Reserve Study Transmittal Letter

Transcription

1 Reserve Study Transmittal Letter Date: August 15, 215 To: Lorrie Olson, Caughlin Creek HOA From: Browning Reserve Group (BRG) Re: Caughlin Creek HOA; Full Study Attached, please find the reserve study for Caughlin Creek HOA. To assist in your understanding of the study, and to highlight key information you may need quickly, we have listed below some of the important information contained in the study. At BRG our goal is to bring clarity from complexity, so should you have any questions, please do not hesitate to contact us anytime. 1. Where do I find the recommended reserve contribution for next year's budget? This is found in Section III, 3 Year Reserve Funding Plan, Cash Flow Method. $ is the annual amount. Directly under the annual amount is the amount per ownership interest, per month, or other period, as applicable. $ For any other funding related issues, if any, see Section III, 3 Year Reserve Funding Plan, Cash Flow Method. 2. Where do I find the status of the reserve fund, based on the Percent Funded calculation? This is found for the 3-year term of the study in Section IV, 3 Year Reserve Funding Plan, Including Fully Funded Balance and % Funded. For the year for which the study was prepared, 216, the Association is 83.2% funded. Based on the 3 year cash flow projection, the Association's reserves appear adequately funded as the reserve fund ending balances remain positive throughout the replacement of all major components during the next 3 years. Nevada statute imposes no reserve funding level requirements nor does it address funding level adequacy, and although one or more of the reserve fund percentages expressed in this report may be less than one hundred percent, those percentages do not necessarily indicate that the Association's reserves are inadequately funded. 3. Where do I find the assumptions for interest and inflation factors? While this information is in various places in the study, it can always be found in Section III, 3 Year Reserve Funding Plan, Cash Flow Method. For this study the assumption is 1.25% for the interest rate and 2.5% for the inflation factor. Please be advised these rates estimate the values that will stand the test of time over the 3-year term of the study, not simply only next year. 12fsv :to.to P. O. Box 6125 / Sacramento, CA 9586 Office (916) Fax (916) Bob@BrowningRG.com /

2 August 15, Reserve Study Page Two 4. What pages from the reserve study get mailed to the members (homeowners)? Please see the last section of the reserve study, "Member Distribution Materials." These are the last two pages (or more) of the study which can be removed, and copied, for distribution to the membership with the budget packet. This packet includes all state mandated disclosures related to the reserves and the reserve study. This section of the study is a stand-alone packet with it's own cover and table of contents. 5. What are the next steps? This study meets the NV NRS and NAC Requirements for a site visit study every five years. New for 213, we have added a new "Section X-b" to assist the association during execution of NV Form 69. This new Section displays in Form 69 order, elements from the reserve study that must be entered on to Form 69. The next site visit study will be due in five years. For the intervening four years, BRG proposes doing an Update Without Site Visit Study, at a nominal cost, which will include the preparation of a reserve study and assistance in reviewing the study per NRS (b). Please read the two helpful sections entitled Glossary and Notes to the Auditor. The glossary explains common reserve study terms as well as BRG specific terminology. The Notes to the Auditor while intended to assist the auditor, has useful information for the casual reader on how year zero, (215) the current fiscal year is dealt with in the study. Thank you for the opportunity to work with the Caughlin Creek HOA on this study. 12fsv :to.to

3 RESERVE STUDY Full Study Caughlin Creek HOA Published - August 15, 215 Browning Reserve Group P. O. Box 6125 / Sacramento, CA 9586 Office (916) Fax (916) Bob@BrowningRG.com / Browning Reserve Group /15/215 12fsv :to.to Version 8/7/215 1:57:25 AM

4 Table of Contents Section Report Page Section I: Summary of Association Reserves 1 Section II: 3 Year Expense Forecast Detailed 5 Section III: 3 Year Reserve Funding Plan Cash Flow Method {c} 9 Section III-a: 3 Year Reserve Funding Plan Cash Flow Method - Ending Balances Chart 1 Section IV: 3 Year Reserve Funding Plan Fully Funded Balance and % Funded 11 Section IV-a: 3 Year Reserve Funding Plan Cash Flow Method - Percent Funded Chart 12 Section V: Reserve Fund Balance Forecast Component Method 13 Section VI: Component Listing Included Components 16 Section VII: Tabular Component Listing Included Components 28 Section VII-a: Expenditures by Year - Next 5 Years 3 Section X: Auditor Notes 32 Section X-a: Supplementary Information for Auditor Section X-b: Reserve Summary Form 69 Abstract Component Method NRS Section XI: Glossary Reserve Study Terms Addendum: Member Distribution Materials See Page ii for Details /15/215 12fsv :to.to Version 8/7/215 1:57:25 AM Browning Reserve Group 215 TOC - i

5 Member Distribution Materials The following Reserve Study sections, located at the end of the report, should be provided to each member. Section Report Nevada: Member Summary /15/215 12fsv :to.to Version 8/7/215 1:57:25 AM Browning Reserve Group 215 TOC - ii

6 Section I Full Study Caughlin Creek HOA Published - August 15, 215 Reserve Study Summary A Reserve Study was conducted of Caughlin Creek HOA (the "Association"). A Full Study includes an on-site review upon where the following tasks are performed: development of a reserve component inventory; condition assessment based upon on-site visual observation; life and valuation estimates; fund status; and a funding plan. Caughlin Creek HOA is a Planned Community with a total of 178 Units. Physical Inspection Browning Reserve Group ("BRG") conducted a physical inspection of the Association. The inspection encompassed those major components that the Association is required to maintain. For this study components are determined to be major components if: 1. As of the date of the study, they have a remaining useful life of less than 3 years, and a value greater than $1,. 2. Such additional components, if any, determined by the Board of Directors. During the inspection, BRG utilized the services of our own construction cost estimator. In addition, independent contractors were retained to render opinions on selected components as indicated in Section VI, Included Component Listing. Supplemental information to the physical inspection may have been obtained from the following sources: 1. Project plans where available. 2. Maintenance records of the reserve components where available. 3. Association board members, management and staff. Summary of Reserves For the first year of the Reserve Study, the reserve contribution is based upon the existing budget unless otherwise noted in Section III, Reserve Funding Plan. In addition BRG relied on the Association to provide an accurate Beginning Reserve Balance /15/215 12fsv :to.to Version 8/7/215 1:57:25 AM Browning Reserve Group 215 P. O. Box 6125 / Sacramento, CA 9586 Office (916) Fax (916) Bob@BrowningRG.com /

