PELICAN ISLE CONDOMINIUM OWNERS ASSOCIATION, INC.

ANNUAL MEETING

OCTOBER 17, 2009

MINUTES

Board Members

Present: David McCombs, President

Hugh Randall, Vice President

Lynn Boyer, Secretary

Art Pattison, Director

Brooks and Shorey Representation: Ron Shorey, Association Manager

Bill Treon, General Manager

Dan Lee, Maintenance Supervisor

Stasia Pavlich, Executive Assistant

Brown Insurance Services: Rob Tallent

Island Beach Services: Brian Cox

Owners Present: Sabine Kelly, unit 102 Charlie & Cathy Edwards, unit 318

Charles Corsentino, units 106 & 405 Paul Streitz, unit 401

Kristine Pattison, unit 201 Dan & Carol Cartledge, unit 408

Duke & Chris Pope, unit 203 Brian O’Connor, unit 414

Joel & Linda Squires, unit 205 Ken & Beverly Glassmeyer, unit 504/601

Gary & Beverly Hall, unit 206 Tim Mieczkowski, unit 505

Joe & Ann Gauvin, unit 218 Duane Gordon, unit 507

John Thomas, unit 309 Annie Whelton, unit 509

Greg & Nancy Schroth, unit 311 Jay & Hyung Wicker, unit 508

Leroy & Karen Johnson, unit 314 Frank & Hatsuko Wilderman, unit 603

CALL TO ORDER

President David McCombs called the meeting to order at 9:00 a.m.

CALLING OF ROLL AND FINAL CALL FOR PROXIES OR BALLOTS

David McCombs called for proxies.

ESTABLISH QUORUM

A quorum was established with 58 owners present by proxy and in person.

PROOF OF NOTICE

President David McCombs advised that the Notice of the meeting was posted in accordance with the By-Laws and Florida Statutes.

DISPOSITION OF MINUTES

Leroy Johnson, unit 314, motioned to approve the Annual Meeting minutes of September 29, 2007. Ken Glassmeyer, units 504 & 601, seconded the motion. The motion passes unanimously.

LIMITED PROXY

The Board is required to determine whether the majority of the ownership agrees to give the Board, in situations that conform to the Florida statutes and the Pelican Isle HOA bylaws, the authority to temporarily borrow against the reserves to provide greater flexibility in budgeting. This would be limited to the 2010 budget year, require renewal vote each subsequent year, and require the Board to produce and implement a plan to ensure the reserves are properly paid by the end of each budget year.

Ron Shorey stated this item is to give the Board the ability to borrow funds from reserves to be paid back in the same calendar year. Ron Shorey stated there is approximately $80,000.00 of uncollectible homeowner’s dues, due to foreclosures that will have to be dealt with in 2010, which means there will probably be a Special Assessment sometime in 2010. The Board will open a line of credit of approximately $70,000.00 to deal with this year’s shortfall.

  1. Do you want to provide this capability to the board for the next budget year? The motion passed for a vote for “YES” by a margin of 45 – 10.
  1. Should the Association resolve that any excess membership income over membership expenses for the year ended December 31, 2009, shall be applied against the subsequent tax year member assessments as provided by IRS revenue ruling 70-604? The motion passed for a vote for “YES” by a margin of 56 – 1.

3.  Should the Association resolve to waive the audit of Association financial records for the 2009 fiscal year? The motion passed for a vote for “YES” by a margin of 46 – 11.

4.  Should the Association ratify the Board of Directors previous decision to pool reserves? The motion passed for a vote for “YES” by a margin of 52 – 5.

REPORTS OF OFFICERS AND ASSOCIATION MANAGER

President:

·  David McCombs stated the Board would obtain a line of credit. The Board is putting a portion of the reserves into a CD, which will actually give the Association interest and the loan would be at 2.5% interest.

·  David McCombs stated there were no more individuals volunteering for the Board then positions available so there was no need to have an election this year. David McCombs stated that he and Art Pattison submitted a letter to serve on the 2010 Board and will appoint the additional three Board members at the next scheduled Board meeting. Hugh Randall and Lynn Boyer would like to serve on the Board again leaving one position open for the Board. Sabine Kelley, owner of unit 102, volunteered to be appointed to the Board. Carol Cartledge, owner of unit 408, requested the Board have regularly scheduled meetings so that other owners can attend. Ron Shorey stated the meeting minutes are now posted on www.emeraldcoastrentals.com, scroll to the bottom of the page to Minutes and the next scheduled Board meeting will be on the minutes. Hugh Randall stated because of all the past legal issues there had been more meetings. David McCombs stated the Board would try to have a regular schedule for Board meetings.

·  David McCombs stated, in reference to the legal issues, he came on the Board in 2008 and the Board was getting ready to take steps to go on the offensive with regards to the common area space. David McCombs stated he is happy to report that in April the judgment ruled in favor of the Association, meaning the common area is owned by the Association. The judgment to the Association was $139,000, but unfortunately the developer is bankrupt. The Board then took the steps to ensure that the Association had the legal right to use the space to the benefit of the Association. The Board put the front desk space out for bids and the only one to respond was Brooks and Shorey Resorts. The Board met with five different rental companies and all made it clear that they are interested when both the Association Management and front desk rental are available for bid. The Board signed a contract with Brooks and Shorey Resorts and they now occupy the front desk area. The Association will receive income based on rental revenue. The developer has taken steps to keep parking spaces that he does not legally own and has offered them up as collateral to a local bank. The Board is working with the Association attorney to get these parking spaces back. Hugh Randall stated a lien has been filed against the parking spaces. Ron Shorey asked that all owners not buy a parking space, because they may end up paying for it twice. Wait until all the legal issues have been settled. David McCombs stated this is financially prudent to the Association because the parking spaces are valued at approximately $5,000 each and there are twenty-one parking spaces.

