Indian Peaks #15 HOA Baseline Road & 95 th Street Lafayette, CO 80026

Transcription

1 Indian Peaks #15 HOA Baseline Road & 95 th Street Lafayette, CO Level 2, Premium Reserve Analysis Report Period 01/01/16 12/31/16 Client Reference Number Property Type Master Association Number of Units 346 Fiscal Year End December 31 Final Version Date of Property Observation - February 25, 2016 Project Manager - G. Michael Kelsen, RS, PRA Main Contact Person - Mr. Kevin Lucas, Community Manager Report was prepared on - Wednesday, August 24, 2016 P.O. Box 1762 Castle Rock, CO Phone (303) Fax (303)

2 Table of Contents SECTION 1: SECTION 2: SECTION 3: Introduction to Reserve Analysis... page 1 General Information and Answers to FAQ s... page 2-3 Summary of Reserve Analysis... page 4 Physical Analysis (Photographic)... page 1-28 Financial Analysis a) Funding Summary... page 1 b) Percent Funded Graph... page 2 c) Asset Inventory List... page 3 d) Significant Components Table... page 4 e) Significant Components Graph... page 5 f) Yearly Summary Table... page 6 g) Yearly Contributions Graph... page 7 h) Component Funding Information... page 8 i) Yearly Cash Flow Table... page 9 j) Projected Expenditures Year by Year Graph... page 10 k) Projected Expenditures Year by Year... page SECTION 4: Glossary of Terms and Definitions... page 1-2

3 Introduction to the Reserve Analysis The elected officials of this association made a wise decision to invest in a Reserve Analysis to get a better understanding of the status of the Reserve funds. This Analysis will be a valuable tool to assist the Board of Directors in making the decision to which the dues are derived. Typically, the Reserve contribution makes up 15% - 40% of the association s total budget. Therefore, Reserves is considered to be a significant part of the overall monthly association payment. Every association conducts its business within a budget. There are typically two main parts to this budget, Operating and Reserves. The Operating budget includes all expenses that are fixed on an annual basis. These would include management fees, maintenance fees, utilities, etc. The Reserves is primarily made up of Capital Replacement items such as asphalt, roofing, fencing, mechanical equipment, etc., that do not normally occur on an annual basis. The Reserve Analysis is also broken down into two different parts, the Physical Analysis and the Financial Analysis. The Physical Analysis is information regarding the physical status and replacement cost of major common area components that the association is responsible to maintain. It is important to understand that while the Component Inventory will remain relatively stable from year to year, the Condition Assessment and Life/Valuation Estimates will most likely vary from year to year. You can find this information in the Asset Inventory Section (Section 2) of this Reserve Analysis. The Financial Analysis Section is the evaluation of the association s Reserve balance, income, and expenses. This is made up of a finding of the clients current Reserve Fund Status (measured as Percent Funded) and a recommendation for an appropriate Reserve Allocation rate (also known as the Funding Plan). You can find this information in Section 3 (pages 1 13) of this Reserve Analysis. The purpose of this Reserve Analysis is to provide an educated estimate as to what the Reserve Allocation needs to be. The detailed schedules will serve as an advanced warning that major projects will need to be addressed in the future. This will allow the Board of Directors to have ample timing to obtain competitive estimates and bids that will result in cost savings to the individual homeowners. This will also ensure the physical well being of the property and ultimately enhance each owner s investment, while limiting the possibility of unexpected major projects that may lead to Special Assessments. It is important for the client, homeowners, and potential future homeowners to understand that the information contained in this analysis is based on estimates and assumptions gathered from various sources. Estimated life expectancies and cycles are based upon conditions that were readily visible and accessible at time of the observation. No destructive or intrusive methods (such as entering the walls to inspect the condition of electrical wiring, plumbing lines, and telephone wires) were performed. In addition, environmental hazards (such as lead paint, asbestos, radon, etc.), construction defects, and acts of nature have not been investigated in the preparation of this report. If problem areas were revealed, a reasonable effort has been made to include these items within the report. While every effort has been made to ensure accurate results, this report reflects the judgment of Aspen Reserve Specialties and should not be construed as a guarantee or assurance of predicting future events. 1

4 General Information and Answers to Frequently Asked Questions Why is it important to perform a Reserve Study? As previously mentioned, the Reserve allocation makes up a significant portion of the total monthly dues. This report provides the essential information that is needed to guide the Board of Directors in establishing the budget in order to run the daily operations of your association. It is suggested that a third party professionally prepare a Reserve Study since there is no vested interest in the property. Also, a professional knows what to look for and how to properly develop an accurate and reliable component list. Now that we have it, what do we do with it? Hopefully, you will not look at this report and think it is too cumbersome to understand. Our intention is to make this Reserve Analysis very easy to read and understand. Please take the time to review it carefully and make sure the main ingredients (asset information) are complete and accurate. If there are any inaccuracies, please inform us immediately so we may revise the report. Once you feel the report is an accurate tool to work from, use it to help establish your budget for the upcoming fiscal year. The Reserve allocation makes up a significant portion of the total monthly dues and this report should help you determine the correct amount of money to go into the Reserve fund. Additionally, the Reserve Study should act as a guide to obtain proposals in advance of pending normal maintenance and replacement projects. This will give you an opportunity to shop around for the best price available. The Reserve Study should be readily available for Real Estate agents, brokerage firms, and lending institutions for potential future homeowners. As the importance of Reserves becomes more of a household term, people are requesting homeowners associations to reveal the strength of the Reserve fund prior to purchasing a condominium or townhome. How often do we update or review it? Unfortunately, there is a misconception that these reports are good for an extended period of time since the report has projections for the next 30 years. Just like any major line item in the budget, the Reserve Analysis should be reviewed each year before the budget is established. Invariably, some assumptions have to be made during the compilation of this analysis. Anticipated events may not materialize and unpredictable circumstances could occur. Aging rates and repair/replacement costs will vary from causes that are unforeseen. Earned interest rates may vary from year to year. These variations could alter the content of the Reserve Analysis. Therefore, this analysis should be reviewed annually, and a property observation should be conducted at least once every three years. Is it the law to have a Reserve Study conducted? The Government requires reserve analyses in approximately 20 states. The State of Colorado currently requires all associations to adopt a Reserve policy, but does not currently enforce a Reserve Study is completed. Despite enacting this current law, the chances are also very good the documents of the association require the association to have a Reserve fund established. This may not mean a Reserve Analysis is required, but how are you going to know there are enough funds in the account if you don t have the proper information? Hypothetically, some associations look at the Reserve fund and think $50,000 is a lot of money and they are in good shape. What they don t know is the roof will need to be replaced within 5 years, and the cost of the roof is going to exceed $75,000. So while $50,000 sounds like a lot of money, in reality it won t even cover the cost of a roof, let alone all the other amenities the association is responsible to maintain. 2

