I. President Don R. Thomas called the meeting to order at 8:30 a.m. Board members present were Lexis Allen, LeRoy Gilsdorf, Ernie Mongeon, Don R. Thomas and Les Yeffa. Daryl Clark and Bob Egan were excused. Also present were CFO Larry Stephens, Board Advisor Al Silver, committee chairs Cleland Noret, Wayne Jervis, Herm Harrow, Bob Hunter and Communiqué Editor Don Langley. Other Owners present were Nadya Andrews, Ann and J. Craig Carlos, Hannah Goody, Noreen Harrow, Elmo Lorenzi, Jenny Lyness, Howard Seto, Marcia Silver and Charmaine Thomas. Management Team members present were Mandy Vergara and Marie Vergara.

II. Following roll call, we held the Pledge of Allegiance.

III. The agenda was approved with minor changes as to who would be giving committee reports.

IV. The minutes of the Board of Directors and Executive Session of February 8, 2006, had previously been approved electronically. The Board confirmed the previous approval and the issuance of the Minutes in compliance with our CC&R's and Bylaws.

V. OWNERS FORUM

1. Wayne Jervis said that he liked the new sofa bed. It looked very good.

2. Cleland Noret said the sink in Room 1206 doesn’t drain quickly enough.

Mandy will check it out.

3. Nadya Andrews commented that she likes the style of the new curved shower rods. Don Thomas commented that it also gives more light into the shower area for safety and at a lower cost than renovations of the shower area lighting.

4. Noreen Harrow said the bath tub faucet in Room 1212 doesn’t shut off all the way, and is difficult to turn.

5. Larry Stephens said in Room 1203 it needs to be vacuumed under the armoire.

6. Ann Carlos commented that she missed the quarterly Communiqué and would like to see it brought back. There was some discussion regarding this request and the fact that updated CDOA information/events are actually posted on our website each month, and that this is more frequent communications with our Owners than a quarterly mailed paper.

7. The TV in Room 1202 was not working properly. Don Thomas discussed this and said that we would be getting upgraded/larger TVs, though this is being coordinated jointly with the Hotel Donatello in an effort to obtain a better price on our units by combining our purchasing power on that transaction.

VI. BOARD COMMITTEE REPORTS

1.*MARKETING: Chairman Wayne Jervis said that we are under projected occupancy

level to be on budget Of all the current marketing programs, Friends and Family was still the most effective for generating additional revenue. Wayne reported that we have become part of the Visa Preferred Card Guarantee best available rate program but that it was still too new to rate. We do have a number of rooms rented under the program now. The "Shop Till You Drop" program is

also too new to rate.

Some people have complained that they did not want to use their credit card online to reserve a room as we did not have a secure site. The CDOA is now signed up with GeoTrust to encrypt the credit cards making it a secure site.

Since that has happened, there has been a big jump in the use of credit cards for on line reservations.

Wayne said that we need to market the website and to educate our Owners to use it more. Wayne also discussed the use of several companies to cost-effectively market our Club Rooms. "Myresortnetwork. Com acts as a broker or renter, Leisurelink.com is another one and myresort time.com. J. Craig Carlos is

going to check out the latter one.

Wayne said that we should be able to send out e-mail to Owners and others but without all the names showing or having it look like spam. He is working on that.

Lastly, he discussed the possibility of box lunches that Owners could take with them on day trips. Max’s Restaurant could supply them to us for $14.00 or possibly we could have Team Members do it for $4.00. This is something that is being investigated further and a proposal then presented to the FMC and BOD for final action.

2.*FINANCIAL MANAGEMENT: Chairman Cleland Noret reported that the FMC recommended that a $1,000 threshold for capitalization of items be set. This would be per invoice. LeRoy Gilsdorf moved the Board accept the recommendation.

