In July we paid our outside accountants for the certified audit of our 2005 Financial Records. Legal Fees are also running in excess of budget and the board is cognizant of this performance and will become a bit more judicious in activities involving legal opinions. Last month the board adopted the policy of deferring expenses associated with our pending Foreclosure Lawsuits, and that resulted in $1041 in legal fees being re-characterized into the related account in Maintenance Fee Receivables. Gate Maintenance expense also came in significantly over budget due to a lightening strike at the Acline Road gate. Most of this expense is covered by our insurance claim, which is also reflected in our July statements albeit in a different account. Those were the significant negative variances in July. The remaining expense accounts came in favorable enough so that our bottom line performance was roughly breakeven showing only a deficit of $693.76, bringing our year-to-date surplus down to $59,725.70.

In recent months I have been reporting our concerns with our Maintenance Fees Receivables. That is, those Maintenance Fees that are 30, 60 and for a few over 90 days old. In the world, our receivables at the end of any month should be zero! Everyone’s Maintenance Fee Receivable is set up on the 1^st then paid on the 1^st leaving a zero balance on the 2^nd. Unfortunately, at the end of July we have 30 homeowners who have not paid either some or all of their July fee and of these 16 have not paid their June fee; and of these 9 have not paid May.

This situation presents a dilemma for the board. The hard line approach to this situation is to record a "Claim of Lien" against the property, which causes is an immediate $200+ in recording and legal fees, sometimes a lot more. This all happens after the homeowners have been notified with two collection letters. This past month Star Management made a significant effort to get to the bottom of this performance. Sherry will be reporting on the results of this effort as part of this meeting’s Management Report.

There were no charges against the Reserve Fund during the month of June. The fund balance at the end of July is $404,753.22 and includes the increase provided through our July Maintenance Fee contributions. For those that get deep into the details of our numbers, Star Management adjusted individual line items in the Reserve Fund during the month of July to reflect the funding levels adopted by the Board of Directors in the revised budget effective May 1^st.

In summary, we remain "on target" relative to our spending plan. Our financial position remains strong, and our outlook for the remainder of the year is favorable.