Annual Meeting information
2014 ANNUAL MEETING
CARRIAGE HOUSE TIMESHARE ASSOCIATION, INC.
Saturday, March 15, 2014
The Carriage House
105 E Harmon Ave
Las Vegas, NV 89119
Registration: 8:30AM - 9:30AM
Please let us know if you will need any special assistance during the meeting. Listening devices for the hearing impaired are available upon request.
Carriage House Timeshare Association (CHTA)
Annual Meeting Minutes*
9th Floor of the Carriage House
Las Vegas Nevada
March 15, 2014
The meeting was called to order by President Kriste Mencher at 9:35am. President Mencher welcomed the members and thanked them for their attendance at the 28th Annual Meeting of the Carriage House Timeshare Association. She introduced Directors: First Vice President, Mike Lincoln; Second Vice President, Gloria Harpenau; Secretary, Jay Koritzinsky and Treasurer, Ben Catanese. She also introduced General Manager, Amy Lowell and OLS Hotels & Resorts Chief Operating Officer Martti Mannoja and Vice President Administration, Rick Ball.
The first order of business was the approval of the 2013 Annual Meeting Minutes. A motion was made by CHTA Director Mr. Koritzinsky, seconded by CHTA owner Ms. Vanden Heuvel and unanimously approved by the membership to waive the reading of the 2013 Annual Meeting Minutes. A second motion was made by CHTA owner Ms. McCallson, seconded by CHTA owner Mr. Brown and unanimously approved by the membership to approve the 2013 Annual Meeting Minutes that were mailed to the owners last June and also available on the CHTA website.
The next item on the agenda was the Election of Directors. The candidates were presented by CHTA owner and Nominating Chair Person David Dean. Candidates introduced were CHTA owners Kriste Mencher, Camille OBrien and Stuart Sturm. The candidates were each given the opportunity to address the group followed by an opportunity for the members to ask questions of the candidates. Although Mr. Sturm was not in attendance, he asked that his written statement be read to the owners by Ms. Lowell. CHTA owner, Ms. McCallson, asked candidate Camille OBrien if she had any affiliation with Diamond Resorts International (DRI). Ms. OBrien answered that she did not. There being no other questions, those present then cast their ballots.
After the election, Ms. Mencher began by stating that it has been her pleasure to serve on the Board of Directors for six years and as President for the past four years. She commented that to many, The Carriage House is “our home away from home” and, like any home, requires continuing maintenance and repairs. The Carriage House is a 40 year old building and for the past 20 plus years renovations have been made. In the early 90’s, and before beginning work, the Board of Directors met with an architect, management, legal counsel and representatives from the Clark County Building and Fire Departments to discuss how to move forward to make renovations. Minor cosmetic changes were made; just enough to get the rooms back in shape so that owners and guests could comfortably be accommodated. A long term comprehensive plan to renovate the exterior of the building was then developed and included a new roof, windows, building exterior surface, pool, tennis court and parking structure. As of today, 66 of the guest rooms have recently been renovated with 20 more currently being finished. The next significant project will involve an update of the fire sprinkler and alarm systems.
This project will involve shutting down one floor at a time to complete the work. As this work is being done the hallway ceiling, lighting, doors, wall covering and flooring will also be replaced. In addition, some of the guest rooms will be upgraded with required ADA enhancements including strobe lights and equipment for the hearing impaired.
During this project, rooms will be taken out of service for several months leaving fewer available for occupancy. There will be some audible testing from time to time which will be disruptive. However, at the end of the project there will be updated hallways and a new fire sprinkler and alarm system. Overall, it will be an extensive and expensive project but one that should be done. There is nothing more important than the safety, security and comfort of the CHTA owners and guests. Since the owners took over the management of The Carriage House in 1987, all renovations and improvements have been paid without the need for a special assessment, and the Directors take great pride in that. And, for this project, a special assessment is also not anticipated. While this has meant some increases in the Annual Maintenance Assessments over the past 5 years, this project is important and necessary.
