Welcome and Introductions. Today s Agenda. Approvals. Message From The Board 11/4/2014. Welcome to Pollard Brook Owners Association

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1 Welcome to Pollard Brook Owners Association Welcome and Introductions Resort Team Board Members Management Team Annual Owners Meeting Legal Counsel Today s Agenda I. Welcome, Introductions, Call to Order II. Approval of Agenda III. Approval Previous Annual Meeting Minutes IV. Message From The Board V. Elections VI. Management Reports VII. Budget/ Finances Approvals - Motion to approve Today s Agenda? - Motion to approve previous annual meeting minutes VIII. IX. Communications and Interactions Election Results X. Open Discussion Q & A XI. Meeting to Remain Open Message From The Board President: William Scanzani Treasurer: Dennis Ducharme Secretary: William (Billy) Curran* *Incumbent Condominium Documents Update What is the history of the issue? Why are these docs so important? The original documents were created back in 1989 when the resort was formed by the original developer ( not the current one) in conjunction with the development of the Villages of Loon. At its inception, Pollard Brook was originally going to be a whole ownership condominium (one owner per unit). The documents were designed originally for that now non-existent ownership structure and included references to entities and outline practices that do not support our current timeshare operations. The new developer, after purchase out of bankruptcy, turned the property into a timeshare product and the State of NH has new regulations that our timeshare property and HOA must conform to. 1

2 Condominium Documents Update Why do we need to do this? These revisions will accomplish several important things, most notably: Meet the legal requirements to conform to changes in the NH Condominium Act Remove old outdated references to the Declarant which no longer exists Allow for new types of communications by electronic means to reflect updated technology and the way all business is conducted today Prevent frivolous lawsuits that we are required to defend and waste your money on because the original documents no longer conform with the law Allow expansion of the Board to include more owner representation by expanding the Board from 3 to 5 members Condominium Documents Update Where did the proposed changes come from? The Board and resort management worked with the Law Firm of Gallagher, Callahan and Gartrell in Concord New Hampshire, the leading firm representing condominium and timeshare interests in the state to draft the changes. Several drafts were reviewed and edited before presenting these to you for approval. Per NH State Law a 2/3rds majority vote (67%) to change the documents is required, which is a high bar to hit especially when 10% of the owner base is unknown to us or in a Viking Ship. Condominium Documents Update Why did the Board decide to assess additional fees if I don t vote? Each year for the last few years we have been notifying every owner on a regular basis who have not voted on the proposed changes and the need to vote on this matter. Each paper mailing costs about $2500. Typically there are 2-3 mailings each year. It is not fair to the majority of owners who have voted to continue to pay the additional costs for these mailings and for legal defense of outdated documents for those who haven t taken the time or interest to read and vote on this important issue. All we are requesting is that you vote or abstain not that you vote yes! What is the status today! As of today because of our diligence and potential special fee assessment we are less than 650 votes short of the required 2/3rd vote to get the documents passed. Approximately 97% of all owners have voted affirmatively for the new documents. A final push of ballots to get us over the top will go out this week with the annual maintenance billing that goes out to everyone. If you haven t voted or abstained, your invoice will include a $25 administrative and legal assessment fee as well as a ballot to complete. The $25 fee can be deducted from the invoice if the ballot is returned and signed. Otherwise the fee is owed like any other special assessment before you can use your timeshare in any manner including exchanges. By-Law Amendment 6960 Total Weeks -288 less POL Trust weeks 6672 Net x 2/3 % = 4448 x Required Approved 656 Still Needed We do owe some owners an apology! Although we need to get this document approved, our management company did run into some administrative issues that should not have occurred. 1) There were two ballots with the newsletter that looked somewhat the same and we could have color coded them better 2) An distribution to other than non-voting members 3) Too slow a system for notifying recent voters that their vote was received and recorded 4) Too slow an initial response to owner requests for additional information and questions on various issues including the ballot 5) Improvements in these areas have already been made to prevent reoccurrence with future communications to owners 2

