REPLACEMENT RESERVE REPORT FY 2019 SANCTUARY AT FALSE CAPE. Prepared for: Ms. Rebecca Beamon

Transcription

1 SANCTUARY AT FALSE CAPE REPLACEMENT RESERVE REPORT FY 2019 SANCTUARY AT FALSE CAPE REPLACEMENT RESERVE REPORT FY 2019 Prepared for: SANCTUARY AT FALSE CAPE Ms. Rebecca Beamon 3700 Sandpiper Road Virginia Beach, VA Consultant: 2661 Riva Road, Suite 1023 Annapolis, MD

2 INTENTIONALLY LEFT BLANK

3 Section A REPLACEMENT RESERVE REPORT Introduction SANCTUARY AT FALSE CAPE VIRGINIA BEACH, VIRGINIA JULY 9, 2018 Section B Sanctuary Description. Sanctuary at False Cape is a condominium located in Virginia Beach, Virginia. Phase 1 construction was completed in 200 and Phase 2 construction was completed in The community consists of two-mid-rise buildings containing 248 units. The survey examined the common elements of the property, including: Section C Large Components Asphalt drive and parking. Concrete sidewalks, and curb and gutter. Retaining walls, fencing, and railings. Swimming pools and cabana building. Building systems. Building exteriors and common interior areas. Furniture, fixtures and equipment. Section D Condition Assessment Level of Service. This study has been performed as a Level 3 Update with no Site Visit or On-Site Review as defined under the National Reserve Study Standards that have been adopted by the Community Associations Institute. As such, the component inventory is based on a Level 2 study that was performed in 201 and the Level 3 study that was performed in 2017 by Miller Dodson Associates. The inventory was adjusted based on offsite correspondence with the Community Manager. The provided fund status and funding plan have been derived from analysis of the adjusted inventory. Appendix Overview, Standard Terms, and Definitions Video Answers to Frequently Asked Questions

4 To aid in the understanding of this report and its concepts and practices, on our web site, we have developed videos addressing frequently asked topics. In addition, there are posted links covering a variety of subjects under the resources page of our web site at mdareserves.com. Purpose. The purpose of this Replacement Reserve Study is to provide Sanctuary at False Cape (hereinafter called the Association) with an inventory of the common community facilities and infrastructure components that require periodic replacement. The Study includes a general view of the condition of these items and an effective financial plan to fund projected periodic replacements. Inventory of Items Owned by the Association. Section B lists the Projected Replacements of the commonly owned items that require periodic replacement using funding from Replacement Reserves. The Replacement Reserve Inventory also provides information about excluded items, which are items whose replacements are not scheduled for funding from Replacement Reserves. Condition of Items Owned by the Association. Section B includes our estimates of the normal economic life and the remaining economic life for the projected replacements. Section C provides a year-by-year listing of the projected replacements. Section D provides additional detail for items that are unique or deserving of attention because of their condition or the manner in which they have been treated in this study. Financial Plan. The Association has a fiduciary responsibility to protect the appearance, value, and safety of the property and it is therefore essential the Association have a financial plan that provides funding for the projected replacements. In conformance with American Institute of Certified Public Accountant guidelines, Section A, Replacement Reserve Analysis evaluates the current funding of Replacement Reserves as reported by the Association and recommends annual funding of Replacement Reserves by the Cash Flow Method. Section A, Replacement Reserve Analysis includes graphic and tabular presentations of the Association s current funding and the recommended funding based on the Cash Flow Method. An Executive Summary of these calculations is provided on Page A1. The alternative Component Method of funding is provided in the Appendix. Basis. The data contained in this Replacement Reserve Study is based upon the following: The Request for Proposal submitted and executed by the Association. ed data from the Manager in June and July 2018 to include current balance and annual contribution amounts, as well as recent replacement cost history and the removal of specific line items in the inventory (fitness equipment, flat screen TV s and balcony edge details Type 1 and 2). Miller - Dodson originally conducted multiple meetings with the Manager, Board Members and Facility staff and performed a visual evaluation on various dates in March, April and May of 201 to determine a remaining useful life and replacement cost for the commonly owned elements of this facility. This study contains additional recommendations to address inflation for the Cash Flow Method only. For this recommendation, Miller - Dodson uses the Producers Price Index (PPI), which gauges inflation in manufacturing and construction. Please see page A for further details. To-Scale Drawings. Site and building plans were not used in the development of this study. We recommend the Association assemble and maintain a library of site and building plans of the entire facility. Record drawings should be scanned into an electronic format for safe storage and ease of distribution. Upon request for a nominal fee, Miller - Dodson can provide scanning services.

5 Current Funding. This reserve study has been prepared for Fiscal Year 2019 covering the period from January 1, 2019 to December 31, The Replacement Reserves on deposit as of June 30, 2018 are reported to be $219,86. The planned contribution for the fiscal year is $00,000. This results in a Reserve Fund balance at the start of the fiscal year as follows: June 30, 2018 balance $219,86 Plus 6 months contribution $20,000 Planned expenditures ($72,200) balcony edges Bldg. B Planned expenditures ($2,640) epoxy on elevator floors Planned expenditure Bldg. ($18,418) A Parking garage Planned expenditure Bldg. ($9,218) B Parking garage FY 2019 opening balance $344,110 The balance and contribution figures have been supplied by the managing agent and confirmation or audit of these figures is beyond the scope of the study. For the purposes of this study, it is assumed that the annual contribution will be deposited at the end of each month. Acknowledgement. Miller - Dodson Associates would like to acknowledge the assistance and input of the Community Manager, Ms. Rebecca Beamon and other Board members and staff who provided very helpful insight into the current operations of the property. Analyst s Credentials. Mr. Philip Pointon holds a Bachelors Degree in Architecture from Virginia Polytechnic Institute and State University and a Masters Degree from Old Dominion University in Engineering Management and is a graduate of the Army Management Staff College. He has been a Registered Professional Architect in the States of Virginia and Hawaii since 1990 and has served in many design, management, and construction capacities as an architect since Mr. Pointon is a Reserve Specialist as accredited by the Community Association Institute for Miller - Dodson Associates. Respectfully submitted, millerdodson C a p i t a l R e s e r v e C o n s u l t a n t s Philip Pointon Philip Pointon, Architect, RS, LEED AP Reserve Specialist

6 INTENTIONALLY LEFT BLANK

7 Replacement Reserve Analysis - Page A1 EXECUTIVE SUMMARY The Sanctuary at False Cape Replacement Reserve Analysis uses the Cash Flow Method (CFM) to calculate Replacement Reserve funding for the periodic replacement of the 262 Projected Replacements identified in the Replacement Reserve Inventory. $84,370 RECOMMENDED REPLACEMENT RESERVE FUNDING FOR THE STUDY YEAR, 2019 $ Per unit (average), minimum monthly funding of Replacement Reserves We recommend the Association adopt a Replacement Reserve Funding Plan based on the annual funding recommendation above. Inflation adjusted funding for subsequent years is shown on Page A. Sanctuary at False Cape reports a Starting Balance of $344,110 and Annual Funding totaling $00,000. Current funding is inadequate to fund the $21,47,837 of Projected Replacements scheduled in the Replacement Reserve Inventory over the 40-year Study Period. See Page A3 for a more detailed evaluation. #1 - Cumulative Replacement Reserve Funding and Expenditures Graph $2,000,000 Cash Flow Method - Cumulative Receipts The starting balance is based on data provided by the Manager Current Funding - Cumulative Receipts Projected Replacements - Cumulative Expenditures This Update made 07/09/2018 reflects adjusted 22,01,837 $20,000,000 $21,47,837 20,344,110 $1,000,000 $10,000,000 $,000,000 $ The Current Funding Objective as calculated by the Component Method (Fully Funded) is $3,39,039 making the reserve account 9.7% funded. See the Appendix for more information on this method. The starting balance is based on data provided by the Manager. This Update made 07/09/2018 reflects adjusted quantities for partial roofing replacements as provided by the Association and the exclusion of line items less than $2, 000 as requested. An accompanying inventory for large components has also been created per the Boards request and deletes those components from this inventory.

8 Replacement Reserve Analysis - Page A2 REPLACEMENT RESERVE ANALYSIS - GENERAL INFORMATION The Sanctuary at False Cape Replacement Reserve Analysis calculations of recommended funding of Replacement Reserves by the Cash Flow Method and the evaluation of the Current Funding are based upon the same Study Year, Study Period, Beginning Balance, Replacement Reserve Inventory and Level of Service STUDY YEAR The Association reports that their accounting year begins on January 1, and the Study Year, the first year evaluated by the Replacement Reserve Analysis, begins on January 1, Years STUDY PERIOD The Replacement Reserve Analysis evaluates the funding of Replacement Reserves over a 40-year Study Period. $344,110 STARTING BALANCE The Association reports Replacement Reserves on Deposit totaling $344,110 at the start of the Study Year. Level Three LEVEL OF SERVICE The Replacement Reserve Inventory has been developed in compliance with the National Reserve Study Standards for a Level Three Study, as defined by the Community Associations Institute (CAI). $21,47,837 REPLACEMENT RESERVE INVENTORY - PROJECTED REPLACEMENTS The Sanctuary at False Cape Replacement Reserve Inventory identifies 262 items that will require periodic replacement, that are to be funded from Replacement Reserves. We estimate the cost of these replacements will be $21,47,837 over the 40-year Study Period. The Projected Replacements are divided into 28 major categories starting on Page B3. Pages B1-B2 provide detailed information on the Replacement Reserve Inventory. #2 - Annual Expenditures for Projected Replacements Graph This graph shows annual expenditures for Projected Replacements over the 40-year Study Period. The red line shows the average annual expenditure of $36,896. Section C provides a year by year Calender of these expenditures. $2,000,000 $1,00,000 $1,000,000 $00,000 $36, year Average $342,664 $67,202 $46,27 $196,76 $440,73 $1,738,004 $12,73 $1,111,864 $469,289 $130,892 $346,376 $19,378 $82,717 $810,61 $93,774 $246,33 $467,983 $9,426 $317,671 $114,323 $911,879 $864,346 $402,717 $280,690 $610,273 $796,410 $167,09 $1,447,84 $423,083 $1,06,402 $1,739,70 $120,379 $813,73 $200,62 $3,634 $40,293 $471,192 $1,216,627 $16,111 $172,82 $

9 Replacement Reserve Analysis - Page A3 UPDATING UPDATING OF THE FUNDING PLAN The Association has a responsibility to review the Funding Plan annually. The review should include a comparison and evaluation of actual reserve funding with recommended levels shown on Page A4 and A. The Projected Replacements listed on Page C2 should be compared with any replacements accomplished and funded from Replacement Reserves. Discrepancies should be evaluated and if necessary, the Reserve Study should be updated or a new study commissioned. We recommend annual increases in replacement reserve funding to account for the impact of inflation. Inflation Adjusted Funding is discussed on Page A. UPDATING OF THE REPLACEMENT RESERVE STUDY At a minimum, the Replacement Reserve Study should be professionally updated every three to five years or after completion of a major replacement project. Updating should also be considered if during the annual review of the Funding Plan, discrepancies are noted between projected and actual reserve funding or replacement costs. Updating may also be necessary if there is a meaningful discrepancy between the actual inflation rate and the inflation rate used for the Inflation Adjusted Funding of Replacement Reserves on Page A. ANNUAL EXPENDITURES AND CURRENT FUNDING The annual expenditures that comprise the $21,47,837 of Projected Expenditures over the 40-year Study Period and the impact of the Association continuing to fund Replacement Reserves at the current level are detailed in Table 3. #3 - Table of Annual Expenditures and Current Funding Data - Years 1 through 40 Year Starting Balance $344,110 Projected Replacements ($342,664) ($67,202) ($46,27) ($196,76) ($440,73) ($1,738,004) ($12,73) ($1,111,864) ($469,289) ($130,892) Annual Deposit $00,000 $00,000 $00,000 $00,000 $00,000 $00,000 $00,000 $00,000 $00,000 $00,000 End of Year Balance $01,446 $934,244 $977,987 $1,281,411 $1,340,68 $102,64 $476,901 ($134,963) ($104,22) $264,86 Cumulative Expenditures ($342,664) ($409,866) ($866,123) ($1,062,699) ($1,03,42) ($3,241,46) ($3,367,209) ($4,479,073) ($4,948,362) ($,079,24) Cumulative Receipts $844,110 $1,344,110 $1,844,110 $2,344,110 $2,844,110 $3,344,110 $3,844,110 $4,344,110 $4,844,110 $,344,110 Year Projected Replacements ($346,376) ($19,378) ($82,717) ($810,61) ($93,774) ($246,33) ($467,983) ($9,426) ($317,671) ($114,323) Annual Deposit $00,000 $00,000 $00,000 $00,000 $00,000 $00,000 $00,000 $00,000 $00,000 $00,000 End of Year Balance $418,480 $723,102 $370,384 $9,734 $46,960 $719,62 $71,642 $66,216 $838,4 $1,224,222 Cumulative Expenditures ($,42,630) ($,621,008) ($6,473,726) ($7,284,376) ($7,378,11) ($7,624,48) ($8,092,468) ($8,687,894) ($9,00,6) ($9,119,888) Cumulative Receipts $,844,110 $6,344,110 $6,844,110 $7,344,110 $7,844,110 $8,344,110 $8,844,110 $9,344,110 $9,844,110 $10,344,110 Year Projected Replacements ($911,879) ($864,346) ($402,717) ($280,690) ($610,273) ($796,410) ($167,09) ($1,447,84) ($423,083) ($1,06,402) Annual Deposit $00,000 $00,000 $00,000 $00,000 $00,000 $00,000 $00,000 $00,000 $00,000 $00,000 End of Year Balance $812,342 $447,996 $4,279 $764,89 $64,316 $37,906 $690,396 ($27,449) ($180,32) ($736,934) Cumulative Expenditures ($10,031,768) ($10,896,114) ($11,298,831) ($11,79,22) ($12,189,79) ($12,986,204) ($13,13,714) ($14,601,9) ($1,024,642) ($16,081,044) Cumulative Receipts $10,844,110 $11,344,110 $11,844,110 $12,344,110 $12,844,110 $13,344,110 $13,844,110 $14,344,110 $14,844,110 $1,344,110 Year Projected Replacements ($1,739,70) ($120,379) ($813,73) ($200,62) ($3,634) ($40,293) ($471,192) ($1,216,627) ($16,111) ($172,82) Annual Deposit $00,000 $00,000 $00,000 $00,000 $00,000 $00,000 $00,000 $00,000 $00,000 $00,000 End of Year Balance ($1,976,04) ($1,96,883) ($1,910,636) ($1,611,288) ($1,164,922) ($1,11,216) ($1,086,408) ($1,803,034) ($1,49,14) ($1,131,727) Cumulative Expenditures ($17,820,614) ($17,940,993) ($18,74,746) ($18,9,398) ($19,009,032) ($19,49,326) ($19,930,18) ($21,147,144) ($21,303,2) ($21,47,837) Cumulative Receipts $1,844,110 $16,344,110 $16,844,110 $17,344,110 $17,844,110 $18,344,110 $18,844,110 $19,344,110 $19,844,110 $20,344,110 EVALUATION OF CURRENT FUNDING The evaluation of Current Funding (Starting Balance of $344,110 & annual funding of $00,000), is done in today's dollars with no adjustments for inflation or interest earned on Replacement Reserves. The evaluation assumes Replacement Reserves will only be used for the 262 Projected Replacements identified in the Replacement Reserve Inventory and that the Association will continue Annual Funding of $00,000 throughout the 40-year Study Period. Annual Funding of $00,000 is approximately 86 percent of the $84,370 recommended Annual Funding calculated by the Cash Flow Method for 2019, the Study Year. Evaluation of the 262 Projected Replacements calculates an average annual expenditure over the next 40 years of $36,896. Annual funding of $00,000 is 93 percent of the average annual expenditure. Our calculations identify funding shortfalls in 1 years of the Study Period with the initial shortfall in The largest shortfall, $-1,976,04, occurs in All shortfalls can be seen and evaluated in Table 3 above. In summary, Current Funding as reported by the Association and shown above, does not provide adequate funding for the $21,47,837 of Projected Replacements scheduled in the Replacement Reserve Inventory over the Study Period.

10 Replacement Reserve Analysis - Page A4 CASH FLOW METHOD FUNDING $84,370 RECOMMENDED REPLACEMENT RESERVE FUNDING FOR 2019 $ Per unit (average), minimum monthly funding of Replacement Reserves Recommended Replacement Reserve Funding has been calculated using the Cash Flow Method (also called the Straight Line or Threshold Method). This method calculates a constant annual funding between peaks in cumulative expenditures, while maintaining a Minimum Balance (threshold) in the Peak Years. Peak Years. The First Peak Year occurs in 2026 with Replacement Reserves on Deposit dropping to the Minimum Balance after the completion of $4,479,073 of replacements from 2019 to Recommended funding declines from $84,370 in 2026 to $80,067 in Peak Years are identified in Chart 4 and Table. Minimum Balance. The calculations assume a Minimum Balance of $40,000 in Replacement Reserves. This is approx. 12 months of average expenditures based on the $36,896, 40-year average annual expenditure. Cash Flow Method Study Period. Cash Flow Method calculates funding for $21,47,837 of expenditures over the 40-year Study Period. It does not include funding for any projects beyond 208 and in 208, the end of year balance will always be the Minimum Balance. #4 - Cash Flow Method - Graph of Cumulative Receipts and Expenditures - Years 1 through 40 $2,000,000 Cash Flow Method - Cumulative Receipts Cash Flow Method - Year End Balance Cumulative Expenditures Peak Year $22,01,837 $20,000,000 $21,47,837 $1,000,000 $10,000,000 $,000,000 $0 $40, # - Cash Flow Method - Table of Receipts & Expenditures - Years 1 through 40 Year st Peak Starting Balance $344,110 Projected Replacements ($342,664) ($67,202) ($46,27) ($196,76) ($440,73) ($1,738,004) ($12,73) ($1,111,864) ($469,289) ($130,892) Annual Deposit $84,370 $84,370 $84,370 $84,370 $84,370 $84,370 $84,370 $84,370 $80,067 $80,067 End of Year Balance $8,817 $1,102,98 $1,231,099 $1,618,893 $1,762,10 $608,876 $1,067,494 $40,000 $60,778 $1,099,93 Cumulative Expenditures $342,664 $409,866 $866,123 $1,062,699 $1,03,42 $3,241,46 $3,367,209 $4,479,073 $4,948,362 $,079,24 Cumulative Receipts $928,480 $1,12,81 $2,097,221 $2,681,92 $3,26,962 $3,80,332 $4,434,703 $,019,073 $,99,140 $6,179,207 Year Projected Replacements ($346,376) ($19,378) ($82,717) ($810,61) ($93,774) ($246,33) ($467,983) ($9,426) ($317,671) ($114,323) Annual Deposit $80,067 $80,067 $80,067 $80,067 $80,067 $80,067 $80,067 $80,067 $80,067 $80,067 End of Year Balance $1,333,644 $1,718,333 $1,44,683 $1,21,099 $1,701,392 $2,03,124 $2,147,208 $2,131,849 $2,394,24 $2,89,989 Cumulative Expenditures ($,42,630) ($,621,008) ($6,473,726) ($7,284,376) ($7,378,11) ($7,624,48) ($8,092,468) ($8,687,894) ($9,00,6) ($9,119,888) Cumulative Receipts $6,79,274 $7,339,341 $7,919,408 $8,499,47 $9,079,42 $9,69,609 $10,239,676 $10,819,743 $11,399,810 $11,979,877 Year Projected Replacements ($911,879) ($864,346) ($402,717) ($280,690) ($610,273) ($796,410) ($167,09) ($1,447,84) ($423,083) ($1,06,402) Annual Deposit $80,067 $80,067 $80,067 $80,067 $80,067 $80,067 $80,067 $80,067 $80,067 $80,067 End of Year Balance $2,28,177 $2,243,897 $2,421,247 $2,720,624 $2,690,418 $2,474,07 $2,886,633 $2,018,84 $2,17,838 $1,699,03 Cumulative Expenditures ($10,031,768) ($10,896,114) ($11,298,831) ($11,79,22) ($12,189,79) ($12,986,204) ($13,13,714) ($14,601,9) ($1,024,642) ($16,081,044) Cumulative Receipts $12,9,944 $13,140,011 $13,720,078 $14,300,14 $14,880,212 $1,460,279 $16,040,346 $16,620,413 $17,200,480 $17,780,47 Year 2nd Peak rd Peak th Peak Projected Replacements ($1,739,70) ($120,379) ($813,73) ($200,62) ($3,634) ($40,293) ($471,192) ($1,216,627) ($16,111) ($172,82) Annual Deposit $80,067 $47,219 $47,219 $47,219 $47,219 $47,219 $47,219 $47,219 $164,346 $164,346 End of Year Balance $40,000 $894,840 $6,30 $830,872 $1,22,46 $1,277,382 $1,281,408 $40,000 $48,236 $40,000 Cumulative Expenditures ($17,820,614) ($17,940,993) ($18,74,746) ($18,9,398) ($19,009,032) ($19,49,326) ($19,930,18) ($21,147,144) ($21,303,2) ($21,47,837) Cumulative Receipts $18,360,614 $18,83,833 $19,311,01 $19,786,270 $20,261,489 $20,736,707 $21,211,926 $21,687,144 $21,81,491 $22,01,837

11 Replacement Reserve Analysis - Page A INFLATION ADJUSTED FUNDING The Cash Flow Method calculations on Page A4 have been done in today's dollars with no adjustment for inflation. At Miller + Dodson, we belive that long-term inflation forecasting is effective at demonstrating the power of compounding, not at calculating appropriate funding levels for Replacement Reserves. We have developed this proprietary model to estimate the short-term impact of inflation on Replacement Reserve funding. $84, CASH FLOW METHOD RECOMMENDED FUNDING #6 - Inflation Adjusted Funding The 2019 Study Year calculations have been made using current replacement costs $700,000 (see Page B2), modified by the Analyst for any project specific conditions. $99, INFLATION ADJUSTED FUNDING A new analysis calculates 2020 funding based on three assumptions; Replacement Reserves on Deposit totaling $8,817 on January 1, All 2019 Projected Replacements listed on Page C2 accomplished at a cost to Replacement Reserves less than $342,664. Construction Cost Inflation of 2.30 percent in The $99,390 inflation adjusted funding in 2020 is a 2.7 percent increase over the non-inflation adjusted 2020 funding of $84,370. $600,000 $00,000 $400,000 $84,370 $84,370 $84,370 $99,390 $84,370 $620,347 $84,370 $641,740 $620, INFLATION ADJUSTED FUNDING A new analysis calculates 2021 funding based on three assumptions; Replacement Reserves on Deposit totaling $1,116,49 on January 1, All 2020 Projected Replacements listed on Page C2 accomplished at a cost to Replacement Reserves less than $68,748. Construction Cost Inflation of 2.30 percent in The $620,347 inflation adjusted funding in 2021 is a 6.16 percent increase over the non-inflation adjusted 2021 funding of $84,370. $300,000 $200,000 $641, INFLATION ADJUSTED FUNDING A new analysis calculates 2022 funding based on three assumptions; Replacement Reserves on Deposit totaling $1,29,320 on January 1, All 2021 Projected Replacements listed on Page C2 accomplished at a cost to Replacement Reserves less than $477,486. Construction Cost Inflation of 2.30 percent in The $641,740 inflation adjusted funding in 2022 is a 9.82 percent increase over the non-inflation adjusted funding of $84, YEAR FIVE & BEYOND The inflation adjusted funding calculations outlined above are not intended to be a substitute for periodic evaluation of common elements by an experienced Reserve Analyst. Industry Standards, lender requirements, and many state and local statutes require a Replacement Reserve Study be professionally updated every 3 to years. INFLATION ADJUSTMENT Prior to approving a budget based upon the 2020, 2021 and 2022 inflation adjusted funding calculations above, the 2.30 percent base rate of inflation used in our calculations should be compared to rates published by the Bureau of Labor Statistics. If there is a significant discrepancy (over 1 percent), contact Miller Dodson + Associates prior to using the Inflation Adjusted Funding. INTEREST ON RESERVES The recommended funding calculations do not account for interest earned on Replacement Reserves. In 2019, based on a 1.00 percent interest rate, we estimate the Association may earn $4,60 on an average balance of $464,963, $8,11 on an average balance of $81,138 in 2020, and $11,879 on $1,187,890 in The Association may elect to attribute 100 percent of the earned interest to Reserves, resulting in a reduction in the 2019 funding from $84,370 to $79,721 (a 0.80 percent reduction), $99,390 to $90,879 in 2020 (a 1.42 percent reduction), and $620,347 to $608,469 in 2021 (a 1.91 percent reduction). $100,000 $0 Cash Flow Method Funding Inflation Adjusted Funding

12 Replacement Reserve Analysis - Page A6 REPLACEMENT RESERVE STUDY - SUPPLEMENTAL COMMENTS Sanctuary at False Cape has 248 units. The type of property is a Condominium Association. The Cash Flow Method calculates the minimum annual funding necessary to prevent Replacement Reserves from dropping below the Minimum Balance. Failure to fund at least the recommended levels may result in funding not being available for the Projected Replacements listed in the Replacement Reserve Inventory. The accuracy of the Replacement Reserve Analysis is dependent upon expenditures from Replacement Reserves being made ONLY for the 262 Projected Replacements specifically listed in the Replacement Reserve Inventory. The inclusion/exclusion of items from the Replacement Reserve Inventory is discussed on Page B1. The original study indicated there are 242 total units. The Manager reports that there are 248 units and that the reserve contribution is prorated based on square footage area of each unit. Phase 1 (also indicated as Building A) is reported to have been completed in 200. Phase 2 (also indicated as Building B) is reported to have been completed in The recommended contribution indicates a significant increase over the prior study due in large part to the significant amount of replacement inventory added to this update as requested by the Board that was not included in the previous study. 09/17/1. Changed study year to Added 12 months contributions to reflect starting balance as of January 1, Subtracted one year from each component's remaining life.

13 Replacement Reserve Inventory - Page B1 REPLACEMENT RESERVE INVENTORY GENERAL INFORMATION Sanctuary at False Cape - Replacement Reserve Inventory identifies 376 items. Two types of items are identified, Projected Replacements and Excluded Items: PROJECTED REPLACEMENTS. 262 of the items are Projected Replacements and the periodic replacements of these items are scheduled for funding from Replacement Reserves. The Projected Replacements have an estimated one-time replacement cost of $8,487,49. Replacements totaling $21,47,837 are scheduled in the Replacement Reserve Inventory over the 40-year Study Period. Projected Replacements are the replacement of commonly-owned physical assets that require periodic replacement and whose replacement is to be funded from Replacement Reserves. EXCLUDED ITEMS. 114 of the items are Excluded Items, and expenditures for these items are NOT scheduled for funding from Replacement Reserves. The accuracy of the calculations made in the Replacement Reserve Analysis is dependent on expenditures NOT being made for Excluded Items. The Excluded Items are listed in the Replacement Reserve Inventory to identify specific items and categories of items that are not to be funded from Replacement Reserves. There are multiple categories of items that are typically excluded from funding by Replacement Reserves, including but not limited to: Tax Code. The United States Tax Code grants very favorable tax status to Replacement Reserves, conditioned on expenditures being made within certain guidelines. These guidelines typically exclude maintenance activities, minor repairs and capital improvements. Value. Items with a replacement cost of less that $1,000 and/or a normal economic life of less than 3 years are typically excluded from funding from Replacement Reserves. This exclusion should reflect Association policy on the administration of Replacement Reserves. If the Association has selected an alternative level, it will be noted in the Replacement Reserve Inventory - General Comments on Page B2. Long-lived Items. Items that when properly maintained, can be assumed to have a life equal to the property as a whole, are typically excluded from the Replacement Reserve Inventory. Unit improvements. Items owned by a single unit and where the items serve a single unit are generally assumed to be the responsibility of that unit, not the Association. Other non-common improvements. Items owned by the local government, public and private utility companies, the United States Postal Service, Master Associations, state and local highway authorities, etc., may be installed on property that is owned by the Association. These types of items are generally not the responsibility of the Association and are excluded from the Replacement Reserve Inventory. The rationale for the exclusion of an item from funding by Replacement Reserves is discussed in more detail in the 'Comments' sections of the Section B - Replacement Reserve Inventory. CATEGORIES. The 376 items included in the Sanctuary at False Cape Replacement Reserve Inventory are divided into 28 major categories. Each category is printed on a separate page, Pages B3 to B30. LEVEL OF SERVICE. This Replacement Reserve Inventory has been developed in compliance with the standards established for a Level Three - Update (no site visit/offsite review), as defined by the National Reserve Study Standards, established in 1998 by Community Associations Institute, which states: Level III Studies are based entirely on the component inventory from a prior study. A site visit is not conducted to confirm this information, to verify the quantities that were used in the previous report or to make observations of the current condition of the inventory components. The estimates of value and remaining life that were used in the previous study are adjusted to reflect current pricing and the simple passage of time. The fund status and funding plan are derived from analysis of this data.

14 Replacement Reserve Inventory - Page B2 REPLACEMENT RESERVE INVENTORY - GENERAL INFORMATION (cont'd) INVENTORY DATA. Each of the 262 Projected Replacements listed in the Replacement Reserve Inventory includes the following data: Item Number. The Item Number is assigned sequentially and is intended for identification purposes only. Item Description. We have identified each item included in the Inventory. Additional information may be included in the Comments section at the bottom of each page of the Inventory. Units. We have used standard abbreviations to identify the number of units including SF-square feet, LF-lineal feet, SY-square yard, LS-lump sum, EA-each, and PR-pair. Non-standard abbreviations are noted in the Comments section at the bottom of the page. Number of Units. The methods used to develop the quantities are discussed in "Level of Service" above. Unit Replacement Cost. We use four sources to develop the unit cost data shown in the Inventory; actual replacement cost data provided by the client, information provided by local contractors and suppliers, industry standard estimating manuals, and a cost database we have developed based upon our detailed interviews with contractors and service providers who are specialists in their respective lines of work. Normal Economic Life (Yrs). The number of years that a new and properly installed item should be expected to remain in service. Remaining Economic Life (Yrs). The estimated number of years before an item will need to be replaced. In "normal" conditions, this could be calculated by subtracting the age of the item from the Normal Economic Life of the item, but only rarely do physical assets age "normally". Some items may have longer or shorter lives depending on many factors such as environment, initial quality of the item, maintenance, etc. Total Replacement Cost. This is calculated by multiplying the Unit Replacement Cost by the Number of Units. Each of the 114 Excluded Items includes the Item Description, Units, and Number of Units. Many of the Excluded Items are listed as a 'Lump Sum' with a quantity of 1. For the Excluded Items, this indicates that all of the items identified by the 'Item Description' are excluded from funding by Replacement Reserves. REVIEW OF EXPENDITURES. This Replacement Reserve Study should be reviewed by an accounting professional representing the Association prior to implementation. PARTIAL FUNDING. Items may have been included in the Replacement Reserve Inventory at less than 100 percent of their full quantity and/or replacement cost. This is done on items that will never be replaced in their entirety, but which may require periodic replacements over an extended period of time. The assumptions that provide the basis for any partial funding are noted in the Comments section. REMAINING ECONOMIC LIFE GREATER THAN 40 YEARS. The calculations do not include funding for initial replacements beyond 40 years. These replacements are included in this Study for tracking and evaluation. They should be included for funding in future Studies, when they enter the 40-year window.

15 Replacement Reserve Inventory - Page B3 Balcony Edges PROJECTED REPLACEMENTS AND EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) Balcony Edge, Type 1 lf 31 3 EXCLUDED Balcony Edge, Type 1 lf 31 3 EXCLUDED Balcony Edge, Type 1 lf 31 3 EXCLUDED Balcony Edge, Type 1 lf 31 3 EXCLUDED Balcony Edge, Type 1 lf 31 3 EXCLUDED Balcony Edge, Type 1 lf 31 3 EXCLUDED Balcony Edge, Type 2 lf 13 3 EXCLUDED Balcony Edge, Type 2 lf 13 3 EXCLUDED Balcony Edge, Type 2 lf 13 3 EXCLUDED Balcony Edge, Type 2 lf 13 3 EXCLUDED Balcony Edge, Type 2 lf 13 3 EXCLUDED Balcony Edge, Type 2 lf 13 3 EXCLUDED 1 Balcony Edge, Type 3 lf 2 $ $3,32 2 Balcony Edge, Type 3 lf 2 $ $3,32 3 Balcony Edge, Type 3 lf 2 $ $3,32 4 Balcony Edge, Type 3 lf 2 $ $3,32 Balcony Edge, Type 3 lf 2 $ none 2 $3,32 6 Balcony Edge, Type 3 lf 2 $ $3,32 Balcony Edges - Replacement Costs - Subtotal $19,92 Balcony Edges COMMENTS The programming of balcony edges uses past percentages of complete repair/replacement to extrapolate remaining quantities to be performed over the next 6 years. The unit prices are based on 201 contract price data as provided with inflation for two years It is assumed the normal life of the Type 2 and 3 will be 40 years. It is assumed the life of the Type 1 will be only 8 years and should be verified for the next update as well as possibly recategorizing to Type 2 or 3 if necessary Balcony edge unit pricing is based on the previous contract cost as reported All Type 1 and Type 2 Balcony Edge replacements are done and have been excluded as requested.

16 Replacement Reserve Inventory - Page B4 SITE COMPONENT PROJECTED REPLACEMENTS AND EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 7 Asphalt pavement, seal coat sf 27,04 $ $,679 8 Asphalt pavement, overlay sf 27,04 $ $44,624 9 Concrete garage pavement (1/2%) sf 83 $ $8, Concrete garage pavement (1/2%) sf 83 $ $8, Concrete garage pavement (1/2%) sf 83 $ $8, Concrete garage pavement (1/2%) sf 83 $ $8, Concrete garage pavement (1/2%) sf 83 $ $8, Concrete garage pavement (1/2%) sf 83 $ $8,809 1 Concrete garage pavement (1/2%) sf 83 $ $8, Concrete garage pavement (1/2%) sf 83 $ $8, Concrete garage pavement (1/2%) sf 83 $ $8, Concrete garage pavement (1/2%) sf 83 $ $8,809 Concrete curb & gutter (20%) ft 20 3 EXCLUDED Concrete curb & gutter (20%) ft 20 3 EXCLUDED Concrete curb & gutter (20%) ft 20 3 EXCLUDED Concrete curb (20%) ft EXCLUDED Concrete curb (20%) ft EXCLUDED Concrete curb (20%) ft EXCLUDED SITE COMPONENT - Replacement Costs - Subtotal $138,396 SITE COMPONENT COMMENTS We have assumed that the Association will replace the asphalt pavement by the installation of a 2 inch thick overlay. The pavement will need to be milled prior to the installation of the overlay. Milling and the cost of minor repairs ( to 10 percent of the total area) to the base materials and bearing soils beneath the pavement are included in the cost shown above. The section of asphalt pavement with an embossed texture and paint coating is not priced separately from normal overlay. The seal coating and striping of parking is reported to have been done in Concrete curb & gutter quantities are based on the previous study. Concrete garage pavement replacement is estimated at 1/2 of 1 percent per year every 6 years. Life of garage pavement replacement may be impacted by below grade stormwater storage system. Unit pricing of garage pavement may be impacted by the below grade stormwater storage system.

