SUMMERHOUSE BEACH AND RACQUET CLUB CONDOMINIUM ASSOCIATION, INC.

Transcription

1 SUMMERHOUSE BEACH AND RACQUET CLUB CONDOMINIUM ASSOCIATION, INC. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION FOR THE YEAR ENDED DECEMBER 31, 2011 AND INDEPENDENT AUDITORS' REPORTS

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3 TABLE OF CONTENTS PAGE INDEPENDENT AUDITORS' REPORT 1 FINANCIAL STATEMENTS: Consolidated Sheets 2 Consolidated Statements of Revenue, Expenses and Changes in s 3 Consolidated Statement of Cash Flows 4 Notes to Consolidated Financial Statements 5-7 INDEPENDENT AUDITORS' REPORT ON SUPPLEMENTARY INFORMATION 8 SUPPLEMENTARY INFORMATION: Schedule of Revenues, Expenses and Changes in s - Operating General 9 Supplementary Information on Future Major Repairs and Replacements 10-14

4 INDEPENDENT AUDITORS' REPORT To the Board of Directors and Members Summerhouse Beach and Racquet Club Condominium Association, Inc. We have audited the accompanying consolidated balance sheets of Summerhouse Beach and Racquet Club Condominium Association, Inc. (the "Association") as of December 31, 2011, and the related consolidated statements of revenue, expenses and changes in fund balances and cash flows for the year then ended. These consolidated financial statements are the responsibility of the Association's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Summerhouse Beach and Racquet Club Condominium Association, Inc. as of December 31, 2011, and the consolidated results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. St. Augustine, Florida June 08, 2012

5 CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2011 Operating s General Rental Replacement Total ASSETS Cash and cash equivalents (Note 3) $ 164,557 $ 462,659 $ 908,370 $ 1,535,586 Certificates of deposit (Note 4) 76,758-39, ,004 Assessments receivable - net 4, ,616 Due from other funds 22, ,618 Prepaid expenses and other assets 20,036 11,510-31,546 Property and equipment - net (Note 5) 25,087 39,278-64,365 Inventory - 4,004-4,004 TOTAL $ 313,672 $ 517,451 $ 947,616 $ 1,778,739 LIABILITIES AND FUND BALANCE Accounts payable and accrued expenses $ 26,724 $ 14,655 $ 197,296 $ 238,675 Prepaid assessments 32, ,539 Prepaid rent - 309, ,983 Due to other funds - 22,618-22,618 Total Liabilities 59, , , ,815 balances 254, , ,320 1,174,924 TOTAL $ 313,672 $ 517,451 $ 947,616 $ 1,778,739 See accompanying notes to financial statements. 2

6 CONSOLIDATED STATEMENTS OF REVENUE, EXPENSES AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED DECEMBER 31, 2011 Operating s General Rental Replacement Total REVENUES: Member assessments $ 833,220 $ - $ 284,184 $ 1,117,404 Rental income - net (Note 7) - 357, ,331 Interest ,024 3,704 Cleaning and linen fees - 126, ,096 Processing fees - 58,900-58,900 Other income 8,913 3,255-12,168 Total Revenues 842, , ,208 1,675,603 EXPENSES: Payroll and benefits 200, , ,717 Administrative 277,904 87, ,834 Rental operating - 70,819-70,819 Cleaning and linen - 118, ,239 Repairs and maintenance 156, , ,369 Utilities 253, ,538 Depreciation 7,317 4,105-11,422 Income taxes Total Expenses 895, , ,118 1,741,150 EXCESS (DEFICIT) OF REVENUES OVER EXPENSES (52,714) 23,077 (35,910) (65,547) BEGINNING FUND BALANCES 236, , ,230 1,240,471 INTERFUND TRANSFERS (NOTE 6) 70,275 (70,275) - - ENDING FUND BALANCES $ 254,409 $ 170,195 $ 750,320 $ 1,174,924 See accompanying notes to financial statements. 3

