RESERVE FUND STUDY REPORT

Transcription

1 RESERVE FUND STUDY REPORT Prepared for TRAILS OF MILL CREEK ESTATES CONDOMINIUM CORPORATION AVENUE, EDMONTON, ALBERTA CONDOMINIUM PLAN No August Avenue, Edmonton, AB T5M 3X

2 NOTICE TO READER All contents are protected by Copyright 1998 by Wade Engineering Ltd. and may not be reproduced without the express written permission of Wade Engineering Ltd. Cost/Life Data, Cost/Life Analysis, Present Course, and Reasonable & Sufficient, spreadsheets are Copyright and protected by law. Financial decisions based on assumptions or findings in this Report must consider the issuance date of this Report, the Scope of Work, Parameters and Variables as defined in this Report.

3 TABLE OF CONTENTS PROJECT SUMMARY... 1 FINANCIAL SUMMARY... 2 SUMMARY OF RECOMMENDATIONS... 3 INTRODUCTION... SCOPE OF WORK... PARAMETERS... 5 VARIABLES... 6 COMPONENT DESCRIPTION AND GENERAL CONDITIONS Roofing... 7 Eavestroughs And Downspouts... 9 Fascia...10 Soffit...11 Exterior Wall Cladding...12 Window Wells...1 Balconies And Decks...15 Patios...17 Exterior Unit Accessories...18 Entrance Steps...19 Walkways...20 Driveways...21 Swales...22 Asphalt Surface...23 Light Standards...2 Fencing...25 Fire Hydrants...26 Landscaping...27 Property Signage...28 ANOMALIES AND SAFETY CONCERNS OF LIFE ITEMS Attics...29 Safety Concerns And Other Anomalies...30 FINANCIAL ANALYSIS...31 QUALIFICATIONS...3 STUDY PERSONNEL...35 REFERENCE SOURCES...36 FINANCIAL SPREADSHEETS Cost Life Data...37 Cost Life Analysis...38 Present Course...39 Reasonable & Sufficient...0 Ten Year Replacement Schedule (Years 1 to 10)...1 Ten Year Replacement Schedule (Years 11 to 20)...2

4 PROJECT SUMMARY Project Name: Condominium Plan Number: Style of Buildings: Number of Units: Number of Buildings: Age of Buildings: Trails Of Mill Creek Estates Avenue, Edmonton, Alberta Townhouse Units 16 Buildings Years (Average) Wade Engineering Ltd. was commissioned to conduct a Reserve Fund Study for Trails Of Mill Creek Estates Condominium Corporation (Condominium Plan No ). This development is located on Avenue in the City of Edmonton. This development consists of units located within16 townhouse style buildings. Some units feature exclusive use decks on the rear and units with walkout basements feature exclusive use balconies and patios. Each unit has an attached garage. An asphalt driveway is located throughout the property to provide access to the units. The grounds are landscaped with grass and trees. As per Section 3 (e) of the Bylaws: "The Unit Owners shall repair, maintain and replace when necessary all windows, doors, locksets, any overhead garage doors, hardware, and garage openers located in or about the building ", therefore these components are not included in the Reserve Fund Study. The quantities and conditions of the common components were determined through site investigations conducted in June and July The component description, overall condition, conditions noted, pertinent history and specific maintenance or replacement recommendations have been summarized in chart form, beginning with the roof, and working down and out from the building. Safety Concerns and Anomalies are summarized in a similar fashion. 1

5 FINANCIAL SUMMARY Current Replacement Cost: Annual Replacement Cost: Recommended Safety Margin $2,076, $80, $81, Opening Fund Balance: Current Annual Reserve Contribution: $10, $10, Recommended Annual Contribution: $26,00.00 The expected life and replacement costs of components were estimated using technical resource literature, and information from contractors and industry professionals. Financial spreadsheets were developed, taking into account interest earned on Reserve Fund investments and inflation of replacement cost estimates. At Trails Of Mill Creek Estates Condominium Corporation, the total cost of the common property components to be replaced or restored by the Reserve Fund, in today s dollars is $2,076, The Annual Replacement Cost (or the annual rate of deterioration of these components expressed in dollars) is $80, per year. A minimum fund balance or Safety Margin is recommended to offset unpredictable expenses, such as random sewer collapses. The Safety Margin for this development has been set at $81, which is based on the Annual Replacement Cost for this development. The Reasonable & Sufficient spreadsheet recommends an Annual Contribution of $26,00.00 (approximately $50.00/unit monthly) increased annually by $5, (approximately $10.00/unit monthly) for the first 3 years and 5% thereafter. This option maintains a balance in the Reserve Fund sufficient to cover the scheduled expenses, with the closing balance falling only slightly below the Safety Margin occasionally. 2

6 SUMMARY OF RECOMMENDATIONS The most important maintenance consideration for Condominium Boards is ensuring that safety concerns are dealt with in a timely fashion. It is also important to keep water out of the interstitial components of the building and to protect components from the damaging effects of the sun and inclement weather. Recommendations are summarized below and listed in order of the report. The funds for the suggestions or recommendations that follow may not be accrued in this Study, unless specifically identified on the Cost/Life Data spreadsheet. It is incumbent on the Board to ensure that ownerinstalled objects have been properly and securely installed, and do not violate any of the current Building, Fire or Safety Codes. As well, it is the Board s responsibility to ensure that unit owners repair or replace these components in a timely fashion. Specific Recommendations: Roofing (Report Pg. 7, Spreadsheets Line 1): Remove travel restraint anchors to avoid potential liability to the Corporation. Install downspout extensions on upper downspouts to drain into lower eavestroughs. Further investigate ice damming concerns to determine cause and appropriate modifications required to manage or significantly reduce ice damming. Asphalt Surface (Report Pg. 23, Spreadsheets Line 31): Seal cracks as they occur. Landscaping (Report Pg. 27, Spreadsheets Line 0): Regrade landscaping where necessary to provide adequate drainage away from the buildings. Safety Concerns and Other Anomalies (Report Pg. 30): The bottom of some fence posts is slightly damaged from grass trimmers. Installation of metal guards can reduce deterioration of fence posts. Some step supports appear to be inadequate and should be reviewed to determine appropriate modifications. 3

