Annual Meeting information

2012 ANNUAL MEETING

OF THE

CARRIAGE HOUSE TIMESHARE ASSOCIATION, INC.

Saturday, March 17, 2012

 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 19, 2011       

The meeting was called to order by President Kriste Mencher at 9:30 am.  President Mencher welcomed the members and thanked them for their attendance at the 25th Annual Meeting of the Carriage House Timeshare Association (CHTA).  She introduced Directors, First Vice President, Mike Lincoln; Secretary, John Blevins; and Treasurer, Robby Frank.  Ms. Mencher advised that Second Vice President Dotty Catanese was not in attendance due to a family matter.  She also introduced General Manager, Amy Lowell, Martti Mannoja, Chief Operating Officer of Outrigger Lodging Services (OLS) and Rick Ball, Vice President of OLS.  A motion was made by CHTA member Mr. Mencher, seconded by CHTA member Ms. Harpenau and unanimously approved by the membership to approve the 2010 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.  President Mencher turned the meeting over to First Vice President Mike Lincoln as she was a candidate in the election.  The candidates were presented by nominating chairperson and past CHTA President, Gloria Harpenau.  Candidates introduced were owners James Borucki, Kriste Mencher and Stuart Sturm.  Kathy Wheeler was nominated from the floor by Frank Goeckel, both of whom are representatives of Diamond Resorts International on behalf of the ILX/Premiere Vacation Club.  Mr. Goeckel explained that as the new owner of the ILX/Premiere Vacation Club 2300 weeks, their organization would like to have one seat on the Board of Directors to protect their interest in The Carriage House.  Ms. Lowell explained that the Premier Vacation Club votes were not permitted to be voted due to the Voting Trust that was put into place in 2001 when the weeks were originally sold to ILX for the benefit of the ILX/Premiere Vacation Club.  After discussion and so that the meeting could continue in a timely manner, it was agreed that Ms. Wheeler could be nominated from the floor and that the election would be verified the following week after review by the CHTA legal counsel.  The candidates were given the opportunity to speak to the members.  A lengthy question and answer session took place with the owners in regards to Diamond Resorts International and their acquisition of the ILX/Premiere Vacation Club interests.  The ballots were then collected.

After the election, President Mencher took over the meeting from Vice President Lincoln.  She commented that it was a pleasure to serve on the Board of Directors for the past three years and as President for the past year.  She and her husband have stayed at many timeshare resorts throughout the country but find The Carriage House to be the most special.  In addition to the familiar faces and comfortable surroundings there are always differences and improvements to the property as the staff constantly strives to make The Carriage House “a home away from home.”  She and her husband particularly enjoy being able to relax and enjoy their vacation without having to worry about the upkeep and maintenance.  She then commented on the national economy and how it has affected The Carriage House.  Fortunately the CHTA is in a strong economic position, far better than many other timeshare properties.  This is due to the constant vigilance and oversight of the budget and investments.  Moving into 2011 the collection of maintenance fees is on track with previous years which indicates the CHTA owners are planning on vacationing at The Carriage House or an exchange resort.

Her final comments were regarding ILX Resorts, the company that owned 2300 Carriage House weeks for the benefit of their Premiere Vacation Club, and that had declared bankruptcy in 2009.  Last summer ILX was purchased through the bankruptcy by Diamond Resorts International, a large timeshare company based in Las Vegas.  Since the acquisition by Diamond Resorts International the CHTA staff has been working closely with their staff.  The transition from ILX to Diamond Resorts International has gone very well and all of their 2011 Annual Maintenance Assessments have been paid.

General Manager Amy Lowell then gave her report beginning with an update on the renovation to the Fire and Life Safety System.  Planning for this project started last year with the CHTA architect, life safety consultants, engineers and the Clark County Fire Department.  The project will be adding at least 4 additional sprinkler heads in the one bedrooms and possibly as many as 15 in the two bedrooms.  Some rooms will be upgraded with enhancements required by the Americans with Disabilities Act (ADA) including strobe lights and equipment for the hearing impaired.  At the same time this project takes place, upgrades to the hallway ceilings and lighting, new front doors, locks and soffits for the piping of the new sprinkler system will be done.  Each hallway will be taken out of service for a period of at least 4 months.  There will be construction noise and audible testing throughout the project which will be disruptive.  However, when all is finished, the building will have updated lighting, hallways, and a new fire and life safety system built to the current code.  The project had been planned to begin in January 2011; however, due to its enormity and cost it has been temporarily postponed until economic conditions improve.  The Clark County Fire Department has been advised of the postponement.  

Ms. Lowell also reported on the new business activity on the 9th floor.  Over the years the CHTA has earned money from various companies leasing this space.  There have been two restaurants and also several companies that sold timeshares.  Recently an agreement has been entered into with Preferred HOA Solutions.  They are leasing the Capri Suite and a portion of the former lounge to sell Carriage House weeks, a vacation club and an internet shopping discount program.  They are also permitted to staff the concierge desk in the lobby to encourage guests and owners to come listen to their presentation on the products they are selling. 

In exchange, The Carriage House receives rent as well as a percentage of their sales. Each year there is a small number of CHTA owners that can no longer pay their maintenance fees.  Their week comes back to the CHTA in the form of a deed back or through foreclosure.  The week must then be resold as soon as possible to a new dues paying owner.  It is believed that this new relationship with Preferred HOA Solutions will help to insure that the CHTA continues to have a financially successful homeowners’ association.

OLS Chief Operating Officer Martti Mannoja then spoke on the difficulties that the hospitality industry has experienced during the past few years.  He commented that there seems to be recovery both nationally and in the Las Vegas market.

