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SANCTUARY AT KEY LARGO

MINUTES OF BOARD MEETING

THURSDAY, DECEMBER 11, 2008

1. CALL MEETING TO ORDER: The meeting was called to order at 5:04 PM by Randy Falcon.

Attending were Rafael Menendez, Henry Cheli, and Steve Schiemann. Also attending were Paula Falcon, Carolyn Schiemann, Charlie Kesmodel, Sue Campbell, and Charlie Merritt. Attending by conference call was Kuldeep Kumar. At 5:30 PM an unidentified caller logged in to the conference call. After repeated requests, the caller would not reveal their identity. To preclude the chance this was an employee, vendor, or other unauthorized party, the Board terminated the conference call to maintain the integrity and security of discussions pertaining to sensitive employee and other topics.

2. APPROVE MINUTES OF LAST MEETING: Steve made a motion to waive the reading and to

approve the minutes of the last meeting and it was seconded by Henry. The minutes were unanimously approved.

3. MAINTENANCE REPORT: Review of open repair projects around the complex: Since the last Board meeting, major efforts were made to complete spreading mulch around the complex and to complete hedge trimming behind the buildings. We need to spread about twelve more pallets of mulch and trim between the pool and building #3. Worn and discolored pool furniture straps have been replaced. It has been observed that some dog owners are not cleaning up after their dogs. Residents are reminded that they need to properly dispose of dog poop, especially in the common areas.

Mailbox repairs: The Board discussed the idea of contracting DJ Installation Corp. to rebuild the mailbox stations, using a more durable material, “Hardy Plank”. DJ Installation Corp. performed the final phase of the office renovation project and does excellent work at reasonable prices. Their expertise combined with using “Hardy Plank” materials could provide us with quality mailbox stations. Henry and Rafael will coordinate and get quotes from DJ Installation Corp. on this project. Recycling bins: Henry has done research on how to get more bins, as the current two per corral are not adequate. Neither the County nor the Sanitation Company has any more in stock. The size or shape of the bin does not really matter. Therefore, we will designate two garbage cans per corral as additional recycling bins to augment the existing bins provided by the County. The cans will have “recycle” painted on the side, and stickers adhered to the lid to identify where to place recycled materials. All residents are kindly asked to rinse out milk and other bottles to reduce leakage and foul odors. There is no need to sort glass, cans, paper, etc., just place it neatly in the bin. Please do not put regular garbage in the bin, as has sometimes happened. Also, please remember that all cardboard boxes must be broken down before placing them in the corrals. Reserve lift for tree trimming: The Board agreed that tree trimming will be performed Feb 17 thru 24, 2009. Because 4 Star Rental Company has a limited number of lifts for rental, we need to reserve the lift now, to be ready for tree trimming operations. The maintenance staff will work straight thru this period to maximize use of the lift. Overtime pay will be authorized, and if

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necessary and feasible, an additional part time employee hired. The lift will be reserved tomorrow. Tool shed mortar repair: After some research and discussion, the Board has determined that this job is more complicated than our staff can handle alone. Steve will do more research and find a contractor who can complete this job to our satisfaction.

4. FINANCIAL REPORT: Update on finances: Rafael forecasted that we will end our Fiscal year 2008 with a deficit. This is so due to unforeseen expenses not budgeted for 2008. They are: the gate repairs due to a lighting strike, an old bill from 2004 that was not paid by a previous Board to Glen Boe and Associates, company that has been contracted to work on the Sewage Hook up with the County and the accumulated expenses on the old cart before buying a new golf cart due to additional breakdowns among other items. The Board earlier this year spent money and expended much personnel labor to repair an old golf cart in an effort to save money. In the end, we wound up having to purchase a new golf cart. An accounting question arose whether to expense this item on this year’s budget, or to roll the expense to next year’s budget. The Board agreed that the golf cart costs must be expended in the 2008 budget. Rafael with the help of Randy Falcon came out with the figures for next years budget and submitted to the Board a preliminary 2009 Budget to later be approved as required on our condo docs. These figures showed that our maintenance fees will still be $500 for the units and $720 for the house for 2009. Rafael also pointed out to the Board, that because all Insurance Claim funds related to Hurricane Wilma in 2005 had been already expended on the pending final repairs, our cash flow will need to be managed carefully in 2009 to avoid falling in shortage of funds, especially, during June and July when our insurance policies are due for renewal. Building 1 Tool Shed Repairs: The Tool shed repairs for buildings 3 and 1 will be charged at the same proportionate rate per building for the labor costs of our employees. Employee’s holidays/pay on holidays/bonus/2009 pay raise?/Shawn’s gas allowance: The Board had a very lengthy discussion of our employee’s job performances for the past year. The discussion noted the mistakes our employees have made in areas of overuse of personnel cell phones and iPods, alleged misconduct while on duty, failure to follow specific instructions and directives, forgetfulness to properly punch in and out, wastefulness of tools and equipment, and other various lapses of judgment and self discipline while on the job. On the other hand, the Board also recognized the good accomplishments of our staff, which included the outstanding job of tree trimming, regular hedge trimming, pool maintenance, boat launching, politeness, outstanding attendance record, and many other tasks they do so well. All in all, the Board agreed the staff is honest, hard working with proper supervision, and reliable. They are good laborers, but need regular supervision. Therefore, the Board made the following decisions: Shawn’s gasoline allowance: When fuel costs were high we paid a flat rate per week, since gasoline prices have declined, we compensate for the price of a reasonable fill-up based on the receipt Shawn turns in. Holiday pay: The Sanctuary maintenance staff will be closed on Thanksgiving, Christmas, and New Years Day. There will be no boat launching or retrieval on these days. These three days