7 INTRODUCTION This Reserve Fund Study Report is a comprehensive document, designed to provide an overall assessment of the common property and the Reserve Fund requirements of the Corporation. In order for a Study of this magnitude to be feasible, it is prudent to establish realistic parameters for a scope of work that will result in a product that meets the needs of the Corporation, at a reasonable cost. If the provider were expected to inspect all components of common property, the costs to the purchaser would be prohibitive. SCOPE OF WORK The Study began with a review of the condominium plan, bylaws and other pertinent documents and consultation with the Property Manager, to determine the common property components to be replaced or refurbished with monies from the Reserve Fund. These components were measured and/or counted during visits to the site (quantity survey). This data is used to calculate the current replacement cost (G.S.T. inclusive) for each component, with the same or similar product. A cursory inspection, noting the general condition of the various components, was conducted in conjunction with the quantity survey. The conditions noted, and the inspector s experience, combined with technical resource material referencing life cycles of building components, were used in forecasting the remaining functional lives of the various components. During the course of site inspections, safety concerns such as Building/Fire Code or condominium bylaw violations, and/or other anomalies if noted, are reported.

8 PARAMETERS No money is accrued in this Study for annual inspections and repairs, as they are considered to be part of ongoing operating costs. However, in the interest of achieving the maximum effective life of all components, specific maintenance recommendations may be included. Furthermore, no monies are included for the catchup of deferred maintenance. The report reflects the condition by penalizing the life of the item. Replacement costs of components expected to last the life of the development, such as: structural building components, concrete foundation, etc., are not included, since their expected lives are considered to be synonymous with that of the development. Periodic and/or random repairs or upgrades to these types of components may be necessary in the future. Attempts to predict the uncertainty of the unknown for inclusion in this report would result in unreliable cost estimates. Components located below grade, such as sewer systems and/or components concealed from view such as electrical, are not reviewed or considered within this Study. A Safety Margin, determined by the study provider, is incorporated in all funding scenarios to help offset unpredictable expenses that may arise. While the sewer system is not considered in the financial forecast in this Study, routine flushing of the system is recommended. The required frequency of flushing depends on various factors such as the location of development, the length of the system, the drainage incline and the consistency of the contents flowing through it. Consultation with an appropriate professional will help to identify a schedule for flushing the system and the associated costs. Other components specifically excluded are those considered the responsibility of the unit owner. The inspections conducted in performance of this Study are cursory and are not to be considered a technical audit. Data generated by this report is not intended for third party use. Wade Engineering Ltd. accepts no responsibility for damages, if any, suffered by a third party, as a result of actions taken, or decisions made, on the basis of this Report. Should our work in preparing this report uncover conditions that are deemed beyond this Study s scope, recommendations for further investigation will be included. Please note that any additional investigations and the related repair costs are not included in the financial forecasts of this report. 5

9 VARIABLES The estimate of life expectancies and replacement costs is not an exact science. However, every attempt is made to anticipate and compensate for the variables encountered in this Study. Market prices fluctuate as a result of supply and demand characteristics; lower prices at the beginning of the season when contractors are looking for work, higher at the end of the season when contractors are over booked. Some components will experience accelerated deterioration in the latter part of their functional life. These, and other such phenomena, can cause significant variations between the original life and cost estimates, and those actually realized. Life cycles and replacement costs have been estimated as accurately as possible. Deterioration of components occurs at different rates, therefore it is prudent to replace or repair portions of some components as they deteriorate, limiting the potential for damage to adjacent components, and/or limiting the Corporation s exposure to liability. For example: Roofs may require maintenance/repair program to realize their expected life. Not all walkways will deteriorate in the last year of their expected lives. Curbs are more susceptible to damage from external forces. In these cases, an allowance may be identified in the financial spreadsheets allocating either; a portion of the replacement costs on a short but perpetual cycle, or phased replacement of major components. Also note that deficiencies may be hidden; or they may be present but not located in areas where random inspections are conducted. It is assumed that the level of future preventive maintenance will be consistent with the standards currently employed. A more aggressive preventive maintenance program may allow various components to achieve a longer functional life, while deferral of maintenance may shorten its life. Although inflation and interest rates are difficult to predict, their impact on future pricing and potential earnings cannot be ignored. The spreadsheets for Funding Scenarios, as well as the Ten Year Replacement Plan, incorporate interest and inflation where applicable. While considerable effort has been made to present realistic projections, periodic updates of the Study are required to ensure it remains a practical approximation. 6

10 COMPONENT DESCRIPTION AND GENERAL CONDITIONS During the course of conducting this Reserve Fund Study, a cursory site inspection was carried out on a representative sample of visible common property components. ROOFING Description: 3tab shingles Current Replacement Cost: $20,363 Overall Condition: Good Expected Life: Actual Age: Effective Age: Remaining Life: Comments: Threetab shingles with selfadhered eave protection membrane are installed on the roofs of the buildings. Numerous travel restraint anchors have been installed. Permanent anchors require a 3,600 lbs. anchor point strength. It is not thought that the anchor attachment to a 2 x will meet this requirement. A Professional Engineer is required to inspect and sign off on the installation of permanent anchors. Upper eavestroughs and downspouts drain directly onto lower roof areas and can erode the granules of the shingles. There are low sloped areas on some units that show signs of ice damming and localized water entry was reported. Slightly damaged shingle tabs were noted at a these locations. Overview of roofing with ample venting and travel restraint anchors 7

11 ROOFING CONTINUED Valley detailing Upper eavestrough draining onto lower roof Low slope area with damaged shingles Specific Recommendations: Remove travel restraint anchors to avoid potential liability to the Corporation. Install downspout extensions on upper downspouts to drain into lower eavestroughs. Further investigate ice damming concerns to determine cause and appropriate modifications required to manage or significantly reduce ice damming. Good Practice Guidelines: Schedule regular maintenance to address deteriorated sealant and damaged shingles as required. Review roofing system annually by a roofing professional or tradesperson to ensure all assemblies are intact and performing adequately. Regular roof inspections for identification of minor deficiencies will allow for timely repair. 8

