2018 Annual Meeting Packet

PORT ROYAL

Association of Landowners of Port Royal Plantation

Annual Meeting November 28, 2018 Westin Hotel, 7:00 pm Page 1 Portroyalplantation.net

October 26, 2018 Dear Landowners: The 2018 Annual Meeting is tentatively scheduled to be held at The Westin Hotel because the timing of the inspections for the Certificate of Occupancy on the new Beach House is uncertain. IF THE BEACH HOUSE IS READY WE WILL POST MULTIPLE NOTICES ABOUT THE CHANGE OF LOCATION BEFORE NOVEMBER 28.

NOTICE IS HEREBY GIVEN that the annual meeting of the Members of the Association of Landowners of Port Royal Plantation, Inc. shall be held beginning at 7:00 PM on Wednesday, November 28, 2018, at The Westin Hotel at 2 Grasslawn Ave., Hilton Head Island, SC. In accordance with the Bylaws, Article VI, Meeting of Members, Section 5. Quorum: if a quorum of members or proxies entitled to cast 45% of the total vote of the membership of the Association is present, the members shall take action on the items listed on the agenda (enclosed). If the said quorum is not forthcoming, then the meeting shall be adjourned to 7:00 p.m. on Wednesday, December 12, 2018, at the aforesaid location. If a quorum of members or proxies entitled to cast 30% of the total vote of the membership is present, the members shall take action on the items listed on the agenda, which is included below. If a quorum is not forthcoming, then the said meeting shall be adjourned to 7:00 p.m. on Wednesday, December 26, 2018, at the aforesaid location. There shall be no quorum requirement and those members or proxies present shall take action on the items listed on the agenda, which is included below.

Enclosed you will find the following information Agenda Annual Meeting Minutes November 14, 2017 Financial Information Significant Events of the Past Year Board Candidate Information 2019 Budget Proxy and return envelope We urge those of you who may not be able to attend the meeting to execute and return your proxy ballot in the return envelope provided. Even if you plan to attend the meeting you may still submit your vote in advance by returning the ballot prior to November 28, 2018. If you execute and return your proxy and subsequently attend the meeting, you may withdraw your proxy.

Kaye Black, Secretary

PR

Association of Landowners of Port Royal Plantation 10 Coggins Point Road • Hilton Head Island, SC 29928 • 843-681-5114

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The Association of Landowners of Port Royal Plantation, Inc. ANNUAL MEETING WESTIN HOTEL, 2 GRASSLAWN AVE, HILTON HEAD ISLAND, SC November 28, 2018 I. Call to Order & Welcome- 7:00 PM, Doug Bolton, President II. Verification of the Presence of a Quorum - Kaye Black, Secretary III. Appointment By President of Five Election Inspectors to Count & Certify Ballots IV. Approval of Minutes of November 14, 2017 Annual Meeting - Doug Bolton, President V. Financial Report - Bob Turner, Treasurer VI. Significant Events of 2018 - Lance Pyle, General Manager VII. 2019 Board of Directors Nominating Committee report by Jerry Knight, Chairperson ● Nominating Committee for 2019 Board: Jim Anderson, Christina Forbis, Mary Ann Schrader, and Barry Wilbur ● Nominees for 2019 Board of Directors: Roger Briney, Marshall Fletcher, Eli M. Roth, and Don Blank-Second Term VIII. Election of Directors - Voting for 2019 Board of Directors IX. Landowner Comments and Questions X. Announcement of Election Results - Doug Bolton, President XI. Appointment of the Nominating Committee Chair for the 2020 Board of Directors ● John Simpson, Chairperson ● Nominating Committee for 2020 Board: Lisa D’Arienzo, Judy Robinson, John Pollak, and Barry Wilbur XII. Adjournment

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2017 Annual Meeting Minutes Association of Landowners of Port Royal Plantation, Inc. 2 Grasslawn Ave, Hilton Head Island, SC 29928 Tuesday, November 14, 2017 7:00 PM – The Westin Hotel 2017 Annual Meeting Minutes I.