3 This Year s Accomplishments Continued to work hard on holding the line on expenses and we are hopeful we will have a balanced budget in 2015 for the first time ever which only 35% or resorts nation wide can do. We will have no increase in the maintenance fee or tax portion of your annual assessment for 2015 and we made only a $7.50 per unit adjustment to the reserve portion of your billing. We continue to make major unit renovations to older units including kitchens and baths We continued to reduce long standing delinquencies with judicial foreclosures and quick claim deed transfers of these units into the Pollard Brook HOA Trust. Additional Major Accomplishments We are the only resort in New England with a direct exchange program with Disney through the InnSeason Vacation Club. New flexible usage products have been developed to help utilize offseason and low demand weeks A Bulk Rental Agreement was signed to guarantee revenue to offset Delinquent accounts weeks. A Busy Year This year has not been without it s share of unanticipated problems. We have had major issues with the Wi-Fi internet connections which has upset our guests and we are working diligently on a solution. We have some major drainage problems that are being addressed around the Woodland Building. Our electric rates are going up about 30% in November because of the shortage of natural gas to run the electric plants in the Northeast. We ve had premature failure with some Jacuzzi's which has required expensive replacements and repairs. Improving Your Experiences As always our responsibility is to ALL of the members of the Homeowners Association We are committed to improving your experience if you stay with us and adding value and services without always making it more expensive Our efforts are paying off as other resorts, RCI, Interval International and VRI are recognizing our efforts as are the guests with their scores Our rentals were up this year over last year I want to thank the Pollard Brook staff for their hard work and dedication to everyone who stayed at our resort this year Board Elections Election Process Your ballot will replace your Proxy (if mailed) For Annual Usage owners, your Ballot will count for one vote for each interval you own For Biennial Usage owners, your ballot will count for one-half vote for each biennial (odd or even) interval that you own. We will elect One (1) board member 3

4 Election Candidate Billy Curran* Founder and CEO of InnSeason Resorts. A sales and marketing executive for more than 35 years he co-founded InnSeason Management, Inc., a successful development business based on Cape Cod, and built a nationally recognized telemarketing business which currently has offices in both Massachusetts and New Hampshire. Board Member Election Additionally, he has developed five spectacular resorts in New England that employed more than 350 people at one time. Objective as Board Member: To ensure the long term financial stability of the resort while maintaining its distinctive level of accommodations and services. *Incumbent By-law Document Update General Manager Report Joel Bourassa 2014 Planned Capital Improvements The exterior of the Streamside Building was painted following wood replacement where needed. This is the 5 th of six buildings to be painted. BEFORE AFTER The original Mt. Liberty master bathrooms were badly outdated. The old Mt. Liberty master baths were completely renovated with all new fixtures, cabinets, tile, lighting, Jacuzzi Tubs, sinks and toilets. 4

5 Mt. Liberty Building also is being re-carpeted this fall. Note the recently re-finished dining room table as well. All Mt. Liberty units now have new dishwashers to replace the originals. Other 2014 Improvements: Removed old wallpaper from several Mt. Washington units. Replaced with a textured knockdown surface. Spending Breakout Interiors Exterior Facilities / Commons Major repairs and upgrades to our emergency lights system. Purchased additional poolside furniture. Rehabbed our main entrance sign. Replaced multiple Jackman Lodge kitchen floors and Jacuzzi tubs $385,280 $337, $403, Reserve Spending $850, $436, Year $441, $659, $500, $400, $900,000 $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 For The Upcoming Year 5

6 Under consideration for 2015 New Wi-Fi System to improve resort service to all units. Under consideration for 2015 New couches and lounge chairs for Woodland and Liberty. Under consideration for 2015 Replacement of out of code and corroded hand rails. Under consideration for 2015 Continued unit artwork replacement. Also under consideration for 2015 New air conditioning units for Mt. Washington or Liberty units New master bedroom televisions for Streamside and Jackman Additional outside pool furniture New comforters for Jackman Building Happy Halloween Weekend! 6

