LEVEL 3 RESERVE STUDY UPDATE For ORCHARD GREENS HOMEOWNERS ASSOCIATION, INC.

Transcription

1 LEVEL 3 RESERVE STUDY UPDATE For ORCHARD GREENS HOMEOWNERS ASSOCIATION, INC. Woodburn, OR January 1, 2015 December 31, 2015 Project No: OR Prepared By: Carson M. Horton, RS Quality Check By: L. Law Broili Date: March 9, 2015 Copyright 2015 USA / Canada /

2 TABLE OF CONTENTS Orchard Greens HOA, Inc. SECTION I SUMMARIES & FINANCIAL ANALYSIS Introduc on 1 1 Property Summary 1 3 Financial Analysis 1 4 Distribu on of Accumulated Reserves 1 7 Current Assessment Funding Method Summary 1 9 Current Assessment Funding Method Projec on 1 10 SECTION II COMPONENT INVENTORY DETAILS Explana on of Component Reports 2 1 Component Summary with Comments 2 2 Component Inventory by Remaining Life Expectancy 2 6 Component Inventory with Current Costs 2 8 Component Detail Reports 2 11 SECTION III RESERVE EXPENDITURE REPORTS Explana on of Expenditure Reports 3 1 Annual Reserve Expenditure Detail 3 2 Annual Expenditure Spread Sheet 3 9 Capital & Non Capital Expenditures 3 18 APPENDIX Physical Analysis Reserve Study Updates 4 3 Reserve Study Parameters & Methodology 4 4 Oregon Statutory Requirements 4 6 Glossary 4 7 Component Detail Index 4 14

3 Disclosures This reserve study document has been provided pursuant to an agreement containing restrictions on its use. No part of the document may be copied or distributed in any form, or disclosed to third parties, without the written permission of Capital Reserve Consultants, LLC. The client shall have the right to reproduce and distribute copies of this report, in whole or in part, as may be required for compliance with the Association s governing documents or applicable state law. This reserve study encompasses a period of 30 years beginning with on January 1, 2015 and ending on December 31, However, the reserve study must be updated annually to remain current. If the reader has obtained this reserve study from anyone other than representatives of Capital Reserve Consultants, LLC, they should verify that this version represents the most recent update of the Association s reserve study. Alterations made to this reserve study by any individual other than a representative of Capital Reserve Consultants, LLC are not authorized and do not represent the opinion of the reserve advisors who prepared this reserve study. Carson M. Horton, RS, the person supervising the preparation of this reserve study is a Community Associations Institute Certified Reserve Specialist (RS); recognized for expertise in the preparation and analysis of reserve funding plans. The authors of this reserve study have no other involvement with Orchard Greens Homeowner's Association, Inc. other than to prepare or update this reserve study. The common area components which are the subject of this reserve study were determined by a physical inspection of the subject property; a review of the Association s governing documents and input from Association representatives. Information regarding the Expected Useful Life of common area components was obtained primarily from Life Cycle Costing for Facilities Reed Construction Data Publishers; the 2007 Study of Life Expectancy of Home Components NAHB & Bank of America; and the Expected Useful Life Tables published by the Federal National Mortgage Association. The purpose of this reserve study is to provide a planning and budgeting tool to assist in the development of a long range financial plan for the Association. Because this reserve study relies on assumptions regarding future events over which Capital Reserve Consultants, LLC has no control, the accuracy of replacement costs and scheduling cannot be guaranteed. For the purposes of this reserve study all components and equipment are assumed to have been installed correctly, in a workmanlike manner, using generally accepted construction practices. It is expected routine preventive maintenance will be performed throughout the entire lifecycle of all components whether or not such maintenance expenses are provided for in this reserve funding plan or not. The component replacement schedules and corresponding funding projections presented in this reserve study assume all components will achieve their normal life expectancy before requiring replacement; unless otherwise noted. Information regarding the beginning reserve fund balance was provided by the Association s management company and is assumed to be correct for the purposes of this reserve study. The authors of this reserve study have no control over whether a special assessment will occur at any time during or after the period of time covered in this reserve study. Capital Reserve Consultants, LLC makes no guarantee, express or implied, that a special assessment will not occur during the time period covered by this reserve study. The reserve study is a reflection of information provided to Capital Reserve Consultants, LLC by third parties and

4 Disclosures cannot be used for the purpose of performing an audit, forensic analysis or verification of historical records. Information regarding the Association s financial condition, including the projected reserve fund balance as of the beginning date of the study, has been provided by representatives of the Association. The information is deemed reliable, but is not based on an audit of the Association s financial condition, and should not be used for purposes other than those intended in this study. An on site inspection conducted in conjunction with a reserve study should not be deemed to be a project audit or quality inspection. Information which has been provided to CRC by third parties is deemed reliable for the purpose of this reserve study. Third party information which is incorrect may have a material impact on the Association s reserve funding requirements. CRC takes no responsibility for the accuracy of any such information or the impact inaccurate information may have on the findings and conclusions presented in this reserve study. This reserve study was prepared in accordance with nationally recognized guidelines for the preparation of reserve studies for common interest developments established by the Community Associations Institute; and the rules set forth in the Audit & Accounting Guide Common Interest Realty Associations (May 1, 2008), published by the American Institute of Certified Public Accountants for maintaining a fund for Future Major Repairs and Replacements. No invasive or destructive testing has been employed in the investigative phase of this study and no environmental assessment of any kind was performed. This reserve study is not intended to address or discover construction defects and no representation is made herein that is meant to imply any such warranty.

