LEVEL 3 RESERVE STUDY UPDATE For TUKWILA HOMEOWNERS ASSOCIATION, INC.

Transcription

1 LEVEL 3 RESERVE STUDY UPDATE For TUKWILA HOMEOWNERS ASSOCIATION, INC. Woodburn, OR January 1, 2016 December 31, 2016 Project No: OR U Prepared By: Carson M. Horton, RS Quality Check By: L. Law Broili Date: July 25, 2016 Copyright 2016 USA/Canada /

2 TABLE OF CONTENTS Tukwila Homeowner's Associa on, Inc. SECTION I SUMMARIES & FINANCIAL ANALYSIS Introduc on 1 1 Property Summary 1 3 Financial Analysis 1 4 Distribu on of Accumulated Reserves 1 8 Current Assessment Funding Method Summary 1 10 Current Assessment Funding Method Projec on 1 11 SECTION II COMPONENT INVENTORY DETAILS Explana on of Component Reports 2 1 Component Summary with Comments 2 2 Component Inventory by Remaining Life Expectancy 2 6 Component Inventory with Current Costs 2 8 Component Detail Reports 2 11 SECTION III RESERVE EXPENDITURE REPORTS Explana on of Expenditure Reports 3 1 Annual Reserve Expenditure Detail 3 2 Annual Expenditure Spread Sheet 3 12 Capital & Non Capital Expenditures 3 21 APPENDIX Physical Analysis Reserve Study Updates 4 3 Reserve Study Parameters & Methodology 4 4 Oregon Statutory Requirements 4 6 Glossary 4 7 Component Detail Index 4 15

3 Disclosures This reserve study should be reviewed carefully. It may not include all common and limited common element components which will require major maintenance, repair, or replacement in future years, and may not include regular contributions to a reserve account for the cost of such maintenance, repair, or replacement. The failure to include a component in a reserve study, or to provide contributions to a reserve account for a component, may, under some circumstances, require you to pay, on demand, as a special assessment, your share of common expenses for the cost of major maintenance, repair, or replacement of a reserve component. Period of Inquiry: This repair and replacement funding and cost analysis (Reserve Study) encompasses a period of thirty (30) years beginning on January 1, 2016 and ending on December 31, Restrictions on Use: This Reserve Study document has been provided pursuant to an agreement containing restrictions on its use. No part of the document may be copied or distributed in any form, or disclosed to third parties, without the written permission of Capital Reserve Consultants, LLC (CRC) or the Association. The Association shall have the right to reproduce and distribute copies of this report, in whole or in part, as may be necessary in the conduct of the Association s business. Current & Final Version: If the reader has obtained this document from anyone other than CRC or the owner of the subject property they should verify that the Reserve Study represents the current, final version of the report. Alterations made to this Reserve Study by any individual other than a representative of CRC are not authorized and do not represent the opinion of the Reserve Specialist who prepared this Reserve Study. Statement of Qualifications: Carson M. Horton, RS, the person supervising the preparation of this Reserve Study, is a Community Associations Institute Certified Reserve Specialist (RS); recognized for expertise in the preparation and analysis of reserve funding plans. Mr. Horton has supervised the preparation of more than eight hundred reserve studies for homeowner s associations; investment property owners and institutional Associations in fourteen states. Objective Analysis: CRC and Carson M. Horton, RS, are independent, third party consultants with no actual or apparent conflict of interest which would prevent them from rendering an objective and impartial opinion regarding the appropriate level of reserve funding for the property which is the subject of this Reserve Study. The authors of this Reserve Study have no other involvement with the Association other than to prepare or update this Reserve Study. Statement of Purpose: The purpose of this Reserve Study is to provide a planning and budgeting tool to assist in the development of a long range financial to pay for the maintenance and renewal of the property which is the subject of the funding analysis. Because this Reserve Study relies on assumptions regarding future events over which CRC has no control, the accuracy of replacement costs and scheduling cannot be guaranteed. Assumptions: This analysis assumes that all components and equipment will be installed correctly, in a workmanlike manner, using generally accepted construction practices. It is expected routine preventive maintenance will be performed throughout the entire lifecycle of all components whether or not such maintenance expenses are provided for in this reserve funding plan. The component replacement schedules and corresponding funding projections presented in this Reserve Study assume all components will achieve their normal life expectancy before requiring replacement, unless otherwise noted. Limitations of the Analysis: Information regarding the reserve fund balance was provided by the Association and has not been confirmed by an independent audit of the Association s financial records. The authors of this Reserve Study have no control over whether the funds allocated for maintenance and renewal of the subject property will be consistent with the recommendations made by this Reserve Study. Reliance on Third Party Information: The Reserve Study is a reflection of information provided to CRC by third parties and cannot be used for the purpose of performing an audit, forensic analysis or verification of historical records. The information is deemed reliable, but is not based on an audit of the Association s financial records,