5 What makes an asset a Reserve item versus an Operating item? A Reserve asset is an item that is the responsibility of the association to maintain, has a limited Useful Life, predictable Remaining Useful Life expectancies, typically occurs on a cyclical basis that exceeds 1 year, and costs above a minimum threshold cost. An operating expense is typically a fixed expense that occurs on an annual basis. For instance, minor repairs to a roof for damage caused by high winds or other weather elements would be considered an operating expense. However, if the entire roof needs to be replaced because it has reached the end of its life expectancy, then the replacement would be considered a Reserve expense. The GREY area of maintenance items that are often seen in a Reserve Study One of the most popular questions revolves around major maintenance items, such as painting the buildings or seal coating the asphalt. You may hear from your accountant that since painting or seal coating is not replacing a capital item, then it cannot be considered a Reserve issue. However, it is the opinion of several major Reserve Study providers that these items are considered to be major expenses that occur on a cyclical basis. Therefore, it makes it very difficult to ignore a major expense that meets the criteria to be considered a Reserve component. Once explained in this context, many accountants tend to agree and will include any expenses, such as these examples, as a Reserve component. The Property Observation The Property Observation was conducted following a review of the documents that were established by the developer identifying all common area assets. In some cases, the Board of Directors at some point may have revised the documents. In either case, the most current set of documents was reviewed prior to inspecting the property. In addition, common area assets may have been reported to Aspen Reserve Specialties by the client, or by other parties. Estimated life expectancies and life cycles are based upon conditions that were readily accessible and visible at the time of the observation. We did not destroy any landscape work, building walls, or perform any methods of intrusive investigation during the observation. In these cases, information may have been obtained by contacting the contractor or vendor that has worked on the property. The Reserve Fund Analysis We projected the starting balance from taking the most recent balance statement, adding expected Reserve contributions for the rest of the year, and subtracting any pending projects for the rest of the year. We compared this number to the ideal Reserve Balance and arrived at the Percent funded level. Measures of strength are as follows: 0% - 30% Funded Is considered to be a weak financial position. Associations that fall into this category are subject to Special Assessments and deferred maintenance, which could lead to lower property values. If the association is in this position, actions should be taken to improve the financial strength of the Reserve Fund. 31% - 69% Funded The majority of associations are considered to be in this fair financial position. While this doesn t represent financial strength and stability, the likelihood of Special Assessments and deferred maintenance is diminished. Effort should be taken to continue strengthening the financial position of the Reserve fund. 70% - 99% Funded This indicates financial strength of a Reserve fund and every attempt to maintain this level should be a goal of the association. 100% Funded This is the ideal amount of Reserve funding. This means that the association has the exact amount of funds in the Reserve account that should be at any given time. 3

6 Summary of Indian Peaks #15 HOA - Assoc. ID # Projected Starting Balance as of May 1, $267,809 Ideal Reserve Balance as of May 1, $536,501 Percent Funded as of May 1, % Recommended Reserve Allocation (per month) - $5,250 (rest of 2016) Recommended Reserve Allocation (per month) - $12,450 (starting 2017) Minimum Reserve Allocation (per month) - $11,500 (starting 2017) Recommended Special Assessment - $0 This report is an update to an existing Reserve Study that was prepared for the association 6 years ago for the 2010 fiscal period. An observation of the property s common area elements originally took place on February 25, In addition, we obtained information by contacting local vendors and contractors, as well as communicating with the property representative. To the best of our knowledge, the conclusions and suggestions of this report are considered reliable and accurate insofar as the information obtained from these sources. This property contains 346 single family detached homes within a community that was completed in approximately The common area amenities were also constructed around this time. Common area amenities the association is responsible to maintain include entry monuments, landscaped areas, sidewalks, park play structures and gazebo s, fencing, rock walls and some crushed granite pathways. Please refer to the Projected Reserve Expenditures table in the Financial Analysis section for a list of when components are scheduled to be addressed. In comparing the projected balance of $267,809 versus the ideal Reserve Balance of $536,501, we find the association Reserve fund to be in an average financial position at this point in time (approximately 50% funded of ideal). Since the budget has already been adopted for the current fiscal year, we recommend maintaining the budgeted Reserve contribution ($5,250 per month) for the rest of However, as a result of the information contained in this report, we find the current Reserve allocation to be less than adequate in maintaining the strength of the Reserve fund to prepare for future projects. Therefore, we are recommending an increase of the Reserve contribution to $12,450 (representing an increase of approximately $20.81 per unit) per month starting January This should be followed by nominal annual increases of 3.25% thereafter to help offset the effects of inflation. By following the recommendation, the plan will maintain the Reserve account at the fully funded position throughout the thirty-year period. In the percent Funded graph, you will see we have also provided a minimum Reserve contribution of $11,500 per month. If the Reserve contribution falls below this rate, then the Reserve fund will fall into a situation where additional Special Assessments, deferred maintenance, and lower property values are possible at some point in the future. The minimum Reserve allocation follows the threshold theory of Reserve funding where the percent funded status is not allowed to dip below 30% funded at any point during the thirty-year period. This was provided for one purpose only, to show the association how small the difference is between the two scenarios and how it would not make financial sense to contribute less money (approximately 7% in this case) to the Reserve fund to only stay above a certain threshold. As you can see, the difference between the two scenarios is considered to be minimal, and based on the risk, we strongly suggest the recommended Reserve Allocation is followed. 4