12 EAVESTROUGHS AND DOWNSPOUTS Current Replacement Cost: Description: Prefinished metal Overall Condition: Good Expected Life: Actual Age: Effective Age: Remaining Life: $9,88 Comments: Prefinished metal eavestroughs and downspouts are installed on the edges of the roofs to facilitate water runoff. Eavestroughs were clear of debris at the time of the site visit. Downspouts drain either into the storm sewer or onto the landscaping. Eavestrough installation Eavestrough/downspout connection Downspout draining into storm sewer Good Practice Guidelines: Eavestroughs should be fastened flush to the fascia at all times. It is recommended that eavestroughs be cleaned of debris, preferably twice a year to prevent water overflowing the trough and draining into and/or onto fascia, wall finishes, etc. 9

13 FASCIA Description: Prefinished metal Current Replacement Cost: $37,237 Overall Condition: Good Expected Life: Actual Age: Effective Age: Remaining Life: 0 36 Comments: Wood fascia is installed on the edges of the roofs and clad with prefinished metal. Prefinished metal fascia Good Practice Guidelines: Inspect annually for loose or damaged sections and repair as necessary. 10

14 SOFFIT Description: Perforated prefinished metal Current Replacement Cost: $111,712 Overall Condition: Good Expected Life: Actual Age: Effective Age: Remaining Life: 0 36 Comments: Perforated prefinished metal soffit is installed on the underside of the eaves and roof overhangs to allow for air infiltration into the attic spaces. Soffit is also installed on the underside of the building overhangs. Perforated prefinished metal soffit Good Practice Guidelines: Inspect annually for displaced or damaged sections and repair as necessary. 11

15 EXTERIOR WALL CLADDING Description: Overall Condition: Good Varies Current Replacement Cost: Expected Life: Actual Age: Effective Age: Remaining Life: Vinyl Siding $517, Concrete Wall Tile Repair $, Metal Trim $8, Sealant Repair $3, Parging Repair $3, Comments: Vinyl siding is installed on the exterior of the buildings. Metal trim around windows and doors and concrete wall tile accentuate the facades. Cementitious parging is applied on the exposed portions of foundation walls. Sealant is applied around wall penetrations. As sealant deteriorates with exposure to the elements, a repair schedule has been budgeted to address deteriorated areas as needed. The base of the walls is missing parging at some locations where landscaping has settled. Approximately 25% of the parging has been budgeted for repair every 5 years to maintain the aesthetics of the component. Front elevation Vinyl siding Concrete wall tile Parging on foundation wall 12

16 EXTERIOR WALL CLADDING CONTINUED Metal trim around various door and window Good Practice Guidelines: Refasten loose siding to prevent potential water entry. Seal larger cracks in stucco to minimize the potential for freeze/thaw action on the surface. Inspect annually and repair damaged areas to ensure no water entry. Although parging is mainly an aesthetic component it also serves to shed water to protect the concrete wall. As parging deteriorates money has been budgeted for target repairs (approximately ¼ of the total) of this component every five years. Sealant requires regular inspection, as it deteriorates with exposure to the elements and becomes ineffective. Once sealant becomes dry, brittle, and/or cracked, it should be removed, and the surface should be free of debris and contaminants before reapplication. Sealant should be applied where objects have been mounted on or through other surfaces to prevent water entry. 13

17 WINDOW WELLS Description: Corrugated steel Current Replacement Cost: Expected Life: $10,395 Overall Condition: Good Actual Age: 0 Effective Age: Remaining Life: 36 Comments: Corrugated steel window wells are installed in front of the basement windows. Window wells Good Practice Guidelines: Window wells can collect snow and water, and often contribute to dampness in basements. The base of the window wells should consist of 6 8 of freedraining material, such as crushed stone, and must be at least 6 below the bottom of the window frame. 1

18 BALCONIES AND DECKS Description: Varies Current Replacement Cost: Overall Condition: Good Expected Life: Actual Age: Effective Age: Remaining Life: Balcony and Deck Membrane $12, Balcony Stairs with Membrane $1, Balcony and Deck Fascia $, Balcony Column Cladding $9, Deck Skirt $, Deck Skirt Paint $ Deck Railings Aluminum $32, Balcony Railings Glass Panel $8, Balcony Soffit $12, Privacy Walls $26, Comments: PVC membranes are installed on the balconies and decks and appear to be sloped to shed water. The membranes are lapped up the walls. PVC membrane covered steps are located on the main floor of some units. Prefinished metal fascia is installed on the edges of all balconies and decks. Painted wooden skirts are installed on the bottom of the rear main floor decks. Powder coated aluminum railings with pickets are installed on all balconies and decks located on the perimeter of the property. Powder coated aluminum railings with glass panels are installed on the balconies on units located in the middle of the property. Prefinished metal soffit is installed on the underside of balconies. Privacy walls with frosted glass panels are located on units in the middle of the property and some lower decks. Balconies and decks on units located on perimeter of property Balconies on units located in middle of property 15

19 BALCONIES CONTINUED Lower decks assembly and privacy wall Deck assembly with PVC membrane and membrane covered steps Aluminum railings with pickets on balcony Aluminum railings with glass panels on balcony Good Practice Guidelines: Balcony membranes should be inspected annually and tears, rips, and holes should be sealed as required. Inspect soffit and fascia annually for displaced or damaged sections and repair as necessary. 16

20 PATIOS Description: Poured concrete Current Replacement Cost: $68,313 Overall Condition: Good Expected Life: Actual Age: Effective Age: Remaining Life: Comments: Poured concrete patios are installed on the main floor levels of units with walkout basements. Concrete patios Good Practice Guidelines: Do not use salt for deicing, as it can cause spalling and premature deterioration of concrete components. An application of a sealer will protect the surface from spalling and freeze / thaw damage. Do not install carpeting on patios, since carpets retain moisture and prevent the concrete from drying properly, which can cause accelerated deterioration of concrete components. 17

