RESERVE STUDY LEVEL I - Full Reserve Study. ABC Condominium Association, Inc.

Transcription

1 Insurance Appraisals Reserve Studies Wind Mitigation RESERVE STUDY LEVEL I - Full Reserve Study Prepared for: ABC Condominium Association, Inc. For the period of January 1, December 31, Enterprise Rd. E., Suite 74 Safety Harbor, FL Office Fax Copyright All Rights Reserved FPAT File#: RES13712

2 71 Enterprise Rd. E., Suite 74 Safety Harbor, FL tel: (866) fax: (866) August 7, 213 ABC Condominium Association, Inc. c/o Property Management Company 1234 Gulf of Mexico Dr. Longboat Key, FL Regarding: January 1, Level I - Full Reserve Study Reserve Study Dear Property Manager, We are pleased to submit this Level I - Full Reserve Study Reserve Study for ABC Condominium Association, Inc. If you have questions about the Reserve Study, please contact us at (866) We look forward to doing business with you in the future. Thank you, Brad Felten, Managing Partner FPAT File# RES13712 Page 2 of 63

3 TABLE OF CONTENTS Reserve Study Summary 4 Reserve Items & Parameters 5 Component Funding Analysis Summary: 3 Year Pooled Cash Flow Funding Analysis Summary: Item Parameters - Summary Item Parameters - Full Detail Item Parameter - Category - Chart Reserve Expenditures 28 Component Funding Analysis 38 3 Year Pooled Cash Flow Funding Plan 41 Explanations & Definitions 48 Florida Statutory Reserve Requirements Florida Administrative Code Reserve Requirements Important Information Annual Update Service Expenditures - Annual Expenditures - Category/Description Component Funding Analysis - Items Cash Flow - Annual Cash Flow - Chart Percent Funded - Annual Percent Funded - Annual - Chart Funding Options Types of Reserve Studies Physical and Financial Analysis Funding Methods Component Funding Analysis Plan (Straight-Line) 3 Year Pooled Cash Flow Analysis Plan Definitions Unit Abbreviations FPAT File# RES Page 3 of 63

4 Reserve Study Summary ABC Condominium Association, Inc. January 1, December 31, 214 The following Level I - Full Reserve Study reserve study was performed for ABC Condominium Association, Inc. ("property") a Condominium Association located in Longboat Key, FL. The property has 45 units. The reserve study is for the fiscal year starting January 1, 214, and ending December 31, 214. The purpose of this reserve study is to produce a reserve funding plan that will project future contributions and expenditures to assure that reserve funds are available as needed. As of January 1, 214, the estimated reserve fund balance is 15,3. The estimated current replacement cost of the reserve items is 645,14, and with an annual compounded inflation rate of 2.% the future replacement cost is 86,16. This report presents the two generally accepted means of estimating reserve contributions; the Component Funding Analysis (Straight-Line) and the 3 Year Pooled Cash Flow Funding Analysis. Component Funding Analysis Summary: The Component Funding Analysis (Straight-Line) calculates the annual contribution amount for each individual line item component by dividing the component s remaining unfunded balance by its remaining useful life. A component s unfunded remaining balance is its replacement cost less the reserve balance for the component at the beginning of the analysis period. The annual contribution rate for each individual line item component is then summed to calculate the total annual contribution rate for this analysis. Straight-line accounting is based on current costs and neither interest or inflation are factored into the calculations. Initial year recommendations based on the Straight Line Funding Plan: Recommended annual contribution: Recommended monthly contribution: Average monthly contribution per unit (45): 15,198 8, Year Pooled Cash Flow Funding Analysis Summary: The 3 Year Pooled Cash Flow Funding Plan is a method of calculating reserve contributions where contributions to the reserve funds are designed to offset the variable annual expenditures from the reserve fund. This analysis calculates the future replacement cost for reserve components when they are due for replacement, and recognizes increases in construction costs as well as interest income attributable to reserve accounts. Funds from the beginning balances are pooled together and a yearly contribution rate is calculated to arrive at a positive cash flow throughout the analysis period. Initial year recommendations based on the 3 year Pooled Cash Flow Funding Plan: Recommended annual contribution: Recommended monthly contribution: Average monthly contribution per unit (45): FPAT File# RES ,182 5, Page 4 of 63

5 Reserve Items & Parameters This section of the report details the physical analysis of the reserve study which includes a complete inventory of the association's major common area components. For each reserve item we have determined estimated life, remaining life, current cost and future cost. Reports displayed in this section utilize the following assumptions: Inflation on Reserve Items - 2.% FPAT File# RES13712 Page 5 of 63

