Pollard Brook Unit Owners Association, Inc. ANNUAL MEETING OF OWNERS NOVEMBER 3, 2012

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1 September 2012 Message from Your Board President Three years ago when I first ran for the Board of Directors I stated to all of you that I had 3 main goals. They were to: 1) Upgrade and maintain the property so that our collective investment in our vacation resort is preserved as well as help with future sales and rental income which reduces required assessments. 2) Aggressively manage our operating budgets so that we contained expenses and invested in green initiatives to lower future long term operating costs. 3) Seek a fair and equitable way to help delinquent owners either become productive again or take back those weeks so they can be resold to a productive maintenance fee paying HOA member so our delinquencies become more manageable. In regards to the first item, your Board has approved and spent about $2 million in the last 3 years making major improvements to all aspects of your vacation experience whether it be the common areas like the indoor pool, outdoor pool and Jacuzzi and camp fire areas, or the unit accommodations like new kitchens, furniture, and appliances, or to government mandated improvements like new deck railings, carbon monoxide detectors in all the units or the ADA required handicap pool lift, or to antiquated but critical infrastructure components like our phone system, security systems and, my favorite, wireless internet access in all units free to owners, but charged to guests. In regards to the operating budgets, our proposed operating budget for 2013 is $4,135,681 which is $248,361 higher than the budget proposed in This budget is 6.4% higher than it was 4 years ago or shows an annual average growth rate of 1.3% annually. Your overall maintenance fees increased 0% in 2010, 2% in 2011, and 5% in 2012, and we are proposing a 3% increase in This is a total increase of 11.2% continued on page 2... Inside This Issue Board Candidate Data 2011 Annual Meeting Minutes Proxy/Ballot Pollard Brook Unit Owners Association, Inc. ANNUAL MEETING OF OWNERS NOVEMBER 3, 2012 Reminder Notice: Our Annual Meeting is scheduled for Saturday, November 3, :00 A.M. at the Lincoln Town Hall Conference Room, 148 Main Street (Route 112 East) in Lincoln, NH (across from Flapjacks Restaurant). If you do not expect to attend the meeting in person, it is vitally important that you mark, sign, date and return the enclosed Proxy/Ballot to reach us no later than November 2, If you later find that you can be present or for any other reason desire to revoke your Proxy/Ballot, you may do so at any time before the voting commences. This Proxy/Ballot is for two important matters and we must meet the quorum requirement: 1) Election of Director; 2) Adoption of Amended and Restated By-laws. Please complete and return the enclosed Proxy/Ballot to reach us no later than November 2, AGENDA I. Welcome and Introductions/Call to Order II. Approval of Agenda III. Approval of 2011 Annual Meeting Minutes IV. Message from the Board V. Elections VI. Management Report VII. Financial Review VIII. Communications and Interactions IX. Election Results X. Open Discussion XI. Adjournment

