The Stepping Stone Association Annual Meeting of Members March 6, 2012

Agenda Welcome and Introduction of Board Members Review Stepping Stone Property 2011 Accomplishments Landscaping Update Barn Update Financial Update Social Committee Update 2012 Plans Architectural Review Board Update Mail Box Painting Proposal Resident Concerns Election of new Board Members Provide New Directories

2011 Board Members and Officers Dan Strait - President Scott Fitzgerald - Treasurer Michelle Slisher – ARB Officers Susie Strait Jennifer Stouffer, Social Lisa Dawes, Social Sandy Sanford, Barn Pam Benson, Barn Trisha Jordan, Neighborhood Liaison Lisa Warner, Neighborhood Liaison

Stepping Stone Review What we own: 12.725 acres Large pond An additional 5.991 acres at the barn (18.716 acres total). In 2011 we leased an additional 5 acres for pasture. 13 stalls Indoor and Outdoor Riding Arenas Conference Room Two Bedroom Apartment

2011 Accomplishments The Neighborhood Street Signs were repainted and improved Routine Maintenance and Upkeep of Grounds, Barn and Apartment Community Newsletter and Directory Community Social Events Barn Improvements A shed was added which allowed for expansion of the Tack Room and the addition of stalls. This should increase our revenue. Drainage issues were addressed Barn and Apartment Maintenance

Landscaping Update - Maintenance, Flowers, Repairs and Pond Management Our landscape contractor, Brinkman, continued routine annual maintenance including planting spring and fall annuals and providing holiday decorations. Brinkman planted pine trees free of charge to replace pine trees damaged by a DuPont herbicide. We signed a 2 year lease renewal with Brinkman Regular maintenance of lighting on roadway at entrance Regular maintenance of pond

Barn Update - Maintenance and Projects The shed allowed for an expansion of stalls and improved Tack Room Lindsay signed a two year lease in December Regular maintenance of barn and surrounding land

Stepping Stone HOA Financial Review Revenue 2011 2010 Assessments $ 43,034 $ 41,063 Apt. Rental 7,140 7,020 Barn Rental 20,465 18,615 Barn Electric Misc. Income 2160 1025 650 Total Revenue $ 73,824 $ 67,348

Stepping Stone HOA 2011 2010 Capital Improvements $ 9,856 $ 5,676 Barn Expense/Apartment Exp 2011 2010 Capital Improvements $ 9,856 $ 5,676 Barn Insurance 2,442 2,311 Barn Real Estate Taxes 6,470 5,938 Barn Electric 4,861 5,584 Barn Water 2,265 2,347 Barn/Apt Repair/Maint. 11,413 4,830 Total Barn Expense $37,307 $26,686

Stepping Stone HOA HOA Expense 2011 2010 Landscape Maintenance $27,005 $27,805 Electric 5,696 4,927 Repairs/Maintenance 6,220 923 Pond Expense 2,495 Insurance 1,562 1,540 Taxes Real Estate 1840 1,689 Misc. Expense 714 519 Social Expense 624 520 Total HOA Expense $46,156 $40,418

Stepping Stone HOA Income Statement 2011 2010 Revenue (HOA, Barn, Rental) $73,824 $67,348 Barn Expense 37,307 26,686 HOA Expense 46,156 40,418 Total Expense $83,463 $67,104 Profit (Loss) $ (9,639) $244

Stepping Stone HOA Checkbook Balance Ledger Balance 12/31/10 $ 15,262 Ledger Balance 12/31/11 $ 5,024 Change $(10,238)

The Barn / Apartment– Financial Update 2011 2010 Apartment Rental $ 7,140 $7,020 Stable Rental 20,465 18,615 Electric Refund Barn Income 2,160 29,765 None 25,635 Barn Expense 37,307 26,686 Profit (Loss) $ (7,542) $(1,051)

