Annual Meeting information

2011 ANNUAL MEETING

OF THE

CARRIAGE HOUSE TIMESHARE ASSOCIATION, INC.

Saturday, March 19, 2011

 9:30 AM

Atomic Testing Museum

755 East Flamingo Road

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.            

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Carriage House Timeshare Association

 Annual Meeting Minutes*

Atomic Testing Museum  Las Vegas Nevada

March 21, 2009

The meeting was called to order by President, John Blevins at 9:30 AM.  He introduced Directors, First Vice President, Mike Lincoln; Second Vice President, Dotty Catanese; Secretary, Kriste Mencher; and Treasurer, Robby Frank. He then introduced Carriage House Timeshare Association (CHTA) General Manager, Amy Lowell, John Fitts, President of Outrigger Lodging Services (OLS) and Rick Ball, Vice President of OLS.  President Blevins welcomed the members and thanked them for their attendance at the 23rd Annual Meeting of the CHTA. He stated that he was honored to have served as the CHTA President this past year. A motion was made by CHTA members Mr. Mencher, seconded by Mrs. Harpenau and unanimously approved by the membership to approve the 2008 Annual Meeting Minutes that were mailed last June and also available on the CHTA website.

The first item on the agenda was the Election of Directors.  As President Blevins was a candidate in the election, he passed the gavel to Second Vice President, Mrs. Catanese. The candidates were presented by nominating chairperson and past CHTA President, Gloria Harpenau. Mrs. Harpenau asked for nominations from the floor.  As there were none, the nominations were closed. The candidates in attendance were then given the opportunity to make a speech to the members. Prior to the election, it was explained that the voting interests for the weeks owned by ILX are in a trust to be voted by the Board of Directors.  While the ILX votes were used at this meeting so that a quorum could be met, they were not used in the Election of Directors.  At the conclusion of the election, Mrs. Catanese passed the gavel back to Mr. Blevins. It was announced later in the meeting by Mrs. Harpenau that John Blevins and Mike Lincoln were reelected to serve three year terms with 1,087 and 934 votes respectively.  Mr. James Borucki will serve as an alternate having received 328 votes.  

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President Blevins began by advising that this completes his 9th year as a Director and he continues to be impressed by how the property and finances are so well managed. He commented that it was a pleasure to walk into the hotel and see all of the improvements that have been made since his visit last October. He continued by commenting that the State of the Association is much better than one might think considering the state of the US economy and especially the economy  in Las Vegas. He noted that according to General Manager, Amy Lowell, the Carriage House actually had a very good year in 2008. While the budgeted rental income goals were not met, 2008 was the fifth best year (out of 21) and also the year with the highest ever average daily room rate.

He continued by stating that on the financial side, all of the bills are paid, assets are up over last year by $73,000 and there is over $2.2 million dollars in the Capital Reserve Fund. The management and staff have known for some time that the months ahead would be challenging and put policies into place that would help the bottom line.  The staff prepared the 2009 budget eliminating salary increases and implementing a hiring freeze.  Some employees have voluntarily cut back their hours.  This is the attitude of our team from top to bottom and we are proud and thankful for having a group like this looking after our interests.

There are continued plans to upgrade the property. All of the rooms have been renovated and the process will begin again. However, this time the improvements will be less extensive therefore less expensive. The Carriage House continues to have the RCI Silver Crown designation which means the comment card scores from the RCI guests are strong which ultimately helps the CHTA owners trade to other timeshare resorts.

At this time, the collection of the Annual Maintenance Assessments from the individual owners is on track with previous years. This may indicate that members are still planning on vacationing either here or at an exchange resort.  He concluded by stating that the Carriage House will have a much better year than most of our contemporaries due to the right management team, the right employees, the right consultants and most importantly the members.

