Legal Fee Income This is legal fees charged back to homeowner s accounts. CROA

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1 The following is a narrative description of each line item in the attached proposed budget for the Celebration Residential Owners Association (CROA) and the Celebration Joint Committee (CJC.) Joint Committee expense items represent expenses that are shared between CROA and the Celebration Non Residential Association (CNOA) based on an allocation of ¼ to CNOA and ¾ to CROA. CROA INCOME Association Dues Single Family, Townhome and Condominium Base Assessments: All recorded residential lots pay this assessment. The current number of recorded lots is 4,321. Working Capital Contributions This is based on the collection of a onetime initial Capital Contribution that is equal to one (1) years Annual Base Assessment at the time of transfer of ownership for each unit. This fee is provided for in the Amendment to the Restatement of the Amended and Restated Declaration of Covenants, Condition and Restrictions for Celebration Residential Owners Association (CROA) approved by the members and recorded on April 2, Working Capital Reserves To provide for funding for the Master Recreation Plan. The recreation fees from apartments and the Initial Capital Contribution at the time of transfer of title is recorded are including in the funding. Any expenditures from this reserve item requires approval from the CROA Board of Directors. Reserve Fund Contributions To provide funding for replacement items. The monthly reserve deposits are budgeted based on the reserve calculation provided from the reserve study. Capital Expenditure To provide for the budgeted 851 Building mortgage payment to be redirected to the Working Capital Fund. Trash Service Fees Trash Service Fees for Single Family and Townhomes: Residents are invoiced a trash fee for residential trash removal that offsets dollarfordollar the service rate charged by the trash contractor. Proposed fee is $ annually and will be invoiced quarterly. Maintenance Income Service Area Income: Reimbursement of labor costs for management, maintenance and janitorial services performed in the service areas. This is $17 per door per month for 543 service area units. This also includes a monthly fee from the Artisan Park service area. Legal Fee Income This is legal fees charged back to homeowner s accounts. Owner/Builder Fines Specific Assessment Income: Based on fines imposed by the Board and Covenants committee as allowed by the Florida Statute for noncompliance with the Use Restrictions in the Amended and Restated Declaration of Covenants, Condition and Restrictions for Celebration Residential Owners Association (CROA) approved by the members and recorded April 2, Late Charges Late Charges/NSF Fee Income: Based on charges applied to homeowners' delinquent account per the Collection Policy established by the Board of Directors. Aquatics Income Aquatics Income: Income generated from aquatics programs. Bad Debt Bad Debt expense for uncollectable assessments, interest, collection fees and legal fees on owner accounts. Delinquency Interest Delinquency Interest Income: Based on charges to homeowners' per the Collections Policy established by the Board of Directors. Interest Income Interest earned from operating accounts throughout the year. Rental Income Reimbursement based on square footage of office space at 851 Celebration Avenue used for management and operation of Celebration Nonresidential Owners Association (CNOA). Miscellaneous Income Income generated from fees for copies, sales of thumb drives containing Association documents and open house listing fees. Recreation Events Income Income generated from lifestyle events. Recreation Income Income generated from recreation programs and room rentals.