2 Message from Your Board President Continued... compounded over that time period for an average annual increase of 2.8%. The differential between your actual assessed maintenance fee increase during these 4 years and the lower increase in our actual operating budget increases can be mostly explained in the increased delinquencies which have risen during this difficult economy. This brings me to my third major goal as your only owner represented member of the Board of Directors, which was to preserve our family oriented business model but at the same time in order to be fair with all owners equally, find a way to either get those who are delinquent to pay up or get those weeks back into the HOA for resale to another owner who can pay the maintenance fee or transfer the ownership to the InnSeason Vacation Club Trust where the maintenance fees to Pollard Brook Homeowners Association is guaranteed. By having the ownership of intervals in the InnSeason Vacation Club or the HOA Trust, these weeks are also protected from ever being put out to pasture in a Viking Ship potentially permanently preventing us from collecting maintenance fees on those intervals. In 2012 we foreclosed on 168 weeks of the roughly 700 weeks that are delinquent. We only foreclosed on owners that were at least 3 years in arrears for maintenance fees and only after proper notification and warning that we were going to do so and after giving those owners every possible way to either work out some kind of a payment plan or pay our legal costs and deed the week back to the HOA. Our 2013 budget includes plans to foreclose on an additional 75 intervals and we will continue this practice for the next several years to help clean up the long term delinquent properties. I want to stress to everyone that I believe in meeting one s responsibilities and although I consider myself a compassionate individual, there is a point when running a business you have to make the difficult and hard decisions that affect all of us collectively even if it further complicates an individual s financial situation. As an owner, the value of your property and the amount of money you pay in annual assessments to use your vacation time is valuable to you. All of us on the Board realize that. We also realize that we must make some substantial changes in the way we provide services to you in order to reduce ongoing operating costs as overall revenues are not expected to increase anytime soon and uncontrollable necessary costs continue to increase. We are 2/3rds the way toward the vote count we need in order to adopt the new condo docs. Adoption of these condo docs is very important. If you haven t voted to allow us to expand the Board with more owners and align our condo docs with the state requirements as yet, we ask you to do so and submit that with your ballot vote for a Board member this year. Our Owners Annual Meeting will be held at the Lincoln Town Hall on Saturday November 3rd at 11:00 AM and I look forward to seeing as many of you there as can make it, and we look forward to your revenue enhancing and cost cutting ideas. Bill Scanzani Pollard Brook HOA Board member and President Board Candidate Data *William Scanzani Interval Week: 29, 33, 46 Education: B.S. in Accounting- Lowell Technological Institute, Masters in Management Boston University Qualifying Experience: Served on the Pollard Brook Board of Advisors for two years and currently the owner s only member of the Board of Directors for the last 3 years. I m a seasoned operations and product manager in the food industry for many years. I have experience in budgeting, operations, managing a staff, purchasing, coordinating major projects, and customer service. Additionally, I have excellent communications skills and the ability to think outside the box to find innovative solutions to problems that need to be solved. My objectives for the next three years have not changed: 1. Maintain the resort property and owner values along with helping in future sales and rental income to reduce assessments. 2. Sustainability of the resort s services and budgets and invested in green initiatives to lower future long term operating costs. 3. Seek fair and equitable ways to help delinquent owners or acquire the delinquent weeks back and sell to fee paying owners. Be an advocate for good owner representation on the Board. 2 September 2012

3 POLLARD BROOK OWNERS ASSOCIATION ANNUAL MEETING MINUTES November 5, 2011 DRAFT I. CALL TO ORDER/ROLL CALL William Scanzani called the meeting to order at 11:00 a.m. He introduced himself as the first owner representative on the Board and has been serving as Board President for the past two years. II. WELCOME AND INTRODUCTIONS Bill Scanzani welcomed the owners, thanked them for their participation in this important forum and introduced the following: Board of Directors: William Scanzani Billy Curran Dennis Ducharme Vacation Resorts International and Resort Management: Scott Dravis, Vice President of Resort Operations, VRI Joel Bourassa, Resort General Manager Staff: Alana Hamm, Front Desk Manager Angela Willey, Housekeeping Inspector Bill reported that quorum requirements are 25% of the owners present either in person or by proxy. The current owner roster records 6236 owners (25% = 1559 required) of which 2809 are represented in person or by proxy, so the quorum is met. III. APPROVAL OF PREVIOUS MEETING MINUTES MOTION: A motion was made and seconded to approve the 2010 annual meeting minutes as presented. The motion was approved unanimously. IV. BOARD REPORT Bill Scanzani stated he would like to touch on the collection of maintenance fees and the effect that the economy is having on that. Every resort has a delinquency factor or, in other words, the percentage of owners that don t or can t pay their annual assessments. Here is what we do to address the problem: Factor bad debt into the budget this raises necessary revenue but all owners have to pay a little more. Bad debt collection go after delinquent owners. Rent delinquent weeks the revenue raised reduces the amount other owners have to pay. A long term solution is to foreclose on delinquent intervals and resell the intervals and get a paying owner in the week. Since the recession of 2008, the delinquency factor increased by 4-5%. This year into 2012 we will be foreclosing on up to 270 intervals. Many of those weeks will be absorbed by the InnSeason Vacation Club. The Club pays maintenance fees like other owners and that will immediately turn those intervals into performing weeks. Bill reminded everyone that we will always work with an owner in setting up a payment plan for maintenance fees. He also reminded owners that a monthly advance payment option is available. He uses it for his weeks and by the time the annual maintenance fees are billed, he is already paid in advance. Bill closed in stating his commitment to the owners: Continue to manage the operating budget aggressively to hold the line on expenses whenever possible. Continue the process of recovering non-dues paying inventory. Aggressively market recovered inventory to bring in duespaying members. Continue to work with ARDA and other industry professionals to promote realistic timeshare resale opportunities. September

