Full Reserve Study For Glenmoor Homeowners Association Conway, South Carolina

Transcription

1 Full Reserve Study For Glenmoor Homeowners Association Conway, South Carolina Prepared for FY 2016 Report Date: November 27, 2015 Southeast Region Hunters Creek Court Jacksonville, FL (904) Mid-Atlantic Region 3 Langhorne Road Newport News, VA (757) Communityadvisors.com

2 November 27, 2015 Ms. Sherri Crawford Association Manger Wright Management th Avenue North Myrtle Beach, SC Re: Reserve Study Report for Glenmoor Homeowners Association Dear Ms. Crawford: Community Advisors is pleased to provide this Revised Reserve Study report for the above referenced Association. We have completed the adjustments you requested and have updated your funding plan. We recommend updating your study every 3 years to keep your information current with changing replacement cost, interest and inflation rates. It has been a pleasure serving you and please let me know if you have any questions or concerns. Respectively submitted, Charles R. Sheppard RS PRA CCI President & Reserve Analyst Southeast Region Charles Sheppard, RS PRA CCI Hunters Creek Court Jacksonville, Fl (904) Mid-Atlantic Region Al Custer, Senior Advisor 3 Langhorne Road Newport News, VA (757)

3 TABLE OF CONTENTS Glenmoor HOA PART I RESERVE STUDY SUMMARY INFORMATION Threshold Funding Summary 1-1 Threshold Funding Plan 1-2 Component Inventory 1-3 PART II FINANCIAL INFORMATION Annual Expenditure Detail 2-1 Cash Flow 2-7 PART III COMPONENT INFORMATION Category Detail Index 3-1 Detail Report by Category 3-2 PART IV CHART & GRAPHS Annual Asset Expenditure Charts 4-1 Asset Current Cost by Category 4-2 Threshold Funding Model & Fully Funded Comparison Chart 4-3 PART V METHODOLOGY & RESERVE STUDY PROCESS Methods & Procedures 5-1 PART VI TERMS CONDITIONS COMPANY INFORMATION General Information and Company Profile 6-1 Definitions 6-3

4 Conway, South Carolina Threshold Funding Summary Report Date November 27, 2015 Budget Year Beginning January 01, 2016 Budget Year Ending December 31, 2016 Report Parameters Inflation 3.00% Annual Assessment Increase 3.00% Interest Rate on Reserve Deposit 0.50% 2016 Beginning Balance $15, Glenmoor HOA is located in Conway, SC and has as its major components; mail pavilion, streets and storm water retention ponds. All components observed appear in good condition with the exception of the Amenity and pool as they were not in place at the time of our site visit. We have projected the amenity and pool component replacement based on plans furnished by the Manager and our component inventory shows a date in service of 12/31/2015 due to the restrictions of our software. We will update this report and funding plan upon completion of the new components. The funding goal for the Association is adequate funding using the cash flow funding method. We have prepared a detailed funding plan that provides adequate funding over the period of this study. This method of determining contributions is based on the remaining useful life and replacement cost of major components and does take into account inflation, contribution increases and interest on invested funds. Reserves that maintain a 30% to 70% full funding level are considered to be adequately funded. Threshold Funding Model Summary of Calculations Required Annual Contribution $20, Average Net Annual Interest Earned $ Total Annual Allocation to Reserves $20, PAGE 1-1

5 Threshold Funding Plan Beginning Balance: $15,592 Projected Fully Year End Current Annual Annual Annual Ending Funded Percent Year Cost Contribution Interest Expenditures Reserves Reserves Funded ,724 20, ,200 34,847 50,842 69% ,776 20, ,236 54,774 70,998 77% ,190 21, ,273 75,392 92,319 82% ,975 22, ,409 90, ,530 83% ,144 22, , , ,910 85% ,709 23, , , ,596 86% ,680 24, , , ,645 87% ,070 24, , , ,115 87% ,893 25,692 1,016 5, , ,636 87% ,159 26,463 1,133 3, , ,598 87% ,884 27,257 1,267 1, , ,506 86% ,081 28,075 1,206 41, , ,227 84% ,763 28,917 1,342 2, , ,084 84% ,946 29,784 1,448 9, , ,780 83% ,644 30,678 1,599 1, , ,290 83% ,874 31,598 1,756 1, , ,736 83% ,650 32,546 1,918 1, , ,202 83% ,989 33,522 2,085 1, , ,772 82% ,909 34,528 2,167 20, , ,345 81% ,426 35,564 2,153 40, , ,461 79% ,559 42,208 2,364 2, , ,179 80% ,326 43,474 2,582 2, , ,328 80% ,746 44,778 2,807 2, , ,009 80% ,838 46, ,865 63, ,832 30% ,623 47, ,089 68, ,915 32% ,122 48, , , ,916 44% ,356 50, , , ,185 54% ,346 51,910 1,058 2, , ,999 60% ,117 53, ,565 84, ,649 38% ,690 55, , , ,178 50% PAGE 1-2

