FAIRFIELD MOUNTAINS PROPERTY OWNERS ASSOCIATION, INC. January 26, 2015 Property Owners Association Quarterly Meeting Minutes

Transcription

1 FAIRFIELD MOUNTAINS PROPERTY OWNERS ASSOCIATION, INC. d/b/a RUMBLING BALD RESORT ON LAKE LURE January 26, 2015 Property Owners Association Quarterly Meeting Minutes The Quarterly Property Owners Association Report Meeting of Fairfield Mountains Property Owners Association was held on Monday, January 26, 2015 in the Mountains Room of the Lakeview Restaurant beginning at 4:00 p.m. Board Members Present Peggy Dahle, President; Mike Modzelewski, Vice President; Donnie Samarotto, Secretary; Jeff Kristjansen, Treasurer; and Chris Ciampa. Board Members Absent Phil Reitano and Jim Rhodes. Staff Present Tom Judson, Chief Executive Officer; James Cain, Director of Community Administration; Christy Roper, Assistant Property Manager; Mark Eades, Marketing and Web Manager; and Dewey Whitaker, IT Network Administrator. Membership Present Approximately 100 property owners were in attendance. Call meeting to order Mrs. Dahle called the meeting to order at 4:00 p.m. Mrs. Dahle explained that a recording of the meeting will be available to property owners by contacting Christy Roper. Introductions & Announcements Mrs. Dahle welcomed property owners and introduced the Board Members and Management staff. Interested in Volunteering? Mrs. Dahle stated that if you are interested in serving on a committee, please see Christy Roper.

2 Treasurer s Report Mr. Kristjansen stated that he would like to reinforce the need for committee members. He explained that the Finance Committee has an opening and if anyone was interested to contact Chairperson John Hegwood. December 2014 P&L Sheet Mr. Kristjansen reviewed the December 2014 P&L actuals compared to budget. He explained that copies of the financials are available in the Member s section on line. Unaudited Financials 2014 Actual 2014 Budget Variance Revenue 10,114 10, Increase from the Business Units. Lodging and F&B led the way. Cost of Sales 2,097 2,002 (95) Tied to added revenue in Lodging, F&B, and Golf Merchandise. Payroll 4,217 4, Savings from Medical Insurance. Expenses 2,975 2,967 (8) Tied to added revenue in Lodging and F&B. Net before Depr (36) Close, but we fell short of our target. Depr & Loss (48) Added depreciation as a result of the projects undertaken in the year. Net Income (84) Target was not achieved. Never recovered from a bad start to the year. Mr. Kristjansen presented the December 2014 Balance Sheet and discussed operating cash, reserve infrastructure, improvement, and repairs funds, reserve POA Board of Directors Quarterly Meeting January 26, 2015 Page 2

3 funds, accounts receivables, inventories, fixed assets, accounts payable, current portion of long term debt, line of credit, advanced deposits, deferred revenue, longterm liabilities, and capital. Mr. Kristjansen explained that a complete copy of the Balance Sheet and Financials are available on the website Budget Review Process Mr. Kristjansen reviewed the Budget Focus for The Review Process The Ad Hoc Budget Review Committee worked many hours over several months to ensure an accurate budget for the coming year. Operating Budget Operating Budget needs to ensure an efficient operation, with an emphasis on departmental accountability. The P&L s for the Business Units must accurately reflect all related expenses. Take advantage of business opportunities where there is growth potential. Resort Improvement Plan Resort Improvement Plan includes $201k for projects for This is significantly less compared to prior year, but reflective of the reduction in dues. The 2015 Resort Improvement Plan was funded through the Initiation Fees and Impact Fees received in Financial Budget The 2015 Resort Financial Budget provides for a neutral cashflow. Continue to minimize the use of the Line of Credit. Ensure the Line of Credit is only used for short term cash flow needs Financial Budget Mr. Kristjansen presented the 2015 Financial Budget: Cash Inflow from Operating Activities 9,532 Inflow includes revenue from all Business Units, plus net anticipated dues. POA Board of Directors Quarterly Meeting January 26, 2015 Page 3

4 Cash Outflow from Operating Activities (9,124) Outflows includes Cost of Sales, Payroll, and Expenses. Outflow for Capital Projects (201) 2015 Capital Projects. Outflow of Financing Activities (187) Includes the paying off of debt and capital leases. Transfer in from the Reserve Initiation Fees and Impact Fees transferred in from the Reserve. Transfer out to the Reserve (242) 2015 Initiation Fees and Impact Fees transferred out to the Reserve for 2016 projects. Net Change in Financial Position 0 No change in cash position for the year P&L Budget Comparison Mr. Kristjansen presented the 2015 P&L Budget Comparison: Unaudited Financials 2014 Actual 2015 Budget Variance Revenue 10,114 9,688 (426) Entire decrease from reduction in dues and lots returned in lieu of dues. Cost of Sales 2,097 2, Adjustments to the mix of Business Unit revenue has resulted in a reduction. Payroll 4,217 4, Reduction of a number of staff and consulting positions. Expenses 2,975 2,997 (22) Medical and Workers Comp insurance increased. Net before Depr (327) Will generate $498k in positive cashflow. POA Board of Directors Quarterly Meeting January 26, 2015 Page 4

