Staff

Office:

James “JB” Burnes, General Manager

Paula Curtiss, Rental Manager & Assistant Manager

Cheryl Kirby, Front Desk

Maintenance:

Kevin Trillo, Maintenance Manager

Aaron Crenshaw, Maintenance Technician

John Breeden, Maintenance Technician

Kenny Foster Maintenance Technician

February 15, 2020 Owners Meeting

2020 Owners’ Meeting Summary

Board of Directors Lee Hansen, President Lee_hansen@bellsouth.net

Dan Lankheit, Vice President dlankheit@msn.com Lucille Hess, Treasurer Lucy.seaspray@gmail.com Dorothy Tampary, Secretary dtampary@me.com Kevin Hofer, Director hofmiester12@gmail.com Rodney Ratliff, Director rodney@ratliffarchitects.com Lawrence Kamm, Director lk37203@yahoo.com

Office (850) 492-2200 Emergencies (888) 547-7930

Because a number of our owners were not able to attend this year’s Owners Meeting, we are providing this summary.

The meeting took place at Eden’s meeting room on the morning of Saturday, February 15th.

Lee Hansen, President of the Board of Direc-tors, called the meeting to order. Board members were introduced.

Quorum: With owners in attendance and proxies mailed in, there was a quorum. The meeting was official.

Nominations: There were two openings on the board (Harry Smith was rolling off after two two-year terms, and Dan Lankheit was

up for re-election for a second two-year term). There were only two nominations (Dan Lankheit and Lawrence Kamm) so there was no requirement for an election. Dan and Larry joined the 2020 SeaSpray Board of Directors.

Overview: Lee Hansen provided an over-view of the meeting’s agenda and then made comments on the Board’s priorities. She not-ed that there would be a new emphasis on cleanliness and upkeep at SeaSpray. Pre-ventive maintenance would be increased. She asked for more owner involvement in committees and in future, for additional own-ers to consider volunteering to serve on the Board.

REPORTS

Insurance: Dan Lankheit

• Based on increased property value ap-praisal we expect a significant increase in insurance premiums upon renewal in April.

• Significant increase in Workers’ Compen-sation insurance based on claims during the past year.

• EIFS (Exterior Insulation & Finish System) limits us to only 3 insurance companies. We will look at ways to mitigate this ex-pense as a priority this year.

• Garage/Slip Exclusive Use “owners” must insure their property. They are responsible for any damage they cause to the property.

• Insurance policies will be up for approval at the March BOD meeting.

Rental Department: Paula Curtiss

• Improvements this year include up-dated website with significantly better unit pictures and information.

• 36 units now on the SeaSpray Pro-gram

• Calendar Year 2019 Data

• $1,072,600 gross revenue

• $864K to owners

• $157K commissions to Association

SeaSpray Board of Directors

Lee HansenPresident

Dan LankheitVice President

Harry SmithTreasurer

DorothyTamparySecretary

Kevin HoferDirector

Lucille HessDirector

Rodney RatliffDirector

Agenda

• Call to Order and Introductions

• Establishment of a Quorum/Owners Present & by Proxy

• Proof of Notice of Meeting

• Reading and Disposal of Unapproved Minutes

• Results of Nominations

• Reports and Presentations

• Owner Q&A

• Next Meeting Date

• Adjournment

Projects Completed: JB Burnes

• Water Supply East Building. Deferred maintenance on pipes, valves and hangers had resulted in hazardous conditions. Fixed with new copper pipes, coatings, new hangers and insulation.

• Disaster Response. Includes plan, training and equipment. Lock box-es for faster access to equipment. Standard operating procedures to assist all staff mem-bers. Great results in preventing water dam-age.

• Straps on rooftop A/C units to prevent damage caused by wind-blown de-bris.

• Upgraded irrigation system on both Riverside and Gulf-side properties.

• East Building Sewer. Past issues had not been re-solved. New preventive pro-gram to preclude future issues.

• Turtle Lighting. SeaSpray took advantage of local grants to fund $30K of the $41K lighting upgrades for compliance with new “Turtle Friendly Lighting” requirements. Replaced 196 lighting fixtures.

• Clean-up of Maintenance Rooms.

Page 2 2020 Owners’ Meeting Summary

REPORTS—Continued

Deferred Maintenance - Domestic Water Supply East Building

Disaster Response

Completed Project - East Building Sewer

• Repair of Unit 226. Because of the deferred mainte-nance, significant repairs were required on the Mainte-nance Manager’s unit. These include mold remedia-tion, ceiling and drywall repair, and appliance replace-ment. One-time Cost: $23K

• Repair of East Building 2nd Floor Roof. Non-standard roof repairs of the past led to significant leaks.

• Exhaust Stacks. Test case completed on 03 stack (West Building) 2-speed energy saver fan installed. Additional stacks to be completed as needed.

• Walkways. Project started in September. Scheduled to be completed in December. Delays caused by:

• Weather

• Repair requirements exceeded expectations

• Walkers on newly coated walkways

Current status and updated schedule briefed. Owners will be surveyed by floor to minimize inconvenience.

• Additional completed projects

Completed Projects – Deferred Maintenance

Ongoing Projects – Exhaust

Walkway Project – Completed Deliverables

Please discourage owners and guests from walking on our wet paint.