CALL TO ORDER & WELCOME The meeting was called to order by Doug Bolton, President, at 7:04 PM. Attendance: Doug Bolton, President; Don Blank, Vice President; Robert Turner, Treasurer; Kaye Black, Secretary; Directors, Kelly Elliott, Stephen Large, Linda Muehlberger, John Pollak, Pete White, Michael Apy, and Jerry Knight and staff, Lance Pyle, General Manager, and Caitlin Lee, Operations Manager. Absent: Jim Hackett

II. QUORUM CERTIFIED Kaye Black, Secretary, confirmed the presence of a quorum of the Board Members with 11 present and 1 absent. She also stated, “A total of 527 proxy/ballots have been received and with those in attendance, a quorum has been met to hold tonight’s 2017 Annual Meeting of the Association of Landowners of Port Royal Plantation. In addition, on Monday, October 16, 2017, the Annual Meeting notice was mailed to all Landowners of record, and the proof of notice has been provided as required by the By-laws.”

III. APPOINTMENT BY THE PRESIDENT OF FIVE ELECTION INSPECTORS TO COUNT & CERIFTY BALLOTS Doug Bolton, President, appointed Joan Whitaker, Tammy Blank, Debbie Topper, Pat Runser, and Caitlin Lee to count and certify ballots.

IV. APPROVAL OF MINUTES OF NOVEMBER 30, 2016 ANNUAL MEETING Kaye Black moved to waive the reading of the November 30, 2016 Annual Meeting minutes and to approve them as written. The motion, seconded by Don Blank, was unanimously approved.

V. FINANCIAL REPORT Robert Turner, Treasurer Bob reviewed the projected financial results for 2017. There is a projected $136,000 surplus in the operating budget due to excess gate revenue and a $14,000 surplus in operating expenses. The 2016 Financial Audit was completed, and Webster Rogers provided the association with a “clean” opinion and has no recommended changes to the Plantation’s accounting methods or procedures. A new Asset Replacement Reserve study was completed in 2017 with a recommendation to increase the funding level to 70% over a ten-year period. The recommendation is to increase the contribution 2.2% each year. The 2018 contribution is $432,804. The Transfer Fee, in place since May 8, 2017 has generated $115,000 in revenue which has been applied to the disaster line of credit. The line of credit balance at the end of 2016 was $136,000 with $365,000 in costs expected to be transferred by the end of 2017. In 2018 the total projected to be on the line of credit is $700,000.

The 2018 operating budget reflects a 2% increase from 2017, including, a decrease in decal revenue from 2017, an addition of a part-time staff member in Administration, lower costs in Maintenance due to the Beach House Project Construction, and a fully staffed Security Department. The Annual Assessment for 2018 for a developed lot is $1,638 and $1,392 for an undeveloped lot.

The projected balance of the Asset Replacement Reserve fund at the end of 2017 is $1,635,019. The 2018 contribution is $432,804. The approved cash expenditure for 2018 is $367,105 including resurfacing the Admin Office & Beach House parking lots, split rail fencing, directional signs, leisure path repairs, finish Administration repairs, new playground, new pool filters, new Maintenance & Security equipment.

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2017 Annual Meeting Minutes Continued VI. SIGNIFICANT EVENTS Lance Pyle, General Manager ● Lance thanked outgoing Board Members, Jim Hackett, Pete White, and Michael Apy for their service. He thanked staff, especially Raul Dominguez for his service to the Community for the past two and a half years. ● He reviewed significant events in the community including: the restoration of the Plantation from Hurricane Matthew, which will be done within the approved $700,000 line of credit, collaboration with the Town of Hilton Head Island to improve the drainage for the Plantation, completion of 2017 Asset Reserve Projects, and a review of the Beach House Project Construction and Funding.

VII.

ANNOUNCEMENT OF NOMINATING COMMITTEE FOR 2018 BOARD OF DIRECTORS John Pollak, Chairperson John Pollak, Chairperson of the Nominating Committee for the 2018 Board of Directors introduced and thanked the nominating committee members for the 2018 Board: Judy Blahut, Michael Hall, Martha Sharma, and Ken Swanson. He introduced the nominees for the 2018 Board, Kaye Black, Larry Landry, Carl Nelson, and John Simpson.

VIII.

ELECTION OF DIRECTORS-VOTING IN PERSON OR BY PROXY Ballots were tallied by the appointed election inspectors.

IX.

