annual disclosures annual budget report and...

LAKE OF THE PINES ASSOCIATION

ANNUAL DISCLOSURES

Annual Budget Report and Annual Policy Statement

Effective January 1, 2018

November 2017 Dear Lake of the Pines Members, Attached is the Lake of the Pines Association 2018 Budget Report and Annual Policy Statement. Your LOP Finance Committee, Board of Directors and Management have worked very hard to adopt a budget that limits the increases and fulfills our responsibilities. This year our increased fees and assessment are greater than recent years, but time has caught up with us and this increase is necessary to maintain our community amenities at a reasonable level in the years to come. If you are receiving your Budget document by email, thank you for taking the time to complete our E-mail Consent Form, which allows us to email certain documents instead of incurring the cost of printing and postage. More than 700 of our members have already signed up for E-mail Consent. If you are receiving this from the post office, that means you have not yet signed up for E-mail Consent. You too can help us save money and control our costs by signing up for E-mail Consent, and then you will also receive the full document, instead of just the summary. If you want the full document, check out our website where it can be downloaded; and the next time you are near our office, stop in and sign up for E-mail Consent. Help us to limit future assessment increases! Your comments are always welcome. Wishing you Happy Holidays and a happy and prosperous New Year! Jim Morrill, LOP Board President

11665 LAKESHORE NORTH, AUBURN, CA 95602 (530) 268-1141 FAX (530) 268-8014

Lake of the Pines Association An Incorporated Membership Community Since 1967

Lake of the Pines Association is a nonprofit, mutual benefit corporation formed to provide for the proper maintenance and administration of the common areas within the planned development of Lake of the Pines, and to uphold the Declaration of Covenants, Conditions and Restrictions (CC&Rs) that govern the planned development. This information is provided by the Board of Directors of Lake of the Pines Association for the benefit of its members and in compliance with California Civil Code and the governing documents of the Association. If you have any questions about this information or about the operations and responsibilities of the Association and for "official communications" you may contact the Association's General Manager, John Bowman, at [email protected], or you may write to the Board of Directors at:

Lake of the Pines Association

11665 Lakeshore North Auburn, CA 95602

e-mail: [email protected] phone: (530) 268-1141 fax: (530) 268-8014 website: www.lop.org

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

NOTICE OF ANNUAL ASSESSMENT

On October 18th, 2017, the Board of Directors approved the 2018 budget and annual assessment of $2,676 per lot. The annual assessment of $2,676 results in a monthly assessment of $223. ACH payments are preferred but you may still pay by check or other methods. Coupon books are mailed by mid-December to all members who currently pay by manual check or any other means than ACH. If you have not received this information please notify the Accounting office at 530 268-1141, ext. 2100.

Payment Due Date Options • Annual payment of $2,676 due January 1, 2018 or • Semi-annual payments of $1,338 due January 1, 2018 and July 1, 2018 or • Monthly payments of $223 are due the first of each month.

Late Charges and Interest • A 10% late fee will be charged on all assessments not received by the

Association by the fifteenth of the month (postmarks not accepted). Interest may be charged on all delinquent amounts at the rate of 1% per month, 12% per annum.

Ways for members to make assessment payments • ACH Automatic Debit (through LOP Association) • Personal Online Banking (Bill Pay) • Pay by Credit Card or Electronic Check through the website only. • Mail or deliver in person to the Association.

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Information for Members Below is information that can/should be provided by you to help keep your information up-to-date and reduce potential responsibility. Contact Information:

Please notify Administration when you have changes to your mailing address, phone number, and/or email address so your contact information can remain up-to-date. The Member Phone Directory is updated periodically, and you can decide what, if any, information will be listed. This is a paper copy that is sold to members. Please contact Administration to find out what is currently included and/or to make changes.

Website: Resident Directory - On the website under Contacts, there is a Resident Directory. For

member contact information, the website defaults to "Hide from Address Book", which means that only your name can be seen. None of the members can look up your contact information on the website. If you would like to have some or all of your information available to other members, please log into www.lop.org, click on My Profile, and uncheck the boxes next to your Phone Numbers, Email Address, and/or Primary Address. Please note: any changes made here will not be updated on your account in Administration or Accounting. Subscriptions - To receive email blasts on the Board Agenda Notifications, Food & Beverage and Recreation events, the Pines Times and emergency notifications to all members, log into www.lop.org, click on My Profile, click on the Subscriptions tab

Vehicles: If you sell a boat, golf cart or vehicle that has an LOP decal on it, please advise

Administration immediately, so the decal can be deactivated. This eliminates the risk of you being charged for any violations incurred by the new owner of the vehicle(s) and any unauthorized entry into LOP.

Residents/ Tenants:

Please advise Administration of changes to your residents/tenants. Oftentimes, individuals move from one house to another inside the lake. This eliminates the risk of you being charged for new fines incurred by past tenants.

PIN #s: Please do not give your PIN number to anyone else. This means anyone having your lot

number and PIN number can call in guests or add guests to your lot. Tenants can have their own PIN numbers for your lot and it will be removed when Administration is advised that they have moved.

ID Cards: Please do not allow anyone else, family or otherwise, to use your LOP ID Card. Not

only will the card be deactivated, but you face a $50 fine if caught.

LOP Contacts Administration ...................................................................................................... 530-268-1141, ext. 2000 Administration Manager ....................................................................................... 530-268-1141, ext. 2002 Environmental Control.......................................................................................... 530-268-1141, ext. 2012 Food & Beverage/Magnolia Pointe Grille ............................................................ 530-268-1141, ext. 2200 General Manager ................................................................................................... 530-268-1141, ext. 2001 Operations Manager .............................................................................................. 530-268-1141, ext. 2101 Public Safety ......................................................................................................... 530-268-1135, ext. 1 Recreation Coordinator ......................................................................................... 530-268-1141, ext. 2015

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Lake of the Pines AssociationBudget Summary

2018Version 6 - 10/11/17

Operating Budget Revenue Expense Net Member Contribution

Common 30,000 753,200 (723,200) Administration 422,300 796,760 (374,460) Accounting 21,400 425,939 (404,539) Environmental Control 24,915 96,492 (71,577) Golf & Pro Shop 635,350 231,247 404,103 Golf Course Maintenance - 652,712 (652,712) Food & Beverage 1,461,594 1,646,221 (184,627) Recreation 28,950 173,536 (144,586) Public Works - 1,087,989 (1,087,989) Public Safety 91,150 628,512 (537,362)

Pre-Assessment Totals 2,715,659 6,492,608 (3,776,949) Operating Assessment 3,736,066 1,857.820

Balance (40,883)

Non-Operating Allocations Amount

Contingency fund 5,379 2.675Renovation/debt service 350,088 174.087Capital additions 85,500 42.516Capital reserve 1,204,388 598.900

Non - Operating Assessment Total 1,645,355 818.178

Operating and Non-Operating Assessment Total 5,381,421 2,675.998Member Monthly Assessment 223.000

The pro forma budget is available at the administration office. Copieswill be provided upon request at the expense of the Association. If anymember requests a mailed copy, the Association will send a copy tothe member within five business days by first class United States mailat the expense of the Association.

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COMMON

2018 BUDGET

2016 2017 2018

Description Actual Budget Budget

REVENUE

Cable TV 26,130 24,000 24,000

Purchase Discounts 303 - -

LOP News 5,932 6,000 6,000

Total Revenue 32,365 30,000 30,000

EXPENSES

Comp-Workers Compensation 12,500 14,000 12,000

Comp-Employee Recognition 52,240 74,825 70,000

Electricity 141,395 138,000 150,000

Satellite TV 942 2,500 2,400

Water - Treated 21,662 21,000 22,000

Telephone 60,243 60,000 40,000

Pager/Cell Phone 12,417 13,000 12,000

Cable/Internet 13,976 13,000 13,000

Solid Waste 28,572 29,000 30,000

Sewer 42,660 42,700 42,700

Propane 25,465 26,000 28,000

Supplies 983 1,000 1,000

Supplies - Committees 1,969 3,500 4,000

Legal 47,325 25,000 40,000

Animal Control 4,945 5,800 6,000

Service Contracts 2,473 2,400 9,000

Bad Debt Expense 17,000 15,000 6,000

Election Expense 7,336 7,500 7,500

Insurance - Directors & Officers 17,000 18,000 19,000

Insurance - Insurance Claims 13,960 15,000 12,000

Insurance - Property/Liabilty 146,999 145,000 148,000

License & Permits 172 100 100

Safety Programs 4,327 3,100 3,500

Software Licenses 65,988 73,000 60,000

Taxes - Personal Property (7,163) 10,000 10,000

Income Tax 1,463 5,000 5,000

TOTAL EXPENSES 736,849 763,425 753,200

NET INCOME (704,484) (733,425) (723,200)

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ADMINISTRATION

2018 BUDGET

2016 2017 2018


REVENUE

Access Card Fee-Member 3,920 4,000 4,400

Access Card Fee- Non-member 26,940 22,000 24,000

Auto Decals 9,346 6,000 7,000

Boat Rack Rental-Annual 7,999 8,800 10,000

Boat Registration 106,307 105,000 115,000

Marina Slip Rental 75,630 77,175 100,000

Street Golf Cart Registration-Annual 15,070 13,000 15,000

Dual Usage 7,770 6,695 6,600

Lake Center Gate Usage 9,660 9,000 9,500

Misc. Income 662 500 1,000

Owner Tenant Fees 23,310 25,000 24,200

RV Income 61,913 61,500 67,500

HOA Doc/Transfer Fees 39,415 30,000 34,600

Rental Fees - Member 3,988 3,500 3,500

Total Revenue 391,930 372,170 422,300

EXPENSES

Comp-Gross Pay 444,269 476,982 487,203

Comp-Gross Pay: Overtime 6,498 2,400 2,400

Comp-Employer Taxes 37,894 43,153 44,079


Comp-Health Care 55,066 77,916 81,812

Comp-Dental 4,147 4,822 5,111

Comp-Life 871 1,124 1,124

Comp-401(k) 10,676 10,395 10,395

Other 1,370 1,500 1,500

Supplies - Office 14,569 15,000 15,000

Supplies - Keys 238 200 200

Supplies - Auto Decals - 6,500 6,500

Supplies - Boat Decals 3,086 3,300 3,300

Supplies - Street Cart Decals 1,345 1,600 1,600

Supplies - Access/Gift Cards 3,818 3,560 4,000

Supplies 4,313 2,000 2,775

Equip - Rent/Lease 2,109 2,100 2,100

HR Consulting/Legal - - 6,000

Business Meals/Entertainment 1,911 2,000 4,000

Recruitment Expense 12,133 7,500 8,500


Cash Shorts/overs (1) 100 100

Dues & Subscriptions 2,237 1,400 1,400

Education & Training 3,568 1,500 6,500

Fees & Memberships - - 2,000

Keys - Lake Center Gate 3,079 200 3,000

Keys - Marina 1,358 100 1,400

Member Recognition 758 3,000 3,000

Marketing/Promotional 90 500 500

Postage 8,629 9,500 9,500

Printing 2,831 4,000 4,000

Travel: Mileage 152 500 1,500

Travel: Other - 3,000 5,000

TOTAL EXPENSES 638,237 695,555 796,760

NET INCOME (246,307) (323,385) (374,460)

