CHICKASAW ASSOCIATION BOARD OF DIRECTORS QUARTERLY MEETING and 2019 BUDGET PRESENTATION DECEMBER 1, 2018

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1 CHICKASAW ASSOCIATION BOARD OF DIRECTORS QUARTERLY MEETING and 2019 BUDGET PRESENTATION DECEMBER 1, 2018 Absent: Ed Black, Mike Dittmer, Dave Sabo Present: 62 President Don Smith called the meeting to order. The minutes of the prior meeting were approved as presented. Golf Course (Pat Craft): The new management team s goal was to improve the overall golf course experience for members, residents and outside golfers. A dress code has been implemented. A starter and ranger program staffed by volunteers has been started on the weekends. A lean-to has been built adjoining the maintenance building to protect the equipment and give golf course staff more room inside to work on equipment. The cart return has been relocated to the cart barn to eliminate cart congestion at the pro shop door. A golf course members meeting and appreciation dinner will be held on January 9, Details about the meeting will be forthcoming. Amenities (Ed Black): No report. Architectural Compliance (James Jarvis): The ACC has received forty-two exterior change requests year-to-date. There are four new homes under construction and four completed this year. A new submittal was received in the prior week which, when approved, will bring the new homes under construction to five. A community covenant review is underway. Thirty-two mailboxes have been replaced thus far this year with approximately one hundred total replaced since the program began. The posts are custom built in batches of twenty, and the mailboxes are purchased from Lowes or Home Depot. A single post and mailbox is $165, a double post and two mailboxes are $140 per home, a quad post and four mailboxes are $140 per home, a 911 sign is $50 per home and new decals are $25 each. Mailbox replacement parts can be purchased from Lowes or Home Depot. Contact James Jarvis or the POA office to order. Communications and Public Relations (Dave Sabo): No report. Roads (Mike Dittmer): In Mike s absence, Don Smith reviewed the road repairs and shoulder work that has been done on Point Road. He also reported that the crack sealing machine was tested on Oconee with positive results. More sealing will be done in the spring. A bid in the amount of $21,000 has been received from Hubbard Paving to repair and repave the front entrance. Paving companies are very busy right now, so the job probably won t be completed this year. Safety (Mike Egan): Improved procedures for visitor check-in will be forthcoming. After the paving is done at the entrance, new striping will also be added to facilitate traffic flow.

2 Cameras have been installed and are recording at all major community facilities. Phone board entry PINs should be safeguarded to limit unauthorized access into the community. All drivers on the community roadways must observe stop signs and speed limits. Stay alert, don t tailgate and watch for pedestrians and golf carts on the roadway. Computer scams are especially prevalent during the holiday season; protect your personal information when online. Use care when lighting bonfires and when traversing icy or slippery walkways. Operations (Don Smith): The loan application submitted to Wells Fargo for the event center construction has been approved pending an appraisal. The loan is for $800,000 at 5.35% with a twenty year amortization and a five year term. The appraisal will take approximately four weeks which means the loan should close in mid-january Capital campaign pledges are now over $200,000, and a capital campaign account has been opened and funds are being deposited. If all goes as planned, construction could begin as early as mid- February Finance (Don Long): YTD financial information for the POA, Utility and CPGA was presented as follows: CHICKASAW ASSOCIATION, INC. 10/31/18 YTD ACTUAL 10/31/18 YTD BUDGET VARIANCE 2018 YEARLY BUDGET REVENUE $687, $608, $79, $670, EXPENSES $551, $508, ($42,815.69) $614, NET INCOME/(LOSS) $136, $99, $36, $55, CHICKASAW UTILITY COMPANY 10/31/18 YTD ACTUAL 10/31/18 YTD BUDGET VARIANCE 2018 YEARLY BUDGET REVENUE $502, $493, $8, $588, EXPENSES $422, $434, $12, $515, OP PROFIT/(LOSS) $80, $59, $20, $73, NON-OP INC/(EXP) $16, $20, ($3,989.11) ($2,480.00) NET INCOME/(LOSS) $96, $79, $16, $71, CPGA, INC. 10/31/18 YTD ACTUAL 10/31/18 YTD BUDGET VARIANCE 2018 YEARLY BUDGET REVENUE $473, EXPENSES $591, $602, $10, $752, OP PROFIT/(LOSS) ($199,886.48) ($188,065.00) ($11,821.48) ($279,615.00) NON-OP INC/(EXP) $177, $191, ($13,642.85) $205, NET INCOME/(LOSS) ($22,369.33) $3, ($25,464.33) ($73,855.00)

