To All Portofino South Unit Owners:
This letter concerns the severe problems inherent in the proposed Special Assessment to be discussed and voted upon at the June 21 Directors Meeting.A new owner started to write about the building on a blog she started, before this problem occurred, and I thought it was a very good way to communicate with all unit owners.This letter is written by J.Parker Reid, a Portofino South Director, Chairman of the Insurance Committee, and a member of the 2010 Budget and Finance Committees. I am also a licensed Florida Community Association Manager and have been the Property Manager of a 100 unit Palm Beach Co-op and a 400 unit West Palm Beach Condominium. Before moving to Florida I graduated from Harvard Law School and was a member of the bar associations of New York and Washington, D.C. and owned an operated numerous large properties.
Here’s the situation: On June 4th a Notice of Special Assessment Meeting was issued to consider the following proposals:
1. Replenishment of Irrigation Reserve $23,000
Replenishment of Hurricane Impact Reserve $102,000
These two items total some $125,000 and resulted from the Board’s authorizing such amounts to be spent on capital projects not covered by reserves. By law these replenishment payments MUST be made.
2. Funding for concrete restoration, waterproofing and exterior painting $ 127,000
Exterior painting and concrete restoration Reserves are $64,000 and $24,000 respectively, totaling $88,000. The meeting notice letter proposed another $127,000 in Special Assessment funding. This would make this exterior project cost about $215,000, some $42,000 over the $173,000 approved by the Board. This overage must be explained.
Certain carpet replacement work was discussed and approved by the Board in the amount of $133,000. Other ancillary work, discussed to augment the carpeting, was corridor baseboard, lighting and painting. At the April 2009 Directors’ meeting the Board voted to “go forward” with the carpeting and lighting. The baseboard work estimates are from $22,000 to $32,000: lighting ranges from as low as $6,000 ($30 per fixture) to perhaps as high as $32,000 and painting with one estimate for $56,000. Legal costs to prepare adequate contracts for all this work are sure to reach $10,000.
Reserves here amount to $111,000 for carpeting, $23,000 for interior painting, zero for baseboard and zero for lighting. Thus, we have a total of $134,000 in reserves for expenditures already proposed and discussed amounting to perhaps $208,000–some $94,000 more for this carpet project.
Thus, to fund the difference between reserve amounts available for the exterior work and the carpeting, etc. would require an additional $127,000 for the exterior and $94,000 for the carpet project. Adding $125,000 for the reserve replenishment would total $346,000–not the $252,000 as stated in the Notice. This is $94,000 more.
THERE ARE SEVERAL MAJOR OBJECTIONS TO ALL OF THIS:
1. The Board voted to approve the $173,000 exterior work and $133,000 carpet work. It is generally understood that the details of all such projects be included in written contracts, reviewed,drafted and approved by our legal counsel. After all such details have been legally analyzed, the contracts are presented to the Directors for final decision. Dollar amounts are only one factor in such contracts. The exterior project contract work was submitted to our attorney but the carpet contract work was not. Nevertheless, it is reported that President Christopherson authorized the signing of a $51,000 carpet purchase before any contract here was legally approved. If true, this is irresponsible and unacceptable.
2. In the consideration of the 2010 Budget our Property Manager, on December 9, 2009, sent a letter to all Unit Owners, stating that, “The Board wants to keep your monthly assessments low by not funding the Reserve Accounts for this year………..which will allow the Board to maintain the current monthly assessments.” By majority vote the Unit Owners voted NOT to fund the 2010 reserves. This means they voted NOT to pay any more assessment money in 2010. In spite of this vote by the Unit Owners the Board is now proposing a $221,000 Special Assessment to fund new capital projects NOT covered by reserves.3. Many Unit Owners TODAY are objecting to these proposals because of personal hardship and suspicions as to the motivations behind these proposals.4. There is NO NECESSITY for the carpet work NOW. If anyone takes the time to walk all 12 corridors, he will come to the same conclusion. Maybe the carpet is not perfect. But is doesn’t have to be replaced NOW.5. There is NO independent , expert opinion as the immediate NECESSITY for the exterior work. Projects of such magnitude should ALWAYS have a second, unbiased opinion.6. While we are negotiating for a Line of Credit the bank may be asking for our reserve accounts to be pledged as collateral for this loan. At the April,2009 Directors’ Meeting , Gene Christopherson stated that the reserves would be so pledged. However, the Florida Condominium Law requires that the use of reserves as collateral must be “approved in advance by a majority vote at a duly called meeting of the association.”7. The newspapers, TV and other media are now screaming DANGER regarding these 3 possibilities:A. The upcoming Hurricane Season. There is almost unanimous meteorological opinion as to the dire threats looming. Portofino South has no reserves or insurance regarding landscaping which is most at risk from hurricanes. We have some $1,300,000 in deductibles for windstorm damage, which means that Unit Owners, on average, would be liable personally for up to about $9,000 before insurance reimbursement would be paid.
B. The Gulf of Mexico British Petroleum oil leak. On June 9, the Palm Beach Post headline read, “Terrifying losses forecast……all of Florida will suffer the oil’s wrath, from Pensacola fishermen to Orlando theme parks to Palm Beach luxury hotels.”
C. The general economy, including unemployment. The stock market just lost some 14 percent with the horrible debt situation in Europe presaging our own reckless spending debacle.
Having talked to many Unit Owners I found that almost all of them are very skeptical about the wisdom of spending all this money at this time. CASH IS KING IN TIMES OF EMERGENCY. Directors are elected by Unit Owners to REPRESENT those Unit Owners. However, many Directors lead insulated lives and simply don’t know or care what the Unit Owners want (and often don’t take the time to find out).By using the new Portofino South BLOG you can easily state your opinion and convey to the Directors what YOU WANT. You can simply state, “I agree” or “I disagree” with this letter. Whatever, choose something. Don’t be part of the Silent Majority.
To access this BLOG on your computer,copy and paste thelink below in your search box.
Once on the blog and after reading the above letter please see the place for
you to comment.
Good Luck and Best Wishes. Sincerely, J.PARKER REID