General Manager Amy Lowell then spoke on Carriage House ownership and how an owner’s week is recorded in the public records. For the most part, all CHTA owners have a “deeded interest” in the building, meaning that ownership includes an actual piece of “Nevada real estate” which is the owner’s in perpetuity. For many, the timeshare was recorded in the name of the husband and wife. This may be fine, although at some point if both husband and wife pass on, and if they live out of state, and want to pass on the timeshare interest to their heirs, their out of state will may need to be probated in the state of Nevada. Unfortunately probating an “out of state will” in Nevada can be costly and may be more than the value of the timeshare. Ms. Lowell clarified that she is not an attorney nor can she provide legal advice but she can verify how an owner’s interest is recorded and then guide owners to the proper individuals who can assist in making changes if needed. In many cases it is simply changing the deed from individuals to a family trust if one is in place, or adding the name of an heir to the account. By reviewing this now, it may prevent extra cost and delays in allowing the timeshare week to be passed on to an owner’s heirs. She concluded her remarks by stating that it is the goal of the CHTA staff to make sure that all owners are completely satisfied with their timeshare.
OLS Hotels & Resorts COO Martti Mannoja began by commenting on the end of the 2013 year travel statistics for Las Vegas.In virtually every category the numbers were flat to the prior year. As an example, overall visitor volume was almost 40,000,000 and that is within one tenth of a percent of the prior year. Room inventory remained stable at approximately 151,000 lodging units, which has been noted in the past is the largest number for any city in the United States. In terms of arriving airline passengers at McCarran, again, that number was strikingly similar to the prior year. For 2013, it was 41,857,000. In the prior year, it was 41,668,000 an increase, but only of 81,000 passengers. Automobile traffic from all highways that feed into Las Vegas was slightly improved over the prior year with Las Vegas market still highly dependent on visitors coming from Southern California. For the CHTA rental program, occupancy increased to 68.2% versus a budget of 56.5% and a prior year of 53.3%. The average daily rate for the year was $97.02, which compared favorably to the budget at $96.93 and the prior year at $92.88.
As a result, total rental revenue was $1,262,461, which compared favorably to the original budget and over the prior year of $1,191,000. Total revenue from all sources for the year at The Carriage House 2013 revenue was $4.5 million against a budget of nearly $4.3 million and prior year of $4.9 million. The reason revenues were lower in 2013 versus 2012, particularly given the success of our rental program activities was due to the fact that in 2012, the CHTA sold leases for the cell towers on the roof which brought in $450,000 and was therefore added to total revenue. That is referred to as a "one-time event" and was very favorable for The Carriage House’s long-term goals.
Additionally, the owner assessment write-downs that have taken place the last several years, peaking in 2012, actually were reduced by over $100,000 in 2013. This indicates that the economy is stabilizing, and that people are feeling good about their ownership at The Carriage House. Having a stable environment with owners that are paying their annual maintenance assessments and utilizing the facilities or as a trade option to go elsewhere is nothing but a healthy thing for The Carriage House. Mr. Mannoja concluded his remarks by stating that OLS continues to be committed to their two decades plus long relationship with The Carriage House and is appreciative of the supportive efforts of the owners, the CHTA Board of Directors, Amy Lowell and her team.
The reports of the officers began with First Vice President Mike Lincoln and an explanation of the process for determining the Capital Reserve Budget.It is the goal of the Directors to have sufficient funds to ensure that the CHTA is kept as a quality and physically sound property now and into the future. This is accomplished each year, in part, by hiring an outside firm that specializes in formulating Capital Reserve Budgets. This process involves listing all of the physical assets, determining their current condition and when they will likely need replacing. This includes such things as the roof, pool, furniture and heating and air conditioning systems. The next step is determining how much money it will cost to replace each item and how much money must be set aside to accomplish this without the need of a special assessment. This suggested number is annually reviewed by the Directors and if approved is divided by the number of CHTA owners. This then becomes the portion of the Annual Maintenance Assessment which is set aside for the future.
