Reserve Study Analysis

Transcription

1 Reserve Study Analysis February 2016 A Planned Master Association Bakersfield, CA PO Box 652 Clovis, CA Fax

2 T his Reserve Study Analysis does not address the foundations, basic framing or substructures of any common area buildings or other structures within this development. Any comments or suggestions contained in the study concerning these structures are for information purposes only with no additional funding established for structural defects unless otherwise directed. The study omits reserve funding for some common area components if the estimated useful life exceeds the expected life of the development or has a minimal replacement cost. Budgeting maintenance line items within the operating accounts to cover repair costs of these components is advisable. Because of unforeseen reasons, common area components may require maintenance or replacement before reaching the estimated remaining lives stated in this study. Furthermore, this firm claims no responsibility for inaccurate reserve fund amounts or information supplied by the association s board of directors or their acting agents. Walla Services supplied this Reserve Study Analysis under contract to the association's board of directors and/or their acting agents to use for reserve fund financial planning of this association. Reproduction of this report in any form is prohibited except for the client s right to reproduce and distribute copies of this entire study or any part thereof as required by state laws and/or this association's governing documents. Copyright 2016, Walla Services All Rights Reserved 02/15/2016 2

3 Table of Contents State Law Compliance and Reserve Studies Davis-Stirling Common Interest Development Act Annual Budget Reports Reserve Account Requirements Requirements and Limitations of Assessments Reserve Account Reviews Use of Reserve Funds The Importance of Reserve Studies The Reserve Study Procedure Reserve Funding Reserve Study Updates Development Introduction Master Development Location / Description Vicinity Map Master Development Facilities Maintenance Responsibilities Master Association Members / Funding Property Manager Area Tract Map Reserve Study Recommendations Recommended Reserve Funding Level Year-End Position (based on fund liability) Reserve Fund Parameters Year-End Reserve Position (based on total replacement costs) Executive Summary Reserve Funded Position Reserve Study Updates Financial Analysis of Common Area Components Component Inventory/Costs Current Financial Position/Recommended Fund Allocations Threshold Funding Cash Flow Recommended Funding Cash Flow Expenditures in Future Dollars Evaluation of Common Area Components Recommended Maintenance Notes Homeowner Assessment and Reserve Fund Disclosure Summary /15/2016 3

4 State Law Compliance and Reserve Studies Davis-Stirling Common Interest Development Act The Davis-Stirling Common Interest Development Act mandates the board s responsibilities, requirements and duties of managing a homeowners association. Various civil codes within the Act stipulate the rules regarding the preparation and distribution of Annual Budget Reports along with homeowner disclosures of association reserve requirements. Divided into eleven Chapters, the Davis-Stirling Common Interest Development Act of the California Civil Code begins with Section 4000 and ends with Section The Act mandates minimum state requirements regarding the conception, establishment and governance of common interest developments. Listed below are the Civil Code Sections that pertain to an association s maintenance responsibilities, annual report requirements, accounting practices, the use of reserve funds and reserve planning. Chapter 5, Article 3 (Maintenance), 4775 to 4790 Chapter 6, Article 7 (Annual Reports), 5300 to 5320 Chapter 7, Article 1 (Accounting), 5500 Chapter 7, Article 2 (Use of Reserve Funds), 5510 to 5520 Chapter 7, Article 3 (Reserve Planning), 5550 to 5580 Most of the Sections listed above include language such as unless otherwise provided in the declaration, notwithstanding a contrary provision in the governing documents or unless the governing documents impose more stringent standards. This language is somewhat straightforward but overall, it simply means that if an association s governing documents indicate tougher standards than the Civil Code in question, the governing documents would be the overriding rule. Annual Budget Reports Notwithstanding a contrary provision in the association s governing documents, Section 5300(a) mandates the distribution of the Annual Budget Report to all members. Distribution of this report shall occur 30 to 90 days before the end of the association s fiscal year. Section 5300(b) stipulates that unless the governing documents impose more stringent standards, the Annual Budget Report shall include all of the following financial information: A pro forma operating budget showing the estimated revenue and expenses on an accrual basis. A summary of the association s reserves, prepared pursuant to Section A summary of the reserve funding plan adopted by the board, as specified in paragraph (5) of subdivision (b) of Section 5550 and shall also include notice that the full reserve study plan is available upon request to any member. A statement as to whether the board has determined to defer or not undertake repairs or replacement of any major component with a remaining life of 30 years or less including the justification of the deferral. A statement as to whether the board, consistent with the reserve funding plan adopted pursuant to Section 5560, has determined or anticipated that the levy of one or more special assessments will be required to repair, replace or restore any major component or to provide adequate reserves therefore, and if required, the statement shall include the special assessment(s) estimated amount(s), commencement date(s) and duration of the assessment(s). A statement as to the mechanism or mechanisms by which the board will fund reserves to repair or replace major components, including assessments, borrowing, use of other assets, deferral of selected replacements or repairs or alternative mechanisms. A general statement addressing the procedures used for the calculation and establishment of those reserves to defray the future repair, replacement or additions to those major components that the association is obligated to maintain. The Assessment and Reserve Funding Disclosure Summary form, prepared pursuant to Section Reserve Account Requirements Civil Code Section 5550 establishes the minimum requirements of reserve studies and mandates the board of directors to have a study of the association s reserve account requirements conducted at least once every 3 years. Information contained in the study must be from a reasonably, competent and diligent visual inspection of all accessible major components. In addition, the board shall annually review this study or cause it to be reviewed to consider and implement any necessary changes and adjustments. Section 5550(b) of the Civil Code establishes the minimum required information contained in the study as follows: Identification of the major components the association is obligated to repair, replace, restore or maintain that have a remaining useful life of less than 30 years. The probable remaining life of the major components. An estimate of the cost of repair, replacement, restoration or maintenance of the major components. An estimate of the total annual contribution necessary to defray the cost to repair, replace, restore or maintain the major components during and at the end of their useful life, after subtracting total reserve funds as of the date of the study. A reserve funding plan that indicates how the association plans to fund the contributions to meet the association s obligation for the repair and replacement of all major components with an expected remaining life of 30 years or less, not including those components the board has determined will not be replaced or repaired. 02/15/2016 1