5 SECTION I SUMMARIES & FINANCIAL ANALYSIS

6 Introduc on 1. Level of Inquiry: This reserve study is an update of a Level 1 Reserve Study. A Level 1 Reserve Study includes a physical inspection of the common area components identified in the Component Inventory. This reserve study update did not include a site visit. The study is an analysis of the General Common Elements which are the responsibility of Orchard Greens Homeowner's Association, Inc. (Association) to maintain and replace, according to the governing documents or as may be required by state law. Opinions regarding the current condition and remaining life expectancy of the common area components are based on visual observations made during the inspection process. Component quantities may be based on field measurements, a physical inventory and/or association records. This information is intended to be used for developing long term reserve funding projections, but should not be considered adequate for the purpose of ordering materials or formulating repair and replacement project costs. 2. Limitations of the Analysis: The physical condition assessment performed in conjunction with this reserve study is not intended to identify construction defects or other sub standard conditions which may require immediate corrective action. The reserve study utilizes information obtained from the following sources to arrive at component replacement costs and useful life estimates for the common area components identified in the component inventory: RS Means Construction Cost Books RS Means Residential Detailed Costs 2013 Life Cycle Costing for Facilities (Reed Construction Publishers) Study of Life Expectancy of Home Components 2007 (NAHB) Preventive Maintenance and Building Operations Efficiency (BOMA) Facility Manager s Maintenance Handbook (McGraw Hill) RS Means Facilities Maintenance & Repair Cost Data 16 th Edition Physical condition assessment of common elements performed by Capital Reserve Consultants, LLC in Vendor Supplied Cost Data: Replacement costs obtained from local vendors are used only at the request of the Board of Directors (BOD) and only when supported by current written estimates, proposals or expense records for work completed within the last three years. Vendor pricing is subject to change due to current market conditions and may not reflect accurate repair and replacement costs under normal circumstances. Vendor replacement cost estimates used in this reserve study are at the request of the BOD and are not based on recommendations by the reserve advisor. CRC reserves the right to reject replacement cost estimates provided by the BOD if we believe they will not result in a realistic level of reserve funding for future repair and replacement expenses. Capital Reserve Consultants, LLC Page 1 1

7 Introduc on 4. Funding Timeframe: The funding time frame covered in this reserve study is 30 years; however, the study must be updated annually to remain current. Failure to maintain a current reserve study may affect the ability of owners and prospective buyers to obtain certain types of mortgage financing. The efficacy of any reserve study will be compromised if annual updates are not completed in a timely manner. Reserve studies which are not updated on an annual basis are not considered current by most mortgage lenders and mortgage insurance underwriters, including the Federal Housing Administration. 5. Distribution of Accumulated Reserves: This report provides a summarized listing of how the accumulated reserves have been allocated as of the beginning date of the Association s upcoming fiscal year. Accumulated reserves are those reserve which have already been collected and are available for spending as of the beginning date of the reserve study. Unless regular assessments, including reserve contributions, are collected annually and are due at the beginning of the Association s fiscal year, reserve contributions scheduled for the current fiscal year will not be included in the allocation of accumulated reserves. The allocation of reserves is based on the chronological schedule of reserve expenditures. Hence, reserve expenditures which are scheduled to occur in the near term will be allocated a portion of the accumulated reserves at a sufficient rate so that 100% of the projected replacement cost will be available as of the first day of the budget year in which the expenditure is scheduled to occur. Expenditures scheduled to occur many years into the future may, or may not be allocated a portion of the accumulated reserves, depending on factors unique to each situation. Unless the Association s reserve account is 100% funded in each of the 30 years covered by the reserve study, there will always be reserve expenditures which receive no allocation of accumulated reserves. Funding for these expenses will begin at a future date, in advance of the year when the expenditure is scheduled to occur. Capital Reserve Consultants, LLC Page 1 2

8 Property Summary The following details pertain to Orchard Greens Homeowner's Association, Inc.: 1. Legal Name: Orchard Greens Homeowner's Association, Inc. 2. Physical Address: 955 Tukwila Drive Woodburn, OR Property Type: Planned Unit Development (PUD) 4. Number of Units or Lots: 32 + I pool lot 5. Year Constructed: Incorporation Date: Unknown 7. Association Responsibilities: The association of unit owners is responsible for repair and replacement of common area components including, but not limited to: Common area concrete sidewalks Common area landscaping & irrigation equipment Swimming pool & related facilities 8. Owner Responsibilities: Owners are responsible for the maintenance, repair and replacement costs relating to their respective homes up to the boundary of the property as illustrated on the official plat and as described in the Declaration for Orchard Greens Homeowner's Association, Inc. Capital Reserve Consultants, LLC Page 1 3

