Foxwood Meadows HOA 2018 Financial Update

Transcription

1 50 Freeport Blvd., Suite 20 Sparks, Nevada Voice: Cell: Funding Reserve Analysis for Foxwood Meadows HOA 2018 Financial Update February 5, 2018 Foxwood Meadows Monday, February 5, 2018 Page 1 of 28 Pages

2 Funding Reserve Analysis for Foxwood Meadows HOA 2018 Financial Update Table of Contents Pages Subject 1 Report Cover Sheet 2 Table of Contents 3 to 9 Reserve Study Summary 10 to 11 Reserve Item Summary 12 to 15 Reserve Item Listing 16 Present Cost Report 17 to 22 Depreciation Report 23 Cash Flow 24 Assessment Summary 25 to 26 Expense Report 27 to 28 Expense Summary Monday, February 5, 2018 Page 2 of 28 Pages

3 50 Freeport Blvd., Suite 20 Sparks, Nevada Voice: Cell: February 5, 2018 Ms. Amy King Protocol Property Management NE 29th Place, Suite 216 Bellevue, WA Subject: Foxwood Meadows HOA 2018 Financial Update Ms. King, Resource 1 BC is pleased to present to Ms. Amy King the requested Reserve Funding study. We believe that you will find the attached study to be thorough and complete. After you have had an opportunity to review the report you may have questions. Please do not hesitate to write or call - we would be pleased to answer any questions you may have. Project Description Foxwood Meadows is located at 184th Place SE Bothell, WA. The homeowners maintain their homes, fences and lots. The association maintains the community mailboxes. signage, common driveway, landscaping, fencing, detention pond, BBQ area and common areas. The oil seal is applied by association volunteers. Resource 1 BC has not inspected the picnic area- concrete pads, bench, picnic table and BBQ which is to be installed in summer of As per Washington 1309, a financial update, without a site visit, is required annually and a new reserve study, with a site visit is required every three years, which would be by November Depth of Study Reserve Study Update without Field Inspection A field inspection of the facility improvements was not made for this reserve study. Substantial reliance was placed on the previous reserve study supplied by the client, which was prepared by Resource 1 BC and dated February 21, Summary of Financial Assumptions The below table contains a partial summary of membership and reserve fund balance provided by Ms. Amy King for the Foxwood Meadows HOA 2018 Financial Update funding study. Reserve Study by Calendar Year Starting January 1, 2018 Funding Study Length 30 Years Number of Assessment Paying Members 41 Reserve Balance as of January 1, 2018¹ $47,511 Annual Inflation Rate 2.00% Tax Rate on Reserve Interest ² 30.00% Minimum Reserve Account Balance $0 Assessment Change Period 3 Years Annual Operating Budget $0 ¹ See ''Financial Condition of Association'' in this report. ² Taxed as an IRS exempt association Monday, February 5, 2018 Page 3 of 28 Pages

4 Reserve Study Assumptions Prepared by Resource 1 BC Foxwood Meadows HOA 2018 Financial Update Funding Study Summary - Continued Cost estimates and financial information are accurate and current. No unforeseen circumstances will cause a significant reduction of reserves. Sufficient comprehensive property insurance exists to protect from insurable risks. The association plans to continue to maintain the existing common areas and amenities. Reserve payments occur at the end of every calendar month. Expenses occur at the end of the expense year. Initial Reserves Initial reserves for this Reserve Study were known to be $47,511 on January 1, Based upon a study start date of January 1, 2018 a total of 0 days of accrued interest at 0.08 percent per annum were compounded to yield an initial reserve balance of $47,511. The implicit assumption has been made that the reserve accounts were not drawn down between the date of the known reserve balance and the study start date. Recommended Payment Schedule The below table contains Resource 1 BC recommended schedule of payments for the next five years. Failure to follow the proposed schedule of payments may result in inadequate reserve funds. The projected life expectancy of the major components and the funding needs of the reserves of the association are based upon the association performing appropriate routine and preventative maintenance for each major component. Failure to perform such maintenance can negatively impact the remaining useful life of the major components and dramatically increase the funding needs of the reserves of the association. Calendar Year Member Monthly Reserve Assessment Proposed Assessment Schedule Member Total Annual Assessment Association Monthly Reserve Assessment Association Annual Reserve Assessment Proposed Reserve Balance 2018 $5.13 $62 $210 $2,526 $44, $5.13 $62 $210 $2,526 $43, $5.13 $62 $210 $2,526 $39, $5.13 $62 $210 $2,526 $35, $8.27 $99 $339 $4,069 $33, $8.27 $99 $339 $4,069 $28,838 Assessment Change Period Resource 1 BC is using a 3 years assessment change period, as a new reserve study required every three years. Washington requires a financial update every year. Ongoing repairs, reserve account balances changes, costs of component changes, inflation rate changes and reserve funds interest rate changes are some of the variables that effect reserve assessments. Financial Condition of Association Foxwood Meadows Association's current reserve funding is in excellent financial condition and/or is adequately funded. The overall status of the reserve of the association is in excellent financial condition and/or is adequately funded. The reserve account is in excess of the total present cost depreciation, which is $26,860. See present cost report. The association is fully funded. Resource 1 BC does not know if the reserve account was reconciled, as the amount was given to Resource 1 BC by the Community Manager. The interest rate the reserve funds earned was given to Resource 1 BC by the Community Manager. Monday, February 5, 2018 Page 4 of 28 Pages

