#1 Landscape/ Snow Contract
We have contracted with Carol Fraioli Landscaping to do the Landscaping and Snow Removal. This contract includes unlimited snow removal as well as sweeping of the streets. This contract starts December 1, 2006 and ends November 30, 2007

#2 Electricity
The HOA’s charges for electricity are related to street lights and the irrigation system. These charges will be the same as 2006.

#3 Water Charges
The HOA has no sewer charges. The water used by the HOA is for seasonal irrigation of the common areas. The budget is based on the prior year’s actual charges from Westchester Joint Water Works for turning on and off the water, service charges and water usage. An additional amount of $ 6,000 has been added to cover the cost of the anticipated increase in water rates, and the cost of replacing damaged access taps, which WJWW will no longer repair.

#4 Storm Water Maintenance
The Town of Harrison has stipulated as a portion of the Subdivision/Site Plan Approval for Hickory Pine at Purchase that the HOA shall enter into an agreement with the Club Lot owner (the Golf Club of Purchase), in perpetuity, for the maintenance of all storm water facilities on the property and for the development and maintenance of the mitigation wetlands to be created on the property.

Maintenance of these areas is set forth in a Maintenance Agreement between the Golf Club and the HOA executed in December 2000. It entails periodic mowing of swales and filter strips annual inspections of storm water maintenance facilities and repairs to these facilities as necessary. The annual estimated cost of this work to the Golf Club is $15,000. Since the complete storm water management system was constructed along with that of the Golf Club, the HOA will be responsible for 20%, or $3,000, of the costs related to the repair and maintenance of the storm water management system. Included in this contract is minor landscaping on HOA property on Purchase Street that the Club shall perform in order to maintain a uniform appearance along the road.

#5 Road Maintenance
These expenses represent the cost of periodic repairs and patching of small potholes, cracks or heaving; street lamp maintenance and repair. $5,000 has been allocated to repairs based on 2006’s experience.

#6 Landscape & Tree Maintenance
This category includes estimated contracts for tree maintenance ($8,000), irrigation- system repairs ($5,000), annual spring plantings ($10,000), and estimated tree pruning
and removal ($24,000). All items are taxable. Additional work will be performed on an as-needed basis at the discretion of the Board.

#7 Insurance
The Insurance costs are based upon the bid presented by Advocate Brokerage of Scarsdale. The renewal date for the policy is in late November.

#8 Legal Fees
Basic annual legal costs for HOA related matters is estimated to be $5,000. We
currently are using McCullough, Goldberger & Staudt.

#9 Accounting Fees
The firm of Larry Honigman, CPA is the HOA’s current accounting firm. Their estimate for 2007 services is $2850, which include an annual audit and preparation of tax returns and tax advice.

#10 Outside Management Services(previously “Administrative Fee”)
Westchester Property Management is the current Managing Agent, who has been providing administrative, bookkeeping and Property Management services on a contractual basis for 2007 this is the first year of a three year contract.

#11 Professional Fees
This category consists of: engineering fees in the event a situation arises where we need the professional advice of an engineer to protect the interests of the HOA. The HOA is retaining Mr. Eric Stockmar to consult with the DRB and the Board on issues that require his extensive knowledge of the history and details of the Purchase Estates’ development. In addition, Mr. Stockmar will also make weekly visits to the property and advise the Property Manager of any issues that require attention.

#12 Miscellaneous
The Board has determined that $10,000 be allocated to cover miscellaneous items such as community donations, beautification, miscellaneous repairs, postage and copies and other unbudgeted projects to benefit the neighborhood that may arise during the year.

#13 Real Estate Taxes
The real estate taxes are based upon actual tax bills from the prior year, with a 5% cushion in anticipation of increases in 2007.

#14 Franchise & Corporate Taxes
The HOA is taxed as a regular corporation. Taxes and filing fees for 2007 are estimated to be approximately $615.

#15 Depreciation
In 2000 the HOA installed a split rail fence on common property at a cost of $11,725. In 2002 street signs costing $1625 and $1500 for additional electrical service at the Magnolia Street entrance were added to the common property. In 2005 we installed entrance signs for $4,010. The Accountants have estimated 2006 depreciation to be $1,675.

#16 Roadway Reserves
The HOA owns 8,925 linear feet of roadway. The Club will maintain 1,500 linear feet of road it owns. The Club has developed an estimate of roadway reserves based on the estimated installation of the total length of roads for both the Club and the HOA. The Club has agreed to assume responsibility for 32.66% of Roadway Reserve requirement, which is slightly higher than its pro-rata share. The Club will require some of its maintenance equipment to run on the roadways owned by the HOA; therefore it has assumed this higher share of the reserve costs.

The reserve amount is based on a useful life for the asphalt wearing course of 20 years. This is supported by an estimate for resurfacing of $3.10 per square yard. Based on a 24 foot pavement width, the cost per mile of resurfacing would be approximately $43,650. The HOA total roadway length of 1.69 miles would cost $73,800 to resurface today. It is estimated that the roadways would have to be resurfaced after 20 years, at which time the cost would be estimated to be $125,650.
Effective 2006 we increased the assessment by ten percent.

As of the year 2000, not all HOA roadways are complete. Based upon actual completed roadways and projected completion dates, the reserve was calculated as follows:

Year LF Road Complete Assessment Cumulative Balance
1998 2,000 5,000 5,000
1999 2,000 5,000 10,000
2000 2,000 5,000 15,000
2001 4,000 7,500 22,500
2002 6,000 7,500 30,000
2003 6,000 7,500 37,500
2004 6,000 7,500 45,000
2005 6,000 7,500 52,500
2006 10,425 8,250 60,750
2007 10,425 8,250 69,000
2008 10,425 8,250 77,250
2009 10,425 8,250 85,500
2010 10,425 8,250 93,750
2011 10,425 11,000 104,750
2012 10,425 11,000 115,750
2013 10,425 11,000 126,750
2014 10,425 11,000 137,750
2015 10,425 11,000 148,750
2016 10,425 11,000 159,750
2017 10,425 11,000 170,750
2018 10,425 11,000 181,750

The allocation of these funds at the end of 20 years would be approximately $122,350 to the HOA and $59,400 to the Golf Club of Purchase.

In 2007, the Golf Club’s portion will be $2,700.

#17 Other Reserve
It is deemed appropriate to allocate additional reserves at a rate of $5 per lot per month for other potential capital requirements.

#18 Contingency Expense Reserve
Historically, a contingency reserve of 3% of the total budget was deemed appropriate for unforeseen operating expenses.

2007 audited financial statements for the HOA