6 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Item Parameters - Summary Basis Cost Service Date Quantity Current Cost Est Adj Rem Future Cost Boat Docks Boat Docks 4, /1/213 17, 17, 2: 2: 19: 34,65 34,65 124,5 124,5 1, 1, 3,185 3,185 32,935 32,935 18,36 2: 2: 16:3 42,575 4: 4: 15:11 24,765 24,765 34,937 34, , ,161 18,243 18,243 33,714 33,714 48,297 48, ,5 Building Items Entry Doors /1/1971 3: 43:5 :5 Carports Carports 15. 8,267. 1/1/1994 3: 3: 1: Elevators Elevator Modernization 5,. 2. 1/1/ : 47: 4: Painting Exterior Painting.79 38,29. 8/1/212 7: 7: 5:7 Paving Asphalt Overlay ,764. 5/31/213 2: 2: 19:4 Roofing Flat Roofing Mansard Roofing 7. 25,758. 1/7-1/ /87-1/93 222,881 36,9 36,9 7,5 25: 16: 2: 1, 8: 8: 1: 58,496 37,51 42,386 42,386 7,83 Seawall Seawall (original section) /1/1971 5: 5: 7: Shuffleboard Court Shuffleboard Replace Shuffleboard Resurface 7, /1/2 1,. 1. 1/1/216 1,218 Page 6 of 63

7 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Item Parameters - Summary Basis Cost Service Date Quantity Current Cost Est Adj Rem 8,5 Future Cost 9,21 11,189 Swimming Pool Pool Fencing /1/1998 Pool Furniture 11, /1/21 Pool Resurfacing 22, /1/213 8,48 3: 3: 14: 11,228 8: 8: 4: 22,75 1: 1: 9:7 42,458 4, 4, 653,514 12,153 27,54 5,847 4,161 4, ,38 Tennis Court Tennis Court Resurface 4,. 1. 1/1/28 8: 8: 2: Page 7 of 63

8 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Item Parameters - Full Detail Boat Docks Item Number Type Category Tracking Method Code Common Area Boat Docks Logistical Fixed Service Description Date 1/1/213 Measurement Basis Each 2: 4,25.. Estimated Useful Basis Cost Salvage Value Replace Date Rem Adj 1/1/233 19: 2: Replacement Cost Current Future Quantity 4. 17,. 24, ,. 24, Comments Scope of Work: Remove and replaced finger pier framing, decking, railing and pilings. Basis for Cost Estimate: Similar projects completed by local contractors. Page 8 of 63

9 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Item Parameters - Full Detail Entry Doors Item Number Type Category Tracking Method 5 Common Area Building Items Logistical Adjusted Measurement Basis Each 3: 55.. Estimated Useful Basis Cost Salvage Value Code Service Description Date Replace Date Rem Adj Replacement Cost Current Future Building C 1/1/1971 6/1/214 :5 43: ,5. 16, Building D 1/1/1971 6/1/214 :5 43: ,15. 18, ,65. 34,937.9 Quantity Comments Scope of Work: Remove and replace all entry doors. Basis for Cost Estimate: 213 National renovation database. Page 9 of 63

10 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Item Parameters - Full Detail Carports Item Number Type Category Tracking Method 6 Common Area Carports Logistical Fixed Measurement Basis Basis Cost Salvage Value Code Service Description Date Replace Date Rem Adj All Carports 1/1/224 1: 3: 1/1/1994 Sq Ft 3: 15.. Estimated Useful Replacement Cost Current Future Quantity ,5. 151, ,5. 151,161.4 Comments Scope of Work: Remove and replace with current building code approved aluminum/steel frame carports. Basis for Cost Estimate: Similar projects completed by local contractors. Page 1 of 63

11 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Item Parameters - Full Detail Elevator Modernization Item Number Type Category Tracking Method 4 Common Area Elevators Logistical Adjusted Measurement Basis Ea 35: 5,.. Estimated Useful Basis Cost Salvage Value Code Service Description Date Replace Date Rem Adj Replacement Cost Current Future Building C 1/1/1971 1/1/218 4: 47: 1. 5,. 54, Building D 1/1/1971 1/1/218 4: 47: 1. 5,. 54, ,. 18, Quantity Comments Scope of Work: Modernize all hydraulic components and renovate interior elevator cabs. Basis for Cost Estimate: Similar projects completed by local contractors. Page 11 of 63

12 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Item Parameters - Full Detail Exterior Painting Item Number Type Category Tracking Method 2 Common Area Painting Logistical Fixed Measurement Basis Sq Ft 7:.79. Estimated Useful Basis Cost Salvage Value Code Service Description Date Replace Date Rem Adj Quantity Replacement Cost Current Future Building C 8/1/212 8/1/219 5:7 7: , , Building D 8/1/212 8/1/219 5:7 7: , , Clubhouse 8/1/212 8/1/219 5:7 7: 18. 1,422. 1, Restrooms 8/1/212 8/1/219 5:7 7: , ,714. Comments Building C Building D Page 12 of 63

13 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Clubhouse Scope of Work: Paint all exterior surfaces of residential buildings, clubhouse and pool restroom building. Basis for Cost Estimate: The cost of this asset is based on actual work completed in 212. Page 13 of 63

14 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Item Parameters - Full Detail Asphalt Overlay Item Number Type Category Tracking Method Code Common Area Paving Logistical Fixed Service Description Date 5/31/213 Measurement Basis Sq Yds 2: Estimated Useful Basis Cost Salvage Value Replace Date Rem Adj 5/31/233 19:4 2: Replacement Cost Current Future Quantity , , , , Comments Scope of Work: Asphalt overlay and striping. Basis for Cost Estimate: The cost of this asset is based on actual work completed in 213. Page 14 of 63

