Budget & Meeting

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Harbor Ridge Condominium Association Special Meeting Agenda

Saturday, December 2, 2023—10:00 a.m.

Annual Meeting Documentation and Zoom Information to be provided on December 1, 2023

1. Call to Order

2. Roll Call of Officers

3.  Election of Officers

4. Consideration of ratification of proposed annual budget

5. Transaction of such business as may properly come before the meeting

6. Adjournment 

¹Seven percent of the assessment total is set aside in a reserve account for maintenance, repair and replacement on a periodic basis of common elements, limited common elements and limited common property for which the Association is responsible and to cover deductible amounts for any insurance policies maintained by the Association.

NOTE: The budget has been prepared based upon what Harbor Ridge believes to be the best current estimates of future costs currently available, such as current and past operation and maintenance costs of the property or of similar properties. In preparing the budget, Harbor Ridge has assumed that all the units will be occupied during the one-year period which the budget covers and that there will be a nominal inflation rate. These estimates are not intended, nor should they be considered, as guarantees or warranties of any kind whatsoever.

Condominium Association Special Meeting Minutes

 Saturday, December 3, 2022 at Harbor Ridge and via Zoom

President Linda Connelly called the meeting to order at 10:01 AM.

Officers Present at Harbor Ridge: Linda Connelly, President; Jan Franz, Treasurer; Jay Hewett, Secretary; Margaret Austin, Manager and Annette Bartlett, Manager.  Present Via Zoom: Dianne Lytle, Member; Absent: Jim Nicholson, Member.

Seven owners were in attendance in person, and another eight owners were in attendance via Zoom. A quorum requires 408 votes. Votes by Proxy from owners: 325.5; Votes available from HOA: 166 thus, a quorum is present. Proxy Votes: for David Ezzio: 166; for William Hayes: 136.  David Ezzio was elected to a 5-year term of office.

Manager Margaret Austin reviewed the proposed income budget for 2022.

The various line items were explained as to what they represented. Line item amounts were not discussed in specifics, but were relatively consistent with previous years.  Adjustments were made for the current economic conditions and the impact on the Resort, as well as people traveling again.

Both Payroll Protection Loans received in 2020 and 2021 have been forgiven.  No additional income from this source can be expected, going forward.

A question regarding legal fees resulted in a discussion of the cost of deed preparation. Currently, deed transfers to family members are prepared at a cost of $100.  Deed transfers to third parties cost $200.

A question regarding the number of HOA owned weeks was answered as 160 weeks, and management explained that they have been used for rentals, owner getaways, and loss of use due to major repair projects and the COVID epidemic.  Long term, we need to reduce the number of HOA owned weeks by selling them to new owners.

A suggestion was made to the effect that because Harbor Ridge has shown itself to be open to all, that we market to groups seeking acceptance of diversity. The Board will discuss this proposal and take any action that is decided.

An owner suggested to put the list of units-for-sale in the unit guest book.  The idea is to generate interest in unit sales.  The list changes constantly and would be difficult to keep up to date in 50 books.  The list is available on request at the front desk.  The lobby white board listing sales is intended as a conversation starter.

Several owners present had questions about the off-season weeks that are not producing income. A summary of management responses included:

Most of the non-productive weeks are in the winter with a few scattered throughout the year.

Management works with owners encouraging payment plans, education on usage, and lastly the costs involved in deeding the week back to the HOA. Use of a collection agency has been tried and will be again, as well as a future foreclosure auction. Collections and foreclosures actions are very time consuming for the staff and expensive in terms of fees and legal costs.

Marketing to locals that want to use the clubhouse facilities and / or need overflow housing for regular events is an on-going effort.

Money received for HOA weeks  sold is applied to Accounts Receivable on the balance sheet.

The HOA retains some weeks throughout the year to offset mistakes and lost weeks due to projects and emergency repairs.

An owner suggestion was to publish a list of weeks that are in demand.  This may induce owners to sell weeks that they are paying for, but no longer want.

Manager Annette Bartlett reviewed the proposed expense budget for 2023. As with the discussion of income, the various line items were explained as to what they represented and were mostly consistent with previous years.

Specific comments pertaining to budget categories included:

Insurance cost always increases, but this year our “experience rating” will be impacted by two freeze-ups last winter that required costly repairs. Steps taken to avoid future problems of this type should improve our rating going forward.

Payroll Expense is up due to wage increases needed to attract and retain housekeeping and maintenance staff in a competitive wage environment ongoing in Maine and MDI.

The significant increase in utilities is primarily due to fuel and electricity. Projected costs based on locked-in fuel and projected electricity rates result in the 20% increase shown in the budget.

An owner asked who determines wages and salaries and do we have a plan to hire more staff. Management responded to say that they determine salaries and staffing levels with the advice and consent of the Board within budgetary constraints.  Additional quality, long term staff is desired.

Another owner asked whether it was possible to make suggestions for specific improvements to amenities and utensils provided in the units. The Management response was a definite yes; we take the requests into account in two ways: lower demand items may be stocked at the front desk for loan-out and higher demand items are typically distributed to all the units.

President Connelly requested a motion to approve the budget as presented. Owner John Hanson moved to accept the proposed 2023 budget as presented. Joseph Guaraldo seconded. The motion was approved by all present and by proxy.

Under other business, owners present at the meeting in person and via Zoom said it was difficult to hear what people “on the other end of the line” were saying. It was suggested that we need better microphones and speakers to better allow those present to hear and communicate with those present via Zoom.  The Board will take this issue up for discussion and make improvements.

Another owner expressed concern for the stagnant salaries of Annette and Margaret. They responded to the effect that their present compensation was a choice they made to help control increasing costs. Linda Connelly, Board president, also made it clear that this is also a concern of the Board’s and is routinely discussed at Board meetings.

