CROWN RIDGE COMDOMINIUM ASOCIATION

2009 ANNUAL MEETING

MINUTES

Date:  Sunday, November 1, 2009

Time: 12PM

Place: Whittier House, Route 16, West Ossipee, NH

1.  Open Meeting:  Jim W. opened meeting at 1:23 pm.

A.  Intro of Board and Head Table:  Jim Bryant, John Kustron, Pat Leblanc, Jim Wiggin, Carol Mayhofer, Edward McBurney, Jodi Moon.

Lang Plumer, board member, was expected but is absent.

B & C.  Proxy/Proof of Notice:  Pat Leblanc confirms there were 15 unit agents in attendance; 2 by proxy, and 3 unit agents are absent; establishing quorum.

2.  Approval of Minutes of 11/2/08 Annual Meeting (vote): 

The Nov. 2, 2008 CRCA Annual Meeting minutes were reviewed.  Tom Bobowski, (Unit 12) motioned to approve the 2008 CRCA Annual Meeting minutes as written.  Carol Habershon (Unit 19) seconded the motion.  The motion passed by a vote of 17-0

3.  Year in Review 2009:

A.  Unit Agents:  CRCA has 20 units, therefore, needs 20 Unit Agents to represent each of those units.  There are currently 19 Unit Agents.  Unit 7 has a vacant Unit Agent slot.  Letters have been sent to NH and Maine Unit 7 owners requesting a volunteer for Unit 7 Unit Agent and there has been no response.  Jim Wiggin nominates John Kustron (also Unit Agent for Unit 4) to represent Unit 7 as their agent until a Unit Agent is found. 

Dick Wolf (Unit 7), in attendance,  requests to serve as Unit Agent for Unit 7. 

Jim asks the membership to approve Dick Wolf as the Unit Agent for Unit 7.  There were no objections. 

Dick Wolf is appointed Unit Agent for Unit 7. Mr. Wolf is thanked by all in attendance for his offer to serve.

B.  Gold Crown Status:  CR has received Gold Crown Status for 2009, the 13^th year in a row.  It’s been a rough year.  Jim Wiggin thanks entire staff of CR. 

C.  Manager’s Report:  Jodi Moon, Resort Manager, speaks:

Announces 2 staff changes:  2/5/09 Jodi Moon was appointed Resort Manager.

One Maintenance employee was lost, one gained.  New employee is working very well.

Jodi states that it has been a tough year; staff changes, higher RCI threshold compared to 2008.  It was challenging, admits she was worried; Steve Beller leaving, her transition, maintenance changes.  A lot has happened.  Crown Ridge is well above average in ratings (RCI) for North American resorts. 

Maintenance Week:  Units 2, 11, and 14 were remodeled during Maintenance Week 2009.  The budget for this planned remodel was pared down to absolute necessity only. Jodi states that $45k to $55k had been spent in remodels/Maintenance in previous years.  In 2009, it was done for just over $25k.  Maintenance Week went well; the units look great.  The largest sums were spent on furnishings, flooring and painting.

Office hours have changed:  previously winter hours were 9am-8pm daily and summer hours were 9am-9pm daily.   Feedback from Unit Owners and guests prompted the change.  The office/pool area is now open Mon-Thurs., 9am-8pm, Fri-Sun, 9am-10 pm, year round.  There has been positive feedback from owners and guests and the need to have summer/winter hours has been eliminated.

Pool dehumidifier /roof repairs:   The dehumidifier is 2/3 complete in repairs.  The Pool roof is 100% done.

Maintenance Fees payments:  In considering the time of year maintenance fees are due, as a service to owners, CRCA  will be offering owners two options for payment of 2010 maintenance fees:

Option 1:  Pay in full by January 1, 2010. 

Option 2:  Pay ½ by January 1, 2010, remaining half paid by March 1, 2010 (Unless week starts before March 1; if this is the case, maintenance fee must be paid prior to arrival for owners week).

For 2011;   An additional option will be available.  Quarterly billing will be offered.  Invoices for maintenance fees will be due on April 1, July 1, and October 1.  The January 1, 2011 invoice amount will be adjusted to meet the budget.  This quarterly billing will ease up on owners having to come up with their maintenance fee payment immediately after the holidays and during tax time. 

