FINAL Approved at the August 21, 2017 Board of Directors Meeting

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1 LA COSTA BEACH CLUB RESORT CONDOMINIUM ASSOCIATION, INC. BOARD OF DIRECTORS MEETING June 12, 2017 CALL TO ORDER & QUORUM VERIFICATION Board President Miller called the June 12, 2017 La Costa Beach Club Resort Board of Directors Meeting to order at 9:02 a.m., and verified a quorum of Board Members was in attendance. Notice of the Meeting was properly given to or waived by each Director and the Notice of the Meeting was posted on the property as required by Florida statutes. ATTENDANCE Present from the Board: First Quarter: Tom Edwards, Secretary Second Quarter: Jane Gagnon, Treasurer Third Quarter: Greg Scott, Vice President Fourth Quarter: Daniel Miller, President Present from SPM Resorts, Inc.: Trish Docherty, Regional Vice President of Operations, Alissa Hochhauser, General Manager. PRESIDENT S REMARKS President Daniel Miller complimented on how well things were going at the Resort and how happy the staff says they are. APPROVAL OF MEETING MINUTES Approval of the March 27, 2017 Minutes The March 27, 2017 Minutes were presented for review and approval. A Motion was made by Jane Gagnon and seconded by Daniel Miller to approve the March 27, 2017 Minutes as corrected. All were in favor, and the Motion carried unanimously. ASSOCIATION FINANCIAL REPORTS 2017 YTD Financial Statements Ms. Docherty reviewed the Balance Sheet as of April 30, 2017, stating that she is hoping in May, the Special Assessment account can be removed from the Balance Sheet. She would like to close the Special Assessment account and move everything to Reserves. This will require a Motion from the Board. At the end of April, there was $55, in the Special Assessment account. Ms. Docherty reported that there is $39, in Prepaid Maintenance Fees for 2018 as well as $35, being received in Prepaid Owner Specials. The Operating Account owed the Special Assessment Account some money. There was some money that was in the Operating Account that was moved to the Special Assessment Account, and that money will then be moved to Reserves. 1

2 June 12, 2017 Ms. Docherty mentioned that the Resort will move from Wells Fargo to CresCom Bank. Ms. Docherty explained to the Board that CresCom is a smaller bank with better loan opportunities and they will not be charged any bank fees Operating Summary Ms. Docherty reviewed the Operating Summary reporting that Maintenance Fees collections are budgeted at 71%. Maintenance Fees are forecasted to come in on budget and Other Revenue is forecasted to come in at $460,275 which is $5,235 higher than what was budgeted. Gross Revenue is forecasted at $2,116,413. Ms. Docherty stated that $226,802 was transferred to the Reserve Fund in January. Net Operating Revenue is forecasted at $1,888,137 while Total Operating Expenses were forecasted to be under budget at $1,740,402 with a forecasted Operating surplus of $147,735. Ms. Docherty stated that the Resort will also have an Operating Equity surplus of $97,720 and the end of the year. Discussion ensued regarding the insurance policy for the Resort. A copy of the policy proposal was provided in the meeting materials Reserve Summary Ms. Docherty reviewed the 2017 Reserve Summary reporting that Total Reserve Revenue was forecasted to be $226,935 and Reserve Expenses were forecasted to be $235,045 leaving a Net Reserve deficit of ($8,110) which would result in a Reserve Fund Balance of $127,328 at the end of Discussion ensued regarding soft goods replacements. Ms. Docherty stated that everything is holding up very well and that the only items that will need to be replaced are the sofas, chairs, ottomans and mattresses Audit Report Ms. Docherty informed the Board that the Auditors from Withum that worked on the Resort s audit were not available to attend the meeting to review the report. A copy of the 2016 Audit Report was provided in the meeting materials. Ms. Docherty reviewed the report with the Board. A Motion was entertained to close out the Special Assessment account once the project is complete and move the remaining negative balance to Furniture and Fixtures as a reserve component. A Motion was made by Tom Edwards and seconded by Greg Scott to close out the Special Assessment account and move the remaining negative balance to Furniture and Fixtures as a reserve component. All were in favor, and the Motion carried unanimously. Ms. Docherty stated that the Auditor suggested that some changes be made regarding the reserve summary data that is provided on page 15 of the report. Funding should be allocated under the five main areas which are roof, paint, pavement, furniture and fixtures, and building. Components such as awnings, elevator, gutters and pool will be reallocated to building. A Motion was made by Jane Gagnon and seconded by Greg Scott to combine the reserve components into the main five areas (roof, paint, pavement, furniture and fixtures, and building) and reallocate the balances. All were in favor, and the Motion carried unanimously. 2

