Comprehensive Reserve Fund Study and Building Condition Assessment for Wellington Standard Condominium Corporation No. 149

Transcription

1 Comprehensive Reserve Fund Study and Building Condition Assessment for Wellington Standard Condominium Corporation No Gartshore Street Fergus, Ontario Report Prepared for the Board of Directors of Wellington Standard Condominium Corporation No. 149 January 29, 2010 Ref. Gartshore820.rfs/r

2 Site Address, City Page 2 January 29, 2010 Ref. Gartshore820.rfs/r Wellington Standard Condominium Corporation No Gartshore Street, Unit 6 P.O. Box 159 Fergus, ON N1M 2W8 Attention: Mr. Albert Dayeh sales@sterlingpromotions.ca Re: Wellington Standard Condominium Corporation No Gartshore Street, Fergus Building Inspection and Comprehensive Reserve Fund Study Please find enclosed our draft summary Building Condition Assessment and Comprehensive Reserve Fund Study report. This report was prepared at the request of Mr. Albert Dayeh acting on behalf of Wellington Standard Condominium Corporation No. 149 in accordance with our related proposal dated August 12 th This report contains our recommendations based on our review of existing conditions and our understanding of the building standards you wish to maintain. Please note that this is a draft report. We encourage both yours and the Board of Directors input in the finalization of this Study to better ensure it meets your requirements. General Building Description: Wellington Standard Condominium Corporation No. 149 is a commercial condominium complex located at 820 Gartshore Street in Fergus, Ontario. It includes 26 units. We understand the complex was constructed in We understand from our review of the Ownership and Repair & Maintenance sections of the Corporation s declaration the building components that are to be maintained by the Corporation as part of this Study are summarized as follows and detailed in the Repair/Replacement Information for Building Component Inventory section of this report. This interpretation should be verified by the Corporation s solicitor. We have also generally accounted for the HST to come into effect in 2010.

3 820 Gartshore Street, Fergus Page 3 Common Elements Included in Study Exterior building elements including roofs and walls. Site finishes consisting of asphalt pavement, landscaping, etc. Common mechanical equipment including sanitary systems, etc. Common electrical equipment including power distribution systems, lighting, etc. The following components are understood to be the responsibility of the individual unit owners and are excluded from the Study. Elements Excluded from Study Exterior building elements including awnings, windows and doors. Interior mechanical equipment servicing one unit only. Interior electrical equipment servicing one unit only. Interior finishes servicing one unit only. Relevant sections of the Corporation s Declaration should be consulted for further information as considered necessary. Financial Parameters: Our cash flow analysis associated with the above replacement costs and timing recommendations is based on the following assumed financial values (Please refer to the attached Reserve Fund Study Concepts for related definitions): No. of Units: 26 Opening Balance (as of September 21, 2009): $2, Present Annual Reserve Contribution: $2,625 Present Average Reserve Contribution/unit/month: $ 8.41 Minimum Desired Reserve Fund Balance: $25,000 Present Reserve to Operating Ratio: 10% Total Operating Budget (Excluding Reserve): $26,244 Present Maintenance Fee/unit/month: $ Long Term Interest Rate: 4.50% Short Term Interest Rate: 2.50% Inflation Rate: 1.50% Post Catch-up Reserve Contribution % Increase: 1.50%

4 820 Gartshore Street, Fergus Page 4 Financial Analyses: We have presented the following funding scenarios, which are meant to illustrate the benefits and drawbacks of various strategies involving extremes in parameter selections. The final plan may be a combination of these approaches. Run 1 Special Assessment to Keep Contributions at Current Level This analysis calculates that if contributions are to be maintained at the current level, a special assessment as detailed below is required to cover future expenditures. Special Assessment 2009/10 Contribution: $2,625 Special Assessment: $435,583 Special Assessment per unit: $16, Subsequent % Increase: 1.50% (to match Inflation) This will keep contribution levels from rising, but does require a significant one-time contribution. Run 2 Immediate Contribution Catch-up ; Subsequent Match Inflation Based on these assumptions, our analysis has calculated that the 2010/11 Reserve Contribution detailed below is required to accommodate future anticipated expenditures, provided this amount is increased to match inflation and interest is reinvested. Immediate Contribution Catch-up 2010/11 Contribution: $19,613 % of Operating Budget: 75% Average Contribution/month/unit: $ Average Contribution Increase: $ Initial % Reserve Increase: 647.4% Subsequent % Reserve Increase: 1.50%(to match Inflation) Initial Maintenance Fee % Increase: 74.7% This is a significant increase from your current contribution level, however in our experience; it is in line with other similar Corporations. It should be noted that the reserve fund falls below the minimum balance in 2010/11 by approximately $14,000. Contribution requirements drop after the first Critical Year.