4 Disclosures and should not be used for purposes other than those intended in this study. An on site inspection conducted in conjunction with a Reserve Study should not be deemed to be a project audit or quality inspection. Information which has been provided to CRC by third parties is deemed reliable for the purpose of this Reserve Study. Third party information which is incorrect may have a material impact on the Association s reserve funding requirements. CRC takes no responsibility for the accuracy of any such information or the impact inaccurate information may have on the findings and conclusions presented in this Reserve Study. Standards of Analysis: This reserve study was prepared in accordance with the National Reserve Study Standards established by the Community Associations Institute for the preparation of reserve studies for common interest developments; the laws of various states and the rules set forth in the Audit & Accounting Guide Common Interest Realty Associations (American Institute of Certified Public Accountants May 1, 2008). No invasive or destructive testing has been employed in the investigative phase of this study and no environmental assessment of any kind was performed. This reserve study is not intended to address or discover construction defects and no representation is made herein that is meant to imply any such warranty.

5 SECTION I SUMMARIES & FINANCIAL ANALYSIS

6 Introduc on 1. Level of Inquiry: This reserve study is a Level 3 update of a Level 1 Reserve Study which was prepared by Capital Reserve Consultants, LLC in A Level 3 Reserve Study Update does not include a physical inspection of the common area components identified in the Component Inventory. This reserve study update did not include a site visit. This reserve study is an analysis of the General and Limited Common Elements which are the responsibility of the Tukwila Homeowner's Association, Inc. (Association) to maintain and replace, according to the governing documents or as may be required by state law. Opinions regarding the current condition and remaining life expectancy of the common area components are based on visual observations made during the inspection process. Component quantities may be based on field measurements, a physical inventory and/or association records. This information is intended to be used for developing long term reserve funding projections, but should not be considered adequate for the purpose of ordering materials or formulating repair and replacement project costs. 2. Limitations of the Analysis: The physical condition assessment performed in conjunction with this reserve study is not intended to identify construction defects or other sub standard conditions which may require immediate corrective action. The reserve study utilizes information obtained from the following sources to arrive at component replacement costs and useful life estimates for the common area components identified in the component inventory: RS Means Construction Cost Books Life Cycle Costing for Facilities (Reed Construction Publishers) Study of Life Expectancy of Home Components 2007 (NAHB) Preventive Maintenance and Building Operations Efficiency (BOMA) Facility Manager s Maintenance Handbook (McGraw Hill) RS Means Facilities Maintenance & Repair Cost Data 16 th Edition Physical condition assessment of common elements performed by Capital Reserve Consultants, LLC in Vendor Supplied Cost Data: Replacement costs obtained from local vendors are used only at the request of the Board of Directors (BOD) and only when supported by current written estimates, proposals or expense records for work completed within the last three years. Vendor pricing is subject to change due to current market conditions and may not reflect accurate repair and replacement costs under normal circumstances. Vendor replacement cost estimates used in this reserve study are at the request of the BOD and are not based on recommendations by the reserve advisor. CRC reserves the right to reject replacement cost estimates provided by the BOD if we believe they will not result in a realistic level of reserve funding for future repair and replacement expenses. Capital Reserve Consultants, LLC Page 1 1

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

8 Property Summary The following details pertain to Tukwila Homeowner's Association: 1. Legal Name: Tukwila Homeowner's Association, Inc. 2. Physical Address: 955 Tukwila Drive Woodburn, OR Property Type: Planned Unit Development (PUD) 4. Number of Units or Lots: Year Constructed: Incorporation Date: 10/27/ Association Responsibilities: The association of unit owners is responsible for repair and replacement of common area components including, but not limited to: Common area concrete sidewalks & steps Exterior common area lighting Common area landscaping & irrigation equipment Exterior painting clubhouse & office Roofing clubhouse & office Gutters & downspouts clubhouse & office HVAC equipment clubhouse & office Entrance monuments & ponds Tennis courts Fitness & walking trails Office equipment & furnishings Clubhouse furnishing & interior finishes 8. Owner Responsibilities: Owners are responsible for the maintenance, repair and replacement costs relating to their respective homes up to the boundary of the property as illustrated on the official plat and as described in the Declaration for the Tukwila Homeowner's Association, Inc. Capital Reserve Consultants, LLC Page 1 3

