PALMETTO DUNES AT PELICAN SOUND CONDOMINIUM ASSOCIATION, INC. ADOPTED BUDGET FOR FISCAL YEAR JANUARY 1, 2018 TO DECEMBER 31, 2018

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1 REVENUE: $975/qtr $1,025/qtr increase $50/unit/qrtr - hurricane costs to be addressed at future date Three major increases in insurance, contingency and roof repairs. Analysis below does not address how Hurricane Irma related expenses are to be funded - presently charged to operations MAINTENANCE ASSESSMENTS 465, , , , budget resulting in cumulative loss as of 2017 year end RESERVE ASSESSMENTS 142, , , , increase reserve funding plan TOTAL ASSESSMENT REVENUE $608, $608, $639, $31, $1, % OTHER INCOME INTEREST EARNED- RESV/CAP 5, , , conservative estimate w/other income sources- one $200K CD pays interest annually LATE FEES conservative estimate w/other income sources APPLICATION FEES 1, , conservative estimate w/other income sources - rental apps down from last yr TOTAL OTHER INCOME $6, $4, $6, ($50.00) $9.61 EXPENSES: TOTAL REVENUE $614, $613, $645, $31, $1, ACCOUNTING 12, , , BUILDING MAINTENANCE 40, , , In 2017 CFI $930/mth plus $875 budget fee and $400 tax preparation; For $30/month increase to base fee % increase. in '17 (thru mid-sept) spent $53.9K on repairs. The main expenses incurred so far this year were $21,480 to Brightlights for purchase/installation of 234 new wall light fixtures including LED bulbs, $13,650 to Community Signs & Mailboxes for new mailboxes, and $16,633 to Jumpp for repairs thru out year including 1x expense of $3,100 to replace concrete slabs guest parking 21810, $900 to replace lattice/enclosure fencing at 21731, $1,963 to replace 32 water handles, over $3K in woodpecker hole repairs thru out year, $700 to replace 10 car stops. Other repairs included drywall repairs, door jamb repairs,sign replacement, touch-up painting, light bulb and photocell replacement - all payments to Jumpp To It. The Association also paid Armstrong Pest $1,640 for subterranean termite treatment at 7881 Classics Court. Before y/e project estimate $1,800/mo in additional r&m. For 2018, left budget the same at $40K CONTINGENCY , , how to address Hurricane related expenses: (1) surplus, (2) reserves, (3) possible insurance settlement proceeds to defer portion of costs and/or (4) special assessment. Initial recommendation by Treasurer - $10K contingency included in 2018 budget ROOF REPAIRS & ENGINEERING INSPECTION 20, , , , In 2014 spent $9,234 in repairs. In 2015 spent $21,562 in repairs. In 2016 spent $17,103. In 2017 (thru end of August) spent $ Three more repair invoices pre-irma totaling approx $4,300. Any more roof repairs in 2017 are most likely the result of hurricane Irma. No additional $s included in projection. For 2018 increase to $25K per Treasurer. DIVISION FEES Basis - $4/unit fee by State ELECTRICITY 5, , , For year 2017, FPL rates expected to increase 2-4% for each of next 4 yrs.- increase '17 budget based on past 2 yrs actual w/3% increase. Actual 2017 costs increased even more even though KW 9.29 usage is same. Need to increase budget in 2018 based on '17 actual. FIRE EXTINGUISHER MAINTENANCE 1, , In 2013 spent $6, extinguishers replaced. In 2014 actual expense $704 - inspected 154 extinguishers and replaced 2. In 2015 paid ABC Fire in April $235 for recharging 4 extniguishers and then in June paid Safety First for annual inspection of 154 extinguishers and recharged 2. In 2016 paid Safety First to inspect 156 $3.50 per = $546. In 2017 paid Safety 1st $ inspected, 4 recharged and 1 replaced.

