Annual Owner's Meeting Minutes: May 15,2010
12:00 Noon, SouthCape Resort
Proceedings:
Meeting called to order at 12:02 p.m. by Clifford Hagberg trustee.
The minutes of the previous annual meeting were approved.
Mr. Hagberg introduced resort manager Rosaleen Cassidy, and the members of the Owner Advisory Committee.
Financial Report:
Rosaleen Cassidy reviewed the financial statement for 2010, and reported on the renovations that were funded by the special assessment. It was noted that 1740 owners paid their maintenance fees in 2009, as compared with approximately 1800 paying owners in 2008. In spite of the decrease in the number of paying members, the year was concluded within budget, and with a profit of $14,486. All of the delinquent fees collected in 2009 were allocated to the reserve account. The resort is currently in its most favorable financial position in over 20 years.
Renovation Report:
Special Assessment fees totaling $649,720 have been collected to date. This represents payment by 1620 owners; fees continue to come in. Special Assessment expenditures to date total $656,540.62. Additional money needed was taken from reserves. All of the exterior renovations have been completed at this time. These include siding, painting, and necessary roofing in units 1 through 24, and painting and replacement of decayed trim in units 32 through 55. Interior refurbishment of units 6 through 24 is near completion. Bedroom furniture will be replaced at a later date.
There is currently a balance of $213,624.45 in the reserve account. This should prove to be more than adequate to fund the necessary septic repairs in the fall. It is also hoped that it will be possible to fund further renovations, including the replacement of bedroom furniture in units 6 through 24, and refurbishment of units 1 through 5, from the reserve account in the next one to two years. In response to an owner's question, it was reported that reserve monies are kept in a separate, interest-bearing, bank account.
Mr. Hagberg provided an update on the current status of the negotiations with the health department with regards to the septic. An agreement has been reached to allow SouthCape to repair the failed septic systems as opposed to building a treatment plant.
Wireless Internet access is now available throughout the resort, and the new reservations system is fully operational.
Management Report:
Mr. Hagberg reported on the negotiations with the town of Mashpee with regards to the parking lot. He voiced frustration with the town's handling of the matter, particularly with their lack of direct communication. A recent Mashpee Enterprise article indicated that the town was considering putting the land up for auction. Mr. Hagberg also noted that there might be a legal issue with regards to the lot being land-locked. Although the resort currently continues to use the property unhindered, there is currently no clear resolution in sight.
Mr. Hagberg reported on the lawsuit filed by a Southcape owner in an attempt to obtain the list of Southcape owners. He explained that the resort holds the position that owner information is private information, the dissemination of which might open the resort to serious liability. He further explained that there is a conflict between current privacy laws, and Mass. Gen. Law 183B, and until this conflict is resolved in the courts, the resort will continue to adhere to the more cautious policy of protecting its owner's privacy. A discussion of the issue of owner privacy followed. An owner suggested an "opt out" list wherein owners could choose whether or not to have their information released. Many owners expressed their desire to have their information treated as confidential.
Developer report:
Mr. Hagberg introduced Rich Hartnett and Kevin Blocker as representatives of Festiva Hospitality Group. He announced that New England Vacation Services were currently in negotiation with Festiva with regards to the sale of the approximately 540 weeks owned by NEVS to Festiva Hospitality Group, and explained that if this sale takes place, it would end NEVS and NEVMS affiliation with Southcape Resort & Club. After the sale, Festiva would assume the management contract.
Kevin Blocker further addressed the implications of the sale of the NEVS inventory to Festiva. Kevin assured the owners that Festiva was a well established and experienced management company who would bring the benefit of that experience to South Cape, taking it to the next level of efficiency and success. He outlined the advantages of a large management company in terms of purchasing power, etc., and pointed out that Festiva wants the same result that owners want: a resort that is run as efficiently as possible. As weeks are placed in the Festiva trust, new maintenance fees will be generated for the resort. He also stated that he felt strongly that owners should have a voice in matters that affected their resort, and that Festiva would take steps to incorporate owner input.
In response to an owner's question as to whether Festiva was a company similar to RCI and II, Kevin responded that FAC was a points system as opposed to an exchange company. However, he noted that members could exchange into any II resort.
Break
A question and answer session followed a 10 minute break:
Q: How did Cliff become a trustee?
A: The previous trustees appointed the current trustees.
Q: How often do the trustees meet?
A: Four or five times a year.
Q: Can owners submit items for the next annual meeting agenda?
A: Owners should submit such items to the trustees in advance of the meeting.
Q: How many weeks does NEVS own?
A: Approximately 540.
Q: Why do NEVS not pay maintenance fees on their weeks.
A: NEVS are not required to pay maintenance fees on their weeks. All rental proceeds from these weeks go to the resort.
Q: Will we see Festiva members at the next annual meeting?
A: No. The weeks of Festiva members are held in trust. These members will not attend Southcape meetings.
Q: If Festiva fails, what will happen to the trust?
A: The trust is owned by the members.
Q: Has there been any improvement in exchange company comment cards in light of the recent renovations?
A: Not yet.
Q: Why does Festiva want to buy Southcape?
A: Festiva believes that Southcape has the potential to be a five star resort.
Q: How much does Festiva charge in management fees?
A: 10%
The meeting was adjourned at 1: 55 p.m.
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