December 1, 1995

Dear Fellow Owner:

On behalf of the Board of Directors of The Lauren I am pleased to present a comprehensive financial package for 1996. In addition to the standard enclosures (the adopted budget, payment coupons and accompanying envelopes) this mailing includes a 5 Year Reserve Plan for the association. Salient points such as projected capital expenditures and related contributions to reserves as well as estimated operating expenses and projected condominium fees form the backbone of this report. Also attached is a glossary of technical terms for all capital expenditures being considered that has been rewritten in layperson language.

Before going into detail on financial matters it is important that one change in administrative procedure be brought to your attention. Specifically, to reduce chances of bookkeeping error all condominium fees should be sent directly to The Lauren. Payments sent to Dubin & Associates will be forwarded unprocessed to the Association's business office.

Overall operating expenses for 1996 are expected to increase 3.0 percent over 1995, closely matching the Cost of Living Index change. The notable line item exceptions are natural gas and property/pool insurance. Gas expense will rise as the building shifts to a single fuel cost. This increase pales in comparison to costs related to replacing, and subsequently monitoring, the underground oil storage tank as confirmed by an independent consultant. Insurance reflects both carrier wide premium increases and the added cost of a separate pool policy. This additional policy obviates the need for lifeguards and thereby significantly reduces pool operating costs while increasing pool availability.

Major capital expenditures during 1996 include the following.

• Hallway renovation will begin this spring.

• The leaking hot water holding tank will be replaced by a system that is both compatible to single fuel usage and more energy efficient than that currently in place.

• Steps are already underway to eliminate the potential liability of the underground oil storage tank by closing it in a manner approved by regulatory agencies.

• Other energy/cost saving devices that will be installed should significantly reduce both electric and water consumption.

In view of the costly nature of 1996's capital expenses, reserves will drop $12,000 even with the condominium fee increase of 5.8% that is integral to 1996's budget.

This year's rise is the last in a planned series of mid range condominium increases that began in 1991. That year, faced with exceptionally high expenses and scarce funds, the Board commissioned a capital reserve study. The resulting report recommended a reserve level of between $1 million and $1.5 million and suggested an immediate increase of 25 percent. While recognizing the need to increase revenues and reserves, the Board that year chose instead to initiate a series of smaller annual increases in the 5 to 9 percent range. As a result, the overall financial health of the Lauren is stronger today than at any time in this decade. Nevertheless, capital reserves remain weak and continued priority should be given to their improvement.

As the enclosed Capital Reserves and 5 Year Capital Reserve Plan indicates -- and barring totally unforeseen events -- the financial health of the Lauren can be maintained for the remainder of this decade with fee increases that approximately mirror Cost of Living/Consumer Price Index changes.

Sincerely,