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SUNWATCH ON ISLAND ESTATES CONDOMINIUM ASSOCIATION, INC. Board of Director's Meeting November 16, 2006 CALL TO ORDER President Jo Warn called the meeting to order at 9:30 AM. Board members present were Bob Burwell, Joe Giacomini and George Powers. Excused - Sue Clark. MINUTES Minutes of the October 19, 2006 Board Meeting were approved as presented. FINANCIAL REPORT The October Financial Report was not available. CORRESPONDENCE None SALE & LEASE APPROVALS It was moved and seconded to grant confirming approval for the following sale: Unit #705 to Bob and Marsha Holland. Motion carried unanimously. It was moved and seconded to grant confirming approval for the following lease for a period of one year: Unit #705 to Wayne and Lisa Huffman. Motion carried unanimously. OLD BUSINESS None NEW BUSINESS It was moved and seconded to recommend to the Membership for the Annual Meeting that any Surplus Funds for the year 2006 carry over to 2007. Motion carried unanimously. Treasurer Bob Burwell stated that Florida Statutes require a year end Audited Financial Statement unless waived by the unit owners. Our CPA will prepare a "Reviewed" Financial Statement for $2,600 where an "Audited" Financial Statement will cost $5,000 to $6,000. It was moved and seconded to recommend to the Membership for the Annual Meeting that the Certified Public Account prepare a Year End "Reviewed" Financial Statement. Motion carried unanimously. Treasurer Bob Burwell stated that the annual insurance premiums for 2007 will be approximately $264,000. It will be necessary to borrow funds to pay those premiums. We could obtain insurance premium financing at a high cost or borrow from a bank paying interest and loan fees. We could borrow from our Reserve Account at no cost. It was moved and seconded to recommend to the Membership that we borrow up to $264,000 from our Reserve Account to be repaid monthly over a period of not more than one year. Motion carried unanimously. A Budget Workshop was held November 9, 2006 to review in detail the proposed 2007 Annual Budget. The Maintenance Fees in the Proposed Budget increased $159,324 from $521,352 to $680,676 which is a 31% increase. Insurance increased $144,000 from $120,432 to $264,432 which is a 120% increase. In other words if the $144,000 insurance increase is deducted from the $159,324 total increase, the remaining part of the budget is up $15,324 which is less than 3%. It was moved and seconded to adopt the 2007 Annual Budget for Total Expenses and Reserve Funding of $700,836. Motion carried unanimously. At the October 19, 2006 Board Meeting, Sheron Nichols requested the Board consider alternatives to Fully Funded Reserves for 2007. Mrs. Nichols attended the Budget Workshop to again express her point of view. The annual contribution is $89,852 for a Fully Funded Reserve for 2007. If we made an annual contribution of 50% or $44,926 as a Partially Funded Reserve, the monthly maintenance fees would reduce only $30.75 for the smallest units to $47.78 for the largest units. Exterior painting of the buildings and resurfacing of the corridors is scheduled for 2007; therefore the feeling of the Board was that we should not be reducing Reserve contributions at this time. NEXT MEETING The next meeting will be the Annual Meeting on Thursday, December 7, 2006 at 6:30 PM. ADJOURNMENT There being no further business, the meeting was adjourned at 9:50 AM. Robert A. Burwell, Secretary/Treasurer