7 Comp #: 209 Wood Rail Fence - Restain - In this climate, we recommend staining wood fences every 2-4 years to maintain appearance and protect wood surfaces from exposure to elements that will cause deterioration. Golf Course perimeter (common areas) Approx. 2,000 LF Area only includes the fence along the golf course that backs to open space, not someones personal property. Life Expectancy: 3 Remaining Life: 0 Best Cost: $12,500 $6.25/LF: Estimate to restain fence Worst Cost: $14,000 Higher estimate for better quality or more repairs Source of Information: Cost database Page 1 of 28

8 Comp #: 212 Metal Surfaces - Repaint - Expect to paint these surfaces approximately every 5 years to maintain appearance and protect metal surfaces. - The handrails should be painted along with the gazebo's. - Remaining life is based on observed conditions and age of the structures. Park Areas (5) Structures, (2) Handrails Life Expectancy: 3 Remaining Life: 0 Best Cost: $9,000 $1800/structure; Estimate to repaint Worst Cost: $10,500 $2100/structure; Higher estimate for more prep Source of Information: Research with contractor Gazebo's - Meadow Mountain park - (1) structure 32' railing - paint rails and posts every 3-4 years Indian Peaks Trail park - (1) structure 40' railing - paint rails and posts every 3-4 years Blue Lake park - (1) structure, no railing paint posts every 3-4 years Thunder Lake Park - (1) structure, no railing paint posts every 3-4 years Red Deer Park - (1) structure, no railing paint posts every 3-4 years Handrails - Indian Peaks Stairs/Indian Peaks Park LF Page 2 of 28

9 Comp #: 217 Wood Surfaces (Play Structures) - Restain - The wood is showing typical wear and tear with fading and discoloring. - Stained wood surfaces should typically be painted approximately every 4 to 5 years. - Remaining life based on current age and condition. Park Areas (4) Structures, (4) Swing sets Life Expectancy: 3 Remaining Life: 0 Best Cost: $10,000 $1250/Structure; Allowance to restain Worst Cost: $12,000 $1500/Structure; Higher allowance for more prep Source of Information: Research with contractor Meadow Mountain - (1) Wood swing set with infant seat and saddle (1) small structure with (2) steering wheels, numbers board, small slide, (2) platforms, bubble window, shaded platform Indian Peaks Trail - (1) small structure with (2) steering wheels, numbers board, small slide, (2) platforms, bubble window, shaded platform (1) Swing set with (2) infant seats and (2) saddles (1) large structure with shaded cover, ladder, spiral slide, curved ladder, monkey bars, tic-tac-toe board, small slide, (4) platforms Red Deer Park - (1) BOLDR Climbing wall (8'x20') - $21,000 Blue Lake Park - (1) Swing set with (2) infant seats and (2) saddles (1) Swing set with (1) infant seat and (1) saddle same structures as Indian Peaks trail Page 3 of 28

10 Comp #: 401 Asphalt - Overlay/Seal Coat - It was reported previously that the streets are the responsibility of the city, and not the HOA. - Therefore, no Reserve funding is included for resurfacing or seal coating at this time. - This line item is for informational purposes only. All streets throughout property Approx. 542,810 GSF Life Expectancy: N/A Remaining Life: Best Cost: $0 Worst Cost: $0 Source of Information: Capped as of 7/04 Thunderlake Cr GSF Indian Peaks Trail GSF Shoshone Trail GSF Blue Lake Trail GSF Notabon Ct GSF Hessie Ct GSF Fern Lake Ct GSF Jasper Peak Ct GSF Meadow Mountain Trail GSF Caribou Pass Cr GSF Not capped as of 7/04 Red Deer Trail GSF Indian Peaks Trail GSF Shoshone Trail (custom homes) GSF Corona Ct GSF Skywalker Pt GSF Page 4 of 28

11 Comp #: 403 Concrete - Repair/Replace - Since it is unlikely that all concrete surfaces will fail at the same time, we suggest establishing a Reserve fund for periodic repairs and replacement to approximately 5% of the total area (5,240 GSF) every 2 years. - Repairs should be coordinated with other concrete surfaces for best cost estimate since most asphalt companies can also perform concrete work. - At the time of our site visit, we observed that approx. 5% of Red Deer Trail had been replaced and another 25% had been replaced on Thunderlake Cir.. - More repairs are needed. Alleys, Driveways Approx. 104,820 GSF Life Expectancy: 2 Remaining Life: 0 Best Cost: $42,000 Allowance to repair 5% of area at this interval Worst Cost: $52,500 Higher allowance for more repairs Red Deer Trail - 11,200 GSF Indian Peaks Trail - 21,355 GSF Thunderlake Cr. - 8,075 GSF Shoshone Trail - 8,370 GSF Blue Lake Trail - 17,380 GSF Alleyways/Townhomes - 38,440 GSF NOTE: Cracking & Spalling at Entrance to 329 Spalling at 383 Source of Information: Cost database Page 5 of 28

12 Comp #: 407 Curb and Gutters - Repair - As with the asphalt streets, this area is expected to be the responsibility of the City of Lafayette. - Therefore, Reserve funding is not required at this time. - This line item is for informational purposes only. Adjacent to streets Approx. 46,915 GSF Life Expectancy: N/A Remaining Life: Best Cost: $0 Worst Cost: $0 Red Deer Trail GSF Indian Peaks Trail GSF Thunderlake Cr GSF Notabon Ct GSF Hessie Ct GSF Corona Ct GSF Skywalker Pt GSF Fern Lake Ct GSF Jasper Peak Ct GSF Meadow Mountain Trail GSF Source of Information: Page 6 of 28

13 Comp #: 601 Concrete Sidewalks/Decks - Repair - Similar to other concrete surfaces, it is unlikely that all concrete surfaces will fail and need to be replaced at the same time. - Therefore, we suggest establishing a Reserve fund for frequent repairs and replacement to a percentage of the area (5% or 2,750 GSF) every 4 years. - Coordinate repairs with other concrete surfaces for best cost estimate. Common area sidewalks, park areas Approx. 54,875 GSF Life Expectancy: 4 Remaining Life: 2 Best Cost: $22,000 Allowance to repair 5% of area at this interval Worst Cost: $24,750 Higher allowance for more repairs Source of Information: Cost database Between 313 and Approx. 600 GSF Between /3126/3130/ Approx. 4,290 Between Approx. 1,000 GSF Between Approx. 1,250 GSF Between Approx. 770 GSF Greenbelt area - Approx. 6,870 Between 2966 and Approx. 1,010 GSF Meadow Mountain Park - Approx. 6,820 GSF Indian Peaks Trail park - Approx. 10,525 GSF Shoshone Park - Approx. 5,490 GSF Red Deer Park - Approx. 1,300 GSF Thunderlake Park - Approx. 3,290 GSF Blue Lake Park - Approx. 4,460 GSF Townhome area - Approx. 7,200 GSF Page 7 of 28

