May 1, 2006

Dear Village of Lake Tarpon Property Owner:

For a number of years the policy makers of the Village have struggled with the daunting task of maintenance and reconstruction of the community infrastructure, including: streets dock, waterways, recreational amenities and improvements, landscaping, entryways and storm sewers.  Unfortunately, the storm sewers and roadways continue to deteriorate faster than funds are available as well as the other areas of our community.  When funds are available only small areas can be added due to escalating costs.  Therefore, several months ago your Board of Directors appointed a “Funding committee” to investigate all the viable options available that could provide the revenue stream necessary to complete the work on a timely basis funded as close as possible at today’s rate.

The Committee, made up of residents like you, took their appointment very seriously.  They spent countless hours evaluating the project’s complexities and at the same time being mindful of all of our ever tightening budgets.  Early on, the committee came to the consensus that a Master Restoration Plan, funded by a “Special Assessment”, appeared to be the only reasonable answer, as delay after delay was only subjecting the project to tens of thousands of dollars in escalating costs.

There was considerable deliberation regarding the scope and the appropriate mechanisms for funding.  Various creative funding options were evaluated in terms of implementation difficulty, equity, political acceptability and the speed and reliability of each.  After all was said and done, and with consideration of the $885,000 that the current maintenance fee contributes annually towards the project the Committee has submitted the following proposal for your consideration.

   A Special Assessment, beginning August 1, 2006, in the amount of $2,100.

     Payable at $35/per month for 60 months or one payment of $2,100.

   Further, the Committee proposes to freeze the monthly maintenance

     fee at $73.23 per month for the sixty months of the assessment.

A separate bank account will be set up for the Special Assessment, which will primarily be used for the purpose of repairing the Village roadways and storm sewers, the canals and water facilities, the recreational area and improvements contained hereon and landscaping.

In approximately ten (10) days from this letter, you will receive another correspondence regarding the proposed Special Assessment.  In that correspondence you will receive additional information and a Limited Proxy for you to cast your vote.

We all have enjoyed the appreciation in the value of our homes over the past several years.  This Special Assessment is designed to insure that the infrastructure will not erode this value.  The Board recommends you cast your vote in favor of this Special Assessment.

   Together, let’s make sure our Village remains the best place in Florida to live.

For the Board and the Committee,

PMS MANAGEMENT SERVICES, INC.