October 10, 2008- as of 2:36 PM EST

Message from the Pointe West Condominium Owners Association
Frequently Asked Questions:

1. Have the services of a public adjuster been retained by the Condo Associations?

The board of directors from both Pointe West Condominium Associations have contracted with International Risk Control (IRC) to provide support services in the filing of Hurricane Ike Insurance claims. IRC will provide a full scope of services beginning with documenting extents of damage to final settlement negotiations. To date IRC has utilized the services of estimators, engineers and hygienists in the process to compile a report that will be submitted to the Condominium Association Insurance carriers. The estimating portion is scheduled to be completed by October 17, 2008 and is part of a process that includes moisture mapping, thermal imaging, and digital photography to determine extents of damage. Based on several onsite meetings and conference calls with the Association’s insurance wind and flood adjusters the first insurance interim payment could arrive within a month.

2. How will the damages to the condos be paid for?

Neither of the Associations has been in existence for an adequate period to establish a reserve that would cover a major reconstruction. Thus the Associations have submitted insurance claims to the Associations’ flood insurance and windstorm insurance carriers for the damages resulting from the hurricane. Due to items such as deductibles and damage defined as out of coverage areas, the homeowners will be responsible for the incremental costs. These costs will be determined after all reconstruction related items have been analyzed and appropriately allocated, and determination of insurance coverage has been made.

The costs not covered by insurance for each Association will need to be addressed through a special assessment of all unit owners within the Association. While the final amount of assessment will be determined only after all insurance coverage issues are determined, the Association will present an initial estimate of the special assessment amount at the Joint Condominium Association Meeting that is set to occur on November 1, 2008, as discussed in question 19 below.

There are immediate costs related to roof wrap, electrical repairs and waterline repairs that are being funded from the reserve accounts until the interim insurance payment is received. The Associations are also exploring loan opportunities if the interim insurance payment is not received before invoices are due payment.

3. How are decisions made and who makes them?

The condominium owners are represented by two separate Associations, the Baywater and the Villas Associations. All contract decisions are approved based on a vote from the Board of Directors. One condo owner has recently been appointed to each of the Associations.

The Villas at Pointe West are represented by:
Joe Castillo, Susan Smith, Todd Erickson and Elizabeth Heckathorn.

The Baywater Condominium Association is represented by:
Joe Castillo, Tom McKinley, Elizabeth Heckathorn and Todd Erickson.

4. Have the roof repairs been completed?

The first line of defense after a storm event is to secure the buildings from additional damage. Thus flexible roof wrap was applied to a total of 24 buildings for over 100,000 square feet. The next step will be to seal balcony ceilings and siding with permanent repairs. The Associations are in the bid process to provide the permanent balcony ceiling repairs. All precautions are being taken in order to mitigate further damage and to monitor our construction costs. The Associations anticipate the permanent repairs to start within the next two weeks if funding is appropriated.

5. Why is it taking so long to determine the damage in my condo?

IRC is using forensic methods to catalog the damage within individual condos. The Association must prove that the damage within each condo of the non- homeowner components occurred as a result of wind damage from the hurricane. IRC is applying scientific methods to determine the path of a water particle as a result in the failure of a building component such as a window seal or ceiling. The methods include moisture mapping and thermal imaging, which are not visible to the naked eye.

This level of analysis is necessary to ensure that the Associations maximize their position in terms of insurance coverage, since the windstorm policy for each condominium building contains an exclusion for what is known as a “wind driven rain”. IRC’s analysis is intended to refute where possible an assertion by the insurance carrier that particular damage would not be covered because of the wind-driven rain exclusion, by demonstrating that the water intrusion resulted from covered wind damage.

6. Will I see a report on the damages within my condo?

Yes. The information is being compiled by both the general contractor and IRC and once the reports are finalized, you will be provided a copy.

7. Has the condominium building insurance coverage been defined in terms of how much of the interior of the units is covered by the association versus the owner?

On behalf of the Associations, IRC has submitted a written interpretation of coverage to the Association’s windstorm insurance carrier. The position that IRC argues is that the Association policy should be interpreted to cover the interiors of individual condominiums, except for personal property, which IRC believes is supported by the language in the Condo Declarations, Insurance policies and the Texas Condominium Act. At this time the Board of Directors has not received a final response from the insurance carrier. Once the insurance carrier’s position has been received by the Association, an update will be provided to all condo owners.

8. When will water and sewer service be restored to the condo buildings?

The City of Galveston has restored water service to the community. However, damage to the water, sewer and fire sprinkler lines occurred during the storm, which is prohibiting the Association from turning water on to the condo buildings. The Association is capping off all breaks in the water system until permanent repairs can be scheduled. Also, electrical power will need to be restored to the external water pumping facilities that provide water pressure to the condo buildings. The long-term repair of these items will be scheduled once the appropriate funding has been secured from the insurance companies and allocated among the critical reconstruction projects.