5 820 Gartshore Street, Fergus Page 5 Run 3 Immediate Contribution Catch-up 30-Year; Subsequent Match Inflation This analysis provides sufficient funding for a 30-year study. Based on these assumptions, our analysis has calculated that the 2010/11 Reserve Contribution detailed below is required if the study is limited to 30 years. A review of the cash flow projections after this (arbitrary) 30-year period reveals very significant negative balances. We do not believe this approach meets New Condominium Act requirements and recommend against it. Immediate Contribution Catch-up 30 Year Scenario 2010/11 Contribution: $17,566 % of Operating Budget: 67% Average Contribution/month/unit: $ Average Contribution Increase: $ Initial % Reserve Increase: 569.4% Subsequent % Reserve Increase: 1.50% (to match Inflation) Initial Maintenance Fee % Increase: 66.9% Again, we do not recommend this approach. Discussion and Follow up: The above scenarios represent a significant increase from reserve fund contribution levels previously anticipated. This increase cannot be attributed to any one item but is a result of the recommended budgets and timings as a whole. The final analysis may be a combination of the above scenarios. Postponing and/or phasing in some of the work needed, particularly past the First Critical Year, will reduce the contribution level required, however the related affect on building standards should be taken into account when reaching a decision in this regard. You may also wish to defer some of the discretionary items to ease present financial requirements. In addition, we may have included some items presently covered by the Operating Budget, in which case they can be deleted from our analysis. Our analysis is based on a difference between assumed inflation and interest of 3%. In our experience this spread is representative of long-term market conditions and is not intended to reflect market conditions at any given time. An increase in this spread will result in a decrease in present contribution requirements. Conversely a decrease in this spread will result in an increase in present contribution requirements.

6 820 Gartshore Street, Fergus Page 6 Some opinions are that this spread should be 2%. While this will reduce risk associated with unknown financial issues beyond the Board s control, it may dramatically increase present contribution requirements. We recommend this spread be reviewed by the corporation s auditor to determine if it can be increased, or should be decreased, within the realms of your current investment philosophy. Please review this report and advise us if we have included any items which you may wish to continue to cover from the Operating Budget. In addition, please let us know if there are any discrepancies with respect to our assessment of the condition of any of the systems which may have been replaced since original construction or problems you are aware of. Once you have had the chance to review our draft report, we would be pleased to meet with you and the Board of Directors to review any proposed modifications (for an additional fee). After such a review, we will issue our final report. We require a minimum of two weeks notice for attendance at the meeting of the Board of Directors. For cancellation or termination of our attendance at such meeting we require 48 hours notice. Failure to provide such notice may result in additional fees being billed. We await your input from this draft. Please call us at with your comments. Thank you. Yours truly, BROWN & BEATTIE LTD. Ben Martin, B.A.Sc. Please note this report was based on a visual assessment of the accessible areas only. No intrusive or destructive testing was completed during this assessment unless otherwise mentioned. Technical specifications should be prepared for any work decided upon as a result of this report. The material in this report reflects best judgement in light of the information available and does not imply fitness for a particular purpose and should not be considered a verification of past or present regulations. Brown & Beattie Ltd. cannot be held responsible for any deficiencies that may be found within inaccessible areas by others, which have not been documented in this report. Brown & Beattie Ltd. s liability to the client in contract and in tort is limited to the amount of fees paid. Brown & Beattie Ltd. accepts no responsibility for damages, if any, suffered by any third party as a result of decisions made or actions based on this report.

7 820 Gartshore Street, Fergus Page 7 RESERVE FUND STUDY OBJECTIVES The Condominium Act and prudent financial planning require that contributions to the Reserve Fund be calculated on the basis of expected repair or replacement costs and life expectancies of the common elements. A Reserve Fund Study should, in our opinion, calculate adequate contribution levels to assist in maintaining the condominium to appropriate standards while assessing unit-owners in a fair and consistent manner. A reserve fund study is not intended to accurately predict the failure of building systems but rather is a planning tool intended to facilitate the provision of adequate funds as required to address predictable capital expenditures. While the Condominium Act has a strict set of requirements and procedures that must be met, a Reserve Fund Study is essentially a long range Capital Maintenance, Repair or Replacement exercise aimed at trying to forecast related cost schedules to facilitate a savings (reserve) plan that will accommodate these costs when they occur. RESERVE FUND STUDY CONCEPTS The following concepts and terms are referenced throughout this report. They are the basis for calculating the required contributions to the Reserve Fund. 1. Building Component This term refers to the various parts of the building under discussion and can be an item, such as a roof, or a system, such as a piping system. 2. History, Conclusion, and Recommendation Summaries This is a summary of the age, history, and our conclusion and recommendation based on this information as well as our assessment of conditions inspected. Unless indicated otherwise, building components are generally the age of the building. 3. Normal Expected Life Normal Expected Life, or Life Cycle, or Frequency is the anticipated life span of the replaced or repaired component starting from the date of the repair or replacement, or the frequency of anticipated expenditures related to a particular line item. The cycle may be different than the original service life as a result of technology changes in the materials or equipment. A cycle of over 50 years indicates that the line item will only be required once in the duration of the study or life of the building.