Motion seconded by Ernie Mongeon and passed unanimously. Cleland also submitted a list of items, both hard goods and labor to be reimbursed to the Operating Account from the Reserves Account. There was $29,529.20 in hard goods and

$2,235.58 in labor. Cleland explained that under the new laws we must do this quarterly. Les Yeffa moved this be done by decreasing the receivable due to the Reserve Fund. No actual cash will be exchanged. Motion seconded by Lexis

Allen. Motion passed with LeRoy Gilsdorf voting no. Cleland then discussed the

external CPA Financial Review Report. Lexis Allen moved that we go back to

the CPA firm to address several items, including correcting the reference to an overdraft on page 2 and the Room Revenues and Other Income on Page 3. Motion passed with LeRoy Gilsdorf voting no. Upon further discussion and clarification of the issues involved, LeRoy Gilsdorf then moved that the report show a list of what is included in the Other Income on Page 3 as a footnote. Motion seconded by Lexis Allen and passed unanimously. Ernie Mongeon then moved that we implement the journal entries as had been discussed. Motion seconded by Lexis Allen and passed. Les Yeffa moved that we accept the independent ARA Reserve Analysis Report. Motion seconded by Ernie Mongeon and passed unanimously.

LeRoy Gilsdorf moved that the Cash Flow Budget be made a standing report.

Motion seconded by Lexis Allen and passed unanimously. LeRoy Gilsdorf moved that we immediately implement the program to ladder investment funds at the best rates in $100,000 Certificates of Deposits. Committee will go to Bank of San Francisco to see if they can match the rates from Patelco. Then we keep the CDs there. Motion was seconded by Lexis Allen and passed unanimously.

President Don Thomas thanked Cleland and the committee for all of the detailed work they had done.

3. * SOCIAL EVENTS AND EDUCATIONAL: Jenny Lyness gave the report as Chair, Suella Martin was excused. She said that the "Opening Day on The Bay" event had been canceled due to lack of reservations. She suggested that we put the list of CDOA events in frames in each Club Room. There will be an Exchange

Seminar on April 30th. Jenny said that the committee is still checking with the

Westin St. Francis for the Christmas Holiday party rather than having it at the Marines Memorial. The committee is also looking at new and different things for educational and social events. She said they are trying to put together an Owner’s 20th anniversary party on August 26th. Jenny also reported that items that had been donated for the SF Senior Center were stolen from Quincy's office. The committee feels that one reason our turn out for some CDOA events has been small is the lack of advance promotion and communication. They feel the Communiqué should be issued quarterly. It was commented that the events are already on the website for anyone to check.

4. * NOMINATING COMMITTEE: Chairman Bob Hunter reported that Owner, Hal Alpert had been approved and was now on the CBR committee. He said there were four applications for candidates for the two Board positions. They were J. Craig

Carlos, Ernie Mongeon, Larry Stephens and Don R. Thomas. Les Yeffa moved

that these four be approved by the Board to be on the ballot. Motion seconded by Lexis Allen and passed with Ernie Mongeon and Don Thomas abstaining. Bob then discussed the change in the Proxy Ballot this year. It will be a two-sided ballot in order to avoid some of the confusion in past years. It will also have a Proxy section for "Other Business" of the Board. Lexis Allen moved this be accepted. Motion seconded by LeRoy Gilsdorf and passed unanimously. Les Yeffa moved that Owners, Jane DeKelaita, Marlene and Bob Hunter be named as Inspectors for the election. Motion seconded by Lexis Allen and passed unanimously.

5. *CC&Rs/BYLAWS/RULES: Bob Hunter said there needed to be changes in three areas. We need to update and expand the Rules and Regulations section. This will be done and then presented to our Owners for their input and comments before being finalized by the Board after a 30-day period. Lexis Allen moved this be done. Motion seconded by Les Yeffa and passed unanimously. CDOA Legal Counsel, Mike Milnes had advised the committee that we needed to reorganize the Bylaws to meet the new CA requirements for next year This would include the new election/voting process. Bob Hunter and Lexis Allen will review the Bylaws and then present them to the Board at the regular quarterly meeting in July.

VII. CLUB MANAGEMENT TEAM PRESENTATION

A. A complete quarterly report had been given to the Board prior to the Board meeting. Mandy Vergara reported that all 45 Club rooms now have new mattresses and that DVD players had been installed in all the Club entertainment units. The curved shower rods are now installed in 10 of our Club rooms, and all Club rooms will have them before the Annual Owners Meeting. Thirteen rooms have new sleeper sofas and in another week all rooms will have the new green carpet and plush pad installed.