14 Comp #: 801 Monuments - Rebuild - While the materials used should have an indefinite life expectancy, we recommend planning on renovating monument every years to maintain current trends and an appropriate appearance. - Remaining life is based on observed conditions and approximately age of all monuments. Entrance to property, parks (8) Various signs Life Expectancy: 30 Remaining Life: 17 Best Cost: $48,000 Estimate to replace/modernize Indian Peaks & Baseline intersection - 60 LF Meadow Mountain park - 10x3 Shoshone park - 5x2 Indian Peaks Trail park - 6x2 Red Deer Park - 6x2 Thunderlake Park - 6x3 West End - 6x3 Blue Lake Park - 6x3 Worst Cost: $56,000 Higher estimate for more elaborate design Source of Information: Cost database Page 8 of 28

15 Comp #: 1001 Wood Fencing - Replace - It was reported this fence is the responsibility of the Indian Peaks Master association. - Therefore, no Reserve funding is required for this component. - This line item is for informational purposes only. Along Baseline and N 95th St. Approx. 1,775 LF Life Expectancy: N/A Remaining Life: Best Cost: $0 Worst Cost: $0 Source of Information: Page 9 of 28

16 Comp #: 1002 Iron Handrails - Replace - Slight surface rust noted. - The average life expectancy for metal railing ranges between years, depending on maintenance schedules and exposure to elements. - The remaining life is based on age of fence and observed conditions. Indian Peaks Stairs/Indian Peaks Park Approx. 100 LF Life Expectancy: 30 Remaining Life: 17 Best Cost: $3,000 $30/LF; Estimate to replace Worst Cost: $3,500 $35/LF: Higher estimate Source of Information: Cost Database Page 10 of 28

17 Comp #: 1006 Rock Wall - Replace - While the wall should have an indefinite life expectancy, the cement cap will require periodic repairs. - The cost of these repairs will depend greatly on the amount of repairs performed each time. - We suggest allocating for repairs to approximately 10% of the area every 5 years. Continue to monitor the wall. - If need be, adjustments can be made during the next Reserve Study update. Along Baseline, roundabouts Approx. 5,515 GSF Life Expectancy: 5 Remaining Life: 0 Best Cost: $12,000 Allowance to repair 10% of area every 5 years Worst Cost: $15,000 Higher allowance for more repairs West End Cr LF x 3' = Approx. 195 GSF Along Baseline LF x 2.5= Approx. 2,925 GSF Baseline and Indian Peaks Trail intersection - 4' high LF = 1,320 GSF 2' high LF = 660 GSF Meadow Mountain Park GSF Blue Lake - 50' x 3' = Approx. 150 GSF NOTE: The anchor rock along Baseline the end of Furn Lake has separated from the wall and should be repaired. Source of Information: Cost database Page 11 of 28

18 Comp #: 1008 Vinyl Fencing - Replace - Rock bedding was added around the fence to prevent landscape equipment from hitting the fence. Conditions have improved, but there were still signs of loose and cracked pickets. - Due to the dry climate, harsh sun and abuse (landscape and vandalism), a Reserve allowance has been established for periodic major repair/replacement to approximately 1/3rd of the total area every 7 years. Parks Approx. 1,910 LF 2 rail fence - Entrance to community - 90 LF Life Expectancy: 7 Remaining Life: 0 Best Cost: $26,000 $40/LF; Estimate to replace 650 LF every 7 years picket fence (parks) - Meadow Mtn park LF Indian Peaks Trail park LF Blue Lake park LF Worst Cost: $29,250 $45/LF; Higher estimate for more replacement Source of Information: Research with contractor Page 12 of 28

19 Comp #: 1009 Rail Fencing - Replace - Per the Declaration, the wood split-rail fences that are behind the homeowner s property, along the golf course, shall be maintained by the homeowner on whose property line the fence is placed - While the overall life expectancy of the fence ranges years, we suggest establishing an allowance to repair 25% of area (500 LF) every 6 years (every other staining cycle) - Coordinate repairs at the same time as staining. Golf Course perimeter (common areas) Approx. 2,000 LF Area only includes the fence along the golf course that backs to open space, not someone's personal property. Life Expectancy: 6 Remaining Life: 0 Best Cost: $13,500 $27/LF; Estimate to replace 25% of area every 6 yrs Worst Cost: $15,000 Higher estimate for better quality or more repairs Source of Information: Cost database Page 13 of 28

20 Comp #: 1301 Play Equipment - Replace - Depending on overall level of use and care, the average life expectancy for play equipment ranges from years. - Expect high use for this facility due to the demographics of the community with the majority being young families with children. - The remaining life is based on the average age of all equipment. All four park areas (4) Structures, (2) Swing sets Life Expectancy: 18 Remaining Life: 7 Best Cost: $165,000 Estimate to replace with similar Worst Cost: $180,000 Higher estimate for upgraded equipment Source of Information: Manufacturers catalogs Meadow Mountain - (1) small structure with (2) steering wheels, numbers board, small slide, (2) platforms, bubble window, shaded platform Indian Peaks Trail - (1) small structure with (2) steering wheels, numbers board, small slide, (2) platforms, bubble window, shaded platform (1) Swing set with (2) infant seats and (2) saddles (1) large structure with shaded cover, ladder, spiral slide, curved ladder, monkey bars, tic-tac-toe board, small slide, (4) platforms Red Deer Park - (1) BOLDR Climbing wall (8'x20') - $21,000 Blue Lake Park - (1) Swing set with (2) infant seats and (2) saddles (1) Swing set with (1) infant seat and (1) saddle same structures as Indian Peaks trail Page 14 of 28