7 Reserve Study - Full Study Caughlin Creek HOA 2 The status of the Association's reserves, as reflected in the following Reserve Study, is as follows: 1. The Expenditure Forecast of the following Reserve Study identifies the major components which the Association is obligated to repair, replace, restore or maintain, as determined in accordance with the criteria specified above, and specifies for each such component: a. Its current estimated replacement cost; b. Its estimated useful life; and c. Its estimated remaining useful life. 2. It is estimated that the total cash reserves necessary to repair, replace, restore or maintain such major components (in the aggregate) during and at the end of their first remaining useful life is $565,75. [For purposes of this calculation, necessary is defined as the Fully Funded Balance (FFB) (Component Current Cost X Effective Age / Useful Life, including a provision for interest and inflation in future years.)] 3. The current amount of accumulated cash reserves actually set aside to repair, replace, restore, or maintain such major components as of the fiscal year ending December 31, 216 is estimated to be $47,956, constituting 83.2% of the total expenditures anticipated for all such major components through their first end of useful life replacement. 4. Based upon the schedule of annual reserve contributions necessary to defray the cost of repairing, replacing, restoring or maintaining such major components in the years such expenditures are estimated to be required, it is estimated that annual reserve contributions in the initial amount of $ [$. per Unit per month (average)] for the fiscal year ending December 31, 216 (the first full fiscal year following first distribution of this report) will be necessary in order to meet all such reserve expenditures when they are projected to come due. Funding Assessment Based on the 3 year cash flow projection, the Association's reserves appear adequately funded as the reserve fund ending balances remain positive throughout the replacement of all major components during the next 3 years. Nevada statute imposes no reserve funding level requirements nor does it address funding level adequacy, and although one or more of the reserve fund percentages expressed in this report may be less than one hundred percent, those percentages do not necessarily indicate that the Association's reserves are inadequately funded. Percent Funded Status Based on paragraphs 1-3 above, the Association is 83.2% funded. The following scale can be used as a measure to determine the Association s financial picture whereas the lower the percentage, the higher the likelihood of the Association requiring a special assessment, or other large increases to the reserve contribution in the future. Percent Funded Poor % Fair % Strong %

8 Reserve Study - Full Study Caughlin Creek HOA 3 Methodology The above recommended reserve contribution for the next fiscal year (and future fiscal years as outlined in Section III, Reserve Fund Balance Forecast) was developed using the cash flow method. This is a method of developing a reserve funding plan where the contributions to the reserve fund are designed to offset the variable annual expenditures from the reserve fund. Different reserve funding plans are tested against the anticipated schedule of reserve expenses until the desired funding goal is achieved. Funding Goals The funding goal employed for Caughlin Creek HOA is Threshold Funding: Establishing a Reserve funding goal of keeping the Reserve balance above a specified dollar or Percent Funded amount. Depending on the threshold, this may be more or less conservative than Fully Funding. Limitations The intention of the Reserve Study is to forecast the Association's ability to repair or replace major components as they wear out in future years. The Reserve Study is not an engineering report, and no destructive testing was performed. The costs outlined in the study are for budgetary and planning purposes only, and actual bid costs would depend upon the defined scope of work at the time repairs are made. Also, any latent defects are excluded from this report. Statutory Disclosures Compliance The Reserve Study was conducted pursuant to NRS , NRS , and NAC This reserve study was produced under the responsible charge of Robert Browning who holds Professional Community Association Manager (PCAM) and Reserve Specialist (RS) designations from CAI. Pursuant to Nevada regulation R145-6, Mr. Browning is a Nevada Reserve Study Specialist (RSS #5). Life Expectancy The projected life expectancy of the major components and the funding needs of the reserves of the Association are based upon the Association performing appropriate routine and preventative maintenance for each major component. Failure to perform such maintenance can negatively impact the remaining useful life of the major components and dramatically increase the funding needs of the reserves of the Association. General: Supplemental Disclosures BRG has no other involvement(s) with the Association which could result in actual or perceived conflicts of interest.

9 Reserve Study - Full Study Caughlin Creek HOA 4 Personnel Credentials: BRG is a licensed general building contractor in California, #768851, and the owner, Robert W. Browning, holds the Reserve Specialist designation, #46 from the Community Associations Institute. Completeness: BRG has found no material issues which, if not disclosed, would cause a distortion of the Association's situation. Reliance on Client Data: Information provided by the official representative of the Association regarding financial, physical, quantity, or historical issues will be deemed reliable by BRG. Scope: This Reserve Study is a reflection of information provided to BRG and assembled for the Association's use, not for the purpose of performing an audit, quality/forensic analysis, health and safety inspection, or background checks of historical records. Reserve Balance: The actual beginning reserve fund balance in this Reserve Study is based upon information provided and was not audited. Reserve Projects: Information provided about reserve projects will be considered reliable. Any on-site inspection should not be considered a project audit, quality inspection, or health and safety review. Browning Reserve Group

10 Section II Caughlin Creek HOA 3 Year Expense Forecast - Detailed Current Replacement Life Useful / Reserve Component Cost Remaining Paving 12 - Asphalt: State Spec. Slurry 232,35 Sq. Ft. Streets 2 - Asphalt: Ongoing Repairs Streets 3 - Asphalt: Petromat Overlay 279,567 Sq. Ft. Streets 2 - Concrete Total 1 - Paving 562, Sidewalks, Curbs & Gutters 64,889 Sq. Ft. Street Side (1%) 36 - Stamped 3,691 Sq. Ft. Streets Total 2 - Concrete 65, Painting: Exterior 41 - Wrought Iron Gates 46 Lin. Ft. Community Entrance Gate 1 Total 3 - Painting: Exterior Gate Equipment 1 - Elite Swing Gate Operators 2 Community Entrance Gate Elite Swing Gate Operators 4 Community Entrance Gate DoorKing Telephone Entry System Community Entrance Gate DoorKing Telephone Entry System Community Entrance Gate Emergency Vehicle Access Device Community Entrance Gate1- Click 2 Enter 8 - Loops, Misc. Wiring Harness Community Entrance Gate Loops, Misc. Wiring Harness 7 - Community Entrance Gate Miscellaneous On-going Repairs 2 Community Entrance Gate Systems 1 & New Gate Installation Community Entrance Gate 1 Total 11 - Gate Equipment 55,8 71, ,118 8,463 91,37 2, ,563 2,627 2,692 2,76 2,829 2,899 2,972 3,46 3,122 3,2 3,28 3,362 3,446 3, , ,533 71,118 2,563 2,627 2,692 2,76 636,825 2,899 2,972 3,46 3,122 94,237 3,28 3,362 3,446 3,532 1, ,642 12,4 13,622 55, ,26 1,642 76,247 13, , ,38 8, , ,129 18,433 3, ,895 4,986 3, ,992 5,111 2, 1 6 2,319 2, ,87 3,497 2, ,942 3,584 4, 4 1 4,1 4,526 4,995 5,514 15, ,153 18,245 22,63 16,153 4,526 2,319 17,484 22,17 4,986 5,111 5, Lakes / Ponds 99 - Miscellaneous Liner & Pond- Annual Maintenance 7, ,856 8,52 8,253 8,46 8,671 8,888 9,11 9,338 9,571 9,811 1,56 1,37 1,565 1, /15/215 12fsv :to.to Version 8/7/215 1:57:25 AM Browning Reserve Group to 229 5