7 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2011 INCREASE (DECREASE) IN CASH Operating s General Rental Replacement Total CASH FLOWS FROM OPERATING ACTIVITIES: Excess (Deficit) of Revenues Over Expenses $ (52,714) $ 23,077 $ (35,910) $ (65,547) Adjustments to reconcile excess (deficit) of revenues over expenses to net cash provided (used) by operating activities: Depreciation 7,317 4,105-11,422 (Increase) in accrued interest (274) - (139) (413) Decrease in assessments receivable 6, ,806 (Increase) decrease in due from other funds (14,654) 14, (Increase) in prepaid expenses and other assets (3,386) (3,158) - (6,544) Decrease in inventory Increase in accounts payable and accrued expenses 14,177 6, , ,768 Increase in prepaid assessments 19, ,668 Increase in prepaid rent - 80,827-80,827 Net Cash Provided by Operating Activities (23,060) 126, , ,273 CASH FLOWS FROM FINANCING ACTIVITIES: Interfund transfers 70,275 (70,275) - - Net Cash Provided (Used) By Financing Activities 70,275 (70,275) - - NET INCREASE IN CASH 47,215 56, , ,273 CASH AT BEGINNING OF YEAR 117, , ,529 1,272,313 CASH AT END OF YEAR $ 164,557 $ 462,659 $ 908,370 $ 1,535,586 SUPPLEMENTAL DISCLOSURES: Income taxes paid $ 2,006 $ - $ - $ 2,006 See accompanying notes to financial statements. 4

8 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. ORGANIZATION Summerhouse Beach and Racquet Club Condominium Association, Inc. (the "Association"), a nonprofit, non-stock corporation, was formed on November 12, 1980, under the laws of the State of Florida as a condominium association and commenced operations on June 12, The Association consists of 256 units on approximately 23.5 acres located in St. Augustine Beach, Florida. The condominium is comprised of four phases. Phase I consists of five buildings and 67 units. Each unit has a 1.49% interest in common elements of the phase and 0.39% interest in common elements of the entire condominium. Phase II, III and IV consist of five buildings and 63 units each. Each unit has a 1.59% interest in common elements of the respective phase and 0.39% interest in common elements of the entire condominium. The primary function of the Association is to provide for the operation and maintenance of the common property of the Association. A separate corporation is responsible for the efficient and effective administration and operation of the rental program on behalf of the Association's unit owners. That corporation is consolidated in these financial statements due to Association's board having the authority to appoint the corporation's board of directors. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying financial statements have been prepared using the American Institute of Certified Public Accountants' Audit and Accounting Guide, "Common Interest Realty Associations," which recommends the use of the accrual basis of accounting. Principles of Consolidation The consolidated financial statements include accounts of the Association and its wholly-owned subsidiary, Summerhouse Rentals, Inc. (the "Rentals"), which is included in the accompanying consolidated financial statements as a rental operating fund. All material intercompany transactions have been included as transfers between funds in the accompanying consolidated financial statements. As part of the consolidation, the Association allocates the property manager's salary between the Association (35%) and the Rentals (65%). Accounting The Association's governing documents provide certain guidelines for governing its financial activities. To ensure observance of limitations and restrictions on the use of financial resources, the Association maintains its accounts using fund accounting. Financial resources are classified for accounting and reporting purposes in the following funds established according to their nature and purpose: "Operating s" - These funds are used to account for financial resources available for the general operations of the Association and include the following: "General " - This fund represents the operating assessments paid by unit owners to meet regular, recurring costs of operations subject to budgetary constraints and the discretion of the Board of Directors. "Rental " - This fund represents the operating activities of the rental program, which is administered by Summerhouse Rentals, Inc., provided for unit owners who choose to rent their units. Expenditures are limited to those connected with rental activities. Any excess of revenues over expenses is available to be transferred as a dividend to the general operating fund at the discretion of the Board of Directors of Summerhouse Rentals, Inc. "Replacement " - This fund is used to accumulate financial resources designated for major repairs and replacement, capital projects, hurricane recovery and emergency repairs. Common Areas As provided in the Declaration of Condominium, each unit owner owns an undivided share in common elements of the condominium. In conformity with industry practice, common property is segregated as follows: i) Common personal property used by the Association in operating, preserving, maintaining, repairing and replacing common property and providing other services. ii) Common real property to which the Association has title and that it can dispose of for cash while retaining the proceeds or that is used to generate significant cash flows from members on the basis of usage or from nonmembers. Accordingly, the Association recognizes the clubhouse building and improvements, furniture and fixtures and equipment as assets at cost on the dates acquired. Depreciation is provided for over the useful lives of the assets using the straight-line and accelerated methods. Other common property of the Association or each phase, including sidewalks, swimming pools, tennis courts, racquetball courts building roofs and parking areas, is not recognized as assets. Cash and Cash Equivalents and Certificates of Deposit For purposes of reporting cash flows, the Association considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. 5