9 Financial Analysis 1. Current Condition: The fiscal year for Orchard Greens Homeowner's Association, Inc. begins January 1 st of each year. This reserve study covers the 30 year period beginning on: January 1, The estimated reserve fund balance on January 1, 2014 was: $15, The reserve fund contribution made during 2014 was: $1, The estimated reserve fund balance as of January 1, 2015 is: $16, Based on the funding schedule set forth in this reserve study, and the beginning reserve fund balance indicated above, the percent funded level as of January 1, 2015 will be: 38% 2. Funding Models: This reserve study utilizes a Cash Flow Funding Model known as Current Assessment Funding. Cash Flow Funding Model: Cash Flow Funding is a reserve funding approach which is designed to generate sufficient annual cash flow to meet the funding obligations established in the reserve study. Assuming the cost and frequency of reserve expenditures does not deviate from the schedule set forth in the reserve study; the Association s reserve fund will always contain enough money to meet its funding obligations. All cash flow funding methods result in the pooling of reserves. Pooled reserves occur when all reserve funds are accumulated in one reserve account and the current reserves are allocated to pay for reserve expenditures based on chronological urgency or discretionary action taken by the Board of Directors. Reserves accumulated in a pooled reserve fund may only be used to pay for current or future reserve obligations. Reserves which are collected to pay for specific component replacement expenses may be reallocated to pay for other reserve expenditures should a surplus of funds exist after a scheduled expense has been incurred. Funds collected for the purpose of providing replacement reserves to pay for repair and replacement of common elements may not be used to pay for operating expenses or any expenses which are not specifically identified as reserve expenditures in the current reserve study. Current Assessment Funding: The Current Assessment Funding Projection that appears in this reserve study is a cash flow funding model which begins with a first year reserve contribution equal to the annual contribution approved by the Association for the previous fiscal year. The Current Assessment Funding Projection contained in this reserve study begins with a reserve fund contribution of $4, in The annual reserve fund contribution will increase 15% each year through After 2017 the annual reserve fund contribution will increase 6.0% each year through Capital Reserve Consultants, LLC Page 1 4

10 Financial Analysis After 2026 the contribution level will remain unchanged for the remaining years covered by this reserve study. This funding schedule represents the minimum annual funding required to meet the obligations as set forth in this reserve study assuming a 2015 reserve contribution of $4, and a minimum year end reserve fund balance of $4, throughout the next thirty years. The Current Assessment Funding Projection presented in this reserve study represents the minimum level of funding required to meet the funding obligations of the Association based on the component replacement costs and financial parameters set forth in this reserve study. 3. Percent Funded Level: The percent funded level resulting from this reserve study analysis is calculated using the following formula, which is mandated by the Community Associations Institute's Reserve Study Guidelines: Fully Funded = PV x CA / EUL. Where PV = present value; CA = current age; and EUL = expected useful life. Hence the Fully Funded calculation for a component with a current age of 3 years, a present value of $10,000 and an expected useful life of 10 years would be: $10,000 x 3 / 10 = $3, Therefore the total amount of money required to be Fully Funded as of the first day of the current funding cycle would be $3, Funding Parameters & Projections: Reserve funds will be accumulated in the replacement fund based on the estimated current replacement cost, adjusted for inflation, of the common area components listed in the Component Inventory. If additional funds are required at the time replacement occurs, the Association reserves the right, subject to member approval, to increase regular assessments or levy special assessments, or it may delay repair or replacement of components until funds are available. Actual costs may vary from the amounts established in this reserve study. Investment income and income tax levels may affect reserve funding levels and the variances may be material. Amounts accumulated in the replacement reserve fund may not be adequate to meet future funding requirements; particularly if updates are not performed in a timely manner, or if reserve contributions are not consistent with the amounts set forth in this reserve study. The reserve funding projections which result from this reserve study utilize the following financial parameters: Capital Reserve Consultants, LLC Page 1 5

11 Financial Analysis A minimum reserve fund balance of $16, as of January 1, Minimum 2015 reserve fund contribution: $4, Earnings on reserve deposits:.02% Annual inflation rate: 3.0% Effective income tax rate: 0%* Reserve fund contingency: 0% Maximum annual reserve fund contribution increase: 15.0% *This funding analysis assumes all income tax obligations will be paid out of the Association s operating fund. The Annual Reserve Fund Expenditure Detail indicates the next reserve expenditures scheduled to occur will be in the year The total amount of these expenditures is estimated to be: $13, The percent funded level under the Current Assessment Funding Projection will be 16% at the end of 2015 assuming the reserve fund activity is consistent with the schedule set forth in this study. The highest percent funded level achieved under this funding projection after 2015 is 53% in The lowest percent funded level under this funding projection is 9% in Capital Reserve Consultants, LLC Page 1 6

12 Distribu on of Accumulated Reserves Report Date March 09, 2015 Beginning Fiscal Year January 01, 2015 Account Number OR Version Number LEVEL 3 Descrip on Remaining Replacement Assigned Life Year Reserves Fully Funded Reserves Exterior Paint Pool Area Trellis & Privacy Wall Exterior Paint Pool Building ,500 1,500 Hot Water Heater Replacement Pool Building ,000 1,000 Irriga on System Equipment Replacement ,000 2,000 Pool Circula ng Pump Motor Replacement Pool Furniture Replacement ,500 7,500 Swimming Pool Lights Replacement Pool Area Bollard Lights Replacement ,919 3,919 Swimming Pool Heater Replacement ,600 3,600 Swimming Pool Salt System Replacement * Swimming Pool Filter Media Replacement Pool Booster Pump & Motor Replacement Pool Circula ng Pump Replacement Concrete Sidewalks Safety Repair Exterior Paint Pool Area Fencing ,087 Common Area Lawn Restora on ,710 Exterior Ligh ng Replacement Pool Building Gu ers & Downspouts Replacement Pool Building Ornamental Landscaping Restora on ,940 Swimming Pool Expansion Joint Sealant Replacement Swimming Pool Coping Replacement ,437 Swimming Pool Plaster Resurfacing ,733 Concrete Swimming Pool Decking Par al Replacement ,064 Interior Light Fixtures Replacement Pool Building Plumbing Fixtures Replacement Pool Building ,533 Pool Tile & Coping Stone Replacement ,957 Controlled Entry Access Equipment Pool Facility Exterior Doors Replacement Pool Building Roof Repair & Restora on Pool Building Capital Reserve Consultants, LLC Page 1 7

