We are in the closing months of our budget year … November and December. Like any business these months your management typically wears two hats each with it’s own certain degree of apprehension.

The first apprehension we have arises out of a desire to control the short-term performance of our community so that the results of operations can be reported more positively. Some analysts call this "window dressing" the financial reports … defined … "on the surface, make the numbers look good!" (Sometimes designed to keep the stockholders/homeowners off our backs!)

Management’s second-hat-apprehension arises out of a desire to position the business to start a new calendar year with an up-beat positive outlook for the long-term performance of the business. (Yes, you guessed it … also sometimes designed to keep the stockholders/homeowners off our backs!)

Oddly, at this single point in time, it’s really too late to do anything significant in the short-term and predicting the long-term future is fraught with uncertainties that only add fuel to our apprehension. So, what to do? Answer: We devise a plan … for us, a budget.

Later, in this meeting, your Board of Directors, through me as your Treasurer, will be presenting to you our budget plan for 2007. But first, let’s put on our short-term hat and determine if 2006 is on track.

Our preliminary income/expense statement for October is reporting a deficit of $2,283, which is in marked contrast to the $8,245 surplus we reported in September. Yikes! You may remember my remarks back on September 12^th when I published that exceedingly long Treasurer’s Report in which I made the following projection for the remainder of 2006:

That projection remains as true now as it was 8-10 weeks ago. That deficit I mentioned materialized here in our October financial reports and it was partly caused by the cul-de-sac resealing project completed toward the end of September and paid for in October. In addition, we paid ½ deposit toward the installation of the lighted fountain in Lake H (a project to be completed soon), payment of the tree-trimming project at the Acline Road and Sweetbay wall, and significant legal expenses associated with the foreclosure lawsuit, which we will continue to pursue. Most of the legal expenses will be reversed once Star Management finalizes the October financial reports. Legal expenses and related costs incurred in connection with enforcing covenants and covenant restrictions are reimbursable to the association at the conclusion of the lawsuit. Sadly, over 97% of late Monthly Maintenance Fee’s are now represented by just one foreclosure lawsuit, which is currently being litigated by our attorney’s. I’ll have more to say about legal expenses later in this Treasurer’s Report.

Some other expenses came in unfavorable in October for the following reasons; Newsletter expenses because we paid two months expense in one month, but is offset with Advertising Income; Resident of the Month expense because we negotiated a 20% discount if we purchased 6 months in advance, so this short term unfavorable will turn into a long term favorable; Pool Rental in the month is unfavorable but by year-end will exactly equal budget; and, Activity Committee Expense due to expenses associated with the Fashion Show which is more than offset with Activity Committee Receipts.

The Reserve Fund continues to be the source of our financial strength. As such, it is also the part of our financial statements that we should understand more completely. Understand not in the manner in which we calculate the numbers, the line items, and the dollars allocated, but in its shear existence and size. The Reserve Fund is our investment in the future success and stability of Seminole Lakes. It is an absolute quantifiable measure of our ability to maintain ourselves in the manner in which we have become accustomed. Think about that!

The gyrations we go through to calculate and allocate our reserve dollars are far less important in the overall scheme of things than the ultimate use of these dollars sometime in the near and/or distant future. As we are established as a non-profit organization, Florida Statues provide for the optional establishment of these reserves, Federal Tax Codes accommodate the concept, and Seminole Lakes Property Owners Association takes full advantage of these provisions for our own safety, security, and the physical well being of our community.

The Reserve Funds report attached to the report, with all it’s gyrations and numbers, has one important message to deliver. That message in these numbers includes these important facts:

Personally, I don’t know how you feel, but I do know for a fact that some condominium and homeowner associations are seriously concerned about how they’re going to justify and pay for $5, $10, $15, increases in their quarterly common area maintenance costs, and, they contribute not one red cent to a Reserve Fund that even if it existed would have zero dollars in it!

I said earlier that I’d have more to say about our legal expenses. I also quoted earlier from my lengthy September Treasurer’s report. At the risk of being criticized for being "wordy" in my reports again, allow me to quote another portion from this same report and try to bring home a message more clearly.

Do You Remember This? That pointing dude was my self-created "Phantom Inquisitor":

It is important for all of us to understand that our governing documents provide for and requires your Board of Directors to enforce the provisions in these documents and collect from an opposing homeowner, for benefit of the association, all costs associated with any successful effort in this regard. This ability to collect additional attorney’s fees, interest, recording fees, appraisal fees, administrative costs and/or, any cost remotely related to a case in point, is not limited to just foreclosure lawsuits for failure to pay Monthly Maintenance fees. It can be for any issue, which is disputed between any homeowner and the Seminole Lakes Property Owners Association, Inc. In such cases, your Board of Directors is the Seminole Lakes Property Owners Association, Inc.

Because of this it becomes not a question of whether we want to travel this road, it is a fact that, however frivolous an issue may be, the board must enforce the provisions in our governing documents.

Now I don’t want to end my report on a seemingly negative note. So, looking ahead, for the remainder of 2006, we have the following non-recurring projects and associated costs anticipated. The Seminole Lakes Country Club sign and wall at our front entrance will be power washed, refurbished and painted by our Maintenance Committee, we’ll make the final installment on the Lake H water fountain, and that will become operational, a project may be approved to improve the appearance of a common area, the previously approved purchase of benches will likely occur, and a small project for the possible relocation of our legal notice bulletin boards. There are several other proposals that are in the early stages of a research and justification effort, but those seem to have a 2007 timetable.

Respectfully,

Al DiSessa

Director Treasurer

Seminole Lakes Property Owners Association