IZATYS TOWNHOUSE ASSOCIATION

							                     VILLAGE AT IZATYS ASSOCIATION
                  BOARD OF DIRECTORS MEETING MINUTES

                                       July 24, 2004

Call to Order
A regular meting of the Board of Directors of The Village At Izatys Association was held
on Saturday July 24, 2004 at The Village of Izatys. The meeting was called to order at
10:00 a.m. by President Dick Beyer and the following Board Members were present:
Ron Zappa, Ervin Lentz, Kristie Lacey-Hause, Betsy Neff and Tom Krause. Ad Hoc
Committee Members present were DeAnn Grimmius. Diane Peplinski, and Mike
Peplinski. John Eggers, Bill Everett and Debra Lind were absent. Also present was Tom
Baltz, Executive Resort General Manager. Sandra Westerdahl was the Recording
Secretary.

General Manager of Izatys Resort – Jason Tollette
Jason Tollette proposed a new addition to the Resort.               It will be the new
Convention/Banquet Center. The building itself will have a heated cement floor in the
banquet room, with a carpet that can be rolled over it for meetings. The banquet hall will
hold approximately 1,000 people. It will bring in more entertainment, conventions,
meetings, weddings, etc. He indicated that he already has bookings for 2005, without any
advertising whatsoever.

Questions were raised as to the sound coming from the Convention/Banquet Center, and
Jason indicated that the Center would be insulated and soundproofed. Board members
also indicated that the owners and guests at Cottage Colony East did not want to see the
building from their units. Jason indicated that the area around the building will be
bermed and landscaped with many trees, and that guests would not be able to see the
building from their units.

Jason indicated the building would be adjacent to the driving range. Additional parking of
approximately 160 stalls will be added. There will be a road between the Links Lodge
and the Club House to reduce traffic on the Beach Village road. The Beach Village road
will then be private for owners. Tuxedo Drive will continue around for beach access from
the Club House, or guests can walk to the beach. All the signage on Midwest Resorts
property will be redone.

Jason said that the proposed plan would get rid of Leisure Links and add a putting green
to the area. He felt that this would reduce the danger of flying golf balls and add to the
overall enjoyment of the property. The Golf Shop will be moved into the
Convention/Banquet Center and golf cart storage will be on the outside of the building.
Izatys Resort is planning to switch to electric golf carts, which have keys that can turn the




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carts off after 10:00 p.m., or if they are left on the road by a guest. The old golf shop will
be converted to an exercise/spa/massage and manicure-pedicure area.


Jason indicated the county has approved the proposed plan and all the legal paperwork
has been done. The building has been purchased, and Keepers Construction in Brainerd
will be reconstructing at the proposed site. The only remaining issue is where it will be
built. The proposed location is ideal. Jason indicated that he is now working with the
Itzatys Townhouse Association Board to obtain approval and to do a land swap. He said
he would like to start construction in September 2004.

The Board discussed Jason’s proposal. The Board asked Jason what he wanted from
them. Jason indicated that he wanted a vote of confidence on the direction the resort is
going. He told the Board that it has taken until now to find out what works and what
doesn’t, and that his vision is to have two golf courses and a water park in five years
time, and for the Resort to be a lot bigger and better. His ultimate goal for the resort is to
increase the vitality of the Resort so there are more activities for the owners to enjoy.
The timeshare people at the resort will be able to use all the amenities of the resort.

The Board indicated they liked Jason’s vision of the future of the resort, as well as, the
proposed expansion and thanked him for coming.

Approve Minutes of May 6, 2004 Board Meeting
The Minutes of the May 6, 2004 meeting were read and discussed. Richard asked for a
motion to approve the minutes. Tom Krause moved to approve the minutes. The motion
was seconded and passed.

Property Management Report
Staffing Update
Ron Zappa gave the staffing update. The resort management team is fully staffed and
fully operational. There has been a low turnover rate, and the team members are
improving all the time.

Boat Launching Agreement
Ron indicated that he negotiating with the Itzatys Marina Association for an agreement
allowing our owners and guests to launch their boats at a reduced rate. The Marina
Association is currently charging a fee of $20.00 per launch for all people, including
owners of slips. Ron’s proposal is for the marina to charge the association $10.00 per
week for unlimited launches per week on 15 boat launch cards. Ron indicated that the
Marina Association is very interested but that the Marina Association proposed that
Midwest Resorts exchange fees for the maintenance and upkeep of the marina, grounds,
bathrooms, etc. Ron felt that any agreement should be exclusively between the
Associations.

Ron explained to the Board that he would be willing to provide some services for free to
the marina, such as mowing the lawn, in order to allow owners and guests to launch for a



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weekly fee of $10.00 for unlimited launching per week, but he did not want to
intermingle funds and services between the management company and the Association.

