Floriston Property HOA

Transcription

1 Full Reserve Study Floriston Property HOA Floriston, CA Report #: For Period Beginning: April 1, 2014 Expires: March 31, 2015 Date Prepared: June 30, 2014

2 Hello, and welcome to your Reserve Study! W e don t want you to be surprised. This Report is designed to help you anticipate, and prepare for, the major common area expenses your association will face. Inside you will find: 1) The Reserve Component List (the Scope and Schedule of your Reserve projects) telling you what your association is Reserving for, what condition they are in now, and what they ll cost to replace. 2) An Evaluation of your current Reserve Fund Size and Strength (Percent Funded). This tells you your financial starting point, revealing your risk of deferred maintenance and special assessments. 3) A Recommended Multi-Year Reserve Funding Plan, answering the question What do we do now? More Questions? Visit our website at or call us at: 415/ Relax, it s from Association Reserves SF LLC

3 Table of Contents 3- Minute Executive Summary... i Reserve Study Summary... i Reserve Component List Table 1... ii Introduction, Objectives, and Methodology... 1 Which Physical Assets are Funded by Reserves?...2 How do we establish Useful Life and Remaining Useful Life estimates?...2 How do we establish Current Repair/Replacement Cost Estimates?...2 How much Reserves are enough?...3 How much should we contribute?...4 What is our Recommended Funding Goal?...4 Projected Expenses... 6 Expense Graph Figure Reserve Fund Status & Recommended Funding Plan... 7 Funding Plan Graph Figure Cash Flow Graph Figure % Funded Graph Figure Table Descriptions... 9 Reserve Component List Detail Table Contribution & Fund Breakdown Table Component Significance Table Year Reserve Plan Summary Table Year Reserve Plan Year by Year Detail Table Accuracy, Limitations, and Disclosures Terms and Definitions Component Details... Appendix Association Reserves SF LLC

4 3- Minute Executive Summary Association: Floriston Property HOA #: Location: Floriston, CA # of Units: 43 Report Period: April 1, 2014 through March 31, 2015 Findings/Recommendations as-of 4/1/2014: Projected Starting Reserve Balance:... $66,000 Current Fully Funded Reserve Balance:... $403,852 Average Reserve Deficit (Surplus) Per Unit:... $7,857 Recommended 2014 Monthly Full Funding Contributions:... $4,000 Minimum contribution to keep Reserves above $0:... $2,700 Recommended 2014 Special Assessment for Reserves:... $0 Most Recent Budgeted Reserve Contribution Rate:... $0 Economic Assumptions: Net Annual After Tax Interest Earnings Accruing to Reserves % Annual Inflation Rate % This is a Full Reserve Study (original, created from scratch ), and is based on our site inspection on April 23, It was prepared by a credentialed Reserve Specialist (RS). Because your Reserve Fund is at 16% Funded, this means the association s special assessment & deferred maintenance risk is currently high. The objective of your multi-year Funding Plan is to Fully Fund your Reserves, where associations enjoy a low risk of such Reserve cash flow problems. Based on this starting point, your anticipated future expenses, and your historical Reserve contribution rate, our recommendation is to increase your Reserve contributions. No assets appropriate for Reserve designation were excluded. Association Reserves SF LLC i

5 Table 1: Executive Summary Useful Rem. Current Life Useful Cost # Component (yrs) Life (yrs) Estimate Roads 201 Asphalt - Major Reconstruction $248, Asphalt - Repair 14 0 $33, Asphalt - Slurry Seal 7 0 $30, Mailbox Structure - Replace $2, Street Signs - Replace $2,475 Water System 1703 Water Collection Vault - Maintain $65, Transport line - Replace/Repair 10% 15 8 $16, Water Return Line - Repl/Repair 10% 15 5 $3, Fire Hydrants - Overhaul 12% 5 3 $1, Water Storage Tank - Replace $125, Water Storage Tank - Clean/Inspect 10 5 $2, Main Distribution Line 6" - Replace $123, Main Distribution Line 4"-Repl (n) $15, Main Distribution Line 4"-Repl (o) $31, Water Supply Laterals - Replace (a) $4, Water Supply Laterals - Replace (b) $5, Water Supply Laterals - Replace (c) $5, Water Supply Laterals - Replace (d) $5, Water Supply Laterals - Replace (e) $5, Water Supply Laterals - Replace (f) $5, Water Supply Laterals - Replace (g) $5, Water Supply Laterals - Replace (h) 30 0 $5, Water Supply Laterals - Replace (i) 30 1 $5, Sand Filters - Replace $11, Micro Filters - Replace 10 5 $6, Micro Filters - Replace 10 6 $6, Chlorinator and Tank - Replace $2, Water Operating Controls - Replace $55, Water Level Monitor - Replace $1,350 Sewage Treatment System 810 Septic Tank - Pumped 5 0 $3, Leach Field - Maintain/Repair $3, Sewer Lines - Replace/Repair 10 6 $5,400 School House 702 Roll-up Garage Door - Replace $1, School House Interiors - Remodel 15 5 $4, School House - Repaint 10 4 $2, Wood Siding/Trim - Repair 10% 10 6 $3, Asphalt/Gravel Roof - Replace 20 8 $3, Comp Shingle Roof - Replace $11, School House Foundation - Replace N/A 8 $60, School Stairs - Replace $3, Total Funded Components Note 1: a Useful Life of N/A means a one-time expense, not expected to repeat. Note 2: Yellow highlighted line items are expected to require attention in the initial year. Association Reserves SF LLC ii

6 Assoc Introduction A Reserve Study is the art and science of anticipating, and preparing for, an association s major common area repair and replacement expenses. Partially art, because in this field we are making projections about the future. Partially science, because our work is a combination of research and welldefined computations, following consistent National Reserve Study Standard principles. The foundation of this and every Reserve Study is your Reserve Component List (what you are reserving for). This is because the Reserve Component List defines the scope and schedule of all your anticipated upcoming Reserve projects. Based on that List and your starting balance, we calculate the association s Reserve Fund Strength (reported in terms of Percent Funded ). Then we compute a Reserve Funding Plan to provide for the Reserve needs of the association. These form the three results of your Reserve Study. Reserve contributions are not for the future. Reserve contributions are designed to offset the ongoing, daily deterioration of your Reserve assets. Done well, a stable, budgeted Reserve Funding Plan will collect sufficient funds from the owners who enjoyed the use of those assets, so the association is financially prepared for the irregular expenditures scattered through future years when those projects eventually require replacement. Methodology For this Full Reserve Study, we started with a review of your Governing Documents, recent Reserve expenditures, an evaluation of how expenditures are handled (ongoing maintenance vs Reserves), and research into any well-established association precedents. We performed an on-site inspection to quantify and evaluate your common areas, creating your Reserve Component List from scratch. Association Reserves SF LLC 1

7 Assoc Which Physical Assets are Funded by Reserves? There is a national-standard four-part test to determine which expenses should appear in your Reserve Component List. First, it must be a common area maintenance responsibility. Second, the component must have a limited life. Third, the remaining life must be predictable (or it by definition is a surprise which cannot be accurately anticipated). Fourth, the component must be above a minimum threshold cost (often between.5% and 1% of an association s total budget). This limits Reserve Components to major, predictable expenses. Within this framework, it is inappropriate to include lifetime components, unpredictable expenses (such as damage due to fire, flood, or earthquake), and expenses more appropriately handled from the Operational Budget or as an insured loss. How do we establish Useful Life and Remaining Useful Life estimates? 1) Visual Inspection (observed wear and age) 2) Association Reserves database of experience 3) Client History (install dates & previous life cycle information) 4) Vendor Evaluation and Recommendation How do we establish Current Repair/Replacement Cost Estimates? In this order 1) Actual client cost history, or current proposals 2) Comparison to Association Reserves database of work done at similar associations 3) Vendor Recommendations 4) Reliable National Industry cost estimating guidebooks Association Reserves SF LLC 2

8 Assoc How much Reserves are enough? Reserve adequacy is not measured in cash terms. Reserve adequacy is found when the amount of current Reserve cash is compared to Reserve component deterioration (the needs of the association). Having enough means the association can execute its projects in a timely manner with existing Reserve funds. Not having enough typically creates deferred maintenance or special assessments. Adequacy is measured in a two-step process: 1) Calculate the value of deterioration at the association (called Fully Funded Balance, or FFB). 2) Compare that to the Reserve Fund Balance, and express as a percentage. Each year, the value of deterioration at the association changes. When there is more deterioration (as components approach the time they need to be replaced), there should be more cash to offset that deterioration and prepare for the expenditure. Conversely, the value of deterioration shrinks after projects are accomplished. The value of deterioration (the FFB) changes each year, and is a moving but predictable target. There is a high risk of special assessments and deferred maintenance when the Percent Funded is weak, below 30%. Approximately 30% of all associations are in this high risk range. While the 100% point is Ideal (indicating Reserve cash is equal to the value of deterioration), a Reserve Fund in the 70% -130% range is considered strong (low risk of special assessment). Measuring your Reserves by Percent Funded tells how well prepared your association is for upcoming Reserve expenses. New buyers should be very aware of this important disclosure! Association Reserves SF LLC 3