17 Replacement Reserve Inventory - Page B SITE COMPONENT (cont.) PROJECTED REPLACEMENTS AND EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 19 Concrete sidewalk (6%) sf 40 $ $,17 20 Concrete sidewalk (6%) sf 40 $ $,17 21 Concrete sidewalk (6%) sf 40 $ $,17 22 Concrete sidewalk (6%) sf 40 $ $,17 23 Concrete sidewalk (6%) sf 40 $ $,17 24 Concrete sidewalk (6%) sf 40 $ $,17 2 Concrete sidewalk (6%) sf 40 $ $,17 26 Concrete sidewalk (6%) sf 40 $ $,17 27 Concrete sidewalk (6%) sf 40 $ $,17 28 Concrete sidewalk (6%) sf 40 $ $,17 29 Bulkhead, concrete, refurbishing ls 1 $8, $8, Bulkhead concrete cap, replace cy 126 $ $74, Bulkhead, sheet piling, 20 ft. deep lf 80 $ $301,70 32 Bulkhead, stainless railing, refurbish lf 80 $ $2,80 33 Bulkhead, stainless railing, replacement lf 80 $ $21, Stormwater system, uncovered ls 1 $3, $3,0 3 Stormwater system, covered Phase 1 ls 1 $18, none 2 $18, Stormwater system, covered Phase 2 ls 1 $18, $18, Stormwater inlets, partial, Phase 1 ls 1 $17, $17,40 38 Stormwater inlets, partial, Phase 2 ls 1 $17, $17,40 Building 2 entrance steel railing ls 1 3 EXCLUDED SITE COMPONENT (cont.) - Replacement Costs - Subtotal $36,683 SITE COMPONENT (cont.) COMMENTS The concrete walks quantity includes the boardwalk at the beach front bulkhead, building entrances and all walks around the buildings. The quantity from the previous study appears to be accurate but the percentage for replacement has been revised to assume 1 percent per year for a failure rate The bulkhead is included for all major components based on quantities described in the previous study. Refurbishing of the railings includes the cleaning of exposed metal, repairing welds and replacement of corroded anchor fasteners. Concrete cap refurbishing includes the replacement of joint sealants, and repair of cracks and spalling of cap 'Beach access structure is currently buried under sand & cannot be visually evaluated for current condition The previous study did not include funds for sand & sediment removal from below grade BMP's.

18 Replacement Reserve Inventory - Page B6 SITE COMPONENT (cont.) PROJECTED REPLACEMENTS AND EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 39 Site lighting, 13' pole & fixture ea 20 $1, $27, Site lighting, 3' bollards ea 61 $ $29, Site lighting, pool area, Phase 1 ea 24 $ $11, Site lighting, pool area, Phase 2 ea 24 $ $11, Walkway lighting, Phase 2 ea 1 $ $7,1 Entry lighting, Phase 1 ea 4 3 EXCLUDED Entry lighting, Phase 2 ea 4 3 EXCLUDED 44 Landscape lighting, Phase 1 ea 22 $ $2,970 4 Landscape lighting, Phase 2 ea 43 $ $,80 46 Mailboxes, Phase 1 ea 99 $ $12, Mailboxes, Phase 2 ea 149 $ $19,221 Entry monument & sign, refurbish ls 1 3 EXCLUDED 48 Entry monument & sign, replace ls 1 $6, $6,80 SITE COMPONENT (cont.) - Replacement Costs - Subtotal $133,86 SITE COMPONENT (cont.) COMMENTS Site lighting quantities are based on the previous study inventory. The landscape lighting was added to this update and the unit pricing was revised to reflect the different types of fixtures. The normal and remaining life has been reduced Although mailboxes are located in the garages, they are still exposed to high humidity and salt.

19 Replacement Reserve Inventory - Page B7 BUILDING EXTERIOR (Phase 1 = PH1) PROJECTED REPLACEMENTS AND EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 49 PH1 Shingle asphalt/fiberglass (0%) sf 49,000 $ $291,0 0 PH1 Shingle asphalt/fiberglass (0%) sf 49,000 $ $291,0 1 PH1 Gutter & downspout, 6" aluminum lf 780 $ $7,09 2 PH1 Single ply membrane roof sf 1,00 $ $13,4 PH1 Standing seam metal sf 79,000 3 EXCLUDED 3 PH1 CMU exterior walls, repoint, partial sf 1,100 $ $,247 4 PH1 Metal grilles, garage, refurbish ea 2 $ none 2 $10,244 PH1 Fiber cement soffit panel, partial sf 10,000 $ $69,00 6 PH1 Fiber cement lap siding, partial sf 10,000 $ $122,00 7 PH1 Fiber cement panel siding, partial sf 1,200 $ $14,700 8 PH1 Fiber cement trim, partial lf 9,00 $ $94,00 9 PH1 Exterior joint sealants, partial lf 17,000 $ $1,80 60 PH1 Storefront doors and windows sf 1,380 $ $62, PH1 Exterior metal doors ea 20 $1, $21, PH1 Aluminum doors w/sidelights ea 8 $1, $12, PH1 Rollup door at 1st floor elevator ea 1 $1, $1,29 64 PH1 Exterior corridor floor coating sf 0,000 $ $347,00 6 PH1 Aluminum railing, refurbish lf,20 $ $28, PH1 Aluminum railing, replace lf,20 $ $219,97 67 PH1 Louvers for heatpump access ea 113 $ $44,63 68 PH1 Wood and aluminum trellis ea 2 $21, $42,90 PH1 Balcony edge flashing replacement lf EXCLUDED PH1 Balcony edge flashing replacement lf EXCLUDED PH1 Balcony edge flashing replacement lf EXCLUDED BUILDING EXTERIOR (Phase 1 = PH1) - Replacement Costs - Subtotal $1,73,014 BUILDING EXTERIOR (Phase 1 = PH1) COMMENTS The previous study did not segregate exterior envelope quantities by Phase 1 and 2. We have separated them using a 0/0 division of quantity and applied different remaining life to reflect the different ages of each phase The fiber cement and joint sealant quantities have been taken from the previous study and is divided into intervals of 20% every 8 years for each building based on observed conditions and the current effort to partially replace damaged and deteriorated materials or poorly installed original work The quantity for storefront doors and windows is increased above previous study which is believed to be low The unit price for various types of fiber cement siding assumes and average The metal grilles at garage level are added to this update (only a partial quantity is indicated) The roll up door at 1st floor elevator exterior opening is added to this update. 8/28/201 Standing seam roofing is moved to the large component inventory Individual storage closet doors and unit doors and windows are excluded components The previous study did not include the aluminum and lumber trellis structures The previous study did not include louver access panels to heatpumps at the unit balconies.

20 Replacement Reserve Inventory - Page B8 BUILDING EXTERIOR (Phase 2 = PH2) PROJECTED REPLACEMENTS AND EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 69 PH2 Shingle asphalt/fiberglass sf 98,000 $ $83, PH2 Gutter & downspout, 6" aluminum lf 780 $ $7,09 71 PH2 Single ply membrane roof sf 1,00 $ $13,4 PH2 Standing seam metal sf 79,000 3 EXCLUDED 72 PH2 CMU exterior walls, repoint, partial sf 1,100 $ $, PH2 Metal grilles, garage, refurbish ea 13 $ $2,61 74 PH2 Fiber cement soffit panel, partial sf 10,000 $ $69,00 7 PH2 Fiber cement lap siding, partial sf 10,000 $ $122,00 76 PH2 Fiber cement panel siding, partial sf 1,200 $ $14, PH2 Fiber cement trim, partial lf 9,00 $ $94,00 78 PH2 Exterior joint sealants, partial lf 17,000 $ $1,80 79 PH2 Storefront doors and windows sf 1,380 $ $62, PH2 Exterior metal doors ea 20 $1, $21, PH2 Aluminum doors w/sidelights ea 8 $1, $12, PH2 Exterior corridor floor coating sf 0,000 $ $347,00 83 PH2 Aluminum railing, refurbish lf,20 $ $28, PH2 Aluminum railing, replace lf,20 $ $219,97 8 PH2 Louvers for heatpump access ea 143 $ $6,48 86 PH2 Wood and aluminum trellis ea 2 $21, $42,90 PH2 Balcony edge flashing replacement lf EXCLUDED PH2 Balcony edge flashing replacement lf EXCLUDED PH2 Balcony edge flashing replacement lf EXCLUDED BUILDING EXTERIOR (Phase 2 = PH2) - Replacement Costs - Subtotal $1,7,886 BUILDING EXTERIOR (Phase 2 = PH2) COMMENTS The balcony edge flashing detail appears to be an original latent construction defect that is failing prematurely and is requiring partial replacement of the metal flashing, concrete balcony decking and membrane and sheathing beneath the concrete. Quantities are unknown and unit pricing per linear foot is based on the current contract worst case conditions. It is assumed this will be phased over 3 years and will be required again when the balcony railings are replaced in the future. Fiber cement soffits, trim, panel and lap siding all display poor installation and considerable deterioration at this time. The fiber cement should be replaced incrementally as needed and the inventory allows for approx. 10% every 8-10 years as requested. Building 2 does not have a roll up door at the elevator ground floor. 8/28/201 Standing seam roofing is moved to the large component inventory Exterior balcony coating is being deferred as requested by the Board The remaining life of shingle roofing has been reduced per investigation by Hentz Engineering One of the exterior metal doors was replaced for $1,07.

21 Replacement Reserve Inventory - Page B9 BUILDING EXTERIOR UNIT DOORS & WINDOWS PROJECTED REPLACEMENTS AND EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 87 Ph1 Exterior door, Unit Entrances ea 99 $1, $103,36 88 Ph1 Sliding door, Unit Balcony ea 99 $1, $13,630 Ph1 Exterior windows, Unit unit 99 3 EXCLUDED 89 Ph1 HVAC Access panel at balcony ea 99 $ $44,41 90 Ph2 Exterior door, Unit Entrances ea 143 $1, $149, Ph2 Sliding door, Unit Balcony ea 168 $1, $230,160 Ph2 Exterior windows, Unit unit EXCLUDED 92 Ph2 HVAC Access panel at balcony ea 143 $ $64,207 Door hardware allowance ls 1 3 EXCLUDED BUILDING EXTERIOR UNIT DOORS & WINDOWS - Replacement Costs - Subtotal $727,096 BUILDING EXTERIOR UNIT DOORS & WINDOWS COMMENTS The previous study did not include the HVAC access panels, doors, windows and sliding doors for the individual units. The Manager requested these be added to this update. An allowance of $1,900 per year for door hardware replacement is an operating expense.

22 Replacement Reserve Inventory - Page B10 BUILDING INTERIORS PROJECTED REPLACEMENTS AND EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 93 Interior signage allowance ls 1 $, $,000 Flat screen TV's ea 4 3 EXCLUDED BUILDING INTERIORS - Replacement Costs - Subtotal $,000 BUILDING INTERIORS COMMENTS The flat screen TV's have been excluded as requested.

23 Replacement Reserve Inventory - Page B11 BUILDING INTERIOR (Phase 1 = PH1) PROJECTED REPLACEMENTS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 94 PH1 Meeting room, renovation ls 1 $8, $8,990 9 PH1 Kitchen renovation ls 1 $24, $24,0 96 PH1 Restroom, renovation ls 1 $4, $4,80 97 PH1 Library, renovation ls 1 $3, $3, PH1 Lobby renovation, lower level ls 1 $18, $18, PH1 Lobby and corridor renovation, upper ls 1 $9, $9, PH1 Offices, renovation ls 1 $6, $6, PH1 carpet sf 800 $ $8, PH1 porcelain tile sf 2,00 $ $42, PH1 stained & epoxy sealed concrete sf 1,000 $ $2, PH1 rubber floor tile sf 40 $ $3, PH1 garage ceiling, partial sf 960 $ $2, PH1 ceiling suspension system, 100% sf 3,840 $ $16, PH1 wainscoting partial allowance sf 300 $ $,98 BUILDING INTERIOR (Phase 1 = PH1) - Replacement Costs - Subtotal $18,739 BUILDING INTERIOR (Phase 1 = PH1) COMMENTS The unit price for carpet replacement is reported as a current vendor unit price Some sofas in Building A were replaced for $2,277

24 Replacement Reserve Inventory - Page B12 BUILDING INTERIOR - FURNITURE AND EQUIPMENT PROJECTED REPLACEMENTS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 108 Office desks with returns ea 8 $1, $9, Office chair ea 8 $ none 2 $4, BUILDING INTERIOR - FURNITURE AND EQUIPMENT - Replacement Costs - Subtotal $14,720 BUILDING INTERIOR - FURNITURE AND EQUIPMENT COMMENTS

25 Replacement Reserve Inventory - Page B13 BUILDING INTERIOR (Phase 2 = PH2) PROJECTED REPLACEMENTS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 110 PH2 Meeting room, renovation ls 1 $4, $4, PH2 Kitchen renovation ls 1 $12, $12, PH2 Restroom and shower, renovation ls 1 $9, $9, PH2 Library, renovation ls 1 $2, $2, PH2 Lobby renovation, lower level ls 1 $12, $12, PH2 Lobby and corridor renovation, upper ls 1 $7, $7, PH2 Offices, renovation ls 1 $2, $2, PH2 carpet sf 1,200 $ none 2 $12, PH2 porcelain tile sf 3,700 $ $63,4 119 PH2 stained & epoxy sealed concrete sf 4,800 $ none 2 $11, PH2 rubber floor tile sf 0 $ $3, PH2 garage ceiling, partial sf 960 $3.09 none 2 $2, PH2 ceiling suspension system, 100% sf 3,840 $ $16, PH2 wainscoting partial allowance sf 300 $ $,98 BUILDING INTERIOR (Phase 2 = PH2) - Replacement Costs - Subtotal $166,06 BUILDING INTERIOR (Phase 2 = PH2) COMMENTS

26 Replacement Reserve Inventory - Page B14 BUILDING SYSTEMS (Phase 1 = PH1) PROJECTED REPLACEMENTS AND EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 124 PH1 Elevator cab & door, passenger ea 4 $8, $34, PH1 Elevator, traction psngr, controls ea 4 $63, $24, PH1 Elevator, traction psngr, mechanical ea 4 $30, $123, PH1 Trash compactor, ram & controls ea 2 $3, none 2 $7,900 PH1 Trash chute hopper doors ea 8 3 EXCLUDED 128 PH1 Backup generator, diesel, 30KW ea 1 $49, $49, PH1 Backup generator, diesel, 30KW ea 1 $49, $49, PH1 Electric meters ea 101 $ $31, PH1 Stairwell lighting, partial ea 24 $ $, PH1 Entry lobby lighting ea 4 $2, $8, PH1 Misc. common interior lighting ea 12 $ none 2 $3, PH1 Garage lighting, 33% ea 17 $ $8,24 13 PH1 Garage lighting, 33% ea 17 $ none 2 $8, PH1 Garage lighting, 33% ea 16 $ $7, PH1 Corridor CFL sconces, partial ea 33 $ none 2 $9, PH1 Corridor CFL sconces, partial ea 33 $ $9, PH1 Corridor CFL sconces, partial ea 33 $ $9, PH1 Balcony lights, red lenses ea 12 $ $36, PH1 Heat pump/ac unit (2 tons) ea 2 $3, none 2 $7, PH1 Heat pump/ac unit (2 tons) ea 2 $3, $7, PH1 Heat pump/ac unit (2 tons) ea 2 $3, $7, PH1 Heat pump/ac unit (3 to tons) ea 2 $6, $13,700 BUILDING SYSTEMS (Phase 1 = PH1) - Replacement Costs - Subtotal $694,19 BUILDING SYSTEMS (Phase 1 = PH1) COMMENTS The Board reports that 6 heat pumps were replaced in 2017 for a cost of $13,000 but specific unit locations were not provided and that a new heat pump was installed for $8, The heat pump in Bldg.A Library and Party Room are both reported to have been replaced in past 4 years.

27 Replacement Reserve Inventory - Page B1 BUILDING SYSTEMS (Phase 2 = PH2) PROJECTED REPLACEMENTS AND EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 14 PH2 Elevator cab & door, passenger ea 4 $8, $34, PH2 Elevator, hydraulic psngr, controls ea 4 $63, $24, PH2 Elevator, hydraulic psngr, piston ea 4 $30, $123, PH2 Trash compactor, ram & controls ea 2 $3, none 2 $7,900 PH2 Trash chute hopper doors ea 8 3 EXCLUDED 149 PH2 Backup generator, diesel, 20KW ea 1 $49, $49,20 10 PH2 Backup generator, diesel, 400KW ea 1 $49, $49,20 11 PH2 Electric meters ea 143 $ $4,04 12 PH2 Stairwell lighting, partial ea 24 $ $, PH2 Entry lobby lighting ea 4 $2, $8, PH2 Misc. common interior lighting ea 12 $ $3,420 1 PH2 Garage lighting, 33% ea 1 $ none 2 $7,27 16 PH2 Garage lighting, 33% ea 14 $ $6, PH2 Garage lighting, 33% ea 14 $ $6, PH2 Corridor CFL sconces, partial ea 48 $ $13, PH2 Corridor CFL sconces, partial ea 48 $ $13, PH2 Corridor CFL sconces, partial ea 47 $ $13, PH2 Balcony lights, red lenses ea 122 $ $3, PH2 Heat pump/ac unit (2 tons) ea 2 $3, none 2 $7, PH2 Heat pump/ac unit (2 tons) ea 2 $3, $7, PH2 Heat pump/ac unit (2 tons) ea 2 $3, $7, PH2 Heat pump/ac unit (3 to tons) ea 2 $6, $13,390 BUILDING SYSTEMS (Phase 2 = PH2) - Replacement Costs - Subtotal $714,987 BUILDING SYSTEMS (Phase 2 = PH2) COMMENTS The unit price for garage light fixture replacement is based on the reported cost of the fixture at $300 plus a $10 rate for labor to hire an electrician although the facility staff is currently performing the replacement with in-house labor.

28 Replacement Reserve Inventory - Page B16 BUILDING SYSTEM (Phase 1 = PH1) PROJECTED REPLACEMENTS AND EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 166 PH1 Garage gate arm ea 4 $ none 2 $3, PH1 Garage operator ea 4 $1, $, PH1 Garage controller ea 4 $1, $4, PH1 Access control system readers ea 2 $2, $4, PH1 Access control system readers ea 2 $1, $2, PH1 CCTV cameras (older ones) ea 12 $ $7, PH1 Oil water separator ea 4 $1, $4, PH1 Backflow preventer, water main ea 1 $, $,790 PH1 BFP valves ea 1 3 EXCLUDED 174 PH1 Domestic water pumps ea 2 $9, $18, PH1 Domestic water pump motors ea 2 $2, $4, PH1 Pump controller ea 1 $, $, PH1 Pressure tank ea 1 $3, $3, PH1 Domestic water piping allowance unit 99 $ $6, PH1 Sanitary piping allowance unit 99 $ $44,0 180 PH1 Fire pump ea 1 $34, $34, PH1 Jockey pump ea 1 $, $,88 PH1 Dry pipe air compressor ea 1 3 EXCLUDED 182 PH1 Fire alarm control panel ea 1 $7, $7,0 183 PH1 Fire alarm annunciator ea 1 $, $, PH1 Gas pipe corrosion inhibitor ls 1 $3,0.00 none 2 $3,0 BUILDING SYSTEM (Phase 1 = PH1) - Replacement Costs - Subtotal $226,60 BUILDING SYSTEM (Phase 1 = PH1) COMMENTS A number of cameras have been installed or replaced in the previous 2 years Some entrance phones, controller and card reader was replaced in 2017 for $2, Domestic water systems for each building were not included in the previous study Allowances for domestic piping and sanitary piping are included in this update The gas lines in the garage level are exposed to severe corrosion and have been cleaned and coated The Building A fire alarm control panel circuit board was replaced for $2, Several backflow devices were replaced for $8,426 although the Board asked these be excluded.

29 Replacement Reserve Inventory - Page B17 BUILDING SYSTEM (Phase 2 = PH2) PROJECTED REPLACEMENTS AND EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 18 PH2 Garage gate arm ea 3 $ none 2 $2, PH2 Garage operator ea 3 $1, $3, PH2 Garage controller ea 3 $1,03.00 none 2 $3, PH2 Access control system readers ea 3 $2, $6, PH2 CCTV cameras (older ones) ea 1 $ $8,77 PH2 Oil water separator ea 2 3 EXCLUDED 190 PH2 Backflow preventer, water main ea 1 $, $,790 PH2 BFP valves ea 1 3 EXCLUDED 191 PH2 Domestic water pumps ea 2 $9, $18, PH2 Domestic water pump motors ea 2 $2, $4, PH2 Pump controller ea 1 $, $, PH2 Pressure tank ea 1 $3, $3,23 19 PH2 Domestic water piping allowance unit 143 $ $82, PH2 Sanitary piping allowance unit 143 $ $63, PH2 Fire pump ea 1 $34, $34, PH2 Jockey pump ea 1 $, $,88 PH2 Dry pipe air compressor ea 1 3 EXCLUDED 199 PH2 Fire alarm control panel ea 1 $7, $7,0 200 PH2 Fire alarm annunciator ea 1 $, $, PH2 Gas pipe corrosion inhibitor ls 1 $3,0.00 none 2 $3,0 BUILDING SYSTEM (Phase 2 = PH2) - Replacement Costs - Subtotal $26,800 BUILDING SYSTEM (Phase 2 = PH2) COMMENTS The FACP in Building B is reported to have been replaced in 2014 for $7, Domestic water systems for each building were not included in the previous study Allowances for domestic piping and sanitary piping are included in this update The gas lines in the garage level are exposed to severe corrosion and have been cleaned and coated.

30 Replacement Reserve Inventory - Page B18 BUILDING SYSTEM (Newer CCTV Cameras) PROJECTED REPLACEMENTS AND EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 202 Security CCTV DVR ls 1 $2, $2, CCTV Cameras (2012) ea $ $2,92 CCTV Cameras (2013) ea 1 3 EXCLUDED CCTV Cameras (2014) ea 1 3 EXCLUDED 204 CCTV Cameras (201) ea 6 $1, $8,340 BUILDING SYSTEM (Newer CCTV Cameras) - Replacement Costs - Subtotal $14,01 BUILDING SYSTEM (Newer CCTV Cameras) COMMENTS Quantities and pricing for CCTV is based on reported information provided by the Manager. Pricing fluctuation is based on the types of cameras and installation requiring conduit, power and cable required for various locations.

31 Replacement Reserve Inventory - Page B19 SWIMMING POOL (Phase 1 = PH1) PROJECTED REPLACEMENTS AND EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 20 PH1 Swimming pool, structure sf 1,300 $ $89, PH1 Swimming pool, whitecoat sf 4,900 $ $19, PH1 Swimming pool, waterline tile ft 600 $ $9, PH1 Swimming pool, coping ft 600 $ $19, PH1 Swimming pool, cover sf 1,600 $ none 2 $3, PH1 Swimming pool, concrete deck (10%) sf 2,814 $ $32, PH1 Swimming pool pump (+ hp) ea 1 $3, $3, PH1 Swimming pool filter ea 2 $2, $, PH1 Swimming pool heater - gas ea 2 $4, $9, PH1 Swimming pool deck coating sf 28,140 $ $194, PH1 Perimeter fence - 42" (aluminum picket) ft 340 $ $9, PH1 Hot tub ea 1 $6, $6,69 PH1 Hot tub cover ea 1 3 EXCLUDED PH2 Hammerhead pool cleaning ea 1 3 EXCLUDED SWIMMING POOL (Phase 1 = PH1) - Replacement Costs - Subtotal $403,10 SWIMMING POOL (Phase 1 = PH1) COMMENTS We have assumed that the project to replace the pool deck will include the replacement of the plumbing and electrical systems installed beneath the pavement Pool A is reported to have had white coat resurfaced along with new waterline tile and coping and pump replaced at the end of Unit prices have been adjusted to reported actual costs. The pool cover does not last more than 3-4 years typically due to its size and configuration One of the HP pool pump motors was replaced in 2016 for $2,410

32 Replacement Reserve Inventory - Page B20 SWIMMING POOL (Phase 2 = PH2) PROJECTED REPLACEMENTS AND EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 217 PH2 Swimming pool, structure sf 993 $ $68, PH2 Swimming pool, whitecoat sf 2,793 $ none 2 $11, PH2 Swimming pool, waterline tile ft 300 $ none 2 $4, PH2 Swimming pool, coping ft 300 $ $9, PH2 Swimming pool, cover sf 1,100 $ none 2 $2, PH2 Swimming pool, concrete deck (10%) sf 1,386 $ $16, PH2 Swimming pool pump (2 hp) ea 1 $3, none 2 $3, PH2 Swimming pool filter ea 1 $2, $2,90 22 PH2 Swimming pool heater - gas ea 2 $4, $9, PH2 Swimming pool deck coating sf 13,860 $ $9, PH2 Perimeter fence - 42" (aluminum picket) ft 240 $ $7, PH2 Water play features ea 3 $1, $4, PH2 water play pumps (1. hp to 3 hp) ea 2 $1, $2, PH2 water play deck surfacing ls 1 $4, $4,1 PH2 Hammerhead pool cleaning ea 1 3 EXCLUDED SWIMMING POOL (Phase 2 = PH2) - Replacement Costs - Subtotal $242,881 SWIMMING POOL (Phase 2 = PH2) COMMENTS

33 Replacement Reserve Inventory - Page B21 C Swimming pool, structure PROJECTED REPLACEMENTS AND EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 231 C Swimming pool, whitecoat sf 1,220 $ $7, C Swimming pool, waterline tile ft 280 $ $4, C Swimming pool, coping ft 280 $ $1, C Swimming pool, cover sf 1,100 $ $2, C Swimming pool, concrete deck (10%) sf 1,200 $ $13, C Swimming pool pump (+ hp) ea 1 $4, $4, C Swimming pool filter ea 2 $2, $, C Swimming pool heater - gas (old) ea 1 $3, $3, C Swimming pool heater - gas (new) ea 1 $3, $3, C Swimming pool deck coating sf 1,000 $ $103, C Wind screen 42" (tempered glass) pane 11 $2, $32,063 C chairs, PVC ea 36 3 EXCLUDED C Swimming pool, structure - Replacement Costs - Subtotal $19,167 C Swimming pool, structure COMMENTS The cabana wind screen is a tempered glass panel, Three of the panels have been replaced at approximately $3k per panel for the curved ones. 8/20/201. Cabana chairs have been excluded as they are not the Associations responsibility One of the cabana pool heaters was replaced in past years and unit price is revised as reported.

34 Replacement Reserve Inventory - Page B22 COURTYARD AND POOL FURNITURE, GAZEBOS AND GRILLS PROJECTED REPLACEMENTS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 242 PVC High back chairs ea 44 $ $4, PVC Lounge chairs (Phase 1 & 2) ea 93 $ $17, Wood chairs ea 160 $ none 2 $6, Wood benches, long ea 3 $1, none 2 $41, Wood benches, short ea 1 $ none 2 $13,7 247 Wood tables, tall, square ea 8 $1, none 2 $8, Wood tables, low, square ea 10 $ none 2 $9, Wood tables, low, round ea 2 $ none 2 $23,37 20 Waste receptacles, metal ea 10 $ $4, Waste receptacles, metal ea 1 $ none 2 $6, Gas grills, partial ea 1 $1, $1, Gas grills, partial ea 9 $1, $1, Gas grills, partial ea 9 $1, $1,273 2 Gas grills, partial ea 8 $1, none 2 $13,76 26 Gas grills, partial ea 9 $1, $1, Grill undercounter cabinets ea 9 $ $3, Grill undercounter cabinets ea 9 $ $3, Grill undercounter cabinets ea 9 $ none 2 $3, Grill undercounter cabinets ea 9 $ $3, Hot tub gazebo ls 1 $16, $16, Pool plaza gazebos ea 3 $13, $41,310 COURTYARD AND POOL FURNITURE, GAZEBOS AND GRILLS - Replacement Costs - Subtotal $320,928 COURTYARD AND POOL FURNITURE, GAZEBOS AND GRILLS COMMENTS Wood site furnishings in the pool areas and along the boardwalk are a moderately high quality teak but are displaying significant deterioration. The normal and remaining life have been reduced based on visual condition. Extensive cleaning and sealing as a preventive maintenance activity wold not restore the potential life of these items. Future purchased items may have a longer life if cleaned and sealed annually and stored in doors during the off season The previous study did not include the gazebos The gas grills are currently be replaced in phases and unit price is based on approx. reported cost Concrete planters are excluded as long-lived components Concrete trash receptacles are excluded as long-lived components Waste receptacle liners are excluded as an operating expense Pool lounge cushions were not included in the previous study and have been excluded in this update Several pool chairs, loungers and gas grills have been replaced in the past 2 years One of the grills was replaced for $1,697. Unit price has been adjusted for all grills.

35 Replacement Reserve Inventory - Page B23 EXERCISE EQUIPMENT (Building A = BA) EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) BA Treadmill ea 2 3 EXCLUDED BA Elliptical trainer ea 1 3 EXCLUDED BA Recumbent bike ea 1 3 EXCLUDED BA Lat/Row machine ea 1 3 EXCLUDED BA Multi press machine ea 1 3 EXCLUDED BA Back and Ab machine ea 1 3 EXCLUDED EXERCISE EQUIPMENT (Building A = BA) COMMENTS The list of fitness equipment is based on information provided and the normal and remaining life is based on comments for Superior Fitness Services LLC. The replacement value used for each piece of equipment is based on current Internet prices where available or comparable equipment prices where the model and manufacturer is no longer available. Remaining life is highly dependent on original quality, annual maintenance and the level of usage Exercise equipment is now leased and has been excluded as requested.

36 Replacement Reserve Inventory - Page B24 EXERCISE EQUIPMENT (Building B = BB) EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) BB Treadmill, Matrix MXT3 ea 3 3 EXCLUDED BB Elliptical trainer, Matrix MXEXC ea 2 3 EXCLUDED BB Recumbent bike, Matrix MX-H-X ea 2 3 EXCLUDED BB Spin Bike, Keiser 0000PBC ea 2 3 EXCLUDED BB Lat pull machine ea 1 3 EXCLUDED BB Press/midrow machine ea 1 3 EXCLUDED BB Seated leg curl machine ea 1 3 EXCLUDED BB Smith Machine ea 1 3 EXCLUDED BB Olympic flat bench ea 1 3 EXCLUDED BB Adjustable incline bench ea 1 3 EXCLUDED EXERCISE EQUIPMENT (Building B = BB) COMMENTS Exercise equipment is now leased and has been excluded as requested.

37 Replacement Reserve Inventory - Page B2 VALUATION EXCLUSIONS EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) Unit heaters ls 1 3 EXCLUDED Toilet accessories ls 1 3 EXCLUDED Miscellaneous signage ls 1 3 EXCLUDED Library materials ls 1 3 EXCLUDED Dishware ls 1 3 EXCLUDED Flatware ls 1 3 EXCLUDED Glassware ls 1 3 EXCLUDED Decorations ls 1 3 EXCLUDED Housekeeping equipment ls 1 3 EXCLUDED Window treatments ls 1 3 EXCLUDED Misc. hot water heaters ls 1 3 EXCLUDED Misc. AC in elev. machine rooms ls 1 3 EXCLUDED Handrail ls 1 3 EXCLUDED Fire extinguishers and cabinets ls 1 3 EXCLUDED Sprinkler head ls 1 3 EXCLUDED Interior doors ls 1 3 EXCLUDED Electric heaters in stairs ls 1 3 EXCLUDED VALUATION EXCLUSIONS COMMENTS Valuation Exclusions. For ease of administration of the Replacement Reserves and to reflect accurately how Replacement Reserves are administered, items with a dollar value less than $1, have not been scheduled for funding from Replacement Reserves. Examples of items excluded from funding by Replacement Reserves by this standard are listed above. The list above exemplifies exclusions by the cited standard(s) and is not intended to be comprehensive.

38 Replacement Reserve Inventory - Page B26 LONG-LIFE EXCLUSIONS EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) Masonry features ls 1 3 EXCLUDED Miscellaneous culverts ls 1 3 EXCLUDED Concrete trash receptacles ls 1 3 EXCLUDED Concrete planters ls 1 3 EXCLUDED Exterior CMU walls ls 1 3 EXCLUDED Exterior stone veneer on site walls ls 1 3 EXCLUDED Concrete copings on site walls ls 1 3 EXCLUDED Building foundation(s) ls 1 3 EXCLUDED Concrete floor slabs (interior) ls 1 3 EXCLUDED Wall, floor, & roof structure ls 1 3 EXCLUDED Electrical wiring ls 1 3 EXCLUDED Water piping at common facilities ls 1 3 EXCLUDED Waste piping at common facilities ls 1 3 EXCLUDED Gas services at common facilities ls 1 3 EXCLUDED Trash chute ls 1 3 EXCLUDED Stainless steel pool fixtures ls 1 3 EXCLUDED Moveable partition in meeting room ls 1 3 EXCLUDED Projection screen ls 1 3 EXCLUDED LONG-LIFE EXCLUSIONS COMMENTS Long Life Exclusions. Components that when properly maintained, can be assumed to have a life equal to the property as a whole, are normally excluded from the Replacement Reserve Inventory. Examples of items excluded from funding by Replacement Reserves by this standard are listed above. Exterior masonry is generally assumed to have an unlimited economic life but periodic repointing is required and we have included this for funding in the Replacement Reserve Inventory. The list above exemplifies exclusions by the cited standard(s) and is not intended to be comprehensive.

39 Replacement Reserve Inventory - Page B27 UNIT IMPROVEMENTS EXCLUSIONS EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) Domestic water pipes serving one unit ls 1 3 EXCLUDED Sanitary sewers serving one unit ls 1 3 EXCLUDED Electrical wiring serving one unit ls 1 3 EXCLUDED Cable TV service serving one unit ls 1 3 EXCLUDED Telephone service serving one unit ls 1 3 EXCLUDED Gas service serving one unit ls 1 3 EXCLUDED Unit interior ls 1 3 EXCLUDED Unit HVAC system ls 1 3 EXCLUDED Unit deck, patio, and/or balcony ls 1 3 EXCLUDED UNIT IMPROVEMENTS EXCLUSIONS COMMENTS Unit improvement Exclusions. We understand that the elements of the project that relate to a single unit are the responsibility of that unit owner. Examples of items excluded from funding by Replacement Reserves by this standard are listed above. The list above exemplifies exclusions by the cited standard(s) and is not intended to be comprehensive.

40 Replacement Reserve Inventory - Page B28 UTILITY EXCLUSIONS EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) Primary electric feeds ls 1 3 EXCLUDED Electric transformers ls 1 3 EXCLUDED Cable TV systems and structures ls 1 3 EXCLUDED Telephone cables and structures ls 1 3 EXCLUDED Water mains and meters ls 1 3 EXCLUDED Sanitary sewers ls 1 3 EXCLUDED UTILITY EXCLUSIONS COMMENTS Utility Exclusions. Many improvements owned by utility companies are on property owned by the Association. We have assumed that repair, maintenance, and replacements of these components will be done at the expense of the appropriate utility company. Examples of items excluded from funding Replacement Reserves by this standard are listed above. The list above exemplifies exclusions by the cited standard(s) and is not intended to be comprehensive.