15 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Item Parameters - Full Detail Flat Roofing Item Number Type Category Tracking Method 1 Common Area Roofing Logistical Fixed Measurement Basis Sq Ft 2: 7.. Estimated Useful Basis Cost Salvage Value Code Service Description Date Replace Date Rem Adj Quantity Replacement Cost Current Future Building C 1/1/213 1/1/233 19: 2: , , Building D 1/1/27 1/1/227 13:9 2: , , Clubhouse 1/1/27 1/1/227 13:9 2: , , Restrooms 1/1/213 1/1/233 19: 2: ,638. 2, , ,5.61 Comments Building C vinyl roof cover Building D tar and gravel roof cover Page 15 of 63

16 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Clubhouse tar and gravel roof cover Restroom Building vinyl roof cover Scope of Work: Remove and replace flat roofing for all residential buildings, clubhouse and pool restroom building. Basis for Cost Estimate: Similar projects completed by local contractors as well as actual work completed for Building C in 213. Page 16 of 63

17 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Item Parameters - Full Detail Mansard Roofing Item Number Type Category Tracking Method 15 Common Area Roofing Logistical Fixed Measurement Basis Squares 4: Estimated Useful Basis Cost Salvage Value Code Service Description Date Replace Date Rem Adj Replacement Cost Current Future Building C 1/1/1993 1/1/233 19: 4: 3. 19,65. 28, Building D 1/1/1987 1/1/227 13: 4: , , Clubhouse 1/1/1987 1/1/227 13: 4: 8. 5,24. 6, Restrooms 1/1/1993 1/1/233 19: 4: 2. 1,31. 1, , ,496.7 Quantity Comments Building C metal mansard roof cover Building D metal mansard roof cover Page 17 of 63

18 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Clubhouse concrete tile mansard roof cover Scope of Work: Remove and replace mansard roof coverings. Basis for Cost Estimate: Similar projects completed by local contractors. Page 18 of 63

19 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Item Parameters - Full Detail Seawall (original section) Item Number Type Category Tracking Method Code Common Area Seawall Logistical Fixed Service Description Date 1/1/1971 Measurement Basis Ln Ft 5: 3.. Estimated Useful Basis Cost Salvage Value Replace Date Rem Adj 1/1/221 7: 5: Replacement Cost Current Future Quantity ,9. 42, ,9. 42,386.5 Comments Scope of Work: Install corrugated vinyl seawall in front of existing concrete wall. Basis for Cost Estimate: The cost of this asset is based on the section of seawall that was recently installed. Page 19 of 63

20 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Item Parameters - Full Detail Shuffleboard Replace Item Number Type Category Tracking Method Code Common Area Shuffleboard Court Logistical One Time Service Description Date 1/1/2 Measurement Basis Each 25: 7,5.. Estimated Useful Basis Cost Salvage Value Replace Date Rem Adj 1/1/216 2: 16: Replacement Cost Current Future Quantity 1. 7,5. 7,83. 7,5. 7,83. Comments Scope of Work: Remove and replace shuffle board court. Basis for Cost Estimate: Similar projects completed by local contractors. Page 2 of 63

21 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Item Parameters - Full Detail Shuffleboard Resurface Item Number Type Category Tracking Method Code Common Area Shuffleboard Court Logistical Fixed Service Description Date 1/1/216 Measurement Basis Each 8: 1,.. Estimated Useful Basis Cost Salvage Value Replace Date Rem Adj 1/1/224 1: 8: Replacement Cost Current Future Quantity 1. 1,. 1, ,. 1, Comments Scope of Work: Resurface shuffleboard court. Basis for Cost Estimate: Similar projects completed by local contractors. Page 21 of 63

22 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Item Parameters - Full Detail Pool Fencing Item Number Type Category Tracking Method 13 Common Area Swimming Pool Logistical Fixed Measurement Basis Basis Cost Salvage Value Code Service Description Date Replace Date Rem Adj Vinyl Picket 1/1/228 14: 3: 1/1/1998 Ln Ft 3: Estimated Useful Replacement Cost Current Future Quantity , , , , Comments Scope of Work: Remove and replace 4' vinyl picket pool fencing. Basis for Cost Estimate: 213 National renovation database. Page 22 of 63

23 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Item Parameters - Full Detail Pool Furniture Item Number Type Category Tracking Method Code 12 Common Area Swimming Pool Logistical Fixed Service Description Date /1/21 Measurement Basis Total 8: 11,228.. Estimated Useful Basis Cost Salvage Value Replace Date Rem Adj 1/1/218 4: 8: Replacement Cost Current Future Quantity 1. 11, , , , Comments (16) Chaise 339 (4) Brunch 335 (16) Brunch 24 (6) 2 Total 11,228 Page 23 of 63