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ACCOUNTING

2018 BUDGET

2016 2017 2018


REVENUE

Late Fees 20,629 18,000 18,000

Interest 1,602 200 1,000

Recovery of Bad Debts 488 2,600 2,400

Recovered Collection Costs 372 - -

Total Revenue 23,091 20,800 21,400

EXPENSES

Comp-Gross Pay 186,591 219,925 254,340



Comp-Workers Compensation 894 1,267 1,461

Comp-Health Care 16,857 31,604 33,184

Comp-Dental 1,311 2,679 2,840

Comp-Life 436 624 624

Comp-401(k) 6,478 6,086 6,086

Comp-Contract & Temp 50,868 - -

Supplies - Office 4,617 3,500 3,500

Audit & Tax 15,205 16,745 20,000

Collection Costs 2,573 6,000 4,000

Payroll Services 25,267 33,991 35,000

Cash Shorts/Overs (31) - -

Credit Card/Bank Fees 29,518 29,000 30,000

Education & Training 746 1,500 1,500

Postage 215 - -

Printing 2,618 5,000 5,000

TOTAL EXPENSES 365,228 383,692 425,939

NET INCOME (342,137) (362,892) (404,539)

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ENVIRONMENTAL CONTROL

2018 BUDGET

2016 2017 2018


REVENUE

Misc. Income 20 10 15

EC Fees 11,442 9,500 10,000

EC Fines 6,775 10,000 6,400

Weed/Lot Maintenance 6,173 6,000 2,500

Road Impact Fees 6,200 5,000 6,000

Total Revenue 30,610 30,510 24,915

EXPENSES

Comp-Gross Pay 52,397 55,721 75,144

Comp-Gross Pay: Overtime 620 1,200 1,200



Comp-Health Care 4,603 4,566 4,794

Comp-Dental 479 536 568

Comp-Life 109 125 125

Comp-401(k) 1,420 1,392 1,392

Supplies - Office 409 300 300

Weed Abatement 5,473 4,000 2,000

Travel: Mileage - 500 150

TOTAL EXPENSES 71,740 75,467 96,492

NET INCOME (41,130) (44,957) (71,577)

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PRO SHOP & GOLF REVENUE

2018 BUDGET

2016 2017 2018


REVENUE

Green Fees - Annual - Spouse 30,888 30,450 32,500

Green Fees - Annual - Guest 4,800 3,600 3,900

Green Fees - Annual - 9 Hole 39,573 41,600 43,700

Green Fees - Annual - Junior 642 800 800

Green Fees - Annual - Regular 204,105 208,080 225,000

Green Fees - Daily Member 30,943 38,000 35,000

Green Fees - Daily Guest 12,426 10,000 11,000

Green Fees - Daily 9 hole Member 18,298 20,000 20,000

Green Fees - Daily 9 hole Guest 1,577 1,800 1,600

Green Fees - Twilight Member 29,915 32,000 30,000

Green Fees - Twilight Guest 110 100 100

Green Fees - Member Tournament 7,797 9,000 8,000

Green Fees - Guest Tournament 10,995 5,000 20,000

Cart Fees - Annual 89,818 92,850 100,900

Cart Fees - Daily 9,915 12,000 12,000

Range Fees-Annual 11,062 11,970 12,100

Range Fees-Daily 11,411 12,000 12,000

Junior Tournament 487 750 750

Merchandise 71,692 62,000 66,000

Total Revenue 586,454 592,000 635,350

EXPENSES

Golf-Cost of Goods Sold 27,303 42,160 44,880

Freight 809 1,500 1,750

Purchase Discounts - - (200)

Comp-Gross Pay 109,286 127,880 131,224

Comp-Gross Pay: Overtime 139 2,400 1,800





Comp-Life 109 125 125

Comp-401(k) 230 243 243

Supplies - Office 1,453 850 750

Supplies - Cleaning - 260 200

Supplies - Golf Cart Decals 949 1,000 1,000

Supplies - Golf Bag Tags 553 570 550

Supplies - Driving Range 2,877 3,000 3,500

Supplies 838 800 1,000

Equip - Repairs 2,078 500 500

Equip - Gas & Oil 85 200 150

Cash Shorts/overs (4) 200 -

Dues & Subscriptions 110 120 100


Golf - Jr. Tournaments 962 1,000 750

Golf - Tournaments 4,655 3,500 4,000

Marketing/Promotional 387 400 250

Travel: Mileage 2,259 1,400 1,400

Uniforms 644 900 750

TOTAL EXPENSES 204,900 226,197 231,247

NET INCOME 381,554 365,803 404,103

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GOLF MAINTENANCE

2018 BUDGET

2016 2017 2018


REVENUE

Total Revenue 0 0

EXPENSES

Comp-Gross Pay 262,185 279,057 381,700




Comp-Health Care 22,400 40,607 44,943

Comp-Dental 2,050 3,751 5,111

Comp-Life 581 874 1,124

Comp-401(k) 5,797 243 6,000

Electricity 31,932 36,000 34,000

Water - Lake 8,544 9,850 9,850


Supplies - Safety 1,901 1,800 1,800

Supplies - Signs 316 500 500

Supplies 7,526 6,000 6,000

Chemicals 6,010 10,000 14,000

Fertilizers 5,824 9,000 12,000

Irrigation Repairs 9,979 9,000 11,000

Repair & Maintenance 2,199 1,600 750

Soil and Sand and seed 3,694 6,000 8,000

Tree Maintenance 7,330 12,000 14,000

Roads & Paths - 250 250


Equip - Rent/Lease 200 500 500

Equip - Repairs 30,711 25,000 25,000

Equip - Small Tools 853 750 750

Equip - Gas & Oil 11,526 12,500 12,500

Dues & Subscriptions 670 600 600


License & Permits 380 250 250

Uniforms 195 250 250

TOTAL EXPENSES 475,504 518,754 652,712

NET INCOME (475,504) (518,754) (652,712)

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Food and Beverage Consolidated

2018 BUDGET

2016 2017 2018


REVENUE

Clubhouse Food 539,895 525,892 626,900

Sports Lounge Food 295,836 315,182 353,760

Clubhouse Beverage 228,713 230,256 252,250

Sports Lounge Beverage 200,118 205,514 228,684

Total Revenue 1,264,562 1,276,844 1,461,594

EXPENSES

CH Food Cost 200,723 241,910 237,793

SL Food Cost 114,681 119,769 134,303

Beer Cost-CH 14,997 86,346 14,280

Wine Cost-CH 35,704 - 32,640

Liquor Cost-CH 19,316 - 24,225

Non-Alcoholic Beverage Cost-CH 8,240 - 5,100

Beer Cost-SL 25,054 67,820 32,640

Wine Cost-SL 14,700 - 16,320

Liquor Cost-SL 20,039 - 22,950

Non-Alcoholic Beverage Cost-SL 10,887 - 6,630

Comp - Gross Pay 614,942 586,602 704,125

Comp - Overtime 52,820 55,017 34,756

Comp - Employer Taxes 96,089 96,767 118,221

Comp - Workers Compensation 29,582 34,314 36,944

Comp - Health Care 9,558 24,477 29,573

Comp - Dental 3,404 4,822 5,971

Comp - Life 870 1,124 1,750

Comp - 401(k) 6,629 7,121 7,250


Supplies - Cleaning 1,108 831 1,550

Supplies - Paper & Plastic 29,808 22,277 31,500

Supplies 7,497 23,115 5,750

Equip - Repairs 2,931 1,036 7,500

Equip - Small Tools 11,708 4,977 7,000

Equipment 43 1,051 -

Linen/Laundry 29,475 25,713 37,500


Cash Shorts/overs 1,679 14,528 -

Comp - Employee Meals 23,226 13,485 22,200

Comp - Employee Meals Use Tax - 10,648 -

Décor Expense 1,704 1,230 1,500

Education & Training 482 - 1,500

License & Permits 6,853 4,373 6,500

Outside Entertainment 17,887 19,717 25,000

Member Recognition 2,375 4,646 2,000

Marketing/Promotional 12 287 1,500

Activities/Event - 3,000

Uniforms - - 2,500

Total Expenses 1,442,027 1,487,886 1,646,221

NET INCOME (177,465) (211,042) (184,627)

J:\BUDGETS\2018 BUDGET\2018 working\Budget 2018_All I-2

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RECREATION

2018 BUDGET

2016 2017 2018

Description Actual Budget budget

REVENUE

Swim Team - Member 2,145 2,000 1,000

Swim Team - Guest 890 1,000 2,000

Swim Lessons 11,725 10,000 9,000

Stroke & Turn Clinic 585 600 800

Tennis: Annual Fee 8,463 7,500 8,400

Tennis: Daily Fees 118 100 50

Tennis Pro Income 250 - -

Activities Fees 2,356 3,000 3,200

Farmers Market 1,912 - -

Day Camp 6,715 7,000 4,500

Special Events 970 1,500 -

Total Revenue 36,129 32,700 28,950

EXPENSES

Comp-Gross Pay 111,696 119,954 120,109






Comp-Life 109 125 125

Comp-401(k) - - 2,004

Propane 10,517 10,000 10,000


Supplies - Safety 299 300 300

Supplies - Keys - 250 500

Supplies 900 250 500

Supplies 24 500 500

Dues & Subscriptions - - 370


Education & Training-swim - 1,000 1,000

Keys - Tennis Courts 541 - -

License & Permits 55 - -

Printing 300 1,000 750

Travel: Mileage 71 300 400

Activities/Event Expense 2,961 4,000 3,000

Farmers Market Expenses 609 - -

Uniforms 1,008 650 800

TOTAL EXPENSES 156,230 172,537 173,536

NET INCOME (120,101) (139,837) (144,586)11 of 52

PUBLIC WORKS

2018 BUDGET

2016 2017 2018


EXPENSES

Comp-Gross Pay 435,345 448,666 457,116




Comp-Health Care 41,092 76,863 75,948

Comp-Dental 4,537 5,894 5,111

Comp-Life 1,101 1,374 1,124

Comp-401(k) 4,055 4,053 4,053

Retirement 1,400 - 1,200

Facility Maintenance Electric 3,266 4,500 4,500

Facility Maintenance Plumbing 5,737 4,000 4,000

Facility Maintenance HVAC 120 3,500 3,500

Facility Maintenance Paint 2,428 3,000 3,000

Facility Maintenance Other 753 - -

Water - Lake 48,417 49,000 49,200



Supplies - Cleaning 29,060 35,000 35,000

Supplies - Signs 1,910 2,500 2,500

Supplies 14,557 15,000 15,000

Brush Removal 13,268 16,000 24,000

Chemicals-Pool 13,126 7,500 7,500

Chemicals-Parks - 4,000 4,000

Fertilizers - 1,000 1,000

Irrigation Repairs 372 - -

Irrigation Repairs-Parks 1,857 2,500 2,500

Repair & Maintenance 28,457 30,000 30,000

Repair & Maintenance-Pool 1,794 - 2,400

Repair & Maintenance-Parks 9,569 8,500 8,500

Soil and Sand 1,460 3,285 3,285

Soil and Sand-Parks 5,638 6,500 6,500

Tree Maintenance 17,579 12,000 12,000

Dock Maintenance 704 2,500 2,500

Lake Safety 3,613 4,000 4,000

Tennis Courts 1,334 2,500 2,500

Lake Chemicals 60,582 75,000 75,000

Roads & Paths 6,434 8,000 8,000

Fences 5,479 2,800 2,800

Water Quality Testing 1,941 - -


Equip - Repairs 13,239 21,000 16,000

Equip - Small Tools 3,193 3,000 3,000

Equip - Gas & Oil 8,399 11,000 13,000

Equip - Vehicle & Cart Repairs 2,088 - 5,000

Equip - Patrol Boat & Barge 2,192 2,000 2,000

Linen/Laundry 3,487 3,000 3,000

Pest Control 4,146 4,070 4,070

Service Contracts - - 84,000


License & Permits 15,312 14,500 14,500

Travel/Milage 45 - -

Uniforms 1,960 3,000 3,000

TOTAL EXPENSES 909,971 986,630 1,087,989

NET INCOME (909,971) (986,630) (1,087,989)12 of 52

PUBLIC SAFETY

2018 BUDGET

2016 2017 2018


REVENUE

Fines- Boating Member 4,375 3,400 3,400

Fines- Boating Guest 750 250 250

Fines- Miscellaneous (Vandalism, noxious behavior)12,200 10,000 10,000

Fines- Moving Violation Member 17,250 40,000 40,000

Fines- Moving Violation Guest 34,200 37,500 37,500

Total Revenue 68,775 91,150 91,150

EXPENSES

Comp-Gross Pay 350,463 466,271 481,304




Comp-Health Care 12,841 27,863 29,256

Comp-Dental 2,490 5,358 5,679

Comp-Life 702 1,249 1,249

Comp-401(k) 5,480 6,689 6,689



Supplies 1,263 1,200 1,200

Repair & Maintenance 748 - -

Equip - Repairs 2,274 2,000 2,000

Equip - Gas & Oil 6,576 10,000 10,000

Education & Training 710 1,800 1,800

License & Permits 1,768 2,250 2,250

Postage 71 - -

Uniforms 4,720 2,500 2,500

TOTAL EXPENSES 518,195 613,038 628,512

NET INCOME (449,420) (521,888) (537,362)

