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TAPRC 1ST QUARTERLY MEETING 2005
APRIL 5TH, 2005
A conference call was held for the first meeting of the TAPRC on April 5, 2005. Members of the Board were: Norman Dodson, Chairman; Fran Williams, Treasurer; Judy Young, Secretary; Jeff Pray, and Richard Sutton. Also participating in the conference call from Pelican Resort were Estela Villanueva and Luis Cabrera. Members from Royal Resorts were Richard Corso, and Eric Millet
Special Contribution and the Annual Maintenance fees: ISCO and Royal Resorts have been dealing directly with some owners that have concerns about the Special Maintenance fee or sometimes are refusing to pay. There was a discussion on collection and foreclosing procedures for both the Special Contribution and the Annual Maintenance fees if owners have not paid these fees by the end of March, 2005.
Building Insurance: The Building insurance was renewed on February 26, 2005 with the same company that has been provided the service for the past two years. The total premium for this year is US$ 460,000.00 which represents a decreased of US$ 25,000.00 compared to last year’s premium. Royal Resorts was responsible for the negotiated savings.
Directors and Officers Insurance: This insurance was renewed on August 2004 for one more year (August 2004 to July 2005) and the annual premium is $ 12,650.00 USD. The cost increased $ 1,150.00 USD (10%) from the previous period of insurance (Aug 2003-July 2004). It was recommended by Royal Resorts that the Board to start looking as soon as possible for other quotations on the D & O insurance. The Board would need to analyze the insurance before the coverage of this policy will come to an end on August 2005. It is the management company’s duty to suggest that certain issues, like this one, be handled by the Board. It would be a conflict of interest for the Management Company to handle it. Fran Williams, Treasurer will look into this matter.
Remodeling of units: All units, scheduled to be remodeled, for the year 2005 will be refurbished by September. There are 191 remaining at the end of 2005. The average cost is $18,000 that includes renting from ISCO while the unit is out of service. The option to complete the project will be to earn our way out by building the new Marina project. The other option would be to raise fees. There are several repair items that are not scheduled. An example is, F building which needs a new roof. The Board and Royal Resort needs a priority list of items that need repair other than the units with projected dollars. The current budget for repairs and maintenance is $314,000.
What is the life of a refurbished unit? There is probably 20-year life for a unit, with replacement of appliances every five years due to rust. It is cheaper to hire outside contractors to do this work. Major appliances cost $1,700 to replace. It was noted that the furniture is not included in refurbishing a unit. There is a need to change the furniture. At our current pace of replacement it will become a problem soon. The Board and Royal Resorts need a break down on the cost of replacing the furniture per unit and in total.
Remodeling of units status
Total Number of units at resort: 342 (100%)
# of units remodeled as of 2004 157 (46%)
# of units to remodel on 2005: 34 (10%)
Total units remodeled at the end of 2005: 191 (56%)
Average cost per unit remodeled US$ 18,000.00
Estimated money needed to complete remaining units: US$ 2.72 million
Communication Materials: The first On-Island Bulletin is ready for printing and will be available for distribution before the end of the April. Last month, RR staff from the design and marketing department visited the island to take some photographs, shoot video and gather information for the project of the redesign of the Pelican Resort official website. The new site is expected to be up and running before the end of the year. The new video channel has been running on a “test-mode” for two months now.
A new web site is being designed at a reduced fee of $20,000 to Pelican. The price of maintaining a web site for RR is $90,000 a year. We need to look for advertisement for the new site. Eric Millet will check into the legal issue of advertising restaurants. There can be no advertisement on the resort according to the F&B contract.
Collective Labor Agreements Negotiations: Negotiations of the CLA for middle management have ended and the document is being drafted and will be signed this month. CLA for line employees and supervisors is still on negotiation stage.
There will be training courses held for the staff at Pelican, conducted by the RR staff.
Owners’ Meetings on island: Luis Cabrera has been conducting these meetings whenever a Board Member is not staying at the resort. Is suggested that Luis speak briefly to the owners during the Welcome Party on Mondays, and invite them to visit them in his office if they have any questions or comments. It was suggested that Board Members would no longer conduct owners meeting and refer comments to the Resort Manager.
Marina Building Project: A first draft of the plans for the new building was discussed. RR is still gathering information. The difference in the unit layout is the addition of a kitchenette. RR assured the Board that no view would be blocked. A new letter of understanding will be drafted for Board approval. The plan is to make the agreement 50/50 with other moneys owed coming out at the end. About $500,000 has been spent to date by Royal Resorts. After all expenses are paid RR and Pelican will split the profit. There has been a delay in starting the project but RR hopes to complete the building by the end of 2006. The project needs the money to finance account receivables. RR would like to discuss the renewal of their contract, which expires in 2010. There is a need to extend the contract to cover the sale of the new building. The votes for the new building would be put in escrow until the accounts receivables are paid.
Motion: To proceed on the building plans. (agreed)
The financing and term of the agreement for PRC needs to be drafted as quickly as possible and presented to the Board. On the original letter of intent the project was to be called Royal St. Martin. This gives the impression that it is for life. In order to avoid a lifetime contract the name will not be Royal St. Martin. RR cautioned the Board not to raise expectations too high for owners. The resort will have 4000 weeks to sell and we are not in a good cash position yet.
There will be someone from Royal Resorts on location approximately 25 days a month during construction of the Marina Project and Luis Cabrera, the Resort Manager, will be on site at all times.
AMF: There was a discussion on our financial situation and the need to raise the AMF in 2006 by at least 10%. We need to be fiscally responsible. There was a five-year period when the AMF was not raised. We need approximately $7M to complete all the projects at the resort. Some will come from the new project but there is a need to increase the AMF to stay current with inflation. This will be discussed at the July meeting.
The next meeting will be held at the Resort on July 13th.
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