PROPOSED PURCHASE OF PARK VIEW CEMETERY

March 24, 2015 and March 28, 2015

SUMMARY OF PRESENTATION

• Overview

• Reasoning

• Details

• Questions/Comments

OVERVIEW OF PROPOSED TRANSACTION

• Park View Cemetery: Historic Medford Village (Odd Fellows) and Kirby’s Mill locations

• Purchase price: $10,875,000

• Source of funds: Bonds to be issued by the Township

• Targeted closing date: December 30, 2015

• Operation: Cemetery to be operated by a Cemetery Management Company

• Anticipated revenue stream: More than $80 million over 50 years(after payment of all expenses, debt service and trust fund contributions)

• Expected to be completely self-sufficient

REASONING

• Purpose: To generate new, annual source of revenue for the long term

• Why? Each year the Township must supplement the funds raised by taxes with other sources of revenue to balance budget

• Proposed 2015 budget (as of 3/23/15)

-Total projected revenue: $20,164,079

-Projected amount to be raised by taxes: $12,223,521

-Difference: $7,940,558

-Virtually no guaranteed sources of annual revenue

• Goal: Reduce dependence on one-time revenues

PARK VIEW CEMETERY AT HISTORIC MEDFORD VILLAGE

PARK VIEW CEMETERY AT HISTORIC MEDFORD VILLAGE

• Formerly known as Odd Fellows and previously operated by Odd Fellows Lodge

• Acquired by Medford Cemetery Association, Inc. in 2008

• Coates and Filbert Streets; behind Braddock’s Tavern

• Approximately 4.2 acres

• 3,740 graves

-97 unsold

-775 interments in graves remaining (sold but not occupied)

• 320 cremation niche spaces

-243 unsold

PARK VIEW CEMETERY AT KIRBY’S MILL

PARK VIEW CEMETERY AT KIRBY’S MILL

• 25 Fostertown Road

• Approved by State Cemetery Board in March 2010; opened in October 2013

• Approximately 9.5 acres

• Upon initial construction completion:

-4,592 double depth graves

-104 cremation lots

-13 private mausoleum sites

-Single building equipped for a 1,588 casket/crypt space community mausoleum, 600 cremation niche spaces and a fully operational crematory

• Potential for additional development:

-7,274 casket/crypt spaces

-4,710 cremation niche spaces

PARK VIEW CEMETERY AT KIRBY’S MILL

PARK VIEW CEMETERY AT KIRBY’S MILL

CURRENT OWNER: MEDFORD CEMETERY ASSOCIATION, INC. (“MCA”)

• President: Earl Stahl

• General Manager: Karen Hoyt

• Certificate Holders:

-Earl Stahl

-Robert Donovan

-Robert Farrington

-Keri Pyse

-Kennard and Barbara Pyse

-Philip and Kathleen Russo

-George Snyder

HOW DID MCA COME TO OWN ODD FELLOWS CEMETERY AND DEVELOP THE PARK VIEW CEMETERY AT KIRBY’S MILL LOCATION?

• Acquired from Odd Fellows Lodge

• Harry Sutton Nursery

• Land for Kirby’s Mill location owned since 1987

• Reeves Station Road solar farm

WHY DOES MCA WANT TO SELL TO THE TOWNSHIP?

• Eliminate debt, fund construction and return on investment

• Opportunity to continue to manage cemetery; intends to respond to RFP

• Township is uniquely positioned to benefit from

ownership due to ability to bond

-Interest rate on bonds

-Unsecured loan

APPROXIMATE BREAKDOWN OF $10,875,000 PURCHASE PRICE

• $5,000,000 to pay holders of certificates of indebtedness (equivalent to stock)

• $160,000 for accrued interest to certificate holders

• $1,550,000 to repay unsecured notes to Earl Stahl

• $1,015,000 to repay unsecured notes to other certificate holders

• $370,830 to repay secured note

• $2,779,170 to partially reimburse construction costs

WHY DOES MEDFORD TOWNSHIP WANT TO PURCHASE THE CEMETERY?

• Township able to achieve greater revenue than private investors

• Total net revenue of $82,755,892 projected over 50 years

• This projection is after:

-Expenses

-Repayment of the Bonds

-Maintenance & Preservation fund payments

-Additional development cost

• Cash flow analysis includes construction of additional development in year 10

-Construction paid for from cemetery pre need sale revenues

-Built into cash flow projections

• Tax Exempt – no loss of real estate taxes

WHY DOES MEDFORD TOWNSHIP WANT TO PURCHASE THE CEMETERY?

• Actual operations to date Year 2014:

-Projected gross income = $340,419

-Actual gross income = $516,444

-Actual income exceeded projected income by over 50%

• Year 2015 (through February):

-Actual gross income = $79,268

-Same period last year = $43,895

-80% increase over last year

• Cemetery Management Company will fund reserve for potential revenue shortfalls in initial years

-$1,585,000 held in escrow for 48 months

-Interest at bond rate accrues after first year

-Reduced as Township determines not needed

BASIS FOR PROJECTIONS

• Prepared in connection with the approvals for the Kirby’s Mill location

• Submitted in November of 2009 and approved by the State Cemetery Board in March 2010

• Used actual revenue reported by other NJ cemeteries on their tax returns

-Harleigh Cemetery in Camden-Locustwood Cemetery in Cherry Hill-Lakeview Memorial Park in Cinnaminson-Holmdel Cemetery in Holmdel

• These cemeteries chosen because each has a pre-need program and at least one of the following:

-Cemetery of similar size to Kirby’s Mill location-Community where cemetery located of similar size to Kirby’s Mill location-Average household income within community is similar to Medford’s-Cemetery provides same type of services planned for Kirby’s Mill location

• Examined total population of Burlington County by age groups to determine amount and rate of services purchased per year

TOWNSHIP INVESTIGATION TO DATE

• Began discussions in September 2012

• Site visits

• Subcommittee of Jeff Beenstock, Chuck Watson, and Dennis Kildea

• Complete review and analysis of all financial information and projections

• Considered worst case scenario

• Consultation with attorney

• Appraisal

• Discussions with Cemetery Board officials

STATE REGULATION

• Cemetery companies required to obtain Certificate of Authority

• Municipalities do not need Certificate of Authority (but State Cemetery Board approval needed for dissolution)

MAINTENANCE AND PRESERVATION FUND

• New Jersey law requires all regulated cemeteries to maintain in perpetuity an irrevocable trust fund for the preservation of the cemetery

• Purpose is to provide for funds to maintain and preserve the cemetery after revenue generations stops

• Stated mandated contributions:

-15% of the revenue from each grave sale

-10% of the revenue from each headstone foundation, crypt and niche sale

-3% of the revenue from each interment

• Cemeteries permitted to contribute additional funds in excess of required amounts

• MCA requires customers to contribute an additional $500 at the time of purchase of each grave, casket space within a crypt, and niche

• Interest income used for operation of cemetery

MAINTENANCE AND PRESERVATION FUND

• One fund for both locations

• Current trust fund amount = $717,645.28

• Projected trust fund amount upon sale of all products and services = $25,742,724

• Projected trust fund amount without additional $500 contribution = $15,821,224

• Critical to long term ownership and operation of cemetery

SUMMARY

• Unique investment opportunity

• Completely self-sufficient

• Opportunity to generate revenue to support general Township operations and reduce dependence on one-time revenue

QUESTIONS/COMMENTS