24 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Item Parameters - Full Detail Pool Resurfacing Item Number Type Category Tracking Method Code Common Area Swimming Pool Logistical Fixed Service Description Date 8/1/213 Measurement Basis Total 1: 22,75.. Estimated Useful Basis Cost Salvage Value Replace Date Rem Adj 8/1/223 9:7 1: Replacement Cost Current Future Quantity 1. 22,75. 27, ,75. 27,54.24 Comments Scope of Work: Resurface swimming pool with exposed aggregate finish. Basis for Cost Estimate: The cost of this asset is based on actual work completed in 213. Page 24 of 63

25 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Item Parameters - Full Detail Tennis Court Resurface Item Number Type Category Tracking Method Code Common Area Tennis Court Logistical Fixed Service Description Date 1/1/28 Measurement Basis Total 8: 4,.. Estimated Useful Basis Cost Salvage Value Replace Date Rem Adj 1/1/216 2: 8: Replacement Cost Current Future Quantity 1. 4,. 4, ,. 4,161.6 Comments Scope of Work: Resurface Tennis Court, Mark Playing Lines, Paint Net Poles and Replace Net Basis for Cost Estimate: Similar projects completed by local contractors. Page 25 of 63

26 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Page 26 of 63

27 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Item Parameter - Category - Chart Page 27 of 63

28 Reserve Expenditures This section of the report details the associations expenditures over the next 3 years. Reports displayed in this section utilize the following assumptions: Inflation on Reserve Items - 2.%

29 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Expenditures - Annual Date Description Code Service Est Future Salvage Net Date Cost Value Expenditure Year /1/214 Entry Doors /1/ :5 16, , /1/214 Entry Doors /1/ :5 18, , , , ,83. Year /1/216 Shuffleboard Replace /1/2 16: 7,83.. 1/1/216 Tennis Court Resurface /1/28 8: 4, , , ,964.6 Year /1/218 Elevator Modernization /1/ : 54, , /1/218 Elevator Modernization /1/ : 54, , /1/218 Pool Furniture /1/21 8: 12, , , , Year /1/219 Exterior Painting /1/212 7: 17, , /1/219 Exterior Painting /1/212 7: 14, , /1/219 Exterior Painting /1/212 7: 1, , /1/219 Exterior Painting /1/212 7: , , , , , , , , , ,54.24 Year /1/221 Seawall (original section) /1/1971 5: Year /1/223 Pool Resurfacing /1/213 1: Year /1/224 Carports /1/1994 3: 151, , /1/224 Shuffleboard Resurface /1/216 8: 1, , /1/224 Tennis Court Resurface /1/216 8: 4, , , , Year /1/226 Pool Furniture /1/218 8: 14, , /1/226 Exterior Painting /1/219 7: 19, , /1/226 Exterior Painting /1/219 7: 16, , /1/226 Exterior Painting /1/219 7: 1, , /1/226 Exterior Painting /1/219 7: , , , , Year /1/227 Mansard Roofing /1/1987 4: Page 29 of 63

30 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Expenditures - Annual Code Service Est Future Salvage Net Date Cost Value Expenditure Date Description 1/1/227 Mansard Roofing /1/1987 4: 1/1/227 Flat Roofing /1/27 2: 1/1/227 Flat Roofing /1/27 2: 6, , , , , , , , , , , , Year /1/228 Pool Fencing /1/1998 3: Year /1/232 Shuffleboard Resurface /1/224 8: 1, , /1/232 Tennis Court Resurface /1/224 8: 5, , , , Year /1/233 Boat Docks /1/213 2: 24, , /1/233 Flat Roofing /1/213 2: 121, , /1/233 Flat Roofing /1/213 2: 2, , /1/233 Mansard Roofing /1/1993 4: 28, , /1/233 Mansard Roofing /1/1993 4: 1, , /31/233 Asphalt Overlay /31/213 2: 48, , /1/233 Exterior Painting /1/226 7: 22, , /1/233 Exterior Painting /1/226 7: 19, , /1/233 Exterior Painting /1/226 7: 2, , /1/233 Exterior Painting /1/226 7: /1/233 Pool Resurfacing /1/223 1: 33, , , , , , , , , Year /1/234 Pool Furniture /1/226 8: Year /1/24 Shuffleboard Resurface /1/232 8: 1, /1/24 Tennis Court Resurface /1/232 8: 6, , /1/24 Exterior Painting /1/233 7: 26, , /1/24 Exterior Painting /1/233 7: 22, , /1/24 Exterior Painting /1/233 7: 2, , /1/24 Exterior Painting /1/233 7: , , , , , , , , Year /1/242 Pool Furniture /1/234 8: Year /1/243 Pool Resurfacing /1/233 1: Page 3 of 63

31 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Expenditures - Annual Date Description Code Service Est Future Salvage Net Date Cost Value Expenditure 4, , Page 31 of 63

32 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Expenditures - Category/Description Description Boat Docks Boat Docks 34,937 Building Items Entry Doors 34,937 Carports Carports Elevators Elevator Modernization 18,243 18,243 Painting Exterior Painting 33,714 33,714 Paving Asphalt Overlay Roofing Flat Roofing Mansard Roofing Seawall Seawall (original section) 42,386 42,386 Shuffleboard Court Shuffleboard Replace Shuffleboard Resurface 7,83 Page 32 of 63

