RECENT BOARD DECISIONS

Last Tuesday's regular Board meeting included two agenda items requiring a Board vote, the contract to properly repair the Zurich balconies and proposed management contracts.  During the discussion of the costs of the new management contract President Marcio Jaspan and Treasurer John Labriola made repeated references to the 'fact' that replacing AMG with Campbell Management was going to save the Association about $40,000 a year.  

They repeated over and over again that when comparing 'apples to apples' the current AMG contract would cost us $170,000 and the proposed Campbell contract will cost us only $130,000.  They stressed that the new contract calls for Campbell to provide the Association with a $60,000/year property manager.  Adding the burden plus the non-specific management and accounting fees brought the contract cost to $130,000.

The existing AMG contract calls for an annual management and accounting fee of $41,375.  If we had asked AMG to provide a $60,000 manager they would no doubt have agreed to our request.  Adding the (approximate) 25% burden brings the manager's cost to $75,000.  Then add the management and accounting fee and the AMG total is $116,375.  This means that the new$130,000 Campbell contract is actually costing us $13,625 MORE than AMG.

So instead of 'saving' $40,000 as repeatedly mentioned in the meeting it's actually going to cost us $13,625 more.  That's a $53,625 error.  

There is little doubt the new Board officers believe their decisions will save us a lot of money.  Unfortunately their two most recent actions, the Zurich balcony fiasco and replacing AMG with Campbell Management, have already cost us well over $60,000.  

Many unit owners believe that the new Board officers (President Marcio Jaspan, Treasurer John Labriola, Secretary Wendy Hernandez and Vice President Duv Wolff) make rash, amateurish decisions, too often based on emotion rather than sound business judgement.  All we can do now is hope that they learn from their mistakes.  

We the unit owners deserve accurate, dependable information about the operation of our Association.  CIVOC is dedicated to provide that information and all unit owners are encouraged to participate.  If you have information you believe important to share with your fellow unit owners please do so either by email or by commenting to the blog entry.  

PLEASE GO TO THE BLOG AND SIGN UP FOR UPDATES.

http://www.ivillagenews.blogspot.com/

Respecfully,

CIVOC (Concerned International Village Owners Committee)

Charles Addison, Zurich

Jill Becker, Nottingham

Lilo Beigel, Marseilles

Sandy Best, Interlaken

Israel Bruch, Orleans

Elaine Campbell, Yorkshire

Joan Clemente, Cabana, Edelweiss

Marsha Curliss, Marseilles

Geoffrey Edwards, Cabanas

Joe Frederick, Heidelberg

Richard Goodheart, Bordeaux

Miriam Gordon, St. Moritz

Collette Goslin, Grenoble

Harriet Handler, Edelweiss

Robert Hoffecker, Yorkshire

Raymond Jean, Orleans

Louis Kornbluth, Yorkshire

Abe Landau, Zurich

Alice Large, Yorkshire

Marty Lattanzi, Marseilles

Phyllis Lloyd, Edelweiss

Betsy Mendelson, Nottingham

Frances Mesirow, Yorkshire

Marilyn Navarre, Bordeaux

Irene Pressner, Yorkshire

Marc Richman, Bordeaux

Ray Rizzo, Bordeaux

Judy Rosen, Heidelberg

Norman Sackin, Nottingham

Helene Scharfman, Yorkshire

Sid Schulman, Bordeaux

Molly 'Jane' Sird, Marseilles

Larry Topolowski, Edelwiess, Heidelberg, Orleans

Marvin Tow, Zurich

Ilan Weiss, Zurich

SO WHAT'S NEXT FOR IV????

Disclaimer: Please note that this blog is a forum for concerned unit owners of International Village and is not meant to represent the official views of the Association and/or its Board of Directors.

Fellow  IV Unit Owners,

There has been much turmoil in the Village since the election.  The new Board majority selected themselves as officers:  Marcio Jaspan, President; Duv Wolff, Vice President; John Labriola, Treasurer; Wendy Hernandez, Secretary.  Resident unit owners have witnessed disturbing actions by one or more Board officers.  These included:

- Selection of a non-resident as Association President in direct violation of Section 6.1.1 of our Bylaws.