CRCA is now offering Recycling.  The response has been very positive; has a cost savings of $2,300.00 yearly!

Employee Health Insurance:  Cigna is no longer offering a plan that meets the needs of the two full time employees that benefit from health insurance.  CRCA has switched back to Anthem Blue Cross & Blue Shield.  The savings to CRCA/owners:  $6,500.00!

Credit for Propane expenses in 2008:   Currently, CRCA is not paying out for Propane.  CRCA was not made aware that the 2008 Budget Plan with the current Propane vendor accrued a credit of approximately $37,000.00 until spring 2009.  This credit will decrease with each 2009 Propane bill.  Once the credit is used in its entirety (expected to be sometime in April or May of 2010), the new budget plan payment will be $3,000.00 less per month than it has been!

CRCA was able to bundle Cable, Internet and Phone expenses with Time Warner Cable.  This resulted in $3,000.00 savings for the year!

Payroll:   Payroll, due to Steve Beller’s departure, has been lowered by $11,000.

Sheriff Sale:  Currently the Sherriff sale is not scheduled; it is anticipated to take place in early 2010.

Jodi Moon commends entire staff for their hard work.

D.  Sherriff’s Sale (Jim Wiggin): 

Six subjects:  All having an effect on each and every owner and the CRCA budget. 

A lot of work has gone into the budget- it hasn’t been easy.  Bottom line:  to ensure that owners do not pay any more than they paid last year.  Some of the cost savings found have already been mentioned (above).  CRCA will continue to search for the best deal, the best price and maintain quality of services. 

The Sheriff’s Sale will be part of the savings realized.

1.  CR owned units:  As of 10/1/2009, CRCA owns a total of 41 units/weeks out of a total of 1,020 units/weeks.  Of those 41 units, 2 were under agreement-as of this meeting date-they had not been closed.  Units that are sold; upon closing, will generate and have maintenance fees paid for 2010.  The Remaining 39 units are selling slowly.  Of the 39 units/weeks that CR does not receive maintenance fees for:  7 are large units, 32 are small units.  This means that $24,174 is not going into the operating account, therefore, the paying owners make up for this in paying higher maintenance fees.

2.  Units/weeks Sold:  In 2007, CRCA sold 22 CR owned units.  In 2008, CRCA sold 12 CR owned units.  In 2009, CRCA sold 6 units.  A sign of the times.  2 additional units are under agreement.  The units/weeks that CRCA owns, including legal expenses, have been outstanding since 2008 and before.  CRCA is also asking non-paying owners to sell their units/weeks.

3.  2008 Outstanding Fees:  2008 is when we rolled up our sleeves and tried to figure out where we were going and where we were at.  A compilation of 2006 thru 2008 unpaid fees was done.  This subject is known as our legal case load.   Attorney McBurney handles our legal case load.

June 1, 2007:  A total of 47 cases.   These were not being dealt with previously.

June 1 2008:   A total of 45 cases remain outstanding. 

Dec 31, 2008:  after enlisting Atty. McBurney’s services---27 cases remain.  A reduction of 18. 

As of 10/28/2009; 11 of those cases remain.   Settled cases are units/weeks that have been returned to the ownership of CRCA.  A total of 36 units/weeks have become the property of CRCA. 

Five (5) of the eleven (11) cases remaining are ready to go up for auction with the next Sheriff Sale.  Of the six (6) remaining cases:  CRCA is hoping to have at least 3 more of the units ready to go to Sheriff Sale as well.  These 11 cases, unfortunately, are also part of our 2009 outstanding fees. 

Bottom line:  we are working with non-paying owners and Atty. Mc Burney to get these cases out of legal to be able to start benefiting.  Jim Wiggin praises Atty. McBurney for all of his hard work.

4.  2009 Maintenance Fees/Payment Plans:

CRCA understands that economic conditions have been terrible to all of us—CRCA is trying to work with owners that are having trouble making their payments.  We are working out payment plans with owners and in doing this we are limiting expenses to owners and CR.  There were 20 owners in May, 2009 on payment plans. As a result of a review of unpaid fees, on 5/17/09, 24 owners were on payment plans.  As of 10/1/09; there were 7 remaining owners on a payment plan. 