33 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Expenditures - Category/Description Description , Swimming Pool Pool Fencing Pool Furniture Pool Resurfacing 12,153 27,54 12,153 27,54 Tennis Court Tennis Court Resurface 4,161 4,161 34,937 11,964 12,396 33,714 42,386 27,54 Page 33 of 63

34 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Expenditures - Category/Description Description Boat Docks Boat Docks 24,765 24, ,161 Building Items Entry Doors Carports Carports 151,161 Elevators Elevator Modernization Painting Exterior Painting 38,726 38,726 44,484 44,484 Paving Asphalt Overlay 48,297 48,297 Roofing Flat Roofing Mansard Roofing 124,736 27, ,268 3, , ,83 Seawall Seawall (original section) Shuffleboard Court Shuffleboard Replace Shuffleboard Resurface 1,218 1,428 Page 34 of 63

35 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Expenditures - Category/Description Description , ,428 Swimming Pool Pool Fencing Pool Furniture Pool Resurfacing 11,189 14,239 33,527 14,239 11,189 33,527 Tennis Court Tennis Court Resurface 4,875 5,712 4,875 5, ,256 52, ,698 11,189 7,141 35,879 Page 35 of 63

36 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Expenditures - Category/Description Description Boat Docks Boat Docks Building Items Entry Doors Carports Carports Elevators Elevator Modernization Painting Exterior Painting 51,99 51,99 Paving Asphalt Overlay Roofing Flat Roofing Mansard Roofing Seawall Seawall (original section) Shuffleboard Court Shuffleboard Replace Shuffleboard Resurface 1,673 Page 36 of 63

37 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Expenditures - Category/Description Description , Swimming Pool Pool Fencing Pool Furniture Pool Resurfacing 16,684 19,548 4,869 16,684 19,548 4,869 Tennis Court Tennis Court Resurface 6,693 6,693 16,684 59,466 19,548 4,869 Page 37 of 63

38 Component Funding Analysis This section of the reserve study report utilizes straight line accounting formulas to arrive at the required annual reserve contribution. The Component Funding Analysis calculates the annual contribution amount for each individual line item component by dividing the component s remaining unfunded balance by its remaining useful life. A component s unfunded remaining balance is its replacement cost less the reserve balance for the component at the beginning of the analysis period. The annual contribution rate for each individual line item component is then summed to calculate the total annual contribution rate for this analysis. Straight-line accounting is based on current costs and neither interest or inflation are factored into the calculations. The projected reserve fund balance at the end of the current fiscal year has been allocated to those components which have the shortest remaining life. This also provides for the lowest straight line contribution amount using this plan. However, per Florida Statute (2)(f)(3) condominium associations in Florida can only re-allocate (use) reserve funds for purposes other than which they were authorized for by getting approval in advance by a vote of the majority of the voting interests.

39 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Component Funding Analysis - Items Current Cost Components by Category Boat Docks Boat Docks Building Items Entry Doors Carports Carports Elevators Elevator Modernization Painting Exterior Painting Paving Asphalt Overlay Roofing Flat Roofing Mansard Roofing Seawall Seawall (original section) 17, 17, 34,65 34,65 124,5 124,5 1, 1, 3,185 3,185 32,935 32,935 18,36 42, ,881 36,9 36,9 Useful YY:MM 2: 3: 3: 35: 7: 2: 2: 4: 5: Remaining YY:MM 19: :5 1: 4: 5:7 19:4 13:9-19: 13: -19: 7: Reserve Balance Reserve Contribution 214 Unfunded Balance 44 16, , ,828 34, ,828 34,294 2, ,63 12,16 2, ,63 12,16 2,372 97,628 24,47 2,372 97,628 24, ,467 5, ,467 5, ,153 1, ,153 1,663 4,275 1,1 176,31 41,565 11,129 2,7 5, ,596 13, ,25 5, ,25 5,146 Page 39 of 63

40 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Component Funding Analysis - Items Current Cost Components by Category Shuffleboard Court Shuffleboard Resurface Swimming Pool Pool Fencing Pool Furniture Pool Resurfacing Tennis Court Tennis Court Resurface Useful YY:MM 8,48 11,228 22,75 42,458 4, 8: Remaining YY:MM Reserve Contribution 214 Unfunded Balance ,28 1,962 22, ,74 2,318 1,6 41,452 5, ,95 1,953 4, 95 3,95 1, ,14 15,3 629,713 15,198 3: 8: 1: 8: 1: Reserve Balance 14: 4: 9:7 2: Page 4 of 63

41 3 Year Pooled Cash Flow Funding Plan This section of the reserve study presents an alternate funding plan to the Component Funding Analysis (Straight-Line). This plan utilizes the same reserve items and life expectancies with costs based on future rather than current. This method calculates the annual reserve contribution based on a 3 year positive cash flow. The 3 Year Pooled Cash Flow Funding Plan is a method of calculating reserve contributions where contributions to the reserve funds are designed to offset the variable annual expenditures from the reserve fund. This analysis calculates the future replacement cost for reserve components when they are due for replacement, and recognizes increases in construction costs as well as interest income attributable to reserve accounts. Funds from the beginning balances are pooled together and a yearly contribution rate is calculated to arrive at a positive cash flow throughout the analysis period. This funding plan utilizes the following assumptions: Annual Contribution Increase -.% Interest Earned -.25% Taxes on Interest Earned -.% Inflation on Reserve Items - 2.% Contingency -.%