Ron will meet again with Darrell Carlson on Monday to get some feedback on this issue,
and to continue to negotiate this agreement.

Tom Krause made a motion that if an agreement is reached with the IMA, each
owner will be charged $10.00 per week for unlimited boat launching per week for
the remainder of 2004. The motion was seconded by Betsy Neff and approved with
one dissenting vote.

Golf Cart Usage Summary
Ron presented Board the golf cart usage chart, and indicated that two new electric golf
carts were purchased recently and that the new carts will alleviate the loss of usage from
any carts that are out of service. Golf cart repair and maintenance accounts will be
separated from the gas and maintenance account on all future financial reports.

Outdoor Pool Proposal.
The proposal is coming from Midwest Resorts. Ron asked the board members to
consider the proposal in order to secure their future and to own some of the land for their
own use. The proposal that Midwest Resorts made to them was to sell the Sales Office
building (8,000 sq ft) and lots one to four for the purchase price of $650,000. The
building could be used anyway we want. An outdoor pool proposal would be predicated
on the purchase of that building. The building could be used for the pool equipment,
bathrooms, an office, snack bar, etc. A parking lot, and a possible enclosure for the pool
would also be possible. Ron indicated that he had one written loan proposal from Crown
Bank, and is waiting on two more from different banks.

Ron made a motion that the proposed sales offer of the Sales Office Building and
Lots 1-4 be accepted as stated with the proposal being sent to the finance committee
for research as to the financial viability of such a purchase and to negotiate the
purchase agreement. Tom Kraus seconded the motion. The motion was passed.

Committee Reports
Finance Committee
Tom Krause gave the financial report and asked if there were any questions. There were
none.

Tom proposed that the finance committee meet twice before the next board meeting.
The meeting dates will be September 16, 2004 at 6:30 p.m. at Midwest Resorts in
Edina for the preliminary budget, and October 6, 2004 at 6:30 p.m. at Midwest
Resorts in Edina to finalize the budget.




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House and Grounds
Tom Baltz gave the House and Grounds report for John. Tom told the Board that many
things have been done to improve the appearance of the resort. These included dead tree
removal, blacktopping, bush trimming, weed spraying, lawn care and weed and bush
trimming by the marina. He informed the Board that Midwest Resorts had purchased a
new riding lawn mower. Also, the maintenance department has been busy doing many
chores such as appliance repair, air conditioning tune-ups, carpet cleaning and
replacement when necessary, furnace repairs, plumbing, grill cleaning, tile replacements
of broken tiles, and many other needed repairs. He told the Board that the maintenance
crew is doing a great job.

Communications Committee
Betsy Neff told the Board that the newsletter went out and the web site is up-to-date on
everything. She asked board members to let her know if they know of anything they
want to be included either in the next newsletter or on the web site.

Policy Committee
Erv Lentz told board members that the Policy and Procedures Manual was reviewed and
some changes were made. He went over some of the changes with the Board.

Ron Zappa made a motion to accept the proposed changes to the Policy and
Procedures Manual, Section 1.9.2, as presented. Betsy seconded the motion. Motion
was passed.

Resort Status Report
Ron Zappa talked about the hours the resort office is open and how well it is being run.
Housekeeping and Maintenance are doing a great job, and Jan is still doing the craft
activities. He indicated that Midwest Resorts did purchase a riding lawn mower, which
will do the lawns at both The Village at Izatys and Izatys Townhouse Association two
times a week, with no changes in manpower. Ron indicated that the in-house scores did
not change by very much, and that indications were that we were still doing a good job.

Developers Update
Kristie gave a summary of the marketing they were doing since June of last year. Several
marketing teams are now in place to support the needs of sales. There were 58% more
tours in the first six months and 50% increase in sales volume this year from last year.
There were many added memberships, and the in-house marketing team, and member
service groups have combined for the convenience of the owners and guests. The sales
teams have also grown and changed. Service has also been upgraded with a particular
sales representative being assigned to a particular client to better meet the clients needs
and provide better quality service.




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Developments of C-19-20 and B-4 have been held off to focus on and finish the
development at Causeway on time. She indicated there are approximately 89 to 90 units
left to develop.




Old Business
John Peplinski asked if a decision on the C units discussed at an earlier board meeting
had been reached as to whether they would now sleep six or eight people. Kristie made a
recommendation to have them sleep eight in both Cottage Colony East and West. Ron
thought that would cause a change in the classification of the C units. A discussion
ensued on this matter and Kristie felt that they might be called something other than C
units. No decision was reached on this matter.

New Business
None.

Adjournment
Dick Beyer made a motion to adjourn. The motion was seconded and passed. The
meeting was adjourned at 1:00 p.m.


Respectfully submitted by Sandra Westerdahl, recording secretary.




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