Annual Budget Report and Policy Statement 2026-2027

2026/2027 Annual Budget

69411 Ramon Rd, Cathedral City, CA 92234

760.328.3834

800.843.3131

ORPS.com

ORPS Budget 2026–27 Explained

On Monday, May 18, the Board approved the 2026–27 operating budget as recommended by both the Finance Committee and Management. For most owners, the first question is understandably: What will the increase in my HOA assessment be beginning July 1?

The increase for the coming fiscal year is $14 per month . Monthly assessments will increase from $560 to $574 , while annual assessments will increase from $6,720 to $6,888 . This represents a 2.5% increase .

Key Factors That Helped Limit the Increase

1. Administrative Restructuring and Staffing Efficiencies

Management and the Board decided not to replace two administrative positions: the Chief Operations Officer, previously held by David Reid, and the Resort Services Manager, previously held by Jennifer Miranda. Responsibilities have been redistributed among existing staff, supplemented by only two seasonal part-time employees. These adjustments generated meaningful savings that will continue into the next fiscal year. 2. Stabilization of Utility Costs After several years of significant increases, utility costs stabilized during the past year and ultimately came in under budget. While some uncertainty remains regarding natural gas and electricity pricing, most utility costs are expected to remain relatively stable in the coming year. 3. Moderation in Insurance Costs Insurance expenses declined this past year modestly. Our insurance broker anticipates increases next year; however, they are expected to be considerably more moderate than those in recent years, and appropriate allowances have been included in the budget. 4. Disciplined Departmental Budget Management Management did an excellent job controlling departmental expenses, with many departments finishing below budget. Rather than applying a blanket 4% inflationary increase across all departments, the new budget was built using the previous year's actual expenditures as the baseline. This more disciplined approach helped generate additional savings.

Areas Where Costs Increased

Although strong financial management helped offset many expenses, several significant cost pressures required additional funding in the 2026–27 budget.

1. Landscaping Contract Increases Many owners expressed concerns regarding the quality of landscaping services during the past year. As a result, the landscaping contract was put out for competitive bid. The new bids came in substantially higher, increasing costs by approximately $260,000 annually , or roughly $17 per owner per month . 2. Employee Compensation Adjustments ORPS staff continued to provide outstanding service throughout the year. The budget includes an average 4% wage increase for employees, along with slightly larger adjustments for several staff members who assumed expanded responsibilities in operations and resort services following the administrative restructuring. 3. Increased Reserve Contributions and Tree Maintenance Costs The updated reserve study recommended increasing annual reserve contributions by approximately $6 per owner per month in order to strengthen long-term financial stability. In

69411 Ramon Road, Cathedral City, CA 92234 - (p)760-328-3834; (f)760-328-7852; orps.com

addition, approximately $140,000 in annual tree-trimming costs, previously funded from reserves, has now been appropriately reclassified as an operational expense, reducing Reserve contributions by $9 per month.

Why the Increase Remained Limited

Owners may reasonably ask how the monthly assessment increase was limited to only $14 despite higher landscaping costs, increased reserve contributions, wage adjustments, and additional operational expenses.

The answer is the result of careful financial stewardship by your volunteer Finance Committee members and management.

How Your Monthly Assessment Is Used

The monthly assessment of $574 supports the resort's operations, maintenance, and long-term sustainability. In addition to assessment revenue, ORPS generates approximately $1,118,950 from non- assessment sources , such as resort fees, lifestyle events, sponsorships, golf green fees, and other sources, helping reduce the financial burden on owners.

Operating Expenses Per Owner Per Month Category

Annual Expense Monthly Cost Per Owner

Administration

$1,151,701

$79.12

Resort Services

$232,470

$15.97

Lifestyle Programs

$341,714

$23.48

Golf Operations

$98,095

$6.74

Grounds & Greens

$1,912,184

$131.37

Security

$581,265

$39.93

Mailroom

$73,747

$5.07

Facilities

$375,778

$25.82

Maintenance & Repairs

$945,121

$64.93

Vehicle Operations

$99,846

$6.86

Utilities

$1,126,808

$77.41

Insurance

$808,589

$55.55

Total Operating Expenses

$7,747,318

$532.24

Budget Contingency

$154,946

$10.64

Reserve Contribution

$1,324,000

$90.96

Capital Contribution

$247,780

$17.02

Total Gross Expense

$9,474,044

$650.87

Less Non-Assessment Income ($1,118,950)

($76.87)

Final Monthly Assessment

$574.00

69411 Ramon Road, Cathedral City, CA 92234 - (p)760-328-3834; (f)760-328-7852; orps.com

Understanding ORPS Reserves

Owners also frequently ask how reserve funds are used and why reserve contributions are so important. It is important to know that the Davis-Sterling Act requires every HOA to maintain a reserve fund to cover the repair and replacement of existing infrastructure and equipment. ORPS currently maintains approximately $9.8 million in resort assets that will eventually require repair or replacement. These include infrastructure, buildings, mechanical systems, vehicles, equipment, roads, and recreational facilities.

At present, the reserve fund contains approximately $4.6 million , representing approximately 48% funded reserves. The long-term goal established for ORPS is a 70% funded reserve level .

