TAPRC 2^ND QUARTERLY MEETING MINUTES - July 13, 2005

Held at Pelican Resort

Legal Counsel - Len Matsunaga and Frank Roozen

1. PCIP Status:  The most recent reports were presented for the Capital Improvement Program.

2.  D & O Insurance:  Directors and Officers Insurance:  This insurance expires on August 25, 2005; the annual premium paid for this insurance was $12,650 USD.  The cost increased $1,150 USD (10%) from the previous period of insurance.  Marsh (insurance broker) has sent the application form for renewal.  Board agreed to look for possible alternate insurers.

3. Ernst & Young visit to ISCO:  From June 6^th to June 8^th, Patrick Aberson from Ernst and Young visited the offices of ISCO at Fort Lauderdale, FL.  Patrick, along with Estela Villanueva, had meetings and interviews with various key staff members of ISCO.  The main subjects covered were Billings, Collections and Reservations.

4. Re-modeled units status:  Units have been re-modeled (or are in the process) during the year 2005, all of this as part of the PCIP project.

Total number of units at the Resort:                   342 (100%)

# of units remodelled as of 2004           157 (46%)

# of units for possible remodelling in 2005       34 (10%)

Total units remodelled at the end of 2005          191 (56%)

Average cost per unit remodelled                         $18,000 USD

Estimated money needed to complete remaining units: $2.72 million USD.

5. Collective Labor Agreement Negotiations:  Negotiations for both CLAs (for line employees and middle management) have ended and the document should be signed this week.  Both contracts will provide a total increase of 10% over a period of three years (2005: 4%, 2006 and 2007: 3% each year).  For the year 2005, this represents an addition of approximately $80,000 USD to the annual budget.

6. Garbage Issue:  Work on the relocation of the garbage site is on going.  RR staff has considered another location that, although it is less convenient for the Resort operation, it will stop the complaints from the Pelican Key neighbors and possibly avoid the bad publicity.  The legal status on the court proceeding related to this issue was provided by FR.

7. Food & Beverage:  July 13, 2005 is the final date for payment by FBMD.  Discussed the plan of action to follow regarding the F&B services at the Resort and the legal proceedings with the FBMD.

8. Legal issues:  Telem:  FR provided an update on this matter. The matter is expected to be settled shortly.

9.  Communications Material Update:  The first On-Island Bulletin has been delivered to all of the owners’ rooms for the past two months.

The new video channel has been running on full mode since May 1^st.

The new edition of the On-Island Bulletin will be prepared by JY and EM, expected date of completion:  August 31, 2005.  The cost of printing this publication is around $800 USD and the revenue expected for the advertisement spaces is $1,400 USD.

Royal Resorts will redo a Web site for Pelican. They will try to make it available by the end of the year.  Cost will be approximately $20,000 USD. The actual cost would be $80,000 USD.  It is hoped to have an interactive site for owners to pay their bills and register at the resort.

10. Annual General Meeting 2005 and TAPRC Board Elections:  The dates for the AGM this year are December 6^th and 7^th.  The location will be at the resort.

Each board member is responsible for preparing different sections of the material that is mailed to all owners prior to the meeting.  Sandra Shaw has helped on previous years gathering the material and coordinating the printing, posting and mailing. 

Two Board seats are up for election. ND and RS terms end and both of them can run for re-election.

Candidate’s proposals are due for submission by August 26^th.

RS suggested that we have a half-day session with the new board and the old board the day after the AGM and also the Board should visit ISCO in March for the quarterly meeting.

11. Other Operational Issues:  Beach umbrellas:  35 new umbrellas and 6 new palapas were installed at the beach.  Security and Beach Staff are taking the necessary actions to avoid guests saving these areas when not in use.

Resort Computer Systems:  In order to advance on different proposed projects involving computer systems (new front desk and reservations program, new web site, internet access for guests) and to improve the efficiency of the existing daily tasks (accounting, human resources, sales, purchasing, administration), several upgrades on hardware and software are needed.  An investment of  $105,000 USD on different equipment and licenses is needed to ensure the success of the projects.

 Financial Issues

12. Special Contribution:  The unpaid balance on the Special Contribution as of June 30, 2005 is $234,000 USD and represents 5.6% of the total amount billed. 

There are still 32 members remaining that only owe the Special Contribution but that have paid the AMF.  These memberships have already been foreclosed.  Foreclosing procedures on all SC balances have been executed (April 22 and June 16) and units are already listed for sale.

After foreclosure, some are paying and if the weeks have not been sold the owner can buy it back.

13. 2005 Annual Maintenance Fee:  The balance of the Maintenance Fee as of June 30, 2005 is $1.37 Million USD and represents 14% of the total amount billed.

Foreclosing on all AMF balances has started (first part on June 30) and these units are listed for sale.

14. Loans from Quantum Investment Trust to PRC:  Operating Capital Loan ($700,000 USD) and Loan for legal settlements (Special Contribution -  $3.2 million USD) have been paid in full.

15. Financial Statements, Cash Flow and Budget 2006:  Cash flow is short again; the resort needs to cover the expenses for the next two months (before the AMF billing).  These expenses total approximately $2 million USD.

The operational budget for the year 2006 will begin to be prepared on July 15^th.  Once it is finished, it will be presented to the Board for approval in order to add it to the Annual General Meeting material.  A significant increase in the AMF is almost inevitable, as has been discussed on previous occasions.

16. Marina:  The remainder of the time was spent discussing the Marina Project. 

The Marina Project dividends aren’t projected until 2013.  Until then, resort shortfalls in operations and capital improvements must be funded through a combination of loans, AMF increases or special contributions.  However, the Marina Project provides receivables from new sales, which improve the Resort’s financial position, as a path to the future since these can serve as collateral for a loan and eventually will present cash flows that can help create a $1 million USD reserve.

17. Other Issues

Meeting adjourned at 5:00 pm.

Judy Young, Secretary

Send mail to Judy@navnet.net with questions or comments about this web site.
 

Design - Roy Martin @ roymartininc@yahoo.ca