6 Component Inventory Description Date in Service Replacement Year Useful Adjustment Remaining Site Components Aluminium Flag Pole Each 2, ,800 Community Sign & Pole Each 1, ,500 Pond Fountain Allowance Each 3, ,500 Site Components - Total $7,800 Units Cost Unit Cost Current Street Resurfacing Asphalt Mill & 1/1/2" Overlay - Barlow C ,087 Square Yards ,914 Asphalt Mill & 1/1/2" Overlay - Britt Court Square Yards ,982 Asphalt Mill & 1/1/2" Overlay - Creyk Co Square Yards ,182 Asphalt Mill & 1/1/2" Overlay - Daresbury ,259 Square Yards ,907 Asphalt Mill & 1/1/2" Overlay - Glenmoor ,879 Square Yards ,495 Asphalt Mill & 1/1/2" Overlay - Macallan Square Yards ,982 Asphalt Mill & 1/1/2" Overlay - Mail Pavi Square Yards ,575 Asphalt Mill & 1/1/2" Overlay - Tattlesbur ,625 Square Yards ,475 Street Resurfacing - Total $241,512 Mail Pavilion Asphalt Shingles Squares ,485 Exterior Painting ,600 Square Feet ,080 Mail Pavilion - Total $4,565 Clubhouse Asphalt Mill & Ovelay Square Yards ,352 Asphalt Shingles Squares ,320 Exterior Painting ,170 Square Feet ,844 Plumbing Fixtures Each ,200 Solid Surface Top Linear Feet ,125 Tile Floor & Walls - Community Room & ,052 Square Feet ,728 Water Cooler Each Clubhouse - Total $36,469 Aluminium Fencing Linear Feet ,520 Pool Pumps & Equipment Annual Allowa Each 1, ,200 Pool Resurfacing ,400 Square Feet ,800 - Total $39,520 Storm Water Ponds Storm Water Pond Dredging Allowance ,159 Cubic Yards ,858 Storm Water Ponds - Total $71,858 PAGE 1-3

7 Component Inventory Description Date in Service Replacement Year Useful Adjustment Remaining Total Asset Summary $401,724 Units Cost Unit Cost Current PAGE 1-4

8 Annual Expenditure Detail Description Expenditures Replacement Year 2016 Pool Pumps & Equipment Annual Allowance 1,200 Total for 2016 $1,200 Replacement Year 2017 Pool Pumps & Equipment Annual Allowance 1,236 Total for 2017 $1,236 Replacement Year 2018 Pool Pumps & Equipment Annual Allowance 1,273 Total for 2018 $1,273 Replacement Year 2019 Site Components Pond Fountain Allowance 3,825 Mail Pavilion Exterior Painting 2,273 Pool Pumps & Equipment Annual Allowance 1,311 Total for 2019 $7,409 Replacement Year 2020 Pool Pumps & Equipment Annual Allowance 1,351 Total for 2020 $1,351 Replacement Year 2021 Pool Pumps & Equipment Annual Allowance 1,391 Total for 2021 $1,391 PAGE 2-1

9 Annual Expenditure Detail Description Expenditures Replacement Year 2022 Pool Pumps & Equipment Annual Allowance 1,433 Total for 2022 $1,433 Replacement Year 2023 Pool Pumps & Equipment Annual Allowance 1,476 Total for 2023 $1,476 Replacement Year 2024 Site Components Pond Fountain Allowance 4,434 Pool Pumps & Equipment Annual Allowance 1,520 Total for 2024 $5,954 Replacement Year 2025 Clubhouse Exterior Painting 2,407 Pool Pumps & Equipment Annual Allowance 1,566 Total for 2025 $3,972 Replacement Year 2026 Pool Pumps & Equipment Annual Allowance 1,613 Total for 2026 $1,613 Replacement Year 2027 Pool Pumps & Equipment Annual Allowance 1,661 Pool Resurfacing 39,866 Total for 2027 $41,527 PAGE 2-2

10 Annual Expenditure Detail Description Expenditures Replacement Year 2028 Clubhouse Water Cooler 1,283 Pool Pumps & Equipment Annual Allowance 1,711 Total for 2028 $2,994 Replacement Year 2029 Site Components Pond Fountain Allowance 5,140 Mail Pavilion Exterior Painting 3,055 Pool Pumps & Equipment Annual Allowance 1,762 Total for 2029 $9,957 Replacement Year 2030 Pool Pumps & Equipment Annual Allowance 1,815 Total for 2030 $1,815 Replacement Year 2031 Pool Pumps & Equipment Annual Allowance 1,870 Total for 2031 $1,870 Replacement Year 2032 Pool Pumps & Equipment Annual Allowance 1,926 Total for 2032 $1,926 Replacement Year 2033 Pool Pumps & Equipment Annual Allowance 1,983 Total for 2033 $1,983 PAGE 2-3