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will be non-paid holidays. On Memorial Day, July 4th and Labor Day only one employee will be on duty and will be paid double time. Memorial and Labor Days both are celebrated on Mondays when normally only one employee is scheduled. If on July 4th both employees are scheduled to work, the senior man gets preference to work or not work. Whoever takes the day off will be paid at regular hourly rate, the man working will receive double time. If both employees are still working here next year, the Memorial and Labor Day schedules may be revised to ensure both employees are treated fairly and equally. Randy made a motion and Steve seconded to pay the employees per these guidelines. The motion passed unanimously. Bonus: Again after a lengthy discussion and debate, Henry made a motion, seconded by Randy, that Shawn will receive a $750.00 bonus and Andre a $450.00 bonus. The motion passed unanimously. The bonus will be paid tomorrow. Pay Raise: Again after much debate, Randy made a motion, seconded by Rafael, that the maintenance staff will not be granted pay increases for 2009. The motion passed unanimously. Late fee issue/formalize policy: The $50.00 delinquent fee for monthly maintenance fees that was instituted by a previous Board was clarified to consist of a Florida Statutory $25.00 late fee and a $25.00 handling and invoicing charge. The Board agreed that the unit #401 account is past due 90 days, including late fees. After reasonable attempts to contact the owner and reconcile the account, the Board agreed that the Secretary must send a certified/return receipt letter to the owner of unit #401 notifying them that the account is past due, and that after 10 days of receipt of this letter the account will be turned over to the Sanctuary attorney for collection. The unit owner will be responsible for all interest, late fees, handling charges, attorney fees and any other costs involved in collection. Vote on next year’s budget: Rafael presented the proposed budget for 2009. Randy explained the highlights of how and why funds will be spent in the coming year. A discussion followed and any questions were answered. Henry made a motion, seconded by Steve, to move this proposed budget to the next step of presenting it to the community as part of the second mail out for the annual meeting.

5. OLD BUSINESS: Renovation project status: The project is almost complete. The only items left are the plumber needs to install the toilet and sink, followed by the final inspection. As of this meeting, the cost of the project exhausted all of the insurance money allocated, plus some additional funding, still more repairs and capital expenditures are needed. The project was very close to the original estimates, but bringing the electrical and plumbing components up to code caused the reasonable additional costs.

Boatyard expansion update: Henry has been in contact with the County biologist and Arbortech Tree Service. We are waiting on the final determination of the number of proposed trees that will be removed, which affects the final mitigation value (payment to the County for allowing tree removal) of the project. Once this information is received, a final proposal can be prepared and presented to the community. Formal presentations will be offered to the community to fully explain the project and answer any questions residents may have before scheduling a special session of the community to vote to expand the boatyard. Sewer project update: This project is moving along thanks to the support of Glen Boe Engineering. They have negotiated a deal for the County to pay for the installation of the

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vacuum pit necessary for the hook up. Line testing from the lift station to the sewage plant is scheduled to be performed on December 18, 2008. We saved a huge amount of money by being able to hook up at the end of East Shore Drive vs. running a line to US 1. The hook up is expected in about a year, so the special assessment for residents will probably be in the third quarter of 2009.

6. NEW BUSINESS: Use of renovated residence, both rooms: The former office area will be used as a business center for official Sanctuary business. The maintenance staff will have limited access to this area and only to conduct official Sanctuary business. The routine office needs of the maintenance staff will remain at the tool shed. The large room will be used as a recreation center. Equipment will gradually be purchased as funds become available. The old universal weight machine for workouts has been declared a surplus item by the Board. If you wish to purchase this exercise machine, please submit your bid of any amount to the Board by December 20, 2008. Employee work ethic’s policy: Currently, we have an unofficial hodgepodge of employee rules and policies. The Board agreed we need a comprehensive employee hand book. Henry volunteered to prepare a handbook for later approval by the Board. Discuss Annual meeting: Four seats are open for election to the Board. The December 8, 2008 deadline to declare an intention to serve has passed. Only one person responded with an interest to serve. Therefore, as of today’s meeting, we will only have a two man Board at the annual meeting – Randy and Steve. Florida law requires a minimum of three people to have a proper Board, otherwise the State steps in and takes expensive measures to run our community. WE NEED SOME PEOPLE TO VOLUNTEER TO SERVE ON THE BOARD!

7. BRIEF OPEN DISCUSSION: Please see the attachment concerning unit owner insurance

responsibility. The important items are to increase your loss assessment coverage to $2,000.00, and to name The Sanctuary at Key Largo as an additional insured and loss payee. The Board is not asking for proof of insurance at this time, just alerting you to the change of insurance requirements so you can update your policies.

8. ADJOURN: Randy made a motion, seconded by Henry, to adjourn the meeting. The motion passed unanimously and the meeting was adjourned at 9:47 PM.

Respectfully submitted, Steve Schiemann / Secretary

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