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KING FARM PRESBYTERIAN

RETIREMENT COMMUNITY, INC.

DISCLOSURE STATEMENT April 2014

Issuance of a certificate of registration by the Maryland Department of Aging does not constitute approval, recommendation or endorsement of a continuing care retirement community by the Department, nor is it evidence of, nor does it attest to, the accuracy or completeness of the information set forth in this Disclosure Statement.

Ingleside at King Farm Disclosure April 30, 2014

Table of Contents

Topic Page Table of Contents 2 Description of Facility 3 Board of Directors 5 Governance, Affiliations 11 Long-Term Financing 12 Operating Reserves 13 Building Renewal and Replacement 13 Certificate of Registration 14 Description of Basic Fees 14 Potential Subscriber Surcharge 20 Role of the Resident Council 20 Description of Internal Grievance Process 20 Amendment to Disclosure Statement

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KING FARM PRESBYTERIAN RETIREMENT COMMUNITY, INC DISCLOSURE STATEMENT

April 2014

The following statement is given in compliance with Section 10-425 of the Human Services Article of the Annotated Code of Maryland. 1. Name, address, and description of the facility and identity of the owner or

owners of the facility and the land on which it is located.

King Farm Presbyterian Retirement Community, Inc., d/b/a Ingleside at King Farm (IKF) is a Maryland not-for-profit, Continuing Care Retirement Community known as Ingleside at King Farm. IKF is located at 701 King Farm Boulevard, Rockville, Maryland 20850. The land on which the community is located is owned by IKF. Description of Facility Ingleside at King Farm is located near the Shady Grove Road exit of I-270 in the city of Rockville, Montgomery County, Maryland, providing access to the Washington Metropolitan Area via I-495, I-95, Rockville Pike (355), and the Shady Grove Metro. IKF is part of the planned, intergenerational, urban neighborhood of King Farm. King Farm is comprised of a variety of residential and commercial developments and near a Village Center which is replete with stores, restaurants, a supermarket and pharmacy. A one-acre park is also within close proximity. IKF is within a few miles of Lake Forest Mall, Montgomery Mall, historic Rockville and Bethesda. Area hospitals are also close to IKF.

IKF is located in the Irvington Centre section of King Farm, bordered on the south by King Farm Boulevard, on the north by Piccard Drive, to the east by a day care center that is at the intersection of King Farm Boulevard and Gaither Road, and to the west by a lot that is the site of a future office building.

The initial phase of development consisted of 242 Independent Living

apartments, now totaling 246 apartments, along with 46 Assisted Living beds and 26 Comprehensive Care beds that include 10 Memory Care beds.

The Independent Living apartments feature modern design and range in size

from 549 to 2309 square feet. Amenities include an indoor pool, fitness center, tennis courts, activity room, wood shop, library/computer room, and multi-purpose room. There is indoor parking and a spacious garden area with a pond and gazebo. There are also casual and formal dining areas available to residents for their use and enjoyment.

Except for three Assisted Living apartments available for double occupancy, the

remainder of the Assisted Living apartments are private. The allocation of units will change in the summer of 2014 from 43 AL units to 32 and from 26 CC units to 41. The 11 AL units were taken off-line in the fall of 2013 in preparation for construction. When


completed there will be 37 private CC units and 8 double occupancy units. In addition, a clinic featuring access to health care services and rehabilitation is

also available

2. The name and address of the provider and of any parent or subsidiary.

King Farm Presbyterian Retirement Community 701 King Farm Boulevard Rockville, Maryland 20850

Westminster Ingleside King Farm Prebyterian Retirement Communities, Inc. 5211 Broad Branch Road, NW

Washington, DC 20008

3. Organizational structure and management of the provider, including if the provider is a corporation, its name, the state in which it is incorporated or formed, the name of the chief executive officer and whether King Farm is qualified as a tax exempt organization.

King Farm Presbyterian Retirement Community, Inc. is a Maryland not-for-profit 501(c) (3) corporation with status as a tax-exempt organization under the Internal Revenue Code. Ingleside at King Farm is governed by a Board of Directors. The parent corporation is the Westminster Ingleside King Farm Presbyterian Retirement Community, known also as the Westminster Ingleside Service Corporation (WISC). Lynn Collins O’ Connor is the President and CEO of WISC. Ms. O’Connor reports to the WISC Board of Directors.

Reporting to Ms. O’Connor is Dr. Marilyn Thomas Leist, the Executive Director.

Dr. Leist has more than 30 years of management experience in the field of technology and nonprofit management. Retired from IBM, Dr. Leist has worked in the nonprofit industry and senior living for several years as a consultant, Chief Continuous Quality Improvement Officer, and Interim President and CEO. She has led quality improvement initiatives including facilitating CARF-CCAC accreditation and participated in the initiatives for the Quality First program in the Colorado Association of Homes and Services for the Aging. Her doctorate is in Adult Education and her research was based on the analysis of a not-for-profit organization. She also holds a Master’s degree in Administration and Management. 4. The name and occupation of each officer, director, trustee, managing or general partner, and each person with a 10% or greater equity or beneficial interest in the provider, and a description of the person’s financial interest in or occupation with the provider.


