November 27, 2001

Dear Neighbor,

The most difficult time for your management board is the fall when we must decide how to spend your money for the next fiscal year. This year is especially difficult for many reasons which include ongoing repairs to chimneys in all four phases and under-funding of the operating budget for the last several years. I will attempt to explain the reasoning behind the painful steps the board was forced to take at the November 3 FMB meeting.

How did it happen?

Over the past three or four years we have endeavored to repair the increasing number of deteriorating chimneys. Unfortunately, the minor repairs attempted were insufficient to correct the problems as crumbling continued. We hired an engineering firm, Noblin Associates, to evaluate the condition of all our chimneys and to recommend steps necessary to correct the problems.

In their first evaluation, they chose different styles of chimneys to ascertain what would be involved in making repairs. They found that there was a difference in the way each phase's chimneys were constructed. Those in most immediate need of reconstruction were found to be in Phases Three and Four. The FMB decided to immediately repair and/or rebuild the thirty-one worst following the engineers' recommendation as well as to evaluate steps needed to completely deal with the "chimney problem" at Sea Pines.

As repairs progressed, we learned that some of the chimneys needed less work than was expected, and unfortunately, others were in need of much more work (total restoration). We decided to fund this initial step with a $300,000 special assessment experienced by all this past September.

The recommendation for the rest of the project is to rebuild or repair approximately another thirty chimneys over the next two years. To prevent further damage, other chimneys would be capped per Noblin's outline in the hope of extending their lives for at least four to seven years.

How do we pay for it?

The FMB as well as many homeowners wrestled with various options. The Board felt that the course chosen, while painful in the near term, will cause less suffering in the long term and will not impact negatively upon property values. Therefore, it will be necessary to have another special assessment of $300,000 effective January 1, 2002.

One half of the repairs will be performed in the spring of 2002 with the remainder being done in the spring of 2003. To minimize the effect on all our budgets, we will offer to those interested the option of spreading the payments over a twelve month period. One twelfth of your total will be due each month beginning with your January 1, 2002 payment. Additionally, we have established a reserve for future chimney repairs, which will be funded each year by a portion of your regular monthly maintenance fees. This should insure that future special assessments for chimneys will be unnecessary.

Monthly maintenance fees will be rising by 14%. I truly understand that this is an unexpected blow. The reasons for this double digit increase are as follows:

All of these intentions will serve to increase our appreciation of Sea Pines as well as our property values. I know it is unfortunate, but in the last twenty some odd years this is only the third special assessment we have experienced. While our monthly fees are being increased substantially this year, Sea Pines is still the best investment on Cape Cod.

At this holiday season, please accept my warm wishes for a healthy, happy and prosperous New Year. I look forward to warm weather, sea breezes and seeing all my neighbors and friends in 2002. (This may not be a double digit number!)

Sincerely,

George Levitt
Chairman FMB

P.S. Included with this letter is the amount of your new fees as well as a copy of the 2002 operating budget.