JULIAN POND KERNERSVILLE, NC. Prepared for: JULIAN POND HOMEOWNERS ASSOCIATION & CAS, INC. Prepared by:

Transcription

1 FULL RESERVE STUDY JULIAN POND KERNERSVILLE, NC Prepared for: JULIAN POND HOMEOWNERS ASSOCIATION KERNERSVILLE, NC & CAS, INC. Prepared by: CRITERIUM GILES ENGINEERS 8819 UNIVERSITY EAST DRIVE, SUITE 200 CHARLOTTE, NC (704) NC LIC. NO. C-2871 MAY 16, 2018 (REVISED: SEPTEMBER 6, 2018)

2 CONTENTS 1.0 INTRODUCTION EXECUTIVE SUMMARY PURPOSE & SCOPE PURPOSE SCOPE SOURCES OF INFORMATION DESCRIPTION OBSERVATIONS RESERVE FUND ANALYSIS CONCLUSION LIMITATIONS APPENDIX A: RESERVE FUND PROJECTIONS... APPENDIX B: PROJECT PHOTOGRAPHS... Julian Pond

3 1.0 INTRODUCTION The Julian Pond Homeowners Association authorized Criterium Giles Engineers to conduct a Reserve Fund Study for the Julian Pond community located in Kernersville, North Carolina. Studies of this nature are important to ensure a community has sufficient funds for long-term, periodic capital expenditure requirements. Anticipating large expenditures over an extended period of time through a structured analysis and scheduling process assists the Association in meeting financial requirements without increasing the service fees above permitted maximums, borrowing the funds, or levying special financial assessments to the home owners. Typically, a community association has two broad cash requirements: the general operating reserves and the capital repair and replacement reserves. In this report, we will focus on those items falling under the capital repair and replacement reserve criteria. We have projected a capital repair and replacement reserve for twenty (20) years. The first ten years are the most reliable. Such a study should be updated every five years. This report is structured to analyze components of the community for which the Association is responsible and to assess a useful expected life and useful remaining life to those components. The anticipated scheduled repair or replacement of the component and the anticipated expense for the activity are then analyzed in conjunction with the current capital reserves funding program for the community. Funding program recommendations are made with the objective of limiting substantial cash excesses while minimizing financial burdens that can result from significant cash inadequacies. This report is intended to be used as a tool to determine reserve fund allocation requirements for the community, to manage future Association obligations, and to inform the community of future financial needs in general. The report that follows has been prepared from the perspective of what an owner of this property would benefit from knowing. Some items, beyond those of immediate concern, may be discussed. Therefore, the report should be read in its entirety in order to fully understand all of the information that has been obtained. Julian Pond Page 1

4 2.0 EXECUTIVE SUMMARY Julian Pond is a community comprised of 105 single family homes and 26 duplex style units in 13 buildings. The community is situated off Piney Grove Road in. According to plat maps provided by Forsyth County records the construction of the home sites began in Julian Pond Page 2 The association has responsibility for the roofs, gutters and exterior siding and cladding on the duplex style buildings as well as various site improvements. The most significant site improvements include the site fencing, entrance signage with lighting/irrigation, and the drainage systems including a storm water retention device. The association is not responsible for maintenance to the single family homes and does not have other amenities. The buildings, common areas and grounds are generally in good to fair condition. Based on our evaluation, the current level of funding does not maintain a positive balance through the term of this study. We have provided recommendations for annual reserve contribution schedules that provide sufficient funding to meet capital expenditure requirements in the next twenty years, in summary as follows: Note, per the association, the single family home (SFH) units contribute 33% of the reserve funding and the townhome (TH) units contribute 67% of the reserve funding. As requested, this percentage is shown in the alternatives below in the unit per month breakdown. Alternative 1: In 2019, increase the annual reserve contribution to $18,000 ($3.82/SFH-unit/month & $7.63/TH-unit/month) and continue to increase the annual contribution by $5,400 ($1.15/SFH-unit/month & $2.29/TH-unit/month) every year for the next 2 years. This alternative is projected to maintain a positive balance of over the term. Alternative 2: In 2019, increase the annual reserve contribution to $14,400 ($3.05/SFH-unit/month & $6.11/TH-unit/month). Then, increase the annual contribution by 9% every year for the next 2 years. A special assessment of $26,200 ($67/SFH-unit & $133/TH-unit) is anticipated in This alternative is projected to maintain a positive balance of over the term. A more detailed analysis of the reserve fund has been provided in Appendix A. Some significant expenditures are expected over the term of the study. Some of the more notable examples are listed below: Replace duplex style building roofing Paint/Repair duplex style building siding and trim Replace duplex style building siding Repair the storm water retention device There are, of course, other capital expenditures to be expected over the next twenty years. Those items that will require attention are discussed later in this report. For your convenience, we have prepared the following summary of the condition of the major systems of the property.