This money is maintained in a separate account from the operating funds and are invested conservatively in Certificates of Deposits with multiple banks, Indexed Market –Linked CD’s that are FDIC insured on the principal and FDIC Insured Bank Deposits and Money Market Funds. After this process, it becomes the goal to work within the budget for the current year which is not always easy with a 40 year old building. The Board is very pleased with the funding and the construction of these ongoing, important and necessary projects. Mr. Lincoln concluded his remarks, by stating that he believes that 2014 will continue to be a positive year for the CHTA but also for our country’s economy as well.
Second Vice President, Gloria Harpenau next reported on some of the improvements and upgrades that were made to The Carriage House in the past year. Historically the CHTA has averaged spending of over a million dollars each year in renovations. However, in 2013, only $600,000 was spent. This decision was made to allow the CHTA to build back the Capital Reserve fund. This money was spent in part, on the complete renovation of four one-bedroom master lock-out units and two studio units. Improvements were also made to the heating, air conditioning and plumbing systems, the computers and elevators. There were also improvements made to the administrative offices as well as the conference room, replacing wallpaper and flooring. In September, the internet service for the guestrooms was upgraded and in November preventative maintenance was done to the roof.
Going forward in 2014, there are currently 20 rooms being remodeled and improvements to some of the older rooms will be made including new furniture, draperies and carpet on an as needed basis. Once these 20 rooms are completed, there will be a total of 86 rooms renovated, leaving 69 to be completed. This year the pool, spa and deck have already been refinished and a beautiful new monument sign added on Harmon Avenue.
Mrs. Harpenau concluded her remarks by stating that the conservative path taken over the past 28 years, plus careful spending, has allowed the CHTA, even during these difficult times, to still have money set aside to continue to improve the building. It is the goal of the Directors to keep the property in outstanding condition for the enjoyment of the owners and to help the rental program be even more successful.
Secretary Jay Koritzinsky then spoke and began by saying what an honor it was to be elected to the CHTA Board of Directors at last year’s annual meeting.He continued by commenting that he had enjoyed learning about The Carriage House this past year, and working with the wonderful staff and the tremendously strong Board of Directors that is in place.
He then reported on the new affiliation that The Carriage House has established with Vacation Internationale, one of the first timeshare companies ever established, and one of the largest owner-controlled timeshare companies in the industry. Vacation Internationale or “VI,” as it’s known, is headquartered in Seattle, and has approximately 42,000 owners in their club, with over 45 different resorts in the US, Canada and Mexico.
The one location that VI did not have a strong presence in was Las Vegas. Thanks to the relationship with OLS, Rick Ball suggested that VI be contacted to see if they were interested in purchasing some of the unsold weeks for their vacation club. Within a few short months, The Carriage House sold 200 Studios and 200 One Bedroom Masters to VI. This sale brought in almost $200,000 to The Carriage House, and, more importantly, there is now a new dues-paying owner for these 400 weeks. Going forward, VI has expressed interest in buying those weeks that come back to The Carriage House through deed backs and/or foreclosures. The CHTA has also entered into a long term agreement with VI to lease this space on the 9th floor for their Sales Operations. Previously this space had housed two restaurants and several timeshare sales operations. Mr. Koritzinsky concluded his remarks by stating that as a Wisconsin Real Estate Attorney who commonly deals in real estate transactions, he found this to be one of the easiest transactions he had ever encountered. This was due in part to VI’s business style which is very similar to that at The Carriage House. He concluded his comments by stating that he was very pleased to be a member of the CHTA Board and couldn’t be more impressed with the manner in which this timeshare association is operated. The operating performance has exceeded expectations, and the improving economy, along with the addition of VI, suggests a very strong future.