11 Annual Expenditure Detail Description Expenditures Replacement Year 2034 Site Components Community Sign & Pole 2,554 Pond Fountain Allowance 5,959 Mail Pavilion Asphalt Shingles 4,231 Clubhouse Plumbing Fixtures 5,448 Pool Pumps & Equipment Annual Allowance 2,043 Total for 2034 $20,233 Replacement Year 2035 Clubhouse Asphalt Shingles 9,329 Exterior Painting 3,234 Tile Floor & Walls - Community Room & Restrooms 25,826 Pool Pumps & Equipment Annual Allowance 2,104 Total for 2035 $40,493 Replacement Year 2036 Pool Pumps & Equipment Annual Allowance 2,167 Total for 2036 $2,167 Replacement Year 2037 Pool Pumps & Equipment Annual Allowance 2,232 Total for 2037 $2,232 Replacement Year 2038 Pool Pumps & Equipment Annual Allowance 2,299 Total for 2038 $2,299 PAGE 2-4

12 Annual Expenditure Detail Description Expenditures Replacement Year 2039 Site Components Pond Fountain Allowance 6,908 Street Resurfacing Asphalt Mill & 1/1/2" Overlay - Barlow Court 37,328 Asphalt Mill & 1/1/2" Overlay - Britt Court 33,516 Asphalt Mill & 1/1/2" Overlay - Creyk Court 31,937 Asphalt Mill & 1/1/2" Overlay - Daresbury Lane 43,235 Asphalt Mill & 1/1/2" Overlay - Glenmoor Drive 133,206 Asphalt Mill & 1/1/2" Overlay - Macallan Court 33,516 Asphalt Mill & 1/1/2" Overlay - Mail Pavilion Drive 5,082 Asphalt Mill & 1/1/2" Overlay - Tattlesbury Drive 158,824 Mail Pavilion Exterior Painting 4,105 Pool Pumps & Equipment Annual Allowance 2,368 Pool Resurfacing 56,839 Total for 2039 $546,865 Replacement Year 2040 Clubhouse Asphalt Mill & Ovelay 16,978 Solid Surface Top 4,320 Aluminium Fencing 19,352 Pool Pumps & Equipment Annual Allowance 2,439 Total for 2040 $43,089 Replacement Year 2041 Clubhouse Water Cooler 1,884 Pool Pumps & Equipment Annual Allowance 2,513 Total for 2041 $4,397 PAGE 2-5

13 Annual Expenditure Detail Description Expenditures Replacement Year 2042 Pool Pumps & Equipment Annual Allowance 2,588 Total for 2042 $2,588 Replacement Year 2043 Pool Pumps & Equipment Annual Allowance 2,666 Total for 2043 $2,666 Replacement Year 2044 Site Components Aluminium Flag Pole 6,406 Pond Fountain Allowance 8,008 Pool Pumps & Equipment Annual Allowance 2,746 Storm Water Ponds Storm Water Pond Dredging Allowance 164,406 Total for 2044 $181,565 Replacement Year 2045 Clubhouse Exterior Painting 4,347 Pool Pumps & Equipment Annual Allowance 2,828 Total for 2045 $7,175 PAGE 2-6

14 Cash Flow Beginning Balance Annual Assessment Interest Earned Expenditures Fully Funded Reserves Percent Fully Funded Ending Balance 15,592 *20, ,200 50,842 69% 34,847 34,847 *20, ,236 70,998 77% 54,774 54,774 *21, ,273 92,319 82% 75,392 75,392 *22, , ,530 83% 90,597 90,597 *22, , ,910 85% 112, ,634 *23, , ,596 86% 135, ,428 *24, , ,645 87% 159, ,004 *24, , ,115 87% 183, ,384 *25,692 1,016 5, ,636 87% 204, ,138 *26,463 1,133 3, ,598 87% 227,762 Description Site Components Aluminium Flag Pole Community Sign & Pole Pond Fountain Allowance 3,825 4,434 Site Components Total: 3,825 4,434 Street Resurfacing Asphalt Mill & 1/1/2" Overlay - Barlow Court Asphalt Mill & 1/1/2" Overlay - Britt Court Asphalt Mill & 1/1/2" Overlay - Creyk Court Asphalt Mill & 1/1/2" Overlay - Daresbury La.. Asphalt Mill & 1/1/2" Overlay - Glenmoor Dr.. Asphalt Mill & 1/1/2" Overlay - Macallan Co.. Asphalt Mill & 1/1/2" Overlay - Mail Pavilion.. Asphalt Mill & 1/1/2" Overlay - Tattlesbury D.. Street Resurfacing Total: Mail Pavilion Asphalt Shingles Exterior Painting 2,273 Mail Pavilion Total: 2,273 Clubhouse Asphalt Mill & Ovelay Asphalt Shingles Exterior Painting 2,407 PAGE 2-7

15 Cash Flow Description Clubhouse continued... Plumbing Fixtures Solid Surface Top Tile Floor & Walls - Community Room & Res.. Water Cooler Clubhouse Total: 2,407 Aluminium Fencing Pool Pumps & Equipment Annual Allowance 1,200 1,236 1,273 1,311 1,351 1,391 1,433 1,476 1,520 1,566 Pool Resurfacing Total: 1,200 1,236 1,273 1,311 1,351 1,391 1,433 1,476 1,520 1,566 Storm Water Ponds Storm Water Pond Dredging Allowance Storm Water Ponds Total: Year Total: 1,200 1,236 1,273 7,409 1,351 1,391 1,433 1,476 5,954 3,972 PAGE 2-8