LANDOWNER COMMENTS AND QUESTIONS A question and answer session allowed members to address the Board of Directors. Questions ranged from the Beach House Project, to the playground replacement project, and requirements for selling Association property. Questions about Heritage Golf, which were directed to Rick Shoemaker.

X.

ANNOUNCEMENT OF BOARD MEMBER ELECTION RESULTS Don Blank, Vice President The total number of votes cast was 558 and Don announced the election of Kaye Black, Larry Landry, Carl Nelson, and John Simpson.

XI.

APPOINTMENT OF NOMINATING COMMITTEE FOR 2019 BOARD OF DIRECTORS Jerry Knight, Chairperson Jerry Knight, Chairperson of the Nominating Committee for the 2019 Board of Directors introduced the nominating committee members for the 2019 Board: Mary Ann Schrader, Christina Forbis, Jim Anderson, and Barry Wilbur.

XII.

ADJOURNMENT Kaye Black moved to adjourn the meeting at 8:15 pm. The motion, seconded by Don Blank, was unanimously approved.

Kaye Black Secretary

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2018 Financial Information

PR

OPERATING INCOME AND EXPENSES

It is the goal of the Board of Directors, Treasurer and General Manager to be fiscally responsible when managing Association resources. The Board has a responsibility to work within the guidelines of the governing document to approve an annual assessment to be used exclusively for the improvement, maintenance, enhancement, enlargement, security and operations of the Common Areas of the Community. Over the past several years improvements have been made to enhance the community and amenities. These improvements addressed some of the many aging items to include: the mailboxes, beach house, bath house, paving, landscaping, etc. However, the Board continues to be challenged annually with difficult decisions with local labor shortages, increase contractor agreements and some aging assets.

The operating budget includes revenue and expenses that cover the general day to day operations for the Assocition.

Percentage

Difference

Annual Assessment

2018

2019

Improved Lot:

$1,638

$1,728

$90

5.5%

Unimproved Lot:

$1,392

$1,469

$77

5.5%

Other Income: Income from decal scales continue remain a positive source of revenue. Annually predictions are made based on historical activity to project this years revenue.

Administration: There is a 11% increase over the 2018 projected expense which also includes the addition of $51K in wages and the transition from a part-time to full time person.

Maintenance: There is a 21% increase over the the 2018 projected expenses, associated with several items, to include $33K in labor, $18K for landscape contract, $14 for debris removal, $13K for tree maintenance, and $22K for Beach House maintenance which are the most significant.

Security: There is an 5% increase over the 2018 projected expenses which is directly related to $27K in labor cost. The Board following an extensive review of staffs’ current wages and the local labor market recognized a deficiency in the overall wages. This deficiency was impacting staff retention and hiring capabilities. Therefore, staff wages have been adjusted to address the local market.

Operating Income / Revenue:

2018 Projection

2019 Budget

Variances

Assessments Income:

1,630,927

1,724,123

93196

Other Income

815,865

842,777

17,390

TOTAL Operating Revenue

2,013,988

2,124,574

110,586

Operating Expenses:

2018 Projection

2019 Budget

Variances

Administration

510,469

565,106

54,636

Maintenance

575,914

698,802

122,877

Security

565,921

594,642

28,540

Utilities

31,121

37,037

5,916

TOTAL Operating Expenses

1,900,646

2,124,574

223,928

Operating Surplus

546,145

442,326

-103,819

Reserve Contribution

432,804

442,326

9,522

Surplus after Reserve (*allocated to Beach House expenses)

113,341*

0

-113,341

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PR

2018 Financial Information ASSET REPLACEMENT RESERVE

The Asset Replacement Reserve is a fund designated to address major components that require more than routine maintenance. These are assets that have a useful life of 1 to 30 years depending on the current condition, including items such as roads, fencing, swimming pool, leisure paths, etc. However, this does not address capital improvements. A professional reserve study was completed in 2017. The study is reviewed annually and assesses the components to make necessary adjustments according to the useful life of an item. It is the Board’s goal to follow the study closely so that when a particular asset needs to be replaced the funds are available.

A full report of the Asset Reserve Replacement, the Income and Expense Statement and Balance Sheet are available at www.portroyalplantation.net.

