Bonita Fairways Master Association Discussion Capital Reserve Budget January 17, 2013

MEETING OVERVIEW

Background history and Plan – Don Griffin

The initial Capital Budget – Keith Barbero

Questions and Answers – Mike Preston

FORMAT

Please hold your questions, there is a lot to cover

All legal aspects of this process have been reviewed and approved by legal council

Overview of Presentation

History of Bonita Fairways

Organization

Organization Chart

Current issues

Operating Budget vs. Capital Reserve Budget

How it effects us

How do we proceed from here

How does the golf course fit in

History of Bermuda Fairways

Main Clubhouse 1993

Carousel Cove 93-2005

BF Master 9/25/1997

CH deed 11/1/2005

Commons CH 1998

New Developer 2005

Rosewood A & B 2005

Bermuda Links 2005-6

The Gardens 2006-7

Recession-construction stops

Summary of Neighborhoods

Neighborhood

Association

Voting

Unit

Voting

Representative

Carousel Cove 107 Allen Bouley

Rosewood A 24 Robert Lustro

Rosewood B 44 John Sims

Bermuda Links 142 Mike Preston

The Gardens 134 Jay Denz

Remaining Units 299 Developer

Total 750

CONDOMINIUM DEVELOPMENT

Developer buys land

Creates the condo entity with the MASTER DEED

Master Association (MA) managed by the developer

The roads and clubhouse are built

Condo buildings completed and sold

Developer TURNS OVER MA to unit owners

Unit owners elect their own Board of Directors

Self managed from that point on

ORGANIZATION CHART

Current issues

The common elements are deteriorating

Clubhouse, pool, roads, tennis and bocce courts

Developer not required to fund a Capitol Reserve Fund

Previous developer did minimal maintenance

The Budgets

Current OPERATING BUDGET is:

$445 annually to the Bonita Fairways operating budget

This is to maintain the property

Landscaping, utilities, repairs and maintenance

Current CAPITAL BUDGET - None

Budgets

OPERATING BUDGET

Annual Insurance

Landscaping

Repairs and Maint.

Utilities, Electric, water & sewer, gas

Cleaning

Management fee

CAPITOL BUDGET

Replace big items

Roads, Roof

Air conditioning units

Carpet replacement

New projects

WE DO NOT HAVE A CAPITOL BUDGET

UNFUNDED CAPITAL BUDGET

Most of our common elements are 20 years old

Maintenance has been minimal over this period

Bonita Fairways is incomplete

We do not control the board of directors

We do not have a Capital Reserve Budget

The new developer is not responsible for capitol items

The worn infrastructure affects property values

THE PLAN- for the unit owners:

Manage the Board as if TURNOVER has occurred

Agree to fund the Capital Budget

Create a planning committee for the Capital Budget

Planning Committee is made up of the five presidents

The presidents are the voting representatives

They vote for their neighborhood associations

THE PLANNING COMMITTEE

Identify projects and costs

Prioritize based on need

Work with the Master Association Board-Mr. Klinger

Work with the golf course in cost sharing

Define project scope, get bids, engage vendors

Manage projects

THE MASTER ASSOCIATION

Mr. Klinger represents the Board of Directors

Opens a new checking account for Capital Budget

The Planning Committee submits projects to Mr. Klinger

He approves projects

Vendors are engaged, work is done

Invoice is approved by the Planning Committee

Mr. Klinger pays invoice out of Capital Checking Account

Ability Management is not involved

THE GOLF COURSE

The Golf Course is our neighbor

We share many elements such as roads, ponds, landscaping on West Terry Street, and the parking lot

Historically, we have paid to maintain these elements

Recently with Mr. Klinger’s help the Golf Course is now paying 50% of landscaping on West Terry, and will pay 50% of new fountain in the main pond at the entrance.

There is more to do, but we need to establish a Capital Budget

We can then approach the Golf Course for participation.

