Wellington Farms Homeowners Association (WFHA) Fence Forum

1. Wellington Farms Homeowners Association (WFHA)Fence Forum September 16, 2008 WFHA Board of Officers and Directors Deanna Kaufman, President

2. Agenda • Project Background • Statistics and condition of current fence • Contributing causes of deterioration • Proposed project • Frequently Asked Questions • Fence Focus Group • Objective and timeline • Replacement options considered • Wood, brick, and brick entryway bids and budget estimates • Frequently Asked Questions • Financial Considerations • Estimated “all-up” budget, wood and brick • Sample financing over 5 years (ESTIMATE) • Financing vs. “saving up” • WFHA Revenue/Expense (FY05-FY07 actual; FY08 budget) • WFHA Savings Allocation (FY05-FY07 actual; FY08 budget) • Use of existing savings • How homeowners might be assessed • Frequently Asked Questions • Comparison Wood vs. Brick Replacement • Suggested Next Steps 2

3. Project Background • Statistics • Our fence is more than 6,100 linear feet (That’s more than a mile!) • Encompasses north and south side of Wolf River Blvd. and the north side of Shelton Rd. around phases 4, 5A, 5B and 6-10 • Condition of current fence • Rotted • Misaligned • Not properly attached to posts and columns • Damaged by storms, wear and tear, and unintended abuse 3

4. Project Background • Contributing causes of deterioration • Age • Weather events (“Hurricane Elvis” etc.) • Landscape maintenance of common areas • Homeowner causes • Yard drainage • Lawn mowers/weed eaters • Landscaping • Improper use (hanging items on fence, allowing other objects to rest on fence) • Pool installations 4

5. Project Background • Proposed project • Replace existing fence, at least in kind, as soon as necessary • If fence project proceeds, include two pairs of missing brick entryways planned but not built 5

6. Project BackgroundFrequently Asked Questions • Why does the fence have to be replaced? • The current wooden fence has deteriorated over the years due to age, normal wear and tear, weather events, and some unintended abuse. At some time the fence will have to be replaced in its entirety. • Why not replace the fence bit by bit rather than try to replace it all at once? • The Town of Collierville strongly recommends replacement of the entire structure at once to maintain a uniform appearance for a subdivision. • Replacing the fence bit by bit saves financing costs but the trade offs are higher prices due to inflation and lower purchasing power (buying less fence at one time). 6

7. Project BackgroundFrequently Asked Questions • How can we make a new fence of wood last as long as possible? • All homeowners share in the responsibility to keep our common assets in good repair to ensure the longest possible life. To that end, homeowners who live directly on the fence must pay particular attention to: • Refrain from fixing drainage problems by routing water that then stands at the fence, quickening rot • Resolve any current standing water situation caused by attempts to fix drainage problems • Use care with lawn mowers and weed eaters to lessen damage to fencing • Control landscaping so that features do not rest on or against the fence (trees, shrubs, garden soil, rock features, etc.) • Avoid using the fence in improper ways (hanging items on the fence, allowing objects to rest against the fence indefinitely) • Not remove fencing to facilitate building additions or pool installations 7

8. Fence Focus Group • Objective – Conduct unbiased fact-finding with no preference given to wood or brick • Review options for fence replacement • Solicit bids using standardized request for quotation • Complete “apples to apples comparison” (normalize bids ensuring valid comparison) • Consider funding options • Timeline • November 2006 – Community volunteers solicited at annual homeowners meeting to form focus group • Summer 2007 – Options reviewed and bid solicitation • Fall 2007 – Service provider presentations to focus group and board • Winter 2007-2008 – Bid normalization/confirmation • Spring 2008 – Financing options explored 8

9. Fence Focus Group • Replacement options considered • Wood • with new style “cap” as requested by Town of Collierville • Brick 9

10. Fence Focus Group – Bids/Budget Estimates Please note that these are ESTIMATES only for our information, no contracts have been signed to proceed and given the age of the proposals would require another request for quote. Vendor names can be released to interested homeowners upon request. We are not publishing vendor names at this point to keep bidding fair and not give any vendor the impression we are starting work since no decisions to proceed have been made. 10

11. Fence Focus Group – Bids/Budget Estimates Please note that these are ESTIMATES only for our information, no contracts have been signed to proceed and given the age of the proposals would require another request for quote. Vendor names can be released to interested homeowners upon request. We are not publishing vendor names at this point to keep bidding fair and not give any vendor the impression we are starting work since no decisions to proceed have been made. 11

12. Fence Focus Group – Bids/Budget Estimates Please note that these are ESTIMATES only for our information, no contracts have been signed to proceed and given the age of the proposals would require another request for quote. Vendor names can be released to interested homeowners upon request. We are not publishing vendor names at this point to keep bidding fair and not give any vendor the impression we are starting work since no decisions to proceed have been made. 12

13. Fence Focus GroupFrequently Asked Questions • How will the safety of my children and pets be ensured while the fence is torn down for replacement? • The service providers responsible for installing the new fence are required to provide temporary fencing in the interim for the brief period of time the fence bordering your home is down. • Please note that the fencing is not durable and you will need to exercise care to be sure your children and pets are protected and do not leave your yard unattended. 13

