Village at Cedar Ridge H.O.A.

Notes for 1999 Operating Budget

NOTES FOR 1999 OPERATING BUDGET

INSURANCE: Includes $1,000,000 basic liability, D&O Coverage, and $10,000 Fidelity Bond for the Board. Includes $25,000 building coverage for the gazebo. Policy with State Farm Insurance based on 159 lot coverage. 1998 Coverage was for only 100 lots.

ELECTRICITY: Three meters assumed. One for the gazebo lighting and any additional sprinkler time clock at the same meter location. Provision is included for two development entry monument lighting and landscaping locations if constructed.

WATER: Three primary meters for landscape only at the gazebo green space and the green space on 14rh Street, plus possible for entry areas or along 15th street.. Minimal or no water usage during winter months of November through March.

LANDSCAPE MAINTENANCE: Based on current landscape contract. Assumes from maps that there are no additional common areas in phase three. Includes labor and normal supplies.

LANDSCAPE EXTRAS: Costs assumed to cover sprinkler repairs, some potential plant replacement, fertilizers or enhancements as may be needed. No regular seasonal color planting included.

BACKFLOW VALVE TESTING: Annual required test by city. Cost estimated at $33 per valve for three valves.

MISCELLANEOUS EXPENSES: For administrative expenses, printing, postage and mailings, unforeseen minor cost, check printing and bank charges, etc.

PROFESSIONAL MANAGEMENT: Assumes quarterly assessment billings, monthly financial statements, accounts payable & annual budgets, monthly inspections of common areas. Miscellaneous costs of administration are extra and budgeted as Miscellaneous Expense. Budget represents revised contract for 159 total homes, but current cost (1998 Budget) is based on +/- 100 homes at current rates.

TAX PREPARATION: Annual state and federal tax filings by outside accountant.

PROVISION FOR LEGAL FEES: Legal reserve for enforcement of regulations and documents (CC&R's and Design Guidelines, etc.).

PROVISION FOR RESERVES: For future major repairs and/or replacement of common area items, principally gazebo structure of $200 per year and gazebo painting at $400 per year (estimated 3 year paint life with estimated repainting cost of $2,000), plus miscellaneous repairs for common areas.