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Lake of the Pines

RESERVE STUDY

Member Distribution Materials

2017 Update- Final

Published - October 30, 2017

Prepared for the 2018 Fiscal Year

Update w/o Site Visit Review

Clarity from Complexity

Section Report Page

California: Member Summary 1

Assessment and Reserve Funding Disclosure Summary

3[Civil Code §5570]

Section III: 30 Year Reserve Funding Plan 5Cash Flow Method {c}

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Browning Reserve Group

© Browning Reserve Group 201714 of 52

October 30, 2017

Lake of the Pines

California Member Summary 2017 Update- Final


This is a summary of the Reserve Study that has been performed for Lake of the Pines, (the "Association"). This study was conducted in compliance with California Civil Code Sections 5300, 5550 and 5560 and is being provided to you, as a member of the Association, as required under these statutes. A full copy is available (through the Association) for review by members of the Association.

The intention of the Reserve Study is to forecast the Association's ability to repair or replace major components as they wear out in future years. This is done utilizing the "Cash Flow Method." This is a method of developing a reserve funding plan where the contributions to the reserve fund are designed to offset the variable annual expenditures from the reserve fund.

Browning Reserve Group prepared this Update w/o Site Visit Review for the January 1, 2018 - December 31, 2018 fiscal year.

Lake of the Pines is a Planned Development with a total of 2,011 Lots.

The Reserve Study is not an engineering report, and no destructive testing was performed. The costs outlined in the study are for budgetary and planning purposes only, and actual bid costs would depend upon the defined scope of work at the time repairs are made. Also, any latent defects are excluded from this report.

Funding Assessment

Based on the 30 year cash flow projection, the Association's reserves appear adequately funded as the reserve fund ending balances remain positive throughout the replacement of all major components during the next 30 years.

California statute imposes no reserve funding level requirements nor does it address funding level adequacy, and although one or more of the reserve fund percentages expressed in this report may be less than one hundred percent, those percentages do not necessarily indicate that the Association's reserves are inadequately funded.

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RemainingLife

UsefulLife

Current Replacement

CostReserve Component

2018Fully

Funded Balance

2018Line Item

Contributionbased on

Cash Flow Method

2017Fully

Funded Balance

Lake of the Pines

California Member Summary

2017 Update- Final


1,236,763 354,62101000 - Paving 2,032,297 1-6 0-5 1,218,873

50,875 7,45202000 - Concrete 104,515 3-30 1-26 42,864

50,230 9,05203000 - Painting: Exterior 66,287 5-15 1-11 39,161

41,499 6,61603500 - Painting: Interior 54,452 7-10 1-7 33,309

1,261,543 83,88204000 - Structural Repairs 2,065,114 5-40 0-39 1,239,141

46,917 6,81604500 - Decking/Balconies 108,159 15-20 4-16 39,843

133,661 18,52105000 - Roofing 297,546 15-30 1-23 114,107

109,461 20,84608000 - Rehab 311,160 11-20 4-16 88,951

19,444 5,14911000 - Gate Equipment 46,128 5-21 0-15 20,503

171,027 21,48312000 - Pool 260,213 5-25 2-16 146,921

37,814 5,27714000 - Recreation 61,261 3-20 0-13 35,900

105,509 16,42917000 - Tennis Court 202,063 3-30 0-21 91,736

3,595 82017500 - Basketball / Sport Court

14,615 25-25 20-20 2,923

664,361 116,73018000 - Landscaping 1,101,511 1-50 0-34 639,180

1,002,158 61,91218500 - Lakes / Ponds 1,166,198 1-40 0-23 941,040

601,279 40,39419000 - Fencing 881,737 5-42 1-28 548,922

30,250 5,52220000 - Lighting 77,148 10-25 4-18 24,563

23,724 4,45221000 - Signage 37,569 5-19 3-8 18,449

191,138 76,00122000 - Office Equipment 329,998 3-12 0-10 172,574

116,298 18,27823000 - Mechanical Equipment

258,621 12-20 2-14 96,676

130,195 23,96924000 - Furnishings 254,926 1-20 0-16 122,551

46,086 8,99924500 - Audio / Visual 90,772 3-20 0-16 42,720

62,842 13,14724600 - Safety / Access 146,694 1-30 0-19 58,317

94,031 16,65625000 - Flooring 158,926 4-20 1-14 74,584

2,578 37125500 - Wallcoverings 6,288 20-20 13-13 2,201

183,900 18,91726000 - Outdoor Equipment 271,810 4-30 1-27 160,454

229,320 54,81227000 - Appliances 572,602 4-20 0-18 246,895

5,676 1,70228500 - Waste Water Treatment

9,230 5-5 3-3 3,692

1,045,115 181,17530000 - Miscellaneous 1,954,689 1-25 0-16 1,141,709

15,375 4,38831000 - Reserve Study 15,000 3-3 1-1 10,000

Totals $7,712,663

39.1%Percent Funded

$1,204,388$12,957,528

$3,013,485Estimated Ending Balance $49.91/Lot/month @ 2011

$7,418,758

44.9%

$3,333,754


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Lake of the Pines

California Assessment and Reserve Funding Disclosure For the Fiscal Year Ending 2018

2017 Update- Final

October 30, 2017

(1) The regular assessment per ownership interest is $223.00 per month for the fiscal year beginning January 1, 2018.

Note: If assessments vary by the size or type of ownership interest, the assessment applicable to this ownership interest may be found on page ___ of the attached summary.

(2) Additional regular or special assessments that have already been scheduled to be imposed or charged, regardless of the purpose, if they have been approved by the board and/or members:

Date

assessment will be due:

Amount per ownership interest per month or year (if assessments

are variable, see note immediately below):Purpose of the assessment:

N/A $0.00 N/A

Total: $0.00

Note: If assessments vary by the size or type of ownership interest, the assessment applicable to this ownership interest may be found on page ___ of the attached report.

(3) Based upon the most recent reserve study and other information available to the board of directors, will currently projected reserve account balances be sufficient at the end of each year to

meet the association's obligation for repair and/or replacement of major components during the next 30 years?

Yes X No

This disclosure has been prepared by Browning Reserve Group and has been reviewed and approved by the association's board of directors based upon the best information available to the association at the time of its preparation. The accuracy of this information over the next 30 years will be dependent upon circumstances which are impossible to predict with specificity, and will require future action to adjust assessments over the period in accordance with the current projections and future developments.

(4) If the answer to (3) is no, what additional assessments or other contributions to reserves would be necessary to ensure that sufficient reserve funds will be available each year during the next 30 years that have not yet been approved by the board or the members

Approximate date assessment will be due: Amount per ownership interest per month or year:

N/A N/A

(5) All major components are included in the reserve study and are included in its calculations. See next page §5300(b)(4), for any major component exclusions.

(6) Based on the method of calculation in paragraph (4) of the subdivision (b) of section 5570, the estimated amount required in the reserve fund at the end of the current fiscal year is $7,418,758, based in whole or in part on the last reserve study or update prepared by Browning Reserve Group as of October, 2017. The projected reserve fund cash balance at the end of the current fiscal year is $3,333,754 resulting in reserves being 44.9% percent funded at this date. Civil code section 5570 does not require the board to fund reserves in accordance with this calculation.

An alternate and generally accepted method of calculation has been utilized to determine future reserve contribution amounts. The reserve contribution for the next fiscal year has been determined using the Cash Flow method of calculation (see section III, Reserve Fund Balance Forecast). This is a method of developing a reserve funding plan where the contributions to the reserve fund are designated to offset the variable annual expenditures from the reserve fund. Different reserve funding plans are tested against the anticipated schedule of reserve expenses until the desired funding goal is achieved.


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Lake of the Pines

California Assessment and Reserve Funding Disclosure For the Fiscal Year Ending 2018

2017 Update- Final

(7) Based on the method of calculation in paragraph (4) of subdivision (b) of section 5570 of the Civil Code, the estimated amount required in the reserve fund at the end of each of the next five budget years is presented in column (b) 'Fully Funded Balance' in the table immediately below; and the projected reserve fund cash balance in each of those years, taking into account only assessments already approved and other known revenues, is presented in column (c) 'Reserve Ending Balance'; leaving the reserve at percent funding as presented in column (d) 'Percent Funded' in each of the respective years.

FiscalYear(a)

Fully FundedBalance

(b)

PercentFunded

(d)

ReserveEnding Balance

(c)

2018 $7,712,663 $3,013,485 39.1%

2019 $7,606,239 $3,220,219 42.3%

2020 $7,995,419 $2,846,693 35.6%

2021 $7,757,749 $2,928,808 37.8%

2022 $7,940,917 $2,953,473 37.2%

If the reserve funding plan approved by the association is implemented, the projected fund cash balance in each of those years will be the amounts presented in column (c) 'Reserve Ending Balance' in the table immediately above, leaving the reserve at percent funding as presented in column (d) 'Percent Funded' in each of the respective years.

NOTE: The financial representations set forth in this summary are based on the best estimates of the preparer at that time. The estimates are subject to change. At the time this summary was prepared, 2.50% per year was the assumed long-term inflation rate, and 2.50% per year was the assumed long-term interest rate.

Additional Disclosures

§5565(d) The current deficiency in reserve funding as of December 31, 2018 is $2,337 per

ownership interest (average).

This is calculated as the current estimate of the amount of cash reserves necessary as of the end of the fiscal year for which the study is prepared, less, the amount of accumulated cash reserves actually (Projected to be) set aside to repair, replace, restore, or maintain the major components.

Deficiency = 2018 Fully Funded Balance - 2018 Reserve Ending BalanceOwnership Interest Quantity

§5300(b)(4) The current board of directors of the association has not deferred or determined to not

undertake repairs or replacements over the next 30 years.

M ajor Component: Justification for Deferral:

N/A N/A

§5300(b)(5) The board of directors as of the date of the study does not anticipate the levy of a

special assessment for the repair, replacement, or restoration of the major components.