5 Funding Method or Reserve Study Goal Prepared by Resource 1 BC Foxwood Meadows HOA 2018 Financial Update Funding Study Summary - Continued Resource 1 BC uses the Baseline Funding Method in the calculation of reserve assessments. This means the reserve fund goal is a minimum account balance consistent with the cash demands of maintenance and replacement of reserve items. Next Full Service Reserve Study Required Date Foxwood Meadows will need a new full service reserve study in three years, which would by November 23, Date of Physical Inspection Foxwood Meadows HOA 2018 Financial Update HOA was physically inspected by Resource 1 BC on November 23, Governing Documents A review was not made of the CCR's (conditions, covenants and restrictions) governing documents. Inflation Rate According to the average inflation rate from InflationData.com [historical CPI] from 2.00 percent. This average is the inflation rate used in this reserve study and over the 30 year period. Resource 1 BC recommends annual updates because inflation rates will vary in the future, effecting reserve assessments. Crude Oil Price On January 5, 2018 the price of crude oil was $62.01 per barrel. As this price continues to rise or fall, the price of petroleum based products, such as asphalt, slurry seal and roofing will also be increased or decreased. Study Method Funding studies may be done in several ways, but we believe that the value of a funding study lies in the details. "Bulk" studies are quick, usually inexpensive, and almost always border on worthless. We believe that meaningful answers to funding studies lie in the details. In this study, we have used the "Component" method because it is the only method which allows scrutiny of the funding details. The method is pragmatic, and allows human judgement and experience to enter into the equation. Unless noted otherwise, the present cost of every reserve item in this report has been estimated using the "National Construction Estimator", a nationally recognized standard, and modified by an area cost adjustment factor. Where possible, known costs have been used. In addition, every reserve item has been given an estimated remaining useful life, an estimated useful life when new, and has been cast into the future to determine the inflated cost. Equal annual payments are calculated for each reserve item based upon a payment starting year and a payment ending year using the end of period payment method. Interest earned on accumulated reserve funds and taxes on the reserve interest are also calculated. Initial reserve funds are consumed as expenses occur until fully depleted, reducing annual reserve payments to a minimum. As you review this report, we are certain that you will appreciate the level of detail provided, allowing you to review each reserve item in detail. Major Component Defined Major component of the common elements: defined as: any component of the common elements, including, without limitation, any amenity, component, furnishing, fixture, system or equipment, that may, within 30 years after its original installation, require repair, replacement or restoration in excess of routine annual maintenance which is included in the annual operating budget of an association. Washington State Reserve Requirements RCW Reserve study Contents. (1) A reserve study as described in RCW is supplemental to the association's operating and maintenance budget. In preparing a reserve study, the association shall estimate the Monday, February 5, 2018 Page 5 of 28 Pages

6 Foxwood Meadows HOA 2018 Financial Update Funding Study Summary - Continued anticipated major maintenance, repair, and replacement costs, whose infrequent and significant nature make them impractical to be included in an annual budget. (2) A reserve study shall include: (a) A reserve component list, including quantities and estimates for useful life of each reserve component, remaining useful life of each reserve component, and current repair and replacement cost for each component; (b) The date of the study and a statement that the study meets the requirements of this section; (c) The level of reserve study performed:(i) Level I: Full reserve study funding analysis and plan; (ii) Level II: Update with visual site inspection; (iii) Level III: Update with no visual site inspection; (d) The association's reserve account balance; (e) The percentage of the fully funded balance that the reserve account is funded; (f) Special assessments already implemented or planned; (g) Interest and inflation assumptions; (h) Current reserve account contribution rate;(i) Recommended reserve account contribution rate; (j) Projected reserve account balance for thirty years and a funding plan to pay for projected costs from those reserves without reliance on future unplanned special assessments; and (k) Whether the reserve study was prepared with the assistance of a reserve study professional. (3) A reserve study shall include the following disclosure: "This reserve study should be reviewed carefully. It may not include all common and limited common element components that will require major maintenance, repair, or replacement in future years, and may not include regular contributions to a reserve account for the cost of such maintenance, repair, or replacement. The failure to include a component in a reserve study, or to provide contributions to a reserve account for a component, may, under some circumstances, require you to pay on demand as a special assessment your share of common expenses for the cost of major maintenance, repair, or replacement of a reserve component." For complete statue see Washington Summary of Findings Resource 1 BC has estimated future projected expenses for Foxwood Meadows HOA 2018 Financial Update based upon preservation of existing improvements. The attached funding study is limited in scope to those expense items listed in the attached "Foxwood Meadows HOA 2018 Financial Update Reserve Study Expense Items". Expense items which have an expected life of more than 30 Years are not included in this reserve study unless payment for these long lived items overlaps the 30 Years reserve study envelope. Of primary concern is the preservation of a positive funding balance with funds sufficient to meet projected expenses throughout the study life. Based upon the attached funding study, it is our professional opinion that member monthly fees as shown in the attached "Foxwood Meadows HOA 2018 Financial Update Assessment Summary" will realize this goal. Some reserve items in the "Revenue Summary Table" may not contain payments. In this analysis the initial reserves were used to make annual payments for expense items in their order of occurrence until the initial reserve was consumed. As a result reserve items without payments may be expected, particularly in the first few years of the funding study. Reserve items that have been paid with initial reserve funds are identified with a [FP] in the Expense Items Sheets. An item marked [PR] is partially paid with initial reserve funds. Ms. Amy King represents and warrants that the information provided to Resource 1 BC, including but not limited to that information contained in the attached Reserve Study Information Summary, that the maintenance records are complete and accurate, and that Resource 1 BC may rely upon such information and documents without further verification or corroboration. Where the age of a particular Reserve Item (as listed in the Reserve Study) is unknown, Ms. Amy King shall provide to Resource 1 BC Ms. Amy King's best-estimated age of that item. If Ms. Amy King is unable to provide and estimate of a Reserve Item's age, Resource 1 BC shall make its own estimate of age of the Reserve Item. The Reserve Study is created for the association's use, and is a reflection of information provided to Resource 1 BC. This information is not for the purpose of performing an audit, historical records, quality or forensic analyses. Any on site inspection is not considered to be a project audit or quality inspection. Percent Funded Many reserve studies use the concept of "Percent Funded" to measure the reserve account balance against a theoretically perfect value. Percent Funded is often used as a measure of the "Financial Health" of an association. The assumption is, the higher the percentage, the greater the "Financial Health". The question of substance is simply: How much is enough? To answer the question, some understanding of Percent Funded is required. Percent Funded is the ratio of current cash reserves divided by the Fully Funded value at any instant in time. Fully Funded is defined as the present value of the sum of all reserve items divided by the expected life of each item. In essence, Fully Funded is simply the total of the average net present value of the association improvements. Reserve items with a remaining life Monday, February 5, 2018 Page 6 of 28 Pages

