Proposed 2021 Operating, Capital, and Cashflow Budgets Overview

2021 OPERATING, CAPITAL, & CASHFLOW BUDGETS - PROPOSED

There is a tremendous amount of information in today s presentation. Questions will get addressed at the end of the presentation. Select Facebook questions will be asked by a moderator.

For those livestreaming this meeting, today s presentation and handout are available on the POA s website in the financial section.

HOW TO FIND THE BUDGET PRESENTATION

HOW TO FIND THE BUDGET PRESENTATION

BOARD INTRODUCTION David Brandenburg Chair Mary Sinkus Vice Chair Mike Abb Jerre Barron, Jr. Teah Bidwell Sandy Fosdick Jerry Hover Jan Simms David Whelchel

SENIOR STAFF Tom Judson - POA Darryl Muldoon Golf Operations Keith Ihms Golf Maintenance Tommy Lee F&B Division Mike Taggart Maintenance & Construction Rick Echols Lakes & Parks Doug McCash Legal & HR Kim Carlson Communications & Marketing Stacie Higgins Accounting Carmen Dissing Member Services Jack Brooks IT Joan Glubczynski Recreation Division Charlie Holt Water Department

BUDGET APPROVAL The Board tentatively plans to vote on the proposed 2021 Budget at their Regular Board Meeting scheduled November 19th. Bella-Vista-POA-Logo-125-65

2020 PLAN COMMITMENTS

2020 PLAN COMMITMENTS Four Financial Commitments: o $6 Eliminating or reducing amenity fee o The commitment is for $1,044,000. For Golf, Recreation, and Lakes, over $1,044,000 in revenue has been reduced from these departments as a result of the elimination or reduction in amenity fees. For all departments, the substantial increase in utilization is making the commitment hard to see, but it is there. Most importantly, the fees remain eliminated or reduced on the fee schedule. o $2 Trafalgar Fire o The commitment is for $348,000. For the 2021 Budget we have included $360,000 in legal fees tied to the Trafalgar Fire. o $4 Operational costs and capital improvements o The commitment is for $696,000. The capital budget for 2021 is $898,000. o $1 Reserves o The commitment is for $174,000. The cashflow budget for 2021 is $174,000.

POA

2020 POA Operating Budget

FINANCIAL PRESENTATION The operating budget for each department will include four columns: o2019 Actuals oTrailing 12 (September 2019 through August 2020) o2021 Budget oDelta (change between the Trail 12 and the 2021 Budget)

Trailing 12 Bella Vista POA Delta 2019 Actual POA w/o Water Budget 2021 Proposed 2021 Cashflow Budget 2019 Actual Trailing 12 Months Actual Budget 2021 Delta Total Income 19,285,983 18,402,163 19,820,741 1,418,578 Cost of Sales 1,205,458 1,060,729 1,113,524 52,795 Total Operating Expenses 20,716,010 18,173,036 18,567,109 394,073 EBITDA (2,635,485) (831,602) 140,108 971,710 Add: Allocations 1,299,083 1,306,304 Subtract: Capital Projects 475,856 897,582 Net Water Loan (borrow) (2,029,576) 280,000 Subtract: Reserves- 2020 Plan - 174,156 SIMPLE CASHFLOW 217,318 94,674

SNEAK PEAK & BUILDING FROM THE BOTTOM UP oThe next slide will give you a sneak peak of the POA s financials. oWe will start with the departments, building the budget from the bottom up.

Bella Vista POA Page #2 POA w/o Water Proposed 2021 Cashflow Budget 2019 Actual Trailing 12 Months Actual Budget 2021 Delta Total Income 19,285,983 18,402,163 19,820,741 1,418,578 Cost of Sales 1,205,458 1,060,729 1,113,524 52,795 Total Operating Expenses 20,716,010 18,173,036 18,567,109 394,073 EBITDA (2,635,485) (831,602) 140,108 971,710 Add: Allocations 1,299,083 1,306,304 Subtract: Capital Projects 475,856 897,582 Net Water Loan (borrow) (2,029,576) 280,000 Subtract: Reserves- 2020 Plan - 174,156 SIMPLE CASHFLOW 217,318 94,674

EMPLOYEE PAYROLL Three primary impacts to payroll: oMinimum wage increase to $11 per hour. This will impact select departments. oProposed 3% wage increase for all departments. For 2020, 1.6% for hourly and zero for salary staff. o Merit based average increase. oFully staffed for the year. Due to COVID, in 2020 multiple departments were closed for extended periods and staffing was kept low.

Departmental Reports Bella-Vista-POA-Logo-125-65

SUMMARY & DETAIL oYour 2021 Budget packet includes a Summary and Detail report for each department. During the presentation I will present the Summary report, but you are welcome to use the Detail report instead.