·  David McCombs stated as an Association manager for Brooks and Shorey Resorts, Ron Shorey took the ball and ran with it. What Ron Shorey cared about was how the building looked and if you look at the building you see a significantly different building now then what it was a year and a half ago. The Association owes Brooks and Shorey money for the maintenance work and that will be taken care of when the Board establishes the line of credit in a couple weeks. David McCombs said he told Ron Shorey you have to slow down, and Ron Shorey replied the building needs to be up to par and the Association can pay when the funds are available. David McCombs stated Ron Shorey is the one to thank for how the building looks. Joe Gauvin, owner of unit 218, wanted to commend Bill Treon, because he always returned his calls. Hugh Randall stated there is one person that makes this Association function and it Stasia Pavlich and the owners need to get to know her. Hugh Randall stated this management team is night and day compared to the last and enables the Board to focus on the big-ticket items. Ron Shorey stated Dan Lee is the maintenance director and lives in a condominium on the island and understands what the owners are looking for. Also he has the best maintenance team. David McCombs stated he has been through four rental management companies and spoke with Ron Shorey and is now on Brooks and Shorey’s rental program. He still has his unit attached to VRBO and David McCombs stated he had the best year he has ever had in rental income.

Vice President:

·  Hugh Randall stated Holly McCann deserves a lot of credit for trying to balance accounts. Hugh Randall stated this year by far has been the most challenging and the most frustrating even after some substantial wins the Association fought for years. Most people do not like change, people didn’t want to change insurance companies and changes are a calculated risk.

·  Hugh Randall stated Frank Wilderman spent a day in court testifying on the Associations behalf and Warren Strietzel, owner of unit 113 for submitting a deposition. Hugh Randall also wanted to thank Dawn O’Connor for being in court for the Association. Hugh Randall thanked the Board for all their hard work. Art Pattison is now on the Board and is onsite. Hugh Randall encouraged owners to bring ideas to the Board and how they would implement the ideas.

·  Hugh Randall stated all owners need to put the House Rules in their units.

Secretary:

·  Art Pattison stated Pelican Isle can be part of a neighborhood watch program and will address it with the Board.

·  Art Pattison stated he came on the Board in May of 2009 and is glad to serve on the Board another year.

Treasurer:

·  David McCombs stated he would present the treasurers report, because Holly McCann was unable to attend the Annual meeting. David McCombs stated he wanted to thank Holly McCann for her time and efforts. David McCombs stated he was the biggest naysayer when Emerald Coast CPA was brought on, because he thought it was a waste of money. David McCombs stated once he became the treasurer of the Board he realized it is the one of the smartest things the Association has done and is well worth the monthly fee. David McCombs stated he had the process changed to an electronic payment process and Holly McCann brought in the creativity. She is an unbelievably detailed individual and what this Board needed was options, which she brought to the table. The Board underestimated the foreclosures and bankruptcies for 2009 and this has caused the Association some financial shortfalls in 2009. The Board has been able to offset some of this with the insurance adjustments and the legal fee reduction. The Board worked hard to reduce the dues for 2010 and Pelican Isle has one of the highest Association dues on the Island. The Board is going to try and reduce the dues again in 2011. David McCombs stated the current shortfall is $50,000 - $70,000 and the Board will obtain a line of credit to pay the bills. The biggest reason the Board chose the line of credit over a Special Assessment this year, is there are owners in foreclosure/bankruptcy that wouldn’t pay anyway. Ron Shorey stated it is hard to put a number on the bad debt expense and until a unit forecloses or short sells the Board does not know how much money will be gained/lost. David McCombs stated the Board chose to triple the bad debt expense line item in 2010 to $36,000.00.

UNFINISHED BUSINESS

NONE

NEW BUSINESS

·  Rob Tallent stated insurance is the largest budget item for Pelican Isle. Rob Tallent stated there have been challenges with the flood insurance premiums. Last year the insurance premium was over $250,000 and the flood insurance made up 85% of that premium, due to the high-risk flood zone. Working with Brooks and Shorey Resorts and the Board, we have been able to accomplish better premiums. Last year FEMA had taken away Pelican Isle’s Community Rate Discount which, is a discount given to most Associations. An engineering firm, PBS&J was hired to perform an engineering study to improve the buildings elevation, which saved approximately $25,000 on the insurance premium. We didn’t stop there, we applied for a V Zone Risk Factor rating form to obtain more credits and with this form saved almost $10,000 in insurance premiums for the remainder of 2009. For 2010 that savings would be an additional $25,000.00. Last year the flood insurance premium was $223,000.00 and this year it will be $158,000.00. So the total insurance premium last year was reduced from $266,000 to $227,000.00. Rob Tallent stated these credits will be applied every year. Rob Tallent stated the other aspect he wanted to discuss is unit owner/content insurance. In 2008 the Florida Legislature passed a statute that states unit owners that own condos in Florida are required to provide proof of insurance to the Association. This new statute is due to the number of claims in south Florida due to past hurricanes and the fact that many owners did not have individual policies. Rob Tallent stated that Brown Insurance Services can provide education on what your insurance needs are and he can be reached at 850-215-5361. Hugh Randall stated Brown Insurance Services is a new insurer for Pelican Isle. The previous Board vetted a few other insurance companies and being a Board member for four years I had been told there is nothing you can’t do about insurance premiums. This gentleman proved that you can. David McCombs stated Frank Wilderman played a big part in the insurance changes. David McCombs stated he has never seen an insurance agent work so hard. An owner inquired about the generator. Ron Shorey stated the generator was below the base flood elevation and the claim was not filed in a timely manner by the previous management company, so the Association was not able to recoup any cost for it.