13 Distribu on of Accumulated Reserves Descrip on Remaining Replacement Assigned Life Year Reserves Fully Funded Reserves Pool Area Fencing Replacement ,234 Electrical Service Equipment Replacement Pool Building ,425 Total Asset Summary $21,667 $55,835 '*' Indicates Par ally Funded Capital Reserve Consultants, LLC Page 1 8

14 Current Assessment Funding Method Summary Report Parameters Report Date March 09, 2015 Account Number OR Version LEVEL 3 Budget Year Beginning January 01, 2015 Budget Year Ending December 31, 2015 Total Units 114 Infla on 3.00% Interest Rate on Reserve Deposit 0.02% 2015 Beginning Balance $16, This funding projection utilizes the Current Assessment Funding Model to generate the funding schedule on the following page. Current Assessment Funding is a cash flow funding method which begins with a first year reserve contribution equal to the current annual contribution approved by the Association for the most recent fiscal year or an amount which is specified to meet the funding obligations of the Association. Current Assessment Funding is often used when an association has already approved the annual reserve contribution for the current fiscal year or when the current level of funding is inadequate to meet the funding obligations set forth in the reserve study, and it is therefore necessary to specify the minimum level of funding which will meet the obligations imposed by the Association's reserve funding plan. Reserves accumulated under a Current Assessment Funding Model Projection are pooled. Pooling of reserves refers to the fact that all funds are maintained in one fund and are allocated based on the annual cash flow required to meet the reserve funding obligations of the Association. Current Assessment Funding Model Summary of Calcula ons Required Annual Contribu on $4, $41.76 per unit annually Average Net Annual Interest Earned $1.55 Total Annual Alloca on to Reserves $4, $41.78 per unit annually Capital Reserve Consultants, LLC Page 1 9

15 Current Assessment Funding Method Projec on Report Date March 09, 2015 Beginning Fiscal Year January 01, 2015 Account Number OR Version Number LEVEL 3 Beginning Balance: $16,906 Projected Fully Current Annual Annual Annual Ending Funded Percent Year Cost Contribu on Interest Expenditures Reserves Reserves Funded ,790 4, ,900 7,769 47,222 16% ,484 5, ,193 4,052 44,892 9% ,258 6, ,350 51,848 20% ,116 6, ,176 58,330 28% ,060 7, ,857 21,398 64,174 33% ,092 7, ,124 25,779 69,110 37% ,214 7, ,930 18,801 62,720 30% ,431 8, ,368 24,865 68,896 36% ,744 8, ,816 76,838 43% ,156 9, ,292 86,211 49% ,671 10, ,972 25,360 69,099 37% ,291 10, ,649 15,352 58,014 26% ,019 10, ,337 15,656 57,165 27% ,860 10, ,319 23,979 64,541 37% ,816 10, ,624 74,697 46% ,890 10, ,957 33,311 73,446 45% ,087 10, ,470 36,486 76,899 47% ,410 10, ,133 88,187 53% ,862 10, ,749 26,027 68,335 38% ,448 10, ,375 33,296 76,538 44% ,171 10, ,720 29,220 73,929 40% ,036 10, ,881 14,979 61,374 24% ,047 10, ,622 73,627 35% ,209 10, ,537 34,729 85,022 41% ,525 10, ,590 39,784 93,029 43% ,001 10, ,486 25,941 82,710 31% ,641 10, ,018 22,565 82,893 27% ,450 10, ,210 97,449 34% ,434 10, ,557 38, ,248 36% ,597 10, , ,270 40% Capital Reserve Consultants, LLC Page

16 SECTION II COMPONENT INVENTORY DETAILS

17 Explana on of Component Reports This section of the reserve study provides a narrative summary and tabular compilations of the common area components which are the subject of this reserve funding analysis. A brief explanation of each report contained in Section II is included here for those readers who may be unfamiliar with the information provided in a reserve study. 1. Component Summary with Comments: This report provides a summary of the component inventory which is a condensed version of the information found in the Component Detail Reports which appears at the end of Section II. The components are grouped by the component category to which they have been assigned, and are listed within each category according to the remaining life expectancy of the component. Other information found in this report includes the in service date, current cost, useful life, remaining life, future cost and current cost of each component. Also included are the comments that appear in the Component Detail Reports and which describes the purpose and scheduling parameters of the expenditure. 2. Component Inventory by Remaining Life Expectancy: This report displays the component inventory sorted by the remaining life expectancy of each component which is included in the reserve funding schedule. Expenditures which are scheduled to recur more than one time over the 30 year period covered by the study will only appear one time in this list based on the next scheduled year of occurrence. Other information provided in this report includes the next scheduled year of replacement, useful life, current cost, assigned reserves and the amount required for each component to be fully funded as of the beginning date of the reserve study. If the assigned reserves are equal to the fully funded amount shown in the far right hand column then the component in question is said to be fully funded. 3. Component Inventory with Current Costs: This report again displays the component inventory by category and remaining life expectancy. It also includes the component quantity based on the unit of measure (SF, SY, LF, etc,), the unit cost which has been used to arrive at the total replacement cost, and the current replacement cost as of the beginning date of the reserve study. 4. Component Detail Reports: This report reflects all of the component data which has been input into the modeling database to develop the reserve funding projections contained in the reserve study. If a photographic inventory has been included in the reserve study a picture of each component will also appear in this report. Most of the information contained in this report is also displayed in one or more of the Component Inventory reports found in Section II. Capital Reserve Consultants, LLC Page 2 1

