REPLACEMENT RESERVE REPORT FY 2018 SANCTUARY AT FALSE CAPE. Prepared for: Ms. Rebecca Beamon

Transcription

1 SANCTUARY AT FALSE CAPE REPLACEMENT RESERVE REPORT FY 2018 SANCTUARY AT FALSE CAPE REPLACEMENT RESERVE REPORT FY 2018 Prepared for: SANCTUARY AT FALSE CAPE Ms. Rebecca Beamon 3700 Sandpiper Road Virginia Beach, VA Consultant: 2661 Riva Road, Suite 1023 Annapolis, MD

2 INTENTIONALLY LEFT BLANK

3 Section A REPLACEMENT RESERVE REPORT Introduction SANCTUARY AT FALSE CAPE VIRGINIA BEACH, VIRGINIA November 1, 2017 Section B Sanctuary Description. Sanctuary at False Cape is a condominium located in Virginia Beach, Virginia. Phase 1 construction was completed in 200 and Phase 2 construction was completed in The community consists of two-mid-rise buildings containing 28 units. The survey examined the common elements of the property, including: Section C Large Components Asphalt drive and parking. Concrete sidewalks, and curb and gutter. Retaining walls, fencing, and railings. Swimming pools and cabana building. Building systems. Building exteriors and common interior areas. Furniture, fixtures and equipment. Section D Condition Assessment Level of Service. This study has been performed as a Level 3 Update with no Site Visit or On-Site Review as defined under the National Reserve Study Standards that have been adopted by the Community Associations Institute. As such, the component inventory is based on a Level 2 study that was performed in 201 by Miller Dodson Associates. The inventory was adjusted based on offsite correspondence with the Community Manager. The provided fund status and funding plan have been derived from analysis of the adjusted inventory. Appendix Overview, Standard Terms, and Definitions Video Answers to Frequently Asked Questions

4 To aid in the understanding of this report and its concepts and practices, on our web site, we have developed videos addressing frequently asked topics. In addition, there are posted links covering a variety of subjects under the resources page of our web site at mdareserves.com. Purpose. The purpose of this Replacement Reserve Study is to provide Sanctuary at False Cape (hereinafter called the Association) with an inventory of the common community facilities and infrastructure components that require periodic replacement. The Study includes a general view of the condition of these items and an effective financial plan to fund projected periodic replacements. Inventory of Items Owned by the Association. Section B lists the Projected Replacements of the commonly owned items that require periodic replacement using funding from Replacement Reserves. The Replacement Reserve Inventory also provides information about excluded items, which are items whose replacements are not scheduled for funding from Replacement Reserves. Condition of Items Owned by the Association. Section B includes our estimates of the normal economic life and the remaining economic life for the projected replacements. Section C provides a year-by-year listing of the projected replacements. Section D provides additional detail for items that are unique or deserving of attention because of their condition or the manner in which they have been treated in this study. Financial Plan. The Association has a fiduciary responsibility to protect the appearance, value, and safety of the property and it is therefore essential the Association have a financial plan that provides funding for the projected replacements. In conformance with American Institute of Certified Public Accountant guidelines, Section A, Replacement Reserve Analysis evaluates the current funding of Replacement Reserves as reported by the Association and recommends annual funding of Replacement Reserves by the Cash Flow Method. Section A, Replacement Reserve Analysis includes graphic and tabular presentations of the Association s current funding and the recommended funding based on the Cash Flow Method. An Executive Summary of these calculations is provided on Page A1. The alternative Component Method of funding is provided in the Appendix. Basis. The data contained in this Replacement Reserve Study is based upon the following: The Request for Proposal submitted and executed by the Association. Miller - Dodson originally conducted multiple meetings with the Manager, Board Members and Facility staff and performed a visual evaluation on various dates in March, April and May of 201 to determine a remaining useful life and replacement cost for the commonly owned elements of this facility. This study contains additional recommendations to address inflation for the Cash Flow Method only. For this recommendation, Miller - Dodson uses the Producers Price Index (PPI), which gauges inflation in manufacturing and construction. Please see page A for further details. To-Scale Drawings. Site and building plans were not used in the development of this study. We recommend the Association assemble and maintain a library of site and building plans of the entire facility. Record drawings should be scanned into an electronic format for safe storage and ease of distribution. Upon request for a nominal fee, Miller - Dodson can provide scanning services. Current Funding. This reserve study has been prepared for Fiscal Year 2018 covering the period from January 1, 2018 to December 31, The Replacement Reserves on deposit as of October 31, 2017 are reported to be $329,101. The planned contribution for the fiscal year is $260,60. This results in a Reserve Fund balance at the start of the fiscal year as follows:

5 October 31, 2017 balance $329,101 Plus 2 months contribution $3,0 Planned expenditures pool ($0,000) Planned expenditures roof ($30,000) FY 2018 opening balance $302,1 The balance and contribution figures have been supplied by the managing agent and confirmation or audit of these figures is beyond the scope of the study. For the purposes of this study, it is assumed that the annual contribution will be deposited at the end of each month. Acknowledgement. Miller - Dodson Associates would like to acknowledge the assistance and input of the Community Manager, Ms. Rebecca Beamon and other Board members and staff who provided very helpful insight into the current operations of the property. Analyst s Credentials. Mr. Philip Pointon holds a Bachelors Degree in Architecture from Virginia Polytechnic Institute and State University and a Masters Degree from Old Dominion University in Engineering Management and is a graduate of the Army Management Staff College. He has been a Registered Professional Architect in the States of Virginia and Hawaii since 1990 and has served in many design, management, and construction capacities as an architect since Mr. Pointon is a Reserve Specialist as accredited by the Community Association Institute for Miller - Dodson Associates. Respectfully submitted, Philip Pointon, RS, Architect, LEED AP Reserve Specialist

6 INTENTIONALLY LEFT BLANK

7 Replacement Reserve Analysis - Page A1 EXECUTIVE SUMMARY The Sanctuary at False Cape Replacement Reserve Analysis uses the Cash Flow Method (CFM) to calculate Replacement Reserve funding for the periodic replacement of the 280 Projected Replacements identified in the Replacement Reserve Inventory. $892,96 RECOMMENDED REPLACEMENT RESERVE FUNDING FOR THE STUDY YEAR, 2018 $ Per unit (average), minimum monthly funding of Replacement Reserves We recommend the Association adopt a Replacement Reserve Funding Plan based on the annual funding recommendation above. Inflation adjusted funding for subsequent years is shown on Page A. Sanctuary at False Cape reports a Starting Balance of $302,1 and Annual Funding totaling $260,60. Current funding is inadequate to fund the $21,332,16 of Projected Replacements scheduled in the Replacement Reserve Inventory over the 0-year Study Period. See Page A3 for a more detailed evaluation. #1 - Cumulative Replacement Reserve Funding and Expenditures Graph $2,000,000 Cash Flow Method - Cumulative Receipts The starting balance is based on data provided by the Manager Current Funding - Cumulative Receipts Projected Replacements - Cumulative Expenditures This Update made 11/1/2017 reflects adjusted 21,862,16 $20,000,000 $21,332,16 $1,000,000 $10,000,000 10,728,11 $,000,000 $ The Current Funding Objective as calculated by the Component Method (Fully Funded) is $3,76,38 making the reserve account 8.% funded. See the Appendix for more information on this method. The starting balance is based on data provided by the Manager. This Update made 11/1/2017 reflects adjusted quantities for partial roofing replacements as provided by the Association and the exclusion of line items less than $2, 000 as requested. An accompanying inventory for large components has also been created per the Boards requested and deletes those components from this inventory.

8 Replacement Reserve Analysis - Page A2 REPLACEMENT RESERVE ANALYSIS - GENERAL INFORMATION The Sanctuary at False Cape Replacement Reserve Analysis calculations of recommended funding of Replacement Reserves by the Cash Flow Method and the evaluation of the Current Funding are based upon the same Study Year, Study Period, Beginning Balance, Replacement Reserve Inventory and Level of Service STUDY YEAR The Association reports that their accounting year begins on January 1, and the Study Year, the first year evaluated by the Replacement Reserve Analysis, begins on January 1, Years STUDY PERIOD The Replacement Reserve Analysis evaluates the funding of Replacement Reserves over a 0-year Study Period. $302,1 STARTING BALANCE The Association reports Replacement Reserves on Deposit totaling $302,1 at the start of the Study Year. Level Three LEVEL OF SERVICE The Replacement Reserve Inventory has been developed in compliance with the National Reserve Study Standards for a Level Three Study, as defined by the Community Associations Institute (CAI). $21,332,16 REPLACEMENT RESERVE INVENTORY - PROJECTED REPLACEMENTS The Sanctuary at False Cape Replacement Reserve Inventory identifies 280 items that will require periodic replacement, that are to be funded from Replacement Reserves. We estimate the cost of these replacements will be $21,332,16 over the 0-year Study Period. The Projected Replacements are divided into 28 major categories starting on Page B3. Pages B1-B2 provide detailed information on the Replacement Reserve Inventory. #2 - Annual Expenditures for Projected Replacements Graph This graph shows annual expenditures for Projected Replacements over the 0-year Study Period. The red line shows the average annual expenditure of $33,313. Section C provides a year by year Calender of these expenditures. $2,000,000 $1,00,000 $1,6,677 $1,18,008 $1,6,8 $1,6,972 $1,000,000 $00,000 $33,313 0-year Average $66,06 $330,06 $9,22 $2,12 $20,21 $21,006 $122,120 $126,190 $1,66 $392,022 $222,96 $861,808 $677,86 $99,213 $7,011 $87,293 $61,08 $301,96 $202,300 $97,66 $717,89 $399,833 $67,78 $83,013 $90,036 $166,798 $60,722 $931,087 $1,891 $3,101 $192,9 $61,00 $90,68 $06,136 $1,080,838 $12,182 $

9 Replacement Reserve Analysis - Page A3 UPDATING UPDATING OF THE FUNDING PLAN The Association has a responsibility to review the Funding Plan annually. The review should include a comparison and evaluation of actual reserve funding with recommended levels shown on Page A and A. The Projected Replacements listed on Page C2 should be compared with any replacements accomplished and funded from Replacement Reserves. Discrepancies should be evaluated and if necessary, the Reserve Study should be updated or a new study commissioned. We recommend annual increases in replacement reserve funding to account for the impact of inflation. Inflation Adjusted Funding is discussed on Page A. UPDATING OF THE REPLACEMENT RESERVE STUDY At a minimum, the Replacement Reserve Study should be professionally updated every three to five years or after completion of a major replacement project. Updating should also be considered if during the annual review of the Funding Plan, discrepancies are noted between projected and actual reserve funding or replacement costs. Updating may also be necessary if there is a meaningful discrepancy between the actual inflation rate and the inflation rate used for the Inflation Adjusted Funding of Replacement Reserves on Page A. ANNUAL EXPENDITURES AND CURRENT FUNDING The annual expenditures that comprise the $21,332,16 of Projected Expenditures over the 0-year Study Period and the impact of the Association continuing to fund Replacement Reserves at the current level are detailed in Table 3. #3 - Table of Annual Expenditures and Current Funding Data - Years 1 through 0 Year Starting Balance $302,1 Projected Replacements ($66,06) ($330,06) ($9,22) ($2,12) ($20,21) ($21,006) ($1,6,677) ($122,120) ($1,18,008) ($126,190) Annual Deposit $260,60 $260,60 $260,60 $260,60 $260,60 $260,60 $260,60 $260,60 $260,60 $260,60 End of Year Balance ($102,32) ($171,71) ($6,33) ($188,12) ($168,006) ($28,372) ($1,632,09) ($1,93,890) ($2,61,28) ($2,16,808) Cumulative Expenditures ($66,06) ($99,72) ($1,090,81) ($1,33,226) ($1,773,77) ($2,29,73) ($3,79,30) ($3,881,1) ($,299,9) ($,2,79) Cumulative Receipts $63,181 $823,821 $1,08,61 $1,3,101 $1,60,71 $1,866,381 $2,127,021 $2,387,661 $2,68,301 $2,908,91 Year Projected Replacements ($1,66) ($392,022) ($222,96) ($861,808) ($677,86) ($99,213) ($7,011) ($87,293) ($61,08) ($301,96) Annual Deposit $260,60 $260,60 $260,60 $260,60 $260,60 $260,60 $260,60 $260,60 $260,60 $260,60 End of Year Balance ($2,11,63) ($2,3,017) ($2,0,32) ($3,106,09) ($3,23,72) ($3,362,299) ($3,676,670) ($3,03,323) ($3,87,731) ($3,899,06) Cumulative Expenditures ($,81,216) ($,973,238) ($6,196,203) ($7,08,010) ($7,73,866) ($7,83,080) ($8,10,091) ($8,97,38) ($9,112,32) ($9,1,397) Cumulative Receipts $3,169,81 $3,30,221 $3,690,861 $3,91,01 $,212,11 $,72,781 $,733,21 $,99,061 $,2,701 $,1,31 Year Projected Replacements ($202,300) ($97,66) ($717,89) ($399,833) ($67,78) ($83,013) ($90,036) ($166,798) ($1,6,8) ($60,722) Annual Deposit $260,60 $260,60 $260,60 $260,60 $260,60 $260,60 $260,60 $260,60 $260,60 $260,60 End of Year Balance ($3,80,716) ($,37,2) ($,99,796) ($,133,989) ($,21,097) ($,73,71) ($,972,867) ($,879,02) ($7,082,968) ($7,283,00) Cumulative Expenditures ($9,616,697) ($10,7,163) ($11,292,07) ($11,691,890) ($12,339,638) ($12,822,62) ($13,312,688) ($13,79,86) ($1,9,069) ($1,0,791) Cumulative Receipts $,77,981 $6,036,621 $6,297,261 $6,7,901 $6,818,1 $7,079,181 $7,339,821 $7,600,61 $7,861,101 $8,121,71 Year Projected Replacements ($931,087) ($1,6,972) ($1,891) ($3,101) ($192,9) ($61,00) ($90,68) ($06,136) ($1,080,838) ($12,182) Annual Deposit $260,60 $260,60 $260,60 $260,60 $260,60 $260,60 $260,60 $260,60 $260,60 $260,60 End of Year Balance ($7,93,97) ($9,337,830) ($9,92,081) ($9,68,2) ($9,616,86) ($9,17,211) ($9,67,139) ($9,892,63) ($10,712,833) ($10,60,37) Cumulative Expenditures ($16,33,878) ($17,980,81) ($18,39,72) ($18,88,83) ($19,01,787) ($19,102,792) ($19,93,360) ($20,099,96) ($21,180,33) ($21,332,16) Cumulative Receipts $8,382,381 $8,63,021 $8,903,661 $9,16,301 $9,2,91 $9,68,81 $9,96,221 $10,206,861 $10,67,01 $10,728,11 EVALUATION OF CURRENT FUNDING The evaluation of Current Funding (Starting Balance of $302,1 & annual funding of $260,60), is done in today's dollars with no adjustments for inflation or interest earned on Replacement Reserves. The evaluation assumes Replacement Reserves will only be used for the 280 Projected Replacements identified in the Replacement Reserve Inventory and that the Association will continue Annual Funding of $260,60 throughout the 0-year Study Period. Annual Funding of $260,60 is approximately 29 percent of the $892,96 recommended Annual Funding calculated by the Cash Flow Method for 2018, the Study Year. Evaluation of the 280 Projected Replacements calculates an average annual expenditure over the next 0 years of $33,313. Annual funding of $260,60 is 9 percent of the average annual expenditure. Our calculations identify funding shortfalls in 0 years of the Study Period with the initial shortfall in The largest shortfall, $-10,712,833, occurs in 206. All shortfalls can be seen and evaluated in Table 3 above. In summary, Current Funding as reported by the Association and shown above, does not provide adequate funding for the $21,332,16 of Projected Replacements scheduled in the Replacement Reserve Inventory over the Study Period.

10 Replacement Reserve Analysis - Page A CASH FLOW METHOD FUNDING $892,96 RECOMMENDED REPLACEMENT RESERVE FUNDING FOR 2018 $ Per unit (average), minimum monthly funding of Replacement Reserves Recommended Replacement Reserve Funding has been calculated using the Cash Flow Method (also called the Straight Line or Threshold Method). This method calculates a constant annual funding between peaks in cumulative expenditures, while maintaining a Minimum Balance (threshold) in the Peak Years. Peak Years. The First Peak Year occurs in 2018 with Replacement Reserves on Deposit dropping to the Minimum Balance after the completion of $66,06 of replacements in the Study Year, Recommended funding declines from $892,96 in 2018 to $79,27 in Peak Years are identified in Chart and Table. Minimum Balance. The calculations assume a Minimum Balance of $30,000 in Replacement Reserves. This is approx. 12 months of average expenditures based on the $33,313, 0-year average annual expenditure. Cash Flow Method Study Period. Cash Flow Method calculates funding for $21,332,16 of expenditures over the 0-year Study Period. It does not include funding for any projects beyond 207 and in 207, the end of year balance will always be the Minimum Balance. # - Cash Flow Method - Graph of Cumulative Receipts and Expenditures - Years 1 through 0 $2,000,000 Cash Flow Method - Cumulative Receipts Cash Flow Method - Year End Balance Cumulative Expenditures Peak Year $21,862,16 $20,000,000 $21,332,16 $1,000,000 $10,000,000 $,000,000 $0 $30, # - Cash Flow Method - Table of Receipts & Expenditures - Years 1 through 0 Year 1st Peak nd Peak Starting Balance $302,1 Projected Replacements ($66,06) ($330,06) ($9,22) ($2,12) ($20,21) ($21,006) ($1,6,677) ($122,120) ($1,18,008) ($126,190) Annual Deposit $892,96 $79,27 $79,27 $79,27 $79,27 $79,27 $79,27 $79,27 $79,27 $1,361 End of Year Balance $30,000 $779,191 $1,263,206 $1,00,00 $1,738,78 $1,797,037 $911,616 $1,368,72 $30,000 $9,170 Cumulative Expenditures $66,06 $99,72 $1,090,81 $1,33,226 $1,773,77 $2,29,73 $3,79,30 $3,881,1 $,299,9 $,2,79 Cumulative Receipts $1,19,06 $1,77,763 $2,3,020 $2,933,276 $3,12,33 $,091,789 $,671,06 $,20,302 $,829,9 $6,380,920 Year Projected Replacements ($1,66) ($392,022) ($222,96) ($861,808) ($677,86) ($99,213) ($7,011) ($87,293) ($61,08) ($301,96) Annual Deposit $1,361 $1,361 $1,361 $1,361 $1,361 $1,361 $1,361 $1,361 $1,361 $1,361 End of Year Balance $1,31,06 $1,10,02 $1,838,798 $1,28,31 $1,01,86 $1,8,003 $1,830,32 $2,29,20 $2,230,732 $2,80,128 Cumulative Expenditures ($,81,216) ($,973,238) ($6,196,203) ($7,08,010) ($7,73,866) ($7,83,080) ($8,10,091) ($8,97,38) ($9,112,32) ($9,1,397) Cumulative Receipts $6,932,280 $7,83,61 $8,03,001 $8,86,362 $9,137,722 $9,689,083 $10,20,3 $10,791,80 $11,33,16 $11,89,2 Year Projected Replacements ($202,300) ($97,66) ($717,89) ($399,833) ($67,78) ($83,013) ($90,036) ($166,798) ($1,6,8) ($60,722) Annual Deposit $1,361 $1,361 $1,361 $1,361 $1,361 $1,361 $1,361 $1,361 $1,361 $1,361 End of Year Balance $2,829,188 $2,23,082 $2,26,9 $2,08,076 $2,311,689 $2,380,036 $2,1,360 $2,82,923 $1,912,700 $2,003,339 Cumulative Expenditures ($9,616,697) ($10,7,163) ($11,292,07) ($11,691,890) ($12,339,638) ($12,822,62) ($13,312,688) ($13,79,86) ($1,9,069) ($1,0,791) Cumulative Receipts $12,,88 $12,997,26 $13,8,606 $1,099,967 $1,61,327 $1,202,688 $1,7,08 $16,30,09 $16,86,769 $17,08,130 Year 208 3rd Peak th Peak th Peak Projected Replacements ($931,087) ($1,6,972) ($1,891) ($3,101) ($192,9) ($61,00) ($90,68) ($06,136) ($1,080,838) ($12,182) Annual Deposit $1,361 $1,361 $7,069 $7,069 $7,069 $7,069 $7,069 $7,069 $7,069 $12,182 End of Year Balance $1,623,612 $30,000 $72,178 $76,16 $80,271 $1,236,33 $1,202,836 $1,13,769 $30,000 $30,000 Cumulative Expenditures ($16,33,878) ($17,980,81) ($18,39,72) ($18,88,83) ($19,01,787) ($19,102,792) ($19,93,360) ($20,099,96) ($21,180,33) ($21,332,16) Cumulative Receipts $17,99,90 $18,10,81 $18,967,920 $19,2,989 $19,882,08 $20,339,127 $20,796,196 $21,23,26 $21,710,33 $21,862,16

11 Replacement Reserve Analysis - Page A INFLATION ADJUSTED FUNDING The Cash Flow Method calculations on Page A have been done in today's dollars with no adjustment for inflation. At Miller + Dodson, we belive that long-term inflation forecasting is effective at demonstrating the power of compounding, not at calculating appropriate funding levels for Replacement Reserves. We have developed this proprietary model to estimate the short-term impact of inflation on Replacement Reserve funding. $892, CASH FLOW METHOD RECOMMENDED FUNDING #6 - Inflation Adjusted Funding The 2018 Study Year calculations have been made using current replacement costs $1,000,000 (see Page B2), modified by the Analyst for any project specific conditions. $93, INFLATION ADJUSTED FUNDING A new analysis calculates 2019 funding based on three assumptions; Replacement Reserves on Deposit totaling $30,000 on January 1, All 2018 Projected Replacements listed on Page C2 accomplished at a cost to Replacement Reserves less than $66,06. Construction Cost Inflation of 2.30 percent in The $93,829 inflation adjusted funding in 2019 is a 2.2 percent increase over the non-inflation adjusted 2019 funding of $79,27. $611, INFLATION ADJUSTED FUNDING A new analysis calculates 2020 funding based on three assumptions; Replacement Reserves on Deposit totaling $786,173 on January 1, All 2019 Projected Replacements listed on Page C2 accomplished at a cost to Replacement Reserves less than $337,67. Construction Cost Inflation of 2.30 percent in The $611,1 inflation adjusted funding in 2020 is a.1 percent increase over the non-inflation adjusted 2020 funding of $79,27. $900,000 $800,000 $700,000 $600,000 $00,000 $00,000 $300,000 $200,000 $892,96 $892,96 $79,27 $93,829 $79,27 $611,1 $79,27 $633,038 $633, INFLATION ADJUSTED FUNDING A new analysis calculates 2021 funding based on three assumptions; Replacement Reserves on Deposit totaling $1,297,63 on January 1, All 2020 Projected Replacements listed on Page C2 accomplished at a cost to Replacement Reserves less than $99,673. Construction Cost Inflation of 2.30 percent in The $633,038 inflation adjusted funding in 2021 is a 9.28 percent increase over the non-inflation adjusted funding of $79, YEAR FIVE & BEYOND The inflation adjusted funding calculations outlined above are not intended to be a substitute for periodic evaluation of common elements by an experienced Reserve Analyst. Industry Standards, lender requirements, and many state and local statutes require a Replacement Reserve Study be professionally updated every 3 to years. INFLATION ADJUSTMENT Prior to approving a budget based upon the 2019, 2020 and 2021 inflation adjusted funding calculations above, the 2.30 percent base rate of inflation used in our calculations should be compared to rates published by the Bureau of Labor Statistics. If there is a significant discrepancy (over 1 percent), contact Miller Dodson + Associates prior to using the Inflation Adjusted Funding. INTEREST ON RESERVES The recommended funding calculations do not account for interest earned on Replacement Reserves. In 2018, based on a 1.00 percent interest rate, we estimate the Association may earn $,163 on an average balance of $16,271, $6,81 on an average balance of $68,086 in 2019, and $10,19 on $1,01,913 in The Association may elect to attribute 100 percent of the earned interest to Reserves, resulting in a reduction in the 2018 funding from $892,96 to $888,803 (a 0.7 percent reduction), $93,829 to $87,29 in 2019 (a 1.11 percent reduction), and $611,1 to $600,73 in 2020 (a 1.70 percent reduction). $100,000 $0 Cash Flow Method Funding Inflation Adjusted Funding

12 Replacement Reserve Analysis - Page A6 REPLACEMENT RESERVE STUDY - SUPPLEMENTAL COMMENTS Sanctuary at False Cape has 28 units. The type of property is a condominium association. The Cash Flow Method calculates the minimum annual funding necessary to prevent Replacement Reserves from dropping below the Minimum Balance. Failure to fund at least the recommended levels may result in funding not being available for the Projected Replacements listed in the Replacement Reserve Inventory. The accuracy of the Replacement Reserve Analysis is dependent upon expenditures from Replacement Reserves being made ONLY for the 280 Projected Replacements specifically listed in the Replacement Reserve Inventory. The inclusion/exclusion of items from the Replacement Reserve Inventory is discussed on Page B1. The original study indicated there are 22 total units. The Manager reports that there are 28 units and that the reserve contribution is prorated based on square footage area of each unit. Phase 1 (also indicated as Building A) is reported to have been completed in 200. Phase 2 (also indicated as Building B) is reported to have been completed in The recommended contribution indicates a significant increase over the prior study due in large part to the significant amount of replacement inventory added to this update as requested by the Board that was not included in the previous study. 09/17/1. Changed study year to Added 12 months contributions to reflect starting balance as of January 1, Subtracted one year from each component's remaining life.

13 Replacement Reserve Inventory - Page B1 REPLACEMENT RESERVE INVENTORY GENERAL INFORMATION Sanctuary at False Cape - Replacement Reserve Inventory identifies 37 items. Two types of items are identified, Projected Replacements and Excluded Items: PROJECTED REPLACEMENTS. 280 of the items are Projected Replacements and the periodic replacements of these items are scheduled for funding from Replacement Reserves. The Projected Replacements have an estimated one-time replacement cost of $8,20,323. Replacements totaling $21,332,16 are scheduled in the Replacement Reserve Inventory over the 0-year Study Period. Projected Replacements are the replacement of commonly-owned physical assets that require periodic replacement and whose replacement is to be funded from Replacement Reserves. EXCLUDED ITEMS. 9 of the items are Excluded Items, and expenditures for these items are NOT scheduled for funding from Replacement Reserves. The accuracy of the calculations made in the Replacement Reserve Analysis is dependent on expenditures NOT being made for Excluded Items. The Excluded Items are listed in the Replacement Reserve Inventory to identify specific items and categories of items that are not to be funded from Replacement Reserves. There are multiple categories of items that are typically excluded from funding by Replacement Reserves, including but not limited to: Tax Code. The United States Tax Code grants very favorable tax status to Replacement Reserves, conditioned on expenditures being made within certain guidelines. These guidelines typically exclude maintenance activities, minor repairs and capital improvements. Value. Items with a replacement cost of less that $1,000 and/or a normal economic life of less than 3 years are typically excluded from funding from Replacement Reserves. This exclusion should reflect Association policy on the administration of Replacement Reserves. If the Association has selected an alternative level, it will be noted in the Replacement Reserve Inventory - General Comments on Page B2. Long-lived Items. Items that when properly maintained, can be assumed to have a life equal to the property as a whole, are typically excluded from the Replacement Reserve Inventory. Unit improvements. Items owned by a single unit and where the items serve a single unit are generally assumed to be the responsibility of that unit, not the Association. Other non-common improvements. Items owned by the local government, public and private utility companies, the United States Postal Service, Master Associations, state and local highway authorities, etc., may be installed on property that is owned by the Association. These types of items are generally not the responsibility of the Association and are excluded from the Replacement Reserve Inventory. The rationale for the exclusion of an item from funding by Replacement Reserves is discussed in more detail in the 'Comments' sections of the Section B - Replacement Reserve Inventory. CATEGORIES. The 37 items included in the Sanctuary at False Cape Replacement Reserve Inventory are divided into 28 major categories. Each category is printed on a separate page, Pages B3 to B30. LEVEL OF SERVICE. This Replacement Reserve Inventory has been developed in compliance with the standards established for a Level Three - Update (no site visit/offsite review), as defined by the National Reserve Study Standards, established in 1998 by Community Associations Institute, which states: Level III Studies are based entirely on the component inventory from a prior study. A site visit is not conducted to confirm this information, to verify the quantities that were used in the previous report or to make observations of the current condition of the inventory components. The estimates of value and remaining life that were used in the previous study are adjusted to reflect current pricing and the simple passage of time. The fund status and funding plan are derived from analysis of this data.

14 Replacement Reserve Inventory - Page B2 REPLACEMENT RESERVE INVENTORY - GENERAL INFORMATION (cont'd) INVENTORY DATA. Each of the 280 Projected Replacements listed in the Replacement Reserve Inventory includes the following data: Item Number. The Item Number is assigned sequentially and is intended for identification purposes only. Item Description. We have identified each item included in the Inventory. Additional information may be included in the Comments section at the bottom of each page of the Inventory. Units. We have used standard abbreviations to identify the number of units including SF-square feet, LF-lineal feet, SY-square yard, LS-lump sum, EA-each, and PR-pair. Non-standard abbreviations are noted in the Comments section at the bottom of the page. Number of Units. The methods used to develop the quantities are discussed in "Level of Service" above. Unit Replacement Cost. We use four sources to develop the unit cost data shown in the Inventory; actual replacement cost data provided by the client, information provided by local contractors and suppliers, industry standard estimating manuals, and a cost database we have developed based upon our detailed interviews with contractors and service providers who are specialists in their respective lines of work. Normal Economic Life (Yrs). The number of years that a new and properly installed item should be expected to remain in service. Remaining Economic Life (Yrs). The estimated number of years before an item will need to be replaced. In "normal" conditions, this could be calculated by subtracting the age of the item from the Normal Economic Life of the item, but only rarely do physical assets age "normally". Some items may have longer or shorter lives depending on many factors such as environment, initial quality of the item, maintenance, etc. Total Replacement Cost. This is calculated by multiplying the Unit Replacement Cost by the Number of Units. Each of the 9 Excluded Items includes the Item Description, Units, and Number of Units. Many of the Excluded Items are listed as a 'Lump Sum' with a quantity of 1. For the Excluded Items, this indicates that all of the items identified by the 'Item Description' are excluded from funding by Replacement Reserves. REVIEW OF EXPENDITURES. This Replacement Reserve Study should be reviewed by an accounting professional representing the Association prior to implementation. PARTIAL FUNDING. Items may have been included in the Replacement Reserve Inventory at less than 100 percent of their full quantity and/or replacement cost. This is done on items that will never be replaced in their entirety, but which may require periodic replacements over an extended period of time. The assumptions that provide the basis for any partial funding are noted in the Comments section. REMAINING ECONOMIC LIFE GREATER THAN 0 YEARS. The calculations do not include funding for initial replacements beyond 0 years. These replacements are included in this Study for tracking and evaluation. They should be included for funding in future Studies, when they enter the 0-year window.

15 Replacement Reserve Inventory - Page B3 Balcony Edges PROJECTED REPLACEMENTS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 1 Balcony Edge, Type 1 lf 31 $ $26 2 Balcony Edge, Type 1 lf 31 $ $26 3 Balcony Edge, Type 1 lf 31 $ $26 Balcony Edge, Type 1 lf 31 $ $26 Balcony Edge, Type 1 lf 31 $ $26 6 Balcony Edge, Type 1 lf 31 $ $26 7 Balcony Edge, Type 2 lf 13 $ $,072 8 Balcony Edge, Type 2 lf 13 $ $,072 9 Balcony Edge, Type 2 lf 13 $ $, Balcony Edge, Type 2 lf 13 $ none 2 $, Balcony Edge, Type 2 lf 13 $ $, Balcony Edge, Type 2 lf 13 $ $, Balcony Edge, Type 3 lf 2 $ $3,32 1 Balcony Edge, Type 3 lf 2 $ $3,32 1 Balcony Edge, Type 3 lf 2 $ $3,32 16 Balcony Edge, Type 3 lf 2 $ none 2 $3,32 17 Balcony Edge, Type 3 lf 2 $ $3,32 18 Balcony Edge, Type 3 lf 2 $ $3,32 Balcony Edges - Replacement Costs - Subtotal $1,863 Balcony Edges COMMENTS The programming of balcony edges uses past percentages of complete repair/replacement to extrapolate remaining quantities to be performed over the next 6 years. The unit prices are based on 201 contract price data as provided with inflation for two years It is assumed the normal life of the Type 2 and 3 will be 0 years. It is assumed the life of the Type 1 will be only 8 years and should be verified for the next update as well as possibly recategorizing to Type 2 or 3 if necessary.