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Lake of the Pines

Section III

30 Year Reserve Funding Plan Cash Flow Method2017 Update- Final


2017 2018 2019 2020 2021 2022 2023 2024 20262025

3,259,875 3,333,754 3,013,485 3,220,219 2,846,693 2,928,808 2,953,473 3,128,328 3,754,2223,284,646Beginning Balance

1,143,739 1,603,018 1,146,877 1,801,677 1,423,632 1,568,467 1,511,972 1,631,303 1,498,3291,349,690Inflated Expenditures @ 2.5%

1,136,215 1,204,388 1,276,651 1,353,250 1,434,445 1,520,512 1,611,743 1,708,448 1,756,6191,732,366Reserve Contribution

47.08 49.91 52.90 56.08 59.44 63.01 66.79 70.80 72.7971.79Lots/month @ 2011

6.0% 6.0% 6.0% 6.0% 6.0% 6.0% 6.0% 1.4%1.4%Percentage Increase

0 0 0 0 0 0 0 0 00Special Assessments / Other

81,403 78,361 76,959 74,900 71,302 72,621 75,084 79,173 97,08486,900Interest Pre Tax @ 2.50%

3,333,754 3,013,485 3,220,219 2,846,693 2,928,808 2,953,473 3,128,328 3,284,646 4,109,5963,754,222Ending Balance

2027 2028 2029 2030 2031 2032 2033 2034 20362035




73.81 74.84 75.89 76.95 78.03 79.12 80.23 81.36 83.6582.49Lots/month @ 2011

1.4% 1.4% 1.4% 1.4% 1.4% 1.4% 1.4% 1.4% 1.4%1.4%Percentage Increase


109,938 106,177 99,231 105,521 112,380 125,055 128,586 127,170 147,237138,273Interest Pre Tax @ 2.50%

4,795,390 3,804,976 4,232,758 4,314,448 4,788,312 5,341,104 5,074,388 5,226,347 5,952,4345,973,731Ending Balance

2037 2038 2039 2040 2041 2042 2043 2044 20462045




84.82 86.01 87.21 88.43 89.67 90.93 92.20 93.49 96.1394.80Lots/month @ 2011

1.4% 1.4% 1.4% 1.4% 1.4% 1.4% 1.4% 1.4% 1.4%1.4%Percentage Increase


152,771 155,950 157,931 158,231 154,212 153,013 147,100 140,953 145,619141,571Interest Pre Tax @ 2.50%

6,422,033 6,209,957 6,582,466 6,234,236 6,256,927 6,137,153 5,777,954 5,639,277 5,967,1675,827,998Ending Balance


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2018 FEE SCHEDULE Effective 01/01/18

GOLF

Due May 1

Green Fees - 18 Holes Member $33.00 Guest of Member $38.00 Junior (Under 18) $10.00 Reciprocal $33.00

Green Fees - 9 Holes Member $18.00 Guest of Member $22.00 Junior (Under 18) $5.00 Reciprocal $22.00

Cart Rental – 9 and 18 Holes Maximum of two passengers per cart

$10.00 Per Person

Twilight Fees Member $20.00 Cart $10.00 Guest of Member $22.00 Junior $5.00 Summer Hours Begin 2:00 p.m. (Commences with Daylight Savings Time) Winter Hours Begin 1:00 p.m. (Commences with Standard Time)

Guest of Member Golf Tournament To be determined

Driving Range Small Bucket $3.00 Large Bucket $5.00

Annual Range Ball Program: Individual $180.00 Two Adults (Residing in Same Residence) $260.00 Junior (Under 18 Residing at Home) $50.00

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Annual Green Fee Members: Annual Individual Adult Membership $1,320.00 Spouse of Individual Adult Member Membership $1,150.00 Individual Adult Nine-Hole Membership (9 holes per day max.) $700.00 Family* Membership $2,640.00 Individual Junior Membership (Under 18) $100.00 * “Family Membership” is defined as two adults & children under 18 living at home. Guest of Member: Individual Adult Program $1,320.00

The Guest of Member Annual Individual Adult Green Fee will be sold only to guests sponsored by an LOP member in good standing, must be assigned to a specific person, and that person is required to join one of the official LOP Golf Clubs. Gate entry and the guest’s actions while within LOP are the responsibility of the sponsoring LOP member.

Junior Golf Team

Member Participation in Junior Golf $5.00 Guest of Members Participating in Junior Golf $35.00

Private Cart Registration - Golf Course and Street Use Due May 1

Annual Golf Course Registration $300.00

Private Golf Cart Registration - Street Use Only Due May 1

Annual Roads Registration $25.00 (Applies only if not registered for golf course)

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BOATING & MARINA Due April 1

All boats powered by an engine or motor 100 HP or greater $182.00 All boats powered by an engine or motor 26-99 HP $174.00 All boats powered by an engine or motor 25 HP or less $119.00 All battery-powered boats $55.00 Sailboats with CF numbers $55.00 Watercraft not required to have CF numbers: $25.00 (Fishing floats, fishing tubes, pedal boats, rigid kayaks, windsurfers, water bikes, sailboats, canoes, rowboats and sculling boats) All other water toys and towed inflatables do not require registration or decals Annual Marina Rental* $650.00 *(Includes one key per slip - $15 each for extra keys – Maximum of 3) Waiting List Prepaid Fee $50.00 Annual Boat Rack Rental $100.00 Waiting List Prepaid Fee $30.00

DECALS – BOATS & GOLF CARTS Transfer decal from lot to lot, boat or cart $10.00 Replacement/lost decal $10.00

SHOPPING CENTER GATE Due April 1

Annual Key Rental - $15.00

RV STORAGE Due October 1

Length of Space Annual Rate Zero to 20' $330.00 Over 20' to 25' $363.00 Over 25' to 30' $396.00 Over 30' to 35' $429.00 Over 35' to 40' $473.00 Over 40' $539.00

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SWIMMING POOL Daily Entry Fee Free

Swim Team Member Participation in Swim Team $15.00 Guest of Members Participating in Swim Team $65.00

PICKLEBALL Due July 1

Annual Key $25.00 Replacement Key $25.00

TENNIS Due July 1

Annual - Single Member $100.00 Annual - Junior (Under 18) $40.00 Annual - Family (2 Adults and Children Under 18 Residing at Home) $150.00 Hourly Court Fee (Plus $20 Refundable Deposit) Billed in hourly increments $5.00 Under 18 Hourly Court Fee (Plus $20 Refundable Deposit) Billed in hourly increments $1.00 Replacement Card $20.00

PARKING PERMIT Due upon receipt

For owner, resident and tenant vehicles without bar code decals. $15.00 Parking permits are NOT available for guests.

GATE ENTRANCE FEES Due upon receipt

Owners/Residents/Tenants

Automotive Decals $10.00 Gate Access Cards

Initial Purchase $20.00 Replacement $20.00 Called in Guests Called in To Public Safety Each Visit N/C Guests (Annual)

Gate Access Cards (Valid for One Year) Card Issuance Cost $50.00 Replacement Card $50.00

Home Care Guests (Annual) $20.00

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Business Access Cards (Annual) - (Replacement Cards $40) Business $50.00 Business’ Employees $50.00 Delivery Vehicles $50.00 Household Employees $50.00 Non-Emergency Medical Assistance $50.00 LOP Contractors, Workers, Deliveries N/C

1st Replacement Card - $10.00 2nd Replacement Card - $15.00

Real Estate Cards (Annual) - (Replacement Cards $40) Real Estate Broker $50.00 Real Estate Agent $50.00 Property Management Services $50.00

SALE OF PROPERTY Transfer Fee $250.00

OWNER/TENANT ADMINISTRATION FEE

Initial Registration $200.00 Subsequent Years at Same Address $50.00 Dual Usage $598.60

APPEAL ADMINISTRATION FEE Member appeal to Covenants Committee Refundable Appearance Deposit $50.00 Member appeal of Covenants Committee decision to the Board Refundable Appearance Deposit $50.00

MARKET PLACE ADS

One Screen Submitted Via E-Mail Free Not Submitted Via E-Mail $15.00 Per Ad/Two Weeks

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ENVIRONMENTAL CONTROL 1. New Home

a) Plan Check Fee $750.00 b) Performance Deposit* $1,500.00 c) Utility Encroachment Fee $50.00 d) Sewer Permit Fee $100.00 e) Road Impact Fees

Up to 2,000 sq. ft. $300.00 Total $ 2,700.00

OR Over 2,000 sq. ft. $400.00 Total $ 2,800.00 2. Living Area & Garage Additions

a) Plan Check Fee $0.60 per square foot up to 1,000 square feet b) Performance Deposit* $100.00 c) Road Impact Fee $200.00

OR a) Plan Check Fee $600.00 over 1,000 square feet b) Performance Deposit* $1,500.00 c) Road Impact Fees $300.00

Maximum Total $2,400.00 3. Swimming Pools

a) Plan Check Fee $250.00 b) Performance Deposit* $1,500.00 c) Road Impact Fees $300.00

Total $ 2050.00 4 Outbuildings, Alterations and Other Improvements

New or expanded driveways, retaining walls 2’ and over in height, sea walls, any structure such as sheds, gazebos, patios, decks, docks, and boat lifts.

a) Plan Check Fee $100.00 b) Clean Up Deposit* $100.00 c) Road Impact Fee ** $100.00

Total $300.00 5. Landscaping Complete front yard or backyard projects, ponds and water features

a) Plan check fee $100.00 b) Compliance Deposit $100.00 c) Road Impact Fee $100.00

$300.00 6. Fencing

a) Plan check fee $50.00 b) Compliance Deposit $100.00

$150.00

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* Deposits may be refunded in whole or in part depending on compliance with Environmental Standards and satisfactory E.C. final inspection sign-off, less any outstanding account balance. Deposits not refunded within two years will be forfeited unless a written extension is issued by ECC. ** Property owners may request an exemption to this Road Impact Fee if they provide a written request to the Environmental Control Department containing a statement and evidence that no commercial vehicles, excluding member owned pick-ups, will be used for the project. All construction or alterations without prior E.C. approval will be subject to a fine four times the normal plan check fee and additional fines may accrue weekly until approval process is complete. 7. Modification to Previously Approved Plans: $50.00

Any modifications to previously approved plans (that had a fee associated to them) need to be submitted to the E.C.C. for approval. A fee of $50.00 per re-submittal will apply.

8. Construction Time Extension Fee to offset cost associated with inspections and letter writing. a. New homes, swimming pools, living area and garage additions - $250.00 b. Driveways, retaining walls, seawalls, sheds, gazebos, patios, decks, docks and boatlifts - $50.00

9. Variance Requests: $100 Requests for a variance from these standards involve neighbor notification letters and associated follow-up and therefore will be subject to a fee of $100.00 to help offset the cost of paper, envelopes, postage, and manpower to process the requested variance. This fee is non-refundable regardless of the E.C.C. decision to approve or deny the variance.

10. Compliance Certificate: $50.00 An “estoppel certificate” certifying that as of the date thereof, all improvements made, and other work completed by the owner, comply with the E.C. Standards. (For more information, see the CC&Rs, Article V, Section 14).

11. Home Business Application and Renewals: $25.00 A “Home Business Application” fee of $25.00 must accompany the application. If approved, the “permit” is valid for a period of 12 months and must be renewed annually.

No Fees There are no fees for plans submitted which involve culverts and drainage ditches, heating & air conditioning units, solar panels, exterior colors, fuel tanks, exterior lighting, mailboxes, play structures, or the replacement or repair of less than 25% of an existing structure that does not change the original “footprint”, height, design, or color as long as the project meets current E.C. Standards and county structural and building codes. Fees are normally non-refundable. However, if the project is canceled within one year, all but the largest of $50.00 or the actual costs incurred by the association will be refunded.

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FACILITY USE FEE SCHEDULE

RATE AVAILABLE HOURS

CLUBHOUSE WEDDING/EVENT

Saturday $1500 (5 hours) 9 A.M. - 12 A.M.Sunday $1500 (5 hours) 4 P.M. - 11 P.M.

Monday - Friday (Day Only) $400 up to 3 hours

$200 for additional hours 7 A.M. - 4 P.M.

Monday - Wednesday (Evening) $400 up to 3 hours

$200 for additional hours 5 P.M. - 11 P.M.Thurs., Fri. unavailable due to dinner service

MEMORIAL Monday - Friday + Sunday after 4 P.M. (includes regular set up with coffee service) $300.00 3 Hours

MEETING ROOM Green Room (Capacity 10) $50.00 4 HoursMulti Purpose (Capacity 24 - 31) $150.00 4 Hours

SPORTS LOUNGE WEDDING/EVENT

Thursday/Friday $500 (5 hours) 5 P.M. - 10 P.M.