9 Financial Analysis 1. Current Condition: The fiscal year for the Tukwila Homeowner's Association, Inc. begins January 1 st of each year. This reserve study covers the 30 year period beginning on: January 1, The reserve fund contribution for 2015 was: $10, The estimated reserve fund balance as of January 1, 2016 is: $46, Based on the funding schedule set forth in this reserve study, and the beginning reserve fund balance indicated above, the percent funded level as of January 1, 2016 will be: 66% 2. Funding Models: This reserve study utilizes a Cash Flow Funding Model known as Current Assessment Funding. Cash Flow Funding Model: Cash Flow Funding is a reserve funding approach which is designed to generate sufficient annual cash flow to meet the funding obligations established in the reserve study. Assuming the cost and frequency of reserve expenditures does not deviate from the schedule set forth in the reserve study; the Association s reserve fund will always contain enough money to meet its funding obligations. All cash flow funding methods result in the pooling of reserves. Pooled reserves occur when all reserve funds are accumulated in one reserve account and the current reserves are allocated to pay for reserve expenditures based on chronological urgency or discretionary action taken by the Board of Directors. Reserves accumulated in a pooled reserve fund may only be used to pay for current or future reserve obligations. Reserves which are collected to pay for specific component replacement expenses may be reallocated to pay for other reserve expenditures should a surplus of funds exist after a scheduled expense has been incurred. Funds collected for the purpose of providing replacement reserves to pay for repair and replacement of common elements may not be used to pay for operating expenses or any expenses which are not specifically identified as reserve expenditures in the current reserve study. Current Assessment Funding: The Current Assessment Funding Projection that appears in this reserve study is a cash flow funding model which begins with a first year reserve contribution equal to the annual contribution approved by the Association for the previous fiscal year. The Current Assessment Funding Projection contained in this reserve study begins with a reserve fund contribution of $10, in The annual reserve fund contribution will increase 3.5% each year for the remaining years covered by this reserve study. 3. Percent Funded Level: The percent funded level resulting from this reserve study analysis is Capital Reserve Consultants, LLC Page 1 4

10 Financial Analysis calculated using the following formula, which is mandated by the Community Associations Institute's Reserve Study Guidelines: Fully Funded = PV x CA / EUL. Where PV = present value; CA = current age; and EUL = expected useful life. Hence the Fully Funded calculation for a component with a current age of 3 years, a present value of $10,000 and an expected useful life of 10 years would be: $10,000 x 3 / 10 = $3, Therefore the total amount of money required to be Fully Funded as of the first day of the current funding cycle would be $3, Funding Parameters & Projections: Reserve funds will be accumulated in the replacement fund based on the estimated current replacement cost, adjusted for inflation, of the common area components listed in the Component Inventory. If additional funds are required at the time replacement occurs, the Association reserves the right, subject to member approval, to increase regular assessments or levy special assessments, or it may delay repair or replacement of components until funds are available. Actual costs may vary from the amounts established in this reserve study. Investment income and income tax levels may affect reserve funding levels and the variances may be material. Amounts accumulated in the replacement reserve fund may not be adequate to meet future funding requirements; particularly if updates are not performed in a timely manner, or if reserve contributions are not consistent with the amounts set forth in this reserve study. The reserve funding projections which result from this reserve study utilize the following financial parameters: A minimum reserve fund balance of $46, as of January 1, A minimum 2016 reserve fund contribution of: $10, Earnings on reserve deposits:.02% Annual inflation rate: 3% Effective income tax rate: 0%* Reserve fund contingency: 0% Capital Reserve Consultants, LLC Page 1 5

11 Financial Analysis Maximum annual reserve contribution increase: 3.5% *This funding analysis assumes income tax obligations will not be paid out of the Association s reserve fund. The Annual Reserve Fund Expenditure Detail indicates the next reserve expenditures scheduled to occur will be in the year The total amount of these expenditures is estimated to be: $6, Current Assessment Funding: The 30 year funding projection contained in this Reserve Study utilizes a cash flow funding method known as Current Assessment Funding. Current Assessment Funding is a reserve funding model in which the first year, or current, reserve fund contribution is established by the Board of Directors or the Reserve Specialist. The Current Assessment Funding Projection begins with a 2017 reserve fund contribution of $10, which equals $21.74 per lot based on 460 lots. 6. Percent Funded Analysis: The percent funded level under the Current Assessment Funding Projection will be 57% at the end of 2016 assuming the reserve fund activity is consistent with the schedule set forth in this Reserve Study. The highest percent funded level after 2016 is 79% in The lowest percent funded level after 2016 is 43% in The Current Assessment Funding Projection included in this Reserve Study represents the contribution schedule required to meet the reserve obligations set forth in this Reserve Study for the next thirty years, assuming a beginning reserve fund balance of $46,717.00; a 2016 year contribution of $10, and a maximum annual increase in the reserve contribution of 3.5% in any year after Total Reserve Spending: Assuming the reserve fund expenditures and contributions do not deviate from the schedule set forth in this reserve study the reserve funding and spending obligations for the thirty year period ending on December 31, 2045 are as follows: Total Reserve Spending $437, Average Annual Reserve Expenditures: $14, Total Reserve Fund Contributions: $516, Interest Earnings on Reserve Fund Deposits: $ December 31, 2045 Reserve Fund Balance: $125, Capital Reserve Consultants, LLC Page 1 6

12 Financial Analysis 8. Minimum Reserve Fund Balance: Assuming the reserve fund contributions and expenditures do not deviate from the schedule set forth in this reserve study, the minimum year end reserve fund balance resulting from the Current Assessment Funding Projection will be $31, in Funding Summary: The Current Assessment Funding Projection results in year end percent funded levels which range from a low of 43% to a high of 79%. The Current Assessment Funding Projection will meet the obligations of the Association s reserve fund assuming the reserve fund activity does not deviate from the schedule set forth on this reserve study. Capital Reserve Consultants, LLC Page 1 7