16 Cash Flow Beginning Balance Annual Assessment Interest Earned Expenditures Fully Funded Reserves Percent Fully Funded Ending Balance 227,762 *27,257 1,267 1, ,506 86% 254, ,673 *28,075 1,206 41, ,227 84% 242, ,427 *28,917 1,342 2, ,084 84% 269, ,691 *29,784 1,448 9, ,780 83% 290, ,966 *30,678 1,599 1, ,290 83% 321, ,428 *31,598 1,756 1, ,736 83% 352, ,913 *32,546 1,918 1, ,202 83% 385, ,451 *33,522 2,085 1, ,772 82% 419, ,075 *34,528 2,167 20, ,345 81% 435, ,536 *35,564 2,153 40, ,461 79% 432,761 Description Site Components Aluminium Flag Pole Community Sign & Pole 2,554 Pond Fountain Allowance 5,140 5,959 Site Components Total: 5,140 8,512 Street Resurfacing Asphalt Mill & 1/1/2" Overlay - Barlow Court Asphalt Mill & 1/1/2" Overlay - Britt Court Asphalt Mill & 1/1/2" Overlay - Creyk Court Asphalt Mill & 1/1/2" Overlay - Daresbury La.. Asphalt Mill & 1/1/2" Overlay - Glenmoor Dr.. Asphalt Mill & 1/1/2" Overlay - Macallan Co.. Asphalt Mill & 1/1/2" Overlay - Mail Pavilion.. Asphalt Mill & 1/1/2" Overlay - Tattlesbury D.. Street Resurfacing Total: Mail Pavilion Asphalt Shingles 4,231 Exterior Painting 3,055 Mail Pavilion Total: 3,055 4,231 Clubhouse Asphalt Mill & Ovelay Asphalt Shingles 9,329 Exterior Painting 3,234 PAGE 2-9

17 Cash Flow Description Clubhouse continued... Plumbing Fixtures 5,448 Solid Surface Top Tile Floor & Walls - Community Room & Res.. 25,826 Water Cooler 1,283 Clubhouse Total: 1,283 5,448 38,389 Aluminium Fencing Pool Pumps & Equipment Annual Allowance 1,613 1,661 1,711 1,762 1,815 1,870 1,926 1,983 2,043 2,104 Pool Resurfacing 39,866 Total: 1,613 41,527 1,711 1,762 1,815 1,870 1,926 1,983 2,043 2,104 Storm Water Ponds Storm Water Pond Dredging Allowance Storm Water Ponds Total: Year Total: 1,613 41,527 2,994 9,957 1,815 1,870 1,926 1,983 20,233 40,493 PAGE 2-10

18 Cash Flow Beginning Balance Annual Assessment Interest Earned Expenditures Fully Funded Reserves Percent Fully Funded Ending Balance 432,761 *42,208 2,364 2, ,179 80% 475, ,165 *43,474 2,582 2, ,328 80% 518, ,989 *44,778 2,807 2, ,009 80% 564, ,275 *46, , ,832 30% 63,850 63,850 *47, , ,915 32% 68,607 68,607 *48, , ,916 44% 113, ,706 *50, , ,185 54% 162, ,325 *51,910 1,058 2, ,999 60% 212, ,627 *53, , ,649 38% 84,952 84,952 *55, , ,178 50% 133,514 Description Site Components Aluminium Flag Pole 6,406 Community Sign & Pole Pond Fountain Allowance 6,908 8,008 Site Components Total: 6,908 14,414 Street Resurfacing Asphalt Mill & 1/1/2" Overlay - Barlow Court 37,328 Asphalt Mill & 1/1/2" Overlay - Britt Court 33,516 Asphalt Mill & 1/1/2" Overlay - Creyk Court 31,937 Asphalt Mill & 1/1/2" Overlay - Daresbury La.. 43,235 Asphalt Mill & 1/1/2" Overlay - Glenmoor Dr.. 133,206 Asphalt Mill & 1/1/2" Overlay - Macallan Co.. 33,516 Asphalt Mill & 1/1/2" Overlay - Mail Pavilion.. 5,082 Asphalt Mill & 1/1/2" Overlay - Tattlesbury D.. 158,824 Street Resurfacing Total: 476,645 Mail Pavilion Asphalt Shingles Exterior Painting 4,105 Mail Pavilion Total: 4,105 Clubhouse Asphalt Mill & Ovelay 16,978 Asphalt Shingles Exterior Painting 4,347 PAGE 2-11