16 Replacement Reserve Inventory - Page B SITE COMPONENT PROJECTED REPLACEMENTS AND EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 19 Asphalt pavement, seal coat sf 27,0 $ $, Asphalt pavement, overlay sf 27,0 $ $,62 21 Concrete garage pavement (1/2%) sf 83 $ $8, Concrete garage pavement (1/2%) sf 83 $ $8, Concrete garage pavement (1/2%) sf 83 $ $8,809 2 Concrete garage pavement (1/2%) sf 83 $ $8,809 2 Concrete garage pavement (1/2%) sf 83 $ $8, Concrete garage pavement (1/2%) sf 83 $ $8, Concrete garage pavement (1/2%) sf 83 $ $8, Concrete garage pavement (1/2%) sf 83 $ $8, Concrete garage pavement (1/2%) sf 83 $ $8, Concrete garage pavement (1/2%) sf 83 $ $8,809 Concrete curb & gutter (20%) ft 20 3 EXCLUDED Concrete curb & gutter (20%) ft 20 3 EXCLUDED Concrete curb & gutter (20%) ft 20 3 EXCLUDED Concrete curb (20%) ft EXCLUDED Concrete curb (20%) ft EXCLUDED Concrete curb (20%) ft EXCLUDED SITE COMPONENT - Replacement Costs - Subtotal $138,396 SITE COMPONENT COMMENTS We have assumed that the Association will replace the asphalt pavement by the installation of a 2 inch thick overlay. The pavement will need to be milled prior to the installation of the overlay. Milling and the cost of minor repairs ( to 10 percent of the total area) to the base materials and bearing soils beneath the pavement are included in the cost shown above. The section of asphalt pavement with an embossed texture and paint coating is not priced separately from normal overlay. The seal coating and striping of parking is reported to have been done in Concrete curb & gutter quantities are based on the previous study. Concrete garage pavement replacement is estimated at 1/2 of 1 percent per year every 6 years. Life of garage pavement replacement may be impacted by below grade stormwater storage system. Unit pricing of garage pavement may be impacted by the below grade stormwater storage system.

17 Replacement Reserve Inventory - Page B SITE COMPONENT (cont.) PROJECTED REPLACEMENTS AND EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 31 Concrete sidewalk (6%) sf 0 $ $,17 32 Concrete sidewalk (6%) sf 0 $ $,17 33 Concrete sidewalk (6%) sf 0 $ $,17 3 Concrete sidewalk (6%) sf 0 $ $,17 3 Concrete sidewalk (6%) sf 0 $ $,17 36 Concrete sidewalk (6%) sf 0 $ $,17 37 Concrete sidewalk (6%) sf 0 $ $,17 38 Concrete sidewalk (6%) sf 0 $ $,17 39 Concrete sidewalk (6%) sf 0 $ $,17 0 Concrete sidewalk (6%) sf 0 $ $,17 1 Bulkhead, concrete, refurbishing ls 1 $8, $8,29 2 Bulkhead concrete cap, replace cy 126 $ $7,8 3 Bulkhead, sheet piling, 20 ft. deep lf 80 $ $29,90 Bulkhead, stainless railing, refurbish lf 80 $ $2,76 Bulkhead, stainless railing, replacement lf 80 $ $21,208 6 Stormwater system, uncovered ls 1 $2, $2,98 7 Stormwater system, covered Phase 1 ls 1 $18, $18,990 8 Stormwater system, covered Phase 2 ls 1 $18, $18,990 9 Stormwater inlets, partial, Phase 1 ls 1 $17, $17,09 0 Stormwater inlets, partial, Phase 2 ls 1 $17, $17,09 Building 2 entrance steel railing ls 1 3 EXCLUDED SITE COMPONENT (cont.) - Replacement Costs - Subtotal $28,71 SITE COMPONENT (cont.) COMMENTS The concrete walks quantity includes the boardwalk at the beachfront bulkhead, building entrances and all walks around the buildings. The quantity from the previous study appears to be accurate but the percentage for replacement has been revised to assume 1 percent per year for a failure rate The bulkhead is included for all major components based on quantities described in the previous study. Refurbishing of the railings includes the cleaning of exposed metal, repairing welds and replacement of corroded anchor fasteners. Concrete cap refurbishing includes the replacement of joint sealants, and repair of cracks and spalling of cap 'Beach access structure is currenlty buried under sand & cannot be visually evaluated for current condition The previous study did not include funds for sand & sediment removal from below grade BMP's.

18 Replacement Reserve Inventory - Page B6 SITE COMPONENT (cont.) PROJECTED REPLACEMENTS AND EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 1 Site lighting, 13' pole & fixture ea 20 $1, $26,880 2 Site lighting, 3' bollards ea 61 $ $28,87 3 Site lighting, pool area, Phase 1 ea 2 $ $10,920 Site lighting, pool area, Phase 2 ea 2 $ $10,920 Walkway lighting, Phase 2 ea 1 $ $6,82 Entry lighting, Phase 1 ea 3 EXCLUDED Entry lighting, Phase 2 ea 3 EXCLUDED 6 Landscape lighting, Phase 1 ea 22 $ none 2 $2,838 7 Landscape lighting, Phase 2 ea 3 $ $,7 8 Mailboxes, Phase 1 ea 99 $ $12,771 9 Mailboxes, Phase 2 ea 19 $ $19,221 Entry monument & sign, refurbish ls 1 3 EXCLUDED 60 Entry monument & sign, replace ls 1 $6, $6,79 SITE COMPONENT (cont.) - Replacement Costs - Subtotal $131,20 SITE COMPONENT (cont.) COMMENTS Site lighting quantities are based on the previous study inventory. The landscape lighting was added to this update and the unit pricing was revised to reflect the different types of fixtures. The normal and remaining life has been reduced Although mailboxes are located in the garages, they are still exposed to high humidity and salt.

19 Replacement Reserve Inventory - Page B7 BUILDING EXTERIOR (Phase 1 = PH1) PROJECTED REPLACEMENTS AND EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 61 PH1 Shingle asphalt/fiberglass (0%) sf 9,000 $ $29, PH1 Shingle asphalt/fiberglass (0%) sf 9,000 $.10 2 none 2 $29, PH1 Gutter & downspout, 6" aluminum lf 780 $ $6,981 6 PH1 Single ply membrane roof sf 1,00 $ $13,33 PH1 Standing seam metal sf 79,000 3 EXCLUDED 6 PH1 CMU exterior walls, repoint, partial sf 1,100 $ $,11 66 PH1 Metal grilles, garage, refurbish ea 2 $ $9,98 67 PH1 Fiber cement soffit panel, partial sf 10,000 $ $67, PH1 Fiber cement lap siding, partial sf 10,000 $ $120, PH1 Fiber cement panel siding, partial sf 1,200 $ $1,08 70 PH1 Fiber cement trim, partial lf 9,00 $ $91,67 71 PH1 Exterior joint sealants, partial lf 17,000 $ $0,10 72 PH1 Storefront doors and windows sf 1,380 $ $61,79 73 PH1 Exterior metal doors ea 20 $1, $20,960 7 PH1 Aluminum doors w/sidelights ea 8 $1, $12,280 7 PH1 Rollup door at 1st floor elevator ea 1 $1, $1,23 76 PH1 Exterior corridor floor coating sf 0,000 $ $338,00 77 PH1 Aluminum railing, refurbish lf,20 $ $26, PH1 Aluminum railing, replace lf,20 $ $21, PH1 Louvers for heatpump access ea 113 $ $1,38 80 PH1 Wood and aluminum trellis ea 2 $20, $0,790 PH1 Balcony edge flashing replacement lf 26 3 EXCLUDED PH1 Balcony edge flashing replacement lf 26 3 EXCLUDED PH1 Balcony edge flashing replacement lf 26 3 EXCLUDED BUILDING EXTERIOR (Phase 1 = PH1) - Replacement Costs - Subtotal $1,637,960 BUILDING EXTERIOR (Phase 1 = PH1) COMMENTS The previous study did not segregate exterior envelope quantities by Phase 1 and 2. We have separated them using a 0/0 division of quantity and applied different remaining life to reflect the different ages of each phase The fiber cement and joint sealant quantities have been taken from the previous study and is divided into intervals of 20% every 8 years for each building based on observed conditions and the current effort to partially replace damaged and deteriorated materials or poorly installed original work The quantity for storefront doors and windows is increased above previous study which is believed to be low The unit price for various types of fiber cement siding assumes and average The metal grilles at garage level are added to this update (only a partial quantity is indicated) The roll up door at 1st floor elevator exterior opening is added to this update. 8/28/201 Standing seam roofing is moved to the large component inventory Individual storage closet doors and unit doors and windows are excluded components The previous study did not include the aluminum and lumber trellis structures The previous study did not include louver access panels to heatpumps at the unit balconies.

20 Replacement Reserve Inventory - Page B8 BUILDING EXTERIOR (Phase 2 = PH2) PROJECTED REPLACEMENTS AND EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 81 PH2 Shingle asphalt/fiberglass sf 98,000 $ $67,60 82 PH2 Gutter & downspout, 6" aluminum lf 780 $ $6, PH2 Single ply membrane roof sf 1,00 $ $13,33 PH2 Standing seam metal sf 79,000 3 EXCLUDED 8 PH2 CMU exterior walls, repoint, partial sf 1,100 $ $,11 8 PH2 Metal grilles, garage, refurbish ea 13 $ none 2 $2,96 86 PH2 Fiber cement soffit panel, partial sf 10,000 $ none 2 $67, PH2 Fiber cement lap siding, partial sf 10,000 $ none 2 $120, PH2 Fiber cement panel siding, partial sf 1,200 $ none 2 $1,08 89 PH2 Fiber cement trim, partial lf 9,00 $9.6 8 none 2 $91,67 90 PH2 Exterior joint sealants, partial lf 17,000 $2.9 none 2 $0,10 91 PH2 Storefront doors and windows sf 1,380 $ $61,79 92 PH2 Exterior metal doors ea 20 $1, $21,00 93 PH2 Aluminum doors w/sidelights ea 8 $1, $12,280 9 PH2 Exterior corridor floor coating sf 0,000 $ $338,00 9 PH2 Aluminum railing, refurbish lf,20 $ $26, PH2 Aluminum railing, replace lf,20 $ $21, PH2 Louvers for heatpump access ea 13 $ $2, PH2 Wood and aluminum trellis ea 2 $20, $0,790 PH2 Balcony edge flashing replacement lf EXCLUDED PH2 Balcony edge flashing replacement lf EXCLUDED PH2 Balcony edge flashing replacement lf EXCLUDED BUILDING EXTERIOR (Phase 2 = PH2) - Replacement Costs - Subtotal $1,608,17 BUILDING EXTERIOR (Phase 2 = PH2) COMMENTS The balcony edge flashing detail appears to be an orginal latent construction defect that is failing prematurely and is requiring partial replacement of the metal flashing, concrete balcony decking and membrane and sheathing beneath the concrete. Quantities are unknown and unit pricing per linear foot is based on the current contract worst case conditions. It is assumed this will be phased over 3 years and will be required again when the balcony railings are replaced in the future. Fiber cement soffits, trim, panel and lap siding all display poor installation and considerable deterioration at this time. The fiber cement should be replaced incrementally as needed and the inventory allows for approx. 10% every 8-10 years as requested. Building 2 does not have a roll up door at the elevator ground floor. 8/28/201 Standing seam roofing is moved to the large component inventory Exterior balcony coating is being deferred as requested by the Board The remaining life of shingle roofing has been reduced per investigation by Hentz Engineering One of the exterior metal doors was replaced for $1,07.

21 Replacement Reserve Inventory - Page B9 BUILDING EXTERIOR UNIT DOORS & WINDOWS PROJECTED REPLACEMENTS AND EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 99 Ph1 Exterior door, Unit Entrances ea 99 $1, $101, Ph1 Sliding door, Unit Balcony ea 99 $1, $13,1 Ph1 Exterior windows, Unit unit 99 3 EXCLUDED 101 Ph1 HVAC Access panel at balcony ea 99 $ $3, Ph2 Exterior door, Unit Entrances ea 13 $1, $17, Ph2 Sliding door, Unit Balcony ea 168 $1, $227,60 Ph2 Exterior windows, Unit unit 13 3 EXCLUDED 10 Ph2 HVAC Access panel at balcony ea 13 $ $62,777 Door hardware allowance ls 1 3 EXCLUDED BUILDING EXTERIOR UNIT DOORS & WINDOWS - Replacement Costs - Subtotal $717,01 BUILDING EXTERIOR UNIT DOORS & WINDOWS COMMENTS The previous study did not include the HVAC access panels, doors, windows and sliding doors for the individual units. The Manager requested these be added to this update. An allowance of $1,900 per year for door hardware replacement i sna operating expense.

22 Replacement Reserve Inventory - Page B10 BUILDING INTERIORS PROJECTED REPLACEMENTS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 10 Interior signage allowance ls 1 $, $, Flat screen TV's ea $1, $,20 BUILDING INTERIORS - Replacement Costs - Subtotal $10,20 BUILDING INTERIORS COMMENTS

23 Replacement Reserve Inventory - Page B11 BUILDING INTERIOR (Phase 1 = PH1) PROJECTED REPLACEMENTS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 107 PH1 Meeting room, renovation ls 1 $8, $8, PH1 Kitchen renovation ls 1 $2, $2, PH1 Restroom, renovation ls 1 $, $, PH1 Library, renovation ls 1 $3, $3, PH1 Lobby renovation, lower level ls 1 $18, $18, PH1 Lobby and corridor renovatio, upper ls 1 $9, $9, PH1 Offices, renovation ls 1 $6, $6, PH1 carpet sf 800 $ $8, PH1 porcelain tile sf 2,00 $ $2, PH1 stained & epoxy sealed concrete sf 1,000 $ $2, PH1 rubber floor tile sf 0 $ $3, PH1 garage ceiling, partial sf 960 $3.0 none 2 $2, PH1 ceiling suspension system, 100% sf 3,80 $ $16, PH1 wainscoting partial allowance sf 300 $ none 2 $,970 BUILDING INTERIOR (Phase 1 = PH1) - Replacement Costs - Subtotal $1,29 BUILDING INTERIOR (Phase 1 = PH1) COMMENTS The unit price for carpet replacement is reported as a current vendor unit price Some sofas in Building A were replaced for $2,277

24 Replacement Reserve Inventory - Page B12 BUILDING INTERIOR - FURNITURE AND EQUIPMENT PROJECTED REPLACEMENTS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 121 Office desks with returns ea 8 $1, $9, Office chair ea 8 $ $,680 BUILDING INTERIOR - FURNITURE AND EQUIPMENT - Replacement Costs - Subtotal $1,200 BUILDING INTERIOR - FURNITURE AND EQUIPMENT COMMENTS

25 Replacement Reserve Inventory - Page B13 BUILDING INTERIOR (Phase 2 = PH2) PROJECTED REPLACEMENTS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 123 PH2 Meeting room, renovation ls 1 $, $, PH2 Kitchen renovation ls 1 $12, $12, PH2 Restroom and shower, renovation ls 1 $9, $9, PH2 Library, renovation ls 1 $2, $2, PH2 Lobby renovation, lower level ls 1 $12, $12, PH2 Lobby and corridor renovatio, upper ls 1 $7, $7, PH2 Offices, renovation ls 1 $2, $2, PH2 carpet sf 1,200 $ $12, PH2 porcelain tile sf 3,700 $ $62,3 132 PH2 stained & epoxy sealed concrete sf,800 $ $10, PH2 rubber floor tile sf 0 $ $3,72 13 PH2 garage ceiling, partial sf 960 $ $2, PH2 ceiling suspension system, 100% sf 3,80 $ $16, PH2 wainscoting partial allowance sf 300 $ $,970 BUILDING INTERIOR (Phase 2 = PH2) - Replacement Costs - Subtotal $163,08 BUILDING INTERIOR (Phase 2 = PH2) COMMENTS

26 Replacement Reserve Inventory - Page B1 BUILDING SYSTEMS (Phase 1 = PH1) PROJECTED REPLACEMENTS AND EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 137 PH1 Elevator cab & door, passenger ea $8, $33,0 138 PH1 Elevator, traction psngr, controls ea $62, $21, PH1 Elevator, traction psngr, mechanical ea $30, $121, PH1 Trash compactor, ram & controls ea 2 $3, none 2 $7,760 PH1 Trash chute hopper doors ea 8 3 EXCLUDED 11 PH1 Backup generator, diesel, 30KW ea 1 $8, $8,70 12 PH1 Backup generator, diesel, 30KW ea 1 $8, $8,70 13 PH1 Electric meters ea 101 $ $29,189 1 PH1 Stairwell lighting, partial ea 2 $ $,688 1 PH1 Entry lobby lighting ea $2, $8,30 16 PH1 Misc. common interior lighting ea 12 $ $3,32 17 PH1 Garage lighting, 33% ea 17 $ none 2 $8, PH1 Garage lighting, 33% ea 17 $ $8, PH1 Garage lighting, 33% ea 16 $ $7, PH1 Corridor CFL sconces, partial ea 33 $ $8, PH1 Corridor CFL sconces, partial ea 33 $ $8, PH1 Corridor CFL sconces, partial ea 33 $ $8, PH1 Balcony lights, red lenses ea 12 $ $36,000 1 PH1 Heat pump/ac unit (2 tons) ea 2 $3, none 2 $7,710 1 PH1 Heat pump/ac unit (2 tons) ea 2 $3, $7, PH1 Heat pump/ac unit (2 tons) ea 2 $3, $7, PH1 Heat pump/ac unit (3 to tons) ea 2 $6, none 2 $13,390 BUILDING SYSTEMS (Phase 1 = PH1) - Replacement Costs - Subtotal $679,928 BUILDING SYSTEMS (Phase 1 = PH1) COMMENTS The Board reports that 6 heatpumps were replaced in 2017 for a cost of $13,000 but specific unnit locations were not provided and that a new heatpump was installed for $8,000. The heat pump in Bldg.A Library and Party Room are both reported to have been replaced in past years.

27 Replacement Reserve Inventory - Page B1 BUILDING SYSTEMS (Phase 2 = PH2) PROJECTED REPLACEMENTS AND EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 18 PH2 Elevator cab & door, passenger ea $8, $33,0 19 PH2 Elevator, hydraulic psngr, controls ea $62, $21, PH2 Elevator, hydraulic psngr, piston ea $30, $121, PH2 Trash compactor, ram & controls ea 2 $3, $7,760 PH2 Trash chute hopper doors ea 8 3 EXCLUDED 162 PH2 Backup generator, diesel, 20KW ea 1 $8, $8, PH2 Backup generator, diesel, 00KW ea 1 $8, $8,70 16 PH2 Electric meters ea 13 $ $1, PH2 Stairwell lighting, partial ea 2 $ $, PH2 Entry lobby lighting ea $2, $8, PH2 Misc. common interior lighting ea 12 $ $3, PH2 Garage lighting, 33% ea 1 $ $7,1 169 PH2 Garage lighting, 33% ea 1 $ $6, PH2 Garage lighting, 33% ea 1 $ $6, PH2 Corridor CFL sconces, partial ea 8 $ $12, PH2 Corridor CFL sconces, partial ea 8 $ $12, PH2 Corridor CFL sconces, partial ea 7 $ $12, PH2 Balcony lights, red lenses ea 122 $ $3, PH2 Heat pump/ac unit (2 tons) ea 2 $3, $7, PH2 Heat pump/ac unit (2 tons) ea 2 $3, $7, PH2 Heat pump/ac unit (2 tons) ea 2 $3, $7, PH2 Heat pump/ac unit (3 to tons) ea 2 $6, $13,390 BUILDING SYSTEMS (Phase 2 = PH2) - Replacement Costs - Subtotal $699,3 BUILDING SYSTEMS (Phase 2 = PH2) COMMENTS The unit price for garage light fixture replacement is based on the reported cost of the fixture at $300 plus a $10 rate for labor to hire an electrician although the facility staff is currently performing the replacement with in-house labor.

28 Replacement Reserve Inventory - Page B16 BUILDING SYSTEM (Phase 1 = PH1) PROJECTED REPLACEMENTS AND EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 179 PH1 Garage gate arm ea $ $3, PH1 Garage operator ea $1, $, PH1 Garage controller ea $ $3, PH1 Access control system readers ea 2 $2, $, PH1 Access control system readers ea 2 $1, $2,28 18 PH1 CCTV cameras (older ones) ea 12 $ $6,92 18 PH1 Oil water separator ea $1, $, PH1 Backflow preventer, water main ea 1 $, $,6 PH1 BFP valves ea 1 3 EXCLUDED 187 PH1 Domestic water pumps ea 2 $8, $17, PH1 Domestic water pump motors ea 2 $1, $3, PH1 Pump controller ea 1 $, $, PH1 Pressure tank ea 1 $3, $3, PH1 Domestic water piping allowance unit 99 $ $, PH1 Sanitary piping allowance unit 99 $ $0, PH1 Fire pump ea 1 $3, $3,20 19 PH1 Jockey pump ea 1 $, $,710 PH1 Dry pipe air compressor ea 1 3 EXCLUDED 19 PH1 Fire alarm control panel ea 1 $7, $7,9 196 PH1 Fire alarm annunciator ea 1 $, $, PH1 Gas pipe corrosion inhibitor ls 1 $3, $3,0 BUILDING SYSTEM (Phase 1 = PH1) - Replacement Costs - Subtotal $218,31 BUILDING SYSTEM (Phase 1 = PH1) COMMENTS A number of cameras have been installed or replaced in the previous 2 years Some entrance phones, controller and card reader was replaced in 2017 for $2, Domestic water systems for each building were not included in the previous study Allowances for domestic piping and sanitary piping are included in this update The gas lines in the garage level are exposed to severe corrosion and have been cleaned and coated The Building A fire alarm control panel circuit board was replaced for $2, Several backflow devices were replaced for $8,26 although the Board asked these be excluded.

29 Replacement Reserve Inventory - Page B17 BUILDING SYSTEM (Phase 2 = PH2) PROJECTED REPLACEMENTS AND EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 198 PH2 Garage gate arm ea 3 $ $2, PH2 Garage operator ea 3 $1, $3, PH2 Garage controller ea 3 $ $2, PH2 Access control system readers ea 3 $1, $3, PH2 CCTV cameras (older ones) ea 1 $ $8,6 PH2 Oil water separator ea 2 3 EXCLUDED 203 PH2 Backflow preventer, water main ea 1 $, $,6 PH2 BFP valves ea 1 3 EXCLUDED 20 PH2 Domestic water pumps ea 2 $8, $17, PH2 Domestic water pump motors ea 2 $1, $3, PH2 Pump controller ea 1 $, $, PH2 Pressure tank ea 1 $3, $3, PH2 Domestic water piping allowance unit 13 $ $80, PH2 Sanitary piping allowance unit 13 $ $8, PH2 Fire pump ea 1 $3, $3, PH2 Jockey pump ea 1 $, $,710 PH2 Dry pipe air compressor ea 1 3 EXCLUDED 212 PH2 Fire alarm control panel ea 1 $7, $7,9 213 PH2 Fire alarm annunciator ea 1 $, $, PH2 Gas pipe corrosion inhibitor ls 1 $3, $3,0 BUILDING SYSTEM (Phase 2 = PH2) - Replacement Costs - Subtotal $22,71 BUILDING SYSTEM (Phase 2 = PH2) COMMENTS The FACP in Building B is reported to have been replaced in 201 for $7, Domestic water systems for each building were not included in the previous study Allowances for domestic piping and sanitary piping are included in this update The gas lines in the garage level are exposed to severe corrosion and have been cleaned and coated.

30 Replacement Reserve Inventory - Page B18 BUILDING SYSTEM (Newer CCTV Cameras) PROJECTED REPLACEMENTS AND EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 21 Security CCTV DVR ls 1 $2, $2, CCTV Cameras (2012) ea $ $2,67 CCTV Cameras (2013) ea 1 3 EXCLUDED CCTV Cameras (201) ea 1 3 EXCLUDED 217 CCTV Cameras (201) ea 6 $1, $7,680 BUILDING SYSTEM (Newer CCTV Cameras) - Replacement Costs - Subtotal $13,01 BUILDING SYSTEM (Newer CCTV Cameras) COMMENTS Quantities and pricing for CCTV is based on reported information provided by the Manager. Pricing fluctuation is based on the types of cameras and installation requiring conduit, power and cable required for various locations.

31 Replacement Reserve Inventory - Page B19 SWIMMING POOL (Phase 1 = PH1) PROJECTED REPLACEMENTS AND EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 218 PH1 Swimming pool, structure sf 1,300 $ $87, PH1 Swimming pool, whitecoat sf,900 $ $27, PH1 Swimming pool, waterline tile ft 600 $ $9, PH1 Swimming pool, coping ft 600 $ $31, PH1 Swimming pool, cover sf 1,600 $ $3, PH1 Swimming pool, concrete deck (10%) sf 2,81 $ $32,02 22 PH1 Swimming pool pump (+ hp) ea 1 $, $, PH1 Swimming pool filter ea 2 $2, $, PH1 Swimming pool heater - gas ea 2 $, $8, PH1 Swimming pool deck coating sf 28,10 $ $187, PH1 Perimeter fence - 2" (aluminum picket) ft 30 $ $9, PH1 Hot tub ea 1 $6, $6,9 PH1 Hot tub cover ea 1 3 EXCLUDED PH2 Hammerhead pool cleaning ea 1 3 EXCLUDED SWIMMING POOL (Phase 1 = PH1) - Replacement Costs - Subtotal $1,73 SWIMMING POOL (Phase 1 = PH1) COMMENTS We have assumed that the project to replace the pool deck will include the replacement of the plumbing and electrical systems installed beneath the pavement Pool A is to have all white coat resurfaced along with new waterline tile and coping completed by the end of The pool cover does not last more than 3- years typically due to its size and configuration One of the HP pool pump motors was replaced in 2016 for $2,10

32 Replacement Reserve Inventory - Page B20 SWIMMING POOL (Phase 2 = PH2) PROJECTED REPLACEMENTS AND EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 230 PH2 Swimming pool, structure sf 993 $ $66, PH2 Swimming pool, whitecoat sf 2,793 $ $1, PH2 Swimming pool, waterline tile ft 300 $ $,7 233 PH2 Swimming pool, coping ft 300 $ $1, PH2 Swimming pool, cover sf 1,100 $ $2, PH2 Swimming pool, concrete deck (10%) sf 1,386 $ $16, PH2 Swimming pool pump (2 hp) ea 1 $, $, PH2 Swimming pool filter ea 1 $2, $2, PH2 Swimming pool heater - gas ea 2 $, $8, PH2 Swimming pool deck coating sf 13,860 $ $92,6 20 PH2 Perimeter fence - 2" (aluminum picket) ft 20 $ $6, PH2 Water play features ea 3 $1, $,36 22 PH2 water play pumps (1. hp to 3 hp) ea 2 $1, $2, PH2 water play deck surfacing ls 1 $3, $3,990 PH2 Hammerhead pool cleaning ea 1 3 EXCLUDED SWIMMING POOL (Phase 2 = PH2) - Replacement Costs - Subtotal $27,937 SWIMMING POOL (Phase 2 = PH2) COMMENTS

33 Replacement Reserve Inventory - Page B21 C Swimming pool, structure PROJECTED REPLACEMENTS AND EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 2 C Swimming pool, whitecoat sf 1,220 $ $6,90 2 C Swimming pool, waterline tile ft 280 $ $,38 26 C Swimming pool, coping ft 280 $ $1,60 27 C Swimming pool, cover sf 1,100 $ $2, C Swimming pool, concrete deck (10%) sf 1,200 $ $13, C Swimming pool pump (+ hp) ea 1 $, $, C Swimming pool filter ea 2 $2, $, C Swimming pool heater - gas ea 2 $, $9,0 22 C Swimming pool deck coating sf 1,000 $ $100,00 23 C Wind screen 2" (tempered glass) pane 11 $2, $30,769 C chairs, PVC ea 36 3 EXCLUDED C Swimming pool, structure - Replacement Costs - Subtotal $193,18 C Swimming pool, structure COMMENTS The cabana wind screen is a tempered glass panel, Three of the panels have been replaced at approximately $3k per panel for the curved ones. 8/20/201. Cabana chairs have been excluded as they are not the Associations responsibility.

34 Replacement Reserve Inventory - Page B22 COURTYARD AND POOL FURNITURE, GAZEBOS AND GRILLS PROJECTED REPLACEMENTS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 2 PVC High back chairs ea $ $,620 2 PVC Lounge chairs (Phase 1 & 2) ea 93 $ $16,61 26 Wood chairs ea 160 $ $,80 27 Wood benches, long ea 3 $1, $39,1 28 Wood benches, short ea 1 $ $13,2 29 Wood tables, tall, square ea 8 $1, $8,0 260 Wood tables, low, square ea 10 $ $8, Wood tables, low, round ea 2 $ $22, Waste receptacles, metal ea 10 $ $, Waste receptacles, metal ea 1 $ $6, 26 Gas grills, partial ea 9 $1, $11, Gas grills, partial ea 9 $1, $11, Gas grills, partial ea 9 $1, $11, Gas grills, partial ea 9 $1, $11, Grill undercounter cabinets ea 9 $ $3, Grill undercounter cabinets ea 9 $ $3, Grill undercounter cabinets ea 9 $ $3, Grill undercounter cabinets ea 9 $ $3, Hot tub gazebo ls 1 $16, $16, Pool plaza gazebos ea 3 $13, $39,900 COURTYARD AND POOL FURNITURE, GAZEBOS AND GRILLS - Replacement Costs - Subtotal $297,08 COURTYARD AND POOL FURNITURE, GAZEBOS AND GRILLS COMMENTS Wood site furnishings in the pool areas and along the boardwalk are a moderately high quality teak but are displaying significant deterioration. The normal and remaining life have been reduced based on visual condition. Extensive cleaning and sealing as a preventive maintenance activity wold not restore the potential life of these items. Future purchased items may have a longer life if cleaned and sealed annually and stored in doors during the off season The previous study did not include the gazebos The gas grills are currently be replaced in phases and unit price is based on approx. reported cost Concrete planters are excluded as long-lived components Concrete trash receptacles are excluded as long-lived components Waste receptacle liners are excluded as an operating expense Pool lounge cushions were not included in the previous study and have been excluded in this update Several pool chairs, loungers and gas grills have been replaced in the past 2 years.

35 Replacement Reserve Inventory - Page B23 EXERCISE EQUIPMENT (Building A = BA) PROJECTED REPLACEMENTS AND EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 27 BA Treadmill ea 2 $2, none 2 $, BA Elliptical trainer ea 1 $, none 2 $, BA Recumbent bike ea 1 $2, none 2 $2,770 BA Lat/Row machine ea 1 3 EXCLUDED BA Multi press machine ea 1 3 EXCLUDED BA Back and Ab machine ea 1 3 EXCLUDED EXERCISE EQUIPMENT (Building A = BA) - Replacement Costs - Subtotal $11,7 EXERCISE EQUIPMENT (Building A = BA) COMMENTS The list of fitness equipment is based on information provided and the normal and remaining life is based on comments for Superior Fitness Services LLC. The replacement value used for each piece of equipment is based on current Internet prices where available or comparable equipment prices where the model and manufacturer is no longer available. Remaining life is highly dependent on original quality, annual maintenance and the level of usage.