9 Assoc How much should we contribute? According to National Reserve Study Standards, there are four Funding Principles to balance in developing your Reserve Funding Plan. Our first objective is to design a plan that provides you with sufficient cash to perform your Reserve projects on time. Second, a stable contribution is desirable because it keeps these naturally irregular expenses from unsettling the budget. Reserve contributions that are evenly distributed over current and future owners enable each owner to pay their fair share of the association s Reserve expenses over the years. And finally, we develop a plan that is fiscally responsible and safe for Boardmembers to recommend to their association. Remember, it is the Board s job to provide for the ongoing care of the common areas. Boardmembers invite liability exposure when Reserve contributions are inadequate to offset ongoing common area deterioration. What is our Recommended Funding Goal? Maintaining the Reserve Fund at a level equal to the value of deterioration is called Full Funding (100% Funded). As each asset ages and becomes used up, the Reserve Fund grows proportionally. This is simple, responsible, and our recommendation. Evidence shows that associations in the % range enjoy a low risk of special assessments or deferred maintenance. Allowing the Reserves to fall close to zero, but not below zero, is called Baseline Funding. Doing so allows the Reserve Fund to drop into the 0-30% range, where there is a high risk of special assessments & deferred maintenance. Since Baseline Funding still provides for the timely execution of all Reserve projects, and only the margin of safety is different, Baseline Funding contributions average only 10% - 15% less than Full Funding contributions. Threshold Funding is the title of all other Cash or Percent Funded objectives between Baseline Funding and Full Funding. Association Reserves SF LLC 4

10 Assoc Site Inspection Notes During our site visit on April 23, 2014, we started with a brief meeting with Chuck Grooms and Mike Smith (Board of Directors), and then started the site inspection beginning with the water treatment pump house. We visually inspected most of the association. Association Reserves SF LLC 5

11 Assoc Projected Expenses While this Reserve Study looks forward 30 years, we have no expectation that all these expenses will all take place as anticipated. This Reserve Study needs to be updated annually because we expect the timing of these expenses to shift and the size of these expenses to change. We do feel more certain of the timing and cost of near-term expenses than expenses many years away. Your first five years of projected Reserve expenses total $80,394. Adding the next five years, your first ten years of projected Reserve expenses are $261,871. Please be aware of your near-term expenses, which we are able to project more accurately than the more distant projections. The figure below summarizes the projected future expenses at your association as defined by your Reserve Component List. A summary of these expenses are shown in Table 5, while details of the projects that make up these expenses are shown in Table 6. Annual Reserve Expenses $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $ Years Figure 1 Association Reserves SF LLC 6

12 Assoc Reserve Fund Status The starting point for our financial analysis is your Reserve Fund balance, projected to be $66,000 as-of the start of your Fiscal Year on April 1, As of April 1, 2014, your Fully Funded Balance is computed to be $403,852 (see Table 3). This figure represents the deteriorated value of your common area components. Comparing your Reserve Balance to your Fully Funded Balance indicates your Reserves are 16% Funded. Across the country, approx 48% of associations in this range experience special assessments or deferred maintenance. Recommended Funding Plan Based on your current Percent Funded and your near-term and long-term Reserve needs, we are recommending budgeted contributions of $4,000/month this Fiscal Year. The overall 30-yr plan, in perspective, is shown below. This same information is shown numerically in both Table 5 and Table 6. Annual Reserve Funding Recommended Alternate (Minimum) Current Budget $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $ Years Figure 2 Association Reserves SF LLC 7

13 Assoc The following chart shows your Reserve balance under our recommended Full Funding Plan, an alternate Baseline Funding Plan, and at your current budgeted contribution rate, compared to your always-changing Fully Funded Balance target. $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200, Yr Cash Flow Target Fully Funded Balance Recommended Funding Plan Alternate (Minimum) Current Budget $ Years Figure 3 This figure shows this same information, plotted on a Percent Funded scale. 120% Percent Funded Recommended Funding Plan Alternate (Minimum) Funding Plan Current Budget 100% 80% 60% 40% 20% 0% Years Figure 4 Association Reserves SF LLC 8

14 Assoc Table Descriptions The tabular information in this Report is broken down into six tables. Table 1 is a summary of your Reserve Components (your Reserve Component List), the information found in Table 2. Table 2 is your Reserve Component List, which forms the foundation of this Reserve Study. This table represents the information from which all other tables are derived. Table 3 shows the calculation of your Fully Funded Balance, the measure of your current Reserve component deterioration. For each component, the Fully Funded Balance is the fraction of life used up multiplied by its estimated Current Replacement Cost. Table 4 shows the significance of each component to Reserve needs of the association, helping you see which components have more (or less) influence than others on your total Reserve contribution rate. The deterioration cost/yr of each component is calculated by dividing Current Replacement Cost by Useful Life, then that component s percentage of the total is displayed. Table 5: This table provides a one-page 30-year summary of the cash flowing into and out of the Reserve Fund, with a display of the Fully Funded Balance, Percent Funded, and special assessment risk for each year. Table 6: This table shows the cash flow detail for the next 30 years. This table makes it possible to see which components are projected to require repair or replacement each year, and the size of those individual expenses. Association Reserves SF LLC 9

15 Table 2: Reserve Component List Detail Rem. Useful Useful [ --- Current Cost Estimate --- ] # Component Quantity Life Life Best Case Worst Case Roads 201 Asphalt - Major Reconstruction Approx GSF $221,000 $276, Asphalt - Repair Approx GSF 14 0 $29,500 $36, Asphalt - Slurry Seal Approx GSF 7 0 $25,000 $35, Mailbox Structure - Replace Approx 100 GSF $2,500 $3, Street Signs - Replace (9) Post w/ Signs $2,250 $2,700 Water System 1703 Water Collection Vault - Maintain Approx 6'x6'x12' $58,000 $73, Transport line - Replace/Repair 10% Approx 4400 LF 15 8 $15,400 $18, Water Return Line - Repl/Repair 10% Approx 890 LF 15 5 $3,100 $3, Fire Hydrants - Overhaul 12% (8) Hydrants 5 3 $1,000 $1, Water Storage Tank - Replace (1) 60,000 Gal Tank $100,000 $150, Water Storage Tank - Clean/Inspect (1) 60,000 Gal Tank 10 5 $2,000 $3, Main Distribution Line 6" - Replace Approx 2800 LF $112,000 $135, Main Distribution Line 4"-Repl (n) Approx 400 LF $14,000 $17, Main Distribution Line 4"-Repl (o) Approx 800 LF $28,000 $35, Water Supply Laterals - Replace (a) (4 of 44) Laterals $3,500 $4, Water Supply Laterals - Replace (b) (5 of 44) Laterals $4,500 $5, Water Supply Laterals - Replace (c) (5 of 44) Laterals $4,500 $5, Water Supply Laterals - Replace (d) (5 of 44) Laterals $4,500 $5, Water Supply Laterals - Replace (e) (5 of 44) Laterals $4,500 $5, Water Supply Laterals - Replace (f) (5 of 44) Laterals $4,500 $5, Water Supply Laterals - Replace (g) (5 of 44) Laterals $4,500 $5, Water Supply Laterals - Replace (h) (5 of 44) Laterals 30 0 $4,500 $5, Water Supply Laterals - Replace (i) (5 of 44) Laterals 30 1 $4,500 $5, Sand Filters - Replace (2) 3' X 7' Filters $10,000 $12, Micro Filters - Replace (3) Filters 10 5 $6,000 $7, Micro Filters - Replace (3) Filters 10 6 $6,000 $7, Chlorinator and Tank - Replace (1)System w/ Holding Tank $2,500 $3, Water Operating Controls - Replace (1) System $50,000 $60, Water Level Monitor - Replace (1) Transducer System $1,200 $1,500 Sewage Treatment System 810 Septic Tank - Pumped (1) Pump and Removal 5 0 $2,800 $3, Leach Field - Maintain/Repair (1) Set of Systems $3,000 $4, Sewer Lines - Replace/Repair Approx 4000 LF 10 6 $4,800 $6,000 School House 702 Roll-up Garage Door - Replace (1) Door $1,500 $1, School House Interiors - Remodel Approx 1740 GSF 15 5 $3,500 $5, School House - Repaint Approx 2550 GSF 10 4 $2,300 $2, Wood Siding/Trim - Repair 10% Approx 2550 GSF 10 6 $3,060 $3, Asphalt/Gravel Roof - Replace Approx 780 GSF 20 8 $3,120 $3, Comp Shingle Roof - Replace Approx 2100 GSF $10,500 $12, School House Foundation - Replace Approx 1740 GSF N/A 8 $50,000 $70, School Stairs - Replace Approx 140 GSF $2,800 $3, Total Funded Components Association Reserves SF LLC 10