3 After the current year financial review, the quarterly meeting adjourned and the 2019 Budget Presentation began Budget Presentation (Don Long): The proposed 2019 budgets for the POA, Utility and Golf Course were presented as follows: ESTIMATED PROPOSED 2019 POA PROPOSED BUDGET BUDGET ACTUAL BUDGET ASSESSMENT INCOME DEVELOPED Base Assessment - Developed 224, , ,060 Capital Reserve Assessment - Developed 40,500 42,100 41,500 Administrative Assessment - Developed 40,500 40,500 41,500 Roads Assessment - Developed 81,000 81,000 83,000 Golf Course/Event Center Assessment - Developed 67,635 77,160 90,055 UNDEVELOPED Base Assessment - Undeveloped 120, , ,310 Golf Course/Event Center Assessment- Undeveloped 38,940 38,940 53, , , ,115 MISCELLANEOUS INCOME Pool Concession Income 1,000 1,900 1,500 Miscellaneous Income 3,600 4,000 4,000 Camp Fees Income 9,500 9,690 9,500 Uncovered Drydock Rental Income 20,000 20,900 20,000 Covered Drydock Deferred Income 5,060 5,060 5,060 Covered Drydock Rental Income 17,520 17,520 17,520 56,680 59,070 57,580 TOTAL INCOME 670, , ,695 FINANCE & ADMINISTRATIVE EXPENSES Salaries/Wages 100, , ,000 F&A Payroll Taxes 8,500 8,400 8,500 Electricity 3,600 3,600 3,000 Telephone 3,720 3,680 3,700 Postage/Mail 2,000 1,350 2,000 Dues/Subscriptions 1, ,000 Office Supplies 3,500 3,500 4,000 Office Equipment 7,000 6,810 7,000 POA Office Maintenance 1,200 1,190 1,200 Miscellaneous Exp 1, ,000

4 Mileage 1, ,000 Accounting Fees 12,200 12,200 12,200 Bank Fees 1,500 2,580 2,500 Credit Card Costs 6,500 6,270 6,500 Legal Fees 5,000 2,475 5,000 Property Taxes 3,000 3,950 4,500 Taxes & Licenses 1, ,000 Insurance 31,000 31,000 31,000 CPGA Office O/H Reimbursement (12,000) (12,000) (12,000) CUCo Office O/H Reimbursement (12,000) (12,000) (12,000) Wells Fargo Loan Interest 6,620 6,620 38,105 Depreciation Expense 48,000 48,000 48, , , ,205 COMMUNICATIONS & PUBLIC RELATIONS Supplies/Hardware/Software 1, ,000 Advertising/Public Relations 3,000 3,000 3,000 Website 1,500 1,400 1,500 5,500 4,750 5,500 POOL Pool Wages 10,000 9,915 10,000 Pool Payroll Taxes 1,000 1,133 1,200 Pool Electricity 6,000 9,240 9,500 Pool Water/Sewer 3,000 2,941 3,200 Pool Telephone 1,800 2,029 2,100 Pool Concession Supplies ,000 Pool Supplies 1, ,000 Chemicals 10,000 9,427 10,000 Pool Equipment 1, ,500 Pool Maintenance 10,000 5,990 10,000 44,300 43,050 49,500 GATE Gate Personnel 45,000 44,760 45,000 Gate Payroll Taxes 5,000 5,118 5,200 Gate Electricity 3,000 2,742 3,000 Gate Water/Sewer 1,800 1,056 1,500 Gate Telephone 1,500 1,120 1,500 Gate Supplies 1,800 1,420 1,500 Bar Code Decals 1,800 1,397 1,500 Gate Maintenance 2,000 1,750 2,000 61,900 59,363 61,200

5 OPERATIONS Ops Salaries/Wages 40,000 36,832 40,000 Ops Payroll Taxes 3,200 3,342 3,400 Ops Electricity 3,000 3,421 3,500 Campground Electricity 7,500 7,820 8,000 Ops Water/Sewer 2,200 1,520 1,800 Campground Water/Sewer 1,500 1,566 1,750 Ops Telephone 2,600 2,185 2,500 Campground Uverse 1,400 1,200 1,200 Ops Maintenance 2,500 1,575 2,500 Tree Removal 5,000 1,950 5,000 Fuel 2,500 2,750 2,500 Trash Pickup 2,220 3,120 3,500 Landscaping & Grounds Maintenance 3,500 2,200 4,000 Landscaping Contractor 6,640 5,948 0 Ops Tools & Equipment 1, ,500 Maintenance-Chipper/Blower 1, ,000 Maintenance- Hand Power Tools 2, ,000 Maintenance- Lawn Mowers/Tractor 4,000 9,100 4,000 Maintenance- Vehicles 3, ,000 Beach/Pavillion/Dock/Dry Docks 3,000 3,045 5,000 Tennis Courts 4,500 4,500 4, ,760 94, ,650 ROADS Roads Resurface 95, ,640 95,000 Roads Culvert Maintenance 2, ,000 97, ,095 97,000 COMMUNITY CENTER Electricity 8,500 10,600 10,750 Water/Sewer 1,200 1,217 1,200 Telephone 1, ,200 DirecTV 3,000 3,057 3,000 Maintenance 5,500 4,200 5,500 Supplies 2,500 2,775 3,000 22,500 22,524 24,650