8 820 Gartshore Street, Fergus Page 8 4. Years Remaining This is our recommendation of how soon from the present to budget for the particular work item under discussion. This assessment is based on our experience related to apparent age and conditions and not simply the time remaining in the component s standard life. The actual life achieved or Service Life of a building component is dependent on a number of factors including existing conditions or potential functional, economic or environmental obsolescence and interim maintenance. Our recommendations assume no inherent construction deficiencies and regular maintenance. When the years figure is larger than the normal expected life (or Frequency ) figure, this usually relates to the periodic partial repair on major maintenance of a component that would likely not be replaced completely, but rather repaired as necessary. 5. Estimated Costs This is the estimated cost of major repair or replacement (and sometimes periodic maintenance) of the common elements of the Corporation based on current costs for the year in which the Study is conducted. Costs represent our opinion, generally based on our experience with similar buildings, regarding the current dollar estimates for the work described, and budget recommendations generally include allowances for GST/HST and any inspection or testing that may seem appropriate. For the purposes of this report, it has been assumed that relatively minor repairs in the order of $2,500 or less will be covered by the Operating Budget and are therefore not included in this analysis. We have included a Miscellaneous / Contingency allowance to address the New Act s requirement for a $500 lower limit. Where applicable, we have included any estimates which have already been made with respect to planned repairs or replacements. 6. Operating Budget Minor repairs and regular maintenance are assumed to be carried out under the Operating Budget and therefore are not typically included in the Reserve Fund Study. We generally assume that these include work items which would cost less than about $2,500. Caution is required to ensure that expenditures assumed under the Operating Budget are not related to progressive problems that will require general replacements or increasing expenditures with time. Compilation of expenditure records by management together with regular updates of the study will assist in monitoring and correcting for such conditions should they exist or develop over time.

9 820 Gartshore Street, Fergus Page 9 7. Opening Balance This refers to the balance in the Reserve Fund at the start of the analysis. 8. Minimum Balance The present value of the lowest planned Reserve Fund balance for the purposes of the financial analysis. An amount in excess of zero is generally recommended to provide a safety margin against unforeseen conditions such as an unanticipated reduction in life expectancy, repair costs exceeding anticipated costs due to market forces, or legislated changes by Building Authorities. 9. Critical Years Critical Years occur, by definition, when the Reserve Fund balance approaches the Minimum Balance. The First Critical Year generally governs the initial level of reserve contributions required. Subsequent Critical Years govern the contributions required beyond the First Critical Year. 10. Interest Rate We take into account an estimated annual interest earned on savings that must be re-invested into the Reserve Fund (as required by the Condominium Act, 1998) to realistically offset contribution requirements. This rate should not necessarily be the current interest rate but is meant to reflect average trends in the near future. In our experience, the spread between interest and inflation (or, perhaps, the Real Rate of Return ) affects reserve fund planning more than the specific values assumed for interest or inflation. 11. Inflation Rate The annual inflation rate is used to calculate increases in future budget estimates as required by the Condominium Act. Interest earned on money is generally historically greater than inflation. Provided interest is reinvested in the Reserve Fund, (which is required by the Condominium Act) the spread between interest and inflation serve to decrease the level of required contributions. This value calculates the estimated cost of major repair and replacement of the common elements of the Corporation at the estimated time of the repair or replacement, as disclosed in the Repair/Replacement Schedules.

10 820 Gartshore Street, Fergus Page 10 Our analysis is based on a difference between assumed inflation and interest of 3%. An increase in this spread will result in a decrease in present contribution requirements. We recommend this spread be reviewed by the corporation s auditor to determine if it can be increased within the realms of your current investment philosophy. 12. Initial Contribution Increase The percentage rate by which the Reserve Fund Contribution is increased each year prior to the First Critical Year, or within a catch-up of up to 10 years (except for condominiums registered after the passing of the New Act) as required by the Condominium Act. This can be used to avoid abrupt changes in the level of contributions by increasing annual contributions by a percentage greater than inflation to the First Critical Year, with certain long-term consequences. 13. Post-Critical (or Subsequent) Contribution Increase The percentage at which contributions are increased after the First Critical Year or catch-up period. Contribution requirements typically drop after the First Critical Year and therefore related increases need not generally exceed inflation. 14. Special Assessment A one-time Reserve Fund Contribution at the time of the Study. This alternative is usually invoked when there are dramatic shortfalls in funding and relatively urgent maintenance requirements, or as a result of previously unforeseen conditions. A Special Assessment can also be levied to lower subsequent Contribution Level requirements or maintain contributions in an under-funded plan at their current level. The Condominium Act, in our opinion, does not allow planning for Future Special Assessments. 15. Contribution Schedule This is the recommended amount of contributions to the Reserve Fund, determined on a cash flow basis, that are required to offset adequately the expected costs in each year of the expected repair or replacement of each item in the component inventory. This can be implemented, in our opinion, as the Funding Plan required by the Condominium Act, 1998.