Page #3 Golf Operations Bella-Vista-POA-Logo-125-65

Increase In Annual Golf Rounds Played 165,000 160,000 155,000 150,000 145,000 140,000 135,000 130,000 125,000 120,000 2017 2018 2019 2020 Est.

SIGNIFICANT DRIVERS GOLF OPERATIONS oRevenue is down compared to 2019 with the approval of the 2020 Plan and the lowering of fees. Effectively, revenue was transferred from this department to General Income (assessments). oCompared to 2019, rounds for 2020 have increased by 23,600 YTD. This is an 18.9% increase, compared to a regional average of 12.5% increase. Is this increase in rounds because golf is COVID friendly or is the increase the result of the lowering of fees, or a combination of the two?

SIGNIFICANT DRIVERS GOLF OPERATIONS oFree green fees (w/ Activity Card) at Brittany has been a huge success. Rounds have gone from 6,300 in 2019, to 14,000 in 2020. oFrom a revenue standpoint, this is the only department that may be negatively impacted if COVID subsides. oLabor is up significantly because of the increase in minimum wage to $11/hr. The minimum wage increase has an impact of $113,000. oExpenses remain flat.

CAPITAL PROJECTS GOLF OPERATIONS o$22,000 - Metfield Parking Lot Paving. Parking lot is in poor condition. o$14,715 Metfield #18 Tee Bank. Bank is in poor condition and is no longer stable.

Bella Vista POA Golf Operations - Darryl Muldoon Delta 2019 Actuals 4,334,099 371,057 1,009,041 938,365 2,015,636 Trailing 12 2021 Budget 4,139,645 1,168,933 1,735,461 Budget vs Trailing 12 Revenue Cost of Sales Labor Expense EBITDA 4,096,922 349,674 1,055,590 889,634 1,802,024 42,723 2,980 113,344 (7,037) (66,563) 352,654 882,597

Page #5 Golf Maintenance Bella-Vista-POA-Logo-125-65

SIGNIFICANT DRIVERS GOLF MAINTENANCE Our goal for the coming year is to improve course conditions. Course conditions were negatively impacted in 2020 due to COVID related cutbacks. 2020 was the first year in many years where all courses were open the entire year. We hope there will be no floods or other unforeseen challenges in 2021 which would prevent us from having all courses open.

SIGNIFICANT DRIVERS GOLF MAINTENANCE Labor will increase because of the following: For 2020, delayed hiring and positions not filled due to COVID cutbacks. Quality of the golf courses was impacted. Budgeting at full staff for 2021. 3% merit increase for staff. Minimum wage increase impacts approximately 13 positions. Extra hours to maintain the greens during the summer months. Expenses appear to decrease with the 2021 Budget, this is caused by over $300,000 in expenses tied to flood and windstorm damage in the Trailing 12 & 2019 Actuals.

CAPITAL PROJECTS GOLF MAINTENANCE $22,000 Root Pruner (shared between all courses). This will help extend the life of our cart paths. $20,000 - Dogwood #18 Pump House Rebuild $19,000 Country Club Sand Top Dresser. Replaces an unreliable 10-year-old piece of equipment. $30,000 Highlands Red Tee Boxes. Tee Boxes need to be leveled and enlarged for better playability. $15,000 Berksdale park mower. Replaces an unreliable 15-year-old piece of equipment.

CAPITAL PROJECTS GOLF MAINTENANCE $110,000 Creek bank and bridge stabilization at #5 Country Club. Protect irrigation system main line and large arched bridge from potential flood damage. $25,000 Country Club Red Tee Boxes. Tee Boxes need to be leveled and enlarged for better playability. $35,000 Highlands Truck Replacement. Current vehicle has over 200,000 miles and is unreliable.

Bella Vista POA Golf Maintenance - Keith Ihms Delta 2019 Actuals 1,782,494 2,191,659 (3,972,517) Trailing 12 2021 Budget 1,961,893 1,973,662 (3,935,555) Budget vs Trailing 12 Revenue Cost of Sales Labor Expense EBITDA 1,636 - 1,189 - - - (1,189) - 206,356 (194,664) (12,881) 1,755,537 2,168,326 (3,922,674)

Page #7 Food & Beverage Bella-Vista-POA-Logo-125-65

SIGNIFICANT DRIVERS FOOD & BEVERAGE oThe F&B Operation was significantly impacted by COVID in 2020. Banquet and bar revenue were impacted the most. oTowards the later portion of 2020, revenue has matched or exceeded prior year on a month-to-month comparison, even with the shortfalls in banquets and bar. oIf the pandemic persists, it will have a negative impact upon the F&B Operation.