41 Replacement Reserve Inventory - Page B29 MAINTENANCE AND REPAIR EXCLUSIONS EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) Cleaning of asphalt pavement ls 1 3 EXCLUDED Crack sealing of asphalt pavement ls 1 3 EXCLUDED Painting of curbs ls 1 3 EXCLUDED Striping of parking spaces ls 1 3 EXCLUDED Numbering of parking spaces ls 1 3 EXCLUDED Landscaping and site grading ls 1 3 EXCLUDED Exterior painting ls 1 3 EXCLUDED Interior painting ls 1 3 EXCLUDED Janitorial service ls 1 3 EXCLUDED Repair services ls 1 3 EXCLUDED Capital improvements ls 1 3 EXCLUDED MAINTENANCE AND REPAIR EXCLUSIONS COMMENTS Maintenance activities, one-time-only repairs, and capital improvements. These activities are NOT appropriately funded from Replacement Reserves. The inclusion of such component in the Replacement Reserve Inventory could jeopardize the special tax status of ALL Replacement Reserves, exposing the Association to significant tax liabilities. We recommend that the Board of Directors discuss these exclusions and Revenue Ruling with a Certified Public Accountant. Examples of items excluded from funding by Replacement Reserves by this standard are listed above. The list above exemplifies exclusions by the cited standard(s) and is not intended to be comprehensive.

42 Replacement Reserve Inventory - Page B30 IRRIGATION SYSTEM EXCLUSIONS EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) Subsurface irrigation pipe ls 1 3 EXCLUDED Subsurface irrigation valve ls 1 3 EXCLUDED Subsurface irrigation control wiring ls 1 3 EXCLUDED Irrigation control system ls 1 3 EXCLUDED IRRIGATION SYSTEM EXCLUSIONS COMMENTS Irrigation System Exclusions. We have assumed that the maintenance, repair, and periodic replacement of the components of the extensive irrigation systems at the property will not be funded from Replacement Reserves. These systems should be inspected each spring when the systems are brought on line and each fall when they are winterized. Repairs/replacements should be made in conjunction with these inspections.

43 Projected Annual Replacements - Page C1 PROJECTED ANNUAL REPLACEMENTS GENERAL INFORMATION CALENDAR OF ANNUAL REPLACEMENTS. The 262 Projected Replacements in the Sanctuary at False Cape Replacement Reserve Inventory whose replacement is scheduled to be funded from Replacement Reserves are broken down on a year-by-year basis, beginning on Page C2. REPLACEMENT RESERVE ANALYSIS AND INVENTORY POLICIES, PROCEDURES, AND ADMINISTRATION REVISIONS. Revisions will be made to the Replacement Reserve Analysis and Replacement Reserve Inventory in accordance with the written instructions of the Board of Directors. No additional charge is incurred for the first revision, if requested in writing within three months of the date of the Replacement Reserve Study. It is our policy to provide revisions in electronic (Adobe PDF) format only. TAX CODE. The United States Tax Code grants favorable tax status to a common interest development (CID) meeting certain guidelines for their Replacement Reserve. If a CID files their taxes as a 'Corporation' on Form 1120 (IRC Section 277), these guidelines typically require maintenance activities, partial replacements, minor replacements, capital improvements, and one-time only replacements to be excluded from Reserves. A CID cannot co-mingle planning for maintenance activities with capital replacement activities in the Reserves (Revenue Ruling 7-370). Funds for maintenance activities and capital replacements activities must be held in separate accounts. If a CID files taxes as an "Exempt Homeowners Association" using Form 1120H (IRC Section 28), the CID does not have to segregate these activities. However, because the CID may elect to change their method of filing from year to year within the Study Period, we advise using the more restrictive approach. We further recommend that the CID consult with their Accountant and consider creating separate and independent accounts and reserves for large maintenance items, such as painting. CONFLICT OF INTEREST. Neither Miller - Dodson Associates nor the Reserve Analyst has any prior or existing relationship with this Association which would represent a real or perceived conflict of interest. RELIANCE ON DATA PROVIDED BY THE CLIENT. Information provided by an official representative of the Association regarding financial, physical conditions, quality, or historical issues is deemed reliable. INTENT. This Replacement Reserve Study is a reflection of the information provided by the Association and the visual evaluations of the Analyst. It has been prepared for the sole use of the Association and is not for the purpose of performing an audit, quality/forensic analyses, or background checks of historical records. PREVIOUS REPLACEMENTS. Information provided to Miller - Dodson Associates regarding prior replacements is considered to be accurate and reliable. Our visual evaluation is not a project audit or quality inspection. EXPERIENCE WITH FUTURE REPLACEMENTS. The Calendar of Annual Projected Replacements, lists replacements we have projected to occur over the next thirty years, begins on Page C2. Actual experience in replacing the items may differ significantly from the cost estimates and time frames shown because of conditions beyond our control. These differences may be caused by maintenance practices, inflation, variations in pricing and market conditions, future technological developments, regulatory actions, acts of God, and luck. Some items may function normally during our visual evaluation and then fail without notice. REVIEW OF THE REPLACEMENT RESERVE STUDY. For this study to be effective, it should be reviewed by the Sanctuary at False Cape Board of Directors, those responsible for the management of the items included in the Replacement Reserve Inventory, and the accounting professionals employed by the Association.

44 Projected Annual Replacements - Page C2 PROJECTED REPLACEMENTS - YEARS 1 TO 3 Item STUDY YEAR $ Item YEAR 2 $ Item YEAR 3 $.7 Balcony Edge, Type 3 $3, Balcony Edge, Type 3 $3, Landscape lighting, Phase 2 $, Stormwater system, covered $18, Bulkhead, stainless railing, $2, PH1 CMU exterior walls, rep $, PH1 Metal grilles, garage, re $10, PH2 Aluminum railing, refurb $28, PH2 Exterior corridor floor co $347, Office chair $4, Interior signage allowance $, PH1 Stairwell lighting, partia $, PH2 carpet $12, PH2 wainscoting partial allow $, PH1 Corridor CFL sconces, $9, PH2 stained & epoxy sealed $11, Security CCTV DVR $2, PH1 Balcony lights, red lens $36, PH2 garage ceiling, partial $2, C Swimming pool, whitecoat $7, PH1 Heat pump/ac unit (2 t $7, PH1 Trash compactor, ram & $7, C Swimming pool, waterline $4, PH1 Garage operator $, PH1 Misc. common interior l $3, C Swimming pool, cover $2, PH1 Garage controller $4, PH1 Garage lighting, 33% $8, C Swimming pool pump (+ $4, PH1 Access control system $2, PH1 Corridor CFL sconces, $9, PH1 CCTV cameras (older o $7, PH1 Heat pump/ac unit (2 t $7, Gas grills, partial $1, PH2 Trash compactor, ram & $7, Grill undercounter cabinets $3, PH2 Garage lighting, 33% $7, PH2 Heat pump/ac unit (2 t $7, PH1 Garage gate arm $3, PH1 Gas pipe corrosion inhi $3,0 186 PH2 Garage gate arm $2, PH2 Garage controller $3, PH2 Gas pipe corrosion inhi $3,0 210 PH1 Swimming pool, cover $3, PH2 Swimming pool, whiteco $11, PH2 Swimming pool, waterli $4, PH2 Swimming pool, cover $2, PH2 Swimming pool pump ( $3, Wood chairs $6, Wood benches, long $41, Wood benches, short $13,7 248 Wood tables, tall, square $8, Wood tables, low, square $9,10 20 Wood tables, low, round $23,37 22 Waste receptacles, metal $6, Gas grills, partial $13, Grill undercounter cabinets $3,870 Total Scheduled Replacements $342,664 Total Scheduled Replacements $67,202 Total Scheduled Replacements $46,27

45 Projected Annual Replacements - Page C3 PROJECTED REPLACEMENTS - YEARS 4 TO 6 Item YEAR 4 $ Item YEAR $ Item YEAR 6 $ 8.7 Asphalt pavement, overlay $44, PH1 Shingle asphalt/fibergla $291,0 7.7 Asphalt pavement, seal coat $, Stormwater system, covered $18, PH1 Misc. common interior l $3,420.8 PH1 Fiber cement soffit pan $69, PH1 Metal grilles, garage, re $10, PH1 Corridor CFL sconces, $9, PH1 Fiber cement lap siding $122, PH2 Metal grilles, garage, re $2, PH2 Domestic water pump m $4, PH1 Fiber cement panel sidi $14, Ph1 HVAC Access panel at $44, Security CCTV DVR $2, PH1 Fiber cement trim, parti $94, PH1 Garage lighting, 33% $7, PH1 Swimming pool heater $9, PH1 Exterior joint sealants, p $1,80 1 PH2 Misc. common interior l $3, PH2 Swimming pool, concre $16, PH2 Shingle asphalt/fibergla $83, PH2 Garage lighting, 33% $6, PH2 Swimming pool heater $9, PH2 CMU exterior walls, rep $, PH2 Corridor CFL sconces, $13, PH2 Swimming pool deck co $9, Ph2 HVAC Access panel at $64, PH2 Heat pump/ac unit (2 t $7, PH1 carpet $8, PH2 Heat pump/ac unit (3 t $13, PH1 garage ceiling, partial $2, PH1 Garage gate arm $3, PH2 garage ceiling, partial $2, PH1 Domestic water pump m $4, PH2 Elevator, hydraulic psng $24, PH2 Garage gate arm $2,20 13 PH2 Stairwell lighting, partia $, CCTV Cameras (2012) $2, PH2 Corridor CFL sconces, $13, PH1 Swimming pool, cover $3, PH2 Balcony lights, red lens $3, PH1 Hot tub $6,69 16 PH2 Heat pump/ac unit (2 t $7, PH1 Gas pipe corrosion inhi $3,0 187 PH2 Garage operator $3, PH2 Garage controller $3, PH2 Access control system $6, PH2 CCTV cameras (older o $8, PH2 Gas pipe corrosion inhi $3,0 211 PH1 Swimming pool, concre $32,02 21 PH1 Swimming pool deck co $194, C Swimming pool, concrete $13, C Swimming pool heater - ga $3, C Swimming pool deck coati $103,00 24 Gas grills, partial $1, Grill undercounter cabinets $3,870 Total Scheduled Replacements $196,76 Total Scheduled Replacements $440,73 Total Scheduled Replacements $1,738,004

46 Projected Annual Replacements - Page C4 PROJECTED REPLACEMENTS - YEARS 7 TO 9 Item YEAR 7 $ Item YEAR 8 $ Item YEAR 9 $ 34.8 Stormwater system, uncover $3, Site lighting, 13' pole & fixtur $27, Bulkhead, concrete, refurbis $8, PH1 Metal grilles, garage, re $10, Site lighting, 3' bollards $29, PH2 Fiber cement soffit pan $69, PH2 Metal grilles, garage, re $2, Site lighting, pool area, Phas $11, PH2 Fiber cement lap siding $122, PH1 Heat pump/ac unit (2 t $7, PH1 Single ply membrane ro $13, PH2 Fiber cement panel sidi $14, PH2 Garage lighting, 33% $6, PH1 Exterior corridor floor co $347, PH2 Fiber cement trim, parti $94, PH1 Garage gate arm $3, PH1 Aluminum railing, refurb $28, PH2 Exterior joint sealants, p $1, PH1 Sanitary piping allowan $44, PH1 Louvers for heatpump $44, PH1 Misc. common interior l $3, PH2 Garage gate arm $2, PH1 Wood and aluminum tre $42, PH2 Sanitary piping allowan $63,63 20 CCTV Cameras (201) $8, PH1 Meeting room, renovati $8, PVC High back chairs $4, PH1 Swimming pool, cover $3, PH1 Kitchen renovation $24,0 244 PVC Lounge chairs (Phase $17, PH2 Swimming pool, cover $2, PH1 Restroom, renovation $4,80 23 Gas grills, partial $1, PH2 Water play features $4, PH1 Library, renovation $3, Gas grills, partial $13, PH2 water play pumps (1. h $2, PH1 Lobby renovation, lowe $18, Grill undercounter cabinets $3, PH2 water play deck surfaci $4, PH1 Lobby and corridor reno $9,40 2 Gas grills, partial $1, PH1 Offices, renovation $6, Grill undercounter cabinets $3, PH1 stained & epoxy sealed $2, PH1 rubber floor tile $3, PH2 carpet $12, PH1 Elevator cab & door, pa $34, PH1 Elevator, traction psngr $24, PH1 Elevator, traction psngr $123,400 1 PH2 Misc. common interior l $3, PH2 Corridor CFL sconces, $13, PH1 Garage controller $4, PH1 Jockey pump $, PH1 Fire alarm control pane $7,0 184 PH1 Fire alarm annunciator $, Security CCTV DVR $2, PH1 Swimming pool filter $, PH1 Perimeter fence - 42" (a $9,94 23 C Swimming pool, cover $2,420 Total Scheduled Replacements $12,73 Total Scheduled Replacements $1,111,864 Total Scheduled Replacements $469,289

47 Projected Annual Replacements - Page C PROJECTED REPLACEMENTS - YEARS 10 TO 12 Item YEAR 10 $ Item YEAR 11 $ Item YEAR 12 $ 4.8 PH1 Metal grilles, garage, re $10, Site lighting, pool area, Phas $11, Asphalt pavement, seal coat $, PH1 Exterior joint sealants, p $1, Walkway lighting, Phase 2 $7, PH2 Aluminum railing, refurb $28, PH2 Metal grilles, garage, re $2, PH2 Single ply membrane ro $13, Interior signage allowance $, Office desks with returns $9, PH2 Louvers for heatpump $6, PH1 ceiling suspension syst $16, Office chair $4, PH2 Wood and aluminum tre $42, PH2 wainscoting partial allow $, PH1 Garage gate arm $3, PH1 garage ceiling, partial $2,966 1 PH2 Misc. common interior l $3, PH2 Garage gate arm $2, PH1 wainscoting partial allow $, PH1 Domestic water pump m $4, PH1 Swimming pool, whiteco $19, PH2 Meeting room, renovati $4, PH1 Domestic water piping a $6, PH1 Swimming pool, waterli $9, PH2 Kitchen renovation $12, C Swimming pool, whitecoat $7, PH1 Swimming pool, cover $3, PH2 Restroom and shower, $9, C Swimming pool, waterline $4, PH1 Swimming pool pump ( $3, PH2 Library, renovation $2, C Swimming pool, coping $1, PH1 Hot tub $6,69 11 PH2 Lobby renovation, lowe $12, C Swimming pool pump (+ $4, C Swimming pool heater - ga $3, PH2 Lobby and corridor reno $7, C Swimming pool filter $, PH2 Offices, renovation $2, C Wind screen 42" (tempere $32, PH2 stained & epoxy sealed $11, PH2 rubber floor tile $3, PH2 garage ceiling, partial $2, PH1 Trash compactor, ram & $7, PH2 Elevator cab & door, pa $34, PH2 Trash compactor, ram & $7, PH1 Gas pipe corrosion inhi $3,0 188 PH2 Garage controller $3, PH2 Jockey pump $, PH2 Fire alarm annunciator $, PH2 Gas pipe corrosion inhi $3,0 203 Security CCTV DVR $2, PH2 Swimming pool, whiteco $11, PH2 Swimming pool, waterli $4, PH2 Swimming pool, coping $9, PH2 Swimming pool pump ( $3, PH2 Swimming pool filter $2, PH2 Perimeter fence - 42" (a $7, Waste receptacles, metal $4, Gas grills, partial $1, Grill undercounter cabinets $3,870 Total Scheduled Replacements $130,892 Total Scheduled Replacements $346,376 Total Scheduled Replacements $19,378

48 Projected Annual Replacements - Page C6 PROJECTED REPLACEMENTS - YEARS 13 TO 1 Item YEAR 13 $ Item YEAR 14 $ Item YEAR 1 $ 44.8 Landscape lighting, Phase 1 $2,970.8 PH1 Fiber cement soffit pan $69, Concrete garage pavement $8, PH1 Gutter & downspout, 6" $7, PH1 Fiber cement lap siding $122, Concrete sidewalk (6%) $, PH1 Metal grilles, garage, re $10, PH1 Fiber cement panel sidi $14, Landscape lighting, Phase 2 $, PH1 Storefront doors and wi $62, PH1 Fiber cement trim, parti $94, PH2 carpet $12, PH1 Exterior metal doors $21, PH1 Exterior joint sealants, p $1, PH2 ceiling suspension syst $16, PH1 Aluminum doors w/side $12, PH1 Access control system $4, PH1 Heat pump/ac unit (2 t $7, PH1 Rollup door at 1st floor $1, PH2 Domestic water piping a $82, PH1 Swimming pool heater $9, PH2 Metal grilles, garage, re $2, Security CCTV DVR $2, PH2 Swimming pool heater $9, PH2 Exterior joint sealants, p $1, CCTV Cameras (2012) $2,92 2 Gas grills, partial $1, PH2 Exterior corridor floor co $347, PH1 Swimming pool, concre $32,02 29 Grill undercounter cabinets $3, PH1 carpet $8, PH1 Swimming pool deck co $194, PH1 Misc. common interior l $3, C Swimming pool, cover $2, PH1 Heat pump/ac unit (2 t $7, C Swimming pool, concrete $13, PH1 Heat pump/ac unit (3 t $13, C Swimming pool deck coati $103, PH2 Heat pump/ac unit (2 t $7, Gas grills, partial $1, PH1 Garage gate arm $3, Grill undercounter cabinets $3, PH1 Garage controller $4, PH2 Garage gate arm $2, PH2 Domestic water pump m $4, PH1 Swimming pool, cover $3, PH2 Swimming pool, cover $2, PH2 Swimming pool, concre $16, PH2 Swimming pool deck co $9, Wood chairs $6, Wood benches, long $41, Wood benches, short $13,7 248 Wood tables, tall, square $8, Wood tables, low, square $9,10 20 Wood tables, low, round $23,37 22 Waste receptacles, metal $6,600 Total Scheduled Replacements $82,717 Total Scheduled Replacements $810,61 Total Scheduled Replacements $93,774

49 Projected Annual Replacements - Page C7 PROJECTED REPLACEMENTS - YEARS 16 TO 18 Item YEAR 16 $ Item YEAR 17 $ Item YEAR 18 $ 3.8 Stormwater system, covered $18, Bulkhead, stainless railing, $2, Asphalt pavement, seal coat $, Stormwater inlets, partial, Ph $17, Stormwater system, uncover $3, Mailboxes, Phase 1 $12, PH1 Metal grilles, garage, re $10, PH2 Fiber cement soffit pan $69, PH1 CMU exterior walls, rep $, PH2 Metal grilles, garage, re $2, PH2 Fiber cement lap siding $122, PH1 Exterior joint sealants, p $1, PH2 Storefront doors and wi $62, PH2 Fiber cement panel sidi $14, PH1 Exterior corridor floor co $347, PH2 Exterior metal doors $21, PH2 Fiber cement trim, parti $94, PH1 Aluminum railing, refurb $28, PH2 Aluminum doors w/side $12, PH2 Exterior joint sealants, p $1, PH2 Gutter & downspout, 6" $7, PH1 garage ceiling, partial $2, PH1 Electric meters $31, PH1 porcelain tile $42, PH2 garage ceiling, partial $2, PH1 Misc. common interior l $3, PH1 stained & epoxy sealed $2, PH1 Garage lighting, 33% $8, PH1 Sanitary piping allowan $44,0 132 PH1 Stairwell lighting, partia $, PH1 Garage lighting, 33% $8, Security CCTV DVR $2, PH1 Entry lobby lighting $8, PH1 Corridor CFL sconces, $9, CCTV Cameras (201) $8, PH1 Corridor CFL sconces, $9,141 1 PH2 Misc. common interior l $3, Gas grills, partial $1, PH1 Balcony lights, red lens $36,87 16 PH2 Garage lighting, 33% $7,27 26 Gas grills, partial $13,76 16 PH2 Heat pump/ac unit (2 t $7, PH2 Heat pump/ac unit (2 t $7, Grill undercounter cabinets $3, PH1 Garage operator $, PH2 Heat pump/ac unit (3 t $13, PH1 Garage controller $4, PH1 Garage gate arm $3, PH1 Access control system $2, PH1 Gas pipe corrosion inhi $3,0 172 PH1 CCTV cameras (older o $7, PH2 Garage gate arm $2, PH1 Oil water separator $4, PH2 Garage controller $3, PH2 Fire alarm control pane $7,0 202 PH2 Gas pipe corrosion inhi $3,0 210 PH1 Swimming pool, cover $3, PH1 Hot tub $6, C Swimming pool heater - ga $3,000 Total Scheduled Replacements $246,33 Total Scheduled Replacements $467,983 Total Scheduled Replacements $9,426

50 Projected Annual Replacements - Page C8 PROJECTED REPLACEMENTS - YEARS 19 TO 21 Item YEAR 19 $ Item YEAR 20 $ Item YEAR 21 $ 29.8 Bulkhead, concrete, refurbis $8, PH1 carpet $8, Concrete garage pavement $8, Stormwater system, covered $18, PH1 Corridor CFL sconces, $9, Concrete sidewalk (6%) $, Stormwater inlets, partial, Ph $17,40 1 PH2 Misc. common interior l $3, Mailboxes, Phase 2 $19, PH1 Metal grilles, garage, re $10, PH1 Backflow preventer, wa $, PH2 CMU exterior walls, rep $, PH2 Metal grilles, garage, re $2,61 17 PH1 Domestic water pumps $18, PH2 Exterior joint sealants, p $1, Ph1 HVAC Access panel at $44, PH1 Domestic water pump m $4, Ph2 HVAC Access panel at $64, Office chair $4, PH1 Pump controller $, PH1 garage ceiling, partial $2, PH1 Garage lighting, 33% $7, Security CCTV DVR $2, PH1 wainscoting partial allow $, PH1 Heat pump/ac unit (2 t $7, PH1 Swimming pool, whiteco $19, PH2 porcelain tile $63,4 17 PH2 Garage lighting, 33% $6, PH1 Swimming pool, waterli $9, PH2 stained & epoxy sealed $11, PH2 Corridor CFL sconces, $13, PH1 Swimming pool, coping $19, PH2 garage ceiling, partial $2, PH1 Garage gate arm $3, PH1 Swimming pool pump ( $3, PH1 Trash compactor, ram & $7, PH2 Garage gate arm $2,20 23 C Swimming pool, cover $2, PH1 Misc. common interior l $3, PH2 Sanitary piping allowan $63, C Swimming pool heater - ga $3, PH2 Elevator, hydraulic psng $24, PH1 Swimming pool, cover $3, PH2 Elevator, hydraulic psng $123, PH2 Swimming pool, cover $2, PH2 Trash compactor, ram & $7, PVC High back chairs $4, PH2 Electric meters $4, PVC Lounge chairs (Phase $17,20 13 PH2 Stairwell lighting, partia $, Gas grills, partial $1, PH2 Entry lobby lighting $8, Grill undercounter cabinets $3, PH2 Corridor CFL sconces, $13, Hot tub gazebo $16, PH2 Balcony lights, red lens $3, Pool plaza gazebos $41, PH1 Gas pipe corrosion inhi $3,0 187 PH2 Garage operator $3, PH2 Garage controller $3, PH2 Access control system $6, PH2 CCTV cameras (older o $8, PH2 Domestic water pump m $4, PH2 Gas pipe corrosion inhi $3,0 219 PH2 Swimming pool, whiteco $11, PH2 Swimming pool, waterli $4, PH2 Swimming pool, concre $16, PH2 Swimming pool pump ( $3, PH2 Swimming pool deck co $9,634 Total Scheduled Replacements $317,671 Total Scheduled Replacements $114,323 Total Scheduled Replacements $911,879

51 Projected Annual Replacements - Page C9 PROJECTED REPLACEMENTS - YEARS 22 TO 24 Item YEAR 22 $ Item YEAR 23 $ Item YEAR 24 $ 8.7 Asphalt pavement, overlay $44, PH2 Exterior corridor floor co $347, Asphalt pavement, seal coat $, PH1 Metal grilles, garage, re $10, PH2 Corridor CFL sconces, $13, Ph1 Exterior door, Unit Entra $103,36.8 PH1 Fiber cement soffit pan $69, PH1 Garage controller $4, Ph1 Sliding door, Unit Balco $13, PH1 Fiber cement lap siding $122, Security CCTV DVR $2,70 1 PH2 Misc. common interior l $3, PH1 Fiber cement panel sidi $14, PH2 Water play features $4, PH2 Backflow preventer, wa $, PH1 Fiber cement trim, parti $94, PH2 water play pumps (1. h $2, PH2 Domestic water pumps $18, PH1 Exterior joint sealants, p $1, PH2 water play deck surfaci $4,1 194 PH2 Pump controller $, PH2 Metal grilles, garage, re $2,61 21 Waste receptacles, metal $4, CCTV Cameras (2012) $2, PH2 Aluminum railing, refurb $28,613 2 Gas grills, partial $1, Interior signage allowance $, Grill undercounter cabinets $3, PH2 carpet $12, PH2 wainscoting partial allow $,98 18 PH2 Garage lighting, 33% $6, PH1 Garage gate arm $3, PH2 Garage gate arm $2, PH1 Swimming pool, cover $3, PH1 Swimming pool, concre $32,02 21 PH1 Swimming pool deck co $194, PH1 Hot tub $6, C Swimming pool, whitecoat $7, C Swimming pool, waterline $4, C Swimming pool, concrete $13, C Swimming pool pump (+ $4, C Swimming pool deck coati $103,00 24 Gas grills, partial $1, Grill undercounter cabinets $3,870 Total Scheduled Replacements $864,346 Total Scheduled Replacements $402,717 Total Scheduled Replacements $280,690

52 Projected Annual Replacements - Page C10 PROJECTED REPLACEMENTS - YEARS 2 TO 27 Item YEAR 2 $ Item YEAR 26 $ Item YEAR 27 $ 44.8 Landscape lighting, Phase 1 $2, PH1 Shingle asphalt/fibergla $291, Concrete garage pavement $8, PH1 Metal grilles, garage, re $10, PH1 Exterior joint sealants, p $1, Concrete sidewalk (6%) $, PH2 Metal grilles, garage, re $2, Ph2 Exterior door, Unit Entra $149, Stormwater system, uncover $3, PH2 Fiber cement soffit pan $69, Ph2 Sliding door, Unit Balco $230, Landscape lighting, Phase 2 $, PH2 Fiber cement lap siding $122, PH1 garage ceiling, partial $2, PH1 carpet $8, PH2 Fiber cement panel sidi $14, PH2 garage ceiling, partial $2, PH1 Heat pump/ac unit (2 t $7, PH2 Fiber cement trim, parti $94, PH1 Backup generator, dies $49, PH1 Domestic water piping a $6, PH2 Exterior joint sealants, p $1,80 18 PH1 Gas pipe corrosion inhi $3,0 180 PH1 Sanitary piping allowan $44,0 134 PH1 Misc. common interior l $3, PH2 Garage controller $3,10 20 CCTV Cameras (201) $8, PH1 Heat pump/ac unit (2 t $7, PH2 Gas pipe corrosion inhi $3,0 27 Gas grills, partial $1, PH1 Heat pump/ac unit (3 t $13, Security CCTV DVR $2, Grill undercounter cabinets $3, PH2 Heat pump/ac unit (2 t $7, C Swimming pool, cover $2, PH1 Garage gate arm $3, C Swimming pool heater - ga $3, PH2 Garage gate arm $2, PH1 Swimming pool, cover $3, PH1 Swimming pool heater $9, PH2 Swimming pool, cover $2, PH2 Swimming pool heater $9, Wood chairs $6, Wood benches, long $41, Wood benches, short $13,7 248 Wood tables, tall, square $8, Wood tables, low, square $9,10 20 Wood tables, low, round $23,37 22 Waste receptacles, metal $6, Gas grills, partial $1, Gas grills, partial $13, Grill undercounter cabinets $3,870 Total Scheduled Replacements $610,273 Total Scheduled Replacements $796,410 Total Scheduled Replacements $167,09

53 Projected Annual Replacements - Page C11 PROJECTED REPLACEMENTS - YEARS 28 TO 30 Item YEAR 28 $ Item YEAR 29 $ Item YEAR 30 $ 39.8 Site lighting, 13' pole & fixtur $27, Bulkhead, concrete, refurbis $8, Asphalt pavement, seal coat $, Site lighting, 3' bollards $29, Entry monument & sign, rep $6, PH1 Shingle asphalt/fibergla $291, Site lighting, pool area, Phas $11, PH2 Exterior joint sealants, p $1,80.8 PH1 Fiber cement soffit pan $69, PH1 Single ply membrane ro $13,4 118 PH2 carpet $12, PH1 Fiber cement lap siding $122, PH1 Metal grilles, garage, re $10, PH1 Misc. common interior l $3, PH1 Fiber cement panel sidi $14, PH1 Exterior corridor floor co $347,00 11 PH2 Backup generator, dies $49, PH1 Fiber cement trim, parti $94, PH1 Aluminum railing, refurb $28, PH1 Access control system $4, PH1 Exterior joint sealants, p $1, PH1 Aluminum railing, repla $219, PH2 Domestic water pump m $4,00 16 PH2 Heat pump/ac unit (2 t $7, PH1 Louvers for heatpump $44, PH2 Domestic water piping a $82, PH1 Swimming pool, whiteco $19, PH1 Wood and aluminum tre $42, PH2 Sanitary piping allowan $63, PH1 Swimming pool, waterli $9, PH2 Metal grilles, garage, re $2, Security CCTV DVR $2, PH1 Swimming pool, concre $32, PH1 Meeting room, renovati $8, PH2 Swimming pool, concre $16, PH1 Swimming pool pump ( $3, PH1 Kitchen renovation $24,0 227 PH2 Swimming pool deck co $9, PH1 Swimming pool deck co $194, PH1 Restroom, renovation $4, PVC High back chairs $4, C Swimming pool, concrete $13, PH1 Library, renovation $3, PVC Lounge chairs (Phase $17, C Swimming pool heater - ga $3, PH1 Lobby renovation, lowe $18, C Swimming pool deck coati $103, PH1 Lobby and corridor reno $9,40 24 Gas grills, partial $1, PH1 Offices, renovation $6, Grill undercounter cabinets $3, PH1 stained & epoxy sealed $2, PH1 rubber floor tile $3, Office chair $4, PH1 Elevator cab & door, pa $34, PH1 Elevator, traction psngr $24, PH1 Elevator, traction psngr $123, PH1 Backup generator, dies $49,20 1 PH2 Misc. common interior l $3, PH2 Heat pump/ac unit (2 t $7, PH2 Heat pump/ac unit (3 t $13, PH1 Garage gate arm $3, PH1 Garage controller $4, PH1 Domestic water pump m $4, PH1 Pressure tank $3, PH1 Fire pump $34, PH1 Jockey pump $, PH1 Fire alarm control pane $7,0 184 PH1 Fire alarm annunciator $, PH2 Garage gate arm $2, PH1 Swimming pool, cover $3, PH1 Swimming pool filter $, PH1 Perimeter fence - 42" (a $9, PH1 Hot tub $6,69 Total Scheduled Replacements $1,447,84 Total Scheduled Replacements $423,083 Total Scheduled Replacements $1,06,402

54 Projected Annual Replacements - Page C12 PROJECTED REPLACEMENTS - YEARS 31 TO 33 Item YEAR 31 $ Item YEAR 32 $ Item YEAR 33 $ 30.8 Bulkhead concrete cap, repl $74, Bulkhead, stainless railing, $2, Concrete garage pavement $8, Bulkhead, sheet piling, 20 ft. $301, PH2 Aluminum railing, refurb $28, Concrete sidewalk (6%) $, Bulkhead, stainless railing, r $21, Interior signage allowance $, PH1 CMU exterior walls, rep $, Stormwater system, covered $18, PH2 wainscoting partial allow $, PH1 Rollup door at 1st floor $1, Stormwater inlets, partial, Ph $17,40 1 PH2 Misc. common interior l $3, PH2 Fiber cement soffit pan $69, Site lighting, pool area, Phas $11, Security CCTV DVR $2, PH2 Fiber cement lap siding $122, Walkway lighting, Phase 2 $7,1 232 C Swimming pool, whitecoat $7, PH2 Fiber cement panel sidi $14, PH1 Metal grilles, garage, re $10, C Swimming pool, waterline $4, PH2 Fiber cement trim, parti $94, PH2 Shingle asphalt/fibergla $83, C Swimming pool, coping $1, PH2 Exterior joint sealants, p $1, PH2 Single ply membrane ro $13,4 23 C Swimming pool, cover $2, PH2 Exterior corridor floor co $347, PH2 Metal grilles, garage, re $2, C Swimming pool pump (+ $4, PH1 Stairwell lighting, partia $, PH2 Aluminum railing, repla $219, C Swimming pool filter $, PH1 Misc. common interior l $3, PH2 Louvers for heatpump $6, C Wind screen 42" (tempere $32, PH1 Corridor CFL sconces, $9, PH2 Wood and aluminum tre $42, PH1 Balcony lights, red lens $36, PH1 garage ceiling, partial $2, PH1 Garage operator $, PH1 wainscoting partial allow $, PH1 Garage controller $4, Office desks with returns $9, PH1 Access control system $2, PH2 Meeting room, renovati $4, PH1 CCTV cameras (older o $7, PH2 Kitchen renovation $12, Gas grills, partial $1, PH2 Restroom and shower, $9,30 26 Gas grills, partial $13, PH2 Library, renovation $2, Grill undercounter cabinets $3, PH2 Lobby renovation, lowe $12, PH2 Lobby and corridor reno $7, PH2 Offices, renovation $2, PH2 stained & epoxy sealed $11, PH2 rubber floor tile $3, PH2 garage ceiling, partial $2, PH1 Trash compactor, ram & $7, PH1 Garage lighting, 33% $8, PH1 Garage lighting, 33% $8, PH1 Corridor CFL sconces, $9, PH1 Heat pump/ac unit (2 t $7, PH2 Elevator cab & door, pa $34, PH2 Trash compactor, ram & $7, PH2 Backup generator, dies $49,20 16 PH2 Garage lighting, 33% $7, PH1 Garage gate arm $3, PH1 Gas pipe corrosion inhi $3,0 186 PH2 Garage gate arm $2, PH2 Garage controller $3,10 19 PH2 Pressure tank $3, PH2 Fire pump $34, PH2 Jockey pump $, PH2 Fire alarm annunciator $, PH2 Gas pipe corrosion inhi $3,0 210 PH1 Swimming pool, cover $3, PH2 Swimming pool, whiteco $11, PH2 Swimming pool, waterli $4, PH2 Swimming pool, coping $9, PH2 Swimming pool, cover $2, PH2 Swimming pool pump ( $3, PH2 Swimming pool filter $2, PH2 Perimeter fence - 42" (a $7,020 2 Gas grills, partial $1, Grill undercounter cabinets $3,870 Total Scheduled Replacements $1,739,70 Total Scheduled Replacements $120,379 Total Scheduled Replacements $813,73