36 Replacement Reserve Inventory - Page B2 EXERCISE EQUIPMENT (Building B = BB) PROJECTED REPLACEMENTS AND EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 277 BB Treadmill, Matrix MXT3 ea 3 $1, $, BB Elliptical trainer, Matrix MXEXC ea 2 $1, $3,0 279 BB Recumbent bike, Matrix MX-H-X ea 2 $, $8, BB Spin Bike, Keiser 0000PBC ea 2 $2, $,190 BB Lat pull machine ea 1 3 EXCLUDED BB Press/midrow machine ea 1 3 EXCLUDED BB Seated leg curl machine ea 1 3 EXCLUDED BB Smith Machine ea 1 3 EXCLUDED BB Olympic flat bench ea 1 3 EXCLUDED BB Adjustable incline bench ea 1 3 EXCLUDED EXERCISE EQUIPMENT (Building B = BB) - Replacement Costs - Subtotal $21,890 EXERCISE EQUIPMENT (Building B = BB) COMMENTS

37 Replacement Reserve Inventory - Page B2 VALUATION EXCLUSIONS EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) Unit heaters ls 1 3 EXCLUDED Toilet accessories ls 1 3 EXCLUDED Miscellaneous signage ls 1 3 EXCLUDED Library materials ls 1 3 EXCLUDED Dishware ls 1 3 EXCLUDED Flatware ls 1 3 EXCLUDED Glassware ls 1 3 EXCLUDED Decorations ls 1 3 EXCLUDED Housekeeping equipment ls 1 3 EXCLUDED Window treatments ls 1 3 EXCLUDED Misc. hot water heaters ls 1 3 EXCLUDED Misc. AC in elev. machine rooms ls 1 3 EXCLUDED Handrail ls 1 3 EXCLUDED Fire extinguishers and cabinets ls 1 3 EXCLUDED Sprinkler head ls 1 3 EXCLUDED Interior doors ls 1 3 EXCLUDED Electric heaters in stairs ls 1 3 EXCLUDED VALUATION EXCLUSIONS COMMENTS Valuation Exclusions. For ease of administration of the Replacement Reserves and to reflect accurately how Replacement Reserves are administered, items with a dollar value less than $1, have not been scheduled for funding from Replacement Reserves. Examples of items excluded from funding by Replacement Reserves by this standard are listed above. The list above exemplifies exclusions by the cited standard(s) and is not intended to be comprehensive.

38 Replacement Reserve Inventory - Page B26 LONG-LIFE EXCLUSIONS EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) Masonry features ls 1 3 EXCLUDED Miscellaneous culverts ls 1 3 EXCLUDED Concrete trash receptacles ls 1 3 EXCLUDED Concrete planters ls 1 3 EXCLUDED Exterior CMU walls ls 1 3 EXCLUDED Exterior stone veneer on site walls ls 1 3 EXCLUDED Concrete copings on site walls ls 1 3 EXCLUDED Building foundation(s) ls 1 3 EXCLUDED Concrete floor slabs (interior) ls 1 3 EXCLUDED Wall, floor, & roof structure ls 1 3 EXCLUDED Electrical wiring ls 1 3 EXCLUDED Water piping at common facilities ls 1 3 EXCLUDED Waste piping at common facilities ls 1 3 EXCLUDED Gas services at common facilities ls 1 3 EXCLUDED Trash chute ls 1 3 EXCLUDED Stainless steel pool fixtures ls 1 3 EXCLUDED Moveable partition in meeting room ls 1 3 EXCLUDED Projection screen ls 1 3 EXCLUDED LONG-LIFE EXCLUSIONS COMMENTS Long Life Exclusions. Components that when properly maintained, can be assumed to have a life equal to the property as a whole, are normally excluded from the Replacement Reserve Inventory. Examples of items excluded from funding by Replacement Reserves by this standard are listed above. Exterior masonry is generally assumed to have an unlimited economic life but periodic repointing is required and we have included this for funding in the Replacement Reserve Inventory. The list above exemplifies exclusions by the cited standard(s) and is not intended to be comprehensive.

39 Replacement Reserve Inventory - Page B27 UNIT IMPROVEMENTS EXCLUSIONS EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) Domestic water pipes serving one unit ls 1 3 EXCLUDED Sanitary sewers serving one unit ls 1 3 EXCLUDED Electrical wiring serving one unit ls 1 3 EXCLUDED Cable TV service serving one unit ls 1 3 EXCLUDED Telephone service serving one unit ls 1 3 EXCLUDED Gas service serving one unit ls 1 3 EXCLUDED Unit interior ls 1 3 EXCLUDED Unit HVAC system ls 1 3 EXCLUDED Unit deck, patio, and/or balcony ls 1 3 EXCLUDED UNIT IMPROVEMENTS EXCLUSIONS COMMENTS Unit improvement Exclusions. We understand that the elements of the project that relate to a single unit are the responsibility of that unit owner. Examples of items excluded from funding by Replacement Reserves by this standard are listed above. The list above exemplifies exclusions by the cited standard(s) and is not intended to be comprehensive.

40 Replacement Reserve Inventory - Page B28 UTILITY EXCLUSIONS EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) Primary electric feeds ls 1 3 EXCLUDED Electric transformers ls 1 3 EXCLUDED Cable TV systems and structures ls 1 3 EXCLUDED Telephone cables and structures ls 1 3 EXCLUDED Water mains and meters ls 1 3 EXCLUDED Sanitary sewers ls 1 3 EXCLUDED UTILITY EXCLUSIONS COMMENTS Utility Exclusions. Many improvements owned by utility companies are on property owned by the Association. We have assumed that repair, maintenance, and replacements of these components will be done at the expense of the appropriate utility company. Examples of items excluded from funding Replacement Reserves by this standard are listed above. The list above exemplifies exclusions by the cited standard(s) and is not intended to be comprehensive.

41 Replacement Reserve Inventory - Page B29 MAINTENANCE AND REPAIR EXCLUSIONS EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) Cleaning of asphalt pavement ls 1 3 EXCLUDED Crack sealing of asphalt pavement ls 1 3 EXCLUDED Painting of curbs ls 1 3 EXCLUDED Striping of parking spaces ls 1 3 EXCLUDED Numbering of parking spaces ls 1 3 EXCLUDED Landscaping and site grading ls 1 3 EXCLUDED Exterior painting ls 1 3 EXCLUDED Interior painting ls 1 3 EXCLUDED Janitorial service ls 1 3 EXCLUDED Repair services ls 1 3 EXCLUDED Capital improvements ls 1 3 EXCLUDED MAINTENANCE AND REPAIR EXCLUSIONS COMMENTS Maintenance activities, one-time-only repairs, and capital improvements. These activities are NOT appropriately funded from Replacement Reserves. The inclusion of such component in the Replacement Reserve Inventory could jeopardize the special tax status of ALL Replacement Reserves, exposing the Association to significant tax liabilities. We recommend that the Board of Directors discuss these exclusions and Revenue Ruling with a Certified Public Accountant. Examples of items excluded from funding by Replacement Reserves by this standard are listed above. The list above exemplifies exclusions by the cited standard(s) and is not intended to be comprehensive.

42 Replacement Reserve Inventory - Page B30 IRRIGATION SYSTEM EXCLUSIONS EXCLUDED ITEMS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) Subsurface irrigation pipe ls 1 3 EXCLUDED Subsurface irrigation valve ls 1 3 EXCLUDED Subsurface irrigation control wiring ls 1 3 EXCLUDED Irrigation control system ls 1 3 EXCLUDED IRRIGATION SYSTEM EXCLUSIONS COMMENTS Irrigation System Exclusions. We have assumed that the maintenance, repair, and periodic replacement of the components of the extensive irrigation systems at the property will not be funded from Replacement Reserves. These systems should be inspected each spring when the systems are brought on line and each fall when they are winterized. Repairs/replacements should be made in conjunction with these inspections.

43 Projected Annual Replacements - Page C1 PROJECTED ANNUAL REPLACEMENTS GENERAL INFORMATION CALENDAR OF ANNUAL REPLACEMENTS. The 280 Projected Replacements in the Sanctuary at False Cape Replacement Reserve Inventory whose replacement is scheduled to be funded from Replacement Reserves are broken down on a year-by-year basis, beginning on Page C2. REPLACEMENT RESERVE ANALYSIS AND INVENTORY POLICIES, PROCEDURES, AND ADMINISTRATION REVISIONS. Revisions will be made to the Replacement Reserve Analysis and Replacement Reserve Inventory in accordance with the written instructions of the Board of Directors. No additional charge is incurred for the first revision, if requested in writing within three months of the date of the Replacement Reserve Study. It is our policy to provide revisions in electronic (Adobe PDF) format only. TAX CODE. The United States Tax Code grants favorable tax status to a common interest development (CID) meeting certain guidelines for their Replacement Reserve. If a CID files their taxes as a 'Corporation' on Form 1120 (IRC Section 277), these guidelines typically require maintenance activities, partial replacements, minor replacements, capital improvements, and one-time only replacements to be excluded from Reserves. A CID cannot co-mingle planning for maintenance activities with capital replacement activities in the Reserves (Revenue Ruling 7-370). Funds for maintenance activities and capital replacements activities must be held in separate accounts. If a CID files taxes as an "Exempt Homeowners Association" using Form 1120H (IRC Section 28), the CID does not have to segregate these activities. However, because the CID may elect to change their method of filing from year to year within the Study Period, we advise using the more restrictive approach. We further recommend that the CID consult with their Accountant and consider creating separate and independent accounts and reserves for large maintenance items, such as painting. CONFLICT OF INTEREST. Neither Miller - Dodson Associates nor the Reserve Analyst has any prior or existing relationship with this Association which would represent a real or perceived conflict of interest. RELIANCE ON DATA PROVIDED BY THE CLIENT. Information provided by an official representative of the Association regarding financial, physical conditions, quality, or historical issues is deemed reliable. INTENT. This Replacement Reserve Study is a reflection of the information provided by the Association and the visual evaluations of the Analyst. It has been prepared for the sole use of the Association and is not for the purpose of performing an audit, quality/forensic analyses, or background checks of historical records. PREVIOUS REPLACEMENTS. Information provided to Miller - Dodson Associates regarding prior replacements is considered to be accurate and reliable. Our visual evaluation is not a project audit or quality inspection. EXPERIENCE WITH FUTURE REPLACEMENTS. The Calendar of Annual Projected Replacements, lists replacements we have projected to occur over the next thirty years, begins on Page C2. Actual experience in replacing the items may differ significantly from the cost estimates and time frames shown because of conditions beyond our control. These differences may be caused by maintenance practices, inflation, variations in pricing and market conditions, future technological developments, regulatory actions, acts of God, and luck. Some items may function normally during our visual evaluation and then fail without notice. REVIEW OF THE REPLACEMENT RESERVE STUDY. For this study to be effective, it should be reviewed by the Sanctuary at False Cape Board of Directors, those responsible for the management of the items included in the Replacement Reserve Inventory, and the accounting professionals employed by the Association.

44 Projected Annual Replacements - Page C2 PROJECTED REPLACEMENTS - YEARS 1 TO 3 Item STUDY YEAR $ Item YEAR 2 $ Item YEAR 3 $ 10 Balcony Edge, Type 2 $,072 Balcony Edge, Type 1 $26 Balcony Edge, Type 1 $26 16 Balcony Edge, Type 3 $3,32 11 Balcony Edge, Type 2 $, Balcony Edge, Type 2 $,072 6 Landscape lighting, Phase 1 $2, Balcony Edge, Type 3 $3,32 18 Balcony Edge, Type 3 $3,32 62 PH1 Shingle asphalt/fibergla $29,900 7 Stormwater system, covered $18,990 Bulkhead, stainless railing, $2,76 8 PH2 Metal grilles, garage, re $2,96 66 PH1 Metal grilles, garage, re $9,98 9 PH2 Aluminum railing, refurb $26, PH2 Fiber cement soffit pan $67, Interior signage allowance $, PH2 carpet $12, PH2 Fiber cement lap siding $120, Flat screen TV's $, PH2 wainscoting partial allow $, PH2 Fiber cement panel sidi $1, Office chair $, PH2 Heat pump/ac unit (2 t $7, PH2 Fiber cement trim, parti $91, PH2 stained & epoxy sealed $10, PH1 Gas pipe corrosion inhi $3,0 90 PH2 Exterior joint sealants, p $0,10 13 PH2 garage ceiling, partial $2, PH2 Gas pipe corrosion inhi $3,0 118 PH1 garage ceiling, partial $2, PH1 Misc. common interior l $3,32 21 Security CCTV DVR $2, PH1 wainscoting partial allow $, PH1 Garage lighting, 33% $8, BB Treadmill, Matrix MXT3 $, PH1 Trash compactor, ram & $7, PH1 Corridor CFL sconces, $8, BB Elliptical trainer, Matrix M $3,0 17 PH1 Garage lighting, 33% $8, PH2 Trash compactor, ram & $7, BB Recumbent bike, Matrix $8,190 1 PH1 Heat pump/ac unit (2 t $7, PH2 Garage lighting, 33% $7,1 280 BB Spin Bike, Keiser 0000 $, PH1 Heat pump/ac unit (3 t $13, PH1 Garage gate arm $3, BA Treadmill $, PH2 Garage gate arm $2,39 27 BA Elliptical trainer $, PH2 Garage controller $2, BA Recumbent bike $2, PH1 Swimming pool, cover $3, PH2 Swimming pool, whiteco $1, PH2 Swimming pool, waterli $,7 23 PH2 Swimming pool, cover $2, PH2 Swimming pool pump ( $,660 2 C Swimming pool, whitecoat $6,90 2 C Swimming pool, waterline $,38 27 C Swimming pool, cover $2, C Swimming pool pump (+ $, Wood chairs $,80 27 Wood benches, long $39,1 28 Wood benches, short $13,2 29 Wood tables, tall, square $8,0 260 Wood tables, low, square $8, Wood tables, low, round $22, Waste receptacles, metal $6, 266 Gas grills, partial $11, Grill undercounter cabinets $3,681 Total Scheduled Replacements $66,06 Total Scheduled Replacements $330,06 Total Scheduled Replacements $9,22

45 Projected Annual Replacements - Page C3 PROJECTED REPLACEMENTS - YEARS TO 6 Item YEAR $ Item YEAR $ Item YEAR 6 $ 6 Balcony Edge, Type 1 $26 20 Asphalt pavement, overlay $,62 61 PH1 Shingle asphalt/fibergla $29,900 7 Landscape lighting, Phase 2 $,7 8 Stormwater system, covered $18, PH1 garage ceiling, partial $2,928 6 PH1 CMU exterior walls, rep $,11 66 PH1 Metal grilles, garage, re $9,98 16 PH1 Misc. common interior l $3,32 8 PH2 Metal grilles, garage, re $2,96 90 PH2 Exterior joint sealants, p $0,10 12 PH1 Corridor CFL sconces, $8,679 9 PH2 Exterior corridor floor co $338, Ph1 HVAC Access panel at $3,61 20 PH2 Domestic water pump m $3,870 1 PH1 Stairwell lighting, partia $, PH1 Garage lighting, 33% $7, Security CCTV DVR $2, PH1 Corridor CFL sconces, $8, PH2 Misc. common interior l $3, PH1 Swimming pool heater $8, PH1 Balcony lights, red lens $36, PH2 Garage lighting, 33% $6, PH2 Swimming pool, concre $16,008 1 PH1 Heat pump/ac unit (2 t $7, PH2 Corridor CFL sconces, $12, PH2 Swimming pool heater $8, PH1 Garage operator $, PH2 Heat pump/ac unit (2 t $7, PH2 Swimming pool deck co $92,6 181 PH1 Garage controller $3, PH2 Heat pump/ac unit (3 t $13, C Swimming pool, concrete $13, PH1 Access control system $2, PH1 Garage gate arm $3, C Swimming pool heater - ga $9,0 18 PH1 CCTV cameras (older o $6, PH1 Domestic water pump m $3, C Swimming pool deck coati $100, Gas grills, partial $11, PH2 Garage gate arm $2, Grill undercounter cabinets $3, CCTV Cameras (2012) $2, PH1 Swimming pool, cover $3, PH1 Hot tub $6,9 Total Scheduled Replacements $2,12 Total Scheduled Replacements $20,21 Total Scheduled Replacements $21,006

46 Projected Annual Replacements - Page C PROJECTED REPLACEMENTS - YEARS 7 TO 9 Item YEAR 7 $ Item YEAR 8 $ Item YEAR 9 $ 1 Balcony Edge, Type 1 $26 2 Balcony Edge, Type 1 $26 3 Balcony Edge, Type 1 $26 19 Asphalt pavement, seal coat $,679 6 Stormwater system, uncover $2,98 1 Site lighting, 13' pole & fixtur $26, PH1 Fiber cement soffit pan $67, PH1 Metal grilles, garage, re $9,98 2 Site lighting, 3' bollards $28,87 68 PH1 Fiber cement lap siding $120, PH1 Heat pump/ac unit (2 t $7,710 3 Site lighting, pool area, Phas $10, PH1 Fiber cement panel sidi $1, PH2 Garage lighting, 33% $6,678 6 PH1 Single ply membrane ro $13,33 70 PH1 Fiber cement trim, parti $91, PH1 Garage gate arm $3, PH1 Exterior corridor floor co $338,00 71 PH1 Exterior joint sealants, p $0, PH1 Sanitary piping allowan $0,91 77 PH1 Aluminum railing, refurb $26, PH2 Shingle asphalt/fibergla $67, PH1 Gas pipe corrosion inhi $3,0 79 PH1 Louvers for heatpump $1,38 8 PH2 CMU exterior walls, rep $, PH2 Garage gate arm $2,39 80 PH1 Wood and aluminum tre $0,790 8 PH2 Metal grilles, garage, re $2,96 21 PH2 Gas pipe corrosion inhi $3,0 86 PH2 Fiber cement soffit pan $67, Ph2 HVAC Access panel at $62, CCTV Cameras (201) $7, PH2 Fiber cement lap siding $120, PH1 carpet $8, PH1 Swimming pool, cover $3, PH2 Fiber cement panel sidi $1,08 13 PH2 garage ceiling, partial $2, PH2 Swimming pool, cover $2, PH2 Fiber cement trim, parti $91,67 19 PH2 Elevator, hydraulic psng $21, PH2 Water play features $,36 90 PH2 Exterior joint sealants, p $0,10 16 PH2 Stairwell lighting, partia $, PH2 water play pumps (1. h $2, PH1 Meeting room, renovati $8, PH2 Corridor CFL sconces, $12,62 23 PH2 water play deck surfaci $3, PH1 Kitchen renovation $2, PH2 Balcony lights, red lens $3, C Swimming pool, cover $2, PH1 Restroom, renovation $, PH2 Heat pump/ac unit (2 t $7, Gas grills, partial $11, PH1 Library, renovation $3, PH2 Garage operator $3, Grill undercounter cabinets $3, PH1 Lobby renovation, lowe $18, PH2 Garage controller $2, PH1 Lobby and corridor reno $9, PH2 Access control system $3, PH1 Offices, renovation $6, PH2 CCTV cameras (older o $8,6 116 PH1 stained & epoxy sealed $2, PH1 Swimming pool, concre $32, PH1 rubber floor tile $3, PH1 Swimming pool deck co $187, PH1 Elevator cab & door, pa $33,0 26 Gas grills, partial $11, PH1 Elevator, traction psngr $21, Grill undercounter cabinets $3, PH1 Elevator, traction psngr $121, PH2 Misc. common interior l $3, PH2 Corridor CFL sconces, $12, PH1 Garage controller $3,70 19 PH1 Jockey pump $, PH1 Fire alarm control pane $7,9 196 PH1 Fire alarm annunciator $, Security CCTV DVR $2, PH1 Swimming pool pump ( $, PH1 Swimming pool filter $, PH1 Perimeter fence - 2" (a $9,860 Total Scheduled Replacements $1,6,677 Total Scheduled Replacements $122,120 Total Scheduled Replacements $1,18,008

47 Projected Annual Replacements - Page C PROJECTED REPLACEMENTS - YEARS 10 TO 12 Item YEAR 10 $ Item YEAR 11 $ Item YEAR 12 $ Balcony Edge, Type 1 $26 Balcony Edge, Type 1 $26 6 Balcony Edge, Type 1 $26 1 Bulkhead, concrete, refurbis $8,29 66 PH1 Metal grilles, garage, re $9,98 Site lighting, pool area, Phas $10,920 8 PH2 Metal grilles, garage, re $2,96 71 PH1 Exterior joint sealants, p $0,10 Walkway lighting, Phase 2 $6, Flat screen TV's $, PH1 garage ceiling, partial $2, PH2 Single ply membrane ro $13, PH2 carpet $12, PH1 wainscoting partial allow $, PH2 Louvers for heatpump $2, PH1 Misc. common interior l $3, Office desks with returns $9,20 98 PH2 Wood and aluminum tre $0, PH2 Sanitary piping allowan $8, Office chair $, Interior signage allowance $,000 2 PVC High back chairs $, PH1 Trash compactor, ram & $7, PH2 Meeting room, renovati $,600 2 PVC Lounge chairs (Phase $16, PH1 Garage gate arm $3, PH2 Kitchen renovation $12, Gas grills, partial $11, PH2 Garage gate arm $2,39 12 PH2 Restroom and shower, $9, Grill undercounter cabinets $3, PH1 Swimming pool, whiteco $27, PH2 Library, renovation $2, PH1 Swimming pool, waterli $9, PH2 Lobby renovation, lowe $12, PH1 Swimming pool, cover $3, PH2 Lobby and corridor reno $7, PH1 Hot tub $6,9 129 PH2 Offices, renovation $2, BA Treadmill $, PH2 stained & epoxy sealed $10, BA Elliptical trainer $, PH2 rubber floor tile $3, BA Recumbent bike $2, PH2 garage ceiling, partial $2, PH2 Elevator cab & door, pa $33,0 161 PH2 Trash compactor, ram & $7, PH2 Garage controller $2, PH2 Jockey pump $, PH2 Fire alarm annunciator $, Security CCTV DVR $2, PH2 Swimming pool, whiteco $1, PH2 Swimming pool, waterli $,7 233 PH2 Swimming pool, coping $1, PH2 Swimming pool pump ( $, PH2 Swimming pool filter $2,89 20 PH2 Perimeter fence - 2" (a $6,960 2 C Swimming pool, whitecoat $6,90 2 C Swimming pool, waterline $,38 26 C Swimming pool, coping $1,60 29 C Swimming pool pump (+ $, C Swimming pool filter $, C Wind screen 2" (tempere $30, Waste receptacles, metal $, Gas grills, partial $11, Grill undercounter cabinets $3,681 Total Scheduled Replacements $126,190 Total Scheduled Replacements $1,66 Total Scheduled Replacements $392,022

48 Projected Annual Replacements - Page C6 PROJECTED REPLACEMENTS - YEARS 13 TO 1 Item YEAR 13 $ Item YEAR 1 $ Item YEAR 1 $ 19 Asphalt pavement, seal coat $, PH1 Gutter & downspout, 6" $6,981 1 Balcony Edge, Type 1 $26 6 Landscape lighting, Phase 1 $2, PH1 Metal grilles, garage, re $9,98 67 PH1 Fiber cement soffit pan $67,200 8 PH2 Metal grilles, garage, re $2,96 72 PH1 Storefront doors and wi $61,79 68 PH1 Fiber cement lap siding $120, PH2 Exterior joint sealants, p $0,10 73 PH1 Exterior metal doors $20, PH1 Fiber cement panel sidi $1,08 9 PH2 Aluminum railing, refurb $26,723 7 PH1 Aluminum doors w/side $12, PH1 Fiber cement trim, parti $91, PH1 ceiling suspension syst $16,090 7 PH1 Rollup door at 1st floor $1,23 71 PH1 Exterior joint sealants, p $0, PH2 wainscoting partial allow $,970 9 PH2 Exterior corridor floor co $338,00 17 PH2 Heat pump/ac unit (2 t $7,710 1 PH1 Heat pump/ac unit (2 t $7, PH1 carpet $8, PH1 Access control system $, PH1 Heat pump/ac unit (3 t $13, PH1 Misc. common interior l $3, PH2 Domestic water piping a $80, PH2 Misc. common interior l $3, PH1 Garage gate arm $3, Security CCTV DVR $2, PH1 Domestic water pump m $3, PH1 Garage controller $3, CCTV Cameras (2012) $2, PH1 Domestic water piping a $, PH2 Garage gate arm $2, PH1 Swimming pool, concre $32, PH1 Gas pipe corrosion inhi $3,0 20 PH2 Domestic water pump m $3, PH1 Swimming pool deck co $187,69 21 PH2 Gas pipe corrosion inhi $3,0 222 PH1 Swimming pool, cover $3, Gas grills, partial $11, BB Treadmill, Matrix MXT3 $, PH2 Swimming pool, cover $2, Grill undercounter cabinets $3, BB Elliptical trainer, Matrix M $3,0 23 PH2 Swimming pool, concre $16, BB Recumbent bike, Matrix $8, PH2 Swimming pool deck co $92,6 280 BB Spin Bike, Keiser 0000 $, C Swimming pool, cover $2, C Swimming pool, concrete $13, C Swimming pool deck coati $100,00 26 Wood chairs $,80 27 Wood benches, long $39,1 28 Wood benches, short $13,2 29 Wood tables, tall, square $8,0 260 Wood tables, low, square $8, Wood tables, low, round $22, Waste receptacles, metal $6, Total Scheduled Replacements $222,96 Total Scheduled Replacements $861,808 Total Scheduled Replacements $677,86

49 Projected Annual Replacements - Page C7 PROJECTED REPLACEMENTS - YEARS 16 TO 18 Item YEAR 16 $ Item YEAR 17 $ Item YEAR 18 $ 2 Balcony Edge, Type 1 $26 3 Balcony Edge, Type 1 $26 Balcony Edge, Type 1 $26 21 Concrete garage pavement $8,809 7 Stormwater system, covered $18,990 Bulkhead, stainless railing, $2,76 31 Concrete sidewalk (6%) $,17 9 Stormwater inlets, partial, Ph $17,09 6 Stormwater system, uncover $2,98 7 Landscape lighting, Phase 2 $,7 66 PH1 Metal grilles, garage, re $9, Flat screen TV's $,20 8 PH2 Metal grilles, garage, re $2,96 86 PH2 Fiber cement soffit pan $67, PH1 Misc. common interior l $3, PH1 garage ceiling, partial $2, PH2 Fiber cement lap siding $120, PH1 Sanitary piping allowan $0,91 13 PH2 ceiling suspension syst $16, PH2 Fiber cement panel sidi $1, PH1 Gas pipe corrosion inhi $3,0 17 PH1 Garage lighting, 33% $8, PH2 Fiber cement trim, parti $91,67 21 PH2 Gas pipe corrosion inhi $3,0 1 PH1 Heat pump/ac unit (2 t $7, PH2 Exterior joint sealants, p $0,10 21 Security CCTV DVR $2, PH1 Swimming pool heater $8, PH2 Storefront doors and wi $61, CCTV Cameras (201) $7, PH2 Swimming pool heater $8, PH2 Exterior metal doors $21, Gas grills, partial $11, C Swimming pool heater - ga $9,0 93 PH2 Aluminum doors w/side $12, Grill undercounter cabinets $3, Gas grills, partial $11, PH2 carpet $12, Grill undercounter cabinets $3, PH2 garage ceiling, partial $2, PH1 Garage lighting, 33% $8, PH1 Corridor CFL sconces, $8, PH2 Misc. common interior l $3, PH2 Garage lighting, 33% $7,1 176 PH2 Heat pump/ac unit (2 t $7, PH2 Heat pump/ac unit (3 t $13, PH1 Garage gate arm $3, PH2 Garage gate arm $2, PH2 Garage controller $2, PH2 Fire alarm control pane $7,9 222 PH1 Swimming pool, cover $3, PH1 Hot tub $6,9 Total Scheduled Replacements $99,213 Total Scheduled Replacements $7,011 Total Scheduled Replacements $87,293

50 Projected Annual Replacements - Page C8 PROJECTED REPLACEMENTS - YEARS 19 TO 21 Item YEAR 19 $ Item YEAR 20 $ Item YEAR 21 $ Balcony Edge, Type 1 $26 6 Balcony Edge, Type 1 $26 90 PH2 Exterior joint sealants, p $0,10 19 Asphalt pavement, seal coat $,679 1 Bulkhead, concrete, refurbis $8,29 11 PH1 carpet $8,000 8 Mailboxes, Phase 1 $12,771 8 Stormwater system, covered $18, PH1 garage ceiling, partial $2,928 6 PH1 CMU exterior walls, rep $,11 0 Stormwater inlets, partial, Ph $17, PH1 wainscoting partial allow $, PH1 Exterior joint sealants, p $0,10 66 PH1 Metal grilles, garage, re $9,98 10 PH1 Trash compactor, ram & $7, PH1 Exterior corridor floor co $338, Ph1 HVAC Access panel at $3,61 12 PH1 Corridor CFL sconces, $8, PH1 Aluminum railing, refurb $26, Office chair $, PH2 Misc. common interior l $3,32 82 PH2 Gutter & downspout, 6" $6, PH1 Garage lighting, 33% $7, PH1 Backflow preventer, wa $,6 8 PH2 Metal grilles, garage, re $2,96 16 PH1 Heat pump/ac unit (2 t $7, PH1 Domestic water pumps $17, PH1 porcelain tile $2, PH2 Garage lighting, 33% $6, PH1 Domestic water pump m $3, PH1 stained & epoxy sealed $2, PH2 Corridor CFL sconces, $12, PH1 Pump controller $,38 13 PH1 Electric meters $29, PH1 Garage gate arm $3, Security CCTV DVR $2,660 1 PH1 Stairwell lighting, partia $, PH2 Garage gate arm $2, PH1 Swimming pool, whiteco $27,73 1 PH1 Entry lobby lighting $8, PH2 Sanitary piping allowan $8, PH1 Swimming pool, waterli $9,10 11 PH1 Corridor CFL sconces, $8, PH1 Swimming pool, cover $3, PH1 Swimming pool, coping $31, PH1 Balcony lights, red lens $36, PH2 Swimming pool, cover $2, BA Treadmill $, PH2 Heat pump/ac unit (2 t $7, C Swimming pool, cover $2, BA Elliptical trainer $, PH1 Garage operator $,668 2 PVC High back chairs $, BA Recumbent bike $2, PH1 Garage controller $3,70 2 PVC Lounge chairs (Phase $16, PH1 Access control system $2, Gas grills, partial $11, PH1 CCTV cameras (older o $6, Grill undercounter cabinets $3, PH1 Oil water separator $, Hot tub gazebo $16, PH1 Swimming pool pump ( $, Pool plaza gazebos $39,900 Total Scheduled Replacements $61,08 Total Scheduled Replacements $301,96 Total Scheduled Replacements $202,300

51 Projected Annual Replacements - Page C9 PROJECTED REPLACEMENTS - YEARS 22 TO 2 Item YEAR 22 $ Item YEAR 23 $ Item YEAR 2 $ 22 Concrete garage pavement $8,809 1 Balcony Edge, Type 1 $26 2 Balcony Edge, Type 1 $26 32 Concrete sidewalk (6%) $,17 20 Asphalt pavement, overlay $,62 9 PH2 Exterior corridor floor co $338,00 9 Mailboxes, Phase 2 $19, PH1 Metal grilles, garage, re $9, PH2 carpet $12,000 8 PH2 CMU exterior walls, rep $,11 67 PH1 Fiber cement soffit pan $67, PH2 Corridor CFL sconces, $12,361 8 PH2 Metal grilles, garage, re $2,96 68 PH1 Fiber cement lap siding $120, PH1 Garage controller $3,70 10 Ph2 HVAC Access panel at $62, PH1 Fiber cement panel sidi $1,08 21 Security CCTV DVR $2, Interior signage allowance $, PH1 Fiber cement trim, parti $91,67 21 PH2 Water play features $, PH2 porcelain tile $62,3 71 PH1 Exterior joint sealants, p $0,10 22 PH2 water play pumps (1. h $2, PH2 stained & epoxy sealed $10,992 9 PH2 Aluminum railing, refurb $26, PH2 water play deck surfaci $3, PH2 garage ceiling, partial $2, PH2 wainscoting partial allow $, Waste receptacles, metal $, PH1 Misc. common interior l $3, PH2 Garage lighting, 33% $6, Gas grills, partial $11, PH2 Elevator, hydraulic psng $21, PH1 Garage gate arm $3, Grill undercounter cabinets $3, PH2 Elevator, hydraulic psng $121, PH1 Gas pipe corrosion inhi $3,0 161 PH2 Trash compactor, ram & $7, PH2 Garage gate arm $2,39 16 PH2 Electric meters $1, PH2 Gas pipe corrosion inhi $3,0 16 PH2 Stairwell lighting, partia $, PH1 Swimming pool, cover $3, PH2 Entry lobby lighting $8, PH1 Swimming pool, concre $32, PH2 Corridor CFL sconces, $12, PH1 Swimming pool deck co $187,69 17 PH2 Balcony lights, red lens $3, PH1 Hot tub $6,9 199 PH2 Garage operator $3,01 26 Gas grills, partial $11, PH2 Garage controller $2, Grill undercounter cabinets $3, PH2 Access control system $3, BB Treadmill, Matrix MXT3 $, PH2 CCTV cameras (older o $8,6 278 BB Elliptical trainer, Matrix M $3,0 20 PH2 Domestic water pump m $3, BB Recumbent bike, Matrix $8, PH2 Swimming pool, whiteco $1, BB Spin Bike, Keiser 0000 $, PH2 Swimming pool, waterli $,7 23 PH2 Swimming pool, concre $16, PH2 Swimming pool pump ( $, PH2 Swimming pool deck co $92,6 2 C Swimming pool, whitecoat $6,90 2 C Swimming pool, waterline $,38 28 C Swimming pool, concrete $13, C Swimming pool pump (+ $, C Swimming pool deck coati $100,00 Total Scheduled Replacements $97,66 Total Scheduled Replacements $717,89 Total Scheduled Replacements $399,833