6 PROJECTS & MISCELLANEOUS Purchase FLC Lots 3,000 3,000 3,000 Other Special Projects 5,000 15,430 5,000 Reserve Study 5, ,000 Community Event Center Project 15,000 8,358 50,000 Community Center Carpet Replacement 9, ,000 Fireworks Equipment 4,000 4,000 0 Transfer to Capital Reserve 16,500 9, ,500 40,500 78,000 TOTAL EXPENSES 614, , ,705 OPERATING PROFIT / (LOSS) 55,775 42,489 46,990 CASH FLOW Reverse Depreciation (non-cash item) 48,000 48,000 48,000 Golf Course Principal Payment (105,556) (105,556) (83,430) YEAR END NET CASH (1,781) (15,067) 11,560

7 ESTIMATED PROPOSED 2019 UTILITY PROPOSED BUDGET BUDGET ACTUAL BUDGET INCOME Water Billings 280, , ,000 Adjustments (3,000) (2,600) (3,000) Sewer Billings 303, , ,500 Late Fees - Water 2,500 2,278 2,500 Late Fees - Sewer 2,500 2,278 2,500 Tap Fee Income - Water 1,500 3,750 3,000 Tap Fee Income - Sewer 1,500 3,750 3, , , ,500 EXPENSES Water Repairs & Supplies 15,000 14,940 15,000 Cost of Water 115, , ,000 Contract Services 96,000 96,000 96,000 Salary 90,000 95,262 96,000 Payroll Taxes 8,300 7,937 8,300 New Service Installation 3,000 3,100 4,000 Water Tower Maintenance 10,800 10,670 10,800 Other Water Expense 3,000 3,100 3,200 Sewer Repairs & Supplies 18,000 17,540 18,000 Chemicals 15,000 13,200 15,000 Sewer Electric 40,000 41,600 40,000 Telephone 2,000 2,300 2,000 Sludge Removal 9,000 8,900 9,000 Road Repairs 10, ,000 Lab Fees 4,300 5,150 4,300 Office Overhead 12,000 12,000 12,000 Legal & Accounting 4,900 4,900 4,900 Insurance 12,900 12,900 12,900 Licenses & Fees 5,000 4,874 5,000 Equipment Maintenance 7,000 6,986 7,000 Fuel 2,500 2,475 2,500 Postage & Stationary 2,500 2,520 2,600 Software Upgrade 1,000 1,720 2,000 Bank Charges/Credit Card Fees 3,500 3,848 3,500 Contingency 1, ,000 Bad Debt 2, Property Taxes 1,500 1,500 1,500 Wear & Tear Depreciation 20,000 20,000 20,000 TOTAL OPERATING EXPENSES 515, , ,250 OPERATING PROFIT/(LOSS) 73,600 90,237 79,250

8 NON-OPERATING INCOME/(EXPENSE) Special Assessment 95,520 96,613 96,480 Capital Reserve Assessment 40,500 40,500 41,500 Golf Course Irrigation Maintenance 12,000 12,000 12,000 Depreciation (90,000) (90,000) (90,000) Capital Projects (10,000) (10,175) (10,000) Rural Development Loan Interest Expense (50,500) (50,500) (50,500) TOTAL NON-OPERATING INC/(EXP) (2,480) (1,562) (520) TOTAL PROFIT/(LOSS) 71,120 88,675 78,730 CASH FLOW Reverse Depreciation 110, , ,000 Capital Reserve Acct (100,000) (30,325) (31,500) Rural Development Loan Principle Payment (19,940) (78,640) (19,940) YEAR END NET CASH 61,180 89, ,290