21 EXTERIOR UNIT ACCESSORIES Description: Varies Current Replacement Cost: Overall Condition: Good Expected Life: Actual Age: Effective Age: Remaining Life: Unit Numbers $1, Light Fixtures $2, Comments: Unit numbers are installed above the garage doors. Exterior lights are located at the entrances, decks, patios and balconies. Lights above entrances Lights at patio Unit number on garage Good Practice Guidelines: Schedule regular maintenance. Weekly walk around and inspection at night to ensure all lighting and light sensors are working properly. 18

22 ENTRANCE STEPS Description: Concrete Current Replacement Cost: Overall Condition: Good Expected Life: Actual Age: Effective Age: Remaining Life: Steps $60, Railings $5, Column Cladding $, Comments: Concrete steps are located at the main entrance of each unit. Powder coated aluminum railings are installed on some steps. Columns on the entrance steps are cladded with prefinished metal. Entrance steps Railings on steps Column cladding Good Practice Guidelines: Do not use salt for deicing, as it can cause spalling and premature deterioration of concrete components. An application of a penetrating hydrophobic sealer will protect the surface from spalling and freeze / thaw damage. 19

23 WALKWAYS Current Replacement Cost: $62,122 Description: Poured concrete Overall Condition: Good Expected Life: Actual Age: Effective Age: Remaining Life: Comments: Poured concrete walkways are located in front of the entrance to each unit. Concrete walkways Good Practice Guidelines: Do not use salt for deicing, as it can cause spalling and premature deterioration of concrete components. An application of a penetrating hydrophobic sealer will protect the surface from spalling and freeze / thaw damage. 20

24 DRIVEWAYS Current Replacement Cost: $380,583 Description: Poured concrete Overall Condition: Good Expected Life: Actual Age: Effective Age: Remaining Life: Comments: Poured concrete driveways are located in front of every unit s garage. Poured concrete driveways Good Practice Guidelines: Do not use salt for deicing, as it can cause spalling and premature deterioration of concrete components. An application of a penetrating hydrophobic sealer will protect the surface from spalling and freeze / thaw damage. 21

25 SWALES Description: Concrete Current Replacement Cost: Overall Condition: Good Expected Life: Actual Age: Effective Age: Remaining Life: Curbs $28, Drainage $3, Comments: Poured concrete swale curbing adjoins the asphalt surface and poured concrete drainage swales are located throughout the landscaping. Minor impact damage and cracking was evident on the swale curbing. Swale curb Drainage swale Good Practice Guidelines: Schedule regular maintenance. 22

26 ASPHALT SURFACE Current Replacement Cost: $75,720 Description: Asphalt Overall Condition: Good Expected Life: Actual Age: Effective Age: Remaining Life: Comments: Asphalt drive surfaces are located throughout the property. Minor cracking was evident at some locations. Asphalt surface Specific Recommendations: Seal cracks as they occur. Good Practice Guidelines: Schedule regular maintenance including localized sealing of cracks and patch repairs to realize the asphalt s expected life. 23

27 LIGHT STANDARDS Current Replacement Cost: Description: Site lighting fixtures Overall Condition: Good Expected Life: Actual Age: Effective Age: Remaining Life: Light Standards $7, Paint $1, Comments: Painted light standards are located throughout the property. Light standard Good Practice Guidelines: Schedule regular maintenance. Weekly walk around and inspection at night to ensure all lighting and light sensors are working properly. 2

28 FENCING Description: Wood, chain link Current Replacement Cost: Overall Condition: Good Expected Life: Actual Age: Effective Age: Remaining Life: Chain Link $35, Wood $1, Wood Neighbouring $11, Wood Paint $8, Pillars $15, Comments: Chain link fencing is installed on the east and south sides of the property and painted wood fencing is installed on the north and west sides of the property. It is thought that the wood fencing on the west side of the property is shared with the adjacent property; therefore, only 50% of the total has been budgeted. Stone tile cladded pillars are installed on the wood fencing on the north side. Chain link fencing Wood fencing with stone clad pillars Good Practice Guidelines: A common area of concern on all fencing is the damage that occurs to the base of the wood fence posts by mechanical grass trimmers, which can result in premature rotting of the post. A galvanized steel guard installed at the base of new posts will help to eliminate this problem. Prior to installation of guards on existing fencing, cuts in the posts should be soaked with a wood preservative. Paint wood fencing approximately every 7 years or as required to protect the wood from the elements. 25

29 FIRE HYDRANTS Current Replacement Cost: $10,500 Description: Fire hydrants Overall Condition: Good Expected Life: Actual Age: Effective Age: Remaining Life: 50 6 Comments: Painted fire hydrants are systematically located throughout the property. Fire hydrant Good Practice Guidelines: Paint fire hydrants approximately every 10 years or as required with a rust inhibitive paint. 26

30 LANDSCAPING Current Replacement Cost: $5,775 Description: Varies Overall Condition: Good Expected Life: Actual Age: Effective Age: Remaining Life: 5 1 Comments: The landscaping consists of grass, gravel beds, deciduous and coniferous trees and shrubs. Due to settlement of the landscaping the grade is slightly sloped towards the building at some locations potentially preventing proper drainage away from the building which can potentially result in water entry. Landscaping throughout property Specific Recommendations: Regrade landscaping where necessary to provide adequate drainage away from the buildings. Good Practice Guidelines: Landscaping will settle over time, and may leave the ground sloped towards the building foundations. Settling also leaves the potential for uneven walking surfaces and tripping hazards. Regrading as necessary will help limit the chances of water entry through the foundations, as well as the Corporation s exposure to liability. A regular tree pruning program would be beneficial. Proper aeration, fertilizing, weed control, cutting, and raking will maintain lawns, and they should not require wholesale replacement. Dead areas of grass should be replaced promptly. 27