52 Projected Annual Replacements - Page C10 PROJECTED REPLACEMENTS - YEARS 2 TO 27 Item YEAR 2 $ Item YEAR 26 $ Item 20 - YEAR 27 $ 3 Balcony Edge, Type 1 $26 Balcony Edge, Type 1 $26 Balcony Edge, Type 1 $26 19 Asphalt pavement, seal coat $, PH1 Shingle asphalt/fibergla $29, PH1 Exterior joint sealants, p $0,10 6 Landscape lighting, Phase 1 $2, PH1 Metal grilles, garage, re $9, Ph2 Exterior door, Unit Entra $17,17 8 PH2 Metal grilles, garage, re $2, Flat screen TV's $, Ph2 Sliding door, Unit Balco $227,60 86 PH2 Fiber cement soffit pan $67, PH1 garage ceiling, partial $2, PH2 garage ceiling, partial $2, PH2 Fiber cement lap siding $120, PH1 Misc. common interior l $3,32 12 PH1 Backup generator, dies $8,70 88 PH2 Fiber cement panel sidi $1, PH1 Garage gate arm $3, PH2 Heat pump/ac unit (2 t $7, PH2 Fiber cement trim, parti $91, PH2 Garage gate arm $2, PH2 Garage controller $2,80 90 PH2 Exterior joint sealants, p $0, PH1 Swimming pool, cover $3, Security CCTV DVR $2, Ph1 Exterior door, Unit Entra $101, PH1 Swimming pool heater $8, Ph1 Sliding door, Unit Balco $13,1 23 PH2 Swimming pool, cover $2,288 1 PH1 Heat pump/ac unit (2 t $7, PH2 Swimming pool heater $8, PH1 Heat pump/ac unit (3 t $13, C Swimming pool, cover $2, PH2 Misc. common interior l $3,32 21 C Swimming pool heater - ga $9,0 203 PH2 Backflow preventer, wa $,6 26 Wood chairs $,80 20 PH2 Domestic water pumps $17, Wood benches, long $39,1 206 PH2 Pump controller $,38 28 Wood benches, short $13,2 216 CCTV Cameras (2012) $2,67 29 Wood tables, tall, square $8,0 260 Wood tables, low, square $8, Wood tables, low, round $22, Waste receptacles, metal $6, 266 Gas grills, partial $11, Grill undercounter cabinets $3,681 Total Scheduled Replacements $67,78 Total Scheduled Replacements $83,013 Total Scheduled Replacements $90,036

53 Projected Annual Replacements - Page C11 PROJECTED REPLACEMENTS - YEARS 28 TO 30 Item 20 - YEAR 28 $ Item YEAR 29 $ Item YEAR 30 $ 6 Balcony Edge, Type 1 $26 1 Site lighting, 13' pole & fixtur $26,880 1 Bulkhead, concrete, refurbis $8,29 23 Concrete garage pavement $8,809 2 Site lighting, 3' bollards $28,87 60 Entry monument & sign, rep $6,79 33 Concrete sidewalk (6%) $,17 3 Site lighting, pool area, Phas $10, PH1 Misc. common interior l $3,32 6 Stormwater system, uncover $2,98 6 PH1 Single ply membrane ro $13, PH2 Backup generator, dies $8,70 7 Landscape lighting, Phase 2 $,7 66 PH1 Metal grilles, garage, re $9, PH1 Access control system $,300 8 PH2 Metal grilles, garage, re $2,96 76 PH1 Exterior corridor floor co $338,00 20 PH2 Domestic water pump m $3, PH1 carpet $8, PH1 Aluminum railing, refurb $26, PH2 Domestic water piping a $80,79 1 PH1 Heat pump/ac unit (2 t $7, PH1 Aluminum railing, repla $21, PH2 Sanitary piping allowan $8, PH1 Domestic water piping a $,93 79 PH1 Louvers for heatpump $1,38 21 Security CCTV DVR $2, PH1 Sanitary piping allowan $0,91 80 PH1 Wood and aluminum tre $0, PH2 Swimming pool, concre $16, PH1 Gas pipe corrosion inhi $3,0 90 PH2 Exterior joint sealants, p $0, PH2 Swimming pool deck co $92,6 21 PH2 Gas pipe corrosion inhi $3,0 107 PH1 Meeting room, renovati $8, C Swimming pool, concrete $13, CCTV Cameras (201) $7, PH1 Kitchen renovation $2, C Swimming pool deck coati $100, Gas grills, partial $11, PH1 Restroom, renovation $,00 2 PVC High back chairs $, Grill undercounter cabinets $3, PH1 Library, renovation $3,600 2 PVC Lounge chairs (Phase $16, PH1 Lobby renovation, lowe $18, PH1 Lobby and corridor reno $9, PH1 Offices, renovation $6, PH1 stained & epoxy sealed $2, PH1 rubber floor tile $3, Office chair $, PH1 Elevator cab & door, pa $33,0 138 PH1 Elevator, traction psngr $21, PH1 Elevator, traction psngr $121, PH1 Backup generator, dies $8, PH2 Misc. common interior l $3, PH2 Heat pump/ac unit (2 t $7, PH2 Heat pump/ac unit (3 t $13, PH1 Garage gate arm $3, PH1 Garage controller $3, PH1 Domestic water pump m $3, PH1 Pressure tank $3, PH1 Fire pump $3,20 19 PH1 Jockey pump $, PH1 Fire alarm control pane $7,9 196 PH1 Fire alarm annunciator $, PH2 Garage gate arm $2, PH1 Swimming pool, cover $3, PH1 Swimming pool pump ( $, PH1 Swimming pool filter $, PH1 Perimeter fence - 2" (a $9, PH1 Hot tub $6,9 Total Scheduled Replacements $166,798 Total Scheduled Replacements $1,6,8 Total Scheduled Replacements $60,722

54 Projected Annual Replacements - Page C12 PROJECTED REPLACEMENTS - YEARS 31 TO 33 Item YEAR 31 $ Item YEAR 32 $ Item YEAR 33 $ 1 Balcony Edge, Type 1 $26 2 Balcony Edge, Type 1 $26 3 Balcony Edge, Type 1 $26 19 Asphalt pavement, seal coat $,679 2 Bulkhead concrete cap, repl $7,8 Bulkhead, stainless railing, $2,76 61 PH1 Shingle asphalt/fibergla $29,900 3 Bulkhead, sheet piling, 20 ft. $29,90 86 PH2 Fiber cement soffit pan $67, PH1 Fiber cement soffit pan $67,200 Bulkhead, stainless railing, r $21, PH2 Fiber cement lap siding $120, PH1 Fiber cement lap siding $120,900 7 Stormwater system, covered $18, PH2 Fiber cement panel sidi $1,08 69 PH1 Fiber cement panel sidi $1,08 9 Stormwater inlets, partial, Ph $17,09 89 PH2 Fiber cement trim, parti $91,67 70 PH1 Fiber cement trim, parti $91,67 Site lighting, pool area, Phas $10, PH2 Exterior joint sealants, p $0,10 71 PH1 Exterior joint sealants, p $0,10 Walkway lighting, Phase 2 $6,82 9 PH2 Aluminum railing, refurb $26,723 8 PH2 Metal grilles, garage, re $2,96 66 PH1 Metal grilles, garage, re $9, PH2 wainscoting partial allow $, PH1 garage ceiling, partial $2, PH2 Shingle asphalt/fibergla $67, PH2 Misc. common interior l $3, PH1 wainscoting partial allow $, PH2 Single ply membrane ro $13, PH1 Gas pipe corrosion inhi $3,0 130 PH2 carpet $12, PH2 Aluminum railing, repla $21, PH2 Gas pipe corrosion inhi $3,0 10 PH1 Trash compactor, ram & $7, PH2 Louvers for heatpump $2, Security CCTV DVR $2, PH1 Garage lighting, 33% $8, PH2 Wood and aluminum tre $0, BB Treadmill, Matrix MXT3 $, PH2 Heat pump/ac unit (2 t $7, Interior signage allowance $, BB Elliptical trainer, Matrix M $3,0 219 PH1 Swimming pool, whiteco $27, Office desks with returns $9, BB Recumbent bike, Matrix $8, PH1 Swimming pool, waterli $9, PH2 Meeting room, renovati $, BB Spin Bike, Keiser 0000 $, PH1 Swimming pool, concre $32,02 12 PH2 Kitchen renovation $12, PH1 Swimming pool deck co $187,69 12 PH2 Restroom and shower, $9, Gas grills, partial $11, PH2 Library, renovation $2, Grill undercounter cabinets $3, PH2 Lobby renovation, lowe $12, BA Treadmill $, PH2 Lobby and corridor reno $7, BA Elliptical trainer $, PH2 Offices, renovation $2, BA Recumbent bike $2, PH2 stained & epoxy sealed $10, PH2 rubber floor tile $3,72 13 PH2 garage ceiling, partial $2, PH1 Garage lighting, 33% $8, PH1 Corridor CFL sconces, $8, PH1 Heat pump/ac unit (2 t $7, PH2 Elevator cab & door, pa $33,0 161 PH2 Trash compactor, ram & $7, PH2 Backup generator, dies $8, PH2 Garage lighting, 33% $7,1 179 PH1 Garage gate arm $3, PH2 Garage gate arm $2, PH2 Garage controller $2, PH2 Pressure tank $3, PH2 Fire pump $3, PH2 Jockey pump $, PH2 Fire alarm annunciator $, PH1 Swimming pool, cover $3, PH2 Swimming pool, whiteco $1, PH2 Swimming pool, waterli $,7 233 PH2 Swimming pool, coping $1, PH2 Swimming pool, cover $2, PH2 Swimming pool pump ( $, PH2 Swimming pool filter $2,89 20 PH2 Perimeter fence - 2" (a $6,960 2 C Swimming pool, whitecoat $6,90 2 C Swimming pool, waterline $,38 26 C Swimming pool, coping $1,60 27 C Swimming pool, cover $2, C Swimming pool pump (+ $, C Swimming pool filter $, C Wind screen 2" (tempere $30, Gas grills, partial $11, Grill undercounter cabinets $3,681 Total Scheduled Replacements $931,087 Total Scheduled Replacements $1,6,972 Total Scheduled Replacements $1,891

55 Projected Annual Replacements - Page C13 PROJECTED REPLACEMENTS - YEARS 3 TO 36 Item YEAR 3 $ Item YEAR 3 $ Item YEAR 36 $ Balcony Edge, Type 1 $26 Balcony Edge, Type 1 $26 6 Balcony Edge, Type 1 $26 2 Concrete garage pavement $8,809 8 Stormwater system, covered $18, PH1 garage ceiling, partial $2,928 3 Concrete sidewalk (6%) $,17 0 Stormwater inlets, partial, Ph $17,09 12 PH1 Corridor CFL sconces, $8,679 6 PH1 CMU exterior walls, rep $,11 66 PH1 Metal grilles, garage, re $9,98 21 Security CCTV DVR $2,660 7 PH1 Rollup door at 1st floor $1,23 71 PH1 Exterior joint sealants, p $0, PH1 Swimming pool heater $8,870 8 PH2 Metal grilles, garage, re $2, Ph1 HVAC Access panel at $3, PH2 Swimming pool heater $8,870 9 PH2 Exterior corridor floor co $338,00 11 PH1 carpet $8, C Swimming pool heater - ga $9,0 106 Flat screen TV's $,20 19 PH1 Garage lighting, 33% $7, Waste receptacles, metal $,370 1 PH1 Stairwell lighting, partia $, PH2 Garage lighting, 33% $6, Gas grills, partial $11, PH1 Misc. common interior l $3, PH2 Corridor CFL sconces, $12, Grill undercounter cabinets $3, PH1 Corridor CFL sconces, $8, PH1 Garage gate arm $3, PH1 Balcony lights, red lens $36, PH2 Garage gate arm $2, PH1 Garage operator $, CCTV Cameras (2012) $2, PH1 Garage controller $3, PH1 Swimming pool, cover $3, PH1 Access control system $2, PH1 Hot tub $6,9 18 PH1 CCTV cameras (older o $6, Gas grills, partial $11, Grill undercounter cabinets $3,681 Total Scheduled Replacements $3,101 Total Scheduled Replacements $192,9 Total Scheduled Replacements $61,00

56 Projected Annual Replacements - Page C1 PROJECTED REPLACEMENTS - YEARS 37 TO 39 Item 20 - YEAR 37 $ Item 20 - YEAR 38 $ Item YEAR 39 $ 19 Asphalt pavement, seal coat $,679 6 Stormwater system, uncover $2,98 1 Balcony Edge, Type 1 $26 6 Landscape lighting, Phase 1 $2, PH1 Metal grilles, garage, re $9,98 7 Balcony Edge, Type 2 $,072 8 PH2 CMU exterior walls, rep $, PH1 ceiling suspension syst $16, Balcony Edge, Type 3 $3,32 8 PH2 Metal grilles, garage, re $2, Office chair $, PH1 Gutter & downspout, 6" $6, PH2 Exterior joint sealants, p $0, PH2 carpet $12, PH1 Fiber cement soffit pan $67, Ph2 HVAC Access panel at $62, PH1 Misc. common interior l $3,32 68 PH1 Fiber cement lap siding $120, PH2 garage ceiling, partial $2, PH2 Garage lighting, 33% $6, PH1 Fiber cement panel sidi $1,08 1 PH1 Heat pump/ac unit (2 t $7, PH1 Garage gate arm $3, PH1 Fiber cement trim, parti $91,67 17 PH1 Heat pump/ac unit (3 t $13, PH1 Sanitary piping allowan $0,91 71 PH1 Exterior joint sealants, p $0,10 19 PH2 Elevator, hydraulic psng $21, PH1 Gas pipe corrosion inhi $3,0 76 PH1 Exterior corridor floor co $338,00 16 PH2 Stairwell lighting, partia $, PH2 Garage gate arm $2,39 77 PH1 Aluminum railing, refurb $26, PH2 Misc. common interior l $3,32 20 PH2 Domestic water pump m $3, PH1 stained & epoxy sealed $2, PH2 Corridor CFL sconces, $12,62 21 PH2 Gas pipe corrosion inhi $3,0 173 PH2 Corridor CFL sconces, $12, PH2 Balcony lights, red lens $3, CCTV Cameras (201) $7, PH2 Heat pump/ac unit (2 t $7, PH1 Domestic water pump m $3, PH1 Swimming pool, cover $3, PH1 Garage controller $3, PH2 Garage operator $3,01 23 PH2 Swimming pool, cover $2, Security CCTV DVR $2, PH2 Garage controller $2,80 23 PH2 Swimming pool, concre $16, PH1 Swimming pool, structu $87, PH2 Access control system $3, PH2 Swimming pool deck co $92,6 223 PH1 Swimming pool, concre $32, PH2 CCTV cameras (older o $8,6 27 C Swimming pool, cover $2, PH1 Swimming pool pump ( $, PH2 Fire alarm control pane $7,9 28 C Swimming pool, concrete $13, PH1 Swimming pool deck co $187,69 22 C Swimming pool deck coati $100,00 26 Gas grills, partial $11, Wood chairs $, Grill undercounter cabinets $3, Wood benches, long $39,1 28 Wood benches, short $13,2 29 Wood tables, tall, square $8,0 260 Wood tables, low, square $8, Wood tables, low, round $22, Waste receptacles, metal $6, Total Scheduled Replacements $90,68 Total Scheduled Replacements $06,136 Total Scheduled Replacements $1,080,838

57 Projected Annual Replacements - Page C1 PROJECTED REPLACEMENTS - YEARS 0 TO 2 Item YEAR 0 $ Item 208 (beyond Study Period) $ Item 209 (beyond Study Period) $ 2 Balcony Edge, Type 1 $26 3 Balcony Edge, Type 1 $26 Balcony Edge, Type 1 $26 8 Balcony Edge, Type 2 $,072 9 Balcony Edge, Type 2 $, Balcony Edge, Type 2 $,072 1 Balcony Edge, Type 3 $3,32 10 Balcony Edge, Type 2 $, Balcony Edge, Type 3 $3,32 2 Concrete garage pavement $8,809 1 Balcony Edge, Type 3 $3,32 10 Interior signage allowance $,000 3 Concrete sidewalk (6%) $,17 16 Balcony Edge, Type 3 $3, Flat screen TV's $,20 1 Bulkhead, concrete, refurbis $8,29 20 Asphalt pavement, overlay $,62 11 PH1 carpet $8,000 7 Landscape lighting, Phase 2 $,7 66 PH1 Metal grilles, garage, re $9, PH2 stained & epoxy sealed $10,992 8 PH2 Metal grilles, garage, re $2,96 86 PH2 Fiber cement soffit pan $67, PH2 garage ceiling, partial $2,928 1 PH1 Heat pump/ac unit (2 t $7, PH2 Fiber cement lap siding $120, PH1 Misc. common interior l $3, PH2 Sanitary piping allowan $8,87 88 PH2 Fiber cement panel sidi $1, PH2 Trash compactor, ram & $7, PH2 Water play features $,36 89 PH2 Fiber cement trim, parti $91, PH2 Garage controller $2,80 22 PH2 water play pumps (1. h $2, PH2 Exterior joint sealants, p $0,10 21 Security CCTV DVR $2, PH2 water play deck surfaci $3, PH1 garage ceiling, partial $2, PH2 Swimming pool, structu $66,31 2 PVC High back chairs $, PH1 wainscoting partial allow $, PH2 Swimming pool, whiteco $1,808 2 PVC Lounge chairs (Phase $16,61 13 PH2 ceiling suspension syst $16, PH2 Swimming pool, waterli $,7 26 Gas grills, partial $11, PH1 Trash compactor, ram & $7, PH2 Swimming pool pump ( $, Grill undercounter cabinets $3, PH2 Misc. common interior l $3,32 2 C Swimming pool, whitecoat $6, PH2 Heat pump/ac unit (2 t $7,710 2 C Swimming pool, waterline $, PH2 Heat pump/ac unit (3 t $13, C Swimming pool pump (+ $, PH1 Garage gate arm $3, Gas grills, partial $11, PH2 Garage gate arm $2, Grill undercounter cabinets $3, PH1 Swimming pool, whiteco $27, PH1 Swimming pool, waterli $9, PH1 Swimming pool, coping $31, PH1 Swimming pool, cover $3, PH1 Hot tub $6,9 27 BA Treadmill $, BA Elliptical trainer $, BA Recumbent bike $2,770 Total Scheduled Replacements $12,182 Total Scheduled Replacements $68,682 Total Scheduled Replacements $180,69

58 Intentionally Left Blank

59 Cash Flow Method Accounting Summary - Page CF1 CASH FLOW METHOD ACCOUNTING SUMMARY This Sanctuary at False Cape - Cash Flow Method Accounting Summary is an attachment to the Sanctuary at False Cape - Replacement Reserve Study dated November 1, 2017 and is for use by accounting and reserve professionals experienced in Association funding and accounting principles. This Summary consists of four reports, the 2018, 2019, and 2020 Cash Flow Method Category Funding Reports (3) and a Three-Year Replacement Funding Report. CASH FLOW METHOD CATEGORY FUNDING REPORT, 2018, 2019, and Each of the 280 Projected Replacements listed in the Sanctuary at False Cape Replacement Reserve Inventory has been assigned to one of 22 categories. The following information is summarized by category in each report: Normal Economic Life and Remaining Economic Life of the Projected Replacements. Cost of all Scheduled Replacements in each category. Replacement Reserves on Deposit allocated to the category at the beginning and end of the report period. Cost of Projected Replacements in the report period. Recommended Replacement Reserve Funding allocated to the category during the report period as calculated by the Cash Flow Method. THREE-YEAR REPLACEMENT FUNDING REPORT. This report details the allocation of the $302,1 Beginning Balance (at the start of the Study Year) and the $2,01,79 of additional Replacement Reserve Funding in 2018 through 2020 (as calculated in the Replacement Reserve Analysis) to each of the 280 Projected Replacements listed in the Replacement Reserve Inventory. These allocations have been made using Chronological Allocation, a method developed by Miller Dodson Associates, Inc., and discussed below. The calculated data includes: Identification and estimated cost of each Projected Replacement scheduled in years 2018 through Allocation of the $302,1 Beginning Balance to the Projected Replacements by Chronological Allocation. Allocation of the $2,01,79 of additional Replacement Reserve Funding recommended in the Replacement Reserve Analysis in years 2018 through 2020, by Chronological Allocation. CHRONOLOGICAL ALLOCATION. Chronological Allocation assigns Replacement Reserves to Projected Replacements on a "first come, first serve" basis in keeping with the basic philosophy of the Cash Flow Method. The Chronological Allocation methodology is outlined below. The first step is the allocation of the $302,1 Beginning Balance to the Projected Replacements in the Study Year. Remaining unallocated funds are next allocated to the Projected Replacements in subsequent years in chronological order until the total of Projected Replacements in the next year is greater than the unallocated funds. Projected Replacements in this year are partially funded with each replacement receiving percentage funding. The percentage of funding is calculated by dividing the unallocated funds by the total of Projected Replacements in the partially funded year. At Sanctuary at False Cape the Beginning Balance funds.% of Scheduled Replacements in the Study Year. The next step is the allocation of the $892,96 of 2018 Cash Flow Method Reserve Funding calculated in the Replacement Reserve Analysis. These funds are first allocated to fund the partially funded Projected Replacements and then to subsequent years in chronological order as outlined above. At Sanctuary at False Cape the Beginning Balance and the 2018 Replacement Reserve Funding, funds replacements through 2020 and partial funds (23.7%) replacements in Allocations of the 2019 and 2020 Reserve Funding are done using the same methodology. The Three-Year Replacement Funding Report details component by component allocations made by Chronological Allocation.

60 Cash Flow Method Accounting Summary - Page CF CASH FLOW METHOD CATEGORY FUNDING REPORT Each of the 280 Projected Replacements included in the Sanctuary at False Cape Replacement Reserve Inventory has been assigned to one of the 22 categories listed in TABLE CF1 below. This calculated data is a summary of data provided in the Three-Year Replacement Funding Report and Replacement Reserve Inventory. The accuracy of this data is dependent upon many factors including the following critical financial data: A Beginning Balance of $302,1 as of the first day of the Study Year, January 1, Total reserve funding (including the Beginning Balance) of $1,19,06 in the Study Year. No expenditures from Replacement Reserves other than those specifically listed in the Replacement Reserve Inventory. All Projected Replacements scheduled in the Replacement Reserve Inventory in 2018 being accomplished in 2018 at a cost of $66,06. If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associates to arrange for an update of the Replacement Reserve Study CASH FLOW METHOD CATEGORY FUNDING - TABLE CF1 NORMAL REMAINING ESTIMATED ECONOMIC ECONOMIC REPLACEMENT BEGINNING RESERVE PROJECTED END OF YEAR CATEGORY LIFE LIFE COST BALANCE FUNDING REPLACEMENTS BALANCE Balcony Edges 8 to 0 years 0 to 0 years $1,863 $3,817 $21,926 ($8,397) $17,36 SITE COMPONENT 6 to 60 years to 69 years $138,396 SITE COMPONENT (cont.) 10 to 60 years 1 to 69 years $28,71 $21,736 $21,736 SITE COMPONENT (cont.) 8 to 0 years 0 to 29 years $131,20 $1,290 $2,860 ($2,838) $1,313 BUILDING EXTERIOR (Phase 1 = PH1) 3 to 0 years 0 to 28 years $1,637,960 $113,60 $17,89 ($29,900) $11,19 BUILDING EXTERIOR (Phase 2 = PH2) 3 to 0 years 0 to 31 years $1,608,17 $17,71 $296,630 ($36,929) $107,16 BUILDING EXTERIOR UNIT DOORS & WIND 1 to 0 years 0 to 26 years $717,01 BUILDING INTERIORS 3 to 2 years 0 to 1 years $10,20 $10,20 $10,20 BUILDING INTERIOR (Phase 1 = PH1) 3 to 30 years 0 to 18 years $1,29 $,0 $,83 ($8,898) BUILDING INTERIOR - FURNITURE AND EQ 3 to 21 years 0 to 10 years $1,200 $,680 $,680 BUILDING INTERIOR (Phase 2 = PH2) to 30 years 1 to 21 years $163,08 $31,890 $31,890 BUILDING SYSTEMS (Phase 1 = PH1) to 0 years 0 to 28 years $679,928 $16,806 $,018 ($36,969) $33,8 BUILDING SYSTEMS (Phase 2 = PH2) to 0 years 0 to 31 years $699,3 $22,62 $22,62 BUILDING SYSTEM (Phase 1 = PH1) 3 to 0 years 0 to 28 years $218,31 $10,80 $10,80 BUILDING SYSTEM (Phase 2 = PH2) 3 to 0 years 0 to 31 years $22,71 $8,69 $8,69 BUILDING SYSTEM (Newer CCTV Cameras) 3 to 2 years 0 to 7 years $13,01 $2,660 $2,660 SWIMMING POOL (Phase 1 = PH1) 2 to 0 years 0 to 38 years $1,73 $3,328 $3,328 SWIMMING POOL (Phase 2 = PH2) 6 to 0 years 0 to 1 years $27,937 $27,11 $27,11 C Swimming pool, structure 6 to 20 years 0 to 11 years $193,18 $18,729 $18,729 COURTYARD AND POOL FURNITURE, GAZ 8 to 32 years 1 to 19 years $297,08 $173,93 $173,93 EXERCISE EQUIPMENT (Building A = BA) 3 to 1 years 0 years $11,7 $,262 $6,313 ($11,7) EXERCISE EQUIPMENT (Building B = BB) 10 to 1 years 0 to 2 years $21,890 $21,890 $21,890

61 Cash Flow Method Accounting Summary - Page CF CASH FLOW METHOD CATEGORY FUNDING REPORT Each of the 280 Projected Replacements included in the Sanctuary at False Cape Replacement Reserve Inventory has been assigned to one of the 22 categories listed in TABLE CF2 below. This calculated data is a summary of data provided in the Three-Year Replacement Funding Report and Replacement Reserve Inventory. The accuracy of this data is dependent upon many factors including the following critical financial data: Replacement Reserves on Deposit totaling $30,000 on January 1, Total reserve funding (including the Beginning Balance) of $1,77,763 from 2018 through No expenditures from Replacement Reserves other than those specifically listed in the Replacement Reserve Inventory. All Projected Replacements scheduled in the Replacement Reserve Inventory in 2019 being accomplished in 2019 at a cost of $330,06. If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associates to arrange for an update of the Replacement Reserve Study CASH FLOW METHOD CATEGORY FUNDING - TABLE CF2 NORMAL REMAINING ESTIMATED ECONOMIC ECONOMIC REPLACEMENT BEGINNING RESERVE PROJECTED END OF YEAR CATEGORY LIFE LIFE COST BALANCE FUNDING REPLACEMENTS BALANCE Balcony Edges 8 to 0 years 0 to 39 years $1,863 $17,36 $188 ($8,6) $8,890 SITE COMPONENT 6 to 60 years 3 to 68 years $138,396 $,62 $,62 SITE COMPONENT (cont.) 10 to 60 years 0 to 68 years $28,71 $21,736 $18,990 ($18,990) $21,736 SITE COMPONENT (cont.) 8 to 0 years 2 to 28 years $131,20 $1,313 $,23 $,7 BUILDING EXTERIOR (Phase 1 = PH1) 3 to 0 years 0 to 27 years $1,637,960 $11,19 $1,376 ($9,98) $1,86 BUILDING EXTERIOR (Phase 2 = PH2) 3 to 0 years 1 to 30 years $1,608,17 $107,16 $310,2 $17,869 BUILDING EXTERIOR UNIT DOORS & WIND 1 to 0 years 3 to 2 years $717,01 $3,61 $3,61 BUILDING INTERIORS 3 to 2 years 0 years $10,20 $10,20 ($10,20) BUILDING INTERIOR (Phase 1 = PH1) 3 to 30 years to 17 years $1,29 $6 $6 BUILDING INTERIOR - FURNITURE AND EQ 3 to 21 years 0 to 9 years $1,200 $,680 ($,680) BUILDING INTERIOR (Phase 2 = PH2) to 30 years 0 to 20 years $163,08 $31,890 ($13,920) $17,970 BUILDING SYSTEMS (Phase 1 = PH1) to 0 years 0 to 27 years $679,928 $33,8 $1,989 ($20,112) $6,732 BUILDING SYSTEMS (Phase 2 = PH2) to 0 years 0 to 30 years $699,3 $22,62 $3,726 ($1,91) $1,36 BUILDING SYSTEM (Phase 1 = PH1) 3 to 0 years 0 to 27 years $218,31 $10,80 $20,89 ($3,192) $28,102 BUILDING SYSTEM (Phase 2 = PH2) 3 to 0 years 0 to 30 years $22,71 $8,69 $2,02 ($,199) $,82 BUILDING SYSTEM (Newer CCTV Cameras) 3 to 2 years 1 to 6 years $13,01 $2,660 $2,680 $,30 SWIMMING POOL (Phase 1 = PH1) 2 to 0 years 0 to 37 years $1,73 $3,328 $9,80 ($3,328) $9,80 SWIMMING POOL (Phase 2 = PH2) 6 to 0 years 0 to 0 years $27,937 $27,11 $229 ($27,11) $229 C Swimming pool, structure 6 to 20 years 0 to 10 years $193,18 $18,729 $21 ($18,729) $21 COURTYARD AND POOL FURNITURE, GAZ 8 to 32 years 0 to 18 years $297,08 $173,93 $11,329 ($170,1) $1,81 EXERCISE EQUIPMENT (Building A = BA) 3 to 1 years 9 years $11,7 EXERCISE EQUIPMENT (Building B = BB) 10 to 1 years 1 years $21,890 $21,890 $21,890

62 Cash Flow Method Accounting Summary - Page CF CASH FLOW METHOD CATEGORY FUNDING REPORT Each of the 280 Projected Replacements included in the Sanctuary at False Cape Replacement Reserve Inventory has been assigned to one of the 22 categories listed in TABLE CF3 below. This calculated data is a summary of data provided in the Three-Year Replacement Funding Report and Replacement Reserve Inventory. The accuracy of this data is dependent upon many factors including the following critical financial data: Replacement Reserves on Deposit totaling $779,191 on January 1, Total Replacement Reserve funding (including the Beginning Balance) of $2,3,020 from 2018 to No expenditures from Replacement Reserves other than those specifically listed in the Replacement Reserve Inventory. All Projected Replacements scheduled in the Replacement Reserve Inventory in 2020 being accomplished in 2020 at a cost of $9,22. If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associates to arrange for an update of the Replacement Reserve Study CASH FLOW METHOD CATEGORY FUNDING - TABLE CF3 NORMAL REMAINING ESTIMATED ECONOMIC ECONOMIC REPLACEMENT BEGINNING RESERVE PROJECTED END OF YEAR CATEGORY LIFE LIFE COST BALANCE FUNDING REPLACEMENTS BALANCE Balcony Edges 8 to 0 years 0 to 39 years $1,863 $8,890 $10 ($8,6) $26 SITE COMPONENT 6 to 60 years 2 to 67 years $138,396 $,62 $230 $,8 SITE COMPONENT (cont.) 10 to 60 years 0 to 67 years $28,71 $21,736 ($2,76) $18,990 SITE COMPONENT (cont.) 8 to 0 years 1 to 27 years $131,20 $,7 $0 $,7 BUILDING EXTERIOR (Phase 1 = PH1) 3 to 0 years 1 to 26 years $1,637,960 $1,86 $263,30 $278,936 BUILDING EXTERIOR (Phase 2 = PH2) 3 to 0 years 0 to 29 years $1,608,17 $17,869 $19,223 ($26,723) $10,369 BUILDING EXTERIOR UNIT DOORS & WIND 1 to 0 years 2 to 2 years $717,01 $3,61 $2,0 $6,001 BUILDING INTERIORS 3 to 2 years 7 to 9 years $10,20 BUILDING INTERIOR (Phase 1 = PH1) 3 to 30 years 3 to 16 years $1,29 $6 $3,26 $3,22 BUILDING INTERIOR - FURNITURE AND EQ 3 to 21 years 8 years $1,200 BUILDING INTERIOR (Phase 2 = PH2) to 30 years 0 to 19 years $163,08 $17,970 $118 ($17,970) $118 BUILDING SYSTEMS (Phase 1 = PH1) to 0 years 1 to 26 years $679,928 $6,732 $11,980 $77,712 BUILDING SYSTEMS (Phase 2 = PH2) to 0 years 0 to 29 years $699,3 $1,36 $12,631 ($7,710) $6,37 BUILDING SYSTEM (Phase 1 = PH1) 3 to 0 years 0 to 26 years $218,31 $28,102 ($0) ($3,0) $2,62 BUILDING SYSTEM (Phase 2 = PH2) 3 to 0 years 0 to 29 years $22,71 $,82 $,60 ($3,0) $7,006 BUILDING SYSTEM (Newer CCTV Cameras) 3 to 2 years 0 to years $13,01 $,30 $2,6 ($2,660) $,33 SWIMMING POOL (Phase 1 = PH1) 2 to 0 years 2 to 36 years $1,73 $9,80 $17,763 $27,603 SWIMMING POOL (Phase 2 = PH2) 6 to 0 years 3 to 39 years $27,937 $229 $117,096 $117,32 C Swimming pool, structure 6 to 20 years 3 to 9 years $193,18 $21 $123,209 $123,0 COURTYARD AND POOL FURNITURE, GAZ 8 to 32 years 1 to 17 years $297,08 $1,81 $601 $1,2 EXERCISE EQUIPMENT (Building A = BA) 3 to 1 years 8 years $11,7 $0 $0 EXERCISE EQUIPMENT (Building B = BB) 10 to 1 years 0 years $21,890 $21,890 ($21,890)