21 Comp #: 1302 Swing Sets - Replace - NOTE - One of the swing sets at Blue Lake Park will be replaced. It had not been replaced as of the date of our site visit, but was going to be done shortly thereafter. - Expect a life of years from this equipment under normal conditions. Mountain Meadow, Blue Lake Park (2) New Metal swing sets Life Expectancy: 15 Remaining Life: 14 Best Cost: $28,000 Estimate to replace Worst Cost: $365,000 Higher estimate for more labor Source of Information: Past client cost Page 15 of 28

22 Comp #: 1303 Tot Lot Groundcover - Refill - Depending on the level of use and care, expect to refill groundcover bed every 2 to 3 years to maintain appearance and ensure proper function as a safety component. All park areas Approx surface feet Life Expectancy: 3 Remaining Life: 1 Best Cost: $15,000 Allowance to refresh groundcover every 3 years Meadow Mtn. - Approx surface feet (Looks new) Indian Peaks - Approx surface feet (Looks new) Red Deer - Approx surface feet (Old) Blue Lake - Approx surface feet (Old) Thunder Lake - Approx. 750 surface feet (Old) Worst Cost: $18,000 Higher allowance for more square footage Source of Information: Research with contractor Page 16 of 28

23 Comp #: 1307 Park Furnishings - Replace - Conditions vary from area to area, but the majority of all pieces are in fair condition. Wood tables were splintering and had moderate signs of wear and use. - We suggest planning on replacement to occur every years due to the level of use these parks receive. - The remaining life is based on the average age of all the park furnishings. All parks Assorted pieces Life Expectancy: 15 Remaining Life: 3 Best Cost: $40,000 Allowance to replace and install equipment Worst Cost: $47,500 Higher allowance for better quality Source of Information: Miracle Rec. Equipment catalog Pricing - (+ install costs) Benches - $750 each Recycled products benches - $850 each Recycled products trash receptacles - $850 each wood picnic tables - $1000 each recycled products picnic tables - $1400 each Basketball hoop and backboard - $900 each Charcoal barbecues - $400 each Bike racks - $600 each Tetherballs - $150 each Park Inventory Breakdown - Indian Peaks Trail Park - (11) Benches, (2) Tables, (1) BBQ, (1) Basketball Hoop/Backboard Shoshone Park - (1) Trash Meadow Mountain Park - (4) Benches, (2) Tables, Blue Lake Park - (2) Tables, (1) Bike Rack Red Deer Park - (3) Recycled Benches, (2) Recycled Tables, (1) Bike Rack, (1) BBQ Thunder Lake Park - (2) Wood/Iron Benches (poor condition), (2) Wood Tables (poor condition) (2) Tetherballs Page 17 of 28

24 Comp #: 1308 Gazebos - Replace - These structures are very high quality and should have an indefinite life expectancy. According to a website, these structures are painted at the factory with a baked on enamel paint. - Factors that will contribute to replacement of these structures include major hail storms that will leave dents and dings on the steel and abuse from neighborhood children. - For conservative measures, Reserve to replace every 30 years at this time. - In future Reserve Study updates, if deterioration rates are slower than projected, the remaining life can be adjusted accordingly. Meadow Mtn., Indian Peaks, Blue Lake (5) Structures Life Expectancy: 30 Remaining Life: 17 Best Cost: $200,000 $40,000/structure; Estimate to replace Worst Cost: $225,000 $45,000/structure; Higher estimate Source of Information: Cost database Meadow Mountain park - (1) structure roof 225 GSF, 32' railing - paint rails and posts every 3-4 years Indian Peaks Trail park - (1) structure, roof 325 GSF, 40' railing - paint rails and posts every 3-4 years Blue Lake park - (1) structure roof 256 GSF, no railing paint posts every 3-4 years Thunder Lake Park - (1) structure roof 225 GSF, no railing paint posts every 3-4 years Red Deer Park - (1) structure roof 225 GSF, no railing paint posts every 3-4 years Page 18 of 28

25 Comp #: 1308 Trash Receptacles - Replace - Conditions vary from area to area, but the majority of all pieces are in good condition with only minor signs of wear and use. - Replacement cycle depends on the level of use and abuse. - We suggest planning on replacement to occur every years due to the level of use these parks receive. Parks (11) Trash Receptacles Life Expectancy: 15 Remaining Life: 2 Best Cost: $10,450 $950/each; Estimate to Replace Worst Cost: $12,100 $1100/each; Higher estimate for better quality Source of Information: Cost Database Page 19 of 28

26 Comp #: 1311 Pet Waste Pick Up Stations - Replace - Due to the low quantity, unlikely event that all will require replacement at the same time and the relatively low cost of individual replacement, we do not recommend reserving for replacement at this time. - Maintain and replace on an as needed basis using operating funds. Parks (6) Stations Life Expectancy: N/A Remaining Life: Best Cost: $0 Meadow Mountain Park - (1) Indian Peaks Trail Park - (2) Blue Lake Park - (1) Red Deer Park - (1) Thunder Lake Park - (1) Worst Cost: $0 Source of Information: Page 20 of 28

27 Comp #: 1609 Street Lights - Replace - These light fixtures remain the responsibility of the City of Lafayette. - Therefore, no Reserve funding is required for this component. - This line item is for informational purposes only. Along all streets (75) fixtures Life Expectancy: N/A Remaining Life: Best Cost: $0 Worst Cost: $0 Caribou Pass Cr Indian Peaks West Trail - 15 Jasper - 1 Shoshone Tr - 15 Hessie Ct - 15 Skywalker Point - 1 Corona Ct - 1 Red Deer Trail - 3 Thunderlake - 5 Blue Lake Trail - 5 Notabon Ct - 1 Fern Lake Ct. - 1 Meadow Mountain Trail - 2 Source of Information: Page 21 of 28

28 Comp #: 1701 Irrigation System - Rebuild - This line item is for repairs and replacement that lies outside the scope of routine maintenance: bulk sprinkler head replacement, bulk valve replacement, rerouting lateral lines, rewiring, etc. - In order to ensure the funds are available for major repairs, we recommend reserving funds for these projects every 4-5 years. - The funding on this line item is for major repairs and is not to be interpreted as complete irrigation system replacement. Parks areas, greenbelts Extensive system Life Expectancy: 5 Remaining Life: 1 Best Cost: $21,000 Estimate for major repairs and renovating system Worst Cost: $25,000 Higher allowance for more repairs Source of Information: Cost database Page 22 of 28