4 V. MANAGEMENT REPORTS Bill Scanzani introduced Scott Dravis of VRI to present a management report. Scott reviewed some key financial reports starting with the income statement for 9 months ending 9/30/11. Category YTD Actual YTD Budget YTD Variance Revenue 2,576,936 2,609,262-32,326 Combined Expense 2,303,680 2,395,879-92,199 Bad Debt 287, ,388 95,760 Net Income -35,887 In review, while Joel Bourassa has done a fantastic job in controlling expenses ($92,199 YTD),a combination of being behind in revenue by -$32,326 and increased bad debt has led to a loss of -$35,887 so far YTD Budget Scott Dravis reported that two main factors have led to an increase in the 2012 budget; increase in bad debt (owner delinquency) and an increase in property taxes. Overall, the fees increased by 5.3% over One Bedroom Example YEAR MAINTENANCE FEE INCREASE 2009 $ $499 0% 2011 $510 2% 2012 $537 5% 3 year average 2.33% General Manager s Report Scott Dravis introduced Joel Bourassa to deliver the General Manager s Report. Joel reported that over 1.9 million dollars in resort improvements have been performed in the last 5 years. Projects for 2011 included: Indoor pool renovations. o New wall tiles. o Pebble tech floor treatment. o New state-of-the-art dehumidification and heating system including a new duct system. o Structural work. o New sauna room. o New pool water heating system. Wi-Fi in all guest units available free of charge. Kitchens updated in Woodland Building. 37 flat screen TV s in all living rooms. Exterior of Mt. Washington building painted. CO detectors in all units. I-home clock radios in all master bedrooms. Total 2011 Capital Expense through 10/31/11: $375, Capital projects under review: New front entrance Porte Cochere. Continue kitchen replacements in Streamside Building. Replace old fitness equipment. New upholstered chairs in Jackman Building. Joel updated the owners on news about the resort departments: Engineering Efforts were made during the last year to utilize the knowledge base and experience of the maintenance staff to perform as much work in-house as is practical. Examples of those efforts include several new exterior staircases, including one on the outside of the Mount Liberty Building. Housekeeping Services Efforts within the Housekeeping Department included: Reorganization of staff. New inventory control procedures. Focus on increased customer service scores. Reducing staff turnover. 4 September 2012