63 Cash Flow Method Accounting Summary - Page CF CASH FLOW METHOD - THREE-YEAR REPLACEMENT FUNDING REPORT TABLE CF below details the allocation of the $302,1 Beginning Balance, as reported by the Association and the $2,01,79 of Replacement Reserve Funding calculated by the Cash Flow Method from 2018 to 2020, to the 280 Projected Replacements listed in the Replacement Reserve Inventory. These allocations have been made by Chronological Allocation, a method developed by Miller Dodson Associates, Inc., and outlined on Page CF1. The accuracy of the allocations is dependent upon many factors including the following critical financial data: Replacement Reserves on Deposit totaling $302,1 on January 1, Replacement Reserves on Deposit totaling $30,000 on January 1, Replacement Reserves on Deposit totaling $779,191 on January 1, Total Replacement Reserve funding (including the Beginning Balance) of $2,3,020 from 2018 to No expenditures from Replacement Reserves other than those specifically listed in the Replacement Reserve Inventory. All Projected Replacements scheduled in the Replacement Reserve Inventory from 2018 to 2020 being accomplished as scheduled in the Replacement Reserve Inventory at a cost of $1,090,81. If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associates, Inc., to arrange for an update of the Replacement Reserve Study. CASH FLOW METHOD - THREE-YEAR REPLACEMENT FUNDING - TABLE CF Description of Estimated Allocation Item Projected Replacement of Beginning Reserve Projected End of Year Reserve Projected End of Year Reserve Projected End of Year # Replacement Costs Balance Funding Replacements Balance Funding Replacements Balance Funding Replacements Balance Balcony Edges 1 Balcony Edge, Type Balcony Edge, Type Balcony Edge, Type 1 26 Balcony Edge, Type (26) Balcony Edge, Type (26) 6 Balcony Edge, Type Balcony Edge, Type 2,072 8 Balcony Edge, Type 2,072 9 Balcony Edge, Type 2, Balcony Edge, Type 2,072 2,306 2,766 (,072) 11 Balcony Edge, Type 2,072,072,072 (,072) 12 Balcony Edge, Type 2,072,072,072,072 (,072) 13 Balcony Edge, Type 3 3,32 1 Balcony Edge, Type 3 3,32 1 Balcony Edge, Type 3 3,32 16 Balcony Edge, Type 3 3,32 1,12 1,81 (3,32) 17 Balcony Edge, Type 3 3,32 3,32 3,32 (3,32) 18 Balcony Edge, Type 3 3,32 3,32 3,32 3,32 (3,32) SITE COMPONENT 19 Asphalt pavement, seal coat, Asphalt pavement, overlay,62,62,62,62 21 Concrete garage pavement (1/2%) 8, Concrete garage pavement (1/2%) 8, Concrete garage pavement (1/2%) 8,809 2 Concrete garage pavement (1/2%) 8,809 2 Concrete garage pavement (1/2%) 8, Concrete garage pavement (1/2%) 8, Concrete garage pavement (1/2%) 8, Concrete garage pavement (1/2%) 8, Concrete garage pavement (1/2%) 8, Concrete garage pavement (1/2%) 8,809 SITE COMPONENT (cont.) 31 Concrete sidewalk (6%),17 32 Concrete sidewalk (6%),17 33 Concrete sidewalk (6%),17 3 Concrete sidewalk (6%),17 3 Concrete sidewalk (6%),17 36 Concrete sidewalk (6%),17 37 Concrete sidewalk (6%),17 38 Concrete sidewalk (6%),17 39 Concrete sidewalk (6%),17

64 Cash Flow Method Accounting Summary - Page CF6 CASH FLOW METHOD - THREE-YEAR REPLACEMENT FUNDING - TABLE CF cont'd Description of Estimated Allocation Item Projected Replacement of Beginning Reserve Projected End of Year Reserve Projected End of Year Reserve Projected End of Year # Replacement Costs Balance Funding Replacements Balance Funding Replacements Balance Funding Replacements Balance 0 Concrete sidewalk (6%),17 1 Bulkhead, concrete, refurbishing 8,29 2 Bulkhead concrete cap, replace 7,8 3 Bulkhead, sheet piling, 20 ft. deep 29,90 Bulkhead, stainless railing, refurbish 2,76 2,76 2,76 2,76 (2,76) Bulkhead, stainless railing, replacemen 21,208 6 Stormwater system, uncovered 2,98 7 Stormwater system, covered Phase 1 18,990 18,990 18,990 (18,990) 8 Stormwater system, covered Phase 2 18,990 18,990 18,990 18,990 9 Stormwater inlets, partial, Phase 1 17,09 0 Stormwater inlets, partial, Phase 2 17,09 SITE COMPONENT (cont.) 1 Site lighting, 13' pole & fixture 26,880 2 Site lighting, 3' bollards 28,87 3 Site lighting, pool area, Phase 1 10,920 Site lighting, pool area, Phase 2 10,920 Walkway lighting, Phase 2 6,82 6 Landscape lighting, Phase 1 2,838 1,290 1,8 (2,838) 7 Landscape lighting, Phase 2,7 1,313 1,313,23,7,7 8 Mailboxes, Phase 1 12,771 9 Mailboxes, Phase 2 19, Entry monument & sign, replace 6,79 BUILDING EXTERIOR (Phase 1 = PH 61 PH1 Shingle asphalt/fiberglass (0%) 29, ,13 29, PH1 Shingle asphalt/fiberglass (0%) 29, ,60 136,29 (29,900) 63 PH1 Gutter & downspout, 6" aluminum 6,981 6 PH1 Single ply membrane roof 13,33 6 PH1 CMU exterior walls, repoint, parti,11 1,210 1,210 3,90,11,11 66 PH1 Metal grilles, garage, refurbish 9,98 9,98 9,98 9,98 (9,98) 9,98 9,98 67 PH1 Fiber cement soffit panel, partial 67,200 2,719 2, PH1 Fiber cement lap siding, partial 120,900,892, PH1 Fiber cement panel siding, partial 1, PH1 Fiber cement trim, partial 91,67 3,710 3, PH1 Exterior joint sealants, partial 0,10 2,029 2, PH1 Storefront doors and windows 61,79 73 PH1 Exterior metal doors 20,960 7 PH1 Aluminum doors w/sidelights 12,280 7 PH1 Rollup door at 1st floor elevator 1,23 76 PH1 Exterior corridor floor coating 338,00 77 PH1 Aluminum railing, refurbish 26, PH1 Aluminum railing, replace 21, PH1 Louvers for heatpump access 1,38 80 PH1 Wood and aluminum trellis 0,790 BUILDING EXTERIOR (Phase 2 = PH 81 PH2 Shingle asphalt/fiberglass 67,60 18,91 18,91 82 PH2 Gutter & downspout, 6" aluminum 6, PH2 Single ply membrane roof 13,33 8 PH2 CMU exterior walls, repoint, parti, PH2 Metal grilles, garage, refurbish 2,96 1,13 1,92 (2,96) 91 1,90 2, ,97 86 PH2 Fiber cement soffit panel, partial 67,200 30,9 36,61 (67,200) 87 PH2 Fiber cement lap siding, partial 120,900,961 6,939 (120,900) 88 PH2 Fiber cement panel siding, partial 1,08 6,9 7,913 (1,08) 89 PH2 Fiber cement trim, partial 91,67 1,676 9,999 (91,67) 90 PH2 Exterior joint sealants, partial 0,10 22,798 27,32 (0,10) 0,10 0,10 0,10 91 PH2 Storefront doors and windows 61,79 92 PH2 Exterior metal doors 21,00 93 PH2 Aluminum doors w/sidelights 12,280 9 PH2 Exterior corridor floor coating 338,00 80,103 80,103 28, ,00 338,00 9 PH2 Aluminum railing, refurbish 26,723 26,723 26,723 26,723 (26,723) 96 PH2 Aluminum railing, replace 21, PH2 Louvers for heatpump access 2, PH2 Wood and aluminum trellis 0,790 BUILDING EXTERIOR UNIT DOOR 99 Ph1 Exterior door, Unit Entrances 101, Ph1 Sliding door, Unit Balcony 13,1 101 Ph1 HVAC Access panel at balcony 3,61 3,61 3,61 3, Ph2 Exterior door, Unit Entrances 17, Ph2 Sliding door, Unit Balcony 227,60

65 Cash Flow Method Accounting Summary - Page CF7 CASH FLOW METHOD - THREE-YEAR REPLACEMENT FUNDING - TABLE CF cont'd Description of Estimated Allocation Item Projected Replacement of Beginning Reserve Projected End of Year Reserve Projected End of Year Reserve Projected End of Year # Replacement Costs Balance Funding Replacements Balance Funding Replacements Balance Funding Replacements Balance 10 Ph2 HVAC Access panel at balcony 62,777 2,0 2,0 BUILDING INTERIORS 10 Interior signage allowance,000,000,000 (,000) 106 Flat screen TV's,20,20,20 (,20) BUILDING INTERIOR (Phase 1 = PH 107 PH1 Meeting room, renovation 8, PH1 Kitchen renovation 2, PH1 Restroom, renovation, PH1 Library, renovation 3, PH1 Lobby renovation, lower level 18, PH1 Lobby and corridor renovatio, upp 9, PH1 Offices, renovation 6, PH1 carpet 8, PH1 porcelain tile 2, PH1 stained & epoxy sealed concrete 2, PH1 rubber floor tile 3, PH1 garage ceiling, partial 2,928 1,331 1,97 (2,928) 6 6 2,922 2, PH1 ceiling suspension system, 100% 16, PH1 wainscoting partial allowance,970 2,71 3,26 (,970) BUILDING INTERIOR - FURNITUR 121 Office desks with returns 9, Office chair,680,680,680 (,680) BUILDING INTERIOR (Phase 2 = PH 123 PH2 Meeting room, renovation, PH2 Kitchen renovation 12, PH2 Restroom and shower, renovation 9, PH2 Library, renovation 2, PH2 Lobby renovation, lower level 12, PH2 Lobby and corridor renovatio, upp 7, PH2 Offices, renovation 2, PH2 carpet 12,000 12,000 12,000 12,000 (12,000) 131 PH2 porcelain tile 62,3 132 PH2 stained & epoxy sealed concrete 10,992 10,992 10,992 (10,992) 133 PH2 rubber floor tile 3,72 13 PH2 garage ceiling, partial 2,928 2,928 2,928 (2,928) PH2 ceiling suspension system, 100% 16, PH2 wainscoting partial allowance,970,970,970,970 (,970) BUILDING SYSTEMS (Phase 1 = PH 137 PH1 Elevator cab & door, passenger 33,0 138 PH1 Elevator, traction psngr, controls 21, PH1 Elevator, traction psngr, mechanic 121, PH1 Trash compactor, ram & controls 7,760 3,28,232 (7,760) 11 PH1 Backup generator, diesel, 30KW 8,70 12 PH1 Backup generator, diesel, 30KW 8,70 13 PH1 Electric meters 29,189 1 PH1 Stairwell lighting, partial,688 1,36 1,36,32,688,688 1 PH1 Entry lobby lighting 8,30 16 PH1 Misc. common interior lighting 3,32 3,32 3,32 6 (3,32) 6 3,318 3,32 17 PH1 Garage lighting, 33% 8,109 3,686,23 (8,109) 18 PH1 Garage lighting, 33% 8,109 8,109 8,109 (8,109) 19 PH1 Garage lighting, 33% 7,632 7,632 7,632 7, PH1 Corridor CFL sconces, partial 8,679 8,679 8,679 (8,679) 11 PH1 Corridor CFL sconces, partial 8,679 2,0 2,0 6,62 8,679 8, PH1 Corridor CFL sconces, partial 8, ,662 8, PH1 Balcony lights, red lenses 36,000 8,19 8,19 27,81 36,000 36,000 1 PH1 Heat pump/ac unit (2 tons) 7,710 3,0,20 (7,710) 1 PH1 Heat pump/ac unit (2 tons) 7,710 1,82 1,82,88 7,710 7, PH1 Heat pump/ac unit (2 tons) 7, PH1 Heat pump/ac unit (3 to tons) 13,390 6,087 7,303 (13,390) BUILDING SYSTEMS (Phase 2 = PH 18 PH2 Elevator cab & door, passenger 33,0 19 PH2 Elevator, hydraulic psngr, control 21,000 10,16 10, PH2 Elevator, hydraulic psngr, piston 121, PH2 Trash compactor, ram & controls 7,760 7,760 7,760 (7,760)

66 Cash Flow Method Accounting Summary - Page CF8 CASH FLOW METHOD - THREE-YEAR REPLACEMENT FUNDING - TABLE CF cont'd Description of Estimated Allocation Item Projected Replacement of Beginning Reserve Projected End of Year Reserve Projected End of Year Reserve Projected End of Year # Replacement Costs Balance Funding Replacements Balance Funding Replacements Balance Funding Replacements Balance 162 PH2 Backup generator, diesel, 20KW 8, PH2 Backup generator, diesel, 00KW 8,70 16 PH2 Electric meters 1, PH2 Stairwell lighting, partial, PH2 Entry lobby lighting 8, PH2 Misc. common interior lighting 3,32 3,32 3,32 3, PH2 Garage lighting, 33% 7,1 7,1 7,1 (7,1) 169 PH2 Garage lighting, 33% 6,678 6,678 6,678 6, PH2 Garage lighting, 33% 6, PH2 Corridor CFL sconces, partial 12,62 12,62 12,62 12, PH2 Corridor CFL sconces, partial 12, PH2 Corridor CFL sconces, partial 12, PH2 Balcony lights, red lenses 3,136 1,22 1,22 17 PH2 Heat pump/ac unit (2 tons) 7,710 7,710 7,710 7,710 (7,710) 176 PH2 Heat pump/ac unit (2 tons) 7,710 7,710 7,710 7, PH2 Heat pump/ac unit (2 tons) 7, PH2 Heat pump/ac unit (3 to tons) 13,390 13,390 13,390 13,390 BUILDING SYSTEM (Phase 1 = PH1 179 PH1 Garage gate arm 3,192 3,192 3,192 3,192 (3,192) 3,192 3, PH1 Garage operator,668 1,10 1,10 3,63,668, PH1 Garage controller 3, ,8 3,70 3, PH1 Access control system readers, PH1 Access control system readers 2, ,72 2,28 2,28 18 PH1 CCTV cameras (older ones) 6,92 1,639 1,639,28 6,92 6,92 18 PH1 Oil water separator, PH1 Backflow preventer, water main,6 187 PH1 Domestic water pumps 17, PH1 Domestic water pump motors 3,870 3,870 3,870 3, PH1 Pump controller, PH1 Pressure tank 3, PH1 Domestic water piping allowance, PH1 Sanitary piping allowance 0, PH1 Fire pump 3,20 19 PH1 Jockey pump, PH1 Fire alarm control panel 7,9 196 PH1 Fire alarm annunciator, PH1 Gas pipe corrosion inhibitor 3,0 3,0 3,0 3,0 (3,0) BUILDING SYSTEM (Phase 2 = PH2 198 PH2 Garage gate arm 2,39 2,39 2,39 2,39 (2,39) 2,39 2, PH2 Garage operator 3, PH2 Garage controller 2,80 2,80 2,80 (2,80) PH2 Access control system readers 3, PH2 CCTV cameras (older ones) 8, PH2 Backflow preventer, water main,6 20 PH2 Domestic water pumps 17, PH2 Domestic water pump motors 3, ,862 3, PH2 Pump controller, PH2 Pressure tank 3, PH2 Domestic water piping allowance 80, PH2 Sanitary piping allowance 8, PH2 Fire pump 3, PH2 Jockey pump, PH2 Fire alarm control panel 7,9 213 PH2 Fire alarm annunciator, PH2 Gas pipe corrosion inhibitor 3,0 3,0 3,0 3,0 (3,0) BUILDING SYSTEM (Newer CCTV 21 Security CCTV DVR 2,660 2,660 2,660 2,66 2,6 (2,660) 2, CCTV Cameras (2012) 2,67 2,67 2,67 2, CCTV Cameras (201) 7,680 SWIMMING POOL (Phase 1 = PH1) 218 PH1 Swimming pool, structure 87, PH1 Swimming pool, whitecoat 27, PH1 Swimming pool, waterline tile 9, PH1 Swimming pool, coping 31, PH1 Swimming pool, cover 3,328 3,328 3,328 3,328 (3,328) 3,328 3, PH1 Swimming pool, concrete deck (1 32,02 1,31 1,31 22 PH1 Swimming pool pump (+ hp), PH1 Swimming pool filter,790

67 Cash Flow Method Accounting Summary - Page CF9 CASH FLOW METHOD - THREE-YEAR REPLACEMENT FUNDING - TABLE CF cont'd Description of Estimated Allocation Item Projected Replacement of Beginning Reserve Projected End of Year Reserve Projected End of Year Reserve Projected End of Year # Replacement Costs Balance Funding Replacements Balance Funding Replacements Balance Funding Replacements Balance 226 PH1 Swimming pool heater - gas 8, ,83 8, PH1 Swimming pool deck coating 187,69 7,9 7,9 228 PH1 Perimeter fence - 2" (aluminum p 9, PH1 Hot tub 6,9 6,9 6,9 6,9 SWIMMING POOL (Phase 2 = PH2) 230 PH2 Swimming pool, structure 66, PH2 Swimming pool, whitecoat 1,808 1,808 1,808 (1,808) 232 PH2 Swimming pool, waterline tile,7,7,7 (,7) 233 PH2 Swimming pool, coping 1, PH2 Swimming pool, cover 2,288 2,288 2,288 (2,288) 23 PH2 Swimming pool, concrete deck (1 16, ,977 16, PH2 Swimming pool pump (2 hp),660,660,660 (,660) 237 PH2 Swimming pool filter 2, PH2 Swimming pool heater - gas 8, ,83 8, PH2 Swimming pool deck coating 92, ,266 92,6 20 PH2 Perimeter fence - 2" (aluminum p 6, PH2 Water play features,36 22 PH2 water play pumps (1. hp to 3 hp) 2, PH2 water play deck surfacing 3,990 C Swimming pool, structure 2 C Swimming pool, whitecoat 6,90 6,90 6,90 (6,90) 2 C Swimming pool, waterline tile,38,38,38 (,38) 26 C Swimming pool, coping 1,60 27 C Swimming pool, cover 2,288 2,288 2,288 (2,288) 28 C Swimming pool, concrete deck (10% 13, ,833 13, C Swimming pool pump (+ hp),098,098,098 (,098) 20 C Swimming pool filter, C Swimming pool heater - gas 9, ,21 9,0 22 C Swimming pool deck coating 100, ,8 100,00 23 C Wind screen 2" (tempered glass) 30,769 COURTYARD AND POOL FURNITU 2 PVC High back chairs,620 2 PVC Lounge chairs (Phase 1 & 2) 16,61 26 Wood chairs,80,80,80 (,80) 27 Wood benches, long 39,1 39,1 39,1 (39,1) 28 Wood benches, short 13,2 13,2 13,2 (13,2) 29 Wood tables, tall, square 8,0 8,0 8,0 (8,0) 260 Wood tables, low, square 8,90 8,90 8,90 (8,90) 261 Wood tables, low, round 22,87 22,87 22,87 (22,87) 262 Waste receptacles, metal, Waste receptacles, metal 6, 6, 6, (6,) 26 Gas grills, partial 11, Gas grills, partial 11, Gas grills, partial 11,160 11,160 11,160 (11,160) 267 Gas grills, partial 11,160 2,61 2,61 8,19 11,160 11, Grill undercounter cabinets 3, Grill undercounter cabinets 3, Grill undercounter cabinets 3,681 3,681 3,681 (3,681) 271 Grill undercounter cabinets 3, ,810 3,681 3, Hot tub gazebo 16, Pool plaza gazebos 39,900 EXERCISE EQUIPMENT (Building A 27 BA Treadmill,710 2,11 2,69 (,710) 27 BA Elliptical trainer,09 1,862 2,233 (,09) 276 BA Recumbent bike 2,770 1,29 1,11 (2,770) EXERCISE EQUIPMENT (Building B 277 BB Treadmill, Matrix MXT3,970,970,970,970 (,970) 278 BB Elliptical trainer, Matrix MXEXC 3,0 3,0 3,0 3,0 (3,0) 279 BB Recumbent bike, Matrix MX-H-X 8,190 8,190 8,190 8,190 (8,190) 280 BB Spin Bike, Keiser 0000PBC,190,190,190,190 (,190)

68 Component Method - Page CM1 COMPONENT METHOD $1,91,087 COMPONENT METHOD RECOMMENDED ANNUAL FUNDING OF REPLACEMENT RESERVES IN THE STUDY YEAR, $01.0 Per unit (average), recommended monthly funding of Replacement Reserves General. The Component Method (also referred to as the Full Funded Method) is a very conservative mathematical model developed by HUD in the early 1980s. Each of the 280 Projected Replacements listed in the Replacement Reserve Inventory is treated as a separate account. The Beginning Balance is allocated to each of the individual accounts, as is all subsequent funding of Replacement Reserves. These funds are "locked" in these individual accounts and are not available to fund other Projected Replacements. The calculation of Recommended Annual Funding of Replacement Reserves is a multi-step process outlined in more detail on Page CM2. Component Method - Cumulative Receipts and Expenditures Graph $2,000,000 Component Method - Cumulative Receipts Component Method - Year End Balance Projected Replacements - Cumulative Expenditures $20,000,000 $19,331,631 $1,000,000 $1,0,791 $10,000,000 $,000,000 $3,926,80 $

69 Component Method - Page CM2 COMPONENT METHOD (cont'd) Current Funding Objective. A Current Funding Objective is calculated for each of the Projected Replacements listed in the Replacement Reserve Inventory. Replacement Cost is divided by the Normal Economic Life to determine the nominal annual contribution. The Remaining Economic Life is then subtracted from the Normal Economic Life to calculate the number of years that the nominal annual contribution should have been made. The two values are then multiplied to determine the Current Funding Objective. This is repeated for each of the 280 Projected Replacements. The total, $3,76,38, is the Current Funding Objective. For an example, consider a very simple Replacement Reserve Inventory with one Projected Replacement, a fence with a $1,000 Replacement Cost, a Normal Economic Life of 10 years, and a Remaining Economic Life of 2 years. A contribution to Replacement Reserves of $100 ($1, years) should have been made in each of the previous 8 years (10 years - 2 years). The result is a Current Funding Objective of $800 (8 years x $100 per year). Funding Percentage. The Funding Percentage is calculated by dividing the Beginning Balance ($302,1) by the Current Funding Objective ($3,76,38). At Sanctuary at False Cape the Funding Percentage is 8.% Allocation of the Beginning Balance. The Beginning Balance is divided among the 280 Projected Replacements in the Replacement Reserve Inventory. The Current Funding Objective for each Projected Replacement is multiplied by the Funding Percentage and these funds are then "locked" into the account of each item. If we relate this calculation back to our fence example, it means that the Association has not accumulated $800 in Reserves (the Funding Objective), but rather at 8. percent funded, there is $68 in the account for the fence. Annual Funding. The Recommended Annual Funding of Replacement Reserves is then calculated for each Projected Replacement. The funds allocated to the account of the Projected Replacement are subtracted from the Replacement Cost. The result is then divided by the number of years until replacement, and the result is the annual funding for each of the Projected Replacements. The sum of these is $1,91,087, the Component Method Recommended Annual Funding of Replacement Reserves in the Study Year (2018). In our fence example, the $68 in the account is subtracted from the $1,000 Total Replacement Cost and divided by the 2 years that remain before replacement, resulting in an annual deposit of $66. Next year, the deposit remains $66, but in the third year, the fence is replaced and the annual funding adjusts to $100. Adjustment to the Component Method for interest and inflation. The calculations in the Replacement Reserve Analysis do not account for interest earned on Replacement Reserves, inflation, or a constant annual increase in Annual Funding of Replacement Reserves. The Component Method is a very conservative method and if the Analysis is updated regularly, adequate funding will be maintained without the need for adjustments. Component Method Data - Years 1 through 30 Year Beginning balance $302,1 Recommended annual funding $1,91,087 $97,891 $828,87 $809,12 $77,107 $727,00 $687,36 $612,800 $610,33 $68,070 Interest on reserves Expenditures $66,06 $330,06 $9,22 $2,12 $20,21 $21,006 $1,6,677 $122,120 $1,18,008 $126,190 Year end balance $1,128,122 $1,7,97 $2,79,293 $2,86,022 $3,32,608 $3,9,102 $2,781,861 $3,272,1 $2,6,87 $2,906,7 Cumulative Expenditures $66,06 $99,72 $1,090,81 $1,33,226 $1,773,77 $2,29,73 $3,79,30 $3,881,1 $,299,9 $,2,79 Cumulative Receipts $1,793,628 $2,71,19 $3,70,106 $,379,28 $,126,3 $,83,8 $6,1,291 $7,1,091 $7,76,3 $8,332,0 Year Recommended annual funding $68,070 $68,031 $8,91 $7,86 $,318 $,318 $3,01 $1,21 $1,21 $9,6 Interest on reserves Expenditures $1,66 $392,022 $222,96 $861,808 $677,86 $99,213 $7,011 $87,293 $61,08 $301,96 Year end balance $3,319,38 $3,9,367 $3,831,318 $3,27,36 $3,03,818 $3,88,923 $3,837,312 $,301,270 $,237,73 $,8,97 Cumulative Expenditures $,81,216 $,973,238 $6,196,203 $7,08,010 $7,73,866 $7,83,080 $8,10,091 $8,97,38 $9,112,32 $9,1,397 Cumulative Receipts $8,900,7 $9,68,60 $10,027,20 $10,8,366 $11,139,68 $11,69,002 $12,27,03 $12,798,6 $13,39,906 $13,899,371 Year Recommended annual funding $8,777 $8,18 $,29 $,29 $,29 $2,8 $2,8 $39,107 $38,863 $36,20 Interest on reserves Expenditures $202,300 $97,66 $717,89 $399,833 $67,78 $83,013 $90,036 $166,798 $1,6,8 $60,722 Year end balance $,831,2 $,22,03 $,29,79 $,39,17 $,292,676 $,32,211 $,0,723 $,777,032 $3,81,312 $3,926,80 Cumulative Expenditures $9,616,697 $10,7,163 $11,292,07 $11,691,890 $12,339,638 $12,822,62 $13,312,688 $13,79,86 $1,9,069 $1,0,791 Cumulative Receipts $1,8,18 $1,996,66 $1,1,816 $16,087,06 $16,632,31 $17,17,863 $17,717,11 $18,26,18 $18,79,381 $19,331,631

70 Component Method Accounting Summary - Page CM3 COMPONENT METHOD ACCOUNTING SUMMARY This Sanctuary at False Cape - Component Method Accounting Summary is an attachment to the Sanctuary at False Cape - Replacement Reserve Study dated November 1, 2017 and is for use by accounting and reserve professionals experienced in Association funding and accounting principles. This Summary consists of four reports, the 2018, 2019, and 2020 Component Method Category Funding Reports (3) and a Three-Year Replacement Funding Report. COMPONENT METHOD CATEGORY FUNDING REPORT, 2018, 2019, and Each of the 280 Projected Replacements listed in the Sanctuary at False Cape Replacement Reserve Inventory has been assigned to one of 22 categories. The following information is summarized by category in each report: Normal Economic Life and Remaining Economic Life of the Projected Replacements. Cost of all Scheduled Replacements in each category. Replacement Reserves on Deposit allocated to the category at the beginning and end of the report period. Cost of Projected Replacements in the report period. Recommended Replacement Reserve Funding allocated to the category during the report period as calculated by the Component Method. THREE-YEAR REPLACEMENT FUNDING REPORT. This report details the allocation of the $302,1 Beginning Balance (at the start of the Study Year) and the $3,267,6 of additional Replacement Reserve funding from 2018 to 2020 (as calculated in the Replacement Reserve Analysis) to each of the 280 Projected Replacements listed in the Replacement Reserve Inventory. These allocations have been made using the Component Method as outlined in the Replacement Reserve Analysis. The calculated data includes: Identification and estimated cost of each Projected Replacement schedule in years 2018 through Allocation of the $302,1 Beginning Balance to the Projected Replacements by the Component Method. Allocation of the $3,267,6 of additional Replacement Reserve Funding recommended in the Replacement Reserve Analysis in years 2018 through 2020, by the Component Method.