11 820 Gartshore Street, Fergus Page 11 RESERVE FUND PLANNING STRATEGIES The Reserve Fund Study process is based on a time verses Funding exercise. It is normally desired by condominium corporations to accomplish more and better element replacements as soon as possible for their residents. However financial cash-flow and Contribution requirement increase restrictions need to be taken into account, with final Plans being in a sense a compromise between these competing factors and associated interim risk and repair costs and disruptions that should be expected. Postponing and/or phasing in some of the work needed, particularly past the First Critical Year, will reduce the contribution level required, however the related affect on building standards should be taken into account when reaching a decision in this regard. You may also wish to defer some of the discretionary items to ease present financial requirements. In addition, the Reserve Fund Study may have included some items presently covered by the Operating Budget, in which case they can be deleted from the long term analysis. These measures may facilitate a reduction in Contribution Requirements, recognizing a corresponding reduction in building standard and planning flexibilities. Should a reduction of risk and uncertainties be required or warranted, budgets and balances should be increased and timings should be decreased from those presented in the study, recognizing this will increase Contribution requirements. Increasing budgets furthermore results in increased Reserve Fund flexibilities and building standards. A Special Assessment can Catch-up a Funding Plan without subsequent contribution increases. Funding Catch-ups are usually recommended by Special Assessments or an Immediate Contribution Increase. In some cases, these can be phased-in; however, this results in Future Contributions being higher than with Special Assessments or Immediate Contribution Increases as a result of delaying the implementation of a fully funded plan and is usually therefore not advisable. In order for the analysis to be kept accurate and up to date, the Reserve Fund Study should be reviewed and updated annually in order for it to be maintained as a useful and relevant tool in the ongoing financial planning of the corporation.

12 820 Gartshore Street, Fergus Reserve Fund Study Repair / Replacement Information For Building Component Inventory November Item Building Component Inventory History, Conclusion, and Recommendation Summaries Normal Expected Life Years Remaining 2009 Estimated Cost STRUCTURE: 1.1 Buildings Significant Reserve Fund expenditures not anticipated with respect to the main interior building structure within Critical Periods. ROOFS: 2.1 Metal Roofing There is metal roofing on the building roof that is in satisfactory condition. We understand the roof is original. There are no reports of leakage $330,000 There are reports of significant ice build-up at the eaves. This is most commonly indicative of poor ventilation or deficient insulation levels, although any means which increase attic temperatures can contribute to its occurrence. 2.2 Eavestroughing There is prefinished aluminum eavestroughing and related downspouts on the building that is in generally satisfactory condition. We have budgeted for replacement as shown. (To be replaced with the metal roofing.) 2.3 Soffit/Fascia There is prefinished aluminum soffit and fascia on the building that is in generally satisfactory condition. We have budgeted for replacement as shown $14, $12, Roof Maintenance/Investigation We recommend budgeting for regular maintenance and investigation of the building roofs to prolong their life $2, Roof Maintenance/Investigation Reduction in maintenance allowance after the roofs have been replaced $2, Roof Maintenance/Investigation Reinstatement of roof maintenance allowance as roofs age $2,500 WALLS: 3.1 Caulking No caulking is currently located around exterior window and door frames. Consideration should be given to sealing the joints between the window frames and siding to avoid related leakage potentials. We have included an allowance for caulking application $5,000

13 820 Gartshore Street, Fergus Reserve Fund Study Repair / Replacement Information For Building Component Inventory November Item Building Component Inventory History, Conclusion, and Recommendation Summaries 3.2 Metal Cladding There is prefinished metal cladding on the building that is in generally satisfactory condition. Some minor dents, scratches and other related deterioration was noted. We have budgeted for replacement as shown. Normal Expected Life Years Remaining 2009 Estimated Cost $170, Painting Understood to be handled from the Operating Budget. 3.4 Awnings and Canopies Understood to be the responsibility of the individual unit owners. 3.5 Cladding Painting Allowance for painting the cladding to restore its appearance $37, Flashings No J-trim or sill flashings were present around the window frames as is typically included in cladding-window frame joint detailing. We have included an alowance for flashing installation/modifications in conjunction with calking work. WINDOWS AND DOORS: $5, Exterior Doors Understood to be the responsibility of the individual unit owners. Repairs and maintenance of the Electrical room door are understood to be handled from the Operating Budget. 4.2 Windows Understood to be the responsibility of the individual unit owners. It should be noted that the windows are installed on the cold side of the wall and that significant condensation was observed at some windows. 4.3 Sealed Unit Replacement Understood to be the responsibility of the individual unit owners. 4.4 Weather-stripping Understood to be the responsibility of the individual unit owners. 4.5 Overhead Doors Understood to be the responsibility of the individual unit owners.

