Approved 10-18-2007 THE SURF CLUB CONDOMINIUM ...

Approved 10-18-2007
THE SURF CLUB CONDOMINIUM ASSOCIATION
BOARD OF DIRECTORS MEETING
WEDNESDAY, MAY 9, 2007
The meeting was called to order at 2:00 p.m. by President M.T. Myers at the Surf Club
resort Marco Island, Florida. Board members in attendance were M.T. Myers, William
Chandler and Joe McCluskey. Attending from Hilton Grand Vacations Company
(HGVC) were: Alyce Tracey – Resort Manager, Anthony McHugh – Assistant to the
Resort Manager, Lael Kilpatrick – Regional Manager Resort Operations and Riki Martin
– Administrative Assistant and Acting Recording Secretary for this meeting. John Lopez
of Myers Brettholtz and Company CPA firm was in attendance for the financial report.
APPOINTMENT OF RECORDING SECRETARY
MOTION was made by Mr. McCluskey and seconded by Mr. Chandler to appoint
Riki Martin as Recording Secretary for this meeting. Mr. Chandler voted aye, Mr.
McCluskey voted aye and Mrs. Myers voted aye. Motion carried unanimously.
APPROVAL OF AGENDA AND CERTIFICATION OF MEETING NOTICE
MOTION was made by Mr. Chandler and seconded by Mr. McCluskey to approve
the agenda and certification of meeting notice and to delay the executive session
until Thursday, May 10 at the regional office. Mr. Chandler voted aye, Mr. McCluskey
voted aye and Mrs. Myers voted aye. Motion carried unanimously.
APPROVAL OF MEETING MINUTES
MOTION was made by Mr. Chandler and seconded by Mr. McCluskey to approve
the minutes of the meeting held on January 19, 2007 as corrected. Mr. Chandler
voted aye, Mr. McCluskey voted aye and Mrs. Myers voted aye. Motion carried
unanimously.
OWNERS COMMENTS AND QUESTIONS
The owners in attendance stated they would prefer no additional special assessments in
the near future.
MANAGEMENT QUARTERLY REPORT
a) Financial Reports
The CPA firm Myers, Brettholtz and Company of Ft. Myers has audited the financial
records through December 31, 2006. Mr. Lopez stated that the financial statements
present fairly, in all material respects, the financial position of The Surf Club of Marco,
Inc. as of December 31, 2006, and the results of its operations and its cash flows for the
year then ended, in conformity with accounting principles generally accepted in the
United States of America.
Mr. Lopez advised that the American Institute of Certified Public Accounts (AICPA) has
initiated 12 new standards which will affect next year’s audit. Sarbanes Oxley legislation
standards currently affect how public companies are audited and will affect

The Surf Club of Marco
Board of Directors Meeting
May 9 & 10, 2007
Page 2 of 6
non-public companies next year. There will be a different way of auditing from the past,
a lot in the area of internal controls and technology, causing additional work. Auditing
will be on a risk assessment/fraud basis. The auditor cannot be part of an entity’s internal
control. The end result, he believes, will be better audits, but the process could prove to
be challenging.
In the past the Association has had a three-year audit contract with a 3% increase, with
the price locked in for those three years. He anticipates that the 2007 audit engagement
contract will probably increase by 15-20%, and then he would propose locking it in for
another three years. Mr. Lopez stated that this increase is low because the Association’s
management entity already has the controls established. Some “mom and pop”
businesses and some other associations don’t have the controls and could be facing a
100% increase. Preliminary work is done in November and December at HGVC’s office
in Orlando. The Association does not get charged for travel time or hotels because the
accounting office is in Florida. Doing the preliminary work allows them to address a
problem earlier than waiting until March or April.
MOTION was made by Mr. Chandler and seconded by Mr. McCluskey to approve
the 2006 audit as corrected and authorize the President to execute the letter of
engagement. Mr. Chandler voted aye, Mr. McCluskey voted aye and Mrs. Myers voted
aye. Motion carried unanimously. The Board would like for HGVC to sign first.
Mr. Lopez left the meeting at 2:50 p.m.
b) Guest Services Reports
The Board reviewed the RCI scores and Salt scores. RCI has changed the grading for
Gold Crown status. Ms. Kilpatrick will be meeting with the new RCI representative on
May 16.
c) Property Operations Reports
The Board reviewed the property operations reports.
Mrs. Tracey stated that there are three major issues the come up at the weekly owners
coffee meetings.
• Mattresses
• Fitness Center
• Website
Mrs. Myers stated some examples of suggestions she received from owners:
• Fans for master bedroom
• Rubber mats for bath tub
• Cushions for pool furniture
• Replace the kitchen table and chairs

