MINUTES OF THE REGULAR MONTHLY MEETINGOF THE BOARD OF DIRECTORSSEAL BEACH MUTUAL TWELVE

October 10, 2019

The Regular Meeting of the Board of Directors of Seal Beach Mutual Twelve was calledto order by President Carson at 9:02 a.m. on Thursday, October 10, 2019, in theAdministration Building, Conference Room A, followed by the Pledge of Allegiance.

SHAREHOLDERS' COMMENTS

Several shareholders made comments.

ROLL CALL

Present:

GRF Representative:

Guests:

Staff:

MINUTES

President Carson, Vice President Andersen, SecretarySprague, Chief Financial Officer Ferraro, Director Milek,Taylor and Mortesen

Ms. Findlay

Four shareholders of Mutual Twelve

Ms. Meacham, Stock Transfer ManagerMr. Antisdel, Building InspectorMs. Senske, Recording Secretary

President Carson asked for any corrections to the Regular Meeting Minutes of September12, 2019. Upon a MOTION duly made by President Carson and seconded by DirectorMilek, it was

RESOLVED to approve the Regular Meeting Minutes ofSeptember 12, 2019, as written.

The MOTION passed.

BU I L DING INSP ECTOR'S REPORT

Following a discussion, and upon a MOTION duly made by President Carson andseconded by Vice President Anderson, it was

RESOLVED to approve the bid from Pinnacle Landscape for rain guttercleanout, not to exceed $4,400.00, $9.71 per apartment, to be charged tolandscape extras, to be completed by November 15, 2019, and authorizethe President to sign the proposal.

The MOTION passed.

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BUILDING INSPECTOR'S REPORT (continuedl

It was the consensus of the board to approve the work order to MJ Jurado for $1,100.00to repaint twelve stop signs in the carport driveways on Glenview and Twin Hills.

Following questions, Inspector Antisdel left the meeting at 10:01 a.m.

GRF REPRESENTATIVE

Ms. Findlay presented the GRF Monthly Report.

Following questions, Ms. Findlay left the meeting at 10:19 a.m.

UNFINISHED BUSINESS

There was no unfinished business to discuss.

NEW BUSINESS

Following a discussion, and upon a MOTION duly made by President Carson andseconded by Chief Financial Officer Ferraro it was

RESOLVED to accept the September 2019 financialstatements as reviewed per California Civil Code Section5500 (a)-(f) for audit as presented.

The MOTION passed.

Following a discussion, and upon a MOTION duly made by President Carson andseconded by Chief Financial Officer Ferraro, it was

RESOLVED to approve the 2020 Seal Beach Mutual No. TwelveBudget Report and Policy Statement as presented.

The MOTION passed.

Following a discussion, and upon a MOTION duly made by President Carson andseconded by Chief Financial Officer Ferraro, it was

RESOLVED to accept the CliftonLarsonAllen LLP Engagement Letter forthe 2019 audit and authorize the President to sign the letter.

The MOTION passed.

2

NEW BUSINESS (continued)

President Carson appointed Chief Financial Officer Ferraro (Chair), DirectorMilek, and Director Mortesen to the Executive Committee that will work ongoverning documents.

Following a discussion, and upon a MOTION duly made by President Carson andseconded by Vice President Anderson, it was

RESOLVED to approve the Mr. C's Towing Agreement for the towing ofvehicles when there is a violation of Mutual Policy, effective 2019-2020,andauthorize the President to sign the agreement.

The MOTION passed.

SECRETARY/ CORRESPONDENCE

Secretary Sprague had no correspondence.

CHIEF FINANCIAL OFFICER'S REPORT

Chief Financial Officer Ferraro presented her report, (attached)

MUTUAL ADMINISTRATION DIRECTOR'S REPORT

In Director Hopkins' absence, Ms. Meacham presented the Mutual AdministratorDirector's report.

ANNOUNCEMENTS

NEXT MEETING: Thursday, November 14, 2019, at 9:00 a.m., Mutual AdministrationBuilding, Conference Room A

COMMITTEE REPORTS

Emergencv Coordinator Reporta. Secretary Sprague discussed the Great Shakeout

Physical Properties

a. Vice President Anderson presented his report

DIRECTORS' COMMENTS

Several Directors made comments.

SHAREHOLDERS' COMMENTS

One shareholder made comments.

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ADJOURNMENT

There being no further business to conduct, President Carson adjourned the meeting at11:34 a.m. and announced there would be an Executive Session following the meeting todiscuss member issues.