16 Table 3: Fully Funded Balance Current Fully Cost Effective Useful Funded # Component Estimate X Age / Life = Balance Roads 201 Asphalt - Major Reconstruction $248,500 X 16 / 28 = $142, Asphalt - Repair $33,200 X 14 / 14 = $33, Asphalt - Slurry Seal $30,000 X 7 / 7 = $30, Mailbox Structure - Replace $2,750 X 4 / 20 = $ Street Signs - Replace $2,475 X 8 / 25 = $792 Water System 1703 Water Collection Vault - Maintain $65,500 X 18 / 50 = $23, Transport line - Replace/Repair 10% $16,950 X 7 / 15 = $7, Water Return Line - Repl/Repair 10% $3,495 X 10 / 15 = $2, Fire Hydrants - Overhaul 12% $1,100 X 2 / 5 = $ Water Storage Tank - Replace $125,000 X 20 / 50 = $50, Water Storage Tank - Clean/Inspect $2,500 X 5 / 10 = $1, Main Distribution Line 6" - Replace $123,500 X 22 / 80 = $33, Main Distribution Line 4"-Repl (n) $15,750 X 22 / 80 = $4, Main Distribution Line 4"-Repl (o) $31,500 X 62 / 80 = $24, Water Supply Laterals - Replace (a) $4,000 X 7 / 30 = $ Water Supply Laterals - Replace (b) $5,000 X 6 / 30 = $1, Water Supply Laterals - Replace (c) $5,000 X 5 / 30 = $ Water Supply Laterals - Replace (d) $5,000 X 4 / 30 = $ Water Supply Laterals - Replace (e) $5,000 X 3 / 30 = $ Water Supply Laterals - Replace (f) $5,000 X 2 / 30 = $ Water Supply Laterals - Replace (g) $5,000 X 1 / 30 = $ Water Supply Laterals - Replace (h) $5,000 X 30 / 30 = $5, Water Supply Laterals - Replace (i) $5,000 X 29 / 30 = $4, Sand Filters - Replace $11,250 X 0 / 15 = $ Micro Filters - Replace $6,600 X 5 / 10 = $3, Micro Filters - Replace $6,600 X 4 / 10 = $2, Chlorinator and Tank - Replace $2,800 X 5 / 15 = $ Water Operating Controls - Replace $55,000 X 0 / 20 = $ Water Level Monitor - Replace $1,350 X 0 / 10 = $0 Sewage Treatment System 810 Septic Tank - Pumped $3,000 X 5 / 5 = $3, Leach Field - Maintain/Repair $3,750 X 10 / 20 = $1, Sewer Lines - Replace/Repair $5,400 X 4 / 10 = $2,160 School House 702 Roll-up Garage Door - Replace $1,675 X 5 / 25 = $ School House Interiors - Remodel $4,250 X 10 / 15 = $2, School House - Repaint $2,525 X 6 / 10 = $1, Wood Siding/Trim - Repair 10% $3,370 X 4 / 10 = $1, Asphalt/Gravel Roof - Replace $3,435 X 12 / 20 = $2, Comp Shingle Roof - Replace $11,550 X 12 / 25 = $5, School House Foundation - Replace $60,000 X 0 / 0 = $6, School Stairs - Replace $3,080 X 4 / 20 = $616 $403,852 Association Reserves SF LLC 11

17 Table 4: Component Significance Current Useful Cost Deterioration Deterioration # Component Life Estimate Cost/yr Significance Roads 201 Asphalt - Major Reconstruction 28 $248,500 $8, % 202 Asphalt - Repair 14 $33,200 $2, % 203 Asphalt - Slurry Seal 7 $30,000 $4, % 404 Mailbox Structure - Replace 20 $2,750 $ % 1402 Street Signs - Replace 25 $2,475 $99 0.3% Water System 1703 Water Collection Vault - Maintain 50 $65,500 $1, % 1811 Transport line - Replace/Repair 10% 15 $16,950 $1, % 1811 Water Return Line - Repl/Repair 10% 15 $3,495 $ % 2557 Fire Hydrants - Overhaul 12% 5 $1,100 $ % 2573 Water Storage Tank - Replace 50 $125,000 $2, % 2574 Water Storage Tank - Clean/Inspect 10 $2,500 $ % 2581 Main Distribution Line 6" - Replace 80 $123,500 $1, % 2582 Main Distribution Line 4"-Repl (n) 80 $15,750 $ % 2582 Main Distribution Line 4"-Repl (o) 80 $31,500 $ % 2583 Water Supply Laterals - Replace (a) 30 $4,000 $ % 2583 Water Supply Laterals - Replace (b) 30 $5,000 $ % 2583 Water Supply Laterals - Replace (c) 30 $5,000 $ % 2583 Water Supply Laterals - Replace (d) 30 $5,000 $ % 2583 Water Supply Laterals - Replace (e) 30 $5,000 $ % 2583 Water Supply Laterals - Replace (f) 30 $5,000 $ % 2583 Water Supply Laterals - Replace (g) 30 $5,000 $ % 2583 Water Supply Laterals - Replace (h) 30 $5,000 $ % 2583 Water Supply Laterals - Replace (i) 30 $5,000 $ % 2650 Sand Filters - Replace 15 $11,250 $ % Micro Filters - Replace 10 $6,600 $ % Micro Filters - Replace 10 $6,600 $ % 2655 Chlorinator and Tank - Replace 15 $2,800 $ % 2670 Water Operating Controls - Replace 20 $55,000 $2, % 2671 Water Level Monitor - Replace 10 $1,350 $ % Sewage Treatment System 810 Septic Tank - Pumped 5 $3,000 $ % 1703 Leach Field - Maintain/Repair 20 $3,750 $ % 1825 Sewer Lines - Replace/Repair 10 $5,400 $ % School House 702 Roll-up Garage Door - Replace 25 $1,675 $67 0.2% 905 School House Interiors - Remodel 15 $4,250 $ % 1115 School House - Repaint 10 $2,525 $ % 1117 Wood Siding/Trim - Repair 10% 10 $3,370 $ % 1301 Asphalt/Gravel Roof - Replace 20 $3,435 $ % 1303 Comp Shingle Roof - Replace 25 $11,550 $ % 1955 School House Foundation - Replace N/A $60,000 $0 0.0% 1960 School Stairs - Replace 20 $3,080 $ % 40 Total Funded Components $33, % Association Reserves SF LLC 12

18 Table 5: 30-Year Reserve Plan Summary Fiscal Year Start: 04/01/14 Interest: 1.0% Inflation: 3.0% Reserve Fund Strength Calculations (All values as of Fiscal Year Start Date) Projected Reserve Balance Changes Starting Fully Special Loans or Reserve Funded Percent Assmt Reserve Special Interest Reserve Year Balance Balance Funded Risk Contribs. Assmts Income Expenses 2014 $66,000 $403, % High $48,000 $0 $547 $71, $43,347 $377, % High $50,400 $0 $663 $5, $89,259 $420, % High $52,920 $0 $1,163 $ $143,342 $470, % Med $55,566 $0 $1,713 $1, $199,419 $523, % Med $58,344 $0 $2,282 $2, $257,203 $577, % Med $61,262 $0 $2,776 $23, $298,235 $617, % Med $64,325 $0 $3,227 $18, $347,434 $669, % Med $66,254 $0 $3,638 $36, $380,430 $731, % Med $68,242 $0 $3,646 $103, $349,095 $690, % Med $70,289 $0 $3,860 $ $423,245 $756, % Med $72,398 $0 $4,542 $14, $485,536 $809, % Med $74,570 $0 $5,252 $ $565,358 $881, % Med $76,807 $0 $4,286 $354, $292,149 $591, % Med $79,111 $0 $3,239 $18, $355,922 $640, % Med $81,484 $0 $3,486 $99, $341,477 $609, % Med $83,929 $0 $3,669 $36, $392,697 $643, % Med $86,447 $0 $4,208 $34, $449,332 $682, % Med $89,040 $0 $4,941 $4, $539,222 $755, % Low $91,711 $0 $5,599 $55, $581,033 $778, % Low $94,463 $0 $6,312 $ $681,808 $862, % Low $97,297 $0 $6,714 $124, $661,612 $822, % Low $100,216 $0 $6,870 $55, $712,889 $852, % Low $103,222 $0 $7,680 $ $823,791 $943, % Low $106,319 $0 $8,591 $43, $895,183 $994, % Low $109,508 $0 $9,466 $15, $998,861 $1,078, % Low $112,794 $0 $10,392 $41, $1,080,380 $1,139, % Low $116,177 $0 $11,216 $43, $1,163,844 $1,202, % Low $119,663 $0 $12,237 $11, $1,284,638 $1,302, % Low $123,253 $0 $12,689 $166, $1,254,167 $1,248, % Low $126,950 $0 $13,178 $11,783 Association Reserves SF LLC 13

19 Table 6: 30-Year Income/Expense Detail (yrs 0 through 4) Fiscal Year Starting Reserve Balance $66,000 $43,347 $89,259 $143,342 $199,419 Annual Reserve Contribution $48,000 $50,400 $52,920 $55,566 $58,344 Recommended Special Assessments $0 $0 $0 $0 $0 Interest Earnings $547 $663 $1,163 $1,713 $2,282 Total Income $114,547 $94,409 $143,342 $200,621 $260,045 # Component Roads 201 Asphalt - Major Reconstruction $0 $0 $0 $0 $0 202 Asphalt - Repair $33,200 $0 $0 $0 $0 203 Asphalt - Slurry Seal $30,000 $0 $0 $0 $0 404 Mailbox Structure - Replace $0 $0 $0 $0 $ Street Signs - Replace $0 $0 $0 $0 $0 Water System 1703 Water Collection Vault - Maintain $0 $0 $0 $0 $ Transport line - Replace/Repair 10% $0 $0 $0 $0 $ Water Return Line - Repl/Repair 10% $0 $0 $0 $0 $ Fire Hydrants - Overhaul 12% $0 $0 $0 $1,202 $ Water Storage Tank - Replace $0 $0 $0 $0 $ Water Storage Tank - Clean/Inspect $0 $0 $0 $0 $ Main Distribution Line 6" - Replace $0 $0 $0 $0 $ Main Distribution Line 4"-Repl (n) $0 $0 $0 $0 $ Main Distribution Line 4"-Repl (o) $0 $0 $0 $0 $ Water Supply Laterals - Replace (a) $0 $0 $0 $0 $ Water Supply Laterals - Replace (b) $0 $0 $0 $0 $ Water Supply Laterals - Replace (c) $0 $0 $0 $0 $ Water Supply Laterals - Replace (d) $0 $0 $0 $0 $ Water Supply Laterals - Replace (e) $0 $0 $0 $0 $ Water Supply Laterals - Replace (f) $0 $0 $0 $0 $ Water Supply Laterals - Replace (g) $0 $0 $0 $0 $ Water Supply Laterals - Replace (h) $5,000 $0 $0 $0 $ Water Supply Laterals - Replace (i) $0 $5,150 $0 $0 $ Sand Filters - Replace $0 $0 $0 $0 $ Micro Filters - Replace $0 $0 $0 $0 $ Micro Filters - Replace $0 $0 $0 $0 $ Chlorinator and Tank - Replace $0 $0 $0 $0 $ Water Operating Controls - Replace $0 $0 $0 $0 $ Water Level Monitor - Replace $0 $0 $0 $0 $0 Sewage Treatment System 810 Septic Tank - Pumped $3,000 $0 $0 $0 $ Leach Field - Maintain/Repair $0 $0 $0 $0 $ Sewer Lines - Replace/Repair $0 $0 $0 $0 $0 School House 702 Roll-up Garage Door - Replace $0 $0 $0 $0 $0 905 School House Interiors - Remodel $0 $0 $0 $0 $ School House - Repaint $0 $0 $0 $0 $2,842 Association Reserves SF LLC 14