5.  How are we doing?  Collection of 2009 Maintenance and Assessment Fees:

5/18/09:  We encouraged non-payers to contact CR prior to this date by sending 50 “last chance letters”.   Ten (10) of the fifty (50) recipients of this letter responded, leaving 40 that did not respond/accounts remaining delinquent.  The total lost revenue for the 40 units-15 large units, 25 small units—amounts to $26,140.00.

6/30/09:  Jodi Moon and Jim Wiggin met at the Registry/Courthouse.  At that time liens were filed on the 40 non-paying owners.   CRCA still has 34 liens in effect (11 large units, 23 small units).  The lost revenue, calculated on maintenance fees alone (interest, late fees, or lien filing fee of $50 is not included), totals $21,918.00.   

6.  2009 Capital Reserve Fund Assessments Owed:   Last year we did something that was agreed to at the annual meeting:  to lessen the impact on CR owners, it was decided to do a split billing for the maintenance fees and Capital Reserve Assessment fees.  11/3/08, a bill for the maintenance fee would be generated and mailed and then 6/09 CR would send an additional bill for the assessment fee.  CRCA has 116 owners that have not paid the Assessment Fee.   36 large units ($5,220.00 total in fees) and 80 small units ($8,960.00 total in fees) have the potential for a lost  $14,180.00  in revenue.  As of 11/1/09; the outstanding fees should have been paid, in the next week, Jodi Moon will compile a list of those whom have not paid.  Assessment fees are being treated the same way maintenance fees are:  If fees are not paid, the unit may not be used.

Separate billings for the maintenance and assessment fees will not occur again. 

Mr. Bobowski noted that 900 of the 1020 weeks have been collected.

Jim Wiggin states that CRCA needs to realize a lighter load for their owners.  “We aren’t giving away anything-but we aren’t going to take on any additional expense either-this is probably the toughest year we have faced. We can all feel better that the numbers for the maintenance fees/assessment fees are lower than last year.”

E.  Land Sale/Quitclaims:

Jim Wiggin “…626 have agreed thus far; 7 have not agreed.   CRCA has to seek a new path to achieve this. The land is owned and is an asset, but it is still a liability.  We pay the least amount of taxes on this property that is possible.  The membership wants to fully fund the capital reserve with the proceeds from the sale of this land-we’d like to see this, but right now we are not counting on being able to do this.  We will continue working on it.”

F.  Crown Ridge Units Owned:

Jim Wiggin:  “All cases (unpaid/delinquent accounts) going to Atty. McBurney can take up to 28 months to get ownership back once in legal.  CRCA is exploring methods to reclaim units in a shorter period of time.  CRCA believes the amount of time to re-claim ownership can be reduced to 6 months or less.  Atty. McBurney will be speaking about this later in the meeting.”

G.  Tricom Management, Inc.:

The Board seeks membership approval to continue to look at management options in the best interest of CR.  Questionnaires sent to Unit Agents and Board Members after the Tricom presentation in June designated that only 1 person thought CR should enlist/pay for Tricom to manage CR 100%. 

Overview:  Jim Wiggin states that we were contacted by Tricom and they requested to do a presentation of their services.  They (Tricom) currently do not have resorts that they manage in this area.  The closest resort is in the Berkshires.  On June 6, 2009, the presentation was made to unit agents/board members.  As a result of that presentation there were more questions.  Right now discussions are in limbo—at $37 per unit-Tricom can provide 100% management.  Tricom has different levels of management/different costs for each level.  CR can choose to have Tricom handle marketing, sales and rentals only.  The levels are customized to the resorts’ wants and needs.   All that is being asked is for the membership to approve authorization for the board to continue to explore this management service.  A member speaks up and asks if there have been complaints about current management-there haven’t been.  Commitments/decisions will not be entered into/made without membership approval. “We would not, under any circumstances-enter into any contract with anyone-without Unit Agents approval.”-Jim Wiggin.

Mr. Rhodes motions for the board to have authority to continue talking with Tricom and others companies to gain info to present in the future to the membership.  Sue Malloy and Mr. Nichols seconded the motion.  The Motion passed.  No objections.

4.  Treasurer’s Report-CRCA Financial Condition-Pat Leblanc

*We have over 58k in capital reserve fund—last year we had 0.

*CR owns 39 units plus 11 units in legal:  50 total units.  Jim Wiggin notes there are also 34 liens outstanding, leaving the potential for CRCA owning a total of 84 to 100 units.  8.4% of our operating cost is paid by CRCA (funds that are not being received). 

