ASHLAND COCKEYSVILLE, MD Prepared for: WPM REAL ESTATE GROUP, LLC AND ASHLAND HOMEOWNERS ASSOCIATION. Prepared by:

Transcription

1 RESERVE FUND STUDY ASHLAND COCKEYSVILLE, MD Prepared for: WPM REAL ESTATE GROUP, LLC AND ASHLAND HOMEOWNERS ASSOCIATION Prepared by: CRITERIUM-HARBOR ENGINEERS PO BOX 408 STEVENSON, MARYLAND FEBRUARY 16, 2012

2 CONTENTS 1.0 INTRODUCTION EXECUTIVE SUMMARY PURPOSE & SCOPE PURPOSE SCOPE SOURCES OF INFORMATION STANDARDS OF REFERENCE DESCRIPTION SITE IMPROVEMENTS STORM DRAINAGE PAVING AND CURBING FLATWORK LANDSCAPING & APPURTENANCES CONCLUSION LIMITATIONS APPENDIX A: RESERVE FUND PROJECTIONS APPENDIX B: PROJECT PHOTOGRAPHS APPENDIX C: REFERENCE DOCUMENTS APPENDIX D: PROFESSIONAL QUALIFICATIONS Ashland HOA Cockeysville, MD

3 1.0 INTRODUCTION WPM Real Estate Group, LLC authorized Criterium-Harbor Engineers to conduct a Building Evaluation and Reserve Fund Study for Ashland Homeowners Association (the Association), located in Cockeysville, MD. Studies of this nature are important to ensure that a community has sufficient funds for long-term, periodic capital expenditure requirements. Anticipating large expenditures over an extended period of time through a structured analysis and scheduling process assists the Association in meeting financial requirements without increasing the service fees above permitted maximums, borrowing the funds, or levying special financial assessments to the owners. Typically, a community association has two broad cash requirements: the general operating reserves and the capital repair and replacement reserves. In this report, we will focus on those items falling under the capital repair and replacement reserve criteria. We have projected a capital repair and replacement reserve for thirty (30) years. The first ten years are the most reliable. Such a study should be updated every three to five years. This report is structured to analyze components of the community for which the Association is responsible and to assess an expected useful life and remaining useful life to those components. The anticipated scheduled repair or replacement of the component and the anticipated expense for the activity are then analyzed in conjunction with the current capital reserves funding program for the community. Funding program recommendations are made with the objective of limiting substantial cash excesses while minimizing financial burdens that can result from significant cash inadequacies. This report is intended to be used as a tool to determine reserve fund allocation requirements for the community, to manage future Association obligations, and to inform the community of future financial needs in general. The report that follows has been prepared from the perspective of what an owner of this property would benefit from knowing. Some items, beyond those of immediate concern, may be discussed. Therefore, the report should be read in its entirety in order to fully understand all of the information that has been obtained. Ashland HOA Cockeysville, MD Page 1

4 2.0 EXECUTIVE SUMMARY Ashland is a mixed development with 24 single-family homes and 86 townhouses in 21 buildings. The site was developed in phases between 1985 and Other than a small ornamental building located at the community entrance there are no common amenities. Based on our conversations with the WPM and Board Members, we understand that the Association is generally responsible for the repair and replacement of the common area components, including landscaping features, the common asphalt-paved driveways, concrete sidewalks, and storm water management systems. The Association is not responsible for repair or replacement of the community roadways or the exterior building finishes and components. We consider the buildings and grounds to be in generally good condition when compared to others of similar age and construction type. Various components will require repair and replacement however over the years. This work should be planned and prioritized in conjunction with the reserve analysis. For a detailed discussion of all of our findings of this study, refer to the appropriate sections of this report. Based on our evaluation, the current level of reserve funding for this community is more than adequate. We have prepared two alternatives to demonstrate the funding levels over the next 30 years if the current level of funding were to be reduced. A more detailed analysis of the reserve fund has been provided in Appendix A. For your convenience, we have prepared the following summary of the condition of the major systems of the property. PROPERTY SUMMARY SYSTEM CONDITION ACTIVITY REQUIRED FREQUENCY SITE Storm Drainage Erosion Control Measures (Northern Boundary) Year 1 G-F Maintenance Stormwater Infiltration Facilities Periodic as Required Asphalt Pavements G Crack Repair & Seal / Resurface Every 5 Years / Every 20 Years Concrete Flatwork G Incremental Replacements Periodic Landscaping & Appurtenances G Replace Features as Required See Tables BUILDING EXTERIOR None BUILDING INTERIORS None MECHANICAL SYSTEMS None COMMUNITY AMENITIES None NA NA NA NA Ashland HOA Cockeysville, MD Page 2