MEETING ROOM *Monday - Sunday (Capacity 26) $200.00 4 Hours

YACHT LOUNGE EVENT Saturday, Sunday & Holiday $150 9 A.M. - 11 P.M.Monday - Friday $125 4 Hours

OTHER FEES Ceremony Area (includes chairs) $250.00Wedding Arch $50.00Set-Up Change Fee $250.00Specialty Rental Items Available

Food minimums will apply to all events except potlucks Set-up fees may apply No fee for Board Approved Specific Club Event Special set up may incur additional charges

NOTICE: Any amounts of an amenity fee in the above list of fees that exceed the actual cost to the Association of the amenity are used to defray the general operating costs incurred by the Association. Approved: October 18, 2017; Effective January 1, 2018

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Outstanding Loan Notification Pursuant to Civil Code §5300(b)(8), Lake of the Pines is required to inform all Members “whether the Association has any outstanding loans with an original term of more than one year, including the payee, interest rate, amount outstanding, annual payment, and when the loan is scheduled to be retired.” Lake of the Pines Association does have a loan for the construction of the new Sports Lounge and Clubhouse remodel as follows:

Loan payee Union Bank Los Angeles, CA 90030 Original loan amount $2,200,000 Interest rate 4.5000% Balance as of 9/30/17 $482,018 Retirement date March 24, 2019 Monthly payment $28,910

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Summary of Specified Insurance Coverages

Lake of the Pines Association

INSURANCE DISCLOSURE 2017-2018

California Civil Code Section 5300 b (9) requires that the Association prepare and distribute to all of its Members a summary of the Association’s property, general liability, and fidelity insurance policies. The Association purchases insurance to cover the Association’s liabilities. The Association’s policies do not address nor afford coverage for the individual home, home furnishings or injury and/or damaged caused by a negligent act committed by the individual homeowner. The insurance coverage does not extend to the real property improvements to the separate interests. Our insurance provider, Hays Companies of Oregon, has provided the following data to insure we meet the requirements of California Civil Code §5300 b (9): THIS SUMMARY of the association’s policies of insurance provides only certain information, as required by Section 5300 (b)(9) of the Civil Code, and should not be considered a substitute for the complete policy terms and conditions contained in the actual policies of insurance. Any association member may, upon request and provision of reasonable notice, review the association’s insurance policies and, upon request and payment of reasonable duplication charges, obtain copies of those policies. Although the association maintains the policies of insurance specified in this summary, the association’s policies of insurance may not cover your property, including personal property or real property improvements to or around your dwelling, or personal injuries or other losses that occur within or around your dwelling. Even if a loss is covered, you may nevertheless be responsible for paying all or a portion of any deductible that applies. Association members should consult with their individual insurance broker or agent for appropriate additional coverage. Notice of a lapse, cancellation or non-renewal of any policy, or any change in policy shall be provided to the members by first class mail as soon as reasonably practicable.

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Our insurance broker, Hays Companies, has provided the following data to insure we meet the requirements of California Civil Code §5300 (b)(9): I. PROPERTY Insurance Company: Granite State Insurance Company (AIG) Policy Number: 02-LX-067990813-2 Policy Term: Oct. 1, 2017 to Oct. 1, 2018 Coverage: Direct physical loss. Loss paid at Replacement Cost Valuation. No Coinsurance.

Coverage applies to common areas only. Covers Buildings, Business Personal Property, Business Income and Outdoor Property subject to the following limits:

Limits: Buildings $6,976,423 Business Personal Property $864,097 Deductibles: $5,000 per Occurrence II. GENERAL LIABILITY Insurance Company: Granite State Insurance Company (AIG) Policy Number: 02-LX-067990813-2 Policy Term: Oct. 1, 2017 to Oct. 1, 2018 Coverage: Pays on behalf of the Named Insured all sums which the insured is legally

obligated to pay as damages because of bodily injury or property damage to third parties, including defense costs. Punitive damages are not insurable.

Limits: General Aggregate $2,000,000 Each Occurrence $1,000,000 Liquor Liability $1,000,000 III. BUSINESS AUTO Insurance Company: Granite State Insurance Company (AIG) Policy Number: 02-CA-084608550-2 Policy Term: Oct. 1, 2017 to Oct. 1, 2018 Coverage: Pays on behalf of the Named Insured all sums which the insured is legally

obligated to pay as damages because of bodily injury or property damage to third parties arising out of the ownership, maintenance or use of any auto, including defense costs.

Limits: Each Accident Combined Single Limit for Bodily Injury & Property Damage $1,000,000 Deductibles: Auto Comprehensive $1,000 Auto Collision $1,000 IV. UMBRELLA LIABILITY Insurance Company: National Union Fire Insurance Company (AIG) Policy Number: 29-UD-016698143-2 Policy Term: Oct. 1, 2017 to Oct. 1, 2018 Coverage: Provides liability limits in excess of underlying General Liability, Liquor

Liability, Automobile Liability, Employer’s Liability, and Directors & Officers Liability

Limits: Each Occurrence $10,000,000 General Aggregate $10,000,000

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V. CRIME/FIDELTY Insurance Company: Liberty Mutual Insurance Company Policy Number: CAC019009-0117 Policy Term: Oct. 1, 2017 to Oct. 1, 2018 Coverage: Coverage for employee theft of money, securities, or property caused by theft or

forgery by any employee. Includes ERISA compliance. Limit: Theft $1,000,000 Computer Fraud $1,000,000 Funds Transfer Fraud $1,000,000 Deductible: Each Loss $5,000 VI. DIRECTORS & OFFICERS LIABILITY Insurance Company: RSUI Indemnity Company Policy Number: HP673935 Policy Term: Oct. 1, 2017 to Oct. 1, 2018 Coverage: Protects insured directors or officers against claims involving allegations of

wrongful acts occurring while performing their respective duties. Limits: Annual Aggregate $2,000,000 Deductible: Each Claim $35,000 VII. NETWORK SECURITY & PRIVACY LIABILITY Insurance Company: Evolve (Lloyds of London) Policy Number: ESG00397940 Policy Term: Oct. 1, 2017 to Oct. 1, 2018 Coverage: Coverage for loss incurred as a direct result of damage, alteration, corruption,

distortion, theft, misuse or destruction of electronic data and computer programs including personally identifiable information.

Limits: Annual Aggregate $1,000,000 System Damage $1,000,000 Member Notification Costs $1,000,000 Deductible: Each Claim $5,000 VIII. WORKERS COMPENSATION Insurance Company: Insurance Company of the West Policy Number: WSA5020470 Policy Term: January 1, 2017 to January 1, 2018 Coverage: Protects employees when an injury occurs when on the job Limits: Each Accident $1,000,000 Policy Limit $1,000,000 Each Employee $1,000,000 This document is a synopsis of coverage only; the individual Policies contain exclusions and / or limitations not shown here. It is not intended to replace, alter or extend the coverages afforded by an actual policy.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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Name and Address of Person Designated to Receive Official Communications to the Association

Pursuant to Civil Code Section §5310(a)(1); §4035, the name and address of the person designated to receive official communications to the Association is:

John Bowman General Manager Lake of the Pines Association 11665 Lakeshore North Auburn, CA 95602

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Notice of Right to Submit Secondary Address for Annual Disclosures and Collection Notices Upon receipt of a written request by an owner identifying a secondary address for purposes of collection notices, Lake of the Pines Association shall send additional copies of any notices required by Civil Code Section 4040(b) to the secondary address provided. Lake of the Pines Association shall notify owners of their right to submit secondary addresses to the association, at the time the association issues the pro forma operating budget pursuant to Section 5300. The owner’s request shall be in writing and shall be mailed to Lake of the Pines Association in a manner that shall indicate Lake of the Pines Association has received it. The owner may identify or change a secondary address at any time, provided that, if a secondary address is identified or changed during the collection process, Lake of the Pines Association shall only be required to send notices to the indicated secondary address from the point that Lake of the Pines Association receives the request. Per Article XIV, Section 2 of the CC&R’s – Personal Service Upon Co-Owners and Others: Personal service of a notice or demand to one of the Co-Owners of any Lot, to any general partner of a partnership which is the Owner of Record of the Lot, or to any officer or agent for service of process of a corporation which is the Owner of Record of the Lot, shall be deemed delivered to all such co-Owners, to such partnership, or to such corporation, as the case may be. Per Article XIV, Section 3 – Deposit in United States Mails: All notices and demands required by this Declaration which are served by mail shall be by first-class or certified mail, with postage prepaid, and shall be deemed delivered four days after deposit in the United States mail in the County.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Civil Code §4041(b). Written Notice to Association The association shall solicit these annual notices of each owner and, at least 30 days prior to making its own required disclosure under Section 5300, shall enter the data into its books and records. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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Notice of Location, if any, Designated for Posting General Notices Pursuant to Civil Code Section §5310(a)(3); §4045, the location designated for posting general notices, e.g., Board Meeting Agendas, Committee Meeting Agendas, etc., is the bulletin board outside the Clubhouse entrance. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Mailing Address for Overnight Payment of Assessments The overnight mail address for payment of assessments is:

Lake of the Pines Association 11665 Lakeshore North Auburn, CA 95602

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Notice of Right to Receive General Notices by Individual Delivery Upon Request Pursuant to Civil Code Section §5310(a)(4); §4045(b), if a member requests to receive general notices by individual delivery, all general notices to that member, given under this section, shall be delivered pursuant to Section 4040, via US mail, e-mail, facsimile, or other electronic means. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Notice of Right to Receive Minutes of Board Meetings Pursuant to Civil Code Section §5310(a)(5); §4950(b), draft minutes, a summary of minutes or minutes of a meeting (other than executive session) are available to members within 30 days of the meeting. They may be obtained upon request and upon reimbursement of costs by contacting the Administration Office at 268-1141. Monthly meetings of Lake of the Pines Association Board are typically held in the Sports Lounge Meeting Room. The Board meets on the first Wednesday following the 12th of the month at 2:00 p.m. Notice of the scheduled meeting date and time, including the agenda, are posted in the bulletin board outside the Association office and on our website, at least four days prior to the regular meeting. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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Notice of Collection Rights & Duties NOTICE ASSESSMENTS AND FORECLOSURE This notice outlines some of the rights and responsibilities of owners of property in common interest developments and the associations that manage them. Please refer to the sections of the Civil Code indicated for further information. A portion of the information in this notice applies only to liens recorded on or after January 1, 2003. You may wish to consult a lawyer if you dispute an assessment.