SIGNIFICANT DRIVERS FOOD & BEVERAGE oLabor will increase in 2021 with a full year of operations. We were closed for several weeks in 2020, which resulted in a savings to labor. oExpenses will decrease as we continue to push to be more efficient.

Bella Vista POA Food and Beverage Division - Tommy Lee Delta 2019 Actuals 1,983,802 745,735 1,090,202 512,311 (364,446) Trailing 12 2021 Budget 1,859,481 1,043,092 (264,565) Budget vs Trailing 12 Revenue Cost of Sales Labor Expense EBITDA 1,642,367 629,218 987,954 439,192 (413,997) 217,114 48,364 55,138 (35,820) 149,432 677,582 403,372

LONG TERM PROSPECTIVE Our original goal was to get the F&B Operation to break even by the fourth full year of operation for both restaurants. The significant negative financial impact of COVID means that 2020 and 2021 will not count towards this timeline.

Page #9 Clubhouses Bella-Vista-POA-Logo-125-65

SIGNIFICANT DRIVERS CLUBHOUSES oThis department accounts for the cost to operate our clubhouses. Expenses for this department include utilities, taxes, insurance, and maintenance & repair. oThere are no employees assigned to this department. oRevenue is limited to the leased space at Kingsdale. oExpenses will increase with a full year of operation. oExpenses will also increase with the elimination of allocations on web/data services and power.

CAPITAL PROJECTS CLUBHOUSES o$55,000 Replace 4 Heat Pump Systems at Highlands. The current old units are at the end of their life and use R-22. o$65,000 Paint Exterior of the Country Club. Exterior paintwork has not been done in over 13 years.

Bella Vista POA Clubhouses Delta 2019 Actuals 289,538 (253,635) Trailing 12 2021 Budget Budget vs Trailing 12 Revenue Cost of Sales Labor Expense EBITDA 35,940 39,940 12,000 (27,940) - - - - - (98) 37 98 323,268 (283,425) 375,428 (363,428) 52,160 (80,003)

Page #11 Maintenance & Construction (MAC) Bella-Vista-POA-Logo-125-65

SIGNIFICANT DRIVERS MAC oRevenue will increase with the sale of two bulldozers, a service truck, and two deck mowers. The bulldozers are no longer needed with the closure of the stump dumps. oLabor will increase for the following reasons: o 3% increase for staff. o Will fill staff vacancies that went unfilled due to COVID cutbacks. oExpenses will increase modestly with the cost of fire extinguishers, fire suppression and hood maintenance no longer allocated to other departments.

CAPITAL PROJECTS MAC o$13,200 Replace an Out-Front Rotary Deck Mower. Existing unit is reaching end of life and is unreliable. o$35,000 Replace a Ton 4x4 Truck. Replacing a high mileage truck that is no longer reliable. o$12,100 Genie Electric 19 Scissor Lift. This will provide worker safety when working in elevated heights. o$75,000 Replacement of a Mini-X Track Hoe.

Bella Vista POA Maint and Const - Mike Taggart Delta 2019 Actuals 1,303,717 519,632 (1,745,667) Trailing 12 2021 Budget 1,351,144 (1,655,178) Budget vs Trailing 12 Revenue Cost of Sales Labor Expense EBITDA 77,682 70,799 169,930 99,131 - - - - 1,261,251 458,156 (1,648,608) 89,894 15,808 (6,570) 473,964

Page #13 Lakes & Parks Bella-Vista-POA-Logo-125-65

SIGNIFICANT DRIVERS LAKES & PARKS oOur goal is to continue to maintain the lakes at a high level and purchase sufficient fish for angling opportunities in our lakes. oRevenue will increase as we anticipate more boat registrations in 2021. There has been a consistent upward trend in the number of boat registrations over the last five years.

SIGNIFICANT DRIVERS LAKES & PARKS oLabor will increase due to the following: o Minimum wage will contribute the most to the overall increase o 3% wage increase for our staff o Keeping a 4th ranger during the winter oExpenses will increase modestly: o Hybrid striped bass o Wood decking o Renovation of trap house #3

CAPITAL PROJECTS LAKES & PARKS o$48,500 Pave Brittany Dam. The pavement at this dam is in very poor condition. o$40,000 Replace two half ton vehicles. Plan to purchase used vehicles. Current vehicles are very high mileage.

Bella Vista POA Lakes and Parks Div-Rick Echols Delta 2019 Actuals 522,985 388,938 337,502 (231,996) Trailing 12 2021 Budget Budget vs Trailing 12 Revenue Cost of Sales Labor Expense EBITDA 469,945 23,617 391,127 325,531 (270,331) 486,618 23,835 443,027 336,476 (316,719) 16,673 218 51,899 10,945 (46,389) 28,541

Page #15 CENTRAL ADMINISTRATION Bella-Vista-POA-Logo-125-65