Key Royal Condominium Association, Inc.

Budget Committee Update Meeting November 19, 2009
Minutes of the Budget Committee Update Meeting Date of Meeting: November 19, 2009 Time of Meeting: 7:00 P.M. Place of Meeting: Key Royal Clubhouse, 8204 Key Royal Lane, Naples, FL. 34119 Call to Order President Ken Stephens called the meeting to order at 7:00 P.M. Roll Call: President Ken Stephens and Vice President Sharon Stites were present. Secretary/Treasurer Joseph Kalinowski was absent. Also present was Susan L. Bedyan; Property Manager. Introduction President Ken Stephens began the meeting by reviewing seven dollar figure changes since the last budget meeting and how those figures will not affect the quarterly assessments. Ken began by line item, starting with our bad debt expense and how that expense has been reduced from $98,000+/- to $61, 000. The next change was listed under the Community Room/Building Cable TV. The original figure of $55,200 did not include the annual increase of 5% that began in July 2009 and will continue each year; raising the figure to $ 57, 960. Ken also added that we have 9 years remaining on our current Comcast contract. Sharon a separate line item for Clubhouse income was also added as per the suggestion of Susan King.

Lawn Maintenance/Landscaping was the next line item discussed. The original figure for these services was quoted at $94,000 and after entertaining some proposals and conducting some research, this figure has been reduced to $89,348. The next line item change discussed was Trash Removal Services; prior years originally figured in around $50,000, (reduced), however but our contract will increase in June/July and bring the amount back up to $50,000. The final line item involved Insurance. Ken explained that we are still in the process of researching companies and as of today obtained an update Appraisal in order to determine if our replacement value has increased or decreased and have that figure used to calculate our insurance. Based on the appraisal, it was apparent that our replacement value has decreased, but the exact figure had not been obtained as of yet. Last year’s budgeted figure of $145,000 actually ended up costing $115,000 but was at an 80% replacement cost and a 5% deductible cost. This year, Ken and Sharon are looking into providing 100% replacement cost at a 3% deductible; which can actually build some deductions into our rate and may cost $130,000 (estimated) until the final figures are obtained. Sharon spoke about replacement and building costs declining due to the economy and the resulting decrease in the price for insurance and how this will reflect in our new cost for insurance. Ken mentioned that our current policy was not at the correct level of coverage based on changes in the law and these premiums have gone up since we need to add coverage for those and we are looking to add contents coverage ( minimal expense) for the clubhouse which was lacking in the past. The next line item discussed was electricity and the amount originally budgeted $29,000 slightly increasing to $29, 696 due to the electric provided to the storage sheds. Lastly, Ken spoke about the Reserves; Painting, Exterior Walls, Estimated Life and Estimated Remaining Life. We have a 7 year Warranty; in the past it was a 3 year Warranty; remaining life is 6 years.

Susan King mentioned that her breezeway is chipping and Sharon agreed that it is happening elsewhere. Ken added that we are currently in contact with Elias Brothers and that they are currently scheduled to return during the week of November 30, 2009 to repaint and resurface several breezeways that are chipping. Susan King asked when we would be mulching and Ken answered that it would probably be after January 1, 2010. Ken mentioned that notices will be mailed out (with a copy of the proposed budget) and posted for the upcoming Annual Budget meeting on December 8, 2009 at 7:00 and after that Presidio will mail out new coupons for the upcoming Assessment payments. Vinnie Zasa asked about the water and sewer line item. Ken explained that there are two components to the water equation. Water is provided by the county through the pump station and filtered to each unit, but the Association pays that bulk bill on a monthly bill to the county. Then the units are billed for their actual use each month. The Association is then reimbursed as the individual payments are collected through American Water and Energy Savers. There is a 75-80% reimbursement rate for the water consumption right now. It will never be 100% due to clubhouse usage, etc. Tom Meier asked if proof of insurance for each condo will be looked into. Ken stated that it will be an ongoing issue, that each owner is required to provide proof to the Association by law but that it is still up in the air. Mike Corso asked about the Management Fee vs. Personnel fee. Ken explained that the management fee (per door fee) that goes toward paperwork processed through Presidio’s Tampa office, i.e. estoppel requests, day-to-day bookkeeping, and Personnel fee is paid for the Property Manager, for clerical and the Maintenance workers for the services provided to the Association. Ken and Sharon both confirmed that the Assessment fees will not be increasing. Ken adjourned the meeting at 7:20 P.M.

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