ASSESSMENTS AND FORECLOSURE Assessments become delinquent 15 days after they are due, unless the governing documents provide for a longer time. The failure to pay association assessments may result in the loss of an owner’s property through foreclosure. Foreclosure may occur either as a result of a court action, known as judicial foreclosure, or without court action, often referred to as nonjudicial foreclosure. For liens recorded on and after January 1, 2006, an association may not use judicial or nonjudicial foreclosure to enforce that lien if the amount of the delinquent assessments or dues, exclusive of any accelerated assessments, late charges, fees, attorney’s fees, interest, and costs of collection, is less than one thousand eight hundred dollars ($1,800). For delinquent assessments or dues in excess of one thousand eight hundred dollars ($1,800) or more than 12 months delinquent, an association may use judicial or nonjudicial foreclosure subject to the conditions set forth in Article 3 (commencing with Section 5700) of Chapter 8 of Part 5 of Division 4 of the Civil Code. When using judicial or nonjudicial foreclosure, the association records a lien on the owner’s property. The owner’s property may be sold to satisfy the lien if the amounts secured by the lien are not paid. (Sections 5700 through 5720 of the Civil Code, inclusive)

In a judicial or nonjudicial foreclosure, the association may recover assessments, reasonable costs of collection, reasonable attorney’s fees, late charges, and interest. The association may not use nonjudicial foreclosure to collect fines or penalties, except for costs to repair common area damaged by a member or a member’s guests, if the governing documents provide for this. (Section 5725 of the Civil Code) The association must comply with the requirements of Article 2 (commencing with Section 5650) of Chapter 8 of Part 5 of Division 4 of the Civil Code when collecting delinquent assessments. If the association fails to follow these requirements, it may not record a lien on the owner’s property until it has satisfied those requirements. Any additional costs that result from satisfying the requirements are the responsibility of the association. (Section 5675 of the Civil Code) At least 30 days prior to recording a lien on an owner’s separate interest, the association must provide the owner of record with certain documents by certified mail, including a description of its collection and lien enforcement procedures and the method of calculating the amount. It must also provide an itemized statement of the charges owed by the owner. An owner has a right to review the association’s records to verify the debt. (Section 5660 of the Civil Code)

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If a lien is recorded against an owner’s property in error, the person who recorded the lien is required to record a lien release within 21 days, and to provide an owner certain documents in this regard. (Section 5685 of the Civil Code)

The collection practices of the association may be governed by state and federal laws regarding fair debt collection. Penalties can be imposed for debt collection practices that violate these laws.

PAYMENTS

When an owner makes a payment, the owner may request a receipt, and the association is required to provide it. On the receipt, the association must indicate the date of payment and the person who received it. The association must inform owners of a mailing address for overnight payments. (Section 5655 of the Civil Code)

An owner may, but is not obligated to, pay under protest any disputed charge or sum levied by the association, including, but not limited to, an assessment, fine, penalty, late fee, collection cost, or monetary penalty imposed as a disciplinary measure, and by so doing, specifically reserve the right to contest the disputed charge or sum in court or otherwise.

An owner may dispute an assessment debt by submitting a written request for dispute resolution to the association as set forth in Article 2 (commencing with Section 5900) of Chapter 10 of Part 5 of Division 4 of the Civil Code. In addition, an association may not initiate a foreclosure without participating in alternative dispute resolution with a neutral third party as set forth in Article 3 (commencing with Section 5925) of Chapter 10 of Part 5 of Division 4 of the Civil Code, if so requested by the owner. Binding arbitration shall not be available if the association intends to initiate a judicial foreclosure.

An owner is not liable for charges, interest, and costs of collection, if it is established that the assessment was paid properly on time. (Section 5685 of the Civil Code)

MEETINGS AND PAYMENT PLANS An owner of a separate interest that is not a time-share interest may request the association to consider a payment plan to satisfy a delinquent assessment. The association must inform owners of the standards for payment plans, if any exists. (Section 5665 of the Civil Code) The board must meet with an owner who makes a proper written request for a meeting to discuss a payment plan when the owner has received a notice of a delinquent assessment. These payment plans must conform with the payment plan standards of the association, if they exist. (Section 5665 of the Civil Code) ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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Assessment Collection Policy A. ASSESSMENT ACCOUNT 1. Lake of The Pines Association, Inc. collects the Regular Assessment in monthly installments,

which are due, in advance, on the first (1st) day of the month and delinquent if not received, in full, by the Association within fifteen (15) days after the due date thereof. Payments may also be made semi-annually (due January and July) or annually (due January). Special and Special Individual Assessments are due on the date(s) specified upon imposition and each installment thereof shall be delinquent if not received by the Association within fifteen (15) days after it is due. A late charge of ten dollars ($10.00) or ten percent (10%) of the delinquent assessment, whichever is greater, shall be due on any such delinquent assessment past due in excess of 15 days.

2. At the option of the Association, interest shall be due on all such amounts, once due and unpaid for thirty (30) days, at the rate of twelve percent (12%) per annum.

3. If any portion of any such assessment, late charge, interest or cost of collection remains unpaid

sixty (60) days after the original due date thereof, the total amount due may be assigned to the Association’s collection agency and the Association thereafter cannot accept any payments. A “Letter of Intent” to file a Notice of Delinquent Assessment (“Lien”) will be prepared and sent by regular and certified mail to the record owner(s) in addition to certain documents, including a general description of the Collection Policy; lien enforcement procedures; the method of calculating the amount; and an itemized statement of the charges owed. Please be advised that the Association has the right to collect all reasonable costs of collection, attorney’s fees, late charges, monthly interest, court costs, filing fees and publication costs.

4. If all such amounts have not been received ninety (90) days after the original due date thereof,

a Lien may be prepared and recorded as to the delinquent property and the owner(s) thereof, and all resulting collection fees and costs will be added to the total delinquent amount.

5. For delinquent assessments in excess of one thousand eight hundred dollars ($1,800.00) or

more, not including any accelerated assessments, late charges, fees and costs of collection, attorney’s fees, or interest, or any assessments that are more than twelve (12) months delinquent, the Association may use judicial or nonjudicial foreclosure subject to the conditions set forth in Section 1367.4 of the Civil Code. The owner’s property may be sold to satisfy the lien if the amounts secured by the lien are not paid. (Chapter 8 of the Civil Code).

6. All payments received by the Association, regardless of the amount paid, will be directed to

the oldest assessment balances first, until which time all assessment balances are paid, and then to late charges, interest and costs of collection unless otherwise specified by written agreement.

7. All above-referenced notices will be mailed to the record owner(s) at the last known mailing

address and secondary address provided in writing to the Association by such owner(s).

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B. OTHER ACCOUNTS 1. This portion of a member’s account is for all other charges, except Regular, Special and Special

Individual Assessments. Member statements for all accounts with an outstanding balance will be mailed monthly.

2. The balance is due and payable upon receipt and delinquent if not received, in full, by the

Association within 15 days after the due date thereof. 3. At the option of the Association, interest shall be due on all such amounts, once due and unpaid

for thirty (30) days, at the rate of twelve percent (12%) per annum. 4. If any portion of the account balance, including late charge, interest or cost of collection

remains unpaid sixty (60) days after the original due date thereof, a “Letter of Intent” to file a suit may be prepared and sent by regular and certified mail to the record owner(s) in addition to certain documents, including a general description of the Collection Policy; enforcement procedures; the method of calculating the amount; and an itemized statement of the charges owed. Please be advised that the Association has the right to collect all reasonable costs of collection, reasonable attorney’s fees, late charges and interest. The Association has the right to recover by means of civil action in Small Claims Court or any other manner prescribed by law.

5. All such amounts and related charges thereafter due to the Association until all such amounts

are paid, must be paid in full and the Association shall not be required to accept any partial or installment payments from the date of the institution of an action to enforce the payment of delinquent amounts to the time that all such amounts are paid in full.

6. If all such amounts have not been received one hundred twenty (120) days after the original

due date the Association may pursue collection in Small Claims or Superior Court to obtain a judgment.

C. PAYMENTS 1. Payments may be mailed to Lake of the Pines at 11665 Lakeshore North, Auburn, CA 95602

or delivered in person to the Association’s Administration Office during regular business hours (9:00 AM to 5:00 PM Monday through Friday), located at 11665 Lakeshore North, Auburn, CA 95602 or paid by credit card or electronic check by calling Official Payments at 1-800-272-9829 or going online to www.official payments.com. or by visiting the lop.org website and clicking on the “Make a Payment” link.

2. The Association must inform owners of a mailing address for overnight payments. The address

is Lake of the Pines Association, 11665 Lakeshore North, Auburn, CA 95602. 3. When an owner makes a payment, he or she may request a receipt, and the Association is

required to provide it. On the receipt, the Association must indicate the date of payment, amount received, lot number and the person who received it.

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4. An owner may dispute an assessment debt by submitting a written request for dispute resolution to the Association. In addition, the Association may not initiate a foreclosure without participating in alternative dispute resolution with a neutral third party, if so requested by the owner.

5. An owner is not liable for charges, interest, and costs of collection, if it is established that the

assessment was paid properly on time. 6. The Board of Directors or designee shall meet with an owner who makes a proper written

request for a meeting to discuss a Payment Plan. These Payment Plans must conform to the Payment Plan standards of the Association.

D. MONTHLY PAYMENT PLAN 1. The Association offers monthly Payment Plans for delinquent accounts, however, certain

restrictions apply and must be approved by the General Manager or his/her designee. 2. Assessments based on the Monthly Payment Plan payments are due, in advance, on the first

(1st) day of each monthly assessment period, and are delinquent if not received by the Association within fifteen (15) days.

3. To initiate the Monthly Payment Plan, the owner must execute and mail or deliver a Payment

Plan Agreement to the Association’s Accounting Office during regular business hours (9:00 AM to 5:00 PM).

4. Payment Plans shall not impede the Association’s ability to record a lien on the owner’s

separate interest to secure payment of delinquent balances, fees and costs. Failure to meet the terms of the Payment Plan Agreement may accelerate all unpaid amounts to become due and payable immediately.

5. In the event of a default or returned check on any Payment Plan, the Association may resume

its efforts to collect the delinquent balances, fees and costs from the time prior to entering into the Payment Plan.

6. Monthly Payment Plan Agreements are not transferable upon sale of property. E. RETURNED CHECKS 1. If the Association is notified by the bank of a returned check for reasons such as “non-

negotiable”; “insufficient funds”; “stop payment”; “account closed” or any other reason, the payer will be mailed a written demand letter and a copy of the returned check by certified mail, return receipt requested.

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2. A service charge not to exceed twenty-five dollars ($25.00) for the first check or thirty-five dollars ($35.00) for each subsequent check plus the cost of mailing the written demand will be assessed.

3. If the full amount of the demand is not paid by cash, money order or cashier’s check within 30

days from the date the written demand was mailed, the payer shall then be liable for treble damages not to exceed one thousand five hundred dollars ($1,500.00) according to California Civil Code Section 1719. The Association may pursue collection in Small Claims Court to obtain a judgment.

4. The payer will not be held liable for the treble charges or any service charges, if payment on

the check was deliberately stopped due to an actual, good faith dispute with the payee. 5. The payer can avoid liability for damages under the statute upon written confirmation to the

payee that the returned check resulted from an error on the part of the payer’s financial institution, or from an inadvertent error or delay of payment of a governmental assistance institution (such as Social Security) upon which the payer relied to cover the amount of the returned check.

F. MEMBERSHIP RIGHTS 1. CC&R’s, Article XIII, Section 6, grants the remedy of suspension of the member’s rights to

use recreation Common Facilities and suspension of the member’s voting rights to enforce the member’s obligation to abide by the Association’s policies and rules. Suspension of membership rights may be imposed when any portion of the member’s account (assessment and/or other) remains unpaid 60 days or more after the original due date.

2. The appeal of a fine to the Covenants Committee and/or Board of Directors does not reinstate

a member to “good standing” or membership rights. Revised: September 19, 2012 – R-13-025 (Effective October 15, 2012) Attorney Change: December 10, 2015 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Discipline Policy, Including Schedule of Fines (“Fine Policy”) A. General

The Lake of the Pines Association By-Laws, Article I and Article VI, sets forth the Purpose and Powers of the Association. Stipulated in the paragraphs contained therein are charges to enforce easements, restrictions, covenants, conditions, agreements and to prescribe and enforce regulations. The By-Laws also in Article VIII, states in part that the Association shall operate manpower and facilities to ensure the enforcement of the Association's rules and regulations.

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It is the intent of this policy to place the primary responsibility of enforcement of the Association Governing Documents with the management of Lake of the Pines and to enable management to impose fines as set forth in the Lake of the Pines Schedule of Fines. The extent of such action will be based on reasonableness, fairness, and equity as determined by the judgment of the Association's Board of Directors.