As a not-for-profit corporation, no individual person owns an equitable or beneficial interest in King Farm.

The members of Ingleside at King Farm’s Board of Directors and the officers and

their occupations are as follows:

ROBERT (Bob) W. FRI, Chair

Bob is currently a Visiting Scholar and Senior Fellow Emeritus of Resources for the Future, where he served as President from 1986 to 1995. From 1996 to 2001, he was Director of the National Museum of Natural History at the Smithsonian Institution. He began his career with McKinsey & Co., where he was elected a principal, before becoming the first deputy administrator of the US Environmental Protection Agency, and then, under President Ford, the deputy administrator of the Energy Research and Development Administration. Bob served both of these agencies as acting administrator before starting his own company, Energy Transition Corporation, in 1978. Bob has served on the Boards of American Electric Power Company, Electric Power Research Institute, Argonne National Laboratory (University of Chicago), and Transco Energy Company. He currently serves on the Boards of the Cosmos Club and the Society for Science and the Public. Bob and his wife, Jill, are Elders of Georgetown Presbyterian Church and are active with the National Capital Presbytery. They have three children and two grandchildren. Bob’s mother was a past resident of Ingleside at Rock Creek (IRC).

JANE ANGUS (Resident Director, Ingleside at Rock Creek) Jane was elected resident director in 2013 by the Residents’ Association of Ingleside at Rock Creek. She had previously served on the IRC board ex officio in 2009-2011, as president of the IRC Residents’ Association. She has chaired the residents’ budget & finance, food & dining, marketing, and hospitality committees and has done much of the photography for Ingleside and Foundation publications and for the Ingleside website. A graduate of Northwestern University and an ordained Presbyterian elder, Jane held a number of church and community leadership positions while her husband Bob served a naval chaplaincy and four civilian churches. She and Bob have organized tours to China, Tibet, Inner Mongolia, India, Nepal, Russia, Ukraine, and 11 African countries. She has also organized cruises for Ingleside and Westminster to Quebec, Bermuda, and Antarctica.

JANE CAMPBELL - Resident Director, Westminster at Lake Ridge Jane grew up in Arlington, Virginia. Most of her activities, both volunteer and professional, have involved children. She was part time Christian Education Coordinator at Arlington Presbyterian Church before becoming Director of Children’s Ministry at Westminster Presbyterian Church in Alexandria. While there, she was active in the Association of Presbyterian Church Educators, first as a regional officer, and later as regional representative to the national organization. From 2001 to 2008, Jane served as a Court Appointed Special Advocate (CASA), gathering


information on child abuse and custody issues, and submitting reports and recommendations to judges in the Alexandria-Arlington jurisdiction. In 2009, she and her husband, Bill, became residents of Westminster at Lake Ridge (WLR).

DALE H. CLARK (Ex-Officio) Dale is currently Chair of the Board of the Westminster-Ingleside Foundation. A graduate of the Amphibious Warfare School, the NATO Defense College, and the Naval War College, he served in the U.S. Marine Corps for 30 years with combat assignments in the Dominican Republic, Vietnam, and Lebanon. He retired with the rank of Colonel in 1986 to serve in the office of the Secretary of Defense as a Director, Senior Management Analyst, and Consultant in Defense Organization and Management, Intelligence, and Counterintelligence. Dale and his wife, Evelyn, have lived at Westminster at Lake Ridge since 2007. The families of their three daughters all reside in Northern Virginia. At WLR, Dale serves on the Residents’ Council and on the Finance, Development, and Dining (Chair) Committees. In addition to golf, he loves singing with the Westminstrals Chorale, the Lake Ridge Celebration Singers, and the Joy Song Chorale of Fredericksburg.

BETH DAVIDSON (Secretary) Beth Davidson is an Associate with Steptoe & Johnson, LLP. She practices in all areas of federal income taxation, with a particular focus on tax-exempt organizations. Prior to joining Steptoe, Ms. Davidson served as Investigative Counsel to the Congressional Oversight Panel for the Troubled Asset Relief Program (TARP). Ms. Davidson is a graduate of Georgetown University Law Center with distinction in Taxation. Her professional affiliations include DC Women’s Bar Association, Editor, Raising the Bar Newsletter and Secretary, ABA Taxation Section’s Exempt Organizations Committee from 2011 through 2013.

MONROE DICKINSON, JR. – Resident Director IKF

Mon is a resident of Ingleside at King Farm (IKF), and has served on IKF committees involving governance, nominating, finance, and development. Trained in electrical engineering at Worcester Polytech and MIT, he spent most of his career with IBM’s Federal Systems Division where he worked on the development of digital computer systems in support of military aircraft for both Navy and Air Force. This led to the development of the sophisticated computers required to guide the Apollo moon launch for NASA, a highlight of his career. He later did similar work for the NASA Space Shuttle. After 37 years with IBM, he joined Northrop Grumman Space Systems Division as Deputy Director of Systems Engineering and Integration for the NASA International Space Station. Upon retirement, Monroe joined Bisselle Meade & Co LLP to establish Dickinson Consulting Inc., an S-corporation which prepared complex income tax returns for wealthy clients. Active members of Saint Mark Presbyterian Church in Rockville, MD, he and his wife of 55 years, Anne Louise Ellsworth, enjoy three children, six grandchildren, and three great-grandchildren.