55 Projected Annual Replacements - Page C13 PROJECTED REPLACEMENTS - YEARS 34 TO 36 Item YEAR 34 $ Item YEAR 3 $ Item YEAR 36 $ 36.8 Stormwater system, covered $18, PH1 Corridor CFL sconces, $9, Asphalt pavement, seal coat $, Stormwater inlets, partial, Ph $17, Security CCTV DVR $2, PH2 CMU exterior walls, rep $, PH1 Metal grilles, garage, re $10, PH1 Swimming pool heater $9, Ph2 HVAC Access panel at $64, PH1 Exterior joint sealants, p $1, PH2 Swimming pool heater $9, PH1 garage ceiling, partial $2, PH2 Metal grilles, garage, re $2,61 21 Waste receptacles, metal $4, PH2 carpet $12, Ph1 HVAC Access panel at $44,41 27 Gas grills, partial $1, PH2 garage ceiling, partial $2, PH1 carpet $8, Grill undercounter cabinets $3, PH2 Elevator, hydraulic psng $24, PH1 Garage lighting, 33% $7, PH2 Stairwell lighting, partia $, PH2 Garage lighting, 33% $6,790 1 PH2 Misc. common interior l $3, PH2 Corridor CFL sconces, $13, PH2 Corridor CFL sconces, $13, PH1 Garage gate arm $3, PH2 Balcony lights, red lens $3, PH2 Garage gate arm $2, PH1 Domestic water pump m $4, CCTV Cameras (2012) $2,92 18 PH1 Gas pipe corrosion inhi $3,0 210 PH1 Swimming pool, cover $3, PH2 Garage operator $3, PH1 Hot tub $6, PH2 Garage controller $3, PH2 Access control system $6, PH2 CCTV cameras (older o $8, PH2 Fire alarm control pane $7,0 202 PH2 Gas pipe corrosion inhi $3,0 239 C Swimming pool heater - ga $3,000 Total Scheduled Replacements $200,62 Total Scheduled Replacements $3,634 Total Scheduled Replacements $40,293

56 Projected Annual Replacements - Page C14 PROJECTED REPLACEMENTS - YEARS 37 TO 39 Item 20 - YEAR 37 $ Item YEAR 38 $ Item YEAR 39 $ 34.8 Stormwater system, uncover $3,0 1.7 Balcony Edge, Type 3 $3, Balcony Edge, Type 3 $3, Landscape lighting, Phase 1 $2, PH1 Gutter & downspout, 6" $7, Concrete garage pavement $8, PH1 Metal grilles, garage, re $10,244.8 PH1 Fiber cement soffit pan $69, Concrete sidewalk (6%) $, PH2 Metal grilles, garage, re $2, PH1 Fiber cement lap siding $122, Bulkhead, concrete, refurbis $8, PH2 Exterior joint sealants, p $1, PH1 Fiber cement panel sidi $14, Landscape lighting, Phase 2 $, PH1 ceiling suspension syst $16, PH1 Fiber cement trim, parti $94, PH1 Heat pump/ac unit (2 t $7, Office chair $4, PH1 Exterior joint sealants, p $1, PH2 Sanitary piping allowan $63, PH1 Misc. common interior l $3, PH1 Exterior corridor floor co $347, PH2 Water play features $4, PH1 Heat pump/ac unit (2 t $7, PH1 Aluminum railing, refurb $28, PH2 water play pumps (1. h $2, PH1 Heat pump/ac unit (3 t $13, PH1 stained & epoxy sealed $2, PH2 water play deck surfaci $4,1 18 PH2 Garage lighting, 33% $6, PH2 Corridor CFL sconces, $13, PVC High back chairs $4, PH2 Heat pump/ac unit (2 t $7, PH1 Garage controller $4, PVC Lounge chairs (Phase $17, PH1 Garage gate arm $3, Security CCTV DVR $2,70 2 Gas grills, partial $1, PH1 Sanitary piping allowan $44,0 206 PH1 Swimming pool, structu $89, Grill undercounter cabinets $3, PH2 Garage gate arm $2, PH1 Swimming pool, concre $32, PH2 Domestic water pump m $4,00 21 PH1 Swimming pool deck co $194, CCTV Cameras (201) $8, C Swimming pool, cover $2, PH1 Swimming pool, cover $3, C Swimming pool, concrete $13, PH2 Swimming pool, cover $2, C Swimming pool deck coati $103, PH2 Swimming pool, concre $16, Gas grills, partial $1, PH2 Swimming pool deck co $9, Grill undercounter cabinets $3, Wood chairs $6, Wood benches, long $41, Wood benches, short $13,7 248 Wood tables, tall, square $8, Wood tables, low, square $9,10 20 Wood tables, low, round $23,37 22 Waste receptacles, metal $6,600 Total Scheduled Replacements $471,192 Total Scheduled Replacements $1,216,627 Total Scheduled Replacements $16,111

57 Projected Annual Replacements - Page C1 PROJECTED REPLACEMENTS - YEARS 40 TO 42 Item YEAR 40 $ Item 209 (beyond Study Period) $ Item 2060 (beyond Study Period) $ 3.7 Balcony Edge, Type 3 $3, Balcony Edge, Type 3 $3, Balcony Edge, Type 3 $3, Asphalt pavement, overlay $44,624.7 Balcony Edge, Type 3 $3, Asphalt pavement, seal coat $, PH1 Metal grilles, garage, re $10, PH2 Fiber cement soffit pan $69, PH1 Exterior joint sealants, p $1, PH2 Metal grilles, garage, re $2, PH2 Fiber cement lap siding $122, PH2 Aluminum railing, refurb $28, PH2 ceiling suspension syst $16, PH2 Fiber cement panel sidi $14, Interior signage allowance $,000 1 PH2 Misc. common interior l $3, PH2 Fiber cement trim, parti $94, PH2 wainscoting partial allow $, PH2 Heat pump/ac unit (2 t $7, PH2 Exterior joint sealants, p $1,80 16 PH2 Heat pump/ac unit (2 t $7, PH2 Heat pump/ac unit (3 t $13, PH1 carpet $8, PH1 Domestic water piping a $6, PH1 Garage gate arm $3, PH1 garage ceiling, partial $2, C Swimming pool, whitecoat $7, PH2 Garage gate arm $2, PH1 wainscoting partial allow $, C Swimming pool, waterline $4, PH1 Swimming pool, whiteco $19, PH2 stained & epoxy sealed $11, C Swimming pool pump (+ $4, PH1 Swimming pool, waterli $9, PH2 garage ceiling, partial $2, PH1 Swimming pool, coping $19, PH1 Trash compactor, ram & $7, PH1 Swimming pool, cover $3, PH1 Misc. common interior l $3, PH1 Swimming pool pump ( $3, PH2 Trash compactor, ram & $7, PH1 Hot tub $6,69 18 PH1 Gas pipe corrosion inhi $3,0 240 C Swimming pool heater - ga $3, PH2 Garage controller $3, PH2 Gas pipe corrosion inhi $3,0 203 Security CCTV DVR $2, PH2 Swimming pool, structu $68, PH2 Swimming pool, whiteco $11, PH2 Swimming pool, waterli $4, PH2 Swimming pool pump ( $3, Gas grills, partial $1, Gas grills, partial $13, Grill undercounter cabinets $3,870 Total Scheduled Replacements $172,82 Total Scheduled Replacements $30,29 Total Scheduled Replacements $181,661

58 Intentionally Left Blank

59 Cash Flow Method Accounting Summary - Page CF1 CASH FLOW METHOD ACCOUNTING SUMMARY This Sanctuary at False Cape - Cash Flow Method Accounting Summary is an attachment to the Sanctuary at False Cape - Replacement Reserve Study dated July 9, 2018 and is for use by accounting and reserve professionals experienced in Association funding and accounting principles. This Summary consists of four reports, the 2019, 2020, and 2021 Cash Flow Method Category Funding Reports (3) and a Three-Year Replacement Funding Report. CASH FLOW METHOD CATEGORY FUNDING REPORT, 2019, 2020, and Each of the 262 Projected Replacements listed in the Sanctuary at False Cape Replacement Reserve Inventory has been assigned to one of 20 categories. The following information is summarized by category in each report: Normal Economic Life and Remaining Economic Life of the Projected Replacements. Cost of all Scheduled Replacements in each category. Replacement Reserves on Deposit allocated to the category at the beginning and end of the report period. Cost of Projected Replacements in the report period. Recommended Replacement Reserve Funding allocated to the category during the report period as calculated by the Cash Flow Method. THREE-YEAR REPLACEMENT FUNDING REPORT. This report details the allocation of the $344,110 Beginning Balance (at the start of the Study Year) and the $1,73,111 of additional Replacement Reserve Funding in 2019 through 2021 (as calculated in the Replacement Reserve Analysis) to each of the 262 Projected Replacements listed in the Replacement Reserve Inventory. These allocations have been made using Chronological Allocation, a method developed by Miller Dodson Associates, Inc., and discussed below. The calculated data includes: Identification and estimated cost of each Projected Replacement scheduled in years 2019 through Allocation of the $344,110 Beginning Balance to the Projected Replacements by Chronological Allocation. Allocation of the $1,73,111 of additional Replacement Reserve Funding recommended in the Replacement Reserve Analysis in years 2019 through 2021, by Chronological Allocation. CHRONOLOGICAL ALLOCATION. Chronological Allocation assigns Replacement Reserves to Projected Replacements on a "first come, first serve" basis in keeping with the basic philosophy of the Cash Flow Method. The Chronological Allocation methodology is outlined below. The first step is the allocation of the $344,110 Beginning Balance to the Projected Replacements in the Study Year. Remaining unallocated funds are next allocated to the Projected Replacements in subsequent years in chronological order until the total of Projected Replacements in the next year is greater than the unallocated funds. Projected Replacements in this year are partially funded with each replacement receiving percentage funding. The percentage of funding is calculated by dividing the unallocated funds by the total of Projected Replacements in the partially funded year. At Sanctuary at False Cape the Beginning Balance funds all Scheduled Replacements in the Study Year through 2019 and provides partial funding (2%) of replacements scheduled in The next step is the allocation of the $84,370 of 2019 Cash Flow Method Reserve Funding calculated in the Replacement Reserve Analysis. These funds are first allocated to fund the partially funded Projected Replacements and then to subsequent years in chronological order as outlined above. At Sanctuary at False Cape the Beginning Balance and the 2019 Replacement Reserve Funding, funds replacements through 2021 and partial funds (31.7%) replacements in Allocations of the 2020 and 2021 Reserve Funding are done using the same methodology. The Three-Year Replacement Funding Report details component by component allocations made by Chronological Allocation.

60 Cash Flow Method Accounting Summary - Page CF CASH FLOW METHOD CATEGORY FUNDING REPORT Each of the 262 Projected Replacements included in the Sanctuary at False Cape Replacement Reserve Inventory has been assigned to one of the 20 categories listed in TABLE CF1 below. This calculated data is a summary of data provided in the Three-Year Replacement Funding Report and Replacement Reserve Inventory. The accuracy of this data is dependent upon many factors including the following critical financial data: A Beginning Balance of $344,110 as of the first day of the Study Year, January 1, Total reserve funding (including the Beginning Balance) of $928,480 in the Study Year. No expenditures from Replacement Reserves other than those specifically listed in the Replacement Reserve Inventory. All Projected Replacements scheduled in the Replacement Reserve Inventory in 2019 being accomplished in 2019 at a cost of $342,664. If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associates to arrange for an update of the Replacement Reserve Study CASH FLOW METHOD CATEGORY FUNDING - TABLE CF1 NORMAL REMAINING ESTIMATED ECONOMIC ECONOMIC REPLACEMENT BEGINNING RESERVE PROJECTED END OF YEAR CATEGORY LIFE LIFE COST BALANCE FUNDING REPLACEMENTS BALANCE Balcony Edges 40 years 0 to 40 years $19,92 $3,397 $3,24 ($3,32) $3,32 SITE COMPONENT 6 to 60 years 3 to 68 years $138,396 $14,16 $14,16 SITE COMPONENT (cont.) 10 to 60 years 0 to 68 years $36,683 $19,00 $8,769 ($18,990) $8,829 SITE COMPONENT (cont.) 8 to 40 years 0 to 28 years $133,86 $,80 $,80 BUILDING EXTERIOR (Phase 1 = PH1) 3 to 40 years 0 to 27 years $1,73,014 $10,244 $8,497 ($10,244) $8,497 BUILDING EXTERIOR (Phase 2 = PH2) 3 to 40 years 0 to 30 years $1,7,886 $616 $376,309 $376,92 BUILDING EXTERIOR UNIT DOORS & WIND 1 to 40 years 0 to 2 years $727,096 $14,101 $14,101 BUILDING INTERIORS 3 to 42 years 0 to 1 years $,000 $108 $4,892 $,000 BUILDING INTERIOR (Phase 1 = PH1) to 30 years to 17 years $18,739 BUILDING INTERIOR - FURNITURE AND EQ 3 to 21 years 0 to 9 years $14,720 $4,760 ($4,760) BUILDING INTERIOR (Phase 2 = PH2) to 30 years 0 to 20 years $166,06 $26,639 $,86 ($26,10) $,98 BUILDING SYSTEMS (Phase 1 = PH1) 4 to 40 years 0 to 27 years $694,19 $36,686 $62,434 ($36,686) $62,434 BUILDING SYSTEMS (Phase 2 = PH2) 4 to 40 years 0 to 30 years $714,987 $23,1 $14,236 ($23,1) $14,236 BUILDING SYSTEM (Phase 1 = PH1) 3 to 40 years 0 to 27 years $226,60 $6,910 $20,941 ($6,910) $20,941 BUILDING SYSTEM (Phase 2 = PH2) 3 to 40 years 0 to 30 years $26,800 $9,17 $799 ($9,17) $799 BUILDING SYSTEM (Newer CCTV Cameras) 3 to 10 years 0 to 6 years $14,01 $9 $3,619 $3,678 SWIMMING POOL (Phase 1 = PH1) 2 to 0 years 0 to 37 years $403,10 $3,20 $3,240 ($3,20) $3,240 SWIMMING POOL (Phase 2 = PH2) 6 to 0 years 0 to 40 years $242,881 $22,287 ($22,287) C Swimming pool, structure 6 to 20 years 0 to 11 years $19,167 $403 $18,321 $18,724 COURTYARD AND POOL FURNITURE, GAZ 8 to 32 years 0 to 18 years $320,928 $177,101 $19,143 ($177,101) $19,143

61 Cash Flow Method Accounting Summary - Page CF CASH FLOW METHOD CATEGORY FUNDING REPORT Each of the 262 Projected Replacements included in the Sanctuary at False Cape Replacement Reserve Inventory has been assigned to one of the 20 categories listed in TABLE CF2 below. This calculated data is a summary of data provided in the Three-Year Replacement Funding Report and Replacement Reserve Inventory. The accuracy of this data is dependent upon many factors including the following critical financial data: Replacement Reserves on Deposit totaling $8,817 on January 1, Total reserve funding (including the Beginning Balance) of $1,12,81 from 2019 through No expenditures from Replacement Reserves other than those specifically listed in the Replacement Reserve Inventory. All Projected Replacements scheduled in the Replacement Reserve Inventory in 2020 being accomplished in 2020 at a cost of $67,202. If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associates to arrange for an update of the Replacement Reserve Study CASH FLOW METHOD CATEGORY FUNDING - TABLE CF2 NORMAL REMAINING ESTIMATED ECONOMIC ECONOMIC REPLACEMENT BEGINNING RESERVE PROJECTED END OF YEAR CATEGORY LIFE LIFE COST BALANCE FUNDING REPLACEMENTS BALANCE Balcony Edges 40 years 0 to 39 years $19,92 $3,32 ($3,32) SITE COMPONENT 6 to 60 years 2 to 67 years $138,396 $14,16 $30,499 $44,6 SITE COMPONENT (cont.) 10 to 60 years 0 to 67 years $36,683 $8,829 $12,966 ($2,80) $18,990 SITE COMPONENT (cont.) 8 to 40 years 1 to 27 years $133,86 $,80 $,80 BUILDING EXTERIOR (Phase 1 = PH1) 3 to 40 years 1 to 26 years $1,73,014 $8,497 $300,41 $308,948 BUILDING EXTERIOR (Phase 2 = PH2) 3 to 40 years 0 to 29 years $1,7,886 $376,92 $4,930 ($28,613) $33,243 BUILDING EXTERIOR UNIT DOORS & WIND 1 to 40 years 2 to 24 years $727,096 $14,101 $30,698 $44,798 BUILDING INTERIORS 3 to 42 years 0 years $,000 $,000 ($,000) BUILDING INTERIOR (Phase 1 = PH1) to 30 years 4 to 16 years $18,739 $61 $61 BUILDING INTERIOR - FURNITURE AND EQ 3 to 21 years 8 years $14,720 BUILDING INTERIOR (Phase 2 = PH2) to 30 years 0 to 19 years $166,06 $,98 $16 ($,98) $16 BUILDING SYSTEMS (Phase 1 = PH1) 4 to 40 years 1 to 26 years $694,19 $62,434 $17,89 $80,293 BUILDING SYSTEMS (Phase 2 = PH2) 4 to 40 years 2 to 29 years $714,987 $14,236 $32,36 $46,92 BUILDING SYSTEM (Phase 1 = PH1) 3 to 40 years 1 to 26 years $226,60 $20,941 $,079 $26,019 BUILDING SYSTEM (Phase 2 = PH2) 3 to 40 years 2 to 29 years $26,800 $799 $,911 $6,711 BUILDING SYSTEM (Newer CCTV Cameras) 3 to 10 years 0 to years $14,01 $3,678 $4,747 ($2,70) $,67 SWIMMING POOL (Phase 1 = PH1) 2 to 0 years 2 to 36 years $403,10 $3,240 $17,300 $20,41 SWIMMING POOL (Phase 2 = PH2) 6 to 0 years 3 to 39 years $242,881 $120,742 $120,742 C Swimming pool, structure 6 to 20 years 0 to 10 years $19,167 $18,724 $61 ($18,724) $61 COURTYARD AND POOL FURNITURE, GAZ 8 to 32 years 1 to 17 years $320,928 $19,143 $104 $19,247

62 Cash Flow Method Accounting Summary - Page CF CASH FLOW METHOD CATEGORY FUNDING REPORT Each of the 262 Projected Replacements included in the Sanctuary at False Cape Replacement Reserve Inventory has been assigned to one of the 20 categories listed in TABLE CF3 below. This calculated data is a summary of data provided in the Three-Year Replacement Funding Report and Replacement Reserve Inventory. The accuracy of this data is dependent upon many factors including the following critical financial data: Replacement Reserves on Deposit totaling $1,102,98 on January 1, Total Replacement Reserve funding (including the Beginning Balance) of $2,097,221 from 2019 to No expenditures from Replacement Reserves other than those specifically listed in the Replacement Reserve Inventory. All Projected Replacements scheduled in the Replacement Reserve Inventory in 2021 being accomplished in 2021 at a cost of $46,27. If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associates to arrange for an update of the Replacement Reserve Study CASH FLOW METHOD CATEGORY FUNDING - TABLE CF3 NORMAL REMAINING ESTIMATED ECONOMIC ECONOMIC REPLACEMENT BEGINNING RESERVE PROJECTED END OF YEAR CATEGORY LIFE LIFE COST BALANCE FUNDING REPLACEMENTS BALANCE Balcony Edges 40 years 3 to 39 years $19,92 ($0) ($0) SITE COMPONENT 6 to 60 years 1 to 66 years $138,396 $44,6 $1,910 $46,6 SITE COMPONENT (cont.) 10 to 60 years 1 to 66 years $36,683 $18,990 ($0) $18,990 SITE COMPONENT (cont.) 8 to 40 years 0 to 26 years $133,86 $,80 ($,80) BUILDING EXTERIOR (Phase 1 = PH1) 3 to 40 years 0 to 2 years $1,73,014 $308,948 $118, ($,247) $422,26 BUILDING EXTERIOR (Phase 2 = PH2) 3 to 40 years 0 to 28 years $1,7,886 $33,243 $197,820 ($347,00) $203,63 BUILDING EXTERIOR UNIT DOORS & WIND 1 to 40 years 1 to 23 years $727,096 $44,798 $21,88 $66,387 BUILDING INTERIORS 3 to 42 years 9 years $,000 $0 $0 BUILDING INTERIOR (Phase 1 = PH1) to 30 years 3 to 1 years $18,739 $61 $3,768 $3,829 BUILDING INTERIOR - FURNITURE AND EQ 3 to 21 years 7 years $14,720 BUILDING INTERIOR (Phase 2 = PH2) to 30 years 3 to 18 years $166,06 $16 $997 $1,013 BUILDING SYSTEMS (Phase 1 = PH1) 4 to 40 years 0 to 2 years $694,19 $80,293 ($9,972) $20,321 BUILDING SYSTEMS (Phase 2 = PH2) 4 to 40 years 1 to 28 years $714,987 $46,92 $106,667 $13,28 BUILDING SYSTEM (Phase 1 = PH1) 3 to 40 years 0 to 2 years $226,60 $26,019 $1,194 ($18,90) $8,623 BUILDING SYSTEM (Phase 2 = PH2) 3 to 40 years 1 to 28 years $26,800 $6,711 $8,74 $1,46 BUILDING SYSTEM (Newer CCTV Cameras) 3 to 10 years 1 to 4 years $14,01 $,67 ($0) $,67 SWIMMING POOL (Phase 1 = PH1) 2 to 0 years 1 to 3 years $403,10 $20,41 $76,213 $96,73 SWIMMING POOL (Phase 2 = PH2) 6 to 0 years 2 to 38 years $242,881 $120,742 $120,742 C Swimming pool, structure 6 to 20 years 3 to 9 years $19,167 $61 $40,469 $41,120 COURTYARD AND POOL FURNITURE, GAZ 8 to 32 years 0 to 16 years $320,928 $19,247 $6,436 ($19,143) $6,40

63 Cash Flow Method Accounting Summary - Page CF CASH FLOW METHOD - THREE-YEAR REPLACEMENT FUNDING REPORT TABLE CF4 below details the allocation of the $344,110 Beginning Balance, as reported by the Association and the $1,73,111 of Replacement Reserve Funding calculated by the Cash Flow Method from 2019 to 2021, to the 262 Projected Replacements listed in the Replacement Reserve Inventory. These allocations have been made by Chronological Allocation, a method developed by Miller Dodson Associates, Inc., and outlined on Page CF1. The accuracy of the allocations is dependent upon many factors including the following critical financial data: Replacement Reserves on Deposit totaling $344,110 on January 1, Replacement Reserves on Deposit totaling $8,817 on January 1, Replacement Reserves on Deposit totaling $1,102,98 on January 1, Total Replacement Reserve funding (including the Beginning Balance) of $2,097,221 from 2019 to No expenditures from Replacement Reserves other than those specifically listed in the Replacement Reserve Inventory. All Projected Replacements scheduled in the Replacement Reserve Inventory from 2019 to 2021 being accomplished as scheduled in the Replacement Reserve Inventory at a cost of $866,123. If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associates, Inc., to arrange for an update of the Replacement Reserve Study. CASH FLOW METHOD - THREE-YEAR REPLACEMENT FUNDING - TABLE CF4 Description of Estimated Allocation Item Projected Replacement of Beginning Reserve Projected End of Year Reserve Projected End of Year Reserve Projected End of Year # Replacement Costs Balance Funding Replacements Balance Funding Replacements Balance Funding Replacements Balance Balcony Edges 2 Balcony Edge, Type 3 3,32 3 Balcony Edge, Type 3 3,32 4 Balcony Edge, Type 3 3,32 Balcony Edge, Type 3 3,32 6 Balcony Edge, Type 3 3,32 3,32 (3,32) 7 Balcony Edge, Type 3 3, ,24 3,32 (3,32) SITE COMPONENT 8 Asphalt pavement, seal coat, ,910 1,940 9 Asphalt pavement, overlay 44,624 14,16 14,16 30,469 44,624 44, Concrete garage pavement (1/2%) 8, Concrete garage pavement (1/2%) 8, Concrete garage pavement (1/2%) 8, Concrete garage pavement (1/2%) 8, Concrete garage pavement (1/2%) 8,809 1 Concrete garage pavement (1/2%) 8, Concrete garage pavement (1/2%) 8, Concrete garage pavement (1/2%) 8, Concrete garage pavement (1/2%) 8, Concrete garage pavement (1/2%) 8,809 SITE COMPONENT (cont.) 20 Concrete sidewalk (6%),17 21 Concrete sidewalk (6%),17 22 Concrete sidewalk (6%),17 23 Concrete sidewalk (6%),17 24 Concrete sidewalk (6%),17 2 Concrete sidewalk (6%),17 26 Concrete sidewalk (6%),17 27 Concrete sidewalk (6%),17 28 Concrete sidewalk (6%),17 29 Concrete sidewalk (6%),17 30 Bulkhead, concrete, refurbishing 8, Bulkhead concrete cap, replace 74, Bulkhead, sheet piling, 20 ft. deep 301,70 33 Bulkhead, stainless railing, refurbish 2, ,74 2,80 (2,80) 34 Bulkhead, stainless railing, replacemen 21,208 3 Stormwater system, uncovered 3,0 36 Stormwater system, covered Phase 1 18,990 18,990 (18,990) 37 Stormwater system, covered Phase 2 18,990 6,024 6,024 12,966 18,990 18, Stormwater inlets, partial, Phase 1 17,40 39 Stormwater inlets, partial, Phase 2 17,40

64 Cash Flow Method Accounting Summary - Page CF6 CASH FLOW METHOD - THREE-YEAR REPLACEMENT FUNDING - TABLE CF4 cont'd Description of Estimated Allocation Item Projected Replacement of Beginning Reserve Projected End of Year Reserve Projected End of Year Reserve Projected End of Year # Replacement Costs Balance Funding Replacements Balance Funding Replacements Balance Funding Replacements Balance SITE COMPONENT (cont.) 40 Site lighting, 13' pole & fixture 27, Site lighting, 3' bollards 29, Site lighting, pool area, Phase 1 11, Site lighting, pool area, Phase 2 11, Walkway lighting, Phase 2 7,1 4 Landscape lighting, Phase 1 2, Landscape lighting, Phase 2,80,80,80,80 (,80) 47 Mailboxes, Phase 1 12, Mailboxes, Phase 2 19, Entry monument & sign, replace 6,80 BUILDING EXTERIOR (Phase 1 = PH 0 PH1 Shingle asphalt/fiberglass (0%) 291,0 291,0 291,0 291,0 1 PH1 Shingle asphalt/fiberglass (0%) 291,0 2 PH1 Gutter & downspout, 6" aluminum 7,09 3 PH1 Single ply membrane roof 13,4 4 PH1 CMU exterior walls, repoint, parti,247,247,247,247 (,247) PH1 Metal grilles, garage, refurbish 10,244 10,244 3,20 (10,244) 3,20 6,994 10,244 10,244 6 PH1 Fiber cement soffit panel, partial 69, ,368 23,744 7 PH1 Fiber cement lap siding, partial 122, ,188 41,81 8 PH1 Fiber cement panel siding, partial 14, ,943,022 9 PH1 Fiber cement trim, partial 94, ,623 32, PH1 Exterior joint sealants, partial 1, ,434 17, PH1 Storefront doors and windows 62, PH1 Exterior metal doors 21, PH1 Aluminum doors w/sidelights 12, PH1 Rollup door at 1st floor elevator 1,29 6 PH1 Exterior corridor floor coating 347,00 66 PH1 Aluminum railing, refurbish 28, PH1 Aluminum railing, replace 219,97 68 PH1 Louvers for heatpump access 44,63 69 PH1 Wood and aluminum trellis 42,90 BUILDING EXTERIOR (Phase 2 = PH 70 PH2 Shingle asphalt/fiberglass 83,100 3,13 3,13 196,06 199, PH2 Gutter & downspout, 6" aluminum 7,09 72 PH2 Single ply membrane roof 13,4 73 PH2 CMU exterior walls, repoint, parti, ,764 1, PH2 Metal grilles, garage, refurbish 2, ,749 2,61 2,61 7 PH2 Fiber cement soffit panel, partial 69,00 76 PH2 Fiber cement lap siding, partial 122,00 77 PH2 Fiber cement panel siding, partial 14, PH2 Fiber cement trim, partial 94,00 79 PH2 Exterior joint sealants, partial 1,80 80 PH2 Storefront doors and windows 62, PH2 Exterior metal doors 21, PH2 Aluminum doors w/sidelights 12, PH2 Exterior corridor floor coating 347,00 347,00 347,00 347,00 (347,00) 84 PH2 Aluminum railing, refurbish 28, ,997 28,613 (28,613) 8 PH2 Aluminum railing, replace 219,97 86 PH2 Louvers for heatpump access 6,48 87 PH2 Wood and aluminum trellis 42,90 BUILDING EXTERIOR UNIT DOOR 88 Ph1 Exterior door, Unit Entrances 103,36 89 Ph1 Sliding door, Unit Balcony 13, Ph1 HVAC Access panel at balcony 44,41 14,101 14,101 30,30 44,41 44,41 91 Ph2 Exterior door, Unit Entrances 149, Ph2 Sliding door, Unit Balcony 230, Ph2 HVAC Access panel at balcony 64, ,88 21,936 BUILDING INTERIORS 94 Interior signage allowance, ,892,000 (,000) BUILDING INTERIOR (Phase 1 = PH 9 PH1 Meeting room, renovation 8, PH1 Kitchen renovation 24,0 97 PH1 Restroom, renovation 4,80 98 PH1 Library, renovation 3,800

65 Cash Flow Method Accounting Summary - Page CF7 CASH FLOW METHOD - THREE-YEAR REPLACEMENT FUNDING - TABLE CF4 cont'd Description of Estimated Allocation Item Projected Replacement of Beginning Reserve Projected End of Year Reserve Projected End of Year Reserve Projected End of Year # Replacement Costs Balance Funding Replacements Balance Funding Replacements Balance Funding Replacements Balance 99 PH1 Lobby renovation, lower level 18, PH1 Lobby and corridor renovation, up 9, PH1 Offices, renovation 6, PH1 carpet 8, ,771 2, PH1 porcelain tile 42, PH1 stained & epoxy sealed concrete 2, PH1 rubber floor tile 3, PH1 garage ceiling, partial 2, , PH1 ceiling suspension system, 100% 16, PH1 wainscoting partial allowance,98 BUILDING INTERIOR - FURNITUR 109 Office desks with returns 9, Office chair 4,760 4,760 (4,760) BUILDING INTERIOR (Phase 2 = PH 111 PH2 Meeting room, renovation 4, PH2 Kitchen renovation 12, PH2 Restroom and shower, renovation 9, PH2 Library, renovation 2,29 11 PH2 Lobby renovation, lower level 12, PH2 Lobby and corridor renovation, up 7, PH2 Offices, renovation 2, PH2 carpet 12,360 12,360 (12,360) 119 PH2 porcelain tile 63,4 120 PH2 stained & epoxy sealed concrete 11,184 11,184 (11,184) 121 PH2 rubber floor tile 3, PH2 garage ceiling, partial 2,966 2,966 (2,966) , PH2 ceiling suspension system, 100% 16, PH2 wainscoting partial allowance,98 129,86,98 (,98) BUILDING SYSTEMS (Phase 1 = PH 12 PH1 Elevator cab & door, passenger 34, PH1 Elevator, traction psngr, controls 24, PH1 Elevator, traction psngr, mechanic 123, PH1 Trash compactor, ram & controls 7,900 7,900 (7,900) 129 PH1 Backup generator, diesel, 30KW 49, PH1 Backup generator, diesel, 30KW 49, PH1 Electric meters 31, PH1 Stairwell lighting, partial,976,976,976,976 (,976) 133 PH1 Entry lobby lighting 8, PH1 Misc. common interior lighting 3,420 3,420 (3,420) 3,420 3,420 3, PH1 Garage lighting, 33% 8, PH1 Garage lighting, 33% 8,24 8,24 (8,24) 137 PH1 Garage lighting, 33% 7,760 2,462 2,462,298 7,760 7, PH1 Corridor CFL sconces, partial 9,141 9,141 (9,141) 139 PH1 Corridor CFL sconces, partial 9,141 9,141 9,141 9,141 (9,141) 140 PH1 Corridor CFL sconces, partial 9,141 9,141 9,141 9, PH1 Balcony lights, red lenses 36,87 36,87 36,87 36,87 (36,87) 142 PH1 Heat pump/ac unit (2 tons) 7,980 7,980 (7,980) 143 PH1 Heat pump/ac unit (2 tons) 7,980 7,980 7,980 7,980 (7,980) 144 PH1 Heat pump/ac unit (2 tons) 7, PH1 Heat pump/ac unit (3 to tons) 13,700 BUILDING SYSTEMS (Phase 2 = PH 146 PH2 Elevator cab & door, passenger 34, PH2 Elevator, hydraulic psngr, control 24,000 1,374 1,374 8,403 86, PH2 Elevator, hydraulic psngr, piston 123, PH2 Trash compactor, ram & controls 7,900 7,900 (7,900) 10 PH2 Backup generator, diesel, 20KW 49,20 11 PH2 Backup generator, diesel, 400KW 49,20 12 PH2 Electric meters 4,04 13 PH2 Stairwell lighting, partial, ,009 2, PH2 Entry lobby lighting 8,760 1 PH2 Misc. common interior lighting 3,420 1,08 1,08 2,33 3,420 3, PH2 Garage lighting, 33% 7,27 7,27 (7,27) 17 PH2 Garage lighting, 33% 6,790 2,14 2,14 4,636 6,790 6, PH2 Garage lighting, 33% 6, PH2 Corridor CFL sconces, partial 13,296 4,218 4,218 9,078 13,296 13, PH2 Corridor CFL sconces, partial 13, ,471 4, PH2 Corridor CFL sconces, partial 13, PH2 Balcony lights, red lenses 3, ,101 12,296

