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For 1999 and thereafter: <br /> (Steps 1 and 2 on the previous page aren't necessary.) <br /> (3) Multiply the Base Rent for the previous year by the Cost of Living. <br /> (This amount, when added to the Base Rent for the previous year, yields <br /> the Base Rent for the next year. For example, to calculate the Base Rent <br /> for 1999, multiply the 1998 Base Rent by the 1998 Cost of Living and add <br /> that amount to the 1998 Base Rent) <br /> (4) Calculate the Operating Expenses; provided, however, that this <br /> amount shall not exceed 105% of the previous year's Operating Expenses; <br /> to the extent it does, the excess shall be carried over to the next year. <br /> (5) Calculate the Real Property Taxes; provided, however, that if there <br /> has been a change of ownership and the Real Property Taxes for the year <br /> (ending 9/30) are more than 105%of the prior year's Real Property Real <br /> Property Taxes, the Real Property Taxes shall be calculated as follows: <br /> See Exhibit D-2. <br /> (6) Add (3) + (4) + (5) to the Base Rent to yield the Monthly Rent <br /> (7) Add the Capital Improvement costs, if any, to (6). Round to the <br /> nearest half dollar. This is the Adjusted Monthly Rent. <br /> See examples in Exhibits E-3 and E-4. <br /> VIII. CAPITAL IMPROVEMENT COSTS <br /> A. Capital Improvements; Amortization. If a Park Owner constructs new <br /> Capital Improvements as provided in subparagraph F, the Park Owner shall amortize the <br /> costs as provided in this paragraph. In addition, attached as Exhibits B-1, B-2 and B-3 <br /> are the Capital Improvements which exist at the Parks and their original construction cost. <br /> If a Park Owner rehabilitates or replaces any existing Capital Improvements, a Park <br /> Owner shall amortize as provided in this paragraph the difference between the original <br /> cost of the Capital Improvement and the cost to rehabilitate or replace the Capital <br /> Improvement. Capital Improvement costs shall not be amortized unless as to Vineyard <br /> Mobile Villa and/or Hacienda Mobilehome Park they exceed $5,000 and as to Fairview <br /> Trailer Park they exceed $1,000. Capital Improvement costs are to be calculated on an <br /> Improvement by Improvement basis and not collectively, although costs can be <br /> accumulated for the same Capital Improvement over a twelve month period. Any costs as <br /> to any particular Capital Improvement that are under the threshold amounts <br /> ( s.m 2/5/97) <br /> 9 <br />