5 State Law Compliance and Reserve Studies (cont.) Requirements and Limitations of Assessments Civil Code Section 5600 establishes the association s right to levy regular and special assessments to the homeowners in adequate amounts to perform its obligations under the governing documents and the Davis-Stirling Common Interest Development Act. This section also states that an association cannot impose or collect an assessment that exceeds the amount necessary to defray operating costs and required reserve funding. Section 5605 addresses certain compliances and limitations an association must follow in order to increase and/or impose regular and special assessments. Section 5605(a) indicates that annual increases of regular assessments cannot be imposed unless the board has complied with various paragraphs of Section 5300 (b) (refer to Annual Budget Reports on the previous page). Section 5605(b) states, notwithstanding more restrictive limitations placed on the board by the governing documents, the board may not impose a regular assessment that is more than 20 percent (20%) greater than the regular assessment for the association s preceding fiscal year or impose special assessments which in the aggregate exceed 5 percent (5%) of the budgeted gross expenses of the association for that fiscal year without the approval of a majority of a quorum of members, pursuant to Section 4070, at a member meeting or election. This section establishes a quorum of members to mean more than 50 percent of the members. However, pursuant to Section 5610, necessary assessment increases to cover costs of extraordinary expenses is not limited under Section The following are extraordinary expenses as outlined under Section 5610: An expense required by an order of a court. An expense necessary to repair or maintain the common interest development or any part of it for which the association is responsible where a threat to personal safety on the property is discovered. An expense necessary to repair or maintain the common interest development or any part of it for which the association is responsible that could not have been reasonably foreseen by the board in preparing and distributing the Annual Budget Report under Section Reserve Account Reviews Section 5500 indicates that unless the governing documents impose more stringent standards, the board of directors shall do the following on a quarterly basis: Review a current reconciliation of the association s reserve accounts. Review the current year s actual reserve revenues and expenses compared to the current year s budget. Use of Reserve Funds Civil Code Sections 5510 through 5520 establishes certain standards concerning the board of directors powers and duties in regards to the use of an association s reserve funds. Section 5510(b) states the board shall not expend designated reserve funds for any purpose other than the repair, restoration, replacement or maintenance of major components the association is obligated to maintain and for which the reserve fund was established. However, Section 5515 does give the board authorization to temporary transfer funds from the reserve fund to the association s general operating fund to meet short-term cash flow requirements if the board has provided notice of the intent to consider the transfer in a board meeting. The notice shall include the reasons of the transfer along with some of the options for repayment including if a special assessment may be required. The board shall cause the repayment of transferred reserve funds within one year of the initial transfer. However, the board may temporarily delay the restoration if it is in the best interest of the common interest development. The Importance of Reserve Studies There are certain important basics to remember when establishing annual pro forma operating budgets for common interest developments (CID). One of the annual budget s essential basics is the development s reserve account requirements. The board of directors has a fiduciary responsibility of maintaining a development s major components and amenities in good condition. This responsibility also includes establishing properly funded reserve accounts to supply adequate funding of major component replacement or restoration costs when required. All of these factors are very significant regarding the overall value of common interest developments. This everchanging situation has a definite impact on the marketability and resale value of individual homes. A comprehensive and well thought-out Reserve Study provides a current estimate of the useful life, remaining life and restoration or replacement cost of the development s major components along with on-site inspection evaluations and maintenance recommendations. The study should indicate to the board and homeowners an accurate and complete representation of the association s financial health. Prospective homebuyers, insurance companies and lending institutions are increasingly aware as to the importance of professionally prepared Reserve Studies. In addition, they recognize the need for long-term reserve funding instead of relying on special assessments. Good financial management policies are apparent by acquiring a professionally prepared Reserve Study and implementing its long-term funding plan. This study establishes a financial blueprint the board of directors can use to fund the association s reserve accounts adequately and/or reach a theoretically fully funded financial position. However, the board has the final decision regarding the overall funding levels of the association s reserves. The savings plan established in this study will usually limit special assessments when dealing with predictable major reserve expenditures. 02/15/2016 2

6 State Law Compliance and Reserve Studies (cont.) The Reserve Study Procedure To determine the scope and extent of association and homeowner maintenance obligations, the distinction between common areas and separate interests becomes critically important. The term common area refers to the entire common interest development except the separately owned interests. The statutory definition of a homeowner s separate interest varies depending on the type of common interest development involved. This association s Declaration of Covenants, Conditions and Restrictions (CC&Rs) was instrumental in identifying the major components or amenities this association is obligated to maintain. The next step in the process was to conduct an on-site quantity survey with all measurements taken in the field followed by a physical inspection of each major component. Component inspections are valuable to establish estimated remaining lives, current component conditions and to provide any recommendations concerning a component s longevity or appearance. This study also includes any recommended and/or preventive maintenance comments. Depending on the maintenance obligations established in the association s governing documents, some major components not located in the common areas but located on residential lots or units may also be the association s responsibility. Therefore, these major components would also be included in the study. After compiling this information, this study uses a modified straight-line calculation method to establish a current reserve account financial position. This calculation method multiplies the number of years each component has been in service by its current replacement cost divided by the estimated useful life. Years in Service Current Replacement Cost Estimated Useful Life = Component Funds Needed Adjustments to these component calculations then use the following long-term assumptions: Interest earnings of present and future fund balances Estimated remaining life of components Estimated future replacement costs of components The Saylor Construction Cost Estimating System, available contractor bids or actual costs of any recently completed projects were the main sources used to establish estimated current replacement costs for this study. This study projects estimated reserve fund cash flows not only for threshold funding but also more importantly, for the study s recommended funding plan. Both cash flow projections are over a 30-year period using estimated replacement or restoration costs in future dollars. The funding plan established in this study does not deduct any taxes that may be due on interest earnings. Historically, it appears that most associations pay their taxes from the operating accounts and not the reserve accounts. Reserve Funding The ideal funding situation is to deposit a fixed amount monthly, quarterly or annually into a separate high yield and federally insured account without commingling these funds with the general operating accounts. The process in determining proper funding levels can be difficult and complex depending on the development s size and the amount of major components involved. Reaching this goal takes careful planning. Analyzing the major components the association is obligated to maintain on a continuing basis and using realistic estimated replacement costs are essential to this goal. Most major components have different useful lives. For example, paint on the surface of a building s exterior has a shorter useful life as compared to a composition shingle roof. This requires a definite amount of funds to be available for the repair or replacement of each major component at different periods. In addition, because some components require replacement or restoration on a repetitive cycle basis, the equation used to determine proper long-term funding must include a constant savings plan for those components. Additional funding to help eliminate or reduce the reserve account s present deficit, if any, is also an important factor in the funding process. One of the reserve account requirement disclosures required by state law must indicate the difference between the total current replacement costs of all components and the actual current cash reserve set aside. This comparison indicates a certain level of percentage funded in the reserve fund but it is not very practical for long-term reserve funding. It is only an indication of how the association s current reserve cash reserves compare to the total replacement and/or restoration costs of all major components. History indicates it is unlikely that most associations will achieve a fully funded position of having actual cash set aside that equals the total current replacement cost of all components. This is because not all major components need repairs or replacement at the same time. The concept of funding a major component s replacement cost over the life of that component is the more realistic approach. Therefore, this reserve study also indicates this association s percentage funded position of the reserves by comparing the total current liability (wear-out period or elapsed-life) of all components to the actual cash set aside as the true financial benchmark. Both the recommended and threshold funding plans for this association use this methodology. Nevertheless, this study indicates both percentage funded positions in the Executive Summary section. Reserve Study Updates This study uses estimated current replacement costs along with various assumptions as to interest earnings and inflation rates. Certain conditions such as the weather, any deferred maintenance, substandard materials used during construction or the general workmanship of the development can decrease a component s useful life. Therefore, we recommend the board of directors to review and update this study on an annual basis. 02/15/2016 3