9. When will electricity be restored to the condo buildings?

Using national crews CenterPoint has restored electrical service to the majority of the subdivision. The Association retained the services of an electrical engineer to review the main disconnects and meter enclosure located in the garages to determine if any damage had occurred and make recommendations for repair. The electrical engineer has submitted his findings to the board and upon review it has been determined that main disconnects and meter enclosure need to be replaced prior to restoring power. The Association has contracted the scope of work and is anticipating that the work will start late next week. The Association anticipates that power will be restored to all appropriate condo buildings within 3 to 4 weeks, this could fluctuate depending on material delivery.

The electrical engineer, electricians and IRC have all advised the Association that turning on the electricity in buildings prior to the replacement of the equipment would result in a significant risk of fire due to corrosion of the damaged equipment, which if turned on, could create sparks that would cause fires within the building. A number of other structures in Galveston have been damaged or destroyed post-hurricane due to fires for similar reasons, and the Association Board has determined that taking such a risk is not in the interest of the Association or its owners.

10. Are expenses related to repairs and post hurricane cleanup being tracked separately from the association’s normal operating expenses?

Yes, the Associations are tracking all temporary repair work (i.e. roof and patio sealing, capping plumbing, etc.), security services and cleanup/debris removal separately to insure accurate reporting to the insurance company for reimbursement.

11. Are the structural foundations of the condo buildings being inspected for possible damage?

Yes, we have general contractors and forensic engineers reviewing the foundation and structure of the buildings.

12. Are the elevators and fire suppression systems being inspected to determine extent of damage?

The Associations have contracted with elevator and fire suppression companies to perform an assessment of the equipment, which is set to start next week.

13. Can homeowners begin water intrusion and mold repairs to their individual units?

Water intrusion and mold remediation repairs must follow strict guidelines set forth in the Texas Statutes. If the work is not performed in accordance with these statutes and the Association’s standards, it could result in corrective action being taken by the Association at the owner’s expense and complications if condo is to be resold.

14. Do the condo associations have alternative options to pay for repair work while waiting on the insurance company to release funds?

The Association is working closely with the insurance companies to release interim claim payments so that some repair work can be completed. If this is not adequate to cover the immediate work that needs to be conducted the association will look into other funding sources such as loans.

15. Are quarterly dues still payable?

Yes, quarterly dues are still payable. The association continues to have normal operating expense that must be paid and funding to the reserve accounts must continue.

16. Is there phone service at the Resort?

Yes, phone service has been restored to the Beach Club. The main number is (409) 632-0616.

17. When will remediation measures start within the condominiums?

The Associations are reviewing bids from contractors to provide demolition services in accordance to IRC estimators and hygienist parameters. The Associations plan to review bids over weekend and provide contractor approval early next week. The schedules for remediation and construction are dependent on the required scopes of construction, available materials and manpower. All these items will be taken into account when determining the construction schedule for each building such that they are completed in the most expedient timeframe.

18. Who will manage the reconstruction?

Although the Board members of the Associations are responsible for overall supervision of the reconstruction effort, all of the Board members have full time obligations with their primary employer that reach outside of the Pointe West community. The Board members are already spending significant time coordinating the daily needs of the community, as well as establishing the strategy in regard to reconstruction and the required financial commitment from the Association.

The Boards are in the process of obtaining bids for general contractor services to undertake the reconstruction, who will be responsible for securing the necessary subcontractors and trades to complete the reconstruction. To assist the Boards in their oversight responsibilities and to best provide the Associations with the expertise and services it needs, the Boards are also seeking proposals for construction management services to provide assistance in review of scheduling, payment requests and change order approvals outside of original contract. Use of construction management services will ensure the necessary oversight over the reconstruction, while giving Board members the time to engage in the necessary forward planning activities that are also their responsibilities, including obtaining next year’s insurance policies, managing budgets and searching for funding alternatives.

19. When is the next Condominium Association meeting?

There will be a combined meeting for both Associations on November 1, 2008. Though the location has not been finalized, the Association is planning to have the meeting at Pointe West at 11:00 am. Advance notice of the meeting and the agenda will be provided.

20. How is PMG supporting this effort?

PMG continues to focus on the day to day management of Pointe West. They do not specialize in insurance claims and thus the reason that the Association has retained the services of IRC. They are supporting owners with their individual insurance claims and owners can continue to call them in regards to other normal operations.

21. How can homeowners participate?

The Association will establish a sub-committee of owners to coordinate with all condo owners as to schedules for remediation and reconstruction. The Association is in the process of defining the complete time and financial commitment. Once these schedules are defined the sub-committee will coordinate with condo owners.