5 3.0 PURPOSE & SCOPE 3.1 Purpose The purpose of this study is to perform a reserve fund analysis and to determine a capital needs plan. It is intended to be used as a tool for the Association in determining the allocation requirements into the reserve fund in order to meet future anticipated capital expenditures for the community. This report forecasts obligations for the community thirty years into the future. It should be noted that events might occur that could have an effect on the underlying component or system useful life assumptions used in this study. Likewise, inevitable market fluctuations can have an impact on component or system replacement and repair costs. Therefore, a study such as this should be updated from time to time, usually on a three to fiveyear cycle, in order to reflect the most accurate needs and obligations of the community. 3.2 Scope This study has been performed according to the scope as generally defined by the Association, Criterium-Harbor Engineers, and the standards of the Community Associations Institute (CAI). The findings and recommendations are based on interviews with individuals who have knowledge about the property; a review of available documentation; and a visual investigation of the building components, equipment and grounds. This study estimates the funding levels required for maintaining the long term viability of the community. Our approach involves: 1. Visual inspection of the building components, equipment and grounds which are the responsibility of the Association. 2. Predicting their remaining service life and, approximating how frequently they may require repair or replacement. 3. Estimating the repair or replacement costs, in current dollars, for each capital item. 4. Using data developed in Steps 1, 2 and 3 to project Capital Reserve balances for the next 30 years. The guidelines used to determine which physical components within the community are to be included in the component inventory are based on the following general criteria: 1. The component must be a common element, or otherwise noted to be the responsibility or the Association to replace. 2. The component must have an estimated remaining useful life of thirty years or less. As the site ages, additional components may need to be added. Ashland HOA Cockeysville, MD Page 3

6 3. The funding for replacement should be from one source only, not funded from another area of the budget or through a maintenance contract. 4. The cost of replacement should be high enough to make it financially unsound to fund it from the operating budget. (Typically at least $3,000) 5. Items such as periodic painting or landscape maintenance are generally not considered as capital expenditures by the IRS. For Association budgeting purposes however we may include some large, non-annual maintenance items in the Reserve Table. You should consult with your Accountant to verify the proper treatment of all components listed in this study for tax purposes. (Capital vs. Expense) The statements in this report are opinions about the present condition of the subject community. They are based on visual evidence available during a diligent investigation of all reasonably accessible areas falling under the responsibility of the Association. We did not remove any surface materials, perform any destructive testing, or move any furnishings. This study is not an exhaustive technical evaluation. Such an evaluation would entail a significantly larger scope than this effort. For additional limitations refer to the Limitations Section of this report. 3.3 Sources of Information Onsite inspections of the property occurred on the following dates: November 2, 2011 December 13, 2011 The following people were interviewed during our study: Ms. Judy Phillips, WPM Real Estate Group Members of the HOA Board The following documents were made available to us and reviewed: Final Development Plan by Daft McCune Walker, Inc., dated August 15, 1985 Declaration of Covenants, Conditions and Restrictions, dated May 6, 1987 We based our cost estimates on some or all of the following: R.S. Means Our data files on similar projects Ashland HOA Cockeysville, MD Page 4

7 3.4 Standards of Reference For your reference, the following definitions may be helpful: Average: Average compares the item to what is typical for construction in the geographic area in which the inspection occurs. It also compares it to buildings of similar age and construction type. Since construction practices vary from region to region, average is intended to be region specific. Excellent: Component or system is in "as new" condition, requiring no rehabilitation and should perform in accordance with expected performance. Good: Component or system is sound and performing its function, although it may show signs of normal wear and tear. Some minor rehabilitation work may be required. Fair: Component or system falls into one or more of the following categories: a) Evidence of previous repairs not in compliance with commonly accepted practice, b) Workmanship not in compliance with commonly accepted standards, c) Component or system is obsolete, d) Component or system approaching end of expected performance. Repair or replacement is required to prevent further deterioration or to prolong expected life. Poor: Component or system has either failed or cannot be relied upon to continue performing its original function as a result of having exceeded its expected performance, excessive deferred maintenance, or state of disrepair. Present condition could contribute to or cause the deterioration of other adjoining elements or systems. Repair or replacement is required. Adequate: A component or system is of a capacity that is defined as enough for what is required, sufficient, suitable, and/or conforms to standard construction practices. Repair/Replacement Reserves - Non-annual maintenance items that will require significant expenditure over the life of the buildings. Included are items that will reach the end of their estimated useful life during the course of this forecast, or, in the opinion of the investigator, will require attention during that time. EUL Expected Useful Life of a component RUL Remaining Useful Life of a component All directions (left, right, rear, etc.), when used, are taken from the viewpoint of an observer standing in front of a building and facing it. Ashland HOA Cockeysville, MD Page 5

