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Councilmember McGovern referred to costs being reduced for residents, but this does not include homeowner association dues or assessments needed for infrastructure costs. Once the residents own the park, they own everything: streets, lights, electricity, water, sewer, and this all must be maintained. Ms. Forbath said the residents would know costs ahead of time prior to making their choice to buy. The Department of Real Estate requires the Park owner to submit a reserve study which will show how much is needed in the reserve account which the current park owner has to fund before selling any lots. The DRE has to approve the budget, the reserves, and the proposed HOA dues, so the residents would know all this information prior to purchasing. Councilmember McGovern said if the sewer line broke underground, the homeowners association would have to have the funding to fix this. She said the park is very old and questioned if everything is brought up to standard prior to the sale of the lots. Ms. Forbath said a reserve study is done through an inspection in the park to determine all components’ useful lives, and based upon this study, the park owner must fund into the reserve account for each item. Councilmember McGovern questioned and confirmed that there was a certain length of time assigned for the infrastructure’s useful life. Mr. Close said it is much like a city budget; there will be repair work needed, but in a mobile home park, sewer systems are generally not replaced but fixed. Normally, the owner will have to write a check to the homeowners association prior to selling the first lot to fund repairs. As lots are sold, the owner continues to own the remaining lots and pays the monthly assessments on those lots. What he has seen is that park owners, when they are getting ready to conduct the first sales, spend a lot of money fixing up the Park in order to generate sales. For example, they will redo the clubhouse, put in newer or upgraded infrastructure, etc. Councilmember Sullivan questioned if the amount of the assessments was part of the Tenant Impact Report. Ms. Forbath said no, once the application is approved by the City, the next step would be an application to the Department of Real Estate which takes approximately six months for review and inspections. Councilmember Sullivan questioned and Ms. Forbath confirmed that this information becomes available to residents once the DRE inspections are done. Lot prices are divulged to residents prior to application to the DRE. Once the public report is received, the lot prices stay in effect for 9 months afterwards. Councilmember Sullivan questioned if any estimates of assessments were provided prior to the survey. Ms. Forbath said no, but she told residents about averages in other parks, where homeowner assessment dues range from $120 to $220 per month, depending upon the infrastructure of the park. Mr. Close also noted that renters do not pay homeowners association dues. City Council Minutes Page 8 of 17 May 5, 2009