Included in your annual assessment is a contribution to the Asset Replacement Reserve; Improved lots - $259; Unimproved lots - $220 Asset Revenue Replacement (ARR) Annual and Other Income Contribution

2018 Yr. Projection 432,804

2019 Budget 442,326

Variance 0.2%

Total Operating Less ARR

2,446,792

2,566,900

5%

Asset Replacement Expenses

2018 Yr. Projection 644,855

2019 Budget 695,614

Asset Replacement Reserve Fund Year 2017 =

1,669,718

Projected ARR Fund at Year End 2018 =

1,457,667

Projected ARR at Year End 2019 =

1,204,379

Community Enhancement Asset Replacements budgeted for 2019 include: ● $661,515 Road Paving; Fort Walker, Everglade, Hartford Place, Robbers Row, Suttlers Row, and Steam Gun. ● $ 19,200 Pool Furniture Replacement ● $ 10,789 Leisure Path Repair ● $ 4,110 Security Equipment ● $695,614 Total

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PR

2018

Year In Review

1 Beach House What an exciting time for Port Royal! We now have a beautiful beach house and improved facilities enhancing the amenities offered to Landowners. The new multi-functional beach house offers: ● A community room with amenity card access for Landowner use. ● A large Ocean Room that can be separated into two spaces so that two functions can be held at the same time. ● A large screened porch so Landowners can escape the pesky bugs and mosquitos. ● A kitchen with two sinks, two dishwashers, two microwaves, stove/oven, warming tray box, commercial refrigerator, center island, and ice maker. ● A large rear deck for relaxing and taking in spectacular views of the ocean. ● A storage space underneath for beach lockers and kayak storage.

2 Bath House / Pool / Kiddie Pool The contractors and staff were able to open the new bathhouse and kiddie pool, and reopen the main pool for Landowners to enjoy by Memorial Day weekend.

The new restrooms are convenient for those enjoying a day at the pool or beach.

The new kiddie pool features a zero entry for easy access.

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3 Accounting Transition To provide improved accountability of the Association’s financial activity the Board of Directors decided to transition all accounting from a third-party firm back to in-house staff. After several months of setting up software, converting Landowner information and reconciling the information the conversion was completed in early August.

NEW STAFF

PR

Bookkeeper

4 Administration Building The renovation of the Administration Building was a long overdue project that has resulted in improved accommodations for the Port Royal Staff and guests.

The changes include: ● Relocation of the conference room from the second floor to the first ● A dedicated pass office ● New flooring ● Interior and exterior painting ● Window replacement ● Two new HVAC systems ● Improved restrooms

Director of Maintenance

Executive Administrative Assistant

5 Drainage Improvements The Town of Hilton Head started a nine-month project dredging the main drainage channel in the community.

The project began near the outlet point by the pond along 278 and continued back through the community to the Planters Row/Scarborough Head ponds. The result of this work provides better water flow and lower ponds levels. It allows for more water storage in the ponds during tropical events and prepares for the addition of water control devices that were never possible before.

6 Landscaping Upgrade In April a change in landscape providers was made based on the unsatisfactory appearance of the community. While the change has had a financial impact, the result has been an overwhelming improvement in the appearance of the plantation.

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Don Blank

Don Blank and his wife Tammie have been Port Royal Plantation landowners for 21 years. Together they have 4 children and 11 grandchildren. Don is originally from Portland, Oregon and spent 25 years in Atlanta, Georgia.

His career began in an advertising agency, which led to the formation of a film, video, and live broadcast television production company. He spent 43 years in the communications, film, video, live broadcast, and television industry. At the end of his career, Don was the Senior Director of Technology Communications for Georgia-Pacific. He managed the development of all electronic communications, including the internal business television network, video webcasting and company intranet.

Don is a passionate snow skier and loves working as a volunteer instructor in the Breckenridge, Colorado adaptive ski program for the disabled. He enjoys golf and is the past President of the Port Royal Plantation Club. He is currently the Vice President of the Association of Landowners of PRP board and has been nominated for a second term.

PR 2019 Board Candidates Roger Briney is a retired attorney who splits his time between his residence in Port Royal Plantation and Charlottesville, VA. Roger received a degree in economics from the University of Virginia (some say he still bleeds orange and blue as a Wahoo, through and through) and graduated from the University of Georgia Law School. He has extensive experience in telecommunications and government regulation, government procurement and commercial law.