13 Distribu on of Accumulated Reserves Report Date July 25, 2016 Beginning Fiscal Year January 01, 2016 Account Number OR Version Number LEVEL 3 Descrip on Remaining Replacement Assigned Life Year Reserves Fully Funded Reserves Furnaces Recrea on Center & Office Replacement ,000 6,000 Landscape Ligh ng Recrea on Center Replacement Common Area Landscaping Renova on ,800 4,800 Computer Equipment Replacement ,280 2,280 Exterior Ligh ng Office & Recrea on Center Replacement ,512 1,512 Exterior Paint Recrea on Center & Office Building ,833 3,833 Kitchen Appliance Recrea on Center Replacement ,125 4,125 Office Equipment Replacement ,400 2,400 Roof Maintenance Cleaning & Repair Signage Replacement ,800 4,800 Tree Care Sa ey Pruning & Innocula on Asphalt Pavement Recrea on Center Clean & Seal Flat Screen TV Recrea on Center Replacement Tennis Courts Cleaning & Resurfacing Recircula ng Pumps Gla Pond Replacement ,780 3,780 Pond Liner Main Entrance Water Feature Replacement ,714 1,714 Recrea on Center Carpet & Tile Flooring Replacement ,000 4,000 Recrea on Center Vinyl Flooring Replacement Concrete Sidewalks Repair & Replacement ,056 1,056 Electrical Service Equipment Replacement (Outdoor Loca on) ,000 6,000 Entrance Monument Renova on ,000 2,000 Gu ers & Downspouts Replacement ,080 1,080 Capital Reserve Consultants, LLC Page 1 8

14 Distribu on of Accumulated Reserves Descrip on Remaining Replacement Assigned Life Year Reserves Fully Funded Reserves Interior Light Fixtures Recrea on Center Replacement *3,469 4,480 Recircula ng Pumps Main Entrance Water Feature Replacement Recrea on Center Furnishing Replacement ,000 A/C Condensing Units Replacement Asphalt Pavement Recrea on Center Overlay ,162 Exterior Doors Office Building Replacement ,090 Exterior Storefront Doors Recrea on Center Replacement ,050 Wooden Footbridges Renova on ,114 Monument Ligh ng Main Entrance Replacement Fitness & Nature Trail Upgrades Landscape Irriga on Controllers Replacement Tennis Court Fencing Replacement ,260 Pond Liner Gla Pond Replacement C.M.U. Block Wall Repair & Restora on Total Asset Summary $56,717 $85,782 '*' Indicates Par ally Funded Capital Reserve Consultants, LLC Page 1 9

15 Current Assessment Funding Method Summary Report Parameters Report Date July 25, 2016 Account Number OR Version LEVEL 3 Budget Year Beginning January 01, 2016 Budget Year Ending December 31, 2016 Total Units 460 Infla on 3.00% Interest Rate on Reserve Deposit 0.02% 2016 Beginning Balance $46, This funding projection utilizes the Current Assessment Funding Model to generate the funding schedule on the following page. Current Assessment Funding is a cash flow funding method which begins with a first year reserve contribution equal to the current annual contribution approved by the Association for the most recent fiscal year or an amount which is specified to meet the funding obligations of the Association. Current Assessment Funding is often used when an association has already approved the annual reserve contribution for the current fiscal year or when the current level of funding is inadequate to meet the funding obligations set forth in the reserve study, and it is therefore necessary to specify the minimum level of funding which will meet the obligations imposed by the Association's reserve funding plan. Reserves accumulated under a Current Assessment Funding Model Projection are pooled. Pooling of reserves refers to the fact that all funds are maintained in one fund and are allocated based on the annual cash flow required to meet the reserve funding obligations of the Association. Current Assessment Funding Model Summary of Calcula ons Required Annual Contribu on $10, $21.74 per unit annually Average Net Annual Interest Earned $9.99 Total Annual Alloca on to Reserves $10, $21.76 per unit annually Capital Reserve Consultants, LLC Page

