PALMETTO DUNES AT PELICAN SOUND CONDOMINIUM ASSOCIATION, INC. ADOPTED BUDGET FOR FISCAL YEAR JANUARY 1, 2017 TO DECEMBER 31, 2017

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1 BUDGET BUDGET 17 Budget PER UNIT NOTES REVENUE: $975/qtr $975/qtr kept the same assessment for 2017 MAINTENANCE ASSESSMENTS 465, , , RESERVE ASSESSMENTS 142, , , no change to reserve funding plan for 2017 estimated operating expenses to remain the same - primary reduction in insurance offset by increase in bldg maintenance - program to replace light fixtures over next 3 years TOTAL ASSESSMENT REVENUE $608, $608, $608, $0.00 $ % OTHER INCOME INTEREST EARNED- RESV/CAP 3, , , , 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 - sales apps down from last yr - 11 vs 3 and so are rent applic fees in 2014 took in 24 app fees. In 2015 thru mid-sept only have taken in 6 rent app fees - last rent applic. fee paid in April Club reported rentals are down - reduce budget. TOTAL OTHER INCOME $4, $4, $6, $1, $9.69 TOTAL REVENUE $613, $612, $614, $1, $ EXPENSES: ACCOUNTING 12, , , In 2016 CFI $930/mth plus $875 budget fee and $400 tax preparation; For no change in price. BUILDING MAINTENANCE 29, , , , in '16 (thru mid-sept) spent $25.2K on repairs. The main expenses incurred so far this year were $23,875 to Jumpp including (1) $10,800 to replace lattice/enclosure fencing at 12 locations/bldgs. (2) $2,700 for repairs to 3 1st floor units with water intrusion, (3) $1,620 to repair woodpecker holes and (4) $1,080 for additional woodpecker hole repairs, waterproofing back wall and inspect attic fro water damage. The Association has also incurred other interior drywall repairs, door jamb repairs, woodpecker holes repairs/touch-up painting, light bulb and photocell replacement - all payments to Jumpp To It. Also reimbursed 2 owners for interior damage. Before y/e project estimate $1,800/mo in additional r&m. For 2017 adding $10K for light fixture replacement and $24K for general r &m. ROOF REPAIRS & ENGINEERING INSPECTION 20, , , In 2014 spent $9,234 in repairs. In 2015 spent $21,562 in repairs. In 2016 (thru mid-sept.) spent $12,396 - estimate $4,900 in reapirs over last 3 1/2 months based on 2015 actual. Left budget the same for 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 8.25 based on past 2 yrs actual w/3% increase 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 paid Safety First to inspect 156 $3.50 per = $546. INSURANCE 118, , , , In '16 - American Capital property ins (3/15/16) $84,500; policies effective 6/4/16 GL/package/D&O $6,833, Umbrella $1,789, & W/C policy 9/27/16 $710 for total $93,831. For '17 per Oswald Trippe insur agent - 5% incr on property for potential increase due to higher replacement values from annual appraisal. 14.5% increase on WC and 0% on other policies. JANITORIAL 9, , , In 2016 paid Jump to It $750/mth. No change for 2017 rate.

2 BUDGET BUDGET 17 Budget PER UNIT NOTES LANDSCAPING CONTRACT 72, , , , budget plan: new landscaper hired 12/1/ Truscapes - $6,046/month. Rate for per contract not to exceed 3% - for 1st draft purposes included 3%. GROUND COVER (MULCH & PINE STRAW) 14, , , , 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 January ,600 3 cu ft of brown mulch was purchased and installed by Greenscapes at cost of $17, application (2nd application paid in '16) expected before year end by Truscapes $16,020 for 3,600 3 cu. ft. bags of coco brown mulch budget basis per landscape committee $15,800.. TREE and TREE TRIMMING/REMOVAL 22, , , , In 2016 one major payment to Dave y Tree - $16,383 in June included pruning 328 sabal palms, pruning 38 pitch apple trees, structral pruning of 64 guavas, remove seeds from montgomery and alexander palms, remove 2 pitch apple, 1 small cypress, 2 mahoganiies and elevate limbs on 2 mahoganies. Also 2 small payments to Truscapes for staking trees knocked down by storm. Per landscaping chair expect tree budget to be used by year end - additional palms and oak trees on street have to be pruned. For 2017 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. Cost will be offset by annual $4,800 trimming of these trees. LANDSCAPING - IRRIGATION 8, , , , In '16 thru mid-sept spent $11,234. Included in above was a one-time $3,093 in repairs after initial inspection of system after being hired. The balance represents monthly r&m on the sprinkler system by Truscapes - approx. $900/mo. on average For 2017, increase the budget based on run rate adjusted for one-time initial inspection repairs. For 2016 two sources of funds for landscape enhancement - $34,870 carryover from 2015 in reserves and $40K included in 2016 budget. Thru mid-sept. spent only $29,618 on enhancements; spent $25,806 in April for new plantings installed in front of all 39 bldgs and $3,812 in May. Per landscaping commitee expect $2,200 for flowers and $850 for some plant LANDSCAPING ENHANCEMENTS (plantings, sod, soil) 40, , , replacements in Sept. If $40K is not spent this year does Board want to transfer unused balance to the landscape enhancement reserve account for future use? For 2017 leave budget the same. MANAGEMENT 14, , , budget plan Sandcastle 3% increase to $1,246/mo. Actual continued to charge at $1,209/month. Rate for no change per Travor Lutz -$1,209/mo. MISCELLANEOUS 6, , , , In '16 thru mid-sept spent only $1,511: $0 paid Pavese Law, paid Becker & Poliakoff $200 retainer fee; paid $165 for Federal '15 tax; paid CFI $170 to attend annual meeting, paid Townsend $260 for insur. appraisal update; ;Corporate Annual report $61.25,$ 205 reimburse to Board mbr for appreciation gift to manager, $255 to Constant Contact for website and $99 for wordpress.com website hosting In 2017 Townsend - expect update appraisal $260, $500 for federal taxes and 7.08 $3,600 for legal/other. Reduce 2017 budget. OFFICE/POSTAGE and ADMINISTRATION 4, , , 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 2016 annual mtg required an election - 12 pg mailing to each owner 7.21 including candidate bios. For 2017 maintain same budget based on past 2 years. PRESSURE WASH 6, , , , budget plan called for full cleaning of all concrete surfaces. As of 9/17/16 no expense 8.01 incurred, but property mgmt estimates $4,500 to be spent before the end of the year In '16- Armstrong Pest continued to charge at $644/mo even though advised price was to increase to $664/month ( from mgmt dated 9/4/13). For left budget the same - per mgmt - no price increase for continued to charge at $644/mo. For 2017 increase to PEST CONTROL (INTERIOR) 7, , , $674/month.