General Manager Amy Lowell spoke about the recent Chapter 11 Bankruptcy Protection filing by ILX Resorts.  She began by reviewing the relationship with ILX Resorts.  In 2001 the CHTA sold 600 weeks to ILX Resorts, a vacation club based in Phoenix, Arizona. Their primary resort is located in Sedona, Arizona but they also have timeshare weeks at a number of other resorts in Arizona, Indiana, Colorado, Nevada and Mexico. They paid the Carriage House $870,000 for the weeks purchased. Since that time, ILX has purchased additional Carriage House weeks for their vacation club members.  They were purchased from various sources including the CHTA foreclosure sales, from timeshare developer Diamond Resorts and directly from those Carriage House owners that wanted to sell their week. They now own approximately 2200 weeks. The relationship has been financially beneficial for the association and for many of the former members. Had ILX not bought these weeks many of them would have been left unsold in the inventory and the Annual Maintenance Assessments would not have been collected.  

Unfortunately, due to the current economic situation, ILX Resorts has made a decision to file for Chapter 11 Bankruptcy Protection.  This means they have requested protection from their creditors while they reorganize their company.  A significant contributing factor for this filing is the exiting of their major lender, Textron Financial, from the financing business.  Alternative financing is scarce in today’s environment.  The majority of the weeks are not actually owned by ILX but by one of their subsidiary companies Premiere Vacation Club.  At this time, Premiere Vacation Club is not directly affected by the bankruptcy filing.  In speaking with ILX President Nancy Stone recently she advised that it is still “business as usual” for their vacation club. They intend to continue paying for, and utilizing their Carriage House weeks for their vacation club members. In the past, ILX has always paid their Annual Maintenance Assessments on time. This year, they paid for ½ of their weeks by the due date but were unable to pay the balance.  A payment plan is in place and it is expected that by the end of the summer, they will have paid for all of the weeks owned.  In the meantime, they will be limited to only using those weeks for which the assessment has been paid. 

It is anticipated that ILX will make the payments for their weeks as it is clearly their intention for their Premiere Vacation Club to be a success. However, as a contingency plan, efforts will be made in researching other vacation clubs that might be interested in buying some of their weeks and or developing additional programs to rent the ILX weeks.

OLS President John Fitts then spoke on the state of the lodging industry.  Due to the

economy, travel in general, but particularly leisure travel, has been reduced by levels heretofore never experienced. In the 40 plus years of his career he has witnessed many recessions, some which were more impactful than others, but never anything like this. Regarding, Las Vegas, it is the classic boomtown.  As with all boomtown stories, what goes up must at some point come down -- too much "irrational exuberance." At the present time, virtually every significant casino company is either in bankruptcy or facing the possibility of bankruptcy if they can't raise equity as the credit markets for casino investments have dried up.  It is a dismal picture.  The Carriage House is not without its challenges, but as compared to just about any other lodging entity -- be it interval owned or otherwise – it is in an enviable position.  The cautious, conservative approach that the boards and management have adhered to for years has now paid off.  The Carriage House has more than adequate capital reserve funding. Given the level and quality of recent capital expenditures, the physical property is in excellent condition.  If necessary the capital projects can be shut down for two years without it having a serious effect on the business model. The Carriage House has a strong financial foundation created over the past two decades and, therefore, does not face the imminent challenges as do many if not most lodging entities in Las Vegas.  He concluded by stating that “there is no question we are in the midst of an economic tornado, but as with all things, this too shall pass.  All of us in this room today have many concerns we are coping with.  If I had one singular message I want to leave you with, it is that The Carriage House is in capable hands and should not add any additional burden to the already significant burdens we all collectively feel.”

First Vice President, Mike Lincoln began by commenting on the massive construction projects still going on in Las Vegas although it is apparent that things have slowed down considerably.  The Harmon Avenue corridor is still one of the busiest construction zones with the Planet Hollywood/Westgate Timeshare project across the street with asking prices reported to be in the $30,000 - $50,000 range per week, the City Center project at the end of Harmon and the two Marriott towers located directly in front of the Carriage House that will begin construction later this year.   