The Surf Club of Marco
Board of Directors Meeting
May 9 & 10, 2007
Page 3 of 6
OLD BUSINESS
a) Policy Manual Review
The Board was in agreement to table the policy manual review until tomorrow, Thursday,
May 10.
Ms. Kilpatrick asked the Board to review the updated investment policy presented by
Comerica.
b) Rules and Regulations Review
Mrs. Tracey presented the House Rules and Regulations to the Board for review. Once
approved, they will be included in the Welcome Packet and distributed to all
owners/guests upon check-in.
c) Balgas
The records indicate that during the third and fourth quarter of 2006 an extremely high
spike in gas utility usage occurred at the Surf Club. Representatives from Balgas and
senior management at HGVC worked very diligently together at that time to try to come
to a conclusion as to the reason for this spike. The possibilities included, but were not
limited to, leaks in hot water or in gas, inoperable gauges or thermostats, or a faulty
meter. None of those possibilities produced a reasonable explanation. Moreover, for the
first quarter of 2007 the gas utility usage seems to have “corrected itself” back to normal
levels without any action having been taken on the part of management or Balgas to
replace any controls, meters etc. The Regional Manger will be in town in the coming
weeks, and HGVC Management will set up a personal meeting to request a possible
refund of the overages paid.
d) Beach Concession
The company, Marco Island Ski and Water Sports, Inc. has been under contract with Surf
Club since February of 2000 to exclusively provide beach furniture and equipment for the
use of owners and guest at a pre-determined cost. Since the contract is self-extending for
five year terms, with no termination clause, the contract could be burdensome in the
future, and the Board has asked that it be re-negotiated.
Several letters have passed between the HGVC attorney, Stephen Ostrow and those for
the contractor. Management will continue to work on this issue to bring it to a resolution.
At this time the contractor is not in any material breach of the contract.
Mrs. Tracey will contact Marco Island Ski and Water Sports, Inc. to request as a courtesy
the removal of the stored beach equipment from the beach area directly in front of the
Surf Club. The Board also asked Ms. Kilpatrick to find out how much the other HGVC
resorts pay for beach concession.

The Surf Club of Marco
Board of Directors Meeting
May 9 & 10, 2007
Page 4 of 6
e) Beach Access
For the safety of owners, guests and visitors, the Board has indicated an intention to
install barrier fencing and gates along the property line between the parking area and the
beach, and also a gate on the boardwalk
MOTION was made by Mr. Chandler and seconded by Mr. McCluskey to direct
management to prepare ASAP plans and specifications for the installation of an
adequate fence from the southwest corner of the building to the Hilton hotel
property line and obtain three bids for construction of same. Mr. Chandler voted aye,
Mr. McCluskey voted aye and Mrs. Myers voted aye. Motion carried unanimously.
NEW BUSINESS
Project List Update
The Board asked management to provide an analysis on the elevators and the fire alarm
system.
The Board and Management were in agreement to research other options for the kitchen
instead of a table and chairs. Mrs. Tracey suggested a cabinet that would be attractive,
functional and also hold the trash cans.
MOTION was made by Mr. McCluskey and seconded by Mrs. Myers to authorize
management to proceed with the installation of the fitness center, cost not to exceed
$10,500. Mr. Chandler voted no, Mr. McCluskey voted aye and Mrs. Myers voted aye.
Motion carried.
MOTION was made by Mr. Chandler and seconded by Mr. McCluskey to authorize
management to proceed with Resort Linen Service for one year using the proposal
presented. Mr. Chandler voted aye, Mr. McCluskey voted aye and Mrs. Myers voted
aye. Motion carried unanimously.
The Board and management decided not to proceed with a public membership program
for the clay tennis courts.
MOTION was made by Mr. Chandler and seconded by Mr. McCluskey to recess the
meeting at 5:45 p.m. Mr. Chandler voted aye, Mr. McCluskey voted aye and Mrs.
Myers voted aye. Motion carried unanimously.
EXECUTIVE SESSION
The Board of Directors went into executive session on Thursday, May 10 from 9:00 a.m.
to 11:00 a.m. to discuss the management contract and legal issues with HGVC, with no
action taken.
Meeting reconvened on Thursday, May 10 @ 11:30 a.m.

