ROCKRIDGE II TOWNHOMES FRACTIONAL FEE

HOMEOWNER ASSOCIATION

MINUTES OF THE BOARD MEETING

NOVEMBER 13, 2004

10:00 A.M.

  1. Meeting called to order at 10:05 AM.

Those in attendance:

Loran Mundy; President,

Catherine Johnson;Secretary,

Liz Berry (NCM);

Invitees – via teleconference:

Bill Weibel

Ron Day

Doug Peterschmidt

  1. Old Business

Mundy welcomed those who joined us via telephone conference and explained that the items on the most of the items on the agenda were included in order to bring everyone up to speed.

  1. Legal Issues: NCM informed the attendees on the status of the pending litigation... NCM explained that prior to the Board hiring NCM they cleaned up all delinquent owners with the exception of the remaining ____. NCM explained that we are now in the process of cleaning up the remainder.Currently the Association has five (5) active cases. NCM has successfully obtained Judgments on 4 of the 5 matters. NCM pointed out that the judgments represented almost $25,000 due to the Association. This amount includes legal fees to date. Although we have domesticated the judgments we still need to proceed with collection and judgment debtor’s examinations. NCM will work with the attorneys involved, and proceed with next process. NCM also pointed out that there are still five other litigations that we need to proceed with litigation. Two are new delinquencies the other three date back several years.
  1. Sales of weeks owned by the Association. NCM informed those in attendance that last year we started a resale program that was semi successful. Although we have new fee paying owners, the organization that sold the units has not remitted the funds to the Association. NCM informed that they have subleased a portion of their office to a gentleman that was opening his own resale company and requested that RRIIFF allow them to sale its inventory starting at $4,000 per interval week. The Association currently owns approximately 14 weeks. NCM will request Jack Crist to prepare a proposal for marketing the inventory.
  1. Rentals – NCM explained the rental program. NCM charges owners 20% commission and the Association 5%
  1. Bonus Time - NCM explained that in the past Bonus Time is limited to weeks owned by the Association. Bonus Time is currently set at $300 per week regardless of how many nights are used. NCM recommends raising the rate to a minimum of $70 per night that way we recap the entire amount allotted for dues. There was discussion regarding when bonus time was, rates, rental promotion and marketing.
  1. Maintenance Items- NCM reported that the units are in pretty good shape with the exception of 1006. The living room floor slopes. Next week NCM will be attending the HOA meeting and this will be a topic for discussion. Currently there are two opinions regarding who is responsible for the repairs. Regardless of the HOA’s decision, NCM feels that this needs to be addressed during the spring maintenance weeks. Peterschmidt asked for an explanation as to the difference between the HOA and FF. NCM explained the relationship and responsibilities. NCM manages both organizations. Johnson inquired on how this would be paid and the cost to the FracFee Association. NCM explained that if the HOA moves forward it has sufficient funds to do minor repairs, however, if it is a major structural problem there may be a special assessment and the FracFee Association would have to remit according to its ownership.

NCM as spoke regarding the fact that the HOA is install gas lines to the complex and that the FracFee Association has yet to make a decision as if they will be switching to insert and gas BBQs. NCM stated that many HOA are making it mandatory that gas be used instead of firewood. NCM reviewed the current fire codes and liability issues.

NCM reported that they had just completed the maintenance week repairs. Mundy stated that NCM is really good on identifying and replacing everything at one time.

  1. Replacement schedule–NCM reported that currently the Association does not have a replacement schedule. NCM reports that in the five years that they have been involved in the management there have been several items replaced (washer/dryer, new tile in the kitchen, computers in the ovens and the interiors of the units completely painted). NCM recommends that the Board put together replacement schedule. Some items that need to be addressed are the seating capacity in the living room, repainting of units, pictures, mattress, etc. Mundy recommended that we table this issue for Board action prior to the Annual Meeting. NCM also stated that the Board really needs to develop a firm 5-year plan and insure that they are allocating sufficient funds to reserves to cover upcoming repairs and replacement costs. NCM will provide the Board with reference materials they have regarding a fair percentage to be set aside for reserves.
  1. Board Insurance – NCM reported that we have successfully secured D&O insurance at a cost of $1,700. NCM will send each board member a copy of the policy as soon as it is received.
  1. Managers Report
  1. Financial – YTD – NCM reviewed the YTD financials. NCM informed all that the financials are prepared quarterly for this board. NCM explained reporting codes such as BV1 and documentation. NCM went over the entire BV and explained what caused the variance, (i.e. repainting of units verse touch up, printing; office supplies and unit supplies). Mundy recommended that when repairs are over $500 that NCM inform the Board prior to taking action. NCM informed all that there is verbiage in their contract that limits decision making and informed all that is why the Budget needs to be reviewed very carefully, as they use that as their “map” for the upcoming year. NCM feels that it there responsibility to make decisions that keeps RCI and owners happy and they may from time to time accelerate a Budget Item if they feel it is necessary. NCM will agree to inform the Board of its decision before any work takes place in the future.
  1. New Business
  1. 2005 Budget Review – NCM went over how the budget was calculated in the past and what changes they are recommending for the 2005 Budget. NCM anticipates that income will be generated by sales and collections. In the past NCM has only received compensation based on 100 interval weeks although there are 150 interval week. NCM explained that they have spent numerous hours preparing for litigation and normally NCM charges $45.00 per hour to perform this type of work. Therefore NCM is requesting that they be compensated based on 128 interval weeks. Mundy suggested that the compensation be reviewed mid year. NCM agreed.

NCM explained another change in the 2005 Budget had to do with how income was included. Based upon recent seminars NCM attended they recommend that you do not included “unknowns” such as rental income, sales, etc. in the operating budget income. As far expenses go, there will have to an increase for D&O insurance line item. NCM has increased the legal line item due to collection effort anticipated in 2005. NCM added a new line item “Meeting Expenses” due to the need to have conference call meetings. Also increased is office supplies, postage and reproduction costs based upon actual for 2004. Under amentias – it is anticipated that the Lodge & Spa will be increasing due to recent improvements. The line item for housekeeping has been increased from $69 to $75 for each weekly clean and that the deep cleans would be increased from $89 to $95 per unit. All other line items are increased slightly. With approximately 5% going into the reserves. After discussion the 2005 Budget was approved with its recommended.

  1. Vacated Board Positions: Mundy asked if anyone in attendance objects to stepping into the vacate positions. All invitees stated they would have no problem being Directors at Large. Mundy announced that at the next meeting there will be a Past President and someone needs to be willing to step up to the call of President.
  1. Communication (Management to Owner, Board to Management, multi-directional) –Mundy stated that communications need to be improved. NCM stated that this is a two way street. NCM agrees that there is always a need for improvements. NCM recommends that we use e-mail as the main path to communicate with them. NCM is available to the Board 24/7.
  1. By-Laws update – No action is needed at this time.
  1. Schedule next meeting: The tentative date for the next meeting is April 16, 2005. The Annual Meeting is usually scheduled during maintenance weeks therefore, NCM will have to review the calendar and then set a date.

6.Adjournment. There being no further business to discuss the meeting was adjourned at 11:45 a.m.

______

Catherine Johnson, SecretaryDate

______

Liz Berry Recording SecretaryDate