December 29, 2017 Annual Meeting Minutes – Approved

The 2017 Annual Member Meeting of Arrowhead at Vail Association (the “Association”) was held on December 29, 2017 at the Broken Arrow in Edwards, Colorado. Board members present were Rick Bross, Cynthia Bell, George Coleman, George Bigley, and Catherine Bennett. In attendance by phone was Board member, Patty Strunk. Also present were Jerry Hensel, Association Manager, Tim Baker, Sr. Director of Base Area Operations, Beth Howard, Vice President and COO of Beaver Creek Resort, Gary Shimanowitz, Vice President of Mountain Operations, Jim Clancy, Director of Public Safety, John Herbert, Manager of Public Safety, Steve Nusbaum and Sid Schultz with Design Review Administration, Erin McCauley, Financial Analyst, Carol Floyd, Secretary to the meeting, and a number of property owners.

Call to Order

The meeting was called to order at 6:02 p.m. Carol Floyd confirmed that a quorum was present in person and by proxy. Records of members in attendance by proxy are held by the Association Manager.

Introductions

Rick Bross introduced the Arrowhead at Vail Association Board of Directors, Arrowhead Metro District Board members, and Vail Resorts staff members.

Approval of 2016 Annual Meeting Minutes

A motion was made by Arnold Gelfand to approve the December 29, 2016 Annual Meeting Minutes as presented. The motion was seconded by Kay Neal and unanimously approved.

Election of Board Members

Greg Perkins stated proxies were sent to all property owners for voting purposes. He explained the Board of Director election process whereby seven members are elected on rotating terms. One member is elected from each district, i.e., low density, medium density, high density, and commercial, and three are elected at large. The two candidates up for election this year are Randy Smith for an At Large seat, and Tim Gropp for the High Density seat. Greg said election results would be announced at the end of the meeting allowing everyone present the opportunity to submit their ballot.

Mountain Update

Beth Howard, Chief Operating Officer of Beaver Creek Resort, described an incredibly interesting year for weather from fall to the present. Very warm temperatures in November left short windows of time to make enough snow to open on November 22nd with a very small footprint. The resort was able to successfully host the World Cup event in early December. Season-to-date natural snowfall last year was 81” vs. 41” currently. Snowmaking is the strength of Beaver Creek’s infrastructure. Beth said focus has been on the guest experience. Red Buffalo Park debuted the new high-speed quad last week, replacing the last fixed-grip lift on the main mountain. It has changed the dynamic of the upper mountain and is now a four minute lift ride, relieving pressure off the Chair 8 maze and Grand Traverse. The entire area has been reimagined for family learning adventure, including a Ski School ski zone, snow sculptures, kid’s adventure zones, and a terrain park. A cookie cabin was added at Patrol Headquarters for ski instructors and classes to warm up, have hot cocoa and a cookie without having to go down to Spruce Saddle. Two weeks ago, Beaver Creek announced their next big strategic capital project for the expansion of 250 acres of Alpine skiing at McCoy Park Nordic center. The initial proposal has been submitted to the US Forest Service (“USFS”). It would be designated as a protected, family-friendly zone with 75 percent beginner terrain and 25 percent intermediate. It would be lift served by a high-speed quad and fixed-grip triple, and could be accessed from the top of Larkspur, Strawberry Park and Upper Beaver Creek Expressway. There would be 17 trails, while maintaining a Nordic component separate from Alpine skiing. Beth, Gary Shimanowitz, and the mountain planner will be making a full presentation with maps and lift alignments to stakeholder groups in the next couple months to answer questions. It is pending United States Forest Service approval, and will be going through environmental studies and public comment in the upcoming months. If it receives approval, it would take two years to build out and approximately three years to ski it. A question was asked if there is a possibility of designating a couple senior-only slopes. Beth answered family zones are designated because they encompass all generations, but the resort has chosen not to make more specific designations. Gary Shimanowitz spoke about the history of Arrowhead and Bachelor Gulch, and the theming of the village-to-village ski experience. Gary recapped the difficulty of opening the mountain with a 48 hour snowmaking window the weekend before Thanksgiving when 70% of the snow was made. Bachelor Gulch opened December 9th, 17 days later than planned. Arrowhead was delayed one week from the December 16th scheduled opening for uploading. Pending the ability to make a little more snow, Little Brave will likely open tomorrow for ski in, ski out access to Arrowhead. The progression will be to open Cresta followed by Golden Bear. Gary noted cold temperatures are needed to make snow, regardless of the latest technology in snowmaking. Connectivity and opening all restaurants and clubs has been the focus for Christmas week. Gary spoke about meeting with the Snow Committee and his commitment for additional safety banners and signage, and more presence of the Mountain Safety program on Arrowhead. Comment was made in regard to the lack of grooming on the final section of Stirrup run, and Gary agreed to look at that area.