B. Marie Vergara said that she is very pleased with our new Team Member in Accounting, Bill McClune. He is approaching the end of the 90-day probation period and has shown that he can do more than just the accounting. She said that we have some old equipment that they would be selling off and we should receive about $800 income for the Club. Marie said that two PIU's have been deeded back to the Club by Owners in lieu of foreclosure. One has already been sold and the CDOA should net about $5,000 from the sale. The dues collections are slightly behind from last year at the same time. There was some discussion regarding the next stage of Small Claims Court actions.

VIII. *CHIEF TECHNOLOGY OFFICER REPORT

Wayne Jervis reported that for cost and work/report production efficiencies we need to move more to electronics. We had 45 e-mail reservations in February and after going to a secure site for credit cards, over 300 e-mail reservations were made in March. He said we need a procedure for sending proactive e-mail to our Owners that would not be taken as spam, thereby allowing us to do more e-mail communications about educational/social events and other Club matters. It was suggested that there be a recording on the telephone telling Owners that they may now make secure reservations online. Peter Nasatir, the Head Concierge up in Club 1500 talked to LodgeNet to try and put activities and other items on the TV welcome page when Owners/Guests check into their rooms, but it can’t be done. Marcia Silver said that the online reservation comment regarding 24-hour turnaround for confirmations should stipulate that it is actually on a Monday through Friday schedule.

IX. HOTEL MANAGEMENT PRESENTATION

Trond Aakre said they are putting packaged towelettes into the spa area of Club 1500. There is some brand new equipment there- a new exercise station, new stairstepper and new treadmill. He said he is working on upgrading the TV cable stations and that the Hotel is looking to put plasma or LCD televisions in every room by next year. This is part of the package that the CDOA is working together with the Hotel on for obtaining a better quality TV unit at a lower cost than if we each purchased them on our own.

X. PPCA

Don Thomas said there would be a quarterly Board of Directors meeting this afternoon. There are continual efforts on his part to get the PPCA to show the full amount of the assets of the PPCA on the financial report. The PPCA may be doing a deep cleaning on the exterior of the building depending on cost and warranties. There was an increase on the insurance premium last year and it was challenged. The challenge was recognized and there will be $30,000 coming back as a credit to the PPCA for the year ending 2005.

XI. OLD BUSINESS

A. It was reported that Mandy Vergara and the Team are still reconciling the

2002-2004 reports of occupancy with the Hotel Management Contract report.

This should be finished by the end of the month. The 2005 reconciliation showed that we overpaid $24,115.63. This will be given back to the CDOA by either a credit or a check. The policy and procedure for the daily reconciliation process for the future should be done by the end of the month.

B. Updated Owner Resales Services Plan. J. Craig Carlos said that resales volume has doubled over the last year. There is not as much product on the market. He is developing some new ideas and the Friday Weekly Welcome Event from

4 PM - 5 PM has been very successful in bringing people into the Club Donatello.

XII. NEW BUSINESS

A. There was discussion of reinstituting the Exchange Service and Fees for our Owners. Many of them use our Reservations Team to assist them in getting an exchange. The Team will track how many requests are made and the time involved over the next three months. It was suggested we start with a flat fee. If a particular exchange takes more time, then we should charge more. There was some discussion as to what the fee should be. Les Yeffa moved that we start out with a $40 fee and at the end of 90 days review the program. Motion seconded by Ernie Mongeon. This CDOA fee would be in addition to the exchange fee that an Owner pays to RCI, SFX or II when an exchange is confirmed. Motion passed unanimously.

XII. EXECUTIVE SESSION

The Board moved into Executive Session at 11:35 p.m. HRM matters, Legal Matters and Confidential Owner Disciplinary Matters were discussed.

No further business appearing, it was moved, seconded and passed that he meeting be adjourned. Meeting adjourned at 12:30.

Respectfully submitted,

.

Leslie A. Yeffa, Secretary

.

Don R. Thomas, President & CEO

* Complete reports are on file in the Administration Office.