He retired from AT&T in 2002, after serving for 26 years, first as a member of AT&T’s trial team in US v. AT&T, then as a regulatory attorney litigating cases before several state regulatory commissions. In 1996, he was named Chief Regulatory Attorney where he managed all of AT&T’s state regulatory litigation in eight southern states. This included appearing before the South Carolina Public Service Commission. His last position with AT&T was as General Attorney supporting AT&T's business with local, state and federal governments. From 2002 to 2017, he engaged in the private practice of law, first with Davis, Wright Tremaine's Washington office and then as a solo practitioner advising clients on government procurement and commercial matters.

His wife Jenny is a retired preschool teacher and a graduate of the University of Georgia. His son Matthew is Vice President of New Media at George Washington's Mount Vernon; daughter Sarah is an Associate Editor and Social Media Manager at Smithsonian.com in Washington, DC; and son John is Director of Marketing for TemperPack, a company seeking to solve the world's packaging; and problems through sustainable design. They all love coming to Port Royal Plantation. In his leisure time, Roger enjoys antiquing, traveling and watching college sports.

Roger Briney Page 10 Portroyalplantation.net

Marshall Fletcher and his wife, Rebecca first started vacationing on Hilton Head Island in 1977. They owned a home in Shipyard for 14 years and are now happy to call Port Royal Plantation home.

After graduation from Virginia Tech, he embarked on a 50-year career in sales, operations, administration, and general management, mostly in the service industry. Throughout Marshall’s career, he was often chosen to work in team environments because of his creative suggestions and ability to represent the team’s final decisions. He is a frequently requested speaker for legal industry groups on subjects including law firm marketing, leadership, creating effective business partnerships with vendors, and corporate actions that could favorably impact the environment Marshall’s volunteer activities include leadership roles in the Association of Legal Administrators (ALA) at the local, regional and international level for 11 years, culminating in the position of President of this 10,000member association. He has also held leadership positions on several boards, including President of the Kingston Cove Homeowners Association, Administrative Board of Sandy Springs UMC, and Wesleyan Day School in Atlanta.

Marshall Fletcher

He wants to make a positive impact on the Port Royal community by donating his time and talent to the PRP Board. Marshall hopes to contribute to our efforts to continue to enhance our unique community in a fiscally responsible manner, present a strong voice in the Hilton Head Island community, and give back in ways that are advantageous to Port Royal Plantation and its residents.

2019 Board Candidates PR Dr. Eli M. Roth and his wife, Renee, have been in Port Royal Plantation for ten years. They have been full-time residents for the last 3 years and part-time residents for the 7 years prior. Eli and Renee have been married for 47 years and previously lived in Cincinnati, Ohio. Together they have 2 sons and 3 grandchildren in Chicago.

Eli is a retired cardiologist with expertise in cardiovascular disease prevention and lipid therapy. Prior to entering medical school, Eli graduated with a BS and MS in Mechanical Engineering. After obtaining his MD, he did an internal medicine residency and a cardiovascular disease fellowship at the University of Cincinnati.

Following 30 years of practice in both interventional and preventive cardiology, he started a clinical trials center conducting clinical research on potential new medications. He has served as medical director and president of the Sterling Research Group for 17 years.

Even in retirement, Eli continues his dedication to his field through medical consulting and speaking nationally and internationally in the field of cholesterol disorders and therapies.

Dr. Eli M. Roth

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2019 Budget

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2019 Budget

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2019 Budget

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PR

Voting Directions Proxy/Ballot 1. Online voting at www.portroyalplantation.net Click the “Online Voting” button on the home page and use the Account Number and Password listed on your Proxy/Ballot.

If you elect the online method, you have agreed to waive your right to use the paper ballot option.

2. Completed and signed paper ballot may be: ● Mailed to Port Royal Plantation c/o Association Voting, 10051 E. Highland Rd, Ste. 29-204 Howell, MI 48843 (envelope enclosed) ●Hand delivered to the Administration office during office hours, 7:30 am to 4:30 pm; or ●Scanned and emailed with “Ballot” in the subject line to administration@portroyalplantation.net Proxy/Ballots received after 7pm on November 28, 2018 will not be valid.

If you are mailing your ballot, please allow a week to ensure delivery.

Association of Landowners of Port Royal Plantation 10 Coggins Point Road • Hilton Head Island, SC 29928 • 843-681-5114

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