LONG RANGE PLAN 2017: PROPOSED FUNDING & PHASING PLAN

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1 More information about the Long-Range Plan & schematic designs for each element can be found on the Club website at www. arbutusclub.com. Contact our CEO, Brent Elkington, at com for questions or @arbutusclub LONG RANGE PLAN 2017: PROPOSED FUNDING & PHASING PLAN

2 INTRODUCTION LRP SUMMARY The Arbutus Club (the Club ) has just completed a Long Range Plan ( LRP ) for its club facilities, which was presented to the Membership at the Annual General Meeting in April The Board is now seeking Member approval of the LRP and to allow the Club to borrow up to 14 million for the implementation of elements of the LRP. This document provides a summary of the LRP, a phasing plan, cost estimates, a funding plan and the resolution to be voted on at the General Meeting scheduled for Thursday, September 28 at 7:00pm at the Strathcona Room. Members may vote at the General Meeting or online (more details will be sent by ). SPECIAL RESOLUTION TO BE VOTED ON AT THE GENERAL MEETING OR ONLINE THURSDAY, SEPTEMBER 28 / 7:00PM / STRATHCONA ROOM Be it resolved that the Board of Directors of The Arbutus Club be authorized to spend up to a total of 20 Million for the Long Range Plan 2017 as outlined in the proposed funding and phasing plan and also be it resolved that the Board of Directors be authorized to borrow up to 14 Million to fund the Long Range Plan View our LRP Boards starting from Thursday, August 17, located on the 2nd floor adjacent to the Main Rink. The LRP was prepared by a design consultant during under the direction of the Long-Range Planning Committee (the LRPC ). The LRP identifies a set of renovation/expansion projects, schematic designs, and a phasing plan. The elements in the LRP being advanced at this time have an estimated Class C cost of 20 million and include: Addition of a new temporary Multipurpose Court Covering (Development and Building Permit already in place) Conversion of the existing Curling Rink to a new full-size Gymnasium and Year-Round Family Fun Centre Renovation of the Shaughnessy Room (Youth Room) Improvement of accessibility and circulation with a new elevator and new and renovated stairs between levels of the Club Consolidation and renovation of the Spa/Physio/Massage and Wellness Spaces in the basement of the Club adjacent to existing adult changerooms Expansion of the Fitness Centre through floor infill and repurposing of an existing group fitness studio Renovation of squash lounge and gymnasium viewing Relocation and renovation of staff lounge and offices for Recreation Services Staff Renovation/relocation of executive offices and Board Room in a condensed footprint and creation of a new multipurpose space Renovation of the retail Pro Shoppe Renovation of existing multipurpose studios (Arbutus Studios) Renovation of Club Reception area LRP elements being deferred include: Conversion of a singles squash court to a doubles squash court Construction of a new mezzanine and associated exit stair to expand the floor area of the Fitness Centre. The proposed scope of work of the project results in an addition of approximately 638 Sq. Ft., which is within the Club s current allowable FSR, and therefore will not require a CD1 Text Amendment for its zoning.

3 PHASING PLAN A phased approach is recommended because: The nature of much of the proposed work requires a sequential approach. The LRP elements shown in blue in the Phasing Plan diagram are interdependent and have a logical sequencing for implementation. There is more flexibility in when the independent elements (shown in green) can be scheduled. Phasing will allow the Club to minimize and manage operational disruption during construction. Phasing allows for loan funding requirements to be minimized. It is anticipated that the work can be completed over a three-year period. The elements currently shown as deferred could be developed separately at a later date. LRP Independent Phases Tennis Cover Arbutus Studios Pro Shop, Coffee/Wine Bar Elevator Lobby (Pkg P2, P3) Year 1 Year 2 Year 3 Deferred 2 months 2 months 4 months 2 months Gym Shaughnessy Room 8 months 3 months LRP Interdependent Phases New Stair and Elevator Expanded Fitness - L2+L3 Spa and Wellness Squash Lounge, Gym Viewing Staff Lounge, Admin Offices Multi-purpose, Group Fitness Executive Offices Reception and Central Stairway 11 months 4 months 5 months 6 months 3 months 4 months 3 months 10 months Expanded Fitness - Mezz + Exit Stair Doubles Squash Court Total # months with construction each year: 6 months 10 months 8 months 11 months 10 months 10 months

4 COST ESTIMATES The Class C cost estimates provided by BTY Cost Consultants are as of May 4, 2017 (in 2017 dollars), and are expected to be accurate to within plus or minus 15% to 20%. The estimates include the following contingencies: 10% design contingency 11% post-tender change order contingency 10% general contingency BTY s total estimate for the included elements is 18.5 million. However, BTY anticipates that costs will escalate by about 2% to 4% per year due to inflation. The Table on the opposite page shows costs escalated at 3% per year to match the three-year phasing plan, assuming Phase 1 begins in The sum of the escalated costs for the included elements is 19.6 million. As the process advances to more detailed design (design development) for each LRP element, the cost estimates will be refined further. SEE OPPOSITE PAGE FOR COST ESTIMATES.