The Lake of the Pines General Manager and designated management representatives shall have the authority to issue citations and, when in their judgment it serves the purpose and intent of the Association's Government Documents, to levy fines as stipulated in the Lake of the Pines Schedule of Fines.

Any citation issued to a guest is the responsibility of the sponsor. Exceptions: (1) A third or subsequent Vehicle Code violation received within a three year period or, (2) all speeding citations issued for 40 mph and above. Both exceptions will automatically be referred to the Nevada County DA for adjudication.

B. Administrative Procedure

1. Receipt of Complaint

In the event that an alleged violation of any Association Governing Documents comes to the attention of the Association, either through a member complaint or from staff, it is the intent of the Board that the General Manager or his designated management representative, initiate a compliance process. Reports of alleged violations of the Association's Governing Documents may be made to Public

Safety Department, a management level employee or Administration Office staff of the Association. Such a report shall constitute a "complaint" preferably in writing. The complaint should clearly state the facts and circumstances regarding the alleged violation. Action may be taken as a result of an oral report (telephone or in person). File documentation shall be generated and maintained to ensure a thorough paper trail for future reference.

2. Notice of Violation to Member

Upon receipt of a complaint, the General Manager or his designated management representative, after a thorough review of all circumstances and investigation or verification of any vague or questionable items relative to the complaint, may issue a written warning notice or citation. Such notice will notify member of time frame to clear violation based upon nature of violation at the determination of management.

3. Notice of Fine and Appeal Process to Member

Should management be unable to bring about compliance or the violation be of a nature that correction of a condition is not appropriate, charges as stipulated in the

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Association's Governing Documents may be imposed. Notification will be made by first class mail or personal delivery stating the violation and the amount of the fine to be imposed. This notice of violation shall detail the following information including but not limited to:

a. Governing Document violated. b. Location of violation. c. Date of violation or initial date of inspection. d. Amount of charge per Fine Schedule. e. Statement of time frame in which to pay. f. Statement as to the Respondent’s rights of appeal.

Any fine(s) shall become effective as of the date of the Notice of Fines. Some violations, as indicated in the Schedule of Fines, will continue to accrue a weekly fine until the violation is brought into compliance.

4. Non-Compliance

If a correctable violation has not been corrected in a manner satisfactory to management, the matter will be referred to Covenants Committee for hearing. Administrative Procedures for the Covenants Committee shall apply.

If the violation is a result of a Member's failure to submit plans to the Environmental Control Committee (ECC), the Covenants Committee may, as a result of a hearing, impose a fine. This fine will accrue until such time as plans are submitted to the ECC. In no other instance will an ECC issue be referred to the Covenants Committee. Noncompliance with ECC directives shall be referred directly to the Board of Directors for adjudication.

5. Non-payment of Fine

The Lake of the Pines Association Collection Policy shall be applied to fines for purposes of collection.

C. Appeal Process

Processes for appeal shall be maintained to ensure due process and fairness in the application of charges as set forth in this policy. It is intended that any member who has been issued a violation may appeal said violation to the Covenants Committee and finally to the Board of Directors. A request for an appeal to the Covenants Committee shall be filed in writing by the alleged violator within 30 days of the postmark of the notice of fine(s) or the date of personal delivery. A request for an appeal to the Board of Directors shall be filed in writing by the alleged violator within ten days of the postmark of the Covenants Committee decision notice.

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D. Flow Chart

The following flow chart depicts the manner in which noncompliance issues are to be processed through the enforcement procedure.

Revised: October 15, 2008 – R-09-049 (Effective November 15, 2008)

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SCHEDULE OF FINES (effective 01/01/18)

Vehicular All moving violation citations issued to non-residents and resident tenants will be assessed to the sponsoring member. All members issued moving violation citations will be sent a fine letter from the Association. Members will have 30 days from the postmark date of the notification letter to pay the appropriate fine or file an appeal. After a 30-day period, the fine will be posted to member's lot number. Third and subsequent offenses for residents and non-residents may be referred to the District Attorney unless there are three years between tickets.

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1. Speeding (Radar Enforced) 1st Offense

Within 3 Years2nd & 3rd Offense Within 3 Years

4th Offense or More

26-30 mph $25 $75 $15031 mph $50 $100 $20032 mph $75 $125 $25033 mph $100 $150 $30034 mph $125 $175 $35035 mph $150 $200 $40036 mph $175 $225 $45037 mph $200 $250 $50038 mph $225 $275 $55039 mph $250 $300 $60040 mph and above:

- $300, plus $25 for every additional mile per hour over the speed limit; - $600, plus $50 for every additional mile per hour for the 4th offense or more; - Management may file with the District Attorney.

2. Passing School Bus with Flashing Red Lights - $400.00 3. Failure to Stop at Stop Sign - $100.00 4. All Other California Vehicle Code Moving Violations - $75 5. Parking on Association Property:

a. On Paved Street or Faced Opposing Traffic $25 per day/occurrence b. Unauthorized Use of Designated Parking Space $25 c. Handicapped $275 d. In Excess of 72 Hrs. $25 per day e. Between 2 a.m. and 6 a.m. $25 per day f. Hazardous Manner $50 g. In front of Fire Hydrant or Mail Boxes $50

6. Unsafe Operation $75

(Includes bicycles, golf carts, etc.) 7. Use of Skateboards & Motorized Scooters $50 in LOP Common Area $25 increase per repeat

occurrence within two years 8. Operation of golf cart on LOP roads without $75 displaying current golf decal or road registration.

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9. Towing In addition to fines, the Board shall have the power and authority to cause the towing, at the vehicle owner’s expense, of vehicles which are parked within the Development in violation of any of the provisions of the Governing Documents, provided that towing of vehicles of guests and other non-Residents of the Development shall be subject to the provisions of applicable law. Costs incurred by the Association relating to the towing and/or storage of any vehicle parked in violation of any provision of the Governing Documents shall be assessed as a Reimbursement Assessment against the Lot Owner responsible or whose household members, tenants, Contract Purchasers, or guests are responsible for the presence of such vehicle. Boating - Violations of Lake Rules Non-CF Registered Boats - as defined in the current Fee Schedule 1. Violations of LOP Lake $50 to $500

Rules & Regulations, Fine amount to be determined by management including unsafe operations. (General Manager and Operations Manager).

Discipline Policy, Including Schedule of Fines (“Fine Policy”) (cont’d) CF Registered Boats 1. Watercraft Dockside or on Lift without Decal

a. Per occurrence $50.00

2. Launched Watercraft without Decal - Member-Owned a. Not registered on time $250.00 b. Registered on time, decal not applied $100.00 c. Boat in quarantine $500.00 d. Repeat Offense for all categories above: Up to $500.00 plus possible

loss of lake privileges 3. Launched Watercraft without Decal - Not Member-Owned

1st Offense 2nd Offense $500.00 $500.00 plus possible loss of lake privileges for sponsoring member 4. Watercraft on Trailers Entering Through Member Lane 1st Offense 2nd Offense Repeat Offense $25.00 $250.00 $500.00 plus loss of lake privileges with fourth infraction 5. Nevada County Ordinance Refer to the District Attorney

Violations

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6. Violations of LOP Lake $50 to $500 Rules & Regulations, Fine amount to be determined by management including unsafe operations. (General Manager and Operations Manager).

Along with citations and/or fines, all boating and/or fishing violations carry with it possible expulsion from, and prohibition of, the use of the lake for a temporary or specific time, even permanently. Repeat violations are subject to increased fines. Golf Course - Violations of Golf Course Rules Golf Course (Golfers) 1. Violators may be fined $100 per occurrence for:

a. Driving an unregistered golf cart on any portion of the golf course or cart path. b. Driving “Road Use Only” registered golf carts on any portion of the golf course

other than cart paths and then only during non-golfing hours. 2. Violators may be fined up to $500 per occurrence, plus the cost to repair or replace any

damage to the Golf Course caused by intentional actions. (Vandalism) 3. Golfers may be fined $50 and/or removed from the golf course for:

a. Failure to register with the Pro Shop. b. Inappropriate Dress. c. Hitting into the group in front of them.

4. Golfers may be fined between $100 and $500, removed from the course, and may have their playing privileges suspended for up to 60 days for: a. Submitting false information for the purpose of securing golfing privileges. b. Playing golf without prior payment of green fees. c. Disorderly conduct, use of abusive or profane language, intoxication or other

behavior detrimental to the normal and orderly operation of the golf course. d. Failing to identify themselves to an injured party when an errant golf shot inflicts

damage to a person or property adjacent to the course. (If owner or resident of damaged property is not present, a note of identification must be posted at the property and with the Pro Shop Staff.)

5. Violations of any other golf course rules and regulations may, at the Head Professional’s

discretion, result in one or more of the following penalties. a. Written Warning. b. Citation and fine between $25 and $500. c. Immediate removal from the golf course. d. Suspension of playing privileges for up to 60 days.

*Fines are doubled for repeat violations of the same offense within two years.

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Golf Course (Non-Golfers) 1. Violators may be fined $100 per occurrence for:

a. Driving an unregistered golf cart on any portion of the golf course or cart path. b. Driving “Road Use Only” registered golf carts on any portion of the golf course

other than cart paths and then only during non-golfing hours. 2. Violators may be fined up to $500 per occurrence, plus the cost to repair or replace any

damage to the Golf Course caused by intentional actions. (Vandalism) 3. Violators may be fined $25 to $100 per occurrence (as determined by the Head

Professional), for any other violations of LOP Golf Course Rules and Regulations. *Fines are doubled for repeat violations of the same offense within two years. Violation of Environmental Control Standards And Prohibition & Requirements 1. $75 per occurrence per week. 2. Exception - CC&R's Article VI, Section 24 relative to the unauthorized removal of trees

over 3 " in diameter, measurement taken 4-feet above ground. Fine of $100 per inch of diameter or portion thereof.

3. Construction or expansion without Environmental Control approval. Fine to equal four

times plan check fee or $400, whichever is greater. Improvements that do not require a Plan Check Fee, and are started prior to approval, are subject to a minimum fine of $200.

4. Weed Abatement Violations are $100 per hour and a two-hour minimum. Animals Dog bites or attacks may be cited as a “Noxious Activity” and/or referred to the County Animal Control. 1. Loose Dogs $20 impound fee each time that dog is held at the Public Safety Dog Kennel. 1st Citation - $25 $25 increase per occurrence* 2. Barking Dogs 1st Citation - Warning 2nd Citation - $25.00 $25 increase per occurrence* 3. Dogs In Unauthorized Areas of Parks 1st Citation - $50.00 As stated in SR-15 or SR-03 $50.00 increase per occurrence*

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4. Feeding of Waterfowl or Deer 1st Citation – Warning 2nd Citation - $25 $25 increase per occurrence* * Will start over as a first citation if no citation received for a period of one year. 5. Allowing conditions to exist on common 1st Citation - $100

or private property which promote an $100 increase per occurrence increase the number of resident Canada Geese within Lake of the Pines. (See Dog & Animal Control Rules)

Vandalism 1. Malicious Mischief $100 (No Damage to Property) 2. Repairable Damage $500 plus any repair costs 3. Destruction of Property $1,000 plus replacement costs Any violations may be reported to State/County/Federal officials as applicable. Unauthorized Use of Passes / Misuse of Guest Pass / Misuse of Member Lot & Pin # 1. Member Cards, Guest Cards $50 or Guest Call Ins $50 increase per repeat occurrence 2. Contractor and Realtor Passes $75 $25 increase per repeat occurrence Breach Fence/Trespass 1. Exterior fence/illegal entrance or exit $75 $25 increase per repeat occurrence 2. Pool $75 per occurrence Violation of Park and Beach Rules, Swimming Pool Rules and Tennis Courts Rules $25 per occurrence Fishing - Violation of Lake Rules 1. No Fishing License $100 2. Over Limit $75

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Solicitation $50 Violation of Parcel E Rules $100

• Plus the Association’s cost to correct the violation • Plus the possible suspension of Parcel E privileges.