20 Table 6: 30-Year Income/Expense Detail (yrs 0 through 4) Fiscal Year Wood Siding/Trim - Repair 10% $0 $0 $0 $0 $ Asphalt/Gravel Roof - Replace $0 $0 $0 $0 $ Comp Shingle Roof - Replace $0 $0 $0 $0 $ School House Foundation - Replace $0 $0 $0 $0 $ School Stairs - Replace $0 $0 $0 $0 $0 Total Expenses $71,200 $5,150 $0 $1,202 $2,842 Ending Reserve Balance: $43,347 $89,259 $143,342 $199,419 $257,203 Association Reserves SF LLC 15

21 Table 6: 30-Year Income/Expense Detail (yrs 5 through 9) Fiscal Year Starting Reserve Balance $257,203 $298,235 $347,434 $380,430 $349,095 Annual Reserve Contribution $61,262 $64,325 $66,254 $68,242 $70,289 Recommended Special Assessments $0 $0 $0 $0 $0 Interest Earnings $2,776 $3,227 $3,638 $3,646 $3,860 Total Income $321,241 $365,787 $417,326 $452,318 $423,245 # Component Roads 201 Asphalt - Major Reconstruction $0 $0 $0 $0 $0 202 Asphalt - Repair $0 $0 $0 $0 $0 203 Asphalt - Slurry Seal $0 $0 $36,896 $0 $0 404 Mailbox Structure - Replace $0 $0 $0 $0 $ Street Signs - Replace $0 $0 $0 $0 $0 Water System 1703 Water Collection Vault - Maintain $0 $0 $0 $0 $ Transport line - Replace/Repair 10% $0 $0 $0 $21,472 $ Water Return Line - Repl/Repair 10% $4,052 $0 $0 $0 $ Fire Hydrants - Overhaul 12% $0 $0 $0 $1,393 $ Water Storage Tank - Replace $0 $0 $0 $0 $ Water Storage Tank - Clean/Inspect $2,898 $0 $0 $0 $ Main Distribution Line 6" - Replace $0 $0 $0 $0 $ Main Distribution Line 4"-Repl (n) $0 $0 $0 $0 $ Main Distribution Line 4"-Repl (o) $0 $0 $0 $0 $ Water Supply Laterals - Replace (a) $0 $0 $0 $0 $ Water Supply Laterals - Replace (b) $0 $0 $0 $0 $ Water Supply Laterals - Replace (c) $0 $0 $0 $0 $ Water Supply Laterals - Replace (d) $0 $0 $0 $0 $ Water Supply Laterals - Replace (e) $0 $0 $0 $0 $ Water Supply Laterals - Replace (f) $0 $0 $0 $0 $ Water Supply Laterals - Replace (g) $0 $0 $0 $0 $ Water Supply Laterals - Replace (h) $0 $0 $0 $0 $ Water Supply Laterals - Replace (i) $0 $0 $0 $0 $ Sand Filters - Replace $0 $0 $0 $0 $ Micro Filters - Replace $7,651 $0 $0 $0 $ Micro Filters - Replace $0 $7,881 $0 $0 $ Chlorinator and Tank - Replace $0 $0 $0 $0 $ Water Operating Controls - Replace $0 $0 $0 $0 $ Water Level Monitor - Replace $0 $0 $0 $0 $0 Sewage Treatment System 810 Septic Tank - Pumped $3,478 $0 $0 $0 $ Leach Field - Maintain/Repair $0 $0 $0 $0 $ Sewer Lines - Replace/Repair $0 $6,448 $0 $0 $0 School House 702 Roll-up Garage Door - Replace $0 $0 $0 $0 $0 905 School House Interiors - Remodel $4,927 $0 $0 $0 $ School House - Repaint $0 $0 $0 $0 $0 Association Reserves SF LLC 16

22 Table 6: 30-Year Income/Expense Detail (yrs 5 through 9) Fiscal Year Wood Siding/Trim - Repair 10% $0 $4,024 $0 $0 $ Asphalt/Gravel Roof - Replace $0 $0 $0 $4,351 $ Comp Shingle Roof - Replace $0 $0 $0 $0 $ School House Foundation - Replace $0 $0 $0 $76,006 $ School Stairs - Replace $0 $0 $0 $0 $0 Total Expenses $23,006 $18,353 $36,896 $103,223 $0 Ending Reserve Balance: $298,235 $347,434 $380,430 $349,095 $423,245 Association Reserves SF LLC 17

23 Table 6: 30-Year Income/Expense Detail (yrs 10 through 14) Fiscal Year Starting Reserve Balance $423,245 $485,536 $565,358 $292,149 $355,922 Annual Reserve Contribution $72,398 $74,570 $76,807 $79,111 $81,484 Recommended Special Assessments $0 $0 $0 $0 $0 Interest Earnings $4,542 $5,252 $4,286 $3,239 $3,486 Total Income $500,184 $565,358 $646,450 $374,499 $440,892 # Component Roads 201 Asphalt - Major Reconstruction $0 $0 $354,302 $0 $0 202 Asphalt - Repair $0 $0 $0 $0 $50, Asphalt - Slurry Seal $0 $0 $0 $0 $45, Mailbox Structure - Replace $0 $0 $0 $0 $ Street Signs - Replace $0 $0 $0 $0 $0 Water System 1703 Water Collection Vault - Maintain $0 $0 $0 $0 $ Transport line - Replace/Repair 10% $0 $0 $0 $0 $ Water Return Line - Repl/Repair 10% $0 $0 $0 $0 $ Fire Hydrants - Overhaul 12% $0 $0 $0 $1,615 $ Water Storage Tank - Replace $0 $0 $0 $0 $ Water Storage Tank - Clean/Inspect $0 $0 $0 $0 $ Main Distribution Line 6" - Replace $0 $0 $0 $0 $ Main Distribution Line 4"-Repl (n) $0 $0 $0 $0 $ Main Distribution Line 4"-Repl (o) $0 $0 $0 $0 $ Water Supply Laterals - Replace (a) $0 $0 $0 $0 $ Water Supply Laterals - Replace (b) $0 $0 $0 $0 $ Water Supply Laterals - Replace (c) $0 $0 $0 $0 $ Water Supply Laterals - Replace (d) $0 $0 $0 $0 $ Water Supply Laterals - Replace (e) $0 $0 $0 $0 $ Water Supply Laterals - Replace (f) $0 $0 $0 $0 $ Water Supply Laterals - Replace (g) $0 $0 $0 $0 $ Water Supply Laterals - Replace (h) $0 $0 $0 $0 $ Water Supply Laterals - Replace (i) $0 $0 $0 $0 $ Sand Filters - Replace $0 $0 $0 $0 $ Micro Filters - Replace $0 $0 $0 $0 $ Micro Filters - Replace $0 $0 $0 $0 $ Chlorinator and Tank - Replace $3,763 $0 $0 $0 $ Water Operating Controls - Replace $0 $0 $0 $0 $ Water Level Monitor - Replace $1,814 $0 $0 $0 $0 Sewage Treatment System 810 Septic Tank - Pumped $4,032 $0 $0 $0 $ Leach Field - Maintain/Repair $5,040 $0 $0 $0 $ Sewer Lines - Replace/Repair $0 $0 $0 $0 $0 School House 702 Roll-up Garage Door - Replace $0 $0 $0 $0 $0 905 School House Interiors - Remodel $0 $0 $0 $0 $ School House - Repaint $0 $0 $0 $0 $3,819 Association Reserves SF LLC 18

24 Table 6: 30-Year Income/Expense Detail (yrs 10 through 14) Fiscal Year Wood Siding/Trim - Repair 10% $0 $0 $0 $0 $ Asphalt/Gravel Roof - Replace $0 $0 $0 $0 $ Comp Shingle Roof - Replace $0 $0 $0 $16,962 $ School House Foundation - Replace $0 $0 $0 $0 $ School Stairs - Replace $0 $0 $0 $0 $0 Total Expenses $14,649 $0 $354,302 $18,577 $99,415 Ending Reserve Balance: $485,536 $565,358 $292,149 $355,922 $341,477 Association Reserves SF LLC 19