7 Development Introduction Master Development Location/Description This master gated community, known as Rio Bravo Community Association, is located east of Bakersfield, California in Kern County off State Route 178 at Miramonte Drive and Casa Club Drive (main entrance). The master association contains various residential tracts located adjacent to or within proximity of the Rio Bravo Golf Course. The entire master development covers approximately acres that includes (±) acres used for residential developments with the golf course covering (±) acres. Master Association Members/Funding This study involves 490 residential lots (359 annexed lots and 131 non-annexed lots) with a final built-out of approximately 599 lots (does not include tract #6160). The annexed and nonannexed lots along with the owner of the Rio Bravo Golf Course contribute to the master association s reserve fund. Terms outlined in the Golf Course Reciprocal Use and Easement Maintenance Agreement between Rio Bravo Community Association and the owner of Rio Bravo Golf Course (A & E Union, Inc.) establishes contribution percentages of operating and reserve funding between the parties as follows. Vicinity Map Members Lots Security Gates Common Facilities & Reserves Casa Club Homeowners Association (other) 30 Estates of Rio Bravo 1 Fuller Apartments (inactive) 1 The Manors at Rio Bravo (DR Horton) 37 Highpointe Rio Bravo 224, LP 139 Rio Vista Community Association 44 80% 70% Guardhouse (Main Entrance) Rio Vista Estates Community Association 28 DR Horton (RVE Phase 3 Basano) 22 Montagna Homeowners Association 57 Non-Annexed HOA % 0% A & E Union % 30% Master Development Facilities This development s common area components or amenities include, but not necessarily limited to, a 24-hour manned guardhouse located at the Casa Club Drive entrance, vehicle gate barriers, vehicle transponder system, surveillance system, Casa Club Drive, various signage, metal tubular fences and stucco pillars at main entrance, curbs, gutters, sidewalks, streetlights and landscaping. Property Manager Mario Valenzuela, Authorized Agent Casa Club Drive Bakersfield, CA Phone: (661) mario@rbcahoa.org Maintenance Responsibilities This master association is responsible for the repair, maintenance and replacement of all common area components as listed above. Any development located within the master association maintains their own common area components such as vehicle gates, streets, streetlights or any other common area element at their sole expense. 02/15/2016 4

8 Area Tract Map 02/15/2016 5

9 R e s e r v e S t u d y R e c o m m e n d a t i o n s 2015 Year-End Reserve Fund Position Total Reserve Fund Liability Remaining Expenditures This Year 2016 Recommended Reserve Funding Level 79, Total Annual Allotment 25, Total Quarterly Allotment 6, Remaining Reserve Fund Allocations 32, Quarterly Allotment (359 Annexed 9.70/lot) 3, Reserve Fund Ending Balance Ideal Reserve Fund Balance (100% Funded) Total Reserve Fund (Deficiency)/Overage Per Annexed Lot (Deficiency)/Overage Per Non-Annexed Lot (Deficiency)/Overage Total Fund Liability Funded 58, Quarterly Allotment (131 Non-Annexed 7.49/lot) , Quarterly Allotment (A & E Union) 1, (21,412.00) Decrease Compared to Current Funding Level % (32.57) Annual Funding Increase (thereafter) 5.00% (25.17) Projected Special Assessments % Projected Year-End Liability Funded 77.55% Reserve Study Parameters On-Site Inspection November 2015 Fiscal Year-Ending (*) December 31, 2015 Number of Annexed Lots (reserve share - 78% of 70%) 359 Number of Non-Annexed Lots (reserve share - 22% of 70%) 131 A & E Union (reserve share - 30% of 100%) N/A Reserve Fund Balance as of June 29, 2015 (*) 25, Average Annual Rate of Return (*) 0.75% Components' Current Total Replacement Cost 405, Components' Future Total Replacement Cost 709, Annual Construction Inflation Index 3.00% Annual Fund Allotment (*) 32, Total Quarterly Fund Allotment 8, Quarterly Allotment (359 annexed lots) 4, Quarterly Allotment (131 non-annexed lots) 1, Quarterly Allotment (A & E Union) 2, Remaining Reserve Fund Allocations (*) 32, Remaining Interest Earnings Approved Special Assessments (*) 0.00 Remaining Major Component Expenditures 0.00 (*) Source: Mario Valenzuela - Authorized Agent Year-End Fund Position (based on total replacement costs) Total Reserve Fund (Deficiency)/Overage Per Ownership Interest (Deficiency)/Overage Total Replacement Costs Funded Executive Summary (347,034.00) N/A 14.44% Total reserve funds or actual cash available on June 29, 2015, was $25, with a projected year-end fund balance of $58, This includes any remaining reserve fund allotments and interest earnings along with the deduction of any planned or recommended remaining expenditures this year. Comparing the reserve fund liability based on the wear-out period of all components to estimated year-end available cash suggests a percentage funded position of 73.23%. To be 100% funded, this association would need an ideal reserve fund balance of $79, The estimated current replacement costs of all components listed in this study total $405, with future replacement costs estimated at $709, Future replacement costs use an assumed annual construction inflation index of 3.00%. Recommendations are to decrease the 2015, quarterly reserve funding level from $8, to $6, (refer to the recommendations above for annexed lots, non-annexed lots and A & E Union allotment amounts). This represents a decrease of % under present funding levels with 5.00% increases per fiscal year thereafter until a 100% funded position is achieved. Currently, projections do not forecast any special assessments. Reserve Funded Position If an association's reserve accounts indicate a liability funded position of 65% or higher, it normally indicates financial stability. However, associations with a reserve fund deficiency does not necessarily indicate a marginal or poor financial condition; unless the deficiency is out of proportion as compared to the development's age. Nevertheless, failure to adopt a long-term savings plan to adequately fund reserve accounts may have a negative impact on the development. Therefore, if funding levels appear not adequate, the board of directors should consider augmenting the reserve accounts by using increased regular allotments and/or special assessments when establishing annual budgets. Reserve Study Updates Recommendations are to review and update this study annually with a new on-site study every three years. 02/15/2016 6

10 Financial Analysis of Common Area Components Component Inventory / Costs The itemization in this section lists this association s major components, the year installed or fully restored, estimated useful and remaining lives, estimated replacement year, component condition, funding level, estimated quantities, estimated unit costs and estimated current and future costs. Cash Position / Recommended Funding This analysis again lists the association s major components and contains two sections. The first section Current Financial Position lists each component s current replacement cost, current liability based on years in service, the percentage of this liability funded, amount of funds allocated to each component from existing reserve funds and the deficit or overage of each component account. The second section Recommended Fund Allocations establishes the recommended monthly and annual reserve fund allotments for each major component along with the percentages of those reserve fund allotments. Various assumptions and parameters helped establish these recommended allocations. Threshold Funding Cash Flow The projections listed on this page indicate a reserve cash flow funding method that meets the association s minimum reserve requirements over a 30-year period. However, this funding plan does not attempt to achieve a 100% funded position of the reserve fund s liability. It only funds each year s reserve expenditure requirements without allowing the reserve fund s liability funded position to drop below 15%. The plan incorporates annual allotments, any special assessments, interest earnings, annual component expenditures, estimated ending and ideal ending balances along with the percentage of liability funded. The cash flow chart graphs the difference between the ideal and threshold funding ending balances. Because of possible inadequately funded reserves that may require deferred maintenance and/or special assessments, threshold funding is not recommended as a longterm funding plan. Recommended Funding Cash Flow These projections indicate the estimated reserve fund cash flow using the study s recommended funding plan over a 30-year period. This funding plan will eventually achieve a 100% funded position of the reserve fund s liability and maintain this funded position for the remaining period this study covers. The analysis incorporates annual allotments, any special assessments, interest earnings, annual component expenditures, estimated ending and ideal ending balances along with the percentage of liability funded. The cash flow chart graphs the difference between the ideal and recommended funding ending balances. Expenditures in Future Dollars The matrix in this section lists estimated component expenditures per year for a 30-year period. The specified future replacement costs use an assumed construction, inflation index rate. 02/15/2016 7

