Your concentration required - settle down, relax and question......

We are fast approaching the time when we can expect to read the President's Report for the year 2007. This is, therefore, an appropriate time to remind Owners of some statements made by the President and/or Treasurer since this time last year with regard to CBH's finances.

Owners will see from the following that few if any of the promised documents have been circulated. Owners will also know that neither the Treasurer's Reports, Accounts, Board Minutes or Manager's Reports have been available to Owners on request or at the Front Desk. It is also evident that the spalling contractor is not working on that contract at present and that much work around the complex is still required. The whole western facade on Building 3 remains untouched, much of the eastern facade of Building 2 also remains unfinished as well as the flashing on various terraces and roofs. Further, the retention of water behind this flashing is holding the rain in situ for long periods. The leaks into the buildings are numerous and substantial. Owners need to consider what this means in extra funds required in order to make this complex wind and water tight. Is an assessment on the cards? Will Owners be sensible enough to insist on a properly qualified engineer's report and recommendations before agreeing to spend more money on trying to fix a botched job with another?

From the President's Report dated October 24, 2006.
'Changing the accounting system was one of the Board's 2006 goals. The software change from Peachtree to Quickbooks and the transfer of information went extremely well. The statements are more detailed indicating the electrical consumption for easy tracking and statements that are much easier to read by all accounts. The management and office staff were true to their word that it would be accomplished in a timely manner and it was. The Board would like to thank the Staff for their diligent effort in this area. This will also be the first year in a long time that a full audit will be performed with accurate numbers accompanied by the auditor's report. This report as well as the audit will be available to all Owners prior to the AGM. The accounting firm will begin the audit in November, accommodating their schedule.'

Owner's Forum held on 15th November, 2006
Treasurer, Phil Galiano, said 'that $300,000 was locked into CDs with a further $200,000 in two accounts with Scotia Bank. Coral Beach Hotel is in the process of moving these accounts to the Commonwealth Bank of the Bahamas but a problem with AMEX deposits is holding the transfer up. Operating costs run alongside maintenance fees that raise approximately $850,000 and the largest deduction is $300,000 pa for insurance. The financial position is such that a further 10% drop in maintenance fees will apply as of January 2007. No further assessments will be necessary at this time. Asked about the sale of the four units by sealed bids, only one bid came from Owners in the first offering, that of Sandra Rufa for $55,100, after being offered publically the other three hotel rooms were sold for $57,000+, $57,000+ and $55,000. Deposits have been received but as the deeds cannot be found all further transactions are on hold. The money raised will go into the Reserve Fund.'

Owners Forum held on November 28th, 2006
When asked to elaborate on the $186,000 loss over 2006 on the P & L account, the Treasurer said that as CBH had $600,000 on account in the bank, there was nothing to worry about. All accounts prior to the August 2006 end-of-year statement (now being drawn up by our Auditors) were inaccurate. Half of the spalling contract has been paid.(nb; Spalling contract $381,000) The CDs in the bank are earning 3%. However 6 Owners together owe CBH $55,000 and all are being advised of liens on their apartments. BR was asked to clarify the CBH insurance position. He said that after hurricanes Frances and Jeanne the Board and the Insurance Company had signed off on a payment of $867,000 for repairs. However this sum did not fully cover all the items it should have done and a further consultation was made with Mr Thompson, a Loss Assessor, who is in the process of claiming $9 million. His interest, should he succeed, will reiumburse him up to 30% of this sum. BR/PG have indicated unofficially that a reduced settlement of around $1.5 million would be acceptable to CBH and believe that the Insurers would be far more likely to settle the claim.

Owners' Forum of December 20th, 2006.
B.Rufa noted that after the 2004 hurricanes the new 2005 Board was under immense pressure to resolve a number of problems: $125,000 had been spent on the roofs (not terraces); $50,000 to Mario Donato to repair his penthouse; railings, gym and other costs had brought the figure to $450,000. BR gave the following figures:
Assessment of hurricane damage in 2005: $800,000 to cover spalling, aircon, grilles, cable wires etc;
Estimate of costs: labour $381,000; material $150,000
Hurricane Wilma in 2005 cost an additional $150,000.
Staff Severance pay August 2005: $100,000
Cost savings as a result of re-structuring at CBH in 2005: 3 full time staff plus 2 part time = $100,000 (2004, 22 full time staff = $460,000)
D. Bain Contracted Services = $150,000. Maintenance/handymen hourly paid as needed = $50,000 (too soon to be very specific)
Gross Annual Income: $1,000,000 includes maintenance fees, leases, laundry, parking & storage. Expenses: $560,000
Mantenance fees will raise $700,000 in 2007, $140,000 in storage fees etc will give CBH $200,000 over expenses for 2007. Add the sale of the Hotel Rooms and a further $300,000 will be added to the working capital sum.
At this stage the Accounts are almost up to date and orderly and the Auditors should be able to write off the accounts this year with more confidence than they have had for a long time. All other things being equal by next year the Accounts will be up to international standards.

Owners Forum held on December 30th, 2006.
BR gave a breakdown of finances: Maintenance fee income for 2007 will bring in $925,000 and expenses will cost $800,000 leaving a surplus of $125,000. The sale of the hotel rooms raised a further $300,000, there was $500,000 in the bank accounts and a further $125,000 owing in maintenance fees. A question was asked about the $17 million insurance claim being followed up by a firm of Head Hunters. BR explained that while the sum remained outstanding, the Insurers had to keep that sum in escrow and therefore had good reason to want to settle. BR said that he had indicated to the Insurers that CBH would accept a $1 million settlement and he felt this could be resolved in a week or two.

Treasurer's Comment on the Blog dated February19th, 2007
Given that CB is still attacking the long list of remedial projects.....CB would need conservatively an infusion of over one million dollars of extra income to improve its infrastructure to return to the point of considering a special reserve fund. I'll leave the specifics of the needed and required improvements to a special report in the near future.....

Owners Forum March 14th, 2007
BR confirmed that the 6 monthly figures (end January 07) would be produced fairly shortly and the intention was to circulate quarterly reports from then on.


CORAL BEACH HOTEL NEEDS THE HELP OF PROFESSIONAL AND KNOWLEDGEABLE OWNERS WITH LEGAL, FINANCIAL, CONSTRUCTION/ENGINEERING AND MANAGERIAL SKILLS TO STAND FOR THE BOARD OF DIRECTORS AND HELP BRING CORAL BEACH HOTEL BACK TO BEING A REAL PIECE OF PARADISE.