31 PROPERTY SIGNAGE Description: Property signage Current Replacement Cost: Expected Life: Actual Age: Effective Age: Remaining Life: $1,050 Overall Condition: Good Comments: A sign is located at the main entrance driveway of the property. Property signage Good Practice Guidelines: Schedule regular maintenance to maintain the aesthetics of the property signs. 28

32 ANOMALIES AND SAFETY CONCERNS OF LIFE ITEMS If deficiencies in a life item are detected they will be included in the Cost/Life Data sheet as a nonreoccurring expense (i.e. structural or other components not typically planned for replacement). It should be noted that some deficiencies may not become apparent during the Reserve Fund Study site inspections since only a representative sample of components are reviewed. Not included are components considered to be the responsibility of the unit owners. Although a report on the cursory inspection of life items and anomalies follows, this should not be considered a technical audit. General comments relating to the condition of the components are included to give a better overall understanding of conditions of the property. Often these conditions may require further investigation for an accurate estimation of repair scope and funds required. No cost centres have been included in this report for these items. ATTICS Comments: At the locations inspected, the level of blowninplace insulation averaged a depth of 1. This provides a thermal insulation value of approximately R35, which meets the current minimum requirement set by the Alberta Building Code. Daylight was visible in the soffits and ventilation appeared to be adequate at the locations inspected. Level of blowninplace insulation Undisturbed distribution of insulation 29

33 SAFETY CONCERNS AND OTHER ANOMALIES Comments: The bottom of some fence posts is slightly damaged from grass trimmers. Installation of metal guards can reduce deterioration of fence posts. Some step supports appear to be inadequate and should be reviewed to determine appropriate modifications. Slightly damaged bottom of fence post Improper step support 30

34 FINANCIAL ANALYSIS The financial spreadsheets that follow summarize and link the quantity survey, conditions noted, estimated life cycles, replacement costs and future expenditures. COST/LIFE DATA" SPREADSHEET Summarizes the following key information: Common Property Component Defines the components to be replaced by the Reserve Fund. Current Replacement Cost Estimates the current replacement cost of each component. Expected Life Expresses the expected life of each component. Actual Age Expresses the actual age of each component. Effective Age The expected life of each component, adjusted to reflect the conditions noted. Remaining Life Determines the expected life of each component, less the effective age of that component. Annual Replacement Cost The Current Replacement Cost of each component, divided by its Expected Life an initial indicator of annual reserve fund contribution requirements "COST/LIFE ANALYSIS" SPREADSHEET Analyses the information from the Cost/Life Data spreadsheet and determines the following: Percent of Total Contribution Determines the percentage of each component s Current Replacement Cost in relation to the Total Replacement Cost of all components. Actual Present Fund Determines the percentage (as calculated above) of the Actual Present Fund, allocated proportionately for each component. Expired Equity Represents the value of each component, that has been used up, calculated by multiplying the Effective Age by the Annual Replacement Cost. Shortfall Calculates the difference between the Expired Equity and the Actual Present Fund. Contingency In order to compensate for the variables discussed previously, a contingent amount is included in the totals. Based on 10% of the total replacement cost spread over a 30year period, and injected annually. 31

35 FUNDING PLAN SCENARIOS The ideal Reserve Fund scenario would see adequate contributions being made from the start of the project s life. Unfortunately, this is a rare occurrence. As the age of a project advances, the catchup of underfunding becomes increasingly difficult. The first step in establishing appropriate contribution figures is consideration of the expenses for which the fund is responsible. It is not practical or reasonable to suggest condominiums maintain a level of funding sufficient to accommodate a major catastrophe. In those situations, it is anticipated the Condominium Board will levy a special assessment. However, it is prudent to maintain a reasonable minimum level of funding (safety margin), to help offset unpredictable expenses. The Study provider determines a safety margin, taking into account various factors including the age, size, and location of the project. The purpose of this Study is to determine a reasonable annual contribution figure that will generate a cash stream sufficient to cover predictable expenses (annual replacement costs), and to help offset unpredictable expenses (random sewer collapse). Various contribution figures are tested, to find the funding scenario that maintains a cash stream that flows as closely to the safety margin as possible (reasonable), without dipping below it (sufficient). Each funding scenario follows the projected flow of cash over a 25year period, starting with the base year (now), and incorporates the effects of interest and inflation. The cash flow is tracked through: Opening Balance begins with current fund balance Expenses cost of components to be replaced or refurbished for each year, with inflation compounded annually Interest calculated on the closing balances for each year, after expenses, and compounded annually Annual Contributions are treated as being contributed at the end of each year, and do not factor in interest accrued for that year; inflation is compounded annually Additional Assessments may be included in some funding plan scenarios, usually when major capital replacement or refurbishment of common property is required within the first few years. Closing Balance each year s closing balance The effects of each funding scenario are illustrated in graph form, by plotting the Closing Balance for each year, along with the Safety Margin. Two Funding scenarios are presented: Present Course Reasonable and Sufficient 32

36 PRESENT COURSE This spreadsheet predicts the flow of funds, based on the current fund balance, current contributions (inflated over time), and predicted expenses. This enables the Board to preview the longterm effects of current funding levels. Review of this funding Scenario can confirm the adequacy of fund balances and contribution levels, or reveal the need for change. REASONABLE AND SUFFICIENT This funding plan suggests the collection of an Annual Contribution approximately equal to the Annual Replacement Cost, in conjunction with the portion of Shortfall required to generate and maintain a cash flow that is: Reasonable covers predictable expenses, yet maintains a cash stream that flows as closely to the safety margin as possible Sufficient does not fall below the safety margin, required to help offset unpredictable expenses TEN YEAR REPLACEMENT SCHEDULE To assist the Board, replacement scheduling of common property components is summarized in chart form. It starts with the Base Year (now), and schedules the predicted replacement of components for a 10year period. The 10 Year Replacement Schedule is included with all scheduling scenarios. CONCLUSION The estimate of life expectancies and replacement costs is, at best, a good guess. However, the Reserve Fund Study Report allows management decisions to be made with the best long range plan available, which is far better than reacting to immediate needs or being surprised with a substantial unbudgeted expense. Review of the "cash flow" and 10year replacement schedule, will help facilitate decisions regarding the scheduling of component replacement and collection of shortfalls required to meet the financial demands of the Corporation. To maximize the effectiveness of the Reserve Fund Study Report, updates are required on an ongoing basis. 33