5 3.0 PURPOSE & SCOPE 3.1 Purpose The purpose of this study is to perform a reserve fund analysis and to determine a capital needs plan. It is intended to be used as a tool for the Julian Pond Homeowners Association in determining the allocation requirements into the reserve fund in order to meet future anticipated capital expenditures for the community. Julian Pond Page 3 This report forecasts obligations for the community twenty years into the future. It should be noted that events might occur that could have an effect on the underlying component or system useful life assumptions used in this study. Likewise, inevitable market fluctuations can have an impact on component or system replacement and repair costs. Therefore, a study such as this should be updated from time to time, usually on a three to fiveyear cycle, in order to reflect the most accurate needs and obligations of the community. 3.2 Scope This study has been performed according to the scope as generally defined by the Julian Pond Homeowners Association, Criterium-Giles Engineers Inc., CAS, Inc., and the standards of the Community Associations Institute. The findings and recommendations are based on interviews with the community s management personnel; a review of available documents; and an investigation of the buildings and site. The Cash Flow Method of calculating reserves has been utilized, whereby contributions to the reserve fund are designed to offset the variable annual expenditures. Funding alternates are recommended which are designed to achieve a Baseline Funding goal by maintaining a positive balance for the term of the study. The guidelines used to determine which physical components within the community are to be included in the component inventory are based on the following general criteria: 1. The component must be a common element, or otherwise noted to be the responsibility of the Association to replace. 2. The component must have an estimated remaining useful life of twenty years or less. As the site ages, additional components may need to be added. 3. The funding for replacement should be from one source only, not funded from another area of the budget or through a maintenance contract. 4. The cost of replacement should be high enough to make it financially unsound to fund it from the operating budget. Our reserve study analysis included evaluating the following association property: Site and Grounds: The HOA is responsible for entrance signage, concrete walking trails, concrete driveways to the duplexes, drainage systems, a stormwater retention device, site walls, site fencing, and duplex mailboxes. Per the plat maps, the streets and adjacent sidewalks/curbing are maintained by the municipality and not the responsibility of the HOA.

6 Buildings: The HOA is responsible for maintenance and replacement of the roofing and gutters on the duplex style buildings. The association is also responsible for maintaining the exterior façade of the duplex style buildings, excluding doors, windows, and other glazing. The HOA is not responsible for maintaining the single family homes. The above list was obtained from the site inspection and discussions with the management firm prior to the inspection. This study estimates the funding levels required for maintaining the longterm viability of the facility. Our approach involves: 1. Examining association managed equipment, building and site facilities. 2. Predicting their remaining service life and, approximating how frequently they will require repair or replacement. 3. Estimating repair or replacement costs (in 2018 dollars) for each capital item. 4. Using data developed in Steps 1, 2 and 3 to project Capital Reserve balances for Years 1 through 20. The statements in this report are opinions about the present condition of the subject community. They are based on visual evidence available during a diligent investigation of all reasonably accessible areas falling under the responsibility of the Association. We did not remove any surface materials, perform any destructive testing, or move any furnishings. This study is not an exhaustive technical evaluation. Such an evaluation would entail a significantly larger scope than this effort. For additional limitations, see Section Sources of Information Onsite inspections of the property occurred on the following date: March 7, 2018 The following people were interviewed during our study: Johnny Grindstaff, Community Manager, CAS, Inc. The following documents were made available to us and reviewed: Forsyth County tax records 2018 HOA budget Governing Documents Recorded plat maps for community Storm water pond repair report We based our cost estimates on some or all of the following: R.S. Means Our data files on similar projects Local contractor estimates Julian Pond Page 4

7 For your reference, the following definitions may be helpful: Excellent: Component or system is in "as new" condition, requiring no rehabilitation and should perform in accordance with expected performance. Good: Component or system is sound and performing its function, although it may show signs of normal wear and tear. Some minor rehabilitation work may be required. Fair: Component or system falls into one or more of the following categories: a) Evidence of previous repairs not in compliance with commonly accepted practice, b) Workmanship not in compliance with commonly accepted standards, c) Component or system is obsolete, d) Component or system approaching end of expected performance. Repair or replacement is required to prevent further deterioration or to prolong expected life. Poor: Component or system has either failed or cannot be relied upon to continue performing its original function as a result of having exceeded its expected performance, excessive deferred maintenance, or state of disrepair. Present condition could contribute to or cause the deterioration of other adjoining elements or systems. Repair or replacement is required. Adequate: A component or system is of a capacity that is defined as enough for what is required, sufficient, suitable, and/or conforms to standard construction practices. All ratings are determined by comparison to other buildings of similar age and construction type. Further, some details of workmanship and materials will be examined more closely in higher quality buildings where such details typically become more relevant. All directions (left, right, rear, etc.), when used, are taken from the viewpoint of an observer standing in front of a building and facing it. Repair/Replacement Reserves - Non-annual maintenance items that will require significant expenditure over the life of the buildings. Included are items that will reach the end of their estimated useful life during the course of this forecast, or, in the opinion of the investigator, will require attention during that time. Julian Pond Page 5

8 4.0 DESCRIPTION Julian Pond is a community comprised of 105 single family homes and 26 duplex style units in 13 buildings. The community is situated off Piney Grove Road in. According to plat maps provided by Forsyth County records the construction of the home sites began in The association has responsibility for the roofs, gutters and exterior siding and cladding on the duplex style buildings as well as various site improvements. The most significant site improvements include the site fencing, entrance signage with lighting/irrigation, and the drainage systems including a storm water retention device. The association is not responsible for maintenance to the single family homes and does not have other amenities. The duplex style buildings are of wood frame construction on crawl space foundations. Exterior surfaces are primarily comprised of vinyl siding and trim. Majority of the duplex style building roofs are clad with asphaltic fiberglass, 3-tab shingles. Five (5) of the duplex style buildings are covered with metal roofing. Aluminum gutters and downspouts discharge stormwater to grade for majority of the buildings. Site drainage is provided via landscaped swales and catch basins in the paved and landscaped areas. These systems direct water flow off site through a storm water retention device located at the south end of the community. 5.0 OBSERVATIONS The following key observations were made about the current condition of the more significant and costly common elements of the property. Note, we have delayed some repairs/maintenance beyond the typical estimated useful life of items due to funding constraints. Site and Grounds A monument is located at the community entrance at the corner of Julian Pond Lane and Piney Grove Road. The entrance monument was comprised of masonry block with stone veneer and precast concrete caps and included a metal inlay sign. The entrance also incorporated ground lighting and an irrigation system. The masonry monument should require little maintenance and periodic cleaning, we have assumed these will be funded from the annual maintenance budget. We have allocated funds to repair/replace the sign inlay and major components of the lighting/irrigation on a 15 year cycle beginning in Drainage systems include gutter downspouts that discharge to grade. Storm water on the site drains via surface flow or via landscaped swales toward the storm water bio-retention device. Catch basins in the storm water retention devices collects and directs storm water off site in an underground system. The swales tend to accumulate sediment that settles out during storm events and will need to be periodically removed and regraded. Areas of bare soil were noted in the community, displaced rip-rap and erosion was noted around the inlets/outlets of the storm water retention Julian Pond Page 6

