SUNWATCH ON ISLAND ESTATES
CONDOMINIUM ASSOCIATION, INC.
Board of Director's Workshop Meeting
January 17, 2005

President Tom Adams called the meeting to order at 9 AM. Board members present were Bob Burwell, Vince Vincent and Terry Werner. Absent was Joe Giacomini.

President Adams turned the floor over to Debbie Reinhardt, Executive Vice President of Resource Property Management. She explained that Florida Statutes require that the Board set up Reserves for common items that have a replacement cost of $10,000 and above unless waived by a majority of the owner membership at a duly called Membership Meeting. Florida Statutes provide for two methods in estimating reserves – Component Funding Analysis and Cash Flow Analysis. Component Funding calls for an annual contribution for each individual component and charges for replacement of a component must be made from that particular line item. Cash Flow Funding calls pooling of the funds of all reserve components and the annual contribution is calculated to arrive at a positive cash flow and reserve account balance to adequately fund the future projected expenditures throughout the period of the analysis.

Debbie stated that since Sunwatch Reserve components do not include any pool heating systems we cannot use Reserve Funds to replace our current heating system, therefore funding for the Symbiont Geo-Thermal Pool Heating System must come from a special assessment or the operating budget.

Jill Ellis was appointed the contact person for Sunwatch to negotiate a more relaxed payment program in order that the $12,692 payment due at signing and the $12,692 due at completion might be reduced and paid over a two (2) year period. The payments could then be offset by a reduction in the monthly charges for natural gas. Debbie stated that $10,000 budgeted in 2004 and the $10,000 budgeted in 2005 could be used for the Symbiont contract. She explained that although the $10,000 was not spent in 2004, it carried over in the operating surplus at the end of the year.

Debbie then addressed ways to fund the $28,000 needed to repair the Fire Alarm System. Again the only component in the Reserves is the Fire Alarm Panel Replacement therefore Reserve Funds cannot be used for the retrofit. The Board could however use the $20,438 in the Reserves Deferred Maintenance. By taking this action, $20,000 less would be taken out of Operating Cash which could be used for the Symbiont contract.

Debbie suggested that beginning with the 2005 Budget that the $250 per month going to Deferred Maintenance be reclassified as an Unallocated Interest Account.

Since the Budget approval, the election of Board members and the insurance contract all happen in December, Debbie suggested we change our annual meeting to November each year.

Board members suggested that a Board Meeting Protocol be set up for more orderly proceedings.

There being no further business, the meeting was adjourned at 10:50 AM.

Robert A. Burwell, Secretary/Treasurer