5 In addition, a new ozone cleaning system was installed in the resort laundry and has made a dramatic improvement on the laundry product, with the additional benefit of providing significant savings on energy costs. Front Desk Joel noted that rentals have increased since He attributes that to a slight improvement with the economy as well as the efforts of the front desk staff. Joel spoke about program known as Catch Me Doing Something Right which encouraged owners and guests to share a positive experience they may have had with a staff member. That program has proven to be popular with the staff and the staff looks forward to the report each month to see if they are named in those reports. Joel also reminded owners about the Adventure Concierge program and encouraged owners to utilize Eric to help them maximize the enjoyment of their vacation experience. Green Initiatives - Joel was pleased to report that the resort received two separate awards in recognition of efforts of Pollard Brook in going green. The first award was given by the NH Lodging Association. The award is the highest honor given to a NH Lodging establishment for Green initiatives. The second recognition was awarded by Governor Lynch for initiatives in Eco-Tourism. Scott Dravis was introduced to moderate the 2011 elections. Scott commented that before proceeding to the elections, he d like to take a moment to speak briefly about the American Resort Development Association (ARDA). Scott explained that an important part of what ARDA does is promote and lobby for the timeshare industry and many owner issues. To do that, ARDA has set up a program called ARDA ROC. The ARDA ROC (Resort Owners Coalition) is a nonprofit program dedicated to preserving, protecting and enhancing the ownership of vacation resort properties. The program is instrumental in helping many associations in New England, including Pollard Brook Resort. Your 2012 maintenance fee invoice includes a voluntary $3 donation to ARDA ROC and Scott encouraged owners to consider making the $3 donation. More information on ARDA can be obtained at VI. ELECTIONS Scott Dravis noted that there was one 3 year position open on the Board of Directors and that there are two candidates running for the position. One is William (Billy) Curran, who is an incumbent Director, and timeshare owner Roland Robillard. Scott called for any other nominations from the floor; hearing none, a motion was made and seconded to close nominations and approved unanimously. Two owners were appointed to assist with tallying ballots collected today to add to ballots already received in the mail. Scott noted that election results would be announced later in the meeting during the question and answer portion. VII. OPEN DISCUSSION Questions from the owners were answered by management and the Board. VIII. ELECTION RESULTS Election results were announced as follows: William Curran votes Roland Robillard, 90 votes Mr. Curran was announced as the winner of the election and elected to a 3 year term. IX. ADJOURNMENT There being no further business, the meeting was adjourned at 12:40 p.m. September

6 PRST FIRST U.S. POSTAGE PAID CURLEY DIRECT c/o Vacation Resorts International P.O. Box 399 Hyannis, MA ADDRESS SERVICE REQUESTED Important Numbers Pollard Brook Unit Owners Association, Inc. and Vacation Resorts International (VRI) Pollard Brook Resort (603) Fax (603) Website Exchange Information Interval International (800) RCI (877) VRI*ety (888) Vacation Owner Services / VRI (800) Maintenance Fees Payment Plans Changes/additions to Ownership nememberservices@vriresorts.com Central Reservations (800) Information and Assistance Fixed Week Reservation Float Week Reservation Bonus Time Rental Program Deposits with Exchange Company innseason@vriresorts.com Still Need Assistance VRI Corporate Services (508) VRI Fax (508) Managed by Vacation Resorts International Perfecting the Art of Hospitality

7 IF YOU MAY BE UNABLE TO ATTEND THE ANNUAL OWNERS MEETING, please note your preference on this Proxy/Ballot and return it to reach us no later than November 2, Pollard Brook Unit Owners Association, Inc. Proxy/Ballot This Proxy/Ballot will be voted according to the instructions indicated below. If you own multiple weeks, only one Proxy/Ballot is required. Please indicate unit/week(s) owned below. PROXY: Solicited on Behalf of the Board of Directors for the Annual Meeting of Owners to be held on November 3, The undersigned hereby appoint(s) (check one only): Billy Curran, Treasurer Other: Only current members of the Unit Owners Association may act as Proxy to act as Proxy with power to vote for and act on behalf of the undersigned on any business that may properly come before the Annual Meeting of the Owners of Pollard Brook Unit Owners Association, Inc. to be held at the Lincoln Town Hall, 148 Main Street (Route 112 East), Lincoln, NH on Saturday, November 3, 2012, 11:00 a.m. or any adjournment thereof. BALLOT: Matter 1: Election of Director Vote for no more than one (1) Director to serve for a three (3) year term. * Indicates Incumbent *William Scanzani Write in Matter 2: Adoption of Amended and Restated By-laws SUMMARY OF BY-LAW REVISIONS POSTED ON THE ASSOCIATION WEBSITE Approve the adoption of the Amended and Restated By-laws. Reject the adoption of the Amended and Restated By-laws. Signature: Interval Owner Date: Signature: Interval Co-owner (if applicable) Date: Please Print Name(s) Legibly: Unit/Week Number(s): PLEASE FOLD OVER AND RETURN IN ENCLOSED ENVELOPE Thank you for your participation! Please complete and mail in time to reach us no later than November 2, 2012.