This open letter was received October 4th, 2021.
Dear Mr. President Bhagwan (Buck) Gupta,
In your letter to unit owners regarding the new 2021 Special Assessment, you specifically mentioned that every penny is accounted for by professionals of AP Management producing our financial reports. I agree with that. But it also looks to me that Aquarius financial reality of 2017 Special Assessment is very different from ‘virtual reality’ presented to us by management and board. As I compared your presentation with financial reports, I found a huge discrepancy in every detail item of the expenses and funds to cover them. The differences range from few hundred thousand dollars to few million dollars.
According to financials, the board collected tremendous amount of money: $23,017,400. The detail description of each fund of money is shown below:
- 65 percent of community paid their share of $15,000,000 in full giving total of cash $9,750,000. Adding here 35 percent unit owners’ monthly payments brings the cash total to $11,549,000. This is the real amount billed and collected (as opposed to your unsupported presentation of $15,000,000 received)
- Immediately after hurricane IRMA, the board collected from unit owners Insurance deductibles amount of $1,195,000.
- During years 2017-2018, the total withdrawal from 15 million credit line equaled $10,000,000. In subsequent years, only $2,500,000 was repaid, leaving us with a debt of $7,500,000 payable monthly by 35% of community up to year 2032.
- In October 2019 a new line of credit $2,500,000 to finance cost overruns was taken by the board. This money has been spent already, but the payment should have been started the first of October, 2021. This loan is for 4.6% interest, 15 years term ending in year 2036. The board have not discussed this loan-credit line with the community and signed it without voting on a Board Meeting. The information about this loan-credit line in included in 2020 Audit Report. The payments have not been started and now the Board wants to include this amount in the new Special Assessment 2021.
- Hurricane Insurance claim settlement check #33251 was received in the amount of $1,314,562. Payments to MERLIN LAW GROUP PA for $495,394 and HURRICANE FUND BAL for $546,206 were deducted from that amount. Therefore, the correct figure of insurance claim is now $275,482 (as opposed to $1,314,562 in your presentation).
- Interest income on collected Special Assessment payments is reported in total of 9,157.
Expenses total, according to Balance Sheet is $22,563,500 (You presented total expenses $938,000 less, only 21,625,663).
The amount of Special Assessment money left is: $23,017,400 – $22,563,500 = $453,900 (contrary to your claim of cash available $1,617,101). This fund needs to be explained in details by the board.
I also would like to note that the amount of Special Assessment 2017 for every unit owner according to his share in the property amenities was calculated from the total amount of $15,000,000. In reality, withdrawals from the credit line totaled only $10,000,000.
Therefore, unit owners who paid the 2017 Special Assessment in full, already overpaid their share of the loan. The other unit owners with monthly payments will overpay the total amount by the end of the loan term. This is not the only example of the board neglecting unit owners’ interest. The board behaves very ignorant, never confirms receiving any communications or any emails from the community members, and does not answer them. The board always rejects unit owner’s proposals and offers as well.
Mr. President, you also mentioned in your letter how hard the board wanted to be transparent in all dealing. This is simply not true. Until last week, none of the financial reports have been posted on the website. The two pages of Balance Sheet attached to every meeting agenda is not understandable to a person without accounting skills. Our treasurer V. Rocha never talked about Special Assessment overruns and always mentioned that we are in a good shape (not in red) in regards to collecting maintenance money. The Board during last five years practically was bathing in money, overspent significantly, and suddenly, out of the blue came up with a new Special Assessment of $14,000,000 with refinance, followed by $9,400,000 without refinance.
Why does this board like to take loans-credit lines? These instruments are very expensive. We have already paid for opening Bank Popular Lines of credit (we have two LOC) $19,760. In addition, total loan interest paid by community is already $1,485,500.
The new Proposed Special Assessment project list represents only estimates and wishful thinking. Nobody explained to unit owners emergency condition of any items included in the Special Assessment New projects totaling $2,439,800.
2.5 million credit line is already financed for 15 years with a good 4.6% interest rate. There is no need to include it in the new proposed Special Assessment.
A mystery item of Overages 2.6 million needs to be detailed explained and seriously discussed.
Reserve Contributions of 1.8 million should be excluded from Proposed Special Assessment breakdown since unit owners voted against Reserves in 2021 and it is also against the condominium law (Condominium Statute 718) to fund reserves by a loan.
I also have to remind the board that 2017 Special Assessment 15 million credit line have a balance of 7.5 million. Currently, 7.5 million is still available to withdrawals as needed. Therefore, the funds for every current new project could be taken from the existed 2017 credit line after specifications have been done, bids received, and contractor selected. These new projects are not needed to be taken all concurrently
In my opinion, the bottom line is:
THE PROPOSED NEW ASSESSMENT IS NOT NEEDED.
Eugenia Aulov-Volchek. Unit 802N, email@example.com
Sway in Amsterdam. A moment of enchantment.