11 Current Replacement Life Useful / Caughlin Creek HOA 3 Year Expense Forecast - Detailed Reserve Component Cost Remaining Total Lakes / Ponds 7, Lighting 2 - Street Lights 22 Streets[se:1] 26 - Bollard Lights Bitter Creek Court 3 - Common Area 4 Community Entrance Gate Common Area 3 Community Entrance Gate Signage Total 2 - Lighting 35, Monument 2 Caughlin Pkwy & Caughlin Creek Rd- Gates 1 &2 Total 21 - Signage 4, 31 - Reserve Study 12-5 Year Update with Site Visit Reserve Study Total 31 - Reserve Study 1,6 7,856 8,52 8,253 8,46 8,671 8,888 9,11 9,338 9,571 9,811 1,56 1,37 1,565 1,829 33, ,438 4,549 4, , 2 5 1, , 2 3 4,38 4,38 1,98 4,438 4,549 4,663 1,6 5 1,6 1,81 2,48 1,6 1,81 2,48 Total Expenditures 2.5% 72,718 39,35 32,742 31,46 11, ,812 9,353 12,82 13,225 3, ,113 31,944 24,146 24,74 19,24 Total Current Replacement Cost 734, /15/215 12fsv :to.to Version 8/7/215 1:57:25 AM Browning Reserve Group to 229 6

12 3 Year Expense Forecast - Detailed Reserve Component Paving 12 - Asphalt: State Spec. Slurry 232,35 Sq. Ft. Streets 2 - Asphalt: Ongoing Repairs Streets 3 - Asphalt: Petromat Overlay 279,567 Sq. Ft. Streets Total 1 - Paving 13, 3, , ,849 3,711 3,84 3,899 3,997 4,97 4,199 4,34 4,412 4,522 4,635 4,751 4,87 4,991 5,116 16,621 3,711 3,84 3,899 3,997 12,632 4,199 4,34 4,412 4,522 1,43,511 4,751 4,87 4,991 5,116 97, Concrete 2 - Sidewalks, Curbs & Gutters 64,889 Sq. Ft. Street Side (1%) 36 - Stamped 3,691 Sq. Ft. Streets Total 2 - Concrete 3 - Painting: Exterior 41 - Wrought Iron Gates 46 Lin. Ft. Community Entrance Gate 1 Total 3 - Painting: Exterior 11 - Gate Equipment 1 - Elite Swing Gate Operators 2 Community Entrance Gate Elite Swing Gate Operators 4 Community Entrance Gate DoorKing Telephone Entry System Community Entrance Gate DoorKing Telephone Entry System Community Entrance Gate Emergency Vehicle Access Device Community Entrance Gate1- Click 2 Enter 8 - Loops, Misc. Wiring Harness Community Entrance Gate Loops, Misc. Wiring Harness 7 - Community Entrance Gate Miscellaneous On-going Repairs 2 Community Entrance Gate Systems 1 & New Gate Installation Community Entrance Gate 1 Total 11 - Gate Equipment Lakes / Ponds 99 - Miscellaneous Liner & Pond- Annual Maintenance Total Lakes / Ponds 15,412 17,438 19,729 15,412 17,438 19,729 1,24 1,131 1,248 1,378 1,24 1,131 1,248 1,378 1,956 13,348 22,459 27,364 6,382 6,542 2,969 3,81 4,261 5,191 4,367 5,321 6,86 6,718 7,416 8,186 2,969 21,33 26,826 13,11 6,542 25,955 36,486 8,186 11,1 11,377 11,662 11,953 12,252 12,558 12,872 13,194 13,524 13,862 14,29 14,564 14,928 15,31 15,684 11,1 11,377 11,662 11,953 12,252 12,558 12,872 13,194 13,524 13,862 14,29 14,564 14,928 15,31 15, Lighting 2 - Street Lights 22 Streets[se:1] 26 - Bollard Lights Bitter Creek Court 3 - Common Area 4 Community Entrance Gate 1 4,779 4,899 5,21 5,147 5,276 5,47 5,543 1,44 1, /15/215 12fsv :to.to Version 8/7/215 1:57:25 AM Browning Reserve Group to 244 7

13 3 Year Expense Forecast - Detailed Reserve Component Common Area 3 Community Entrance Gate 2 Total 2 - Lighting 4,779 4,899 5,21 6,551 5,276 5,47 5,543 3,244 1, Signage Monument 2 Caughlin Pkwy & Caughlin Creek Rd- Gates 1 &2 Total 21 - Signage 31 - Reserve Study 12-5 Year Update with Site Visit Reserve Study Total 31 - Reserve Study Total Expenditures 2.5% 7,58 7,58 2,317 2,622 2,966 2,317 2,622 2, ,817 39,393 41,79 49,229 21, ,35 53,152 24,4 24,994 19,632 1,89,886 75,529 19,797 21,67 28, /15/215 12fsv :to.to Version 8/7/215 1:57:25 AM Browning Reserve Group to 244 8