16 Current Assessment Funding Method Projec on Report Date July 25, 2016 Beginning Fiscal Year January 01, 2016 Account Number OR Version Number LEVEL 3 Beginning Balance: $46,717 Projected Fully Current Annual Annual Annual Ending Funded Percent Year Cost Contribu on Interest Expenditures Reserves Reserves Funded ,798 10, ,750 49,977 87,713 57% ,872 10, ,329 31,004 70,025 44% ,068 10, ,475 39,249 78,931 50% ,390 11, ,267 43,078 83,591 52% ,842 11, ,405 44,157 85,549 52% ,427 11, ,449 54,596 96,817 56% ,150 12, ,795 40,102 83,382 48% ,014 12, ,354 32,476 76,298 43% ,025 13, ,339 37,313 81,354 46% ,186 13, ,631 49,321 93,604 53% ,501 14, ,613 61, ,582 58% ,976 14, ,321 56, ,635 55% ,615 15, ,099 67, ,126 59% ,424 15, ,892 57, ,546 55% ,407 16, ,520 65, ,467 58% ,569 16, ,947 80, ,597 63% ,916 17, ,876 49,876 97,664 51% ,453 17, ,372 62, ,761 57% ,187 18, , ,029 63% ,123 19, ,035 64, ,259 58% ,266 19, ,057 70, ,427 60% ,624 20, ,859 70, ,425 61% ,203 21, ,502 71, ,270 62% ,009 22, ,124 80, ,993 65% ,049 22, ,895 97, ,699 70% ,331 23, ,183 97, ,124 70% ,861 24, ,732 92, ,505 70% ,647 25, , , ,856 74% ,696 26, , , ,811 77% ,017 27, , , ,036 79% Capital Reserve Consultants, LLC Page

17 SECTION II COMPONENT INVENTORY DETAILS

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

19 Component Summary with Comments Report Date July 25, 2016 Beginning Fiscal Year January 01, 2016 Account Number OR Version Number LEVEL 3 Descrip on Asphalt & Concrete Pavement Asset ID Date In Service Cost Current Useful Life Adjustment Asphalt Pavement Recrea on Center Clean & Seal 01/01/ Concrete Sidewalks Repair & Replacement 01/01/12 2, , Asphalt Pavement Recrea on Center Overlay 01/01/92 5, , Cabinets, Casework & Countertops Kitchen Appliance Recrea on Center Replacement 01/01/05 4, ,635 4, This component provides funding for replacement of the kitchen appliances located in the Recreation Center. Remaining The life expectancy can vary depending on the type of appliance and level of use but it is generally more cost effective to purchase all appliances at the same time. Cost Future Quan ty Unit Cost Decks, Footbridges & Railings Wooden Footbridges Renova on 01/01/92 6, ,305 2, This component provides funding for renovation of three wooden footbridges located to the south of the Miller Farm Subdivision. These brigdes are constrcuted of heavy timer frames and decking. Maintenance is performed on recurring basis with two of the bridges having recently been repaired and refinished. The easternmost bridge is scheduled for similar maintenance in the summer of Due to the level of maintenance and heavy frame construction the life expectancy of the bridges is expected to exceed the normal lifespan of outdoor wooden deck structures. This component provides funding for renovationg the bridges after 35; assuming an in service date of Electrical Equipment Electrical Service Equipment Replacement (Outdoor Loca on) 01/01/92 7, ,955 2, This component provides funding for replacement of the electrical service equipment adjacent to the main entrance monument & water feature; Glatt Pond and the in ground electrical vault located at the corner of Tukwila Drive and Miller Farm Road. These electrical systems provide power to street lights, irrigation controls, water feature pumps, timers and landscape lighting. Due to the outdoor location of this equipment the life expectancy is reduced to 30 years. Electronics & Computer Equipment Computer Equipment Replacement 01/01/12 2, ,935 2, This component provides a lump sum for replacement of office equipment and furnishing other than computer Capital Reserve Consultants, LLC Page 2 2

20 Component Summary with Comments Descrip on Asset ID Electronics & Computer Equipment con nued... Date In Service Cost Current Useful Life Adjustment Remaining Cost Future Quan ty Unit Cost Computer Equipment Replacement con nued... related equipment. Funding is discretionary and may be revised at the request of the Board of Directors. Electronics & Computer Equipment Flat Screen TV Recrea on Center Replacement Exterior Light Fixtures 01/01/08 1, ,273 1, Landscape Ligh ng Recrea on Center Replacement 01/01/ Exterior Ligh ng Office & Recrea on Center Replacement 01/01/92 1, , Monument Ligh ng Main Entrance Replacement 01/01/ , This component provides funding for replacement of four monument lights located at the main entrance monument. Three of the lights are in ground fixtures with glass lenses which illuminate the trees behind the water feature. The fourth is a ground based flood light which illuminates the water feature. Exterior Paint & Coa ngs Exterior Paint Recrea on Center & Office Building 01/01/11 4, ,738 4, Flooring Recrea on Center Carpet & Tile Flooring Replacement 01/01/08 6, ,753 6, Recrea on Center Vinyl Flooring Replacement 01/01/ HVAC & Mechanical Equipment Furnaces Recrea on Center & Office Replacement 01/01/92 6, ,000 3, A/C Condensing Units Replacement 01/01/ Indoor Furniture Recrea on Center Furnishing Replacement 01/01/08 7, ,224 7, This component provides a lump sum for replacement of loose furnishings located in the Recreation Center building. The amount of funding is discretionary and may be revised at the request of the Board of Directors. Capital Reserve Consultants, LLC Page 2 3