In 2008, the visitor count in Las Vegas was down about 4% which is over 1 million less visitors and gambling revenues down by about 10%.  Considering that the available rooms total is over 140,000 this has powerful dynamics on the Las Vegas economy.  As a financial planner for the past 35 years, he has never witnessed systemic changes that the events of the last 4 months have brought.  This has caused radical perspective changes in everyone on how their finances are handled. It appears to be accelerating at the moment and no one really knows when it will bottom out. However, as in any adverse situation, there are opportunities.  For example, there are many good deals now in Las Vegas offering special hotel rates, many with food and gaming credits as well as discounts on shows.

Mr. Lincoln continued by stating that even at our small property, this period will be survived. In this case, with the dedicated staff changes can be made quickly.  The lobby and front desk area has recently been remodeled including a new mini mart, exercise room and business center. This was all paid for out of the Capital Replacement Fund.  While the rental revenues are down they are not by any means out and still have a positive impact on the CHTA’s financial situation. Many timeshare associations have seen dramatic increases in their maintenance fees.  At the Carriage House the fees remained the same for 5 years with only a moderate increase of 6.5% in 2009.  Additionally, many of these associations still struggle to survive financially.  The CHTA has never had a special assessment which has become an all too common way for other resorts to fund their repairs and maintenance items that have been deferred and/or not reserved for. The Carriage House is in a very solid financial position. The management of Amy and her team is one of the most dedicated, creative and hard working groups of people in the industry. They continue to economize and cut costs wherever possible while still giving a first class vacation experience.  The Directors have been conservative in the reserve spending and investment policies and not one dime has been lost in the financial markets.  Funds have been deposited in secure investments such as government insured CD’s.  The property is monitored on a regular basis and the Directors will continue to react to the current economic situation to assure the association’s best interests are considered.  

Second Vice President Dotty Catanese began by stating that this was the 8th year she has served as a Director. Combined, she and her husband Ben have served as Board Members for over 20 years. They both are honored to have done so and have enjoyed the opportunity to have served as Directors.  She then spoke about the changes and $1.1 million dollars in upgrades that were made to the property in 2008. The pool and spa were rebuilt with ADA improvements including a pool lift, a new telephone system was installed, improvements to the heating and air conditioning system and upgrades to the computers were made. Also purchased were flat screen TV’s for the guest rooms. The most noticeable improvements were to the ground floor with the remodeling of the front desk, lobby, and construction of the new fitness room, complimentary business center and mini market.

Going forward in 2009, the Directors have decided to be cautious in spending.  However, upgrades of new furniture, carpet and draperies will be made to some of the rooms.  There will also be upgrades to the passenger elevators and the hallways.  Fortunately, the conservative path that has been taken over the past 20 years and careful spending allows even during these difficult times, to still have money in the bank which can be used to continue to improve the building.

Regarding the 9th floor, which was formerly occupied by “Joey Bistro Restaurant,” the Directors believe that it is in the best interest of the members to eventually convert this space into

additional units.  However, because of the current economic situation, this project will not begin for a few years. In the meantime, some of the space may be leased out to provide additional income to the association. Mrs. Catanese concluded by stating that since the formation of the homeowners’ association over 20 years ago, the building has been renovated inside and out without any special assessment to the members.  The goal has been to keep the hotel in outstanding condition for the enjoyment of the members.

Secretary Kriste Mencher began by thanking the owners for attending today’s meeting.  She stated that it has been a privilege to serve on the Board this past year. Despite the economy being in such bad condition, the Carriage House is fiscally sound.  This is due to the fine management team, led by Amy, which has instituted innovative programs to keep the association that way and to the Board of Directors which has made sure to invest the CHTA’s money wisely and approve needed projects to keep the property efficient. 

She then spoke on two subjects, the first being the need to protect your CHTA investment.  If you intend to transfer your week to a family member, there are certain legal documents that need to be filled out and Owner Services Manager, Yvonne Brown, can assist you.  It is important to do this as part of your estate planning. If you decide to sell your week to a family member or a friend on your own the Owner Services office can help you as well. 