Mike Zielinski expressed appreciation to Margaret and Annette for their long service, a combined 50 years, and credited them for the on-going success of Harbor Ridge Resort.

Annette indicated that major projects planned for Spring of 2023 include re-roofing and new skylights on Building 5 and renovating carpets and master bathrooms in building 3.  She also expressed relief that they were able to lock-in our oil delivery price at $3.95 per gallon when current prices are $5 and up.

There being no further business or discussion, the meeting was adjourned at approximately 11:30AM on a motion by John Hanson.

Respectfully submitted,

Jay Hewett, Secretary

Harbor Ridge Condominium Association  Special Meeting Minutes

December 4, 2021 via Zoom

President Linda Connelly called the meeting to order at 10:05 AM.  Officers present via Zoom included: Linda Connelly, President; Jan Franz, Treasurer; Jay Hewett, Secretary; Dianne Lytle, Member; Jim Nicholson, Member.  Harbor Ridge Managers Margaret Austin and Annette Bartlett were also present via Zoom.  Two owners were present in person.  Thirteen additional owners attended via Zoom.  There was a quorum with proxy votes submitted.

Manager Margaret Austin reviewed the proposed income budget for 2022.  The proposed 2022 Maintenance Fee is $550 per unit-week, an increase of $30 over the two previous years.

Both Payroll Protection Loans have been forgiven.  No additional income from this source can be expected going forward.

Both owner and HOA rentals have significantly increased during COVID.

There were several questions regarding unit weeks owned by the Homeowner Association (HOA):

How many unit weeks does the HOA own? The answer was given as 141 weeks, an increase of 30 over 2020.  Policies have been added due to costly foreclosure costs and to counteract the suspect and fraudulent timeshare practices.

What is the seasonality of HOA-owned weeks? Management stated that most are off season with only a handful of peak season weeks. These have been used to offset lost weeks due to major maintenance projects and COVID.

Manager Annette Bartlett reviewed the proposed expense budget for 2022.

Specific comments pertaining to budget categories included:

Bad Debt expense reflects loss of maintenance fees associated with the weeks owned by the HOA. Timeshares use the accrual method of accounting, which requires all weeks be recognized as revenue.

Gift Shop purchases are higher than normal due to lack of purchases in the first year of COVID-19.  The gift shop did well this year.

Loss of Use reflects the cost of renting weeks needed for major maintenance projects, such as roofing.

Owner Expenses were minimal, as the resort did not host breakfast and wine and cheese.  S’more campfires were held August thru October.  These events were missed by guests, and they will return when it is safe to do so.

Payroll Expense is up due to wage increases needed to retain housekeeping staff in a competitive wage environment ongoing in Maine and MDI.

Repairs and Supplies include things like new roofing and skylight projects, bathroom renovations, carpeting, and other routine maintenance projects.

Supplies include cleaning, office, and townhouse supplies, along with large appliance and furniture purchases.  Sixteen sofas are also on order and more than 20 major appliances were purchased this year.

Utilities include oil, electricity, water, sewer, cable TV, and internet service. All have increased due to higher occupancy.  Internet service is now free to guests.

Management indicated that bank charges are a cost of doing business, and it reflects the processing fees charged to the HOA to accept maintenance fees, rentals, and gift shop sales by credit card.

President Connelly requested a motion to approve the budget as presented. Owner John Hanson moved to accept the proposed 2022 budget as presented. A second to the motion was offered by Dianne Lytle. The motion to approve the budget was approved by all present and by proxy.

Under other business, management reported that functions are still not allowed in the Great Room and that it recently dropped Clubhouse use by reservation.  A few owners have objected and want previous COVID protocols reinstated.

John Hanson questioned how flexible our COVID policies and practices have been.  He indicated that it is important to err on the side of caution.  Management indicated that we have been flexible via Board policy and action.  It was suggested that the schedule be split into reserved and open blocks.  The Board will discuss this further in their meeting to follow.

Mike Zelinski expressed appreciation to the Board and Management for good performance during the pandemic, as Harbor Ridge remains in a financially sound position.

Manager Margaret Austin indicated that we may still need to do six-day rentals in 2022, because of limited staff and continuation of increased cleaning and laundry requirements.

Charles Sidman feels the hybrid annual meetings are needed, and it is not too difficult to do. The Board will consider continuing them beyond the pandemic period.

There being no further business or discussion, a motion to adjourn was offered by John Hanson and seconded by Charles Sidman.  This was approved by all present at 11:05 AM.

Respectfully submitted by Jay Hewett, Secretary

Condominium Association Special Meeting Minutes

 Saturday, December 5, 2020 via Zoom

The meeting was called to order at 10:02 am by President Linda Connelly.   Board members, Dianne Lytle, Jan Franz, Jim Nicholson, Jay Hewett and managers, Margaret Austin and Annette Bartlett, were present.  It was held via ZOOM, with several owners as far away as Washington State and Texas participating.

There were 413.5 owner proxies submitted prior to the meeting and in attendance virtually.

Margaret reviewed how the resort has fared through the COVID-19 situation.  The resort was closed entirely from mid March through June 1.  We reopened first to Maine resident owners, then gradually added other state residents with 14-day quarantines and negative test results.  Occupancy rates have been around 75-90% of normal occupancy depending on the week.  The clubhouse is now open by reservation, one family at a time for 45 minutes each.  We received a Payroll Protection Plan loan, which has been forgiven in full, but we do not yet know whether it will be classified as taxable or nontaxable income.

Management has been working very hard to make sure that owners do not miss out on their 2020 vacation because of the closures.  If anyone who could not use their week in 2020 because of the pandemic  and has not spoken with Annette or Margaret, they should call to see what can be done.

