DESTIN — A review of plans to offset costs associated with a multi-million dollar renovation of the aging Shoreline Towers condominium complex has sparked worries and calls for emergency action from members of the homeowner's association board.
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"This means that there
are no reserve funds held for maintenance and repair or
emergency situations at our 40+ year old condominium
complex," Rosenau said in the memo.
Rosenau expressed surprise and frustration over the
findings.
"Compromising current and future reserves of this
association by misallocation of the resources required to
sustain and maintain the Shoreline complex is wholly
unacceptable," she said in the memo. "We are extremely
concerned about the financial position of the HOA that we
have discovered."
The revelations come as Shoreline Towers transitions from
one governing board to another.
In February, residents succeeded in removing the majority of
members from the homeowner's association governing board.
Six of the seven members of the board of directors who
approved funding for the renovation project were
successfully recalled by order of a state arbitrator.
The recall effort was initiated last September, just as
pre-construction inspections were being conducted ahead of
the start of the costly project.
"Owners were exceedingly concerned about the overall lack of
transparency and communication from the board, who began
steadily increasing the estimated assessments without
providing the owners with sufficient details about the
multi-million-dollar project," said a news release from the
law firm of Bernhardt Riley, which represented the group of
owners against the former board.
The need for work on the condo, whose three high-rise
buildings are 45 years old, is critical, a study by the
engineering group O'Connell & Associates found. Kent said
following the recall vote that the renovations would proceed
as planned and approved by the outgoing board.
"If they're not done immediately there will be continued
structural damage occurring at the complex," Kent, whose
company is overseeing the work, said in an interview last
year.
The list of projects is extensive, and initial plans called
for work to get underway in mid-September and take up to 18
months to complete.
Included in the renovations are removal and repair of
deteriorated or damaged concrete on balconies, walkways,
stairway interiors and parking garages, as well as the
removal and replacement of windows and sliding glass doors.
Rosenau declined to comment on the findings reported by the
new board members. She referred questions about the content
of her memo to Kent, who did not return several phone calls
to his office.
According to Rosenau's memo, in their late February meeting
with Kent, members of the new board also learned that
several change orders to the project that were approved last
year — including structural beams and coatings for the
walkways — had not yet been funded.
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Rosenau called for emergency action and offered potential
solutions to the condominium owner's predicament, including:
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Risk leaving zero reserves for three years
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Increasing HOA fees
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Adding an eighth quarterly installment assessment.
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Reducing reserves for three years by some amount, for example - $350,000.
A seventh quarterly
installment assessment has already been approved to cover
the costs of the structural beam change order, the memo
said. The reduction of reserves to be discussed would result
in under-funded reserves but offset some additional
assessments to owners, it said.
"We have a fiduciary responsibility and obligation to the
owners to be transparent stewards of the association and to
bring matters to your attention as soon as possible, which
we have done and will continue to do," Rosenau said in her
memorandum. "Immediate attention is required on behalf of
the owners to consider a decision going forward that best
represents the association’s best interest."
The memo said Rosenau intended to call a special meeting to
address "concerns with respect to Shoreline Towers’ ability
to finance future maintenance and repair issues as well as
emergency situations (like hurricanes) going forward through
2023."
It was unclear whether a the emergency meeting had been held
and if any decisions had been made by the board.