The second subject was about purchasing weeks at the Carriage House.  In the current market most real estate prices are low and this is a good time to pick up an extra week.  The Carriage House has a limited number of weeks in inventory.  Again, Yvonne Brown is heading up this

endeavor and will make it an easy and convenient process.  Prices for a studio start in the $550 range and for a one bedroom at the $1000 range. Consider purchasing an additional week now.  The benefits are numerous.  The first benefit is to the Association.  By having a healthy, active membership, this keeps the annual maintenance assessments low.  When there is unsold inventory annual maintenance assessments cannot be collected.  

And the other benefit is to you, whether you use it here or trade to another resort.  Trading is an option and Carriage House weeks trade very well.  She and her husband own five Carriage House weeks and have been successful trading into many other resorts throughout the country including Hawaii.  For exchange purposes, all inventory in Las Vegas is considered red time.  You could also encourage friends and family to buy a week here. Recently a monthly email newsletter has been developed. You are asked to forward it along to friends and family so that they can investigate on their own all that The Carriage House has to offer.  The website is www.carriagehouselasvegas.com  and is a good resource for current as well as prospective owners. They can make reservations or even buy a week.  We all know that Carriage House owners are our best ambassadors.

Director Robby Frank gave the Treasurer’s Report.  He began by stating that The Carriage House ended 2008 in sound financial condition.  He explained that two separate accounts are used to fund all the expenses of The Carriage House:  the Capital Reserve Account and the Operating Account.  The Capital Reserve Account is for the capital improvements to the property.  At the end of 2008, the Capital Reserve Account balance was a healthy $2.2 million dollars even after spending overt $1 million dollars on improvements this past year. In 2009, the original plan was to spend approximately $1 million dollars on improvements although due to the current economic conditions that number has been revised downward to $700,000. However, this is still a sizeable figure which will be used to continue making upgrades to the property.

The Operating Account handles the expenses that keep The Carriage House running on a day-to-day basis.  This account pays for all of the salaries, taxes, insurance, utilities and building and grounds maintenance. Operating revenue comes from several sources, the two main sources being the Annual Maintenance Assessments and hotel rental revenue from nights not occupied by owners.

While The Carriage House has seen continuing increases in energy costs, property taxes, and insurance premiums, the Board and management team have been able to control expenses and did not increase the Annual Maintenance Assessments for 5 years.  However, in 2009 it was necessary to raise the Assessments by 6.5%.  At this point, it is not know what will happen in 2009 but every effort to control expenses will be made while still providing our members with the best possible vacation experience.  As of today, all of the bills are paid and there is sufficient money set aside for future capital improvements.

Mr. Frank concluded by stating that the firm of Huber, Erickson & Bowman recently completed the 2007/2008 Annual Audit.  The Carriage House received the best rating of an unqualified opinion.  The 2009 Operating Budget, the 2009 Long Term Capital Reserve Study, and the Investment Policy were all reviewed and approved by The Carriage House Timeshare Association Board of Directors.  As stated in Article 4, Section 16c, of the Bylaws it is required that these three important documents be approved by the membership.  The Membership voted and unanimously ratified the 2009 Operating Budget, 2009 Long Term Capital Reserve Study and the Investment Policy. 

As there was no old business to address, a question and answer period took place.  There were several questions from owners regarding exchange companies and one regarding the ILX Bankruptcy.  The June 2009 newsletter will include information on the various exchange companies available to timeshare owners. There were also positive comments made on the new lobby and mini mart.

A drawing was held for three complimentary seven night stays in a One Bedroom Suite at The Carriage House.  The winners from the meeting were Gloria Frank and Ronald Fairbrother.  The member that won from the Mail-In Ballots was Carol Olson. OLS President John Fitts also donated a one week stay in Hawaii which was won by Gladys Touchton. There being no further business to discuss; a motion was made to adjourn the meeting at 11:15 AM.  The members were invited to enjoy a box lunch and to tour the Atomic Testing Museum.

*Minutes approved at the 2010 Annual Meeting.