11 Component Inventory / Costs On-Site Inspection: November 2015 Number of Units/Lots: 490 Fiscal Year Ending: Component Description Install Year Est. Useful Life Est. Remain Life Est. Replace Year Condition Funding Level Est. Quantity Est. Unit Cost Current Replace Cost Future Replace Cost PAVED AREAS Street, asphalt replacement (Casa Club Drive) Good 100% 106,884 sf 2.52 sf 269, ,586 Street, asphalt seal coat (2-coat) Good 100% 106,884 sf 0.17 sf 18,500 21,447 Street, asphalt speed bumps Good 100% 5 ea ea 1,800 3,769 Street, curbs/gutters (2') Fair-Good 10% 7,124 lf lf 17,400 23,384 Street, fire lane painting N/A Poor 100% 836 lf 1.55 lf 1,300 1,339 Street, lane striping, single skip line/markings Good 100% 3,337 lf 0.51 lf 1,700 1,971 Sidewalks, north entrance area (134 lf) Fair 50% 535 sf sf 2,800 2,884 Sidewalk, south entrance area (134 lf) Good 50% 535 sf sf 2,800 4,767 SIGNAGE Development Sign, carved wood (25" x 72") Poor 100% 1 ea 1, ea 1,850 1,906 Misc. Street/Guardhouse Signs, metal N/A Good 100% 15 ea ea 1,950 2,398 No Trespassing Sign, carved wood Poor 100% 1 ea ea Speed Limit, metal N/A Good 100% 1 ea ea Speed Limit, carved wood Poor-Fair 100% 4 ea ea 1,400 1,442 Street Name Panels, carved wood Poor-Fair 100% 3 ea ea Street Name Panels, metal N/A Good 100% 4 ea ea STREETLIGHTS Concrete Pole w/lantern head Fair-Good 30% 10 ea 4, ea 13,500 18,143 Concrete Pole w/lantern head Good 30% 1 ea 4, ea 1,350 3,181 Metal Pole, single arm Good 30% 1 ea 4, ea 1,200 2,666 VEHICLE TRANSPONDER SYSTEM Antenna, Sirit Identity Flex Good 100% 1 ea 1, ea 1,200 1,566 Antenna Pole (12') Good 100% 1 ea 1, ea 1,500 2,630 Cabinet, stainless steel, NEMA Type 3R, V.I.T Good 100% 1 ea 2, ea 2,200 3,858 Cabinet Cooling Fans, IEI Not Observed 100% 2 ea ea Interface Panel, dwellinglive 12 channel Good 100% 1 ea ea Networked Controller, dwellinglive V Good 100% 1 ea 1, ea 1,100 1,435 RFID Reader, Sirit ID4000-Flex Good 100% 1 ea 6, ea 6,000 7,829 Multi-Output Power Supply, Altronix AL600ULM Good 100% 1 ea 1, ea 1,300 1,463 Power Supply, TDK-Lambda DSP Good 100% 1 ea ea VEHICLE BARRIER GATES Arms, Magnetic Autocontrol MSB-5N-030 (10') Good 100% 2 ea ea 800 1,044 Gate Entry Opener Relay, dwellinglive Good 100% 1 ea ea Operators, Magnetic Autocontrol MIB Good 100% 2 ea 4, ea 8,000 10,438 Loop Detectors Good 100% 2 ea ea 900 1,174 SURVEILLANCE SYSTEM Cable Modem, Surfboard SBG Good 100% 1 ea ea Camera, dome N/A 100% 3 ea ea 2,400 2,952 Camera, license plate N/A 100% 1 ea 1, ea 1,300 1,599 Computer/Monitors, Dell Vostro Good 100% 1 ls 1, total 1,400 1,485 Pass Printer, Zebra GK420T Good 100% 1 ea ea /15/2016 8

12 Component Inventory / Costs On-Site Inspection: November 2015 Number of Units/Lots: 490 Fiscal Year Ending: Component Description Install Year Est. Useful Life Est. Remain Life Est. Replace Year Condition Funding Level Est. Quantity Est. Unit Cost Current Replace Cost Future Replace Cost FENCES/WALLS Fences, metal tubular (5.5') Good 100% 161 lf lf 10,050 13,506 Stucco Columns (1' x 1' x 7') Good 100% 7 ea ea 1,050 1,636 Painting, metal tubular fence Poor 100% 1,771 sf 0.73 sf 1,300 1,339 Painting, stucco columns Good 100% 7 ea ea GUARDHOUSE Building Repairs N/A 100% 1 ls 1, total 1,500 1,957 Canopy, canvas Fair 100% 1 ea 1, ea 1,250 1,326 Evaporative Cooler, Champion Cooler WC Good 100% 1 ea 1, ea 1,100 1,568 Fixtures/Misc Fair 100% 1 ls 1, total 1,200 1,391 Floors, linoleum tile Poor 100% 189 sf 6.05 sf 1,150 1,185 Lights, exterior, LED Good 100% 4 ea ea 700 1,028 Lights, interior, tract lighting/fluorescent Good 100% 1 ls total Painting, exterior Good 100% 660 sf 2.35 sf 1,600 1,855 Painting, interior Fair-Good 100% 675 sf 2.45 sf 1,700 1,971 Roof, clay tile Fair-Good 100% 225 sf sf 2,250 3,505 LANDSCAPING Irrigation System N/A 100% 1 ls 3, total 3,500 4,704 Landscape Renovations N/A 100% 1 ls 2, total 2,500 2,814 Tree Trim/Remove N/A 100% 1 ls 5, total 5,000 5,796 Totals: 405, ,641 02/15/2016 9

13 Current Financial Position / Recommended Fund Allocations On-Site Inspection: November 2015 Number of Units/Lots: 490 Fiscal Year Ending: Year-End Reserve Fund Position 2016 Recommended Allocations Component Description Current Replace Cost Component Liability Percent of Liability Funds Allocated (Deficit) or Overage Monthly Allotment Annual Allotment Percent of Allotment PAVED AREAS Street, asphalt replacement (Casa Club Drive) 269,350 21, % 15,779 (5,769) 1, , % Street, asphalt seal coat (2-coat) 18, % , % Street, asphalt speed bumps 1, % % Street, curbs/gutters (2') 17,400 13, % 9,910 (3,623) % Street, fire lane painting 1, % 635 (232) % Street, lane striping, single skip line/markings 1, % % Sidewalks, north entrance area (134 lf) 2,800 2, % 1,993 (729) % Sidewalk, south entrance area (134 lf) 2, % 205 (75) % SIGNAGE Development Sign, carved wood (25" x 72") 1,850 1, % 1,317 (482) % Misc. Street/Guardhouse Signs, metal 1,950 1, % 928 (339) % No Trespassing Sign, carved wood % 249 (91) % Speed Limit, metal % 71 (26) % Speed Limit, carved wood 1,400 1, % 997 (364) % Street Name Panels, carved wood % 214 (78) % Street Name Panels, metal % 119 (44) % STREETLIGHTS Concrete Pole w/lantern head 13,500 10, % 7,689 (2,811) % Concrete Pole w/lantern head 1, % 169 (62) % Metal Pole, single arm 1, % 201 (73) % VEHICLE TRANSPONDER SYSTEM Antenna, Sirit Identity Flex , % 88 (32) % Antenna Pole (12') 1, % 264 (96) % Cabinet, stainless steel, NEMA Type 3R, V.I.T. 2, % 387 (141) % Cabinet Cooling Fans, IEI % 314 (115) % Interface Panel, dwellinglive 12 channel % 51 (19) % Networked Controller, dwellinglive V1000 1, % 81 (29) % RFID Reader, Sirit ID4000-Flex 6, % 439 (161) % Multi-Output Power Supply, Altronix AL600ULM 1, % 571 (209) % Power Supply, TDK-Lambda DSP % 88 (32) % VEHICLE BARRIER GATES Arms, Magnetic Autocontrol MSB-5N-030 (10') % 234 (86) % Gate Entry Opener Relay, dwellinglive % 37 (13) % Operators, Magnetic Autocontrol MIB-30 8,000 3, % 2,343 (857) % Loop Detectors % 264 (96) % SURVEILLANCE SYSTEM Cable Modem, Surfboard SBG % 137 (50) % Camera, dome 2, % 220 (80) % Camera, license plate 1, % 119 (44) % Computer/Monitors, Dell Vostro 1,400 1, % 769 (281) % Pass Printer, Zebra GK420T % 206 (75) % 02/15/