Management presented the 2021 budget, along with the balance sheet and actual expenses and income for 2020 as of November 30, along with year end numbers for  2019 and 2018.   These documents were sent out prior to the meeting for those who had signed up for the Zoom meeting.  The uncertainty of next year’s COVID-19 situation made the budget preparation very difficult.  Margaret reviewed the income side of the financials line by line and answered several questions.  Revenues directly impacted by COVID-19 included bonus week purchases, gift shop sales, rental commissions, owner charges, internet, and vending machine revenues.  Rentals were down for the year, but they were much better than expected.

Annette then went over the expenses and reviewed the balance sheet.  On the expense side, some differences may be associated with the timing of bills being paid.  Automobile expenses included some major repairs (e.g. control arm and steering pump) this year, as the truck is now 10 years old.

Additional bad debt will be written off before year end.  Most bad debt reflects the maintenance fees of the HOA owned weeks.

Credit card processing fees are stable; and management is seeking to add online maintenance fee payments.

Computer charges increased due to the redesign of the website.  Contracts were significantly higher, as the pest control company increased their rates and then they offered a discount on next year’s services if we prepaid, so we did.

Dues, fees, licenses, and permits were up due to the permit for the linen storage shed (required for COVID-19) and the Chamber of Commerce dues increased.

Insurances were down due to changes in employee health plans.

Gift shop purchases normally occur in early spring.  With COVID-19 exploding at that time, it was decided to defer purchases, as the gift shop was sufficiently stocked.

Loss of use was incurred, as the association had to rent a few units during Building 3’s roofing project.

Owner expenses were minimal, as the resort did not host breakfast, wine and cheese, or s’more campfires after March 15.  These events were missed by guests, and they will return when it is safe to do so.

Payroll was down with the loss of two full-time maintenance employees due to retirement, as well as the employees being furlowed in April and May.  Management was on-site during the closure.  Harbor Ridge was very fortunate to retain its staff through the entire summer and fall season, which has only just slowed down in mid-December.

Property taxes for the entire association increased by $3,179.95.

Repairs and supplies are up significantly; but the improvements are many.  There are new rugs throughout Buildings 1 and 5.  The master bathrooms in Building 1 are completely renovated.  The ocean side of Building 4’s roof was done in the spring, along with the driveway side of Building 3 this fall.  The decision was made to remove the bathroom skylights and only replace the “hall” skylights.  The new skylights have blinds and automatically close during a rain shower.  A linen shed was purchased to house the additional linens needed to meet the cleaning requirements during the COVID-19 pandemic.

The supplies category encompasses a lot of expenditures, and overall it was down; however, the cleaning supplies were up $6,000, and townhouse furnishings were down $20,000, as we did not purchase any new furniture this year.  Linen purchases were up 200%.

Utilities were down due to the resort being closed in April and May, with limited occupancy in June.  Our cost per gallon of No. 2 fuel was down by $0.29, and the resort locked in at $1.689 for this year.

David Ezzio moved to accept the budget and financials as presented, seconded by Dianne Lytle, and the motion passed.

One owner who is trying to dispose of her week brought a suggestion to the group about a way to offer it to other owners, as all of her fees are up to date.  It was agreed that the Board would consider the suggestion, and management will work with this owner to find a satisfactory solution.

Another owner asked about the use of the bike shed for storage of maintenance items.  Annette assured him that she would speak to maintenance about clearing out the space for next summer and fall.  The shed has been a huge asset for winter equipment storage.

Annette mentioned that Dave Leissner called prior to the meeting and extended his appreciation for the maintenance fees remaining the same and for excellent usage of funds during COVID-19 to keep the resort on good financial footing while keeping employees and improving the property.

There being no further business brought forward, the meeting adjourned at 11:26 am.

Respectfully submitted,

Dianne Lytle, Secretary

Condominium Association Special Meeting Minutes

 Saturday, December 7, 2019

Dianne Lytle called the meeting to order at 10:00 AM, as outgoing President Tim Letourneau had a family emergency out of state.   Board members, Dianne Lytle, Jan Franz, Jim Nicholson, Linda Connelly, and managers, Margaret Austin and Annette Bartlett, were present.  Owners in attendance introduced themselves and write-in candidates, Jay Hewett and David Ezzio, gave brief biographies on themselves.

There were 332 owner proxies submitted prior to the meeting.  Owners in attendance submitted ballots at the meeting to cast their votes.  The meeting continued as the financial discussion continued during the calculation of the results.

The Profit and Loss Previous Year Comparison was presented by Margaret. While some revenue sources increased, other revenue sources were down slightly.  Bonus weeks can be purchased from the HOA. Owners continue to convert to the Club Interval Gold points membership making their exchange opportunities more transparent.  Gift shop sales are $2,000 over last year.  The rental commissions were down.  The HOA receives a 30% commission of each rental.  The sales price of any HOA-owned resale is applied first to past due maintenance fees. 

HR was forced to find another internet provider when the existing provider gave short notice that they would no longer supply internet access on MDI as of July 1.  All of the internal internet infrastructure was upgraded, and the speed was significantly improved. 

Deed fees were up, due to more resales and more owners adding family members to their deeds.  Questions about legal fees and deed title searches came from David.  Management explained that the legal fee revenue line includes the fees that the resort charges to prepare and record the deed.  Management has done 95% of the deed work and does not use attorneys, therefore saving costs. Annette reported that unofficial title searches are done through online access to the Registry of Deeds and assured no title insurance was sold. She confirms that mortgages have been discharged and that there are no liens on the property.  If any problem exists with the deeds that cannot be handled inhouse, she advises the owners to hire an attorney to do their deed work.

Owner charges include internal exchanges, upgrades, guest fees, and Great Room functions. Long term rentals are the rental proceeds from the apartment located above the laundry room.

On the expense side, some differences may be associated with the timing of bills being paid.  Advertising includes employment ads and marketing costs for social media sites, Trip Advisor and Trivago.