18 Component Summary with Comments Report Date March 09, 2015 Beginning Fiscal Year January 01, 2015 Account Number OR Version Number LEVEL 3 Descrip on Access Control & Security Equipment Asset ID Date In Service Cost Current Useful Life Adjustment Controlled Entry Access Equipment Pool Facility 01/01/10 2, ,895 2, The component replacement cost is based on the actual cost incurred in Remaining Cost Future Quan ty Unit Cost Asphalt & Concrete Pavement Concrete Sidewalks Safety Repair 01/01/ Concrete Swimming Pool Decking Par al Replacement 01/01/96 6, , This component provides funding for replacement of 25% of the total pool deck surface after 30 years. Electrical Equipment Electrical Service Equipment Replacement Pool Building 01/01/96 3, ,581 3, This component provides funding for replacement of the electrical service equipment which serves to pool facility. Exterior Light Fixtures Swimming Pool Lights Replacement 01/01/ Pool Area Bollard Lights Replacement 01/01/96 4, , Exterior Ligh ng Replacement Pool Building 01/01/ Exterior Paint & Coa ngs Exterior Paint Pool Area Trellis & Privacy Wall 01/01/ Exterior Paint Pool Building 01/01/08 1, ,500 1, Fencing & Gates Exterior Paint Pool Area Fencing 01/01/10 2, , Pool Area Fencing Replacement 01/01/08 15, , The estimated replacement cost includes removal of the existing fencing and replacement of the pedestrian gate. The component cost if based on the actual replacement cost incurred in Outdoor Furniture Pool Furniture Replacement 01/01/96 7, ,500 7, This component provides a lump sum for replacement of the pool furniture every seven years beginning in The amount of funding is discretionary and may be revised at the request of the Board of Directors. Capital Reserve Consultants, LLC Page 2 2

19 Component Summary with Comments Descrip on Interior Light Fixtures Asset ID Date In Service Cost Current Useful Life Adjustment Interior Light Fixtures Replacement Pool Building 01/01/ Plumbing Fixtures & Equipment Hot Water Heater Replacement Pool Building 01/01/96 1, ,000 1, Plumbing Fixtures Replacement Pool Building 01/01/96 4, ,537 4, Replacement of all plumbing fixtures and faucets in both restrooms is assumed; including the fiberglass shower stall. Remaining Cost Future Quan ty Unit Cost Swimming Pools & Spas Pool Circula ng Pump Motor Replacement 01/01/ This component provides funding for the replacement of one 2.5hp pool circulating pump motor every 6 years beginning in Replacement of the pump assembly is included as a separate component in this reserve study. Swimming Pool Heater Replacement 01/01/06 4, ,120 4, This component provides funding for replacement of the pool heater every 10 years beginning in Swimming Pool Salt System Replacement 01/01/ This component provides funding for replacement of the salt based pool sanitizing system that was installed in The life expectancy of the salt cartridge is 6 to 8 years according to Pacific Pools. The life expectancy of other pool equipment may be shortened if the salt sanitizing system does not include an anode to neutralize the effects of electrolysis which results from the operation of the system. Swimming Pool Filter Media Replacement 01/01/ This component provides funding for the replacement of the pool filter media every 5 years. Replacement is generally recommended every 5 to 7 years depending on the amount use the pool receives. The board of directors may choose to modify the replacement schedule based on experience with operating the pool facility. Pool Booster Pump & Motor Replacement 01/01/ , This component provides funding for the replacement of the pool cleaner booster pump & motor assembly every 12 years beginning in Replacement of the pump motor is included as a separate component in this reserve study. Capital Reserve Consultants, LLC Page 2 3