7 Foxwood Meadows HOA 2018 Financial Update Funding Study Summary - Continued greater than the study life are not included in the calculation. For example; building framing, foundations, water lines, and other long-lived items that fall outside the envelope of the reserve study are excluded from the calculation.percent Funded is then, the current reserve balance divided by the Fully Funded value multiplied by 100 (to give a percentage). The concept of percent funded is useful when the reserve study is comprehensive, but misleading when the reserve study is superficial or constrained. As a result, we recommend that the statement "Percent Funded" be used with caution. Keeping Your Reserve Study Current Resource 1 BC believes that funding studies are an essential part of property management. People and property are constantly changing and evolving. As a result, the useful life of a funding study is at best a few years, and certainly not more than five years. This reserve study should be updated: At least once a year At changes in interest rates At changes in inflation rates At changes in the number of dues paying members Before starting new improvements Before making changes to the property After a flood or fire After the change of ownership or management After Annexation or Incorporation Items Beyond the Scope of this Report Building or land appraisals for any purpose. State or local zoning ordinance violations. Building code violations. Soils conditions, soils contamination or geological stability of site. Engineering analysis or structural stability of site. Air quality, asbestos, electromagnetic radiation, formaldehyde, lead, mercury, radon, water quality or other environmental hazards. Invasions by pests, termites and any or all other destroying organisms, insects, birds, bats or animals to buildings or site. This study is not a pest inspection. Adequacy or efficiency of any system or component on site. Specifically excluded reserve items. Septic systems and septic tanks. Buried or concealed portions of swimming pools, pool liners, Jacuzzies and spas or similar items. Items concealed by signs, carpets or other things are also excluded from this study. Missing or omitted information supplied by the Protocol Property Management for the purposes of reserve study preparation. Hidden improvements such as sewer lines, water lines, irrigation lines or other buried or concealed items. Monday, February 5, 2018 Page 7 of 28 Pages

8 Foxwood Meadows HOA 2018 Financial Update Funding Study Summary - Continued Construction Defects Resource 1 BC has no knowledge of construction defects and/or potential or active lawsuits on this project. This reserve study reflects that there are no known construction defects. Professional Liability Insurance Resource 1 BC carries full professional liability with error's and omissions, and workman's compensation insurance. Proof available on request at no charge. Statement of Qualifications Resource 1 BC is a professional in the business of preparing reserve studies for community associations. Resource 1 BC is familiar with construction practices, construction costs, and contracting practices in WA. Kenneth Rowan was a CAI certified Reserve Study Specialist. Kenneth Rowan has a State of Nevada Reserve Specialist Permit. Christine Rowan, Associate, was a CAI certified Reserve Study Specialist. Kenneth R. Rowan Background Kenneth R. Rowan University of Nevada, Reno - B.Sc. Business Administration State of Nevada Reserve Specialist Permit RSS CAI-RS Reserve Specialist Certification #00064 from 2002 to 2014 State of Nevada Inspector of Structures Master IOS M OSHA Supervisor Construction Safety Class, Western Nevada College-30 hours of training (Occupational Safety and Health Administration). Master Inspector Class, Western Nevada Community College- 24 hours of training (ADA Inspections). General Inspector Class, Western Nevada Community College- 40 hours of training (Uniform Building Code) Residential Inspector Class, Western Nevada Community College- 40 hours of training Commercial Property Inspection Course, inspection Training Associates- 16 hours of training Nevada 2015 Legislative Update for the CIC Industry- 3 hours credits Nevada Law Nevada Budgets and Reserves in the CIC for the Reserves Study Providers- 3 hours General Credit Past HOA President Riverbend and Meadowridge Associations Christine M. Rowan Associate Background Christine M. Rowan University of California, Los Angeles: BA Degree in Psychology and Biology University of Pepperdine: MBA Degree Resource 1 BC Associate from May 2005 to present CAI-RS Reserve Specialist Certification #00193 from 2010 to 2013 Nevada 2015 Legislative Update for the CIC Industry- 3 hours credits Nevada Law Nevada Budgets and Reserves in the CIC for the Reserves Study Providers- 3 hours General Credit Past HOA President Riverdale Association Conflict of Interest As the preparer of this reserve study, Resource 1 BC certifies that we do not have any vested interests, financial interests, or other interests that would cause a conflict of interest in the preparation of this reserve study. Monday, February 5, 2018 Page 8 of 28 Pages

9 Foxwood Meadows HOA 2018 Financial Update Funding Study Summary - Continued Resource 1 BC would like to thank Protocol Property Management for the opportunity to be of service in the preparation of the attached Funding Study. Again, please feel free to write or call at our letterhead address, if you have any questions. Prepared by: Christine Rowan Associate Kenneth Rowan State of Nevada Reserve Study Specialist Permit # RSS Monday, February 5, 2018 Page 9 of 28 Pages

10 Foxwood Meadows HOA 2018 Financial Update Reserve Study Expense Item Summary Reserve Items Current Cost When New Estimated Remaining Life Common Area Expected Life When New First Replacement Cost Repeating Item? Signage $2, Years 30 Years $3,104 Yes Signage Trellis Natural State $500 5 Years 25 Years $564 Yes Mail Boxes $1,500 5 Years 20 Years $1,691 Yes Sprinkler Timing Station $750 2 Years 10 Years $796 Yes Sprinkler Control Box $375 2 Years 10 Years $398 Yes Landscaping Allowance $1,000 0 Years 2 Years $1,020 Yes NGPE Allowance $2,000 0 Year 1 Years $2,040 Yes Fence Replacement and Maintenance $2,000 0 Year 1 Years $2,040 Yes Shared Driveway Paving 1 1/2 inch Overlay and Repair $1,750 5 Years 25 Years $1,973 Yes Paving Oil Seal $210 0 Years 4 Years $214 Yes Detention Pond Detention Pond Cleaning $2,000 3 Years 5 Years $2,166 Yes Fence Wood 6ft Natural State $15, Years 20 Years $18,688 Yes PCC Retaining Wall $7, Years 40 Years $11,867 Yes Fencing Chain Link 6 ft $7, Years 40 Years $11,867 Yes Paving 1 1/2 inch Overlay $ Years 25 Years $457 Yes Oil Seal $ Years 4 Years $38 Yes BBQ Area Capital Improvement 2018 PCC Slab $1, Years 30 Years $2,230 Yes Bench Metal $1, Years 30 Years $1,858 Yes Picnic Tables Metal $1, Years 30 Years $2,787 Yes BBQ Metal $ Years 15 Years $688 Yes Months Remaining in Calendar Year 2018: 12 Expected annual inflation: 2.00% Interest earned on reserve funds: 0.08% Initial Reserve: $47,511 Monday, February 5, 2018 Page 10 of 28 Pages