14 Section III Caughlin Creek HOA 3 Year Reserve Funding Plan Cash Flow Method Beginning Balance Inflated 2.5% Reserve Contribution 178 Percentage Increase Special Assessments / Other Interest After 1.25% Ending Balance 1) ,249 54,24 47, , ,743 65,24 85,362 83, , ,712 72,718 39,35 32,742 31,46 11, ,812 9,353 12,82 13,225 3, , 78, 81,12 84,365 87,74 88,968 9,214 91, %.% 4.% 4.% 4.% 4.% 1.4% 1.4% 1.4% 6,674 6,57 6,151 6,783 7,596 4,569 1,51 1,528 2,59 3,45 54,24 47, , ,743 65,24 85,362 83, , ,712 36,416 No 215 reserve contribution per client. BRG is recommending no contribution for 216, and then start collecting reserve contributions in 217 per this plan. Beginning Balance Inflated 2.5% Reserve Contribution 178 Percentage Increase Special Assessments / Other Interest After 1.25% Ending Balance , ,67 34,64 416, ,83 58, , , , , ,113 31,944 24,146 24,74 19,24 124,817 39,393 41,79 49,229 21,524 92,758 94,57 95,374 96,79 98,63 99,436 1,828 12,24 13,671 15, % 1.4% 1.4% 1.4% 1.4% 1.4% 1.4% 1.4% 1.4% 1.4% 3,69 3,822 4,73 5,661 6,679 7,98 7,412 8,267 9,88 1,64 274,67 34,64 416, ,83 58, , , , , ,21 Beginning Balance Inflated 2.5% Reserve Contribution 178 Percentage Increase Special Assessments / Other Interest After 1.25% Ending Balance ,21 831, , ,74 1,93,852 1,21, , , , , ,35 53,152 24,4 24,994 19,632 1,89,886 75,529 19,797 21,67 28,985 16,594 18,86 19, , , , , , ,134 12, % 1.4% 1.4% 1.4% 1.4% 1.4% 1.4% 1.4% 1.4% 1.4% 1,489 1,74 11,753 12,973 14,255 8,917 3,183 4,85 5,356 6,66 831, , ,74 1,93,852 1,21, , , , , , /15/215 12fsv :to.to Version 8/7/215 1:57:25 AM Browning Reserve Group 215 9

15 Fund Balance Section III-a Caughlin Creek HOA 3 Year Reserve Funding Plan Cash Flow Method - Ending Balances $1,4, $1,2, $1,, $8, $6, $4, $2, $ /15/215 12fsv :to.to Version 8/7/215 1:57:25 AM Browning Reserve Group Years

16 Section IV Caughlin Creek HOA 3 Year Reserve Funding Plan Including Fully Funded Balance and % Funded Year Beginning Balance Fully Funded Balance Percent Funded Inflated 2.5% Reserve Contribution Special Assessments & Other Contributions ,249 57, % 72,718 6,674 54, ,24 565, % 39,35 6,57 47, ,956 62, % 32,742 75, 6, , , , % 31,46 78, 6, , , , % 11,219 81,12 7,596 65, ,24 77, % 653,812 84,365 4,569 85, , , % 9,353 87,74 1,51 83, , , % 12,82 88,968 1, , , , % 13,225 9,214 2,59 241, ,712 33, % 3,178 91,477 3,45 36, , ,84 77.% 128,113 92,758 3,69 274, ,67 312, % 31,944 94,57 3,822 34, ,64 368, % 24,146 95,374 4,73 416, , , % 24,74 96,79 5, , ,83 55, % 19,24 98,63 6,679 58, , , % 124,817 99,436 7,98 562, ,265 56, % 39,393 1,828 7, , , , % 41,79 12,24 8, , ,829 69, % 49,229 13,671 9,88 763, , , % 21,524 15,122 1,64 857, ,21 847, % 142,35 16,594 1, , , , % 53,152 18,86 1,74 897, , , % 24,4 19,599 11, , ,74 994, % 24, ,133 12,973 1,93, ,93,852 1,12,7 19.% 19, ,689 14,255 1,21, ,21,164 1,22, % 1,89, ,267 8, , , , % 75, ,867 3, , , , % 19, ,489 4,85 379, , , % 21,67 119,134 5, , ,579 57, % 28,985 12,82 6,66 581,2 Interest Ending Balance /15/215 12fsv :to.to Version 8/7/215 1:57:25 AM Browning Reserve Group

17 Percent Funded Section IV-a Caughlin Creek HOA 3 Year Reserve Funding Plan Cash Flow Method - Percent Funded Years /15/215 12fsv :to.to Version 8/7/215 1:57:25 AM Browning Reserve Group

18 Section V Caughlin Creek HOA Reserve Fund Balance Forecast Component Method Reserve Component Current Repl. Cost Useful Life Remaining Life Estimated Future Replacement Costs Per Year 215 Fully Funded Balance 216 Fully Funded Balance % Per Year Straight Line 216 Line Item Contribution based on Cash Flow Method 1 - Paving 12 - Asphalt: State Spec. Slurry 232,35 Sq. Ft. Streets 2 - Asphalt: Ongoing Repairs Streets 3 - Asphalt: Petromat Overlay 279,567 Sq. Ft. Streets 71, ,118 14,224 71,118 14, % 2, ,563 1,281 1,25 2, % 489, ,533 27, ,932 41, % Sub-total [1 - Paving] 562,86 627,213 43, ,3 418, % 2 - Concrete 2 - Sidewalks, Curbs & Gutters 64,889 Sq. Ft. Street Side (1%) 36 - Stamped 3,691 Sq. Ft. Streets 1, ,642 2,128 8,36 1, % 55, ,26 1,65 47,6 49, % Sub-total [2 - Concrete] 65,747 74,848 3,734 55,366 6, % 3 - Painting: Exterior 41 - Wrought Iron Gates 46 Lin. Ft. Community Entrance Gate % /15/215 12fsv :to.to Version 8/7/215 1:57:25 AM Browning Reserve Group