9 device. Also, it is likely that erosion concerns will develop over time and require repair. In addition, over time, small landscape drainage systems will likely need to be installed in flat areas of the community to address concerns. We have allocated funds to periodically inspect and repair the drainage systems on a 5 year cycle beginning in Repairs will likely include retrenching of swales to improve flow, extending gutter downspouts to underground systems, repairing soil erosion, installation and repair of rip rap or turf reinforcement on steep slopes, installing french drains or other types of subsurface drainage systems. These types of repairs can be moderate (re-trenching swales, flushing pipes), to very expensive (new underground pipe systems). We have included a moderate budget to help cover these costs. The primary stormwater retention device is located on the south side of the community. The retention device generally appeared to be in good to fair condition with erosion noted along the edges, inlets, and outlet. Per discussion with the HOA board and information provided by the property manager, the dam previously washed out during a storm event. Based on information provided, the dam repairs were installed in No additional significant repairs to the dam are anticipated for the storm water pond within the term of this study. Sediment and silts will flow from the streets and landscaped areas into the storm sewer system where they will be deposited in the device. As the sediment accumulates, the device will be in jeopardy of failing the annual inspections. In addition, drought and other natural stresses will cause the plantings to die and require replacement. We have allocated for sediment removal, including revegetation, and funding for major improvements of the devices approximately every 20 years beginning in We strongly encourage the association to contract with a pond maintenance company to provide routine inspections and maintenance of the ponds to ensure they comply with all requirements. The association is responsible for maintaining the concrete walking trails and driveways to the duplex buildings throughout the community. The concrete flatwork generally appeared to be in good condition, with some minor cracking and displacement evident. We have allocated funds for periodic repairs and/or replacement of concrete surfaces as required and have assumed that 5% of the surfaces will require maintenance every 8 years beginning in Anodized aluminum fence is installed along the top of multiple retaining walls in the community. Although replacement of this fence is not anticipated during the term of this study, we anticipate that due to fading and corrosion, painting and minor repairs of limited sections of the fencing will likely be required on a 15 year cycle beginning in A wood privacy fence was installed along the north east perimeter of the community. The fence was in fair condition with fading evident and limited sections of damaged pickets. We have included funds to make minor repairs and stain the privacy fencing on a 5-year cycle, beginning in Also, we have allocated funds to replace the fencing on a 25-year Julian Pond Page 7

10 cycle, beginning in Mailbox structures are located at each duplex style unit. The mailboxes generally appeared to be in fair to poor condition and have an expected useful life of approximately 20 years. We have allocated funds for their replacement in The association is responsible for the underground utility infrastructure. Overtime, these systems can become clogged. The systems will require periodic inspections. We have allocated funds at the end of the term for major repairs to the underground pipe network. Multiple segmental block walls are located in the common areas throughout the community. Retaining walls are installed in areas of the community to address topographical changes. Segmental block walls are typically installed on a gravel bed footing and include geo-grid reinforcement extending behind the wall. French drains are typically installed immediately behind the wall and include gravel and a drain pipe located near the bottom of the wall. Assuming the drainage system properly functions the segmental block retaining walls will require little maintenance over the term of this study. We have included funding in the drainage improvements for minor repairs to the segmental block walls Common Building Exteriors The predominant pitched roof surfaces over six (6) of the duplex style buildings are covered in asphaltic fiberglass 3-tab shingles. The remaining buildings are covered with metal roofing. Reportedly, per the HOA board, the metal roofing was recently installed; however, future roofing replacements will consist of architectural grade asphalt shingles. Roof surfacing is applied over roof sheathing, and appears to be in good to fair condition. We are unaware of any concerns with current or previous roof leaks. Minor repairs to the vent boots, flashings and gutters will likely be required between roofing replacements. We have assumed these minor repairs would be funded from an annual maintenance budget. Assuming minor repairs are completed as needed in the interim, we estimate the roof shingles to have an expected useful life of approximately 20 years. We strongly recommend that any re-roofing project closely follow procedures outlined by the current edition of the National Roofing Contractors Association s Roofing and Waterproofing Manual. A reroofing sequence should include removal of the existing roofing material, replacement of any inadequate roof sheathing, replacement of any damaged flashing, and replacement of drip edge components. We have allocated funds to replace the remaining shingled roofs on the duplex buildings in three phases beginning in 2019, 2020, and Note, the metal roofing material expected useful life is beyond the term of this study. We have assumed minor repairs to the metal roofing will be funded from the annual maintenance budget. The roofing on the single family homes in the community are the responsibility of the individual home owners. We have not allocated funds for maintaining the single family homes in this study. Julian Pond Page 8