20 Component Summary with Comments Descrip on Swimming Pools & Spas con nued... Asset ID Date In Service Cost Current Useful Life Adjustment Pool Circula ng Pump Replacement 01/01/ This component provides funding for the replacement of the pool circulating pump every 12 years beginning in Replacement of the pump motor is included as a separate component in this reserve study. Swimming Pool Expansion Joint Sealant Replacement 01/01/10 1, , This component provides funding for periodic replacement of the caulked expansion seal between the coping tile and the concrete pool decking and filling of cracks in the concrete pavement. The component cost is based on the actual cost incurred for this work in Swimming Pool Coping Replacement 01/01/96 3, , This component provides funding for replacement of the edge coping around the perimeter of the swimming pool in conjunction with the pool replastering scheduled for Swimming Pool Plaster Resurfacing 01/01/10 8, ,020 8, This component provides funding for resurfacing the plaster swimming pool interior. The component cost is based on the actual cost incurred in Pool Tile & Coping Stone Replacement 01/01/92 4, , This component provides funding for replacement of the water line tile and coping stone at 30 years of age. This work should be coordinated with the replastering of the pool interior. Remaining Cost Future Quan ty Unit Cost Roofing & Waterproofing Components Gu ers & Downspouts Replacement Pool Building 01/01/ Roof Repair & Restora on Pool Building 01/01/96 1, , This component provides funding for repair and renovation of the concrete tile roof on the pool building. The life expectancy of the tile exceeds 50 years. Replacement of the underlayment, flashings and broken or damaged tiles is typically required at 30 to 40 years of age. Doors & Windows Exterior Doors Replacement Pool Building Landscaping & Irriga on Equipment 01/01/96 1, , Irriga on System Equipment Replacement 01/01/96 2, ,000 2, This component provides funding for replacement of landscape irrigation system components. Replacement is scheduled every 15 years beginning in The amount of funding is discretionary and may be revised at the request of the Board of Directors. Common Area Lawn Restora on 01/01/96 2, , Capital Reserve Consultants, LLC Page 2 4

21 Component Summary with Comments Descrip on Asset ID Landscaping & Irriga on Equipment con nued... Date In Service Cost Current Useful Life Adjustment Ornamental Landscaping Restora on 01/01/96 6, , Remaining Cost Future Quan ty Unit Cost Capital Reserve Consultants, LLC Page 2 5

22 Component Inventory by Remaining Life Expectancy Report Date March 09, 2015 Beginning Fiscal Year January 01, 2015 Account Number OR Version Number LEVEL 3 Descrip on Year Replacement Life Useful Adjustment Life Remaining Cost Current Assigned Reserves Fully Funded Exterior Paint Pool Area Trellis & Privacy Wall Exterior Paint Pool Building ,500 1,500 1,500 Hot Water Heater Replacement Pool Building ,000 1,000 1,000 Irriga on System Equipment Replacement ,000 2,000 2,000 Pool Circula ng Pump Motor Replacement Pool Furniture Replacement ,500 7,500 7,500 Swimming Pool Lights Replacement Pool Area Bollard Lights Replacement ,125 3,919 3,919 Swimming Pool Heater Replacement ,000 3,600 3,600 Swimming Pool Salt System Replacement Swimming Pool Filter Media Replacement Pool Booster Pump & Motor Replacement Pool Circula ng Pump Replacement Concrete Sidewalks Safety Repair Exterior Paint Pool Area Fencing , ,087 Common Area Lawn Restora on , ,710 Exterior Ligh ng Replacement Pool Building Gu ers & Downspouts Replacement Pool Building Ornamental Landscaping Restora on , ,940 Swimming Pool Expansion Joint Sealant Replacement , Swimming Pool Coping Replacement , ,437 Swimming Pool Plaster Resurfacing , ,733 Concrete Swimming Pool Decking Par al Replacement , ,064 Interior Light Fixtures Replacement Pool Building Plumbing Fixtures Replacement Pool Building , ,533 Pool Tile & Coping Stone Replacement , ,957 Controlled Entry Access Equipment Pool Facility , Exterior Doors Replacement Pool Building , Roof Repair & Restora on Pool Building , Pool Area Fencing Replacement , ,234 Electrical Service Equipment Replacement Pool Building , ,425 Capital Reserve Consultants, LLC Page 2 6

23 Component Inventory by Remaining Life Expectancy Descrip on Replacement Year Life Useful Adjustment Life Remaining Cost Current Assigned Reserves Fully Funded Total Asset Summary $89,790 $21,667 $55,835 Capital Reserve Consultants, LLC Page 2 7

24 Component Inventory with Current Costs Report Date March 09, 2015 Beginning Fiscal Year January 01, 2015 Account Number OR Version Number LEVEL 3 Descrip on Date in Service Replacement Year Useful Adjustment Remaining Access Control & Security Equipment Controlled Entry Access Equipment Pool Facility Total 2, ,500 Access Control & Security Equipment Total $2,500 Units Cost Unit Cost Current Asphalt & Concrete Pavement Concrete Sidewalks Safety Repair SF Concrete Swimming Pool Decking Par al Replacement SF ,417 Asphalt & Concrete Pavement Total $6,937 Electrical Equipment Electrical Service Equipment Replacement Pool Building Total 3, ,000 Electrical Equipment Total $3,000 Exterior Light Fixtures Swimming Pool Lights Replacement Total Pool Area Bollard Lights Replacement EA ,125 Exterior Ligh ng Replacement Pool Building Total Exterior Light Fixtures Total $5,275 Exterior Paint & Coa ngs Exterior Paint Pool Area Trellis & Privacy Total Exterior Paint Pool Building Total 1, ,500 Exterior Paint & Coa ngs Total $2,000 Fencing & Gates Exterior Paint Pool Area Fencing LF ,175 Pool Area Fencing Replacement LF ,120 Fencing & Gates Total $17,295 Outdoor Furniture Pool Furniture Replacement Total 7, ,500 Outdoor Furniture Total $7,500 Capital Reserve Consultants, LLC Page 2 8