19 Cash Flow Description Clubhouse continued... Plumbing Fixtures Solid Surface Top 4,320 Tile Floor & Walls - Community Room & Res.. Water Cooler 1,884 Clubhouse Total: 21,298 1,884 4,347 Aluminium Fencing 19,352 Pool Pumps & Equipment Annual Allowance 2,167 2,232 2,299 2,368 2,439 2,513 2,588 2,666 2,746 2,828 Pool Resurfacing 56,839 Total: 2,167 2,232 2,299 59,208 21,792 2,513 2,588 2,666 2,746 2,828 Storm Water Ponds Storm Water Pond Dredging Allowance 164,406 Storm Water Ponds Total: 164,406 Year Total: 2,167 2,232 2, ,865 43,089 4,397 2,588 2, ,565 7,175 PAGE 2-12

20 Category Detail Index Description Replacement Page Aluminium Fencing Aluminium Flag Pole Asphalt Mill & 1/1/2" Overlay - Barlow Court Asphalt Mill & 1/1/2" Overlay - Britt Court Asphalt Mill & 1/1/2" Overlay - Creyk Court Asphalt Mill & 1/1/2" Overlay - Daresbury Lane Asphalt Mill & 1/1/2" Overlay - Glenmoor Drive Asphalt Mill & 1/1/2" Overlay - Macallan Court Asphalt Mill & 1/1/2" Overlay - Mail Pavilion Drive Asphalt Mill & 1/1/2" Overlay - Tattlesbury Drive Asphalt Mill & Ovelay Asphalt Shingles Asphalt Shingles Community Sign & Pole Exterior Painting Exterior Painting Plumbing Fixtures Pond Fountain Allowance Pool Pumps & Equipment Annual Allowance Pool Resurfacing Solid Surface Top Storm Water Pond Dredging Allowance Tile Floor & Walls - Community Room & Restrooms Water Cooler Total Funded Assets 24 Total Unfunded Assets 0 Total Assets 24 PAGE 3-1

21 Detail Report by Category Aluminium Flag Pole Site Components Placed in Service June 2014 Useful Life 30 Replacement Year 2044 Remaining Life 28 1 $2, Asset Cost $2, Future Cost $6, Community Sign & Pole Site Components Placed in Service June 2014 Useful Life 20 Replacement Year 2034 Remaining Life 18 1 $1, Asset Cost $1, Future Cost $2, PAGE 3-2

22 Detail Report by Category Pond Fountain Allowance Site Components Placed in Service June 2014 Useful Life 5 Replacement Year 2019 Remaining Life 3 1 $3, Asset Cost $3, Future Cost $3, Motor size is unknown so an allowance is used. Site Components - Total Current Cost $7,800 PAGE 3-3

23 Detail Report by Category Asphalt Mill & 1/1/2" Overlay - Barlow Court Street Resurfacing Placed in Service June 2014 Useful Life 25 Replacement Year 2039 Remaining Life 23 1,087 Square $17.40 Asset Cost $18, Future Cost $37, Asphalt Mill & 1/1/2" Overlay - Britt Court Street Resurfacing Placed in Service June 2014 Useful Life 25 Replacement Year 2039 Remaining Life Square $17.40 Asset Cost $16, Future Cost $33, Asphalt Mill & 1/1/2" Overlay - Creyk Court Street Resurfacing Placed in Service June 2014 Useful Life 25 Replacement Year 2039 Remaining Life Square $17.40 Asset Cost $16, Future Cost $31, Asphalt Mill & 1/1/2" Overlay - Daresbury Lane Street Resurfacing Placed in Service June 2014 Useful Life 25 Replacement Year 2039 Remaining Life 23 1,259 Square $17.40 Asset Cost $21, Future Cost $43, PAGE 3-4

24 Detail Report by Category Asphalt Mill & 1/1/2" Overlay - Glenmoor Drive Street Resurfacing Placed in Service June 2014 Useful Life 25 Replacement Year 2039 Remaining Life 23 3,879 Square $17.40 Asset Cost $67, Future Cost $133, Asphalt Mill & 1/1/2" Overlay - Macallan Court Street Resurfacing Placed in Service June 2014 Useful Life 25 Replacement Year 2039 Remaining Life Square $17.40 Asset Cost $16, Future Cost $33, Asphalt Mill & 1/1/2" Overlay - Mail Pavilion Drive Street Resurfacing Placed in Service June 2014 Useful Life 25 Replacement Year 2039 Remaining Life Square $17.40 Asset Cost $2, Future Cost $5, Asphalt Mill & 1/1/2" Overlay - Tattlesbury Drive Street Resurfacing Placed in Service June 2014 Useful Life 25 Replacement Year 2039 Remaining Life 23 4,625 Square $17.40 Asset Cost $80, Future Cost $158, PAGE 3-5

25 Detail Report by Category Street Resurfacing - Total Current Cost $241,512 PAGE 3-6

26 Detail Report by Category Asphalt Shingles Mail Pavilion Placed in Service June 2014 Useful Life 20 Replacement Year 2034 Remaining Life 18 7 $ Asset Cost $2, Future Cost $4, Exterior Painting Mail Pavilion Placed in Service June 2014 Useful Life 10 Adjustment -5 Replacement Year 2019 Remaining Life 3 1,600 Square $1.30 Asset Cost $2, Future Cost $2, PAGE 3-7