14. Financial ConsiderationsEstimated “all-up” budget, wood and brick 14

15. Financial ConsiderationsSample financing over 5 years (ESTIMATE) 15

16. Financing Can implement replacement project on shorter notice if needed High turnover neighborhood considerations Contribute as little as necessary for time here Conveys benefit of use while part of community Incurs cost of financing as a trade off to secure lower project costs (due to inflation) “Saving up” Delays project until all funds are available regardless of need Neighbors here for a short time contribute but may not get use of new fence Avoids financing costs and increases fund through interest on savings but incurs higher project costs (due to inflation) Financial ConsiderationsFinancing vs. “saving up” 16

17. Financial ConsiderationsWFHA Revenue/Expense 17

18. Financial ConsiderationsWFHA Savings Allocation 18

19. Financial ConsiderationsUse of existing savings • At end of FY08, estimate $30,000 “free” savings (not allocated to mandated reserve or one year’s expense) • Contributing all or most of savings to project may increase risk of missing note payments due to slow collection of fees • Some level of savings should be held in reserve against slow collection to guard against default/penalties in case financing is sought 19

20. Financial ConsiderationsHow homeowners might be assessed if community elects to proceed • Suggest an annual assessment annually in March (Spring) for entire year’s worth of fence payments; concurrent with start of any fencing project (year TBD) • Annual assessment of loan payments: • Ensures collection can be done in a timely manner • Provides further protection against default other than WFHA savings • Are placed at opposite time of year from annual maintenance fee assessments to spread out financial burden 20

21. Financial ConsiderationsFrequently Asked Questions • Why do the homeowners have to pay for the fence to be replaced? • Collierville, TN neighborhoods, particularly those developed in the last decade, are primarily organized into associations for the express purpose of maintaining their communities. As such, the association is responsible for capital assets such as the fence that surrounds our phases and the brick entrances located at most of our entrances. These assets belong to the Wellington Farms Homeowners Association to which you belong if you reside in phases 4, 5A, 5B or 6-10 of Wellington Farms. • Can those homeowners directly on the fence line pay for all of it? • Bylaws for homeowners associations require that all homeowners are treated the same; all homeowners must be assessed the same as others for expenses or capital improvements done in common for the good of the neighborhood. • Individuals may be “charged” separately for repairs for any damage done to common property such as damage to our irrigation system when a pool is installed. 21

22. Financial ConsiderationsFrequently Asked QuestionsRevised Based on Community Feedback from Fence Forum • How will the decision be made on material and funding? • Decisions regarding the management of the homeowners association is delegated to your representatives by you and your fellow homeowners when they are elected at our annual meeting in November. • Because of the sensitive issue associated with the costs of any kind of capital project to replace the fencing, the board members suggest that in 2009 the issue be put to community vote on a variety of options, including doing nothing to replace the fence itself, with results to be published on the homeowners association website. • The current (2007-2008) board further recommends that subsequent boards conduct similar periodic votes with regard to capital projects and post results for the community’s review before proceeding. • What happens if I don’t want to pay special assessments associated with a fence replacement project? • All homeowners are required to pay both the annual maintenance fees as well as any special assessments levied by the homeowners association. If a replacement of the fence is undertaken and financed a special assessment would be required to meet financial obligations. • When some of your fellow homeowners do not pay their annual maintenance fees, and after a reasonable collection effort is made, a lien is placed on their home until the monies are collected. When a lien is filed, the costs are increased to include the fee, late fees, and any legal costs incurred. Lifting the lien requires payment of the entire lien amount. • The same process of placing liens will be followed for non-payment associated with any capital project like fence replacement. 22

23. Wood: “Pros” Cost Offers upgraded appearance for some period of time “Cons” Requires more frequent replacement Weathers quickly Vulnerable to damage (storms, people) Higher annual maintenance (approximately $3,000/year) Brick: “Pros” Longevity/sturdier Lasting upgraded appearance Reduced maintenance costs “Cons” Requires new foundations which in turn requires architect and arborist Cost Comparison Wood vs. Brick Replacement 23

24. Suggested Next Steps Revised Based on Community Feedback from Fence Forum The current board suggests that 2008-2009 board: • Undertake a community survey (vote) via mail to determine the will of the community in this matter, providing various questions and options for consideration • Conduct the survey using postage paid/pre-addressed return envelopes to drive as far as possible to 100% participation • Publish results of survey for community review and act accordingly • If based on the community’s will the board proceeds with fence replacement, specific steps to complete a project of this nature would need to be undertaken including but not limited to: • Soliciting the community for a project manager who has expertise in this area • Re-confirming quotes and selecting providers • Determining final budget • Determining how project will be funded • Proceed with work, with expected time to do a replacement project in its entirety estimated at 2-3 months • If based on the community’s will the main focus of replacing the fence itself is not undertaken at this time the following actions be followed: • Re-survey the community from time to time (annually for example) to determine will of community in the matter • Review and make recommendations on what beautification projects might be undertaken funded solely out of current savings 24