• Concrete Repairs

Walkway Project – Completed Deliverables

• Coatings

Completed Projects – 2019

Page 3 2020 Owners’ Meeting

Summary

REPORTS—Continued

Planned Projects: Kevin Trillo & Kevin Hofer

• Correct Deferred Maintenance: $45K

• Perpetual Painting Plan: 32 Sections/52 Weeks. Will save approx. 20% on 7-year EIFS painting plan and ensure property looks clean and fresh.

• Pool Repairs: East and West pools to be repaired and refinished in 2020. Riverside minor repairs and refinished in 2021.

• Balcony Repairs: Engineering survey completed. Worst issues in the 01 stack (West). RFP to go out in May. Phased plan briefed.

• Door Cleaning: Doors are not meant to be painted. Past painting has caused mold. Owners are respon-sible for cleaning. Staff will complete cleaning for $125. Sign up with front office.

Financials: Harry Smith & Lucy Hess

• Financial Position Remains Strong

• Proposed Budget: In the proposed $1,479,965 20-21 Budget, expenses consist of:

• 29% Maintenance

• 21% Reserves

• 16% Utilities

• 14% Insurance

• 12% Administrative

• 8% Rental

• BP Money:

• Tax Resolution: Standard resolution passed

Financial Position

is Strong

• From FY 2018 Audit:

• Total Assets 2018 $3.656M vs. 2017 $2.546M

an increase of 44%

• No long term debt

• Fund Balance 2018 $3.290 vs. 2017 $2.297 an increase of 43%

• Primary driver—BP revenue of $1.381M

Condensed Balance Sheets and Selected Operating Income Data

Condensed Balance Sheets Nine months ended Percent Change

December 31, 2019 March 31, 2019 March 31, 2018 3/31/18 to 12/31/19

Cash 774,928 1,055,106 135,062 474%

Cash in reserve fund 987,597 1,124,258 589,710 67%

Settlement receivable 1,381,496

Other assets 58,269 229,374 201,765 -71%

Property and Equipment 1,356,231 1,356,232 1,347,565 1%

Total Assets 3,177,025 3,764,970 3,655,598 3%

Current Liabilities 161,284 473,644 365,170 -56%

Long term liabilities 0 0 0

Total Liabilities 161,284 473,644 365,170 30%

Fund Balance 3,015,741 3,291,326 3,290,428 -8%

Total Liabilities and Fund Balances 3,177,025 3,764,970 3,655,598 3%

Operating history

Net income (loss) operating fund (196,580) (82,798) 1,286,026

Net income Rental Management Fund 104,321 59,148 33,212

Net operating income (loss) exclusive of reserves (92,259) (23,650) 1,319,238

Twelve months ended

Life After BP-BP Funds

Usage

Cash flow assuming no corporate taxes

Cash flow

Total net proceeds 1,381,496

2018 tax loss (79,520)

Cash available 1,301,976

Replenish Operating Fund working capital (100,000)

Pay insurance premium, no finance (200,000)

Transfer to prefund reserves (510,000)

Cash for other uses 3/31/19 491,976

Amounts committed/spent on smaller

"betterments" in FY 2019 & 20 (73,322)

Proposed prefunding March 2020 (150,000)

Estimated operating loss FY 2020 (92,000)

Projected funds available April 1, 2020 176,654

Tax Resolution Rev Ruling

70-604

Association Resolution for Revenue Ruling 70-604 Election—

WHEREAS, the SeaSpray Perdido Key Owner’s Association, Inc., is a Florida corporation duly organized and existing under the laws of the State of Florida; and

WHEREAS, the members desire that the corporation shall act in full accordance with the rulings and regulations of the Internal Revenue Service.

NOW THEREFORE, the members hereby adopt the following resolution by and on behalf of the SeaSpray Perdido Key Owner’s Association, Inc.

RESOLVED, that any excess of membership income over membership expenses for the year ending March 31, 2019 and 2020, shall be applied 1. Against the Association’s Membership Net Operating Loss Carryover and/or 2. to increase the Replacement Reserves Fund, and/or 3. to reduce the subsequent tax year member assessments as provided by IRS Revenue Ruling 70-604, such that any federal income tax liability shall be eliminated or reduced, as the Board of Directors shall determine.

Door Cleaning Project

• The procedure for cleaning doors takes approximately 2 hours to complete, on average.

• The cost to complete cleaning a door and kick plate is $125.00, materials included.

Planned Special Projects – 2020/2021

• East Building Fountain

• Generator Room x3

• Garage Lights

• Electrical Room x2

• Public Restrooms

• Paint Suite 106

• Parking Lot Paint, Sealant, Signs

• Garage Unit Driveways

• Clean Floors 106 and 123

• Dutch Door 106 (B)

• Solid Door for 106 (B)

• Tile Replacement at West building

• West Walkway Pavers

• Parking Garage Hangers

• Shop Storage Solution (B)

• Pool Pump Houses x2

• Floor Scrubber Machine (B)

Estimated Cost $45,535.00

Planned Projects – Balcony Repairs

No Balcony Repair Required on East Building

• Phase 1 - 9 Balconies on 01 stack of West Building (Fall 2020)

• Phase 2 - 25 Balconies on remainder of West Building (Spring 2021)

• Phase 3 - 20 Balconies on Riverside Building (Fall 2021)

WRAP UP

Owners were asked to consider joining a committee, helping with identifying ways to improve SeaSpray and in general, participating in the improvement of all owners’ investments. Committees include: Betterments, Finance, Insurance, Landscape, Maintenance, Marina and Rental.

Next Owners’ Meeting is scheduled for Saturday, February 13th, 2021.