How Reserve Planning Works

ORPS engages professional reserve analysts who evaluate the expected useful life and future replacement cost of all resort assets.

For example: •

The air conditioning units at the La Palma Clubhouse were originally installed with an estimated useful life of 12 years; they are now approximately 11 years old. Since installation, reserve funds have been set aside each year to ensure replacement can occur. • The recently renovated Satellite C restrooms have an estimated useful life of 20 years and an estimated future replacement cost of approximately $130,000. Reserve funding for that future replacement is already being set aside. Before any reserve-funded replacement is approved, the asset is visually inspected by the maintenance team and the General Manager. If replacement is necessary, it is added to the reserve schedule; if not, it continues to be monitored each year until it is replaced.

The Purpose of the Reserve Fund

The reserve fund functions as the resort’s long-term savings account. Its purpose is to ensure that ORPS can maintain the quality, safety, and functionality of its infrastructure and amenities over time without relying on large special assessments to owners. Every asset within the resort will eventually require repair or replacement. Consistent reserve funding ensures that future obligations can be met responsibly while protecting both the resort's financial stability and the value of owners’ investments. It is our hope that the information provided presents a clear picture of our approved budget and our current reserve funding. If you have any other questions about the budget or our reserve fund, please do not hesitate to ask one of your Board of Directors members, email us at boardofdirectore@orps.com, or ask your question at the open forum at our next board meeting on June 15.

Respectfully submitted, The Board of Directors Outdoor Resort Palm Springs

69411 Ramon Road, Cathedral City, CA 92234 - (p)760-328-3834; (f)760-328-7852; orps.com

2026-2027 Annual Budget Report

Budget Summary See enclosed Budget Summary for your review. The complete Budget may be obtained by a request to SSalazar@orps.com. Assessment & Reserve Funding Disclosure Summary See enclosed Assessment and Reserve Funding Disclosure Summary for your review, which includes a: A. Reserve Funding Summary B. Reserve Funding Plan C. Procedures for Calculating Reserves Major Component Repairs The Board of Directors has not deferred or eliminated any repairs or replacements of any major reserve components . Anticipated Special Assessments At this time, the Board of Directors does not anticipate the need for a special assessment. Reserve contributions are currently funded through monthly assessments.

Outstanding Loans The Association does not have any outstanding loans.

Insurance Summary See enclosed Insurance Summary for your review.

Charges for Documents Provided See enclosed for Charges for Documents provided for your review.

OUTDOOR RESORT - PALM SPRINGS 2026-2027 Budget Summary July 1, 2026 - June 30, 2027 Approved by the Board May 18, 2026

ITEM

ANNUAL

MONTHLY/UNIT

REVENUE

Assessments

8,355,094

574.00

Total Administration Revenue (Including Assesments)

8,626,344

592.63

Total Rental/Reimburesement Revenue

469,100

32.23

Total Lifestyles Revenue

363,850

25.00

Total Golf Revenue

14,750

1.01

TOTAL REVENUE

9,474,044

650.87

EXPENSE

Total Administration Expense

1,151,701

79.12

Total Resort Services Expense

232,470

15.97

Total Lifestyles Expense

341,714

23.48

Total Golf Expense

98,095

6.74

Total Grounds & Greens Expense

1,912,184

131.37

Total Security Expense

581,265

39.93

Total Mailroom Expense

73,747

5.07

Total Facilities Expense

375,778

25.82

Total Maintenance & Repair Expense

945,121

64.93

Total Vehicle Expense

99,846

6.86

Total Utilities Expense

1,126,808

77.41

Total Insurance Expense

808,589

55.55

TOTAL OPERATING EXPENSE

7,747,318

532.24

Budget Contingency

154,946

10.64

Total Reserve Contribution

1,324,000

90.96

Total Capital Contribution

247,780

17.02

TOTAL GROSS EXPENSE

(9,474,044)

650.87

NON-ASSESSMENT INCOME

1,118,950

(76.87)

ASSESSMENT INCOME

8,355,094

574.00

NET INCOME/LOSS

0.00

Assessment and Reserve Funding Disclosure Summary

Outdoor Resort Palm Springs, Cathedral City

For Fiscal Year Beginning: 7/1/2026

# of units: 1213

1) Budgeted Amounts:

Total

Average Per Unit*

Reserve Transfers:

$104,333.00 $696,262.00

$86.01

Total Assessment Income: $574.00 per: Month 2) Additional 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: Year Total Amount Total Amount Per Unit* Purpose Total: $0.00 Total: $0.00 3) Based on the most recent Reserve Study and other information available to the Board of Directors, at this point in time does it appear that currently projected Reserve account balances will 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 4) If the answer to #3 is no, what additional assessments or other transfers/loans to Reserves would be necessary to ensure that sufficient Reserve Funds will be available each year during the next 30 years? Approximate Fiscal Year Assessment Will Be Due Total Amount Average Total Amount Per Unit* Total: $0.00 Total: $0.00 5) All major components appropriate for Reserve Funding (components that are a common area maintenance responsibility with a limited life expectancy and predictable remaining useful life, above a minimum threshold cost of significance) are included in this Reserve Funding Plan: Yes 6) All computations/disclosures are based on the fiscal year start date of: 7/1/2026 Fully Funded Balance (based on formula defined in 5570(b)4): $9,814,519 Projected Reserve Fund Balance: $4,770,791 Percent Funded: 48.6 % Reserve Deficit (surplus) on a mathematical avg-per-unit* basis: $4,158 From the 5/15/2026 Reserve Study by Association Reserves and any minor changes since that date. * If assessments vary by the size or type of unit, allocate as noted within your Governing Documents. 7) See attached 30-yr Summary Table, showing the projected Reserve Funding Plan, Reserve Balance, Percent Funded, and assumptions for interest and inflation.