37 QUALIFICATIONS Wade Engineering Ltd. was established in 1986, as an independent consulting firm, specializing in preparation of specifications for and/or review of work in progress for the restoration and repair of building envelopes and exterior finishes. A combination of technical expertise and hands on experience has resulted in an extensive understanding of the repair and replacement procedures for common property components. Years of involvement in the condominium industry, including involvement with some education based organizations, has resulted in a sound understanding of the Reserve Fund requirements for condominiums, as well as the challenges facing Managers, Board Members and owners. Wade Engineering Ltd. carries Commercial General Liability insurance, Professional Liability insurance and Document Replacement Insurance. 3

38 STUDY PERSONNEL The Reserve Fund Study is conducted through the combined skills of the following personnel: A. C. (Al) King, B.A.Sc., P.Eng., A.C.C.I., F.C.C.I. Bachelor of Applied Science degree from the University of Waterloo Professional Engineering degree from the University of Waterloo, and registered with the Association of Professional Engineers Geologists & Geophysicists of Alberta Alberta Roofing Contractors Association (ARCA) Accepted Roof Inspector Member of RCI, Inc. (Roof Consultants, Inc.) Associate of the Canadian Condominium Institute Fellow of the Canadian Condominium Institute. Ron Shannon, Building Envelope Consultant Building Envelope Inspector Window, siding, stucco; specification & maintenance program consultant for 12 years Five years experience in the manufacture of vinyl window systems, insulated glass units and prehung steel entry doors Certified Moisture Control Technician through SAIT Member of RCI, Inc. (Roof Consultants, Inc.) Roofing consulting in Winnipeg and Edmonton for 3 years Tony Foster, ARCA Accepted Roof Inspector Journeyman Roofer, with an Interprovincial Red Seal, issued by Alberta Advanced Education and Career Development Alberta Roofing Contractors Association (ARCA) Accepted Roof Inspector Member of RCI, Inc. (Roof Consultants, Inc.) 21 years experience in the roofing industry Other individuals employed by Wade Engineering Ltd. may be called upon for technical and/or clerical assistance. Outside professionals may also be consulted. 35

39 REFERENCE SOURCES Information used in completing this Study was collected from the following sources: Condominium Plan ByLaws Financial Statements Technical Reports on Common Property Components Site Investigations Property Manager and/or Board Members Technical Resource Material The life cycles of common property components were determined using a combination of the following: Recognizable conditions Experience factors Discussion with manufacturers, suppliers and service contractors Replacement costs of common property components were determined using a combination of the following: RSMeans Repair and Remodelling Cost Data 2013 RSMeans Square Foot Costs 2013 Experience with similar developments Discussion with manufacturers, suppliers and service contractors Review of financial documentation 36

40 Trails Of Millcreek Estates 37 WADE ENGINEERING LTD CURRENT COST/LIFE DATA 20/12/2013 ANNUAL REPLACEMENT EXPECTED ACTUAL EFFECTIVE REMAINING REPLACEMENT NO. COMPONENT COST LIFE AGE AGE LIFE COST 1 Roofing 20, ,615 2 Eavestroughs and Downspouts 9, ,980 3 Fascia 37, Soffit 111, ,793 5 Vinyl Siding 517, ,23 6 Concrete Wall Tile Repair, Metal Trim 8, Sealant Repair 3, Parging Repair 3, Window Wells 10, Balcony and Deck Membrane 12, , Balcony Stairs with Membrane 1, Balcony and Deck Fascia, Balcony Column Cladding 9, Deck Skirt, Deck Skirt Paint Deck Railings Aluminum 32, Balcony Railings Glass Panel 8, Balcony Soffit 12, Privacy Walls 26, Patios 68, , Unit Numbers 1, Exterior Light Fixtures 2, Entrance Steps 60, , Entrance Steps Railings 5, Entrance Steps Column Cladding, Walkways 62, , Driveways 380, ,87 29 Swales Curbs 28, , Swales Drainage 3, Asphalt Surface 75, , Light Standards 7, Light Standards Paint 1, Fencing Chain Link 35, Fencing Wood 1, Fencing Wood Neighbouring 11, Fencing Wood Paint 8, ,17 38 Fencing Pillars 15, Fire Hydrants 10, Landscaping 5, ,155 1 Property Signage 1, Contingency 6, , TOTAL $ 2,076,322 $ 80,031

41 Trails Of Millcreek Estates 38 WADE ENGINEERING LTD COST/LIFE ANALYSIS 20/12/2013 % OF ANNUAL ACTUAL REPLACEMENT PRESENT EXPIRED SHORT NO. COMPONENT COSTS FUND EQUITY FALL 1 Roofing 12.01% 1,201 38,60 37,259 2 Eavestroughs and Downspouts 2.7% 27 7,920 7,673 3 Fascia 1.16% 116 3,72 3,608 Soffit 3.9% 39 11,172 10,823 5 Vinyl Siding 21.55% 2,155 68,972 66,817 6 Concrete Wall Tile Repair 0.51% 51 1,636 1,585 7 Metal Trim 0.33% 33 1,072 1,039 8 Sealant Repair 0.98% 98 3,152 3,05 9 Parging Repair 0.98% 98 3,1 3,06 10 Window Wells 0.32% 32 1,00 1, Balcony and Deck Membrane 8.89% ,8 27, Balcony Stairs with Membrane 0.93% 93 2,992 2, Balcony and Deck Fascia 0.27% Balcony Column Cladding 0.36% 36 1,1 1, Deck Skirt 0.28% Deck Skirt Paint 0.16% Deck Railings Aluminum 1.00% 100 3,20 3,10 18 Balcony Railings Glass Panel 0.26% Balcony Soffit 0.78% 78 2,96 2,18 20 Privacy Walls 0.8% 8 2,688 2,60 21 Patios 2.% 2 7,808 7,56 22 Unit Numbers 0.08% Exterior Light Fixtures 1.00% 100 3,216 3,116 2 Entrance Steps 2.1% 21 6,86 6, Entrance Steps Railings 0.20% Entrance Steps Column Cladding 0.15% Walkways 2.22% 222 7,100 6, Driveways 13.59% 1,359 3,96 2, Swales Curbs 1.% 1,612,68 30 Swales Drainage 0.18% Asphalt Surface 3.78% ,116 11, Light Standards 0.28% Light Standards Paint 0.16% Fencing Chain Link 1.10% 110 3,512 3,02 35 Fencing Wood 0.73% 73 2,32 2, Fencing Wood Neighbouring 0.58% 58 1,856 1, Fencing Wood Paint 1.7% 17,696,59 38 Fencing Pillars 0.9% 9 1,576 1, Fire Hydrants 0.26% Landscaping 1.% 1,620,76 1 Property Signage 0.05% Contingency 8.62% 862 6,899 6, TOTAL % $ 10,000 $ 299,27 $ 289,27

