Two Letters from Corkey & Noni Eley

Since this letter was sent the "condensed" version has arrived in some homes in Third Mutual. Mine arrived on the 18th of November. The first letter:

Milt Johns, Gerneral Manager
Janet Price,

As of November12, 2009 there has not been an Operating Budget
mailed to the homeowners of Leisure World/Laguna Woods Village.
WHY? The Amendment to the Trust dated April 6, 1964 states the
Operating Budget should be mailed 60 Days prior to the beginning of
the fiscal year.

The Amendment to the Original Trust dated April 6,1964 under
number six (6) of the Terms of this agreement states:"Golden Rain
shall operate and manage the improvements and provide
administrative, recreational and medical services for the benefit of the
members of the Cooperatives and their successors in interest at cost
and on a nonprofit basis. The cost thereof shall be included in a monthly
carrying charges charged on a pro rata basis to the members by their
respective Cooperatives. Not less than sixty (60) days prior to the
beginning of each fiscal year GOLDEN RAIN shall prepare an
operating budget setting forth its estimate of the cost of operating
and managing the improvements and providing the other aforesaid
services desired for the ensuing year and shall cause copies of same
to be delivered to the members of the Cooperatives or to the
Cooperatives for delivery to their members. The estimated cost
shall include administrative expenses, operating expenses, utilities,
hazard insurance, taxes and assessments, interest and amortization,
and a reasonable contigency reserve. Golden Rain in its capacity
as Trustee of the Golden Rain Foundation Trust shall maintain
and repair the Improvements for the benefit of the Cooperatives
and their successors in interest at cost and on a nonprofit basis and
shall prepare and deliver cost estimates for such maintenance
and repair in the same manner and such costs shall be charged in the
same manner as provided above for operating and managing costs
Such cost shall include resonable reserve for replacement and
renovation.

Unless the homeowners purchase the RED BOOK, they have
no idea what the Operating Budget for Leisure World/Laguna Woods
Village is ($95,000,000 plus). It is time for PCM and GRF to mail a
Complete Operating Budget to each homeowner in this nonprofit
senior citizen homeowners association,
Sincerely yours,
Corkey and Noni Eley

The second letter:

Re: Article 5 of 2007-2011 Management Contracts between PCM
and the four corporations (PCM, Third, United & Fifty of LWV)

Questions have arisen regarding Article 5 of the Management
Contracts between Professional Community Management and each of
the four Corporations (GRF. United, Third and Fifty) who manage,
operate and maintain Leisure World/Laguna Woods Village. Article
5 is printed below.

Article 5, Fee. Agent shall be paid, as its sole compensation for
all services performed hereunder, a fee payable in advance on the first
day of each month in an amount, exclusive of all surcharges, determind
on the basis of the total number of dwelling units in Mutual
under management by Agent as of the last day of the preceeding month
as follows:
(a) Said fee shall consist of a monthly charge in the amount of
$1.80 per dwelling unit.
(b) Said fee shall be adjusted annually for each succeeding year
by the same percentage as the All Urban Consumer Price Index
(CPI) of the United States Bureau of Labor Statistics for the Los
Angeles - Riverside, Orange County Metropolitan Area/. Such annual
re-computation shall be based on the July to June CPI increase or
decrease but not to exceed eight percent (8%). Should the variation
in the CPI exceed eight percent (8%) the fee set herein shall be
reopened automatically and subject to renegotiations. Such fee
adjustments shall be budgeted and become effective as of January 1
of the succeeding year.

After reading Article 5(b), the question that needs to be answered
is: Was there a minus two point six percent (2.6%) decrease in the fee
paid to the Agent on the 2010 Operating Budget? The Consumer Price
Index (CPI) for the Los Angeles-Riverside, OrangeCounty, Ca. based on
the July to June CPI was minus two point six percent (2.6%)

There should definitely be a decrease in the fee paid to the Agent
on the 2010 Operating Budget based on the Consumer Price Index
(CPI) as per the Management Contracts between PCM and the four
Corporations Article 5(b).
Sincerely yours,
Corkey and Noni Eley