11 Foxwood Meadows HOA 2018 Financial Update Funding Study Expense Item Summary - Continued Abbreviations AC - Asphalt ELEC - Electrical PNL - Panel AQ - Average Quality EP - Electrical Panelboard PNT - Paint BLDG - Building EXT - Exterior PVMT - Pavement BLK - Block FA - Fire Alarm PWD - Plywood BUR - Built up Roof FLR - Floor QT - Quarry Tile C&G - Curb and Gutter FN - Fence R/R - Remove and Replace CAB - Cabinet FND - Foundation RA - Return Air CB - Catch Basin FPL - Fireplace RCP - Reinforced Concrete Pipe CEM - Cement FTG - Footing RD - Roof Drain CFT - Cubic Foot FY - Fiscal Year REM - Remove CIP - Cast-in-place Concrete HQ - High Quality RL - Rail CMU - Concrete Masonry Unit LAM - Laminate S - South COL - Column LAV - Lavatory SCB - Speed Control Bump CPT - Carpet LC - Light Control SHTH - Sheathing CT - Ceramic Tile LW - Lightweight Concrete SQ - Square CTR - Counter MAS - Masonry ST - Steel CYD - Cubic Yard MFD - Metal Floor Decking STO - Storage D - Drain MH - Manhole SYS - System DEM - Demolish MQ - Medium Quality VB - Vapor Barrier DR - Door MRB - Marble W - West DS - Downspout MRD - Metal Roof Decking WC - Water Closet DW - Dumb Waiter N - North WIN - Window E - East EA - Each PCC - Portland Cement Concrete PG - Plate Glass YD - Yard Monday, February 5, 2018 Page 11 of 28 Pages

12 Foxwood Meadows HOA 2018 Financial Update Reserve Study Expense Item Listing Reserve Items Unit Cost No Units Current Cost When New Signage $2,000 ea 1 $2,000 Signage Trellis Natural State $500 ea 1 $500 Mail Boxes $500 ea 3 $1,500 Sprinkler Timing Station Sprinkler Control Box Landscaping Allowance NGPE Allowance $250 ea 3 $750 $125 ea 3 $375 $1,000 ea 1 $1,000 $2,000 ea 1 $2,000 Common Area Estimated Remaining Life Expected Life When New Calendar Year Estimated Future Cost 21 Years 2039 $3, Years 30 Years 2069 $5,654 5 Years 2023 $ Years 25 Years 2048 $929 5 Years 20 Years 2 Years 10 Years 2 Years 10 Years 0 Years 2 Years 0 Years 1 Years 20 Years 10 Years 10 Years 2 Years 1 Year 2023 $1, $2, $3, $ $ $1, $1, $ $ $ $ $1, $1, $1, $1, $1, $1, $1, $1, $1, $1, $1, $1, $1, $1, $1, $1, $2, $2, $2, $2, $2,210 Monday, February 5, 2018 Page 12 of 28 Pages

13 Foxwood Meadows HOA 2018 Financial Update Reserve Study Expense Item Listing - Continued Reserve Items Unit Cost No Units NGPE Allowance Fence Replacement and Maintenance Current Cost When New Estimated Remaining Life Expected Life When New $2,000 ea 1 $2,000 1 Years 1 Year $2,000 ea 1 $2,000 0 Years 1 Years 1 Year Calendar Year Estimated Future Cost 2023 $2, $2, $2, $2, $2, $2, $2, $2, $2, $2, $2, $2, $2, $2, $2, $3, $3, $3, $3, $3, $3, $3, $3, $3, $3, $3, $2, $2, $2, $2, $2, $2, $2, $2, $2, $2, $2,492 Monday, February 5, 2018 Page 13 of 28 Pages

14 Foxwood Meadows HOA 2018 Financial Update Reserve Study Expense Item Listing - Continued Reserve Items Unit Cost No Units Fence Replacement and Maintenance Current Cost When New Estimated Remaining Life Expected Life When New $2,000 ea 1 $2,000 1 Years 1 Year Calendar Year Estimated Future Cost 2029 $2, $2, $2, $2, $2, $2, $2, $2, $2, $3, $3, $3, $3, $3, $3, $3, $3, $3, $3, $3,716 Shared Driveway Paving 1 1/2 inch Overlay and Repair $1.25 / ft 1400 ft $1,750 Paving Oil Seal $0.15 / ft 1400 ft $210 5 Years 2023 $1, Years 25 Years 2048 $3,251 0 Years 2018 $ $ $ $272 4 Years 4 Years 2034 $ $ $ $ $406 Detention Pond Detention Pond Cleaning $2,000 ea 1 $2,000 3 Years 2021 $2,166 5 Years 5 Years 2026 $2,394 Monday, February 5, 2018 Page 14 of 28 Pages

15 Foxwood Meadows HOA 2018 Financial Update Reserve Study Expense Item Listing - Continued Reserve Items Unit Cost No Units Detention Pond Cleaning Fence Wood 6ft Natural State PCC Retaining Wall Fencing Chain Link 6 ft Paving 1 1/2 inch Overlay Current Cost When New Estimated Remaining Life Expected Life When New $2,000 ea 1 $2,000 5 Years 5 Years $25.00 / lf 600 lf $15,000 $10.00 / ft 780 ft $7,800 $20.00 / lf 390 lf $7,800 $1.25 / ft 250 ft $313 Oil Seal $0.15 / ft 250 ft $38 Calendar Year Estimated Future Cost 2031 $2, $2, $3, $3, $3, Years 2028 $18, Years 20 Years 2048 $27, Years 2038 $11, Years 40 Years 2078 $26, Years 2038 $11, Years 40 Years 2078 $26, Years 2036 $ Years 25 Years 2061 $753 0 Years 4 Years 4 Years 2018 $ $ $ $ $ $ $ $ $73 BBQ Area Capital Improvement 2018 PCC Slab $6.00 / ft 200 ft $1, Years 30 Years 2048 $2,230 Bench Metal $1,000 ea 1 $1, Years 30 Years 2048 $1,858 Picnic Tables Metal $1,500 ea 1 $1, Years 30 Years 2048 $2,787 BBQ Metal $500 ea 1 $ Years 15 Years Months Remaining in Calendar Year 2018: 12 Expected annual inflation: 2.00% Interest earned on reserve funds: 0.08% Initial Reserve: $47, $ $929 Monday, February 5, 2018 Page 15 of 28 Pages