Prepared by: Kevin Leonard

Date: 5/26/2026

The financial representations at the time of preparation are based on the Reserve Study for the fiscal year shown at the top of this page and the best estimates of the preparer. These estimates should be expected to change from year to year. Some information on this form has been provided to Association Reserves, and has not been independently verified.

Association Reserves

1 of 2

www.ReserveStudy.com

30-Year Reserve Plan Starting with Board of Directors 2026 Rate

6510-4

Fiscal Year Start: 7/1/2026

Net After Tax Interest:

3.00 % Avg 30-Yr Inflation: 3.00 %

Reserve Fund Strength (as-of Fiscal Year Start)

Projected Reserve Balance Changes

Starting Reserve Balance

Fully

Special Assmt

Loan or Special

Funded Percent Balance Funded

Reserve Funding

Interest

Reserve

Year

Risk

Assmts Income Expenses

2026

$4,770,791 $9,814,519 48.6 %

Medium

$1,251,996

$0 $137,582 $1,746,880

2027

$4,413,489 $9,669,175 45.6 %

Medium

$1,299,572

$0 $114,226 $2,615,603

2028

$3,211,685 $8,665,472 37.1 %

Medium

$1,348,956

$0 $106,744 $753,366

2029

$3,914,018 $9,591,770 40.8 %

Medium

$1,400,216

$0 $123,163 $1,129,683

2030

$4,307,714 $10,201,520 42.2 %

Medium

$1,453,424

$0 $133,873 $1,266,029

2031

$4,628,982 $10,733,693 43.1 %

Medium

$1,508,654

$0 $154,663 $596,760

2032

$5,695,540 $12,017,083 47.4 %

Medium

$1,565,983

$0 $169,835 $1,789,550

2033

$5,641,808 $12,157,682 46.4 %

Medium

$1,625,490

$0 $174,338 $1,445,495

2034

$5,996,142 $12,705,575 47.2 %

Medium

$1,687,259

$0 $177,426 $2,012,923

2035

$5,847,904 $12,735,614 45.9 %

Medium

$1,751,375

$0 $184,051 $1,344,921

2036

$6,438,408 $13,506,263 47.7 %

Medium

$1,817,927

$0 $166,328 $3,757,859

2037

$4,664,804 $11,867,920 39.3 %

Medium

$1,887,008

$0 $127,144 $2,856,256

2038

$3,822,701 $11,163,890 34.2 %

Medium

$1,958,715

$0 $106,552 $2,597,765

2039

$3,290,203 $10,761,441 30.6 %

Medium

$2,033,146

$0 $104,417 $1,747,584

2040

$3,680,182 $11,280,754 32.6 %

Medium

$2,110,405

$0 $115,892 $1,850,306

2041

$4,056,174 $11,769,739 34.5 %

Medium

$2,190,601

$0 $137,956 $1,231,682

2042

$5,153,048 $12,972,266 39.7 %

Medium

$2,273,844

$0 $166,866 $1,607,675

2043

$5,986,083 $13,887,139 43.1 %

Medium

$2,326,142

$0 $194,471 $1,510,901

2044

$6,995,794 $14,994,583 46.7 %

Medium

$2,379,643

$0 $197,355 $3,394,175

2045

$6,178,617 $14,262,891 43.3 %

Medium

$2,434,375

$0 $194,427 $2,007,098

2046

$6,800,321 $15,007,370 45.3 %

Medium

$2,490,366

$0 $216,641 $1,845,791

2047

$7,661,536 $16,011,848 47.8 %

Medium

$2,547,644

$0 $238,385 $2,195,743

2048

$8,251,822 $16,759,672 49.2 %

Medium

$2,606,240

$0 $261,924 $1,887,074

2049

$9,232,912 $17,923,732 51.5 %

Medium

$2,666,183

$0 $291,582 $1,959,021

2050 $10,231,656 $19,126,757 53.5 %

Medium

$2,727,506

$0 $305,679 $3,090,904

2051 $10,173,937 $19,280,526 52.8 %

Medium

$2,790,238

$0 $308,188 $2,873,229

2052 $10,399,134 $19,746,023 52.7 %

Medium

$2,854,414

$0 $310,309 $3,248,301

2053 $10,315,557 $19,924,555 51.8 %

Medium

$2,920,065

$0 $324,657 $2,203,341

2054 $11,356,939 $21,272,709 53.4 %

Medium

$2,987,227

$0 $345,881 $2,957,719

2055 $11,732,328 $21,974,894 53.4 %

Medium

$3,055,933

$0 $379,538 $1,564,100

Association Reserves

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Outdoor Resorts/Palm Springs Owners Association - Insurance Disclosure Summary

Policy Terms: 7/1/2025 – 7/1/2026

This summary of the association's policies of insurance provides only certain information, as required by Section 5300 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 agent for appropriate additional coverage.