21 Component Summary with Comments Descrip on Interior Light Fixtures Asset ID Date In Service Cost Current Useful Life Adjustment Interior Light Fixtures Recrea on Center Replacement 01/01/92 5, , Recrea onal Ameni es Tennis Courts Cleaning & Resurfacing 01/01/ Fitness & Nature Trail Upgrades 01/01/15 2, ,235 2, Roofing & Waterproofing Components Roof Maintenance Cleaning & Repair 01/01/15 1, ,287 1, Gu ers & Downspouts Replacement 01/01/92 1, , Monuments, Water Features & Flag Poles Recircula ng Pumps Gla Pond Replacement 01/01/09 5, ,901 5, Pond Liner Main Entrance Water Feature Replacement 01/01/92 2, ,251 2, Entrance Monument Renova on 01/01/92 2, ,985 2, This component provides funding for renovation of the main entrance monument every 30 years beginning in Remaining Funding for replacement of the lighting, recirculating pumps and pond liner pertaining to the water feature are included as separate components in this reserve study. Recircula ng Pumps Main Entrance Water Feature Replacement 01/01/13 1, ,476 1, Pond Liner Gla Pond Replacement 01/01/15 13, ,672 13, Office Furniture & Equipment Office Equipment Replacement 01/01/92 2, ,575 2, This component provides a lump sum for replacement of office equipment and furnishing other than computer related equipment. The amount of funding is discretionary and may be revised at the request of the Board of Directors. Cost Future Quan ty Unit Cost Doors, Windows & Storefront Enclosures Exterior Doors Office Building Replacement 01/01/92 1, , Exterior Storefront Doors Recrea on Center Replacement 01/01/92 2, ,139 1, Fencing & Barrier Walls Tennis Court Fencing Replacement 01/01/92 17, , The estimated replacement cost includes removal of the existing fencing and replacement of the pedestrian gates. Capital Reserve Consultants, LLC Page 2 4

22 Component Summary with Comments Descrip on Fencing & Barrier Walls con nued... Asset ID Date In Service Cost Current Useful Life Adjustment C.M.U. Block Wall Repair & Restora on 01/01/10 2, ,895 11, This component provides funding for repair and restoration of the new C.M.U. block wall which was constructed along the north side of the recreation center parking lot in Routine cleaning and maintenance of the wall is not included in this reserve study. Remaining Cost Future Quan ty Unit Cost Landscaping & Irriga on Equipment Common Area Landscaping Renova on 01/01/92 5, ,150 5, Tree Care Sa ey Pruning & Innocula on 01/01/14 1, ,236 1, Landscape Irriga on Controllers Replacement 01/01/15 2, ,781 2, This component provides funding for replacement of the landscape irrigation system controllers throughout the community in 2015 and every 15 years thereafter. The amount of funding is discretionary and may be revised at the request of the Board of Directors. Site Furnishings & Signage Signage Replacement 01/01/92 5, ,150 5, This component provides funding for replacement of signage at various locations within the community including the main entrance monument, Glatt Pond and the Recreation Center. Capital Reserve Consultants, LLC Page 2 5

23 Component Inventory by Remaining Life Expectancy Report Date July 25, 2016 Beginning Fiscal Year January 01, 2016 Account Number OR Version Number LEVEL 3 Descrip on Year Replacement Life Useful Adjustment Life Remaining Cost Current Assigned Reserves Fully Funded Furnaces Recrea on Center & Office Replacement ,000 6,000 6,000 Landscape Ligh ng Recrea on Center Replacement Common Area Landscaping Renova on ,000 4,800 4,800 Computer Equipment Replacement ,850 2,280 2,280 Exterior Ligh ng Office & Recrea on Center Replacement ,575 1,512 1,512 Exterior Paint Recrea on Center & Office Building ,600 3,833 3,833 Kitchen Appliance Recrea on Center Replacement ,500 4,125 4,125 Office Equipment Replacement ,500 2,400 2,400 Roof Maintenance Cleaning & Repair , Signage Replacement ,000 4,800 4,800 Tree Care Sa ey Pruning & Innocula on , Asphalt Pavement Recrea on Center Clean & Seal Flat Screen TV Recrea on Center Replacement , Tennis Courts Cleaning & Resurfacing Recircula ng Pumps Gla Pond Replacement ,400 3,780 3,780 Pond Liner Main Entrance Water Feature Replacement ,000 1,714 1,714 Recrea on Center Carpet & Tile Flooring Replacement ,000 4,000 4,000 Recrea on Center Vinyl Flooring Replacement Concrete Sidewalks Repair & Replacement ,640 1,056 1,056 Electrical Service Equipment Replacement (Outdoor Loca on) ,500 6,000 6,000 Entrance Monument Renova on ,500 2,000 2,000 Gu ers & Downspouts Replacement ,350 1,080 1,080 Interior Light Fixtures Recrea on Center Replacement ,600 3,469 4,480 Recircula ng Pumps Main Entrance Water Feature Replacement , Recrea on Center Furnishing Replacement , ,000 A/C Condensing Units Replacement Asphalt Pavement Recrea on Center Overlay , ,162 Capital Reserve Consultants, LLC Page 2 6