66 Cash Flow Method Accounting Summary - Page CF8 CASH FLOW METHOD - THREE-YEAR REPLACEMENT FUNDING - TABLE CF4 cont'd Description of Estimated Allocation Item Projected Replacement of Beginning Reserve Projected End of Year Reserve Projected End of Year Reserve Projected End of Year # Replacement Costs Balance Funding Replacements Balance Funding Replacements Balance Funding Replacements Balance 163 PH2 Heat pump/ac unit (2 tons) 7,980 7,980 (7,980) 164 PH2 Heat pump/ac unit (2 tons) 7,980 2,31 2,31,449 7,980 7, PH2 Heat pump/ac unit (2 tons) 7, ,683 2, PH2 Heat pump/ac unit (3 to tons) 13,390 4,248 4,248 9,142 13,390 13,390 BUILDING SYSTEM (Phase 1 = PH1 167 PH1 Garage gate arm 3,360 3,360 1,066 (3,360) 1,066 2,294 3,360 3, PH1 Garage operator,020,020,020,020 (,020) 169 PH1 Garage controller 4,140 4,140 4,140 4,140 (4,140) 170 PH1 Access control system readers 4, PH1 Access control system readers 2,410 2,410 2,410 2,410 (2,410) 172 PH1 CCTV cameras (older ones) 7,020 7,020 7,020 7,020 (7,020) 173 PH1 Oil water separator 4, PH1 Backflow preventer, water main, PH1 Domestic water pumps 18, PH1 Domestic water pump motors 4,00 1,28 1,28 2,76 4,00 4, PH1 Pump controller, PH1 Pressure tank 3, PH1 Domestic water piping allowance 6, PH1 Sanitary piping allowance 44,0 181 PH1 Fire pump 34, PH1 Jockey pump, PH1 Fire alarm control panel 7,0 184 PH1 Fire alarm annunciator,99 18 PH1 Gas pipe corrosion inhibitor 3,0 3,0 (3,0) ,194 1,213 BUILDING SYSTEM (Phase 2 = PH2 186 PH2 Garage gate arm 2,20 2, (2,20) 799 1,721 2,20 2, PH2 Garage operator 3, ,266 1, PH2 Garage controller 3,10 3,10 (3,10) ,044 1, PH2 Access control system readers 6, ,300 2, PH2 CCTV cameras (older ones) 8, ,90 2, PH2 Backflow preventer, water main, PH2 Domestic water pumps 18, PH2 Domestic water pump motors 4,00 4,00 4,00 4, PH2 Pump controller, PH2 Pressure tank 3, PH2 Domestic water piping allowance 82, PH2 Sanitary piping allowance 63, PH2 Fire pump 34, PH2 Jockey pump, PH2 Fire alarm control panel 7,0 201 PH2 Fire alarm annunciator, PH2 Gas pipe corrosion inhibitor 3,0 3,0 (3,0) ,194 1,213 BUILDING SYSTEM (Newer CCTV 203 Security CCTV DVR 2,70 9 2,691 2,70 2,70 (2,70) 2,70 2, CCTV Cameras (2012) 2, ,997 2,92 2,92 20 CCTV Cameras (201) 8,340 SWIMMING POOL (Phase 1 = PH1) 206 PH1 Swimming pool, structure 89, PH1 Swimming pool, whitecoat 19, PH1 Swimming pool, waterline tile 9, PH1 Swimming pool, coping 19, PH1 Swimming pool, cover 3,20 3,20 1,117 (3,20) 1,117 2,403 3,20 3, PH1 Swimming pool, concrete deck (1 32, ,928 11, PH1 Swimming pool pump (+ hp) 3, PH1 Swimming pool filter, PH1 Swimming pool heater - gas 9,100 9,100 9,100 9, PH1 Swimming pool deck coating 194,166 1,00 1,00 6,28 66, PH1 Perimeter fence - 42" (aluminum p 9, PH1 Hot tub 6,69 2,124 2,124 4,71 6,69 6,69 SWIMMING POOL (Phase 2 = PH2) 218 PH2 Swimming pool, structure 68, PH2 Swimming pool, whitecoat 11,172 11,172 (11,172) 220 PH2 Swimming pool, waterline tile 4,81 4,81 (4,81) 221 PH2 Swimming pool, coping 9, PH2 Swimming pool, cover 2,420 2,420 (2,420) 223 PH2 Swimming pool, concrete deck (1 16,008 16,008 16,008 16,008

67 Cash Flow Method Accounting Summary - Page CF9 CASH FLOW METHOD - THREE-YEAR REPLACEMENT FUNDING - TABLE CF4 cont'd Description of Estimated Allocation Item Projected Replacement of Beginning Reserve Projected End of Year Reserve Projected End of Year Reserve Projected End of Year # Replacement Costs Balance Funding Replacements Balance Funding Replacements Balance Funding Replacements Balance 224 PH2 Swimming pool pump (2 hp) 3,880 3,880 (3,880) 22 PH2 Swimming pool filter 2, PH2 Swimming pool heater - gas 9,100 9,100 9,100 9, PH2 Swimming pool deck coating 9,634 9,634 9,634 9, PH2 Perimeter fence - 42" (aluminum p 7, PH2 Water play features 4, PH2 water play pumps (1. hp to 3 hp) 2, PH2 water play deck surfacing 4,1 C Swimming pool, structure 232 C Swimming pool, whitecoat 7, ,864 7,01 (7,01) 233 C Swimming pool, waterline tile 4, ,397 4,494 (4,494) 234 C Swimming pool, coping 1, C Swimming pool, cover 2, ,368 2,420 (2,420) 236 C Swimming pool, concrete deck (10% 13, ,660 4, C Swimming pool pump (+ hp) 4, ,692 4,79 (4,79) 238 C Swimming pool filter, C Swimming pool heater - gas (old) 3, ,009 1, C Swimming pool heater - gas (new) 3, C Swimming pool deck coating 103, ,800 3, C Wind screen 42" (tempered glass) 32,063 COURTYARD AND POOL FURNITU 243 PVC High back chairs 4, PVC Lounge chairs (Phase 1 & 2) 17,20 24 Wood chairs 6,800 6,800 (6,800) 246 Wood benches, long 41,47 41,47 (41,47) 247 Wood benches, short 13,7 13,7 (13,7) 248 Wood tables, tall, square 8,680 8,680 (8,680) 249 Wood tables, low, square 9,10 9,10 (9,10) 20 Wood tables, low, round 23,37 23,37 (23,37) 21 Waste receptacles, metal 4, Waste receptacles, metal 6,600 6,600 (6,600) 23 Gas grills, partial 1, Gas grills, partial 1, ,13,218 2 Gas grills, partial 1, Gas grills, partial 13,76 13,76 (13,76) 27 Gas grills, partial 1,273 1,273 1,273 1,273 (1,273) 28 Grill undercounter cabinets 3, ,301 1, Grill undercounter cabinets 3, Grill undercounter cabinets 3,870 3,870 (3,870) 261 Grill undercounter cabinets 3,870 3,870 3,870 3,870 (3,870) 262 Hot tub gazebo 16, Pool plaza gazebos 41,310

68 Component Method - Page CM1 COMPONENT METHOD $1,238,169 COMPONENT METHOD RECOMMENDED ANNUAL FUNDING OF REPLACEMENT RESERVES IN THE STUDY YEAR, $416.0 Per unit (average), recommended monthly funding of Replacement Reserves General. The Component Method (also referred to as the Full Funded Method) is a very conservative mathematical model developed by HUD in the early 1980s. Each of the 262 Projected Replacements listed in the Replacement Reserve Inventory is treated as a separate account. The Beginning Balance is allocated to each of the individual accounts, as is all subsequent funding of Replacement Reserves. These funds are "locked" in these individual accounts and are not available to fund other Projected Replacements. The calculation of Recommended Annual Funding of Replacement Reserves is a multi-step process outlined in more detail on Page CM2. Component Method - Cumulative Receipts and Expenditures Graph $2,000,000 Component Method - Cumulative Receipts Component Method - Year End Balance Projected Replacements - Cumulative Expenditures $20,000,000 $19,690,668 $16,081,044 $1,000,000 $10,000,000 $,000,000 $3,609,624 $

69 Component Method - Page CM2 COMPONENT METHOD (cont'd) Current Funding Objective. A Current Funding Objective is calculated for each of the Projected Replacements listed in the Replacement Reserve Inventory. Replacement Cost is divided by the Normal Economic Life to determine the nominal annual contribution. The Remaining Economic Life is then subtracted from the Normal Economic Life to calculate the number of years that the nominal annual contribution should have been made. The two values are then multiplied to determine the Current Funding Objective. This is repeated for each of the 262 Projected Replacements. The total, $3,39,039, is the Current Funding Objective. For an example, consider a very simple Replacement Reserve Inventory with one Projected Replacement, a fence with a $1,000 Replacement Cost, a Normal Economic Life of 10 years, and a Remaining Economic Life of 2 years. A contribution to Replacement Reserves of $100 ($1, years) should have been made in each of the previous 8 years (10 years - 2 years). The result is a Current Funding Objective of $800 (8 years x $100 per year). Funding Percentage. The Funding Percentage is calculated by dividing the Beginning Balance ($344,110) by the Current Funding Objective ($3,39,039). At Sanctuary at False Cape the Funding Percentage is 9.7% Allocation of the Beginning Balance. The Beginning Balance is divided among the 262 Projected Replacements in the Replacement Reserve Inventory. The Current Funding Objective for each Projected Replacement is multiplied by the Funding Percentage and these funds are then "locked" into the account of each item. If we relate this calculation back to our fence example, it means that the Association has not accumulated $800 in Reserves (the Funding Objective), but rather at 9.7 percent funded, there is $78 in the account for the fence. Annual Funding. The Recommended Annual Funding of Replacement Reserves is then calculated for each Projected Replacement. The funds allocated to the account of the Projected Replacement are subtracted from the Replacement Cost. The result is then divided by the number of years until replacement, and the result is the annual funding for each of the Projected Replacements. The sum of these is $1,238,169, the Component Method Recommended Annual Funding of Replacement Reserves in the Study Year (2019). In our fence example, the $78 in the account is subtracted from the $1,000 Total Replacement Cost and divided by the 2 years that remain before replacement, resulting in an annual deposit of $461. Next year, the deposit remains $461, but in the third year, the fence is replaced and the annual funding adjusts to $100. Adjustment to the Component Method for interest and inflation. The calculations in the Replacement Reserve Analysis do not account for interest earned on Replacement Reserves, inflation, or a constant annual increase in Annual Funding of Replacement Reserves. The Component Method is a very conservative method and if the Analysis is updated regularly, adequate funding will be maintained without the need for adjustments. Component Method Data - Years 1 through 30 Year Beginning balance $344,110 Recommended annual funding $1,238,169 $966,02 $942,201 $844,33 $817,233 $764,44 $640,41 $636,212 $79,907 $90,36 Interest on reserves Expenditures $342,664 $67,202 $46,27 $196,76 $440,73 $1,738,004 $12,73 $1,111,864 $469,289 $130,892 Year end balance $1,239,61 $2,138,466 $2,624,410 $3,272,367 $3,648,846 $2,67,386 $3,190,048 $2,714,396 $2,82,014 $3,284,487 Cumulative Expenditures $342,664 $409,866 $866,123 $1,062,699 $1,03,42 $3,241,46 $3,367,209 $4,479,073 $4,948,362 $,079,24 Cumulative Receipts $1,82,279 $2,48,332 $3,490,32 $4,33,066 $,12,298 $,916,842 $6,7,27 $7,193,469 $7,773,376 $8,363,741 Year Recommended annual funding $89,894 $80,64 $77,2 $73,91 $73,218 $72,194 $69,672 $68,940 $67,46 $66,8 Interest on reserves Expenditures $346,376 $19,378 $82,717 $810,61 $93,774 $246,33 $467,983 $9,426 $317,671 $114,323 Year end balance $3,28,006 $3,913,272 $3,638,107 $3,401,047 $3,880,490 $4,206,30 $4,308,039 $4,281,3 $4,31,347 $4,983,609 Cumulative Expenditures $,42,630 $,621,008 $6,473,726 $7,284,376 $7,378,11 $7,624,48 $8,092,468 $8,687,894 $9,00,6 $9,119,888 Cumulative Receipts $8,93,63 $9,34,280 $10,111,832 $10,68,423 $11,28,641 $11,830,83 $12,400,07 $12,969,448 $13,36,913 $14,103,497 Year Recommended annual funding $66,082 $62,340 $62,340 $62,340 $9,236 $9,236 $,698 $,441 $2,468 $1,987 Interest on reserves Expenditures $911,879 $864,346 $402,717 $280,690 $610,273 $796,410 $167,09 $1,447,84 $423,083 $1,06,402 Year end balance $4,637,812 $4,33,806 $4,49,430 $4,777,080 $4,726,043 $4,488,869 $4,877,08 $3,984,64 $4,114,038 $3,609,624 Cumulative Expenditures $10,031,768 $10,896,114 $11,298,831 $11,79,22 $12,189,79 $12,986,204 $13,13,714 $14,601,9 $1,024,642 $16,081,044 Cumulative Receipts $14,669,80 $1,231,920 $1,794,261 $16,36,601 $16,91,837 $17,47,073 $18,030,771 $18,86,213 $19,138,680 $19,690,668

70 Component Method Accounting Summary - Page CM3 COMPONENT METHOD ACCOUNTING SUMMARY This Sanctuary at False Cape - Component Method Accounting Summary is an attachment to the Sanctuary at False Cape - Replacement Reserve Study dated July 9, 2018 and is for use by accounting and reserve professionals experienced in Association funding and accounting principles. This Summary consists of four reports, the 2019, 2020, and 2021 Component Method Category Funding Reports (3) and a Three-Year Replacement Funding Report. COMPONENT METHOD CATEGORY FUNDING REPORT, 2019, 2020, and Each of the 262 Projected Replacements listed in the Sanctuary at False Cape Replacement Reserve Inventory has been assigned to one of 20 categories. The following information is summarized by category in each report: Normal Economic Life and Remaining Economic Life of the Projected Replacements. Cost of all Scheduled Replacements in each category. Replacement Reserves on Deposit allocated to the category at the beginning and end of the report period. Cost of Projected Replacements in the report period. Recommended Replacement Reserve Funding allocated to the category during the report period as calculated by the Component Method. THREE-YEAR REPLACEMENT FUNDING REPORT. This report details the allocation of the $344,110 Beginning Balance (at the start of the Study Year) and the $3,146,422 of additional Replacement Reserve funding from 2019 to 2021 (as calculated in the Replacement Reserve Analysis) to each of the 262 Projected Replacements listed in the Replacement Reserve Inventory. These allocations have been made using the Component Method as outlined in the Replacement Reserve Analysis. The calculated data includes: Identification and estimated cost of each Projected Replacement schedule in years 2019 through Allocation of the $344,110 Beginning Balance to the Projected Replacements by the Component Method. Allocation of the $3,146,422 of additional Replacement Reserve Funding recommended in the Replacement Reserve Analysis in years 2019 through 2021, by the Component Method.

71 Component Method Accounting Summary - Page CM COMPONENT METHOD CATEGORY FUNDING REPORT Each of the 262 Projected Replacements included in the Sanctuary at False Cape Replacement Reserve Inventory has been assigned to one of the 20 categories listed in TABLE CM1 below. This calculated data is a summary of data provided in the Three-Year Replacement Funding Report and Replacement Reserve Inventory. The accuracy of this data is dependent upon many factors including the following critical financial data: A Beginning Balance of $344,110 as of the first day of the Study Year, January 1, Total reserve funding (including the Beginning Balance) of $1,82,279 in the Study Year. No expenditures from Replacement Reserves other than those specifically listed in the Replacement Reserve Inventory. All Projected Replacements scheduled in the Replacement Reserve Inventory in 2019 being accomplished in 2019 at a cost of $342,664. If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associates to arrange for an update of the Replacement Reserve Study COMPONENT METHOD CATEGORY FUNDING - TABLE CM1 NORMAL REMAINING ESTIMATED ECONOMIC ECONOMIC REPLACEMENT BEGINNING RESERVE PROJECTED END OF YEAR CATEGORY LIFE LIFE COST BALANCE FUNDING REPLACEMENTS BALANCE 0to40years Balcony Edges 40 years 0 to 40 years $19,92 $6 $4,848 $3,32 $2,177 SITE COMPONENT 6 to 60 years 3 to 68 years $138,396 $6,116 $13,761 $19,877 SITE COMPONENT (cont.) 10 to 60 years 0 to 68 years $36,683 $17,249 $40,11 $18,990 $38,374 SITE COMPONENT (cont.) 8 to 40 years 0 to 28 years $133,86 $6,424 $13,402 $19,826 BUILDING EXTERIOR (Phase 1 = PH1) 3 to 40 years 0 to 27 years $1,73,014 $6,700 $206,621 $10,244 $23,077 BUILDING EXTERIOR (Phase 2 = PH2) 3 to 40 years 0 to 30 years $1,7,886 $83,89 $274,663 $38,22 BUILDING EXTERIOR UNIT DOORS & WIND 1 to 40 years 0 to 2 years $727,096 $23,706 $44,280 $67,986 BUILDING INTERIORS 3 to 42 years 0 to 1 years $,000 $389 $2,306 $2,694 BUILDING INTERIOR (Phase 1 = PH1) to 30 years to 17 years $18,739 $7,321 $1,678 $22,999 BUILDING INTERIOR - FURNITURE AND EQ 3 to 21 years 0 to 9 years $14,720 $970 $,242 $4,760 $1,43 BUILDING INTERIOR (Phase 2 = PH2) to 30 years 0 to 20 years $166,06 $7,902 $3,386 $26,10 $16,778 BUILDING SYSTEMS (Phase 1 = PH1) 4 to 40 years 0 to 27 years $694,19 $38,469 $111,988 $36,686 $113,771 BUILDING SYSTEMS (Phase 2 = PH2) 4 to 40 years 0 to 30 years $714,987 $33,02 $98,06 $23,1 $108,412 BUILDING SYSTEM (Phase 1 = PH1) 3 to 40 years 0 to 27 years $226,60 $8,069 $29,320 $6,910 $30,479 BUILDING SYSTEM (Phase 2 = PH2) 3 to 40 years 0 to 30 years $26,800 $,46 $28,80 $9,17 $2,221 BUILDING SYSTEM (Newer CCTV Cameras) 3 to 10 years 0 to 6 years $14,01 $03 $3,176 $3,679 SWIMMING POOL (Phase 1 = PH1) 2 to 0 years 0 to 37 years $403,10 $9,29 $1,761 $3,20 $7,770 SWIMMING POOL (Phase 2 = PH2) 6 to 0 years 0 to 40 years $242,881 $9,379 $48,298 $22,287 $3,390 C Swimming pool, structure 6 to 20 years 0 to 11 years $19,167 $6,49 $32,766 $39,22 COURTYARD AND POOL FURNITURE, GAZ 8 to 32 years 0 to 18 years $320,928 $21,634 $177,642 $177,101 $22,17

72 Component Method Accounting Summary - Page CM COMPONENT METHOD CATEGORY FUNDING REPORT Each of the 262 Projected Replacements included in the Sanctuary at False Cape Replacement Reserve Inventory has been assigned to one of the 20 categories listed in TABLE CM2 below. This calculated data is a summary of data provided in the Three-Year Replacement Funding Report and Replacement Reserve Inventory. The accuracy of this data is dependent upon many factors including the following critical financial data: Replacement Reserves on Deposit totaling $1,239,61 on January 1, Total reserve funding (including the Beginning Balance) of $2,48,332 from 2019 through No expenditures from Replacement Reserves other than those specifically listed in the Replacement Reserve Inventory. All Projected Replacements scheduled in the Replacement Reserve Inventory in 2020 being accomplished in 2020 at a cost of $67,202. If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associates to arrange for an update of the Replacement Reserve Study COMPONENT METHOD CATEGORY FUNDING - TABLE CM2 NORMAL REMAINING ESTIMATED ECONOMIC ECONOMIC REPLACEMENT BEGINNING RESERVE PROJECTED END OF YEAR CATEGORY LIFE LIFE COST BALANCE FUNDING REPLACEMENTS BALANCE Balcony Edges 40 years 0 to 39 years $19,92 $2,177 $1,929 $3,32 $780 SITE COMPONENT 6 to 60 years 2 to 67 years $138,396 $19,877 $13,761 $33,638 SITE COMPONENT (cont.) 10 to 60 years 0 to 67 years $36,683 $38,374 $24,238 $2,80 $9,807 SITE COMPONENT (cont.) 8 to 40 years 1 to 27 years $133,86 $19,826 $13,402 $33,229 BUILDING EXTERIOR (Phase 1 = PH1) 3 to 40 years 1 to 26 years $1,73,014 $23,077 $200,788 $43,86 BUILDING EXTERIOR (Phase 2 = PH2) 3 to 40 years 0 to 29 years $1,7,886 $38,22 $274,663 $28,613 $604,302 BUILDING EXTERIOR UNIT DOORS & WIND 1 to 40 years 2 to 24 years $727,096 $67,986 $44,280 $112,266 BUILDING INTERIORS 3 to 42 years 0 years $,000 $2,694 $2,306 $,000 BUILDING INTERIOR (Phase 1 = PH1) to 30 years 4 to 16 years $18,739 $22,999 $1,678 $38,677 BUILDING INTERIOR - FURNITURE AND EQ 3 to 21 years 8 years $14,720 $1,43 $1,474 $2,927 BUILDING INTERIOR (Phase 2 = PH2) to 30 years 0 to 19 years $166,06 $16,778 $14,931 $,98 $2,724 BUILDING SYSTEMS (Phase 1 = PH1) 4 to 40 years 1 to 26 years $694,19 $113,771 $82,338 $196,109 BUILDING SYSTEMS (Phase 2 = PH2) 4 to 40 years 2 to 29 years $714,987 $108,412 $79,102 $187,14 BUILDING SYSTEM (Phase 1 = PH1) 3 to 40 years 1 to 26 years $226,60 $30,479 $24,912 $,391 BUILDING SYSTEM (Phase 2 = PH2) 3 to 40 years 2 to 29 years $26,800 $2,221 $22,738 $47,960 BUILDING SYSTEM (Newer CCTV Cameras) 3 to 10 years 0 to years $14,01 $3,679 $3,176 $2,70 $4,104 SWIMMING POOL (Phase 1 = PH1) 2 to 0 years 2 to 36 years $403,10 $7,770 $49,77 $107,27 SWIMMING POOL (Phase 2 = PH2) 6 to 0 years 3 to 39 years $242,881 $3,390 $30,68 $6,98 C Swimming pool, structure 6 to 20 years 0 to 10 years $19,167 $39,22 $32,766 $18,724 $3,267 COURTYARD AND POOL FURNITURE, GAZ 8 to 32 years 1 to 17 years $320,928 $22,17 $33,246 $,421

73 Component Method Accounting Summary - Page CM COMPONENT METHOD CATEGORY FUNDING REPORT Each of the 262 Projected Replacements included in the Sanctuary at False Cape Replacement Reserve Inventory has been assigned to one of the 20 categories listed in TABLE CM3 below. This calculated data is a summary of data provided in the Three-Year Replacement Funding Report and Replacement Reserve Inventory. The accuracy of this data is dependent upon many factors including the following critical financial data: Replacement Reserves on Deposit totaling $2,138,466 on January 1, Total Replacement Reserve funding (including the Beginning Balance) of $3,490,32 from 2019 to No expenditures from Replacement Reserves other than those specifically listed in the Replacement Reserve Inventory. All Projected Replacements scheduled in the Replacement Reserve Inventory in 2021 being accomplished in 2021 at a cost of $46,27. If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associates to arrange for an update of the Replacement Reserve Study COMPONENT METHOD CATEGORY FUNDING - TABLE CM3 NORMAL REMAINING ESTIMATED ECONOMIC ECONOMIC REPLACEMENT BEGINNING RESERVE PROJECTED END OF YEAR CATEGORY LIFE LIFE COST BALANCE FUNDING REPLACEMENTS BALANCE Balcony Edges 40 years 3 to 39 years $19,92 $780 $03 $1,283 SITE COMPONENT 6 to 60 years 1 to 66 years $138,396 $33,638 $13,761 $47,399 SITE COMPONENT (cont.) 10 to 60 years 1 to 66 years $36,683 $9,807 $23,140 $82,948 SITE COMPONENT (cont.) 8 to 40 years 0 to 26 years $133,86 $33,229 $13,402 $,80 $40,826 BUILDING EXTERIOR (Phase 1 = PH1) 3 to 40 years 0 to 2 years $1,73,014 $43,86 $200,788 $,247 $649,406 BUILDING EXTERIOR (Phase 2 = PH2) 3 to 40 years 0 to 28 years $1,7,886 $604,302 $264,331 $347,00 $21,132 BUILDING EXTERIOR UNIT DOORS & WIND 1 to 40 years 1 to 23 years $727,096 $112,266 $44,280 $16,46 BUILDING INTERIORS 3 to 42 years 9 years $,000 $00 $00 BUILDING INTERIOR (Phase 1 = PH1) to 30 years 3 to 1 years $18,739 $38,677 $1,678 $4,3 BUILDING INTERIOR - FURNITURE AND EQ 3 to 21 years 7 years $14,720 $2,927 $1,474 $4,401 BUILDING INTERIOR (Phase 2 = PH2) to 30 years 3 to 18 years $166,06 $2,724 $12,770 $38,494 BUILDING SYSTEMS (Phase 1 = PH1) 4 to 40 years 0 to 2 years $694,19 $196,109 $82,338 $9,972 $218,47 BUILDING SYSTEMS (Phase 2 = PH2) 4 to 40 years 1 to 28 years $714,987 $187,14 $79,102 $266,616 BUILDING SYSTEM (Phase 1 = PH1) 3 to 40 years 0 to 2 years $226,60 $,391 $24,912 $18,90 $61,713 BUILDING SYSTEM (Phase 2 = PH2) 3 to 40 years 1 to 28 years $26,800 $47,960 $22,738 $70,698 BUILDING SYSTEM (Newer CCTV Cameras) 3 to 10 years 1 to 4 years $14,01 $4,104 $2,762 $6,866 SWIMMING POOL (Phase 1 = PH1) 2 to 0 years 1 to 3 years $403,10 $107,27 $49,77 $17,284 SWIMMING POOL (Phase 2 = PH2) 6 to 0 years 2 to 38 years $242,881 $6,98 $30,68 $96,2 C Swimming pool, structure 6 to 20 years 3 to 9 years $19,167 $3,267 $26,10 $79,418 COURTYARD AND POOL FURNITURE, GAZ 8 to 32 years 0 to 16 years $320,928 $,421 $33,246 $19,143 $69,24

74 Component Method Accounting Summary - Page CM7 COMPONENT METHOD - THREE-YEAR REPLACEMENT FUNDING REPORT TABLE CM4 below details the allocation of the $344,110 Beginning Balance, as reported by the Association and the $3,146,422 of Replacement Reserve Funding calculated by the Cash Flow Method from 2019 to 2021, to the 262 Projected Replacements listed in the Replacement Reserve Inventory. These allocations have been made by Chronological Allocation, a method developed by Miller Dodson Associates, Inc., and outlined on Page CF1. The accuracy of the allocations is dependent upon many factors including the following critical financial data: Replacement Reserves on Deposit totaling $344,110 on January 1, Replacement Reserves on Deposit totaling $1,239,61 on January 1, Replacement Reserves on Deposit totaling $2,138,466 on January 1, Total Replacement Reserve funding (including the Beginning Balance) of $3,490,32 from 2019 to No expenditures from Replacement Reserves other than those specifically listed in the Replacement Reserve Inventory. All Projected Replacements scheduled in the Replacement Reserve Inventory from 2019 to 2021 being accomplished as scheduled in the Replacement Reserve Inventory at a cost of $866,123. If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associates, Inc., to arrange for an update of the Replacement Reserve Study. COMPONENT METHOD - THREE-YEAR REPLACEMENT FUNDING - TABLE CM4 Description of Estimated Allocation Item Projected Replacement of Beginning Reserve Projected End of Year Reserve Projected End of Year Reserve Projected End of Year # Replacement Costs Balance Funding Replacements Balance Funding Replacements Balance Funding Replacements Balance Balcony Edges 2 Balcony Edge, Type 3 3, Balcony Edge, Type 3 3, Balcony Edge, Type 3 3, Balcony Edge, Type 3 3, Balcony Edge, Type 3 3, ,002 (3,32) Balcony Edge, Type 3 3, ,09 1,816 1,09 (3,32) SITE COMPONENT 8 Asphalt pavement, seal coat, , ,840 9 Asphalt pavement, overlay 44,624 3,37 10,312 13,687 10,312 23,999 10,312 34, Concrete garage pavement (1/2%) 8, , , , Concrete garage pavement (1/2%) 8, , , Concrete garage pavement (1/2%) 8, , , Concrete garage pavement (1/2%) 8, ,11 14 Concrete garage pavement (1/2%) 8, Concrete garage pavement (1/2%) 8, Concrete garage pavement (1/2%) 8, Concrete garage pavement (1/2%) 8, Concrete garage pavement (1/2%) 8, Concrete garage pavement (1/2%) 8, SITE COMPONENT (cont.) 20 Concrete sidewalk (6%), , , Concrete sidewalk (6%), , Concrete sidewalk (6%), Concrete sidewalk (6%), Concrete sidewalk (6%), Concrete sidewalk (6%), Concrete sidewalk (6%), Concrete sidewalk (6%), Concrete sidewalk (6%), Concrete sidewalk (6%), Bulkhead, concrete, refurbishing 8, , , ,88 31 Bulkhead concrete cap, replace 74,926 2,267 2,344 4,610 2,344 6,94 2,344 9, Bulkhead, sheet piling, 20 ft. deep 301,70 9,128 9,439 18,67 9,439 28,007 9,439 37, Bulkhead, stainless railing, refurbish 2, ,284 1,21 1,284 (2,80) Bulkhead, stainless railing, replacemen 21, , , ,632 3 Stormwater system, uncovered 3, , Stormwater system, covered Phase 1 18,990 1,846 17,144 (18,990) 1,266 1,266 1,266 2,32 37 Stormwater system, covered Phase 2 18,990 1,34 4,409,763 4,409 10,172 4,409 14,81 38 Stormwater inlets, partial, Phase 1 17,40 1,091 1,091 1,091 2,181 1,091 3, Stormwater inlets, partial, Phase 2 17, , ,7

75 Component Method Accounting Summary - Page CM8 COMPONENT METHOD - THREE-YEAR REPLACEMENT FUNDING - TABLE CM4 cont'd Description of Estimated Allocation Item Projected Replacement of Beginning Reserve Projected End of Year Reserve Projected End of Year Reserve Projected End of Year # Replacement Costs Balance Funding Replacements Balance Funding Replacements Balance Funding Replacements Balance SITE COMPONENT (cont.) 40 Site lighting, 13' pole & fixture 27,100 1,81 3,190 4,771 3,190 7,961 3,190 11,11 41 Site lighting, 3' bollards 29,097 1,698 3,42,122 3,42 8,47 3,42 11, Site lighting, pool area, Phase 1 11, ,348 2,01 1,348 3,363 1,348 4, Site lighting, pool area, Phase 2 11, , , , Walkway lighting, Phase 2 7, , ,179 4 Landscape lighting, Phase 1 2, Landscape lighting, Phase 2, ,794 2,217 1,794 4,011 1,794 (,80) 47 Mailboxes, Phase 1 12, , , ,42 48 Mailboxes, Phase 2 19, , , , Entry monument & sign, replace 6, BUILDING EXTERIOR (Phase 1 = PH 0 PH1 Shingle asphalt/fiberglass (0%) 291,0 22,679 3,774 76,43 3, ,227 3, ,001 1 PH1 Shingle asphalt/fiberglass (0%) 291,0 11,213 11,213 11,213 22,427 11,213 33,640 2 PH1 Gutter & downspout, 6" aluminum 7, , ,882 3 PH1 Single ply membrane roof 13, ,94 2,38 1,94 3,979 1,94,73 4 PH1 CMU exterior walls, repoint, parti, ,613 2,021 1,613 3,634 1,613 (,247) PH1 Metal grilles, garage, refurbish 10, ,248 (10,244) 3,41 3,41 3,41 6,829 6 PH1 Fiber cement soffit panel, partial 69,00 1,689 11,302 12,991 11,302 24,293 11,302 3,9 7 PH1 Fiber cement lap siding, partial 122,00 2,978 19,920 22,898 19,920 42,818 19,920 62,739 8 PH1 Fiber cement panel siding, partial 14, ,390 2,748 2,390,138 2,390 7,29 9 PH1 Fiber cement trim, partial 94,00 2,286 1,294 17,80 1,294 32,874 1,294 48, PH1 Exterior joint sealants, partial 1,80 8,642 8,642 8,642 17,283 8,642 2,92 61 PH1 Storefront doors and windows 62,031 3,418 4,09 7,927 4,09 12,43 4,09 16, PH1 Exterior metal doors 21,900 1,207 1,92 2,798 1,92 4,390 1,92, PH1 Aluminum doors w/sidelights 12, , , , PH1 Rollup door at 1st floor elevator 1, PH1 Exterior corridor floor coating 347,00 6,78 42,93 49,30 42,93 91,943 42,93 134,36 66 PH1 Aluminum railing, refurbish 28, ,07 4,063 3,07 7,70 3,07 11, PH1 Aluminum railing, replace 219,97 6,417 7,627 14,044 7,627 21,671 7,627 29, PH1 Louvers for heatpump access 44,63 2,604,24 7,88,24 13,112,24 18, PH1 Wood and aluminum trellis 42,90 2,48,013 7,498,013 12,11,013 17,24 BUILDING EXTERIOR (Phase 2 = PH 70 PH2 Shingle asphalt/fiberglass 83,100 43,089 90, ,091 90, ,093 90, ,09 71 PH2 Gutter & downspout, 6" aluminum 7, , PH2 Single ply membrane roof 13,4 93 1,177 1,770 1,177 2,948 1,177 4,12 73 PH2 CMU exterior walls, repoint, parti, , , , PH2 Metal grilles, garage, refurbish 2, , ,921 7 PH2 Fiber cement soffit panel, partial 69,00 7,722 7,722 7,722 1,444 7,722 23, PH2 Fiber cement lap siding, partial 122,00 13,611 13,611 13,611 27,222 13,611 40, PH2 Fiber cement panel siding, partial 14,700 1,633 1,633 1,633 3,267 1,633 4, PH2 Fiber cement trim, partial 94,00 10,40 10,40 10,40 20,900 10,40 31,30 79 PH2 Exterior joint sealants, partial 1,80,761,761,761 11,22,761 17, PH2 Storefront doors and windows 62,031 2,81 3,701 6,16 3,701 10,217 3,701 13, PH2 Exterior metal doors 21, ,307 2,300 1,307 3,607 1,307 4, PH2 Aluminum doors w/sidelights 12, , , ,84 83 PH2 Exterior corridor floor coating 347,00 23,62 107, , , ,1 107,949 (347,00) 84 PH2 Aluminum railing, refurbish 28,613 2,226 13,193 1,419 13,193 (28,613) 2,861 2,861 8 PH2 Aluminum railing, replace 219,97 4,812 6,941 11,73 6,941 18,694 6,941 2,63 86 PH2 Louvers for heatpump access 6,48 2,471 4,910 7,382 4,910 12,292 4,910 17, PH2 Wood and aluminum trellis 42,90 1,864 3,702,66 3,702 9,268 3,702 12,971 BUILDING EXTERIOR UNIT DOOR 88 Ph1 Exterior door, Unit Entrances 103,36 3,18 4,17 7,333 4,17 11,08 4,17 1, Ph1 Sliding door, Unit Balcony 13,630 4,14,479 9,623,479 1,102,479 20,80 90 Ph1 HVAC Access panel at balcony 44,41 3,170 10,320 13,490 10,320 23,810 10,320 34, Ph2 Exterior door, Unit Entrances 149,292 3,733,98 9,331,98 14,930,98 20,28 92 Ph2 Sliding door, Unit Balcony 230,160,7 8,631 14,386 8,631 23,017 8,631 31, Ph2 HVAC Access panel at balcony 64,207 3,746 10,077 13,823 10,077 23,900 10,077 33,976 BUILDING INTERIORS 94 Interior signage allowance, ,306 2,694 2,306 (,000) BUILDING INTERIOR (Phase 1 = PH 9 PH1 Meeting room, renovation 8, ,08 1,83 1,08 2,641 1,08 3, PH1 Kitchen renovation 24,0 1,432 2,890 4,322 2,890 7,212 2,890 10, PH1 Restroom, renovation 4, , , PH1 Library, renovation 3, , ,64