29 Comp #: 1703 Irrigation Controllers - Replace - At the time of our site visit we noted that a few controllers had been replaced and updated. - Expect to replace irrigation controllers every years if properly maintained and under normal conditions. - Due to varying ages, we have adjusted the funding plan to replace half of the controllers every 6 years. Parks, greenbelts, monument (8) Assorted clocks Life Expectancy: 6 Remaining Life: 0 Best Cost: $8,000 $2000/clock; Average est. to replace 4 controllers Worst Cost: $10,000 $2500/clock; Higher estimate for better quilaity Source of Information: Cost database Indian Peaks and Baseline intersection - (1) Rainbird - ESP 24LX, s/n: , Date: 16JL0? (1) Irritrol - MC-30 Plus, s/n:000047, Date: n/a Shoshone Trail greenbelt area - (1) Irritrol, MC 42 Plus, s/n:100690, Date: n/a Shoshone Park - (1) Rainbird, ESP 32MC with cycle & soak s/n: , Date: April 26, 2010 Red Deer Park - "F" - Rainbird, ESP 24MC with cycle & soak s/n: , Date: 10JL03 - Rainbird ESP-ME June 26,2015 Thunderlake greenbelt - (1) Rainbird, ESP 24MC with cycle & soak s/n: , Date: 11NV03 - Hunter - May 2011 Page 23 of 28

30 Comp #: 1706 Backflow Devices - Replace - All devices are enclosed in a protective cage to prevent theft. No reported problems with any of the devices. - Due to the ability to rebuild and replace these devices for a relatively low cost and the fact that failure of the device is unpredictable, we do not recommend reserving for replacement. - Repair and/or replace these devices/cages on an as needed basis using operating funds. Adjacent to parks and greenbelts Approx. 7 devices Life Expectancy: N/A Remaining Life: Best Cost: $0 Worst Cost: $0 Source of Information: Page 24 of 28

31 Comp #: 1801 Groundcover - Replenish - This line item, similar to irrigation repairs, is for projects that lie outside the scope of routine maintenance. - In order to preserve an attractive curb appeal and to maintain the health of the plants and shrubs, we recommend reserving for refurbishment projects every 2-4 years. - This line item is for cyclical refurbishment and should not be considered as complete landscaping replacement. Parks and common areas Extensive areas Life Expectancy: 4 Remaining Life: 2 Best Cost: $15,000 Allowance for major replenishment Worst Cost: $18,000 Higher allowance for more material Source of Information: Cost Database Page 25 of 28

32 Comp #: 1804 Tree - Replacement/Major Maintenance - It is very difficult to predict a replacement cycle for trees as there are several factors such as disease, infestation of insects, heavy snow storms, etc. can all attribute to eventual tree replacement. - Since it is difficult to predict when the replacement will be necessary, Reserve funding is typically not a factor. - However, per the request of the association, we have included an allowance for partial replacement, or major maintenance (trimming, treatments, etc.) every 3 years. Park Areas/Common Areas Extensive Life Expectancy: 3 Remaining Life: 0 Best Cost: $30,000 Allowance to replace trees Worst Cost: $35,000 Higher allowance for more replacement Source of Information: Cost database Page 26 of 28

33 Comp #: 1810 Crushed Granite Path - Replenish - Most of the crushed granite paths were starting to show signs of deterioration with some loss of material and wash out into other landscaped areas. - A Reserve allowance has been established to re-furbish these areas every 3 years. Thunderlake Park greenbelt Approx. 2,950 GSF Life Expectancy: 3 Remaining Life: 0 Best Cost: $5,400 Allowance to re-fresh areas every 3 years Thunderlake Park Greenbelt - Approx. 2,200 GSF Red Deer Park - Approx. 300 GSF Shoshone Park - Approx. 200 GSF Indian Peak - Approx. 250 GSF Worst Cost: $6,750 Higher allowance for more work Source of Information: Cost database Page 27 of 28

34 Comp #: 1811 Turf Blocks - Major Repairs - Major settling noted in various areas. - Based on observed conditions, major repairs need to occur immediately. - Due to the varying levels of use and settling, we recommend establishing funds for periodic major repairs, as opposed to complete replacement. Fire lanes Approx GSF Life Expectancy: 8 Remaining Life: 0 Thunder Ridge area GSF Meadow Mountain Trace GSF Best Cost: $21,500 Allowance for major repairs Worst Cost: $25,800 Higher allowance for more repairs Source of Information: Cost Database Page 28 of 28

35 Funding Summary For Indian Peaks #15 HOA Beginning Assumptions Financial Information Source Research With Client # of units 346 Fiscal Year End December 31, 2016 Monthly Dues from 2016 Approved budget $35, Monthly Reserve Allocation from 2016 Approved Budget $5, Projected Starting Reserve Balance (as of 5/1/2016) $267,809 Ideal Starting Reserve Balance (as of 5/1/2016) $536,501 Economic Factors Past 20 year Average Inflation Rate (based on CCI) 3.50% Current Average Interest Rate 1.00% Current Reserve Status Current Balance as a % of Ideal Balance 50% Recommendations for 2016 Fiscal Year Monthly Reserve Allocation (2016) $5,250 Per Unit $15.17 Monthly Reserve Allocation (starting 2017) $12,450 Per Unit $35.98 Minimum Monthly Reserve Allocation (starting 2017) $11,500 Per Unit $33.24 Nominal Annual Increases 3.25% # of Years 30 Special Assessment $0 Per Unit $0 Changes to Current 2016 Budget Increase/Decrease to Reserve Allocation $0 as Percentage 0% Per Unit $0.00 Changes from 2016 to 2017 Increase/Decrease to Reserve Allocation $7,200 as Percentage 137% Per Unit $

36 Percent Funded Graph For Indian Peaks #15 HOA Percent Funded Recommended Monthly Reserve Allocation from 2016 Approved Budget Minimum 120% 100% % Level of Funding 80% 60% 40% 20% 0% Year 2