42 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Cash Flow - Annual Begin Balance 15,3 47, ,5 158, , ,493 17,12 225, ,57 294,15 Contribution 67,182 67,182 1,492 1,492 1,22 1,22 1,22 1,22 1,22 1,22 1,22 1,22.%.% %.%.%.%.%.%.%.% ,937 11,964 12,396 33,714 42,386 27,54 47, ,5 158, , ,493 17,12 225, ,57 294,15 322,34 Average Per Unit Percent Change Special Assessment Interest Less Tax on Interest Net Interest Less Expenditures Less Deferred Expenditure Ending Balance Begin Balance 322,34 22, ,31 278, , , , , ,8 441,68 Contribution 1,22 1,22 1,22 1,22 1,22 1,22 1,22 1,22 1,22 1,22.%.%.%.%.%.%.%.%.%.% , , ,256 52, ,698 11,189 7,141 35,879 Average Per Unit Percent Change Special Assessment Interest Less Tax on Interest Net Interest Less Expenditures Less Deferred Expenditure Ending Balance 22, ,31 278, , , , , ,8 441,68 191,237 Page 42 of 63

43 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Begin Balance 191, , , , ,68 453,45 59,161 55, , ,928 Contribution Average Per Unit Percent Change Special Assessment Interest Less Tax on Interest Net Interest Less Expenditures Less Deferred Expenditure Ending Balance 1,22 1,22 1,22 1,22 1,22 1,22 1,22 1,22 1,22 1,22.%.%.%.%.%.%.%.%.%.% ,62 1,22 1,275 1,334 1,428 1, ,62 1,22 1,275 1,334 1,428 1,529 16,684 59,466 19,548 4, , , , ,68 453,45 59,161 55, , , ,52 Page 43 of 63

44 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Cash Flow - Chart Page 44 of 63

45 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Percent Funded - Annual 1 % Beginning Funded Beginning Percent Date Time Value Balance Funded 1/1/214 Expenditure Contribution 4.75 % Interest 321,9 15,3 1/1/ ,725 47, , /1/ ,54 115, ,964 1/1/ , , /1/ ,68 213, ,396 1/1/ , , ,714 1/1/22 357,24 17, /1/ ,9 225, ,386 1/1/ ,32 238, /1/ , , ,54 1/1/ ,74 322, ,256 1/1/ ,822 22, /1/ , , ,966 1/1/ , , ,698 1/1/228 27,1 181, ,189 1/1/229 33, , /1/23 349, , /1/ , , /1/ , , ,34 7,141 1/1/ , , ,879 1/1/ , , ,684 1/1/ ,41 229, /1/ , , /1/ , , /1/ , , ,62 1/1/239 48, , ,22 1/1/24 539,6 59, ,275 59,466 1/1/ ,733 55, ,334 1/1/242 61, , ,428 19,548 1/1/ , , ,529 4,869 67,182 Future Cost 75 34,937 Page 45 of 63

46 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Page 46 of 63

47 Analysis Date - January 1, 214 Inflation:2.% Investment:.25% Cont.Factor:.% Adjust.Factor:.% Contingency:.%,: CalcMeth:Future Percent Funded - Annual - Chart Page 47 of 63

48 Explanations & Definitions Preparing the annual budget and overseeing the association s finances are perhaps the most important responsibilities of board members. The annual operating and reserve budgets reflect the planning and goals of the association and set the level and quality of service for all of the association s activities. Funding Options When a major repair or replacement is required in a community, an association has essentially four options available to address the expenditure: The first, and only logical means that the Board of Directors has to ensure its ability to maintain the assets for which it is obligated, is by assessing an adequate level of reserves as part of the regular membership assessment, thereby distributing the cost of the replacements uniformly over the entire membership. The community is not only comprised of present members, but also future members. Any decision by the Board of Directors to adopt a calculation method or funding plan which would disproportionately burden future members in order to make up for past reserve deficits, would be a breach of its fiduciary responsibility to those future members. Unlike individuals determining their own course of action, the board is responsible to the community as a whole. Whereas, if the association was setting aside reserves for this purpose, using the vehicle of the regularly assessed membership dues, it would have had the full term of the life of the roof, for example, to accumulate the necessary moneys. Additionally, those contributions would have been evenly distributed over the entire membership and would have earned interest as part of that contribution. The second option is for the association to acquire a loan from a lending institution in order to effect the required repairs. In many cases, banks will lend to an association using future homeowner assessments as collateral for the loan. With this method, the current board is pledging the future assets of an association. They are also incurring the additional expense of interest fees along with the original principal amount. In the case of a 15, roofing replacement, the association may be required to pay back the loan over a three to five year period, with interest. The third option, too often used, is simply to defer the required repair or replacement. This option, which is not recommended, can create an environment of declining property values due to expanding lists of deferred maintenance items and the association s financial inability to keep pace with the normal aging process of the common area components. This, in turn, can have a seriously negative impact on sellers in the association by making it difficult, or even impossible, for potential buyers to obtain financing from lenders. Increasingly, lending institutions are requesting copies of the association s most recent reserve study before granting loans, either for the association itself, a prospective purchaser, or for an individual within such an association. The fourth option is to pass a special assessment to the membership in an amount required to cover the expenditure. When a special assessment is passed, the association has the authority and responsibility to collect the assessments, even by means of foreclosure, if necessary. However, an association considering a special assessment cannot guarantee that an assessment, when needed, will be passed. Consequently, the association cannot guarantee its ability to perform the required repairs or replacements to those major components for which it is obligated when the need arises. Additionally, while relatively new communities require very little in the way of major reserve expenditures, associations reaching 12 to 15 years of age and older, find many components