14 820 Gartshore Street, Fergus Reserve Fund Study Repair / Replacement Information For Building Component Inventory November Item Building Component Inventory SITE SERVICES: History, Conclusion, and Recommendation Summaries Normal Expected Life Years Remaining 2009 Estimated Cost Roadway Replacement The asphalt pavement is in generally satisfactory condition. Localized patches and cracks, some of which have been sealed are present. We have budgeted for removal and replacement as shown $175,000 We would further note that current world-wide volatility in the cost of crude oil further increases the difficulty of predicting future replacement costs based on past experience. The costs within this report are based on our understanding of material costs at the time this study was completed Interim Asphalt Pavement Repairs We have included an interim allowance for repairs or application of sealers to asphalt pavement to prolong their serviceable lives. 5 5 $2, Concrete Curbs & Catch Basins Localized replacement has been included with asphalt paving above and need not be budgeted for separately. 5.3 Concrete Sidewalks Allowance for localized replacement of the concrete sidewalks $1, Landscaping Understood to be handled from the Operating Budget. 5.5 Chain-Link Fence Understood to be the responsibility of the neibouring property. MECHANICAL SYSTEMS: 6.1 Heating Systems Understood to be the responsibility of the individual unit owners. 6.2 Air Conditioners Understood to be the responsibility of the individual unit owners. 6.3 Domestic Hot Water Heaters Understood to be the responsibility of the individual unit owners. 6.4 Sanitary Drainage Allowance for repairs to the sanitary drainage piping after 30 years of life. Similar allowances should be made every 10 years thereafter. Reserve Fund allowances should be adjusted as the building ages based on maintenance performed and internal inspection $10,000

15 820 Gartshore Street, Fergus Reserve Fund Study Repair / Replacement Information For Building Component Inventory November Item Building Component Inventory History, Conclusion, and Recommendation Summaries 6.5 Domestic Water Supply Allowance for repairs to water main breaks after 25 years of life. Similar allowances should be made every 5 years thereafter. Reserve Fund allowances should be adjusted as the building ages based on maintenance performed. Normal Expected Life Years Remaining 2009 Estimated Cost 5 25 $5, Fire Hydrants Rebuilding of shut-off valves is assumed to be handled from the Operating Budget. ELECTRICAL SYSTEMS: 7.1 Electrical System Allowance Allowance for localized repairs to common wiring after 30 years of life. Similar allowances should be made every 10 years thereafter. Reserve Fund allowances should be adjusted as the building ages based on maintenance performed $5, Exterior Light Fixtures Understood to be handled from the Operating Budget. 7.3 Cable TV and Telephone Systems Understood to be the responsibility of the separate utilities. 7.4 Electrical Contingency Allowance for repairs to switch gear and panels $10,000 MISCELLANEOUS: 8.1 Contingency/Miscellaneous We recommend budgeting a contingency for items not specifically mentioned in this study. 2 1 $1, Reserve Fund Study Updates (Site Inspection) Allowance for periodic Reserve Fund Study Updates based on site inspections, as required by the New Condominium Act. 6 1 $2, Reserve Fund Study Updates (No Site Inspection) Allowance for periodic Reserve Fund Study Updates not based on site inspections, as required by the New Condominium Act. 6 4 $1,000

16 820 Gartshore Street, Fergus 10 Year Repair / Replacement Schedule Minimum Balance: $25,000 Short Term Interest Rate: 2.50% Opening Balance: $2,186 (as of Sept.21/09) Run: 1 Long Term Interest Rate: 4.50% Assumed Inflation Rate: 1.50% Initial Contribution Increase: 1.50% Special Assessment: $435,583 Nov-09 Subsequent Contribution Increase: 1.50% Total Annual Expected Costs -$3,045 -$10,302 -$1,046 -$1,061 -$3,770 -$3,330 -$1,143 Interest Income $55 $10,935 $11,018 $20,402 $21,396 $22,314 $23,446 $24,480 $25,713 Contributions $2,625 $2,664 $2,704 $2,745 $2,786 $2,828 $2,870 $2,913 $2,957 Balance At Year Ending Sep. 21 $2,186 $437,403 $440,700 $453,376 $475,462 $495,873 $521,015 $544,002 $571,395 $598,922 Item Building Element STRUCTURE: 1.1 Buildings ROOFS: 2.1 Metal Roofing 2.2 Eavestroughing 2.3 Soffit/Fascia Roof Maintenance/Investigation Roof Maintenance/Investigation Roof Maintenance/Investigation WALLS: 3.1 Caulking $5, Metal Cladding 3.3 Painting 3.4 Awnings and Canopies 3.5 Cladding Painting 3.6 Flashings $5,151 WINDOWS AND DOORS: 4.1 Exterior Doors 4.2 Windows 4.3 Sealed Unit Replacement 4.4 Weather-stripping 4.5 Overhead Doors SITE SERVICES: Roadway Replacement Interim Asphalt Pavement Repairs $2, Concrete Curbs & Catch Basins 5.3 Concrete Sidewalks 5.4 Landscaping 5.5 Chain-Link Fence MECHANICAL SYSTEMS: 6.1 Heating Systems 6.2 Air Conditioners 6.3 Domestic Hot Water Heaters 6.4 Sanitary Drainage 6.5 Domestic Water Supply 6.6 Fire Hydrants ELECTRICAL SYSTEMS: 7.1 Electrical System Allowance 7.2 Exterior Light Fixtures 7.3 Cable TV and Telephone Systems 7.4 Electrical Contingency MISCELLANEOUS: 8.1 Contingency/Miscellaneous $1,015 $1,046 $1,077 $1,110 $1, Reserve Fund Study Updates (Site Inspection) $2,030 $2, Reserve Fund Study Updates (No Site Inspection) $1,061