2 HURRICANE DAMAGE , INSURANCE 98, , , , In Sept. '17 paid Tree Guardian LLC $10,000 to remove 11 fallen trees and stumps and haul to dumpsite, $375 to Jumpp for some initial debris clean-up following storm, $7,680 to Truscapes for 240 hrs labor for debris clean-up and $6,646 to Truscapes for removal/disposal of various trees blocking roadway, driveways and entrances to homes. As of 10/15/17 have $82, in roof repairs from Irma from Colonial and $9,644 proposal for soffit repairs to Total Contracting LLC. Between 10/17-10/20/17 received another $10, in invoices from Colonial for additional roof repairs, $650 from Expert Tree to flush cut dead pine tree,$210 from Jumpp for small repairs post hurricane, $100 from Sandcastle - pre/post hurricane fee, Total as of 10/22/17 - $127.7K At least another $80K to complete roof repairs was discussed at workshop meeting. Board approved borrowing from Reserves on 10/24/17 to help cover the hurricane costs In '17 - American Capital property ins (3/15/17) $79,096; policies effective 6/4/17 GL/package/D&O $6,810, Umbrella $1,792, & W/C policy 9/27/17 $773 for total $88,471. For '18 per Oswald Trippe insur agent % incr on property for potential increase as result of '17 hurricanes, 3-5% on package and 0% on other policies. JANITORIAL 9, , , In 2017 paid Jump to It $750/mth rate - no change $750 In 2014 pine straw was applied at cost of $8,746. For 2015 budgeted based on mulch $16,500. As of 2015 year end mulch not installed. In applications paid for: Jan ,600 3 cu ft of brown mulch by Greenscapes at cost of $17,096 and in Nov. 16 pd Truscapes $16,020 for GROUND COVER (MULCH & PINE STRAW) 15, , , ,600 3 cu. ft. bags of coco brown mulch budget basis per landscape committee $15,800. As of 9/30/17 no expense - estimate full amount to be spent by year end. TREE and TREE TRIMMING/REMOVAL 24, , , LANDSCAPING CONTRACT 74, , , LANDSCAPING - IRRIGATION 10, , , , budget plan increase to $24K will include one-time plan to remove pitch apple trees whose roots are threat to bldg foundations at cost of $6,000. In 2017 (thru mid Sept.) did not remove pitch apple trees. Spent $15,897 to date on: $7,695 to trim 81 live oaks, $3,830 to trim 230 cabbage palms, $1,750 to trim 8 large/6 small pitch apples into "lollipop" shape, $2,010 to remove 2 pines/3 oaks. All above payments to Coastline Tree Service. Also paid Truscapes $575 for 2 tree removals and one stump removal. In late Sept. paid Truscapes $2,232 to trim 124 carpenter palms. Mgmt estimates another $5,000 before year end for regular tree maintenance budget plan: expected 3% increase from Truscapes - $6,227/month. Actual never changed rate - continued to $6,046/mo. Rate for per contract not to exceed 3% - for 1st draft purposes included 3% based on 2017 actual price - no budget change. In '17 thru mid-sept spent $5,463 all payments to Truscapes - represent monthly r&m on the sprinkler system. No extraordinary expenses to date - approx. $780/mo. on average For 2018, recommend small reduction to budget. In 2017 (thru mid-sept.) spent $40,481 - all payments to Truscapes. $21,039 spent in April for flax lily, ixora nora grant, foxtail fern, variegated arboricola, crotons, sod and other plantings throughout the community, $11,100 in March for installing 3 gallon carissa around the ligustrum trees, $1,968 for 475 mixed vincas, $1,404 for bromeliads, $1,213 in May for additional foxtail ferns, crotons, LANDSCAPING ENHANCEMENTS (plantings, sod, soil) 40, , , variegated arboricola and ixora nora grants. Various other smaller invoices throughout year. For , 1st draft continue funding $40K for enhancements. Property manager also recommends $40K. MANAGEMENT 14, , , budget plan Sandcastle - $1,246/mo. For requesting a 5% increase to $1,309/month. MISCELLANEOUS 4, , , , In '17 thru mid-sept spent $1,824: $0 paid to attorneys, paid $618for Federal '16 tax; paid CFI $148 to attend annual meeting, paid Townsend $260 for insur. appraisal update; $254 reimburse to Board mbr for appreciation gift to manager, $255 to Constant Contact for website, $219 for lunch board meeting and $26 for wordpress.com website hosting In 2018 Townsend - expect update appraisal 4.81 $260, $500 for federal taxes and $2,200 for legal/other. Reduce 2018 budget.