16 Present Cost Report Category Item Name No Units Unit Cost Present Cost Common Area Net Present Value Depreciation Signage 1 $2, ea $2, $1, $ Signage Trellis Natural State 1 $ ea $ $ $ Mail Boxes 3 $ ea $1, $ $1, Sprinkler Timing Station 3 $ ea $ $ $ Sprinkler Control Box 3 $ ea $ $75.00 $ Landscaping Allowance 1 $1, ea $1, $0.00 $1, NGPE Allowance 1 $2, ea $2, $0.00 $2, Fence Replacement and Maintenance 1 $2, ea $2, $0.00 $2, Common Area Sub Total = $10, $2, $8, Shared Driveway Paving 1 1/2 inch Overlay and Repair 1400 ft $1.25 / ft $1, $ $1, Paving Oil Seal 1400 ft $0.15 / ft $ $0.00 $ Shared Driveway Sub Total = $1, $ $1, Detention Pond Detention Pond Cleaning 1 $2, ea $2, $1, $ Fence Wood 6ft Natural State 600 lf $25.00 / lf $15, $7, $7, PCC Retaining Wall 780 ft $10.00 / ft $7, $3, $3, Fencing Chain Link 6 ft 390 lf $20.00 / lf $7, $3, $3, Paving 1 1/2 inch Overlay 250 ft $1.25 / ft $ $ $87.50 Oil Seal 250 ft $0.15 / ft $37.50 $0.00 $37.50 Detention Pond Sub Total = $32, $16, $16, BBQ Area Capital Improvement 2018 PCC Slab 200 ft $6.00 / ft $1, $1, $0.00 Bench Metal 1 $1, ea $1, $1, $0.00 Picnic Tables Metal 1 $1, ea $1, $1, $0.00 BBQ Metal 1 $ ea $ $ $0.00 BBQ Area Capital Improvement 2018 Sub Total = $4, $4, $0.00 Totals = $49, $23, $25, Monday, February 5, 2018 Page 16 of 28 Pages

17 Foxwood Meadows HOA 2018 Financial Update Funding Study - Depreciation by Item and by Calendar Year Item Description Common Area Signage $658 $739 $822 $909 $998 $1,091 $1,187 $1,287 $1,390 $1,497 $1,608 $1,722 Signage Trellis Natural State $412 $440 $470 $500 $531 $564 $23 $47 $72 $98 $125 $153 Mail Boxes $1,166 $1,264 $1,365 $1,470 $1,579 $1,691 $86 $176 $269 $366 $467 $572 Sprinkler Timing Station $626 $710 $796 $81 $166 $254 $345 $440 $539 $641 $748 $858 Sprinkler Control Box $313 $355 $398 $41 $83 $127 $173 $220 $269 $321 $374 $429 Landscaping Allowance $1,020 $520 $1,062 $542 $1,105 $564 $1,150 $587 $1,197 $611 $1,246 $635 NGPE Allowance $2,040 $2,082 $2,124 $2,166 $2,210 $2,255 $2,300 $2,347 $2,394 $2,442 $2,492 $2,542 Fence Replacement and Maintenance $2,040 $2,082 $2,124 $2,166 $2,210 $2,255 $2,300 $2,347 $2,394 $2,442 $2,492 $2,542 Common Area Depreciation Subtotal : $8,275 $8,192 $9,161 $7,875 $8,882 $8,801 $7,564 $7,451 $8,524 $8,418 $9,552 $9,453 Shared Driveway Paving 1 1/2 inch Overlay and Repair $1,442 $1,541 $1,644 $1,750 $1,860 $1,973 $81 $164 $251 $342 $436 $534 Paving Oil Seal $214 $55 $111 $171 $232 $59 $121 $185 $251 $64 $131 $200 Shared Driveway Depreciation Subtotal : $1,656 $1,596 $1,755 $1,921 $2,092 $2,032 $202 $349 $502 $406 $567 $734 Detention Pond Detention Pond Cleaning $1,020 $1,388 $1,770 $2,166 $442 $902 $1,380 $1,877 $2,394 $488 $997 $1,525 Fence Wood 6ft Natural State $8,016 $8,921 $9,859 $10,832 $11,840 $12,884 $13,966 $15,086 $16,246 $17,446 $18,688 $953 PCC Retaining Wall $4,076 $4,356 $4,646 $4,946 $5,256 $5,576 $5,908 $6,250 $6,604 $6,970 $7,347 $7,738 Fencing Chain Link 6 ft $4,076 $4,356 $4,646 $4,946 $5,256 $5,576 $5,908 $6,250 $6,604 $6,970 $7,347 $7,738 Paving 1 1/2 inch Overlay $98 $113 $128 $143 $159 $176 $194 $212 $230 $250 $270 $290 Oil Seal $38 $10 $20 $30 $41 $11 $22 $33 $45 $11 $23 $36 Detention Pond Depreciation Subtotal : $17,324 $19,144 $21,069 $23,063 $22,994 $25,125 $27,378 $29,708 $32,123 $32,135 $34,672 $18,280 Monday, February 5, 2018 Page 17 of 28 Pages

18 Foxwood Meadows HOA 2018 Financial Update - Depreciation Report by Calendar Year - Continued Item Description BBQ Area Capital Improvement 2018 PCC Slab $39 $81 $123 $168 $214 $262 $312 $363 $417 $473 $530 $590 Bench Metal $33 $67 $103 $140 $178 $218 $260 $303 $348 $394 $442 $492 Picnic Tables Metal $49 $101 $154 $210 $267 $327 $390 $454 $521 $591 $663 $738 BBQ Metal $32 $65 $100 $135 $173 $211 $252 $293 $337 $382 $428 $477 BBQ Area Capital Improvement 2018 Depreciation Subtotal : $153 $314 $480 $653 $832 $1,018 $1,214 $1,413 $1,623 $1,840 $2,063 $2,297 Total Depreciation : $27,410 $29,243 $32,464 $33,512 $34,801 $36,976 $36,355 $38,921 $42,773 $42,798 $46,853 $30,763 Monday, February 5, 2018 Page 18 of 28 Pages