37 Category Asset # Asset Name UL RUL Best Cost Worst Cost Painted Surfaces 209 Wood Rail Fence - Restain 3 0 $12,500 $14, Metal Surfaces - Repaint 3 0 $9,000 $10, Wood Surfaces (Play Structures) - Restai 3 0 $10,000 $12,000 Drive Materials 401 Asphalt - Overlay/Seal Coat N/A $0 $0 403 Concrete - Repair/Replace 2 0 $42,000 $52, Curb and Gutters - Repair N/A $0 $0 Walking Surfaces 601 Concrete Sidewalks/Decks - Repair 4 2 $22,000 $24,750 Prop. Identification 801 Monuments - Rebuild $48,000 $56,000 Fencing/Walls 1001 Wood Fencing - Replace N/A $0 $ Iron Handrails - Replace $3,000 $3, Rock Wall - Replace 5 0 $12,000 $15, Vinyl Fencing - Replace 7 0 $26,000 $29, Rail Fencing - Replace 6 0 $13,500 $15,000 Recreation Equip Play Equipment - Replace 18 7 $165,000 $180, Swing Sets - Replace $28,000 $365, Tot Lot Groundcover - Refill 3 1 $15,000 $18, Park Furnishings - Replace 15 3 $40,000 $47, Gazebos - Replace $200,000 $225, Trash Receptacles - Replace 15 2 $10,450 $12, Pet Waste Pick Up Stations - Replace N/A $0 $0 Light Fixtures 1609 Street Lights - Replace N/A $0 $0 Irrig. System 1701 Irrigation System - Rebuild 5 1 $21,000 $25, Irrigation Controllers - Replace 6 0 $8,000 $10, Backflow Devices - Replace N/A $0 $0 Landscaping 1801 Groundcover - Replenish 4 2 $15,000 $18, Tree - Replacement/Major Maintenance 3 0 $30,000 $35, Crushed Granite Path - Replenish 3 0 $5,400 $6, Turf Blocks - Major Repairs 8 0 $21,500 $25,800 3

38 Significant Components For Indian Peaks #15 HOA Significance: Ave Curr (Curr Cost/UL) ID Asset Name UL RUL Cost As $ As % 209 Wood Rail Fence - Restain 3 0 $13,250 $4, % 212 Metal Surfaces - Repaint 3 0 $9,750 $3, % 217 Wood Surfaces (Play Structures) - Restain 3 0 $11,000 $3, % 403 Concrete - Repair/Replace 2 0 $47,250 $23, % 601 Concrete Sidewalks/Decks - Repair 4 2 $23,375 $5, % 801 Monuments - Rebuild $52,000 $1, % 1002 Iron Handrails - Replace $3,250 $ % 1006 Rock Wall - Replace 5 0 $13,500 $2, % 1008 Vinyl Fencing - Replace 7 0 $27,625 $3, % 1009 Rail Fencing - Replace 6 0 $14,250 $2, % 1301 Play Equipment - Replace 18 7 $172,500 $9, % 1302 Swing Sets - Replace $196,500 $13, % 1303 Tot Lot Groundcover - Refill 3 1 $16,500 $5, % 1307 Park Furnishings - Replace 15 3 $43,750 $2, % 1308 Gazebos - Replace $212,500 $7, % 1308 Trash Receptacles - Replace 15 2 $11,275 $ % 1701 Irrigation System - Rebuild 5 1 $23,000 $4, % 1703 Irrigation Controllers - Replace 6 0 $9,000 $1, % 1801 Groundcover - Replenish 4 2 $16,500 $4, % 1804 Tree - Replacement/Major Maintenance 3 0 $32,500 $10, % 1810 Crushed Granite Path - Replenish 3 0 $6,075 $2, % 1811 Turf Blocks - Major Repairs 8 0 $23,650 $2, % 4

39 Significant Components Graph For Indian Peaks #15 HOA 403 Concrete - Repair/Replace 1302 Swing Sets - Replace 1804 Tree - Replacement/Major Maintenance 1301 Play Equipment - Replace All Other 51% 8% 20% 11% 10% Significance: (Curr Cost/UL) Asset ID Asset Name UL RUL Average Curr. Cost As $ As % 403 Concrete - Repair/Replace 2 0 $47,250 $23,625 20% 1302 Swing Sets - Replace $196,500 $13,100 11% 1804 Tree - Replacement/Major Maintenance 3 0 $32,500 $10,833 9% 1301 Play Equipment - Replace 18 7 $172,500 $9,583 8% All Other See Expanded Table For Breakdown $59,498 51% 5

40 Yearly Summary For Indian Peaks #15 HOA Starting Fully Funded Reserve Percent Annual Reserve Rec. Special Interest Reserve Year 2016 Balance $536,501 Balance $267,809 Funded 50% Contribs $36,750 Ass'mnt $0 Income $1,963 Expenses $207, $460,876 $98,672 21% $149,400 $0 $1,536 $40, $559,640 $208,726 37% $154,256 $0 $2,342 $105, $599,451 $259,915 43% $159,269 $0 $2,763 $128, $620,793 $292,975 47% $164,445 $0 $3,402 $73, $705,337 $387,668 55% $169,790 $0 $4,667 $16, $856,809 $546,090 64% $175,308 $0 $5,095 $253, $773,169 $473,328 61% $181,005 $0 $4,280 $275, $668,569 $383,005 57% $186,888 $0 $4,317 $93, $754,307 $480,849 64% $192,962 $0 $5,303 $98, $842,866 $580,201 69% $199,233 $0 $6,000 $165, $871,658 $620,217 71% $205,708 $0 $7,095 $33, $1,043,662 $799,441 77% $212,394 $0 $8,012 $216, $1,038,846 $803,650 77% $219,296 $0 $9,045 $25, $1,237,302 $1,006,187 81% $226,423 $0 $8,715 $503, $954,567 $737,506 77% $233,782 $0 $7,859 $144, $1,040,976 $834,942 80% $241,380 $0 $8,639 $191, $1,088,609 $893,529 82% $249,225 $0 $7,713 $500, $825,081 $649,707 79% $257,325 $0 $5,704 $421, $642,368 $491,643 77% $265,688 $0 $6,114 $31, $864,108 $731,724 85% $274,323 $0 $8,122 $120, $1,009,453 $893,289 88% $283,238 $0 $9,122 $253, $1,030,800 $931,927 90% $292,443 $0 $9,722 $220, $1,095,590 $1,013,214 92% $301,948 $0 $11,695 $ $1,400,263 $1,326,858 95% $311,761 $0 $12,983 $380, $1,330,908 $1,270,914 95% $321,893 $0 $11,981 $478, $1,167,480 $1,126,231 96% $332,355 $0 $11,630 $269, $1,224,834 $1,200,855 98% $343,156 $0 $12,865 $183, $1,383,160 $1,373,148 99% $354,309 $0 $14,372 $239, $1,500,086 $1,502, % $365,824 $0 $14,254 $532,884 6