- President Jaspan coerced the Association's IT specialist into hacking into the our management company's (AMG) data platform.  Fortunately a responsible Board member was able to intervene before an actual crime was committed.

- Three Board officers, the President, Treasurer and Secretary, tried to get access to all unit owner's personal files.  This effort was thwarted by the refusal of the V.P. to participate in this unprecedented intrusion into the personal information of all unit owners contained in our records.

- The President ordered Clubhouse lights to be turned off in order to save electricity.  One result was that a realtor came into the Clubhouse, noticed that it was dark and asked the guard whether the Village was going bankrupt because it couldn't pay it's bills.

- The President ordered the lights leading up the steps to the Salon be turned off.  This presented a slip and fall liability to the Association.

- Since the President appointed Secretary Wendy Hernandez as the head of the Sales and Leases Committee approvals have virtually ceased.

- The President followed through on his public promise to have our maintenance employees make repairs to badly damaged balconies.  This action led directly to the City violating the Association for illegal repairs, issuing fines, and ordering that proper repairs be made totaling over $20,000.  The City also ordered the 40-Year Re-certification, before it would have otherwise been due.

- Back room deals were and are being arranged by one or more of the new officers without the participation of the entire Board in a Noticed meeting, in violation of Florida Statute 718 and our Governing Docs.

Most unit owners agree on that the extraordinarily short sighted and counterproductive decision by the officers to get rid of AMG, by far the most effective management company the Association has ever had. (See the attached discussion of AMG's record as our property management firm.)  They blamed the illegal balcony repairs on Jason Levy, our former and exceptionally talented property manager, and used that story to justify dismissing AMG.  

One of the advantages AMG brought to the table was their comprehensive list of experienced contractors and vendors.  They also provided invaluable relationships with lenders, most notably (Banco) Popular Community Bank.  Just at the time when we really can use AMG's contacts and valuable experience they have been forced out.

This is all happening when our loan agreement with Wells Fargo, often called the 'Wilma' loan with a balance of about $2 million, is due and payable by the end of this month.  Former Treasurer Marc Richman and AMG worked closely with Wells Fargo to get the loan account back on track after more than three years of non-compliance.  (Please see Dr. Richman's statement attached.)

Wells Fargo has expressed concern about the stability of the Association now that we have the added burden of the mandatory 40-Year Re-certification projects which could total about $1/2 million this year and over $2 million next year and 2016.  Wells Fargo has also expressed disappointment in the fact that AMG is no longer our management company, and Marc Richman is no longer Treasurer.

The subject of a recall has been raised by large number of unit owners concerned about the events of the last couple of months.  They are worried that these arrogant individuals with virtually no business experience are now making rash decisions about the operation of our $4 million dollar community association.  They point to the officers' early actions as a predictor of the types of decisions that will ultimately cause the Association excessive and unnecessary expenses in the near future.

Please let us know your thoughts.  Would you support a recall at this time?  PLEASE COMMENT TO THIS BLOG.

Note that the number of CIVOC supporters has tripled since we formed last month.  Please let us know if you would like to add your name to the growing list of unit owners who want clear, accurate, dependable information shared with the Membership.

Respectfully,

CIVOC (Concerned International Village Owners Committee)

Charles Addison, Zurich

Jill Becker, Nottingham

Lilo Beigel, Marseilles

Sandy Best, Interlaken

Israel Bruch, Orleans

Elaine Campbell, Yorkshire

Joan Clemente, Cabana, Edelweiss

Marsha Curliss, Marseilles

Geoffrey Edwards, Cabanas

Joe Frederick, Heidelberg

Richard Goodheart, Bordeaux

Miriam Gordon, St. Moritz

Collette Goslin, Grenoble

Harriet Handler, Edelweiss

Robert Hoffecker, Yorkshire

Raymond Jean, Orleans

Louis Kornbluth, Yorkshire

Abe Landau, Zurich

Alice Large, Yorkshire

Marty Lattanzi, Marseilles

Phyllis Lloyd, Edelweiss

Betsy Mendelson, Nottingham

Frances Mesirow, Yorkshire

Marilyn Navarre, Bordeaux

Irene Pressner, Yorkshire

Marc Richman, Bordeaux

Ray Rizzo, Bordeaux

Judy Rosen, Heidelberg

Norman Sackin, Nottingham

Helene Scharfman, Yorkshire

Sid Schulman, Bordeaux

Larry Topolowski, Edelwiess, Heidelberg, Orleans

Marvin Tow, Zurich

Ilan Weiss, Zurich

Miriam Leher, Zurich

FINANCIAL TRANSPARENCY

Disclaimer: Please note that this blog is a forum for concerned unit owners of International Village and is not meant to represent the official views of the Association and/or its Board of Directors.