MORGAN (Mick) O. DOOLITTLE, III (Vice Chair)


Mick has been Corporate Counsel for Foulger-Pratt Companies since 2003, after serving in executive management and legal positions with Upshire Capital Partners, Bold Concepts, Inc., Kemper Real Estate Management, Bedford Properties, and ABB, Asea Brown Boveri. His main expertise is in commercial transactions, real estate, land use, and telecommunications. Mick is a graduate of Allegheny College (B.A.), the University of Hartford (M.S.), and Washington & Lee University (J.D. and Law Review). He has served as president of a number of PTAs and has coached Youth League Softball in Frederick County.

JAN FELDMAN Jan is recognized as an innovative problem-solver by colleagues and clients alike. She has earned a well-deserved national reputation for building resourceful coalitions and teams that achieve organizational objectives—quickly and effectively. Jan has honed those skills over the course of her 30-year career, which includes both administrative and clinical health care positions, with an emphasis on nursing. Before joining Brink & Associates, Jan served as Hospital Chief Operating Officer and interim Hospital Chief Executive at Georgetown University Medical Center. She also held positions as Vice President for Patient Care Services at Sound Shore Health System, and the Associate Director of the Clinical Center and Director of Nursing at the National Institutes of Health. Jan brings an enormous amount of experience, enthusiasm, and innovation to projects and issues that face her clients. Besides relying on her own background and experience, Jan also calls upon her network of trusted contacts across the country. She is able to quickly assemble a select team of experts to address virtually any operational challenge or special project

REV. GERALD HOPKINS

Rev. Gerald Hopkins (Jerry) is currently a Parish Associate for Lewinsville Presbyterian Church in McLean, VA. He was President of the Chesterbrook Residences, Inc. (CRI) Board which developed a mixed income assisted living facility for seniors on a 9-acre property in McLean owned by the National Capital Presbytery and leased to Chesterbrook Residences for 75 years. Chesterbrook Residences is a $13.6 million facility featuring 97 apartments, is non-profit and non-sectarian, and was created by three McLean religious congregations: Lewinsville Presbyterian Church, Immanuel Presbyterian Church, and Temple Rodef Shalom.

SHERRY HURLEY Sherry Hurley is a Certified Public Accountant and Member of the American Institute of Certified Public Accountants. She is a graduate of the College of William and Mary and holds an MBA in Accounting from the University of West Florida. Ms. Hurley is currently employed by Pepco Holdings, Inc. where she is responsible for tax reporting, auditing, and the development of standardized financial processes. She has experience managing the financial, legal, operational, human resources and technology aspects of businesses.


SHELLEY C. JENNINGS Shelley retired after more than 30 years of service to Washington Gas and its affiliated companies. She was responsible for maintaining corporate liquidity, for commercial and investment banking relationships, and for managing benefit plan funding. Shelley earned her M.B.A. from George Washington University and her B.A. in Political Science from Wake Forest University. She holds the designation Chartered Financial Analyst (CFA) and is a member of The CFA Institute and The CFA Society of Washington, where she previously was an officer and director. She currently serves as a Director and Treasurer of The Wellness Community – Greater Washington, DC, an organization that provides education and hope to cancer patients and their families. She is also an Elder of the Georgetown Presbyterian Church in Washington, DC.

EDWARD (MIKE) KELLEY

Mike has spent a lifetime in leadership positions in industry, finance, public service and education. He was appointed a Governor of the Federal Reserve Board in 1987, continuing in that position until retirement in 2001. He is currently Director Emeritus of the Washington Mutual Investment Fund, a Director of Promontory Inter-financial Network and on the Advisory Board of Capital Partners, Inc. He has been a board member of numerous banks and investment advisory firms, serving as Board Chair on several. He has been a Trustee of his alma mater, Rice University, has chaired the Board of St. John’s school, is Chair of the United Methodist Publishing House, and just recently stepped down from the Board of Wesley Theological Seminary, which he Chaired from 2001 to 2006. A graduate of Harvard Business School, he has also applied his knowledge, experience, and concern for society to benefit numerous non-profit organizations and public policy activities. He and his wife, Janet, are Washington residents, with roots deep in the heart of Texas

DR. WILLIAM (BILL) LEAHY Dr. (Bill) Leahy has recently completed 34 years as President of Neurological Medicine, PA, a neurology practice he co-founded and developed. His training was at Princeton University, Northwestern University Medical School and Johns Hopkins Medical Institution, with a continued part-time faculty position in the Department of Neurology. He also completed positions at the NIH in neurochemistry and in the Army (retired Major) during the Vietnam era. For the past ten years, he has been on the board of Princeton Alumni Corps, and has served as president for the past four years. In 1998, he founded and expanded the High School Home Health Foundation, an educational program which, on a pro-bono basis, prepares non-college bound students for certification as home health aides and CNAs. The program was centered in Prince George’s County. He co-authored the text-book for the course and authored a companion book, Caregiving at Home. Bill and his wife, Chris, reside in Chevy Chase, Maryland and have two adult children: a daughter living in Brooklyn and working in education at a public policy institution, and a son residing in Washington and practicing international trade law at Aiken, Gump. Bill currently serves on the Personnel Committee of Chevy Chase Presbyterian Church.