27 Detail Report by Category Mail Pavilion - Total Current Cost $4,565 PAGE 3-8

28 Detail Report by Category Asphalt Mill & Ovelay Clubhouse Placed in Service December 2015 Useful Life 25 Replacement Year 2040 Remaining Life Square $17.40 Asset Cost $8, Future Cost $16, Asphalt Shingles Clubhouse Placed in Service December 2015 Useful Life 20 Replacement Year 2035 Remaining Life $ Asset Cost $5, Future Cost $9, The Amenity for the community is scheduled for completion in 2016 at which time we will update this report and funding plan to include those components. Exterior Painting Clubhouse Placed in Service December 2015 Useful Life 10 Replacement Year 2025 Remaining Life 9 2,170 Square $0.85 Asset Cost $1, Future Cost $2, Plumbing Fixtures Clubhouse Placed in Service December 2015 Useful Life 19 Replacement Year 2034 Remaining Life 18 4 $ Asset Cost $3, Future Cost $5, PAGE 3-9

29 Detail Report by Category Solid Surface Top Clubhouse Placed in Service December 2015 Useful Life 25 Replacement Year 2040 Remaining Life Linear $ Asset Cost $2, Future Cost $4, Tile Floor & Walls - Community Room & Restrooms Clubhouse Placed in Service December 2015 Useful Life 20 Replacement Year 2035 Remaining Life 19 1,052 Square $14.00 Asset Cost $14, Future Cost $25, Water Cooler Clubhouse Placed in Service December 2015 Useful Life 13 Replacement Year 2028 Remaining Life 12 1 $ Asset Cost $ Future Cost $1, Clubhouse - Total Current Cost $36,469 PAGE 3-10

30 Detail Report by Category Aluminium Fencing Placed in Service December 2015 Useful Life 25 Replacement Year 2040 Remaining Life Linear $28.00 Asset Cost $9, Future Cost $19, Pool Pumps & Equipment Annual Allowance Placed in Service December 2015 Useful Life 1 Replacement Year 2016 Remaining Life 0 1 $1, Asset Cost $1, Future Cost $1, Pool Resurfacing Placed in Service December 2015 Useful Life 12 Replacement Year 2027 Remaining Life 11 2,400 Square $12.00 Asset Cost $28, Future Cost $39, Total Current Cost $39,520 PAGE 3-11

31 Detail Report by Category Storm Water Pond Dredging Allowance Storm Water Ponds Placed in Service June 2014 Useful Life 30 Replacement Year 2044 Remaining Life 28 1,159 Cubic $62.00 Asset Cost $71, Future Cost $164, Storm water pond dredging is an unpredictable event dependent on quality of construction, erosion control and weather. We have included an allowance to dredge the four ponds onsite 12" over 20% of the pond surface area. We recommend that a bathymetric survey be completed every 10 years to determine the level of material that has accumulated and this allowance updated. Storm Water Ponds - Total Current Cost $71,858 PAGE 3-12

32 Annual Asset Expenditure Charts PAGE 4-1

33 Asset Current Cost by Category PAGE 4-2

34 Threshold Funding Model & Fully Funded Comparison Chart The Threshold Funding Model calculates the minimum reserve assessments, with the restriction that the reserve balance is not allowed to go below $0 or other predetermined threshold, during the period of time examined. All funds for planned reserve expenditures will be available on the first day of each fiscal year. The Threshold Funding Model allows the client to choose the level of conservative funding they desire by choosing the threshold dollar amount. PAGE 4-3

35 Reserve Study Methods and Procedures Types of Reserve Studies Full Reserve Study (Level I) Update with site inspection (Level II) Update without site inspection (Level III) In a Full Reserve Study, the reserve provider conducts a component inventory, a condition assessment (based upon on-site visual observations), and life and valuation estimates to determine both a fund status and funding plan. In an Update with site inspection, the reserve provider conducts a component inventory (verification only, not quantification unless new components have been added to the inventory), a condition assessment (based upon on-site visual observations), and life and valuation estimates to determine both the fund status and funding plan. In an Update without site inspection, the reserve provider conducts life and valuation estimates to determine the fund status and funding plan. Physical and Financial Analysis There are two components of a reserve study: a physical analysis and a financial analysis. Physical Analysis During the physical analysis, a reserve study provider evaluates information regarding the physical status and repair/replacement cost of the community s major common area components. To do so, the provider conducts a component inventory, a condition assessment, and life and valuation estimate and prepares a list of components which will be included in the study. No destructive testing is conducted. Financial Analysis The financial analysis assesses the community s reserve balance or fund status (measured in cash or as percent fully funded) to determine a recommendation for the appropriate reserve contribution rate in the future, known as the funding plan. Preparing the Reserve Study Once the reserve assets have been identified and quantified, their respective replacement costs, useful lives and remaining lives must be assigned so that a funding schedule can be constructed. Replacement costs and useful lives can be found in published manuals such as construction estimators, appraisal handbooks, and valuation guides. Remaining lives are calculated from the useful lives and ages of assets and adjusted according to conditions such as design, manufactured quality, usage, exposure to the elements and maintenance history. By following the recommendations of an effective reserve study, the community/religious organizations should avoid any major shortfalls. However, to remain accurate, the report should be updated on an annual basis to reflect such changes as shifts in economic parameters, additions of phases or assets, or expenditures of reserve funds. PAGE 5-1

