SIMBA RUN CONDOMINIUM ASSOCIATION BOARD OF DIRECTORS CONFERENCE CALL
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1 SIMBA RUN CONDOMINIUM ASSOCIATION BOARD OF DIRECTORS CONFERENCE CALL April 15, 2015 A conference call was held on Wednesday, April 15, 2015 at 6:00 PM Mountain time. Board members on the call were Graham Lythgoe, President, Gary Mah, Marty Levy, Brian Hay and Charlie Calcaterra. In addition, Bridget Hitt and Anne Nelson were on the call along with twelve owners. The meeting was called to order at 6:04 PM. Graham welcomed everyone and started with the introduction of the Board members and the following comments: Firstly the Board would like to acknowledge & thank the Management of Simba Run for a very successful 2014/15 ski season... Vail had record snowfall... &... commensurately Simba had record visitors... am sure that Bridget will have more to say in her remarks... judging by the Trip Advisor reviews our visitors are very positive with 89% of the reviews being in the Very Good or Excellent category... there have been a few that less than stellar for a variety of reasons... however of special note... Bridget takes the time to respond to all reviews... good or bad... for the good a word of "thanks" for the visit... &... for the less fortunate some remarks on what action may have been taken &/or suggestions for future visits.. Thanks Bridget & staff for making Simba a very desirable visitor friendly resort. Secondly would like to update you on the Legal Disputes... o The Saxton Law Suit... since we last got together Mr. Wayne Saxton (#1104) filed a suit on March 4 against the Simba Run Owners Association in the small claims court of Eagle County... in an attempt to recover the parking fees that were attributed to their renters since the RBO rules were introduced in January... since the basis for the suit is somewhat similar to that filed by Mr. Kleinman (#2310) our attorneys recommended that the suit be moved from the small claims court to the District Court to be consolidated & thus treated in the same manner... this consolidation is being contested... however proceedings are dragging since Mr. Kleinman left Vail for approximately one month to go diving in Fiji & a personal visit New Zealand... he was granted an extension to respond till April 28 o The Kleinman suit... answers to the complaints for both the main suit & the Derivative suit have been submitted to the court... with both sides trading legal arguments o Legal Expenses... it is recognized that these law suits are beginning to add up unbudgeted expenses... &... will continue to place a burden on the overall budget... Allow me to run through briefly a few key points The majority of the legal defense expenses are being borne by the Insurance Company... however we will continue to incur some costs of different aspects of the cases by the Association Attorneys Year to date... through good expense control... the additional expenses have not had a significant impact on the overall financial health of Simba Run... Projecting out to the end of the financial year... we should be in good shape We will be shortly starting the budgeting process for 2015 / &... then we will be able to better predict the overall financial impact of the cases & budget accordingly
2 o Please remember that neither Simba Run Owners Association nor any of the Board Members wanted these legal actions brought on by Mr. Kleinman et al... however they need to be defended and defended professionally... &... should SROA prevail we will be claiming recovery of all legal fees incurred as a matter of course after judgement. Gary can answer any questions on budgetary concerns in his review I will report further on the legal proceedings... as & when any substantive changes take place. At this time I cannot report a great deal as the case is ongoing. UNIT OWNER FORUM Graham asked all owners if anyone had an item to add to the published agenda. Charlie Calcaterra said he had a question as he was contacted by an owner who wants to enter into a long-term rental. Charlie asked if he was correct that the RBO rules apply only to rentals that are short term - 30 days or less. The Board members agreed that Charlie was correct. There were no items to be added to the agenda. APPROVAL OF MINUTES OF FEBRUARY 18, 2015 BOARD MEETING Graham moved to approve the minutes of the February 18, 2015 Board meeting as presented. Gary Mah seconded the motion and all Board members approved. TREASURER S REVIEW Gary Mah began with the Simba Run Management company and said that it had been a successful ski season and that many positive comments had been received. Financials at March 31, 2015 show income more than $200,000 over budget. Variable expenses go up with higher occupancy, but other expenses have been controlled and the bottom line shows Net Income of $110,000 over budget. Don Heath asked a question about insurance coverage. He wondered at what percentage is Simba Run insured. Bridget said she would get the answer and let Don know. Gary reported that the owners association has less fluctuation than the management company because income comes from the monthly dues. He noted that the one line item that is significantly over budget is Professional Services. All other line items are within normal variances. Gary said that additional expenses are expected due to the delay of the dehumidification project and skylight project. These expenses could include storage costs and consultation fees when the projects start up again. Gary also reported that the Capital Reserve balances total approximately $219,500 and that an additional $10,400 is transferred each month through dues collections. Charlie commented that the Professional Services show $20,000 of legal fees. Gary corrected that not all professional services are legal. Anne Nelson stated that $3,400 was for the annual review and tax return preparation. Anne broke down the fees - $3,400 for review and tax preparation, $1,300 for general legal advice, $1,600 for Annual Meeting questions and preparation, $6,700 for RBO Rules and Regulations and $7,000 for the Kleinman suit. Gary noted that these expenses were not foreseen at the time the 2014/2015 budget was created.