2 Farmers Market Income Income from Farmers Market Prior Year Surplus Prior year surplus used to balance the budget Contingencies Used for emergency funding. Common Area Key Fee This is revenue from Resident ID Card and Lanyards. EXPENSES ADMINISTRATIVE AND GENERAL Manager/Admin To provide for association staff costs. This line includes the salary, taxes, workers' compensation and benefits including a Manager, Full Time and Part Time staff member. OPERATIONAL EXPENSES Gas/Oil/Travel To provide for the maintenance, gas, taxes and tags for vehicles, NEVS and work related mileage and toll reimbursement for employees. Park and Pool Monitor To provide for roving park monitors on duty seven (7) days per week during evenings and weekends. Farmers Market To provide for staff payroll and signage for support to the market. This also includes the cost of the monthly port a potties. Telephone/Communication To provide for the telephone lines needed for security emergency phone lines. Audit Expense To provide for an annual audit of the associations' books and tax returns to be prepared by an independent CPA Firm, as required by the Florida Statutes. Legal & Professional To provide for legal and professional fees, as needed, for document interpretation, contract review, policy resolution review, enforcement actions, collection efforts and resident based issues. Proposed cost for 2016 includes the services for a Building Architect and a Landscape Architect to assist in expediting the ARC and Landscape application process, anticipated legal fees to cover collections, general counsel, covenants enforcement and ARC issues, mediation and the Civic Corridor. Covenants/Homeowner To provide for landscape services to care for abandoned homes that are maintained by the Association until legal action is complete. Joint Committee Expenses CROA's portion of the shared expenses between CNOA and CROA ROA pays 75% of the CJC expenses and CNOA pays 25% of the CJC expenses. Misc Administrative To provide for CROA Annual Meeting supplies, elections for Board members, surveys, committee meetings (ARC, Covenants, Parks & Rec, etc.), statements, postage, membership fees, corporate registration, bank charges and other supplies/administrative costs specific to CROA RECREATIONAL EXPENSES Facility Maintenance Staff To provide staffing costs for the Operations Manager and five (5) full time and one (1) part time maintenance staff members. Staffing costs include wages, taxes, workers' compensation and benefits Recreation Staff To provide staffing costs for the aquatics, youth sports, recreation programs and events. Staffing costs include wages, taxes, workers' compensation and benefits. This includes the Parks and Recreation Manager, a Lifestyle Coordinator, a Parks and Recreation Coordinator, (1) Aquatics Manager and one (1) Facility Support Staff Pool/Lifeguard Staff To provide for lifeguard staffing costs for the Lakeside pool. Staffing costs include wages, taxes and workers' compensation. This also includes staffing for swim lessons. Personnel Equipment/Admin To provide for expenses for aquatics program including certifications, audits, swimsuits, conferences, classes and memberships, uniforms, supplies and equipment, office phone and cell phones. Net Programs/Events To provide for routine costs necessary to offer activities and programs for residents. Aquatics Expenses To provide for routine costs necessary to offer aquatics activities.

3 TAXES Landscape Management To provide complete landscape management program for the parks, including routine maintenance and care as well as fertilization, disease/pest control, mulch, etc. Also includes maintenance, irrigation repairs and sprinkler upgrades, mulching, sod and plant replacements. This is the third year of a three (3) year contract with Davey Tree. Pool Maintenance To provide for daily maintenance, chemicals, supplies, required permits, inspections, maintenance and pool repairs for five (5) Celebration pool facilities including Spring Lake. Maintenance Facility To provide for general maintenance and supplies as needed for all facilities including but not limited to electrical, plumbing, playground equipment, pest control, maintenance equipment and other supplies related to all active parks, including the Spring Lake. Income Taxes To provide for income tax per the 2016 tax return. Property Taxes To provide for property taxes on common areas. Expenses include taxes to be paid to the CDD on the seventeen (17) acre parcel in the Civic Corridor. JOINT COMMITTEE INCOME Allocation from CROA 75% of the total CJC budget is funded from CROA. Allocation from CNOA 25% of the total CJC budget is funded from CNOA. Electricity To provide for electrical service and exterior lighting for all facilities. Water/Reclaimed To provide for irrigation water for active park facilities as well as potable water for the swimming pools and facilities. Natural Gas To provide for the operation of the pool heaters at Lakeside and Spring Park. Monitoring Expense To provide for monitoring expenses of all pool facilities and parks including sprinkler monitoring and monitoring of all buildings for fire/safety, electronic access and repairs. Janitorial Supplies To provide for cleaning supplies, equipment, soap, paper towels, trash bags & liners and the buffing and stripping of floors. Supplies/EquipRec To provide for the supplies for use in activities and for the general enjoyment of residents such as: tables, chairs, linens, tents, flags, recreational equipment and large tools. DIRECT BILLING CONTRACTS TRASH REMOVAL Trash Removal To provide residential trash removal for all closed homes at a rate of $ per year and will be invoiced quarterly. Budget based on the number of homes projected to be sold at 12/31/2017. Newsletter Income Income from newspaper ad sales. Bad Debt Bad Debt expense for uncollectable assessments, interest, collection fees and legal fees on owner accounts. Miscellaneous Income Map Sales Reserve Fund Contribution To provide funds for painting and replacement of the Water Tower. EXPENSE ADMINISTRATIVE AND GENERAL Audit Expense To provide for an annual audit of the committee's books and tax returns for 2016 to be prepared by an independent CPA firm. Proposed cost is based on a quote from the prior year's auditor with no increase. Engagement letters will be signed in November. Legal and Professional To provide for legal fees and needed for document interpretation, contract review and policy resolution review. Town Hall Network To provide for contract services to manage Town Hall Network/Celebration Front Porch. This includes repairs and upgrades, hardware, support, highspeed internet and CeleService.

