Board Minutes February 23, 2008

BOARD OF DIRECTORS MEETING

February 23, 2008

I. The meeting was called to order at 8:30 by President Don Thomas. Board Members present were Lexis Allen, Daryl Clark, Robert Egan, Wayne Jervis, Larry Stephens, Don R. Thomas and Les Yeffa. Also present were Committee Chairs Nadya Andrews, Julie Jervis, Dennis Myers, EJ Lorenzi and Herm Harrow. Other Owners present were Harry Aho, Hal Alpert, Mike and Sherry Burwen, Lawrence Chazen, Jan Clark, Earl Corin, Bruce Dunn, LeRoy Gilsdorf, Hanna Goody, Kathy Myers, Ken and Loretta Reaves, Howard Seto, Marcia Silver, Ruth Swart, Charmaine Thomas and Nancy Yeffa. Team Management Members present were Marie Vergara, Mandy Vergara and Rodolfo Pelaez.

II. Following roll call, we had the Pledge of Allegiance to our flag.

III. The Agenda was approved as presented.

IV. The Board confirmed the Electronic Approval of the Board Minutes and Executive Session

minutes of the October 24, 2007, and all Actions Without a Meeting transactions since

October 24, 2007.

V. OPEN FORUM

1. Daryl Clark recommended that the Board should write a letter of thanks to the Parking

Valets thanking them for their friendliness, courtesy and great service. It was added that

the Bellmen and Front Desk should also be thanked.
2. Wayne Jervis said it would be appropriate to add an extra thank you to the Hotel and Club

Team Members that are always so helpful.
3. There was some discussion regarding the old weight scales in the bathroom. Mandy

Vergara said the new ones are going to be digital.
4. Sherry Burwen suggested that we get both baseball caps and T-shirts with the Club Logo

for the Spring/Summer season to promote the Club.
5. Larry Chazen commented that the wireless internet connection was not working well in

his room last night. Also, he did not believe that upscale hotels have scales. He felt we

should just get rid of them.
Larry also questioned the cleaning of glasses in our rooms after the stories that have been in the news. Don Thomas assured him that all the used cups and glasses are cleaned daily in the Club dishwasher. Larry also commented that he was not able to get the TV channel that carries the Warriors and that should be added to our channels.

6. Hal Alpert commented that other hotels have cheaper rates during mid-week. Don

Thomas discussed this competitive issue in the SF market and talked about the

differences we need to work with for our Owners Use priority for Club Rooms vs. Hotel

Rooms and the cost to just open a room. Don also said that the parking at the Donatello

Garage was still the lowest of any hotel in the area, so we still offer a very competitive . package for overnight stays.

7. Jan Clark questioned why we had little coffee cups in the Club rooms rather than the

mugs with the Club Logo. Mandy Vergara said it was an interim measure as the gold was

wearing off the older mugs and new mugs are on order.

VI.     BOARD COMMITTEE REPORTS
          A. *MARKETING AND BUSINESS DEVELOPMENT Chairperson Nadya
                Andrews reported that we achieved 87% occupancy for 2007. The FMC/IC and their

committee has set the occupancy/budgetary goal at 85% for 2008. The Corporate

Rewards and Family & Friends are still the best programs. She said the committee

discussed idea of putting some of their Club nights on E Bay. She and Mike Burwen

are working on selling 2 of their own nights to see what happens.

B. *FINANCIAL MANAGEMENT: Chairperson Julie Jervis reported that due to ongoing

ill health, Cleland Noret had sold his unit and was no longer an Owner. Board Liaison

Les Yeffa had informed the committee yesterday that she was selected as the new

Chair for this committee, pending Board approval. She said that the committee was

recommending to the Board that Cleland be given Emeritus status and his expertise

continue to be available for the committee. He would not have a vote on the

committee. Julie said that in reviewing the financial statements, they are

recommending transferring $136,972 from the Reserves to reimburse the Operating

Funds for the fourth quarter of 2007. She also said that the monthly financial

                            statements must have footnotes for items where there is a 10% or greater
              variance between actual and budget.
              There was a discussion to change the date of the budget planning meeting from
               September 16th. It was decided to leave the date as is based on availability of a

                             majority of the committee members.

               Larry Stephens, CFO, moved to confirm Julie Jervis as Chairman of the Financial
              Management Committee. Motion seconded by Lexis Allen and passed unanimously.

               Les Yeffa moved that Cleland Noret be given Emeritus Status even though he
               is not an Owner and continue to serve on the Financial Management
               Committee without a vote. Motion seconded by Lexis Allen and passed
               unanimously. Don Thomas will write Cleland a letter informing him of this
               and telling him how much he is appreciated.

                 Daryl Clark moved the Board approve the transfer of $136,972 from the
                 Reserves to reimburse the Operating Account for Q-4 – 2007, as recommended by the

FMC. Motion seconded by Wayne Jervis and passed unanimously.

C. *EDUCATIONAL/SOCIAL EVENTS: In the absence of the Committee Chair, Marcia

Silver reported that the 2007 Christmas Holiday party made a very small profit. The committee is looking at having the Alexandra Room at the Westin St. Francis Hotel again this year. She discussed several events that the committee is looking into for this year.