25 Table 6: 30-Year Income/Expense Detail (yrs 15 through 19) Fiscal Year Starting Reserve Balance $341,477 $392,697 $449,332 $539,222 $581,033 Annual Reserve Contribution $83,929 $86,447 $89,040 $91,711 $94,463 Recommended Special Assessments $0 $0 $0 $0 $0 Interest Earnings $3,669 $4,208 $4,941 $5,599 $6,312 Total Income $429,075 $483,352 $543,313 $636,533 $681,808 # Component Roads 201 Asphalt - Major Reconstruction $0 $0 $0 $0 $0 202 Asphalt - Repair $0 $0 $0 $0 $0 203 Asphalt - Slurry Seal $0 $0 $0 $0 $0 404 Mailbox Structure - Replace $0 $4,413 $0 $0 $ Street Signs - Replace $0 $0 $4,091 $0 $0 Water System 1703 Water Collection Vault - Maintain $0 $0 $0 $0 $ Transport line - Replace/Repair 10% $0 $0 $0 $0 $ Water Return Line - Repl/Repair 10% $0 $0 $0 $0 $ Fire Hydrants - Overhaul 12% $0 $0 $0 $1,873 $ Water Storage Tank - Replace $0 $0 $0 $0 $ Water Storage Tank - Clean/Inspect $3,895 $0 $0 $0 $ Main Distribution Line 6" - Replace $0 $0 $0 $0 $ Main Distribution Line 4"-Repl (n) $0 $0 $0 $0 $ Main Distribution Line 4"-Repl (o) $0 $0 $0 $53,627 $ Water Supply Laterals - Replace (a) $0 $0 $0 $0 $ Water Supply Laterals - Replace (b) $0 $0 $0 $0 $ Water Supply Laterals - Replace (c) $0 $0 $0 $0 $ Water Supply Laterals - Replace (d) $0 $0 $0 $0 $ Water Supply Laterals - Replace (e) $0 $0 $0 $0 $ Water Supply Laterals - Replace (f) $0 $0 $0 $0 $ Water Supply Laterals - Replace (g) $0 $0 $0 $0 $ Water Supply Laterals - Replace (h) $0 $0 $0 $0 $ Water Supply Laterals - Replace (i) $0 $0 $0 $0 $ Sand Filters - Replace $17,527 $0 $0 $0 $ Micro Filters - Replace $10,283 $0 $0 $0 $ Micro Filters - Replace $0 $10,591 $0 $0 $ Chlorinator and Tank - Replace $0 $0 $0 $0 $ Water Operating Controls - Replace $0 $0 $0 $0 $ Water Level Monitor - Replace $0 $0 $0 $0 $0 Sewage Treatment System 810 Septic Tank - Pumped $4,674 $0 $0 $0 $ Leach Field - Maintain/Repair $0 $0 $0 $0 $ Sewer Lines - Replace/Repair $0 $8,665 $0 $0 $0 School House 702 Roll-up Garage Door - Replace $0 $0 $0 $0 $0 905 School House Interiors - Remodel $0 $0 $0 $0 $ School House - Repaint $0 $0 $0 $0 $0 Association Reserves SF LLC 20

26 Table 6: 30-Year Income/Expense Detail (yrs 15 through 19) Fiscal Year Wood Siding/Trim - Repair 10% $0 $5,408 $0 $0 $ Asphalt/Gravel Roof - Replace $0 $0 $0 $0 $ Comp Shingle Roof - Replace $0 $0 $0 $0 $ School House Foundation - Replace $0 $0 $0 $0 $ School Stairs - Replace $0 $4,942 $0 $0 $0 Total Expenses $36,379 $34,020 $4,091 $55,499 $0 Ending Reserve Balance: $392,697 $449,332 $539,222 $581,033 $681,808 Association Reserves SF LLC 21

27 Table 6: 30-Year Income/Expense Detail (yrs 20 through 24) Fiscal Year Starting Reserve Balance $681,808 $661,612 $712,889 $823,791 $895,183 Annual Reserve Contribution $97,297 $100,216 $103,222 $106,319 $109,508 Recommended Special Assessments $0 $0 $0 $0 $0 Interest Earnings $6,714 $6,870 $7,680 $8,591 $9,466 Total Income $785,819 $768,698 $823,791 $938,701 $1,014,158 # Component Roads 201 Asphalt - Major Reconstruction $0 $0 $0 $0 $0 202 Asphalt - Repair $0 $0 $0 $0 $0 203 Asphalt - Slurry Seal $0 $55,809 $0 $0 $0 404 Mailbox Structure - Replace $0 $0 $0 $0 $ Street Signs - Replace $0 $0 $0 $0 $0 Water System 1703 Water Collection Vault - Maintain $0 $0 $0 $0 $ Transport line - Replace/Repair 10% $0 $0 $0 $33,452 $ Water Return Line - Repl/Repair 10% $6,312 $0 $0 $0 $ Fire Hydrants - Overhaul 12% $0 $0 $0 $2,171 $ Water Storage Tank - Replace $0 $0 $0 $0 $ Water Storage Tank - Clean/Inspect $0 $0 $0 $0 $ Main Distribution Line 6" - Replace $0 $0 $0 $0 $ Main Distribution Line 4"-Repl (n) $0 $0 $0 $0 $ Main Distribution Line 4"-Repl (o) $0 $0 $0 $0 $ Water Supply Laterals - Replace (a) $0 $0 $0 $7,894 $ Water Supply Laterals - Replace (b) $0 $0 $0 $0 $10, Water Supply Laterals - Replace (c) $0 $0 $0 $0 $ Water Supply Laterals - Replace (d) $0 $0 $0 $0 $ Water Supply Laterals - Replace (e) $0 $0 $0 $0 $ Water Supply Laterals - Replace (f) $0 $0 $0 $0 $ Water Supply Laterals - Replace (g) $0 $0 $0 $0 $ Water Supply Laterals - Replace (h) $0 $0 $0 $0 $ Water Supply Laterals - Replace (i) $0 $0 $0 $0 $ Sand Filters - Replace $0 $0 $0 $0 $ Micro Filters - Replace $0 $0 $0 $0 $ Micro Filters - Replace $0 $0 $0 $0 $ Chlorinator and Tank - Replace $0 $0 $0 $0 $ Water Operating Controls - Replace $99,336 $0 $0 $0 $ Water Level Monitor - Replace $2,438 $0 $0 $0 $0 Sewage Treatment System 810 Septic Tank - Pumped $5,418 $0 $0 $0 $ Leach Field - Maintain/Repair $0 $0 $0 $0 $ Sewer Lines - Replace/Repair $0 $0 $0 $0 $0 School House 702 Roll-up Garage Door - Replace $3,025 $0 $0 $0 $0 905 School House Interiors - Remodel $7,676 $0 $0 $0 $ School House - Repaint $0 $0 $0 $0 $5,133 Association Reserves SF LLC 22

28 Table 6: 30-Year Income/Expense Detail (yrs 20 through 24) Fiscal Year Wood Siding/Trim - Repair 10% $0 $0 $0 $0 $ Asphalt/Gravel Roof - Replace $0 $0 $0 $0 $ Comp Shingle Roof - Replace $0 $0 $0 $0 $ School House Foundation - Replace $0 $0 $0 $0 $ School Stairs - Replace $0 $0 $0 $0 $0 Total Expenses $124,206 $55,809 $0 $43,518 $15,297 Ending Reserve Balance: $661,612 $712,889 $823,791 $895,183 $998,861 Association Reserves SF LLC 23

29 Table 6: 30-Year Income/Expense Detail (yrs 25 through 29) Fiscal Year Starting Reserve Balance $998,861 $1,080,380 $1,163,844 $1,284,638 $1,254,167 Annual Reserve Contribution $112,794 $116,177 $119,663 $123,253 $126,950 Recommended Special Assessments $0 $0 $0 $0 $0 Interest Earnings $10,392 $11,216 $12,237 $12,689 $13,178 Total Income $1,122,047 $1,207,774 $1,295,744 $1,420,579 $1,394,294 # Component Roads 201 Asphalt - Major Reconstruction $0 $0 $0 $0 $0 202 Asphalt - Repair $0 $0 $0 $75,959 $0 203 Asphalt - Slurry Seal $0 $0 $0 $68,638 $0 404 Mailbox Structure - Replace $0 $0 $0 $0 $ Street Signs - Replace $0 $0 $0 $0 $0 Water System 1703 Water Collection Vault - Maintain $0 $0 $0 $0 $ Transport line - Replace/Repair 10% $0 $0 $0 $0 $ Water Return Line - Repl/Repair 10% $0 $0 $0 $0 $ Fire Hydrants - Overhaul 12% $0 $0 $0 $2,517 $ Water Storage Tank - Replace $0 $0 $0 $0 $ Water Storage Tank - Clean/Inspect $5,234 $0 $0 $0 $ Main Distribution Line 6" - Replace $0 $0 $0 $0 $ Main Distribution Line 4"-Repl (n) $0 $0 $0 $0 $ Main Distribution Line 4"-Repl (o) $0 $0 $0 $0 $ Water Supply Laterals - Replace (a) $0 $0 $0 $0 $ Water Supply Laterals - Replace (b) $0 $0 $0 $0 $ Water Supply Laterals - Replace (c) $10,469 $0 $0 $0 $ Water Supply Laterals - Replace (d) $0 $10,783 $0 $0 $ Water Supply Laterals - Replace (e) $0 $0 $11,106 $0 $ Water Supply Laterals - Replace (f) $0 $0 $0 $11,440 $ Water Supply Laterals - Replace (g) $0 $0 $0 $0 $11, Water Supply Laterals - Replace (h) $0 $0 $0 $0 $ Water Supply Laterals - Replace (i) $0 $0 $0 $0 $ Sand Filters - Replace $0 $0 $0 $0 $ Micro Filters - Replace $13,819 $0 $0 $0 $ Micro Filters - Replace $0 $14,234 $0 $0 $ Chlorinator and Tank - Replace $5,863 $0 $0 $0 $ Water Operating Controls - Replace $0 $0 $0 $0 $ Water Level Monitor - Replace $0 $0 $0 $0 $0 Sewage Treatment System 810 Septic Tank - Pumped $6,281 $0 $0 $0 $ Leach Field - Maintain/Repair $0 $0 $0 $0 $ Sewer Lines - Replace/Repair $0 $11,646 $0 $0 $0 School House 702 Roll-up Garage Door - Replace $0 $0 $0 $0 $0 905 School House Interiors - Remodel $0 $0 $0 $0 $ School House - Repaint $0 $0 $0 $0 $0 Association Reserves SF LLC 24

