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Finance Committee Meeting

December 13, 2006

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Objectives

Review interim cash reporting limitations

Review 1st and 2nd Quarter FY Performance Review Significant Variances to Budget

Forecast events driving performance for the

balance of Fiscal Year 2007

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Cash Reporting Limitations

Interim Financials based on Actual Cash distributions for the period

Quarterly reporting covers the period from April, 2006 through September,2006 and does not capture current pay the bills, as accounting entries not are

not made until after they are approved

Annual audits based on accrual basis, not cash basis, as requested

Cash Reporting has several key flaws:

Bills often lag well behind when service was rendered One invoice often covers multiple periods Monthly treatment will not match up with year end audited statements

This interim update is being provided consistent with Accountantsrecommendations for Quarterly review of expenditures

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1st Quarter Performance Summary

Favorable across all subtotals vs.budget

Significant favorable capitalvariance, primarily due to scheduletiming

Operating Unfavorable propertymanagement and interest expensesoffset by lower solicitor fees andadvertising expenses

Construction Management andArchitect fees also favorable;offsetting unfavorable businessadvisory fees and pre-openingexpenditures

Cash controls in place to matchcapital sources with uses

80.9%4.852M1.146MCapital

9.7%33,552381,183Net

OperatingIncome

6.6%17,229242,147Expenses

2.7%16,323623,330Revenues

%Diff.VarianceActual

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2nd Quarter Performance Summary

91.6%7.215M658,092Capital

-4.0%(35,160)846,590Net

OperatingIncome

-4.5%(8,954)205,800Expenses

-2.4%(26,206)1.052MRevenues

%Diff.VarianceActual

Slightly lower than projectedrevenues drive unfavorable NOIvariance

Significant favorable capitalvariance, primarily due to

schedule timing Operating Unfavorable building

utilities, surveys and advertisingoffset by lower solicitor fees andpublic relations

Special counsel fees unfavorable

as such expenditures wereunanticipated within the budget Other capital categories favorable

as cash controls in place tomatch capital sources with uses

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FY 2007 Forecast Variables

Access to Bond proceeds extended from May, 2006 to January,2007

Approximately $2.2M paid by RACL/PSP for Phase 1 work tobe recovered during January, 2007

Existing payables to be extinguished at bond remarketing Construction costs ramp up starting February, 2007 FY 2008 budget (forthcoming) will better capture current draw

schedule Advisory and Legal fees to be reduced during the construction

period Structured approach going forward with bank covenants and

controls

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Summary

Cash reporting methods pose limitations vs. accrualmethod employed by auditors

Matching capital sources with uses achieved

effective LCCCA cash management

Budgeted vs. Actual construction expendituresprimarily attributable to favorable capital budget

1st half FY demonstrates that a $9,883 unfavorablerevenue variance contributed to $1,609 unfavorableNOI variance (0.1%)