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| SUN LAKES LIFESTYLES | JULY 2016 | 7 From the Treasurer By Dan Comerford, Master Board Treasurer A few changes to the report format – Profit/Loss have been changed to Surplus/Deficit. We now have five months of Balance Sheet data in the rolling window – some items to note: In April, based on audit adjustments, both the Capital Improvement assets and equity were increased by about $500K due to capitalization issues between the auditor and the HOA. These adjustments are completely on the books now, and we have a draft capitalization policy in review by the Board, PCM and the Auditor. The Board will discuss - and probably act – to move more funds from the prior year category into Reserves. Interest rates are so low. The overall operational surplus grew again this month – a significant driver of the continuing underrun is the less than expected salary expenses in all labor categories except one. We experienced another decline in interest income – interest rates are very low as has been the case for a long time – so bad in fact, that the Reserve Cash and cash equivalents grew by only $682 this month. In the HOA arena, significant variances were noted in the landscape area (down by$73K YTD), Maintenance Expense (down by $15K YTD), Property Protection (down by $11,260 YTD), while normal utility water was up by $31K YTD). The Golf area of operations had less of an overrun than was anticipated. Some specific areas of significant variances are as follows: Revenue down by $31K YTD, irrigation water up by $16K YTD, and Maintenance Repairs down by $22K YTD. We can expect water/irrigation costs to increase as the warmer weather arrives. Golf revenue continues to be down due to less play. Guests and individual play continues to be less than anticipated. Expenses are down primarily to timing of fertilizers, etc. The F&B operation had a good month for revenue, due to more diners using the restaurant and the increase in the menu prices. Expenses are down, primarily due to vacancies in the kitchen area. These cost reductions will continue until staffing changes. One last note on the prior year surplus – audit adjustments allowed us to move another s$160K to prior year surplus – as noted above, the Board intends to move these funds to Reserves as soon as possible. Please direct comments and/or questions to me via mainder01@ gmail.com.

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