25 Component Inventory with Current Costs Descrip on Date in Service Replacement Year Useful Adjustment Remaining Interior Light Fixtures Interior Light Fixtures Replacement Pool Building Total Interior Light Fixtures Total $500 Units Cost Unit Cost Current Plumbing Fixtures & Equipment Hot Water Heater Replacement Pool Build EA 1, ,000 Plumbing Fixtures Replacement Pool Build Total 4, ,000 Plumbing Fixtures & Equipment Total $5,000 Swimming Pools & Spas Pool Circula ng Pump Motor Replacement Total Swimming Pool Heater Replacement EA 4, ,000 Swimming Pool Salt System Replacement Total Swimming Pool Filter Media Replacement Total Pool Booster Pump & Motor Replacement Total Pool Circula ng Pump Replacement Total Swimming Pool Expansion Joint Sealant Replacement LF ,125 Swimming Pool Coping Replacement LF ,720 Swimming Pool Plaster Resurfacing Total 8, ,200 Pool Tile & Coping Stone Replacement LF ,500 Swimming Pools & Spas Total $25,524 Roofing & Waterproofing Components Gu ers & Downspouts Replacement Pool Building LF Roof Repair & Restora on Pool Building SQ ,520 Roofing & Waterproofing Components Total $2,024 Doors & Windows Exterior Doors Replacement Pool Building EA ,485 Doors & Windows Total $1,485 Landscaping & Irriga on Equipment Irriga on System Equipment Replacement Total 2, ,000 Common Area Lawn Restora on ,500 SF ,250 Ornamental Landscaping Restora on ,200 SF ,500 Landscaping & Irriga on Equipment Total $10,750 Capital Reserve Consultants, LLC Page 2 9

26 Component Inventory with Current Costs Descrip on Date in Service Replacement Year Useful Adjustment Remaining Total Asset Summary $89,790 Units Cost Unit Cost Current Capital Reserve Consultants, LLC Page

27 Component Detail Reports Report Date March 09, 2015 Beginning Fiscal Year January 01, 2015 Account Number OR Version Number LEVEL 3 Exterior Paint Pool Area Trellis & Privacy Wall 2015 Asset ID Non Capital Expenditures Exterior Paint & Coa ngs Placed in Service January 2008 Useful Life 6 Adjustment 1 Replacement Year 2015 Remaining Life 0 1 $ Asset Cost $ Percent Replacement 100% Future Cost $ Assigned Reserves $ Annual Assessment $37.44 Interest Contribu on Reserve Alloca on $37.45 Exterior Paint Pool Building 2015 Asset ID Non Capital Expenditures Exterior Paint & Coa ngs Placed in Service January 2008 Useful Life 6 Adjustment 1 Replacement Year 2015 Remaining Life 0 1 $1, Asset Cost $1, Percent Replacement 100% Future Cost $1, Assigned Reserves $1, Annual Assessment $ Interest Contribu on $0.02 Reserve Alloca on $ Hot Water Heater Replacement Pool Building 2015 Asset ID Capital Expenditures Plumbing Fixtures & Equipment Placed in Service January 1996 Useful Life 15 Adjustment 4 Replacement Year 2015 Remaining Life 0 1 $1, Asset Cost $1, Percent Replacement 100% Future Cost $1, Assigned Reserves $1, Annual Assessment $39.05 Interest Contribu on Reserve Alloca on $39.05 Capital Reserve Consultants, LLC Page

28 Component Detail Reports Irriga on System Equipment Replacement 2015 Asset ID Capital Expenditures Landscaping & Irriga on Equipment Placed in Service January 1996 Useful Life 15 Adjustment 4 Replacement Year 2015 Remaining Life 0 1 $2, Asset Cost $2, Percent Replacement 100% Future Cost $2, Assigned Reserves $2, Annual Assessment $78.09 Interest Contribu on $0.02 Reserve Alloca on $78.11 This component provides funding for replacement of landscape irrigation system components. Replacement is scheduled every 15 years beginning in The amount of funding is discretionary and may be revised at the request of the Board of Directors. Pool Circula ng Pump Motor Replacement 2015 Asset ID Capital Expenditures Swimming Pools & Spas Placed in Service January 2007 Useful Life 6 Adjustment 2 Replacement Year 2015 Remaining Life 0 1 $ Asset Cost $ Percent Replacement 100% Future Cost $ Assigned Reserves $ Annual Assessment $56.16 Interest Contribu on $0.01 Reserve Alloca on $56.17 This component provides funding for the replacement of one 2.5hp pool circulating pump motor every 6 years beginning in Replacement of the pump assembly is included as a separate component in this reserve study. Pool Furniture Replacement 2015 Asset ID Capital Expenditures Outdoor Furniture Placed in Service January 1996 Useful Life 10 Adjustment 9 Replacement Year 2015 Remaining Life 0 1 $7, Asset Cost $7, Percent Replacement 100% Future Cost $7, Assigned Reserves $7, Annual Assessment $ Interest Contribu on $0.08 Reserve Alloca on $ This component provides a lump sum for replacement of the pool furniture every seven years beginning in Capital Reserve Consultants, LLC Page