71 Component Method Accounting Summary - Page CM COMPONENT METHOD CATEGORY FUNDING REPORT Each of the 280 Projected Replacements included in the Sanctuary at False Cape Replacement Reserve Inventory has been assigned to one of the 22 categories listed in TABLE CM1 below. This calculated data is a summary of data provided in the Three-Year Replacement Funding Report and Replacement Reserve Inventory. The accuracy of this data is dependent upon many factors including the following critical financial data: A Beginning Balance of $302,1 as of the first day of the Study Year, January 1, Total reserve funding (including the Beginning Balance) of $1,793,628 in the Study Year. No expenditures from Replacement Reserves other than those specifically listed in the Replacement Reserve Inventory. All Projected Replacements scheduled in the Replacement Reserve Inventory in 2018 being accomplished in 2018 at a cost of $66,06. If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associates to arrange for an update of the Replacement Reserve Study COMPONENT METHOD CATEGORY FUNDING - TABLE CM1 NORMAL REMAINING ESTIMATED ECONOMIC ECONOMIC REPLACEMENT BEGINNING RESERVE PROJECTED END OF YEAR CATEGORY LIFE LIFE COST BALANCE FUNDING REPLACEMENTS BALANCE 0to0years Balcony Edges 8 to 0 years 0 to 0 years $1,863 $2,102 $1,103 $8,397 $8,808 SITE COMPONENT 6 to 60 years to 69 years $138,396 $,012 $11,621 $16,632 SITE COMPONENT (cont.) 10 to 60 years 1 to 69 years $28,71 $13,86 $29,626 $3,212 SITE COMPONENT (cont.) 8 to 0 years 0 to 29 years $131,20 $,211 $1,08 $2,838 $16,8 BUILDING EXTERIOR (Phase 1 = PH1) 3 to 0 years 0 to 28 years $1,637,960 $8,01 $387,163 $29,900 $19,278 BUILDING EXTERIOR (Phase 2 = PH2) 3 to 0 years 0 to 31 years $1,608,17 $87,688 $90,63 $36,929 $231,39 BUILDING EXTERIOR UNIT DOORS & WIND 1 to 0 years 0 to 26 years $717,01 $18,23 $39,91 $7,82 BUILDING INTERIORS 3 to 2 years 0 to 1 years $10,20 $682 $,869 $,1 BUILDING INTERIOR (Phase 1 = PH1) 3 to 30 years 0 to 18 years $1,29 $6,307 $21,017 $8,898 $18,27 BUILDING INTERIOR - FURNITURE AND EQ 3 to 21 years 0 to 10 years $1,200 $691 $3,017 $3,708 BUILDING INTERIOR (Phase 2 = PH2) to 30 years 1 to 21 years $163,08 $,07 $20,182 $2,689 BUILDING SYSTEMS (Phase 1 = PH1) to 0 years 0 to 28 years $679,928 $31,662 $108,886 $36,969 $103,78 BUILDING SYSTEMS (Phase 2 = PH2) to 0 years 0 to 31 years $699,3 $2,203 $7,760 $100,963 BUILDING SYSTEM (Phase 1 = PH1) 3 to 0 years 0 to 28 years $218,31 $,29 $21,923 $27,217 BUILDING SYSTEM (Phase 2 = PH2) 3 to 0 years 0 to 31 years $22,71 $2,76 $21,2 $2,009 BUILDING SYSTEM (Newer CCTV Cameras) 3 to 2 years 0 to 7 years $13,01 $23 $2,33 $2,86 SWIMMING POOL (Phase 1 = PH1) 2 to 0 years 0 to 38 years $1,73 $,203 $,68 $9,887 SWIMMING POOL (Phase 2 = PH2) 6 to 0 years 0 to 1 years $27,937 $6,662 $36,902 $3,6 C Swimming pool, structure 6 to 20 years 0 to 11 years $193,18 $,707 $32,989 $38,696 COURTYARD AND POOL FURNITURE, GAZ 8 to 32 years 1 to 19 years $297,08 $1,93 $91,987 $106,80 EXERCISE EQUIPMENT (Building A = BA) 3 to 1 years 0 years $11,7 $979 $10,96 $11,7 ($0) EXERCISE EQUIPMENT (Building B = BB) 10 to 1 years 0 to 2 years $21,890 $1,296 $6,86 $8,161

72 Component Method Accounting Summary - Page CM COMPONENT METHOD CATEGORY FUNDING REPORT Each of the 280 Projected Replacements included in the Sanctuary at False Cape Replacement Reserve Inventory has been assigned to one of the 22 categories listed in TABLE CM2 below. This calculated data is a summary of data provided in the Three-Year Replacement Funding Report and Replacement Reserve Inventory. The accuracy of this data is dependent upon many factors including the following critical financial data: Replacement Reserves on Deposit totaling $1,128,122 on January 1, Total reserve funding (including the Beginning Balance) of $2,71,19 from 2018 through No expenditures from Replacement Reserves other than those specifically listed in the Replacement Reserve Inventory. All Projected Replacements scheduled in the Replacement Reserve Inventory in 2019 being accomplished in 2019 at a cost of $330,06. If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associates to arrange for an update of the Replacement Reserve Study COMPONENT METHOD CATEGORY FUNDING - TABLE CM2 NORMAL REMAINING ESTIMATED ECONOMIC ECONOMIC REPLACEMENT BEGINNING RESERVE PROJECTED END OF YEAR CATEGORY LIFE LIFE COST BALANCE FUNDING REPLACEMENTS BALANCE Balcony Edges 8 to 0 years 0 to 39 years $1,863 $8,808 $7,626 $8,6 $7,790 SITE COMPONENT 6 to 60 years 3 to 68 years $138,396 $16,632 $11,621 $28,23 SITE COMPONENT (cont.) 10 to 60 years 0 to 68 years $28,71 $3,212 $29,626 $18,990 $3,88 SITE COMPONENT (cont.) 8 to 0 years 2 to 28 years $131,20 $16,8 $11,723 $28,181 BUILDING EXTERIOR (Phase 1 = PH1) 3 to 0 years 0 to 27 years $1,637,960 $19,278 $168,399 $9,98 $33,693 BUILDING EXTERIOR (Phase 2 = PH2) 3 to 0 years 1 to 30 years $1,608,17 $231,39 $223,209 $,60 BUILDING EXTERIOR UNIT DOORS & WIND 1 to 0 years 3 to 2 years $717,01 $7,82 $39,91 $97,16 BUILDING INTERIORS 3 to 2 years 0 years $10,20 $,1 $,869 $10,20 BUILDING INTERIOR (Phase 1 = PH1) 3 to 30 years to 17 years $1,29 $18,27 $1,0 $32,82 BUILDING INTERIOR - FURNITURE AND EQ 3 to 21 years 0 to 9 years $1,200 $3,708 $3,017 $,680 $2,0 BUILDING INTERIOR (Phase 2 = PH2) to 30 years 0 to 20 years $163,08 $2,689 $20,182 $13,920 $31,91 BUILDING SYSTEMS (Phase 1 = PH1) to 0 years 0 to 27 years $679,928 $103,78 $78,119 $20,112 $161,8 BUILDING SYSTEMS (Phase 2 = PH2) to 0 years 0 to 30 years $699,3 $100,963 $7,760 $1,91 $161,807 BUILDING SYSTEM (Phase 1 = PH1) 3 to 0 years 0 to 27 years $218,31 $27,217 $21,923 $3,192 $,97 BUILDING SYSTEM (Phase 2 = PH2) 3 to 0 years 0 to 30 years $22,71 $2,009 $21,2 $,199 $0,0 BUILDING SYSTEM (Newer CCTV Cameras) 3 to 2 years 1 to 6 years $13,01 $2,86 $2,33 $,929 SWIMMING POOL (Phase 1 = PH1) 2 to 0 years 0 to 37 years $1,73 $9,887 $,68 $3,328 $91,2 SWIMMING POOL (Phase 2 = PH2) 6 to 0 years 0 to 0 years $27,937 $3,6 $36,902 $27,11 $2,9 C Swimming pool, structure 6 to 20 years 0 to 10 years $193,18 $38,696 $32,989 $18,729 $2,96 COURTYARD AND POOL FURNITURE, GAZ 8 to 32 years 0 to 18 years $297,08 $106,80 $91,987 $170,1 $28,026 EXERCISE EQUIPMENT (Building A = BA) 3 to 1 years 9 years $11,7 ($0) $1,18 $1,17 EXERCISE EQUIPMENT (Building B = BB) 10 to 1 years 1 years $21,890 $8,161 $6,86 $1,02

73 Component Method Accounting Summary - Page CM COMPONENT METHOD CATEGORY FUNDING REPORT Each of the 280 Projected Replacements included in the Sanctuary at False Cape Replacement Reserve Inventory has been assigned to one of the 22 categories listed in TABLE CM3 below. This calculated data is a summary of data provided in the Three-Year Replacement Funding Report and Replacement Reserve Inventory. The accuracy of this data is dependent upon many factors including the following critical financial data: Replacement Reserves on Deposit totaling $1,7,97 on January 1, Total Replacement Reserve funding (including the Beginning Balance) of $3,70,106 from 2018 to No expenditures from Replacement Reserves other than those specifically listed in the Replacement Reserve Inventory. All Projected Replacements scheduled in the Replacement Reserve Inventory in 2020 being accomplished in 2020 at a cost of $9,22. If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associates to arrange for an update of the Replacement Reserve Study COMPONENT METHOD CATEGORY FUNDING - TABLE CM3 NORMAL REMAINING ESTIMATED ECONOMIC ECONOMIC REPLACEMENT BEGINNING RESERVE PROJECTED END OF YEAR CATEGORY LIFE LIFE COST BALANCE FUNDING REPLACEMENTS BALANCE Balcony Edges 8 to 0 years 0 to 39 years $1,863 $7,790 $3,890 $8,6 $3,036 SITE COMPONENT 6 to 60 years 2 to 67 years $138,396 $28,23 $11,621 $39,873 SITE COMPONENT (cont.) 10 to 60 years 0 to 67 years $28,71 $3,88 $22,093 $2,76 $73,19 SITE COMPONENT (cont.) 8 to 0 years 1 to 27 years $131,20 $28,181 $11,723 $39,90 BUILDING EXTERIOR (Phase 1 = PH1) 3 to 0 years 1 to 26 years $1,637,960 $33,693 $166,876 $20,69 BUILDING EXTERIOR (Phase 2 = PH2) 3 to 0 years 0 to 29 years $1,608,17 $,60 $223,209 $26,723 $61,090 BUILDING EXTERIOR UNIT DOORS & WIND 1 to 0 years 2 to 2 years $717,01 $97,16 $39,91 $137,006 BUILDING INTERIORS 3 to 2 years 7 to 9 years $10,20 $1,178 $1,178 BUILDING INTERIOR (Phase 1 = PH1) 3 to 30 years 3 to 16 years $1,29 $32,82 $1,0 $6,36 BUILDING INTERIOR - FURNITURE AND EQ 3 to 21 years 8 years $1,200 $2,0 $1,31 $3,39 BUILDING INTERIOR (Phase 2 = PH2) to 30 years 0 to 19 years $163,08 $31,91 $1,33 $17,970 $29,33 BUILDING SYSTEMS (Phase 1 = PH1) to 0 years 1 to 26 years $679,928 $161,8 $70,699 $232,28 BUILDING SYSTEMS (Phase 2 = PH2) to 0 years 0 to 29 years $699,3 $161,807 $70,080 $7,710 $22,178 BUILDING SYSTEM (Phase 1 = PH1) 3 to 0 years 0 to 26 years $218,31 $,97 $21,36 $3,0 $63,933 BUILDING SYSTEM (Phase 2 = PH2) 3 to 0 years 0 to 29 years $22,71 $0,0 $20,109 $3,0 $6,712 BUILDING SYSTEM (Newer CCTV Cameras) 3 to 2 years 0 to years $13,01 $,929 $2,33 $2,660 $,611 SWIMMING POOL (Phase 1 = PH1) 2 to 0 years 2 to 36 years $1,73 $91,2 $,177 $13,21 SWIMMING POOL (Phase 2 = PH2) 6 to 0 years 3 to 39 years $27,937 $2,9 $26,968 $79,923 C Swimming pool, structure 6 to 20 years 3 to 9 years $193,18 $2,96 $26,271 $79,226 COURTYARD AND POOL FURNITURE, GAZ 8 to 32 years 1 to 17 years $297,08 $28,026 $27, $,70 EXERCISE EQUIPMENT (Building A = BA) 3 to 1 years 8 years $11,7 $1,17 $1,18 $2,31 EXERCISE EQUIPMENT (Building B = BB) 10 to 1 years 0 years $21,890 $1,02 $6,86 $21,890

74 Component Method Accounting Summary - Page CM7 COMPONENT METHOD - THREE-YEAR REPLACEMENT FUNDING REPORT TABLE CM below details the allocation of the $302,1 Beginning Balance, as reported by the Association and the $3,267,6 of Replacement Reserve Funding calculated by the Cash Flow Method from 2018 to 2020, to the 280 Projected Replacements listed in the Replacement Reserve Inventory. These allocations have been made by Chronological Allocation, a method developed by Miller Dodson Associates, Inc., and outlined on Page CF1. The accuracy of the allocations is dependent upon many factors including the following critical financial data: Replacement Reserves on Deposit totaling $302,1 on January 1, Replacement Reserves on Deposit totaling $1,128,122 on January 1, Replacement Reserves on Deposit totaling $1,7,97 on January 1, Total Replacement Reserve funding (including the Beginning Balance) of $3,70,106 from 2018 to No expenditures from Replacement Reserves other than those specifically listed in the Replacement Reserve Inventory. All Projected Replacements scheduled in the Replacement Reserve Inventory from 2018 to 2020 being accomplished as scheduled in the Replacement Reserve Inventory at a cost of $1,090,81. If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associates, Inc., to arrange for an update of the Replacement Reserve Study. COMPONENT METHOD - THREE-YEAR REPLACEMENT FUNDING - TABLE CM Description of Estimated Allocation Item Projected Replacement of Beginning Reserve Projected End of Year Reserve Projected End of Year Reserve Projected End of Year # Replacement Costs Balance Funding Replacements Balance Funding Replacements Balance Funding Replacements Balance Balcony Edges 1 Balcony Edge, Type Balcony Edge, Type Balcony Edge, Type Balcony Edge, Type (26) Balcony Edge, Type (26) 6 Balcony Edge, Type Balcony Edge, Type 2, Balcony Edge, Type 2, Balcony Edge, Type 2, Balcony Edge, Type 2,072 29,63 (,072) Balcony Edge, Type 2, ,332 2,70 2,332 (,072) Balcony Edge, Type 2, ,8 1,9 1,8 3,1 1,8 (,072) 13 Balcony Edge, Type 3 3, Balcony Edge, Type 3 3, Balcony Edge, Type 3 3, Balcony Edge, Type 3 3, ,0 (3,32) Balcony Edge, Type 3 3, ,29 1,796 1,29 (3,32) Balcony Edge, Type 3 3, ,022 1,282 1,022 2,30 1,022 (3,32) SITE COMPONENT 19 Asphalt pavement, seal coat, , ,3 20 Asphalt pavement, overlay,62 2,726 8,380 11,106 8,380 19,86 8,380 27,86 21 Concrete garage pavement (1/2%) 8, , , , Concrete garage pavement (1/2%) 8, , , Concrete garage pavement (1/2%) 8, ,299 2 Concrete garage pavement (1/2%) 8, ,072 2 Concrete garage pavement (1/2%) 8, Concrete garage pavement (1/2%) 8, Concrete garage pavement (1/2%) 8, Concrete garage pavement (1/2%) 8, Concrete garage pavement (1/2%) 8, Concrete garage pavement (1/2%) 8, SITE COMPONENT (cont.) 31 Concrete sidewalk (6%), , Concrete sidewalk (6%), Concrete sidewalk (6%), Concrete sidewalk (6%), Concrete sidewalk (6%), Concrete sidewalk (6%), Concrete sidewalk (6%), Concrete sidewalk (6%), Concrete sidewalk (6%),

75 Component Method Accounting Summary - Page CM8 COMPONENT METHOD - THREE-YEAR REPLACEMENT FUNDING - TABLE CM cont'd Description of Estimated Allocation Item Projected Replacement of Beginning Reserve Projected End of Year Reserve Projected End of Year Reserve Projected End of Year # Replacement Costs Balance Funding Replacements Balance Funding Replacements Balance Funding Replacements Balance 0 Concrete sidewalk (6%), Bulkhead, concrete, refurbishing 8, , ,89 2 Bulkhead concrete cap, replace 7,8 1,822 2,273,09 2,273 6,367 2,273 8,60 3 Bulkhead, sheet piling, 20 ft. deep 29,90 7,208 8,992 16,200 8,992 2,192 8,992 3,18 Bulkhead, stainless railing, refurbish 2, , , (2,76) Bulkhead, stainless railing, replacemen 21, , , ,8 6 Stormwater system, uncovered 2, ,11 7 Stormwater system, covered Phase 1 18,990 1,392 8,799 10,191 8,799 (18,990) 1,266 1,266 8 Stormwater system, covered Phase 2 18,990 1,071 3,8,6 3,8 8,239 3,8 11,822 9 Stormwater inlets, partial, Phase 1 17,09 1,006 1,006 1,006 2,011 1,006 3,017 0 Stormwater inlets, partial, Phase 2 17, , ,6 SITE COMPONENT (cont.) 1 Site lighting, 13' pole & fixture 26,880 1,21 2,88,098 2,88 6,96 2,88 9,79 2 Site lighting, 3' bollards 28,87 1,32 3,018,33 3,018 7,361 3,018 10,379 3 Site lighting, pool area, Phase 1 10, ,17 1,66 1,17 2,822 1,17 3,979 Site lighting, pool area, Phase 2 10, , , ,007 Walkway lighting, Phase 2 6, , ,879 6 Landscape lighting, Phase 1 2, ,98 (2,838) Landscape lighting, Phase 2, ,309 1,621 1,309 2,930 1,309,238 8 Mailboxes, Phase 1 12, , , ,30 9 Mailboxes, Phase 2 19, , ,12 8 2, Entry monument & sign, replace 6, BUILDING EXTERIOR (Phase 1 = PH 61 PH1 Shingle asphalt/fiberglass (0%) 29,900 16,066 38,972,039 38,972 9,011 38, , PH1 Shingle asphalt/fiberglass (0%) 29,900 21,10 228,760 (29,900) 9,996 9,996 9,996 19, PH1 Gutter & downspout, 6" aluminum 6, , ,700 6 PH1 Single ply membrane roof 13, ,13 2,033 1,13 3,6 1,13,89 6 PH1 CMU exterior walls, repoint, parti, ,199 1,17 1,199 2,716 1,199 3, PH1 Metal grilles, garage, refurbish 9,98 282,81,133,81 (9,98) 3,328 3, PH1 Fiber cement soffit panel, partial 67, ,98 10,209 9,98 19,708 9,98 29, PH1 Fiber cement lap siding, partial 120,900 1,278 17,089 18,367 17,089 3,6 17,089 2, 69 PH1 Fiber cement panel siding, partial 1, ,01 2,20 2,01,2 2,01 6,30 70 PH1 Fiber cement trim, partial 91, ,98 13,927 12,98 26,88 12,98 39,83 71 PH1 Exterior joint sealants, partial 0,10 7,16 7,16 7,16 1,329 7,16 21,93 72 PH1 Storefront doors and windows 61,79 2,77,193 6,967,193 11,160,193 1,33 73 PH1 Exterior metal doors 20, ,30 2,37 1,30 3,80 1,30,23 7 PH1 Aluminum doors w/sidelights 12, , , ,067 7 PH1 Rollup door at 1st floor elevator 1, PH1 Exterior corridor floor coating 338,00 2,86 37,293 0,16 37,293 77,9 37,293 11,72 77 PH1 Aluminum railing, refurbish 26, ,9 3,170 2,9 6,11 2,9 9,08 78 PH1 Aluminum railing, replace 21,988,001 7,21 12,22 7,21 19,83 7,21 26,72 79 PH1 Louvers for heatpump access 1,38 1,92,382 6,306,382 10,687,382 1, PH1 Wood and aluminum trellis 0,790 1,898,321 6,219,321 10,1,321 1,862 BUILDING EXTERIOR (Phase 2 = PH 81 PH2 Shingle asphalt/fiberglass 67,60 28,72 62,713 91,18 62,713 13,897 62, , PH2 Gutter & downspout, 6" aluminum 6, , PH2 Single ply membrane roof 13,33 1 1,07 1,2 1,07 2,99 1,07 3,672 8 PH2 CMU exterior walls, repoint, parti, , ,32 8 PH2 Metal grilles, garage, refurbish 2, ,28 (2,96) ,66 86 PH2 Fiber cement soffit panel, partial 67,200,68 61,1 (67,200) 8,00 8,00 8,00 16, PH2 Fiber cement lap siding, partial 120,900 10, ,673 (120,900) 1,113 1,113 1,113 30,22 88 PH2 Fiber cement panel siding, partial 1,08 1,227 13,281 (1,08) 1,81 1,81 1,81 3, PH2 Fiber cement trim, partial 91,67 7,7 83,920 (91,67) 11,9 11,9 11,9 22, PH2 Exterior joint sealants, partial 0,10,22,908 (0,10) 12,38 12,38 12,38 2,07 91 PH2 Storefront doors and windows 61,79 2,2 3,8,738 3,8 9,221 3,8 12,70 92 PH2 Exterior metal doors 21, ,218 2,006 1,218 3,22 1,218,3 93 PH2 Aluminum doors w/sidelights 12, , , ,38 9 PH2 Exterior corridor floor coating 338,00 17,181 80,330 97,11 80, ,81 80,330 28,170 9 PH2 Aluminum railing, refurbish 26,723 1,82 8,380 9,962 8,380 18,32 8,380 (26,723) 96 PH2 Aluminum railing, replace 21,988 3,637 6,60 10,22 6,60 16,87 6,60 23,1 97 PH2 Louvers for heatpump access 2,338 1,771,21,98,21 10,199,21 1,13 98 PH2 Wood and aluminum trellis 0,790 1,380 3,28,66 3,28 7,99 3,28 11,233 BUILDING EXTERIOR UNIT DOOR 99 Ph1 Exterior door, Unit Entrances 101,871 2,62 3,976 6,39 3,976 10,1 3,976 1, Ph1 Sliding door, Unit Balcony 13,1 3,22,236 8,78,236 13,71,236 18, Ph1 HVAC Access panel at balcony 3,61 2,1 8,202 10,63 8,202 18,8 8,202 27, Ph2 Exterior door, Unit Entrances 17,17 2,8,3 8,190,3 13,3,3 18, Ph2 Sliding door, Unit Balcony 227,60,02 8,268 12,670 8,268 20,938 8,268 29,206

76 Component Method Accounting Summary - Page CM9 COMPONENT METHOD - THREE-YEAR REPLACEMENT FUNDING - TABLE CM cont'd Description of Estimated Allocation Item Projected Replacement of Beginning Reserve Projected End of Year Reserve Projected End of Year Reserve Projected End of Year # Replacement Costs Balance Funding Replacements Balance Funding Replacements Balance Funding Replacements Balance 10 Ph2 HVAC Access panel at balcony 62,777 2,832 8,6 11,396 8,6 19,99 8,6 28,23 BUILDING INTERIORS 10 Interior signage allowance, ,331 2,669 2,331 (,000) Flat screen TV's,20 3 2,38 2,882 2,38 (,20) BUILDING INTERIOR (Phase 1 = PH 107 PH1 Meeting room, renovation 8, , , , PH1 Kitchen renovation 2,000 1,117 2,3 3,69 2,3 6,202 2,3 8,7 109 PH1 Restroom, renovation, , , PH1 Library, renovation 3, , PH1 Lobby renovation, lower level 18, ,907 2,7 1,907,61 1,907 6,8 112 PH1 Lobby and corridor renovatio, upp 9, , , , PH1 Offices, renovation 6, , , PH1 carpet 8,000 1,13 1,13 1,13 2,286 1,13 3,29 11 PH1 porcelain tile 2,12 1,307 2,18 3, 2,18,603 2,18 7, PH1 stained & epoxy sealed concrete 2, PH1 rubber floor tile 3, , PH1 garage ceiling, partial 2, ,680 (2,928) , PH1 ceiling suspension system, 100% 16, ,187 1,81 1,187 3,028 1,187, PH1 wainscoting partial allowance,970 0,6 (,970) ,19 BUILDING INTERIOR - FURNITUR 121 Office desks with returns 9, , , , Office chair, ,186 2,9 2,186 (,680) BUILDING INTERIOR (Phase 2 = PH 123 PH2 Meeting room, renovation, , PH2 Kitchen renovation 12, , , ,30 12 PH2 Restroom and shower, renovation 9, , , , PH2 Library, renovation 2, PH2 Lobby renovation, lower level 12, , , , PH2 Lobby and corridor renovatio, upp 7, ,36 6 1, PH2 Offices, renovation 2, PH2 carpet 12, ,807,387 3,807 8,193 3,807 (12,000) 131 PH2 porcelain tile 62,3 1,06 2,770,176 2,770 6,96 2,770 9, PH2 stained & epoxy sealed concrete 10,992 7,12,868,12 (10,992) 1,099 1, PH2 rubber floor tile 3, ,02 13 PH2 garage ceiling, partial 2, ,390 1,38 1,390 (2,928) PH2 ceiling suspension system, 100% 16, ,6 97 2,0 97 3,1 136 PH2 wainscoting partial allowance, ,872 2,226 1,872,098 1,872 (,970) BUILDING SYSTEMS (Phase 1 = PH 137 PH1 Elevator cab & door, passenger 33,0 1,61 3,3,11 3,3 8,667 3,3 12, PH1 Elevator, traction psngr, controls 21,000 11,678 26,91 38,270 26,91 6,861 26,91 91,2 139 PH1 Elevator, traction psngr, mechanic 121,180,638 12,838 18,76 12,838 31,31 12,838,12 10 PH1 Trash compactor, ram & controls 7, ,10 (7,760) ,2 11 PH1 Backup generator, diesel, 30KW 8,70 1,13 1,62 2,776 1,62,18 1,62 6, PH1 Backup generator, diesel, 30KW 8,70 1,30 1,76 3,096 1,76,82 1,76 6, PH1 Electric meters 29, ,89 2,39 1,89 3,883 1,89,371 1 PH1 Stairwell lighting, partial, ,33 1,687 1,33 3,020 1,33,3 1 PH1 Entry lobby lighting 8, , ,3 16 PH1 Misc. common interior lighting 3, ,92 1,732 1,92 (3,32) PH1 Garage lighting, 33% 8, ,23 (8,109) , PH1 Garage lighting, 33% 8, ,77,32 3,77 (8,109) PH1 Garage lighting, 33% 7, ,0 1,871 1,0 3,311 1,0,71 10 PH1 Corridor CFL sconces, partial 8, ,021,68,021 (8,679) PH1 Corridor CFL sconces, partial 8, ,03 2,7 2,03,609 2,03 6,6 12 PH1 Corridor CFL sconces, partial 8, ,373 1,81 1,373 3,187 1,373,60 13 PH1 Balcony lights, red lenses 36,000 2,233 8,2 10,67 8,2 19,117 8,2 27,8 1 PH1 Heat pump/ac unit (2 tons) 7, ,08 (7,710) ,28 1 PH1 Heat pump/ac unit (2 tons) 7, ,819 2,2 1,819,072 1,819, PH1 Heat pump/ac unit (2 tons) 7, , , , PH1 Heat pump/ac unit (3 to tons) 13,390 1,133 12,27 (13,390) 1,116 1,116 1,116 2,232 BUILDING SYSTEMS (Phase 2 = PH 18 PH2 Elevator cab & door, passenger 33,0 1,13 2,700 3,83 2,700 6,36 2,700 9, PH2 Elevator, hydraulic psngr, control 21,000 11,32 3,239,6 3,239 79,803 3,239 11, PH2 Elevator, hydraulic psngr, piston 121,180 2,73,38 8,118,38 13,01,38 18, PH2 Trash compactor, ram & controls 7, ,617,13 3,617 (7,760)

77 Component Method Accounting Summary - Page CM10 COMPONENT METHOD - THREE-YEAR REPLACEMENT FUNDING - TABLE CM cont'd Description of Estimated Allocation Item Projected Replacement of Beginning Reserve Projected End of Year Reserve Projected End of Year Reserve Projected End of Year # Replacement Costs Balance Funding Replacements Balance Funding Replacements Balance Funding Replacements Balance 162 PH2 Backup generator, diesel, 20KW 8, ,98 2,322 1,98 3,820 1,98, PH2 Backup generator, diesel, 00KW 8,70 1,031 1,91 2,622 1,91,212 1,91, PH2 Electric meters 1, ,836 2,768 1,836,60 1,836 6,1 16 PH2 Stairwell lighting, partial, , , ,8 166 PH2 Entry lobby lighting 8, , PH2 Misc. common interior lighting 3, , , PH2 Garage lighting, 33% 7,1 2 3,31 3,80 3,31 (7,1) PH2 Garage lighting, 33% 6, ,260 1,637 1,260 2,897 1,260, PH2 Garage lighting, 33% 6, , , , PH2 Corridor CFL sconces, partial 12, ,382 3,09 2,382,77 2,382 7, PH2 Corridor CFL sconces, partial 12, ,722 2,292 1,722,01 1,722, PH2 Corridor CFL sconces, partial 12, ,327 1,7 1,327 3,072 1,327, PH2 Balcony lights, red lenses 3,136 1,8,793 6,378,793 11,171,793 1,96 17 PH2 Heat pump/ac unit (2 tons) 7, ,07 2,896 2,07,303 2,07 (7,710) 176 PH2 Heat pump/ac unit (2 tons) 7, ,66 1,86 1,66 3,312 1,66, PH2 Heat pump/ac unit (2 tons) 7, ,063 1,33 1,063 2,397 1,063 3, PH2 Heat pump/ac unit (3 to tons) 13, ,6 3,207 2,6,72 2,6 8,298 BUILDING SYSTEM (Phase 1 = PH1 179 PH1 Garage gate arm 3, ,1 1,61 1,1 (3,192) 1,06 1, PH1 Garage operator, ,09 1,38 1,09 2,79 1,09 3, PH1 Garage controller 3, , , PH1 Access control system readers, PH1 Access control system readers 2, , , PH1 CCTV cameras (older ones) 6, ,62 2,03 1,62 3,677 1,62, PH1 Oil water separator, PH1 Backflow preventer, water main, PH1 Domestic water pumps 17, , , , PH1 Domestic water pump motors 3, , , PH1 Pump controller, PH1 Pressure tank 3, PH1 Domestic water piping allowance,93 631,2,88,2 9,139,2 13, PH1 Sanitary piping allowance 0,91 68,976,661,976 10,637,976 1, PH1 Fire pump 3, ,1 1,90 1,1 3,10 1,1,27 19 PH1 Jockey pump, , , PH1 Fire alarm control panel 7, , , , PH1 Fire alarm annunciator, , , PH1 Gas pipe corrosion inhibitor 3, ,111 1,228 1,111 2,339 1,111 (3,0) BUILDING SYSTEM (Phase 2 = PH2 198 PH2 Garage gate arm 2, ,163 1,231 1,163 (2,39) PH2 Garage operator 3, , , PH2 Garage controller 2, ,331 1,7 1,331 (2,80) PH2 Access control system readers 3, , , PH2 CCTV cameras (older ones) 8, ,181 1,71 1,181 2,72 1,181 3, PH2 Backflow preventer, water main, PH2 Domestic water pumps 17, , , ,39 20 PH2 Domestic water pump motors 3, , , PH2 Pump controller, PH2 Pressure tank 3, PH2 Domestic water piping allowance 80,79,386,386,386 10,773,386 16, PH2 Sanitary piping allowance 8,87,89,89,89 11,697,89 17,6 210 PH2 Fire pump 3, ,02 1,632 1,02 2,68 1,02 3, PH2 Jockey pump, , , PH2 Fire alarm control panel 7, , PH2 Fire alarm annunciator, , , PH2 Gas pipe corrosion inhibitor 3, ,111 1,228 1,111 2,339 1,111 (3,0) BUILDING SYSTEM (Newer CCTV 21 Security CCTV DVR 2, , (2,660) 216 CCTV Cameras (2012) 2, , , CCTV Cameras (201) 7, ,07 9 2, ,961 SWIMMING POOL (Phase 1 = PH1) 218 PH1 Swimming pool, structure 87,100 1,621 2,192 3,813 2,192 6,00 2,192 8, PH1 Swimming pool, whitecoat 27,73 2,21 2,21 2,21,03 2,21 7,6 220 PH1 Swimming pool, waterline tile 9, , ,9 221 PH1 Swimming pool, coping 31,200 1,86 1,86 1,86 2,971 1,86,7 222 PH1 Swimming pool, cover 3, ,617 1,711 1,617 (3,328) 1,109 1, PH1 Swimming pool, concrete deck (1 32,02 3,9,938,9 9,32,9 1, PH1 Swimming pool pump (+ hp), , ,80 22 PH1 Swimming pool filter, , ,110

