Presidents Report_Diane Exter_Issue 05_210828

FRENCHMAN’S CREEK, INC.

President’s Report

Diane Exter, President

August 28, 2021 — Issue 5

Dear Fellow Members, I hope you and yours are well. There is much activity at Frenchman ’ s with prep arations in full swing for the fall season and our longer - term future. Over the last two weeks we received two reports on our clubhouse—a full club house mold assessment completed by Integrity Mold and a structural engineering re view completed by Jezerinac Group, which emphasized specific areas of concern. Both reports were sent to all Members on Monday, August 23 rd accompanied by sum mary notes. We then had a very important Board meeting on Tuesday, August 24 th where we discussed: • Specific issues concerning the health of our clubhouse building based on the mold and structural engineering reports. • Plans for relocating our staff and members to alternative facilities in the near term. • Incremental costs that are expected to be required if we are to complete a substantial renovation. The present estimate for a substantial renovation, without a West Terrace roof, is roughly $53,000,000. Based on these discussions, the Board decided to begin a parallel path of re - evaluating a new clubhouse, one that has a second - floor entrance similar to our current clubhouse. At the end of this letter there will be links to both the mold and structural engi neering materials as well as a link to the August 24 th Board meeting. I encourage those members who were unable to attend the zoom Board of Governors meeting to watch the meeting and/or review these reports, paying particular attention to the pho tographs. If you would like paper copies of the mold and structural engineering re ports, please contact the POA.

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FINANCIAL REPORT Herb Selzer, Treasurer, reported that the Community finished the first quarter with a positive variance of $57K as compared to budget; Club income being favorable to budget by $63K and the POA favorable by $28k. Expenses related to the Oceanview Church Agreement totaled $33K and are listed as an extraordinary item on the P&L. Proceeds from the forgiven PPP loan have been allocated between the Club ’ s Capital Fund and the POA ’ s Capital Reserve. Total cash balances exceeded $19M at month - end. As of the first four months of our fiscal year, we have four new member completed sales and three new mem ber pending sales. Despite the low in ventory (only 2 homes on the market), we continue to see a significant interest by prospective buyers. Realtors are building their wait lists. INTEGRITY MOLD REPORT Two plus weeks ago, Integrity Mold Inspections conducted a two - and a - half - day investigation covering 100% of the clubhouse. Gary Rose, the owner of Integrity, joined our Board meeting to answer questions. Below are some of the con clusions: • Gary stated that this was the worst condition our building has been in since he has been testing over the last 8 years. Mold and mildew have permeated many parts of our build ing and continue to grow and flourish in our environment. • The building currently is producing an abnormal amount of mold due to the well - known problems with the

building's HVAC system and numerous intrusion leaks from the roof, walls, win dows and other sources. "It's like hav ing buckets of water sitting throughout the clubhouse while you are dehumidi fying." • The Club has had 7 thorough investiga tions by Integrity over the past 8 years. Each report contained a specific proto col describing the minimum work nec essary to mitigate the mold situation. Seven years ago, we hired a licensed mitigation company to do the work. Since then, we have hired clean ing companies and then switched to in house services to manage the prob lem. We have invested hundreds of thousands of dollars in equipment and labor to do this work but, partly due to the seriousness of the issues, we have not succeeded in managing the ongoing problem. • Humidity levels have been measured daily throughout the building for the last several months. Buildings should be optimally kept at 45 - 55% humidity. Our clubhouse consistently has humidity readings above 65% in certain rooms and in some rooms over 70%. Gary confirmed that mold can grow in our building at humidity ratings above 65%. • At this point, until the HVAC system is fully replaced, the Club could invest hundreds of thousands of additional dollars in equipment, professional ser vices, cleaning and engineering staff time and Gary believes that the prob lems would only be temporarily remedi ated. It was the general view of the professionals, management, staff and Board members that it would not make sense to spend these incremental