Deferred maintenance

Ceiling tiles Rusting windows

Deferred maintenance

Wiring & Carpeting Kitchen Drains

Deferred maintenance

Damaged Wall Rusting Frames

Deferred maintenance

Bocce Court Rust Bubbler Pitted

Deferred maintenance

Tennis Court Landscaping

CAPITAL ITEMS

Main Kitchen Stove Food Warmer

Capital Items

Old Carpeting Pitted Plumbing

Capital Items

Bocce Court Paving - Dumpster

Capital Items

Patio Finish Obsolete Kitchen

Capital Items

Air Conditioning Interior Decor

Keith Barbero

Operating Budget

A detailed projection of all estimated income and expenses based on forecasted revenue during a given year.

Capital Budget

The term "Capital Budget" is used to describe how managers plan significant outlays on projects that have long-term implications such as the purchase of new equipment and the introduction of new products or services.

EXAMPLES

Operating Budget • Maintenance of buildings

• Cleaning

• Telephone

• Postage and charges

• Insurance

• Minor purchases

• Maintenance Janitor etc.

• Accountant - Lawyer

• Unexpected costs (5% of costs)

Capital Budget • Kitchen Equipment

• Well and Irrigation Equipment

• Roads, Landscaping

• New Roof for Building

• New Carpeting in Building

• Capital Reserve Fund

• New Fitness Center Equipment

• Lake Restoration

REMEMBER

AS HOMEOWNERS, WE OWN THE MASTER ASSOCIATION PROPERTY

MR. KLINGER, AS DEVELOPER, MANAGES AND CONTROLS THE MASTER ASSOCIATION PROPERTY UNTIL HE DECIDES TO TURN IT OVER TO US

GOAL -PROPERTY VALUE

This effort started by the Presidents and a few owners

Since last spring much has been done

Many ideas have been considered

Goal is to improve condition of our capital assets

This will result in more attractive and usable clubhouse

This will increase our individual home values

This proposal is the result of these efforts

WHAT NEEDS TO BE DONE?

Develop a way to raise funds to update capital items

Collect money and have it managed by the owners

Method to prioritize needs for the most impact

Maximize our return on investment with improvements

This must be an owner driven effort with visibility

HOW TO ACCOMPLISH THE GOAL

Owners must accept that we OWN the property

BUT, it is CONTROLLED by the MA Board of directors

This is essentially Mr. Klinger, the new developer

Mr. Klinger will work with us to achieve our goal

It also benefits his interests

Each of us will be contributing to the Capital Fund

There may be participation from the golf course

The developer pays for operating expense shortfalls

Planning committee collects and controls the budget

Planning committee establishes priorities

Needs and Wants to Date. This is by no means a firm final list. It is the result of the Work done to date by the Presidents and Volunteers,

and the Numbers must be firmed up in many cases.

Project Estimated Cost Road Need $150,000 Club House Interior Need Interior Decorating $50,000 Furniture $10,000 Kitchen Equipment $30,000 Fitness Center possible rent $80,000 Air Conditioning $20,000 Kitchen downstairs and other Room $20,000 Bocce Courts Want $25,000 Pool $50,000 Apron Surface Trees in Center Other Landscaping Need $75,000 Lakes Need $50,000 Reserves Need $200,000 (Roofs, Roads Driveways, Paint Building, Pool)

SUMMARY

The preliminary list totals $560,000 or $1,240 per door

We have rounded that to $451,000, or $1,000 per door

We assume there will be some golf course participation

We assume some of this is operational expense to be paid by the developer

There is a need to establish a Capital Reserve Fund.

This is just good fiscal management

Bocce Courts in Highland Woods Next Door

Tarpon Cove on Wiggins Pass

T A R P O N

C O V E

F I T N E S S

C E N T E R

The Proposal

Presidents pass a $1,000 per unit special assessment

Presidents create the Planning Committee

Committee / developer implement special assessment

Committee / developer control funds, and set priorities

Committee estimates costs on projects

Committee provides updates on project status

Important!

This Assessment Projection is not

expected to exceed $1,000 Per Door

Payment options

Pay $1,000 one time

Pay $500 annually for 2 years

Thank You for your

SUPPORT!

ANY QUESTIONS?