5 Depr & Loss Increase from 2015 capital projects. Net Income 212 (110) (322) While the budgeted P&L shows a loss, overall cashflow will break even. Chief Executive s Report Mr. Judson presented a look back at 2014 and a look forward at Business Units Lodging Brought in a record breaking $2M in revenue. Net Income was better than budget and prior year. F&B Brought in a record breaking $96k in Net Income. Net Income was short of budget but better than prior year. Wellness/Marina/Salon Net Income for Marina and Salon were record breaking. Net Income was short of budget but better than prior year. Managed Properties Net Income was better than budget and better than prior year. Marketing & Sales Net Income was better than budget and better than prior year. Business Units Combined Net Income fell short of budget by $67k. Net Income was better than prior year by $202k. Positive Outlook Mr. Judson presented a positive Outlook for 2015: Advanced Deposits are up $114k (+94%) over prior year. We have 36 weddings under contract compared to 26 at this time last year. Lodging Reservations are also strong for Reservations are up $232k (+38%) over prior year. Room nights are up 26% and the Average Daily Rate is up $ We have 11 contracted crew teams for this March, with a 12th possible. Our previous high was 6 teams. POA Board of Directors Quarterly Meeting January 26, 2015 Page 5

6 2014 Accounts Receivable Over 60 Days December 31, 2014 December 31, 2013 Receivables over 60 days $352,000 $309,000 Allowance for Bad Debt ($352,000) ($309,000) Net Receivables Over 60 Days $0 $0 Mr. Judson explained that although the files have been written off, Management will continue to pursue unpaid balances. Property in Lieu of Dues Mr. Judson explained the growing number of lots returned to the POA is having a detrimental impact upon the amount of dues paid. Lots returned each year Dues impact $173, Living Here Campaign Mr. Judson explained that Marketing is working on a Living Here Campaign. Marketing is looking for eight couples to interview for our new Living Here promotion. If you love living here, you may be interested in volunteering. Please see Mark Eades following today s meeting Resort Improvement Plan Mr. Modzelewski presented the 2014 Resort Improvement Plan: Lake Dredging Mr. Modzelewski commented on the lake dredging: POA Board of Directors Quarterly Meeting January 26, 2015 Page 6

7 The Town of Lake Lure agreed to contribute $70,000 to the removal of silt in the North Cove. The POA is contributing an additional $37,936: o $20,000 for silt removal o $13,536 for the relocation of the docks o $4,400 for clearing of the silt containment area The initial silt removed from the lake will get deposited into a Department of Natural Resources and Town of Lake Lure approved silt containment area located behind Trout Stream Pool. This area will soon be at capacity. Once the silt containment area is full, the silt will get removed off property. With the recent arrival of the long reach track hoe, we anticipate the pace of removal will quicken. The project is on target with room to spare in case of bad weather and other unforeseen challenges. We anticipate the Town will begin to raise the level of the lake at the end of February. We linked the docks together to give crew teams access to the lake in the event the lake is not raised on time. Bald Mountain Lake Lowering Mr. Modzelewski stated that on January 2, 2015 we began lowering Bald Mountain Lake (smaller lake along West Lake Drive). The lake is currently four feet below normal. The lake will begin to refill on February 16, Resort Improvement Plan Mr. Modzelewski presented the 2015 Resort Improvement Plan: General Resort Improvements Drainage Repair Placeholder $15,000 Sea Wall Completed $20,048 Silt Removal Moving docks for silt removal In process $13,536 Silt removal Underway $20,000 Clearing of silt containment area Completed $4,400 POA Board of Directors Quarterly Meeting January 26, 2015 Page 7