3 OFFICE/POSTAGE and Paid SandCastle and CFI for admin services, copies, envelopes, postage & labor for mailings. Also reimbursed Board members for miscellaneous office expenses incurred at home on association business. In 2017 annual mtg did not require an election resulting in singificantly lower costs. For ADMINISTRATION 4, , , reduce budget based on 2016 actual.. PRESSURE WASH 5, , , budget plan called for full cleaning of all concrete surfaces. As of 9/17/17 no expense 8.01 incurred, but property mgmt estimates $5K to be spent before the end of the year PEST CONTROL (INTERIOR) 8, , , In '17- Armstrong Pest charge at $674/mo. For 2018 no increase per mgmt. RODENT CONTROL 1, , , In '17- Armstrong Pest charge at $465/qrtr. For 2018 no increase per mgmt. WATER/SEWER 76, , , , No rate increase effective 10/1/17 per Lee County Utilities. For 2018 budget basedon 2017 projected actual and 2016 actual. WATER/SEWER - DEPOSIT REFUND , In April 2017 all 39 Lee County Utility invoices were credited $ for a total of $17, The refunds were initial deposits paid to establish the accounts. Most of these deposits were paid for by 0.00 WCI. TOTAL OPERATING EXPENSES $466, $652, $495, $28, $ RESERVE EXPENSES: (SEE DETAIL RESERVE SCHEDULE) RESERVE/CAPITAL-INTEREST 5, , , transfer of reserve/capital interest RESERVE - CASH POOLING 142, , , , increase reserve funding plan - added exterior lighting and mailboxes to future plan TOTAL RESERVE EXPENSES $147, $146, $150, $2, $ percentage change in expenses TOTAL EXPENSES $614, $799, $645, $31, $1, % NET INCOME/(LOSS) $0.00 ($186,061.09) $0.00 $0.00 $0.03 $63, /31/16 Cumulative Surplus ($122,771.88) 12/31/17 Projected Cumulative Loss NOTE 1: As of year end, the Association is projected to have a cumulative operating loss of approximately $122,800 as a result of Hurricane Irma related costs. NOTE 2: The Association also has $34,871 in a reserve dedicated to future landscaping enhancements.

4 Cash REPLACEMENT COST NORMAL LIFE REMAINING LIFE pure funding 2014 ACTUAL 2015 ACTUAL 2016 ACTUAL 2017 Projected Actual 2017 PLAN PAINT - plan in 2022 $170, , ,000 ROOF REPLACEMENT $1,950, ,000, ,000 ROOF CLEANING $25, ,000 25,000 25,000 DRIVEWAY SURFACE, CONCRETE REPAIRS $10, ,000 5,000 10,000 10,000 MAILBOXES $15, LIGHT FIXTURES $25, CPA AUDIT $6, ,200 6,000 6,000 6,000 6,000 $2,201,000 $109,770 Beginning cash balance 693, , , , ,012 1,058,856 1,179, ,832 77, , , , , , , , ,402 Annual reserve contribution 106, , , , , , , , , , , , , , , , ,000 Bank Loan forecasted 550,000 Annual reserve interest 4,078 3,043 5,470 3,888 4,570 5,294 5,898 1, ,118 1,674 2,077 2,638 3,201 3,717 Expenditures 166, ,200 36,000 30,000 1,000, ,000 16, , , ,000 6,000 Ending Cash Balance 637, , ,272 1,058,856 1,025,478 1,179, ,832 77, , , , , , , , , ,119 Reserve Expense History: 2017 Reserve Expenses: (thru 9/30/17) In Mar./June paid Gerstle, Rosen & Goldberg total of $4,200 to complete 2016 audit Reserve Expenses: 2015 Reserve Expenses: 2014 Reserve Expenses: In Feb 2014-May 2014, paid Elias Brothers Group Painting $166,971 to pressure clean, seal & paint bldgs

5 Cash REPLACEMENT COST NORMAL LIFE REMAINING LIFE Total PAINT - plan in 2022 $170, ROOF REPLACEMENT $1,950, ROOF CLEANING $25, DRIVEWAY SURFACE, CONCRETE REPAIRS $10, MAILBOXES $15, LIGHT FIXTURES $25, CPA AUDIT $6, $2,201,000 Beginning cash balance Annual reserve contribution Bank Loan forecasted Annual reserve interest Expenditures Ending Cash Balance Reserve Expense History: 2017 Reserve Expenses: (thru 9/30/17) In Mar./June paid Gerstle, Rosen & Goldberg total of $4,200 to complete 2016 audit , ,000 1,950,000 25,000 25, ,000 10,000 35,000 15,000 15,000 25,000 25,000 6,000 24, , , , ,648 1,107,641 1,183,179 1,264,095 1,380, , , , , , , , ,000 2,306, ,000 4,256 3,852 4,421 4,993 5,538 5,916 6,320 6,902 71, , ,000 40,000 35, ,489, , , ,648 1,107,641 1,183,179 1,264,095 1,380,415 1,497,317 1,497, Reserve Expenses: 2015 Reserve Expenses: 2014 Reserve Expenses: In Feb 2014-May 2014, paid Elias Brothers Group Painting $166,971 to pressure clea