17 820 Gartshore Street, Fergus Year Repair / Replacement Schedule Run: Total Annual Expected Costs -$8,704 -$1,178 -$8,967 -$3,641 -$3,079 -$4,376 -$4,441 -$48,945 -$3,268 -$3,981 -$8,755 -$1,367 -$254,618 -$1,408 -$10,721 -$15,235 -$18,409 -$1,495 -$20,482 -$1,540 Interest Income $26,951 $27,908 $29,248 $30,299 $31,640 $33,069 $34,506 $36,006 $35,574 $37,180 $38,828 $40,338 $42,251 $32,856 $34,435 $35,668 $36,757 $37,754 $39,559 $40,594 Contributions $3,001 $3,046 $3,092 $3,138 $3,186 $3,233 $3,282 $3,331 $3,381 $3,432 $3,483 $3,535 $3,589 $3,642 $3,697 $3,752 $3,809 $3,866 $3,924 $3,983 Balance At Year Ending Sep. 21 $620,171 $649,947 $673,319 $703,117 $734,863 $766,789 $800,135 $790,528 $826,214 $862,845 $896,401 $938,908 $730,129 $765,219 $792,630 $816,816 $838,972 $879,097 $902,098 $945,135 Item Building Element STRUCTURE: 1.1 Buildings ROOFS: 2.1 Metal Roofing 2.2 Eavestroughing 2.3 Soffit/Fascia Roof Maintenance/Investigation $2,901 $2,989 $3,079 $3,172 $3,268 $3,367 $3,469 $3,574 $3,682 $3, Roof Maintenance/Investigation Roof Maintenance/Investigation WALLS: 3.1 Caulking $5,978 $6, Metal Cladding 3.3 Painting 3.4 Awnings and Canopies 3.5 Cladding Painting $47, Flashings WINDOWS AND DOORS: 4.1 Exterior Doors 4.2 Windows 4.3 Sealed Unit Replacement 4.4 Weather-stripping 4.5 Overhead Doors SITE SERVICES: Roadway Replacement $242, Interim Asphalt Pavement Repairs $2,901 $3,126 $3,367 $3, Concrete Curbs & Catch Basins 5.3 Concrete Sidewalks $1,741 $2, Landscaping 5.5 Chain-Link Fence MECHANICAL SYSTEMS: 6.1 Heating Systems 6.2 Air Conditioners 6.3 Domestic Hot Water Heaters 6.4 Sanitary Drainage $14, Domestic Water Supply $7, Fire Hydrants ELECTRICAL SYSTEMS: 7.1 Electrical System Allowance $7, Exterior Light Fixtures 7.3 Cable TV and Telephone Systems 7.4 Electrical Contingency $15,172 MISCELLANEOUS: 8.1 Contingency/Miscellaneous $1,178 $1,214 $1,250 $1,288 $1,327 $1,367 $1,408 $1,451 $1,495 $1, Reserve Fund Study Updates (Site Inspection) $2,427 $2,654 $2, Reserve Fund Study Updates (No Site Inspection) $1,161 $1,269 $1,388 $1,517

18 # of Units: Special Assessment: Fiscal Year End: Min. Balance: Opening Balance: Present Contribution: 820 Gartshore Street, Fergus Reserve Fund Study Cash Flow Summary / Contribution Schedule / Funding Plan 26 Nov-09 Run: 1 $435,583 Sep. 21 Short Term (3 yr.) Interest: 2.50% Assumed Inflation: 1.50% Long Term Interest: 4.50% Initial Contribution Increase: 1.50% $25,000 Subsequent Contribution Increase: 1.50% $2,186 (as of Sept.21/09) $2,625 (avg/unit/month): $8.41 Fiscal Year Ending Sep. 21 Expected Costs Interest Contribution Schedule Balance 2009 (avg/unit/month) $2,186 (% Increase) $3,045 $55 $2,625 ($8.41) $437, $10,302 $10,935 $2,664 ($8.54) $440, % $1,046 $11,018 $2,704 ($8.67) $453, % $1,061 $20,402 $2,745 ($8.80) $475, % $3,770 $21,396 $2,786 ($8.93) $495, % 2015 $0 $22,314 $2,828 ($9.06) $521, % $3,330 $23,446 $2,870 ($9.20) $544, % 2017 $0 $24,480 $2,913 ($9.34) $571, % $1,143 $25,713 $2,957 ($9.48) $598, % $8,704 $26,951 $3,001 ($9.62) $620, % $1,178 $27,908 $3,046 ($9.76) $649, % $8,967 $29,248 $3,092 ($9.91) $673, % $3,641 $30,299 $3,138 ($10.06) $703, % $3,079 $31,640 $3,186 ($10.21) $734, % $4,376 $33,069 $3,233 ($10.36) $766, % $4,441 $34,506 $3,282 ($10.52) $800, % $48,945 $36,006 $3,331 ($10.68) $790, % $3,268 $35,574 $3,381 ($10.84) $826, % $3,981 $37,180 $3,432 ($11.00) $862, % $8,755 $38,828 $3,483 ($11.16) $896, % $1,367 $40,338 $3,535 ($11.33) $938, % $254,618 $42,251 $3,589 ($11.50) $730, % $1,408 $32,856 $3,642 ($11.67) $765, % $10,721 $34,435 $3,697 ($11.85) $792, % $15,235 $35,668 $3,752 ($12.03) $816, % $18,409 $36,757 $3,809 ($12.21) $838, % $1,495 $37,754 $3,866 ($12.39) $879, % $20,482 $39,559 $3,924 ($12.58) $902, % $1,540 $40,594 $3,983 ($12.77) $945, % $17,975 $42,531 $4,042 ($12.96) $973, % $4,760 $43,818 $4,103 ($13.15) $1,016, % $305,156 $45,760 $4,165 ($13.35) $761, % $1,634 $34,275 $4,227 ($13.55) $798, % $14,101 $35,934 $4,291 ($13.75) $824, % $14,313 $37,109 $4,355 ($13.96) $851, % $21,364 $38,331 $4,420 ($14.17) $873, % $601,967 $39,294 $4,486 ($14.38) $315, % $17,608 $14,175 $4,554 ($14.60) $316, % $1,787 $14,226 $4,622 ($14.81) $333, % $18,140 $14,993 $4,691 ($15.04) $334, % $1,841 $15,063 $4,762 ($15.26) $352, % $9,344 $15,872 $4,833 ($15.49) $364, % $5,691 $16,383 $4,906 ($15.72) $379, % $9,627 $17,085 $4,979 ($15.96) $392, % $16,611 $17,645 $5,054 ($16.20) $398, % $21,819 $17,919 $5,130 ($16.44) $399, % $354,337 $17,974 $5,207 ($16.69) $68, % $25,543 $3,072 $5,285 ($16.94) $51, % $6,222 $2,299 $5,364 ($17.19) $52, % Comments Contribution Set Increase to Match Inflation 1st Critical Year (End of Study)