11 Gutters and downspouts are in generally good condition and should not require replacement over the term of this study. We have assumed minor repairs will be funded from the annual maintenance budget. Note, the building with units 300 and 304 did not have gutters installed on the rear. We have assumed this will be repaired in conjunction with the next roofing cycle. The duplex buildings in the community are of wood framed construction and are primarily clad in vinyl siding and trim. The exterior doors, composite trim components and shutters generally appeared to be in good condition. We have allocated funds to paint these items, caulk/seal around windows, and make minor repairs to the siding on a 7 year cycle, beginning in While vinyl siding is sometimes projected to last fifty years, it has been our experience that a shorter life span may be expected of this material. As the siding ages, the colors begin to lose their color density and show signs of oxidation, the components become unsightly from neglect and impact damage, mold and mildew growth occurs, and replacement sections made necessary by periodic repairs become evident as colors and styles no longer match. We have allocated funding for the replacement of the vinyl siding on all the duplex style buildings in the community at the end of the study. There are wood decks on the rear of approximately 12 of the duplex style townhome units. The association is responsible for the maintaining the decks. We have allocated funds to replace the decking boards and handrails and make minor repairs to the deck structure on a 20-year cycle beginning in With minor repairs in the interim, the estimated useful life of the deck structure is approximately 40 years. We have allocated funds for full deck structure replacement at the end of the term of this study. 6.0 RESERVE FUND ANALYSIS Using software developed by Criterium Engineers and KPMG Peat Marwick, we have analyzed capital reserves draw-down for the projected capital expenditures to determine the amount needed. The following is a projected reserve fund analysis for non-annual items as discussed in the report. This projection takes into consideration a reasonable return on invested moneys and inflation. Please review this thoroughly and let us know of any changes that may be desired. The intent of this reserve fund projection is to help the Association develop a reserve fund to provide for anticipated repair or replacements of various system components during the next twenty years. The capital items listed are those that are typically the responsibility of the Association and are derived from a list provided the Association with several items added as a result of the inspection. However, association bylaws vary, and therefore, which components are the responsibilities of the owner and which are the responsibilities of the Association can vary. The Association should confirm that the items listed should be financed by the reserve fund. Julian Pond Page 9

12 This projection provides the following: An input sheet that defines all the criteria used for the financial alternatives, including the assumed inflation rate of 3% annually and rate of return on deposited reserve funds of 1.5% annually. A table that lists anticipated replacement and/or repair items complete with estimated remaining life expectancies, projected costs of replacement and/or repair, a frequency in years of when these items require replacement and/or repair, and a projection based on this frequency. A table and graph that represent end of year balances versus capital expenditures based on your current funding program and reserve balances, and alternatives to your current program. The provided graphs illustrate what effects the funding methods will have over the presented twenty-year period versus the anticipated capital expenditures. Note that based on our developed list of capital items and taking inflation into account; the current funding level is not adequate. The Association should bear in mind that unanticipated expenditures can always arise and maintenance of a significant reserve fund balance can be viewed as a way to avoid special assessments. We have included alternatives to your current reserve funding program and recommend that the board adopt an alternative that best reflects the objectives of the community. In summary they are as follows: Current Reserve Funding Rate: $11,712/year; ($7.51/unit/month) Current Reserve Balance: $46,371 (projected Jan balance) Note, per the association, the single family home (SFH) units contribute 33% of the reserve funding and the townhome (TH) units contribute 67% of the reserve funding. As requested, this percentage is shown in the alternatives below in the unit per month breakdown. Alternative 1: In 2019, increase the annual reserve contribution to $18,000 ($3.82/SFH-unit/month & $7.63/TH-unit/month) and continue to increase the annual contribution by $5,400 ($1.15/SFH-unit/month & $2.29/TH-unit/month) every year for the next 2 years. This alternative is projected to maintain a positive balance of over the term. Alternative 2: In 2019, increase the annual reserve contribution to $14,400 ($3.05/SFH-unit/month & $6.11/TH-unit/month). Then, increase the annual contribution by 9% every year for the next 2 years. A special assessment of $26,200 ($67/SFH-unit & $133/TH-unit) is anticipated in This alternative is projected to maintain a positive balance of over the term. Alternative 3: This alternative is typically reserved for special assessments. Assuming one of the funding alternatives above is Julian Pond Page 10

13 implemented, we do not anticipate additional special assessments will be required to adequately fund reserves. Please note that the reserve fund study does not include typical annual maintenance items. Our assumption is that you already have an annual operating budget that provides for these typical, repetitive items. This includes miscellaneous repairs, lawn and grounds maintenance, routine minor painting, etc. We have focused on those significant, non-annual items where careful financial planning is important. Finally, please note that the estimates we have developed are based on 2018 dollars. Our reserve fund study does adjust for an estimated annual inflation and a given return on investment assuming that the indicated fund balances are maintained. 7.0 CONCLUSION The alternatives provided above will provide sufficient funding to meet estimated capital expenditures during the next twenty years. Further detail of the reserve fund analysis is provided in Appendix A. 8.0 LIMITATIONS The observations described in this study are valid on the date of the investigation and have been made under the conditions noted in the report. We prepared this study for the exclusive use of the Julian Pond Homeowners Association. Criterium-Giles Engineers Inc. does not intend any other individual or party to rely upon this study without our express written consent. If another individual or party relies on this study, they shall indemnify and hold Criterium-Giles Engineers Inc. harmless for any damages, losses, or expenses they may incur as a result of its use. This study is limited to the visual observations made during our inspection. We did not remove surface materials, conduct any destructive or invasive testing, move furnishings or equipment, or undertake any digging or excavation. Accordingly, we cannot comment on the condition of systems that we could not see, such as buried structures and utilities, nor are we responsible for conditions that could not be seen or were not within the scope of our services at the time of the investigation. We did not undertake to completely assess the stability of the buildings or the underlying foundation soil since this effort would require excavation and destructive testing. Likewise, this is not a seismic assessment. We did not investigate the following areas: Buried utilities or infrastructure Concealed structural members or systems Unit interiors We do not render an opinion on uninvestigated portions of the community. We did not perform any computations or other engineering analysis as part of this evaluation, nor did we conduct a comprehensive code compliance investigation. This study is not to be considered a warranty of condition, and no warranty is implied. The appendices are an integral part of this report and must be included in any review. Julian Pond Page 11