36 Funding Methods From the simplest to the most complex, reserve analysis providers use many different computational processes to calculate reserve requirements. However, there are two basic processes identified as industry standards: the Cash Flow Method and the Component Method. The Cash Flow Method develops a reserve-funding plan where 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 actual anticipated schedule of reserve expenses until the desired funding goal is achieved. The Threshold and the Current Assessment funding models are based upon the cash flow method. The Component Method develops a reserve-funding plan where the total contribution is based upon the sum of contributions for individual components. The component method is the more conservative of the two funding options, and assures that the community/religious organization will achieve and maintain an ideal level of reserves over time Funding Strategies Once a community has established its funding goals, they can select an appropriate funding plan. Communities will have to update their reserve studies more or less frequently depending on the funding strategy they select. Full Funding---Each year a portion of the replacement cost is contributed to reserves to provide adequate funds when a component is replaced. This is the safest method. Baseline Funding---This Goal keeps the reserve balance above zero. With this low funding level special assessments and deferred maintenance are common. Threshold Funding---Reserves are maintained at a predetermined funding level or dollar amount. Statutory Funding---This method is based on local statutes. Funding Models Used Threshold Funding Model. This method is based upon the cash flow funding concept. The minimum reserve cash balance in threshold funding, however, is set at a predetermined dollar amount (other than $0). Current Assessment Funding Model. This method is also based upon the cash flow funding concept. The initial reserve assessment is set at the community s current fiscal year funding level and a 30-year projection is calculated to illustrate the adequacy of the current funding over time. Component Funding Model. This is a straight-line funding model. It distributes the cash reserves to individual reserve components and then calculates what the reserve assessment and interest contribution should be, again by each reserve component. The current annual assessment is then determined by summing all the individual component assessments, hence the name Component Funding Model. This is the most conservative funding model. PAGE 5-2

37 General Information & Conditions This document has been provided pursuant to an agreement containing restrictions on its use. No part of this document may be copied or distributed, in any form or by any means, nor disclosed to third parties without the expressed written permission of. This reserve analysis study and the parameters under which it has been completed are based upon information provided to us in part by representatives of the Community Association, Management Company, Community Development District and its contractors, assorted vendors, specialist and independent contractors, the Community Association s Institute, and various construction pricing and scheduling manuals including, but not limited to: Marshall & Swift Valuation Service, RS Means Building Construction Cost Data and from numerous vendor catalogues, actual quotations or historical costs, and our own experience in the field of property management and reserve study preparation. Any Reserve Study Updates assume quantities are accurate. No liability is assumed as the result of changing market prices or inaccurate estimates or projections of remaining useful life of components. We are not responsible for any hidden defects or determining the condition of hidden or underground components or systems. Observing environmental conditions, hazardous materials or determine compliance with building codes or ADA regulations is not included in our scope of work. will not be required to participate in any legal action conducted on a property for whatever reason and shall also not be required to give testimony in depositions or in court. In all cases the liability of any action taken by and its Principals, Employees, contractors and Vendors shall be limited to the consulting fee agreed upon for the production of this report. All measurements taken are general and approximant and estimates of both quantity and remaining useful life are submitted as an opinion by the producer of this report. The scope of work as contracted for by the client does not include roof-top inspections or roof-top measurements unless noted in the proposal. Some component quantities are determined by use of available internet based maps and images and their measurement tools. We also from time to time utilize aerial imaging services to provide roof area measurements for one building in a multiple building complex. We then use this estimated quantity to calculate the roof area of the other buildings based on the number of living units in that building. Actual quantities may vary from building to building and a more accurate measurement can be taken if requested and at the additional expense to the client. This reserve study is a reflection of the information provided by this client and assembled for their use and not for the purposes of performing an audit, quality or forensic analyses, or background checks of historical records. This information should not be used to estimate construction projects or relied upon for replacement cost until current vendor pricing has been obtained. We assume all components have been maintained properly unless noted in this report and our remaining useful life projections assume they will be maintained per normal operating standards. Replacement cost does not include any Engineering or Architectural fees unless noted in the study. Beginning fund balances are unaudited and provided by the Association or Manager. Unless noted in the report we assume the funding goal of the Association is to reserve adequate funds for future capital replacements if they are pooling their reserves and fully funding reserves if they are using the Component Method of funding. It has been assumed, unless otherwise noted in this report, that all assets have been designed and constructed properly and that each estimated useful life will approximate that of the norm per industry standards and/or manufacturer s specifications. In some cases, estimates may have been used on assets, PAGE 6-1