42 Trails Of Millcreek Estates 39 WADE ENGINEERING LTD PRESENT COURSE 20/12/2013 Inflation 3.0% Interest 1.5% Annual Contribution Increase 5% Opening Annual Additional Closing Year Balance Expenses Interest Contribution Assessments Balance , ,000 20, ,150 20,97 (12) 10,500 9, ,691 6, ,025 13, ,859 16,851 (5) 11,576 8, ,50 6, ,155 13, ,822 6, ,763 19, ,790 29,629 (18) 13,01 3, ,15 6,898 (52) 1,071 10, ,535 6, ,775 18, ,66 6, ,513 27, ,255 19, ,289 2, ,67 25,1 (12) 17,103 16, ,325 6, ,959 27, ,527 6, ,856 39, ,795 6, ,799 53, ,189 6, ,789 67, , ,81 (3,526) 21, , (216,76) 20,822 (3,56) 22, , (218,230) 6,898 (3,377) 2,066 20, (20,38) 6,898 (3,170) 25, , (189,237) 6,898 (2,92) 26, ,5 203 (172,5) 732,886 (13,581) 27, , (891,152) 6,898 (13,71) 29, , (882,268) 6,898 (13,337) 30, , (871,788) 22,893 (13,20) 32, , (875,850) 6,898 (13,21) 33,86 862,126 $ 1,301,673 $ 81,587 $ 511,135 $ 00, , ,000 00, , ,000 1,000, FUND BALANCE SAFETY MARGIN $81,000

43 Trails Of Millcreek Estates 0 WADE ENGINEERING LTD REASONABLE AND SUFFICIENT 20/12/2013 Inflation Variable Interest 1.5% Annual Contribution Increase 5% Opening Annual Additional Closing Year Balance Expenses Interest Contribution Assessments Balance , ,000 20, ,150 20,97 (12) 26,00 25, ,591 6, ,680 50, ,653 16, ,960 71, ,269 6, ,20 107, ,577 6,898 1,510,352 16, ,51 29,629 1,75 6, , ,235 6,898 2,375 8, , ,610 6,898 3,01 51,33 257, ,096 6,898 3,753 53, , ,861 19,020,333 56,606 39, ,779 25,1,865 59,36 388, ,666 6,898 5,727 62,08 9, ,902 6,898 6,65 65, , ,177 6,898 7,62 68,805 58, ,708 6,898 8,667 72,25 658, , ,81 5,338 75,857 37, ,075 20,822 6,2 79, , ,17 6,898 7,29 83, , ,310 6,898 8,691 87,81 675, ,917 6,898 10,035 92, , , , , , ,763 6,898 1, , , ,5 6,898 3, , , ,677 22,893, ,075 29, ,552 6,898 6,30 117,679 56,672 $ 1,301,673 $ 106,85 $ 1,731,500 $ 900, , , , ,000 00, , , , FUND BALANCE SAFETY MARGIN $81,000