19 # of Units: Special Assessment: Fiscal Year End: Min. Balance: Opening Balance: Present Contribution: 820 Gartshore Street, Fergus Reserve Fund Study Cash Flow Summary / Contribution Schedule / Funding Plan 26 Nov-09 Run: 2 $0 Sep. 21 Short Term (3 yr.) Interest: 2.50% Assumed Inflation: 1.50% Long Term Interest: 4.50% Initial Contribution Increase: % $25,000 Subsequent Contribution Increase: 1.50% $2,186 (as of Sept.21/09) $2,625 (avg/unit/month): $8.41 Fiscal Year Ending Sep. 21 Expected Costs Interest Contribution Schedule Balance 2009 (avg/unit/month) $2,186 (% Increase) $3,045 $55 $2,625 ($8.41) $1, $10,302 $46 $19,613 ($62.86) $11, % $1,046 $279 $19,907 ($63.81) $30, % $1,061 $1,364 $20,206 ($64.76) $50, % $3,770 $2,287 $20,509 ($65.73) $69, % 2015 $0 $3,143 $20,817 ($66.72) $93, % $3,330 $4,222 $21,129 ($67.72) $115, % 2017 $0 $5,212 $21,446 ($68.74) $142, % $1,143 $6,412 $21,767 ($69.77) $169, % $8,704 $7,629 $22,094 ($70.81) $190, % $1,178 $8,575 $22,425 ($71.88) $220, % $8,967 $9,917 $22,762 ($72.95) $244, % $3,641 $10,984 $23,103 ($74.05) $274, % $3,079 $12,354 $23,450 ($75.16) $307, % $4,376 $13,826 $23,802 ($76.29) $340, % $4,441 $15,323 $24,159 ($77.43) $375, % $48,945 $16,899 $24,521 ($78.59) $368, % $3,268 $16,561 $24,889 ($79.77) $406, % $3,981 $18,279 $25,262 ($80.97) $445, % $8,755 $20,059 $25,641 ($82.18) $482, % $1,367 $21,722 $26,026 ($83.42) $529, % $254,618 $23,809 $26,416 ($84.67) $324, % $1,408 $14,611 $26,812 ($85.94) $364, % $10,721 $16,412 $27,214 ($87.23) $397, % $15,235 $17,892 $27,623 ($88.53) $427, % $18,409 $19,255 $28,037 ($89.86) $456, % $1,495 $20,555 $28,458 ($91.21) $504, % $20,482 $22,693 $28,884 ($92.58) $535, % $1,540 $24,092 $29,318 ($93.97) $587, % $17,975 $26,427 $29,757 ($95.38) $625, % $4,760 $28,146 $30,204 ($96.81) $679, % $305,156 $30,558 $30,657 ($98.26) $435, % $1,634 $19,580 $31,117 ($99.73) $484, % $14,101 $21,788 $31,583 ($101.23) $523, % $14,313 $23,555 $32,057 ($102.75) $564, % $21,364 $25,414 $32,538 ($104.29) $601, % $601,967 $27,060 $33,026 ($105.85) $59, % $17,608 $2,675 $33,522 ($107.44) $78, % $1,787 $3,512 $34,024 ($109.05) $113, % $18,140 $5,120 $34,535 ($110.69) $135, % $1,841 $6,089 $35,053 ($112.35) $174, % $9,344 $7,857 $35,579 ($114.03) $208, % $5,691 $9,391 $36,112 ($115.74) $248, % $9,627 $11,183 $36,654 ($117.48) $286, % $16,611 $12,902 $37,204 ($119.24) $320, % $21,819 $14,410 $37,762 ($121.03) $350, % $354,337 $15,775 $38,328 ($122.85) $50, % $25,543 $2,265 $38,903 ($124.69) $65, % $6,222 $2,968 $39,487 ($126.56) $102, % Comments Contribution Set Contr. Increase (Sub-critical Year) Increase to Match Inflation 1st Critical Year (End of Study)