19 Foxwood Meadows HOA 2018 Financial Update - Depreciation Report by Calendar Year - Continued Item Description Common Area Signage $1,840 $1,963 $2,090 $2,221 $2,356 $2,496 $2,641 $2,790 $2,945 $3,104 $106 $215 Signage Trellis Natural State $182 $212 $243 $275 $309 $344 $380 $418 $456 $497 $538 $582 Mail Boxes $681 $794 $911 $1,033 $1,159 $1,290 $1,425 $1,566 $1,712 $1,863 $2,019 $2,181 Sprinkler Timing Station $972 $99 $202 $310 $421 $537 $658 $783 $913 $1,048 $1,188 $121 Sprinkler Control Box $486 $50 $101 $155 $211 $269 $329 $391 $456 $524 $594 $61 Landscaping Allowance $1,297 $661 $1,350 $688 $1,405 $716 $1,462 $746 $1,521 $776 $1,583 $808 NGPE Allowance $2,593 $2,646 $2,699 $2,754 $2,809 $2,866 $2,924 $2,983 $3,043 $3,104 $3,167 $3,231 Fence Replacement and Maintenance $2,593 $2,646 $2,699 $2,754 $2,809 $2,866 $2,924 $2,983 $3,043 $3,104 $3,167 $3,231 Common Area Depreciation Subtotal : $10,644 $9,071 $10,295 $10,190 $11,479 $11,384 $12,743 $12,660 $14,089 $14,020 $12,362 $10,430 Shared Driveway Paving 1 1/2 inch Overlay and Repair $635 $741 $850 $964 $1,082 $1,204 $1,330 $1,462 $1,598 $1,738 $1,884 $2,035 Paving Oil Seal $272 $69 $142 $217 $295 $75 $153 $235 $320 $81 $166 $254 Shared Driveway Depreciation Subtotal : $907 $810 $992 $1,181 $1,377 $1,279 $1,483 $1,697 $1,918 $1,819 $2,050 $2,289 Detention Pond Detention Pond Cleaning $2,075 $2,646 $540 $1,101 $1,685 $2,293 $2,924 $597 $1,217 $1,863 $2,534 $3,231 Fence Wood 6ft Natural State $1,945 $2,976 $4,049 $5,163 $6,320 $7,523 $8,771 $10,066 $11,411 $12,805 $14,251 $15,750 PCC Retaining Wall $8,140 $8,556 $8,986 $9,429 $9,887 $10,359 $10,846 $11,349 $11,867 $303 $618 $945 Fencing Chain Link 6 ft $8,140 $8,556 $8,986 $9,429 $9,887 $10,359 $10,846 $11,349 $11,867 $303 $618 $945 Paving 1 1/2 inch Overlay $312 $334 $357 $381 $405 $431 $457 $19 $38 $58 $79 $101 Oil Seal $49 $12 $25 $39 $53 $13 $27 $42 $57 $15 $30 $45 Detention Pond Depreciation Subtotal : $20,661 $23,080 $22,943 $25,542 $28,237 $30,978 $33,871 $33,422 $36,457 $15,347 $18,130 $21,017 Monday, February 5, 2018 Page 19 of 28 Pages

20 Foxwood Meadows HOA 2018 Financial Update - Depreciation Report by Calendar Year - Continued Item Description BBQ Area Capital Improvement 2018 PCC Slab $653 $717 $784 $853 $924 $998 $1,075 $1,155 $1,237 $1,322 $1,410 $1,501 Bench Metal $544 $597 $653 $711 $770 $832 $896 $962 $1,031 $1,102 $1,175 $1,251 Picnic Tables Metal $816 $896 $979 $1,066 $1,155 $1,248 $1,344 $1,443 $1,546 $1,652 $1,762 $1,876 BBQ Metal $527 $579 $633 $688 $47 $96 $146 $199 $254 $310 $369 $431 BBQ Area Capital Improvement 2018 Depreciation Subtotal : $2,540 $2,789 $3,049 $3,318 $2,896 $3,174 $3,461 $3,759 $4,068 $4,386 $4,716 $5,059 Total Depreciation : $34,752 $35,750 $37,277 $40,229 $43,989 $46,813 $51,558 $51,535 $56,530 $35,571 $37,257 $38,795 Monday, February 5, 2018 Page 20 of 28 Pages

21 Foxwood Meadows HOA 2018 Financial Update - Depreciation Report by Calendar Year - Continued Item Description Common Area Signage $330 $448 $572 $700 $833 $971 $1,115 Signage Trellis Natural State $626 $673 $720 $770 $821 $874 $929 Mail Boxes $2,348 $2,522 $129 $262 $402 $546 $697 Sprinkler Timing Station $247 $378 $515 $656 $803 $956 $1,115 Sprinkler Control Box $124 $189 $257 $328 $402 $478 $557 Landscaping Allowance $1,648 $841 $1,715 $875 $1,785 $911 $1,858 NGPE Allowance $3,296 $3,363 $3,430 $3,500 $3,570 $3,642 $3,716 Fence Replacement and Maintenance $3,296 $3,363 $3,430 $3,500 $3,570 $3,642 $3,716 Common Area Depreciation Subtotal : $11,915 $11,777 $10,768 $10,591 $12,186 $12,020 $13,703 Shared Driveway Paving 1 1/2 inch Overlay and Repair $2,192 $2,354 $2,521 $2,695 $2,874 $3,060 $3,251 Paving Oil Seal $346 $88 $180 $276 $375 $96 $195 Shared Driveway Depreciation Subtotal : $2,538 $2,442 $2,701 $2,971 $3,249 $3,156 $3,446 Detention Pond Detention Pond Cleaning $659 $1,345 $2,058 $2,800 $3,570 $728 $1,486 Fence Wood 6ft Natural State $17,304 $18,915 $20,583 $22,311 $24,100 $25,952 $27,870 PCC Retaining Wall $1,285 $1,639 $2,007 $2,389 $2,785 $3,196 $3,623 Fencing Chain Link 6 ft $1,285 $1,639 $2,007 $2,389 $2,785 $3,196 $3,623 Paving 1 1/2 inch Overlay $124 $147 $172 $197 $223 $250 $279 Oil Seal $62 $16 $32 $49 $67 $17 $35 Detention Pond Depreciation Subtotal : $20,719 $23,701 $26,859 $30,135 $33,530 $33,339 $36,916 Monday, February 5, 2018 Page 21 of 28 Pages