LINE OF COVERAGE

NAME OF INSURER

POLICY NUMBER

LIMITS OF LIABILITY

DEDUCTIBLE

Total Insurable Value (Building) Total Insurable Value (Personal Property) Property in the Open Business Income

$8,259,665 $818,800 $250,000 $199,998

Property

Northfield Insurance Company

WH017879

$10,000

Travelers Property Casualty Company of America StarStone Specialty Insurance Company Atain Specialty Insurance Company

Scheduled Items Blanket Items

$287,493 $50,000

Mobile Equipment

QT6606Y547127TIL25

$1,000

Earthquake

DSP2506365

Aggregate Limit

$10,974,442

10% per Unit

General Aggregate Per Occurrence Assault & Battery

$2,000,000 $1,000,000 $300,000

General Liability

Kinsale Insurance Company

01003251061

$10,000

California Automobile Insurance Company

$500 Comprehensive $500 Collision

Automobile Liability (9/18/2025 – 9/18/2026)

BA040000075130

Liability

$1,000,000

Each Occurrence Aggregate

$5,000,000 $5,000,000 $1,000,000 $1,000,000 $300,000

Excess Liability

Century Surety Company

CCP1324358

None

Each Common Cause Aggregate Assault & Battery

Swiss Re Corporate Solutions Capacity Insurance Corporation

Liquor Liability

88G280000300

$5,000 per claim

Management Liability

Everest National Insurance Company VN00002106251

D&O & Employment Practices Aggregate

$2,000,000

$5,000

Disclaimer: Please be aware that the coverage described in this letter only applies to association policies insured through Brown & Brown. This master insurance review letter is based on the information provided to the Agency by you and contains a general description of the coverage(s), but it does not constitute a policy or contract. For complete policy information, including exclusions, limitations, and conditions, please refer to your policy. In the event of a difference, the policy will prevail.

Excess Management Liability

Atlantic Specialty Insurance Company MMX0006550725

Aggregate

$1,000,000

None

Travelers Casualty and Surety Company of America

Crime

107680848

Employee Theft

$4,000,000

$40,000

Accidental Death Accidental Dismemberment Accidental Paralysis

$25,000 $50,000 $50,000

Philadelphia Indemnity Insurance Company

Participant Accident

PHPA164883000

None

Each Accident Policy Limit Each Employee

$1,000,000 $1,000,000 $1,000,000

Workers Compensation (1/1/2026 – 1/1/2027)

Security National Insurance Company SNP1618687

None

Key Information regarding Association’s Master Policy: The common area buildings and structures are covered. The master policy carries “Special Form” coverage, which includes fire, lightning, windstorm, hail, explosion, riot, aircraft and vehicle damage, smoke, vandalism, falling objects, the weight of ice, snow or sleet, collapse, sudden rapid water escape of overflow from plumbing or appliances, frozen pipes, and convector units. No coverage is provided for wear and tear, deterioration, damage by insects or animals, settling or cracking of foundation, walls, basements, or roofs. There is no coverage for damage caused by repeated leaking or seeping from appliances or plumbing. This includes leaking from around the shower, bathtub, toilet, or sink. These events are properly classified as maintenance items. This policy contains full details on coverages, limitations, and exclusions.

Claims 

If you have a claim that you believe needs to be submitted to the association policy, you must first notify the association manager or a board member as Brown & Brown only accepts claims from an association manager or a designated member of the board of directors.  A claim that involves your personal property should be submitted to your homeowner’s insurance carrier. Claims are not accepted directly from a unit owner.

Lenders/Mortgage Companies If your lender needs verification of insurance for the Association, please have them send an email request to: coi@bbrown.com

Your Community Association Practice Team

Tim Clarke, MLS, CPCU, AIC SVP, Claims & Risk Leader Tim.clarke@bbrown.com O (503) 219-3223 | C (503) 442-2000 Brad Miller, AIC, ARM Claims & Risk Services Manager Brad.miller@bbrown.com O (503) 219-3293 | C (503) 484-3140 Matt Koch, ARM, AIC, AIS Claims & Risk Services Manager Matthew.koch@bbrown.com O (503) 219-3210 24 Hour Claims Reporting O (503) 274-6511 claimsreporting@bbrown.com

Michael Hughes, ARM, CIC, CMCA SVP, Community Association Practice Michael.hughes@bbrown.com O (503) 624-4763 | C (503) 523-6351 Christine House, CISR Community Association Practice Team Lead Christine House@bbrown.com O (503) 219-3232

Stan Moskalyuk Account Executive Stan.Moskalyuk@bbrown.com O (503) 219-3281 Robby Archer Senior Account Manager Robby.Archer@bbrown.com O (503) 790-9326