8 4.0 DESCRIPTION Ashland is a mixed development with 24 single-family homes and 86 townhouses in 21 buildings. 14 of the townhouse buildings have garages with common driveways. The other seven townhouse buildings have on street parking. The site was developed in phases between 1985 and There is a small ornamental building located at the community entrance which is not used for any function. Otherwise, there are no common amenities. The site is adjacent however to a publicly maintained pedestrian and bike trail. 5.0 SITE IMPROVEMENTS 5.1 Storm Drainage Based on our conversations with the WPM and Board Members, we understand that the Association is generally responsible for the repair and replacement of the common area components, including landscaping features, the common asphalt-paved driveways, concrete sidewalks, and storm water management systems. The Association is not responsible for the pavement of community roadways which are publicly maintained. The individual unit owners are responsible for repair and replacement of the building exterior finishes and components, including concrete stoops, wood decks, fences, etc. The unit owners are also responsible for sidewalks which only serve one individual residence. Sidewalks which serve more than one residence are the responsibility of the Association. Description Stormwater from the building roofs is collected by gutters and downspouts which generally discharge at grade. Stormwater runoff from the site is collected by curbed-inlets with catch basins located along the public streets and some area drains located within the landscaped areas. All of these stormwater inlets are connected by underground concrete piping which discharges to Western Run at the southeast corner of the community and to the Loch Raven Reservoir at the northwest corner of the community. The discharge to Western Run includes an underground stormwater infiltration facility located upstream of the concrete discharge structure. The discharge to Loch Raven Reservoir includes an above ground, or open channel, stormwater infiltration facility located downstream of the discharge structure. The stormwater infiltration facilities are designed to reduce the amount of runoff as well as provide a means of recharging the groundwater table. Evaluation & Recommendations The storm water management systems appear to be adequate for the site. However, we did observe some areas of erosion and excessive runoff along the northern boundary of the community, between Ferrous Court and Furnace Court. Improvements are required in this area and we have included a cost estimate in the Reserve Tables for some work in this regard. Ashland HOA Cockeysville, MD Page 6

9 It appears that sediment buildup over the years is limiting the effectiveness of some concrete intake structures located along the northern boundary. We recommend that some regarding be accomplished in this area to recreate a larger swale and to open of the stormwater intakes. In addition some measures will be required to transport stormwater from the rear edge of the asphalt driveways in this area down to the inlet structures without eroding the soil embankments. Refer to the photographs in the Appendix. The stormwater infiltration facilities are the responsibility of the Association to maintain. The underground facility has a sedimentation chamber which requires periodic removal and proper disposal of the sediment buildup. The above ground facility also requires periodic cleaning of sediment buildup in order to maintain the design rate of infiltration of the stormwater to the ground. We have included periodic cost for this maintenance work in the Reserve Tables. The concrete chambers, inlet and outlet structures generally have an EUL of well beyond 50 years and we do not anticipate any major replacements of any of these components within the term of this evaluation. 5.2 Paving and Curbing Description Evaluation & Recommendations The community roadways are public and maintained by Baltimore County. However the Association maintains the pavement for 18 common driveways located next to, and in between the townhouses groups that have garages. These driveways are paved with asphalt. These pavements do not have any perimeter curbing. The asphalt pavement is generally in good condition. We observed some minor cracking in the pavement, particularly at low points, or swales in the pavement used for drainage. These areas may require patching sooner than an overlay of the entire pavement. Members of the Board reported that the driveways received a complete asphalt overlay approximately three years ago. Based on the EUL of this component, we have included the cost for a subsequent overlay in the Reserve Tables. In addition to resurfacing, we recommend the application of an oil resistant sealant to all asphalt paved surfaces on a five-year cycle. Coincident with this work all cracks, such as those noted above, should be properly sealed. We have included a periodic cost in the Reserve Table for this work. We also observed some settlement in the asphalt pavement in a driveway next to a segmental retaining wall which has recently been constructed behind the homes on the west side of Furnace Court. This settlement is the result of settlement of the newly placed soil behind the wall. Members of the Board reported that the contractor for the wall has pledged to repair this pavement if any further settlement occurs. Ashland HOA Cockeysville, MD Page 7