3 June 12, 2017 BILLING AND COLLECTION REPORTS 2017 YTD Collection Report Ms. Docherty reviewed the 2017 Maintenance Fee Collection Report that showed collections through June 5, 2017 were $1,722, or 69.9%, and an additional $26, had also been collected for Prior Years Maintenance Fees, Late Fees and Interest noting that $26, is needed in order to achieve the budget. Delinquent Owners Report Ms. Docherty reviewed the Delinquent Owners Report included in the meeting materials, reporting there were 1,098 accounts with a high balance over $1,000, and 86 accounts with a low balance under $1,000. SALES REPORTS 2017 YTD Sales Report Ms. Docherty reviewed the 2017 YTD Sales Report that was provided in the meeting materials. The overall total of weeks sold is 362. Total weeks sold in April was 38. The number of weeks sold by CRG to date is 94. CRG has met their quota for the year as they are only required to sell 75 weeks per year. An Association Unit Sales Report was also included in the meeting materials which shows 4 HOA weeks sold. GENERAL MANAGER S REPORT Accomplishments and Achievements Ms. Hochhauser presented the General Manager s Report. She highlighted some areas that were in the Operations Report that was part of the meeting materials. Ms. Hochhauser reported that the May 5-year occupancy history shows that the occupancy percentages for 2016 and 2017 have increased slightly. Ms. Hochhauser reported that Cabana Rental Revenue commission for May was $525 and the year to date total was $2,767. Revenue for Interval International for May was $3,646 and $25,048 year to date. Ms. Hochhauser reviewed the lists of projects for the Maintenance department that was included in the meeting materials. Some projects to highlight are as follows: painted roof over linen exchange; painted steps at the end with yellow paint as caution strips around property; built a work bench in maintenance area; changed all beachside lights to be amber due to Turtle Nesting Season that started in May; cleaned and painted railings from 216 to 220. Future projects for the Resort consist of the following: build an extended roof for maintenance work area; replace roof on N pool pump room; replace patio door knobs on tower units; paint the South and North stairwell floors and walls; paint the gym; paint the other half of the Admin office; and paint the walkways around the property. 3