4 This also includes web site hosting, Proactive hardware and virus support, MS & MacAfee corporate license for Microsoft, Mail Chimp for weekly Friday Flash or other mass s, Smart City for fiber to town hall, Vimeo for hosting videos, Comcast Lakeside internet for camera and key card access. Management Fees Monthly management fees to CCMC for adminstrative, general operating, fiscal/accounting and risk/claims management services. Misc On Site Exp To provide for other onsite expenses as needed including storage rental, Sam's Club membership, water, candy, coffee (hospitality), mat care, holiday decorations and recycling. OPERATIONAL Common Area Repair Provides for repairs or maintenance for the Water Tower at Water Tower Place. Supplies Administr To provide for perishable supplies such as paper, pens, paperclips, CDs, toner, etc. This includes stationery, envelopes, business cards and general administrative costs Misc Administrative Bank fees, employment posters, chamber dues, CAI membership employment ads, CN Inventory, Uniforms, CC Fees Staff Payroll To provide for the salary, taxes, workers comp and benefits for the Executive Director, Community Manager, 15 hours Customer Solutions Manager, Office Manager, Accounts Payable and Accounts Receivables employee and three and a half rotating receptionists for Town Hall. The receptionist will take all cash, check and credit card payments for assessments, retail, facility booking, program registration, key cards, and weekend real estate open house. Supplies/Equipment To provide for cost of association onsite office equipment leases for computers, new computers, copier (Cannon), printer, postage (Pitney Bowes) and fax machine. Also includes monies for additional furniture, equipment and software as needed with growth. Member Comm & Prog Expenses related to the production of the Celebration News. Includes salaries and benefits for the Communications Manager, Part of Customer Solutions Manager, Sales Rep and Art Director, printing, postage costs, delivery and storage of the papers. Other expenses include staff payroll, bandwidth and some programming and filming of the Board meetings and recreational programs, etc. and expenses for the operation and maintenance of the Community website. Include Tribune Direct, Verizon, U.S. Postmaster, Uncle Bob's Storage. Telephone/Communicat To provide for the cost of the association's administrative office and staff member telephone and communication needs including office VOIP phones, cell phones, required landlines for emergencies and after hours answering service ARC/Covenants Staff To provide for staff payroll for Covenants, ARC & Administration for CROA/CNOA and CJC. This includes the salary, taxes, workers' compensation and benefits. Elec Water Tower To provide electricity to the Water Tower at Water Tower Place. Grounds MTC Water T To provide for landscape maintenance and plant replacements, as needed, for the parcel of land at the Water Tower, (not the entire Water Tower place). Special Events To support events such as Founders Day, Posh Pooch and Food Truck Fridays. Security Service To provide security when needed. INSURANCE Insurance Deductible To cover any insurance deductibles. Property Taxes Property taxes for the parcel of land at the Water Tower. D&O Insurance To provide professional liability protection for the officers and directors of CJC, CROA and CNOA. Combining entities results in savings to the community.

