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including debt service and reserve funding) of$8.4 million. The property is also drawing approximately $180,000 annually from the operating reserve to subsidize the additional below market rents that were established in 20133. This withdrawal request will still leave sufficient reserves available to offset this operating deficit. As described below, the facility operators have seen considerable improvement/correction of the vacancy rate and are making efforts toward ensuring there will not be the need to make similar withdrawal requests in 2023 or future years. The Parkview Efforts to Maintain Financial Sustainability Both BLP Partners, Inc. and Eskaton have been coordinating their efforts to ensure that a similar request does not need to be made in future years, and that The Parkview remains on a fiscally solid foundation. Efforts reported by The Parkview toward correcting the prior years' financial issues include: • Increased focus on marketing and outreach to improve the property's occupancy, including advertising, sending out direct mailers, and having its sales team focus on following up with all leads and ensuring that prospects are receiving a high degree of personal contact through the marketing process. • Regular evaluation of rents to ensure that they are competitive, and if necessary, offering concessions, such as waiving the community fee of$5,000. • Completing property upgrades, such as painting the exterior of property to contribute to the overall marketability of the property. • Implementing a 5 percent rent increase to all residents effective January 1, 2023, which is resulting in an increase in the overall rent revenue for the property. Vacancy has been steadily improving since 2022, and The Parkview is projecting to have a 94 percent occupancy at the end of July 2023. As the vacant units get re-leased and occupancy stabilizes, The Parkview is projecting unit turnover costs to decrease as well. Eskaton has also been focusing on hiring permanent staff and on stabilizing its current staff. Overall pay rates for new hires as well as existing staff have been increased to remain more competitive in hiring, and Eskaton also began using differential pay rates for weekend and night shifts. These improved pay rates have resulted in an increase in new hires in the early part of 2023 and improved retention of current staff. Eskaton will continue to work on filling the remaining open positions with permanent staff. Lastly, the solar panels have been repaired and re-installed and have been back online since May 10, 2023, resulting in a decrease in electricity expenses. Based on these trends, staff believes The Parkview will be on more stable footing this year and going forward but will have to re-evaluate the situation if there are ongoing operating deficits. 3 As required by Section 2.14 of the Regulatory Agreement and Declaration of Restrictive Covenant, dated September 21, 2005, The Parkview established an Affordability Reserve that provides rental subsidies to low-income residents residing in the market rate units. The $180,000 annual withdrawal is for the difference between the market rate and affordable charges for four additionally subsidized units. Page 4 of 5