The Surf Club of Marco
Board of Directors Meeting
May 9 & 10, 2007
Page 5 of 6
Mr. Piatt joined the meeting at this time.
Surf Club Website
In April of 2005 the domain name “The Surf Club of Marco.com”, was secured for a
period of 5 years.
The Board asked management to research the cost of maintaining the Surf Club website.
Mr. Piatt stated that, since HGVC currently provides a viable website for use as a
communication tool for Surf Club members under its HGVC website link, Management
would have to charge the Association an additional fee to research and implement a
second website for the Association. Mrs. Myers agreed to research for the website.
The Board also discussed the website, www.surfclub.us, a website that is owned and
maintained by a Surf Club owner, Mr. Tom Bertz and represented as the Surf Club
website According to Mr. Bertz, the website was established four years ago to facilitate
communication between the Surf Club owners. After receiving complaints from owners,
the website was monitored. There were eighty members, twenty-five of which were Surf
Club owners and the other fifty–five were individuals that had posted hundreds of links to
hard core pornography on the site. Both the Board and Management agreed that it would
not be acceptable to have the owners exposed to this material and the website was not
appropriate for an association with the family atmosphere of the Surf Club of Marco
resort.
The Board requested that Management contact Mr. Bertz to discuss this issue. Mr. Piatt
excused himself from the meeting and immediately contacted the owner, who indicated
that he had not been aware of the objectionable links and assured Mr. Piatt that those
links would be removed without delay. Mr. Piatt reported the discussion to the Board.
The Board and Management will follow up to verify that the links have been removed. If
the matter is not resolved the Board and Management will contact an attorney to see what
other action will need to be taken.
Owners’ Directory
MOTION was made by Mr. Chandler and seconded by Mr. McCluskey authorizing
management to send out an owner directory release form for a voluntary owner
directory. Mr. Chandler voted aye, Mr. McCluskey voted aye and Mrs. Myers voted
aye. Motion carried unanimously.
Non-Guest Owners’ Use of Facilities
MOTION was made by Mr. McCluskey and seconded by Mr. Chandler authorizing
management to prepare a policy stating that owners may only use the facilities when
they are in-house. Mr. Chandler voted aye, Mr. McCluskey voted aye and Mrs. Myers
voted aye. Motion carried unanimously.
By-Laws Revision

The Surf Club of Marco
Board of Directors Meeting
May 9 & 10, 2007
Page 6 of 6
The Board discussed the anticipated results of the vote to amend the By-Laws to increase
the Board from 3 members to 5 members. The official vote will be announced at the
upcoming Annual Meeting. MOTION was made by Mr. McCluskey and seconded by
Mrs. Myers, that if the amendment fails, a new ballot will be mailed to the owners as
soon as possible in order to receive the required number of votes. Mr. Chandler
voted no, Mr. McCluskey voted aye and Mrs. Myers voted aye. Motion carried.
The Board was in agreement to table the policy manual review and the investment policy
until the October Budget meeting.
ADJOURNMENT
MOTION was made by Mr. Chandler and seconded by Mr. McCluskey to adjourn
the meeting. Mr. Chandler voted aye, Mr. McCluskey voted aye and Mrs. Myers voted
aye. Motion carried unanimously.
Meeting adjourned at 12:40 p.m.