7 Customer Satisfaction Index Customer Satisfaction Year-Over-Year Customer Satisfaction Index YTD Question Vacation Experience Rating Core Deliverables Rating Amenities Rating Friendly Service Rating Guest Satisfaction Rating Items RCI II Vacation Experience 90% 92% Resort Area 90% 90% Guest Services 91% 92% Unit 88% 91% Overall 90% 91% 2013 Review Delinquency 2014 YTD 2015 Budget Financials + Year End 2013 Area 13 Actual 13 Budget $ Diff (Unfavorable) Operating Income $3,614,427 $3,657,164 ($42,737) Payroll $1,567,776 $1,619,850 ($52,074) Operating $807,923 $813,519 ($5,596) Bad Debt $370,073 $398,867 ($28,794) General & Admin $852,774 $824,928 $27,846 Net $15,881 $0 $15,881 Area 13 Actual 13 Budget $ Diff Reserve Income $521,229 $601,652 ($80,423) Bad Debt $62,822 $63,537 ($715) Reserve Expense $631,610 $538,115 $93,495 Net ($173,203) $0 ($173,203) Bottom Line ($157,203) $0 ($157,203) 7

8 % Delinquent 25% 20% 15% 10% 5% 0% Collections Review Delinquency 19.10% 18.70% 18.10% 14.51% 10.90% 17.00% 11.26% 13.80% 7.31% Year Fighting Delinquency Steps being taken: - Pre-Payment Plans - Late Payment Plans - Internal Collection Efforts - External Collection Efforts - Renting Delinquent Weeks - Amnesty Programs - Deed-in-lieu - Foreclosure 2014 Year-to-date Sept Area 14 Act YTD 14 Bdgt YTD $ Diff (Unfavorable) Operating Income $2,779,730 $2,772,621 $7,109 Payroll $1,146,835 $1,218,006 ($71,171) Operating $623,600 $594,670 $28,930 Bad Debt $276,976 $265,300 $11,676 Admin & General $640,231 $731,664 ($91,433) Net $92,088 ($37,019) $129,107 *Net of Depreciation Area 14 Act YTD 14 Bdgt YTD $ Diff Reserve Income $405,866 $407,557 ($1,691) Bad Debt $44,414 $45,943 ($1,529) Reserve Expense $388,308 $361,621 $26,687 Net ($26,856) ($7) ($26,849) Bottom Line $65,232 ($37,026) $102, Budget Area 2015 Budget 2014 Budget $ Diff Operating Income $3,743,730 $3,685,895 $57,835 Payroll $1,559,241 $1,612,124 $(52,882) Operating $873,142 $775,643 $97,499 Bad Debt $964,580 $945,993 $18,587 Admin/General $346,767 $ 352,135 $(5,368) Net $0 $0 Area 2015 Budget 2014 Budget $ Diff Reserve Income $601,336 $542,606 $58,730 Reserve Expense $539,304 $481,874 $57,430 Bad Debt $62,032 $60,732 $(1,300) Net $0 $0 Bottom Line $0 $ Fee Review YEAR UNIT OPERATING RE TAX RESERVES TOTAL % Per Night 2015 Fees 1BD $ $26.74 $91.03 $ % $ BD $ $33.97 $98.84 $ % $ BD $ $38.83 $ $ % $ Fees 1BD $ $26.74 $83.53 $ % $ BD $ $33.97 $91.34 $ % $ BD $ $38.83 $ $ % $ Annual Survey shows average fees at $859 up 5% from 2012 $ What We Spend On Average Annually Time Share $859 Coffee $1,092 Lunch $2,000 Cell phone $720 Pets $1,183 Beer $850 Salon $658 Nails $572 Cigarettes $5000 8

9 To Recap Cash-flow is stable Expenses are stable Historical deficit down Renovations happening consistently and at a good pace Satisfaction Scores are up Managing Delinquency and Default Owners Club House Available online now: Administer personal account View demographic, contract, reservation and maintenance fee information Customized information and updates Election Results Open Discussion Please use the Podium and Microphone for all Questions This Meeting Will Not Adjourn 9