22 Foxwood Meadows HOA 2018 Financial Update - Depreciation Report by Calendar Year - Continued Item Description BBQ Area Capital Improvement 2018 PCC Slab $1,595 $1,692 $1,793 $1,897 $2,004 $2,115 $2,230 Bench Metal $1,329 $1,410 $1,494 $1,581 $1,670 $1,762 $1,858 Picnic Tables Metal $1,994 $2,115 $2,241 $2,371 $2,505 $2,644 $2,787 BBQ Metal $494 $560 $629 $700 $774 $850 $929 BBQ Area Capital Improvement 2018 Depreciation Subtotal : $5,412 $5,777 $6,157 $6,549 $6,953 $7,371 $7,804 Total Depreciation : $40,585 $43,697 $46,485 $50,243 $55,918 $55,888 $61,868 Monday, February 5, 2018 Page 22 of 28 Pages

23 Foxwood Meadows HOA 2018 Financial Update Funding Study Cash Flow Analysis Calendar Year Annual Assessment Annual Interest Annual Expenses Annual Income Tax Net Reserve Funds % Funded Fully Funded Balance 2018 $2,526 $39 $5,353 $12 $44, % $27, $2,526 $37 $4,163 $11 $43, % $29, $2,526 $35 $6,503 $11 $39, % $32, $2,526 $32 $6,499 $10 $35, % $33, $4,069 $30 $5,799 $9 $33, % $34, $4,069 $28 $8,737 $8 $28, % $36, $4,069 $25 $5,751 $7 $27, % $36, $8,116 $25 $4,693 $7 $30, % $38, $8,116 $27 $8,676 $8 $30, % $42, $8,116 $27 $4,885 $8 $33, % $42, $9,858 $30 $24,917 $9 $18, % $46, $9,858 $18 $5,084 $5 $23, % $30, $9,858 $22 $8,263 $7 $24, % $34, $10,188 $23 $7,937 $7 $26, % $35, $10,188 $25 $6,748 $8 $30, % $37, $10,188 $28 $6,195 $8 $34, % $40, $10,601 $31 $7,370 $9 $37, % $43, $10,601 $34 $5,732 $10 $42, % $46, $10,601 $38 $10,690 $11 $42, % $51, $11,136 $38 $5,965 $11 $47, % $51, $11,136 $42 $31,718 $13 $27, % $56, $11,136 $26 $9,313 $8 $28, % $35, $11,773 $28 $9,699 $8 $31, % $37, $11,773 $29 $9,693 $9 $33, % $38, $11,773 $31 $8,648 $9 $36, % $40, $12,336 $34 $9,247 $10 $39, % $43, $12,336 $36 $8,576 $11 $43, % $46, $12,336 $39 $6,999 $12 $48, % $50, $12,883 $44 $12,938 $13 $48, % $55, $12,883 $44 $7,285 $13 $54, % $55, $12,883 $48 $49,143 $14 $17, % $61,868 Totals : $282,984 $994 $313,220 $298 ¹ Cash Reserves minus Fully Funded Value The cash distribution shown in this table applies to repair and replacement cash reserves only. Basis of Funding Study Cash reserves have been set to a minimum of $0 Months Remaining in Calendar Year 2018: 12 Inflation = 2.00 % Interest = 0.08 % Study Life = 30 years Initial Reserve Funds = $47, Final Reserve Value = $17, Annual Payments Held Constant for 3 years Monday, February 5, 2018 Page 23 of 28 Pages

24 Calendar Year Prepared by Resource 1 BC Foxwood Meadows HOA 2018 Financial Update Reserve Assessment Summary Projected Assessment by Month and by Calendar Year Member Monthly Reserve Assessment Member Total Monthly Assessment Member Total Annual Assessment Monthly Reserve Assessment Annual Reserve Assessment 2018 $5.13 $5.13 $61.61 $210 $2, $5.13 $5.13 $61.61 $210 $2, $5.13 $5.13 $61.61 $210 $2, $5.13 $5.13 $61.61 $210 $2, $8.27 $8.27 $99.24 $339 $4, $8.27 $8.27 $99.24 $339 $4, $8.27 $8.27 $99.24 $339 $4, $16.50 $16.50 $ $676 $8, $16.50 $16.50 $ $676 $8, $16.50 $16.50 $ $676 $8, $20.04 $20.04 $ $821 $9, $20.04 $20.04 $ $821 $9, $20.04 $20.04 $ $821 $9, $20.71 $20.71 $ $849 $10, $20.71 $20.71 $ $849 $10, $20.71 $20.71 $ $849 $10, $21.55 $21.55 $ $883 $10, $21.55 $21.55 $ $883 $10, $21.55 $21.55 $ $883 $10, $22.63 $22.63 $ $928 $11, $22.63 $22.63 $ $928 $11, $22.63 $22.63 $ $928 $11, $23.93 $23.93 $ $981 $11, $23.93 $23.93 $ $981 $11, $23.93 $23.93 $ $981 $11, $25.07 $25.07 $ $1,028 $12, $25.07 $25.07 $ $1,028 $12, $25.07 $25.07 $ $1,028 $12, $26.19 $26.19 $ $1,074 $12, $26.19 $26.19 $ $1,074 $12, $26.19 $26.19 $ $1,074 $12,883 In the context of the Reserve Payment Summary, the ''Annual Reserve Payment'' corresponds with the ''Annual Revenue'' in the Cash Flow report. Operations Payments Include an annual inflation factor of 2.00% Number of Payment Months in Calendar Year 2018: 12 Number of Years of Constant Payments: 3 No of Assessed Members: 41 Monday, February 5, 2018 Page 24 of 28 Pages