Financials

Rick Bross addressed the 2018 budget, noting the operating budget ranges from $2.1m to $2.2m per year and expenses are increasing. An increase for trash collection will take effect January 1, 2018. He stated there has been no annual assessment increase for seven years. Transfer fees have been inconsistent year to year, and tend to come in late in the year, making it hard to commit to capital projects and presenting a challenge to maintaining sufficient reserves. Rick said the Board has proposed a $400 increase to the annual assessment which will fund slightly over 50% of the annual operating budget. Any excess transfer fees will be allocated to future improvements in the community. In order for property values to grow, properties and amenities and facilities within the community must continue to be enhanced. A question was raised in regard to a rise in gross real estate sales in 2015, and what that surplus was used for. George Coleman answered it was a shortfall of income that the surplus was used for. Rick Bross spoke about many improvements that have been made such as beautification of the lift area, restrooms at the playground and west tennis courts, upgrades to the security system, gates, irrigation system, addition of Cherokee and Navaho trails, snowshoe and cross-country skiing at the golf course, playground equipment, improvement of the Har-Tru courts and tennis pavilion remodel, and resurfacing and striping the west tennis courts for pickle ball. George added the increased assessment will allow the Association to meet budget and hopefully provide a modest surplus to plan more appropriately for the community going forward. The question was asked as to what is the transfer fee percentage, and Cathie Bennett answered 1.5%. Pertaining to the 2018 budget, an inquiry was made regarding the necessity of a lighting assessment and feasibility study. George Coleman answered the Board is responding to the desires of the community identified in the survey. 70% of respondents were in favor of an owners-only swimming pool, 67% asked that there be further trails, and 80 – 90% wanted the design guidelines to be updated and relevant to today. It was explained that expertise is necessary for engineering, and other technical studies. Rick said although current lighting has been upgraded, homeowners have indicated additional lighting is needed in certain areas for safety.

Community Update

Design Guideline Update

Rick Bross introduced the Design Review Committee (“DRC”) members present. He thanked Bert Solomon for his seven years of service on the DRC, and willingness to stay on through the Design Guideline update. David Cooper, Chair of the DRC, shared they have engaged a very good local group of consultants. The next step in the process will be getting input from the community. A survey went out and there are two Town Hall meetings scheduled at Country Club of the Rockies (“CCR”). David expressed his opinion that the guidelines are not very progressive and are difficult to work with because they are restrictive. The goal is allow more freedom with materials, scales and size.

Public Safety

Rick Bross spoke about measures to make Arrowhead as safe and private as possible. The southeast and southwest gates have been locked down from 11:00 pm to 5:00 am for incoming traffic. Emergency vehicles have access 24/7. Homeowner-only signage is being installed. In response to complaints about speed in the community, Arrowhead Metro District has purchased two digital speed control signs, with the capability to record data. Signage will be posted at the Cresta gate asking bikers and pedestrians to stay on the right side of the road. The Association has asked Vail Resorts to consider signage at the top of Mud Springs Trail directing mountain bikers to stay on the mountain trail, rather than descend onto the Mud Springs Trail to Cresta Road. Wildlife signs have been posted at the playground. A sign requiring dogs on leash has been placed at McCoy Springs. Rick said in the past homeowners were required to alert Public Safety of guests and infrequent service providers prior to their arrival. The Board is looking at technology to reinstate this policy and minimize the impact on Public Safety and homeowners.

Capital Project Update

Jerry Hensel reported on three capital projects completed over the summer. Landscape was added on the east side of the lift to finish the base area. At the clay tennis courts, the softscape was removed and replaced with an expanded patio and lawn furniture for gatherings. The fixed benches at the shelter were removed. A water fountain and bottle filling station were installed. The McCoy gate irrigation was upgraded as part of the main line distribution system the Association has been working on in phases with CCR, eliminating one of the last three domestic taps and reducing Arrowhead Metro District’s water expense. Proposed projects for 2018 include landscaping along Cresta Road from the parking lot to the Cresta Gate by lowering the ground, exposing the water feature, sodding, and adding landscape beds and tree pods. Jerry clarified the $30,000 budgeted for Village landscape is discretionary money the Landscape Committee controls for when immediate improvements are needed. The access control system will be integrated with the current system adding cameras at every keypad. It will allow Public Safety to change codes from the main gate. Jerry said the east end hiking trail is still under consideration, and the Association will be in negotiations with Vail Resorts in the coming months in an effort to secure access to build a trail. A swimming pool engineering study is being conducted to identify possible locations. The lighting analysis will recognize dark spots within the community or opportunities to upgrade existing lighting. George Coleman added any lighting will be dark sky compliant.

Other Business

Rick Bross said the Board will be reviewing current regulations, and are working with the Association’s legal counsel in regard to short-term rentals. Greg Perkins described two preliminary concepts. One option would be to include a minimum rental period in the recorded covenants. The other possibility would be to allow and regulate the use by subjecting property owners to certain rules and fees.

Further discussion took place regarding the pool and potential locations. George Coleman spoke about the highly collaborative process directed by survey responses. There were eight locations considered, the most practical being property owned by the Metro District. George said at each step of the process, the Board will come back to community and ask whether to proceed. He estimated 2019 or 2020 before a final decision is made.

One property owner asked the Board to consider constructing covered tennis courts for year round use. Rick Bross responded this came back as a low priority on the survey.

The topic of short-term rentals was revisited. A suggestion was made to require a license and implement a tax mechanism. Rick Bross advised this matter is a priority and will be examined by the Association’s legal counsel.

An inquiry was made regarding the status of single-stream recycling. Jerry Hensel said the Association would like to go in that direction and intends to do so when financially feasible. He explained there is a significant cost associated with single-stream recycling because there is no local sorting facility and everything must be shipped out. The question was asked if there is an option to have a recycling bin at the dumpster area. Jerry answered this has been unsuccessful in the past due to contamination when trash is inadvertently mixed in.

Election Results

Greg Perkins confirmed Randy Smith and Tim Gropp were elected to the Association Board of Directors.

Rick Bross expressed his enjoyment of serving on the Board. On behalf of the community, George Coleman thanked Rick Bross and Cynthia Bell for their service. He spoke in appreciation of the work they have done and will be doing going forward. George said he is hopeful the next Board will initiate a Past Presidents Council to engage all past presidents and retain their institutional knowledge.

There being no further business, a motion was made by Bob Rosen to adjourn the meeting. Bob Neal seconded the motion and the meeting was adjourned at 7:22 p.m.

Respectfully submitted,

Carol Floyd
Secretary to the Meeting