Physical Address 601 SW 2 nd Avenue, Ste. 1200 Portland, OR 97204

General Inquiries O (503) 274-6511 F (503) 914-5430

Requests for Certificates of Insurance coi@bbrown.com

Charges for Documents Provided as Required by Section 4525

Property Address: 69411 Ramon Rd Lot #

. Cathedral City, Ca 92234

Owner of Property: Owners Mailing Address: Provider of the Section 4525 Items: Outdoor Resort Palm Springs Homeowners Association Date:

Civil Code Section

Included

Document

Not Available (N/A) or Not Applicable

Articles of Incorporation or statement that not incorporated

Section 4525(a)(1)

$ 10.00 $ 40.00 $ 20.00 $ 10.00

CC&R's Bylaws

Section 4525(a)(1) Section 4525(a)(1) Section 4525(a)(1) Section 4525(a)(2)

Operating Rules

Age restrictions, if any.

Pro forma Operating Budget or summary, including Reserve Study Assessment and Reserve funding Disclosure Summary

Sections 5300 & 4525 (a)(3)

$ 10.00

Sections 5300 & 4525(a)(4) Sections 5305 & 4525(a)(3) Sections 5310 & 4525(a)(4) Sections 5300 & 4525(a)(3)

$ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00

Financial Statement review Assessment Enforcement Policy

Insurance Summary Regular Assessment Special Assessment Emergency Assessment

Section 4525(a)(4) Section 4525(a)(4) Section 4525(a)(4)

X X X

Other unpaid obligations of Seller

Sections 5675 & 4525 (a)(4) Sections 5300 & 4525(a)(4), (8) Sections 4525(a)(6), (7) , 6000, & 6100 Sections 4525(a)(6), 6000, & 6100 Sections 5855 & 4525(a)(5)

Approved changes to Assessments

Settlement notice regarding Common area defects

Preliminary list of defects

Notice of violation

X X

Required statement of fees

Section 4525

Minutes of Regular meetings of the Board of Directors conducted over the previous 12 months, if requested

Section 4525(a)(10) ($5.00 each)

$ 60.00

Total Fees for these documents: $200.00 The information provided by this form may not include all fees that may be imposed before the close of escrow. Additional fees that are not related to the requirements of Section 4525 may be charged separately. A seller may request to purchase some or all of these documents but shall not be required to purchase ALL of the documents listed on this form.

2026/2027 Annual Policy Statement

69411 Ramon Rd, Cathedral City, CA 92234

760.328.3834

800.843.3131

ORPS.com

2026-2027 Annual Policy Statement

Designated Recipient Any document required to be delivered to the Association pursuant to the Davis-Stirling Common Interest Development Act and/or any other official document shall be addressed to:

Outdoor Resort Palm Springs Owners Association Attn: Synthia F. Salazar, General Manager 69411 Ramon Road, Cathedral City, CA 92234

Right to Notice to Two Addresses A member may submit a request to have notices sent to up to two (2) different specified addresses, pursuant to the Davis-Stirling Common Interest Development Act of the California Civil Code Section 4040. General Notices to Members The Civil Code also requires that the membership be notified of the designated area for the posting of general notices. General notices (including meeting notices and agendas) are posted either on the bulletin board adjacent to the Boardroom in the La Palma Clubhouse or on the official ORPS Owner Portal Engage. Right to Individual Delivery . A member has the option to receive General Notices by individual delivery upon written request to the Association in a manner that indicates the Association has received it in accordance with the Davis-Stirling Common Interest Development Act of the California Civil Code. Right to Minutes The minutes proposed for adoption that are marked to indicate draft status, or a summary of the minutes, of any meeting of the Board of Directors, other than an Executive Session, shall be available to members within 30 days of the meeting. Thereafter, minutes may be obtained in the Association administration office upon payment of the Association’s costs for providing such copies.

Collection Policy See enclosed Collection Policy for your review.

Lien Policy The Lien policy can be found by referencing the Collection policy.

Rules Enforcement Policy See enclosed Rules Enforcement Policy for your review.

Dispute Resolution Procedures See enclosed Internal Dispute Resolution and Alternative Dispute Resolution procedures for your review.

10. Architectural

See enclosed Architectural & Aesthetics Requirements for your review.

11. Overnight payments Overnight payment of assessments may be sent/delivered to the following address:

OUTDOOR RESORTS PALM SPRINGS OWNERS ASSOCIATION HOA Accounting Office 69-411 Ramon Rd. Cathedral City, CA 92234-3376

Collection Policy for Delinquent Assessments

SECTION 16 - COLLECTION POLICY

1. Regular & Special Assessments

Regular Assessments are due and payable, in advance, on the first day of each month. If imposed, special assessments shall be due and payable on the due date specified by the Board. Assessments, interest, late charges, collection costs and reasonable attorney’s fees, if any are imposed are the personal obligation of the person who is the Owner of the subdivision interest at the time when the assessment or other charge fell due.

2. Right to Receipt

When an Owner makes a payment, the Owner may request a receipt, and the Association shall provide same which shall indicate the date of payment and the person who received such payment.