25 Foxwood Meadows HOA 2018 Financial Update Funding Study - Expenses by Item and by Calendar Year Item Description Reserve Category : Common Area Signage $3,104 Signage Trellis Natural State $564 Mail Boxes $1,691 Sprinkler Timing Station $796 $972 Sprinkler Control Box $398 $486 Landscaping Allowance $1,020 $1,062 $1,105 $1,150 $1,197 $1,246 $1,297 $1,350 $1,405 $1,462 $1,521 NGPE Allowance $2,040 $2,082 $2,124 $2,166 $2,210 $2,255 $2,300 $2,347 $2,394 $2,442 $2,492 $2,542 $2,593 $2,646 $2,699 $2,754 $2,809 $2,866 $2,924 $2,983 $3,043 $3,104 Fence Replacement and Maintenance $2,040 $2,082 $2,124 $2,166 $2,210 $2,255 $2,300 $2,347 $2,394 $2,442 $2,492 $2,542 $2,593 $2,646 $2,699 $2,754 $2,809 $2,866 $2,924 $2,983 $3,043 $3,104 Category Subtotal : $5,100 $4,164 $6,504 $4,332 $5,525 $6,765 $5,750 $4,694 $5,985 $4,884 $6,230 $5,084 $7,941 $5,292 $6,748 $5,508 $7,023 $5,732 $7,310 $5,966 $7,607 $9,312 Reserve Category : Shared Driveway Paving 1 1/2 inch Overlay and Repair $1,973 Paving Oil Seal $214 $232 $251 $272 $295 $320 Category Subtotal : $214 $232 $1,973 $251 $272 $295 $320 Reserve Category : Detention Pond Detention Pond Cleaning $2,166 $2,394 $2,646 $2,924 Fence Wood 6ft Natural State $18,688 PCC Retaining Wall $11,867 Fencing Chain Link 6 ft $11,867 Paving 1 1/2 inch Overlay $457 Oil Seal $38 $41 $45 $49 $53 $57 Category Subtotal : $38 $2,166 $41 $2,439 $18,688 $49 $2,646 $53 $3,381 $23,791 Reserve Category : BBQ Area Capital Improvement 2018 PCC Slab Bench Metal Picnic Tables Metal BBQ Metal $688 Category Subtotal : $688 Expense Totals : $5,353 $4,163 $6,503 $6,499 $5,799 $8,737 $5,751 $4,693 $8,676 $4,885 $24,917 $5,084 $8,263 $7,937 $6,748 $6,195 $7,370 $5,732 $10,690 $5,965 $31,718 $9,313 Payments made with Initial Reserves Monday, February 5, 2018 Page 25 of 28 Pages

26 Foxwood Meadows HOA 2018 Financial Update Funding Study Expenses by Calendar Year - Continued Item Description Reserve Category : Common Area Signage Signage Trellis Natural State $929 Mail Boxes $2,522 Sprinkler Timing Station $1,188 Sprinkler Control Box $594 Landscaping Allowance $1,583 $1,648 $1,715 $1,785 $1,858 NGPE Allowance $3,167 $3,231 $3,296 $3,363 $3,430 $3,500 $3,570 $3,642 $3,716 Fence Replacement and Maintenance $3,167 $3,231 $3,296 $3,363 $3,430 $3,500 $3,570 $3,642 $3,716 Category Subtotal : $9,699 $6,462 $8,240 $9,248 $8,575 $7,000 $8,925 $7,284 $10,219 Reserve Category : Shared Driveway Paving 1 1/2 inch Overlay and Repair $3,251 Paving Oil Seal $346 $375 Category Subtotal : $346 $375 $3,251 Reserve Category : Detention Pond Detention Pond Cleaning $3,231 $3,570 Fence Wood 6ft Natural State $27,870 PCC Retaining Wall Fencing Chain Link 6 ft Paving 1 1/2 inch Overlay Oil Seal $62 $67 Category Subtotal : $3,231 $62 $3,637 $27,870 Reserve Category : BBQ Area Capital Improvement 2018 PCC Slab $2,230 Bench Metal $1,858 Picnic Tables Metal $2,787 BBQ Metal $929 Category Subtotal : $7,804 Expense Totals : $9,699 $9,693 $8,648 $9,247 $8,576 $6,999 $12,938 $7,285 $49,143 Payments made with Initial Reserves Monday, February 5, 2018 Page 26 of 28 Pages

27 50 Freeport Blvd., Suite 20 Sparks, Nevada Voice: Cell: February 5, 2018 Year Category Item Name Expense Landscaping Allowance $1, Common Area NGPE Allowance $2,040 Fence Replacement and Maintenance $2,040 Common Area Subtotal = $5, Shared Driveway Paving Oil Seal $214 Detention Pond Oil Seal $ Annual Expense Total = $5, Common Area NGPE Allowance $2,082 Fence Replacement and Maintenance $2,082 Common Area Subtotal = $4, Annual Expense Total = $4, Common Area Sprinkler Timing Station $796 Sprinkler Control Box $398 Landscaping Allowance $1,062 NGPE Allowance $2,124 Fence Replacement and Maintenance $2,124 Common Area Subtotal = $6, Annual Expense Total = $6, Common Area NGPE Allowance $2,166 Fence Replacement and Maintenance $2,166 Common Area Subtotal = $4, Detention Pond Detention Pond Cleaning $2, Annual Expense Total = $6,498 Landscaping Allowance $1, Common Area NGPE Allowance $2,210 Fence Replacement and Maintenance $2,210 Common Area Subtotal = $5, Shared Driveway Paving Oil Seal $232 Monday, February 5, 2018 Page 27 of 28 Pages

28 Year Category Item Name Expense 2022 Detention Pond Oil Seal $ Annual Expense Total = $5,798 Signage Trellis Natural State $ Common Area Mail Boxes $1,691 NGPE Allowance $2,255 Fence Replacement and Maintenance $2,255 Common Area Subtotal = $6, Shared Driveway Paving 1 1/2 inch Overlay and Repair $1, Annual Expense Total = $8,738 Monday, February 5, 2018 Page 28 of 28 Pages