VILLAGE AT IZATYS ASSOCIATION

(Owner Approved 12/5/04)

2003 ANNUAL MEETING

Sunday, December 7, 2003, 2:00 p.m.

Corporate Offices of Midwest Resorts

6600 France Avenue South, Suite 275

Edina, Minnesota 55435

Call to Order

The Annual Meeting of The Village at Izatys Association was held on Sunday, December 7, 2003 at the Corporate Offices of Midwest Resorts. The meeting was called to order at 2:05 p.m. by President Dick Beyer and the following Board Members were present: Ron Zappa, Ervin Lentz, Kristie Lacey-Hause, Tom Kraus, and Betsy Neff. Stan Taube was absent. Ad Hoc Committee Members present were Diane Peplinski, Mike Peplinski, John Eggers, DeAnn Grimmius, and Debra Lind. Also present was Tom Baltz, Executive Resort General Manager. Sandra Westerdahl was the Recording Secretary.

Introduction of Board of Directors, Midwest Resort Attendees

Dick Beyer, President, introduced board members Ron Zappa, Tom Kraus, Kristie Lacey-Hause, Erv Lentz, and Betsy Neff. Ad Hoc members in attendance were John Eggers, Deanne Grimmius, Debra Lind, Mike Peplinski and Diane Peplinski. Representing Midwest Resorts were Tom Baltz, Resort General Manager and Dena Kohlgraf, Housekeeping Manager.

Read and approve minutes of December 7, 2002 Annual Members Meeting

A motion was made to approve the minutes as presented of the December 7, 2002 Annual Members Meeting. The motion was seconded and approved.

Election of Directors

Dick Beyer told members that three seats were up for reelection. Ron Zappa, Dick Beyer, Mike Peplinski, Diane Peplinski and John Eggers were presented as nominees. Dick requested nominations from the floor. There were no additional nominations and Dick Beyer moved to close the nominations. Tom Kraus seconded the motion and motion was approved.

Members were instructed by Ron Zappa to turn their ballots in to Dena Kohlgraf, who would tabulate them and present the final results to the Board Secretary.

Introduction of Ad Hoc Committee Appointments

Dick Beyer introduced the current Ad Hoc Committee members. He told members that anyone wishing to sit on the Ad Hoc Committee should contact one of the board members.

President’s Report

Dick Beyer presented the Board of Directors Mission Statement; “Maintain the Village at Izatys’ 5-Star Status and Financial Viability, While Providing an Outstanding Vacation Experience at the Lowest Possible Cost.” He also gave and talked about the three Priorities. Priority #1 – Maintain a viable replacement and renovation program consistent with maintaining 5-Star standards, Priority #2 – Build Reserve Fund to Ensure the Future of The Village at Izatys, and Priority #3 – Maintain 5-Star Status, Goal of 95% Customer Satisfaction Ratings. Dick also stated that it is extremely important to maintain a strong working relationship with Izatys Resort to provide our owners with a total vacation package. Izatys Resort has improved the total resort amenities package by expanding the outdoor pool deck area, the addition of an 18-person outdoor hot tub, providing live outdoor bands and entertainment and adding an expanded winter activities program.

Financial Report

Tom Kraus presented the 2004 Budget and 2003 Forecast. The 2004 Budget included a maintenance fee increase of 3.0%. Tom presented the Reserve Fund balance from 1998 through 2004 showing the growth in the Association’s fund balance and that the maintenance fee increase was necessary to continue Reserve Fund growth, as well as, maintaining a strong Replacement and Renovation program.

Resort Operations Report

Ron Zappa, Director of Resort Operations, stated that the entire Village staff is dedicated to providing a vacation of a lifetime, every time. He told members that the 2003 customer satisfaction rating goal is a 95%. Ron gave the results of the customer service ratings on a 12-month average for 2003. The resort had a 94% customer satisfaction rating for year-to-date. Even though the goal of a 95% overall customer service rating was not attained, he was extremely proud of the entire staff for their efforts throughout the year. He talked about the new and expanded in-house Member Services Department, which was “created to enhance your resort and vacation experience.” Member Services Department can be reached at 1-866-466-9378, or at 1-866-GO M West. There is coverage six days a week Monday through Friday from 9-9 and Saturday from 9-1.

Several questions were raised from the floor concerning the policy change in providing free boat slips to owners during the stay. Owners felt that they had previously been provided boat slips at no charge and that it was unfair that they will now be charged for usage. Ron explained that Izatys Resort sold the boat slips on an individual basis and no longer owns the marina. Ron further explained that the Association was offered boat slips at $24,000 per slip. The Board of Directors, after extensive review, unanimously voted not to purchase the boat slips, as it would put the Association in financial jeopardy. Ron also explained that the management company will try to negotiate a favorable launch fee agreement when the new Marina Association is finalized.

Questions were raised concerning the 3% maintenance fee increase for 2004. Ron explained that in 1996 the units were new with the cost of renovation virtually nonexistent over the initial few years. However, as time goes by, and units show signs of wear and tear, the replacement and renovations needed increase significantly. The Board has continued to plan for the future, as well as, taking care of today’s needs. The primary focus is maintaining all units at the Village at Izatys to 5-Star standards.

Developer’s Report

Kristie Lacey-Hause, President and Chief Executive Officer of Midwest Resorts, gave her report on the resort expansion. 2004 projects include the completion of Cottage Colony West (18 units), beginning construction of twin homes in Cottage Colony East, and the construction of the B-4 single family home. Future Resort plans include two 7-plex buildings on the golf course, two 6-plex marina units, nine twin homes in Cottage Colony East, and the five remaining single family units.

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Kristie asked members to put their comments and suggestions on the notepad as they leave or to contact her directly for more information.

Old Business

None.

New Business

None.

Tom Krause presented the election results. The new board members for 2004 through 2006 are: Ron Zappa, Dick Beyer and John Eggers. He thanked all nominees for their contributions to the Board and the Association.

Kristie thanked the entire Board of Directors and Ad Hoc committee members for the great job they are doing amid all the changes. Applause from the floor.

Betsy Neff reminder owners of our Association website at www.villageatizatys.com . She encouraged everyone to visit the site frequently and to send any suggestions to improve the site.

Dick Beyer thanked everyone for coming.

Adjourn

A motion was made to adjourn. The motion was seconded and passed.

The meeting was adjourned at 3:05 p.m.

The next meeting will be on Wednesday, January 7, 2004 at 6:00 p.m. at the Corporate Offices of Midwest Resorts at 6600 France Avenue South, Suite 275, Edina, Minnesota 55435.

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