14 Current Financial Position / Recommended Fund Allocations On-Site Inspection: November 2015 Number of Units/Lots: 490 Fiscal Year Ending: Year-End Reserve Fund Position 2016 Recommended Allocations Component Description Current Replace Cost Component Liability Percent of Liability Funds Allocated (Deficit) or Overage Monthly Allotment Annual Allotment Percent of Allotment FENCES/WALLS Fences, metal tubular (5.5') 10,050 7, % 5,724 (2,093) % Stucco Columns (1' x 1' x 7') 1, % % Painting, metal tubular fence 1,300 1, % 762 (278) % Painting, stucco columns % % GUARDHOUSE Building Repairs 1, % 110 (40) % Canopy, canvas 1,250 1, % 808 (295) % Evaporative Cooler, Champion Cooler WC37 1, % 161 (59) % Fixtures/Misc. 1,200 1, % 769 (281) % Floors, linoleum tile 1,150 1, % 819 (299) % Lights, exterior, LED % 68 (25) % Lights, interior, tract lighting/fluorescent % 49 (18) % Painting, exterior 1, % 335 (122) % Painting, interior 1, % 356 (130) % Roof, clay tile 2,250 1, % 1,153 (422) % LANDSCAPING Irrigation System 3, % % Landscape Renovations 2, % 366 (134) % Tree Trim/Remove 5, % , % Totals: 405,600 79, % 58,566 (21,412) 2, , % 02/15/

15 Threshold Funding Cash Flow On-Site Inspection: November 2015 Number of Units/Lots: 490 Fiscal Year Ending: Year Annual Allotments Approved Special Assessments Interest Earnings Annual Expenditures Estimated Ending Balance Ideal Ending Balance Liability Funded , ,566 79, % , ,279 67,727 94, % , ,077 86, , % , , , % , , , , % , , , , % , , , , % , ,065 9, , , % , , , , % , ,421 30, , , % , ,428 97, , , % , , , , % , ,182 6, , , % , ,403 4, , , % , ,651 6, , , % , ,901 50, , , % , ,834 4, , , % , , , , % , ,481 7, , , % , ,792 40, , , % , ,877 51, , , % , ,896 4, , , % , ,290 3, , , % , , ,888 19, , % , ,849 52, , % , ,254 54, , % , , , , % , , , , % , ,169 6, , , % , ,600 37, , , % , ,803 72, , , % 700,000 Ideal Ending Balance Threshold Ending Balance 600, , , , , , /15/

16 Recommended Funding Cash Flow On-Site Inspection: November 2015 Number of Units/Lots: 490 Fiscal Year Ending: Year Annual Allotments Projected Special Assessments Interest Earnings Annual Expenditures Estimated Ending Balance Ideal Ending Balance Liability Funded , ,566 79, % , ,279 73,227 94, % , ,077 97, , % , , , % , , , , % , ,131 35, , , % , ,107 1, , , % , ,348 9, , , % , , , , % , ,820 30, , , % , ,889 97, , , % , ,468 1, , , % , ,777 6, , , % , ,045 4, , , % , ,320 6, , , % , ,598 50, , , % , ,559 4, , , % , , , , % , ,244 7, , , % , ,573 40, , , % , ,675 51, , , % , ,704 4, , , % , ,098 3, , , % , , , , , % , , , , % , ,115 59, , , % , ,060 13, , , % , ,357 10, , , % , ,698 6, , , % , ,089 37, , , % , ,268 72, , , % 700,000 Ideal Ending Balance Recommend Funding Ending Balance 600, , , , , , /15/

17 Expenditures in Future Dollars On-Site Inspection: November 2015 Number of Units/Lots: 490 Fiscal Year Ending: Component Description PAVED AREAS Street, asphalt replacement (Casa Club Drive) Street, asphalt seal coat (2-coat) 21,447 24,862 Street, asphalt speed bumps Street, curbs/gutters (2') 23,384 Street, fire lane painting 1,339 1,463 1,599 1,747 Street, lane striping, single skip line/markings 1,971 2,285 Sidewalks, north entrance area (134 lf) 2,884 Sidewalk, south entrance area (134 lf) SIGNAGE Development Sign, carved wood (25" x 72") 1,906 Misc. Street/Guardhouse Signs, metal 2,398 No Trespassing Sign, carved wood 361 Speed Limit, metal 184 Speed Limit, carved wood 1,442 Street Name Panels, carved wood 309 Street Name Panels, metal 307 STREETLIGHTS Concrete Pole w/lantern head 18,143 Concrete Pole w/lantern head Metal Pole, single arm VEHICLE TRANSPONDER SYSTEM Antenna, Sirit Identity Flex ,566 Antenna Pole (12') Cabinet, stainless steel, NEMA Type 3R, V.I.T. Cabinet Cooling Fans, IEI Interface Panel, dwellinglive 12 channel 913 Networked Controller, dwellinglive V1000 1,435 RFID Reader, Sirit ID4000-Flex 7,829 Multi-Output Power Supply, Altronix AL600ULM 1,463 Power Supply, TDK-Lambda DSP VEHICLE BARRIER GATES Arms, Magnetic Autocontrol MSB-5N-030 (10') 1,044 Gate Entry Opener Relay, dwellinglive Operators, Magnetic Autocontrol MIB-30 10,438 Loop Detectors 1,174 SURVEILLANCE SYSTEM Cable Modem, Surfboard SBG Camera, dome 2,952 Camera, license plate 1,599 Computer/Monitors, Dell Vostro 1,485 1,881 02/15/

18 Expenditures in Future Dollars On-Site Inspection: November 2015 Number of Units/Lots: 490 Fiscal Year Ending: Component Description Pass Printer, Zebra GK420T 869 FENCES/WALLS Fences, metal tubular (5.5') 13,506 Stucco Columns (1' x 1' x 7') Painting, metal tubular fence 1,339 1,552 Painting, stucco columns 369 GUARDHOUSE Building Repairs 1,957 Canopy, canvas 1,326 Evaporative Cooler, Champion Cooler WC37 Fixtures/Misc. 1,391 Floors, linoleum tile 1,185 Lights, exterior, LED Lights, interior, tract lighting/fluorescent Painting, exterior 1,855 Painting, interior 1,971 Roof, clay tile LANDSCAPING Irrigation System 4,704 Landscape Renovations 2,814 3,262 Tree Trim/Remove 5,796 6,720 Total Future Replacement Cost 11,279 3,077 5,965 35,300 1,552 9, ,271 97,568 Estimated Available Reserve Funds(1) 58,566 84, , , , , , , , , ,325 (1) Estimated available funds based on recommended funding plan 02/15/