KARL MATTISON Karl is currently Executive Director of the Presbyterian Endowment Education Resource (PEER) Network. He has served Presbyterian churches and affiliated charitable organizations in establishing endowments and managing investments since 2005. Karl was previously with Riggs Bank in Washington, DC where he was Special Assistant to the Chairman and subsequently Vice President and Manager of the Eurasian Department, managing the commercial and personal accounts of over 55 embassies and their diplomats. Prior to his banking career, Karl taught and volunteered extensively in the former Soviet Union. A graduate of Davidson College, he also studied at the Moscow Aviation Institute and did graduate work in Russian studies at Georgetown University. Karl and his wife, Ashley, have two young daughters.

MARY LYNNE MCKENZIE Mary Lynne McKenzie is a native Washingtonian, born and brought up in Washington DC where her father was pastor of Western Presbyterian Church. She was a teacher of first and second graders for 34 years. Her connections to the Presbyterian Home have been strong all her life. Both parents were active in the Home. Her father, concerned about the many single elderly women in his congregation, was on the committee to look for a new site for the Home which would allow for expansion. A member of the congregation, Mr. Oliphant, offered to put up the money if the Reverend McKenzie would find a suitable site. Mary Lynne’s mother counseled her husband, “Don’t put them out in a cow pasture!” He found this Rock Creek location for the building which still bears Mr. Oliphant’s name. As a Women’s Board member, Mary Lynne’s mother was liaison to the committee that built the Apartments. And it was Mary Lynne’s idea to include a swimming pool. At Western Presbyterian Church Mary Lynne has been active as an Elder, Deacon, Sunday School teacher, on the pulpit search committee and as Clerk of Session. As soon as she retired from her teaching career, Mary Lynne joined the Women’s Board where she is very active and has twice held the position of Vice President. For several years she has been in charge of the monumental task of Christmas decorating for the Assisted Living and the Health Care Center.

LYNN O’CONNOR, PRESIDENT AND CEO, (Ex-Officio) Lynn is the President and CEO for all three campuses -- Ingleside at Rock Creek, Westminster at Lake Ridge, and Ingleside at King Farm. She also oversees the Westminster-Ingleside Foundation. Lynn has over 30 years of experience in senior living leadership, has a B.S. in Health Care Management from St. Joseph’s University, an M.S.A. in Health Care Administration from Central Michigan University, is a Licensed Nursing Home Administrator in DC and MD, and is a Certified Aging Services Professional. Lynn and her husband, Kevin, live in Washington, DC, and have one daughter. They are members of Holy Trinity Church in Georgetown.


RICHARD (Dick) RIEGEL Dick spent 30 years with the U.S. Air Force in command and senior leadership positions throughout the United States, Asia, and Europe. He operated and maintained a full service air base community for 10,000 military and family members and commanded 200 aircraft that provided support for airlift participating induring Desert Shield/Desert Storm. Dick later worked in private sector and government positions: Special Consultant for Fidelity Technologies Corporation; Senior Management Analyst for the District of Columbia Government; Director of Operations for the National Defense Industrial Association. As a member of Chevy Chase Presbyterian Church, Dick has served in numerous leadership positions, including Chairman of the Board of Trustees where he oversaw a $1.2 million annual operating budget and an early pay-off of a $1 million mortgage for facility renovation.

JOAN SHARKEY (Ex-Officio) Joan is currently President of the Ingleside Women’s Board and Secretary for the Board of Directors of the three Ingleside communities. She began her career as a Foreign Service Officer in Saigon where she met her late husband, a Washington Post journalist. Their return to Washington and the arrival of three children led Joan to become involved in education instead. For 20 years, she was head of a cooperative pre-school for the DC Department of Parks and Recreation; she continues to be active on the Board of PACT (the Potomac Association of Cooperative Teachers), where she currently serves as Treasurer. Additionally, she has been involved with the Boy Scouts of America for a long time; as a member of the Advancement Committee of the Washington, D.C. District Committee, she continues to advise Eagle Scout candidates as a member of the Advancement Committee of the Washington DC District Committee. Joan is a member of the National Presbyterian Church.

ROBYN I. STONE, Dr. P.H. Dr. Stone is the Executive Director of the Center for Applied Research and Sr. Vice President for Research at Leading Age in Washington, D.C. In this role Dr. Stone is responsible for developing and overseeing applied policy research that focuses on developing and translating evidence-based approaches to advancing quality in aging services, developing a quality workforce and enhancing residential options for older adults. She also participates in many professional activities as a member of the National Advisory Committee on Apprenticeship with the U.S. Department of Labor, the National Geriatric Nursing Education Advisory Committee, and the CMS Staffing Quality Measures Study Technical Expert Panel. Ms. Stone earned her doctorate in Public Health at the University of California, Berkeley.

Also, see Exhibit A for Ingleside at King Farm’s organizational chart.