Summary of 2011 Stepping Stone HOA Financials Revenue increased 8.5% due to increased barn revenue & HOA fees Barn expenses increased nearly 40% predominantly due to barn additions and drainage upgrades HOA expenses increased 14% due increase repairs & maintenance Overall the total HOA had a loss of $(9639) TY vs. $244 profit LY In general, the loss was largely due to barn upgrades & unusually high barn repair expenses. 2012 looks to be better year due to anticipated lower maintenance costs, lower capital improvements, and increased revenue

Social Committee Update Directories delivered Spring Egg Hunt – April 16, 2011 Candy and goody bags provided Happy Hour – Friday, June 10, 2011 Appetizers, Beer and Wine provided Block Party – Sat., August 20, 2011 30 households attended Games were provided by Dawes and Middlestadt families Halloween Party Entertainment provided by Peter Rushton of PT Reptiles

2012 Plans What we plan to do in 2012: Fence in the South Pasture Spring 2012 Lindsay previously leased from the Cohee family of 7031 Aly Dar The Cohees raised the rent by 25% (from $400 to $500) and conveyed that would raise the rent to $700 a month. The Cohees pay property taxes of $1,044 a year ($87 a month) and provided no seeding or maintenance A horse grazing on the Cohee pasture was shot and killed on December 1, 2011 Raises our monthly revenue by $400 Barn Improvements Paint cupola Replace front door Replace apartment’s privacy fence

2012 Upcoming Issues/Goals Continue to Improve Landscaping/Pond Management Work with Lindsay Yinger on strategy for barn improvements Look into property management company if volunteer interest continues to be low

What is the Architectural Review Board (ARB)? Committee under the Home Owners’ Association Monthly meetings (first Tuesday) 7:00PM at the barn Mandate is driven by Stepping Stone covenants Agenda driven by covenants, resident, and/or ARB member observations and requests

What is the purpose of the Architectural Review Board (ARB)? Establish and preserve design guidelines Ensure we maintain the character of the neighborhood Maintain property values Pre-approve all exterior changes and additions Additions or alterations must be submitted to ARB for prior approval Maximum response time is 60 days Enforcement By ARB or by the HOA Board at recommendation of ARB This may include removal of improvements and assessment of related costs to homeowner

Which covenants are applicable to the Architectural Review Board (ARB)? Article IV (Architectural Review), and Article V (Protective Covenants and Restrictions) Summary of relevant covenants distributed to all residents Part of welcoming process for new residents Realtors with listings Available on Stepping Stone web site note: the covenant language overrides the summary

Architectural Review Board (ARB) ARB applications should be submitted for the following: Any improvement, addition, change, or alteration visible to the exterior any change in exterior color landscaping land contours and grades plans for cross sections and elevations exterior lighting plans mail boxes, address markers and exterior ornamentation walls, fencing and screening patios, fences, gazebos and porches swing sets, play areas, basketball boards, and similar improvements drawings with samples of materials and colors vehicles, trailers, boats antennas and dishes swimming pools

Mail Box Painting Proposal There are many mail boxes in poor condition The mail boxes are truly front and center. They are very visible. Other communities provide a similar service and it creates a better more uniform look to the neighborhood. The cost is low and may cost less than the resident doing the work themselves.

Architectural Review Board (ARB) Members Jacquie Fadel Michelle Slisher Angela Richards Lisa Middlestadt WE ARE IN NEED OF NEW MEMBERS!

Resident Concerns

Election of New Board Members Open Nominations for Election to the Board President opens the election and asks for nominations from the floor by asking a raise of a hand, stating name and residence address. A nomination is completed with a second Only one individual, owner or spouse, residing at a residence may run for an elected office Nominations are closed when no more hands are raised Nominees are Designated and Ballots Distributed for Voting Only one vote per household. Ballots will contain the street address of said voter resident The President (if not a nominee) will Appoint a Committee to Collect and Count Executed Ballots. If the President is a nominee for re-election, he or she will appoint a resident, at will, to supervise the vote

Election of New Board Members (cont.) Vote Count by Appointed Committee The Vote committee is to announce the winners of the election at the close of the Annual Meeting, but refrain from submitting the numbers of votes for each nominee Solicit Volunteers for Officers and Committees