8 Golf Course Improvements Golf Course Bunkers Underway $12,000 (All greenside bunkers: BM #10 and BM #17) Buildings & Grounds Improvements Replace 3 HVAC Units Placeholder $18,000 Apple Valley Clubhouse Underway $18,432 Apple Valley Pool Complex Winter/Spring $4,925 Apple Valley Maint. Building Roof Spring $10,538 Deli Box for Legends Winter/Spring $3,200 Technology Upgrade POS System Upgrade (Agilysys) Underway $61,303 Mr. Modzelewski stated that the combined total of all projects for 2015 is $201,382 He explained that the projects for 2015 were funded from 2014 Initiation Fees and Impact Fees. Fees received in 2015 will be allocated towards 2016 projects. Presidents Closing Comments Mrs. Dahle, on behalf of the membership, thanked the members who volunteer their time and services in support of our community. If you are interested in serving on a committee, please see Christy Roper. Member Comments A property owner asked if Management has considered using the silt in other locations after the silt containment area is full. She stated there is a washout area on Roundabout where the silt might be useful. Mr. Judson stated the silt cannot get placed anywhere that isn t approved by the Department of Natural Resources or the Town of Lake Lure. He also stated the silt is not suitable because it does not hold together once it dries. Mr. Modzelewski stated that the Infrastructure Committee is reviewing that area. There are plans to take additional efforts on this issue in the future. A property owner stated he loves the golf courses but stated the cart paths are in bad shape with areas that need to be resurfaced and potholes filled. Mr. Judson stated there is no money in the Capital Improvement Plan for cart path renovation, but there are some funds in the operating budget for cart path repairs. POA Board of Directors Quarterly Meeting January 26, 2015 Page 8

9 A property owner stated he was looking for the full performance of the resort. He did not see anything about the performance in Golf, since the department lost $120k last year. He stated the presenters are quick to highlight the positives in Food and Beverage and Lodging. He stated he expected to see the bad news along with the good. He also stated that Golf is forecasted to lose $75k for Mrs. Dahle stated the Board made a conscious decision to limit the number of slides on financial data as a result of all the other information which requires attention. Detailed financial statements are available on the Resort s website. A property owner explained that over the last five years the Resort has written off almost one million dollars in unpaid dues. He explained that he noticed the new Convenience Fee, and was concerned this would increase the amount of unpaid dues. Mr. Judson encourages members to pay by check. If the owner wants to pay with a credit card, the Convenience Fee covers the credit card fee charged to the Resort. A property owner stated he owns two homes in the Resort and one of the homes is a vacation rental. He stated he only has about a 15% occupancy rate and is now being charged an Amenity Fee. He asked if the Resort s rental properties have to pay the fee. Mr. Judson explained that in October the Resort began charging an Amenity Fee for all reservations booked through the Resort s vacation rental program. Effectively the Resort has passed along the Amenity Fee to renters, instead of charging the property owners. Since the Amenity Fee has been passed along to the renter, there is no need to charge an Amenity Fee to property owners utilizing the Resort rental program. Property owners who manage their own rentals can also elect to pass along the Amenity Fee to their renters. He also explained that renters use the facilities more than property owners and there is an additional cost to maintaining the amenities. Mr. Judson explained that if the Resort tried to charge admission to the pool it would create a terrible customer service issue. A property owner stated he gets good service from the Restaurants and had a great time at the New Year s Eve celebration. He stated that more property owners would visit the restaurants if they received more than the 5% discount. He suggested giving property owners a 10% discount. He also suggested discounted owner rates for miniature golf and marina services. POA Board of Directors Quarterly Meeting January 26, 2015 Page 9

10 A property owner commented on the bunkers not being raked on the golf courses. Mr. Judson explained the Resort cannot afford to rake the bunkers every day. He stated that during bunker renovations they are being raised so they are not too deep, which allows staff to rack the bunkers using equipment instead of time consuming hand work. A property owner commented on the increase in advanced bookings and contributed it to the Marketing Department. She asked why the Marketing Consultant was eliminated. Mr. Judson commended Mr. Bill Ashman s contribution to Marketing and also for his mentoring of Mr. Eades. Unfortunately the budget for 2015 is tight and difficult decisions had to be made. She asked Mr. Eades to explain what Marketing is doing. Mr. Eades stated that much of the 2015 Marketing efforts will focus on relocation and second home living. He is advertising in Southern Living and doing online videos for a social media campaign. He also stated that there is more focus on golf in A property owner asked how much the Resort pays in credit card fees. Mr. Judson explained that the resort pays approximately $30k in credit card fees for dues processing alone. He stated that the fees on average are approximately $50 on dues. He stated that we went out to bid for credit card processing, two companies responded that we have great rates. He also stated that the Resort stopped excepting American Express last year because their fees were too high. A property owner stated that he would like to see the cumulative value for all the properties returned to the Resort over the last four years. Mr. Judson stated that he doesn t have that information at this time but is willing to provide that information. Adjournment The meeting adjourned at 5:20 p.m. I, HEREBY CERTIFY that the Board of Directors has duly adopted these minutes this day of February Secretary, Board of Directors POA Board of Directors Quarterly Meeting January 26, 2015 Page 10