5. The name and address of any entity in which a person identified in item 4 has a 10% or greater financial interest and that is anticipated to provide goods, premises, or services with a value of $10,000 or more to the facility or King Farm in a fiscal year, and a description of the goods, premises, or services and their anticipated cost to the facility or provider, which need not include salary, wage, or benefit information of employees of the provider. Not applicable. 6. A description of any matter in which an individual identified in item 4: (i) has been convicted of felony or pleaded nolo contendere to a felony charge, if the felony involved fraud, embezzlement, fraudulent conversion, or misappropriation of property; (ii) has been held liable or enjoined in a civil action by final judgment, if the civil action involved fraud, embezzlement, fraudulent conversion, or misappropriation as a fiduciary; (iii) has been subject to an effective injunctive or restrictive order of a court of record in an action that arose out of or related to business activity or health care, including an action that affected a license to operate a facility or service for senior, impaired, or dependent persons; or (iv) in the past 10 years, had a state or federal license or permit suspended or revoked because a governmental unit brought an action that arose out of or related to business activity or health care, including an action that affected a license to operate a facility or service for senior, impaired, or dependent persons.

Not applicable.

7. A description of the form of governance of King Farm, including the composition of the governing body, and a statement that the provider will satisfy the requirements of Sections 10-426 and 10-427 of the Human Services Article of the Annotated Code of Maryland. IKF is the provider with a mailing address of 701 King Farm Boulevard, Rockville, Maryland 20850. There is a supporting organization, Westminster-Ingleside Services Corporation (“WISC”) with a President and Chief Executive Officer, Lynn O’Connor presiding. Mrs. O’Connor is responsible for three continuing care retirement communities (Ingleside at Rock Creek, Ingleside at King Farm and Westminster at Lake Ridge), the Westminster Ingleside Foundation, and the parent corporation Westminster Ingleside Service Corporation. In accordance with IKF’s Bylaws, WISC retains certain rights or reserved powers. These reserved powers include: the right to remove IKF directors and officers in accordance with IKF’s Bylaws, and the right to establish certain policies and procedures. IKF’s Board shall seek and obtain approval from WISC with respect to certain actions (i.e., amending the Articles of Incorporation and the Bylaws of IKF; incurring of indebtedness over a specified amount; selling real or personal property valued over a specified amount; creating any subsidiary or affiliate entities, or the participation of IKF in any joint venture, partnership, limited liability company or similar arrangement; making significant changes to the scope of facilities or services provided


by or offered by IKF; and modifying the Mission Statement and Strategic Plan of IKF). In addition, WISC: (i) selects IKF’s directors, independent auditor and insurance; (ii) establishes and monitors certain investment activities, governance activities, ethical standards, self-assessment programs and budgetary guidelines; and (iii) approves and monitors financial, human resources and compliance policies and quality of care standards.

In addition, the CEO and or the CFO meet at least four times annually with the residents to present a summary of its operations, significant changes from the previous year, and the goals and objectives for the next year. The CEO receives and answers questions from residents at these meetings. Furthermore, the Executive Director holds 8 meetings each year with the entire resident population and regularly attends meetings of the Resident Council to give reports and to address issues. 8. A statement of any affiliation with a religious, charitable, or other nonprofit organization, and the extent to which the organization is responsible for the financial and contractual obligations of the provider.

Ingleside at King Farm is affiliated with Ingleside at Rock Creek in Washington,

DC, Westminster at Lake Ridge in Lake Ridge, Virginia, and Westminster Ingleside Foundation. None of the organizations is responsible for the financial and contractual obligations of Ingleside at King Farm. For the responsibilities of the parent corporation, WISC, see section 2, page 4.

9. Name and address of the manager/management company if the facility is managed on a day-to-day basis by a person other than an individual directly employed by King Farm, and a description of the business experience, if any, of the manager or company in the operation or management of similar facilities.

IKF is managed by the Westminster Ingleside Service Corporation, a 501(c)(3), not-for-profit organization. Lynn Collins O’Connor, the President and Chief Executive Officer, has over 30 years’ experience in the long term care industry. On a day to day basis IKF is managed by Dr. Marilyn Thomas Leist, who has over 30 years of management experience, 7.5 of which have been in continuing care. She is retired from IBM and holds an Ed.D. in Adult Education and a Master’s Degree in Administration and Management.

10. A copy of the most recent certified financial statement under generally accepted accounting principles.

See Exhibit G-1 for Ingleside at King Farm’s most recent certified financial

statements. The Board approved audited financials will be sent to the Department of Aging

by May 15, 2014 after approval by the Board of Directors. 11. A description of the long-term financing for the facility.