19 Reserve Fund Balance Forecast Component Method Reserve Component Current Repl. Cost Useful Life Remaining Life Estimated Future Replacement Costs Per Year 215 Fully Funded Balance 216 Fully Funded Balance % Per Year Straight Line 216 Line Item Contribution based on Cash Flow Method 11 - Gate Equipment 1 - Elite Swing Gate Operators 2 Community Entrance Gate Elite Swing Gate Operators 4 Community Entrance Gate DoorKing Telephone Entry System Community Entrance Gate DoorKing Telephone Entry System Community Entrance Gate Emergency Vehicle Access Device Community Entrance Gate1- Click 2 Enter 8 - Loops, Misc. Wiring Harness Community Entrance Gate Loops, Misc. Wiring Harness 7 - Community Entrance Gate Miscellaneous On-going Repairs 2 Community Entrance Gate Systems 1 & New Gate Installation Community Entrance Gate 1 7, , ,3 7, % 14, ,129 1,891 1,8 12, % 3, , ,42 3,895.66% 3, , ,4 3,56.68% 2, 1 6 2, ,25.39% 2, , ,45 2,87.61% 2, , ,1 2,511.62% 4, 4 1 4,1 1,25 3, 4,1 1.74% 15, , ,875 14,66.69% Sub-total [11 - Gate Equipment] 55,8 58,781 5,99 45,785 52, % Lakes / Ponds 99 - Miscellaneous Liner & Pond- Annual Maintenance 2 - Lighting 2 - Street Lights 22 Streets[se:1] 26 - Bollard Lights Bitter Creek Court 3 - Common Area 4 Community Entrance Gate Common Area 3 Community Entrance Gate 2 7, ,856 3,928 3,832 7, % 33, ,722 1,243 19,388 2, % , % 1, 2 5 1, % % Sub-total [2 - Lighting] 35,65 53,16 1,46 2,864 22, % 21 - Signage Monument 2 Caughlin Pkwy & Caughlin Creek Rd- Gates 1 & Reserve Study 12-5 Year Update with Site Visit Reserve Study 4, 2 3 4, ,4 3,69.37% 1,6 5 1,6 32 1, % /15/215 12fsv :to.to Version 8/7/215 1:57:25 AM Browning Reserve Group

20 Reserve Fund Balance Forecast Component Method Reserve Component Current Repl. Cost Useful Life Remaining Life Estimated Future Replacement Costs Per Year 215 Fully Funded Balance 216 Fully Funded Balance % Per Year Straight Line 216 Line Item Contribution based on Cash Flow Method [A] [B] Totals 734,11 828,552 58,867 57, ,75 1.% [EndBal] [EndBal] [A] [B] Percent Funded 88.42% 83.24% /15/215 12fsv :to.to Version 8/7/215 1:57:25 AM Browning Reserve Group

21 Section VI Caughlin Creek HOA Component Listing Included Components 1 - Paving 12 - Asphalt: State Spec. Slurry Useful Life 232,35 Sq. Ft. Streets Quantity 232,35 Unit of Measure Square Feet Summary 5 Cost /SqFt $.36 % Included Remaining Life 1.% Total Cost/Study $71,118 Replacement Year 215 Future Cost $71,118 This is to prepare the surface and apply a state specification slurry seal. Considering the approaching need for overlay, client should consult with a paving professional regarding application of the seal coat and whether it is warranted this close to overlay. In 215, the lower streets, units 1-3, exhibit areas of heavy raveling and on-going crack repair. The upper streets, units 4-7, appear newer and in less need of major repair. 215 $71,118 anticipated to seal Quantity amended from 279,567 to 232,35. BRG road dimensions are available on request $26,25 was expended. This picture shows heavy raveling of the paved surfaces /15/215 12fsv :to.to Version 8/7/215 1:57:25 AM Browning Reserve Group

22 Component Listing Included Components 1 - Paving 2 - Asphalt: Ongoing Repairs Useful Life Streets Quantity 1 Unit of Measure Lump Sum Summary 1 Cost /LS $2,5 % Included Remaining Life 1.% Total Cost/Study $2,5 Replacement Year 216 Future Cost $2,562 This is for miscellaneous repairs including crackfill, skin patching and minor dig out & fill. Cracks 1/4" or wider should be filled when observed Percent to include reduced from 5 to 2.5% 7/1/215. Also the remaining life has been synced to expend funds with the next seal cycle, then changed to yearly 8/7/15 ad well as cost reduced per contractor/client input to $2,5/year $1, was expended for crack fill $16,2 was expended for crack fill /15/215 12fsv :to.to Version 8/7/215 1:57:25 AM Browning Reserve Group

23 Component Listing Included Components 1 - Paving 3 - Asphalt: Petromat Overlay Useful Life 279,567 Sq. Ft. Streets Quantity 279,567 Unit of Measure Square Feet Summary 2 Cost /SqFt $1.75 % Included Remaining Life 1.% Total Cost/Study $489,242 Replacement Year 22 Future Cost $553,533 This is to apply an overlay on top of the existing asphalt surface along with a minimum 1-1/2" of new hot asphalt. Generally this includes edge grinding and utility box extensions. As overlay is approaching, should the association contract the services of a qualified paving professional to develop a paving plan, that plan can then be incorporated into the reserve study. It is possible this work may be able to be phased over two sealing cycles. A major consideration is whether the paved surfaces are a good candidate for overlay (approximately $2. sf) versus the more expensive alternative of removal and replacement (approximately $4.5 sf). Several determining factors are the condition of the paving to be overlayed, adequate space for heavy equipment and maintaining drainage. Although the upper and lower streets differ in condition, this component does not address a possible delay for the upper, better condition streets. This decision should be determined by a paving professional and then reflected in the reserve study Overlay cost increased from $1.6 to $1.75 per client 7/1/ Placed in service /15/215 12fsv :to.to Version 8/7/215 1:57:25 AM Browning Reserve Group

24 Component Listing Included Components 2 - Concrete 2 - Sidewalks, Curbs & Gutters Useful Life 64,889 Sq. Ft. Street Side (1%) Quantity 64,889 Unit of Measure Square Feet Summary 5 Cost /SqFt $16. Qty * $/SqFt $1,38,224 % Included Remaining Life 1.% Total Cost/Study $1,382 Replacement Year 216 Future Cost $1,642 This is to repair, replace or grind concrete sidewalks, curbs and gutters to remove abrupt elevation changes and maintain functionality. The concrete useful life exceeds the scope of this study, so this component provides for repair only $1,989 was expended for entry island curb repairs Stamped Useful Life 3,691 Sq. Ft. Streets Quantity 3,691 Unit of Measure Square Feet Summary 4 Cost /SqFt $15. % Included Remaining Life 1.% Total Cost/Study $55,365 Replacement Year 221 Future Cost $64,26 This is to replace the "Bomanite" stamped concrete. Rehab of the concrete should be considered to coincide with paving overlay In 215, the stamped concrete is in fair to poor condition exhibiting cracking, areas of mismatched repairs and lack of color Cost decreased from $2 to $15 per square foot per client 7/1/ The picture shows a repair completed with asphalt in lieu of a stamped concrete patch /15/215 12fsv :to.to Version 8/7/215 1:57:25 AM Browning Reserve Group