78 Component Method Accounting Summary - Page CM11 COMPONENT METHOD - THREE-YEAR REPLACEMENT FUNDING - TABLE CM cont'd Description of Estimated Allocation Item Projected Replacement of Beginning Reserve Projected End of Year Reserve Projected End of Year Reserve Projected End of Year # Replacement Costs Balance Funding Replacements Balance Funding Replacements Balance Funding Replacements Balance 226 PH1 Swimming pool heater - gas 8, ,28 1,728 1,28 3,17 1,28,8 227 PH1 Swimming pool deck coating 187,69 1,98 26,30 28,1 26,30,0 26,30 81,7 228 PH1 Perimeter fence - 2" (aluminum p 9, ,0 1,03 1,0 2,8 1,0 3, PH1 Hot tub 6,9 92 1,281 1,372 1,281 2,63 1,281 3,93 SWIMMING POOL (Phase 2 = PH2) 230 PH2 Swimming pool, structure 66, ,63 2,63 1,63,026 1,63, PH2 Swimming pool, whitecoat 1,808 1,070 7,369 8,39 7,369 (1,808) 1,81 1, PH2 Swimming pool, waterline tile, ,217 2,38 2,217 (,7) PH2 Swimming pool, coping 1, ,26 1,78 1,26 3,00 1,26, PH2 Swimming pool, cover 2, ,079 1,209 1,079 (2,288) PH2 Swimming pool, concrete deck (1 16, ,612 2,90 2,612,62 2,612 8, PH2 Swimming pool pump (2 hp), ,172 2,88 2,172 (,660) PH2 Swimming pool filter 2, PH2 Swimming pool heater - gas 8, ,28 1,728 1,28 3,17 1,28,8 239 PH2 Swimming pool deck coating 92,6 1,9 1,082 17,037 1,082 32,119 1,082 7, PH2 Perimeter fence - 2" (aluminum p 6, , , PH2 Water play features, , ,72 22 PH2 water play pumps (1. hp to 3 hp) 2, , PH2 water play deck surfacing 3, , ,602 C Swimming pool, structure 2 C Swimming pool, whitecoat 6, ,219 3,686 3,219 (6,90) C Swimming pool, waterline tile, ,069 2,369 2,069 (,38) 26 C Swimming pool, coping 1, ,172 1,66 1,172 2,837 1,172, C Swimming pool, cover 2, ,079 1,209 1,079 (2,288) C Swimming pool, concrete deck (10% 13, ,261 2, 2,261,81 2,261 7, C Swimming pool pump (+ hp), ,376 2,722 2,376 (,098) C Swimming pool filter, , , C Swimming pool heater - gas 9, ,36 1,89 1,36 3,39 1,36, C Swimming pool deck coating 100,00 2,116 16,322 18,38 16,322 3,761 16,322 1, C Wind screen 2" (tempered glass) 30,769 1,01 2,77 3,18 2,77,996 2,77 8,73 COURTYARD AND POOL FURNITU 2 PVC High back chairs, ,386 2 PVC Lounge chairs (Phase 1 & 2) 16,61 1,66 1,66 1,66 3,292 1,66, Wood chairs,80 3,936 2,92 29,888 2,92 (,80),63,63 27 Wood benches, long 39,1 2,786 18,36 21,10 18,36 (39,1) 3,293 3, Wood benches, short 13,2 96 6,239 7,186 6,239 (13,2) 1,119 1, Wood tables, tall, square 8,0 9 3,923,17 3,923 (8,0) Wood tables, low, square 8,90 631,160,790,160 (8,90) Wood tables, low, round 22,87 1,613 10,631 12,2 10,631 (22,87) 1,906 1, Waste receptacles, metal, , Waste receptacles, metal 6, 62 3,06 3,09 3,06 (6,) Gas grills, partial 11, ,77 1,69 1,77 3,273 1,77,80 26 Gas grills, partial 11,160 1,39 1,39 1,39 2,790 1,39, Gas grills, partial 11, ,226,93,226 (11,160) 1,39 1, Gas grills, partial 11, ,672 3,1 2,672,816 2,672 8, Grill undercounter cabinets 3, , , Grill undercounter cabinets 3, , Grill undercounter cabinets 3, ,72 1,97 1,72 (3,681) Grill undercounter cabinets 3, , , , Hot tub gazebo 16, , , , Pool plaza gazebos 39,900 1,266 1,932 3,197 1,932,129 1,932 7,061 EXERCISE EQUIPMENT (Building A 27 BA Treadmill, ,312 (,710) BA Elliptical trainer, ,79 (,09) BA Recumbent bike 2, ,36 (2,770) EXERCISE EQUIPMENT (Building B 277 BB Treadmill, Matrix MXT3, ,872 2,226 1,872,098 1,872 (,970) 278 BB Elliptical trainer, Matrix MXEXC 3, ,110 1,320 1,110 2,30 1,110 (3,0) 279 BB Recumbent bike, Matrix MX-H-X 8, ,68 3,03 2,68,622 2,68 (8,190) 280 BB Spin Bike, Keiser 0000PBC, ,31 1,62 1,31 2,876 1,31 (,190)

79 Replacement Reserve Analysis - Page A1 Sanctuary Large Components November 1, SANCTUAR18 EXECUTIVE SUMMARY The Sanctuary Large Components Replacement Reserve Analysis uses the Cash Flow Method (CFM) to calculate Replacement Reserve funding for the periodic replacement of the Projected Replacements identified in the Replacement Reserve Inventory. $96,171 RECOMMENDED REPLACEMENT RESERVE FUNDING FOR THE STUDY YEAR, 2018 $32.32 Per unit (average), minimum monthly funding of Replacement Reserves We recommend the Association adopt a Replacement Reserve Funding Plan based on the annual funding recommendation above. Inflation adjusted funding for subsequent years is shown on Page A. Sanctuary Large Components reports a Starting Balance of $0 and Annual Funding totaling $0. Current funding is inadequate to fund the $3,002,70 of Projected Replacements scheduled in the Replacement Reserve Inventory over the 0-year Study Period. See Page A3 for a more detailed evaluation. #1 - Cumulative Replacement Reserve Funding and Expenditures Graph $3,00,000 Cash Flow Method - Cumulative Receipts Projected Replacements - Cumulative This is a companion inventory for the Sanctuary at False Cape and includes inventory components that were removed Current Funding - Cumulative Receipts $3,000,000 $2,00,000 Expenditures $3,002,70 3,077,70 $2,000,000 $1,00,000 $1,000,000 $00,000 $ The Current Funding Objective as calculated by the Component Method (Fully Funded) is $721,26 making the reserve account 0.0% funded. See the Appendix for more information on this method. This is a companion inventory for the Sanctuary at False Cape and includes inventory components that were removed from the original inventory based on a replacement value greater than $00,000 and a remaining life more than 2/3's of the normal life.

80 Replacement Reserve Analysis - Page A2 Sanctuary Large Components November 1, SANCTUAR18 REPLACEMENT RESERVE ANALYSIS - GENERAL INFORMATION The Sanctuary Large Components Replacement Reserve Analysis calculations of recommended funding of Replacement Reserves by the Cash Flow Method and the evaluation of the Current Funding are based upon the same Study Year, Study Period, Beginning Balance, Replacement Reserve Inventory and Level of Service STUDY YEAR The Association reports that their accounting year begins on January 1, and the Study Year, the first year evaluated by the Replacement Reserve Analysis, begins on January 1, Years STUDY PERIOD The Replacement Reserve Analysis evaluates the funding of Replacement Reserves over a 0-year Study Period. $0 STARTING BALANCE The Association reports Replacement Reserves on Deposit totaling $0 at the start of the Study Year. Level Three LEVEL OF SERVICE The Replacement Reserve Inventory has been developed in compliance with the National Reserve Study Standards for a Level Three Study, as defined by the Community Associations Institute (CAI). $3,002,70 REPLACEMENT RESERVE INVENTORY - PROJECTED REPLACEMENTS The Sanctuary Large Components Replacement Reserve Inventory identifies items that will require periodic replacement, that are to be funded from Replacement Reserves. We estimate the cost of these replacements will be $3,002,70 over the 0-year Study Period. The Projected Replacements are divided into 1 major categories starting on Page B3. Pages B1-B2 provide detailed information on the Replacement Reserve Inventory. #2 - Annual Expenditures for Projected Replacements Graph This graph shows annual expenditures for Projected Replacements over the 0-year Study Period. The red line shows the average annual expenditure of $7,062. Section C provides a year by year Calender of these expenditures. $1,00,000 $1,200,000 $1,212,60 $1,212,60 $1,000,000 $800,000 $600,000 $00,000 $236,11 $31,0 $200,000 $0 $7,062 0-year Average $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $

81 Replacement Reserve Analysis - Page A3 Sanctuary Large Components November 1, SANCTUAR18 UPDATING UPDATING OF THE FUNDING PLAN The Association has a responsibility to review the Funding Plan annually. The review should include a comparison and evaluation of actual reserve funding with recommended levels shown on Page A and A. The Projected Replacements listed on Page C2 should be compared with any replacements accomplished and funded from Replacement Reserves. Discrepancies should be evaluated and if necessary, the Reserve Study should be updated or a new study commissioned. We recommend annual increases in replacement reserve funding to account for the impact of inflation. Inflation Adjusted Funding is discussed on Page A. UPDATING OF THE REPLACEMENT RESERVE STUDY At a minimum, the Replacement Reserve Study should be professionally updated every three to five years or after completion of a major replacement project. Updating should also be considered if during the annual review of the Funding Plan, discrepancies are noted between projected and actual reserve funding or replacement costs. Updating may also be necessary if there is a meaningful discrepancy between the actual inflation rate and the inflation rate used for the Inflation Adjusted Funding of Replacement Reserves on Page A. ANNUAL EXPENDITURES AND CURRENT FUNDING The annual expenditures that comprise the $3,002,70 of Projected Expenditures over the 0-year Study Period and the impact of the Association continuing to fund Replacement Reserves at the current level are detailed in Table 3. #3 - Table of Annual Expenditures and Current Funding Data - Years 1 through 0 Year Starting Balance $0 Projected Replacements Annual Deposit $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 End of Year Balance $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Cumulative Expenditures Cumulative Receipts $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Year Projected Replacements Annual Deposit $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 End of Year Balance $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Cumulative Expenditures Cumulative Receipts $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Year Projected Replacements ($236,11) ($31,0) ($1,212,60) Annual Deposit $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 End of Year Balance $0 $0 $0 $0 ($236,11) ($236,11) ($77,170) ($77,170) ($1,789,820) ($1,789,820) Cumulative Expenditures ($236,11) ($236,11) ($77,170) ($77,170) ($1,789,820) ($1,789,820) Cumulative Receipts $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Year Projected Replacements ($1,212,60) Annual Deposit $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 End of Year Balance ($1,789,820) ($3,002,70) ($3,002,70) ($3,002,70) ($3,002,70) ($3,002,70) ($3,002,70) ($3,002,70) ($3,002,70) ($3,002,70) Cumulative Expenditures ($1,789,820) ($3,002,70) ($3,002,70) ($3,002,70) ($3,002,70) ($3,002,70) ($3,002,70) ($3,002,70) ($3,002,70) ($3,002,70) Cumulative Receipts $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 EVALUATION OF CURRENT FUNDING The evaluation of Current Funding (Starting Balance of $0 & annual funding of $0), is done in today's dollars with no adjustments for inflation or interest earned on Replacement Reserves. The evaluation assumes Replacement Reserves will only be used for the Projected Replacements identified in the Replacement Reserve Inventory and that the Association will continue Annual Funding of $0 throughout the 0-year Study Period. Annual Funding of $0 is approximately 0 percent of the $96,171 recommended Annual Funding calculated by the Cash Flow Method for 2018, the Study Year. Evaluation of the Projected Replacements calculates an average annual expenditure over the next 0 years of $7,062. Annual funding of $0 is 0 percent of the average annual expenditure. Our calculations identify funding shortfalls in 16 years of the Study Period with the initial shortfall in 202. The largest shortfall, $-3,002,70, occurs in 209. All shortfalls can be seen and evaluated in Table 3 above. In summary, Current Funding as reported by the Association and shown above, does not provide adequate funding for the $3,002,70 of Projected Replacements scheduled in the Replacement Reserve Inventory over the Study Period.

82 Replacement Reserve Analysis - Page A Sanctuary Large Components November 1, SANCTUAR18 CASH FLOW METHOD FUNDING $96,171 RECOMMENDED REPLACEMENT RESERVE FUNDING FOR 2018 $32.32 Per unit (average), minimum monthly funding of Replacement Reserves Recommended Replacement Reserve Funding has been calculated using the Cash Flow Method (also called the Straight Line or Threshold Method). This method calculates a constant annual funding between peaks in cumulative expenditures, while maintaining a Minimum Balance (threshold) in the Peak Years. Peak Years. The First Peak Year occurs in 209 with Replacement Reserves on Deposit dropping to the Minimum Balance after the completion of $3,002,70 of replacements from 2018 to 209. Recommended funding declines from $96,171 in 209 to $ in 200. Peak Years are identified in Chart and Table. Minimum Balance. The calculations assume a Minimum Balance of $7,000 in Replacement Reserves. This is approx. 12 months of average expenditures based on the $7,062, 0-year average annual expenditure. Cash Flow Method Study Period. Cash Flow Method calculates funding for $3,002,70 of expenditures over the 0-year Study Period. It does not include funding for any projects beyond 207 and in 207, the end of year balance will always be the Minimum Balance. # - Cash Flow Method - Graph of Cumulative Receipts and Expenditures - Years 1 through 0 $3,00,000 $3,000,000 $2,00,000 Cash Flow Method - Cumulative Receipts Cash Flow Method - Year End Balance Cumulative Expenditures Peak Year $3,002,70 $3,077,70 $2,000,000 $1,00,000 $1,000,000 $00,000 $0 $7, # - Cash Flow Method - Table of Receipts & Expenditures - Years 1 through 0 Year Starting Balance $0 Projected Replacements Annual Deposit $96,171 $96,171 $96,171 $96,171 $96,171 $96,171 $96,171 $96,171 $96,171 $96,171 End of Year Balance $96,171 $192,32 $288,13 $38,68 $80,8 $77,026 $673,197 $769,368 $86,38 $961,709 Cumulative Expenditures Cumulative Receipts $96,171 $192,32 $288,13 $38,68 $80,8 $77,026 $673,197 $769,368 $86,38 $961,709 Year Projected Replacements Annual Deposit $96,171 $96,171 $96,171 $96,171 $96,171 $96,171 $96,171 $96,171 $96,171 $96,171 End of Year Balance $1,07,880 $1,1,01 $1,20,222 $1,36,393 $1,2,6 $1,38,73 $1,63,906 $1,731,077 $1,827,28 $1,923,19 Cumulative Expenditures Cumulative Receipts $1,07,880 $1,1,01 $1,20,222 $1,36,393 $1,2,6 $1,38,73 $1,63,906 $1,731,077 $1,827,28 $1,923,19 Year Projected Replacements ($236,11) ($31,0) ($1,212,60) Annual Deposit $96,171 $96,171 $96,171 $96,171 $96,171 $96,171 $96,171 $96,171 $96,171 $96,171 End of Year Balance $2,019,90 $2,11,761 $2,211,932 $2,308,103 $2,168,18 $2,26,329 $2,019, $2,11,616 $999,137 $1,09,308 Cumulative Expenditures ($236,11) ($236,11) ($77,170) ($77,170) ($1,789,820) ($1,789,820) Cumulative Receipts $2,019,90 $2,11,761 $2,211,932 $2,308,103 $2,0,273 $2,00, $2,96,61 $2,692,786 $2,788,97 $2,88,128 Year 208 1st Peak Projected Replacements ($1,212,60) Annual Deposit $96,171 $96,171 End of Year Balance $1,191,79 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 Cumulative Expenditures ($1,789,820) ($3,002,70) ($3,002,70) ($3,002,70) ($3,002,70) ($3,002,70) ($3,002,70) ($3,002,70) ($3,002,70) ($3,002,70) Cumulative Receipts $2,981,299 $3,077,70 $3,077,70 $3,077,70 $3,077,70 $3,077,70 $3,077,70 $3,077,70 $3,077,70 $3,077,70

83 Replacement Reserve Analysis - Page A Sanctuary Large Components November 1, SANCTUAR18 INFLATION ADJUSTED FUNDING The Cash Flow Method calculations on Page A have been done in today's dollars with no adjustment for inflation. At Miller + Dodson, we belive that long-term inflation forecasting is effective at demonstrating the power of compounding, not at calculating appropriate funding levels for Replacement Reserves. We have developed this proprietary model to estimate the short-term impact of inflation on Replacement Reserve funding. $96, CASH FLOW METHOD RECOMMENDED FUNDING #6 - Inflation Adjusted Funding The 2018 Study Year calculations have been made using current replacement costs $120,000 (see Page B2), modified by the Analyst for any project specific conditions. $98, INFLATION ADJUSTED FUNDING A new analysis calculates 2019 funding based on three assumptions; Replacement Reserves on Deposit totaling $96,171 on January 1, No Expenditures from Replacement Reserves in $100,000 $96,171 $96,171 $96,171 $98,28 $96,171 $101,016 $96,171 $103,66 Construction Cost Inflation of 2.30 percent in The $98,28 inflation adjusted funding in 2019 is a 2. percent increase over the non-inflation adjusted 2019 funding of $96,171. $80,000 $101, INFLATION ADJUSTED FUNDING A new analysis calculates 2020 funding based on three assumptions; Replacement Reserves on Deposit totaling $19,699 on January 1, No Expenditures from Replacement Reserves in Construction Cost Inflation of 2.30 percent in The $101,016 inflation adjusted funding in 2020 is a.0 percent increase over the non-inflation adjusted 2020 funding of $96,171. $103, INFLATION ADJUSTED FUNDING A new analysis calculates 2021 funding based on three assumptions; Replacement Reserves on Deposit totaling $29,71 on January 1, No Expenditures from Replacement Reserves in $60,000 $0,000 $20,000 $ Construction Cost Inflation of 2.30 percent in The $103,66 inflation adjusted funding in 2021 is a 7.77 percent increase over the non-inflation adjusted funding of $96,171. Cash Flow Method Funding YEAR FIVE & BEYOND The inflation adjusted funding calculations outlined above are not intended to be a substitute for periodic evaluation of common elements by an experienced Reserve Analyst. Industry Standards, lender requirements, and many state and local statutes require a Replacement Reserve Study be professionally updated every 3 to years. INFLATION ADJUSTMENT Prior to approving a budget based upon the 2019, 2020 and 2021 inflation adjusted funding calculations above, the 2.30 percent base rate of inflation used in our calculations should be compared to rates published by the Bureau of Labor Statistics. If there is a significant discrepancy (over 1 percent), contact Miller Dodson + Associates prior to using the Inflation Adjusted Funding. INTEREST ON RESERVES The recommended funding calculations do not account for interest earned on Replacement Reserves. In 2018, based on a 1.00 percent interest rate, we estimate the Association may earn $81 on an average balance of $8,08, $1, on an average balance of $1,3 in 2019, and $2,2 on $2,206 in The Association may elect to attribute 100 percent of the earned interest to Reserves, resulting in a reduction in the 2018 funding from $96,171 to $9,690 (a 0.0 percent reduction), $98,28 to $97,073 in 2019 (a 1.8 percent reduction), and $101,016 to $98,6 in 2020 (a 2.3 percent reduction). Inflation Adjusted Funding

84 Replacement Reserve Analysis - Page A6 Sanctuary Large Components November 1, SANCTUAR18 REPLACEMENT RESERVE STUDY - SUPPLEMENTAL COMMENTS Sanctuary Large Components has 28 units. The type of property is a condominium association. The Cash Flow Method calculates the minimum annual funding necessary to prevent Replacement Reserves from dropping below the Minimum Balance. Failure to fund at least the recommended levels may result in funding not being available for the Projected Replacements listed in the Replacement Reserve Inventory. The accuracy of the Replacement Reserve Analysis is dependent upon expenditures from Replacement Reserves being made ONLY for the Projected Replacements specifically listed in the Replacement Reserve Inventory. The inclusion/exclusion of items from the Replacement Reserve Inventory is discussed on Page B1. No starting balance or annual contribution are indicated as reported by the Manager and the current Board.

85 Replacement Reserve Inventory - Page B1 Sanctuary Large Components November 1, SANCTUAR18 REPLACEMENT RESERVE INVENTORY GENERAL INFORMATION Sanctuary Large Components - Replacement Reserve Inventory identifies Projected Replacements. PROJECTED REPLACEMENTS. of the items are Projected Replacements and the periodic replacements of these items are scheduled for funding from Replacement Reserves. The Projected Replacements have an estimated one-time replacement cost of $3,002,70. Replacements totaling $3,002,70 are scheduled in the Replacement Reserve Inventory over the 0-year Study Period. Projected Replacements are the replacement of commonly-owned physical assets that require periodic replacement and whose replacement is to be funded from Replacement Reserves. EXCLUDED ITEMS. None of the items included in the Replacement Reserve Inventory are 'Excluded Items'. Multiple categories of items are typically excluded from funding by Replacement Reserves, including but not limited to: Tax Code. The United States Tax Code grants very favorable tax status to Replacement Reserves, conditioned on expenditures being made within certain guidelines. These guidelines typically exclude maintenance activities, minor repairs and capital improvements. Value. Items with a replacement cost of less that $1,000 and/or a normal economic life of less than 3 years are typically excluded from funding from Replacement Reserves. This exclusion should reflect Association policy on the administration of Replacement Reserves. If the Association has selected an alternative level, it will be noted in the Replacement Reserve Inventory - General Comments on Page B2. Long-lived Items. Items that when properly maintained, can be assumed to have a life equal to the property as a whole, are typically excluded from the Replacement Reserve Inventory. Unit improvements. Items owned by a single unit and where the items serve a single unit are generally assumed to be the responsibility of that unit, not the Association. Other non-common improvements. Items owned by the local government, public and private utility companies, the United States Postal Service, Master Associations, state and local highway authorities, etc., may be installed on property that is owned by the Association. These types of items are generally not the responsibility of the Association and are excluded from the Replacement Reserve Inventory. CATEGORIES. The items included in the Sanctuary Large Components Replacement Reserve Inventory are divided into 1 major categories. Each category is printed on a separate page, Pages B3 to B3. LEVEL OF SERVICE. This Replacement Reserve Inventory has been developed in compliance with the standards established for a Level Three - Update (no site visit/offsite review), as defined by the National Reserve Study Standards, established in 1998 by Community Associations Institute, which states: Level III Studies are based entirely on the component inventory from a prior study. A site visit is not conducted to confirm this information, to verify the quantities that were used in the previous report or to make observations of the current condition of the inventory components. The estimates of value and remaining life that were used in the previous study are adjusted to reflect current pricing and the simple passage of time. The fund status and funding plan are derived from analysis of this data.

86 Replacement Reserve Inventory - Page B2 Sanctuary Large Components November 1, SANCTUAR18 REPLACEMENT RESERVE INVENTORY - GENERAL INFORMATION (cont'd) INVENTORY DATA. Each of the Projected Replacements listed in the Replacement Reserve Inventory includes the following data: Item Number. The Item Number is assigned sequentially and is intended for identification purposes only. Item Description. We have identified each item included in the Inventory. Additional information may be included in the Comments section at the bottom of each page of the Inventory. Units. We have used standard abbreviations to identify the number of units including SF-square feet, LF-lineal feet, SY-square yard, LS-lump sum, EA-each, and PR-pair. Non-standard abbreviations are noted in the Comments section at the bottom of the page. Number of Units. The methods used to develop the quantities are discussed in "Level of Service" above. Unit Replacement Cost. We use four sources to develop the unit cost data shown in the Inventory; actual replacement cost data provided by the client, information provided by local contractors and suppliers, industry standard estimating manuals, and a cost database we have developed based upon our detailed interviews with contractors and service providers who are specialists in their respective lines of work. Normal Economic Life (Yrs). The number of years that a new and properly installed item should be expected to remain in service. Remaining Economic Life (Yrs). The estimated number of years before an item will need to be replaced. In "normal" conditions, this could be calculated by subtracting the age of the item from the Normal Economic Life of the item, but only rarely do physical assets age "normally". Some items may have longer or shorter lives depending on many factors such as environment, initial quality of the item, maintenance, etc. Total Replacement Cost. This is calculated by multiplying the Unit Replacement Cost by the Number of Units. REVIEW OF EXPENDITURES. This Replacement Reserve Study should be reviewed by an accounting professional representing the Association prior to implementation. PARTIAL FUNDING. Items may have been included in the Replacement Reserve Inventory at less than 100 percent of their full quantity and/or replacement cost. This is done on items that will never be replaced in their entirety, but which may require periodic replacements over an extended period of time. The assumptions that provide the basis for any partial funding are noted in the Comments section. REMAINING ECONOMIC LIFE GREATER THAN 0 YEARS. The calculations do not include funding for initial replacements beyond 0 years. These replacements are included in this Study for tracking and evaluation. They should be included for funding in future Studies, when they enter the 0-year window.

87 Replacement Reserve Inventory - Page B3 Sanctuary Large Components November 1, SANCTUAR18 LARGE VALUE COMPONENTS PROJECTED REPLACEMENTS UNIT NORMAL REMAINING ITEM ITEM NUMBER REPLACEMENT ECONOMIC ECONOMIC REPLACEMENT # DESCRIPTION UNIT OF UNITS COST ($) LIFE (YRS) LIFE (YRS) COST ($) 1 Ph1 Standing seam metal roofing sf 79,000 $ $1,212,60 2 Ph2 Standing seam metal roofing sf 79,000 $ $1,212,60 3 Ph1 Exterior windows unit 99 $2, $236,11 Ph2 Exterior windows unit 13 $2, $31,0 LARGE VALUE COMPONENTS - Replacement Costs - Subtotal $3,002,70 LARGE VALUE COMPONENTS COMMENTS

88 Intentionally Left Blank

89 Projected Annual Replacements - Page C1 Sanctuary Large Components November 1, SANCTUAR18 PROJECTED ANNUAL REPLACEMENTS GENERAL INFORMATION CALENDAR OF ANNUAL REPLACEMENTS. The Projected Replacements in the Sanctuary Large Components Replacement Reserve Inventory whose replacement is scheduled to be funded from Replacement Reserves are broken down on a year-by-year basis, beginning on Page C2. REPLACEMENT RESERVE ANALYSIS AND INVENTORY POLICIES, PROCEDURES, AND ADMINISTRATION REVISIONS. Revisions will be made to the Replacement Reserve Analysis and Replacement Reserve Inventory in accordance with the written instructions of the Board of Directors. No additional charge is incurred for the first revision, if requested in writing within three months of the date of the Replacement Reserve Study. It is our policy to provide revisions in electronic (Adobe PDF) format only. TAX CODE. The United States Tax Code grants favorable tax status to a common interest development (CID) meeting certain guidelines for their Replacement Reserve. If a CID files their taxes as a 'Corporation' on Form 1120 (IRC Section 277), these guidelines typically require maintenance activities, partial replacements, minor replacements, capital improvements, and one-time only replacements to be excluded from Reserves. A CID cannot co-mingle planning for maintenance activities with capital replacement activities in the Reserves (Revenue Ruling 7-370). Funds for maintenance activities and capital replacements activities must be held in separate accounts. If a CID files taxes as an "Exempt Homeowners Association" using Form 1120H (IRC Section 28), the CID does not have to segregate these activities. However, because the CID may elect to change their method of filing from year to year within the Study Period, we advise using the more restrictive approach. We further recommend that the CID consult with their Accountant and consider creating separate and independent accounts and reserves for large maintenance items, such as painting. CONFLICT OF INTEREST. Neither Miller - Dodson Associates nor the Reserve Analyst has any prior or existing relationship with this Association which would represent a real or perceived conflict of interest. RELIANCE ON DATA PROVIDED BY THE CLIENT. Information provided by an official representative of the Association regarding financial, physical conditions, quality, or historical issues is deemed reliable. INTENT. This Replacement Reserve Study is a reflection of the information provided by the Association and the visual evaluations of the Analyst. It has been prepared for the sole use of the Association and is not for the purpose of performing an audit, quality/forensic analyses, or background checks of historical records. PREVIOUS REPLACEMENTS. Information provided to Miller - Dodson Associates regarding prior replacements is considered to be accurate and reliable. Our visual evaluation is not a project audit or quality inspection. EXPERIENCE WITH FUTURE REPLACEMENTS. The Calendar of Annual Projected Replacements, lists replacements we have projected to occur over the next thirty years, begins on Page C2. Actual experience in replacing the items may differ significantly from the cost estimates and time frames shown because of conditions beyond our control. These differences may be caused by maintenance practices, inflation, variations in pricing and market conditions, future technological developments, regulatory actions, acts of God, and luck. Some items may function normally during our visual evaluation and then fail without notice. REVIEW OF THE REPLACEMENT RESERVE STUDY. For this study to be effective, it should be reviewed by the Sanctuary Large Components Board of Directors, those responsible for the management of the items included in the Replacement Reserve Inventory, and the accounting professionals employed by the Association.

90 Projected Annual Replacements - Page C2 Sanctuary Large Components November 1, SANCTUAR18 PROJECTED REPLACEMENTS - YEARS ONE TO FIFTEEN Item STUDY YEAR $ Item YEAR 2 $ Item YEAR 3 $ No Scheduled Replacements No Scheduled Replacements No Scheduled Replacements Item YEAR $ Item YEAR $ Item YEAR 6 $ No Scheduled Replacements No Scheduled Replacements No Scheduled Replacements Item YEAR 7 $ Item YEAR 8 $ Item YEAR 9 $ No Scheduled Replacements No Scheduled Replacements No Scheduled Replacements Item YEAR 10 $ Item YEAR 11 $ Item YEAR 12 $ No Scheduled Replacements No Scheduled Replacements No Scheduled Replacements Item YEAR 13 $ Item YEAR 1 $ Item YEAR 1 $ No Scheduled Replacements No Scheduled Replacements No Scheduled Replacements

91 Projected Annual Replacements - Page C3 Sanctuary Large Components November 1, SANCTUAR18 PROJECTED REPLACEMENTS - YEARS SIXTEEN TO THIRTY Item YEAR 16 $ Item YEAR 17 $ Item YEAR 18 $ No Scheduled Replacements No Scheduled Replacements No Scheduled Replacements Item YEAR 19 $ Item YEAR 20 $ Item YEAR 21 $ No Scheduled Replacements No Scheduled Replacements No Scheduled Replacements Item YEAR 22 $ Item YEAR 23 $ Item YEAR 2 $ No Scheduled Replacements No Scheduled Replacements No Scheduled Replacements Item YEAR 2 $ Item YEAR 26 $ Item 20 - YEAR 27 $ 3 Ph1 Exterior windows $236,11 Ph2 Exterior windows $31,0 Total Scheduled Replacements $236,11 No Scheduled Replacements Total Scheduled Replacements $31,0 Item 20 - YEAR 28 $ Item YEAR 29 $ Item YEAR 30 $ 1 Ph1 Standing seam metal ro $1,212,60 No Scheduled Replacements Total Scheduled Replacements $1,212,60 No Scheduled Replacements

92 Projected Annual Replacements - Page C Sanctuary Large Components November 1, SANCTUAR18 PROJECTED REPLACEMENTS - YEARS THIRTY-ONE TO FORTY-FIVE Item YEAR 31 $ Item YEAR 32 $ Item YEAR 33 $ 2 Ph2 Standing seam metal ro $1,212,60 No Scheduled Replacements Total Scheduled Replacements $1,212,60 No Scheduled Replacements Item YEAR 3 $ Item YEAR 3 $ Item YEAR 36 $ No Scheduled Replacements No Scheduled Replacements No Scheduled Replacements Item 20 - YEAR 37 $ Item 20 - YEAR 38 $ Item YEAR 39 $ No Scheduled Replacements No Scheduled Replacements No Scheduled Replacements Item YEAR 0 $ Item 208 (beyond Study Period) $ Item 209 (beyond Study Period) $ No Scheduled Replacements No Scheduled Replacements No Scheduled Replacements Item 2060 (beyond Study Period) $ Item 2061 (beyond Study Period) $ Item 2062 (beyond Study Period) $ No Scheduled Replacements No Scheduled Replacements No Scheduled Replacements

93 Cash Flow Method Accounting Summary - Page CF1 Sanctuary Large Components November 1, SANCTUAR18 CASH FLOW METHOD ACCOUNTING SUMMARY This Sanctuary Large Components - Cash Flow Method Accounting Summary is an attachment to the Sanctuary Large Components - Replacement Reserve Study dated November 1, 2017 and is for use by accounting and reserve professionals experienced in Association funding and accounting principles. This Summary consists of four reports, the 2018, 2019, and 2020 Cash Flow Method Category Funding Reports (3) and a Three-Year Replacement Funding Report. CASH FLOW METHOD CATEGORY FUNDING REPORT, 2018, 2019, and Each of the Projected Replacements listed in the Sanctuary Large Components Replacement Reserve Inventory has been assigned to one of 1 categories. The following information is summarized by category in each report: Normal Economic Life and Remaining Economic Life of the Projected Replacements. Cost of all Scheduled Replacements in each category. Replacement Reserves on Deposit allocated to the category at the beginning and end of the report period. Cost of Projected Replacements in the report period. Recommended Replacement Reserve Funding allocated to the category during the report period as calculated by the Cash Flow Method. THREE-YEAR REPLACEMENT FUNDING REPORT. This report details the allocation of the $0 Beginning Balance (at the start of the Study Year) and the $288,13 of additional Replacement Reserve Funding in 2018 through 2020 (as calculated in the Replacement Reserve Analysis) to each of the Projected Replacements listed in the Replacement Reserve Inventory. These allocations have been made using Chronological Allocation, a method developed by Miller Dodson Associates, Inc., and discussed below. The calculated data includes: Identification and estimated cost of each Projected Replacement scheduled in years 2018 through Allocation of the $0 Beginning Balance to the Projected Replacements by Chronological Allocation. Allocation of the $288,13 of additional Replacement Reserve Funding recommended in the Replacement Reserve Analysis in years 2018 through 2020, by Chronological Allocation. CHRONOLOGICAL ALLOCATION. Chronological Allocation assigns Replacement Reserves to Projected Replacements on a "first come, first serve" basis in keeping with the basic philosophy of the Cash Flow Method. The Chronological Allocation methodology is outlined below. The first step is the allocation of the $0 Beginning Balance to the Projected Replacements in the Study Year. Remaining unallocated funds are next allocated to the Projected Replacements in subsequent years in chronological order until the total of Projected Replacements in the next year is greater than the unallocated funds. Projected Replacements in this year are partially funded with each replacement receiving percentage funding. The percentage of funding is calculated by dividing the unallocated funds by the total of Projected Replacements in the partially funded year. At Sanctuary Large Components the Beginning Balance funds all Scheduled Replacements in the Study Year through 201 and provides partial funding (0%) of replacements scheduled in 202. The next step is the allocation of the $96,171 of 2018 Cash Flow Method Reserve Funding calculated in the Replacement Reserve Analysis. These funds are first allocated to fund the partially funded Projected Replacements and then to subsequent years in chronological order as outlined above. At Sanctuary Large Components the Beginning Balance and the 2018 Replacement Reserve Funding, funds replacements through 201 and partial funds (0.7%) replacements in 202. Allocations of the 2019 and 2020 Reserve Funding are done using the same methodology. The Three-Year Replacement Funding Report details component by component allocations made by Chronological Allocation.