Ingleside at King Farm is utilizing $54,590,000 tax-exempt Mortgage Revenue Bonds (Series 2007A Bonds) which bear interest at rates from 5% to 5.35%, payable semi-annually. The principal is due in the amounts of $4,780,000 in 2017, $17,155,000 in 2027, and $32,655,000 in 2037. The mortgage is secured by Ingleside at King Farm’s real estate. Ingleside at King Farm paid off $120,000,000 tax-exempt Mortgage Revenue Bonds in 2012. Additionally, a land enhancement loan of $1,110,000 is in place, and is being paid off at a rate of $60,000 per year. $870,000 is the remaining balance of this loan. 12. Cash flow forecast statement for the current and next two fiscal years. See Exhibit G-3 for King Farm’s cash flow forecast statement for the current and next two fiscal years. 13. A description of any activity related to a renovation, expansion, or new development during the preceding fiscal year or proposed for the current fiscal year. The original construction of the Community has been completed and the Community, including all three levels of care, Independent Living, Assisted Living, and Comprehensive Care, is fully operational. Ingleside at King Farm received its Certificate of Registration from the Maryland Department of Aging to offer continuing care in 2009. During 2012, plans were developed and approved by the Department of Aging to convert four Dumbarton apartments into Congressionals (one Bedroom/Den/1 ½ Baths) and Duponts (Studios). This construction was completed in December of 2012, adding 4 Independent Living apartments to the original 242. The conversion of 11 Assisted Living apartments to 19 Skilled Nursing rooms is expected to be completed by the end of May 2014. In addition a dining and kitchen expansion is being planned and is expected to be completed by January of 2016. See Exhibit M for more information regarding these renovations. 14. A description of: (i) the steps that have been or will be taken to comply with the operating reserve requirements; and (ii) King Farm’s investment policy related to the required reserves, including how often and by whom the reserve fund investment is reviewed.

Section 10-423 of the Human Services Article of the Annotated Code of Maryland requires that Continuing Care Retirement Communities that are not the subject of a conversion and that have residents who are not parties to continuing care agreements set aside operating reserves equal to at least 15% of the pro rata proportion of the net operating expenses. Ingleside at King Farm is required to hold separate and apart from other funds $7,600,000 to create an operating reserve fund as a requirement of bond issuance. Ingleside at King Farm had operating expenses of $13,062,603 and $12,286,149 during 2013 and 2012 respectively, thus requiring a reserve of $1,959,390 and $1,842,922 respectively. For both fiscal years ending 2013 and 2012, Ingleside at King Farm maintained iin its operating reserve account no amounts less than the


required $7,600,000. 15. A description of the financial arrangements that King Farm has made to address the renewal and replacement of the buildings and improvements to the facility, such as the establishment of a renewal and replacement fund. In September 2012, IKF began depositing $15,000 monthly into a renewal and replacement fund. The fund is managed by our bond trustee (Bank of New York Mellon). 16. A summary of the feasibility study if the facility has not reached 85% occupancy of its independent living units including: Ingleside at King Farm reached higher than 85% occupancy in its Independent Living apartments in 2012. 17. A description of the conditions under which Ingleside at King Farm may be issued a certificate of registration and may use escrowed deposits, and a statement of the amount of the subscriber’s deposit that may be used.

All conditions have been met and IKF has been issued a certificate of registration. 18. Description of all basic fees, including entrance fees, fees for health related services, and periodic fees, collected by the provider from subscribers, setting forth the amount and frequency of the fee changes during each of the previous 5 years or each year it has been in operation. See Exhibit I for a history of fees during each year that King Farm has been operating.

A. Entrance Fee

Under the terms of the Independent Living Residence and Care Agreements, the resident pays one of two types of Entrance Fees. Residents signing an Independent Living Residence and Care Agreement sign either a Type C fee-for-service 100% Refundable Entrance Fee agreement, a 50% Refundable Entrance Fee agreement, or a Type C fee-for-service Declining Refund Entrance Fee agreement that declines over 25 months at the rate of four percent (4%) per month (or fraction of a month). Refunds are paid based on the applicable Residence and Care Agreement signed by the resident. The amount of the Entrance Fee will vary depending upon the type of residence chosen, whether a Declining Balance Entrance Fee or Refundable Entrance Fee is chosen, and whether there are one or two persons who receive benefits under the Residence and Care Agreement. *Carefully read the Residence and Services Agreement for the conditions that must be


satisfied before Ingleside at King Farm is required to pay the entrance fee refund. See Exhibit I price sheet to this Disclosure Statement for Entrance Fees.

B. Monthly Charge

Residents also pay a monthly charge for services and amenities. A monthly charge is assigned to each type of residence based upon single or double occupancy of an Independent Living residence. Residents admitted directly into the Health Center will pay a per diem rate for Assisted Living and Comprehensive Care residences. The monthly charge and per diem rate may be adjusted from time to time by Ingleside at King Farm, at its discretion upon THIRTY (30) DAYS’ prior written notice to Independent Living residents, and FORTY FIVE (45) DAYS’ prior written notice to Assisted Living and Comprehensive Care residents.