Automobile expenses include mileage reimbursement and truck repairs.  There were some major repairs (e.g. U Joints) this year, as the truck is now nine years old.

Additional bad debt will be written off before year end.  Most bad debt reflects the maintenance fees of the HOA owned weeks. 

Management renegotiated better credit card processing rates this year. HR rates are higher as transactions are mostly hand-keyed, not swiped.

Two new computers and software had to be purchased this year.  HR has preventive maintenance and service contracts on the following:  copier, furnaces, collection, fire sprinkler protection, pest control, security, and the dehumidification system in the swimming pool area.

Employee expenses include employee appreciation meals, birthday gift cards, the Christmas party, and staff shirts.

Gift shop inventory purchases are up; however, it directly relates to better sales.

HR management works closely with Cross Insurance for its insurance needs.  Each building’s replacement cost is approximately $825,000. The Clubhouse is slightly higher. Our umbrella policy is five million dollars. David Ezzio asked if the resort’s total market value was evaluated. Margaret explained each year insurance increases to compensate for value changes. Annette stated that replacement value was calculated by insurance company. Jay Hewett stated that tax assessments would be used as one of many factors in calculating replacement costs. Annette provided some history of Southwest Harbor’s tax assessments when BLDG 5 was completed in 1999 and the 2014 property tax reevaluation. After BLDG 5 was completed, the taxes quadrupled. After the 2014 reassessment, taxes decreased.  David Leissner stated that with the current insurance, each unit would equate to $120,000. 

Bob O’Brien asked questions on property taxes. Annette stated that HR pays the entire bill for the homeowner’s association. The stated expense amount on the profit and loss is the increase in taxes from one year to the next.  The taxes are a liability “pass through” account, and owners are billed in arrears due to the invoicing schedule. Prime week owners are charged at a higher tax rate; however, the base maintenance fee for operations is equal for all owners.

Health insurance is provided only for full time employees.  Our workers compensation insurance will unfortunately increase due to a couple of incidents this year.

Owner expenses include costs associated with the breakfast, the social hour, spring water for Clubhouse guests, and the seasonal campfire s’more supplies.

Professional fees include accountant and legal fees, when needed.  Registry expense is the cost to record the deeds, discharges, liens, and release of liens.

The supplies expense line includes laundry chemicals, cleaning supplies, office and general supplies, miscellaneous items, large furniture purchases, and townhouse appliances.

Utility costs are up overall.  The water costs were less this year due to last year’s pool water supply pipe breakage issue.  The average price per gallon of fuel is up.  Our cable costs are higher; however, our digital picture is much improved. Internet will remain stable.

Dave Leissner complimented management for reduction in expenses and increase in income. He stated that this was outstanding. Annette explained that upcoming carpet costs were not included on this report, and there were budgeted dollars remaining to be used that would allow Harbor Ridge to recognize a near zero profit for 2019.

David Ezzio asked about depreciation. Annette explained how depreciation is reported for income tax purposes. Annette reported that there was $42,706 for 2018.  Bob O’Brien had a follow up question regarding depreciation. Annette explained the time share reporting of depreciation. Many purchases are expensed immediately, while other purchases are not. At the end of the year, the HR accountant determines that year’s depreciation schedule. 

Dave Leissner moved to approve the Profit and Loss as presented. David Ezzio seconded the motion, and the report was approved. 

Margaret presented the 2020 budget and reminded owners that a budget is a guideline.  Questions:  David Ezzio asked about the anticipated additional expenses. He stated that the income did not appear to increase.  Management assured that if the cash is not there, major upgrades are postponed. The HOA has no loan payments. The growing bad debt is a concern, HR will need a public foreclosure auction again, which is expensive.  Payroll has seen significant increases to retain employees. There have been mandated minimum wage increases for the past three years. She stated that Hannaford pays $13.00 per hour for baggers, and there is a small, competitive labor pool on the island, especially for housekeepers. HR was not fully staffed this year.

David Ezzio asked why HOA resale income was not anticipated. Revenues are applied to annual assessment accounts receivable. The 2016 annual assessments will be written off this year. David asked if all bad debt is from unpaid owner maintenance fees, and Annette said it includes owner and homeowner association owned units.

Charles Sidman had three separate areas of concern. He stated that the overall costs are going up 7 to 8 percent per year. He said these numbers are not unreasonable but wants to discuss areas that are higher than 7 to 8 percent. He also had a Reserves question. He stated that the percentages are higher than the cost of living and wanted to know if HBR is sustainable. AB reported that like our individual homes, as the resort property ages, expenses increase. Resort repairs, supplies, and payroll costs increase. There are unknown and uncontrollable occurrences that happen, such as the swimming pool and hot tub areas which must be addressed immediately and would cause increase costs. Health insurance costs have increased more than 8 percent, and the age-banded insurance changes impacted HR.  HR also needed to increase housekeeping wages for retention and needed to add another maintenance person.  Many HR employees are multifaceted, which helps HR function as efficiently as possible. Annette stated that Management and the Board must work at selling resale weeks to raise the revenue line items. Margaret said that several locals have purchased resales to use the facilities, which increases ownership. 

Linda discussed the Board and management’s dedication at keeping maintenance fees as low as possible without jeopardizing HR’s premier rating with exchange affiliate, Interval International. HR is viable and sustainable. Ongoing upkeep is a must. We want to retain our independent status and not become managed by larger resort holding companies, such as Diamond Resorts, Wyndham, VRI, or others, as overall costs will dramatically increase.   HR must continue to be proactive as possible in maintaining the property. Linda thanked the attendees for bringing up the valuable questions and concerns for discussion. 

David Leissner moved to approve the budget as stated. David Ezzio seconded the motion, and the budget was approved.

