Mutiny on the Park Sonesta Bayfront Hotel Shared Component Budget Line Item Definitions

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1 Mutiny on the Park Sonesta Bayfront Hotel Shared Component Budget Line Item Definitions Hotel Unit Maintenance Fee Hotel Units share of the condominium maintenance fees. This equals 12% of the total annual shared component budget. Residential Units Maintenance Fees The portion of the total maintenance fees paid by residential units. Each unit s share is specified in the condominium documents. Memberships Membership fees collected from squash club members Mutiny Hotel Easement Amount paid by the Mutiny Hotel for the rights to use 212 spaces in the garage. Commercial Garage Easement Amount paid by the underground commercial parking garage to cover such items as insurance, elevator maintenance and similar expenses. Miscellaneous Income from valet parking; income from late fees; other miscellaneous income. Management Payroll Salary of the Resident Program Manager: The Resident Program Manager is responsible for interfacing with the residential unit owners and attending to any of their needs as related to their Sonesta ownership experience. This person s responsibilities cover such activities as answering questions about the condominium; coordinating maintenance of units and special projects; coordinating and providing services requested by owners; administering condominium association and Board of Directors meetings. One third of the salary of the General Manager: The General Manager oversees all aspects of the condominium and hotel. This includes maintenance; security; cleaning; services & amenities; food & beverage; hiring and training; monitoring employee performance; compliance with regulatory requirements; accounting; marketing of the hotel and restaurant. The General Manager sets standards and ensures adherence to them. He is responsible for the retention of good team players and for inspiring everyone to perform to the best of their abilities. The General Manager holds a Florida CAM (Community Association Manager) license. He is also responsible for networking and being a liaison with community and governmental organizations. One third of the General Manager s Executive Assistant salary.

2 Accounting Payroll Salaries and wages of personnel that handles the condominium association s and shared components accounting functions. Duties include accounts payable, payroll, accounts receivable, compilation of financial statements, contract negotiations, and handling of legal issues. Information Systems Payroll 25% of the salary of the Information Technology Manager: This person is responsible for all computers, printers and computerized systems utilized by the property including internet access, HVAC management, security video monitoring, and all other information systems. Human Resources Payroll 17.5% of the total salaries for the Human Resources Department (Director of Human Resources, Human Resources, Manager, and Training Coordinator). This department is responsible for recruiting, training, counseling, performance appraisals, employee benefits, and legal issues related to employment. 17.5% is the percentage of all building employees that worked directly for the condominium and shared components. Repairs and Maintenance Payroll 75% of the salary of the Chief Engineer plus the wages of 4 ½ maintenance employees. These individuals are responsible for maintaining the shared component areas and all equipment associated with them. They are also responsible for routine maintenance in residential units such as air conditioning filter replacements, lock maintenance and small repairs. Front Office Payroll 50% of the Resident Manager salary: This individual is responsible for overseeing the departments of front office, housekeeping, security, valet parking, and food and beverage. This individual also performs the duties of General Manager in the absence of the General Manager. One front desk agent per 8-hour shift (i.e., 3 agent shifts per 24-hour period). One bellman shift per 24-hour period. Housekeeping Payroll One lobby attendant shift per 24-hour period: This person is responsible for cleaning the lobby, lobby restrooms, front entrance, entrance from lobby garage and elevators. One hallway attendant shift per 24-hour period: This individual is responsible for cleaning the hallways on floors 9 through PH, as well as the Fitness Center. 60% of the payroll of pool and recreational areas attendants: These individuals are responsible for maintaining the cleanliness of the swimming pool and surrounding deck, Grove Terrace, squash courts, 8 th floor corridors and 8 th floor public restrooms. 50% of the payroll of the night cleaners responsible for overnight cleaning of public areas. Consulting Cost of outside engineering firm which will conduct an assessment of future capital improvement needs as requested by the Condominium Board of Directors.