19 Expenditures in Future Dollars Number of Units/Lots: 490 Component Description On-Site Inspection: November 2015 Fiscal Year Ending: PAVED AREAS Street, asphalt replacement (Casa Club Drive) Street, asphalt seal coat (2-coat) Street, asphalt speed bumps Street, curbs/gutters (2') Street, fire lane painting Street, lane striping, single skip line/markings Sidewalks, north entrance area (134 lf) Sidewalk, south entrance area (134 lf) SIGNAGE Development Sign, carved wood (25" x 72") Misc. Street/Guardhouse Signs, metal No Trespassing Sign, carved wood Speed Limit, metal Speed Limit, carved wood Street Name Panels, carved wood Street Name Panels, metal STREETLIGHTS Concrete Pole w/lantern head Concrete Pole w/lantern head Metal Pole, single arm VEHICLE TRANSPONDER SYSTEM Antenna, Sirit Identity Flex 4100 Antenna Pole (12') Cabinet, stainless steel, NEMA Type 3R, V.I.T. Cabinet Cooling Fans, IEI Interface Panel, dwellinglive 12 channel Networked Controller, dwellinglive V1000 RFID Reader, Sirit ID4000-Flex Multi-Output Power Supply, Altronix AL600ULM Power Supply, TDK-Lambda DSP VEHICLE BARRIER GATES 28,822 33,413 1,909 2,086 2,280 2,649 3,070 4,767 2,104 2,630 3, ,227 1,929 10,521 1, Arms, Magnetic Autocontrol MSB-5N-030 (10') Gate Entry Opener Relay, dwellinglive Operators, Magnetic Autocontrol MIB-30 Loop Detectors SURVEILLANCE SYSTEM Cable Modem, Surfboard SBG6580 Camera, dome Camera, license plate Computer/Monitors, Dell Vostro 3,739 2, , /15/

20 Expenditures in Future Dollars Number of Units/Lots: 490 Component Description On-Site Inspection: November 2015 Fiscal Year Ending: Pass Printer, Zebra GK420T FENCES/WALLS Fences, metal tubular (5.5') Stucco Columns (1' x 1' x 7') Painting, metal tubular fence Painting, stucco columns GUARDHOUSE Building Repairs Canopy, canvas Evaporative Cooler, Champion Cooler WC37 Fixtures/Misc. Floors, linoleum tile Lights, exterior, LED Lights, interior, tract lighting/fluorescent Painting, exterior Painting, interior Roof, clay tile LANDSCAPING Irrigation System Landscape Renovations Tree Trim/Remove 1,101 1,395 1,636 1,800 2,086 2, ,630 2,192 1,568 1, ,281 2,806 2,424 2,981 3,505 6,321 3,781 4,384 7,790 9,031 Total Future Replacement Cost Estimated Available Reserve Funds(1) 1,800 6,273 4,773 6,504 50,946 4,172 7,576 40,418 51,835 4, , , , , , , , , , , ,798 (1) Estimated available funds based on recommended funding plan 02/15/

21 Expenditures in Future Dollars Number of Units/Lots: 490 Component Description On-Site Inspection: November 2015 Fiscal Year Ending: PAVED AREAS Street, asphalt replacement (Casa Club Drive) Street, asphalt seal coat (2-coat) Street, asphalt speed bumps Street, curbs/gutters (2') Street, fire lane painting Street, lane striping, single skip line/markings Sidewalks, north entrance area (134 lf) Sidewalk, south entrance area (134 lf) SIGNAGE Development Sign, carved wood (25" x 72") Misc. Street/Guardhouse Signs, metal No Trespassing Sign, carved wood Speed Limit, metal Speed Limit, carved wood Street Name Panels, carved wood Street Name Panels, metal STREETLIGHTS Concrete Pole w/lantern head Concrete Pole w/lantern head Metal Pole, single arm VEHICLE TRANSPONDER SYSTEM Antenna, Sirit Identity Flex 4100 Antenna Pole (12') 531,586 38,735 44,904 3,769 2,491 2,722 2,974 3,250 3,559 4,126 4, ,181 2,666 2,828 Cabinet, stainless steel, NEMA Type 3R, V.I.T. Cabinet Cooling Fans, IEI Interface Panel, dwellinglive 12 channel Networked Controller, dwellinglive V1000 RFID Reader, Sirit ID4000-Flex Multi-Output Power Supply, Altronix AL600ULM Power Supply, TDK-Lambda DSP VEHICLE BARRIER GATES Arms, Magnetic Autocontrol MSB-5N-030 (10') Gate Entry Opener Relay, dwellinglive Operators, Magnetic Autocontrol MIB-30 Loop Detectors SURVEILLANCE SYSTEM Cable Modem, Surfboard SBG6580 Camera, dome Camera, license plate Computer/Monitors, Dell Vostro 958 1,178 1,650 2,592 14,139 2, ,626 1,178 16,262 1, ,737 6,000 2,566 3,250 3,019 02/15/

22 Expenditures in Future Dollars Number of Units/Lots: 490 Component Description On-Site Inspection: November 2015 Fiscal Year Ending: Pass Printer, Zebra GK420T FENCES/WALLS Fences, metal tubular (5.5') Stucco Columns (1' x 1' x 7') Painting, metal tubular fence Painting, stucco columns GUARDHOUSE Building Repairs Canopy, canvas Evaporative Cooler, Champion Cooler WC37 Fixtures/Misc. Floors, linoleum tile Lights, exterior, LED Lights, interior, tract lighting/fluorescent Painting, exterior Painting, interior Roof, clay tile LANDSCAPING Irrigation System Landscape Renovations Tree Trim/Remove 1,767 2,549 2,804 3, ,535 2,443 1,602 1,144 3,451 3,666 8,495 5,082 5,891 10,469 12,136 Total Future Replacement Cost Estimated Available Reserve Funds(1) 3, ,888 27,849 59,254 13,479 10,329 6,406 37,941 72,211 15, , , , , , , , , , , ,549 (1) Estimated available funds based on recommended funding plan 02/15/

23 Evaluation of Common Area Components T he following pages contain information obtained from an on-site visual inspection of accessible major components this association is obligated to maintain. Inspections did not use destructive testing or any other testing procedures to determine a component s condition. A detailed quantity survey was also conducted in order to establish the association s inventory of common area major components along with any other maintenance areas. Inspection of individual components is extremely valuable and is essential to establish estimated useful and remaining lives, current conditions and to provide any recommendations concerning a component s longevity or appearance. 02/15/

