above, information will be sent to the association tax accountant soon. 8. Report of Reserve Funds Dave noted that due to timing there is usually little Reserve Fund activity to report on by February annually, though much work is being accomplished. Erin has sent the board a Summary of Expenditures spent YTD. Deb reported on the refresh items in several homes, all going according to schedule. More significant work will be done in March, April and May before the summer high season when owners want to use their homes. Carpet expenditures through January were approximately $25,000, tile and ceramic floor and wall expenditures were approximately $12,.000. Ed noted that Erin s report was very helpful and asked that she be acknowledged for the work. Scott thanked Deb for the new website information available to the Board which will make it easier to review current information and compare to historical data. 9. Report of the Governance Committee Recommendations 10. Consideration of Governing Documents Recommendations These agenda items were considered together at the end of the meeting. Harry Yosten presented the drafts of amended and restated Declaration, Articles, and Bylaws which the Governance Committee has been working on for the past several months. He also presented summaries of the changes incorporated into the drafts. The revisions to governing documents are estimated to be 90% complete at this time, with 100% completion expected in the next several weeks after additional meetings with Deb, and a meeting with the Association s attorney. It is also expected that the Board will have the opportunity to discuss and have input on many items in the revisions at this meeting and before the next formal Board meeting. Board members are encouraged to send any additional ideas for changes to Harry as soon as possible.

3 Harry presented the major changes to the Declaration including the adoption of the Colorado Common Interest Ownership Act (if approved by owner vote later this year), and the recent Colorado law changes in regards to Community Association Managers. Provisions that are obsolete including references to the RAO Corporation have been deleted. Denise requested that references to current law be noted to include any future law changes. Harry presented the major changes to the Articles including adding the Rams Horn Village Mission Statement, and adding a new Board officer position to be called a Director of Communications. It is the strong opinion of the Committee that the owner communications that began last year be continued in the future with a Board member having specific duties to assure that owners not only receive information, but have the opportunity for input. Harry presented the major changes to the Bylaws including moving important Policies into the Bylaws to assure that owners have a vote before they can be changed. Such Policies include voting issues (specifically voting of Association-owned weeks), electronic voting, code of ethics, investments, and requisite changes of Board meetings and Annual Owner meetings as a result of the implementation of electronic voting. Harry requested whether current Policies pertaining to smoking and pets should also be elevated to Bylaw status. An extensive discussion ensued concerning smoking of marijuana now legalized in Colorado, other uses of marijuana (edibles), and use of e-cigarettes. The Board decided to add current smoking and pet Policies to the Bylaws, and to define e-cigarettes as smoking for these purposes. The Board will conduct an Owner survey on allowing or restricting other uses of marijuana on the property. Deb noted that while she does not support this activity on site, three other area resorts are allowing smoking and other uses of marijuana and view it as a draw for customers, in-state and out of state. The Governance Committee is assigned the task of preparing survey questions for the Board s consideration after making the changes to the Policies and Bylaws as described above. The Board then discussed several proposed Bylaws and requested changes as follows: The attorney should be consulted in regards to the effectiveness of 2-year proxies given in 2013 for 2015 voting so as to be able to advise affected owners who had given proxies earlier. The proposed calendar changes of Board meetings and duties, and Owner meetings, should be changed to provide more flexibility. It may be desirable to move future annual Owner meetings around so that more owners, especially those with children who typically come in the summer, will be able to attend. Since election of Directors, and other voting, will no longer occur at annual meetings, the meetings will change to become more informational. Flexibility in the future will be important to address the communication desires of the Owners. The former Investment Policy, to become an investment Bylaw, should be changed to remove many of the specifics so that a future vote of owners would not be needed to, for example, allow an investment that matures in 10.5 years to be made when the Bylaw as written might limit investments to maturities with less than 10 years.. Such specific requirements should be sent back to the Policies where they could be amended by future Boards in future years. Bylaws 8.3 and 8.10 should be changed to reflect current and historical practices and verbiage. A designated Human Resource Committee should be added as a standing committee. Angie also suggested in the future, at the organizational meeting of a new Board, that any old Board members no longer serving be invited to attend and advise new members of duties, responsibilities, ongoing business and such other items that new members would find useful as they assume their positions.