94 Cash Flow Method Accounting Summary - Page CF2 Sanctuary Large Components November 1, SANCTUAR CASH FLOW METHOD CATEGORY FUNDING REPORT Each of the Projected Replacements included in the Sanctuary Large Components Replacement Reserve Inventory has been assigned to one of the 1 categories listed in TABLE CF1 below. This calculated data is a summary of data provided in the Three-Year Replacement Funding Report and Replacement Reserve Inventory. The accuracy of this data is dependent upon many factors including the following critical financial data: A Beginning Balance of $0 as of the first day of the Study Year, January 1, Total reserve funding (including the Beginning Balance) of $96,171 in the Study Year. No expenditures from Replacement Reserves other than those specifically listed in the Replacement Reserve Inventory. If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associates to arrange for an update of the Replacement Reserve Study CASH FLOW METHOD CATEGORY FUNDING - TABLE CF1 NORMAL REMAINING ESTIMATED ECONOMIC ECONOMIC REPLACEMENT BEGINNING RESERVE PROJECTED END OF YEAR CATEGORY LIFE LIFE COST BALANCE FUNDING REPLACEMENTS BALANCE LARGE VALUE COMPONENTS 3 to 0 years 2 to 31 years $3,002,70 $0 $96,171 $96,171

95 Cash Flow Method Accounting Summary - Page CF3 Sanctuary Large Components November 1, SANCTUAR CASH FLOW METHOD CATEGORY FUNDING REPORT Each of the Projected Replacements included in the Sanctuary Large Components Replacement Reserve Inventory has been assigned to one of the 1 categories listed in TABLE CF2 below. This calculated data is a summary of data provided in the Three-Year Replacement Funding Report and Replacement Reserve Inventory. The accuracy of this data is dependent upon many factors including the following critical financial data: Replacement Reserves on Deposit totaling $96,171 on January 1, Total reserve funding (including the Beginning Balance) of $192,32 from 2018 through No expenditures from Replacement Reserves other than those specifically listed in the Replacement Reserve Inventory. If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associates to arrange for an update of the Replacement Reserve Study CASH FLOW METHOD CATEGORY FUNDING - TABLE CF2 NORMAL REMAINING ESTIMATED ECONOMIC ECONOMIC REPLACEMENT BEGINNING RESERVE PROJECTED END OF YEAR CATEGORY LIFE LIFE COST BALANCE FUNDING REPLACEMENTS BALANCE LARGE VALUE COMPONENTS 3 to 0 years 23 to 30 years $3,002,70 $96,171 $96,171 $192,32

96 Cash Flow Method Accounting Summary - Page CF Sanctuary Large Components November 1, SANCTUAR CASH FLOW METHOD CATEGORY FUNDING REPORT Each of the Projected Replacements included in the Sanctuary Large Components Replacement Reserve Inventory has been assigned to one of the 1 categories listed in TABLE CF3 below. This calculated data is a summary of data provided in the Three-Year Replacement Funding Report and Replacement Reserve Inventory. The accuracy of this data is dependent upon many factors including the following critical financial data: Replacement Reserves on Deposit totaling $192,32 on January 1, Total Replacement Reserve funding (including the Beginning Balance) of $288,13 from 2018 to No expenditures from Replacement Reserves other than those specifically listed in the Replacement Reserve Inventory. If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associates to arrange for an update of the Replacement Reserve Study CASH FLOW METHOD CATEGORY FUNDING - TABLE CF3 NORMAL REMAINING ESTIMATED ECONOMIC ECONOMIC REPLACEMENT BEGINNING RESERVE PROJECTED END OF YEAR CATEGORY LIFE LIFE COST BALANCE FUNDING REPLACEMENTS BALANCE LARGE VALUE COMPONENTS 3 to 0 years 22 to 29 years $3,002,70 $192,32 $96,171 $288,13

97 Cash Flow Method Accounting Summary - Page CF Sanctuary Large Components November 1, SANCTUAR18 CASH FLOW METHOD - THREE-YEAR REPLACEMENT FUNDING REPORT TABLE CF below details the allocation of the $0 Beginning Balance, as reported by the Association and the $288,13 of Replacement Reserve Funding calculated by the Cash Flow Method from 2018 to 2020, to the Projected Replacements listed in the Replacement Reserve Inventory. These allocations have been made by Chronological Allocation, a method developed by Miller Dodson Associates, Inc., and outlined on Page CF1. The accuracy of the allocations is dependent upon many factors including the following critical financial data: Replacement Reserves on Deposit totaling $0 on January 1, Replacement Reserves on Deposit totaling $96,171 on January 1, Replacement Reserves on Deposit totaling $192,32 on January 1, Total Replacement Reserve funding (including the Beginning Balance) of $288,13 from 2018 to No expenditures from Replacement Reserves other than those specifically listed in the Replacement Reserve Inventory. If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associates, Inc., to arrange for an update of the Replacement Reserve Study. CASH FLOW METHOD - THREE-YEAR REPLACEMENT FUNDING - TABLE CF Description of Estimated Allocation Item Projected Replacement of Beginning Reserve Projected End of Year Reserve Projected End of Year Reserve Projected End of Year # Replacement Costs Balance Funding Replacements Balance Funding Replacements Balance Funding Replacements Balance LARGE VALUE COMPONENTS 1 Ph1 Standing seam metal roofing 1,212,60 2 Ph2 Standing seam metal roofing 1,212,60 3 Ph1 Exterior windows 236,11 96,171 96,171 96, ,32 3, ,11 Ph2 Exterior windows 31,0 2,398 2,398

98 Component Method - Page CM1 Sanctuary Large Components November 1, SANCTUAR18 COMPONENT METHOD $101,787 COMPONENT METHOD RECOMMENDED ANNUAL FUNDING OF REPLACEMENT RESERVES IN THE STUDY YEAR, $3.20 Per unit (average), recommended monthly funding of Replacement Reserves General. The Component Method (also referred to as the Full Funded Method) is a very conservative mathematical model developed by HUD in the early 1980s. Each of the Projected Replacements listed in the Replacement Reserve Inventory is treated as a separate account. The Beginning Balance is allocated to each of the individual accounts, as is all subsequent funding of Replacement Reserves. These funds are "locked" in these individual accounts and are not available to fund other Projected Replacements. The calculation of Recommended Annual Funding of Replacement Reserves is a multi-step process outlined in more detail on Page CM2. Component Method - Cumulative Receipts and Expenditures Graph $3,00,000 Component Method - Cumulative Receipts Component Method - Year End Balance Projected Replacements - Cumulative Expenditures $3,000,000 $3,019,960 $2,00,000 $2,000,000 $1,789,820 $1,00,000 $1,230,10 $1,000,000 $00,000 $

99 Component Method - Page CM2 Sanctuary Large Components November 1, SANCTUAR18 COMPONENT METHOD (cont'd) Current Funding Objective. A Current Funding Objective is calculated for each of the Projected Replacements listed in the Replacement Reserve Inventory. Replacement Cost is divided by the Normal Economic Life to determine the nominal annual contribution. The Remaining Economic Life is then subtracted from the Normal Economic Life to calculate the number of years that the nominal annual contribution should have been made. The two values are then multiplied to determine the Current Funding Objective. This is repeated for each of the Projected Replacements. The total, $721,26, is the Current Funding Objective. For an example, consider a very simple Replacement Reserve Inventory with one Projected Replacement, a fence with a $1,000 Replacement Cost, a Normal Economic Life of 10 years, and a Remaining Economic Life of 2 years. A contribution to Replacement Reserves of $100 ($1, years) should have been made in each of the previous 8 years (10 years - 2 years). The result is a Current Funding Objective of $800 (8 years x $100 per year). Funding Percentage. The Funding Percentage is calculated by dividing the Beginning Balance ($0) by the Current Funding Objective ($721,26). At Sanctuary Large Components the Funding Percentage is 0.0% Allocation of the Beginning Balance. The Beginning Balance is divided among the Projected Replacements in the Replacement Reserve Inventory. The Current Funding Objective for each Projected Replacement is multiplied by the Funding Percentage and these funds are then "locked" into the account of each item. If we relate this calculation back to our fence example, it means that the Association has not accumulated $800 in Reserves (the Funding Objective), but rather at 0.0 percent funded, there is $0 in the account for the fence. Annual Funding. The Recommended Annual Funding of Replacement Reserves is then calculated for each Projected Replacement. The funds allocated to the account of the Projected Replacement are subtracted from the Replacement Cost. The result is then divided by the number of years until replacement, and the result is the annual funding for each of the Projected Replacements. The sum of these is $101,787, the Component Method Recommended Annual Funding of Replacement Reserves in the Study Year (2018). In our fence example, the $0 in the account is subtracted from the $1,000 Total Replacement Cost and divided by the 2 years that remain before replacement, resulting in an annual deposit of $00. Next year, the deposit remains $00, but in the third year, the fence is replaced and the annual funding adjusts to $100. Adjustment to the Component Method for interest and inflation. The calculations in the Replacement Reserve Analysis do not account for interest earned on Replacement Reserves, inflation, or a constant annual increase in Annual Funding of Replacement Reserves. The Component Method is a very conservative method and if the Analysis is updated regularly, adequate funding will be maintained without the need for adjustments. Component Method Data - Years 1 through 30 Year Beginning balance $0 Recommended annual funding $101,787 $101,787 $101,787 $101,787 $101,787 $101,787 $101,787 $101,787 $101,787 $101,787 Interest on reserves Expenditures Year end balance $101,787 $203,7 $30,361 $07,18 $08,93 $610,723 $712,10 $81,297 $916,08 $1,017,871 Cumulative Expenditures Cumulative Receipts $101,787 $203,7 $30,361 $07,18 $08,93 $610,723 $712,10 $81,297 $916,08 $1,017,871 Year Recommended annual funding $101,787 $101,787 $101,787 $101,787 $101,787 $101,787 $101,787 $101,787 $101,787 $101,787 Interest on reserves Expenditures Year end balance $1,119,68 $1,221, $1,323,232 $1,2,019 $1,26,806 $1,628,9 $1,730,381 $1,832,168 $1,933,9 $2,03,72 Cumulative Expenditures Cumulative Receipts $1,119,68 $1,221, $1,323,232 $1,2,019 $1,26,806 $1,628,9 $1,730,381 $1,832,168 $1,933,9 $2,03,72 Year Recommended annual funding $101,787 $101,787 $101,787 $101,787 $101,787 $99,089 $99,089 $96,201 $96,201 $8,702 Interest on reserves Expenditures $236,11 $31,0 $1,212,60 Year end balance $2,137,29 $2,239,316 $2,31,103 $2,2,890 $2,308,62 $2,07,61 $2,16,68 $2,261,886 $1,1,37 $1,230,10 Cumulative Expenditures $236,11 $236,11 $77,170 $77,170 $1,789,820 $1,789,820 Cumulative Receipts $2,137,29 $2,239,316 $2,31,103 $2,2,890 $2,,677 $2,63,766 $2,72,8 $2,839,06 $2,93,27 $3,019,960

100 Component Method Accounting Summary - Page CM3 Sanctuary Large Components November 1, SANCTUAR18 COMPONENT METHOD ACCOUNTING SUMMARY This Sanctuary Large Components - Component Method Accounting Summary is an attachment to the Sanctuary Large Components - Replacement Reserve Study dated November 1, 2017 and is for use by accounting and reserve professionals experienced in Association funding and accounting principles. This Summary consists of four reports, the 2018, 2019, and 2020 Component Method Category Funding Reports (3) and a Three-Year Replacement Funding Report. COMPONENT METHOD CATEGORY FUNDING REPORT, 2018, 2019, and Each of the Projected Replacements listed in the Sanctuary Large Components Replacement Reserve Inventory has been assigned to one of 1 categories. The following information is summarized by category in each report: Normal Economic Life and Remaining Economic Life of the Projected Replacements. Cost of all Scheduled Replacements in each category. Replacement Reserves on Deposit allocated to the category at the beginning and end of the report period. Cost of Projected Replacements in the report period. Recommended Replacement Reserve Funding allocated to the category during the report period as calculated by the Component Method. THREE-YEAR REPLACEMENT FUNDING REPORT. This report details the allocation of the $0 Beginning Balance (at the start of the Study Year) and the $30,361 of additional Replacement Reserve funding from 2018 to 2020 (as calculated in the Replacement Reserve Analysis) to each of the Projected Replacements listed in the Replacement Reserve Inventory. These allocations have been made using the Component Method as outlined in the Replacement Reserve Analysis. The calculated data includes: Identification and estimated cost of each Projected Replacement schedule in years 2018 through Allocation of the $0 Beginning Balance to the Projected Replacements by the Component Method. Allocation of the $30,361 of additional Replacement Reserve Funding recommended in the Replacement Reserve Analysis in years 2018 through 2020, by the Component Method.

101 Component Method Accounting Summary - Page CM Sanctuary Large Components November 1, SANCTUAR COMPONENT METHOD CATEGORY FUNDING REPORT Each of the Projected Replacements included in the Sanctuary Large Components Replacement Reserve Inventory has been assigned to one of the 1 categories listed in TABLE CM1 below. This calculated data is a summary of data provided in the Three-Year Replacement Funding Report and Replacement Reserve Inventory. The accuracy of this data is dependent upon many factors including the following critical financial data: A Beginning Balance of $0 as of the first day of the Study Year, January 1, Total reserve funding (including the Beginning Balance) of $101,787 in the Study Year. No expenditures from Replacement Reserves other than those specifically listed in the Replacement Reserve Inventory. If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associates to arrange for an update of the Replacement Reserve Study COMPONENT METHOD CATEGORY FUNDING - TABLE CM1 NORMAL REMAINING ESTIMATED ECONOMIC ECONOMIC REPLACEMENT BEGINNING RESERVE PROJECTED END OF YEAR CATEGORY LIFE LIFE COST BALANCE FUNDING REPLACEMENTS BALANCE 2 to 31 years LARGE VALUE COMPONENTS 3 to 0 years 2 to 31 years $3,002,70 $0 $101,787 $101,787

102 Component Method Accounting Summary - Page CM Sanctuary Large Components November 1, SANCTUAR COMPONENT METHOD CATEGORY FUNDING REPORT Each of the Projected Replacements included in the Sanctuary Large Components Replacement Reserve Inventory has been assigned to one of the 1 categories listed in TABLE CM2 below. This calculated data is a summary of data provided in the Three-Year Replacement Funding Report and Replacement Reserve Inventory. The accuracy of this data is dependent upon many factors including the following critical financial data: Replacement Reserves on Deposit totaling $101,787 on January 1, Total reserve funding (including the Beginning Balance) of $203,7 from 2018 through No expenditures from Replacement Reserves other than those specifically listed in the Replacement Reserve Inventory. If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associates to arrange for an update of the Replacement Reserve Study COMPONENT METHOD CATEGORY FUNDING - TABLE CM2 NORMAL REMAINING ESTIMATED ECONOMIC ECONOMIC REPLACEMENT BEGINNING RESERVE PROJECTED END OF YEAR CATEGORY LIFE LIFE COST BALANCE FUNDING REPLACEMENTS BALANCE LARGE VALUE COMPONENTS 3 to 0 years 23 to 30 years $3,002,70 $101,787 $101,787 $203,7

103 Component Method Accounting Summary - Page CM6 Sanctuary Large Components November 1, SANCTUAR COMPONENT METHOD CATEGORY FUNDING REPORT Each of the Projected Replacements included in the Sanctuary Large Components Replacement Reserve Inventory has been assigned to one of the 1 categories listed in TABLE CM3 below. This calculated data is a summary of data provided in the Three-Year Replacement Funding Report and Replacement Reserve Inventory. The accuracy of this data is dependent upon many factors including the following critical financial data: Replacement Reserves on Deposit totaling $203,7 on January 1, Total Replacement Reserve funding (including the Beginning Balance) of $30,361 from 2018 to No expenditures from Replacement Reserves other than those specifically listed in the Replacement Reserve Inventory. If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associates to arrange for an update of the Replacement Reserve Study COMPONENT METHOD CATEGORY FUNDING - TABLE CM3 NORMAL REMAINING ESTIMATED ECONOMIC ECONOMIC REPLACEMENT BEGINNING RESERVE PROJECTED END OF YEAR CATEGORY LIFE LIFE COST BALANCE FUNDING REPLACEMENTS BALANCE LARGE VALUE COMPONENTS 3 to 0 years 22 to 29 years $3,002,70 $203,7 $101,787 $30,361

104 Component Method Accounting Summary - Page CM7 Sanctuary Large Components November 1, SANCTUAR18 COMPONENT METHOD - THREE-YEAR REPLACEMENT FUNDING REPORT TABLE CM below details the allocation of the $0 Beginning Balance, as reported by the Association and the $30,361 of Replacement Reserve Funding calculated by the Cash Flow Method from 2018 to 2020, to the Projected Replacements listed in the Replacement Reserve Inventory. These allocations have been made by Chronological Allocation, a method developed by Miller Dodson Associates, Inc., and outlined on Page CF1. The accuracy of the allocations is dependent upon many factors including the following critical financial data: Replacement Reserves on Deposit totaling $0 on January 1, Replacement Reserves on Deposit totaling $101,787 on January 1, Replacement Reserves on Deposit totaling $203,7 on January 1, Total Replacement Reserve funding (including the Beginning Balance) of $30,361 from 2018 to No expenditures from Replacement Reserves other than those specifically listed in the Replacement Reserve Inventory. If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associates, Inc., to arrange for an update of the Replacement Reserve Study. COMPONENT METHOD - THREE-YEAR REPLACEMENT FUNDING - TABLE CM Description of Estimated Allocation Item Projected Replacement of Beginning Reserve Projected End of Year Reserve Projected End of Year Reserve Projected End of Year # Replacement Costs Balance Funding Replacements Balance Funding Replacements Balance Funding Replacements Balance LARGE VALUE COMPONENTS 1 Ph1 Standing seam metal roofing 1,212,60 0 1,816 1,816 1,816 83,631 1,816 12,7 2 Ph2 Standing seam metal roofing 1,212, ,89 37,89 37,89 7,791 37,89 113,686 3 Ph1 Exterior windows 236,11 0 9, 9, 9, 18,889 9, 28,33 Ph2 Exterior windows 31,0 0 12,632 12,632 12,632 2,263 12,632 37,89

105 Miller - Dodson Associates, Inc. Page 1 Overview, Standard Terms, and Definitions 1. COMMON INTEREST DEVELOPMENTS - AN OVERVIEW Over the past 0 years, the responsibility for community facilities and infrastructure around many of our homes has shifted from the local government to Community Associations. Thirty years ago, a typical new town house abutted a public street on the front and a public alley on the rear. Open space was provided by a nearby public park and recreational facilities were purchased ala carte from privately owned country clubs, swim clubs, tennis clubs, and gymnasiums. Today, 60% of all new residential construction, i.e. townhouses, single-family homes, condominiums, and cooperatives, is in Common Interest Developments (CID). In a CID, a homeowner is bound to a Community Association that owns, maintains, and is responsible for periodic replacements of various components that may include the roads, curbs, sidewalks, playgrounds, streetlights, recreational facilities, and other community facilities and infrastructure. The growth of Community Associations has been explosive. In 196, there were only 00 Community Associations in the United States. According to the 1990 U.S. Census, there were 130,000 Community Associations. Community Associations Institute (CAI), a national trade association, estimates there were more than 200,000 Community Associations in the year 2000, and that the number of Community Associations will continue to multiply. The shift of responsibility for billions of dollars of community facilities and infrastructure from the local government and private sector to Community Associations has generated new and unanticipated problems. Although Community Associations have succeeded in solving many short-term problems, many Associations have failed to properly plan for the tremendous expenses of replacing community facilities and infrastructure components. When inadequate replacement reserve funding results in less than timely replacements of failing components, home owners are exposed to the burden of special assessments, major increases in Association fees, and a decline in property values. 2. REPLACEMENT RESERVE STUDY The purpose of a Replacement Reserve Study is to provide the Association with an inventory of the common community facilities and infrastructure components that require periodic replacement, a general view of the condition of these components, and an effective financial plan to fund projected periodic replacements. The Replacement Reserve Study consists of the following: Replacement Reserve Study Introduction. The introduction provides a description of the property, reviews the intent of the Replacement Reserve Study, and lists documents and site evaluations upon which the Replacement Reserve Study is based. Section A Replacement Reserve Analysis. Many components owned by the Association have a limited life and require periodic replacement. Therefore, it is essential the Association have a financial plan that provides funding for the timely replacement of these components in order to protect the safety, appearance, and value of the community. In conformance with American Institute of Certified Public Accountant guidelines, a Replacement Reserve Analysis evaluates the current funding of Replacement Reserves as reported by the Association and recommends annual funding of Replacement Reserves by two generally accepted accounting methods; the Cash Flow Method and the Component Method. Miller - Dodson provides a replacement reserve recommendation based on the Cash Flow Method in Section A, and the Component Method in the Appendix of the report. Section B Replacement Reserve Inventory. The Replacement Reserve Inventory lists the commonly owned components within the community that require periodic replacement using funding from Replacement Reserves. The Replacement Reserve Inventory also provides information about components excluded from the Replacement Reserve Inventory whose replacement is not scheduled for funding from Replacement Reserves. Replacement Reserve Inventory includes estimates of the normal economic life and the remaining economic life for those components whose replacement is scheduled for funding from Replacement Reserves. Section C Projected Annual Replacements. The Calendar of Projected Annual Replacements provides a year-by-year listing of the Projected Replacements based on the data in the Replacement Reserve Inventory. Section D Condition Assessment. Several of the items listed in the Replacement Reserve Inventory are discussed in more detail. The Condition Assessment includes a narrative and photographs that document conditions at the property observed during our visual evaluation. The Appendix is provided as an attachment to the Replacement Reserve Study. Additional attachments may include supplemental photographs to document conditions at the property and additional information specific to the property cited in the Conditions Assessment (i.e. Consumer Product Safety Commission, Handbook for Public Playground Safety, information on segmental retaining walls, manufacturer recommendations for asphalt shingles or siding, etc). The Appendix also includes the Accounting Summary for the Cash Flow Method and the Component Method.

106 Miller - Dodson Associates, Inc. Page 2 Overview, Standard Terms, and Definitions 3. METHODS OF ANALYSIS The Replacement Reserve industry generally recognizes two different methods of accounting for Replacement Reserve Analysis. Due to the difference in accounting methodologies, these methods lead to different calculated values for the Minimum Annual Contribution to the Reserves. The results of both methods are presented in this report. The Association should obtain the advice of its accounting professional as to which method is more appropriate for the Association. The two methods are: Cash Flow Method. The Cash Flow Method is sometimes referred to as the "Pooling Method." It calculates the minimum constant annual contribution to reserves (Minimum Annual Deposit) required to meet projected expenditures without allowing total reserves on hand to fall below the specified minimum level in any year. First, the Minimum Recommended Reserve Level to be Held on Account is determined based on the age, condition, and replacement cost of the individual components. The mathematical model then allocates the estimated replacement costs to the future years in which they are projected to occur. Based on these expenditures, it then calculates the minimum constant yearly contribution (Minimum Annual Deposit) to the reserves necessary to keep the reserve balance at the end of each year above the Minimum Recommended Reserve Level to be Held on Account. The Cash Flow Analysis assumes that the Association will have authority to use all of the reserves on hand for replacements as the need occurs. This method usually results in a Minimum Annual Deposit that is less than that arrived at by the Component Method. Component Method. This method is a time tested mathematical model developed by HUD in the early 1980s, but has been generally relegated to a few States that require it by law. For the vast majority of Miller - Dodson s clients, this method is not used. The Component Method treats each item in the replacement schedule as an individual line item budget. Generally, the Minimum Annual Contribution to Reserves is higher when calculated by the Component Method. The mathematical model for this method works as follows: First, the total Current Objective is calculated, which is the reserve amount that would have accumulated had all of the items on the schedule been funded from initial construction at their current replacement costs. Next, the Reserves Currently on Deposit (as reported by the Association) are distributed to the components in the schedule in proportion to the Current Objective. The Minimum Annual Deposit for each component is equal to the Estimated Replacement Cost, minus the Reserves on Hand, divided by the years of life remaining.. REPLACEMENT RESERVE STUDY DATA Identification of Reserve Components. The Reserve Analyst has only two methods of identifying Reserve Components; (1) information provided by the Association and (2) observations made at the site. It is important that the Reserve Analyst be provided with all available information detailing the components owned by the Association. It is our policy to request such information prior to bidding on a project and to meet with the individuals responsible for maintaining the community after acceptance of our proposal. After completion of the Study, the Study should be reviewed by the Board of Directors, individuals responsible for maintaining the community, and the Association s accounting professionals. We are dependent upon the Association for correct information, documentation, and drawings. Unit Costs. Unit costs are developed using nationally published standards and estimating guides and are adjusted by state or region. In some instances, recent data received in the course of our work is used to modify these figures. Contractor proposals or actual cost experience may be available as part of the Association records. This is useful information, which should be incorporated into your report. Please bring any such available data to our attention, preferably before the report is commenced. Replacement vs. Repair and Maintenance. A Replacement Reserve Study addresses the required funding for Capital Replacement Expenditures. This should not be confused with operational costs or cost of repairs or maintenance.

107 Miller - Dodson Associates, Inc. Page 3 Overview, Standard Terms, and Definitions. DEFINITIONS Adjusted Cash Flow Analysis. Cash flow analysis adjusted to take into account annual cost increases due to inflation and interest earned on invested reserves. In this method, the annual contribution is assumed to grow annually at the inflation rate. Annual Deposit if Reserves Were Fully Funded. Shown on the Summary Sheet A1 in the Component Method summary, this would be the amount of the Annual Deposit needed if the Reserves Currently on Deposit were equal to the Total Current Objective. Cash Flow Analysis. See Cash Flow Method, above. Component Analysis. See Component Method, above. Contingency. An allowance for unexpected requirements. Roughly the same as the Minimum Recommended Reserve Level to be Held on Account used in the Cash Flow Method of analysis. Critical Year. In the Cash Flow Method, a year in which the reserves on hand are projected to fall to the established minimum level. See Minimum Recommended Reserve Level to be Held on Account. Current Objective. This is the reserve amount that would have accumulated had the item been funded from initial construction at its current replacement cost. It is equal to the estimated replacement cost divided by the estimated economic life, times the number of years expended (the difference between the Estimated Economic Life and the Estimated Life Left). The Total Current Objective can be thought of as the amount of reserves the Association should now have on hand based on the sum of all of the Current Objectives. Cyclic Replacement Item. A component item that typically begins to fail after an initial period (Estimated Initial Replacement), but which will be replaced in increments over a number of years (the Estimated Replacement Cycle). The Reserve Analysis program divides the number of years in the Estimated Replacement Cycle into five equal increments. It then allocates the Estimated Replacement Cost equally over those five increments. (As distinguished from Normal Replacement Items, see below) Estimated Economic Life. Used in the Normal Replacement Schedules. This represents the industry average number of years that a new item should be expected to last until it has to be replaced. This figure is sometimes modified by climate, region, or original construction conditions. Estimated Economic Life Left. Used in the Normal Replacement Schedules. Number of years until the item is expected to need replacement. Normally, this number would be considered to be the difference between the Estimated Economic Life and the age of the item. However, this number must be modified to reflect maintenance practice, climate, original construction and quality, or other conditions. For the purpose of this report, this number is determined by the Reserve Analyst based on the present condition of the item relative to the actual age. Estimated Initial Replacement. For a Cyclic Replacement Item (see above), the number of years until the replacement cycle is expected to begin. Estimated Replacement Cycle. For a Cyclic Replacement Item, the number of years over which the remainder of the component's replacement occurs. Minimum Annual Deposit. Shown on the Summary Sheet A1. The calculated requirement for annual contribution to reserves as calculated by the Cash Flow Method (see above). Minimum Deposit in the Study Year. Shown on the Summary Sheet A1. The calculated requirement for contribution to reserves in the study year as calculated by the Component Method (see above). Minimum Recommended Reserve Level to be Held on Account. Shown on the Summary Sheet A1, this number is used in the Cash Flow Method only. This is the prescribed level below which the reserves will not be allowed to fall in any year. This amount is determined based on the age, condition, and replacement cost of the individual components. This number is normally given as a percentage of the total Estimated Replacement Cost of all reserve components. Normal Replacement Item. A component of the property that, after an expected economic life, is replaced in its entirety. (As distinguished from Cyclic Replacement Items, see above.)

108 Miller - Dodson Associates, Inc. Page Overview, Standard Terms, and Definitions Normal Replacement Schedules. The list of Normal Replacement Items by category or location. These items appear on pages designated. Number of Years of the Study. The numbers of years into the future for which expenditures are projected and reserve levels calculated. This number should be large enough to include the projected replacement of every item on the schedule, at least once. This study covers a 0-year period. One Time Deposit Required to Fully Fund Reserves. Shown on the Summary Sheet A1 in the Component Method summary, this is the difference between the Total Current Objective and the Reserves Currently on Deposit. Reserves Currently on Deposit. Shown on the Summary Sheet A1, this is the amount of accumulated reserves as reported by the Association in the current year. Reserves on Hand. Shown in the Cyclic Replacement and Normal Replacement Schedules, this is the amount of reserves allocated to each component item in the Cyclic or Normal Replacement schedules. This figure is based on the ratio of Reserves Currently on Deposit divided by the total Current Objective. Replacement Reserve Study. An analysis of all of the components of the common property of the Association for which a need for replacement should be anticipated within the economic life of the property as a whole. The analysis involves estimation for each component of its estimated Replacement Cost, Estimated Economic Life, and Estimated Life Left. The objective of the study is to calculate a recommended annual contribution to the Association's Replacement Reserve Fund. Total Replacement Cost. Shown on the Summary Sheet A1, this is total of the Estimated Replacement Costs for all items on the schedule if they were to be replaced once. Unit Replacement Cost. Estimated replacement cost for a single unit of a given item on the schedule. Unit (of Measure). Non-standard abbreviations are defined on the page of the Replacement Reserve Inventory where the item appears. The following standard abbreviations are used in this report: EA: each FT: feet LS: lump sum PR: pair SF: square feet SY: square yard

109 Miller - Dodson Associates, Inc. Page Video Answers to Frequently Asked Questions What is a Reserve Study? Who are we? What kind of property uses a Reserve Study? Who are our clients? Who conducts a Reserve Study? Reserve Specialist (RS) what does this mean? When should a Reserve Study be updated? What are the different types of Reserve Studies? What is in a Reserve Study and what is out? Improvement vs Component, is there a difference? What is my role as a Community Manager? Will the report help me explain Reserves to my clients?

110 Miller - Dodson Associates, Inc. Page 6 Video Answers to Frequently Asked Questions What is my role as a Board Member? Will a Reserve Study meet my community s needs? Community dues, how can a Reserve Study help? Will a study help keep my property competitive? How do I read the report? Will I have a say in what the report contains? Where do the numbers come from? Cumulative expenditures and funding, what? How are interest and inflation addressed? What should we look at when considering inflation? A community needs more help, where do we go? What is a Strategic Funding Plan?