Election of Board Members:  Three write-in candidates submitted their names after the newsletter had been mailed to the owner base. The candidates were Kurt Zemba, Jay Hewett, and David Ezzio. Incumbent Jan Franz’s term was up for re-election, and she was listed on the original proxy. There were now four names for two open board positions. The biographies were presented to the attending members. Once the attending members’ proxies were returned to Annette, she tabulated the proxy ballot results for the incoming board members. The total votes were tallied as follows: Jan Franz – 320.5 votes; Kurt Zemba – 2.5 votes; Jay Hewett – 8 votes; David Ezzio – 5 votes. Fifteen blank votes were given to the Secretary to vote.  One person attending the meeting abstained their vote. Jan Franz and Jay Hewett were voted in as board members.

There was no additional business presented.  The meeting adjourned at 11:30 am. 

Respectfully submitted by,

Linda Connelly, Secretary

Harbor Ridge Board Condominium Association

 Special Meeting ~ December 1, 2018

Tim Letourneau called the meeting to order at 10:00 AM.

Board Members, Tim Letourneau, Dianne Lytle, Jan Franz, Jim Nicholson and Linda Connelly, were all present, along with Managers Annette Bartlett and Margaret Austin.  Owners in attendance introduced themselves.

There were 400.5 owner proxies submitted prior to the meeting. With those in attendance, there were 412, and the 20% quorum was met.  HOA votes from the Secretary were not needed due to sufficient owner proxies submitted. Linda Connelly and Dianne Lytle were reelected as Board Members. 

The Profit and Loss Previous Year Comparison was presented.  The Club Interval Gold line item was discussed. This Interval International option is a point-based system that allows owners additional vacation time opportunities. Gift Shop income was down this year. 2018 rentals have been successful, while resale income is lower. When a resale occurs, proceeds are applied to annual assessment accounts receivables before recognizing profits.  Owner charges include cleaning fees, great room usage, guest fees, and internal exchanges. Long term rental income is the rental of the on-site apartment for seasonal housekeeping staff.

The advertising cost increase is due to Trip Advisor and other advertising means. Although the expense is higher, there is an overall positive effect on the income side.

Generally, maintenance fees are written off as bad debt after four years, and it will be evaluated again in December.  Bank charges are up, as more people use reward-based credit cards. Management recently called the credit card processing company to negotiate better rates.  Computer costs have remained steady; however, upgrades may be needed soon. Contracts include furnace maintenance, alarm systems, pest control, and sprinkler system maintenance. These ongoing contract costs have remained steady.

Employee expenses include meals, work related clothing, holiday celebrations, flowers for employees experiencing family loss, and birthday recognitions. Gift shop purchases have been steady.

Insurances were lower due to switching the building liability insurance to Patron’s Oxford.  Loss of use occurs when we must rent someone’s unit due to a maintenance issue when full occupancy is expected. Owner expenses include breakfast, s’mores, and wine and cheese costs.

Payroll expenses are up due to essential raises and seasonal bonuses to attract and retain staff. Professional fees include accounting and collection fees.

Property taxes increased due to the first mil rate increase in five years.  Property taxes are recorded as liabilities and are reflected on the balance sheet.

Registry expenses are down due to fewer deed transfers between parents and children.

Repairs and supplies are higher due to broken water pipes that supply the pool in February. A pipe broke underground, and the SW Harbor Water District supervisor reported to management the large increase in water usage mid-cycle. The pipe had been broken for a while before it was discovered, and another broken pipe was detected as soon as the first repair was done. It was also determined that one more pipe needs to be done, and this pipe will be replaced when finances and timing allows. The gable ends of Units 18, 28, and 38 were repaired. Unit 11 has been started and will be finished in the spring. Other gable ends will be completed in 2019.  All living rooms, other than Unit 51, now have a hard surface floor. This change has been a major enhancement and well received by owners and guests. Staff has also commented how much easier these floors are for cleaning. Pavement crack sealing was done this summer. New sofas for Building 4 were installed this past spring, and Building 2 is scheduled later this winter. Annette recently visited a timeshare with a higher end hospitality sofa, and she ordered this brand for longevity and better sleeping comfort. The cedar walls in the pool area and the pool liner are scheduled for repair in January. Units 45 – 48’s carpets will be replaced this winter.

Seminar and training expenses were up due to required pool chemical recertification classes. Annette attended an Interval International conference in October. Interval has provided numerous accommodation certificates and increased point exchange values for our owners this year, and the board has renewed its exclusive agreement with Interval. 

Utility costs remained steady overall. Management has been upgrading to LED lights, which has saved the resort close to $8,000. When the pipes for the pool broke, the SW Harbor Water District worked with us. This eliminated the need to go through two $5,000 insurance deductible claims. Heat pumps have reduced the overall oil usage by approximately 4,000 gallons. 

Tim asked for approval of the budget as presented. Dave Leisner made a motion to accept the budget as presented.  Dennis Connelly seconded the motion, and the budget was approved.

Other business included an owner requesting the board to evaluate solar power again.

Mrs. Kostron requested new sofas for Building 2, and Annette reported that Building 2 sofas are being ordered this week.

Annette clarified that the maintenance fee increase for 2019 is $15.00. 

Dave Leisner asked if the path that leads to downtown could be better maintained and cut back. Annette stated that it is done each summer, but it should probably be done earlier in the season.

Mrs. Kostron asked if internet charges could be dropped as many resorts offer free wi-fi access.  Dianne commented that it would result in an increase in the maintenance fee.  Annette stated that the Board evaluates this topic each year.  As mobile companies increasingly offer unlimited data plans, Harbor Ridge internet income may decrease.

Since there was no further business to be discussed, the meeting adjourned at 10:45 am.

Respectfully submitted by,

Linda Connelly, Secretary

Harbor Ridge Board Condominium Association

 Special Meeting ~ December 2, 2017

President Tim Letourneau called the meeting to order at 10:00 AM. A moment of silence was held as Board Member Jerry Williams recently passed away.