D. *CBR/NOMINATING: Committee Chair Dennis Myers said the committee discussed the need for ongoing education of our Owners regarding the use of Owners Time, Anniversary Years and weekends. He also reported that there had been a serious violation of the rules by an Owner. The committee recommended that the Board immediately send a letter to the Owner for a disciplinary hearing with members of the committee. This will be discussed in the Board's Executive Session.
Dennis also had a new list of fines and charges for Rules violations. This will be circulated to the Board and an action will be taken electronically. The Owners must be notified of the proposed changes for at least 30-days before the fines and charges can be put into effect by separate Board action.
Dennis also recommended that the specific times be taken off the agenda, as it might be a violation of the Brown Act if we were to discuss something on the agenda at a time other than when it is shown to be discussed. Don said the time was shown only as a working guideline so we could keep the meeting on schedule. For the future agendas, we will simply show the amount of time allocated for each particular subject and see how that works.

Don Thomas also added that there is a large time-share management company (VRI) that has stated that they have a legal opinion stating that the confidential two envelope ballot we used last year may not be necessary and that proxies can be used for electing Directors. Lexis Allen, Dennis Myers and Mike Milnes will communicate with the attorneys for the company and see if we can go back to the proxy form we had used in the past, as it could be a significant time and money saving process for our Association.

E. RISK MANAGEMENT: There was no report as the committee did not meet this quarter.

F. *HRM: Committee Chair Herman Harrow reported that they will finish the review and updating of the HRM Policy & Employees Manual by the April 2008 meeting. The committee will be reviewing the descriptions for the five Managers/Supervisors positions to be sure they meet the required criteria for exempt and non-exempt classifications.

G. LEGAL: The legal matters will be discussed in Executive Session.

H. *CHIEF TECHNOLOGY OFFICER: Wayne Jervis reported that the new RDP data storage system has been installed. There was another virus attack in December and he will be upgrading the virus protection on all Club computers. The updated Club and Board calendar has been placed on the website. Sherry Burwen suggested that more holidays be put on to the calendar. Marie Vergara said that the printed CDOA calendar only includes those holidays that specifically effect the work schedule of the Team Members

I. *CLUB MANAGEMENT TEAM PRESENTATION:
A. Mandy Vergara reported that we purchased 10 new sofa sleepers. This year he will getting new floor, table and wall lamps for all 45 Club rooms to improve on our lighting and the appearance of some of the very old lamps that have been in our rooms for over 20 years.

B. Rodolfo Pelaez reported that all the rooms have been caulked where needed and the carpets in Club rooms are being regularly shampooed. Four of the rooms are scheduled for carpet/pad replacement this year.

C. Marie Vergara reported that in 2006 it had been necessary to use over $200,000 of 2007 dues to cover our cash-flow needs without borrowing money from the bank. However, for 2007, it was not necessary to use any of the 2008 dues for meeting all of our 2007 cash-flow needs. It has taken a number of years to finally get to this position and it is about 3 years earlier than the Long-Term Financial Plan projections previously approved by the Board in 2005.

VII. OLD BUSINESS
A. Daryl Clark moved to confirm transferring $321,300 from the Dues Account into the

2008 Reserves. The transfer was approved in January by Electronic Approval of the

Board through the documented Action Without A Meeting policy and procedure.

Motion was seconded by Lexis Allen and approved unanimously.

B. Don Thomas reminded everyone that if a committee member misses a couple of

meetings without good and sufficient reason, that member can be removed from the

committee by the Board Liaison and Committee Chair. It does not require Board

review and approval.
The Board Liaison and the Committee Chair may also approve the appointment of a

new committee member. Several committee lists need to be updated, as we have

several Owners volunteering to serve on our Board-appointed committees.

VIII. NEW BUSINESS
A. Don Thomas said the updated list of fines and violations will be sent to the Board

                    Members and then to all Owners during the month of March.

IX.     HOTEL MANAGEMENT
               Don Thomas said that Trond Aakre was away on business. In his stead, Don
              reported that the new awning to replace the damaged one on Mason St. would be

replaced in March. It was requested that digital pictures of this new design be available

              for placement on our WEB page as soon as they are available.

   X.     PPCA
           Don Thomas reported that the new Club 1500 spa replacement project would be put in

place in April. All of the City permits have been approved. He also reported that the

restricted smoking area outside on the Club 1500 Terrace area has been designated and will

be the only place that smoking is allowed on the 15th floor. Don said the PPCA is working on getting updated financial statements, as the financial statement being generated from the SVC Corporate Office have not been timely or accurate. We are assisting by providing copies of all of the historical PPCA Minutes and Financial Statements that were generated before the local accounting function was transferred to the SVC Corporate Office

XI. EXECUTIVE SESSION
The Board moved into Executive Session at 11:15 a.m. HRM matters, matters, confidential Owner disciplinary were discussed.

No further business appearing, it was moved, seconded and passed the meeting be adjourned. Meeting adjourned at 12:12 p.m.

Respectfully submitted,

.
Leslie A. Yeffa, Secretary

.
Don R. Thomas, President & CEO

*Complete copies of Committee Reports are on file in the Administrative Office