38 which have an indeterminable but potential liability to the Association or Community Development District. The decision for the inclusion of these as well as all assets considered is left to the client. We recommend that your reserve analysis study be updated on an annual basis due to fluctuating interest rates, inflationary changes, and the unpredictable nature of the lives of many of the assets under consideration. All of the information collected during our inspection of the property and computations made subsequently in preparing this reserve analysis study are retained in our computer files. Therefore, annual updates may be completed quickly and inexpensively each year. Use of this report is acceptance by the Client of the above Information and Conditions. Company Profile The site inspection and preparation of this reserve study report were supervised by Mr. Charles R. Sheppard who has over 30 years of experience in real estate development, property operation and construction and he holds a Certified General Contractor License and a Certified Home Inspector License in the state of Florida. Mr. Sheppard is a graduate of Virginia Polytechnic Institute & State University in Blacksburg, Virginia where he earned a BS degree. Mr. Sheppard has earned the Reserve Specialist, (RS) designation from the Community Association s Institute, (CAI). Mr. Sheppard is a member of the Jacksonville Metro chapter of CAI and the Southeast Virginia Chapter. Community Advisors is also a member of the Association of Professional Reserve Analyst, (APRA) and Mr. Sheppard has earned the designation of Professional Reserve Analyst, (PRA). Community Advisors has completed this Reserve Study at the request of the Management Company, Board Member or Facility Manager and does not have any involvement with this client except to produce this Reserve Study. PAGE 6-2

39 Reserve Terms Dictionary Accumulated Reserve Balance: The anticipated reserve balance on the first day of the fiscal year for which the report has been prepared. Net Monthly Allocation: The sum of the monthly assessment and interest contribution figures. Annual Assessment increase: The percentage rate at which the association will increase its assessment to reserves at the end of each year until the year in which the asset is replaced. For example, in order to accumulate $10,000 in 10 years, you set aside $1,000 per year. As an alternative, you could set aside $795 the first year and increase that amount by 5% each year until year of replacement. In either case you arrive at the same amount. The idea is that you start setting aside a lower amount and increase that number each year in accordance with the planned percentage. Ideally this should be equal to the rate of inflation. It can, however, be used to aid those associations who have not set aside appropriate reserves in the past by making the initial year's allocation less formidable. Investment Yield: The average interest rate anticipated by the association based upon their current investment practices. Budget year beginning/ending (fiscal): the budgetary year for which the report is prepared. For associations with fiscal years ending December 31, the monthly assessment figures indicated are for the 12 month period beginning 1/1/0X and ending 12/31/0X. Monthly Assessment: The assessment for reserves required by the association each month. Interest Contribution: The interest that should be earned on the reserves, net of taxes, based upon their beginning reserve balance and monthly assessments for one year. This figure is averaged for budgeting purposes. Threshold Funding Model: This analysis calculates the minimum reserve assessments, with the restriction that the reserve balance is not allowed to go below $0 or other predetermined threshold, during the period of time examined. All funds for planned reserve expenditures will be available on the first day of each fiscal year. The Threshold Funding Model allows the client to choose the level of conservative funding it desires by choosing the threshold dollar amount. Current Assessment Funding Model: This analysis is based on the current annual assessment, parameters, and reserve fund balance. Because It is calculated using the current annual assessment, it will give an accurate projection of how well the association is funded for the next 30 years of planned reserve expenditures. Component Funding Model: This funding model s long-term objective is to provide a plan to a fully funded reserve position over the longest period of time practical. This is the most conservative funding model. Fixed Accumulated Reserves: An optional figure which, if used, will override all calculations and set the assessment at this amount. Percentage of Replacement: In some cases, an asset may not be replaced in its entirety or the cost may be shared with a second party. Examples are budgeting for a percentage of replacement of streets over a period of time, or sharing the expense to replace a common wall with a neighboring party. PAGE 6-3

40 Placed in Service Date: The month and year that the asset was placed in service. This may be the construction date, the first escrow closure date in a given phase, or the date of the last servicing or replacement. Future Replacement Cost: The estimated cost to repair or replace the asset at the end of its estimated useful life based upon the current replacement cost and inflation. Taxes on Yield: The estimated percentage of interest income which will be set aside for taxes. Replacement Year: The year that the asset is scheduled to be replaced. The appropriate funds will be available by the first day of the fiscal year for which replacement is anticipated. Estimated Remaining Life: This calculation is completed internally based upon the report's fiscal year date and the date the asset was placed in service. Adjustment to Useful Life: Once the useful life is determined, it may be adjusted +/- by this separate figure for the current cycle of replacement. This will allow for a current period adjustment without affecting the estimate replacement cycles for future replacements. Estimated Useful Life: The estimated useful life of an asset based upon industry standards, manufacturer specification, visual inspection, location, usage, association standards and prior history. All of these factors are taken into consideration when tailoring the estimated useful life to the particular asset. For example, the carpeting in a hallway or elevator (a heavy traffic area) will not have the same life as the identical carpeting in a seldom used meeting room or office. Salvage Value: This term defined estimates the salvage value of the asset at the time of replacement, if applicable. One Time Replacement: Notation if the asset is to be replaced on a one-time basis. Current Replacement Cost: The estimated replacement cost effects as of the beginning of the fiscal year for which the report is being prepared. PAGE 6-4