The following board members and managers were in attendance: Tim Letourneau, Dianne Lytle, Jan Franz, Linda Connelly, Annette Bartlett, and Margaret Austin.  Owners in attendance introduced themselves. 

Annette collected the proxies from those in attendance, then reported the final tally for the election of the new board position. The total results were David Ezzio – 92.5, Jim Nicholson – 165.5, and Kurt Zemba – 57.0.  Jim Nicholson has been elected for a five-year position.

Margaret discussed the Profit and Loss Previous Year Comparison. Bonus week income was less this year due to Week 53 in 2016. Club Interval Gold sales have increased this year. Legal fees have increased due to multiple resales and deed transfers to children.

Gift Shop income is listed as gross revenue and the off-setting expenses are stated.  Rentals are down.  HR collects a 30% rental commission.  If an online booking is made, a 15% rental commission is made to the online booking agent.  If an online booking starts at the HR website, no commission is paid to the booking agent.  Weeks 18-42 are the best rental weeks.  The weekly rental rates were increased from $1,000 to $1,200 this year for June and September weeks. There were complaints from our repeat customers, and management worked with these repeat customers for retention.

Bad Debt expenses are non-performing units.  Credit card charges are up due to the increase of credit card use for consumer rewards, along with most of our transactions being a manually keyed transaction. Credit card use is a cost of doing business. To guarantee rentals, credit card transactions are best.

Overall contract expenses are slightly lower.  Pest control is up due to monthly bed bug prevention measures.  We have a maintenance contract on the pool dehumidification system.  Dead River service contracts for propane and oil will be changing in May 2018, as they are eliminating the presidential plan.  The new plan is a cost sharing plan for parts and labor.

The overall insurance costs are lower due to changes in health insurance and the number of employees covered in 2017 vs 2016. 

Following the management’s explanation of the profit and loss, Tim asked if there were questions from the floor.  David Leisner had a property tax question. Property taxes are paid twice a year, and the liability is shown on the balance sheet.  Property tax costs remain steady.  HR collects property taxes for the Town of Southwest Harbor. 

Peter Kuda asked why repairs and supplies were so much higher this year.  Several hardwood floors and carpets were replaced.  We replaced all living room chairs. We moved the living room chairs to the guest bedrooms, and then we sold the older bedroom chairs. There are larger TV’s coming for the living rooms. The current living room TV’s will be relocated downstairs for DVD use only. Management works diligently to do improvements within the budgetary constraints to keep maintenance fees low.

David Ezzio had an insurance question for 2016 vs 2017. The business office and umbrella insurance policy of $47,000 is a significant portion of the expense. We have a $5,000 property deductible and a $5,000 Worker’s Comp deductible per incident.  Worker’s Comp went down due to an improved experience rating.  The employee health insurance cost of $49,500 was lower due to fewer employees insured. The property is valued at $12.5 million, and building and content replacement value is increased annually.  HR will review the policy with Cross Insurance again in February. 

Peter Kuda asked about comparing different insurance companies. Management has compared plans, and costs vary due to HR being a not-for-profit owners association. Tim stated that Cross Insurance is the most competitive provider in this area.

Several questions occurred from the floor regarding owners paying maintenance fees by check to save credit card costs. Credit card charges are higher for HR because the credit cards are manually entered versus swiped due to the nature of our business. To reduce costs, staff asks for mailing addresses and security codes. December, January, June, July, and August have the highest credit card charges due to maintenance fee and rental payments. The average credit card charge is 3.5%. Multiple recommendations came from the floor requesting Management add verbiage to invoices asking owners to pay by check to help defray costs.

David Ezzio questioned bad debt.  HR uses accrual accounting, and all maintenance fees due are reported as revenue, but cash is not received. There are 86.5 weeks owned by the HOA.  When weeks are resold, the purchase price is applied to maintenance fees owed.  Bad debt was not written off for many years, and management is now routinely writing off bad debt.

Tim asked for approval of the budget as presented. It was a unanimous acceptance of the budget.

Transaction of such business as may properly come before the meeting:

Peter Kuda discussed his 2017 stay and commented on the fire pit experiment using charcoal for the campfire s’mores activity.  Peter purchased the charcoal, and he wanted the HOA to supply charcoal going forward.  Owners present did not feel the HOA should be responsible for the agreed-upon solution. Management stated that they received comments from guests that they preferred wood fires, including an eight-year-old who missed seeing the flames. Annette was present and the charcoal smell had stronger odors at the initial igniting.  Peter stated that he was concerned about wood fires later in the week. Annette reported that due to the s’mores evening being on Monday, it is rare that fires are lit on other evenings.  At most, generally there are two fires in a week.  This topic is closed.

Peter Kuda stated they happily stored their bikes in the new shed during their stay. The shed is now being used for equipment winter storage.  This now fulfills a long overdue wish list item.

David Ezzio asked about the use of solar power. Tim reported that it had been reviewed in the past and the pay back was too cost prohibitive.  Tim reported that regulations are changing and electric companies may not be reimbursing solar power users.

HR just renewed a 3-year electrical contract where costs are less than the previous contract. HR upgraded to LED bulbs in the bathrooms and some reading lamps. Due to specialty light bulbs, the initial outlay was originally $8 per bulb. Now, through Efficiency Maine, the specialty bulbs were $1 each. The new bulbs resulted in significant savings in the first electrical cycle.  Since LED bulbs are meant for longevity, David Ezzio recommended putting a small amount of lubricant prior to screwing in the bulbs for easier future replacement.

David Ezzio reported that the floor squeaks in Unit 12. Annette reported that Units 11 and 12 have far fewer squeaks than the prior flooring, and she’ll see if the contractor can make improvements without removing the entire floors.

The meeting adjourned at 11:10 am.

