Member Questions Answered
As mentioned at the Annual Meeting we were unable to take questions during the presentation. However, the Board and leadership team have received great questions this week and appreciate your concerns, thoughtfulness and insight. Some questions were very similar however all have been answered below.
Q: While the presented cash flow forecast only projected through Sept 30, I want to confirm that our financial team has modeled cash flow through this operating cycle ending 11/30/20 and as well the full year ending 11/30/21 and that these projections support our financial health and decisions to continue capital projects vs postponing for one year to protect cash.
A: We’ve looked at projections through the end of the year based on what we know today. However, we believe we will have a much better picture in the next 90 days on what the model would like from a revenue and expense viewpoint; and could then better project through next season. In the next few weeks we will also know what amenities and services the State of Florida and Monroe County will allow us to open back up, which will impact projections.
Q: Did our financial team perform some sensitivity analysis including worse case scenarios (such as an extended pandemic and significant downturn in revenues) to confirm that cash flow will be adequate and not result in Member assessments through the current and following operating cycle?
A: Yes, Club leadership and Board have reviewed a number of worse case scenarios to ensure cash flow is adequate and not result in assessments. Please feel free to view the Annual Meeting on the Ocean Reef Club website.
Q: Have these financial projections been shared with Price Waterhouse?
A: Our Club projections have been shared with both the Club’s Board and the Financial Committee. We are fortunate to have experienced CEO’s, CFO’s and company turn-around professionals on our Board.
Q: Have you put Club construction projects on hold for 2020 until we understand the financial impact of this crisis?
A: The Club is moving forward with three key projects starting this month. This was discussed at length in our Annual Meeting. You can view the details and reasoning here oceanreef.com/AnnualMeeting.
Q: Could we be included on capital project decisions as a community of Equity owners? Our use of Club services provides the revenue and I was wondering if we could have a vote on a certain level, let’s say over $5 MM?
A: The structure of the Club’s governance provides the Board with a way to move forward on Capital projects that will suit the majority of Members. All of the current capital projects were part of the Club’s long-term master plan. That plan is further enhanced by the feedback from all Members as provided in the 2010, 2015 and now 2020 Census. That is why it was so important to hear from as many Members as possible. All of these current projects were well-supported by the Membership going back as far as the 2010 Census.
Q: Approximately how many external contract workers will be onsite to support the capital projects and how will the Club ensure that they don’t present an unnecessary risk to the Club Members and Associates? Will the contractor workers be required to wear protective equipment when entering and exiting the property to get to the construction sites and will the contractor be required to check their worker temperatures on a daily basis to essentially be cleared to work. Of particular concern, there currently is no vaccine or cure available and may not be for an extended period of time.
A: There will be numerous projects taking place at The Reef this summer between ORCA Welcome Center, the Chapel, and the three Club projects. Our plan is to limit the construction workers to their specific job sites; and we are working closely with ORCA and Medical Center on other best practices for construction workers on-site.
Q: The safety of the community should be paramount. Not profit.
A: Both Club leadership and the Board agree that the safety of the Club’s Members and Associates is paramount. We believe all the actions we have taken thus far have reflected that concern. To date, we have complied with all State and County Ordinances, and in some cases, have taken actions prior to those Executive Orders. We will continue to work closely with ORCA and the Medical Center to best safeguard the community.
Q: Is the Medical Center adequately stocked with the appropriate testing and treatment supplies for COVID-19?
A: Yes to testing supplies. Any care that requires hospitalization would not occur in the Medical Center.
Q: Is the Club considering providing and testing all Members and workers currently at the Club for COVID-19? Fisher Island has decided to implement testing for the entire community and many believe it would be beneficial to do the same at ORC.
A: There were two challenges with the Fisher Island testing. The first was that the test that Fisher Island implemented was a one-time trial, experimental in nature with a level of uncertainty in the results. Second, the backlash from the surrounding and medical communities for taking tests, however unreliable, away from those in the greatest need has not played well in the media. As much as we would all like to be certain, we are not currently planning on testing Members or Associates. Also, we are in close contact with the professionals at the Medical Center and will follow the advice on how best to proceed. They have been working closely with Baptist Hospital on this process.
Q: Why was Ocean Reef so slow to react verses other Florida clubs in protecting their members who are homeowners?
A: We are not clear with regard to what action might have been perceived as delayed. As one of the first clubs in Florida to shut down the restaurants to seated service and having done so long before any government requirement, along with closing of our Associate housing and removing our seasonal staff from the property starting in mid-March, we were on the front end of action within the club and hospitality industries.
Q: These are some questions and concerns that I would appreciate being addressed. Unfortunately, I see many Members going back and forth from other homes further exposing The Reef to additional infection [as per confirmed case #2].
A: We cannot prevent a Member from leaving or entering their private home.
Q: Since private flights and yachts, although greatly reduced, appear to continue using our Airport and Marina, what preventive/testing measures are in place to prevent/detect a passenger from bringing COVID-19 to Ocean Reef, aside from voluntary quarantine?
A: The Club does not offer nor provide random testing and medical professionals are being advised that due to a shortage of testing only those showing symptoms should be tested. We can tell you that the majority of the private flights at our Airport in recent weeks are Members departing the Club (not new arrivals) and that flights coming in/out of The Reef in the last 3-4 weeks are either Equity Members or their family.
Q: Ocean Reef sent an email stating that anyone who was not at Ocean Reef by April 4 should not come to The Reef. Since that time, planes are flying in and out daily. One must assume that new arrivals are happening via private plane. Why is the Airport still open?