5 LRP Independent Phases Class C Cost with annual escalation (rounded to 000 s) BTY 'Class C' Cost Estimates ( 2017) (1) Elapsed Const Time Total Class C Costs escalated at 3% per year from 2017 Cost including Cost minus 20% Cost plus 20% Project Description (months) Contingency Multicourt Covering 2 2,103,500 1,682,800 2,524,200 2,167,000 Arbutus Studios 2 254, , , ,000 Pro Shoppe, Coffee/Wine Bar 4 773, , , ,000 Elevator Lobby (Pkg P2, P3) 2 243, , , ,000 Simple Sum of Years 1-4 2,167, , , ,000 Gym 8 3,527,700 2,822,160 4,233,240 3,634,000 Shaughnessy Room 3 638, , , ,000 Subtotal 4,165,900 3,332,720 4,999,080-4,291, ,634, ,000 4,291,000 LRP Interdependent Phases Expanded fitness - mezz + exit stair 6 deferred deferred (2) Squash Lounge, Gym viewing 6 880, ,240 1,056, , ,000 Doubles Squash court 10 deferred deferred (2) Subtotal 880, ,240 1,056, , ,000 New Stair and Elevator 11 2,670,300 2,136,240 3,204,360 2,833,000 2,833,000 Expanded Fitness - L2+L3 4 2,220,800 1,776,640 2,664,960 2,356,000 2,356,000 Spa and Wellness 5 1,068, ,400 1,281,600 1,133,000 1,133,000 Subtotal 5,959,100 4,767,280 7,150, ,322,000-6,322,000 Staff Lounge, Admin Offices 3 642, , , , ,000 Multi-purpose, Group Fitness 4 789, , , , ,000 Executive Offices 3 591, , , , ,000 Subtotal 1,380,500 1,104,400 1,656, ,508,000 1,508,000 Reception and Central Stairway 10 2,054,300 1,643,440 2,465,160 2,245,000 2,245,000 TOTAL LRP 18,457,400 14,765,920 22,148,880-6,458,000 7,412,000 5,683,000 19,553,000 (1) Cost Estimates provided by BTY cost consultants May 4, 2017 are accurate to within +/- 15%-20%. (2) The estimated cost of the deferred elements totals 3.8 million (1.7 million fitness mezzanine, 2.2 million doubles squash)

6 FUNDING PLAN The Club s annual operating budgets allow for fee revenue from dues to cover annual operating costs. Any cash accumulated during a fiscal year is usually from membership activity (i.e. Initiation Fees). This cash accumulation is typically used to pay for major capital projects and to repay outstanding loans. The table below shows the Club s forecast of its cash position to It s position without the LRP is shown in blue. The LRP is shown in yellow phased over three years beginning in Anticipated borrowing needed to fund the LRP is shown in green. The forecast estimates that borrowing of 12.5 million will be required by 2020 and will be repaid by The special resolution is requesting Member authorization for LRP borrowing of up to 14 million (calculated as 12.5 million plus 20% reflecting the variance in the Class C cost estimates). = Based on CFO s Long Range Cash Forecast as of May 31, = Funds used for LRP. = Use and repayment of borrowed funds Forecast of new applicants on wait list (1) Forecast of changes in cash position Starting cash Cash accumulation during year Cash used for regular annual capital items Cash used for other major projects (2) ,166,800 5,779, , , , , , , ,500 2,012,300 1,852,500 2,030,900 2,371,200 2,970,000 3,697,400 4,037,800 3,490,600 3,561, , , , , , , , , ,000-1,800,000-1,800,000 Cash used for LRP Three-Year Phasing Plan Ending cash before loan New funds from loan Loan payment - principal Loan payment - interest Ending cash 5,779,100-6,458,000-7,412,000-5,683, ,126,400-5,037,500-3,299,300 2,960,700 3,692,100 3,949,900 3,372,500 3,476,000 2,000,000 6,000,000 4,500,000-1,700,000-2,600,000-3,000,000-2,500,000-2,700,000-30, , , , , , ,000-54, , , , , , , , ,000 Notes (1) Assumes wait list frozen until September 2018 (2) Kitchen 2017, Kids Wing 2017, Fireside Grille 2018