76 Component Method Accounting Summary - Page CM9 COMPONENT METHOD - THREE-YEAR REPLACEMENT FUNDING - TABLE CM4 cont'd Description of Estimated Allocation Item Projected Replacement of Beginning Reserve Projected End of Year Reserve Projected End of Year Reserve Projected End of Year # Replacement Costs Balance Funding Replacements Balance Funding Replacements Balance Funding Replacements Balance 99 PH1 Lobby renovation, lower level 18,900 1,103 2,22 3,327 2,22,2 2,22 7, PH1 Lobby and corridor renovation, up 9,40 1 1,112 1,664 1,112 2,776 1,112 3, PH1 Offices, renovation 6, , , , PH1 carpet 8, ,34 1,469 1,34 2,823 1,34 4, PH1 porcelain tile 42,87 1,668 2,289 3,97 2,289 6,246 2,289 8,3 104 PH1 stained & epoxy sealed concrete 2, PH1 rubber floor tile 3, , PH1 garage ceiling, partial 2, , PH1 ceiling suspension system, 100% 16, ,291 2,116 1,291 3,408 1,291 4, PH1 wainscoting partial allowance, , ,632 BUILDING INTERIOR - FURNITUR 109 Office desks with returns 9, , , , Office chair 4, ,297 (4,760) ,08 BUILDING INTERIOR (Phase 2 = PH 111 PH2 Meeting room, renovation 4, , , PH2 Kitchen renovation 12, ,068 1,606 1,068 2,67 1,068 3, PH2 Restroom and shower, renovation 9, , , , PH2 Library, renovation 2, PH2 Lobby renovation, lower level 12, ,078 1,621 1,078 2,698 1,078 3, PH2 Lobby and corridor renovation, up 7, ,6 62 2, PH2 Offices, renovation 2, PH2 carpet 12,360 1,202 11,18 (12,360) 1,766 1,766 1,766 3, PH2 porcelain tile 63,4 1,81 2,934 4,784 2,934 7,718 2,934 10, PH2 stained & epoxy sealed concrete 11,184 1,087 10,097 (11,184) 1,118 1,118 1,118 2, PH2 rubber floor tile 3, , PH2 garage ceiling, partial 2, ,678 (2,966) , PH2 ceiling suspension system, 100% 16, ,046 1,680 1,046 2,726 1,046 3, PH2 wainscoting partial allowance, ,760 3,22 2,760 (,98) BUILDING SYSTEMS (Phase 1 = PH 12 PH1 Elevator cab & door, passenger 34,200 1,99 4,026 6,021 4,026 10,046 4,026 14, PH1 Elevator, traction psngr, controls 24,000 14,818 29,898 44,716 29,898 74,614 29, , PH1 Elevator, traction psngr, mechanic 123,400 7,199 14,2 21,724 14,2 36,249 14,2 0, PH1 Trash compactor, ram & controls 7, ,132 (7,900) , PH1 Backup generator, diesel, 30KW 49,20 1,437 1,708 3,144 1,708 4,82 1,708 6,9 130 PH1 Backup generator, diesel, 30KW 49,20 1,676 1,830 3,06 1,830,336 1,830 7, PH1 Electric meters 31,81 1,340 1,793 3,133 1,793 4,926 1,793 6, PH1 Stairwell lighting, partial, ,837 2,302 1,837 4,139 1,837 (,976) 133 PH1 Entry lobby lighting 8, , , PH1 Misc. common interior lighting 3, ,087 (3,420) , PH1 Garage lighting, 33% 8, , , PH1 Garage lighting, 33% 8, ,443 (8,24) , PH1 Garage lighting, 33% 7, ,802 2,3 1,802 4,17 1,802, PH1 Corridor CFL sconces, partial 9, ,22 (9,141) , PH1 Corridor CFL sconces, partial 9, ,810 3,21 2,810 6,331 2,810 (9,141) 140 PH1 Corridor CFL sconces, partial 9, ,710 2,302 1,710 4,012 1,710, PH1 Balcony lights, red lenses 36,87 2,868 11,336 14,204 11,336 2,39 11,336 (36,87) 142 PH1 Heat pump/ac unit (2 tons) 7, ,204 (7,980) , PH1 Heat pump/ac unit (2 tons) 7, ,466 3,048 2,466,14 2,466 (7,980) 144 PH1 Heat pump/ac unit (2 tons) 7, ,094 1,417 1,094 2,11 1,094 3,60 14 PH1 Heat pump/ac unit (3 to tons) 13,700 1,04 1,04 1,04 2,108 1,04 3,162 BUILDING SYSTEMS (Phase 2 = PH 146 PH2 Elevator cab & door, passenger 34,200 1,496 2,973 4,469 2,973 7,443 2,973 10, PH2 Elevator, hydraulic psngr, control 24,000 14,818 39,864 4,682 39,864 94,46 39, , PH2 Elevator, hydraulic psngr, piston 123,400 3,600,70 9,304,70 1,009,70 20, PH2 Trash compactor, ram & controls 7, ,132 (7,900) ,80 10 PH2 Backup generator, diesel, 20KW 49,20 1,077 1,4 2,631 1,4 4,18 1,4, PH2 Backup generator, diesel, 400KW 49,20 1,317 1,63 2,970 1,63 4,623 1,63 6,27 12 PH2 Electric meters 4,04 1,314 2,082 3,396 2,082,479 2,082 7,61 13 PH2 Stairwell lighting, partial, , , , PH2 Entry lobby lighting 8, , ,470 1 PH2 Misc. common interior lighting 3, , ,6 16 PH2 Garage lighting, 33% 7, ,68 (7,27) PH2 Garage lighting, 33% 6, ,76 2,061 1,76 3,637 1,76, PH2 Garage lighting, 33% 6, , , , PH2 Corridor CFL sconces, partial 13, ,087 4,03 3,087 7,122 3,087 10, PH2 Corridor CFL sconces, partial 13, ,087 2,862 2,087 4,949 2,087 7, PH2 Corridor CFL sconces, partial 13, ,4 2,144 1,4 3,698 1,4, PH2 Balcony lights, red lenses 3,990 2,100,648 7,748,648 13,396,648 19,04

77 Component Method Accounting Summary - Page CM10 COMPONENT METHOD - THREE-YEAR REPLACEMENT FUNDING - TABLE CM4 cont'd Description of Estimated Allocation Item Projected Replacement of Beginning Reserve Projected End of Year Reserve Projected End of Year Reserve Projected End of Year # Replacement Costs Balance Funding Replacements Balance Funding Replacements Balance Funding Replacements Balance 163 PH2 Heat pump/ac unit (2 tons) 7, ,204 (7,980) , PH2 Heat pump/ac unit (2 tons) 7, ,866 2,383 1,866 4,249 1,866 6, PH2 Heat pump/ac unit (2 tons) 7, ,26 1,63 1,26 2,919 1,26 4, PH2 Heat pump/ac unit (3 to tons) 13, ,131 3,998 3,131 7,129 3,131 10,29 BUILDING SYSTEM (Phase 1 = PH1 167 PH1 Garage gate arm 3, ,033 (3,360) 1,120 1,120 1,120 2, PH1 Garage operator, ,43 1,934 1,43 3,477 1,43 (,020) 169 PH1 Garage controller 4, ,326 1,487 1,326 2,814 1,326 (4,140) 170 PH1 Access control system readers 4, , PH1 Access control system readers 2, , (2,410) 172 PH1 CCTV cameras (older ones) 7, ,18 2,704 2,18 4,862 2,18 (7,020) 173 PH1 Oil water separator 4, PH1 Backflow preventer, water main, , PH1 Domestic water pumps 18, , , , PH1 Domestic water pump motors 4, , , , PH1 Pump controller, , PH1 Pressure tank 3, PH1 Domestic water piping allowance 6,92 1,107 4,62,78 4,62 10,410 4,62 1, PH1 Sanitary piping allowance 44,0 1,28 6,110 7,39 6,110 13,0 6,110 19, PH1 Fire pump 34,990 1,021 1,213 2,234 1,213 3,447 1,213 4, PH1 Jockey pump, , , , PH1 Fire alarm control panel 7, , , , PH1 Fire alarm annunciator, , , , PH1 Gas pipe corrosion inhibitor 3,0 34 3,20 (3,0) ,420 BUILDING SYSTEM (Phase 2 = PH2 186 PH2 Garage gate arm 2, ,27 (2,20) , PH2 Garage operator 3, , , PH2 Garage controller 3, ,803 (3,10) , PH2 Access control system readers 6, ,073 1,473 1,073 2,46 1,073 3, PH2 CCTV cameras (older ones) 8, ,377 1,889 1,377 3,266 1,377 4, PH2 Backflow preventer, water main, PH2 Domestic water pumps 18, , , , PH2 Domestic water pump motors 4, , , PH2 Pump controller, PH2 Pressure tank 3, PH2 Domestic water piping allowance 82,22 33,83 6,368,83 12,203,83 18, PH2 Sanitary piping allowance 63, ,002 7,621 7,002 14,622 7,002 21, PH2 Fire pump 34, ,104 1,870 1,104 2,974 1,104 4, PH2 Jockey pump, , , PH2 Fire alarm control panel 7, , ,3 201 PH2 Fire alarm annunciator, , , PH2 Gas pipe corrosion inhibitor 3,0 34 3,20 (3,0) ,420 BUILDING SYSTEM (Newer CCTV 203 Security CCTV DVR 2, ,330 1,420 1,330 (2,70) CCTV Cameras (2012) 2, , , CCTV Cameras (201) 8, ,17 1,400 1,17 2,7 1,17 3,713 SWIMMING POOL (Phase 1 = PH1) 206 PH1 Swimming pool, structure 89,700 2,093 2,30 4,399 2,30 6,704 2,30 9, PH1 Swimming pool, whitecoat 19,600 1,960 1,960 1,960 3,920 1,960, PH1 Swimming pool, waterline tile 9, , , PH1 Swimming pool, coping 19, , , PH1 Swimming pool, cover 3, ,178 (3,20) 1,173 1,173 1,173 2, PH1 Swimming pool, concrete deck (1 32,02 790,28 6,07,28 11,361,28 16, PH1 Swimming pool pump (+ hp) 3, PH1 Swimming pool filter, , , , PH1 Swimming pool heater - gas 9, ,732 2,174 1,732 3,90 1,732, PH1 Swimming pool deck coating 194,166 4,720 31,74 36,294 31,74 67,869 31,74 99, PH1 Perimeter fence - 42" (aluminum p 9, ,171 1,71 1,171 2,921 1,171 4, PH1 Hot tub 6, ,620 1,836 1,620 3,46 1,620,07 SWIMMING POOL (Phase 2 = PH2) 218 PH2 Swimming pool, structure 68,17 1,199 1,642 2,841 1,642 4,483 1,642 6, PH2 Swimming pool, whitecoat 11,172 1,086 10,086 (11,172) 1,117 1,117 1,117 2, PH2 Swimming pool, waterline tile 4, ,347 (4,81) PH2 Swimming pool, coping 9, ,2 83 2, , PH2 Swimming pool, cover 2, ,18 (2,420) PH2 Swimming pool, concrete deck (1 16, ,08 3,669 3,08 6,74 3,08 9,838

78 Component Method Accounting Summary - Page CM11 COMPONENT METHOD - THREE-YEAR REPLACEMENT FUNDING - TABLE CM4 cont'd Description of Estimated Allocation Item Projected Replacement of Beginning Reserve Projected End of Year Reserve Projected End of Year Reserve Projected End of Year # Replacement Costs Balance Funding Replacements Balance Funding Replacements Balance Funding Replacements Balance 224 PH2 Swimming pool pump (2 hp) 3, ,03 (3,880) PH2 Swimming pool filter 2, PH2 Swimming pool heater - gas 9, ,732 2,174 1,732 3,90 1,732, PH2 Swimming pool deck coating 9,634 3,487 18,429 21,916 18,429 40,346 18,429 8, PH2 Perimeter fence - 42" (aluminum p 7, , , PH2 Water play features 4, , , PH2 water play pumps (1. hp to 3 hp) 2, , PH2 water play deck surfacing 4, , ,911 C Swimming pool, structure 232 C Swimming pool, whitecoat 7, ,23 3,780 3,23 (7,01) C Swimming pool, waterline tile 4, ,072 2,422 2,072 (4,494) C Swimming pool, coping 1, ,211 1,799 1,211 3,010 1,211 4, C Swimming pool, cover 2, ,132 1,288 1,132 (2,420) C Swimming pool, concrete deck (10% 13, ,24 2,91 2,24 4,84 2,24 7, C Swimming pool pump (+ hp) 4, ,211 2,84 2,211 (4,79) C Swimming pool filter, , , C Swimming pool heater - gas (old) 3, , ,8 240 C Swimming pool heater - gas (new) 3, C Swimming pool deck coating 103,00 2,16 16,831 19,347 16,831 36,177 16,831 3, C Wind screen 42" (tempered glass) 32,063 1,247 2,68 3,81 2,68 6,383 2,68 8,91 COURTYARD AND POOL FURNITU 243 PVC High back chairs 4, , , PVC Lounge chairs (Phase 1 & 2) 17, ,893 2,060 1,893 3,93 1,893, Wood chairs 6,800,23 1,277 (6,800) 4,733 4,733 4,733 9, Wood benches, long 41,47 4,033 37,442 (41,47) 3,46 3,46 3,46 6, Wood benches, short 13,7 1,320 12,2 (13,7) 1,131 1,131 1,131 2, Wood tables, tall, square 8, ,836 (8,680) , Wood tables, low, square 9, ,260 (9,10) ,2 20 Wood tables, low, round 23,37 2,273 21,102 (23,37) 1,948 1,948 1,948 3, Waste receptacles, metal 4, , Waste receptacles, metal 6, ,98 (6,600) , Gas grills, partial 1, Gas grills, partial 1, ,484 2,8 2,484,339 2,484 7,822 2 Gas grills, partial 1, ,1 2,341 2,1 4,496 2,1 6,62 26 Gas grills, partial 13,76 1,320 12,26 (13,76) 1,697 1,697 1,697 3, Gas grills, partial 1, ,782,710 4,782 10,491 4,782 (1,273) 28 Grill undercounter cabinets 3, , , Grill undercounter cabinets 3, , , Grill undercounter cabinets 3, ,494 (3,870) Grill undercounter cabinets 3, ,212 1,447 1,212 2,68 1,212 (3,870) 262 Hot tub gazebo 16, , , , Pool plaza gazebos 41,310 1,632 2,088 3,720 2,088,808 2,088 7,897

79 Replacement Reserve Analysis - Page A1 Sanctuary Large Components July 9, SANCTUAR19 EXECUTIVE SUMMARY The Sanctuary Large Components Replacement Reserve Analysis uses the Cash Flow Method (CFM) to calculate Replacement Reserve funding for the periodic replacement of the 4 Projected Replacements identified in the Replacement Reserve Inventory. $100,12 RECOMMENDED REPLACEMENT RESERVE FUNDING FOR THE STUDY YEAR, 2019 $33.77 Per unit (average), minimum monthly funding of Replacement Reserves We recommend the Association adopt a Replacement Reserve Funding Plan based on the annual funding recommendation above. Inflation adjusted funding for subsequent years is shown on Page A. Sanctuary Large Components reports a Starting Balance of $0 and Annual Funding totaling $0. Current funding is inadequate to fund the $3,039,878 of Projected Replacements scheduled in the Replacement Reserve Inventory over the 40-year Study Period. See Page A3 for a more detailed evaluation. #1 - Cumulative Replacement Reserve Funding and Expenditures Graph $3,00,000 Cash Flow Method - Cumulative Receipts Projected Replacements - Cumulative This is a companion inventory for the Sanctuary at False Cape and includes inventory components that were removed Current Funding - Cumulative Receipts Expenditures 3,11,878 $3,000,000 $2,00,000 $3,039,878 $2,000,000 $1,00,000 $1,000,000 $00,000 $ The Current Funding Objective as calculated by the Component Method (Fully Funded) is $808,473 making the reserve account 0.0% funded. See the Appendix for more information on this method. This is a companion inventory for the Sanctuary at False Cape and includes inventory components that were removed from the original inventory based on a replacement value greater than $00,000 and a remaining life more than 2/3's of the normal life.

80 Replacement Reserve Analysis - Page A2 Sanctuary Large Components July 9, SANCTUAR19 REPLACEMENT RESERVE ANALYSIS - GENERAL INFORMATION The Sanctuary Large Components Replacement Reserve Analysis calculations of recommended funding of Replacement Reserves by the Cash Flow Method and the evaluation of the Current Funding are based upon the same Study Year, Study Period, Beginning Balance, Replacement Reserve Inventory and Level of Service STUDY YEAR The Association reports that their accounting year begins on January 1, and the Study Year, the first year evaluated by the Replacement Reserve Analysis, begins on January 1, Years STUDY PERIOD The Replacement Reserve Analysis evaluates the funding of Replacement Reserves over a 40-year Study Period. $0 STARTING BALANCE The Association reports Replacement Reserves on Deposit totaling $0 at the start of the Study Year. Level Three LEVEL OF SERVICE The Replacement Reserve Inventory has been developed in compliance with the National Reserve Study Standards for a Level Three Study, as defined by the Community Associations Institute (CAI). $3,039,878 REPLACEMENT RESERVE INVENTORY - PROJECTED REPLACEMENTS The Sanctuary Large Components Replacement Reserve Inventory identifies 4 items that will require periodic replacement, that are to be funded from Replacement Reserves. We estimate the cost of these replacements will be $3,039,878 over the 40-year Study Period. The Projected Replacements are divided into 1 major categories starting on Page B3. Pages B1-B2 provide detailed information on the Replacement Reserve Inventory. #2 - Annual Expenditures for Projected Replacements Graph This graph shows annual expenditures for Projected Replacements over the 40-year Study Period. The red line shows the average annual expenditure of $7,997. Section C provides a year by year Calender of these expenditures. $1,400,000 $1,200,000 $1,228,40 $1,228,40 $1,000,000 $800,000 $600,000 $400,000 $238,491 $344,487 $200,000 $0 $7, year Average $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $

81 Replacement Reserve Analysis - Page A3 Sanctuary Large Components July 9, SANCTUAR19 UPDATING UPDATING OF THE FUNDING PLAN The Association has a responsibility to review the Funding Plan annually. The review should include a comparison and evaluation of actual reserve funding with recommended levels shown on Page A4 and A. The Projected Replacements listed on Page C2 should be compared with any replacements accomplished and funded from Replacement Reserves. Discrepancies should be evaluated and if necessary, the Reserve Study should be updated or a new study commissioned. We recommend annual increases in replacement reserve funding to account for the impact of inflation. Inflation Adjusted Funding is discussed on Page A. UPDATING OF THE REPLACEMENT RESERVE STUDY At a minimum, the Replacement Reserve Study should be professionally updated every three to five years or after completion of a major replacement project. Updating should also be considered if during the annual review of the Funding Plan, discrepancies are noted between projected and actual reserve funding or replacement costs. Updating may also be necessary if there is a meaningful discrepancy between the actual inflation rate and the inflation rate used for the Inflation Adjusted Funding of Replacement Reserves on Page A. ANNUAL EXPENDITURES AND CURRENT FUNDING The annual expenditures that comprise the $3,039,878 of Projected Expenditures over the 40-year Study Period and the impact of the Association continuing to fund Replacement Reserves at the current level are detailed in Table 3. #3 - Table of Annual Expenditures and Current Funding Data - Years 1 through 40 Year Starting Balance $0 Projected Replacements Annual Deposit $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 End of Year Balance $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Cumulative Expenditures Cumulative Receipts $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Year Projected Replacements Annual Deposit $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 End of Year Balance $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Cumulative Expenditures Cumulative Receipts $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Year Projected Replacements ($238,491) ($344,487) ($1,228,40) Annual Deposit $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 End of Year Balance $0 $0 $0 ($238,491) ($238,491) ($82,978) ($82,978) ($1,811,428) ($1,811,428) ($1,811,428) Cumulative Expenditures ($238,491) ($238,491) ($82,978) ($82,978) ($1,811,428) ($1,811,428) ($1,811,428) Cumulative Receipts $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Year Projected Replacements ($1,228,40) Annual Deposit $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 End of Year Balance ($3,039,878) ($3,039,878) ($3,039,878) ($3,039,878) ($3,039,878) ($3,039,878) ($3,039,878) ($3,039,878) ($3,039,878) ($3,039,878) Cumulative Expenditures ($3,039,878) ($3,039,878) ($3,039,878) ($3,039,878) ($3,039,878) ($3,039,878) ($3,039,878) ($3,039,878) ($3,039,878) ($3,039,878) Cumulative Receipts $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 EVALUATION OF CURRENT FUNDING The evaluation of Current Funding (Starting Balance of $0 & annual funding of $0), is done in today's dollars with no adjustments for inflation or interest earned on Replacement Reserves. The evaluation assumes Replacement Reserves will only be used for the 4 Projected Replacements identified in the Replacement Reserve Inventory and that the Association will continue Annual Funding of $0 throughout the 40-year Study Period. Annual Funding of $0 is approximately 0 percent of the $100,12 recommended Annual Funding calculated by the Cash Flow Method for 2019, the Study Year. Evaluation of the 4 Projected Replacements calculates an average annual expenditure over the next 40 years of $7,997. Annual funding of $0 is 0 percent of the average annual expenditure. Our calculations identify funding shortfalls in 17 years of the Study Period with the initial shortfall in The largest shortfall, $-3,039,878, occurs in All shortfalls can be seen and evaluated in Table 3 above. In summary, Current Funding as reported by the Association and shown above, does not provide adequate funding for the $3,039,878 of Projected Replacements scheduled in the Replacement Reserve Inventory over the Study Period.

82 Replacement Reserve Analysis - Page A4 Sanctuary Large Components July 9, SANCTUAR19 CASH FLOW METHOD FUNDING $100,12 RECOMMENDED REPLACEMENT RESERVE FUNDING FOR 2019 $33.77 Per unit (average), minimum monthly funding of Replacement Reserves Recommended Replacement Reserve Funding has been calculated using the Cash Flow Method (also called the Straight Line or Threshold Method). This method calculates a constant annual funding between peaks in cumulative expenditures, while maintaining a Minimum Balance (threshold) in the Peak Years. Peak Years. The First Peak Year occurs in 2049 with Replacement Reserves on Deposit dropping to the Minimum Balance after the completion of $3,039,878 of replacements from 2019 to Recommended funding declines from $100,12 in 2049 to $ in 200. Peak Years are identified in Chart 4 and Table. Minimum Balance. The calculations assume a Minimum Balance of $76,000 in Replacement Reserves. This is approx. 12 months of average expenditures based on the $7,997, 40-year average annual expenditure. Cash Flow Method Study Period. Cash Flow Method calculates funding for $3,039,878 of expenditures over the 40-year Study Period. It does not include funding for any projects beyond 208 and in 208, the end of year balance will always be the Minimum Balance. #4 - Cash Flow Method - Graph of Cumulative Receipts and Expenditures - Years 1 through 40 $3,00,000 $3,000,000 $2,00,000 Cash Flow Method - Cumulative Receipts Cash Flow Method - Year End Balance Cumulative Expenditures Peak Year $3,039,878 $3,11,878 $2,000,000 $1,00,000 $1,000,000 $00,000 $0 $76, # - Cash Flow Method - Table of Receipts & Expenditures - Years 1 through 40 Year Starting Balance $0 Projected Replacements Annual Deposit $100,12 $100,12 $100,12 $100,12 $100,12 $100,12 $100,12 $100,12 $100,12 $100,12 End of Year Balance $100,12 $201,024 $301,37 $402,049 $02,61 $603,073 $703,8 $804,098 $904,610 $1,00,122 Cumulative Expenditures Cumulative Receipts $100,12 $201,024 $301,37 $402,049 $02,61 $603,073 $703,8 $804,098 $904,610 $1,00,122 Year Projected Replacements Annual Deposit $100,12 $100,12 $100,12 $100,12 $100,12 $100,12 $100,12 $100,12 $100,12 $100,12 End of Year Balance $1,10,634 $1,206,146 $1,306,69 $1,407,171 $1,07,683 $1,608,19 $1,708,707 $1,809,219 $1,909,732 $2,010,244 Cumulative Expenditures Cumulative Receipts $1,10,634 $1,206,146 $1,306,69 $1,407,171 $1,07,683 $1,608,19 $1,708,707 $1,809,219 $1,909,732 $2,010,244 Year Projected Replacements ($238,491) ($344,487) ($1,228,40) Annual Deposit $100,12 $100,12 $100,12 $100,12 $100,12 $100,12 $100,12 $100,12 $100,12 $100,12 End of Year Balance $2,110,76 $2,211,268 $2,311,780 $2,173,802 $2,274,314 $2,030,339 $2,130,81 $1,002,913 $1,103,426 $1,203,938 Cumulative Expenditures ($238,491) ($238,491) ($82,978) ($82,978) ($1,811,428) ($1,811,428) ($1,811,428) Cumulative Receipts $2,110,76 $2,211,268 $2,311,780 $2,412,293 $2,12,80 $2,613,317 $2,713,829 $2,814,341 $2,914,84 $3,01,366 Year 1st Peak Projected Replacements ($1,228,40) Annual Deposit $100,12 End of Year Balance $76,000 $76,000 $76,000 $76,000 $76,000 $76,000 $76,000 $76,000 $76,000 $76,000 Cumulative Expenditures ($3,039,878) ($3,039,878) ($3,039,878) ($3,039,878) ($3,039,878) ($3,039,878) ($3,039,878) ($3,039,878) ($3,039,878) ($3,039,878) Cumulative Receipts $3,11,878 $3,11,878 $3,11,878 $3,11,878 $3,11,878 $3,11,878 $3,11,878 $3,11,878 $3,11,878 $3,11,878

83 Replacement Reserve Analysis - Page A Sanctuary Large Components July 9, SANCTUAR19 INFLATION ADJUSTED FUNDING The Cash Flow Method calculations on Page A4 have been done in today's dollars with no adjustment for inflation. At Miller + Dodson, we belive that long-term inflation forecasting is effective at demonstrating the power of compounding, not at calculating appropriate funding levels for Replacement Reserves. We have developed this proprietary model to estimate the short-term impact of inflation on Replacement Reserve funding. $100, CASH FLOW METHOD RECOMMENDED FUNDING #6 - Inflation Adjusted Funding The 2019 Study Year calculations have been made using current replacement costs $120,000 (see Page B2), modified by the Analyst for any project specific conditions. $102, INFLATION ADJUSTED FUNDING A new analysis calculates 2020 funding based on three assumptions; Replacement Reserves on Deposit totaling $100,12 on January 1, No Expenditures from Replacement Reserves in $100,000 $100,12 $100,12 $100,12 $102,976 $100,12 $10,80 $100,12 $108,337 Construction Cost Inflation of 2.30 percent in The $102,976 inflation adjusted funding in 2020 is a 2.4 percent increase over the non-inflation adjusted 2020 funding of $100,12. $80,000 $10, INFLATION ADJUSTED FUNDING A new analysis calculates 2021 funding based on three assumptions; Replacement Reserves on Deposit totaling $203,488 on January 1, No Expenditures from Replacement Reserves in Construction Cost Inflation of 2.30 percent in The $10,80 inflation adjusted funding in 2021 is a.04 percent increase over the non-inflation adjusted 2021 funding of $100,12. $108, INFLATION ADJUSTED FUNDING A new analysis calculates 2022 funding based on three assumptions; Replacement Reserves on Deposit totaling $309,069 on January 1, No Expenditures from Replacement Reserves in $60,000 $40,000 $20,000 $ Construction Cost Inflation of 2.30 percent in The $108,337 inflation adjusted funding in 2022 is a 7.78 percent increase over the non-inflation adjusted funding of $100,12. Cash Flow Method Funding YEAR FIVE & BEYOND The inflation adjusted funding calculations outlined above are not intended to be a substitute for periodic evaluation of common elements by an experienced Reserve Analyst. Industry Standards, lender requirements, and many state and local statutes require a Replacement Reserve Study be professionally updated every 3 to years. INFLATION ADJUSTMENT Prior to approving a budget based upon the 2020, 2021 and 2022 inflation adjusted funding calculations above, the 2.30 percent base rate of inflation used in our calculations should be compared to rates published by the Bureau of Labor Statistics. If there is a significant discrepancy (over 1 percent), contact Miller Dodson + Associates prior to using the Inflation Adjusted Funding. INTEREST ON RESERVES The recommended funding calculations do not account for interest earned on Replacement Reserves. In 2019, based on a 1.00 percent interest rate, we estimate the Association may earn $03 on an average balance of $0,26, $1,20 on an average balance of $12,000 in 2020, and $2,63 on $26,279 in The Association may elect to attribute 100 percent of the earned interest to Reserves, resulting in a reduction in the 2019 funding from $100,12 to $100,010 (a 0.0 percent reduction), $102,976 to $101,46 in 2020 (a 1.48 percent reduction), and $10,80 to $103,018 in 2021 (a 2.43 percent reduction). Inflation Adjusted Funding

84 Replacement Reserve Analysis - Page A6 Sanctuary Large Components July 9, SANCTUAR19 REPLACEMENT RESERVE STUDY - SUPPLEMENTAL COMMENTS Sanctuary Large Components has 248 units. The type of property is a Condominium Association. The Cash Flow Method calculates the minimum annual funding necessary to prevent Replacement Reserves from dropping below the Minimum Balance. Failure to fund at least the recommended levels may result in funding not being available for the Projected Replacements listed in the Replacement Reserve Inventory. The accuracy of the Replacement Reserve Analysis is dependent upon expenditures from Replacement Reserves being made ONLY for the 4 Projected Replacements specifically listed in the Replacement Reserve Inventory. The inclusion/exclusion of items from the Replacement Reserve Inventory is discussed on Page B1. No starting balance or annual contribution are indicated as reported by the Manager and the current Board.

85 Replacement Reserve Inventory - Page B1 Sanctuary Large Components July 9, SANCTUAR19 REPLACEMENT RESERVE INVENTORY GENERAL INFORMATION Sanctuary Large Components - Replacement Reserve Inventory identifies 4 Projected Replacements. PROJECTED REPLACEMENTS. 4 of the items are Projected Replacements and the periodic replacements of these items are scheduled for funding from Replacement Reserves. The Projected Replacements have an estimated one-time replacement cost of $3,039,878. Replacements totaling $3,039,878 are scheduled in the Replacement Reserve Inventory over the 40-year Study Period. Projected Replacements are the replacement of commonly-owned physical assets that require periodic replacement and whose replacement is to be funded from Replacement Reserves. EXCLUDED ITEMS. None of the items included in the Replacement Reserve Inventory are 'Excluded Items'. Multiple categories of items are typically excluded from funding by Replacement Reserves, including but not limited to: Tax Code. The United States Tax Code grants very favorable tax status to Replacement Reserves, conditioned on expenditures being made within certain guidelines. These guidelines typically exclude maintenance activities, minor repairs and capital improvements. Value. Items with a replacement cost of less that $1,000 and/or a normal economic life of less than 3 years are typically excluded from funding from Replacement Reserves. This exclusion should reflect Association policy on the administration of Replacement Reserves. If the Association has selected an alternative level, it will be noted in the Replacement Reserve Inventory - General Comments on Page B2. Long-lived Items. Items that when properly maintained, can be assumed to have a life equal to the property as a whole, are typically excluded from the Replacement Reserve Inventory. Unit improvements. Items owned by a single unit and where the items serve a single unit are generally assumed to be the responsibility of that unit, not the Association. Other non-common improvements. Items owned by the local government, public and private utility companies, the United States Postal Service, Master Associations, state and local highway authorities, etc., may be installed on property that is owned by the Association. These types of items are generally not the responsibility of the Association and are excluded from the Replacement Reserve Inventory. CATEGORIES. The 4 items included in the Sanctuary Large Components Replacement Reserve Inventory are divided into 1 major categories. Each category is printed on a separate page, Pages B3 to B3. LEVEL OF SERVICE. This Replacement Reserve Inventory has been developed in compliance with the standards established for a Level Three - Update (no site visit/offsite review), as defined by the National Reserve Study Standards, established in 1998 by Community Associations Institute, which states: Level III Studies are based entirely on the component inventory from a prior study. A site visit is not conducted to confirm this information, to verify the quantities that were used in the previous report or to make observations of the current condition of the inventory components. The estimates of value and remaining life that were used in the previous study are adjusted to reflect current pricing and the simple passage of time. The fund status and funding plan are derived from analysis of this data.

86 Replacement Reserve Inventory - Page B2 Sanctuary Large Components July 9, SANCTUAR19 REPLACEMENT RESERVE INVENTORY - GENERAL INFORMATION (cont'd) INVENTORY DATA. Each of the 4 Projected Replacements listed in the Replacement Reserve Inventory includes the following data: Item Number. The Item Number is assigned sequentially and is intended for identification purposes only. Item Description. We have identified each item included in the Inventory. Additional information may be included in the Comments section at the bottom of each page of the Inventory. Units. We have used standard abbreviations to identify the number of units including SF-square feet, LF-lineal feet, SY-square yard, LS-lump sum, EA-each, and PR-pair. Non-standard abbreviations are noted in the Comments section at the bottom of the page. Number of Units. The methods used to develop the quantities are discussed in "Level of Service" above. Unit Replacement Cost. We use four sources to develop the unit cost data shown in the Inventory; actual replacement cost data provided by the client, information provided by local contractors and suppliers, industry standard estimating manuals, and a cost database we have developed based upon our detailed interviews with contractors and service providers who are specialists in their respective lines of work. Normal Economic Life (Yrs). The number of years that a new and properly installed item should be expected to remain in service. Remaining Economic Life (Yrs). The estimated number of years before an item will need to be replaced. In "normal" conditions, this could be calculated by subtracting the age of the item from the Normal Economic Life of the item, but only rarely do physical assets age "normally". Some items may have longer or shorter lives depending on many factors such as environment, initial quality of the item, maintenance, etc. Total Replacement Cost. This is calculated by multiplying the Unit Replacement Cost by the Number of Units. REVIEW OF EXPENDITURES. This Replacement Reserve Study should be reviewed by an accounting professional representing the Association prior to implementation. PARTIAL FUNDING. Items may have been included in the Replacement Reserve Inventory at less than 100 percent of their full quantity and/or replacement cost. This is done on items that will never be replaced in their entirety, but which may require periodic replacements over an extended period of time. The assumptions that provide the basis for any partial funding are noted in the Comments section. REMAINING ECONOMIC LIFE GREATER THAN 40 YEARS. The calculations do not include funding for initial replacements beyond 40 years. These replacements are included in this Study for tracking and evaluation. They should be included for funding in future Studies, when they enter the 40-year window.