5 CELEBRATION RESIDENTIAL OWNERS ASSOCIATION OPERATING BUDGET COMPARISON TO PRIOR YEAR BUDGET YEAR BUDGET BUDGET YE PROJ GL ACCT # INCOME 0401 ASSOCIATION DUES $ 3,938,159 $ 3,938,160 $ 3,938, WORKING CAPITAL $ 330,838 $ 322,636 $ 373, WORKING CAPITAL RESERV $ (653,489) $ (634,841) $ (690,178) 0402 RESERVE FUND CONTRIB $ (591,000) $ (476,000) $ (476,000) CAPITAL EXPENDITURE $ (310,200) $ (187,308) $ (187,308) 0417 TRASH SERVICE FEES $ 755,850 $ 730,767 $ 724, RECREATION FEE APT $ 322,651 $ 312,205 $ 316, MAINTENANCE INCOME $ 116,280 $ 86,504 $ 108, LEGAL FEE INCOME $ 62,004 $ $ 49, OWNER/BUILDER FINES $ $ $ 0441 LATE CHARGES $ 30,447 $ 41,025 $ 37, AQUATICS INCOME $ 23,500 $ 25,830 $ 23, BAD DEBT $ (10,020) $ (115,937) $ (18,186) 0449 DELINQUENCY INTEREST $ 39,996 $ 47,159 $ 39, INTEREST INCOME OP $ 3,504 $ 3,960 $ 4, RENTAL INCOME $ 24,024 $ 24,024 $ 24, MISCELLANEOUS INCOME $ 4,500 $ 3,000 $ 25, RECREATION EVENT INC $ 110,370 $ 134,832 $ 105, RECREATION INCOME $ 84,000 $ 81,590 $ 86, FARMERS MARKET REVENUE $ 40,200 $ 6,000 $ 41, PRIOR YEAR SURPLUS $ 63,565 $ $ 6871 CONTINGENCIES $ (38,208) $ (38,208) $ (38,208) 0452 COMMON AREA KEY FEE $ 16,980 $ 20,000 $ 17,852 TOTAL INCOME $ 4,363,951 $ 4,325,398 $ 4,505,429 EXPENSES ADMINISTRATIVE & GENERAL MANAGER/ADMIN $ 126,499 $ 124,370 $121, AUDIT EXPENSE $ 10,900 $ 10,900 $10, LEGAL & PROF $ 116,208 $ 93,252 $116, COVENANTS/ HOMEOWNER $ 1,500 $ 3,000 $ JOINT COMMITTEE EXP $ 1,001,004 $ 1,011,781 $993, MISC ADMINISTRATIV $ 52,740 $ 60,996 $48,210 TOTAL ADMINISTRATION $ 1,308,851 $ 1,304,299 $ 1,290,901 OPERATIONAL EXPENSES 6581 GAS/OIL/TRAVEL $ 9,675 $ 15,732 $9, PARK AND POOL MONITOR $ 50,004 $ 71,787 $62, FARMERS MARKET $ 36,996 $ 15,600 $36, TELEPHONE/COMMUNICAT $ 4,788 $ 8,340 $4,800 TOTAL OPERATIONAL EXPENSES $ 101,463 $ 111,459 $ 113,425 RECREATIONAL EXPENSES 6649 FACILITY MAINTENANCE STAFF $ 367,773 $ 361,509 $354, RECREATION STAFF $ 239,275 $ 222,748 $229, POOL/LIFEGUARD STAFF $ 70,884 $ 60,343 $65, PERSONNEL EQUIP/ADMN $ 27,276 $ 29,516 $20, NET PROGRAMS/EVENTS $ 172,091 $ 177,039 $165,000 6