4 June 12, 2017 Ms. Hochhauser reported that 2022 proxy collection as of June 5 th was 951 with 935 yes votes and 16 no votes. They are working on contacting the owners who voted no to see what their reasoning was for doing so. Ms. Hochhauser was able to contact a few owners, and it was found that they didn t quite fully understand the question. Review RCI and SPM Comment Card Reports The RCI Report and the SPM Comment Card Report as of April 2017 were included in the meeting materials for review noting that the Resort is still at Silver Crown status for RCI. Ms. Hochhauser reported the following scores from the RCI comment cards: Check-in/Checkout: 4.7 and 4.6 for 12 months; Resort Hospitality: 4.3 and 4.6 for 12 months; Resort Maintenance 4.6 and 4.7 for 12 months; Unit Maintenance: 4.0 and 4.4 for 12 months; and Unit Housekeeping: 4.5 and 4.5 for 12 months. Ms. Hochhauser reported the following scores from the SPM comment cards: Check-in/Checkout: 4.8 and 4.8 for 12 months; Resort Hospitality: 4.8 and 4.9 for 12 months; Resort Maintenance: 4.6 and 4.8 for 12 months; Unit Maintenance: 4.4 and 4.6 for 12 months; and Unit Housekeeping: 4.4 and 4.7 for 12 months. A brief discussion ensued. OLD BUSINESS Action Item List Ms. Docherty reviewed the Action Item List and highlighted the status as follows: Item #6: Research heating the indoor pool during the winter months. Status: Ongoing. Item #61: Research tankless water heater options. Status: Ongoing. Item #63: Reserve Investment options for the hurricane deductible. Status: On Hold. Item #107: Management to check with Andy Thompson regarding rates for CD investment. Status: Ongoing. Item #110: The Board requested that Management look at the roof over the laundry room door on the 2 nd floor to see if it could be painted to make it look better and to get a bid on how much it would cost. Status: Complete. Item #111: The Board requested that management get bids to replace the fire door in the tower. Status: Ongoing. Item #112: The Board requested that Management reach out to the 17 owners who voted No on the 2022 proxies to get a reasoning of their vote. Status: Ongoing. Item #113: The Board requested that Management look for a new type of bush that is more durable to replace those that are along the walkway at the tower. Status: Complete. Item #114: The Board requested that Management price out balcony door locks for the tower. Status: Complete. Item #115: Purge all action items through 2015 leaving all ongoing items on the list. Status: Complete. 4

5 June 12, 2017 Item #116: Management to ask Andy Thompson to check the national market for CD and national rates. Status: Removed (duplicate of #107). Item #117: Management to ask Charles Foster with Regions Insurance to look at changing policies to January to January. Status: Complete. Item #118: Management to ask Charles Foster if a Storm surge hits the property on either side, is the Resort covered for flood. Status: Complete. Item #119: The Board requested that Management allow owners to post their units for sale on website and to announce it in the next newsletter. Status: Complete. Item #120: Management to bring proposals for room safes to the June 12, 2017 meeting. Status: Complete. A Motion was entertained to move forward with having safes installed in each unit. A Motion was made by Jane Gagnon and seconded by Greg Scott to have Safemark Systems install safes in each unit as long as the price does not increase to over $18,000. All were in favor, and the Motion carried unanimously. NEW BUSINESS Roof Proposals Ms. Docherty provided proposals from three companies to do the roof replacement project in the meeting materials. Also included in the meeting materials was a summary of all the proposals which showed a breakdown of all the costs and warranty coverage for each phase of work. Ms. Docherty is recommending that the Board go with Com-ESCO to do the work. Ms. Docherty stated that, even though it is not shown on the breakdown, Com-ESCO offers a 2-year warranty on workmanship. She is also recommending that the Admin roof and the Tower roof be completed and to put off the South building roof replacement until next year because it would be much more complicated to replace due to the existing deck. Discussion ensued. A Motion was made by Greg Scott and seconded by Tom Edwards to accept the com-esco proposal based on SPM Management working out all the details to meet the Resort s criteria and starting the work on the Admin and Tower roofs as soon as possible. All were in favor, and the Motion carried unanimously. Bob Kinssies from com-esco joined the meeting via phone at approximately 11:30 a.m. Discussion ensued with Mr. Kinssies regarding the staging area, duration of the project, roof maintenance and warranty. Ms. Docherty asked Mr. Kinssies if he would coordinate the work with the A/C company. Ms. Hochhauser will give the A/C company Mr. Kinssies contact information. Mr. Kinssies was excused from the meeting at 11:56 a.m. 5

6 June 12, 2017 New Action Items There were no new Action Items requested at this meeting. Next Board Meeting Date The next Board Meeting is scheduled for Monday, August 21, 2017 at 9:00 a.m. ADJOURNMENT There being no further business before the Board a Motion was entertained to adjourn the meeting. A Motion was made by Jane Gagnon and seconded by Greg Scott to adjourn the June 12, 2017 La Costa Beach Club Resort at 12:02 p.m. All were in favor, and the Motion carried unanimously. Tom Edwards, Secretary 6