The report of the officers began with First Vice President Mike Lincoln.  Mr. Lincoln began by stating how proud he was of the CHTA operation including the investment portion of the association.  He is involved with several other timeshare and homeowners associations and stated that none of them handle their affairs as well as the CHTA.  He continued by stating that time is set aside at each of the three Board of Directors’ meetings that are held throughout the year to review the CHTA’s investments and to make adjustments if needed.  The primary objectives of the investment strategy are as follows:

• To ensure preservation of capital for all the financial assets of CHTA.  At this time 100% of the CHTA investments are fully insured or guaranteed by the US Government.
• To maximize the rate of return on investments while minimizing the potential for risk.

• To monitor the progress and assure that the goals are being managed properly and insuring that the needed cash flow, for day to day operations as well as capital projects, is available.
• To establish and maintain a relationship with a competent financial advisor who can make recommendations and help manage the CHTA’s funds.  This has been done by establishing a long term relationship with investment advisor Chris Van Ruiten, Senior Vice president with Comerica Securities.  He is a CPA and earlier in his career was the President of RCI Resort Management.  As such he has an excellent understanding of how timeshare associations operate. 

Early on Mr. Van Ruiten recommended that the CHTA investments be laddered by investing funds for certain periods of time based on the needs of the CHTA operation. The majority of the CHTA funds are received early in the year and then invested appropriately to fund the expenditures for the rest of the year.  Mr. Lincoln concluded his remarks by reporting that even through these difficult economic times the CHTA has not lost “one dime” of the investments.  Currently the CHTA investments include the following: CD’s with multiple banks, index market linked CD’s which are FDIC insured,Government Money Market Funds, FDIC insured bank deposits and Money Market Funds and Government insured Ginnie Mae Securities.

Secretary John Blevins then spoke about the upgrades that were made to the property in 2010.  Over $1,000,000 was spent on improvements including the renovation of 27 studio units.  The rooms are beautiful and received an award for their design.  The building was also painted and new awnings installed.  Over $85,000 was spent on the heating and air conditioning system and $15,000 on improvements to the computer system.  Funds were also spent developing plans to upgrade the Fire and Life Safety systems. 

This year approximately $1,000,000 will be spent upgrading the exterior of the property with a new block wall and landscaping on Harmon Avenue and resurfacing of the parking lot.  Fifteen of the One Bedroom Masters including two handicapped rooms   and two of the One Bedrooms are going to be remodeled using the same design theme that was used in the studios.  Wireless Internet will also be installed.  As has been stated before, the conservative path taken by the Directors over the past 20 plus years and careful spending during these difficult times has allowed the CHTA to have money in the bank which can be used for improvements.  The goal is to keep The Carriage House in outstanding condition for the enjoyment of the owners and guests.

Treasurer Robby Frank then gave the Financial Report.  The Carriage House ended 2010 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 entirely by a portion of the Annual Maintenance Assessments, approximately 25% of the total, and is listed as a separate line item on the owners’ bills each year.  At fiscal year-end 2010, the Capital Reserve Account balance was a healthy $2,300,000, even after spending over $1,000,000 on significant improvements this past year to the property.  The Operating Account covers the expenses that keep The Carriage House up and 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 main sources being the Annual Maintenance Assessments and the hotel rental revenue from rooms not occupied by owners.  While The Carriage House has seen continuing increases in energy costs, property taxes, and insurance premiums, the Board of Directors and Management Team have been able to control expenses and did not increase the Annual Maintenance Assessments for 2011.  At this time, it is unclear how the future rental market and contribution to the dues will unfold, but the staff under the guidance of the Directors will do its best to continue to control expenses.  

Each month, the Board of Directors and OLS 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 giving the Board a foundation from which to budget for the coming year.  A copy of the 2011 budget was included in the Annual Maintenance Assessment billing which was mailed in December 2010.  Additionally, the Board of Directors hires an outside accounting firm to conduct an annual audit of the financial operations.  On Thursday, the Directors received an “unqualified opinion” from the auditors for the Fiscal Year End November 2010.  An “unqualified opinion” means that no exceptions were found and the accounting practices are sound and the Financial Statements fairly represent in all material aspects the financial position of the CHTA as of November 30, 2010.  A copy of the Audit Report is available from Ms. Lowell for your review.  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 20 years.  The 2011 Operating Budget, and the 2011 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.  A motion was made by Mr. Frank to ratify the 2011 Operating Budget, the 2011 Long Term Capital Reserve Study and the Investment Policy.  The motion was seconded by Mr. Mencher and unanimously approved by the membership.

Prior to the announcement of the election results, Diamond Resort International Representative, Mr. Goeckel advised that if the Directors allowed Ms. Wheeler to attend future Directors’ meetings that he would withdraw her name as a candidate.  President Mencher advised that Ms. Wheeler could attend the meetings with the exception of an Executive Session.  This is allowed for any CHTA owner wanting to do the same.  Mr. Goeckel did make it clear that his withdrawing Ms. Wheeler’s name from the 2011 election was for this year only and that he would not guarantee that Diamond Resorts International would not want to have a representative from their ILX/Premiere Vacation Club on the Board of Directors in the future.  Ms. Wheeler’s name was then withdrawn from the election.  Mrs. Harpenau announced that Ms. Mencher had been reelected to serve a three year term.

There was no Old Business to address so the agenda moved to New Business with a question and answer period.  The majority of the questions related to the weeks that are now owned by Diamond Resorts International.  A drawing was held for a complimentary seven night stay in a One Bedroom Suite at The Carriage House.  The winner from the meeting was Cleto Belez and the member that won from the Mail-In Ballots was Loomis Hays.  There being no further business to discuss, the meeting was adjourned at 11:15am.  The members were then invited to enjoy a box lunch and meet with the Directors and Carriage House and OLS staff.

*Minutes to be approved by the CHTA members at the 2012 Annual Meeting.