3 Management Fee The management fee is paid to the management company (Sonesta). The management company provides guidance, support and resources to the property s senior management team. In addition to this, the management company provides the credibility necessary for attracting the right talent to fill the condominium s and hotel s leadership positions. Condominium associations are often regarded as unstable and risky employers. The presence of a management company, especially one with a solid reputation in the marketplace provides employees and prospective employees an assurance of security and certainty. Security Cost of outside security company which provides the following coverage: Two security officers per shift (6 per 24-hour period), including working supervisor. There is no direct charge for supervision provided by the area supervisor and senior staff. Office Supplies Cost of office supplies, telephone and office equipment leases. Postage Postage for all correspondence to unit owners. Human Resources Part of non-payroll expenses associated with the operation of the Human Resources Department, proportionally allocated based on the number of employees who work for the condominium and shared components. Information Systems Cost of maintaining the hardware and software on information systems related to the operation of the condominium and shared component. This includes the purchase of supplies as well as maintenance. Licenses and Permits The cost of obtaining and renewing licenses required by the State, County and City for the operation of the condominium. This expense does not include the cost of permits related to the operation of the hotel. Legal Fees The cost of legal services provided to the condominium. Such services are primarily related to defaults in payments of maintenance fees, foreclosures, etc. Uniforms Cost of purchasing and cleaning uniforms of the employees who work for the condominium and shared component (17.5% of all employees). Uniforms Repairs and Maintenance Department Cost of purchasing and cleaning uniforms of the maintenance personnel responsible for maintaining the shared component and providing routine maintenance to residential units.

4 Bad Debt Funds allocated to a reserve account intended to recover maintenance fees owed by units that default on the condominium maintenance payments. Carpet Cleaning Cost of maintaining entrance mats and runners in various areas in the shared component; cost of shampooing the carpets of the Fitness Center and corridors twice per year. Garage Cleaning Cost of payroll of one employee who is responsible for cleaning the garage and waste disposal area; cleaning supplies; golf cart maintenance. Window Cleaning Cost of outside contractor to clean windows once per year. Health Club/Pool/Squash Courts Cost of supplies, maintenance contracts and repair services for the swimming pool, fitness center and squash courts. This includes the cost of licensed contracted swimming pool cleaning service and preventive maintenance service for fitness center equipment. Supplies Repairs and Maintenance Cost of supplies used in maintaining the share component areas and equipment there within, as well as supplies used in routine maintenance of residential units. Landscaping Cost of contract with landscaping service to provide and maintain plants in all exterior area planters; cost of interior flowers; cost of maintenance of irrigation system. Cleaning Supplies Cost of cleaning supplies used for cleaning of the shared component areas (i.e. chemicals, trash bags, brooms, paper etc). Security Systems Cost of repairs to security camera system. Elevator Maintenance Cost of maintenance contract with outside elevator service provider; cost of repairs to elevators; cost of required elevator inspections. HVAC Maintenance Cost of maintenance contracts with outside air conditioning systems provider; repairs to central chillers and cooling towers and air handlers and other air conditioning equipment for shared component areas. Fire Pump Maintenance Cost of annual inspection and repairs to the fire pumps that supply water to the standpipes and fire suppression sprinkler system.

5 Generator Maintenance Cost of maintenance contract with outside service provider and necessary repairs to the emergency backup generator. Fire Alarm Maintenance Cost of required annual inspections of smoke detectors, pull stations, fire alarm panel, fire extinguishers and other fire detection and suppression equipment; cost of repairs to such equipment. Pool Maintenance Cost of contract with outside licensed swimming pool maintenance provider Pest Control Cost of pest control service contract 2007 Supplemental Expenses Expenses incurred in 2007, which were unforeseen and therefore had not been included in the 2007 maintenance fees. Such expenses included repairs to the fire detection and suppression system; landscaping; energy; HVAC repairs; service training of all employees. Power 91.5% of the electricity for the building, excluding the 8 th floor and the ground level restaurant space occupied by Nikki Coconut Grove. Water 80% of water for the building Gas 50% of the cost of natural gas Trash Removal 75% of cost of hauling trash Cable Television Cost of cable subscription to cable television and internet service. Insurance Cost Employee Dishonesty Crime Coverage Boiler Insurance Umbrella Liability Insurance: the liability insurance provides coverage for all claims in connection with the operations of the building and the rental program. To provide seamless coverage the following parties are named insured in the policies: Management Company (Sonesta), Hotel Unit Owner (Mutiny), the Condo Association and Owners who placed their unit in the rental program. 25% of the premium is allocated to the hotel, the remaining of the premium is allocated between the share component and the individual unit owners who are part of the rental program. A formula is used whereby the unit owners in the rental program pay twice the amount paid by the unit owner not in the rental program.

6 Property Insurance: Amount charged for the building coverage. The portion of the premium relating to business interruption coverage is paid by the hotel.

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