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Board Briefing | 4.23.23

This past week has been a busy one for the board. We are working over 40 hours each week on the various issues before us.


Tackling the first one, ARS is exerting significant pressure on us to pay down some of the $11.7 million they claim we owe. Thus far, ARS has received $980,000 (our deductible) and about $3 million (from the insurance company).


We are currently working with our attorney regarding our next steps. We are all in agreement that the fees charged to us are totally unacceptable. To this end, the board is considering hiring a public adjuster. We are interviewing two candidates: Association Adjusting and Altieri Insurance Consultants, both out of Tampa. Their focus would be to represent us with the insurance company and bring in experts to support our case. They will audit and check the validity of ARS billing. Since the dismissal of MMA, filling this position helps us gain better understanding of our claim and expenses.


Next, as for the reconstruction phase of our redevelopment, the board will continue with the planning process. Those projects that are not fast tracked, we will put a temporary hold on construction expenses until we get a clearer understanding of expenses and claim reimbursement. We are developing a priority list which will be shared with you once complete.


With regards to voting on future projects, our attorney has reviewed our documents. Their findings indicate that a vote by the owners is not needed to make any repairs, upgrades, or changes to specifications of any portion of the property damaged by the hurricane. A vote of the owners will be needed if a $25,000 charge is made to non-damaged property. This means that most of our current projects under consideration will only need to be subject to board approval. An owner’s vote will be needed for proposed tiling outside of the lobby and new storm windows.


On a more positive note, the finance committee is recommending the board approve an antenna lease with a new company. They will provide greater income with the possibility of another antenna on the roof, meaning greater revenue.

The finance committee is also recommending to the board that the proposed $25K special assessment be paid in one lump sum. This will give us a working fund to start repairs and replacements while we wait for the insurance money. The committee also recommends the approval of the proposed quarterly HOA fee to be $3935.70. This will start on July 1, 2023 vs. Jan. 1, 2023, retroactively.

All these items will be discussed at Friday’s board meeting.


Q&A


Q: Where is the money going for the special assessment.


A: Doors and windows 250K

Lanai and screen repair 250K

Paint and vents 1.2M

Wall replacement 700K

Generator repair 30K

Seawall 600K

Front gate intermediate repairs 50K

Site lighting 350K

Pool 600K

A/C repairs 30K

Towers roof repairs 11K

This list totals just over $4 million which would be covered by the special assessment ($3.75M) plus added quarterly revenue for 2 quarters ($390K). All costs are our best projections currently.


We are in an environment where cost estimates, specifications, and circumstances are changing almost daily. The numbers that were projected yesterday have changed. Again, the need for a good public adjuster to help us with those projections.


A final comment. This has not been a good week. The board is working over 40 hours per week on these and many other issues. I personally have gone from optimistic, to pessimistic, to realistic, with several bouts of depression. Just the stress alone from the ARS situation is considerable. I have stated it in the past and say again that this is not the Fort Myers Beach of the past. Expect change, not all of which will be agreeable or pleasant. Thanks for your support and allowing me to vent.


Ed Boerman

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The last comment was by Ray Bonito not Betty Bonito. Thanks

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We were under the impression that we have reserve dollars for the painting of the building Why would this $1.2M need to be part of the special assessment. Also, there is a 360,0 line item in the budget for loan debt service. What are the details of this loan? What are the loan funds being used for?

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Rebuild Project and Property Management:

We lost millions after a much smaller Hurricane Irma due to individual management errors and legal fights because OH association is run by non-experts. The association is lacking much needed legal, financial and technical expertise. On top of that: Board members are only present during season. You can’t run a multimillion dollar real estate investment and rebuild project and not be available on the property.

The whole rebuild project needs to be done by experts only. We should learn from the mistakes in the past: For this multimillion dollar rebuild project we should hire a general contractor that provides different scenarios (repairs only, some upgrades, think big) and oversees all work that is done. Who…

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Replying to

I want to thank the Board for all that they have done to dedicate their time to this very important endeavor. It is as mentioned a volunteer position and I am grateful for that they have done.

I do however agree that the Board should approach and EPC firm and hire a full time project manager that reports to the Board. This person should have deep experience in project management for projects of this size, contract management and be able to deal with legal and insurance issues that have arisen and will continue to arise. This would be a full time position for the next 12-18 months. It may cost us $300k-400K for a position like this but I promis…


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ARS:

Their million dollar claim seems to be one of the biggest problems at the moment, we further need to clear the dust:

-Regarding ARS what is the advice of Becker/lawyers? What is their legal risk assessment?

-Which portion of the $12 million is covered by the insurance company (how much wind/how much flood)? The $3 million paid to ARS by insurance company was wind or flood?

-We have received the estimate by the wind insurance to pay $5.7 million: Is that the total amount the wind insurance wants to cover? How much is estimated to be paid by flood insurance (provide a range: best case, worst case)?

-How much of the wind estimate of $5.7 million is for repairs/work…

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Budget 2023:

Seeing the information provided so far I would ask the board to postpone a vote on the budget 2023:

I do understand that the numbers are changing constantly. The more important it is that the Budget 2023 accurately and completely portrays the financial condition of the association as of today. All future expenses depend on the association’s financial needs and abilities. There was no such overview provided yet showing these needs and abilities (2023 assessment is missing, couldn't bring in line Ed's numbers above with the budget/reserves). A badly drafted Budget 2023 does more harm than good since it gives a false sense of security (Budget 2023 looks ok, but only on paper, not in reality).

I would…

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