Respectfully submitted by,

Linda Connelly, Secretary

Harbor Ridge Board Condominium Association

Special Meeting ~ December 3, 2016

Tim Letourneau called the meeting to order at 10:00 AM.  President Tim Letourneau, Treasurer Jan Franz, Secretary Linda Connelly, Member Dianne Lytle, Manager Annette Bartlett, and Manager Margaret Austin were present. Member Jerry Williams was absent. Owners in attendance introduced themselves.

Consideration of ratification of proposed annual budget:  Annette discussed the Profit and Loss Previous Year Comparison in detail. 

Bonus week income is up due to Week 53 in 2016. Owners should review the 2017 dates according to the Harbor Ridge and/or Interval calendar.

Ten owners have become Club Interval Gold members this year. Management helps owners determine if this option would enhance their specific timeshare ownership.

Gift shop sales are up.  HR rentals of association owned weeks have increased.  The 100th anniversary of National Parks helped rental income this year for both owners and the Association. Rental and resale commission are up. Many existing owners have purchased additional timeshare weeks. Internet income was down because people are using hot spots on their cell phones. The Internet will be upgraded in two weeks with additional access points and double the bandwidth.  Legal fees are deed transactions completed on sales and transfer of ownership completed by the Association. Maintenance fee was raised by $10.00 for 2017. Due to the amount of work involved internal exchanges for owners will be $89.00, as compared to $189 through Interval International.  Rental income is from office rental and from our J1 visa workers. Sale of used property is ongoing based on available inventory.

Expenses:  Advertising is primarily for Trip Advisor and Trivago. This advertising has increased our income and helped owners rent their units.  Automobile expense includes the gas and repairs to the truck and housekeeping van.

Bad debt is up considerably, as management wrote off two years of maintenance fees. This was done with the accountant’s approval for tax purposes. The bad debt weeks are non-performing weeks and weeks owned by the Association.  In the past, only one year was written off for bad debt.  Due to accrual accounting, all maintenance fees must be recognized as income, and then amounts due are in Account Receivable accounts. Some owners are on payment plans. Most non-payment owners are in collections. There are some weeks that should be foreclosed upon, which is a long, costly process. Management rents these non-performing units, which helps recoup the HOA overall costs. Management plans to offer a deed-back option to these owners. David Ezzio requested Management to create a profile of owners and trends to get an accurate picture of non-performers. Management responded that most are owners that were on tight budgets when they purchased.  He congratulated Management for having the resale board at the check-in desk and expressed the need to continue this type of option. Management rents empty units to local businesses that have traveling employees. The HOA officially owns 43 annual weeks and 88 biennial weeks. There are another 38 owners that owe 2 or more years of maintenance fees. Annette reported there are approximately 275 intervals listed for sale, and they are not on the web site due to attracting potential “scammers.”  The web site states to contact Management for resales. 

Bank charges are credit card processing fees, which is a cost of business.  Gift shop purchases are down because the gift shop was closed for a time last year for renovations. Insurance expenses are down due to a better experience rating with Worker’s Compensation.   Harbor Ridge has a $5,000 insurance deductible when a claim occurs. Interest expense was for the heat pump loan that has been completely paid off.  Owner expense for the breakfast, s’mores, and the wine and cheese social is down slightly.  Wages increased in 2016 to retain housekeeping employees. The new increase in Maine’s minimum wage will have minimal affect. Starting housekeeping wage is $11.00 with a $0.50 increase in 30 days. At this time the core housekeeping staff is solid and all earn above $11.50.

Repairs and supplies are lower due to the completion of the water side of all five unit buildings.  Over the last six years the total cost of this project was well over $775,000.00 and was completed without special assessments or significant maintenance fee increases. An owner asked Management to think about replacing the balcony door locks to prevent guests from getting locked out.  The Board will review new locks and ask Management to get quotes. Board members commented on the excellent job Management does to keep the resort up and in good shape. With that said, an owner asked if anything “scanted” in repairs. Flooring is the next issue being worked on. Building II master bedroom and stair carpeting will be replaced in January. Living room chairs are on order.  Since the older chairs are still in good shape, they will be moved downstairs. Management does massive and minor replacements as needed.

Utility costs are stable.  The heat pumps have lowered fuel consumption. Owners and guests have been very happy with the heat in colder months and the air conditioner option in warmer months. The net income is much higher, and it was noted there is still December to reduce net income for tax purposes. It was reported the net value according to the Town of Southwest Harbor is approximately $12.4 million. Harbor Ridge has a good relationship with the Town of Southwest Harbor and taxes have remained stable for three years.

Tim Letourneau asked for approval of the budget as presented. All owners present motioned to accept budget as proposed. Motion passed.

Transaction of such business as may properly come before the meeting.

An owner expressed concern about the fire pit again. He stated that having the fire pit causes smoke on their balcony and smoke in their unit in Building I. He stated that smoking is not allowed, yet smoke comes up for 3 hours on both Mondays that they are at Harbor Ridge. He requests that owners present, the Board and management re-evaluate the fire pit. An owner in attendance asked if they tried to mitigate the fire pit evening by closing windows. The reply was no because they prefer to leave their windows open for the fresh Island air. The owner’s wife asked to be recognized and stated that they love fire pits when camping and have a fire pit in their back yard. She loves their Building I unit and likes the look of the fire pit. The owner stated he has a more sensitive nose than his wife and feels there’s a time and place for a fire pit and not at Harbor Ridge. The owner was asked if he felt we could place the fire pit elsewhere. The response was Harbor Ridge does not have the footprint to move the fire pit anywhere that would not be an issue. A question arose to see if Harbor Ridge could have propane or gas. It was stated that the tanks would need to somehow be hidden and concerns of children around the tanks was an issue. It was stated by another owner that gas or lp option would increase costs. It was mentioned to try charcoal. The owner was asked if he would consider bringing charcoal for his two weeks and he replied yes. Another owner also suggested that we could use a portable propane tank during the owners two weeks. This option would only function if Harbor Ridge converted to a propane fire pit.  A Board Member mentioned the Board requested Management to follow up with guests and owners at check-out about the fire pit and all comments were favorable and all enjoyed the fire pit. After many months of evaluations, all comments were positive and there were no other complaints. In closing of this discussion, the owner with the issue and all owners present agreed to compromise with the owner bringing charcoal for the two weeks they are at Harbor Ridge.