3. Overnight Payments

Payment of assessments may be made by overnight mail to the following address:

OUTDOOR RESORT PALM SPRINGS OWNERS ASSOCIATION HOA Accounting Office 69-411 Ramon Rd. Cathedral City, CA 92234-3376

4. Application of Payments on Delinquent Assessments

Payments received on delinquent assessment accounts will be applied first to the regular or special assessments owed and then be applied to interest, late charges, collection costs, administration fees, attorneys' fees, reimbursement assessments, and any other amount due to the Association in connection with collection of delinquent assessments.

5. Late Charge

Regular & Special assessments are delinquent (15) days after they become due. A late charge of ten percent (10%) of the delinquent assessment or ten dollars ($10.00), whichever is greater, may be applied if payment in full of any assessment is not received fifteen (15) days after the payment is due.

6. Additional Charges, Costs and Attorney’s Fees

Pursuant to Civil Code § 5650(b), the Association is entitled to recover reasonable collection costs, including reasonable attorney’s fees, incurred in connection with collection of delinquent assessments. Costs may include, but are not limited to, publication, recording, posting, service and mailing.

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7. Interest

Interest at the Annual rate of twelve percent (12%) may be charged on all sums due, that are thirty (30) or more days delinquent.

8. Pay or Lien Letter

Any Owner who is more than thirty (30) days delinquent in the payment of his or her assessments may be referred to the Association’s management company or the Association’s attorney for collection and will receive a pay-or-lien demand letter, via certified mail. The letter will be sent at least thirty 30 days prior to a Notice of Delinquent Assessment Lien being recorded against the delinquent Owner’s property, and will notify the Owner of record in writing of the following pursuant to Civil Code § 5660 (a)-(f) (a) A general description of the collection and lien enforcement procedures of the Association and the method of calculation of the amount; (b) An itemized statement of the amounts owed, including delinquent assessments, fees and reasonable costs of collection, reasonable attorney’s fees, late charges and interest charges, if any;

(d) The Owner’s right to request a meeting with the Board of Directors, as set forth below;

(e) That the Owner will not be liable for late charges, interest and costs of collection if it is determined that the assessment was paid on time to the association. (f) The Owner’s right to dispute the debt by submitting a written request for dispute resolution to the Association pursuant to its meet and confer program (known as Internal Dispute Resolution or IDR) pursuant to Civil Code § 5910 ; (g) The Owner’s right to request Alternative Dispute Resolution (ADR) with a neutral third party pursuant to Civil Code 5935 before the association may initiate foreclosure against the Owner;

9. Owner’s Dispute of Debt/Request for Meeting with Board Prior to Lien/Commencement of Small Claims Lawsuit.

Pursuant to Civil Code § 5660 (a)-(f) and 5658, the Owner has the following rights:

(a) Meet & confer. Prior to recording a lien, the Association shall offer and, if so requested by the Owner, to participate in dispute resolution pursuant to the Association’s meet and confer program (known as Internal Dispute Resolution or IDR) pursuant to Civil Code § 5910 . (b) Request to Meet with Board to Discuss Payment Plan. The Owner may submit a written request to meet with the Board to discuss a payment plan for the debt owed. The Association will provide any standards it has adopted regarding payment plans to Owners. The Board will meet with the Owner in Executive Session in conjunction with a regularly scheduled Board meeting, within 45 days of the postmark of the request, if such was mailed, no later than 15 days after the postmark of the pay or lien letter. If there is no regularly scheduled Board meeting within that period, the Board may designate a committee of one or more members to meet with the Owner.

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(c) Payment Under Protest and Commencement of Small Claims Action. In addition to pursuing dispute resolution pursuant to Civil Code §5910 and 5935, pursuant to Civil code §5658, the Owner may pay under protest the disputed amount and all other amounts levied, including any fees and reasonable costs of collection, reasonable attorney’s fees, late charges, and interest, if any, and may thereafter commence an action in Small Claims Court provided the amount in dispute does not exceed the jurisdictional limits of that Court.

10. Lien/Notice of Delinquent Assessment

If the delinquent Owner does not bring their account current within (30) days of the Pay or Lien Demand Letter, and unless a dispute over such debt has been resolved or a payment plan has been entered into as set forth above, a lien will be recorded against the Owner’s property upon a majority of the Board voting to approve recording the Lien in an open meeting. The Board shall record the vote in the minutes of the meeting. Confidentiality shall be maintained by identifying the property by the parcel number in those minutes. The President or other person designated by the Association, including the Association’s managing agent or the Association’s legal counsel, shall sign the lien. The Lien shall include an itemized statement of the charges included in the amount of the Lien including the delinquent assessment(s) and all other sum owed, such as late charges, costs and reasonable attorneys' fees, a legal description of the property, the name of the record Owner, and the name and address of the trustee authorized to enforce the Lien by sale. A copy of the itemized statement of charges shall be recorded with the Lien. A copy of such Lien will be mailed to every person whose name is shown as an Owner of the separate interest in the Association’s records within 10 days of the date the Lien is recorded. Upon receipt of a written request by an Owner (mailed in a manner indicating the Association has received the same such as by certified mail) identifying a secondary address to which the Owner wishes collection notices to be sent, the Association shall also send additional copies of any required collection notices to such secondary address. The Lien is subject to non- judicial foreclosure, and the property may ultimately be foreclosed upon and sold without court action to satisfy the debt owed. Reasonable collection costs incurred in connection with preparing and recording the Lien may be included in the amount of the Lien.