In 2010-budget expenses were reduced by $82,475 however actual expenses also increased which resulted in a net reduction of expenses of $37,775.  Maintenance fees will be less because of these reductions.    Large units will pay $858.76 ($47.24 less this year), and small units will pay $664.62 ($36.38 less year).

*Small discussion concerning the sale of the CRCA owned units and Internet site recognition, maintenance week, separate billings for maintenance fees and assessment fees, confirmation that Capital Reserve is not for maintaining monthly expenses. 

*Proposed Budget 2010/Financial Status/Operating Funds/Capital Reserve Schedule & Funds:  Line items gone through included:

Repairs & Maintenance was increased by $10,000.00 

Legal increased $4,000.00

Payroll Processing Fees increased because cost to CR went up.

Electricity increased by $10,000.00 due to rate increase.

                        Real Estate Taxes/NH BET Taxes increased, due to rate increases.

The 5% ($34,300.00) maintenance and assessment fees that are “Uncollectable” have been added to the budget as well.  It is noted that the actual number for “Uncollectable” is about 8.4%, which calculates to be an additional $20,000.00 that could be added to the budget (increasing maintenance fees for large units to $881.92 and small units to $682.55).  The 5% ($34,300.00) was the amount added to lessen the impact on paying owners.  It is noted that the increased maintenance fees to cover  the 3.4% gap in ”uncollectable” still results in lower maintenance fees for 2010.  The BOD believes this budget can and will work using only the 5% number.  This 5% Uncollectable is based on last years decision to add the line item to the budget to compensate for the 5% delinquent fee.  Operations have always counted on 100% of owners paying their maintenance fees, but this isn’t happening.

*Small discussion as to problems that arose this year and the impact the cost had on CRCA included the pool heater, pool roof, and dehumidifier.

*Small discussion concerning Capital Reserve being used to maintain monthly expenses of resort should the budget fall short.  Capital Reserve is not to be touched.  An emergency is considered a Capital Reserve expense.  Over time, the Capital Reserve will be fully funded.  It would take approximately $432,000 to fully fund the Capital Reserve.   Assessment fee last year was to partially fund Capital Reserve.  Numbers show we were able to collect nearly $118,000 of the anticipated amount of $124,000+. 

Budget (2010) vote and Maintenance Fee (2010) vote:  John Branscombe motioned to accept budget and maintenance fees as presented.  Mr. Ruona 2nds the motion.  It is decided that maintenance fees will be rounded to be $859.00 for large units, $665.00 for small units.  The motion passed 17-0.

5.      Election of 2010 Board of Directors and Reserve Members (Vote): 

Jim Wiggin:    Current 5 board members (Jim Wiggin, Jim Bryant, John Kustron, Pat Leblanc, and Lang Plumer) are seeking reappointment.  Carol Habershon motions to reappoint existing board.  Mr. Ring 2nds the motion.  The motion passed 17-0.

Reserve Board Members:  Andy Lamers seeking re-appointment; Kathy Stockbridge seeking to withdraw.  Jim Wiggin nominates John Branscombe and Dan Bilodeau, to serve as Reserve Board Members.  Both accept.  Geraldine Boudreau motions to accept Reserve Board Members as presented.  Kathy Radmae 2nds the motion.  The motion passed 17-0.

      6.  Goals for 2010:  Jim Wiggin

A.     Continue collection efforts with delinquent owners.  We depend on this money and will continue to take this very seriously.

B.     Reduce operating expenses.  We will continue this effort.

C.     Strive to maintain current level of Maintenance Fees.

D.     Commence unit remodeling in accordance with existing remodeling schedule (units 3, 12 & 13).  Needs and wants will be addressed. 

E.      Continue with Quitclaims and Land Sale.  Attorney McBurney will address this subject momentarily.

F.      Marketing of Crown Ridge (locally, nationally and internationally).  This is going to happen. 

G.     Maintenance Fee payment structure for 2010 and future:  Thanks and

praise for Jodi Moon’s hard work in putting together the payment schedules for 2010, 2011 and future.   We are working to save money for our owners and for CRCA as well.

                 H & I.  Mortgage Note & Deed for payment plans:  Attorney McBurney is introduced.  