41 Reserve Contributions For Indian Peaks #15 HOA Reserve Contributions Recommended Current Minimum $35,000 $30,000 Monthly Contribution $25,000 $20,000 $15,000 $10,000 $5,000 $ Year 7

42 Component Funding Information For Indian Peaks #15 HOA Ave Current Current Fund ID Component Name Cost Future Cost Balance Balance Monthly 209 Wood Rail Fence - Restain $13,250 $14,691 $13,250 $13,250 $ Metal Surfaces - Repaint $9,750 $10,810 $9,750 $9,750 $ Wood Surfaces (Play Structures) - Restain $11,000 $12,196 $11,000 $11,000 $ Concrete - Repair/Replace $47,250 $50,615 $47,250 $47,250 $1, Concrete Sidewalks/Decks - Repair $23,375 $25,040 $11,688 $11,688 $ Monuments - Rebuild $52,000 $93,323 $22,533 $0 $ Iron Handrails - Replace $3,250 $5,833 $1,408 $0 $ Rock Wall - Replace $13,500 $16,034 $13,500 $13,500 $ Vinyl Fencing - Replace $27,625 $35,147 $27,625 $27,625 $ Rail Fencing - Replace $14,250 $17,517 $14,250 $14,250 $ Play Equipment - Replace $172,500 $219,468 $105,417 $0 $ Swing Sets - Replace $196,500 $318,073 $13,100 $0 $ Tot Lot Groundcover - Refill $16,500 $17,078 $11,000 $11,000 $ Park Furnishings - Replace $43,750 $48,506 $35,000 $850 $ Gazebos - Replace $212,500 $381,369 $92,083 $0 $ Trash Receptacles - Replace $11,275 $12,078 $9,772 $9,772 $ Irrigation System - Rebuild $23,000 $23,805 $18,400 $18,400 $ Irrigation Controllers - Replace $9,000 $11,063 $9,000 $9,000 $ Groundcover - Replenish $16,500 $17,675 $8,250 $8,250 $ Tree - Replacement/Major Maintenance $32,500 $36,033 $32,500 $32,500 $ Crushed Granite Path - Replenish $6,075 $6,735 $6,075 $6,075 $ Turf Blocks - Major Repairs $23,650 $31,143 $23,650 $23,650 $ Ideal 8

43 Yearly Cash Flow For Indian Peaks #15 HOA Year Starting Balance $267,809 $98,672 $208,726 $259,915 $292,975 Reserve Income $36,750 $149,400 $154,256 $159,269 $164,445 Interest Earnings $1,963 $1,536 $2,342 $2,763 $3,402 Special Assessments $0 $0 $0 $0 $0 Funds Available $306,522 $249,608 $365,323 $421,947 $460,822 Reserve Expenditures $207,850 $40,883 $105,409 $128,972 $73,155 Ending Balance $98,672 $208,726 $259,915 $292,975 $387,668 Year Starting Balance $387,668 $546,090 $473,328 $383,005 $480,849 Reserve Income $169,790 $175,308 $181,005 $186,888 $192,962 Interest Earnings $4,667 $5,095 $4,280 $4,317 $5,303 Special Assessments $0 $0 $0 $0 $0 Funds Available $562,124 $726,493 $658,613 $574,210 $679,113 Reserve Expenditures $16,034 $253,165 $275,607 $93,362 $98,912 Ending Balance $546,090 $473,328 $383,005 $480,849 $580,201 Year Starting Balance $580,201 $620,217 $799,441 $803,650 $1,006,187 Reserve Income $199,233 $205,708 $212,394 $219,296 $226,423 Interest Earnings $6,000 $7,095 $8,012 $9,045 $8,715 Special Assessments $0 $0 $0 $0 $0 Funds Available $785,433 $833,020 $1,019,847 $1,031,992 $1,241,325 Reserve Expenditures $165,216 $33,579 $216,196 $25,805 $503,819 Ending Balance $620,217 $799,441 $803,650 $1,006,187 $737,506 Year Starting Balance $737,506 $834,942 $893,529 $649,707 $491,643 Reserve Income $233,782 $241,380 $249,225 $257,325 $265,688 Interest Earnings $7,859 $8,639 $7,713 $5,704 $6,114 Special Assessments $0 $0 $0 $0 $0 Funds Available $979,147 $1,084,961 $1,150,466 $912,736 $763,445 Reserve Expenditures $144,206 $191,432 $500,759 $421,093 $31,721 Ending Balance $834,942 $893,529 $649,707 $491,643 $731,724 Year Starting Balance $731,724 $893,289 $931,927 $1,013,214 $1,326,858 Reserve Income $274,323 $283,238 $292,443 $301,948 $311,761 Interest Earnings $8,122 $9,122 $9,722 $11,695 $12,983 Special Assessments $0 $0 $0 $0 $0 Funds Available $1,014,168 $1,185,649 $1,234,092 $1,326,858 $1,651,602 Reserve Expenditures $120,880 $253,722 $220,878 $0 $380,688 Ending Balance $893,289 $931,927 $1,013,214 $1,326,858 $1,270,914 Year Starting Balance $1,270,914 $1,126,231 $1,200,855 $1,373,148 $1,502,410 Reserve Income $321,893 $332,355 $343,156 $354,309 $365,824 Interest Earnings $11,981 $11,630 $12,865 $14,372 $14,254 Special Assessments $0 $0 $0 $0 $0 Funds Available $1,604,788 $1,470,216 $1,556,876 $1,741,828 $1,882,488 Reserve Expenditures $478,557 $269,361 $183,728 $239,418 $532,884 Ending Balance $1,126,231 $1,200,855 $1,373,148 $1,502,410 $1,349,604 9

44 Yearly Expenditures Graph For Indian Peaks #15 HOA Reserve Expenditures $600,000 $500,000 $400,000 Annual Totals $300,000 $200,000 $100,000 $ Year