25 Component Listing Included Components 3 - Painting: Exterior 41 - Wrought Iron Gates Useful Life 46 Lin. Ft. Community Entrance Gate 1 Quantity 46 Unit of Measure Linear Feet Summary 4 Cost /l.f. $15. % Included Remaining Life 1.% Total Cost/Study $69 Replacement Year 223 Future Cost $841 This is to prepare, power wash, sand, scrape, spot prime and paint the wrought iron gates. This component assumes that a lighter gate system will be installed this fiscal year delaying the first painting of the new gates for a minimum of 4 years after installation. In 215, the gates were not operational at the time of the site review. 2-3' x 23' gates Gate Equipment 1 - Elite Swing Gate Operators Useful Life 2 Community Entrance Gate 1 Quantity 2 Unit of Measure Items Summary 8 Cost /Itm $3,6 % Included Remaining Life 1.% Total Cost/Study $7,2 Replacement Year 216 Future Cost $7,38 This is to replace the Elite gate control operators dated 23 and 26 with HySecurity operators Remaining life to 216 from 215 per client 7/1/ Refer to the Tholl Fence proposal dated 4/15/215 for information. The cost indicated is not based on the proposal as no cost breakdown is provided. New equipment will be verified at the next site review or per client provided documentation Elite Swing Gate Operators Useful Life 4 Community Entrance Gate 2 Quantity 4 Unit of Measure Items Summary 8 Cost /Itm $3,6 % Included This is to replace the Viking gate control operators all dated 28. Remaining Life 1.% Total Cost/Study $14,4 Replacement Year 217 Future Cost $15, /15/215 12fsv :to.to Version 8/7/215 1:57:25 AM Browning Reserve Group 215 2

26 Component Listing Included Components 11 - Gate Equipment 6 - DoorKing Telephone Entry System Useful Life Community Entrance Gate 1 Quantity 1 Unit of Measure Items Summary 1 Cost /Itm $3,8 % Included Remaining Life 1.% Total Cost/Study $3,8 Replacement Year 216 Future Cost $3,895 This is to replace the DKS telephone access system with a Dorking model Remaining life from 215 to 216 per client 7/1/ Refer to the Tholl Fence proposal dated 4/15/215 for information. The cost indicated is not based on the proposal as no cost breakdown is provided. New equipment will be verified at the next site review or per client provided documentation DoorKing Telephone Entry System Useful Life Community Entrance Gate 2 Quantity 1 Unit of Measure Items Summary This is to replace the DKS telephone access system. 1 Cost /Itm $3,8 % Included Remaining Life 1.% Total Cost/Study $3,8 Replacement Year 217 Future Cost $3, /15/215 12fsv :to.to Version 8/7/215 1:57:25 AM Browning Reserve Group

27 Component Listing Included Components 11 - Gate Equipment Emergency Vehicle Access Device Useful Life Community Entrance Gate1- Click 2 Enter Quantity 1 Unit of Measure Items Summary 1 Cost /Itm $2, % Included This is to replace the emergency vehicle access device. Remaining Life 1.% Total Cost/Study $2, Replacement Year 221 Future Cost $2, Remaining life from 215 to 221 and cost increased from $1, to 2, per client 7/1/ Refer to the Tholl Fence proposal dated 4/15/215 for information. The cost indicated is not based on the proposal as no cost breakdown is provided. New equipment will be verified at the next site review or per client provided documentation Loops, Misc. Wiring Harness Useful Life Community Entrance Gate 1 Quantity 1 Unit of Measure Lump Sum Summary 8 Cost /LS $2,8 % Included Remaining Life 1.% Total Cost/Study $2,8 Replacement Year 216 Future Cost $2,87 This is to have funds for replacing the underground sensor loops with a new loop and vehicle detection system Refer to the Tholl Fence proposal dated 4/15/215 for information. The cost indicated is not based on the proposal as no cost breakdown is provided. New equipment will be verified at the next site review or per client provided accepted proposals /15/215 12fsv :to.to Version 8/7/215 1:57:25 AM Browning Reserve Group

28 Component Listing Included Components 11 - Gate Equipment 84 - Loops, Misc. Wiring Harness Useful Life 7 - Community Entrance Gate 2 Quantity 7 Unit of Measure Items Summary 8 Cost /Itm $4 % Included Remaining Life 1.% Total Cost/Study $2,8 Replacement Year 217 Future Cost $2,942 This is for replacing the underground sensor loops with a new loop and vehicle detection system Miscellaneous On-going Repairs Useful Life 2 Community Entrance Gate Systems 1 & 2 Quantity 2 Unit of Measure Lump Sum Summary 4 Cost /LS $2, % Included This is for ongoing miscellaneous vehicle gate equipment repairs. In 215, the magnetic catches were not closing properly Cost increased from $1,5 to $2, per client 7/1/ $85 was expended for repairs 213- $1,242 was expended for repairs $2,712 was expended for unspecified work. Remaining Life 1.% Total Cost/Study $4, Replacement Year 216 Future Cost $4, /15/215 12fsv :to.to Version 8/7/215 1:57:25 AM Browning Reserve Group

29 Component Listing Included Components 11 - Gate Equipment 9 - New Gate Installation Useful Life Community Entrance Gate 1 Quantity 1 Unit of Measure Lump Sum Summary This is to install new, lighter gates. 4 Cost /LS $15, % Included Remaining Life 1.% Total Cost/Study $15, Replacement Year 218 Future Cost $16, Although a priority, client has not confirmed replacement of the gates as of the date of the site observation. Final cost has not been clarified and will be dependent upon design, configuration and scope of work. Client input will further define this component Lakes / Ponds 99 - Miscellaneous Useful Life Liner & Pond- Annual Maintenance Quantity 1 Unit of Measure Lump Sum Summary This is for annual maintenance of Caughlin Pond. 1 Cost /LS $7,664 % Included Remaining Life 1.% Total Cost/Study $7,664 Replacement Year 216 Future Cost $7, $7,664 anticipated expenditure. Added as a component of the reserve study 7/1/ /15/215 12fsv :to.to Version 8/7/215 1:57:25 AM Browning Reserve Group