9 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONCLUDED) Fair Value Measurement FASB ASC Topic 820, Fair Value Measurements and Disclosures, clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a marketbased measurement that should be determined based upon assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, FASB ASC Topic 820 establishes a three tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1: Observable inputs such as quoted prices in active markets; Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. An asset s or liability s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. Assets and liabilities measured at fair value are based on one or more of the following three valuation techniques noted in FASB ASC Topic 820: A. Market approach: Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. B. Cost approach: Amount that would be required to replace the service capacity of an asset (replacement cost). C. Income approach: Techniques to convert future amounts to a single present amount based upon market expectations (including present value techniques, option-pricing and excess earnings models). Member Assessments Association members are subject to monthly assessments to provide funds for the Association's operating expenses and future repairs and replacements. Income and expenses are allocated equally to each unit owner. The Association's policy is to charge late fees on assessments delinquent ten days or more and to retain legal counsel and place liens on the properties of unit owners whose assessments are sixty days or more delinquent. Assessments receivable at the balance sheet date represent fees due from unit owners. Any excess assessments at yearend are retained by the Association for use in the succeeding year. The Association determines an allowance based on the status of each individual account. As of December 31, 2011, the Association considers all assessments to be collectible and, accordingly, no allowance for uncollectible accounts is deemed necessary. Prepaid assessments at the balance sheet date represent fees paid in advance by property owners. Advertising The Association expenses advertising costs as they are incurred. For the year ended December 31, 2011, advertising expense was $21,549 and included in rental operating expenses in the accompanying consolidated statement of revenues, expenses and changes in fund balances. Use of Accounting Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and related disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. 3. CASH AND CASH EQUIVALENTS The Association maintains accounts at various financial institutions in bank deposits which, at times, may exceed federally-insured limits. The Association has not experienced any losses on such accounts and believes it is not exposed to any significant risk on cash. 4. CERTIFICATES OF DEPOSIT At December 31, 2011, investments consisted of three certificates of deposit, with maturities ranging from April 23, 2012 to December 9, 2012 with an interest rate of 0.30%. Investments that the Association has the intent and ability to hold to maturity are classified as held-to-maturity investments. The Association classifies all investments as held-to-maturity. The Association's certificates of deposit are stated at fair value level 2 inputs, which include significant other observable inputs either directly or indirectly (including quoted prices for similar securities, interest rates, yield curves, credit risk, etc.). 6

