1. 8/16/7Residents Voice Meeting1 “Following the Money” 8/16/2007 Conrad Grundke On the Trail.....

2. 8/16/7Residents Voice Meeting2 The Money Trail (Cont): The Last Episode: 2007 Update on Credit Card Data Aug 1 GRF Special Meeting Bonus & Incentive Plans This Episode: Audit – WHY/WHAT? History of LW (leisure World) Guidelines/Policies/Management Agreements The Future

3. 8/16/7Residents Voice Meeting3 Audits Purpose of Financial Audits: 1.“Yearly” Audit is a “Balance Sheet” Audit –Ensures that Balance Sheet figures were derived from acceptable accounting standards. –These companies all passed yearly audits; GM, ULHM, Starbucks, TLHM, IBM, Enron, GRF, WorldCom, etc. 2.“Forensic” Audit is a “Detailed” Audit “creative” –It can locate “creative” bookkeeping. –Could –Could prevent such accounting problems as; Enron, WorldCom, Tyco, Global Crossing, etc.

4. 8/16/7Residents Voice Meeting4 History – 1960’s Ross Cortese Leisure World Build LW Resales Sell PCM Maintenance

5. 8/16/7Residents Voice Meeting5 Evolution of PCM 19642008 Maintenance Land Development %OFEFFORT%OFEFFORT

6. 8/16/7Residents Voice Meeting6 Determining Controls via Management Agreement ACTUAL Money Spent Knowing WHERE spent CONTROLS

7. 8/16/7Residents Voice Meeting7 The Future - Guidelines, policies, & controls ACTUAL Money Spent Knowing WHERE spent CONTROLS RESULTS

8. 8/16/7Residents Voice Meeting8 DescOne TimeAnnualYearTo Date Prop Tax1,500,000550,00020052,600,000 Fed Tax600,000250,00020012,100,000 State Tax500,00050,00019961,050,000 Grants400,0002000400,000 Emerg Access Rd950,0002007950,000 Landscape Staffing480,00019927,200,000 Cable TV850,00020033,400,000 Wrkr Comp350,00019944,550,000 Hi-speed Internet500,00020051,000,000 Composting225,00019923,375,000 Why would we need controls with the following savings !

9. 8/16/7Residents Voice Meeting9 PCM Cost Savings (Cont) DescOne TimeAnnualYearTo Date Gate Clearance200,0002006200,000 Nursery185,00019903,145,000 Recycling130,00019941,690,000 In-house Interior70,000200670,000 Total3,950,0003,840,00031,730,000

10. 8/16/7Residents Voice Meeting10 Let’s create a simple Budget Assumptions: –No Growth Fixed Amount of Facilities –No Additional Service Levels

11. 8/16/7Residents Voice Meeting11 A simple projection $259 3% CPI Increase

12. 8/16/7Residents Voice Meeting12 Let’s review the actual $259 3% CPI Increase 3% CPI yearly Increase! 4.2% Cost Saving! $90 mil budget and we save $3.8 mil Where should our actual be if we have a 4% cost savings per year ? What happened to the savings? Actual

13. 8/16/7Residents Voice Meeting13 Ask Your Candidate! Support Forensic Audit? Understand Ledgers? Renegotiate Contract?

14. 8/16/7Residents Voice Meeting14 We return to the major ingredient between the Owners & PCM? TRUST

15. 8/16/7Residents Voice Meeting15 How do we get it? Measure & Verify

16. 8/16/7Residents Voice Meeting16 A Success Story Beginning In 1987

17. 8/16/7Residents Voice Meeting17 Nebraska California or Bust

18. 8/16/7Residents Voice Meeting18 Reaching Paradise

19. 8/16/7Residents Voice Meeting19 Community Activities United Board Room Committee Rooms

20. 8/16/7Residents Voice Meeting20 Business woman/editor Jan’s Exterminating Co.

21. 8/16/7Residents Voice Meeting21 The (Ex)Terminator The “Voice”

22. 8/16/7Residents Voice Meeting22 Jan’s guarantee Eliminate from: Home LWV Community Board Meetings LW Globe Articles Any future : Residents Voice Infestation! PCM Rodents will be protected.

23. 8/16/7Residents Voice Meeting23 Jan’s Promise ! Yearly Cost for this service will be a minimal: 1% of Yearly Budget Not to exceed $900,000

24. 8/16/7Residents Voice Meeting24 The End