A CHRONOLOGICAL HISTORY OF FINANCIAL EVENTS AT INTERNATIONAL VILLAGE  WITH RESPECT TO THE HURRICANE WILMA SPECIAL ASSESSMENT and ASSOCIATED BANK LOANS

On December 28, 2006 a line of credit of up to $7,000,000 was negotiated between I.V. and Wachovia Bank to pay for construction projects in the aftermath of the October 2005 Hurricane Wilma.  Separately the Association levied a $7,000,000 Special Assessment (SA) on the Membership in January, 2007 allowing for the immediate payment in full, or for monthly payments for 11 1/2 years ending on August 27, 2018.  During the period of construction the Association withdrew a maximum of $6,400,000 from the line of credit.  That balance was reduced by SA pre-payments and an insurance settlement.

With the recession's onset in 2008-2009 the bank insisted on a renegotiation of the original agreement. This was finalized on Feb 27, 2009.  The new promissory note began with a principal balance of $4,544,702.51 at a variable rate averaging more than 6% with a balloon payment of $3,542,884.76 due on Feb 27, 2014.    

(Special note should be made to paragraph 4 (b) section (v) of the First Amendment to the Loan Agreement which clearly states: "all prepaid special assessments, whenever collected by  Borrower, shall immediately be used to reduce the principal loan balance and shall not be retained or accrued by Borrower.")

Retrospectively, it was clear that I.V. was not in compliance with the loan agreement from the day it was signed until mid 2012.  By early 2011 Wells Fargo had taken over Wachovia and the Wilma loan had been put in the hands of its risk manager for obvious non-compliance. 

At that time I agreed to become treasurer and Charles Fitzpatrick agreed to be the financial overseer.  It took us six months to get the data collected to discern what had transpired allowing us to set up a plan for the future. That plan amounted simply to correct the financial errors that had occurred by making full restitution to the bank as soon as possible.  The ultimate goal was to assure the bank that we were credit worthy and that we could be effective and trusted when the time came to renegotiate the loan.  I developed a spread sheet which became the reporting document required by the bank to this day.

At the onset of the loan Wells Fargo drew monthly interest and principal of $36,000/month.  However, I.V. received $46,000/month from its monthly Wilma SA payers.  The difference of $10,000/month should have gone to the bank for further principal reduction but had been used over the years by all Boards (wittingly or unwittingly) to pay for operating expenses and non-budgeted projects.  Also, any unit sold by a monthly Wilma SA payer should have had the full sum-of-payments balance of the assessment removed from the proceeds of the sale and returned to the Association.  Throughout the years 2009 and 2010 (except for one $100,000 payment in Oct, 2009) not one penny of these funds was credited to the Wilma loan for principal reduction.

Once these facts became apparent, we began to redress these deficiencies.  By the end of 2011, $341,000 was sent to Wells Fargo for principal reduction.

This method has continued to the present.  The loan balance on 12/31/2011 was $3,551,226.69 and as of May 1, 2014 was approximately $1,994,000.  The question may legitimately be asked: "Where did the money come from?"   Answer: It came from all remaining funds from prior insurance settlements and from all properly allocated Wilma SA monies from 2009 to the present.

These efforts were rewarded by the bank.  In the fall of 2013 we were "promoted" from supervision by the risk manager back to the "normal" business management group.  Secondly, I was able to negotiate an extension of the loan to May 27, 2014.  Of great significance, our relatively low principal balance meant that the interest only portion of the loan that pegged our interest at about 6% was no longer demanded by the bank.  In simpler terms, as of March, we converted a $5,000 monthly interest charge into a $5,000 principal reduction!!   The May 27 date was also important.  At present we have one other bank (Banco) Popular Community Bank considering helping us but they would not comment until the annual financial report was available.  Thus we now had at least two banks hopefully looking for our business.