An owner again requested a bike house to protect bikes. Management has reviewed options and it has been placed on the wish list. Location of the bike house would also need to be evaluated.  A location suggestion was by the laundry room. Management will ask the contractor how much a 16X10 storage space would cost.  Management is in strong support of this request, as it would be dual functioning for winter storage.  Guest bedroom TV’s currently are a greater priority.  Priorities are set by reviewing Interval evaluations, Trip Advisor comments, owner requests, and guest verbal and written comments. At this time it was reported the interior of the townhouses need updates, guest TV’s, and the sauna request are currently top priority.

David stated that Margaret and Annette do an exceptional job. He asked if the board has a plan should Margaret and Annette both resign at the same time. Tim Letourneau stated that management companies exist, but that would come at a high cost. It was also mentioned other Maine timeshares help each other and staff could step up to the plate.  Tim Letourneau stated the Board would discuss it.

The meeting adjourned at 11:50 AM.

Respectfully submitted by,

Linda Connelly, Secretary

Harbor Ridge Board Condominium Association

Special Meeting ~ December 5, 2015

President Tim Letourneau called the meeting to order at 10:00 AM. Treasurer Jan Franz, Secretary Linda Connelly, Member Dianne Lytle, Member Jerry Williams, and Managers Margaret Austin and Annette Bartlett were introduced.  There were an additional 26 owners in attendance, along with special guests David Callaghan and Bill Dwyer from Interval International.

Consideration of ratification of proposed budget: Margaret discussed each line item of the 2016 proposed budget.  Bonus week income is from fees paid for off-peak weeks to be deposited into the exchange company. The gift shop was remodeled and restocked this year.  Rentals were up due to exposure on Booking.com.

David Ezzio requested clarification on the following items.  Annette reported over 30 weeks were sold in 2015, and many HOA weeks were sold to local people. Payment plan options for maintenance fees have been working well. Margaret explained that property taxes are paid in arrears. Management wrote off the 2011 delinquent annual assessments, and they are generally written off after 4 years. Management works with delinquent owners to pay what they can to encourage reengagement into their ownership. Annette reported that the HOA owns 86.5 weeks, and there are about another 25 weeks that should be foreclosed upon.  There is approximately $94,000 in receivables for 2015. These delinquency rates are below industry standards.

Seacoast Security now monitors the units for furnace failures and low temperatures in the units. Dead River discontinued this service last winter under the Presidential Plans. Several Fairpoint phone lines were removed and the new monitoring devices are more specific about the problem locations.

Wendy Kuda inquired about guest fees. Margaret explained that non-owners pay $5.00 to use the pool when accompanied by an owner, and the revenue is listed under Owner Charges.

Mr. Geraldo asked if management saw any savings from the installation of the heat pumps. Margaret reported the heat pumps have not been in long enough to report on specific cost effectiveness; however, she feels it has been worthwhile.

David Ezzio asked about utility costs for 2015. Margaret reported the fuel expenses were $52,000 and electricity was $54,100.  He also asked if the board had explored solar panels. Tim responded that the Board reviewed it a few years ago, and the cost would take 40 years for a return.  He also noted that the Board reviewed windmill possibilities, and Dianne mentioned that local and National Park ordinances are very restrictive for our location.

David Ezzio also asked about reserves and how the resort handles the reserve fund. He subscribes to the Timesharing Today magazine and many articles discuss the need to have high reserves for capital improvements.  Margaret said that since we are a not-for-profit organization, we are not allowed to make a profit without paying corporate income taxes. David is concerned that the resort may not have sufficient funds to cover an unexpected capital expense.  Margaret said management will review the issue with their accountant again. David commended Annette for her article submission to Timesharing Today.

David asked if management could consider providing a building for bikes when it rains, which could then be used to store items in the winter. Wendy Kuda agreed.  The Board and management will review.

The maintenance fee was raised by $8.00 for 2016.  The proposed budget was moved and seconded, and the budget was approved unanimously.

Transaction of such business as may properly come before the meeting:  Tim announced that Interval International representatives were available to speak with owners after the special meeting.  David Callaghan, Vice President of Resort Sales and Service, reported that Harbor Ridge has a 96% guest services rating from exchange in guests, which is highly commendable.

Peter Kuda, owner of Unit 13, proposed moving the fire pit. He said they smelled smoke in their unit when people used the fire pit. He said that we have a no smoking policy, and the fire pit causes an undesirable smell. The Kudas do not believe the fire pit belongs where it is located. Other resorts have fire pits, but they are located away from the actual buildings. He proposes the Board discuss and move the fire pit to another location away from the unit buildings.  David Ezzio asked if people could start fires on their own and if it was possible to move the pit to another location. Annette answered yes to both questions. Another owner asked if there were other complaints regarding the fire pit, and Margaret reported that no other complaints were filed and that the guests have been extremely pleased with the new amenity. Wendy Kuda said that Building One may be more susceptible to the smoke. It was recommended that the Board and Management review and come up with an alternate location.

Tim reported that some owners had an issue with the new no lock on the lockers policy, but no one was in attendance to discuss it. Management is working on providing alternatives for this issue.

Annette reported that an owner had requested a sauna. She anticipates that it would cost around $5,000, and owners in attendance expressed interest in that possibility. Management will do more research on adding this amenity.

The meeting adjourned at 11:15 AM.