24 Component Inventory by Remaining Life Expectancy Descrip on Replacement Year Life Useful Adjustment Life Remaining Cost Current Assigned Reserves Fully Funded Exterior Doors Office Building Replacement , ,090 Exterior Storefront Doors Recrea on Center Replacement , ,050 Wooden Footbridges Renova on , ,114 Monument Ligh ng Main Entrance Replacement Fitness & Nature Trail Upgrades , Landscape Irriga on Controllers Replacement , Tennis Court Fencing Replacement , ,260 Pond Liner Gla Pond Replacement , C.M.U. Block Wall Repair & Restora on , Total Asset Summary $135,798 $56,717 $85,782 Capital Reserve Consultants, LLC Page 2 7

25 Component Inventory with Current Costs Report Date July 25, 2016 Beginning Fiscal Year January 01, 2016 Account Number OR Version Number LEVEL 3 Descrip on Date in Service Replacement Year Useful Adjustment Remaining Asphalt & Concrete Pavement Asphalt Pavement Recrea on Center Clean & Seal ,700 SF Concrete Sidewalks Repair & Replacement SF ,640 Asphalt Pavement Recrea on Center Over ,700 SF ,550 Asphalt & Concrete Pavement Total $8,523 Units Cost Unit Cost Current Cabinets, Casework & Countertops Kitchen Appliance Recrea on Center Replacement Total 4, ,500 Cabinets, Casework & Countertops Total $4,500 Decks, Footbridges & Railings Wooden Footbridges Renova on EA 2, ,000 Decks, Footbridges & Railings Total $6,000 Electrical Equipment Electrical Service Equipment Replacement (Outdoor Loca on) EA 2, ,500 Electrical Equipment Total $7,500 Electronics & Computer Equipment Computer Equipment Replacement Total 2, ,850 Flat Screen TV Recrea on Center Replacement Total 1, ,200 Electronics & Computer Equipment Total $4,050 Exterior Light Fixtures Landscape Ligh ng Recrea on Center Replacement EA Exterior Ligh ng Office & Recrea on Center Replacement EA ,575 Monument Ligh ng Main Entrance Replacement EA Exterior Light Fixtures Total $3,200 Capital Reserve Consultants, LLC Page 2 8

26 Component Inventory with Current Costs Descrip on Date in Service Replacement Year Useful Adjustment Remaining Exterior Paint & Coa ngs Exterior Paint Recrea on Center & Office Building Total 4, ,600 Exterior Paint & Coa ngs Total $4,600 Units Cost Unit Cost Current Flooring Recrea on Center Carpet & Tile Flooring Replacement Total 6, ,000 Recrea on Center Vinyl Flooring Replacement SY Flooring Total $6,045 HVAC & Mechanical Equipment Furnaces Recrea on Center & Office Replacement EA 3, ,000 A/C Condensing Units Replacement Total HVAC & Mechanical Equipment Total $6,700 Indoor Furniture Recrea on Center Furnishing Replacement Total 7, ,500 Indoor Furniture Total $7,500 Interior Light Fixtures Interior Light Fixtures Recrea on Center Replacement EA ,600 Interior Light Fixtures Total $5,600 Recrea onal Ameni es Tennis Courts Cleaning & Resurfacing Total Fitness & Nature Trail Upgrades Total 2, ,800 Recrea onal Ameni es Total $3,600 Roofing & Waterproofing Components Roof Maintenance Cleaning & Repair Total 1, ,250 Gu ers & Downspouts Replacement LF ,350 Roofing & Waterproofing Components Total $2,600 Monuments, Water Features & Flag Poles Recircula ng Pumps Gla Pond Replacem Total 5, ,400 Pond Liner Main Entrance Water Feature Replacement Total 2, ,000 Entrance Monument Renova on Total 2, ,500 Capital Reserve Consultants, LLC Page 2 9

27 Component Inventory with Current Costs Descrip on Date in Service Replacement Year Useful Adjustment Remaining Monuments, Water Features & Flag Poles con nued... Recircula ng Pumps Main Entrance Water Feature Replacement Total 1, ,200 Pond Liner Gla Pond Replacement Total 13, ,500 Monuments, Water Features & Flag Poles Total $24,600 Units Cost Unit Cost Current Office Furniture & Equipment Office Equipment Replacement Total 2, ,500 Office Furniture & Equipment Total $2,500 Doors, Windows & Storefront Enclosures Exterior Doors Office Building Replacement EA ,590 Exterior Storefront Doors Recrea on Center Replacement EA 1, ,990 Doors, Windows & Storefront Enclosures Total $4,580 Fencing & Barrier Walls Tennis Court Fencing Replacement LF ,100 C.M.U. Block Wall Repair & Restora on Total 11, ,900 Fencing & Barrier Walls Total $20,000 Landscaping & Irriga on Equipment Common Area Landscaping Renova on Total 5, ,000 Tree Care Sa ey Pruning & Innocula on Total 1, ,200 Landscape Irriga on Controllers Replacem Total 2, ,500 Landscaping & Irriga on Equipment Total $8,700 Site Furnishings & Signage Signage Replacement Total 5, ,000 Site Furnishings & Signage Total $5,000 Total Asset Summary $135,798 Capital Reserve Consultants, LLC Page