49 reaching the end of their effective useful lives. These required expenditures, all accruing at the same time, could be devastating to an association s overall budget. Types of Reserve Studies Most reserve studies fit into one of three categories: Level I - Full Reserve Study with site visit; Level II - Update with site visit; and Level III - Update without site visit. 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 association s major common area components. To do so, the provider conducts a component inventory, a condition assessment, and life and valuation estimates. Developing a Component List The budget process begins with full inventory of all the major components for which the association is responsible. The determination of whether an expense should be labeled as operational, reserve, or excluded altogether is sometimes subjective. Since this labeling may have a major impact on the financial plans of the association, subjective determinations should be minimized. We suggest the following considerations when labeling an expense. Operational Expenses Occur at least annually, no matter how large the expense, and can be budgeted for effectively each year. They are characterized as being reasonably predictable, both in terms of frequency and cost. Operational expenses include all minor expenses, which would not otherwise adversely affect an operational budget from one year to the next. Examples of operational expenses include: Utilities: Administrative: Services: Repair Expenses: Electricity Supplies Landscaping Minor Roof Repairs Gas Licenses, Permits & Fees Pool Maintenance Minor Concrete Repairs Water Insurance(s) Street Sweeping Operating Contingency Telephone Bank Service Charges Accounting Cable TV Dues & Publications Reserve Study FPAT File# RES13712 Page 49 of 63

50 Reserve Expenses These are major expenses that occur other than annually, and which must be budgeted for in advance in order to ensure the availability of the necessary funds in time for their use. Reserve expenses are reasonably predictable both in terms of frequency and cost. However, they may include significant assets that have an indeterminable but potential liability that may be demonstrated as a likely occurrence. They are expenses that, when incurred, would have a significant effect on the smooth operation of the budgetary process from one year to the next, if they were not reserved for in advance. Examples of reserve expenses include: Roof Replacements Elevator Modernization Painting Interior Furnishings Deck Resurfacing Park/Play Equipment Fencing Replacement Pool/Spa Re-plastering Asphalt Seal Coating Pool Equipment Replacement Asphalt Repairs Pool Furniture Replacement Asphalt Overlays Tennis Court Resurfacing Equipment Replacement Lighting Replacement Budgeting is Normally Excluded for: Repairs or replacements of assets which are deemed to have an estimated useful life equal to or exceeding the estimated useful life of the facility or community itself, or exceeding the legal life of the community as defined in an association s governing documents. Examples include the complete replacement of elevators, wiring, plumbing, concrete driveways, etc. Also excluded are insignificant expenses that may be covered either by an operating or reserve contingency, or otherwise in a general maintenance fund. Expenses that are necessitated by acts of nature, accidents or other occurrences that are more properly insured for, rather than reserved for, are also excluded. Financial Analysis The financial analysis assesses the association 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 association 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. The association can assist in simplifying the reserve analysis update process by keeping accurate records of these changes throughout the year. FPAT File# RES13712 Page 5 of 63