All this occurred without any increase in maintenance from 2007 through 2011 leaving I.V. with a huge structural deficit.  It is extremely important for all unit owners to understand where we were, what has been accomplished and what needs to be done.  Two large maintenance increases in 2012 and 2013 have righted this sinking ship.  A budgetary deficit of $1,000,000 in early 2012 was converted into a $1,000 surplus at the end of 2013.  We are finally in balance.  The heavy lifting has been done.

Yet, much remains.  The Wilma loan is due on May 27th and we have been cited for the 40-Year Re-Certification program on three of our buildings now and the others to follow next year.  In my view we have begun on an ominous note.  The new Board majority has seen fit to reward AMG - the talented and supremely competent management company that has been intricately involved in the improvement process of International Village Association - by firing them. 

This has threatened our relationship with both Wells Fargo and Popular Community Bank.  I find that deed beyond comprehension.

Sincerely yours,

Marc W. Richman, Board Member

Former Treasurer

THANK YOU AMG!

Disclaimer: Please note that this blog is a forum for concerned unit owners of International Village and is not meant to represent the official views of the Association and/or its Board of Directors.

When AMG came to IV, they took over the following situation:

1.  2011 Operating Deficit of approximately $960,000.

2.  2012 Operating Deficit of Approximately $800,000 (AMG saved approximately $160,000 mid year).

3.  There were 7 outstanding law suits and DBPR cases.

4.  The Wells Fargo loan was in default and owed over $330,000 in      past due payments.

5.  Prior to 2012, Special Assessment income meant for the Wells Fargo loan was being co-mingled with the operating accounts and not all payments to the loan were made.

6.  Phone systems were constantly going down.

7.  Resident complaints were rising.

8.  Our accounting was a nightmare and accounts were mixed up and incomplete. Monies were being posted to the incorrect accounts.

9.  Numerous complaints of lack of maintenance of the buildings and grounds.

10.  Complete lack of management organization.  For example, routine work orders were disorganized and not being completed.

  

After AMG was hired as our Management company, they accomplished the following:

1.  Renegotiated phone service to the Association and provided WiFi to the residential buildings.  This saved us over $15,000 on our phone budget while providing every individual unit owner free WiFi, thus saving unit owners who had been paying for  internet access hundreds of dollars a year.

2.  Saved over $9,500 on landscape services.

3.  Assisted with saving over $100,000 on insurance.

4.  Saved approximately $200,000 in collections expense while increasing collections revenue.

5.  Assisted with decreasing and settling law suits to save more than $35,000 in legal fees in 2013.

6.  Bad debt decreased by over $80,000.

7.  Savings in water over $44,000.

8.  Savings of over $56,000 in regular operating Repairs and Maintenance in 2013 vs 2012.

9.  Stabilized the budget and assisted the Board of Directors with proper accounting for all accounts.

10.  Assisted the Treasurer with maintaining the new systems and controls regarding the Wells Fargo loan.

11.  Paid down the Wells Fargo loan over $1.4 million from April 2012 until April 2014 while keeping the monies accounted for and properly allocated.

12.  Assisted with the relationships with Wells Fargo.

13.  IV was now in good graces with Wells Fargo regarding the loan and not in default.

14.  Dramatically reduced delinquencies.  

15.  Received two recognitions for financial turn-around as "Comeback Community" from Florida Communities of Excellence.

16.  Decrease of complaints and increase of resident satisfaction.

17.  Computerized work orders.

18.  Organized office operations and hired competent management and staff.

19.  Created improved Policies and Procedures working with the Board of Directors and input from the community.

20.  Cut over $500,000 out of the 2013 budget vs 2012.

Through the professionalism and relationships in the industry, AMG was able to get banks to listen to us when no one would in the past.  They assisted us with turning this community around when we were at our worst.  They served our community with care and diligence.  It was obvious that the management team took pride in working for IV and worked together with the residents and the Board of Directors to assist in any way that they could.

Concerned unit owners would like to sincerely thank AMG and its management for their hard work and loyalty to our community!