10 5.3 Flatwork Description Flatwork on the site includes concrete paved sidewalks running along the public streets and to the front entrances of the houses. At changes in elevation the sidewalks include elongated steps without any railings. The sidewalks also do not have any perimeter curbing. The Association is responsible for the maintenance and replacement of all of the sidewalks which are common to more than one home. Sections of the sidewalk which only provide access to a single home, such as lead walks, are the responsibility of the individual homeowners. Evaluation & Recommendations The concrete sidewalks are generally in good condition. We observed some minor areas of cracking and heaving which is typical and to be expected. We also observed some sections of sidewalk which have been replaced over the years. Concrete flatwork has an EUL of 50 years or more, although its replacement typically occurs in small increments as required. We recommend that a replacement program be maintained in order to replace damaged or deteriorated sections of the flatwork every few years. Assumptions for the percentage of periodic replacement with cost estimates are included in the Reserve Tables. 5.4 Landscaping & Appurtenances Description Landscaping at the site includes some turf grass areas as well as some wooded areas with natural vegetation and many mature trees. There is some shrubbery and seasonal plantings at the community entrance. The property is identified with a large, carved wood sign, suspended between two stone piers, located at the community entrance. The Association also maintains several smaller, informational, wood signs located throughout the community. There are three retaining walls located throughout the community. One wall has recently been replaced with a segmental, masonry type wall. This wall is located behind the townhomes on the west side of Furnace Court. In addition there are two small landscape walls, constructed of wood timbers; one located behind the homes on the east side of Furnace Court and the other located at the end of Foundry Court. There is a fence located along Ashland Road leading to the main entrance for the community. This fence has vinyl covered wood posts and vinyl rails. At the entrance to the community there is a small octagonal building with stone veneered exterior walls and a wood shake roof surface. This oneroom building has electric service but is not used for any function. Ashland HOA Cockeysville, MD Page 8

11 Exterior site lighting is provided throughout the community by fiberglass, pole mounted fixtures. These fixtures and poles are provided and maintained by the utility company (BGE) through a lease agreement with the Association. Cluster box units are provided for postal service throughout the community. These units are provided and maintained by the United States Postal Service. Evaluation & Recommendations The landscaping is generally in good condition. With the amount of mature trees, particularly the ones in close proximity to the buildings, on-going tree trimming and removal will be required. This activity is currently included in the annual maintenance budget and we have not included any non-annual costs in the Reserve Tables. The property signage is in good condition, although we did observe some rusting on the support brackets. Ms. Phillips reported that there is a current plan to replace this sign and to make some lighting improvements at the entrance. A cost for this work has been included in the Reserve Tables. Periodic replacement of the smaller, informational signs is considered small enough to be accomplished on the annual operations and maintenance budget. The new segmental retaining walls are well constructed and in good condition. This type of wall should have an EUL well beyond 30 years and no replacement costs are included in the Reserve Tables. The smaller, timber landscape walls are also in good condition; however based on their EUL of approximately 20 years, replacement of these walls will be required during the term of this evaluation. The vinyl fence is in good condition; based on the EUL we have included a cost in the Reserve Tables for its eventual replacement. The small building at the community entrance is in good condition. Based on the small size and the fact that it is not used we have not included any reserve costs for this structure. Some of the cluster mailboxes are rusting at the bases and are in fair condition. We recommend that the USPS be contacted to discuss possible replacement. 6.0 CONCLUSION In Summary, we consider this property to be in generally good condition. There are however components which will require repair or replacement over the term of this analysis. These expenditures should be prioritized in conjunction with the reserve strategies presented in Appendix A. Based on our evaluation, the current level of funding of the reserve for this community is more than adequate. We have prepared two alternatives to demonstrate the funding levels over the next 30 years if the current level of funding were to be reduced. Ashland HOA Cockeysville, MD Page 9