10 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 5. PROPERTY AND EQUIPMENT Major classifications of property and equipment and their respective lives at December 31 are summarized below: 2011 Lives Clubhouse building $ 257, years Furniture and fixtures 58, years Equipment 70, years 386,458 Less accumulated depreciation (322,093) 6. INTERFUND TRANSACTIONS $ 64,365 Transfers for the year ended December 31, 2011, consisted of the following: Operating s General Rental Replacement Dividend distributions $ 40,000 $ (40,000) $ - Office rent 18,000 (18,000) - Transfer of pavilion 12,275 (12,275) - 7. RENTAL INCOME - NET $ 70,275 $ (70,275) $ - Rental income net of payments to owners for the year ended December 31, 2011, consisted of the following: Gross rental income $ 1,772,696 Payment to owners (1,415,365) Rental income - net $ 357, FUTURE MAJOR REPAIRS AND REPLACEMENTS The Association's governing documents and Florida Statutes require the Association to accumulate funds for future major repairs and replacements unless waived by the membership. The Board of Directors has reviewed the major components of common property and, as a part of this review, evaluated the estimated useful lives and the estimated current replacement costs of the components of the replacement fund. Where applicable, licensed contractors have been consulted regarding useful lives and current replacement costs. The Board of Directors intends to fund for major repairs and replacements over the estimated useful lives of the components based on estimates of current replacement costs. Actual expenditures may vary from the estimated future expenditures and the variations may be material. Therefore, amounts accumulated in the Replacement may not be adequate to meet all future needs. If additional funds are needed, the Association has the right, subject to membership approval, to increase regular assessments, pass special assessments, or delay major repairs and replacements until funds are available. 10. WINDSTORM INSURANCE The deductible amount for named hurricane storms is estimated at $749,765, which represents 3% of insured value of all buildings, which is estimated to be $24,992,175. The Association is responsible for losses based on a deductible by building as defined in the insurance policy. 11. SUBSEQUENT EVENTS The Association has evaluated events and transactions for potential recognition or disclosure in the financial statements through June 08, 2012, the date the financial statements were available to be issued. 8. INCOME TAXES The Association receives exemption from Federal and state income taxes as a homeowners' associations under certain provisions of the Internal Revenue Code. As such, membership income is not taxed to the extent income and expenses are related to its exempt purpose. Net non-exempt function income, which includes interest and revenues from non-members (such as rental revenue), is taxed at statutory Federal and State rates. 7

11 8 INDEPENDENT AUDITORS' REPORT ON SUPPLEMENTARY INFORMATION To the Board of Directors and Members Summerhouse Beach and Racquet Club Condominium Association, Inc. Our report on our audit of the basic consolidated financial statements of Summerhouse Beach and Racquet Club Condominium Association, Inc. (the "Association") for the year ended December 31, 2011 appears on page 1. That audit was conducted for the purpose of forming an opinion on the basic consolidated financial statements taken as a whole. The Schedule of Revenues, Expenses and Changes in s - Operating General for the year ended December 31, 2011, on page 9 and the activity of the individual replacement fund components, as required by Rule 61B (3), Florida Statutes, on pages is presented for purposes of additional analysis and is not a required part of the basic consolidated financial statements. Such information, except for the portion marked "UNAUDITED", on which we express no opinion, has been subjected to the auditing procedures applied in the audit of the basic consolidated financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic consolidated financial statements taken as a whole. The Supplementary Information on Future Major Repairs and Replacements on pages is not a required part of the basic consolidated financial statements of the Association, but is supplementary information required by the American Institute of Certified Public Accountants. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the supplementary information. However, we did not audit the information and express no opinion on it. St. Augustine, Florida June 08, 2012

12 SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCES - OPERATING GENERAL FUND FOR THE YEAR ENDED DECEMBER 31, 2011 Phase I Phase II Phase III Phase IV Total REVENUES: Member assessments $ 217,627 $ 203,507 $ 201,815 $ 210,271 $ 833,220 Interest Other income 2,311 2,255 2,174 2,173 8,913 Total Revenues 220, , , , ,407 EXPENSES: Payroll and benefits 52,367 49,245 49,245 49, ,102 Administrative 72,515 68,912 68,214 68, ,904 Repairs and maintenance 39,985 38,104 38,576 39, ,048 Utilities 66,611 62,309 62,309 62, ,538 Depreciation 1,914 1,801 1,801 1,801 7,317 Income taxes Total Expenses 233, , , , ,121 DEFICIT OF REVENUES OVER EXPENSES (13,440) (14,593) (16,140) (8,541) (52,714) FUND BALANCE, BEGINNING OF THE YEAR 59,101 61,853 44,056 71, ,848 INTERFUND TRANSFERS: Office rent 4,710 4,430 4,430 4,430 18,000 Rental dividend distribution 10,468 9,844 9,844 9,844 40,000 Transfer of pavilion 3,212 3,021 3,021 3,021 12,275 FUND BALANCE, END OF THE YEAR $ 64,051 $ 64,555 $ 45,211 $ 80,592 $ 254,409 Non-assessment revenues and expenses are allocated to the condominium phase based on each condominium's prorata share of units, with exception of specific repairs and maintenance expense items. 9