30 Table 6: 30-Year Income/Expense Detail (yrs 25 through 29) Fiscal Year Wood Siding/Trim - Repair 10% $0 $7,268 $0 $0 $ Asphalt/Gravel Roof - Replace $0 $0 $0 $7,859 $ Comp Shingle Roof - Replace $0 $0 $0 $0 $ School House Foundation - Replace $0 $0 $0 $0 $ School Stairs - Replace $0 $0 $0 $0 $0 Total Expenses $41,666 $43,930 $11,106 $166,412 $11,783 Ending Reserve Balance: $1,080,380 $1,163,844 $1,284,638 $1,254,167 $1,382,512 Association Reserves SF LLC 25

31 Assoc Accuracy, Limitations, and Disclosures Because we have no control over future events, we cannot claim that all the events we anticipate will occur as planned. We expect that inflationary trends will continue, and we expect that financial institutions will provide interest earnings on funds on-deposit. We believe that reasonable estimates for these figures are much more accurate than ignoring these economic realities. The things we can control are measurements, which we attempt to establish within 5% accuracy. Your starting Reserve Balance and current Reserve interest earnings are also numbers that can be identified with a high degree of certainty. These figures have been provided to us, and were not confirmed by our independent research. Our projections assume a stable economic environment and lack of natural disasters. Because both the physical status and financial status of the association change each year, this Reserve Study is by nature a one-year document. This information can and should be adjusted annually as part of the Reserve Study Update process so that more accurate estimates can be reflected in the Reserve plan. Reality often differs from even the best assumptions due to changing economic factors, physical factors, or ownership expectations. Because many years of financial preparation help the preparation for large expenses, this Report shows expenses for the next 30 years. We fully expect a number of adjustments will be necessary through the interim years to both the cost and timing of distant expense projections. It is our recommendation and that of the American Institute of Certified Public Accountants (AICPA) that your Reserve Study be updated annually. Association Reserves SF, LLC, and its employees have no ownership, management, or other business relationships with the client other than this Reserve Study engagement. Derek Eckert, R.S., company president, is a credentialed Reserve Specialist (#114). All work done by Association Reserves is performed under his Responsible Charge. There are no material issues to our knowledge that have not been disclosed to the client that would cause a distortion of the association s situation. We have relied upon the client to provide the current (or projected) Reserve Balance, the estimated net-after-tax current rate of interest earnings, and to indicate if those earnings accrue to the Reserve Fund. In addition, we have considered the association s representation of current and historical Reserve projects reliable, and we have considered the representations made by its vendors and suppliers to also be accurate and reliable. Component quantities indicated in this Report were derived from the prior Reserve Study, unless otherwise noted in our Site Inspection Notes comments. No destructive or intrusive testing was performed, nor should the site inspection be assumed to be anything other than for budget purposes. Association Reserves liability in any matter involving this Reserve Study is limited to our Fee for services rendered. Association Reserves SF LLC 26

32 Assoc Terms and Definitions BTU DIA GSF GSY HP LF British Thermal Unit (a standard unit of energy) Diameter Gross Square Feet (area). Equivalent to Square Feet Gross Square Yards (area). Equivalent to Square Yards Horsepower Linear Feet (length) Effective Age: The difference between Useful Life and Remaining Useful Life. Note that this is not necessarily equivalent to the chronological age of the component. Fully Funded Balance (FFB): The value of the deterioration of the Reserve Components. This is the fraction of life used up of each component multiplied by its estimated Current Replacement. While calculated for each component, it is summed together for an association total. Inflation: Interest: FFB = (Current Cost X Effective Age) / Useful Life Cost factors are adjusted for inflation at the rate defined in the Executive Summary and compounded annually. These increasing costs can be seen as you follow the recurring cycles of a component on Table 6. Interest earnings on Reserve Funds are calculated using the average balance for the year (taking into account income and expenses through the year) and compounded monthly using the rate defined in the Executive Summary. Annual interest earning assumption appears in the Executive Summary. Percent Funded: The ratio, at a particular point in time (the first day of the Fiscal Year), of the actual (or projected) Reserve Balance to the Fully Funded Balance, expressed as a percentage. Remaining Useful Life (RUL): The estimated time, in years, that a common area component can be expected to continue to serve its intended function. Useful Life (UL): The estimated time, in years, that a common area component can be expected to serve its intended function. Association Reserves SF LLC 27

33 Assoc Component Details Association Reserves SF LLC 28

34 Association Reserves -SF, LLC Client: 26862A Floriston Property - Roads Comp # : 201 Asphalt - Major Reconstruction Location : Association streets History : Installed with asphalt in 1998/99 Quantity: Approx GSF Component Details Evaluation : Resurfaced periodically (every years), the asphalt should not require complete reconstruction. If cracking and deterioration become so severe that asphalt base becomes compromised, it may no longer be 28 years 12 years Best Case: $221,000 Worst Case: $276,000 Lower allowance for major reconstruction Comp # : 202 Asphalt - Repair Location : Association streets History : Cost Source: ARSF Cost Database Higher allowance for major reconstruction Quantity: Approx GSF Evaluation : Overall declining condition noted with significant raveling (loss of binder) damage or deterioration observed. We recommend having surface slurry sealed and repaired regularly as directed in component #203 for maximum design life. Even with ordinary care and maintenance, plan for eventual large scale resurface at roughly the time frame below. As timing draws nearer, consult with asphalt vendor/consultant for recommendations and complete scope. As routine maintenance, keep roadway clean, free of debris and well drained; fill/seal cracks (hot rubberized crack fill) to prevent water from penetrating into the sub-base and accelerating damage. 14 years 0 years Best Case: $29,500 Worst Case: $36,900 Lower allowance to repair Higher allowance to repair Cost Source: ARSF Cost Database June 30,2014 Page 1 of 4

35 Association Reserves -SF, LLC Client: 26862A Floriston Property - Roads Comp # : 203 Asphalt - Slurry Seal Location : Association streets History : Has not been slurry sealed since 1999 Quantity: Approx GSF Component Details Evaluation : Currently dry and faded. In need of a slurry seal at this time. If slurry sealed regularly (every 5-7 years), you will be able to prolong the need for complete reconstruction. 7 years 0 years Best Case: $25,000 Worst Case: $35,000 Lower allowance to reseal Higher allowance to reseal Cost Source: Estimate Provided by Client Comp # : 209 Tunnels - Replace/Repair Quantity: (2) Tunnels Location : At entrance Funded? : No These are not the Floriston Property Associations responsibility, no funding needed. History : Evaluation : Best Case: Cost Source: Worst Case: June 30,2014 Page 2 of 4

36 Association Reserves -SF, LLC Client: 26862A Floriston Property - Roads Comp # : 320 Pole Lights - Replace Quantity: (3) Fixtures Location : Adjacent to streets Funded? : No These are not the responsibility of the HOA. No funding allocated. History : Evaluation : Component Details Best Case: Cost Source: Worst Case: Comp # : 403 Mailboxes - Replace Quantity: (3) Kiosk Location : At entrance Funded? : No The post office takes care of these, they are not the responsibility of the HOA. No Reserve funding allocated. History : Evaluation : Best Case: Cost Source: Worst Case: June 30,2014 Page 3 of 4

37 Association Reserves -SF, LLC Component Details Client: 26862A Floriston Property - Roads Comp # : 404 Mailbox Structure - Replace Quantity: Approx 100 GSF Location : At entrance History : Evaluation : Good condition. Sturdy and intact. Pressure treated wood supports. Best to plan for future replacement. 20 years 16 years Best Case: $2,500 Worst Case: $3,000 Lower allowance to replace Comp # : 1402 Street Signs - Replace Location : Adjacent to streets History : Replaced in 2006 Cost Source: ARSF Cost Database Higher allowance to replace Quantity: (9) Post w/ Signs Evaluation : Legible condition with no significant damage/deterioration noted. Plan for regular cycles of repainting/refinishing at the intervals below to maintain appearance. As routine maintenance, inspect regularly, clean/touch up for appearance and repair from operating budget. 25 years 17 years Best Case: $2,250 Worst Case: $2,700 Lower allowance to replace Higher allowance to replace Cost Source: ARSF Cost Database June 30,2014 Page 4 of 4

38 Association Reserves -SF, LLC Client: 26862B Floriston Property - Water System Comp # : 1701 Water Treatment Plant - Maintain Quantity: (1) Pump house Location : Funded? : No This plant and pump house has an indefinite life. Replace components and pumps as needed. History : Built in 2001 & additional upgrades in Component Details Evaluation : Has several Filters canisters made of stainless steal, connected to 80 PVC pipe. Inspect plant for signs of leakage or corrosion. Manually operate all valves on facility. Best Case: Cost Source: Worst Case: Comp # : 1703 Water Collection Vault - Maintain Location : Fish and Game Property History : Reconstructed in Quantity: Approx 6'x6'x12' Evaluation : "V" shaped trench, lined with cinder blocks and placed on sides to form a conduit that terminates into a collection box. Build in 1997 cost $47,000. A recent inspection of the facility indicates settling of the material over the collection conduit trenches. Vegetation continues to encroach around the facility. Insect V trench cover for foreign materials. Remove all vegetation and prioritize due East of the collection vault. 50 years 32 years Photo Not Available Best Case: $58,000 Worst Case: $73,000 Lower allowance to maintain Higher allowance to maintain Cost Source: Cost History, plus Inflation June 30,2014 Page 1 of 14