Treasurer Ben Catanese then gave the Financial Report.The Carriage House ended 2013 in sound financial condition. Two separate accounts are used to fund all of the expenses of The Carriage House: The Capital Reserve Account and the Operating Account. The Capital Reserve account is used exclusively for making repairs and improvements to the property. It is funded by a portion of the Annual Maintenance Assessments, usually between 10%-30% of the total and is listed as a separate line item on the billing statement each year. At fiscal year-end 2013 the CHTA had over $1.9 million in the Capital Reserve Account even after spending nearly $600,000 on significant improvements. Going forward in 2014, approximately $1.3 million will be spent in renovations.
The Operating Account covers the expenses that keep The Carriage House running on a day-to-day basis. This includes salaries, office supplies, equipment, taxes, insurance, utilities, building and grounds maintenance. Operating revenue comes from several sources; the two primary sources being the Annual Maintenance Assessments and the rental revenue from rooms not occupied by owners or exchange guests. The Annual Maintenance Assessments for 2013 increased by 5%. Even with this increase, the CHTA fees continue to be some of the lowest in the industry.
Each month, the Board of Directors and management consultant, OLS Hotels & Resorts, review the financial reports for the previous month and keep a close eye on revenues and expenses to see that they conform to the approved budget. A review of the financial situation for the current year is conducted during the fall Board meeting. This provides the Board a foundation from which to budget for the upcoming year. A copy of the 2014 budget was included with the Annual Maintenance Assessment invoice that was mailed last December. Additionally, the Board of Directors hires an outside accounting firm to conduct an annual audit of the financial operations. On March 12, 2014 Thursday the Directors approved the final Annual Audit Report for Fiscal Year End November 30, 2013. The report included an “unqualified opinion” from the auditors. This means that all accounting practices are sound and the financial statements fairly represent in all material aspects the financial position of the CHTA as of November 30, 2013.
On an annual basis, the Board and the Management Team also update the Long Term Capital Reserve Study. This study is conducted by an outside firm that specializes in forecasting improvements that will need to be made over the next 30 years. The 2014 Operating Budget, and the 2014 Long Term Capital Reserve Study, as well as the Investment Policy were all reviewed and approved by The Carriage House Timeshare Association Board of Directors. Article 4, Section 16c, of the Bylaws require that these three important documents be ratified by the membership.
Mr. Catanese made a motion that The Carriage House members ratify the 2014 Operating Budget, the 2014 Long Term Capital Reserve Study and the Investment Policy that were all reviewed and approved by The Carriage House Timeshare Association Board of Directors. The motion was seconded by CHTA owner Mr. Brown and unanimously approved by the owners.
Mr. Dean then announced the election results. The winner of the election was Mrs. Mencher with 1,656 votes. Mr. Sturm will serve as the alternate director with 463 votes and Ms. OBrien received 148 votes.
There was no Old Business to address so the agenda moved to New Business with a question and answer session. Topics discussed included the following: contacting Clark County to ask for improved signage for Harmon Avenue from Las Vegas Boulevard, consider “on line” voting for the Annual Meeting, consider solar energy, consider some type of comments section for the owners on the CHTA website and consider moving the date of the Annual Meeting.
President Mencher thanked former Director Robby Frank, although not in attendance, for his many years of service to the CHTA and stated that he will be given a gift certificate for a week’s vacation. A drawing was then held for two complimentary seven night stays in a One Bedroom Suite at The Carriage House. The winner from the meeting was Ms. McCallson from California. The owner that won from the Mail-In Ballots was Mr. Hanson from Colorado. The owner that won the exchange week from DAE Exchange Company was Mr. McCambridge, also from Colorado. There being no further business to discuss, the meeting adjourned at 11:15am. The owners were invited to enjoy a box lunch with the Directors and The Carriage House and OLS staff.
*Minutes to be approved by the CHTA owners at the 2015 Annual Meeting.