9 ESTIMATED PROPOSED 2019 GOLF COURSE PROPOSED BUDGET BUDGET ACTUAL BUDGET MEMBER FEES Annual Memberships 55,000 45,900 45,000 Handicap Fee 2,500 2,500 2,500 Trail Fees 54,000 49,600 49, ,500 98,000 96,500 NON-MEMBER FEES Green Fees 136, , ,000 Tournament Income 12,000 15,000 12, , , ,000 PRO SHOP/GRILL SALES Range Balls 7,000 8,450 9,000 Range Membership 3,000 4,550 5,000 General Merchandise 40,000 37,000 30,000 Food - Lunch Svc, Tournaments, Events 77,000 78,690 5,000 Food - Dinner Svc 19, Drinks - Lunch Svc, Tournaments, Events 13,000 11,060 5,000 Drinks - Dinner Svc 1, Alcohol - Lunch Svc, Tournaments, Events 40,000 43,975 7,500 Alcohol - Dinner Svc 11, , ,725 61,500 TOTAL INCOME 473, , ,000 COST OF SALES General Merchandise 20,000 23,316 15,000 Tournament Expenses 0 3,987 3,000 Food 52,700 52,135 2,500 Beverages 6,280 6,600 2,500 Alcohol 18,300 18,090 2,500 Happy Hour Costs 4,000 5, , ,348 25,500 GOLF COURSE MAINTENANCE Wages 125, , ,000 Irrigation Maintenance 3,500 3,250 3,500 Golf Course Maintenance 25,000 23,975 25,000 Equipment Maintenance 16,000 15,920 16,000 Chemicals 46,000 48,175 50,000 Irrigation Contract 12,000 12,000 12,000 Tools 1, ,000 Fuel 19,000 19,250 19,000

10 Cell Phones 2,000 2,400 2,500 Kubota Tractor Purchase 4,900 4,875 4,900 Equipment Lease 43,000 44,541 46, , , ,970 PRO SHOP EXPENSES Pro Shop Wages 45,000 41,963 40,000 Maintenance & Repairs 2,500 2,190 1,500 Pro Shop Supplies 3,500 3,640 3,500 51,000 47,793 45,000 GRILL EXPENSES Grill Wages - Lunch Svc, Tournaments, Events 42,800 45,780 25,000 Grill Wages - Dinner Svc 7, Grill Supplies 5,000 4,950 1,000 Special Event Expenses 0 3,000 0 Fire Security 1,200 1, Propane Gas 4,500 4, Pest Control Taxes & Licenses 2,500 2,790 1,000 Furniture & Equipment 2,500 4, Maintenance/Repairs 2,000 1, ,795 68,743 29,250 ADMINISTRATIVE EXPENSES Electricity 40,000 38,324 30,000 Water & Sewage 7,000 7,381 5,000 DirecTV 3,000 3,774 3,800 Waste Disposal 2,220 4,200 4,200 Telephone 3,500 6,114 3,500 Cart Lease 26,700 24,720 26,700 Advertising 2,500 1,450 5,000 Depreciation 60,000 60,000 60,000 Insurance 26,000 26,000 26,000 Professional Dues & Fees 2,500 2,356 2,500 Bank Fees Postage & Supplies Credit Card Costs 7,000 8,750 7,000 Campground Host Program 10,000 10,136 5,000 Office Overhead 12,000 12,000 12,000 Cash Short or Over Handicap Fees 2,000 1,875 2,000 Legal Fees Accounting Fees 1,000 1,000 1, , , ,435

11 TAXES Property Tax 5,000 5,000 5,000 Liquor Tax Admission Tax SC Income Tax 1,500 1,356 1,500 Payroll Tax 20,500 23,410 15,500 27,400 29,963 22,400 TOTAL OPERATING EXPENSES 752, , ,555 OPERATING PROFIT/(LOSS) (279,615) (342,395) (332,555) NON-OPERATING INCOME/(EXPENSE Assessment Income 205, , ,340 Capital Assessment Income 40,500 40,500 51,875 Capital Project or Transfer (40,500) (59,853) (51,875) 205, , ,340 NET INCOME/(LOSS) (73,855) (155,988) (123,215) CASH FLOW Reverse Depreciation 60,000 60,000 60,000 YEAR END NET CASH (13,855) (95,988) (63,215)

12 Assessment Category 2018 Developed 2019 Proposed Developed 2018 Undeveloped 2019 Proposed Undeveloped POA Base Assessment $554 $564 $205 $209 POA Capital Assessment POA Administrative Assessment POA Roads Assessment Utility Capital Assessment Utility RDA Loan Assessment Golf Course Operations Assessment Golf Course Capital Assessment Golf Course/Event Center Loan Assessment Total $1,775 $1,860 $470 $499 The meeting adjourned at 11:35AM.

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