39 Association Reserves -SF, LLC Client: 26862B Floriston Property - Water System Comp # : 1811 Transport line - Replace/Repair 10% Quantity: Approx 4400 LF Location : Underground, between the pump house and the holding tanks. History : Construction in 1963, additional 900 LF was replaced in 2005 Component Details Evaluation : Spring water transport line, constructed in " galvanized pipe. Perform annual gravity test. Manually operate all valves on the system. 15 years 8 years Photo Not Available Best Case: $15,400 Worst Case: $18,500 Lower estimate to replace/repair (10%) Higher estimate to replace/repair (10%) Cost Source: ARSF Cost Database Comp # : 1811 Water Return Line - Repl/Repair 10% Quantity: Approx 890 LF Location : Underground, between the pump house and the holding tanks. History : Constructed in Evaluation : No significant problems reported, such as; widespread corrosion, sediment, pressure, leaks or occlusions at this time. This pipeline was constructed in 2005, and it is made of 4" C-900 plastic pipe,. It transports treated water to the storage tanks. 15 years 5 years Photo Not Available Best Case: $3,100 Worst Case: $3,890 Lower estimate to replace/repair (10%) Higher estimate to replace/repair (10%) Cost Source: ARSF Cost Database June 30,2014 Page 2 of 14

40 Association Reserves -SF, LLC Client: 26862B Floriston Property - Water System Comp # : 2557 Fire Hydrants - Overhaul 12% Location : Along side roads History : Installed in 1997 Quantity: (8) Hydrants Component Details Evaluation : Recent observation shows vegetation is encroaching around some units affecting visibility and ease of operation. Remove vegetation for a minimum of 10 feet around hydrants. Inspect from impact and top off with mineral oil lubricant. Manually operate all street and main valves cleaning calve boxes as necessary. 5 years 3 years Best Case: $1,000 Worst Case: $1,200 Lower allowance to modernize Higher allowance to modernize Cost Source: ARSF Cost Database Comp # : 2573 Water Storage Tank - Replace Location : Top of hill History : Installed in 1995 Evaluation : Good overall condition. No issues at this time. Quantity: (1) 60,000 Gal Tank 50 years 30 years Best Case: $100,000 Worst Case: $150,000 Lower allowance to replace Higher allowance to replace Cost Source: Research with Local Vendor/Contractor June 30,2014 Page 3 of 14

41 Association Reserves -SF, LLC Component Details Client: 26862B Floriston Property - Water System Comp # : 2574 Water Storage Tank - Clean/Inspect Quantity: (1) 60,000 Gal Tank Location : Top of hill History : Evaluation : A vendor from Oregon comes out and either inspects the tank with scuba gear or drains the tank and inspects it. 10 years 5 years Best Case: $2,000 Worst Case: $3,000 Lower allowance to clean/inspect Higher allowance to clean/inspect Cost Source: ARSF Cost Database Comp # : 2575 Auxiliary Storage Tank - Replace Quantity: (1) 5,000 Gal Tank Location : Top of hill Funded? : No This tank is used as a backup, no expectation to replace this tank. History : Installed in 1979 Evaluation : Best Case: Cost Source: Worst Case: June 30,2014 Page 4 of 14

42 Association Reserves -SF, LLC Client: 26862B Floriston Property - Water System Comp # : 2581 Main Distribution Line 6" - Replace Location : Underground History : Quantity: Approx 2800 LF Evaluation : Original constructed of " asbestos concrete pipe was replaced in 1995 with Poly pipe. Note: plastic pipe is the new age technology used when replacing lines. Component Details 80 years 58 years Photo Not Available Best Case: $112,000 Worst Case: $135,000 Lower allowance to replace Higher allowance to replace Cost Source: ARSF Cost Database Comp # : 2582 Main Distribution Line 4"-Repl (n) Location : Underground, runs between the town History : 1993 Evaluation : This line was replaced with 4"c-900 plastic pipe. Quantity: Approx 400 LF 80 years 58 years Photo Not Available Best Case: $14,000 Worst Case: $17,500 Lower allowance to replace Higher allowance to replace Cost Source: ARSF Cost Database June 30,2014 Page 5 of 14

43 Association Reserves -SF, LLC Client: 26862B Floriston Property - Water System Comp # : 2582 Main Distribution Line 4"-Repl (o) Location : Underground, runs between the town History : Original construction from 1963 Quantity: Approx 800 LF Component Details Evaluation : These are the original water supply pipes. These lines run off of the 6" pipes and feed the homes in-between the town. These pipes are asbestos concrete pipe. An inspection of the 4" asbestos concrete pipe, conducted in 2008 shows no signs of corrosion inside or outside the pipes. Anticipate the need to replace these pipes with new age technology piping in the next years. 80 years 18 years Photo Not Available Best Case: $28,000 Worst Case: $35,000 Lower allowance to replace Higher allowance to replace Cost Source: ARSF Cost Database Comp # : 2583 Water Supply Laterals - Replace (a) Quantity: (4 of 44) Laterals Location : Connect the water supply lines to the homes History : Evaluation : The association has project history of replacing 5 per year. 30 years 23 years Photo Not Available Best Case: $3,500 Worst Case: $4,500 Lower allowance to replace Higher allowance to replace Cost Source: Client Cost History June 30,2014 Page 6 of 14

44 Association Reserves -SF, LLC Component Details Client: 26862B Floriston Property - Water System Comp # : 2583 Water Supply Laterals - Replace (b) Quantity: (5 of 44) Laterals Location : Connect the water supply lines to the homes History : Evaluation : The association has project history of replacing 5 per year. 30 years 24 years Photo Not Available Best Case: $4,500 Worst Case: $5,500 Lower allowance to replace Higher allowance to replace Cost Source: Client Cost History Comp # : 2583 Water Supply Laterals - Replace (c) Quantity: (5 of 44) Laterals Location : Connect the water supply lines to the homes History : Evaluation : The association has project history of replacing 5 per year. 30 years 25 years Photo Not Available Best Case: $4,500 Worst Case: $5,500 Lower allowance to replace Higher allowance to replace Cost Source: Client Cost History June 30,2014 Page 7 of 14

45 Association Reserves -SF, LLC Component Details Client: 26862B Floriston Property - Water System Comp # : 2583 Water Supply Laterals - Replace (d) Quantity: (5 of 44) Laterals Location : Connect the water supply lines to the homes History : Evaluation : The association has project history of replacing 5 per year. 30 years 26 years Photo Not Available Best Case: $4,500 Worst Case: $5,500 Lower allowance to replace Higher allowance to replace Cost Source: Client Cost History Comp # : 2583 Water Supply Laterals - Replace (e) Quantity: (5 of 44) Laterals Location : Connect the water supply lines to the homes History : Evaluation : The association has project history of replacing 5 per year. 30 years 27 years Photo Not Available Best Case: $4,500 Worst Case: $5,500 Lower allowance to replace Higher allowance to replace Cost Source: Client Cost History June 30,2014 Page 8 of 14

46 Association Reserves -SF, LLC Component Details Client: 26862B Floriston Property - Water System Comp # : 2583 Water Supply Laterals - Replace (f) Quantity: (5 of 44) Laterals Location : Connect the water supply lines to the homes History : Evaluation : The association has project history of replacing 5 per year. 30 years 28 years Photo Not Available Best Case: $4,500 Worst Case: $5,500 Lower allowance to replace Higher allowance to replace Cost Source: Client Cost History Comp # : 2583 Water Supply Laterals - Replace (g) Quantity: (5 of 44) Laterals Location : Connect the water supply lines to the homes History : Evaluation : The association has project history of replacing 5 per year. 30 years 29 years Photo Not Available Best Case: $4,500 Worst Case: $5,500 Lower allowance to replace Higher allowance to replace Cost Source: Client Cost History June 30,2014 Page 9 of 14

47 Association Reserves -SF, LLC Component Details Client: 26862B Floriston Property - Water System Comp # : 2583 Water Supply Laterals - Replace (h) Quantity: (5 of 44) Laterals Location : Connect the water supply lines to the homes History : Evaluation : The association has project history of replacing 5 per year. 30 years 0 years Photo Not Available Best Case: $4,500 Worst Case: $5,500 Lower allowance to replace Higher allowance to replace Cost Source: Client Cost History Comp # : 2583 Water Supply Laterals - Replace (i) Quantity: (5 of 44) Laterals Location : Connect the water supply lines to the homes History : Evaluation : The association has project history of replacing 5 per year. 30 years 1 years Photo Not Available Best Case: $4,500 Worst Case: $5,500 Lower allowance to replace Higher allowance to replace Cost Source: Client Cost History June 30,2014 Page 10 of 14

48 Association Reserves -SF, LLC Client: 26862B Floriston Property - Water System Comp # : 2650 Sand Filters - Replace Location : Pump house History : Scheduled to be installed in 2015 Quantity: (2) 3' X 7' Filters Component Details Evaluation : Original installation will be installed and paid for as part of a grant. Once installed it will be the associations responsibility to replace 15 years 15 years Photo Not Available Best Case: $10,000 Worst Case: $12,500 Lower allowance to replace Higher allowance to replace Cost Source: ARSF Cost Database Comp # : Micro Filter - Replace Quantity: (1) Filter Location : Pump house Funded? : No This filter will be replaced by sand filters that will be installed in History : Evaluation : Best Case: Cost Source: Worst Case: June 30,2014 Page 11 of 14