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dollars at this time given the impending renovation. • The POA and back of house areas were tested thoroughly. Each room was opened and inspected. The con clusion was reached that the entire POA and back of house should be included in the substantial renova tion. • There were several Member areas where the mold could potentially be managed: Sports Bar, Sports Bar Kitchen, Main Kitchen, and the East and West Dining Rooms. The Lounge could also potentially be managed but should not be, given its proximity to the Living Room (which has structural is sues). • Plans are currently being worked on to move many of the Club's employ ees out of the building to alternative spaces. STRUCTURAL ENGINEERING REPORT In light of the recent Surfside condo minium disaster, an independent structur al engineering firm, Jezerinac Group, was hired to investigate and confirm the struc tural integrity of our building, including the many additions and modifications. The two - and - a - half - day physical in vestigation included three structural engi neers and Andrew Taylor, our chief engi neer. The investigation covered the entire building with a more detailed review (which included significant demolition) in areas of concern - the Living Room area off the Lobby (referred to incorrectly as the Library in the report), the main kitchen cooler area over the Men ’ s Locker Room, and the 19 th Hole ceiling underneath the Sports Bar.

Billy Raiola, a Principal at Jezeri nac Group, reported that based on a document review and field observations, the clubhouse is structurally safe for use (except for the Living Room and the ac counting and marketing offices directly below the Living Room), though sub stantial repairs are required in several locations. Most of the original building (built in 1987) appears to be in good condition. However, many of the addi tions and/or modifications to the building have created concerns. Further demoli tion is needed in order to expose those additional areas of concern. Below are details from the struc tural engineering report and subsequent discussions regarding their conclusions: The floor was not built in compliance with the structural drawings and shows extreme corrosion of the sup porting structure due to an unknown moisture source and cracking in both the finish flooring and the topping slab. This requires a full replacement of the floor. • The roof trusses were not framed in compliance with the structural draw ings. Two splices at the bottom of two girders were found damaged and were immediately shored. The wood trusses showed water damage and need to be either repaired or re placed. • The front wall of the library was not built in compliance with the structural drawings and is missing a large sup port beam. Additional analysis is needed to test and confirm the stabil ity of the front wall. The Living Room: •

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The only way to determine the final scope and budget of the sub stantial renovation is to either (a) thoroughly investigate the full build ing ’ s structural health now or (b) wait until construction begins and deal with the issues at that time. Choosing this second option requires signifi cantly higher contingencies to be built into the budget. • Relocating staff to other locations as quickly as possible. • Significantly restricting member usage of the clubhouse . Therefore, the club requires more complete interim facilities to properly serve the membership. Brett Handler presented a complete budget and plan to the Board to accommodate the in creased requirements. The new plan is for the current Tik ky - ball courts to be the primary site for our “ alternative ” clubhouse facilities. These facilities will include a 9,000 sq. ft. tent (with valet service and a space large enough to host events), restroom trailers for members and staff, three specially constructed container kitchens totaling 2,300 sq. ft. (for food served or delivered on campus), and additional office trailers for F&B staff, Purchasing, Human Re sources, Staff lockers and Staff dining. Six temporary Tikky - ball courts are being set up on tennis courts 1 and 5 as we wait for the needed permits to con struct the 8 new Tikky - ball/pickleball courts and the additional tennis court in cluded in the new site plan. ALTERNATIVE FACILITIES Based on the above, we are:

• The flat roof and cupula over the li brary show pooling of water. This may be the source of moisture noted above. Additional analysis is war ranted. The Kitchen Coolers and the Men ’ s Locker Room Ceiling: • A new cooler system was added to the kitchen 15 years ago, without an appropriate vapor barrier. Moisture from the coolers has saturated both the floor beneath the coolers and the ceiling of the men ’ s locker room. The effect has been constant leaks and a musty odor. Eighteen months ago, in an effort to stop the leaks, closed cell insulation on the under side of the locker room ceiling was installed. This ended the leaks but encapsulated the moisture in the ce ment. The concrete and metal struc ture is not designed for this type of continuous moisture. Additional test ing requiring substantial demolition of the kitchen and locker rooms needs to be performed. The 19 th Hole Ceiling and the Sport Bar Floor: • The galvanized trusses holding up the Sports Bar are discolored and have significant rust. The trusses need to be tested for structural capa bility and, at a minimum, need to be sandblasted and recoated. This issue stems from moisture intrusion from the Sports Bar above. The structure was not designed for continuous moisture and additional testing needs to be done.