28 Component Detail Reports Report Date July 25, 2016 Beginning Fiscal Year January 01, 2016 Account Number OR Version Number LEVEL 3 Furnaces Recrea on Center & Office Replacement 2016 Asset ID Capital Expenditures HVAC & Mechanical Equipment Placed in Service January 1992 Useful Life 20 Adjustment 4 Replacement Year 2016 Remaining Life 0 2 $3, Asset Cost $6, Percent Replacement 100% Future Cost $6, Assigned Reserves $6, Annual Assessment $ Interest Contribu on $0.07 Reserve Alloca on $ Landscape Ligh ng Recrea on Center Replacement 2016 Asset ID Capital Expenditures Exterior Light Fixtures Placed in Service January 1992 Useful Life 20 Adjustment 4 Replacement Year 2016 Remaining Life 0 5 $ Asset Cost $ Percent Replacement 100% Future Cost $ Assigned Reserves $ Annual Assessment $42.13 Interest Contribu on Reserve Alloca on $42.14 Common Area Landscaping Renova on 2017 Asset ID Capital Expenditures Landscaping & Irriga on Equipment Placed in Service January 1992 Useful Life 25 Replacement Year 2017 Remaining Life 1 1 $5, Asset Cost $5, Percent Replacement 100% Future Cost $5, Assigned Reserves $4, Annual Assessment $ Interest Contribu on $1.00 Reserve Alloca on $ Capital Reserve Consultants, LLC Page

29 Component Detail Reports Computer Equipment Replacement 2017 Asset ID Capital Expenditures Electronics & Computer Equipment Placed in Service January 2012 Useful Life 5 Replacement Year 2017 Remaining Life 1 1 $2, Asset Cost $2, Percent Replacement 100% Future Cost $2, Assigned Reserves $2, Annual Assessment $ Interest Contribu on $0.54 Reserve Alloca on $ This component provides a lump sum for replacement of office equipment and furnishing other than computer related equipment. Funding is discretionary and may be revised at the request of the Board of Directors. Exterior Ligh ng Office & Recrea on Center Replacement 2017 Asset ID Capital Expenditures Exterior Light Fixtures Placed in Service January 1992 Useful Life 20 Adjustment 5 Replacement Year 2017 Remaining Life 1 9 $ Asset Cost $1, Percent Replacement 100% Future Cost $1, Assigned Reserves $1, Annual Assessment $68.52 Interest Contribu on $0.32 Reserve Alloca on $68.83 Exterior Paint Recrea on Center & Office Building 2017 Asset ID Non Capital Expenditures Exterior Paint & Coa ngs Placed in Service January 2011 Useful Life 6 Replacement Year 2017 Remaining Life 1 1 $4, Asset Cost $4, Percent Replacement 100% Future Cost $4, Assigned Reserves $3, Annual Assessment $ Interest Contribu on $0.88 Reserve Alloca on $ Capital Reserve Consultants, LLC Page

30 Component Detail Reports Kitchen Appliance Recrea on Center Replacement 2017 Asset ID Capital Expenditures Cabinets, Casework & Countertops Placed in Service January 2005 Useful Life 12 Replacement Year 2017 Remaining Life 1 1 $4, Asset Cost $4, Percent Replacement 100% Future Cost $4, Assigned Reserves $4, Annual Assessment $ Interest Contribu on $0.89 Reserve Alloca on $ This component provides funding for replacement of the kitchen appliances located in the Recreation Center. The life expectancy can vary depending on the type of appliance and level of use but it is generally more cost effective to purchase all appliances at the same time. Office Equipment Replacement 2017 Asset ID Capital Expenditures Office Furniture & Equipment Placed in Service January 1992 Useful Life 25 Replacement Year 2017 Remaining Life 1 1 $2, Asset Cost $2, Percent Replacement 100% Future Cost $2, Assigned Reserves $2, Annual Assessment $ Interest Contribu on $0.50 Reserve Alloca on $ This component provides a lump sum for replacement of office equipment and furnishing other than computer related equipment. The amount of funding is discretionary and may be revised at the request of the Board of Directors. Roof Maintenance Cleaning & Repair 2017 Asset ID Capital Expenditures Roofing & Waterproofing Components Placed in Service January 2015 Useful Life 2 Replacement Year 2017 Remaining Life 1 1 $1, Asset Cost $1, Percent Replacement 100% Future Cost $1, Assigned Reserves $ Annual Assessment $ Interest Contribu on $0.21 Reserve Alloca on $ Capital Reserve Consultants, LLC Page