14 Members of the Criterium-Giles Engineers team working on this reserve study are not members of, or otherwise associated with the association. Criterium-Giles Engineers has disclosed any other involvement with the association that could result in conflicts of interest. Information provided by the official representative of the association regarding financial, physical, quantity, or historical issues, will be deemed reliable by Criterium-Giles Engineers. The reserve balance presented in the Reserve Study is based upon information provided and was not audited. Information provided about reserve projects will be considered reliable. Any on-site inspection should not be considered a project audit or quality inspection. Criterium-Giles Engineers is not aware of any additional material issues which, if not disclosed, would cause a distortion of the association s situation. In our Reserve Fund Analysis, we have provided estimated costs. These costs are based on our general knowledge of building systems and the contracting and construction industry. When appropriate, we have relied on standard sources, such as Means Building Construction Cost Data, to develop estimates. However, for items that we have developed costs (e.g.: structural repairs), no standard guide for developing such costs exists. Actual costs can vary significantly, based on the availability of qualified contractors to do the work, as well as many other variables. We cannot be responsible for the specific cost estimates provided. We have performed no design work as part of this study, nor have we obtained competitive quotations or estimates from contractors as this also is beyond the scope of the project. The actual cost to remedy deficiencies and deferred maintenance items that we have identified may vary significantly from estimates and competitive quotations from contractors. If you have any questions about this study or the reserve fund analysis, please feel free to contact us. Thank-you for the opportunity to be of assistance to you. Respectfully submitted, Tyler C. Hall, PE, MCE, RS Project Engineer Criterium-Giles Engineers Inc. Julian Pond Page 12

15 Lexington Commons Greensboro, NC Page 1 Appendix A: RESERVE FUND PROJECTIONS

16 Itemized Worksheet Capital Item Reserve Frequency Remaining To Be Replaced Quantity Unit cost Requirement (*) (yrs**) Life (yrs) Information Source Site Entrance Signage 1 LS $1, $1, Repair/Upgrade Entrance Lighting 1 LS $1, $1, Repair/Upgrade Entrance Irrigation 1 LS $2, $2, Drainage Improvements 1 LS $5, $5, Major Repairs Storm Water Retention Device 1 LS $15, $15, Repair Concrete Flatwork 70 SY $95.00 $6, Paint/Repair Aluminium Fence 720 LF $11.00 $7, Stain/Repair Wood Privacy Fencing 530 LF $5.00 $2, Replace Wood Privacy Fencing 530 LF $25.00 $13, Replace Mailboxes at Townhomes 26 Ea $ $5, Allocation for Buried Utility Piping 1 LS $25, $25, Building Exterior Replace Roofing on Townhomes (Phase 1) 1 LS $18, $18, Budgeted Amount for 2 Units Replace Roofing on Townhomes (Phase 2) 1 LS $18, $18, Budgeted Amount for 2 Units Replace Roofing on Townhomes (Phase 3) 1 LS $18, $18, Budgeted Amount for 2 Units Paint Doors, Trim, Shutters, Caulk Windows & Repair Siding 26 Units $ $7, Allocation to Replace Vinyl Siding 13 Units $2, $32, Approximately 1/2 units to start saving for replacement Replace/Repair Decking & Handrails (THs only) 12 Units $1, $14, Rear decks on 12 townhome units Replace/Repair Rear Deck Structure 12 Units $2, $24, Rear decks on 12 townhome units Building Interior Mechanical Amenities Other Totals $220, * Costs are typically 10%± ** Reserve study is based on a 20 year projection of non-annual maintenance Total Over Term $263, Criterium Engineers Page 1 of 12 9/6/2018

17 Annual Expense By Year Year: Year Number: Site Entrance Signage , Repair/Upgrade Entrance Lighting , Repair/Upgrade Entrance Irrigation , Drainage Improvements 5, , , ,000 Major Repairs Storm Water Retention Device , Repair Concrete Flatwork , Paint/Repair Aluminium Fence 0 0 7, Stain/Repair Wood Privacy Fencing 0 2, , Replace Wood Privacy Fencing , Replace Mailboxes at Townhomes 5, Allocation for Buried Utility Piping Building Exterior Replace Roofing on Townhomes (Phase 1) 18, Replace Roofing on Townhomes (Phase 2) 0 18, Replace Roofing on Townhomes (Phase 3) , Paint Doors, Trim, Shutters, Caulk Windows & Repair Siding , , Allocation to Replace Vinyl Siding Replace/Repair Decking & Handrails (THs only) , Replace/Repair Rear Deck Structure Building Interior Mechanical Amenities Other Total Costs 28,700 21,150 40,820 5, ,800 2, , , , ,000 Total Costs Adjusted For 3% Inflation 28,700 21,785 43,306 6, ,228 3, , , , ,790 Criterium Engineers Page 2 of 12 9/6/2018