29 2015. Orchard Greens HOA, Inc. Component Detail Reports Pool Furniture Replacement con nued... The amount of funding is discretionary and may be revised at the request of the Board of Directors. Swimming Pool Lights Replacement 2015 Asset ID Capital Expenditures Exterior Light Fixtures Placed in Service January 2005 Useful Life 10 Replacement Year 2015 Remaining Life 0 1 $ Asset Cost $ Percent Replacement 100% Future Cost $ Assigned Reserves $ Annual Assessment $32.86 Interest Contribu on Reserve Alloca on $32.86 Pool Area Bollard Lights Replacement 2016 Asset ID Capital Expenditures Exterior Light Fixtures Placed in Service January 1996 Useful Life 20 Replacement Year 2016 Remaining Life 1 11 $ Asset Cost $4, Percent Replacement 100% Future Cost $4, Assigned Reserves $3, Annual Assessment $ Interest Contribu on $0.81 Reserve Alloca on $ Swimming Pool Heater Replacement 2016 Asset ID Capital Expenditures Swimming Pools & Spas Placed in Service January 2006 Useful Life 10 Replacement Year 2016 Remaining Life 1 1 $4, Asset Cost $4, Percent Replacement 100% Future Cost $4, Assigned Reserves $3, Annual Assessment $ Interest Contribu on $0.76 Reserve Alloca on $ This component provides funding for replacement of the pool heater every 10 years beginning in Capital Reserve Consultants, LLC Page

30 Component Detail Reports Swimming Pool Salt System Replacement 2016 Asset ID Capital Expenditures Swimming Pools & Spas Placed in Service January 2010 Useful Life 6 Replacement Year 2016 Remaining Life 1 1 $ Asset Cost $ Percent Replacement 100% Future Cost $ Assigned Reserves $ Annual Assessment $ Interest Contribu on $0.09 Reserve Alloca on $ This component provides funding for replacement of the salt based pool sanitizing system that was installed in The life expectancy of the salt cartridge is 6 to 8 years according to Pacific Pools. The life expectancy of other pool equipment may be shortened if the salt sanitizing system does not include an anode to neutralize the effects of electrolysis which results from the operation of the system. Swimming Pool Filter Media Replacement 2018 Asset ID Capital Expenditures Swimming Pools & Spas Placed in Service January 2013 Useful Life 5 Replacement Year 2018 Remaining Life 3 1 $ Asset Cost $ Percent Replacement 100% Future Cost $ Assigned Reserves none Annual Assessment $ Interest Contribu on $0.02 Reserve Alloca on $ This component provides funding for the replacement of the pool filter media every 5 years. Replacement is generally recommended every 5 to 7 years depending on the amount use the pool receives. The board of directors may choose to modify the replacement schedule based on experience with operating the pool facility. Capital Reserve Consultants, LLC Page

31 Component Detail Reports Pool Booster Pump & Motor Replacement 2019 Asset ID Capital Expenditures Swimming Pools & Spas Placed in Service January 2007 Useful Life 12 Replacement Year 2019 Remaining Life 4 1 $ Asset Cost $ Percent Replacement 100% Future Cost $1, Assigned Reserves none Annual Assessment $95.31 Interest Contribu on $0.02 Reserve Alloca on $95.32 This component provides funding for the replacement of the pool cleaner booster pump & motor assembly every 12 years beginning in Replacement of the pump motor is included as a separate component in this reserve study. Pool Circula ng Pump Replacement 2019 Asset ID Capital Expenditures Swimming Pools & Spas Placed in Service January 2007 Useful Life 12 Replacement Year 2019 Remaining Life 4 1 $ Asset Cost $ Percent Replacement 100% Future Cost $ Assigned Reserves none Annual Assessment $79.42 Interest Contribu on $0.02 Reserve Alloca on $79.44 This component provides funding for the replacement of the pool circulating pump every 12 years beginning in Replacement of the pump motor is included as a separate component in this reserve study. Concrete Sidewalks Safety Repair 2020 Asset ID Non Capital Expenditures Asphalt & Concrete Pavement Placed in Service January 1996 Useful Life 20 Adjustment 4 Replacement Year 2020 Remaining Life $8.25 Asset Cost $ Percent Replacement 7% Future Cost $ Assigned Reserves none Annual Assessment $45.35 Interest Contribu on Reserve Alloca on $45.36 Capital Reserve Consultants, LLC Page

32 Component Detail Reports Exterior Paint Pool Area Fencing 2020 Asset ID Capital Expenditures Fencing & Gates Placed in Service January 2010 Useful Life 10 Replacement Year 2020 Remaining Life $15.00 Asset Cost $2, Percent Replacement 100% Future Cost $2, Assigned Reserves none Annual Assessment $ Interest Contribu on $0.04 Reserve Alloca on $ Common Area Lawn Restora on 2021 Asset ID Capital Expenditures Landscaping & Irriga on Equipment Placed in Service January 1996 Useful Life 15 Adjustment 10 Replacement Year 2021 Remaining Life 6 4,500 $0.50 Asset Cost $2, Percent Replacement 100% Future Cost $2, Assigned Reserves none Annual Assessment $ Interest Contribu on $0.03 Reserve Alloca on $ Exterior Ligh ng Replacement Pool Building 2021 Asset ID Capital Expenditures Exterior Light Fixtures Placed in Service January 1996 Useful Life 25 Replacement Year 2021 Remaining Life 6 1 $ Asset Cost $ Percent Replacement 100% Future Cost $ Assigned Reserves none Annual Assessment $37.44 Interest Contribu on Reserve Alloca on $37.45 Capital Reserve Consultants, LLC Page