87 Replacement Reserve Inventory - Page B3 Sanctuary Large Components July 9, SANCTUAR19 LARGE VALUE COMPONENTS PROJECTED REPLACEMENTS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 1 Ph1 Standing seam metal roofing sf 79,000 $ $1,228,40 2 Ph2 Standing seam metal roofing sf 79,000 $ $1,228,40 3 Ph1 Exterior windows unit 99 $2, $238,491 4 Ph2 Exterior windows unit 143 $2, $344,487 LARGE VALUE COMPONENTS - Replacement Costs - Subtotal $3,039,878 LARGE VALUE COMPONENTS COMMENTS

88 Intentionally Left Blank

89 Projected Annual Replacements - Page C1 Sanctuary Large Components July 9, SANCTUAR19 PROJECTED ANNUAL REPLACEMENTS GENERAL INFORMATION CALENDAR OF ANNUAL REPLACEMENTS. The 4 Projected Replacements in the Sanctuary Large Components Replacement Reserve Inventory whose replacement is scheduled to be funded from Replacement Reserves are broken down on a year-by-year basis, beginning on Page C2. REPLACEMENT RESERVE ANALYSIS AND INVENTORY POLICIES, PROCEDURES, AND ADMINISTRATION REVISIONS. Revisions will be made to the Replacement Reserve Analysis and Replacement Reserve Inventory in accordance with the written instructions of the Board of Directors. No additional charge is incurred for the first revision, if requested in writing within three months of the date of the Replacement Reserve Study. It is our policy to provide revisions in electronic (Adobe PDF) format only. TAX CODE. The United States Tax Code grants favorable tax status to a common interest development (CID) meeting certain guidelines for their Replacement Reserve. If a CID files their taxes as a 'Corporation' on Form 1120 (IRC Section 277), these guidelines typically require maintenance activities, partial replacements, minor replacements, capital improvements, and one-time only replacements to be excluded from Reserves. A CID cannot co-mingle planning for maintenance activities with capital replacement activities in the Reserves (Revenue Ruling 7-370). Funds for maintenance activities and capital replacements activities must be held in separate accounts. If a CID files taxes as an "Exempt Homeowners Association" using Form 1120H (IRC Section 28), the CID does not have to segregate these activities. However, because the CID may elect to change their method of filing from year to year within the Study Period, we advise using the more restrictive approach. We further recommend that the CID consult with their Accountant and consider creating separate and independent accounts and reserves for large maintenance items, such as painting. CONFLICT OF INTEREST. Neither Miller - Dodson Associates nor the Reserve Analyst has any prior or existing relationship with this Association which would represent a real or perceived conflict of interest. RELIANCE ON DATA PROVIDED BY THE CLIENT. Information provided by an official representative of the Association regarding financial, physical conditions, quality, or historical issues is deemed reliable. INTENT. This Replacement Reserve Study is a reflection of the information provided by the Association and the visual evaluations of the Analyst. It has been prepared for the sole use of the Association and is not for the purpose of performing an audit, quality/forensic analyses, or background checks of historical records. PREVIOUS REPLACEMENTS. Information provided to Miller - Dodson Associates regarding prior replacements is considered to be accurate and reliable. Our visual evaluation is not a project audit or quality inspection. EXPERIENCE WITH FUTURE REPLACEMENTS. The Calendar of Annual Projected Replacements, lists replacements we have projected to occur over the next thirty years, begins on Page C2. Actual experience in replacing the items may differ significantly from the cost estimates and time frames shown because of conditions beyond our control. These differences may be caused by maintenance practices, inflation, variations in pricing and market conditions, future technological developments, regulatory actions, acts of God, and luck. Some items may function normally during our visual evaluation and then fail without notice. REVIEW OF THE REPLACEMENT RESERVE STUDY. For this study to be effective, it should be reviewed by the Sanctuary Large Components Board of Directors, those responsible for the management of the items included in the Replacement Reserve Inventory, and the accounting professionals employed by the Association.

90 Projected Annual Replacements - Page C2 Sanctuary Large Components July 9, SANCTUAR19 PROJECTED REPLACEMENTS - YEARS ONE TO FIFTEEN Item STUDY YEAR $ Item YEAR 2 $ Item YEAR 3 $ No Scheduled Replacements No Scheduled Replacements No Scheduled Replacements Item YEAR 4 $ Item YEAR $ Item YEAR 6 $ No Scheduled Replacements No Scheduled Replacements No Scheduled Replacements Item YEAR 7 $ Item YEAR 8 $ Item YEAR 9 $ No Scheduled Replacements No Scheduled Replacements No Scheduled Replacements Item YEAR 10 $ Item YEAR 11 $ Item YEAR 12 $ No Scheduled Replacements No Scheduled Replacements No Scheduled Replacements Item YEAR 13 $ Item YEAR 14 $ Item YEAR 1 $ No Scheduled Replacements No Scheduled Replacements No Scheduled Replacements

91 Projected Annual Replacements - Page C3 Sanctuary Large Components July 9, SANCTUAR19 PROJECTED REPLACEMENTS - YEARS SIXTEEN TO THIRTY Item YEAR 16 $ Item YEAR 17 $ Item YEAR 18 $ No Scheduled Replacements No Scheduled Replacements No Scheduled Replacements Item YEAR 19 $ Item YEAR 20 $ Item YEAR 21 $ No Scheduled Replacements No Scheduled Replacements No Scheduled Replacements Item YEAR 22 $ Item YEAR 23 $ Item YEAR 24 $ 3 Ph1 Exterior windows $238,491 No Scheduled Replacements No Scheduled Replacements Total Scheduled Replacements $238,491 Item YEAR 2 $ Item YEAR 26 $ Item YEAR 27 $ 4 Ph2 Exterior windows $344,487 No Scheduled Replacements Total Scheduled Replacements $344,487 No Scheduled Replacements Item YEAR 28 $ Item YEAR 29 $ Item YEAR 30 $ 1 Ph1 Standing seam metal ro $1,228,40 Total Scheduled Replacements $1,228,40 No Scheduled Replacements No Scheduled Replacements

92 Projected Annual Replacements - Page C4 Sanctuary Large Components July 9, SANCTUAR19 PROJECTED REPLACEMENTS - YEARS THIRTY-ONE TO FORTY-FIVE Item YEAR 31 $ Item YEAR 32 $ Item YEAR 33 $ 2 Ph2 Standing seam metal ro $1,228,40 Total Scheduled Replacements $1,228,40 No Scheduled Replacements No Scheduled Replacements Item YEAR 34 $ Item YEAR 3 $ Item YEAR 36 $ No Scheduled Replacements No Scheduled Replacements No Scheduled Replacements Item 20 - YEAR 37 $ Item YEAR 38 $ Item YEAR 39 $ No Scheduled Replacements No Scheduled Replacements No Scheduled Replacements Item YEAR 40 $ Item 209 (beyond Study Period) $ Item 2060 (beyond Study Period) $ No Scheduled Replacements No Scheduled Replacements No Scheduled Replacements Item 2061 (beyond Study Period) $ Item 2062 (beyond Study Period) $ Item 2063 (beyond Study Period) $ No Scheduled Replacements No Scheduled Replacements No Scheduled Replacements

93 Cash Flow Method Accounting Summary - Page CF1 Sanctuary Large Components July 9, SANCTUAR19 CASH FLOW METHOD ACCOUNTING SUMMARY This Sanctuary Large Components - Cash Flow Method Accounting Summary is an attachment to the Sanctuary Large Components - Replacement Reserve Study dated July 9, 2018 and is for use by accounting and reserve professionals experienced in Association funding and accounting principles. This Summary consists of four reports, the 2019, 2020, and 2021 Cash Flow Method Category Funding Reports (3) and a Three-Year Replacement Funding Report. CASH FLOW METHOD CATEGORY FUNDING REPORT, 2019, 2020, and Each of the 4 Projected Replacements listed in the Sanctuary Large Components Replacement Reserve Inventory has been assigned to one of 1 categories. The following information is summarized by category in each report: Normal Economic Life and Remaining Economic Life of the Projected Replacements. Cost of all Scheduled Replacements in each category. Replacement Reserves on Deposit allocated to the category at the beginning and end of the report period. Cost of Projected Replacements in the report period. Recommended Replacement Reserve Funding allocated to the category during the report period as calculated by the Cash Flow Method. THREE-YEAR REPLACEMENT FUNDING REPORT. This report details the allocation of the $0 Beginning Balance (at the start of the Study Year) and the $301,37 of additional Replacement Reserve Funding in 2019 through 2021 (as calculated in the Replacement Reserve Analysis) to each of the 4 Projected Replacements listed in the Replacement Reserve Inventory. These allocations have been made using Chronological Allocation, a method developed by Miller Dodson Associates, Inc., and discussed below. The calculated data includes: Identification and estimated cost of each Projected Replacement scheduled in years 2019 through Allocation of the $0 Beginning Balance to the Projected Replacements by Chronological Allocation. Allocation of the $301,37 of additional Replacement Reserve Funding recommended in the Replacement Reserve Analysis in years 2019 through 2021, by Chronological Allocation. CHRONOLOGICAL ALLOCATION. Chronological Allocation assigns Replacement Reserves to Projected Replacements on a "first come, first serve" basis in keeping with the basic philosophy of the Cash Flow Method. The Chronological Allocation methodology is outlined below. The first step is the allocation of the $0 Beginning Balance to the Projected Replacements in the Study Year. Remaining unallocated funds are next allocated to the Projected Replacements in subsequent years in chronological order until the total of Projected Replacements in the next year is greater than the unallocated funds. Projected Replacements in this year are partially funded with each replacement receiving percentage funding. The percentage of funding is calculated by dividing the unallocated funds by the total of Projected Replacements in the partially funded year. At Sanctuary Large Components the Beginning Balance funds all Scheduled Replacements in the Study Year through 2041 and provides partial funding (0%) of replacements scheduled in The next step is the allocation of the $100,12 of 2019 Cash Flow Method Reserve Funding calculated in the Replacement Reserve Analysis. These funds are first allocated to fund the partially funded Projected Replacements and then to subsequent years in chronological order as outlined above. At Sanctuary Large Components the Beginning Balance and the 2019 Replacement Reserve Funding, funds replacements through 2041 and partial funds (42.1%) replacements in Allocations of the 2020 and 2021 Reserve Funding are done using the same methodology. The Three-Year Replacement Funding Report details component by component allocations made by Chronological Allocation.

94 Cash Flow Method Accounting Summary - Page CF2 Sanctuary Large Components July 9, SANCTUAR CASH FLOW METHOD CATEGORY FUNDING REPORT Each of the 4 Projected Replacements included in the Sanctuary Large Components Replacement Reserve Inventory has been assigned to one of the 1 categories listed in TABLE CF1 below. This calculated data is a summary of data provided in the Three-Year Replacement Funding Report and Replacement Reserve Inventory. The accuracy of this data is dependent upon many factors including the following critical financial data: A Beginning Balance of $0 as of the first day of the Study Year, January 1, Total reserve funding (including the Beginning Balance) of $100,12 in the Study Year. No expenditures from Replacement Reserves other than those specifically listed in the Replacement Reserve Inventory. If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associates to arrange for an update of the Replacement Reserve Study CASH FLOW METHOD CATEGORY FUNDING - TABLE CF1 NORMAL REMAINING ESTIMATED ECONOMIC ECONOMIC REPLACEMENT BEGINNING RESERVE PROJECTED END OF YEAR CATEGORY LIFE LIFE COST BALANCE FUNDING REPLACEMENTS BALANCE LARGE VALUE COMPONENTS 3 to 40 years 23 to 30 years $3,039,878 $0 $100,12 $100,12

95 Cash Flow Method Accounting Summary - Page CF3 Sanctuary Large Components July 9, SANCTUAR CASH FLOW METHOD CATEGORY FUNDING REPORT Each of the 4 Projected Replacements included in the Sanctuary Large Components Replacement Reserve Inventory has been assigned to one of the 1 categories listed in TABLE CF2 below. This calculated data is a summary of data provided in the Three-Year Replacement Funding Report and Replacement Reserve Inventory. The accuracy of this data is dependent upon many factors including the following critical financial data: Replacement Reserves on Deposit totaling $100,12 on January 1, Total reserve funding (including the Beginning Balance) of $201,024 from 2019 through No expenditures from Replacement Reserves other than those specifically listed in the Replacement Reserve Inventory. If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associates to arrange for an update of the Replacement Reserve Study CASH FLOW METHOD CATEGORY FUNDING - TABLE CF2 NORMAL REMAINING ESTIMATED ECONOMIC ECONOMIC REPLACEMENT BEGINNING RESERVE PROJECTED END OF YEAR CATEGORY LIFE LIFE COST BALANCE FUNDING REPLACEMENTS BALANCE LARGE VALUE COMPONENTS 3 to 40 years 22 to 29 years $3,039,878 $100,12 $100,12 $201,024

96 Cash Flow Method Accounting Summary - Page CF4 Sanctuary Large Components July 9, SANCTUAR CASH FLOW METHOD CATEGORY FUNDING REPORT Each of the 4 Projected Replacements included in the Sanctuary Large Components Replacement Reserve Inventory has been assigned to one of the 1 categories listed in TABLE CF3 below. This calculated data is a summary of data provided in the Three-Year Replacement Funding Report and Replacement Reserve Inventory. The accuracy of this data is dependent upon many factors including the following critical financial data: Replacement Reserves on Deposit totaling $201,024 on January 1, Total Replacement Reserve funding (including the Beginning Balance) of $301,37 from 2019 to No expenditures from Replacement Reserves other than those specifically listed in the Replacement Reserve Inventory. If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associates to arrange for an update of the Replacement Reserve Study CASH FLOW METHOD CATEGORY FUNDING - TABLE CF3 NORMAL REMAINING ESTIMATED ECONOMIC ECONOMIC REPLACEMENT BEGINNING RESERVE PROJECTED END OF YEAR CATEGORY LIFE LIFE COST BALANCE FUNDING REPLACEMENTS BALANCE LARGE VALUE COMPONENTS 3 to 40 years 21 to 28 years $3,039,878 $201,024 $100,12 $301,37

97 Cash Flow Method Accounting Summary - Page CF Sanctuary Large Components July 9, SANCTUAR19 CASH FLOW METHOD - THREE-YEAR REPLACEMENT FUNDING REPORT TABLE CF4 below details the allocation of the $0 Beginning Balance, as reported by the Association and the $301,37 of Replacement Reserve Funding calculated by the Cash Flow Method from 2019 to 2021, to the 4 Projected Replacements listed in the Replacement Reserve Inventory. These allocations have been made by Chronological Allocation, a method developed by Miller Dodson Associates, Inc., and outlined on Page CF1. The accuracy of the allocations is dependent upon many factors including the following critical financial data: Replacement Reserves on Deposit totaling $0 on January 1, Replacement Reserves on Deposit totaling $100,12 on January 1, Replacement Reserves on Deposit totaling $201,024 on January 1, Total Replacement Reserve funding (including the Beginning Balance) of $301,37 from 2019 to No expenditures from Replacement Reserves other than those specifically listed in the Replacement Reserve Inventory. If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associates, Inc., to arrange for an update of the Replacement Reserve Study. CASH FLOW METHOD - THREE-YEAR REPLACEMENT FUNDING - TABLE CF4 Description of Estimated Allocation Item Projected Replacement of Beginning Reserve Projected End of Year Reserve Projected End of Year Reserve Projected End of Year # Replacement Costs Balance Funding Replacements Balance Funding Replacements Balance Funding Replacements Balance LARGE VALUE COMPONENTS 1 Ph1 Standing seam metal roofing 1,228,40 2 Ph2 Standing seam metal roofing 1,228,40 3 Ph1 Exterior windows 238, ,12 100,12 100,12 201,024 37, ,491 4 Ph2 Exterior windows 344,487 63,046 63,046

98 Component Method - Page CM1 Sanctuary Large Components July 9, SANCTUAR19 COMPONENT METHOD $106,687 COMPONENT METHOD RECOMMENDED ANNUAL FUNDING OF REPLACEMENT RESERVES IN THE STUDY YEAR, $3.8 Per unit (average), recommended monthly funding of Replacement Reserves General. The Component Method (also referred to as the Full Funded Method) is a very conservative mathematical model developed by HUD in the early 1980s. Each of the 4 Projected Replacements listed in the Replacement Reserve Inventory is treated as a separate account. The Beginning Balance is allocated to each of the individual accounts, as is all subsequent funding of Replacement Reserves. These funds are "locked" in these individual accounts and are not available to fund other Projected Replacements. The calculation of Recommended Annual Funding of Replacement Reserves is a multi-step process outlined in more detail on Page CM2. Component Method - Cumulative Receipts and Expenditures Graph $3,00,000 Component Method - Cumulative Receipts Component Method - Year End Balance Projected Replacements - Cumulative Expenditures $3,141,927 $3,000,000 $2,00,000 $2,000,000 $1,811,428 $1,00,000 $1,330,499 $1,000,000 $00,000 $

99 Component Method - Page CM2 Sanctuary Large Components July 9, SANCTUAR19 COMPONENT METHOD (cont'd) Current Funding Objective. A Current Funding Objective is calculated for each of the Projected Replacements listed in the Replacement Reserve Inventory. Replacement Cost is divided by the Normal Economic Life to determine the nominal annual contribution. The Remaining Economic Life is then subtracted from the Normal Economic Life to calculate the number of years that the nominal annual contribution should have been made. The two values are then multiplied to determine the Current Funding Objective. This is repeated for each of the 4 Projected Replacements. The total, $808,473, is the Current Funding Objective. For an example, consider a very simple Replacement Reserve Inventory with one Projected Replacement, a fence with a $1,000 Replacement Cost, a Normal Economic Life of 10 years, and a Remaining Economic Life of 2 years. A contribution to Replacement Reserves of $100 ($1, years) should have been made in each of the previous 8 years (10 years - 2 years). The result is a Current Funding Objective of $800 (8 years x $100 per year). Funding Percentage. The Funding Percentage is calculated by dividing the Beginning Balance ($0) by the Current Funding Objective ($808,473). At Sanctuary Large Components the Funding Percentage is 0.0% Allocation of the Beginning Balance. The Beginning Balance is divided among the 4 Projected Replacements in the Replacement Reserve Inventory. The Current Funding Objective for each Projected Replacement is multiplied by the Funding Percentage and these funds are then "locked" into the account of each item. If we relate this calculation back to our fence example, it means that the Association has not accumulated $800 in Reserves (the Funding Objective), but rather at 0.0 percent funded, there is $0 in the account for the fence. Annual Funding. The Recommended Annual Funding of Replacement Reserves is then calculated for each Projected Replacement. The funds allocated to the account of the Projected Replacement are subtracted from the Replacement Cost. The result is then divided by the number of years until replacement, and the result is the annual funding for each of the Projected Replacements. The sum of these is $106,687, the Component Method Recommended Annual Funding of Replacement Reserves in the Study Year (2019). In our fence example, the $0 in the account is subtracted from the $1,000 Total Replacement Cost and divided by the 2 years that remain before replacement, resulting in an annual deposit of $00. Next year, the deposit remains $00, but in the third year, the fence is replaced and the annual funding adjusts to $100. Adjustment to the Component Method for interest and inflation. The calculations in the Replacement Reserve Analysis do not account for interest earned on Replacement Reserves, inflation, or a constant annual increase in Annual Funding of Replacement Reserves. The Component Method is a very conservative method and if the Analysis is updated regularly, adequate funding will be maintained without the need for adjustments. Component Method Data - Years 1 through 30 Year Beginning balance $0 Recommended annual funding $106,687 $106,687 $106,687 $106,687 $106,687 $106,687 $106,687 $106,687 $106,687 $106,687 Interest on reserves Expenditures Year end balance $106,687 $213,37 $320,062 $426,749 $33,436 $640,124 $746,811 $83,498 $960,18 $1,066,873 Cumulative Expenditures Cumulative Receipts $106,687 $213,37 $320,062 $426,749 $33,436 $640,124 $746,811 $83,498 $960,18 $1,066,873 Year Recommended annual funding $106,687 $106,687 $106,687 $106,687 $106,687 $106,687 $106,687 $106,687 $106,687 $106,687 Interest on reserves Expenditures Year end balance $1,173,60 $1,280,247 $1,386,934 $1,493,622 $1,600,309 $1,706,996 $1,813,683 $1,920,371 $2,027,08 $2,133,74 Cumulative Expenditures Cumulative Receipts $1,173,60 $1,280,247 $1,386,934 $1,493,622 $1,600,309 $1,706,996 $1,813,683 $1,920,371 $2,027,08 $2,133,74 Year Recommended annual funding $106,687 $106,687 $106,687 $106,687 $103,64 $103,64 $100,17 $100,17 $86,99 $86,99 Interest on reserves Expenditures $238,491 $344,487 $1,228,40 Year end balance $2,240,432 $2,347,120 $2,43,807 $2,322,003 $2,42,67 $2,184,64 $2,284,802 $1,16,09 $1,243,04 $1,330,499 Cumulative Expenditures $238,491 $238,491 $82,978 $82,978 $1,811,428 $1,811,428 $1,811,428 Cumulative Receipts $2,240,432 $2,347,120 $2,43,807 $2,60,494 $2,664,08 $2,767,623 $2,867,780 $2,967,937 $3,04,932 $3,141,927

100 Component Method Accounting Summary - Page CM3 Sanctuary Large Components July 9, SANCTUAR19 COMPONENT METHOD ACCOUNTING SUMMARY This Sanctuary Large Components - Component Method Accounting Summary is an attachment to the Sanctuary Large Components - Replacement Reserve Study dated July 9, 2018 and is for use by accounting and reserve professionals experienced in Association funding and accounting principles. This Summary consists of four reports, the 2019, 2020, and 2021 Component Method Category Funding Reports (3) and a Three-Year Replacement Funding Report. COMPONENT METHOD CATEGORY FUNDING REPORT, 2019, 2020, and Each of the 4 Projected Replacements listed in the Sanctuary Large Components Replacement Reserve Inventory has been assigned to one of 1 categories. The following information is summarized by category in each report: Normal Economic Life and Remaining Economic Life of the Projected Replacements. Cost of all Scheduled Replacements in each category. Replacement Reserves on Deposit allocated to the category at the beginning and end of the report period. Cost of Projected Replacements in the report period. Recommended Replacement Reserve Funding allocated to the category during the report period as calculated by the Component Method. THREE-YEAR REPLACEMENT FUNDING REPORT. This report details the allocation of the $0 Beginning Balance (at the start of the Study Year) and the $320,062 of additional Replacement Reserve funding from 2019 to 2021 (as calculated in the Replacement Reserve Analysis) to each of the 4 Projected Replacements listed in the Replacement Reserve Inventory. These allocations have been made using the Component Method as outlined in the Replacement Reserve Analysis. The calculated data includes: Identification and estimated cost of each Projected Replacement schedule in years 2019 through Allocation of the $0 Beginning Balance to the Projected Replacements by the Component Method. Allocation of the $320,062 of additional Replacement Reserve Funding recommended in the Replacement Reserve Analysis in years 2019 through 2021, by the Component Method.

101 Component Method Accounting Summary - Page CM4 Sanctuary Large Components July 9, SANCTUAR COMPONENT METHOD CATEGORY FUNDING REPORT Each of the 4 Projected Replacements included in the Sanctuary Large Components Replacement Reserve Inventory has been assigned to one of the 1 categories listed in TABLE CM1 below. This calculated data is a summary of data provided in the Three-Year Replacement Funding Report and Replacement Reserve Inventory. The accuracy of this data is dependent upon many factors including the following critical financial data: A Beginning Balance of $0 as of the first day of the Study Year, January 1, Total reserve funding (including the Beginning Balance) of $106,687 in the Study Year. No expenditures from Replacement Reserves other than those specifically listed in the Replacement Reserve Inventory. If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associates to arrange for an update of the Replacement Reserve Study COMPONENT METHOD CATEGORY FUNDING - TABLE CM1 NORMAL REMAINING ESTIMATED ECONOMIC ECONOMIC REPLACEMENT BEGINNING RESERVE PROJECTED END OF YEAR CATEGORY LIFE LIFE COST BALANCE FUNDING REPLACEMENTS BALANCE 23 to 30 years LARGE VALUE COMPONENTS 3 to 40 years 23 to 30 years $3,039,878 $0 $106,687 $106,687

102 Component Method Accounting Summary - Page CM Sanctuary Large Components July 9, SANCTUAR COMPONENT METHOD CATEGORY FUNDING REPORT Each of the 4 Projected Replacements included in the Sanctuary Large Components Replacement Reserve Inventory has been assigned to one of the 1 categories listed in TABLE CM2 below. This calculated data is a summary of data provided in the Three-Year Replacement Funding Report and Replacement Reserve Inventory. The accuracy of this data is dependent upon many factors including the following critical financial data: Replacement Reserves on Deposit totaling $106,687 on January 1, Total reserve funding (including the Beginning Balance) of $213,37 from 2019 through No expenditures from Replacement Reserves other than those specifically listed in the Replacement Reserve Inventory. If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associates to arrange for an update of the Replacement Reserve Study COMPONENT METHOD CATEGORY FUNDING - TABLE CM2 NORMAL REMAINING ESTIMATED ECONOMIC ECONOMIC REPLACEMENT BEGINNING RESERVE PROJECTED END OF YEAR CATEGORY LIFE LIFE COST BALANCE FUNDING REPLACEMENTS BALANCE LARGE VALUE COMPONENTS 3 to 40 years 22 to 29 years $3,039,878 $106,687 $106,687 $213,37

103 Component Method Accounting Summary - Page CM6 Sanctuary Large Components July 9, SANCTUAR COMPONENT METHOD CATEGORY FUNDING REPORT Each of the 4 Projected Replacements included in the Sanctuary Large Components Replacement Reserve Inventory has been assigned to one of the 1 categories listed in TABLE CM3 below. This calculated data is a summary of data provided in the Three-Year Replacement Funding Report and Replacement Reserve Inventory. The accuracy of this data is dependent upon many factors including the following critical financial data: Replacement Reserves on Deposit totaling $213,37 on January 1, Total Replacement Reserve funding (including the Beginning Balance) of $320,062 from 2019 to No expenditures from Replacement Reserves other than those specifically listed in the Replacement Reserve Inventory. If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associates to arrange for an update of the Replacement Reserve Study COMPONENT METHOD CATEGORY FUNDING - TABLE CM3 NORMAL REMAINING ESTIMATED ECONOMIC ECONOMIC REPLACEMENT BEGINNING RESERVE PROJECTED END OF YEAR CATEGORY LIFE LIFE COST BALANCE FUNDING REPLACEMENTS BALANCE LARGE VALUE COMPONENTS 3 to 40 years 21 to 28 years $3,039,878 $213,37 $106,687 $320,062

104 Component Method Accounting Summary - Page CM7 Sanctuary Large Components July 9, SANCTUAR19 COMPONENT METHOD - THREE-YEAR REPLACEMENT FUNDING REPORT TABLE CM4 below details the allocation of the $0 Beginning Balance, as reported by the Association and the $320,062 of Replacement Reserve Funding calculated by the Cash Flow Method from 2019 to 2021, to the 4 Projected Replacements listed in the Replacement Reserve Inventory. These allocations have been made by Chronological Allocation, a method developed by Miller Dodson Associates, Inc., and outlined on Page CF1. The accuracy of the allocations is dependent upon many factors including the following critical financial data: Replacement Reserves on Deposit totaling $0 on January 1, Replacement Reserves on Deposit totaling $106,687 on January 1, Replacement Reserves on Deposit totaling $213,37 on January 1, Total Replacement Reserve funding (including the Beginning Balance) of $320,062 from 2019 to No expenditures from Replacement Reserves other than those specifically listed in the Replacement Reserve Inventory. If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associates, Inc., to arrange for an update of the Replacement Reserve Study. COMPONENT METHOD - THREE-YEAR REPLACEMENT FUNDING - TABLE CM4 Description of Estimated Allocation Item Projected Replacement of Beginning Reserve Projected End of Year Reserve Projected End of Year Reserve Projected End of Year # Replacement Costs Balance Funding Replacements Balance Funding Replacements Balance Funding Replacements Balance LARGE VALUE COMPONENTS 1 Ph1 Standing seam metal roofing 1,228, ,873 43,873 43,873 87,746 43, ,620 2 Ph2 Standing seam metal roofing 1,228, ,627 39,627 39,627 79,2 39, ,882 3 Ph1 Exterior windows 238, ,937 9,937 9,937 19,874 9,937 29,811 4 Ph2 Exterior windows 344, ,249 13,20 13,249 26,499 13,249 39,749

105 Miller - Dodson Associates, Inc. Condition Assessment - Page D1 CONDITION ASSESSMENT General Comments. Miller - Dodson Associates conducted a Level 2 Reserve Study at Sanctuary at False Cape in May 201 and a Level 3 Reserve Study in November of 2017 which both serve as the basis of this Level 3 Update. Sanctuary at False Cape is in generally mixed condition for a community constructed in A review of the Replacement Reserve Inventory will show that we are anticipating most of the components achieving their normal economic lives excluding components identified by the Board and Manager with input from professional consultants as furnished and identified herein. The following comments pertain to the larger, more significant components in the Replacement Reserve Inventory and to those items that are unique or deserving of attention because of their condition or the manner in which they have been treated in the Replacement Reserve Analysis or Inventory. General Condition Statements. Excellent. 100% to 90% of Normal Economic Life expected, with no appreciable wear or defects. Good. 90% to 60% of Normal Economic Life expected, minor wear or cosmetic defects found. Normal maintenance should be expected. If performed properly, normal maintenance may increase the useful life of a component. Otherwise, the component is wearing normally. Fair. 60% to 30% of Normal Economic Life expected, moderate wear with defects found. Repair actions should be taken to extend the life of the component or to correct repairable defects and distress. Otherwise, the component is wearing normally. Marginal. 30% to 10% of Normal Economic Life expected, with moderate to significant wear or distress found. Repair actions are expected to be cost effective for localized issues, but normal wear and use are evident. The component is reaching the end of the Normal Economic Life. Poor. 10% to 0% of Normal Economic Life expected, with significant distress and wear. Left unattended, additional damage to underlying structures is likely to occur. Further maintenance is unlikely to be cost effective. SITE COMPONENTS Entry Monument and Signage. The Association maintains a single large entry monument. The monument is made of CMU masonry with a stone masonry veneer and is in overall condition. The monument lettering appears to be acrylic or other synthetic material and is expected to have a useful life of 10 to 1 years. We recommend repointing and replacement of defective areas of the masonry as needed. The Association may want to consider applying a coat of Siloxane or other appropriate breathable sealant to mitigate water penetration and further degradation of the masonry work. For additional information, please see the appropriate links on our web site at In addition to the monument, the Association is responsible for the various community s signage on the site and within the parking garages, including stop, speed, parking, and other major signs. Other small miscellaneous signs are not considered in this study and should be replaced using other funds. These smaller signs should be replaced on an as needed basis and we have included an allowance for partial incremental replacement. The Manager reports no work has been performed and there are no current issues with this components for this Level 3 update.

106 Miller - Dodson Associates, Inc. Condition Assessment - Page D2 Asphalt Pavement. The Association is responsible for the roadways and parking areas. In general, the Association s asphalt pavements are in good overall condition, with minor cracking. As a rule of thumb, asphalt should be overlaid when approximately % of the surface area is cracked or otherwise deteriorated. The normal service life of asphalt pavement is typically 18 to 20 years. In order to maintain the condition of the pavement throughout the community and to ensure the longest life of the asphalt, we recommend a systematic and comprehensive maintenance program that includes: Cleaning. Long-term exposure to oil or gas breaks down asphalt. Because this asphalt pavement is generally not used for long-term parking, it is unlikely that frequent cleaning will be necessary. When necessary, spill areas should be cleaned or patched if deterioration has penetrated the asphalt. This is a maintenance activity, and we have assumed that it will not be funded from Reserves. Crack Repair. All cracks should be repaired with an appropriate compound to prevent water infiltration through the asphalt into the base. This repair should be done annually. Crack repair is normally considered a maintenance activity and is not funded from Reserves. Areas of extensive cracking or deterioration that cannot be made watertight should be cut out and patched. Seal Coating. The asphalt should be seal coated every five to seven years. For this maintenance activity to be effective in extending the life of the asphalt, cleaning and crack repair should be performed first. The pricing used is based on recent contracts for a two-inch overlay, which reflects the current local market for this work. For seal coating, several different products are available. The older, more traditional seal coating products are simply paints. They coat the surface of the asphalt and they are minimally effective. However, the newer coating materials, such as those from Total Asphalt Management, Asphalt Restoration Technologies, Inc., and others, are penetrating. They are engineered, so to speak, to remoisturize the pavement. Asphalt pavement is intended to be flexible. Over time, the volatile chemicals in the pavement dry, the pavement becomes brittle, and degradation follows in the forms of cracking and potholes. Remoisturizing the pavement can return its flexibility and extend the life of the pavement. Lastly, the resource links provided on our website may provide insight into the general terms and concerns, including maintenance related advantages and disadvantages, which may help the Association better manage the asphalt pavements throughout the community: The Manager reports no work has been performed and there are no current issues with these components for this Level 3 update. Concrete Work. The concrete work includes the community curbs, sidewalks, leadwalks, patios, and other flatwork. We have modeled for curb replacement when the asphalt pavement is overlaid. The overall condition of the concrete work is good with no obvious tripping hazards and only a few areas of general deterioration, including cracking, spalling, and scale. The standards we use for recommending replacement are as follows: Trip hazard, ½ inch height difference. Severe cracking. Severe spalling and scale. Uneven riser heights on steps. Steps with risers in excess of 8¼ inches.

107 Miller - Dodson Associates, Inc. Condition Assessment - Page D3 Because it is highly unlikely that all of the concrete components will fail and require replacement in the period of the study, we have programmed funds for the replacement of these inventories and spread the funds over an extended timeframe to reflect the incremental nature of this work. The relevant links on our web site may provide useful information related to concrete terminology, maintenance, and repair. Please see The Manager reports some concrete work has been performed in and there are no current issues with these components for this Level 3 update. Site Walls. The community has a number of masonry site walls covered with manufactured stone veneer. Manufactured stone veneer has been installed on the exterior site wall around the pool areas and near the oceanfront cabana. These walls display good overall condition but a noticeable number of individual stone pieces have come loose and fallen off. Typically, these surfaces are properly installed, but we recommend assessing the installation at this community based on comparison against The Masonry Veneer Manufacturers Association s, Installation Guidelines. See In addition, the Masonry Veneer Manufacturers Association may be able to provide additional information related to the maintenance and care of these materials. Similar to other masonry components, we recommend repointing. Because weather and other conditions result in the slow deterioration of the mortar in the joints, we have included funding in the Reserve Analysis for repointing. Consider purchasing a quantity of the stone to keep in storage for periodic repairs as some of these may become broken or cannot be reinstalled. The Manager reports no work has been performed and there are no current issues with these components for this Level 3 update. Seawall. The oceanfront portion of the property boundary is comprised of a cast in place concrete capped steel sheet pile seawall. The wall is overall good condition but has notable cracks and evidence of past repairs. The wall should have an original economic life of 0+ years if properly designed and installed. However, the expansion joints should be planned for replacement every 8-10 year or more often as needed. And cracks or spalled sections of the concrete cap should be repairs promptly to prevent more aggressive deterioration. In the event a major tidal storm exposes large portions of the wall to include the sheet piling and deadman anchors, a qualified structural engineer with experience in coastal shoreline hardening should promptly examine the exposed portions of the wall for damage. The Manager reports some seawall work has been performed in and there are no current issues with these components for this Level 3 update. Metal Railings. There are three primary types of railings as part of the site improvements. The Association maintains metal handrails and railing posts that are embedded in concrete or masonry at the retail area parking sidewalk near the front entrance. This railing is painted steel and displays excessive corrosion and is in poor overall condition. The railing that is mounted on top of the seawall is a stainless steel pipe railing that is in good overall condition. This should be inspected annually for damage and failing anchor fasteners. The aluminum picket trailing system used around the pools is in fair to good condition. As part of normal maintenance, we recommend the following: Lift or remove ornamental base covers, if applicable. Remove existing caulk completely. Clean, prime, and paint all posts, rails, and pickets. Apply an appropriate caulk around each post base. Tool and shape caulking to shed water from post. Reinstall base covers, and seal and paint all joints.