30 Component Listing Included Components 2 - Lighting 2 - Street Lights Useful Life 22 Streets Quantity 22 Unit of Measure Items Summary 4 Cost /Itm $1,5 % Included 1.% Remaining Life 12 Treatment [se:1] Total Cost/Study $33, Replacement Year 227 Future Cost $49,722 This is to replace the street lights. Since the core light standard and fixture useful life exceeds the scope of this study, this component is for partial replacement only Deleted per client 7/1/ Bollard Lights Useful Life Bitter Creek Court Quantity 1 Unit of Measure Items Summary 22 Cost /Itm $9 % Included Remaining Life 18 1.% Total Cost/Study $9 Replacement Year 233 Future Cost $1,44 This is to replace the bollard light reusing the existing wiring and conduit /15/215 12fsv :to.to Version 8/7/215 1:57:25 AM Browning Reserve Group

31 Component Listing Included Components 2 - Lighting 3 - Common Area Useful Life 4 Community Entrance Gate 1 Quantity 4 Unit of Measure Items Summary This is to replace the landscape lighting. 2 Cost /Itm $25 % Included Remaining Life 1.% Total Cost/Study $1, Replacement Year 22 Future Cost $1, Common Area Useful Life 3 Community Entrance Gate 2 Quantity 3 Unit of Measure Items Summary This is to replace the landscape lighting. 2 Cost /Itm $25 % Included Remaining Life 1.% Total Cost/Study $75 Replacement Year 22 Future Cost $ Signage Monument 2 Caughlin Pkwy & Caughlin Creek Rd- Gates 1 &2 Summary Useful Life 2 Quantity 2 Unit of Measure Items Cost /Itm $2, % Included Remaining Life 1.% Total Cost/Study $4, Replacement Year 218 Future Cost $4,38 3 This is to replace the 4' x 1' monument signs /15/215 12fsv :to.to Version 8/7/215 1:57:25 AM Browning Reserve Group

32 Component Listing Included Components 31 - Reserve Study 12-5 Year Update with Site Visit Useful Life Reserve Study Quantity 1 Unit of Measure Lump Sum Summary 5 Cost /LS $1,6 % Included Remaining Life 1.% Total Cost/Study $1,6 Replacement Year 215 Future Cost $1,6 This is to have a professional reserve study prepared for the association as required by NRS. This is for the 5 year complete reserve study which includes a visual observation of the accessible reserve components the association is obligated to maintain /15/215 12fsv :to.to Version 8/7/215 1:57:25 AM Browning Reserve Group

33 Section VII Caughlin Creek HOA Component Tabular Listing Included Components Component Current Replacement Cost Useful Life Remaining Life Quantity Cost/ U of M Treatment Location 1 - Paving 12 - Asphalt: State Spec. Slurry $71, ,35 $.31/SqFt Streets 2 - Asphalt: Ongoing Repairs $2, $2,5/LS Streets 3 - Asphalt: Petromat Overlay $489, ,567 $1.75/SqFt Streets 2 - Concrete 2 - Sidewalks, Curbs & Gutters $1, ,889 $16./SqFt (1%) Street Side 36 - Stamped $55, ,691 $15./SqFt Streets 3 - Painting: Exterior 41 - Wrought Iron Gates $ $15./l.f. Community Entrance Gate Gate Equipment 1 - Elite Swing Gate Operators $7, $3,6/Itm Community Entrance Gate Elite Swing Gate Operators $14, $3,6/Itm Community Entrance Gate DoorKing Telephone Entry System 64 - DoorKing Telephone Entry System Emergency Vehicle Access Device $3, $3,8/Itm Community Entrance Gate 1 $3, $3,8/Itm Community Entrance Gate 2 $2, $2,/Itm Community Entrance Gate1- Click 2 Enter 8 - Loops, Misc. Wiring Harness $2, $2,8/LS Community Entrance Gate Loops, Misc. Wiring Harness $2, $4/Itm - Community Entrance Gate Miscellaneous On-going Repairs $4, $2,/LS Community Entrance Gate Systems 1 & New Gate Installation $15, $15,/LS Community Entrance Gate Lakes / Ponds 99 - Miscellaneous $7, $7,664/LS Liner & Pond- Annual Maintenance 2 - Lighting 2 - Street Lights $33, $1,5/Itm [se:1] Streets 26 - Bollard Lights $ $9/Itm Bitter Creek Court 3 - Common Area $1, $25/Itm Community Entrance Gate Common Area $ $25/Itm Community Entrance Gate /15/215 12fsv :to.to Version 8/7/215 1:57:25 AM Browning Reserve Group

34 Component Tabular Listing Component Current Replacement Cost Useful Life Remaining Life Quantity Cost/ U of M Treatment Location Included Components 21 - Signage Monument $4, $2,/Itm Caughlin Pkwy & Caughlin Creek Rd- Gates 1 & Reserve Study 12-5 Year Update with Site Visit $1,6 5 1 $1,6/LS Reserve Study /15/215 12fsv :to.to Version 8/7/215 1:57:25 AM Browning Reserve Group

35 Section VII-a Caughlin Creek HOA Expenditures by Year - Next 5 Years Reserve Component Life Useful Current Replacement Cost Forecast Inflated 2.5% Paving 12 - Asphalt: State Spec. Slurry 232,35 Sq. Ft. Streets 5 71, Reserve Study 12-5 Year Update with Site Visit Reserve Study 5 1,6 Total 215: 72, Paving 2 - Asphalt: Ongoing Repairs Streets 2 - Concrete 2 - Sidewalks, Curbs & Gutters 64,889 Sq. Ft. Street Side (1%) 11 - Gate Equipment 1 - Elite Swing Gate Operators 2 Community Entrance Gate DoorKing Telephone Entry System Community Entrance Gate Loops, Misc. Wiring Harness Community Entrance Gate Miscellaneous On-going Repairs 2 Community Entrance Gate Systems 1 & Lakes / Ponds 99 - Miscellaneous Liner & Pond- Annual Maintenance Total 11 - Gate Equipment: 17,8 1 2,5 2, ,382 1, ,2 7,38 1 3,8 3, ,8 2,87 4 4, 4,1 18, ,664 7,856 Total 216: 38,346 39, Paving 2 - Asphalt: Ongoing Repairs Streets 11 - Gate Equipment 11 - Elite Swing Gate Operators 4 Community Entrance Gate DoorKing Telephone Entry System Community Entrance Gate Loops, Misc. Wiring Harness 7 - Community Entrance Gate Lakes / Ponds 99 - Miscellaneous Liner & Pond- Annual Maintenance Total 11 - Gate Equipment: 21, 1 2,5 2, ,4 15, ,8 3, ,8 2,942 22,63 1 7,664 8, /15/215 12fsv :to.to Version 8/7/215 1:57:25 AM Browning Reserve Group 215 3