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As you have read, professionals have been engaged to perform thor ough investigations and analyses of, among other issues, the extent of mold in the clubhouse and the club house ’ s structural integrity . Other areas that have been evaluated are the increases in building material costs , need for a more expensive HVAC system , the adequacy of the techno logical infrastructure , designs for the kitchens , hardscape and land scape costs , compliance with new building codes and, given all of the above, a need for a more robust con tingency . The negative impact of what has been discovered so far on both the budget and timetable for the project has been substantial. It is important to note that what we are discussing is on ly what we know . We continue to be concerned about what we don ’ t know and won ’ t know until more of the build ing is demolished. However, what we do know is that even without the roof over the West Terrace and any additional tem porary facilities costs, the Substantial Renovation is currently anticipated to cost roughly $53,000,000 . This is a very significant increase from the $40.8mm approved by the membership in February. The Committee understands that a building of this age, complexity and size could be renovated. However, the committee is concerned about the sub stantial, already revealed, deficiencies in the building and the additional defi ciencies that may be revealed as we continue this process.

The following staff are moving or have moved to their new spaces: • Accounting and Marketing have moved to the church building. • Engineering has moved to the golf course maintenance building. • The POA will relocate to the real estate building by mid - September. • The Pro Shop will relocate to a trailer closer to the driving range area. Members will still be able to contact staff members through their designated emails and telephone numbers and the POA Office will continue to provide ser vices at their new location. The total cost of the alternative fa cilities is projected to be just under $3,000,000.One million eighty - eight thou sand ($1,088,000) has been previously allocated ($800,000 for Temporary Facili ties under the substantial renovation budget and $288,000 reallocated from the Fitness Center atrium roof.) The bal ance will be funded from prior operating budget surpluses or from savings in oper ations, given the building will be mostly closed. The Board approved the plan, the budget, and the funding unanimously. Implementation is currently underway. CLUBHOUSE AD HOC COMMITTEE UPDATE The Clubhouse Ad Hoc Committee, chaired by Harvey Schulweis, has done a great deal of work to advance our knowledge with respect to the proper scope of the planned renovation of the clubhouse.

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kitchen consultants (Cheney Brothers, who have already been paid to com plete their work, which includes the tem porary kitchen) and Proctor (who will work with subcontractors to get more confidence in real, current pricing which will be valuable for either project.). During this time period we will move both the Substantial Renovation and the New, New Clubhouse plans for ward on parallel paths, with very limited dollars. On September 28 th, the Board will have a discussion on which project we should move forward to the mem bership. Lots to do between here and there. Please feel free to write me at President@Frenchmanscreek.com to share your thoughts with me. I find your letters very informative. I may not be able to answer every letter, but I read every letter carefully .

A PARALLEL PATH— RE - ANALYZING A NEW CLUBHOUSE Based on all that was presented at the board meeting including the mold report, the structural report, the need to move members and staff out of the clubhouse and the significant increase in the expected cost of the renovation, the Board discussed re - evaluating a new clubhouse, albeit one with a sec ond - floor entrance similar to our current clubhouse. The Board unanimously ap proved using $50,000 of the board des ignated funds to have Brian Idle of Pea cock and Lewis design a new, new clubhouse and present these designs to the board at our next board meeting on Tuesday, September 28 th at 2:30. As part of his process, Brian will be hosting four zoom calls before the board meeting to share his design ide as for a new, new clubhouse and hear feedback from Members. Most of the Renovation project professionals have been asked to put their work on hold until after the Sep tember 28 th board meeting, except our owners ’ rep (Gaudet Associates), the

Thank you.

Sincerely, Diane Exter Diane Exter, President President@Frenchmanscreek.com

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The Next Board Meeting is Tuesday, September 28, 2021, at 2:30 p.m. via Zoom To participate under “ Communications from Members, ” Please email your Question/Comment to the Board at President@frenchmanscreek.com – no later than September 27, 2021.

2021/2022 BOARD OF GOVERNORS

ELECTRONIC ONLINE VOTING Please complete your Consent Form and return it to the POA Office as soon as possible.

Officers: Diane Exter, President

Michael Azeez, 1st Vice President Robert Scherer, 2nd Vice President Robert Annunziata, 3rd Vice President Herbert Selzer, Treasurer Martin Krall, Secretary

Board Members: Stewart Friedman Michael Gianatasio

Jeffrey Glazer Brett Handler Ellen Malasky Krista Nicklaus Jeffrey Parker Gale Salz Harvey Schulweis

Thank you

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