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| SUN LAKES LIFESTYLES | APRIL 2018 | 9 Treasurer's Report By John Clark BOTTOM LINE: This report covers the first two months of the year. Most homeowners are aware of the systems problems which have delayed financial statements. January was received a week ago and a portion of February earlier this week. It is presumed a normal schedule will return in March. In any case, the delays have prevented checking out several items in time to meet the publishing deadline. The available reports show that, through February, the Association is positive to the financial plan by $45,248. There are several caveats. First, it is always risky to predict a year based upon the first couple of months. Secondly, there are a number of expenses being checked where a correction, if needed, would impact February. NON-OPERATIONS: A total of 24 homes closed escrow during the period, against a plan of 27.2 homes. Master Architectural Committee members are investigating to determine who is planning on selling two tenths of their home. REVENUE: Revenue exceeded plan by $22,203 for the two months. The principal reason is golfers purchasing a large number of 30 play cards. It is reasonable to assume this will reduce over time, evening out in future months. EXPENSE: Big-ticket items were: • Labor expense is over budget by approximately $34,000 or 5.0 percent. The bulk of this ($24,800) is in the Food & Beverage operation. Initial review indicates that at least part of this is due to a posting error(s). • Furniture and Equipment expense was over plan by $10,500 due to purchase of equipment needed in support of the identification card project. • The Community Patrol service contract is under plan by $84,800. This is being checked and appears to be the result of delayed receipt of the final billing from the previous contractor and the initial billing from the new contractor (Securitas). As such, it should correct in March. • Supplies for the Community Patrol service were over plan by $14,408 because of the purchase of gate transponders to cover all 2018 requirements. This account should move back toward plan as the year progresses. • The monthly charge for cable TV is $41,033 over plan. This was a billing error by the provider and will be corrected in March. • Golf Course Improvements expense is under budget by $31,300 through February. This was caused by a delay in the billing of bulk shipments of turf amendments. • Irrigation water and power expense for the two months was $23,000 over plan or 28 percent. This was largely due to the high winds which dry out the grass requiring heavier irrigation. • The Cost of Food, a troublesome restaurant item in 2017, is on target with the increased plan adopted for 2018. TOTAL FUNDS: The total of all funds has increased by $363,800 since the beginning of the year, primarily due to low activity. ANNUAL AUDIT: A different accounting firm is conducting the 2017 financial audit of the Association. They made two comments, related to our operations, based on their audits of similar associations. The first related to the Food and Beverage operation. They stated that salary expense, cost of goods sold, and total revenue and expense, all compare favorably to similar organizations that they audit. The second comment, addressed cash and investment positions and again, they stated Sun Lakes compares favorably with similar associations. They did caution against further reductions in the Association's cash position. FINALLY, from Winston Churchill - You will never reach your destination if you stop to throw stones at every dog that barks. Comments: jdclark@dc.rr.com

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