12 We feel that the reserve strategies included with this report outline several possible strategies for the community to adopt given the current condition of the community as a whole. As time passes, it may become necessary to re-establish financial priorities and capital expenditure schedules given any unforeseen circumstances. We recommend and encourage this activity. 7.0 LIMITATIONS The observations described in this study are valid on the date of the investigation and have been made under the conditions noted in the report. We prepared this study for the exclusive use of Ashland Homeowners Association. Criterium-Harbor Engineers does not intend any other individual or party to rely upon this study without our express written consent. If another individual or party relies on this study, they shall indemnify and hold Criterium-Harbor Engineers harmless for any damages, losses, or expenses they may incur as a result of its use. This study is limited to the visual observations made during our inspection. We did not remove surface materials, conduct any destructive or invasive testing, move furnishings or equipment, or undertake any digging or excavation. Accordingly, we cannot comment on the condition of systems that we could not see, such as buried structures and utilities, nor are we responsible for conditions that could not be seen or were not within the scope of our services at the time of the investigation. We did not undertake to completely assess the stability of the buildings or the underlying foundation soil since this effort would require excavation and destructive testing. Likewise, this is not a seismic assessment. We did not investigate the following areas: The interiors of the individual units Underground utilities and manholes We do not render an opinion on uninvestigated portions of the community. We did not perform any computations or other engineering analysis as part of this evaluation, nor did we conduct a comprehensive code compliance investigation. This study is not to be considered a warranty of condition, and no warranty is implied. The appendices are an integral part of this report and must be included in any review. In our Reserve Fund Analysis, we have provided estimated costs. These costs are based on our general knowledge of building systems and the contracting and construction industry. When appropriate, we have relied on standard sources, such as Means Building Construction Cost Data, to develop estimates. However, for items that we have developed costs (e.g.: structural repairs), no standard guide for developing such costs exists. Actual costs can vary significantly, based on the availability of qualified contractors to do the work, as well as many other variables. We cannot be responsible for the specific cost estimates provided. Ashland HOA Cockeysville, MD Page 10

13 We have performed no design work as part of this study, nor have we obtained competitive quotations or estimates from contractors as this also is beyond the scope of the project. The actual cost to remedy deficiencies and deferred maintenance items that we have identified may vary significantly from estimates and competitive quotations from contractors. If you have any questions about this study or the reserve fund analysis, please feel free to contact us. Thank-you for the opportunity to be of assistance to you. Respectfully submitted, Mr. Craig D. Smith, PE Criterium-Harbor Engineers Ashland HOA Cockeysville, MD Page 11

14 Appendix A: RESERVE FUND PROJECTIONS

15 INTRODUCTION The following is a projected reserve fund analysis for non-annual items as discussed in our report. This projection takes into consideration a long term estimate for inflation, as well as an estimate of return on invested reserve funds. Keep in mind that these two numbers can greatly affect the funding levels over the years. Please evaluate our estimates and let us know of any changes that may be desired. The intent of this reserve fund projection is to help the Association develop a reserve fund to provide for anticipated repair or replacements of various system components during the next thirty years. The capital items listed are those that are typically the responsibility of the Association and are derived from our review of the Public Offering Statements and conversations with members of the Association. The Association should confirm that the items listed should be financed by the Association reserve fund. This projection provides the following: An input Worksheet that defines all the criteria used for the financial alternatives, including the assumed inflation rate and rate of return on deposited reserve funds. An Itemized Worksheet that lists anticipated replacement and/or repair items complete with estimated remaining life expectancies, projected costs of replacement and/or repair, a frequency in years of when these items require replacement and/or repair, and a projection based on this frequency. A table and graph that represent end of year balances versus capital expenditures based on your Current Funding program and reserve balances, and Alternatives to your current program. The provided graphs illustrate what effects the funding methods will have over the presented thirty year period versus the anticipated capital expenditures. Care should be taken in analyzing the graphs due to varying graphic scales that occur within each graph and between graphs. Based on our developed list of capital items and taking inflation into account; the current general reserve funding is more than adequate. The Association should bear in mind that unanticipated expenditures can always arise and maintenance of a significant reserve fund balance can be viewed as a way to avoid special assessments. We have included two alternatives to your current general reserve funding program for general comparison. We recommend that the board adopt an alternative that best reflects the objectives of the community: Alternative 1: Decrease the current reserve contribution level of approximately $20,000 per year, by 10 percent and maintain that level for 30 years. This will provide adequate reserve funding.