44 Trails Of Millcreek Estates 1 WADE ENGINEERING LTD TEN YEAR REPLACEMENT SCHEDULE (Years 1 to 10) 20/12/ NO. COMPONENT Inflation Rate 0% 3% 3% 3% 3% 3% 3% 3% 3% 3% 1 Roofing $ $ $ $ $ $ $ $ $ $ 2 Eavestroughs and Downspouts $ $ $ $ $ $ $ $ $ $ 3 Fascia $ $ $ $ $ $ $ $ $ $ Soffit $ $ $ $ $ $ $ $ $ $ 5 Vinyl Siding $ $ $ $ $ $ $ $ $ $ 6 Concrete Wall Tile Repair $ $ $ $ $ $ $,877 $ $ $ 7 Metal Trim $ $ $ $ $ $ $ $ $ $ 8 Sealant Repair $ $,056 $ $ $ $ $,702 $ $ $ 9 Parging Repair $ $,05 $ $ $ $ $,690 $ $ $ 10 Window Wells $ $ $ $ $ $ $ $ $ $ 11 Balcony and Deck Membrane $ $ $ $ $ $ $ $ $ $ 12 Balcony Stairs with Membrane $ $ $ $ $ $ $ $ $ $ 13 Balcony and Deck Fascia $ $ $ $ $ $ $ $ $ $ 1 Balcony Column Cladding $ $ $ $ $ $ $ $ $ $ 15 Deck Skirt $ $ $ $ $ $ $ $ $ $ 16 Deck Skirt Paint $ $ $ $ 978 $ $ $ $ $ $ 17 Deck Railings Aluminum $ $ $ $ $ $ $ $ $ $ 18 Balcony Railings Glass Panel $ $ $ $ $ $ $ $ $ $ 19 Balcony Soffit $ $ $ $ $ $ $ $ $ $ 20 Privacy Walls $ $ $ $ $ $ $ $ $ $ 21 Patios $ $ $ $ $ $ $ $ $ $ 22 Unit Numbers $ $ $ $ $ $ $ $ $ $ 23 Exterior Light Fixtures $ $ $ $ $ $ $ $ $ $ 2 Entrance Steps $ $ $ $ $ $ $ $ $ $ 25 Entrance Steps Railings $ $ $ $ $ $ $ $ $ $ 26 Entrance Steps Column Cladding $ $ $ $ $ $ $ $ $ $ 27 Walkways $ $ $ $ $ $ $ $ $ $ 28 Driveways $ $ $ $ $ $ $ $ $ $ 29 Swales Curbs $ $ $ $ $ $ $ $ $ $ 30 Swales Drainage $ $ $ $ $ $ $ $ $ $ 31 Asphalt Surface $ $ $ $ $ $ $ $ $ $ 32 Light Standards $ $ $ $ $ $ $ $ $ $ 33 Light Standards Paint $ $ $ $ $ $ $ 1,567 $ $ $ 3 Fencing Chain Link $ $ $ $ $ $ $ $ $ $ 35 Fencing Wood $ $ $ $ $ $ $ $ $ $ 36 Fencing Wood Neighbouring $ $ $ $ $ $ $ $ $ $ 37 Fencing Wood Paint $ $ $ $ 8,975 $ $ $ $ $ $ 38 Fencing Pillars $ $ $ $ $ $ $ $ $ $ 39 Fire Hydrants $ $ $ $ $ $ $ $ $ $ 0 Landscaping $ $ 5,98 $ $ $ $ $ 6,896 $ $ $ 1 Property Signage $ $ $ $ $ $ $ $ $ $ 10 Contingency $ 6,898 $ 6,898 $ 6,898 $ 6,898 $ 6,898 $ 6,898 $ 6,898 $ 6,898 $ 6, Future Dollars $ $ 20,97 $ 6,898 $ 16,851 $ 6,898 $ 6,898 $ 29,629 $ 6,898 $ 6,898 $ 6,898

45 Trails Of Millcreek Estates LC5 WADE ENGINEERING LTD TEN YEAR REPLACEMENT SCHEDULE (Years 11 to 20) 20/12/ NO. COMPONENT Inflation Rate 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 1 Roofing $ $ $ $ $ $ $ $ $ $ 2 Eavestroughs and Downspouts $ $ $ $ $ $ $ $ $ $ 3 Fascia $ $ $ $ $ $ $ $ $ $ Soffit $ $ $ $ $ $ $ $ $ $ 5 Vinyl Siding $ $ $ $ $ $ $ $ $ $ 6 Concrete Wall Tile Repair $ $ $ $ $ $ $ 6,121 $ $ 7 Metal Trim $ $ $ $ $ $ $ $ $ $ 8 Sealant Repair $ $ 5,35 $ $ $ $ $ 5,901 $ $ $ 9 Parging Repair $ $ 5,332 $ $ $ $ $ 5,887 $ $ $ 10 Window Wells $ $ $ $ $ $ $ $ $ $ 11 Balcony and Deck Membrane $ $ $ $ $ $ $ 213,159 $ $ $ 12 Balcony Stairs with Membrane $ $ $ $ $ $ $ 22,10 $ $ $ 13 Balcony and Deck Fascia $ $ $ $ $ $ $ 6,59 $ $ $ 1 Balcony Column Cladding $ $ $ $ $ $ $ $ $ $ 15 Deck Skirt $ $ $ $ $ $ $ 6,688 $ $ $ 16 Deck Skirt Paint $ 1,191 $ $ $ $ $ $ $ 1,368 $ $ 17 Deck Railings Aluminum $ $ $ $ $ $ $ $ $ $ 18 Balcony Railings Glass Panel $ $ $ $ $ $ $ $ $ $ 19 Balcony Soffit $ $ $ $ $ $ $ 18,696 $ $ $ 20 Privacy Walls $ $ $ $ $ $ $ $ $ $ 21 Patios $ $ $ $ $ $ $ $ $ $ 22 Unit Numbers $ $ $ $ $ $ $ $ $ $ 23 Exterior Light Fixtures $ $ $ $ $ $ $ $ $ $ 2 Entrance Steps $ $ $ $ $ $ $ $ $ $ 25 Entrance Steps Railings $ $ $ $ $ $ $ $ $ $ 26 Entrance Steps Column Cladding $ $ $ $ $ $ $ $ $ $ 27 Walkways $ $ $ $ $ $ $ $ $ $ 28 Driveways $ $ $ $ $ $ $ $ $ $ 29 Swales Curbs $ $ $ $ $ $ $ $ $ $ 30 Swales Drainage $ $ $ $ $ $ $ $ $ $ 31 Asphalt Surface $ $ $ $ $ $ $ $ $ $ 32 Light Standards $ $ $ $ $ $ $ $ $ $ 33 Light Standards Paint $ $ $ $ $ $ $ 1,967 $ $ $ 3 Fencing Chain Link $ $ $ $ $ $ $ $ $ $ 35 Fencing Wood $ $ $ $ $ $ $ $ $ $ 36 Fencing Wood Neighbouring $ $ $ $ $ $ $ $ $ $ 37 Fencing Wood Paint $ 10,931 $ $ $ $ $ $ $ 12,556 $ $ 38 Fencing Pillars $ $ $ $ $ $ $ $ $ $ 39 Fire Hydrants $ $ $ $ $ $ $ $ $ $ 0 Landscaping $ $ 7,839 $ $ $ $ $ 8,655 $ $ $ 1 Property Signage $ $ $ $ $ $ $ $ $ $ 10 Contingency $ 6,898 $ 6,898 $ 6,898 $ 6,898 $ 6,898 $ 6,898 $ 6,898 $ 6,898 $ 6,898 $ 6, Future Dollars $ 19,020 $ 25,1 $ 6,898 $ 6,898 $ 6,898 $ 6,898 $ 302,81 $ 20,822 $ 6,898 $ 6,898