51 Funding Methods This report presents the two generally accepted means of estimating reserve contributions; the Straight Line Funding Plan and the 3 Year Pooled Cash Flow Plan. Component Funding Analysis Plan (Straight-Line) The Component Funding Analysis Plan calculates the annual contribution amount for each individual line item component by dividing the component s remaining unfunded balance by its remaining useful life. A component s unfunded remaining balance is its replacement cost less the reserve balance for the component at the beginning of the analysis period. The annual contribution rate for each individual line item component is then summed to calculate the total annual contribution rate for this analysis. Straight-line accounting is based on current costs and neither interest or inflation are factored into the calculations. The projected reserve fund balance at the end of the current fiscal year has been allocated to those components which have the shortest remaining life. This also provides for the lowest straight line contribution amount using this plan. However, per Florida Statute (2)(f)(3) condominium associations in Florida can only re-allocate (use) reserve funds for purposes other than which they were authorized for by getting approval in advance by a vote of the majority of the voting interests. 3 Year Pooled Cash Flow Analysis Plan The 3 Year Cash Flow Plan is a method of calculating reserve contributions where contributions to the reserve funds are designed to offset the variable annual expenditures from the reserve fund. This analysis calculates the future replacement cost for reserve components when they are due for replacement, and recognizes increases in construction costs as well as interest income attributable to reserve accounts. Funds from the beginning balances are pooled together and a yearly contribution rate is calculated to arrive at a positive cash flow throughout the analysis period. The following describes how the cash flow was produced: Reserve Fund Balance projected from the date this reserve study was prepared to the beginning of the fiscal year above; Reserve Item Data - for each reserve item the following was determined: description, category, basis cost, cost, quantity, estimated useful life and estimated remaining life; Expenditures - the reserve item data above was used to project when the initial and recurring expenditures will be incurred over the next 3 years; Interest calculated on the available funds; Contribution determined based on the following: annual contribution increases, earned with related taxes and inflation on reserve items. interest Prior to December 23, 22, Florida statute mandated that condominium associations calculate reserves via the Component Funding Analysis method, on an annual basis. Funding at less than 1% of the fully funded estimate, based on the Component Funding Analysis method, could occur only after a full vote of the association membership. As of December 23, 22, amendments to the FPAT File# RES13712 Page 51 of 63

52 Florida Administrative Code recognize the Cash Flow Analysis method as an approved methodology for the calculation of reserve funding for condominium associations. The fund requirement estimated by the Cash Flow Analysis method can now be provided to the membership, on an annual basis as a fully funded figure. The analysis must be completed as a portion of the association's annual budget, include the total estimated useful lives, estimated remaining useful lives, and estimated replacement cost/deferred maintenance expenses of all assets in the reserve budget (minimum roofing, painting, paving and any other item with a replacement/repair cost over 1,), and the estimated fund balance of the pooled reserve account as of the beginning of the period for which the budget will be in effect. If the association maintains a pooled account for reserves, the amount of the contribution to the pooled reserve account as disclosed on the proposed budget shall be not less than that required to ensure that the balance on hand at the beginning of the period for which the budget will go into effect plus the projected annual cash inflows over the remaining estimated useful lives of all of the assets that make up the reserve pool are equal to or greater than the projected annual cash outflows over the remaining estimated useful lives of all of the assets that make up the reserve pool, based on the current reserve analysis. The projected annual cash inflows may include estimated earnings from investment of principal; the association may include annual percentage increases in costs for the reserve components, but these increases are not mandated. Fully funded reserve contributions utilizing this methodology may not include future special assessments, and the annual funding levels cannot include percentage increases. Definitions Reserves Monies set aside for the projected repair and/or replacement of the associations common elements. Component A specific item or element which is part of the association's common area assets and is considered to require reserve funding. Component Inventory The task of selecting and qualifying reserve components. This task can be accomplished through on-site visual, review of association design and organizational documents, a review of established association precedents, and discussion with appropriate association representative(s). Quantity The quantity or amount of each reserve component element. Units The unit of measurement for each quantity. Cost per Unit The estimated cost to replace a reserve component per unit of measurement. Current Replacement Cost The estimated replacement cost effective at the beginning of the fiscal year for which the report is being prepared 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. 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. FPAT File# RES13712 Page 52 of 63

53 Estimated Useful The estimated useful life of an asset based upon industry standards, manufacturer specifications, 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. Adjustment to Useful Once the useful life is determined, it may be adjusted, up or down, by this separate figure for the current cycle of replacement. This will allow for a current period adjustment without affecting the estimated replacement cycles for future replacements. Estimated Remaining This calculation is completed internally based upon the report s fiscal year date and the date the asset was placed-in-service. 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. Budget Year Beginning/Ending The budgetary year for which the report is prepared. For associations with fiscal years ending December 31st, the monthly contribution figures indicated are for the 12-month period beginning 1/1/2xx and ending 12/31/2xx. Number of Units and/or Phases If applicable, the number of units and/or phases included in this version of the report. Inflation This figure is used to approximate the future cost to repair or replace each component in the report. The current cost for each component is compounded on an annual basis by the number of remaining years to replacement, and the total is used in calculating the monthly reserve contribution that will be necessary to accumulate the required funds in time for replacement. Annual Assessment Increase This represents the percentage rate at which the association will increase its assessment to reserves at the end of each year. For example, in order to accumulate 1, in 1 years, you could set aside 1, per year. As an alternative, you could set aside 795 the first year and increase that amount by 5% each year until the 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 figure should be equal to the rate of inflation. It can, however, be used to aide those associations that have not set aside appropriate reserves in the past, by making the initial year s allocation less formidable. Investment Yield Before Taxes The average interest rate anticipated practices. by the association based upon its current investment Taxes on Interest Yield The estimated percentage of interest income that will be set aside to pay income taxes on the interest earned. Projected Reserve Balance The anticipated reserve balance on the first day of the fiscal year for which this report has been prepared. This is based upon information provided and not audited. Percent Fully Funded The ratio, at the beginning of the fiscal year, of the actual (or projected) reserve balance to the calculated fully funded balance, expressed as a percentage. Phase Increment Detail and/or Age FPAT File# RES13712 Page 53 of 63