24 Paved Areas Casa Club Drive Inspection of this recently replaced master association street revealed no signs of alligator, transverse or general cracking, deterioration, depressions or potholes. Even though inspections did not use destructive testing or core samples, the street appeared well constructed and in good condition. Records indicate removal and replacement of the original asphalt along with the pavers that were located at the entrance (guardhouse) cost approximately $243, in In 2015, the application of a two-coat seal coat along with new lane striping cost $19, The recently applied seal coat and lane striping appeared in good condition. In addition, the installation of five speed bumps at various locations along Casa Club Drive cost $1, Overall, the street s concrete curbs and gutters appeared in fair to good condition with some signs of crack-damaged curbing at the street s landscaped medians. Locations of the two worst areas that may require repairs are at the median s western and eastern sides by the guardhouse. Also noted during inspections, was some cracking at other areas but, it appears repairs are presently not required in those areas. Records indicate the replacement of some sections by the guardhouse along with sidewalk repairs cost $4, in This also included areas at the clubhouse parking area. Recommendations Because painted curbs at fire lane areas appeared in poor condition, recommendations are to paint fire lanes. Repair damaged street median curbing. It was observed during inspections that a section of Anacapa Drive at the end of Casa Club Drive received a two-coat seal coat application in 2015 at a cost of $4, Management indicated this project was intended to give this area a uniform appearance with Casa Club Drive. General Asphalt Maintenance Most premature pavement damage is due to an inadequately designed base, poor base compaction or water migration under the asphalt. Adopting an annual inspection and maintenance program will help ensure maximum life of the pavement. Inspections should identify and inventory problem areas along with developing the proper corrective action. Any required repairs may include structure patching of failing areas and crack sealing. Crack sealing entails filling any major cracks with a slurry seal mixed with a fine aggregate or other suitable crack sealer. If any areas require structural patching, its design and construction should use Full-Depth asphalt concrete to ensure strength equal to or exceeding the surrounding pavement areas. Asphalt Surface Treatments A maintenance program should also include surface treatments with application intervals every three to seven years depending on treatment type and traffic load. Surface treatments will typically fill minor cracks and voids and help prevent top layer deterioration and moisture seepage under pavement areas one of the main causes of asphalt failures. Generally, when asphalt is in fair to good condition applying a seal coat at regular intervals can provide the necessary asphalt protection. Slurry seals are usually for asphalt surfaces with extensive deterioration and wear but void of major cracking or other damage. Listed below are the most common types of asphalt surface treatments. Fog Seal This asphalt surface treatment is a light application of diluted slow-setting emulsion. It is used to rejuvenate old asphalt surfaces, seal small cracks and surface voids and inhibit raveling. In addition, it slows the rate of weathering and oxidation. Service life ranges from 1 to 2 years. However, its use is for structurally sound pavements to improvement surface conditions on pavements showing minor signs of cracking, weathering, segregation or raveling. 02/15/

25 Paved Areas (cont.) Asphalt Emulsion Systems These surface treatments, usually called seal coats, consist of a factory-blended compound of emulsified asphalt binder along with selected mineral and fiber fillers. Usually applied as a two-coat system one coat with sand and one without. Service life is normally from 3 to 5 years. This asphalt treatment fills and improves surface texture, protects pavements from the effects of weather erosion and oxidation and provides a smooth, non-abrasive surface. However, these sealers do not add thickness or structural quality to the asphalt. Slurry Seal A paving technique using closely graded aggregate, asphalt emulsion, water and mineral fillers all carefully calibrated and mixed forming a mortar-like compound. They serve as a positive sealer and provide a durable, non-skid surface. Service life can range from 4 to 8 years. Slurry seals can improve surface friction, slow surface raveling, fill voids and eroded areas and seal small cracks while correcting any surface irregularities. However, use a slurry seal only on stable pavements with a sound base and not on pavements that have structural distress. Slurry seals are different from seal coats and produced according to State of California Department of Transportation Standard Specifications, Section Slurry seals fall into three formula classification types; Type I, Type II and Type III with Type I having the smallest aggregate and Type III with the largest. When properly applied, slurry seals are approximately 3/16 thick. Chip Seals Chip seals can also provide water proofing of a pavement s surface by providing a uniform surface texture with skid resistance, seal minor cracks and prolong the pavement s useful life. Even though chip seals may not provide any structural value or improvement to existing pavement, it may provide different advantages over other surface treatments. Service life normally ranges from 5 to 7 years. Chip seals usually have a useful life ranging from 7 to 10 years depending on traffic and environmental conditions. Chip seals consist of a polymer or non-polymer, modified PMCRS-2h, CRS-2 or CRS-2h grade asphalt emulsion applied at a rate from 0.15 to 0.40 gallons per square yard depending on the chip size used. Chip screening sizes range from 1/4 x No. 10 (Fine) to 1/28 x No. 4 (Coarse) applied at rates from 12 to 30 pounds per square yard. Surfaces are then rolled by pneumatic-tired rollers after the screening application. Asphalt Overlays The preparation for successful asphalt overlays takes careful planning and evaluation of the pavement's present condition. Planning involves a continuous inventory of problem areas that should develop the proper corrective action. Evaluation of pavement areas includes geometric adequacy, surface condition, and structural adequacy that involve current and future uses. Evaluation of geometric adequacy involves reviewing the original construction plans along with field inspections. The evaluation of surface conditions involves a field inspection. Evaluation of the structural adequacy is by studying the surface condition and pavement components or by measuring pavement deflection. Asphalt overlays can consist of one or more courses depending on the desired thickness. If more than one course is applied, the first course is called a "leveling course" to help eliminate irregularities in the existing pavement surface. Overlay caps should never be applied over extensively alligator cracked pavement or any areas that show base and pavement failure. These problem areas will transfer to the new asphalt cap in a very short time. These areas require complete removal and replacement with new asphalt. If the pavement surface and base have not failed but the pavement does show some minimal signs of general cracking, recommendations are to use a petromat overlay. 02/15/

26 Paved Areas (cont.) Northern Sidewalk Southern Sidewalk Sidewalks These sidewalks are located at the main vehicle entrance by the guardhouse. The northern area sidewalk appeared in fair condition with some signs of raised sections (from tree roots) observed at three locations. The southern sidewalk appeared in good condition with no signs of damage. Repairs to this sidewalk were in Recommendations Recommendations are to repair the three raised sections at the northern side sidewalk. General Comments Concrete damage can be a result of ground settlement, damage from tree roots, improper base compaction, improper concrete mixtures and moisture migration under the concrete or simply ground movement. Concrete paved areas are normally "life of the development" components that may not require full replacement funding. Funding levels established in this study represent repairs only. Therefore, the board should review this account annually for any useful life or funding changes. 02/15/

27 Signage Development Sign This wood-carved development sign, located at the main vehicle entrance, appeared in poor condition during inspections. Recommendations Recommendations are to replace this sign. No Trespassing Sign This wood-carved sign, also located at the main vehicle entrance, appeared in poor condition during inspections. Recommendations Recommendations are to replace this sign. Miscellaneous Street / Guardhouse Signs These metal signs are located at the main vehicle entrance and various areas along Casa Club Drive. Overall, they appeared in good condition during inspections. Speed Limit Signs / Street Name Panels The metal speed limit signs and street name panels located along Casa Club Drive appeared in good condition. The remaining wood carved speed limit signs and street name panels appeared in poor to fair condition. Recommendations Recommendations are to replace the remaining wood carved signs and name panels. 02/15/

28 Streetlights Streetlights Without actually observing street light operations, most concrete pole streetlights appeared in fair to good condition. Replacement of the unit located at the intersection of Casa Club Drive and Vista Grande Drive cost $7, in The single arm, metal pole street light installed in 2007 by PG&E and located in proximity of the golf course clubhouse appeared in good condition. Recommendations Recommendations are to clean and paint all lantern style heads within one year. 02/15/