4 Harry noted that all 3 documents now make it clear that amendments can occur only with a vote of the Owners. All 3 documents rename the Board of Managers to Board of Directors, a designation more in line with the oversight, and not management duties, the Board is assigned by the documents. All 3 documents refer to Policies and Procedures, and references to rules and regulations (of which we have none) have been deleted. All 3 documents have had formats revised to make reading them easier, and to remove gender references. A summary of changes for owners has been prepared and will be updated to accommodate all changes when final revisions are completed. The Board thanked the Governance Committee for its work on this project. 11. Sales Report/Rams Horn Realty Dave noted the amount needed in sales to meet the 2015 budget and make up for the 2014 deficit. Deb noted that there has been little activity YTD, although a dozen inquiries are being followed. The overall Estes Park real estate market seems stronger which bodes well also for the sale of Rams Horn Village timeshare ownership. She expects an uptick in sales this year. She noted that approximately ½ of the inventory of weeks listed after the annual homeowners meeting has now moved. 12. General Manager/Deborah Gibson Deb reported that rentals YTD through March are up 4% over last year s YTD through March And current YTD advance rentals through December are up 11 ½% over Two employees have resigned since last meeting to pursue other opportunities. Hiring in the area has become increasingly difficult due to the drop in unemployment in the front range of Colorado, the loss of worker residents after the flood and the lack of affordable housing. 13. Other Reports There were no other reports presented. 14. Old Business Dave reported on the request to Denise by an Owner inquiring about the policy of reporting Owner rental income on forms The issue has come up in the past also. The Board has received counsel in the past that such forms should be issued by Rams Horn to avoid any potential tax liability issues with the IRS. Individual Owners should seek their own advice in regards to their reporting obligations of the information on the 1099s. The Board noted that it will give no such advice to individual Owners, except to note the Association s position that such forms will continue to be prepared and sent to necessary recipients including the IRS. 15. New Business Dave reported on a special situation. The Board has received information that the Personal Representative of the Estate of a deceased Owner has discovered that the Owner owned a single white week at RHV. Unfortunately the Estate has legally closed, and would be costly to re-open for the purpose of distributing the asset by normal deeding. None of the beneficiaries of the Estate want the week. There are no funds left in the Estate to pay assessments, or the cost of re-opening the Estate. Without the ability to grant a marketable title, the Estate may be unable to list the home for sale with a realtor. The week may already have become unsellable in a normal transaction. RHV was not aware of the death, and did not file a claim for any unpaid assessment, and now the 2015 assessment will be due soon.

5 Dave noted that any white weeks which might be acquired in any fashion by the Association would become a financial burden because white weeks are unlikely to be rented in a sufficient amount to cover the annual assessment, and the Association already owns its own weeks which it desires to sell. It is in the best interest of the Association that this week become owned by an Owner who will pay any past and future assessments. The cost to foreclose on a non-paying week is $2-$3000, plus the time and effort lost in a foreclosure. Sally reported that she, personally, might be interested in acquiring the week from the Estate. Ed questioned whether this would pose a conflict of interest, and whether such conflict could be acknowledged and waived by the Board. It is noted that the Board owes a fiduciary duty to the Association, and to the Owners, to make decisions that are in the best interests, including financial interests, of the organization and its Owners. In this case there appears no duty to Owners as potential buyers of other Owners weeks, or to the Estate as the potential seller. The primary duty would be to make the week able to contribute annual assessments for the Association. Scott noted that he had purchased his home from a liquidating Estate before he became a Director. Given the situation, the Board determined that it would not be an improper personal benefit for Sally to discuss with the Personal Representative her interest in acquiring the week, and to consummate a purchase if any arrangements could be made. Future situations similar to this will be handled on a case-by-case basis, and this determination will have no precedent value in making any future determination. There are Owner privacy concerns involving any disclosures of situations like this that may prevent or direct future actions, which concerns will be addressed by counsel at a future date. There may also be conflicts involving the Association s status as a seller of weeks at RHV which also need to be addressed in the future. 17. Meeting schedule for the remainder of The next meeting is scheduled for May 13 and 14. Ed inquired when the agenda for that meeting might be available, Deb responded that it would be sent two weeks before the meeting. At the meeting the final recommendations of the Governance Committee will be presented, but will also be available for review two weeks prior to the meeting. 18. Adjournment There being no other business, Dave adjourned the meeting at 6:56 p.m. Respectfully submitted, Harry Yosten Acting secretary-for-the-meeting Approved: Dave Mohr, President, Board of Managers