18 Annual Expense By Year Year: Year Number: Site Entrance Signage Repair/Upgrade Entrance Lighting Repair/Upgrade Entrance Irrigation Drainage Improvements Major Repairs Storm Water Retention Device Repair Concrete Flatwork Paint/Repair Aluminium Fence Stain/Repair Wood Privacy Fencing Replace Wood Privacy Fencing Replace Mailboxes at Townhomes Allocation for Buried Utility Piping Building Exterior Replace Roofing on Townhomes (Phase 1) Replace Roofing on Townhomes (Phase 2) Replace Roofing on Townhomes (Phase 3) Paint Doors, Trim, Shutters, Caulk Windows & Repair Siding Allocation to Replace Vinyl Siding Replace/Repair Decking & Handrails (THs only) Replace/Repair Rear Deck Structure Building Interior Mechanical Amenities Other Total Costs Total Costs Adjusted For 3% Inflation , , , , , , , , ,000 9, ,800 89,300 14, , ,588 Criterium Engineers Page 3 of 12 9/6/2018

19 Reserve Study Worksheet General Information: 1 Organization: Julian Pond 2 Address: Julian Pond Lane 3 Number of Units Age of Building (in years) 18 5a Study Period (in years) 20 5b Normal Fiscal Year starts: January 1, c Partial Fiscal Year starts: January 1, d Partial Year Length: 12 months 6 Site Inspection Date March 7, Reserve Funds at start $46,371 8 Rate of Return on invested Reserve Funds (%) 1.5% 9 Inflation Rate (%) 3.0% 10 Current Funding Levels Existing Funding Levels Total/Month Total Annual Per Unit/Month Per Unit/Year Reserve Fund Contribution... $976 $11,712 $7.45 $89.40 Years Out Total Annual Per Unit Planned Special Assessment... 0 $0 $0 Balance Computed... ($81,638) 11 Alternative Reserve Fund Contribution Alternative 1 Level Funding with Steps Total/Month Total Annual Per Unit/Month Per Unit/Year Monthly Amount, (First Year)... $1,500 $18,000 $11.45 $ Monthly Amount, (Last Year)... $2,400 $28,800 $18.32 $ Balance Required Final Year... $18,438 Special Assessments: Years Out Total/Year Per Unit First Assessment... 0 $0 $0 Second Assessment... 0 $0 $0 Balance Computed... $295,759 Alternative 2 Escalating Funding at 9% per Year Total/Month Total Annual Per Unit/Month Per Unit/Year Monthly Amount, (First Year)... $1,200 $14,400 $9.16 $ Monthly Amount, (Last Year)... $1,426 $17,109 $10.88 $ Balance Required Final Year... $18,438 Base Escalation % % Special Assessments: Years Out Total/Year Per Unit First Assessment... 3 Jan 2021 $26,200 $200 Second Assessment... 0 $0 $0 Balance Computed... $71,798 Alternative 3 Escalating Funding with Special Assessments (Not Used) Total/Month Total Annual Per Unit/Month Per Unit/Year Monthly Amount, (First Year)... $0 $0 $0.00 $0.00 Monthly Amount, (Last Year)... $0 $0 $0.00 $0.00 Balance Required Final Year... $18,438 Base Escalation % % Special Assessments: Years Out Total/Year Per Unit First Assessment... 0 $0 $0 Second Assessment... 0 $0 $0 Balance Computed... Criterium Engineers ($322,132) Page 4 of 12 9/6/2018

20 Itemized Graph Categories Totals Site $113,270 Building Exterior $149,800 Building Interior $0 Mechanical $0 Amenities $0 Other $0 Total $263,070 Itemized Graph Site, $113,270 Site Building Exterior Building Interior Mechanical Amenities Other Amenities, $0 Other, $0 Mechanical, $0 Building Interior, $0 Building Exterior, $149,800 Criterium Engineers Page 5 of 12 9/6/2018

21 Existing Funding Levels Beginning Year Reserve Fund Fee Special Investment Capital Ending Year Number Balance Revenue Assessments Earnings Expenditures Balance $46,371 $11,712 $0 $441 $28,700 $29, $29,823 $11,712 $0 $296 $21,785 $20, $20,047 $11,712 $0 $0 $43,306 ($11,547) ($11,547) $11,712 $0 $0 $6,338 ($6,173) ($6,173) $11,712 $0 $83 $0 $5, $5,623 $11,712 $0 $0 $32,228 ($14,893) ($14,893) $11,712 $0 $0 $3,164 ($6,345) ($6,345) $11,712 $0 $80 $0 $5, $5,447 $11,712 $0 $131 $8,424 $8, $8,866 $11,712 $0 $309 $0 $20, $20,887 $11,712 $0 $121 $24,526 $8, $8,193 $11,712 $0 $299 $0 $20, $20,204 $11,712 $0 $312 $11,121 $21, $21,107 $11,712 $0 $492 $0 $33, $33,311 $11,712 $0 $675 $0 $45, $45,698 $11,712 $0 $744 $7,790 $50, $50,365 $11,712 $0 $707 $14,924 $47, $47,860 $11,712 $0 $894 $0 $60, $60,466 $11,712 $0 $935 $9,874 $63, $63,239 $11,712 $0 $0 $156,588 ($81,638) Criterium Engineers Page 6 of 12 9/6/2018