Short Term Rental Violation of the prohibition of short term $500 first offense; rental restrictions: Fine doubles at each occurrence as determined by management. Noxious Activities Violations of LOP Noxious Fines between $100 and $1000, as Activities Policy determined by management (General

Manager and/or Operations Manager). *Any violation not addressed in this Schedule of Fines is subject to fines between $50 and $1,000 as determined by management. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Dispute Resolution Summary (“Meet and Confer” and Alternative Dispute Resolution)

SUMMARY OF (1) THE INTERNAL DISPUTE RESOLUTION PROCESS

SET FORTH IN CALIFORNIA CIVIL CODE SECTIONS 5900 - 5915 AND

(2) CALIFORNIA CIVIL CODE SECTIONS 5925 - 5965 CONCERNING ALTERNATIVE DISPUTE RESOLUTION

(1) THE INTERNAL DISPUTE RESOLUTION PROCESS SET FORTH IN CALIFORNIA CIVIL CODE SECTIONS 5900 - 5915

California Civil Code Sections 5900 - 5915 require an association to provide a fair, reasonable, and expeditious procedure for resolving certain disputes between the association and a member. The following procedure, which may be invoked by either party to a dispute, shall apply:

(1) The party may request the other party to meet and confer in an effort to resolve the dispute. The request shall be made in writing.

(2) A member of an association may refuse a request to meet and confer. The association may not refuse a request to meet and confer.

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(3) The board shall designate a director to meet and confer with the other party to the dispute.

(4) The parties shall meet promptly at a mutually convenient time and place, explain their positions to each other, and confer in good faith in an effort to resolve the dispute.

(5) A resolution of the dispute agreed to by the parties shall be memorialized in writing and signed by the parties, including the board designee on behalf of the association. The parties may be assisted by an attorney or another person at their own cost when conferring.

A written agreement reached under this procedure binds the parties and is enforceable by a court if both of the following conditions are satisfied:

(1) The agreement is not in conflict with law or the governing documents of the common interest development or association.

(2) The agreement is either consistent with the authority granted by the board to its designee or the agreement is ratified by the board.

If the parties to the dispute are unable to resolve the matter using this internal dispute resolution procedure, the association or the member may then serve a Request for Resolution pursuant to California Civil Code Section 5935, if applicable. (2) CALIFORNIA CIVIL CODE SECTIONS 5925 – 5965 CONCERNING ALTERNATIVE DISPUTE RESOLUTION

California Civil Code Sections 5925 - 5965 address your rights to sue the association or another member of the association regarding the enforcement of the governing documents. The following is a summary of the provisions of Civil Code Sections 5925 - 5965:

In general, Civil Code Sections 5925 - 5965 encourage parties to certain disputes involving enforcement of an association's governing documents to submit the dispute to a form of alternative dispute resolution (ADR) such as mediation or arbitration prior to filing a lawsuit. The form of ADR may be binding or non-binding, and the costs of the ADR shall be borne by the parties.

Any party to a dispute may initiate the process of ADR by serving a Request for Resolution on all other parties to the dispute. A Request for Resolution must contain: (1) a brief description of the dispute between the parties, (2) a request for ADR, (3) a notice that the party receiving the Request for Resolution is required to respond within 30 days of receipt or the Request will be deemed rejected, and (4) if sent to the owner of a separate interest, a copy of Civil Code Sections 5925 - 5965. If the Request is accepted, the ADR must be completed within 90 days of receipt of the acceptance, unless otherwise agreed by the parties. Once a Request for Resolution is served, all applicable statutes of limitation are tolled as set forth in Civil Code Section 5945.

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FAILURE OF A MEMBER OF THE ASSOCIATION TO COMPLY WITH THE ALTERNATIVE DISPUTE RESOLUTION REQUIREMENTS OF SECTION 5930 OF THE CIVIL CODE MAY RESULT IN THE LOSS OF YOUR RIGHT TO SUE THE ASSOCIATION OR ANOTHER MEMBER OF THE ASSOCIATION REGARDING ENFORCEMENT OF THE GOVERNING DOCUMENTS OR THE APPLICABLE LAW.

The law requires the party filing a lawsuit for enforcement of the association's governing documents to file a certificate with the court stating that (1) ADR has been completed prior to the filing of the suit, or (2) ADR was not undertaken because one of the other parties to the dispute did not accept the terms offered for the ADR, or (3) ADR was not undertaken because preliminary or temporary injunctive relief is necessary. Failure to file this certificate can be grounds for dismissing the lawsuit.

Furthermore, while the prevailing party in any lawsuit to enforce the governing documents shall be awarded attorney's fees and costs, under Civil Code §5960 the court may consider whether a party's refusal to participate in ADR was reasonable when it determines the amount of the award.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Architectural Guidelines and Procedures

Notice of Requirements for Approval of Physical Changes to Property Following is a summary of the requirements and procedures used to review and approve or disapprove a proposed change to member property and home exteriors. Refer to the “Environmental Standards and Requirements for Architectural Review” which are available online at www.lop.org or in the Administration office for complete information. Before any changes or improvements are made to the property or exterior of any home, an owner must first receive approval from the Environmental Control Committee (ECC). All requests for approval must be submitted by the lot owner or have a signed authorization from the owner attached to the request. Approval is Required for, but Not Limited to: New home construction or any change to the footprint or roofline of a house. Outbuildings such as garages, sheds, gazebos, etc. Roofing materials and colors, exterior colors, view restrictions. Placement, color, and screening of LPG tanks, heating and air conditioning units. Decks, docks, pools, hot tubs, shade screens, boat lifts, etc. Driveways, walkways, patios, fences, retaining walls, etc. Decorative ponds, fountains, exterior lighting, and other lawn and yard ornaments. Tree removal and the planting of new trees, and other vegetation that is, or will be over three

feet in height at maturity. Seawalls, riprap, beaches, lake access, etc. Excavation, drainage, and soil erosion. Parking, storage, and screening of personal vehicles, RV’s, boats, trailers, etc. Wood stacks, trash can storage, play equipment, tarps, and covers. Home Business Permits.

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Before considering a project, members should obtain and carefully read a copy of the “Covenants, Conditions and Restrictions” and the “Environmental Standards”. In addition, they should obtain a checklist for submitting plans and discuss the proposed project with Environmental Control (EC) staff for additional instructions. Plans must be received at the Admin office no later than 5:00 p.m. the Thursday before the meeting at which they are to be reviewed by the ECC. The ECC will not commence review of plans until all requirements are met. Plans are normally reviewed and approved or denied within 21 days of submittal, but the ECC has up to 60 days to complete the initial review process (45 days for solar energy systems). Resubmission of changed plans will be approved or disapproved within 30 days. The ECC may approve or deny plans, specifications and details. After review by the ECC, the member will receive back one copy of the plans and a letter advising them of the ECC’s decision. Any changes in the original submission require a resubmission detailing the changes for ECC approval. No project that requires prior ECC approval shall be deemed to be approved simply because the owner completes the project without a complaint, notice of violation, or commencement of a suit to enjoin such work. Association inspections are intended to identify items that are either not consistent with approved plans or not in compliance with current standards. While it is the Association’s goal to identify all non-conformance, occasionally items are missed during the inspection process. By performing an inspection, the Association makes no warranty that all non-conforming items have been noted. If a non-conforming item is discovered after an inspection has been completed, the owner of the property remains responsible for correcting the violation unless an explicit variance from the standards has been issued by the Association in writing. Decisions of the ECC may be appealed (in writing) to the Board of Directors, and submitted to the following address: Director of Member Services, Lake of the Pines Association, 11665 Lakeshore North, Auburn, CA 95602. Phone: 530-268-1141. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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OTHER INFORMATION Signing Up for Information by Email The Association regularly sends out important information and community updates by email. To get on this distribution list, you must fill out and sign an Electronic Mail Consent Form. By completing this form, you will receive important information more quickly and save printing and postage expenses. Contact the Association office or visit our website for more information. Association Office Hours Lake of the Pines Association office is located in the Clubhouse at 11665 Lakeshore North. Office hours are Monday through Friday from 9:00 a.m. till 5:00 p.m., except holidays. Our office phone number is (530) 268-1141. A drop box is also available to the right of the Clubhouse entrance for assessment payments, architectural submittals and general Association correspondence. Annual Meeting of the Association Members The Association holds a meeting for the members of the Association annually on the fourth Saturday in June. All members of the Association are invited to attend this meeting and participate. A separate notice of this meeting is sent to all members at least ten days prior to the meeting. During the annual meeting, we count the ballots in our election of Board Directors. Watch your Association mailings for information about our nomination process and for your ballot and voting instructions. Security & Crime Reporting The Association’s Public Safety staff are on-site 24 hours a day. You may contact our Public Safety dispatcher by calling 268-1135, ext. 1. Our Public Safety patrol and gate operations serve a role of “observe and report”. While their presence in the community may act as a deterrent to crime, Public Safety are not law enforcement. To report any crimes or suspected crimes in progress, first contact the Nevada County Sheriff Department or call 911 and then alert our Public Safety staff. Security Disclaimer While we hope that our Public Safety staff provides some deterrence to crime, no matter what steps we take no community can ever be completely safe and secure. For example, it is possible for someone to enter the gates under false pretenses to commit crimes; for residents to commit crimes against their own neighbors; for guests to commit crimes; for contractors or employees to commit crimes. As a result, LOP is not free of crime and we cannot guarantee your safety or security. Accordingly, you should NOT rely on the Association to protect you from loss or harm. Instead, you should provide for your own security by taking common sense precautions, such as carrying insurance against loss, keeping your garage door closed, keeping your doors lock, refusing to open your door to strangers, asking workers for I.D., installing a security system, locking your car at all times, keeping valuable items that are in your car out of sight, etc.

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Neighborhood Watch Groups Neighborhood Watch Groups are forming throughout Lake of the Pines. This can be a great way to get to know your neighbors, so you can help keep an eye on each other. To learn more about Neighborhood Watch or to volunteer to be a Block Captain for your area, contact the LOP Neighborhood Watch Coordinator, Jan Cantwell at [email protected]. Megan’s Law Website The California Department of Justice maintains an internet website where you can find out information about persons who are registered as sex offenders who could be living in your area. The Association does not provide specific notice of individuals who may appear on this list, other than to let you know that the list is available for your benefit. Anyone who uses this list to commit a crime or to harass the offender or his or her family is subject to criminal prosecution and civil liability. The Megan’s Law website is found at www.meganslaw.ca.gov. Wildlife Living in the foothills means living closer to nature. With this benefit also comes responsibility. The Association periodically receives reports about rattlesnakes, mountain lion sightings and other wildlife that is native to this region. Please take all reasonable precautions to assure the safety of your family and pets. The California Department of Fish and Wildlife has some excellent information on things to know about living near wildlife. Visit their website at www.keepmewild.org for information on staying safe while living in mountain lion country and around other wildlife, as well. Wildfire Lake of the Pines is an active Firewise Community, working together to keep the entire community much safer from wildfire. Please be sure to maintain your property, not only for your protection but for the protection of the entire community. Trained volunteers are available to provide courtesy “defensible space” inspections of your property. Contact LOP’s Firewise Committee volunteers by calling the Association offices, or visit the website for the Fire Safe Council of Nevada County at www.areyoufiresafe.com. CodeRED Nevada County maintains an emergency notification system called “CodeRED”. CodeRED sends alerts to your mobile device via text message if an emergency is happening in your neighborhood. To sign up for CodeRED, visit www.mynevadacounty.com and find the CodeRED registration under the department of the Office of Emergency Services.

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