DESTIN — A review of plans to offset costs associated with a multi-million dollar renovation of the aging Shoreline Towers condominium complex has sparked worries and calls for emergency action from members of the homeowner's association board.

Three members of the condominium's governing board learned at a recent meeting with Mike Kent, the president of Progressive Management of America, that its predecessors had obligated money from the condo's HOA reserve fund to offset assessments to owners for the estimated $20 million in renovations.

"To offset assessment costs and appease disgruntled owners at Shoreline Towers, it was decided to use all of these reserve funds through 2023," Shoreline Towers' Community Association Manager Dina Rosenau told owners in the memo.

Plans called for dipping into reserves for $700,000 for 2021, $650,000 for 2022 and $650,000 for 2023, the memo said.

"This means that there are no reserve funds held for maintenance and repair or emergency situations at our 40+ year old condominium complex," Rosenau said in the memo.

"This means that there are no reserve funds held for maintenance and repair or emergency situations at our 40+ year old condominium complex," Rosenau said in the memo.

Rosenau expressed surprise and frustration over the findings.

"Compromising current and future reserves of this association by misallocation of the resources required to sustain and maintain the Shoreline complex is wholly unacceptable," she said in the memo. "We are extremely concerned about the financial position of the HOA that we have discovered."

The revelations come as Shoreline Towers transitions from one governing board to another.

In February, residents succeeded in removing the majority of members from the homeowner's association governing board. Six of the seven members of the board of directors who approved funding for the renovation project were successfully recalled by order of a state arbitrator.

The recall effort was initiated last September, just as pre-construction inspections were being conducted ahead of the start of the costly project.

"Owners were exceedingly concerned about the overall lack of transparency and communication from the board, who began steadily increasing the estimated assessments without providing the owners with sufficient details about the multi-million-dollar project," said a news release from the law firm of Bernhardt Riley, which represented the group of owners against the former board.

The need for work on the condo, whose three high-rise buildings are 45 years old, is critical, a study by the engineering group O'Connell & Associates found. Kent said following the recall vote that the renovations would proceed as planned and approved by the outgoing board.

"If they're not done immediately there will be continued structural damage occurring at the complex," Kent, whose company is overseeing the work, said in an interview last year.

The list of projects is extensive, and initial plans called for work to get underway in mid-September and take up to 18 months to complete.

Included in the renovations are removal and repair of deteriorated or damaged concrete on balconies, walkways, stairway interiors and parking garages, as well as the removal and replacement of windows and sliding glass doors.

Rosenau declined to comment on the findings reported by the new board members. She referred questions about the content of her memo to Kent, who did not return several phone calls to his office.

According to Rosenau's memo, in their late February meeting with Kent, members of the new board also learned that several change orders to the project that were approved last year — including structural beams and coatings for the walkways — had not yet been funded.

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Rosenau called for emergency action and offered potential solutions to the condominium owner's predicament, including:

  • Risk leaving zero reserves for three years

  • Increasing HOA fees

  • Adding an eighth quarterly installment assessment.

  • Reducing reserves for three years by some amount, for example - $350,000.

A seventh quarterly installment assessment has already been approved to cover the costs of the structural beam change order, the memo said. The reduction of reserves to be discussed would result in under-funded reserves but offset some additional assessments to owners, it said.

"We have a fiduciary responsibility and obligation to the owners to be transparent stewards of the association and to bring matters to your attention as soon as possible, which we have done and will continue to do," Rosenau said in her memorandum. "Immediate attention is required on behalf of the owners to consider a decision going forward that best represents the association’s best interest."

The memo said Rosenau intended to call a special meeting to address "concerns with respect to Shoreline Towers’ ability to finance future maintenance and repair issues as well as emergency situations (like hurricanes) going forward through 2023."

It was unclear whether a the emergency meeting had been held and if any decisions had been made by the board.