13 SUPPLEMENTARY INFORMATION ON FUTURE MAJOR REPAIRS AND REPLACEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 The Association's Board of Directors reviews annually the remaining useful lives and the estimated replacement costs of the components of common property. Replacement costs are based on the estimated costs to repair or replace the common property components at the date of the review. Estimated current replacement costs do not take into account the effects of inflation between the date of the review and the date the components will require repair or replacement. On an annual basis, the Board of Directors reviews the estimated remaining useful lives and estimated current replacement costs and make adjustments as deemed necessary. Interest income is allocated to replacement fund components based on assessments collected during the year. In October 2006, the membership approved to allow the Board of Directors to transfer funds between the replacement fund components within a phase. The following information presents significant supplementary information concerning the replacement fund as required by accounting principles generally accepted in the United States of America: Estimated Estimated Current Major Remaining Repair or 2012 Useful Lives Replacement Budgeted at (Years) Cost ing December 31, UNAUDITED UNAUDITED UNAUDITED 2011 Component Building painting/waterproofing 3 years $ 15,090 $ 3,072 $ 11,836 Roofing 5 years 27,620 3,072 18,563 Tennis/racquetball/shuffle board courts 5 years 47,355 9,216 6,844 Paving and sealing 1-7 years 6,600-16,240 Concrete restoration 5 years 50, $ 146,665 $ 15,360 $ 53,483 December 31, Interest December 31, Components 2010 Assessments Income Expenses Transfers 2011 Building painting / waterproofing $ 8,746 $ 3,072 $ 18 $ - $ - $ 11,836 Roofing 15,593 3, (120) - 18,563 Tennis / racquetball / shuffle board courts 11,580 9, (14,004) - 6,844 Paving and sealing 16, ,240 $ 52,159 $ 15,360 $ 88 $ (14,124) $ - $ 53,483 10

14 SUPPLEMENTARY INFORMATION ON FUTURE MAJOR REPAIRS AND REPLACEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 Phase I The following information presents significant supplementary information concerning the replacement fund as required by accounting principles generally accepted in the United States of America: Estimated Estimated Current Major Remaining Repair or 2012 Useful Lives Replacement Budgeted at (Years) Cost ing December 31, UNAUDITED UNAUDITED UNAUDITED 2011 Component Building painting/waterproofing 3 years $ 75,450 $ 4,020 $ 45,275 Roofing 5 years 138,100 9,648 62,625 Swimming pool 2-5 years 39,880 2,412 5,294 Paving and sealing 1-7 years 33,000 1,608 17,882 Beach walk-over 25 years 47,250 2,412 1,201 Concrete restoration 5 years 250,000 46,632 77,709 $ 583,680 $ 66,732 $ 209,986 December 31, Interest December 31, Components 2010 Assessments Income Expenses Transfers 2011 Building painting/waterproofing $ 66,005 $ 5,628 $ 28 $ (1,386) $ (25,000) $ 45,275 Roofing 89,568 11, (3,254) (35,000) 62,625 Swimming pool 14,372 3, (12,310) - 5,294 Paving and sealing 22,958 2, (7,500) 17,882 Beach walk-over 16,404 1,608 8 (9,319) (7,500) 1,201 Concrete restoration - 46, (44,152) 75,000 77,709 $ 209,307 $ 70,752 $ 348 $ (70,421) $ - $ 209,986 11