29 Vehicle Transponder System Remote Antenna The Sirit Identity Flex 4100 Antenna is an all-weather dual aperture antenna that uses an ultra high frequency of 902 to 928 MHz for automatic vehicle identification. The antenna is equipped with a red light emitting diode (LED) that illuminates when a vehicle s transponder is within range. The antenna works in conjunction with the RFID Sirit ID4000-Flex Reader and Transponders. This unit replaced the original Identity Flex Antenna. The replacement in 2014 cost $ plus labor. The unit appeared in good condition during inspections. The metal antenna pole, installed in 2009 for $1, plus labor costs, also appeared in good condition. Stainless Steel Cabinet Installed in 2009 for $1, plus labor, this NEMA Type 3R rated heavy-duty enclosure with cooling fans provides weather and vandal resistant protection for the transponder system s interface panel, networked controller, RFID reader and multioutput power supplies. Overall, the cabinet appeared in good condition. The cabinet has a limited ten-year warranty. However, expectations are the cabinet will have a 30-year useful life. Cabinet Cooling Fans The operation of the cabinet s two cooling fans was not observed during inspections. The fans circulate the air in the cabinet to help cool the electronics. Interface Panel/Networked Controller In 2014, upgraded interface panel and networked controller units replaced the original 2009 installed units for approximately $1, plus labor. The HID VertX V1000 Networked Master Controller provides a fully featured hardware/firmware infrastructure for access control, software host systems and connects to the host and other devices on a TCP/IP network. The unit can store a complete access control and configuration database for up to 32 reader interfaces. RFID Reader The Sirit ID4000-Flex Reader used for this installation is a multi-channel, multi-protocol reader and is capable as a standalone reader or can interface with a standard controller as with this installation. The unit appeared to operate properly during inspections. This RFID Reader replaced the originally 2009-installed unit for $5, in 2014 plus labor costs. Multi-Output Power Supply The Altronix AL600ULM model power supply/charger converts an 115VAC/60Hz input into five individually protected Class 2 Rated power limited 12 VDC or 24VDC outputs. These outputs operate in both Fail-Safe and Fail-Secure modes and supply power for a variety of access control hardware devices. Both the Altronix and TDK-Lambda units appeared in good condition. Transponders The Identity Flex Transponder is a small radio frequency device that has a programmed, unique 64-bit identification code. As a transponder-equipped vehicle approaches the read zone, the presence of the reader s radio frequency activates the transponder to return the pre-programmed code to the reader system. This identifies the vehicle and authorizes the automatic opening of the barrier gate. Because the cost of transponders is considered an operating expense, this study does not establish replacement funding in the association s reserves. 02/15/

30 Vehicle Barrier Gates Gate Barrier Arms These barrier arms, mounted on the barrier gate operators, appeared in good condition during inspections. Construction of the Magnetic Autocontrol gate barrier arms are from extruded aluminum alloy and then powder coated. Records indicate the arms cost $ each in 2009 plus labor. Sensor Loops Sensor loops detect a vehicle s presence and work in conjunction with a loop detector to reverse a closing gate if a vehicle is present preventing the gates from closing on vehicles. Overall, the sensor loops appeared to operate properly during inspections and considered in good condition. Records indicate the loop sensors cost $ each in 2009 plus labor. Gate Barrier Operators Both gate barrier operators appeared to operate properly and considered in good condition. The installation of the both gate barrier systems cost $11, in Individually, the operators cost $3, each plus labor. The Magnetic Autocontrol MIB-30 model has the entire drive system mounted in the barrier housing as a single unit. In addition, the operator supplies very short opening and closing cycles. The motor remains under power in the end positions that assist the mechanical locking system. However, during power outages, movement of the arms by hand is possible. A built-in spring mechanism also provides a precise counterbalance for the barrier boom. Gate Entry Opener Relay To improve resident accessibility, a new dwellinglive opener relay was installed in 2014 for $1, It was assumed in good condition. 02/15/

31 Surveillance System Cable Modem The Surfboard cable modem located within the guardhouse appeared to operate properly during inspections and considered in good condition. Computer/Flat Panel Monitor This computer system s main use is for the vehicle transponder system. Most computer components appeared in good condition during inspections. Cameras There are three wall-mounted dome cameras at the guardhouse and one pole-mounted license plate camera. The cameras operating condition was not determined during inspections. Pass Printer This Zebra G-Series desktop printer appeared in good operating condition during inspections. The thermal transfer or direct thermal printer has a print resolution of 203 dpi and can print at speeds of 5 to 6 inches per second. 02/15/

32 Fences/Walls Metal Tubular Fences Structurally, the metal picket fences incorporated within the stucco pillars appeared in good condition. However, painted surfaces appeared in poor condition with signs of faded paint film and some surface rust. Records indicate that extensive repairs to bottom rails and fence painting in 2013 cost $2, Recommendations Recommendations are to re-paint the fence within one year. General Painting Comments Because metal surfaces usually develop rust problems, removing surface rust with a wire brush or simply sanding affected areas is important. Follow this procedure by applying a rust preventive sealer/primer over problem areas. This will ensure a good quality and durable finish coat. Recommendations include painting fences in 4 to 5 year cycles. Stucco Pillars The stucco pillars located at the main entrance area appeared in good condition with no signs of cracking, deterioration or surface staining. Records indicate pillar repairs and painting cost $1, in General Painting Comments Painting or re-dashing stucco surfaces are usually for "appearance" reasons - to cover faded or stained surfaces or simply to change the color. Dashing will hide existing stucco cracks and deterioration repairs better than paint. However, neither process guarantees that cracks will not reappear. 02/15/

33 Guardhouse Building Repairs/Painting Overall, the building s stucco walls, windows, doors and roof rafters appeared in good condition. Records indicate repairs to the doors, locks, rafters, etc. cost $1, in Inspections also revealed the exterior paint is in good condition with interior walls noted in fair to good condition. Records also indicate that rafter repairs along with exterior painting cost $2, in Also in 2013, interior painting of the guardhouse cost $1, Canvas Canopy Overall, the canopy mounted over the western window appeared in fair condition with replacement expected in approximately 1 to 3 years. Evaporative Cooler The Champion evaporative cooler appeared to operate properly during inspections and considered in good condition. Fixtures/Miscellaneous Components Most guardhouse fixtures and miscellaneous components appeared in fair condition. Replacement of interior fixtures is usually on an "as needed" basis. Linoleum Floors The guardhouse floors appeared in poor condition with extensive signs of wear and damage. Recommendations Recommendations are to replace the linoleum flooring within one year. Lighting Without actually observing light fixture operations, most exterior lighting units appeared in good condition. The interior light fixtures also appeared in good condition. Records indicate some upgrades to exterior lighting along with repairs cost $ in Clay Tile Roof Overall, the concrete tile roofs appeared in fair to good condition with no slipped, cracked or damaged tiles observed. 02/15/

34 Landscaping Irrigation System The overall operational condition of the irrigation system at the vehicle entrance area was not determined during inspections. However, because of recent repairs and component replacements, it was assumed in good condition. Records indicate sprinkler and line repairs in 2014 cost $4, In 2015, sprinkler and lines repairs cost $3, Irrigation controllers usually have a normal useful life ranging from 8 to 15 years depending on unit type and the environmental conditions they are subject too. There is no periodical maintenance required with most name brand irrigation controllers. The replacement of irrigation valves is normally on an "as needed" basis. Total irrigation systems, except for controllers (clocks), are typically "life of the development" components with complete replacement not required. However, if major line problems occur, this account can help supply the necessary funding for repairs. Landscape Renovation This account establishes reserve funds for landscape replacement at the vehicle entrance and street medians. The board should review this account periodically for any timeline or funding changes. Records indicate that new plants and lawn seeding in 2014 cost $1, Tree Trim/Remove This account provides funding to help cover costs associated with tree trimming and any removals. Overall, most trees appeared well trimmed with no major problems noted. Records indicate that trimming in 2013 cost $ In 2014, costs for tree work were $13, In addition, the removal of twenty-seven Oleanders in 2015 cost $2, /15/