6 CELEBRATION RESIDENTIAL OWNERS ASSOCIATION OPERATING BUDGET COMPARISON TO PRIOR YEAR BUDGET YEAR BUDGET BUDGET YE PROJ 6716 AQUATICS EXPENSE $ 6,048 $ 18,296 $9, LANDSCAPE MGMTPOOLS $ 668,016 $ 610,746 $550, POOL MAINTENANCE $ 116,052 $ 128,916 $117, MAINTENANCEFACILITY $ 158,304 $ 169,260 $149, ELECTRICITY $ 137,880 $ 143,188 $134, WATER/RECL/SPR/MONIT $ 128,856 $ 133,108 $111, NATURAL GAS $ 16,360 $ 16,000 $16, MONITORING EXPENSE $ 7,860 $ 8,472 $7, JANITORAL SUPPLIES $ 9,636 $ 7,888 $9, SUPPLIES/EQUIPREC $ 52,716 $ 51,744 $48,194 TOTAL REPAIRS & MAINT $ 2,179,027 $ 2,138,773 $1,989,063 DIRECT BILLING CONTRACTS 6613 TRASH REMOVAL $ 755,850 $ 730,767 $737,882 TOTAL DIRECT BILLING CONTRACTS $ 755,850 $ 730,767 $ 737,882 TAXES 6806 INCOME TAXES $ 1,400 $ 1,400 $ RE PROPERTY TAXES $ 17,360 $ 38,700 $38,700 TOTAL TAXES $ 18,760 $ 40,100 $ 38,700 TOTAL EXPENSE $ 4,363,951 $ 4,325,398 $ 4,169,971 NET INCOME/(LOSS) $ 0 $ $ 335,458 7

7 CELEBRATION JOINT COMMITTEE MONTHLY OPERATING BUDGET BUDGET YEAR GL ACCT # INCOME BUDGET BUDGET YE PROJ ALLOCATION FROM CROA $ 1,001,001 $1,011,781 $1,006, ALLOCATION FROM CNOA $ 333,667 $337,261 $329, NEWSLETTER INCOME $ 350,004 $351,228 $ 339, BAD DEBT $ $0 $ (8,564) 0459 MISCELLANEOUS INCOME $ 10,008 $9,996 $ 11, RESERVE FUND CONTRIB $ (8,004) $ (8,000) $ (8,004) TOTAL INCOME $ 1,686,676 $1,702,266 $ 1,671,287 EXPENSES ADMINISTRATIVE & GENERAL 6501 AUDIT EXPENSE $ 3,000 $ 3,000 $ 3, LEGAL & PROF $ 505 $ 504 $ 6509 TOWN HALL NETWORK $ 37,356 $ 51,996 $ 54, MANAGEMENT FEES $ 93,600 $ 91,200 $ 91, SUPPLIES ADMINISTR $ 6,350 $ 9,996 $ 8, MISC ADMINISTRATIV $ 6,636 $ 6,996 $ 6, STAFF PAYROLL $ 627,053 $ 501,024 $ 494, SUPPLIES/EQUIPMENT $ 20,405 $ 27,996 $ 19, MEMBER COMM & PROG $ 458,040 $ 456,996 $ 462, TELEPHONE/COMMUNICAT $ 24,924 $ 24,996 $ 29, MISC ONSITE EXP $ 14,580 $ 16,008 $ 17,644 TOTAL ADMINISTRATION $ 1,292,449 $ 1,190,712 $ 1,188,444 OPERATIONAL EXPENSES 6601 COMMON AREA REPAIR $ 996 $ 1,008 $ 6608 ARC/COVENANTS STAFF $ 215,352 $ 333,654 $ 335, ELEC WATER TOWER $ 715 $ 792 $ GROUNS MTC WATER T $ 15,408 $ 17,160 $ 15, SPECIAL EVENTS $ 20,004 $ 20,004 $20, SECURITY SERVICE $ 5,004 $ 9,996 $400 TOTAL OPERATIONAL EXPENSES $ 257,479 $ 382,614 $ 371,514 INSURANCE 6801 PROP/CGL/FIDEL INSUR $ 111,852 $ 108,936 $78, INSURANCE DEDUCTIBLE $ 2,500 $ 2,500 $ RE PROPERTY TAXES $ 2,412 $ 2,500 $2, D&O INSURANCE $ 19,984 $ 15,000 $15,000 TOTAL INSURANCE $ 136,748 $ 128,936 $95,496 TOTAL EXPENSE $ 1,686,676 $ 1,702,262 $1,655,454 NET INCOME/(LOSS) $ $ 4 $ 15,833 DEPRECIATION 0892 DEPRECIATION EXP $ $ $0 NET INC/(LOSS) AFTR DEPREC $ $ 4 $ 15,833 8