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from the treasurer Operations Summary: The financial plan for the Association anticipated expenses to exceed income by $91,972 in August (a summer month, irrigating, etc.). In actuality expenses exceeded income by $184,033, an increase of $92,061. The reason - $106,238 of unbudgeted expense related to the purchase of a foreclosed home on Wailea and to the Breckenridge lawsuit (more information on these items below). Eliminating these two items would mean the HOA improved on the budget by $13,366. The end result, however, is that the HOA is now short of the plan for the eight months by $237,128 . Except for these two items the expectation is that the plan will still be met by year end. Non-Operations: Property transactions jumped back in August (with 18) and the total for the eight months is 126 (almost 16 per month). Separately, interest income continues slightly ahead of last year's monthly average. HOA: The HOA now has $55,700 of unbudgeted expense on the books related to the Breckenridge drainage lawsuit. The award money of $600,000 is in the bank and the HOA has requested another round of bids from prospective contractors with the bid opening scheduled for Oct. 1. Should the winning bid come in under $600,000 the HOA will use the surplus to write-off an equivalent amount of the $55,700. The HOA has purchased a home on Wailea Beach Drive. The HOA had a lien on the home for delinquencies and the mortgage holder foreclosed. The HOA placed a bid on the home to protect its interest and it was the only bid submitted. The net result was the Association acquired a home with a market value in excess of $300,000 for approximately $100,000. The plan was to sell the home and in fact the HOA had a cash offer for $300,000. It was learned that title insurance companies will not immediately By John Clark, Master Board Treasurer issue title insurance on foreclosed homes within community associations. Discussions with the Association's attorney determined the best course of action would be to rent the home until such time a clear title was available (two+ years). The home is currently rented. Although not the original intent, the rent on the home will yield about 10 percent on the Association's investment. By comparison, the Association just reinvested $1M in CD's (one year maturity) with a yield of 0.5 percent. Golf Operations: Golf was positive to budget by $12,098. The amount charged to HOA Landscaping for work on common areas was $28,000 more than planned. Offsetting a portion of this was reduced income from play. Food and Beverage: F & B also was positive to budget ($2,002 for the month and $41,791 for the year). All income categories within both the Restaurant and Lounge operations came in better than plan. Expense was up primarily due to the extra labor to handle the extra volume. Funds: Total funds decreased by $121,420 for the month. Major Reserve expenditures included $22,500 on the MCH veranda and $57,000 for the on-going Sandwedge renovation. Capital improvement expenditures included $168,500 for the veranda. The negative variance for the month of $184,033 reduced the Home Owner (HO) Equity. Homeowner delinquencies: As of the end of August, there are 159 homeowners (up 10) more than 30 days delinquent on their accounts owing $136,077 (up $953). Of these, 101 (down 22) owing $115,921 (down $8,654) are more than 120 days delinquent. Finally, an interesting thought: Opinions are the cheapest commodities in the world (Author unknown). Enuf: Comments, etc., to jdclark@dc.rr.com. community news | sun lakes lifestyles | october 2013 | 5

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