Dear Village Pointe Owners,

On October 12, 2011 your board once again held our annual budget meeting for the upcoming 2012 year. This message to you will be devoted entirely to the decisions made by your board in the face of the major financial crisis facing us. Never since I have been President of your association have we faced such a major deficit in our operating budget as we now face and will face on into 2012.

In our case, several past and present issues have contributed to this problem. We are by and large a fixed week association. Because of this, and the way the association was sold and structured, we have consistently struggled with owners who have defaulted, and continue to default, on their yearly maintenance fees. This has caused us to lose operating revenue with which to sustain expenses. These delinquent accounts have cost us dearly and no matter what we have tried we have not been able to stem the tide. This coupled with a struggling economy have only led to more delinquencies as time has. This hurts us financially and places a tremendous burden on those owners who have remained faithful to their commitment.

To make matters worse, the weeks we received back to the association are no longer popular as sales through Wyndham Pagosa as Wyndham has gone to selling a newer product not compatible with our fixed week re-sales. In addition, the cost to the association to foreclose on a deeded fixed week in the state of Colorado is more than in many states, and is both a lengthy and costly process that over time has drained our finances with little to show for it in return.

As a result we now find ourselves struggling to make our bills, sustain our reserves, and keep our properties at the best level of value possible. We are also caught in the huge dilemma of finding the revenue to meet our obligations without adding to our delinquency roles. Your board had to weigh and decide on one of two options in developing the budget for 2012, neither one of which was to our liking. Either option decided upon would take sacrifice on our parts and mean an increase in cost to our faithful. One option suggested we raise next year's maintenance fee from $650.00 to $680.00 per unit interval along with a one time special assessment of $410.00 per unit interval. The other option suggested we increase the fees from $650.00 to $794.00 per unit interval without a special assessment. Your board opted for the option to hold the maintenance fees down to an increase of $30.00 over 2011 ($2.50 per month) and incur the one time special assessment of $410.00 which can be paid in one payment or in installments arranged by each owner with Wyndham Plus billing.

As stated in my earlier message, Wyndham corporate is developing a program that may virtually get us out from under our foreclosures. If this agreement becomes viable, Corporate will take all current foreclosures off our books and incur a portion of the cost of all future foreclosures in exchange for the inventory (weekly units intervals) resulting from those foreclosures. This will significantly reduce the foreclosure cost to the association while at the same time reducing delinquencies foreclosed on by the association.

Your board will continue to take pre-foreclosed delinquencies to collections and will continue to place liens on delinquent owners prior to any foreclosure action being taken. In addition, since Wyndham Pagosa sales will not be in a position to resell any deeded back fixed weeks, the association will discontinue accepting deeded back weeks until other arrangements with corporate can be arranged.

As always, your board remains committed to you our owners. We do encourage your comments and concerns. We are always open to your suggestions and recommendations. Please refer any questions, suggestions, or recommendations you have to me via e-mail at lfuller08@hotmail.com or contact Wyndham at 800-210-1477.

Respectfully,

Larry Fuller
President, Village Pointe