C. Additional Fees Fees for services and items not included in the monthly charge are provided in accordance with a published fee schedule provided to residents, and may include such items and services as: additional housekeeping and laundry services; guest meals, salon services, life enrichment programs, and private transportation. 19. Summary of basic services provided under the continuing care agreement, including the extent to which health related services are furnished, that clearly states which services are indicated in the agreement as included in the basic fee or fees and which services are or will be made available at or by Ingleside at King Farm at an extra charge. The resident’s rights under the Residence and Care Agreement are not proprietary and do not include any right, title or interest in the real or personal property of Ingleside at King Farm. Independent Living Residents The following benefits and services are available at no extra fee:

One designated covered parking space for each unit, providing resident(s) own and operate a vehicle;

Use of all public rooms and common areas (including, but not limited to, dining rooms, lounges, swimming pool, wellness and fitness center, library/computer room, and outdoor areas);

Annual housekeeping services including interior window washing and high traffic carpet cleaning;

Light housekeeping services on a weekly basis;

Monitoring of smoke alarms and emergency call system;


24-hour security personnel to supervise the community buildings and grounds;

Maintenance of all common areas including the buildings, lawns, walkways, driveways, and landscaping, and including snow removal;

Scheduled transportation to shopping centers, religious facilities, stores, and malls;

Water, sewerage, air conditioning, basic cable, gas and electricity;

Trash disposal and waste management, excluding hazardous waste, furniture and appliance disposal;

Activities planning and coordination;

Priority access to Assisted Living and Comprehensive Nursing Care;

A dining card that will be credited with an amount of money equal to one meal per day (30 or 31 meals per month depending on the number of days in the month);

Access to a health clinic providing minor first aid, vital signs, etc.; and

Individual mailboxes.

Services or items not listed above are not included as part of the services and items to be received for the monthly charge. The following services are available to residents of the Community for purchase at an additional cost on an individual basis:

Salon services;

Additional housekeeping and laundry services;

Additional meals;

Telephone, premium cable and internet;

Additional transportation for special, personal, and group trips on a first-come, first-serve basis;

Additional parking (if available);

Newspaper delivery services;

Life Enrichment Activities

Dry cleaning services;

Guest meals; and

Guest Suite, subject to availability Residents may receive an away credit of $7.00 per day commencing on the

fifteenth day if the resident is away from the Community for more than fourteen (14) consecutive days.

If a resident relocates to Assisted Living or Comprehensive Care on a temporary basis, the resident is required to sign the appropriate level of care agreement and pay the applicable per diem rate for the services provided in addition to the monthly charge for his/her Independent Living residence.

If the resident transfers on a permanent basis to Assisted Living or


Comprehensive Care, the resident is required to enter into a new agreement for the type of accommodation that he or she is entering and also to be responsible for the applicable per diem rate. Upon permanent transfer, the resident is required to release the Independent Living residence, which releases the resident from the responsibility of paying the monthly charge for such residence.

Residents who sign a 100% Refundable Entrance Fee contract are entitled to

request that a portion (not to exceed the difference between the new per diem rate and the old IL monthly charge) of their refund be applied to their outstanding monthly balance upon a transfer to Assisted Living or Comprehensive Care. Residents who are admitted directly into the Health Center upon admission to the Community may not access the Entrance Fee refund for this purpose.

Assisted Living Residents Residents entering Assisted Living are required to sign either a 100%

Refundable Entrance Fee or limited Community Fee contract for Assisted Living services. Assisted Living services are provided in Assisted Living private, single-occupancy one-bedroom apartments or double-occupancy apartments. The apartments contain a full bath, walk-in closet, carpeting, window treatments and an emergency call system. Ingleside at King Farm’s Assisted Living Program is licensed by the Maryland Department of Health and Mental Hygiene as a Level 3, High Level of Care Assisted Living Program.

An individualized plan of care (wellness program) is developed for every resident

in the Assisted Living Program, based upon a physician’s report and a healthcare assessment. Personal care services are provided, consistent with the resident’s needs and service plan.

A variety of social, cultural, educational, physical and spiritual activities are made

available to residents for their use and enjoyment at no additional charge. Ingleside at King Farm provides residents with three (3) meals daily, served in

the Assisted Living dining room, and provides special diets when ordered by the Medical Director, the resident’s physician with the concurrence of the Medical Director, or if ordered by a Health Center dietician.

Residents are provided with bed and bath linens at no additional charge, and are encouraged to furnish their apartment with their own furnishings. At the resident’s request, Ingleside at King Farm shall provide the apartment with a bed with mattress, two pillows, a bedside stand with a locked drawer, a chair, a chest of drawers with at least two dresser drawers, and a bedside or over-the-bed lamp. A rental fee is charged for furnishings.

Some other services and benefits that are available to residents at no additional


charge include:

Licensed nursing staff 24 hours a day

Social services

Daily light housekeeping services

Utilities, including: electricity, gas, water, basic cable television and

local telephone service, flat linen service

Use of all facilities and services in Assisted Living, such as recreational

areas, lounges and general activities conducted for residents

Wheelchair assistance

Assistance with and/or supervision of the activities of daily living

Therapeutic activities

Special events planning and coordination

Use of wellness and fitness center and coordination of fitness plan

Use of computer room with available internet connection

Medication administration

Security

Personal laundry services

Scheduled transportation to shopping, religious services, etc.

Maintenance of common areas, roads and grounds and buildings, including snow removal, and window washing.