11. Dispute of Charges After Lien

Prior to initiating foreclosure for delinquent assessments, the Association shall offer the Owner and, if so requested by the Owner, shall participate in the Association’s” meet and confer” program (known as Internal Dispute Resolution or IDR) pursuant to Civil Code 5910 or Alternative Dispute Resolution (ADR) with a neutral third party pursuant to Civil Code 5935. The decision to pursue dispute resolution or a particular type of alternative dispute resolution shall be the choice of the Owner (binding arbitration not available if the Association pursues judicial foreclosure.)

12. Foreclosure

If the delinquent Owner does not bring their account current after the Lien has been recorded, and after the foregoing offers of dispute resolution have been presented, a majority of the Board may vote to initiate foreclosure on the Lien, in an Executive session meeting of the Board The Board may only authorize foreclosure on a Lien for those regular or special assessments which are of an amount equal to or exceeding one thousand eight hundred dollars($1,800) exclusive of late charges, fees, costs of collection, attorney’s fees or interest) or which are more than twelve (12) months delinquent. The Board shall record the vote in the minutes of the next meeting of the Board open to all members. Confidentiality shall be maintained by identifying the property by parcel number in those minutes. The Board shall also vote to approve foreclosure on a Lien which vote shall occur at least thirty (30) days prior to any public sale of the Owner’s separate interest property. The Board shall deliver notice of the

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decision to foreclose by personal service on the Owner or the Owner’s legal representative, and by first class mail, postage pre-paid to non-occupant Owners at the most current address shown on the Association’s books. These limits do not apply to timeshares or assessments owed by developers. Non-judicial foreclosure will then be commenced by the Association’s law firm pursuant to the CC&R’s, and Civil Code 5700(a), 5710(a), 5735, and 5710(c)(1)-(2), and 2924, et.seq.as follows: (a) “Initiate Foreclosure”- Notice of Default and Election to Sell (NOD). A notice of Default and Election to Sell (NOD) will be recorded with the County Recorder’s Office which puts property into foreclosure. The Association cannot continue with the non-judicial foreclosure on the property for ninety (90) days from the date the NOD is recorded. The delinquent Owner is responsible for all fees and costs incurred to initiate foreclosure in addition to the delinquent assessments, late charges, and interest. (b) “Approve Foreclosure”- Notice of Sale. If the delinquency is not cured within ninety (90) days of the Notice of Default being recorded, and upon receipt of approval and authorization of the action by the Board pursuant to a vote, the attorney will proceed by recording, publishing and posting a Notice of Sale. The delinquent Owner is responsible for all fees and costs incurred to prepare, record, publish and post the NOS, in addition to the delinquent assessments, late charges and interest. 13. Partial Payments- Any assessment payments received from a delinquent Owner will be applied to that Owner’s account. However, absent receipt of payment in full of all amounts due, the Association will proceed with any collection action initiated against the Owner’s separate interest or the delinquent Owner personally pursuant to and consistent with the requirements of California statutory and case law unless the payments are remitted pursuant to a written payment plan approved by the Board.

13. Redemption

An Owner may redeem the property foreclosed upon by the Association by paying all amounts due and owing within ninety (90) days of the date of the foreclosure sale.

14. Lawsuit

The Association may, at any time, determine to file a personal lawsuit against the delinquent Owner to recover all delinquent charges pursuant to relevant law. All costs and attorney’s fees in connection with the lawsuit, in addition to the delinquent charges and other collection costs will be sought from the delinquent Owner.

15. Release of Liens Upon Payment

Within twenty- one (21) days of payment in full of all delinquent assessments and charges, or if it is determined that a Lien previously recorded was recorded in error, the attorney will prepare a Release of Lien which will be recorded by the County Recorder’s Office and will provide Owner with a copy of such release or notice that the delinquent assessment has been satisfied.

If this document contains any restriction based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, genetic information, national origin, source of income as defined in subdivision (p) of section 12955, or ancestry, that restriction violates state and federal fair housing laws and is void and may be removed pursuant to section 12956.2 of the Government code. Lawful restrictions under State and Federal Law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

