TREASURER’S REPORT
2009 ANNUAL MEMBERSHIP MEETING

Last month I reported that 2008 preliminary Results of Operations would result in a deficit of approximately $41k compared to our plan of a $36k deficit. The main reason for the difference was legal expense related to Semlak lawsuit previously mentioned by Bob in his report. This overage will be accommodated in the 2009 budget insuring our two-year plan to return surplus cash balances from the operating fund will not be impacted.

We have been busy with our Auditing firm to finalize required year-end adjustments. These adjustments are mostly necessary to make sure we get expenses and revenues occurring at the end of the year into the appropriate years results. It is the way we make sure that all the t’s are crossed and i’s dotted. I met with our CPA last Friday and, while he was not able to furnish a final audit, I am able to furnish you with anticipated adjustments. First, the audit will be issued without any exceptions or recommendations. It is a clean audit with no problems. Year-end adjustments will increase the size of the 2008 deficit by about $10K. These items are non cash flow related however so they will not effect our two year plan to return cash surpluses. Major adjustments are 1.) Transferring an invoice ($7600) for legal fees in process into 2008 from 2009. This invoice was submitted and paid in January 2009 but technically belongs in 2008 results. It has no effect on our two-year plan since it only switches from one year to the other 2.) We determined it was prudent to reserve an additional $5000 for Bad Debts based on the dismissal of a Chapter 13 Bankruptcy filing by a resident with past due assessments. This is also a non cash flow item and will not affect our plans. 3.) $3800 in income tax expense will be moved to the Reserve funds to account for the tax effect of interest earned on Reserve CD’s. I won’t go into the details of tax liabilities for POA’s, however if you have an interest I’ll be happy to meet with you.

Reserves for major capital repairs and replacements remain appropriately funded in accordance with statutory requirements and Board policies. These reserves exceed $540k at year-end and, coupled with our insurance coverage’s, ensure that the Association is well positioned to handle future major cash needs without the need for special assessments.

We anticipate the finalized audit to be available in the next two weeks. If you would like a copy, please contact Star Management.

While we start 2009 in good financial condition with our plans for the year on schedule, the year will not be without challenges given economic conditions in the community. Your Board will continue to aggressively pursue past due assessments and assert our rights in foreclosures and bankruptcies in order to protect the financial interests of the community.

Respectfully Submitted

Nick Cole

Treasurer Seminole Lakes Property Owners Association