A: The Executive Order does not say, “Don’t come to Florida after April 4”. It says if you do come from the tristate area or Louisiana you must quarantine for 14 days and comply with the Monroe County Health Department form. The Ocean Reef Airport is still open to Equity Members. Since the Governor’s Executive Order on Airports, we have only had two – four flights daily, and only three from the tristate area. Anyone who lands here is complying and has completed a Monroe County Health Department form. Most of the flights you see are here are to pick up Members who are departing.
Q: What measures are being taken to limit/screen arrivals by boat to the Club?
A: We have not rented any slips since the Governor’s Executive Order a few weeks ago. Only Equity Members who own Marina slips are able to access their slips and we present them with the same Health Department form that the Airport uses.
Q: On Saturday, April 4, 2020, Ocean Reef Club asked Members not already in residence not to come to the Club. Why then are visitors still being admitted? I refer specifically to the recent positive case of coronavirus, but also generally.
A: Equity Members are legally permitted to have guests at the home. The Club cannot legally restrict access. We continue to urge all Members to resist from bringing additional family and friends to The Reef. Also, the Club has complied with all the State and County Executive Orders on prohibiting short term rentals at the Inn, Vacation Homes, and Marina.
Q: Please explain especially in light of the NEW CORONAVIRUS positive test from an outside lab – not the Medical Center. Did this person leave The Reef and then return? Or did they arrive to The Reef with coronavirus? We have had only one positive for so long until this new positive test.
A: Unfortunately, the Club does not have specific information regarding the person that tested positive. Monroe County Health Department would be the ones speaking directly with that individual, and the County is not at liberty to share patient information with us. We agree that we have been very fortunate thus far, and hopefully we continue on this track.
Q: What action will the Club be taking against the individual that was diagnosed this week having arrived from New York for failing to report his diagnosis, social distance etc. and endangering the lives of all in our community?
A: Any positive result creates a heightened level of concern. However, there is no law requiring a person to disclose they are taking a test or that they received a positive result for COVID-19. We do not have access to any medical information, including who tested positive and that is the case with all medical records for all Members. Only Monroe County Health Department would have that information. We continue to urge Members to disclose if they are positive but we cannot legally require it.
Q: Who monitors anyone under quarantine?
A: Monroe County Sheriff’s Office, who is notified by the Department of Health.
Q: What are the Club’s plans for Summer Memberships and Social Members’ usage of the Club this summer? Has the Club considered allowing only Equity Members to utilize the Club for the foreseeable future. Many Equity Members currently here are not planning to return to their other homes as usual this year and are concerned with an influx of new people who have not been here recently.
A: The current plan is that once the Government lifts the “Shelter at home” orders, and Monroe County determines that it is once again safe to have short term visitors to the Keys; Social Members will have access to the Club as they typically do. However, the Club is reviewing potential changes like limited seating in dining venues and how to limit high volume areas. Right now, we are not clear as to how far off this reopening will occur.
Q: Given the virtual shutdown with no buyers around, would you extend the requirement to have an Equity on an unsold property for an additional year?
A: Real estate sales have remained good in March and April. That rule is designed to support Members and their lifestyle at the Club. Every situation is carefully reviewed and a number of factors are considered when reviewing for an extension.
Q: Will you be offering Summer Membership if quarantine restrictions are lifted?
A: We are still offering memberships – Equity, Social and Summer.
Q: Have you canceled the conferences for the balance of 2020 to protect Member homeowners?
A: There are no current plans to do so. However, we do not have conferences coming to the Club through June, and we do not anticipate many groups through the summer. Additionally, we will not be hosting conferences groups until we are very certain that the health and safety of our Associates and Members is not impacted.
Q: There was discussion of an Equity-only bar within the confines of the new Clubhouse. Will that still happen?
A: The Lounge Bar and CH Prime in the new Clubhouse will be available to Equity, Legacy and Social Members.
Q: My question is about the severe odor problem in the ladies’ room. Will that be addressed in the Ocean Room/Inn renovation?
A: Yes, absolutely. The restrooms will be completely redone in the Inn Lobby area.
Q: The channel side of the Gianni and Burgee building was damaged by Irma and not repaired. Is this on the list for repairs and general maintenance?
A: Yes, we have started those repairs already, and they are on a list for completion in the next 45-60 days.
Q: Not mentioned in the meeting was whether with the planned updating and construction of all projects a hurricane fund is set aside?
A: Yes the Board, has since before Irma, always “Reserved” $5mm of the cash on hand as a “cushion” in the event of another hurricane.
Q: Do you think summer camps will be offered this year if quarantine restrictions are lifted?
A: Our goal would be to have summer camps once the State and County restrictions are lifted. We would likely need to make some modifications. We want to make sure we are doing what we can to safeguard the children, parents and Associates as best we can.
Q: Will we have a playground with basketball someplace else? The playground was shaded and a nice place to entertain young grandchildren.
A: Yes, we have ordered a beautiful playground which will be located in the Reef Club Kids/Nature Center area; next to other kids games and animal viewing area. We agree the shade was wonderful, and we plan on offering that as well, along with a seating area for parents. The new basketball court will be located less than 100 yards from the previous one and constructed this fall.
Q: Can you give a date for our Club’s re-opening? There is a fine line between being overly conservative and getting life back to normal. This Virus will likely stick with us for more than a year. The country is beginning to reopen and I believe ORC should as well. Certainly during the month of May.
A: Unfortunately, we do not have a date yet. Our first step will be to see when the State and County lift their current requirements.