3 BUDGET BUDGET 17 Budget PER UNIT NOTES RODENT CONTROL , , , Service was eliminated in 2009, but in 2016 after budget was adopted the need to reimplement rodent control program became necessary. Thru-mid Sept incurred 2 expenses - $650 in March to replace/repair bait stations and place bait and in June $465 to bait the stations. Estimated services in Sept and $465/service and for 2017 $465. WATER/SEWER 76, , , No rate increase effective 10/1/16 per Lee County Utilities. Rate study was to be completed in early 2016 by County to determine if rates should increase effective 10/1/2016, but no decision made at this time. For 2017 budget basedon 2016 projected actual and 2015 actual. TOTAL OPERATING EXPENSES $467, $461, $466, ($1,248.00) $ RESERVE EXPENSES: (SEE DETAIL RESERVE SCHEDULE) RESERVE/CAPITAL-INTEREST 3, , , , transfer of reserve/capital interest RESERVE - CASH POOLING 142, , , increase in reserves attributable to increase in roof reserves - in 2016 roof replacement expense moved from to TOTAL RESERVE EXPENSES $146, $146, $147, $1, $ percentage change in expenses TOTAL EXPENSES $614, $607, $614, ($48.00) $ % NET INCOME/(LOSS) ($1,248.00) $5, $0.00 $1, $0.02 $60, /31/15 Cumulative Surplus $65, /31/16 Projected Cumulative Surplus NOTE 1: As of year end, the Association is projected to have a cumulative operating surplus of approximately $65,430. NOTE 2: The Association also has $34,871 in a reserve dedicated to future landscaping enhancements.

4 PALMETTO DUNES ADOPTED RESERVE ANALYSIS CASH METHODOLOGY (20 YEAR FORECAST) FOR FISCAL YEAR JAN. 1, 2017 TO DEC. 31, 2017 Cash REPLACEMENT COST NORMAL LIFE REMAINING LIFE PROJECTED 2016 PLAN PAINT - plan in 2022 $170, , ,000 ROOF REPLACEMENT $1,950, ,000, ,000 ROOF CLEANING $25, ,000 25,000 DRIVEWAY SURFACE, CONCRETE REPAIRS $10, ,000 5,000 10,000 10,000 CPA AUDIT $6, ,000 6,000 6,000 $2,161,000 Beginning cash balance 693, , , , ,012 1,025,478 1,173, ,265 66, ,106 97, , , , , ,491 Annual reserve contribution 106, , , , , , , , , , , , , , , ,000 Bank Loan forecasted 550,000 Annual reserve interest 4,078 3,043 3,210 3,840 4,570 5,127 5,868 1, ,032 1,577 1,970 2,520 3,072 Expenditures 166, ,000 36, ,000, ,000 16, , , ,000 Ending Cash Balance 637, , , ,680 1,025,478 1,173, ,265 66, ,106 97, , , , , , ,563 Reserve Expense History [updated as of 10/7/16) 2016 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 39/2story bldgs (156 uts total) 2013 Reserve Expenses In August 2013 paid Colonial Roofing $14,663 to repair all building eaves risers. In Sept Dec paid Stroemer & Co. $5,500 for audit of 2012 records. In Sept paid Bain Sealcoat $1,000 from Pavement reserve

5 PALMETTO DUNES ADOPTED RESERVE ANALYSIS CASH METHODOLOGY (20 YEAR FORECAST) FOR FISCAL YEAR JAN. 1, 2017 TO DEC. 31, 2017 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, CPA AUDIT $6, $2,161,000 Beginning cash balance Annual reserve contribution Bank Loan forecasted Annual reserve interest Expenditures Ending Cash Balance Reserve Expense History [updated as of 10/7/16) , ,000 1,950,000 25,000 25, ,000 10,000 35,000 6,000 6,000 30,000 2,455, , , , , ,188 1,068,999 1,182,344 1,261, , , , , , , , ,000 2,299, ,000 3,578 4,106 3,691 4,250 4,811 5,345 5,912 6,306 66,966 6, , , , ,455, , , , ,188 1,068,999 1,182,344 1,261,256 1,375,562 1,375, 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 39/2story bldgs (156 uts total) 2013 Reserve Expenses In August 2013 paid Colonial Roofing $14,663 to repair all building eaves risers. In Sept Dec paid Stroemer & Co. $5,500 for audit of 2012 records. In Sept paid Bain Sealcoat $1,000 from Pavement reserve