22 Dollars Existing Funding Levels Beginning Balance as of start of year beginning Jan 2019: $46,371 CONTRIBUTIONS SPECIAL ASSESSMENTS AMOUNT Totals $11, per year Per Year $0 Per Unit $0 $89.40 per unit per year $ per month $7.45 per unit per month Projected Annual Funding and Expenditures: Year: Year Number: End of Year Reserve Fund Balance 29,823 20,047 (11,547) (6,173) 5,623 (14,893) (6,345) 5,447 8,866 20,887 8,193 20,204 21,107 33,311 45,698 Capital Expenditures: 28,700 21,785 43,306 6,338-32,228 3,164-8,424-24,526-11, Total Revenue (all sources) 12,153 12,008 11,712 11,712 11,795 11,712 11,712 11,792 11,843 12,021 11,833 12,011 12,024 12,204 12,387 Year: Year Number: End of Year Reserve Fund Balance 50,365 47,860 60,466 63,239 (81,638) Capital Expenditures: 7,790 14,924-9, ,588 Total Revenue (all sources) 12,456 12,419 12,606 12,647 11,712 Existing Funding Levels 80,000 60,000 40,000 20, (20,000) (40,000) (60,000) (80,000) (100,000) Funding Years Criterium Engineers Page 7 of 12 9/6/2018

23 Alternative 1: Level Funding with Steps Beginning Year Reserve Fund Fee Special Special Investment Capital Ending Year Number Balance Revenue Assessments 1 Assessments 2 Earnings Expenditures Balance $46,371 $18,000 $0 $0 $535 $28,700 $36, $36,206 $23,400 $0 $0 $567 $21,785 $38, $38,389 $28,800 $0 $0 $358 $43,306 $24, $24,241 $28,800 $0 $0 $701 $6,338 $47, $47,404 $28,800 $0 $0 $1,143 $0 $77, $77,347 $28,800 $0 $0 $1,109 $32,228 $75, $75,028 $28,800 $0 $0 $1,510 $3,164 $102, $102,173 $28,800 $0 $0 $1,965 $0 $132, $132,938 $28,800 $0 $0 $2,300 $8,424 $155, $155,614 $28,800 $0 $0 $2,766 $0 $187, $187,180 $28,800 $0 $0 $2,872 $24,526 $194, $194,325 $28,800 $0 $0 $3,347 $0 $226, $226,472 $28,800 $0 $0 $3,662 $11,121 $247, $247,813 $28,800 $0 $0 $4,149 $0 $280, $280,763 $28,800 $0 $0 $4,643 $0 $314, $314,206 $28,800 $0 $0 $5,028 $7,790 $340, $340,244 $28,800 $0 $0 $5,312 $14,924 $359, $359,432 $28,800 $0 $0 $5,823 $0 $394, $394,056 $28,800 $0 $0 $6,195 $9,874 $419, $419,177 $28,800 $0 $0 $4,371 $156,588 $295,759 Criterium Engineers Page 8 of 12 9/6/2018

24 Dollars Alternative 1: Level Funding with Steps Beginning Balance as of start of year beginning Jan 2019: $46,371 CONTRIBUTIONS SPECIAL ASSESSMENTS SETTINGS (analyzed by year) FIRST YR LAST YR Totals Starting amount ($): 1500 $18, $28, per year First Per Year $0 Per Unit $0 Increment by ($): 450 $ $ per unit per year Second Per Year $0 Per Unit $0 Every 1 year $1, $2, per month Frequency: 2 time $11.45 $18.32 per unit per month Projected Annual Funding and Expenditures: Year: Year Number: End of Year Reserve Fund Balance 36,206 38,389 24,241 47,404 77,347 75, , , , , , , , , ,206 Capital Expenditures: 28,700 21,785 43,306 6,338-32,228 3,164-8,424-24,526-11, Total Revenue (all sources) 18,535 23,967 29,158 29,501 29,943 29,909 30,310 30,765 31,100 31,566 31,672 32,147 32,462 32,949 33,443 Year: Year Number: End of Year Reserve Fund Balance 340, , , , ,759 Capital Expenditures: 7,790 14,924-9, ,588 Total Revenue (all sources) 33,828 34,112 34,623 34,995 33,171 Alternative 1: Level Funding with Steps 450, , , , , , , ,000 50, Funding Years Criterium Engineers Page 9 of 12 9/6/2018

25 Alternative 2: Escalating Funding at 9% per Year Beginning Year Reserve Fund Fee Special Special Investment Capital Ending Year Number Balance Revenue Assessments 1 Assessments 2 Earnings Expenditures Balance $46,371 $14,400 $0 $0 $481 $28,700 $32, $32,552 $15,696 $0 $0 $397 $21,785 $26, $26,860 $17,109 $26,200 $0 $403 $43,306 $27, $27,266 $17,109 $0 $0 $571 $6,338 $38, $38,607 $17,109 $0 $0 $836 $0 $56, $56,552 $17,109 $0 $0 $621 $32,228 $42, $42,054 $17,109 $0 $0 $840 $3,164 $56, $56,838 $17,109 $0 $0 $1,109 $0 $75, $75,056 $17,109 $0 $0 $1,256 $8,424 $84, $84,997 $17,109 $0 $0 $1,532 $0 $103, $103,637 $17,109 $0 $0 $1,443 $24,526 $97, $97,663 $17,109 $0 $0 $1,722 $0 $116, $116,493 $17,109 $0 $0 $1,837 $11,121 $124, $124,318 $17,109 $0 $0 $2,121 $0 $143, $143,548 $17,109 $0 $0 $2,410 $0 $163, $163,066 $17,109 $0 $0 $2,586 $7,790 $174, $174,971 $17,109 $0 $0 $2,657 $14,924 $179, $179,813 $17,109 $0 $0 $2,954 $0 $199, $199,875 $17,109 $0 $0 $3,107 $9,874 $210, $210,217 $17,109 $0 $0 $1,061 $156,588 $71,798 Criterium Engineers Page 10 of 12 9/6/2018