36 Reserve Component 217 Life Useful Caughlin Creek HOA Expenditures by Year- Next 5 Years Current Replacement Cost Forecast Inflated 2.5% Total 217: 31,164 32, Paving 2 - Asphalt: Ongoing Repairs Streets 11 - Gate Equipment 9 - New Gate Installation Community Entrance Gate Lakes / Ponds 99 - Miscellaneous Liner & Pond- Annual Maintenance 21 - Signage Monument 2 Caughlin Pkwy & Caughlin Creek Rd- Gates 1 &2 1 2,5 2, , 16, ,664 8, , 4,38 Total 218: 29,164 31, Paving 2 - Asphalt: Ongoing Repairs Streets Lakes / Ponds 99 - Miscellaneous Liner & Pond- Annual Maintenance 1 2,5 2,76 1 7,664 8,46 Total 219: 1,164 11, /15/215 12fsv :to.to Version 8/7/215 1:57:25 AM Browning Reserve Group

37 Section X Caughlin Creek HOA Notes to the Auditor This report is intended to assist the auditor while preparing the audit, review or compilation of Caughlin Creek HOA s (the "Association") financial documents. Browning Reserve Group ("BRG") prepared a reserve study for the Association during the 215 fiscal year. This was done to help determine the Association's reserve contribution for the next fiscal year (216) and future fiscal years. In addition, BRG prepared the proper statutory disclosures for distribution to the Association members. This Reserve Study is a Full Study. A Full Study includes an on-site review upon where the following tasks are performed: development of a reserve component inventory; condition assessment based upon on-site visual observation; life and valuation estimates; fund status; and a funding plan. Please note, in order to complete these study tasks, one or more visits were conducted by BRG to Caughlin Creek HOA. For BRG reserve studies, the year in which the study is being conducted, is the first year of the study. For example, this study is being prepared during 215 and is the Association s first year in the study. This enables BRG to use a starting point which ties to the last audited financial statement, December 31, 214. You will notice in Section III, Reserve Fund Balance Forecast, a Beginning Reserve Balance of $57,249 is being used which ties to the last completed audit or review of the Association s financial statements. BRG then re-builds the first year of the study, in this case 215, and estimates an ending reserve fund balance. Again, see Section III and the 215 ending reserve balance estimate of $54,24. Re-building the first year of the study as mentioned above simply means using the 215 adopted budget for the 215 reserve contribution. Finally, the 215 reserve expenses both actual and projected are estimated. We find by using the above method a more accurate reserve study is possible because the beginning reserve fund balance ties directly to the Association s audited financial statement or, in the absence of an audit or review, the year end balance sheet. There is no need to rely on others for determining mid year reserve balances or estimating current year ending reserve balances. This approach forces all involved, to look at the current year s reserve fund activities so a more accurate ending reserve fund balance can be estimated /15/215 12fsv :to.to Version 8/7/215 1:57:25 AM Browning Reserve Group

38 Notes to the Auditor With respect to the reserve component Percent Funded values on the next page(s), here are the calculations: FFB = Year Cost X Year Effective Age / Useful Life % Funded = Year Estimated Ending Reserve Balance / Year FFB Please see Section V - Reserve Fund Balance Forecast. Browning Reserve Group /15/215 12fsv :to.to Version 8/7/215 1:57:25 AM Browning Reserve Group

39 Schedule of Supplementary Information for Auditor Component Method Reserve Component Current Repl. Cost Useful Life Remaining Life 215 Fully Funded Balance 216 Fully Funded Balance 216 Line Item Contribution based on Cash Flow Method 1 - Paving 12 - Asphalt: State Spec. Slurry 232,35 Sq. Ft. Streets 2 - Asphalt: Ongoing Repairs Streets 3 - Asphalt: Petromat Overlay 279,567 Sq. Ft. Streets 2 - Concrete 2 - Sidewalks, Curbs & Gutters 64,889 Sq. Ft. Street Side (1%) 36 - Stamped 3,691 Sq. Ft. Streets 3 - Painting: Exterior 41 - Wrought Iron Gates 46 Lin. Ft. Community Entrance Gate Gate Equipment 1 - Elite Swing Gate Operators 2 Community Entrance Gate Elite Swing Gate Operators 4 Community Entrance Gate DoorKing Telephone Entry System Community Entrance Gate DoorKing Telephone Entry System Community Entrance Gate Emergency Vehicle Access Device Community Entrance Gate1- Click 2 Enter 8 - Loops, Misc. Wiring Harness Community Entrance Gate Loops, Misc. Wiring Harness 7 - Community Entrance Gate Miscellaneous On-going Repairs 2 Community Entrance Gate Systems 1 & New Gate Installation Community Entrance Gate Lakes / Ponds 99 - Miscellaneous Liner & Pond- Annual Maintenance 2 - Lighting 2 - Street Lights 22 Streets[se:1] 2 - Street Lights 22 Streets[se:1] 2 - Street Lights 22 Streets[se:1] 2 - Street Lights 22 Streets[se:1] 2 - Street Lights 22 Streets[se:1] 2 - Street Lights 22 Streets[se:1] 2 - Street Lights 22 Streets[se:1] 2 - Street Lights 22 Streets[se:1] 71, ,118 14,579 2, ,25 2, , ,932 41,179 1, ,36 1,642 55, ,6 49, , ,3 7,38 14, ,8 12,915 3, ,42 3,895 3, ,4 3,56 2, ,25 2, ,45 2,87 2, ,1 2,511 4, 4 1 3, 4,1 15, ,875 14,66 7, ,832 7,856 3, ,31 2,452 3, ,228 2,368 3, ,145 2,283 3, ,63 2,199 3, ,98 2,114 3, ,898 2,3 3, ,815 1,945 3, ,733 1, /15/215 December 31 Version 8/7/215 1:57:25 AM Browning Reserve Group