(

(UM.Attest, Rose Marie Spra^ue, StecretarySEAL BEACH MUTUAL TWELVEds: 10/10/19Attachments

NEXT MEETING: Thursday, November 14, 2019, at 9:00 a.m. AdministrationBuilding, Conference Room A

SPECIAL MEETING ANNOUNCEMENTS AND AGENDAS ARE POSTED INLAUNDRY ROOM 57 (D SIDE). FOR INFORMAL INDIVIDUAL NOTICE OF SPECIALMEETINGS, CONTACT SECRETARY SPRAGUE OR EMAIL PRESIDENT CARSONAT RICH.CARSON0)MUTUALTWELVE.ORG

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RESOLUTIONS IN THE REGULARMONTHLY MEETING OF October 10, 2019

10/10/2019 RESOLVED to approve the Regular Meeting Minutes of September12, 2019, as written

RESOLVED to approve the bid from Pinnacle Landscape for raingutter cleanout, not to exceed $4,400.00, $9.71 per apartment, to becharged to landscape extras, completed by November 15, 2019 andauthorize the President to sign the proposal.

It was the consensus of the board to approve the work order to MJJurado for $1,100.00 to repaint twelve stop signs in the carportdriveways on Glenview and Twin Hills.

RESOLVED to accept the August 2019 financial statements asreviewed per California Civil Code Section 5500 (a)-(f) for audit aspresented.

RESOLVED to approve the 2020 Seal Beach Mutual No. TwelveBudget Report and Policy Statement as presented.

RESOLVED to accept the CliftonLarsonAllen LLP Engagement Letterfor the 2019 audit and authorize the President to sign the letter.

President Carson appointed Chief Financial Officer Ferraro (chair),Director Milek, and Director Mortesen to the Executive Committee thatwill work on governing documents.

RESOLVED to approve the Mr. C's Towing Agreement for the towingof vehicles when there is a violation of Mutual Policy, effective 2019-2020, and authorize the President to sign the agreement

5

1

3

4

5

6

218

222

227

285

288

290

292

329

351

352

353

388

389

390

456

457

492

493

497

503

506

507

524

529

531

A B C D E F G H I

MUTUAL: (12) TWELVE)

UNIT # DESCRIPTION OF WORKGRF/CITY

PERMIT

START

DATE

COMP.

DATE

CHANGE

ORDERFINAL INSPECTION

10-I HEAT PUMP BOTH 09/04/19 10/31/19 NO NONE NEAT WAVE

10-I SKYLIGHTS BOTH 09/23/19 09/27/19 YES NONE HADI

41-D COUNTER TOPS BOTH 08/20/19 10/30/19 NO 10/01/19 FINAL GRECO

43-D KITCHEN CABINETS BOTH 08/30/19 03/30/20 NO NONE LW DÉCOR

46-I FLOORING GRF 06/05/19 11/10/19 NO NONE LW DÉCOR

56-H KITCHEN REMODEL BOTH 07/08/19 11/30/19 NO 09/19/19 FINAL ACE MAINTENANCE

56-I TILE AT PATIO GRF 09/11/19 11/11/19 NO NONE ACE MAINTENANCE

62-B FLOORING GRF 09/20/19 09/21/19 NO 09/21/19 FINAL ALEXANDER FLOORING

71-I FLOORING GRF 08/30/19 09/30/19 NO 09/26/19 FINAL KARYS CARPET

72-D TILE AT PATIO GRF 09/05/19 10/05/19 NO 09/26/19 FINAL KARYS CARPET

72-E TILE AT PATIO GRF 09/05/19 10/05/19 NO 09/26/19 FINAL KARYS CARPET

GREY AREAS HAVE BEEN SIGNED OFF

NMI PLI NBO FI COE DATE ROF

8-D 05/30/19

8-K 05/29/19

35-B 05/24/19

38-H 05/23/19

42-A 09/09/19

42-L 04/19/19 09/19/19 09/20/19 10/04/19

45-D 06/28/19

56-D 07/16/19

57-A 09/09/19 09/23/19 09/30/19 10/14/19

Escrow Activity

INSPECTOR MONTHLY MUTUAL REPORT

JERRY ANTISDEL

MUTUAL BOARD MEETING DATE:OCTOBER 10 TH

PERMIT ACTIVITY

CONTRACTOR / COMMENTS

INSPECTOR:

10/2/2019Print Date:

1

3

4

A B C D E F G H I

MUTUAL: (12) TWELVE)

INSPECTOR MONTHLY MUTUAL REPORT

JERRY ANTISDEL

MUTUAL BOARD MEETING DATE:OCTOBER 10 TH

INSPECTOR:

10/2/2019Print Date:

