Annual Meeting Tuesday, October 16, 2018

Agenda Call to order Quorum/Proof of Notice Introductions Approval of 2017 Meeting Minutes Community/Financial Review Q&A on HOA Issues Board of Directors Meeting Approval of 2019 Budget Adjournment

Questions At this stage we would normally take Q&A on agenda items and the financials. In order to address most of these concerns we will review Financials first. The Q&A responses submitted ahead of this meeting are in your packages. If there are any new questions we will open it up to the floor.

Financial Review Income 2018 Budget 2019 Proposed $3,057,325 Assessments $3,057,325 $2,911,870 Revenue is calculated on 1800 closed homes at Dec 31st 2018 - 125 homes projected for 2019 $128 per month per home. Lease Fee Income $25,000 $24,000 Lease fee income. Background checks for lease Varies from $25 - $95 Subsidy $500,856.60 $520,834.33 Projected shortfall from Revenue vs. expenses paid by developer. Amount may be higher or lower. Capital Contributions- Reserves $59,000 $62,500 Income from new build sales paid at closing to fund the Reserve Account. (Not charged on Resale's) $500 based on 125 Projected closings for 2019 Misc Sales to Residents $2,400 Misc. income from sales of additional transponders for Gate access. Transfers to Reserve Fund -$131608.00 -$138,956 Based on Reserve Study by McKenzie Engineering - $9.04 per door per month. Transfer of Capital Contribution-Reserves -$59,000 -$62,500 Transfer Cap Cont. to Reserve funds Total Income $3,453,973.60 $3,320,148.33

Financial Review Expenses Administrative 2018 Budget 2019 Proposed Hurricane Irma Clean up Pay Back Reserves $266,818.20 $0.00 Salaries & Wages $175,640.00 $232,502.40 Association Staffing with 4% increased, (2) additional staff for violations & one maintenance due to work volume and total closed homes Payroll Taxes & Benefits $56,204.80 $74,400.77 Training & Development $1,200 $6,000 Training & Dev – HOA Staff Meeting & Community $280 Community meetings. Blockwatch $240 Blockwatch program and any expenses that come from meetings. Taxes, Licenses & Fees $100 Licenses, taxes and fees of Association, which includes the corporate annual tax returns required by law. Insurance Expense $22,500 $72,000 Workers Comp / D&O / GL / Equipment / Crime / Umbrella Coverage for HOA Insurance allowing for 5% increase.

Financial Review Administrative – Cont… $2,500 $3,000 $3850 $3,850 2018 Budget 2019 Proposed Legal Fees-General $2,500 $3,000 Cost of legal activities on HOA business. Audit Fees $3850 $3,850 Annual audit fees paid to an independent CPA Bank Service Charges $600 HOA checking and Reserve Acc $ Credit Card processing fees. Office Equipment $1,200 Office Equipment – LCAM HOA Staff Bad Debt Expense- Assessments $91,719.75 $87,356.10 Assumes 3% Homeowners per month will be delinquent in their assessments. Mileage Reimbursement Reimbursement to Association staff for mileage while conducting HOA business. Postage & Copies $20,681.50 $20,683.09 Charges for financial statements, mailings to residents, etc. Lease Set Up Fee $21500 $20,000 Expense to run Lease application background checks. Offset against income.

Financial Review Repairs & Maintenance $51,000 $52,800 $10,200 $7,500 Common Area Maintenance $51,000 $52,800 Repairs and Maintenance of Association common areas. Self Help-Maintenance $10,200 All self help charges are billed back to homeowners account. Repairs & Maint-Signage $7,500 Repair & replacement, street signage, Irrigation Repairs $40,000 $39,000 Irrigation repair and maintenance community common property. Security Gates Maintenance $50,400 $50,700 Gate Preventative maintenance agreement, repairs and any service calls. Gate House Equipment $ 2,325 $1,800 Gate house equipment – IT Needs Pest Control $1,200 Covers the guard house for monthly pest treatments for bugs & spiders. Mosquito Control $32,568 Mosquito control spraying in the community. Repairs & Maint- Asphalt/Walk Repair/replace damaged sidewalk within the community. Major repairs covered under Reserve Funds Plant Replacement-Tree trim $20,000 $50,000 Replacement costs of the trees, shrubs and sod in the Community Common areas which are not covered under a warranty.

Financial Review Contracted Services $22,015.35 $59,885.00 $648,000 Management Contract $22,015.35 $59,885.00 Evergreen Lifestyles Management Fee - per closed home. $2.50 per closed home per month + website fee. First increase since 2015 Landscape Contract $648,000 $675,000 Landscape maintenance of the Community Common Area Property. This contract is an all-inclusive contract. Included in this contract are 30 self helps p/ mon. Covers Landscape contract for school Cable Contract $780,145 $828,763 $37 per Home p/ mon inclusive of sales and franchise taxes. Based on 1811 closed homes at 2018-year end. The charge is for Basic Cable Only Cable Contract - Gates $12,000 Internet service for Gate controllers. Gate Programming $10,200 $15,000 Community access system, Dwelling Live software. Aquatic Maintenance Contract $80,000 $72,000 Maintain all water bodies for algae and weed control on a monthly basis. Wetlands conservation contract. Patrol Services $48,000 $52,800 Off Duty Officer program - Security Patrol OCSO shifts 365 days Security Contract $500,000 $534,849.97 All inclusive contracts to include gatehouse security and roving patrol.

Financial Review Utilities $226,800 $5,400 $5,670 $26,400 Electricity $226,800 Electricity entry neighborhood monument signage and irrigation pedestals and any arterial road street lighting. 38 accounts including irrigation pumps lift stations, guard house, monument, and fountains. Water & Sewer $5,400 $5,670 Common area irrigation, storm drains and pump stations. KUA & Toho water accounts. Telephone $26,400 Phone lines & Fax lines for the association. Total Expenses $3,453,973.60 $3,320,148.33

Financial Review ASSESSMENTS Increase Developer Subsidy to $520,834.33 2019 Assessment - $128 per home per month, Decreased

Bellalago & Isles of Bellalago Resident Committees Please stand and be recognized, Thank you for your service to your community. Advisory Committee Security Committee Landscape Committee ARC/Compliance/Fining

Community Standards Update ARC Requests 404 Total 1/1/18 – 10/15/2018 Top Three Landscaping Improvements Screen Enclosures Paint

Community Standards Update Violations 4800 Total 1/1/18 – 10/15/18 Top Violations Landscape Related issues Exterior Home Maintenance Parking & Vehicle Violations

Bellalago & Isles of Bellalago Membership Meeting Any New Business Adjournment

Bellalago & Isles of Bellalago Board of Directors Meeting Call to Order/Quorum/Proof of Notice Approval of the 2017 Meeting Minutes

Bellalago & Isles of Bellalago Board of Directors Meeting Approval of 2019 Budget Any New Business Adjournment

Bellalago Club Review Increase as per the Club Plan - $2 Club Dues for 2019 = $147 monthly

Additional Q&A Time permitting! Original Q&A submitted prior to the meeting can we viewed on WWW.BellalagoHOA.com – there is a link from the home page on the scrolling banners.

Looking Forward to 2019!