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O UTDOOR R ESORT P ALM S PRINGS – R ULES & R EGULATIONS

SECTION 1 8 – ENFORCEMENT PROCEDURES The Association and/or any owner has the right generally to enforce the Association’s Governing Documents. This right includes requesting the violator to cease the offending action, taking legal action against the violator, and/or making a complaint to the Board of Directors. If a resident gives the Board of Directors, a written complaint alleging that a rule has been violated, the Board will investigate the allegation and may take action against the offending resident, including but not limited to fining or special assessing, if appropriate, suspending privileges, or instituting legal actions. However, nothing in this document obligates or requires the Board of Directors or authorized committee to take any action against an individual resident. The Board of Directors, in making this decision, will determine the costs and benefits of taking such action. 1 8 .A ENFORCEMENT PROCEDURES Upon notification of an alleged violation of the Association’s Governing Documents by an Owner/Resident, a Board member, A&A Committee member, Association’s Compliance Officer, access control personnel, or another designated representative of the Association, the General Manager will investigate and upon verification of the violation, will take the following steps: 1. Violations of the Association’s Architecture and Aesthetics (A&A) Rules (architectural and landscape violations): a. Provide Homeowner a courtesy warning by personal contact, telephone or email specifying the violation of the Governing Documents and requesting the Homeowner cure the violation within ten (10) days of contact. If the Association is unable to make contact as specified, the Homeowner will be sent a Courtesy Warning Notice by first class mail. b. If the violation is not cured by date indicated following notification as provided in A.1.a above, or if there was a re-occurrence of the violation for which the courtesy notice was sent, the Association will issue a Violation Notice by personal delivery or first-class mail, requesting the owner cure the violation within ten days of the date of the Violation Notice. c. If a Violation Notice is sent and the violation is remedied by the date specified, a Hearing Notice is sent to the Homeowner in accordance with Section 16.B, Homeowner Hearing Procedure and Due Process Rights. d. Steps A.1 and A.2 may be skipped, and a Hearing Notice sent if the seriousness of the situation requires immediate action, or if it is a re-occurring violation. 2. Non- Architectural Violations and Violations of the Association’s Rules and Regulations. a. Upon verification, the Homeowner will be scheduled for a hearing before the Board of Directors pursuant to Section 16.B, Homeowner Hearing Procedure and Due Process Rights. b. Initiation of a Citation by the Association’s Security staff is considered verification that a violation has occurred. It is the discretion of the officer whether a citation is to be written. In many cases a warning is sufficient, such as if the violation is immediately corrected without protest by the violator and there is no knowledge of a recurring problem. If a citation is issued by Security staff for a violation of the Rules & Regulations and a fine assessed as authorized under Section 16.C.2, the Homeowner may either: i. Pay the fine indicated on the citation within 15 days of the citation date. If a person chooses this option, they must print, date, and sign their name in the space provided on the reserve side of the citation and return the citation to Accounting, Outdoor Resort Palm Springs, 69411 Ramon Road, Cathedral City, CA 92234, or ii. Contest the violation. If an Owner/Resident fails to remit payment within 15 days of the citation date and/or chooses to contest the citation, the Owner/Resident will be scheduled for a hearing before the Board of Directors, pursuant to Section 16.B, Homeowner Hearing

O UTDOOR R ESORT P ALM S PRINGS – R ULES & R EGULATIONS

Procedure and Due Process Rights. Any person who contests the citation and is determined to be in violation of the Association’s Governing Documents could face the imposition of administrative expenses, further disciplinary action such as suspension of privileges or use of the recreational amenities, in addition to imposition of a fine as authorized under Section 16.C.2.

1 8 .B HOMEOWNER HEARING PROCEDURE AND DUE PROCESS RIGHTS

Prior to the imposition of any fine, special assessment, or suspension of rights or privileges, a hearing will be held before the Board of Directors pursuant to the following Homeowner Hearing Procedures and Remedies: 1. Homeowner Hearing Notice: Homeowner will provide a written notice by certified mail at least ten (10) days prior to the meeting at which disciplinary action may be considered or proposed. The Notice will contain the following: a. The date, time and place of the hearing. b. The nature of the alleged violation for which a member may be disciplined or the nature of the damage to the common area and facilities for which a monetary charge may be imposed, and c. A statement that the member has the right to attend the hearing either in person or by the teleconference and present evidence in his/her defense in writing, rather than make an appearance at the hearing. 2. Homeowner Hearing Procedures Homeowner hearings will be held in accordance with the following procedure: a. Review of all documentation submitted by the Association staff. b. Statement of Violation by acting chairperson. c. Review requirements of Association’s Governing Documents. d. Statement by Homeowner. e. Statement by any third-party witnesses. f. Discussion and questioning of the Homeowner by the Association. g. Questions (if any) and final statement by the Homeowner. h. Hearing ends. Homeowner is excused. i. Board deliberates. 3. Penalties If it is determined a violation has taken place, the Board of Directors may take any or all of the following actions: a. Imposition of Fines/Monetary Penalties. b. Imposition of Reimbursement Assessments for damage to the Common Area or to reimburse the Association for costs incurred to bring an Owner or his/her family members, guests, tenants, invitees, and occupants into compliance with the Governing Documents. c. Suspension of Rights: The Association may suspend voting rights and the right to use the Common Facilities and may disconnect bulk cable services for up to thirty (30) days due to violation of the Governing Documents by an Owner, or his/her family members, guests, tenants, invitees, and occupants. In addition, the Association may suspend the voting rights and right to use the Common Facilities and disconnect bulk cable services for any period during which any Assessments remain unpaid. 4. Ruling Notice Within fifteen (15) days after the date that disciplinary action is taken, the Homeowner shall be given a Ruling Notice containing the following: a. The Board’s findings as it relates to the violation of the Governing Documents with facts. If no violation is found, then no remedy is required, and the Association would then issue a Ruling Notice affirming no violation. b. The penalties imposed, if any, against the Homeowner; and

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