Services and items that are available for an additional charge include:

Occupational, speech, physical therapy and restorative services

Podiatry

Psychotherapy

Incontinence care, catheter and colostomy supplies

Oxygen therapy and pulse oximeter

Radiology services

Rental of health equipment

Rental of furniture and scooters

Salon services

Additional transportation services for medical, special, personal and group trips

Additional housekeeping services

Guest meals

Guest Suite, subject to availability Comprehensive Care Residents

Residents entering Comprehensive Care are required to sign a contract for

Comprehensive Care services. Comprehensive Care services are provided in private accommodations.


Direct admission into Comprehensive Care may occur only if a spouse or relative will be admitted at the same time under a joint contract to Independent or Assisted Living; or a person with whom the individual has had a long-term relationship with will be admitted to the Community at the same time under a joint contract to Independent or Assisted Living; or if the individual’s personal physician who is not an owner or employee of the Community has certified in writing that the individual has the potential for an eventual transfer to Independent Living or Assisted Living; Occupancy of the total number of Comprehensive Care beds by continuing care residents who have been admitted directly is twenty percent (20%) or less; and the admission shall not cause the occupancy of the Comprehensive Care portion of the Health Center to exceed ninety-five percent (95%) of full capacity.

A variety of social, cultural, educational, physical and spiritual activities are made available to residents for their use and enjoyment at no additional charge. Residents are encouraged to use all common areas of the Community, including all facilities of the Nursing Facility, such as recreational areas, lounges, and private meeting spaces.

Other services and benefits available to residents at no additional charge include:

Licensed nursing staff 24 hours a day

Three meals daily

Utilities, including electricity, gas, water, basic cable television and local telephone service

Between-meal snacks and beverages

Special or modified diets when prescribed by the resident’s physician

Daily housekeeping services

Medication management

Flat linen service

Emergency call system

Security

Therapeutic and recreational activities

Special events planning and coordination

Assistance with activities of daily living

Scheduled transportation to shopping, religious services, etc.

Maintenance of common areas, roads and grounds and buildings, including snow removal, and window washing

Trash and waste management

Use of wellness and fitness center and coordination of fitness plan

Use of computer room with available internet connection Ancillary services and supplies that are available for an additional charge include:

Occupational, speech and physical therapy services

Physician services


Private duty nurses and aides

Medical supplies

Radiology services

Laboratory services

Pharmacy services

Rental of special equipment

Salon services

Individual transportation requests Continuing Care Residents When there are differences between the requirements for continuing care

certification and the licensure requirements for Assisted Living or Comprehensive Care, the applicable requirements most favorable to the resident will prevail while the resident is residing in Assisted Living or Comprehensive Nursing Care.

20. Statement if it is Ingleside at King Farm’s policy to impose a surcharge on some, but not all, subscribers because of some condition or circumstance and that the surcharge will not be considered part of the entrance fee in the statutory refund. Ingleside at King Farm reserves the right, as a condition for admission, to charge additional amounts for persons who are under 65 years of age when they enter the Community, and to persons who have unusual health or other special conditions. 21. A description of the existence and role of the Resident Association. The Resident Association is available for all residents of the Community to meet privately and conduct business. The Resident Council provides Ingleside at King Farm with input regarding Community services and amenities. A IKF resident is appointed to the Board of Directors as a full and regular member of the Board, with voting rights applicable only to Ingleside at King Farm. 22. A description of the internal grievance procedure.

Ingleside at King Farm encourages residents and family members to express their grievances and to suggest remedies or improvements in rules and services.

A Resident or group of Residents collectively may submit a written grievance to

the Executive Director, and is entitled to receive a written acknowledgment within five (5) days after receipt of the written grievance. A Resident who submits a written grievance shall have the right to meet with management of King Farm within thirty (30) days after receipt of the written grievance. The Resident or group of Residents collectively shall receive a response from the Executive Director explaining what investigation occurred and the resolution to the grievance within forty-five (45) days


after receipt of the written grievance. Within thirty (30) days after Ingleside at King Farm provides its response to the grievance, a Resident, group of Residents collectively or Ingleside at King Farm may seek mediation through one of the community mediation centers in the State or another mediation provider. If a Resident, group of Residents collectively or Ingleside at King Farm seeks mediation based on the preceding sentence, the mediation shall be nonbinding and neither the Resident, group of Residents collectively nor Ingleside at King Farm may be represented by counsel.

Residents also may contact the following regulatory agencies: Maryland Department of Aging; Department of Health and Mental Hygiene, Office of Health Care Quality (for Assisted Living and Comprehensive Care residents); Long-Term Care Ombudsman (for Assisted Living and Comprehensive Care residents); Montgomery County Department of Social Services (for adult protective services); or any other regulatory agency having jurisdiction over the matter, including, but not limited to, Medicare and Medicaid.

23. Statement that Ingleside at King Farm shall amend its Disclosure Statement if an amendment is necessary. Ingleside at King Farm King Farm agrees to amend this Disclosure Statement if, at any time, Ingleside at King Farm or the Department of Aging is of the opinion that an amendment is necessary to prevent the Disclosure Statement from containing any material misstatement of facts, as required by Section 10-425 of the Human Services Article of the Annotated Code of Maryland to be stated in this Disclosure Statement, or omits a material fact required by Section 10-425 of the Human Services Article of the Annotated Code of Maryland to be stated in this Disclosure Statement.

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