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| SUN LAKES LIFESTYLES | JUNE 2020 | 3 From the President's Desk By Sandra Moyer Welcome summer and some normalcy! Before I address the changes made at the time of this writing, I want to introduce the newly elected Board Members. They are Bob Walter, Frank DiNucci, and Marsha Midgett. Congratulations to all! Changes are made frequently, either by the Riverside County Health Dept. or by the Governor. Now in addition to golf, tennis, paddle & pickleball, we were able to open the pools with certain guidelines. These are posted on the SL website, Good Day Sun Lakes, and SL Facebook. Please be aware that opening these activities cost the Association more financially than normal because of the need to have monitors, disinfecting materials to wipe down shared touched areas, bathroom and showers, as well as protective equipment for the employees. I have had requests to reduce our HOA assessment to cover the time of closed facilities. In response, please read the "Memorandum" (at right) from our legal counsel. Food for thought: It isn't what you have, or who you are, or where you are, or what you are doing that makes you happy or unhappy. It is what you think about. ~ Dale Carnegie You never know how strong you are until being strong is the only choice you have. ~ Bob Marley SUN LAKES COUNTRY CLUB HOMEOWNERS ASSOCIATION MEMORANDUM TO: Members, Sun Lakes Country Club Homeowners Association FROM: Board of Directors, Sun Lakes Country Club Homeowners Association DATE: May 1, 2020 RE: Impact of the COVID-19 Emergency on Association Finances Some members of the Association have inquired about the Association's "savings" from the closure of some Association facilities required as a result of the COVID-19 emergency. In response to these inquiries, the Board wanted to explain the Association's circumstances to the members during this unprecedented emergency. While the COVID-19 emergency has reduced some Association expenses, other expenses have increased for the Association. The financial obligations of the Association to maintain, insure, repair and reserve for the common facilities have not been reduced. The Association's management costs, private patrol, gate staffing, accounting and legal fees have not been reduced. In accordance with California law, the Association uses an annual budget to set the Association's assessment level. If the Association's expenses are less than estimated in any fiscal year and the Association's income was as budgeted, the Association adjusts the next year's budget to account for the year-end surplus. The contrary may be the case if the Association's expenses are higher than estimated or the Association's income is less than estimated. The COVID-19 emergency has been a trying experience made more difficult by the commencement of an economic recession. The depth and longevity of the recession are impossible to know at this point, but high rates of unemployment imply a deep, lasting recession. Recessions lead to increases in assessment delinquencies in the HOA industry. Sun Lakes has been fortunate to have a stable, conscientious population of homeowners who diligently manage their own financial affairs and pay their obligations to the Association. However, if the current recession leads to an increase in mortgage foreclosures, the Association's rights to claim assessment liens will be of little value to the Association because mortgage lender foreclosures will wipe out the Association's subordinate security interest. Accordingly, assessment collections may fall. It always has been and remains vital to the Association's successful operation that members pay their assessments in full and on time. As the Sun Lakes CC&Rs state: "All Assessments shall be payable in the amount specified in the levy thereof and no offsets or reductions thereof shall be permitted for any reason, including without limitation, non-use of the Association Properties…" (Sec. 9.19 of the CC&Rs recorded in 1987.) The Board of Directors and management staff are closely watching the Association's finances, its expenses and income as the current emergency unfolds. Those circumstances will be taken into consideration by the Board in setting the budget for the next fiscal year and adjusting the assessment level to fulfill Sun Lakes' obligations to levy "assessments sufficient to perform its obligations under the governing documents…" and the law. [Civ. Code §5600(a).] The Board cannot modify the assessment level mid-year based only upon short-term expense reductions; it must continue to focus on prudent long-term financial management. The support and understanding of the Association's membership is sincerely appreciated.

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