49 Association Reserves -SF, LLC Client: 26862B Floriston Property - Water System Comp # : Micro Filters - Replace Quantity: (3) Filters Location : Pump house History : 2004 Manufacture date, installed in 2010 Evaluation : S/N: 20452, 20453, Good condition. No issues at this time. Component Details 10 years 5 years Best Case: $6,000 Worst Case: $7,200 Lower allowance to replace Higher allowance to replace Cost Source: ARSF Cost Database Comp # : Micro Filters - Replace Quantity: (3) Filters Location : Pump house History : 2009 Manufacture date, installed in 2010/11 Evaluation : S/N: 23616, 23615, Good condition. No issues at this time. 10 years 6 years Best Case: $6,000 Worst Case: $7,200 Lower allowance to replace Higher allowance to replace Cost Source: ARSF Cost Database June 30,2014 Page 12 of 14

50 Association Reserves -SF, LLC Component Details Client: 26862B Floriston Property - Water System Comp # : 2655 Chlorinator and Tank - Replace Quantity: (1)System w/ Holding Tank Location : Pump house History : Evaluation : Good condition. No issues at this time. Tank should last 10+ yrs. 15 years 10 years Best Case: $2,500 Worst Case: $3,100 Lower allowance to replace Comp # : 2670 Water Operating Controls - Replace Location : Pump house History : Installing a Scada System in 2015 Cost Source: ARSF Cost Database Higher allowance to replace Quantity: (1) System Evaluation : This system is currently offline. In 2015 they plan to install a Scada System, initial funding for this will come from a government grant. 20 years 20 years Best Case: $50,000 Worst Case: $60,000 Lower allowance to replace Higher allowance to replace Cost Source: ARSF Cost Database June 30,2014 Page 13 of 14

51 Association Reserves -SF, LLC Client: 26862B Floriston Property - Water System Comp # : 2671 Water Level Monitor - Replace Location : Pump house History : Installing a Scada System in 2015 Quantity: (1) Transducer System Component Details Evaluation : In 2015 they plan to install a Scada System, initial funding for this will come from a government grant. The water level monitoring system will be replaced as part of the Scada upgrades. 10 years 10 years Best Case: $1,200 Worst Case: $1,500 Lower allowance to replace Higher allowance to replace Cost Source: ARSF Cost Database June 30,2014 Page 14 of 14

52 Association Reserves -SF, LLC Client: 26862C Floriston Property - Sewage System Component Details Comp # : 805 Septic Tanks - Replace Quantity: (2) Tanks Location : Funded? : No These tanks are made up of precast concrete, no expectation to replace these in the near future. History : Main in 1988, additional tank in 2004 Evaluation : Recent inspections have shown no signs of deterioration. Although deferred maintenance to the tanks is unlikely to affect their lifespan, it will affect downstream components. Inspect tanks for excessive build up of solids and evaluate pumping schedule. Best Case: Cost Source: Worst Case: Comp # : 810 Septic Tank - Pumped Location : Bottom of the hill History : Quantity: (1) Pump and Removal Evaluation : Septic tanks get pumped every 4-6 years. Recent inspections have shown no signs of deterioration. Although deferred maintenance to the tanks is unlikely to affect their lifespan, it will affect downstream components. Inspect tanks for excessive build up of solids and evaluate pumping schedule. 5 years 0 years Best Case: $2,800 Worst Case: $3,200 Lower allowance to be pumped Higher allowance to be pumped Cost Source: Client Cost History June 30,2014 Page 1 of 3

53 Association Reserves -SF, LLC Client: 26862C Floriston Property - Sewage System Comp # : 1703 Leach Field - Maintain/Repair Location : At bottom of hill History : Reconstructed in Quantity: (1) Set of Systems Component Details Evaluation : Its current design is a very effective infiltrator system. A recent inspection determined the system to be running at less than 25% of capacity. 1. Inspect all monitoring ports for build up or signs of a surge, an indicator of an up stream problem. 2. Recommend walking area during the dry season looking for unusual green-up and assure traffic barriers remain effective. 20 years 10 years Best Case: $3,000 Worst Case: $4,500 Lower allowance to Maintain/Repair Cost Source: ARSF Cost Database Higher allowance to Maintain/Repair Comp # : 1722 Monitor Wells - Maintain/Replace Quantity: (2) Monitoring Wells Location : Funded? : No Not functional at this time. If these wells are corrected and go back online, then we can add this back to your reserve fund. History : Wells drilled in Evaluation : These are two monitoring wells; one upstream of the leach field and one below. The purpose of these wells was to detect FPOA impact on the groundwater. Unfortunately, this project was unsuccessful. The upstream well (31) has industrial waste from the paper mill and the downstream well (#2) is dry. Photo Not Available Best Case: Cost Source: Worst Case: June 30,2014 Page 2 of 3

54 Association Reserves -SF, LLC Client: 26862C Floriston Property - Sewage System Comp # : 1825 Sewer Lines - Replace/Repair Location : Underground History : This system was constructed in 1998 Quantity: Approx 4000 LF Component Details Evaluation : No expectation to replace all of the sewer lines at anyone time. This program provides funding for general repairs and/or partial replacement. 10 years 6 years Best Case: $4,800 Worst Case: $6,000 Lower allowance for repairs Higher allowance to repairs Cost Source: ARSF Cost Database June 30,2014 Page 3 of 3

55 Association Reserves -SF, LLC Client: 26862D Floriston - School House/Park Comp # : 100 School House - Replace Location : School house Funded? : No History : Initially built in Quantity: Approx 2550 GSF Component Details Evaluation : A decision must be made by the membership to either demolish this building to prevent damage to the utility building, or fund temporary cribbing and supports in order to prevent collapse until foundation replacement is funded. Best Case: Cost Source: Worst Case: Comp # : 405 Play Equipment - Replace Quantity: (1) Tot-Lot Location : Near the school house Funded? : No Maintained and replaced by the Park and Rec, therefore no funding needed. History : Evaluation : Best Case: Cost Source: Worst Case: June 30,2014 Page 1 of 5

56 Association Reserves -SF, LLC Client: 26862D Floriston - School House/Park Comp # : 702 Roll-up Garage Door - Replace Quantity: (1) Door Location : At school house History : Evaluation : Good condition, no reports of any issues. Not used much. Component Details We recommend regular professional inspections, maintenance and repairs to help extend useful life cycles. Metal doors are typically durable, however, we recommend setting aside funding for regular intervals of replacement due to consistent exposure and usage as seen in similar associations. 25 years 20 years Best Case: $1,500 Worst Case: $1,850 Lower allowance to replace Comp # : 905 School House Interiors - Remodel Location : Interiors, includes (1) bathroom History : Cost Source: ARSF Cost Database Higher allowance to replace Quantity: Approx 1740 GSF Evaluation : This component suggests setting aside funding for periodic remodeling and aesthetic updating. Currently basic setting, original wood floor. No issues or problems. 15 years 5 years Best Case: $3,500 Worst Case: $5,000 Lower allowance to remodel Higher allowance to remodel Cost Source: ARSF Cost Database June 30,2014 Page 2 of 5

57 Association Reserves -SF, LLC Client: 26862D Floriston - School House/Park Comp # : 1115 School House - Repaint Location : Exterior surfaces History : Quantity: Approx 2550 GSF Component Details Evaluation : Currently in fair condition overall. Painting recommended every 8-10 years to preserve the surfaces and maintain appearance. Future painting should be done in conjunction with other exterior surfaces. 10 years 4 years Best Case: $2,300 Worst Case: $2,750 Lower allowance to repaint Comp # : 1117 Wood Siding/Trim - Repair 10% Location : Exterior surfaces History : Cost Source: Estimate Provided by Client Higher allowance to repaint Quantity: Approx 2550 GSF Evaluation : Original siding is holding up well for age. Funding recommended for partial replacement of wood in the future due to potential for termite damage, wood rot and natural deterioration. Coordinate with future painting. 10 years 6 years Best Case: $3,060 Worst Case: $3,680 Lower allowance for repairs Higher allowance for repairs Cost Source: ARSF Cost Database June 30,2014 Page 3 of 5

58 Association Reserves -SF, LLC Client: 26862D Floriston - School House/Park Comp # : 1301 Asphalt/Gravel Roof - Replace Location : Pump house/school house roof History : Quantity: Approx 780 GSF Component Details Evaluation : Roof had fair gravel coverage with no significant signs of water ponding or abnormal aging. No leaks or problems reported. 20 years 8 years Best Case: $3,120 Worst Case: $3,750 Lower allowance to replace Comp # : 1303 Comp Shingle Roof - Replace Location : School house History : Replaced in 1994/95 Cost Source: ARSF Cost Database Higher allowance to replace Quantity: Approx 2100 GSF Evaluation : Average quality shingle. Normal conditions for age of roof, moderate wearing of surfaces, minor lifting and curling. Ridge shingles exhibit minor cracking at stress point. Expect full useful life of years. 25 years 13 years Best Case: $10,500 Worst Case: $12,600 Lower allowance to replace Higher allowance to replace Cost Source: ARSF Cost Database June 30,2014 Page 4 of 5

59 Association Reserves -SF, LLC Client: 26862D Floriston - School House/Park Comp # : 1955 School House Foundation - Replace Location : School house foundation History : Quantity: Approx 1740 GSF Component Details Evaluation : Original school house to the early 1900's. Currently sits on top of stone foundation system. It is recommended that they replace the foundation, to ensure that the structure survives. This is expected to be a one-time project. 8 years Best Case: $50,000 Worst Case: $70,000 Lower allowance to replace Comp # : 1960 School Stairs - Replace Location : History : Cost Source: Estimate Provided by Client Higher allowance to replace Quantity: Approx 140 GSF Evaluation : Good, sturdy condition. Some of the pieces are trex, the support post are pressure treated. Typical useful life is years. 20 years 16 years Best Case: $2,800 Worst Case: $3,360 Lower allowance to replace Higher allowance to replace Cost Source: ARSF Cost Database June 30,2014 Page 5 of 5