26 Dollars Alternative 2: Escalating Funding at 9% per Year Beginning Balance as of start of year beginning Jan 2019: $46,371 CONTRIBUTIONS SPECIAL ASSESSMENTS SETTINGS (analyzed by year) FIRST YR LAST YR Totals Starting amount ($): 1200 $14, $17, per year First Jan 2021 Per Year $26,200 Per Unit $200 Increment by (%): 9 $ $ per unit per year Second Per Year $0 Per Unit $0 Step (%): $1, $1, per month Every 1 year $9.16 $10.88 per unit per month Frequency: 2 time Projected Annual Funding and Expenditures: Year: Year Number: End of Year Reserve Fund Balance 32,552 26,860 27,266 38,607 56,552 42,054 56,838 75,056 84, ,637 97, , , , ,066 Capital Expenditures: 28,700 21,785 43,306 6,338-32,228 3,164-8,424-24,526-11, Total Revenue (all sources) 14,881 16,093 43,712 17,679 17,944 17,730 17,949 18,218 18,365 18,640 18,552 18,830 18,946 19,230 19,518 Year: Year Number: End of Year Reserve Fund Balance 174, , , ,217 71,798 Capital Expenditures: 7,790 14,924-9, ,588 Total Revenue (all sources) 19,694 19,766 20,062 20,215 18,170 Alternative 2: Escalating Funding at 9% per Year 250, , , ,000 50, Funding Years Criterium Engineers Page 11 of 12 9/6/2018

27 Dollars Summary of Reserve Balances Year Yearly Year Number Expenditures Alt. 1 Alt. 2 Alt. 3 (Not Used) $28,700 $36,206 $32,552 $17, $21,785 $38,389 $26,860 ($3,849) $43,306 $24,241 $27,266 ($47,155) $6,338 $47,404 $38,607 ($53,492) $0 $77,347 $56,552 ($53,492) $32,228 $75,028 $42,054 ($85,720) $3,164 $102,173 $56,838 ($88,885) $0 $132,938 $75,056 ($88,885) $8,424 $155,614 $84,997 ($97,309) $0 $187,180 $103,637 ($97,309) $24,526 $194,325 $97,663 ($121,835) $0 $226,472 $116,493 ($121,835) $11,121 $247,813 $124,318 ($132,956) $0 $280,763 $143,548 ($132,956) $0 $314,206 $163,066 ($132,956) $7,790 $340,244 $174,971 ($140,746) $14,924 $359,432 $179,813 ($155,670) $0 $394,056 $199,875 ($155,670) $9,874 $419,177 $210,217 ($165,544) $156,588 $295,759 $71,798 ($322,132) Summary of Reserve Balances $500,000 $400,000 $300,000 $200,000 $100,000 $ ($100,000) ($200,000) ($300,000) ($400,000) Funding Years Alt. 1 Alt. 2 Alt. 3 (Not Used) Criterium Engineers Page 12 of 12 9/6/2018

28 Appendix B: PROJECT PHOTOGRAPHS

29 Location: Photo Taken by: Date: Julian Pond Tyler C. Hall, PE March 7, 2018 Entrance monument 1 Irrigation control and electrical meter at entrance 2

30 Location: Photo Taken by: Date: Julian Pond Tyler C. Hall, PE March 7, 2018 Lighting at entrance 3 Typical front elevation of duplex style building with metal roofing 4

31 Location: Photo Taken by: Date: Julian Pond Tyler C. Hall, PE March 7, 2018 Typical front elevation of duplex style building with shingle roofing 5 Typical rear elevation of duplex style unit 6

32 Location: Photo Taken by: Date: Julian Pond Tyler C. Hall, PE March 7, 2018 Typical segmented block retaining wall with aluminum fence 7 Typical aluminum fence 8

33 Location: Photo Taken by: Date: Julian Pond Tyler C. Hall, PE March 7, 2018 Limited damage to aluminum fence 9 Limited damage to aluminum fence 10

34 Location: Photo Taken by: Date: Julian Pond Tyler C. Hall, PE March 7, 2018 Wood privacy fencing 11 Damaged fence at tree 12

35 Location: Photo Taken by: Date: Julian Pond Tyler C. Hall, PE March 7, 2018 Typical concrete driveway serving duplex unit 13 Typical concrete walking trail 14

36 Location: Photo Taken by: Date: Julian Pond Tyler C. Hall, PE March 7, 2018 Displaced section of walking trail 15 Erosion in landscaped swale 16

37 Location: Photo Taken by: Date: Julian Pond Tyler C. Hall, PE March 7, 2018 Storm water retention device 17 Bare soil adjacent to pond 18

38 Location: Photo Taken by: Date: Julian Pond Tyler C. Hall, PE March 7, 2018 Erosion near pond inlet 19 Sediment accumulation at inlet to pond 20

39 Location: Photo Taken by: Date: Julian Pond Tyler C. Hall, PE March 7, 2018 Storm water retention dam and riser 21 Displaced rip rap at pond outlet 22