3 There was discussion about the RBO Parking Fee going to the Association, but Charlie asked if the RBO Resort Fee goes to SRM or the Association. Gary said the Resort Fees stays with the management company to offset the cost of amenities those guests and renters receive, such as DVD rental, pool towels, front desk, etc. Charlie questioned the $6,800 income collected through March 31 vs. approximately $17,000 in legal fees and asked why the Board is still pursuing the new RBO rules. Charlie sees it as a losing proposition. Brian asked Charlie if he wants to stop paying his monthly dues, could he simply do that and have no one try to resolve the issue to the benefit of the association? Charlie said that for 35 years, things have run smoothly and he wonders why things changed. Gary said that the Resort Fees were implemented because the RBO owners and guests were demanding the same services as the SRM guests received, but they were not paying for them. Marty Levy agreed, saying the playing field was never equitable. Marty also noted that the Kleinman suit is about much more than just the RBO rules. A question was asked about the status of the dehumidification project. Graham said that, unfortunately, there has been no change as it is a part of the lawsuit filed by Kleinman. Graham said it is locked into the lawsuit and therefore on hold. Marty asked a question as an owner. She asked if there is any possibility that the dehumidification unit could be moved somewhere else. Graham said that they have been looking at other options, but the location is only one point in the lawsuit. Also the planned location is the most suitable. MANAGER REPORT Bridget reported the following: Things went very well this season for Simba Run Management The next three months will be slow in comparison The Average Daily Rate is up 22% over last year There are nine units for sale including one employee-housing unit. The asking prices range from $324,000 to $625,000. All employees made it through the season and stuck with Simba Run The garage door is working properly; it is turned off during the hours when the van is running The van will stop running on April 24 The Town of Vail and the Department of Transportation have marked trees that will be removed during the underpass construction Late word that the skylight project has been delayed another week Charlie asked Bridget where her time is spent in a normal workday. Bridget said she is currently working to get the grounds ready and on project issues lining up all aspects of the projects including emptying the pool and coordination. She also fills in at the front desk, handles rental issues some of everything and every day is different.
4 ONGOING PROJECT UPDATES Graham reported the following: The skylights over the pool area work will start on Monday, April 27 and last about three weeks. During this time, the pool will be drained and the area will be off limits as there is some risk of flying debris. The permit was finally received today for the skylights as that piece of the project has been separated from the dehumidification project. The Garage Door Bridget has had quite a time over the past couple of months working with the various contractors involved however am happy to report the door and operating system is finally fixed The Garage Repairs still waiting for a quote from a specialist concrete company to repair the vertical precast parts of the garage that have been damaged over the years by the humid air from the pool venting into the garage (subject of the dehumidification project currently held up by the Kleinman law suit). The general state of the garage is good, but it is in need of some repair. Pool Heater this will be replaced while the skylight work is going on. The Water Storage Tanks in Building 2 will be replaced also as the skylight work is going on. At the February 18 Board Meeting we discussed ADA pool lift compliance. Upon further research by Charlie and Graham, on the government ADA website regarding existing pools, we found that Simba Run qualifies under the category of a Private Residential Community where access is limited to owners and guests in no way is Simba s pool a public pool as such Simba Run is not covered by the ADA accessibility requirements. Therefore, unless there are new requirements, it is not necessary to go forward with a lift. The Board will be announcing soon the appointment of a project committee to look at further long term project needs Graham asked if there were questions regarding projects. Charlie said that one item that Bridget had brought up earlier was the need to replace the garage lights with LED lights. He understood there was an energy credit available from Holy Cross and asked when that offer expires. Bridget said that it is ongoing and there is no deadline at the time. Bridget said that the current fixtures would have to be replaced and that there are quite a few fixtures in the garage (possibly 84). The fixtures are expensive and a licensed electrician would have to install them. Holy Cross will reimburse 50% of the cost of the light bulbs or the fixture if the lightbulb is a part of it. Gary commented that he understands there is an issue with wiring and switches as well. Bridget agreed, saying the majority of fixtures are so corroded due to humidity in the garage that an electrician said that we might as well wait for the dehumidification project to be completed, as we would be throwing away our money until then. Graham said this item would be added to the Capital Reserve project discussion. UNIT OWNER COMMENTS & QUESTIONS Graham asked if there were any final Unit Owner Comments or questions not already answered. Don Heath asked Bridget what the LQA rating is for the Vail Racquet Club. Bridget said it is Gold the same as Simba Run Graham asked Charlie if there is any update on the underpass. Charlie said the final decision would be made by the Town of Vail on May 5.
5 Bob Morrow asked Charlie If approved, when would the work on the underpass begin. Charlie said there were funding questions to be decided about how much CDOT would fund and how much the TOV would have to fund. Construction is to begin during the summer of 2016 and is to take 1 ½ to 2 years. Joel Feinberg commented that he wanted to thank the Board and Graham in particular, for hanging tough with the lawsuit. Joel commented that there is more to the suit than the listed items, that it is evil for an owner to sue the Association, and that the entity of Simba Run risks falling apart if it this allowed to continue. Rich Larson asked Bridget why we are shorthanded at the front desk. Bridget said an employee had a family issue that had to be dealt with. Rich Larson also asked what is happening with the money collected for the dehumidification project. Anne responded that the money is being held in a separate account and has not been spent for anything other than what was originally planned. Bridget asked what happens with long term renters or owner guests that bring dogs? Brian Hay said that the policy is that only owners can have dogs. Graham said that if anyone other than an owner wants to bring a dog, they must have written approval from the Board. He also noted that an RBO owner needs the rules about this written into the contract with a long-term renter. Marty added that the owners should provide the Board a copy of their contract. Charlie suggested that the top ten dangerous dog breeds not be allowed at Simba Run at all. Graham summarized by saying he would put it on the Board s agenda to create a policy and have it at the front desk. With no further questions, Graham thanked everyone for participating in the meeting. He wished everyone a happy summer and announced that the next meeting would be held on Wednesday, June 17, The meeting adjourned at 7:03 PM. Respectfully submitted, Anne L. Nelson Anne L Nelson, Recording Secretary
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