Jim Wiggin:  “All cases (unpaid/delinquent accounts) going to Atty. McBurney can take up to 28 months to get ownership back once in legal.  CRCA is exploring methods to reclaim units in a shorter period of time.  CRCA believes the amount of time to re-claim ownership can be reduced to 6 months or less.  Atty. McBurney will be speaking about this later in the meeting.”

      *Most of the old owed monies have been received; we are working on the current owed monies.  Due to legislature changes (budget cuts staff cuts, increased fees) it is taking approximately 28 months from start to finish to get a non-payer’s unit back.  Add to that 28 months, the number of months that CR has unsuccessfully tried to collect the unpaid fees for a unit.  CR is losing up to 4 years worth of fees on these units.  In addition to the loss of fees, there is also the legal cost to regain a unit which is approximately $2,500.00.  We have been investigating other ways to collect monies owed and reduce the time it takes to get a unit back.

      Short Term Solution:  Mortgage Note and Mortgage Deed:  When people want to pay on a payment plan, they will be asked to sign a Note and a Mortgage Deed to CR.  The advantage to this:  if payment is not received as promised, CR can foreclose on the unit and it takes 35 days.  The only expense is the publication and actual sale (we do the sales in-house) of the unit.  Serious objections have been made by people requesting payment plans.  We are not going to allow payment plans if the Note and Mortgage Deed is not signed.    

Long Term Solution:  The Crown Ridge Condominium Association Board of Directors is proposing a new entity to help with the maintaining of maintenance fee payments called The Crown Ridge Trust Owners Association (CRTOA).

CRTOA will be a non-profit owner of Crown Ridge Resort timeshares.  They will be subject to the Crown Ridge Declaration of Condominium, just like any other owner; however, they will be able to sell Certificates of Beneficial Interest (CBI)

A CBI is comparable to a renewable lease.  It is a contract for exclusive right to use; therefore it is governed by contract law, not Real Estate law.  It is revocable, so if an owner defaults on the contract (doesn’t pay his maintenance fees) the contract becomes null and void and the right to use is rescinded.

Currently, under Real Estate law, we must file liens each year on an owner who does not pay their maintenance fees.  We then have to file small claims, foreclose or hold a Sheriff Sale.  This process can take 2-3 years from the first non-payment and cost approximately $1,000 per unit/week in legal fees.  Under a CBI, if an owner does not pay his fees, CRTOA will notify them that they have a certain amount of time to settle their account.  If the account is not settled, CRTOA revokes the right to use and ownership reverts to CRTOA.  There is no legal process.

It is suggested that CRA convert the units/weeks owned by CRCA (currently 43) to CRTOA subject to a “blanket mortgage”.  These units/weeks would then be sold by CRTOA as right to use using a CBI.  When a unit/week is sold by CRTOA it pays down its mortgage to CRA.

Current deeded owners would not be affected by CRTOA unless they choose to convert their deed to a CBI.

Any owner wishing to sell their unit/week may do so through CRTOA.  Example:  Jim wants to sell his deeded unit/week to Ed.  CRTOA may purchase the unit/week from Jim for the agreed upon price he would sell it to Ed (similar to first right of refusal).  CRTOA then sells the unit/week to Ed as a CBI.  Jim does not have to pay for deed preparation, NH transfer taxes or recording fees.  Ed does not have to pay NH transfer taxes, recording fees or the L-Chip surcharge.  Everyone wins.

Utilizing CRTOA and CBIs will help to diminish costs associated with non-payment and also non-paying owners.  The CBI system is currently in use at Mountain View Resort with great success.

      Unit Agents were asked to approve both the Mortgage Note and Mortgage Deed to be continued for those wishing to utilize payment plans.  Carol Habershon motioned, Mr. Wolf seconded the motion.  16-1; Motion passed.

      Unit Agents were asked to approve the establishment of the Crown Ridge Trust Ownership Association for future ownerships.  John Branscombe motioned for the CRTOA to be established.  Mr. Bilodeau seconded the motion.  16-1; Motion passed.

7.  Adjourn Meeting:  4:10 pm Motion to adjourn made by John Kustron, Carol Habershon seconded the motion.  16-1 Motion passed.  It is announced that a brief meeting of newly elected and re-elected members of the CRCA Board and Reserve Board is being held immediately following the annual meeting.