15 SUPPLEMENTARY INFORMATION ON FUTURE MAJOR REPAIRS AND REPLACEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 Phase II The following information presents significant supplementary information concerning the replacement fund as required by accounting principles generally accepted in the United States of America: Estimated Estimated Current Major Remaining Repair or 2012 Useful Lives Replacement Budgeted at (Years) Cost ing December 31, UNAUDITED UNAUDITED UNAUDITED 2011 Component Building painting/waterproofing 3 years $ 75,450 $ 4,536 $ 42,362 Roofing 5 years 138,100 7,560 50,569 Swimming pool 2-5 years 34,320 3,024 13,937 Paving and sealing 1-7 years 33,000 2,268 14,474 Beach walk-over 25 years 47,250 3, Concrete restoration 5 years 250,000 43,848 80,280 $ 578,120 $ 64,260 $ 201,729 December 31, Interest December 31, Components 2010 Assessments Income Expenses Transfers 2011 Building painting/waterproofing $ 62,532 $ 6,048 $ 85 $ (1,303) $ (25,000) $ 42,362 Roofing 76,763 8, (2,127) (32,500) 50,569 Swimming pool 14,219 3, (3,348) - 13,937 Paving and sealing 22,174 2, (10,000) 14,474 Beach walk-over 14,292 1, (8,218) (7,500) 107 Concrete restoration - 43, (39,182) 75,000 80,280 $ 189,980 $ 65,016 $ 911 $ (54,178) $ - $ 201,729 12

16 SUPPLEMENTARY INFORMATION ON FUTURE MAJOR REPAIRS AND REPLACEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 Phase III The following information presents significant supplementary information concerning the replacement fund as required by accounting principles generally accepted in the United States of America: Estimated Estimated Current Major Remaining Repair or 2012 Useful Lives Replacement Budgeted at (Years) Cost ing December 31, UNAUDITED UNAUDITED UNAUDITED 2011 Component Building painting/waterproofing 3 years $ 75,450 $ 5,292 $ 35,036 Roofing 5 years 138,100 6,804 63,775 Swimming pool 2-5 years 34,320 3,024 9,420 Paving and sealing 1-7 years 33, ,311 Beach walk-over 25 years 47,250 3,024 5,762 Concrete restoration 5 years 250,000 43,848 59,842 $ 578,120 $ 62,748 $ 197,146 December 31, Interest December 31, Components 2010 Assessments Income Expenses Transfers 2011 Building painting/waterproofing $ 56,001 $ 5,292 $ 46 $ (1,303) $ (25,000) $ 35,036 Roofing 87,329 7, (1,179) (30,000) 63,775 Swimming pool 8,955 3, (3,348) - 9,420 Paving and sealing 31,786 1, (10,000) 23,311 Beach walk-over 23, (8,751) (10,000) 5,762 Concrete restoration - 43, (59,385) 75,000 59,842 $ 207,821 $ 62,748 $ 543 $ (73,966) $ - $ 197,146 13

17 SUPPLEMENTARY INFORMATION ON FUTURE MAJOR REPAIRS AND REPLACEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 Phase IV The following information presents significant supplementary information concerning the replacement fund as required by accounting principles generally accepted in the United States of America: Estimated Estimated Current Major Remaining Repair or 2012 Useful Lives Replacement Budgeted at (Years) Cost ing December 31, UNAUDITED UNAUDITED UNAUDITED 2011 Component Building painting/waterproofing 3 years $ 75,450 $ 6,048 $ 14,695 Roofing 5 years 138,100 9,072 35,084 Swimming pool 2-5 years 34,320 6,048 15,034 Paving and sealing 1-7 years 33,000 2,268 14,227 Beach walk-over 25 years 47,250 3, Concrete restoration 5 years 250,000 43,848 29,839 $ 578,120 $ 70,308 $ 108,976 December 31, Interest December 31, Components 2010 Assessments Income Expenses Transfers 2011 Building painting/waterproofing $ 23,748 $ 8,316 $ 134 $ (2,503) $ (15,000) $ 14,695 Roofing 76,446 9, (4,149) (47,200) 35,084 Swimming pool 14,541 3, (3,348) - 15,034 Paving and sealing 21,154 3, (10,000) 14,227 Beach walk-over 12,074 1, (10,713) (2,800) 97 Concrete restoration - 43, (89,716) 75,000 29,839 $ 147,963 $ 70,308 $ 1,134 $ (110,429) $ - $ 108,976 14