532

533

534

535

537

542

546

547

548

549

554

570

571572

595

808

809

810

811

874

882

896

921

58-G 09/13/19

59-F 03/22/19

62-E 04/11/19

62-F 03/22/19

64-A 11/02/18

69-J 12/04/18

71-K 06/24/19

72-K 09/13/19

73-F 03/28/18

73-H 12/04/18

GREY AREAS HAVE BEEN SIGNED OFF

Contract Services Project DescriptionFENN TERMITE AND PEST CONTROL CONTRACT GOOD UNTIL 2020

FENN BAIT STATION REPORT

EMPIRE PIPE CLEANING CONTRACT GOOD UNTIL 2020

PINNACLE LANDSCAPE MONTH TO MONTH

ROOFING STANDARDS WILL START BLDG.43 AND 47 OCTOBER 21ST

BUMPERS AT END OF CARPORTS STANDARS WOOD INSTALL $725.00 EACH END $1,325.00 WITH COMPOSIT MATERIAL

Site Visits52

FI = Final Inspection FCOEI = Final COE Inspection ROF = Release of Funds

NMI = New Member Inspection PLI = Pre-Listing Inspection NBO = New Buyer Orientation

CFO REPORT REGULAR MEETING - October 10,2019

The Mutual 12 Financial Review Committee recently met and reviewed the August 31, 2019 detailedfinancial statements and accompanying information, as required. Additionally, each member of theBoard of Directors has received a copy of the full report for their individual review and comments. Acopy of the Financial Statement Recap for August 31, 2019 is attached to this report.

Most of you are aware of the 2020 Budget numbers that are effective January 1, 2020. Since I havereceived a few telephone calls on this subject, and for those who may not know, here is a breakdown ofthe approved $10.30 increase:

Mutual 12 Operating costs $3.87 (Primarily due to Property and Liability Insurance)Mutual 12 Reserve Funding 1.52 (Required funding)Mutual 12 Increase $ 5.39GRF Trust Costs 4.91TOTAL INCREASE $10.30

In addition—remember that your real property taxes are included in your monthly assessments and willmore than likely increase each year as allowed by law. Plan accordingly!

The numbers: Cash in the Bank:

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Reserves:

AppliancePaintingRoofingInfrastmcture

$ 330,076 (Operations)

$ 34,192$ 169,784$1,938,897$ 16,056

Emer/Contingency $ 294.294

Total Reserves $2,453,223

Reserve Commitments: $ 932,133 (Contract Payable-Roofmg, Other)

Shareholder Receivables $ 34,896There are 3 shareholder accounts in excess of $1800 that are 30 days or more past due. One of those accounts was paid in

fall in September in the amount of$ 17,631, so receivable were reduced by half. The second is an ESTATE account forlegal fees to be paid upon transfer, and the other account is an ESTATE that owes for assessments/carrying charges. Theseare being closely monitored.

Operating Income and Expense Notes:

Mutual Income:

Mutual Expenses:

Mutual Excess Income:

Respectfully submitted,

^^^ 7^U^^J>Susan FerraroMutual 12 CFO

$ 21,591$ 19.301

$ 40.892

Positive variance from BudgetPositive variance from Budget

P.O. Box 2069Seal Beach CA 90740

1012 Seal Beach MutuatNo. TwelveFinancial Statement Recap

08/31/2019

Page: \

\

AugActual

AugBudget

2019Y^NDActual

2619Y-T.DBudget

115,66260,808

176,470

115,66260,808

176,470

Carrying ChargesReserve Funding

Total Regular Assessments

925,299486,460

1,411,759

925,296486,464

1,411,760

2,63515,331

17,965

194,435

1,6142,342

3,956

180,426

Financial IncomeOther Income

Total Other Income

Total Mutual Income

22,47430,766

53,240

1,464,999

12,91218,736

31,648

1,443,408

71,50615,019

35922,46611,97260,808

182,130

12,306

8,899

3,406

71,50614,2921,582

22,6099,628

60,808

180,425

1

0

1

GRF Trust Maintenance FeeUtilitiesProfessional FeesOutside ServicesTaxes & InsuranceContributions to Reserves

Total Expenses Before Off-Budget

Excess lnc/(Exp) Before Off-Budget

Depreciation Expense

Excess lnc/(Exp) After Off-Budget

569,24297,6016,935

171,53792,324

486,460

1,424,099

40,899

62,880

(21,981)

572,048114,33612,656

180,87277,024

486,464

1,443,400

8

0

8

(2,520)6,654

35,5450

(71,337)

00000

Restricted ReservesAppliance Reserve EquityPainting ReserveRoofing ReserveEmergency Reserve EquityInfrastructure Reserve

34,192169,783

1,021,313294,294

1,508

00000

(31,658) 0 Total Restricted Reserves 1,521,091 0