108 Miller - Dodson Associates, Inc. Condition Assessment - Page D4 Railings can have an extended useful life if these simple maintenance activities are performed. If left unattended, the pressure from expansive post rust can crack and damage the supporting material. The Manager reports some metal railing replacement has been performed in and there are no current issues with these components for this Level 3 update. Site Lighting. The Association is responsible for the operation of the facility s street and walkway lights. The lighting is comprised of both pole mounted fixtures and bollard lights, and building mounted lights. The lighting system was not on at the time of our site visit. We understand that the lighting system is in operating condition. We did note, however, some defects associated with a number of the components of the system, primarily the deterioration of finishes and lenses due to harsh environmental conditions of the site. This study assumes replacement of the light fixtures every 1 to 20 years, and pole replacement every 30 to 40 years. When the light poles are replaced, we assume that the underground wiring will also be replaced. When a whole-scale lighting replacement project is called for, we recommend consulting with a lighting design expert. Many municipalities have design codes, guidelines, and restrictions when it comes to exterior illumination. In addition, new technology such LED and LIFI among others should be evaluated when considering replacement. The Manager reports no work has been performed and there are no current issues with these components for this Level 3 update. Underground Utilities. The Association is responsible for the maintenance of the underground utility lines, including the storm water management pipes, water lines and sanitary lines, and fire suppression water lines. Engineering drawings were not used in the determination of these underground components. Instead, we have provided an estimate of the approximate replacement costs based on our experience with other facilities of similar size and configuration. The inspection and evaluation of underground lines and structures is beyond the scope of work for this study. The Manager reports no replacement has been performed and there are no current issues with these components for this Level 3 update. Storm Water BMP. The property has an extensive underground storm water BMP and a small surface BMP. The surface BMP is a shallow grass covered sand depression that clearly displays altered contours were water discharges into the BMP. It is suspected that the original storage volume is reduced but a survey and the original design would be required to verify this suspicion. The storm water storage beneath the parking garage slabs includes numerous monitoring wells. The Facility Manager reports that the City has an annual inspection of the property BMPS. A thorough review of these systems is beyond the scope of a reserve study but these systems typically have very specific maintenance requirements that can significantly reduce the life of the system is normal operating and maintenance is not performed. The Manager reports no replacement has been performed and there are no current issues with these components for this Level 3 update. BUILDING EXTERIORS Building Roofing. The primary buildings and ancillary structures are roofed in combinations of asphalt shingles, standing seam metal roofs, and small areas of flat roofing system that are in generally good condition.

109 Miller - Dodson Associates, Inc. Condition Assessment - Page D The Manager has provided a report of asphalt shingle investigation performed by Hentz Engineering which identified numerous deficiencies and damage or deterioration to the shingle roofs. An extensive amount of repair and partial replacement was recommended and is being executed in The remaining half of the Building A shingle roof is reported to have been replaced. The remaining life of the original shingle roofs has been reduced for this Level 3 Update in accordance with the opinion of life stated in the Hentz report. Asphalt shingle roofs can have a useful life of 20 to 0 years depending on the weight and quality of the shingle. Weathered, curled, and missing shingles are all indications that the shingles may be nearing the end of their useful life. Metal roofing can be standing seam, rolled seam, or shingle with a normal economic life of 0 to 100 years. In some cases, recoating or repainting can extend the useful life of a metal roof. Flat roofing systems can have a variety of configurations that will greatly affect the cost of replacement including insulation, ballast, the height of the building, and the density of installed mechanical equipment. Flat roofing systems typically have a useful life of 1 to 2 years. Annual inspections are recommended, with cleaning, repair, and mitigation of vegetation performed as needed. Access, inspection, and repair work should be performed by contractors and personnel with the appropriate access equipment who are experienced in the types of roofing used for the facility. For additional information on roofs and roof maintenance, please see the appropriate links on our web site at Gutters and Downspouts. The buildings have has aluminum gutters and downspouts. The gutters and downspouts are in mixed condition. While these primarily appear to be large enough for the expansive roof areas being drained, there are some locations that are believed to have downspouts too far apart and the gutters have overflowed during heavy rains. This leads to wear and deterioration of the fiber cement siding. A gutter and downspout system will remove rainwater from the area of the building roof, siding, and foundation. This will protect building s exterior surfaces from water damage. Gutters should run the full length of all drip edges of the building roof. Even with full gutters it is important to inspection the function of the gutters during heavy rain to identify any deficiencies. It may be necessary to periodically adjust the slope of sections, repair connections, replace hangers, and install shrouds to the gutters. Downspouts should be securely attached to the side of the structure. Any broken straps should be replaced. The area of the outlet should be inspected to promote run-off in the desired direction. Long straight runs should have an elbow at the bottom. Splash blocks should be installed to fray the water from the downspout. Prior to replacing the existing gutters and downspouts, review the original drawings for all gutter and downspout requirements that may have been shown. Consult the SMACNA Sheet Metal guide for calculating the size and spacing of gutters and downspouts based on local weather data for rainfall. Because much of the runoff is discharged into the storm water system beneath the parking slabs, it is important that all of the run-off be captured for quality and quantity requirements. The Manager reports no replacement has been performed and there are no current issues with these components for this Level 3 update. Siding and Trim. The exteriors of the buildings are clad in combinations of fiber cement, synthetic materials and manufactured stone veneer. The fiber cement soffits, trim and siding materials are in mixed condition with a large amount of fiber cement already having been replaced, in the process of being replaced or in need of replacement in the near future. The community has undertaken and extensive program to identify the problem areas and are working to improve details and methods of installation that will minimize the premature failure of these long lived materials. The Manager indicates that a moisture investigation was performed by ETC. The report was not furnished and specific repairs or partial replacements in accordance with ETC s observation and recommendations was not

110 Miller - Dodson Associates, Inc. Condition Assessment - Page D6 provided. The Manager and the Board previously indicate that some siding and trim replacement was anticipated to be performed in The locations and amounts of partial replacement of fiber cement siding and trim are likely to vary. Fiber Cement materials typically have an extended useful life and will require repainting and recaulking every 10 to 1 years. Following the manufacturer s recommendations for cleaning, painting, and caulking, we expect cementitious products to have a useful life of 40 years or more. Synthetic products are used in the decorative architectural details. Often these are made of Polyvinylchloride or (PVC). PVC is known to have degradation problems with sunlight and in particular, ultra violet radiation. These products come from the manufacturer with several coats of primer, and painting after installation is required. Following the manufacturer s recommendations for cleaning, painting, and caulking, we expect this product to have a useful life of 40 years or more. Manufactured stone veneer has been installed as an accent on potions of the facility s exterior. Typically, these surfaces are improperly installed, and we recommend assessing the installation at this community based on comparison against The Masonry Veneer Manufacturers Association s, Installation Guidelines. See In addition, the Masonry Veneer Manufacturers Association may be able to provide additional information related to the maintenance and care of these materials. Similar to other masonry components, we recommend repointing. Because weather and other conditions result in the slow deterioration of the mortar in the joints, we have included funding in the Reserve Analysis for repointing. Brick and block masonry is used as a main exterior cladding of the building at the ground floor parking garage elevations. As masonry weathers, the mortar joints will become damaged by water penetration. As additional water gains access to the joints, repeated freeze-thaw cycles gradually increase the damage to the mortar joints. If allowed to progress, even the masonry units such as brick, block, and stone can have their surfaces affected and masonry units can become loose. In general, masonry is considered a long-life item and is therefore excluded from reserve funding. However, because weather and other conditions result in the slow deterioration of the mortar in masonry joints, we have included funding in this study for repointing. Repointing is the process of raking and cutting out damaged sections of mortar and replacing them with new mortar. Periodic repointing and local replacement of damaged masonry units will limit the damage done by moisture penetration. For this study, we assume that 10% of the masonry will require repointing every 10 years after approximately 30 years. For additional information about masonry and repointing, please view the relevant links at Metal Grilles at Garage Openings. The large and numerous openings through the masonry and concrete walls of the garages have openings for ventilation. These openings are equipped with decorative metal grilles made of welded tube steel. Although these are coated, many of these display significant corrosion. Although these could potentially have a long economic life it is obvious the grilles and anchors securing them to the masonry walls are prone to environmental degradation. The previous study did not include these for either refurbishing or replacement. It is advised that some funds be reserved for refurbishing to allow the maximum life to be achieved and for some partial replacement as corrosion makes portions of them impossible to maintain. Storefronts. The main entrances to the buildings are commercial aluminum and glass storefront systems. The doors include electric operators. The overall condition of the storefront installation is good. The environmental factors of the site may potentially reduce the normal life of these systems. The storefront system consists of aluminum steel framing and glass panels. Typically, the gaskets between the glazing and framing, and the door hinges fail first. Failed gaskets can allow water into the building or

111 Miller - Dodson Associates, Inc. Condition Assessment - Page D7 storefront framing, which can accelerate corrosion. We recommend inspecting the system once each year for failed gaskets, corrosion, and hinge operation. Since many of these storefront systems are modular, we assume that gasket and hinge replacement will be performed as need and as a maintenance activity. The Manager reports no replacement has been performed and there are no current issues with these components for this Level 3 update. Concrete Balconies and Walks. The Association maintains the individual unit concrete balconies and the courtyard side walkways on each floor of the buildings. The structural concrete balcony decks are in mixed condition. Many of the balconies display significant deterioration at the outside edges attributed to the original design and construction. The Association is currently undertaking an extensive repair program to address the worst condition concrete issues. The metal railings are in good overall condition. The Manager reports that the incremental repair and replacement of balcony edge details along with associated concrete surface repairs and replacement has continued over the previous 3 years. For this 2019 Level 3 Update the Type 1 and Type 2 details are no longer being done and they have been excluded from the inventory as requested. We noted no significant defects of the walkways but we did note significant defects including spalling of the concrete surface, cracks in the concrete, exposed sections of reinforcing steel, and spalling of the edges of the balconies. The balcony surfaces are not coated. Adding a coating may be a necessary capital improvement after the repairs are done to create both a uniform aesthetic result (conceal the patching) and add a protective quality to increase the normal and remaining life. Concrete balconies are prone to deterioration due to their exposure to the elements. This deterioration begins within the concrete and slowly progresses to the surface. By the time, it becomes visible, the damage has been done, and expensive remedial action is typically required. The leading cause of concrete balcony deterioration is the corrosion of the embedded reinforcing steel. Water penetrates the concrete surface or enters the concrete through penetrations such as railing mounting holes, and when water meets the reinforcing steel, corrosion results. As the steel corrodes, it expands, putting pressure on the surrounding concrete. This pressure will eventually result in cracks, delamination, and spalling. The rate of corrosion is influenced by such factors as the thickness and density of the concrete, the rate of water infiltration, and the installation of carpet or other water retaining materials on the balcony s surface. We recommend for the Association implement an annual inspection and power-washing program. Installation of carpet or other water trapping coverings should be prohibited and potted plants should be placed on raised feet to allow for proper air circulation and drying. Additionally, we recommend the application of appropriate sealants or coatings to the top surface and exposed edges of the concrete deck, as well as recaulking all railing post mounted into the deck slab. The underside of the concrete deck should be left untreated or treated with a breathable finish to allow entrapped moisture to escape. BUILDING INTERIORS Common Interiors. The Association maintains the lobbies, halls, meeting room and other common interior spaces that are in generally good overall condition. We have assumed that the Association will want to maintain these areas in a commercially acceptable condition. Typically, replacement cycles for common interior spaces vary between to 10 years depending on the aesthetic tastes of the community, usage, and construction. Material selection and the community s

112 Miller - Dodson Associates, Inc. Condition Assessment - Page D8 preferences are the major factors in setting the reserve components for items such as refurnishing and interior refurbishment. The Association will need to establish these cycles as these facilities age. Maintaining historical records and incorporating these trends and preferences into a future Reserve Study update is the best way to adjust for these cycles. Carpet. The carpet in the building s corridors and various common area rooms are in mixed condition. Commercial carpet of this construction in this type of application has a typical service life of 7 to 10 years. The Manager reports that all carpet in Phases 1 and 2 are planned for replacement in To extend the life of the carpet, it is important that the Association continue with a comprehensive maintenance program that includes regular vacuuming, spot and spill removal, interim cleaning of high traffic areas, and regular scheduled cleanings. It is also recommended that all entrances be fitted with walk-off mats to trap soil. PLUMBING, MECHANICAL & ELECTRICAL Fire Safety Systems. The building is fitted with a fire safety system that includes sprinklers and alarms, and these are reported to be operating normally. Testing and inspection of fire safety systems are not included in this study. For the 2018 Level 3 update the Manager reported that one of the Fire Alarm Control Panels was replaced. For the 2019 Level 3 Update the Manager indicates that both the Phase 1 and 2 dry pipe compressors will be replaced. Sprinkler pipe systems have a wide variety of configurations and requirements depending on their age, condition, and jurisdictional location. Specific county and municipal codes can make a significant difference on what your facility s specific requirements may be. Building fire alarm systems have a service life of 1 to 2 years. While the panels may continue to operate past this point, changes in fire safety technology and building fire safety codes tend to render them obsolete. In addition, manufacturers only support their systems for a limited period, typically about 1 years. After this time, it may be increasingly difficult to obtain replacement parts and service. When it becomes necessary to upgrade the fire alarm system, differences in the technologies and new code requirements are likely to require upgrades in lighting, sensors, alarms, and other system and sub components. For wet and dry pipe systems, we have assumed that these are long life components and will not require whole scale replacement. It is imperative however for these pipes to be properly drained or for the water to be properly conditioned. Other components such as heads, gauges, and valves are assumed to be normal maintenance items and are therefore excluded from the study. We recommend having your entire fire safety system inspected and evaluated by a professional in this field who is familiar with your area of the country. In addition, a comprehensive preventative maintenance program will ensure the maximum possible useful life from these components, and a qualified professional will be able to help in setting up and implementing such a program. Your local CAI chapter may have a service provider list on their web site that may refer you to a local fire and life safety consultant. As an alternative, please contact our office and we will provide recommendations. As a preliminary estimate, we have provided an allowance every 1 years for the major repair and upgrade of the fire safety systems. A detailed evaluation of the facility s fire safety system should include an estimate of reserve funding for these components and this funding estimate should be incorporated in the next reserve study update. Inspections and annual maintenance work are not accounted for or included in this study.

113 Miller - Dodson Associates, Inc. Condition Assessment - Page D9 Building Piping. During our 201 inspection, we noticed the presence of some leaking pipes, and pinhole leaks are being reported. Portions of the piping were reported to have been repaired or replaced. For this 2019 Level 3 Update the corrosion of dry pipe suppression piping is planned for corrosion abatement. As a result of changes in water chemistry, brought on by federal clean water legislation, piping has been developing pin-hole leaks, which can lead to higher maintenance costs and a shorter than normal service life. For further information about the problem and research that is being conducted, please see the WSSC link on our web site at In addition, in some cases, the pipe and fitting materials are of poor quality, and pin-hole leaks have been reported in as little as three years. Water quality, in particular the Ph of the water, is critical to the longevity of these systems, and typically, the pressurized water supply lines are the most problematic followed by the central heating and cooling lines. As a result of these problems, the facility s piping will require replacement at some point in time. As a less expensive alternative to the extremely costly work of re-piping a building, systems have been developed to clean and epoxy-line the interior surfaces of these and other types of pipes. In addition, new pipe materials are on the market. Please note that the timeframe for repiping a facility can vary widely, and the estimation of the remaining economic life is highly speculative. Given the age of the facility, the Association should be aware of the various technologies available for pipe replacement and pipe lining, including traditional pipe replacement, replacement with CPVC and other synthetic pipes, and linings from companies such as Ace Duraflo and Curaflo. However, Miller - Dodson does not endorse any specific process or company. For budgeting purposes, an allowance every 2 years is included in this study for repiping work. Please note that this work has a high degree of variability depending on the layout of the facility and accessibility to the piping components. To gain a better understanding of the condition of this facility s pipes and water supply lines, we recommend having an expert evaluation of the piping performed. This evaluation should provide an estimation of remaining useful life of the piping systems, the condition of the water supply, and recommendations for replacement to maximize the remaining useful life of this facility s piping systems. To gain a better understanding of this issue, please see the Water Delivery Report on our web site at For the 2018 Level 3 update the Manager reported that some of the backflow preventer valves had been replaced. Building Electrical Service. The electrical systems of the buildings are reported to be operating normally. Other than transformers and meters and if protected from water damage or overloading, interior electrical systems within a building, including feed lines and switch gear, are considered long-life components, and unless otherwise noted, are excluded from this study. In order to maintain this equipment properly, periodic tightening of all connections is recommended every three to five years. Insurance policies in some cases may have specific requirements regarding the tightening of electrical connections. It is also recommended that outlets, sockets, switches, and minor fixtures be replaced at a maximum of every 30 years. Replacement of these smaller components, unless otherwise identified, is considered incidental to refurbishment or is considered a Valuation Exclusion. Light Fixtures. The buildings include a large quantity of lighting fixtures of various styles for garage lighting, interior lighting and exterior lighting. Exterior and garage fixtures display a wide variety of current conditions based original quality, and environmental exposure. Lobby illumination is provided by an assortment of ceiling pendant mounted, recessed and lay-in style fixtures as well as wall mounted sconces and indirect light fixtures.

114 Miller - Dodson Associates, Inc. Condition Assessment - Page D10 The fixtures use a variety of incandescent, compact fluorescent and now also some LED lamps. The fixtures are in good working condition and provide adequate lighting. Fixtures of this type have a typical service life of 2 years. For the 2018 Level 3 Update the Manager reported that some lighting had been replaced in the previous two years and that some additional lighting replacement was anticipated in HVAC. The common areas have split DX units and heat pump systems for heating and cooling that are of various sizes, age, and condition. The facility staff provided input for size and cost of recently replaced units. Smaller equipment such as electric heaters in stairs is excluded due to the low value of individual items. The Manager reports that numerous heat pumps were replaced in both buildings in and that a few units will be replaced in RECREATIONAL FACILITIES Swimming Pool. The community operates two outdoor pools in the courtyards, and a spa of concrete construction. There is also a hot tub and spray park feature at one of the pools. At the beachfront cabana is another outdoor pool. Listed below are the major components of the pool facilities: The pools were all winterized at the time of the original inspection in 201 but they were reported to be in good overall condition. Pool Shell. The shells for each swimming pool are reported to be in good overall condition. In the past few years there have been some concerns about the larger pool which were investigated by a structural engineer. There is no conclusive indication the pool shell is in jeopardy although there has been differential settlement of portions of the pool deck in the vicinity of the pool. Pool Deck. The pools have concrete decks. The overall condition of the decks is good with no tripping hazards. The problems noted above have been corrected and cracks have been routed and filled periodically as needed. Pool Deck Coating. The concrete pool deck is coated with an elastomeric coating. The coating is in good overall condition. We have assumed a service life for the coating of ten years. Fiberglass Coating. The fiberglass coating is in good condition. We have assumed a service life of 2 years for the fiberglass coat. Whitecoat. The spa whitecoat is in fair condition. We have assumed a service life of eight to ten years for the spa whitecoat. Pool A whitecoat is indicated to be replaced at the end of Pool B whitecoat is planned for replacement in Waterline Tile. The waterline tile is in good overall condition although several tiles at the spa were noted to be missing. We have assumed that the waterline tile will be replaced or restored when the pool is whitecoated. Pool A waterline tile is indicated to be replaced at the end of Pool B waterline tile is planned for replacement in Coping. The pools are edged with masonry coping. The coping is reported to in good overall condition. Pool A coping is indicated to be replaced at the end of Pump and Filter System. The filter system is in good overall operating condition. One of the pool pump motors is reported to have been replaced in The Pool A pump was replaced in 2018 and the Pool B pump will be replaced in 2019.

115 Miller - Dodson Associates, Inc. Condition Assessment - Page D11 Pool Covers. The swimming pool covers are in varied condition. The covers are exposed to very strong winds and based on the size and shape of the largest cover typically only lasts two to three years. Pool Heaters. The cabana pool had one of its heaters replaced in Outdoor Grilles. The community is equipped with numerous outdoor cooking capability within the courtyards around the pools. This amenity features granite counter tops, with built stainless steel gas grilles and under counter cabinets. A number of the grilles have recently been replaced with new. The granite tops have required a small amount of modification. Even though the granite tops could have an indefinite economic life, is anticipated that all countertops will require future replacement as the replacement grilles being used will eventually become obsolete and continued modification of the top is not practical. The Manager reports that numerous gas grilles have been replaced in One of the grilles was reported to be replaced in and the unit price was used to update all grilles for this 2019 Leve 3 Update. This Condition Assessment is based upon our visual survey of the property. The sole purpose of the visual survey was an evaluation of the common elements of the property to ascertain the remaining useful life and the replacement costs of these common elements. Our evaluation assumed that all components met building code requirements in force at the time of construction. Our visual survey was conducted with care by experienced persons, but no warranty or guarantee is expressed or implied. End of Condition Assessment

116 Miller - Dodson Associates, Inc. Condition Assessment - Page D12

117 Miller - Dodson Associates, Inc. Page 1 Overview, Standard Terms, and Definitions 1. COMMON INTEREST DEVELOPMENTS - AN OVERVIEW Over the past 40 years, the responsibility for community facilities and infrastructure around many of our homes has shifted from the local government to Community Associations. Thirty years ago, a typical new town house abutted a public street on the front and a public alley on the rear. Open space was provided by a nearby public park and recreational facilities were purchased ala carte from privately owned country clubs, swim clubs, tennis clubs, and gymnasiums. Today, 60% of all new residential construction, i.e. townhouses, single-family homes, condominiums, and cooperatives, is in Common Interest Developments (CID). In a CID, a homeowner is bound to a Community Association that owns, maintains, and is responsible for periodic replacements of various components that may include the roads, curbs, sidewalks, playgrounds, streetlights, recreational facilities, and other community facilities and infrastructure. The growth of Community Associations has been explosive. In 196, there were only 00 Community Associations in the United States. According to the 1990 U.S. Census, there were 130,000 Community Associations. Community Associations Institute (CAI), a national trade association, estimates there were more than 200,000 Community Associations in the year 2000, and that the number of Community Associations will continue to multiply. The shift of responsibility for billions of dollars of community facilities and infrastructure from the local government and private sector to Community Associations has generated new and unanticipated problems. Although Community Associations have succeeded in solving many short-term problems, many Associations have failed to properly plan for the tremendous expenses of replacing community facilities and infrastructure components. When inadequate replacement reserve funding results in less than timely replacements of failing components, home owners are exposed to the burden of special assessments, major increases in Association fees, and a decline in property values. 2. REPLACEMENT RESERVE STUDY The purpose of a Replacement Reserve Study is to provide the Association with an inventory of the common community facilities and infrastructure components that require periodic replacement, a general view of the condition of these components, and an effective financial plan to fund projected periodic replacements. The Replacement Reserve Study consists of the following: Replacement Reserve Study Introduction. The introduction provides a description of the property, reviews the intent of the Replacement Reserve Study, and lists documents and site evaluations upon which the Replacement Reserve Study is based. Section A Replacement Reserve Analysis. Many components owned by the Association have a limited life and require periodic replacement. Therefore, it is essential the Association have a financial plan that provides funding for the timely replacement of these components in order to protect the safety, appearance, and value of the community. In conformance with American Institute of Certified Public Accountant guidelines, a Replacement Reserve Analysis evaluates the current funding of Replacement Reserves as reported by the Association and recommends annual funding of Replacement Reserves by two generally accepted accounting methods; the Cash Flow Method and the Component Method. Miller - Dodson provides a replacement reserve recommendation based on the Cash Flow Method in Section A, and the Component Method in the Appendix of the report. Section B Replacement Reserve Inventory. The Replacement Reserve Inventory lists the commonly owned components within the community that require periodic replacement using funding from Replacement Reserves. The Replacement Reserve Inventory also provides information about components excluded from the Replacement Reserve Inventory whose replacement is not scheduled for funding from Replacement Reserves. Replacement Reserve Inventory includes estimates of the normal economic life and the remaining economic life for those components whose replacement is scheduled for funding from Replacement Reserves. Section C Projected Annual Replacements. The Calendar of Projected Annual Replacements provides a year-by-year listing of the Projected Replacements based on the data in the Replacement Reserve Inventory. Section D Condition Assessment. Several of the items listed in the Replacement Reserve Inventory are discussed in more detail. The Condition Assessment includes a narrative and photographs that document conditions at the property observed during our visual evaluation. The Appendix is provided as an attachment to the Replacement Reserve Study. Additional attachments may include supplemental photographs to document conditions at the property and additional information specific to the property cited in the Conditions Assessment (i.e. Consumer Product Safety Commission, Handbook for Public Playground Safety, information on segmental retaining walls, manufacturer recommendations for asphalt shingles or siding, etc). The Appendix also includes the Accounting Summary for the Cash Flow Method and the Component Method.

118 Miller - Dodson Associates, Inc. Page 2 Overview, Standard Terms, and Definitions 3. METHODS OF ANALYSIS The Replacement Reserve industry generally recognizes two different methods of accounting for Replacement Reserve Analysis. Due to the difference in accounting methodologies, these methods lead to different calculated values for the Minimum Annual Contribution to the Reserves. The results of both methods are presented in this report. The Association should obtain the advice of its accounting professional as to which method is more appropriate for the Association. The two methods are: Cash Flow Method. The Cash Flow Method is sometimes referred to as the "Pooling Method." It calculates the minimum constant annual contribution to reserves (Minimum Annual Deposit) required to meet projected expenditures without allowing total reserves on hand to fall below the specified minimum level in any year. First, the Minimum Recommended Reserve Level to be Held on Account is determined based on the age, condition, and replacement cost of the individual components. The mathematical model then allocates the estimated replacement costs to the future years in which they are projected to occur. Based on these expenditures, it then calculates the minimum constant yearly contribution (Minimum Annual Deposit) to the reserves necessary to keep the reserve balance at the end of each year above the Minimum Recommended Reserve Level to be Held on Account. The Cash Flow Analysis assumes that the Association will have authority to use all of the reserves on hand for replacements as the need occurs. This method usually results in a Minimum Annual Deposit that is less than that arrived at by the Component Method. Component Method. This method is a time tested mathematical model developed by HUD in the early 1980s, but has been generally relegated to a few States that require it by law. For the vast majority of Miller - Dodson s clients, this method is not used. The Component Method treats each item in the replacement schedule as an individual line item budget. Generally, the Minimum Annual Contribution to Reserves is higher when calculated by the Component Method. The mathematical model for this method works as follows: First, the total Current Objective is calculated, which is the reserve amount that would have accumulated had all of the items on the schedule been funded from initial construction at their current replacement costs. Next, the Reserves Currently on Deposit (as reported by the Association) are distributed to the components in the schedule in proportion to the Current Objective. The Minimum Annual Deposit for each component is equal to the Estimated Replacement Cost, minus the Reserves on Hand, divided by the years of life remaining. 4. REPLACEMENT RESERVE STUDY DATA Identification of Reserve Components. The Reserve Analyst has only two methods of identifying Reserve Components; (1) information provided by the Association and (2) observations made at the site. It is important that the Reserve Analyst be provided with all available information detailing the components owned by the Association. It is our policy to request such information prior to bidding on a project and to meet with the individuals responsible for maintaining the community after acceptance of our proposal. After completion of the Study, the Study should be reviewed by the Board of Directors, individuals responsible for maintaining the community, and the Association s accounting professionals. We are dependent upon the Association for correct information, documentation, and drawings. Unit Costs. Unit costs are developed using nationally published standards and estimating guides and are adjusted by state or region. In some instances, recent data received in the course of our work is used to modify these figures. Contractor proposals or actual cost experience may be available as part of the Association records. This is useful information, which should be incorporated into your report. Please bring any such available data to our attention, preferably before the report is commenced. Replacement vs. Repair and Maintenance. A Replacement Reserve Study addresses the required funding for Capital Replacement Expenditures. This should not be confused with operational costs or cost of repairs or maintenance.

119 Miller - Dodson Associates, Inc. Page 3 Overview, Standard Terms, and Definitions. DEFINITIONS Adjusted Cash Flow Analysis. Cash flow analysis adjusted to take into account annual cost increases due to inflation and interest earned on invested reserves. In this method, the annual contribution is assumed to grow annually at the inflation rate. Annual Deposit if Reserves Were Fully Funded. Shown on the Summary Sheet A1 in the Component Method summary, this would be the amount of the Annual Deposit needed if the Reserves Currently on Deposit were equal to the Total Current Objective. Cash Flow Analysis. See Cash Flow Method, above. Component Analysis. See Component Method, above. Contingency. An allowance for unexpected requirements. Roughly the same as the Minimum Recommended Reserve Level to be Held on Account used in the Cash Flow Method of analysis. Critical Year. In the Cash Flow Method, a year in which the reserves on hand are projected to fall to the established minimum level. See Minimum Recommended Reserve Level to be Held on Account. Current Objective. This is the reserve amount that would have accumulated had the item been funded from initial construction at its current replacement cost. It is equal to the estimated replacement cost divided by the estimated economic life, times the number of years expended (the difference between the Estimated Economic Life and the Estimated Life Left). The Total Current Objective can be thought of as the amount of reserves the Association should now have on hand based on the sum of all of the Current Objectives. Cyclic Replacement Item. A component item that typically begins to fail after an initial period (Estimated Initial Replacement), but which will be replaced in increments over a number of years (the Estimated Replacement Cycle). The Reserve Analysis program divides the number of years in the Estimated Replacement Cycle into five equal increments. It then allocates the Estimated Replacement Cost equally over those five increments. (As distinguished from Normal Replacement Items, see below) Estimated Economic Life. Used in the Normal Replacement Schedules. This represents the industry average number of years that a new item should be expected to last until it has to be replaced. This figure is sometimes modified by climate, region, or original construction conditions. Estimated Economic Life Left. Used in the Normal Replacement Schedules. Number of years until the item is expected to need replacement. Normally, this number would be considered to be the difference between the Estimated Economic Life and the age of the item. However, this number must be modified to reflect maintenance practice, climate, original construction and quality, or other conditions. For the purpose of this report, this number is determined by the Reserve Analyst based on the present condition of the item relative to the actual age. Estimated Initial Replacement. For a Cyclic Replacement Item (see above), the number of years until the replacement cycle is expected to begin. Estimated Replacement Cycle. For a Cyclic Replacement Item, the number of years over which the remainder of the component's replacement occurs. Minimum Annual Deposit. Shown on the Summary Sheet A1. The calculated requirement for annual contribution to reserves as calculated by the Cash Flow Method (see above). Minimum Deposit in the Study Year. Shown on the Summary Sheet A1. The calculated requirement for contribution to reserves in the study year as calculated by the Component Method (see above). Minimum Recommended Reserve Level to be Held on Account. Shown on the Summary Sheet A1, this number is used in the Cash Flow Method only. This is the prescribed level below which the reserves will not be allowed to fall in any year. This amount is determined based on the age, condition, and replacement cost of the individual components. This number is normally given as a percentage of the total Estimated Replacement Cost of all reserve components. Normal Replacement Item. A component of the property that, after an expected economic life, is replaced in its entirety. (As distinguished from Cyclic Replacement Items, see above.)

120 Miller - Dodson Associates, Inc. Page 4 Overview, Standard Terms, and Definitions Normal Replacement Schedules. The list of Normal Replacement Items by category or location. These items appear on pages designated. Number of Years of the Study. The numbers of years into the future for which expenditures are projected and reserve levels calculated. This number should be large enough to include the projected replacement of every item on the schedule, at least once. This study covers a 40-year period. One Time Deposit Required to Fully Fund Reserves. Shown on the Summary Sheet A1 in the Component Method summary, this is the difference between the Total Current Objective and the Reserves Currently on Deposit. Reserves Currently on Deposit. Shown on the Summary Sheet A1, this is the amount of accumulated reserves as reported by the Association in the current year. Reserves on Hand. Shown in the Cyclic Replacement and Normal Replacement Schedules, this is the amount of reserves allocated to each component item in the Cyclic or Normal Replacement schedules. This figure is based on the ratio of Reserves Currently on Deposit divided by the total Current Objective. Replacement Reserve Study. An analysis of all of the components of the common property of the Association for which a need for replacement should be anticipated within the economic life of the property as a whole. The analysis involves estimation for each component of its estimated Replacement Cost, Estimated Economic Life, and Estimated Life Left. The objective of the study is to calculate a recommended annual contribution to the Association's Replacement Reserve Fund. Total Replacement Cost. Shown on the Summary Sheet A1, this is total of the Estimated Replacement Costs for all items on the schedule if they were to be replaced once. Unit Replacement Cost. Estimated replacement cost for a single unit of a given item on the schedule. Unit (of Measure). Non-standard abbreviations are defined on the page of the Replacement Reserve Inventory where the item appears. The following standard abbreviations are used in this report: EA: each FT: feet LS: lump sum PR: pair SF: square feet SY: square yard

121 Miller - Dodson Associates, Inc. Page Video Answers to Frequently Asked Questions What is a Reserve Study? Who are we? What kind of property uses a Reserve Study? Who are our clients? Who conducts a Reserve Study? Reserve Specialist (RS) what does this mean? When should a Reserve Study be updated? What are the different types of Reserve Studies? What is in a Reserve Study and what is out? Improvement vs Component, is there a difference? What is my role as a Community Manager? Will the report help me explain Reserves to my clients?

122 Miller - Dodson Associates, Inc. Page 6 Video Answers to Frequently Asked Questions What is my role as a Board Member? Will a Reserve Study meet my community s needs? Community dues, how can a Reserve Study help? Will a study help keep my property competitive? How do I read the report? Will I have a say in what the report contains? Where do the numbers come from? Cumulative expenditures and funding, what? How are interest and inflation addressed? What should we look at when considering inflation? A community needs more help, where do we go? What is a Strategic Funding Plan?