20 # of Units: Special Assessment: Fiscal Year End: Min. Balance: Opening Balance: Present Contribution: 820 Gartshore Street, Fergus Reserve Fund Study Cash Flow Summary / Contribution Schedule / Funding Plan 26 Nov-09 Run: 3 $0 Sep. 21 Short Term (3 yr.) Interest: 2.50% Assumed Inflation: 1.50% Long Term Interest: 4.50% Initial Contribution Increase: % $25,000 Subsequent Contribution Increase: 1.50% $2,186 (as of Sept.21/09) $2,625 (avg/unit/month): $8.41 Fiscal Year Ending Sep. 21 Expected Costs Interest Contribution Schedule Balance 2009 (avg/unit/month) $2,186 (% Increase) $3,045 $55 $2,625 ($8.41) $1, $10,302 $46 $17,566 ($56.30) $9, % $1,046 $228 $17,830 ($57.15) $26, % $1,061 $1,176 $11,631 ($37.28) $37, % $3,770 $1,705 $11,806 ($37.84) $47, % 2015 $0 $2,143 $11,983 ($38.41) $61, % $3,330 $2,779 $12,163 ($38.98) $73, % 2017 $0 $3,301 $12,345 ($39.57) $89, % $1,143 $4,006 $12,530 ($40.16) $104, % $8,704 $4,698 $12,718 ($40.76) $113, % $1,178 $5,090 $12,909 ($41.37) $129, % $8,967 $5,847 $13,103 ($42.00) $139, % $3,641 $6,296 $13,299 ($42.63) $155, % $3,079 $7,014 $13,499 ($43.26) $173, % $4,376 $7,799 $13,701 ($43.91) $190, % $4,441 $8,570 $13,907 ($44.57) $208, % $48,945 $9,381 $14,115 ($45.24) $183, % $3,268 $8,236 $14,327 ($45.92) $202, % $3,981 $9,104 $14,542 ($46.61) $221, % $8,755 $9,989 $14,760 ($47.31) $237, % $1,367 $10,709 $14,981 ($48.02) $262, % $254,618 $11,803 $15,206 ($48.74) $34, % $1,408 $1,561 $9,857 ($31.59) $44, % $10,721 $2,011 $10,005 ($32.07) $45, % $15,235 $2,070 $10,155 ($32.55) $42, % $18,409 $1,934 $10,308 ($33.04) $36, % $1,495 $1,657 $9,597 ($30.76) $46, % $20,482 $2,096 $9,741 ($31.22) $37, % $1,540 $1,707 $8,369 ($26.82) $46, % $17,975 $2,091 $8,495 ($27.23) $39, % $4,760 $1,758 $8,622 ($27.64) $44, % $305,156 $2,011 $8,752 ($28.05) -$249, % $1,634 -$11,236 $8,883 ($28.47) -$253, % $14,101 -$11,416 $9,016 ($28.90) -$270, % $14,313 -$12,158 $9,151 ($29.33) -$287, % $21,364 -$12,938 $9,289 ($29.77) -$312, % $601,967 -$14,063 $9,428 ($30.22) -$919, % $17,608 -$41,360 $9,569 ($30.67) -$968, % $1,787 -$43,583 $9,713 ($31.13) -$1,004, % $18,140 -$45,188 $9,859 ($31.60) -$1,057, % $1,841 -$47,594 $10,006 ($32.07) -$1,097, % $9,344 -$49,368 $10,156 ($32.55) -$1,145, % $5,691 -$51,553 $10,309 ($33.04) -$1,192, % $9,627 -$53,666 $10,463 ($33.54) -$1,245, % $16,611 -$56,043 $10,620 ($34.04) -$1,307, % $21,819 -$58,834 $10,780 ($34.55) -$1,377, % $354,337 -$61,979 $10,941 ($35.07) -$1,782, % $25,543 -$80,221 $11,106 ($35.59) -$1,877, % $6,222 -$84,480 $11,272 ($36.13) -$1,956, % Comments Contribution Set Contr. Increase (Sub-critical Year) 1st Critical Year Contribution Reduction Increase to Match Inflation 2nd Critical Year Contribution Reduction Increase to Match Inflation 3rd Critical Year Contribution Reduction 4th Critical Year Contribution Reduction 5th Critical Year (End of 30 Year Study)