16 Alternative 2: Decrease the current reserve contribution level of approximately $20,000 per year, by 20 percent and maintain that level for 30 years. This will provide adequate reserve funding. Please note that the reserve fund study does not include typical annual maintenance items. Our assumption is that you already have an annual operating budget that provides for these typical, repetitive items. This includes miscellaneous repairs, lawn and grounds maintenance, routine minor painting, etc. We have focused on those significant, non-annual items where careful financial planning is important. Finally, please note that the estimates we have developed are based on 2012 dollars. Our reserve fund study does adjust for an estimated annual inflation and a given return on investment assuming that the indicated fund balances are maintained.

17 Reserve Study Worksheet General Information: 1 Organization: Ashland Homeowners Association 2 Address: Ashland Road Cockeysville, MD Number of Units Age of Building (in years) 23 5a Study Period (in years) 30 5b Normal Fiscal Year starts: January 1, c Partial Fiscal Year starts: January 1, d Partial Year Length: 12 months 6 Site Inspection Date November 2, Reserve Funds at start $122,000 8 Rate of Return on invested Reserve Funds (%) 2.5% 9 Inflation Rate (%) 3.0% 10 Current Funding Levels Existing Funding Levels Total/Month Total Annual Per Unit/Month Per Unit/Year Reserve Fund Contribution... $1,667 $20,000 $15.15 $ Years Out Total Annual Per Unit Planned Special Assessment... 0 $0 $0 Balance Computed... $293, Alternative Reserve Fund Contribution Alternative 1 Lower by 10% and Maintain for 30 Years Total/Month Total Annual Per Unit/Month Per Unit/Year Monthly Amount, (First Year)... $1,667 $20,000 $15.15 $ Monthly Amount, (Last Year)... $1,500 $18,000 $13.64 $ Balance Required Final Year... $19,763 Special Assessments: Years Out Total/Year Per Unit First Assessment... 0 $0 $0 Second Assessment... 0 $0 $0 Balance Computed... $207,529 Alternative 2 Lower by 20% and Maintain for 30 Years Total/Month Total Annual Per Unit/Month Per Unit/Year Monthly Amount, (First Year)... $1,667 $20,000 $15.15 $ Monthly Amount, (Last Year)... $1,333 $16,000 $12.12 $ Balance Required Final Year... $19,763 Base Escalation % % Special Assessments: Years Out Total/Year Per Unit First Assessment... 0 $0 $0 Second Assessment... 0 $0 $0 Balance Computed... $121,724 Alternative 3 Not Used Total/Month Total Annual Per Unit/Month Per Unit/Year Monthly Amount, (First Year)... $0 $0 $0.00 $0.00 Monthly Amount, (Last Year)... $0 $0 $0.00 $0.00 Balance Required Final Year... $19,763 Base Escalation % % Special Assessments: Years Out Total/Year Per Unit First Assessment... 0 $0 $0 Second Assessment... 0 $0 $0 Balance Computed... ($456,195)

18 Itemized Worksheet Full Capital Item Reserve Beginning Frequency Remaining Reserve Funding Required Funding To Be Replaced Quantity Unit cost Requirement (*) Balance (yrs**) Life (yrs) Monthly Annual Balance Site Re-Grade Swale along Northern Boundary 1 LS $5, $5, $7, $0.00 $0.00 $5, Provide Erosion Control Measures on Embankments 2 EA $3, $6, $8, $0.00 $0.00 $6, Maintenance of Stormwater Infiltration Facilities 2 EA $2, $5, $5, ($82.70) ($992.39) $4, Asphalt Driveways - Resurface 6,400 SY $18.00 $115, $43, $ $4, $28, Asphalt Driveways - Crack Repair and Seal Coat 6,400 SY $3.00 $19, $17, $80.91 $ $11, Concrete Sidewalks - Replace (7% every 5 yrs) 1,300 SF $10.00 $13, $19, $0.00 $0.00 $13, Main Entrance Sign Replace & and Add Lighting 1 LS $4, $4, $5, $0.00 $0.00 $4, Landscape Wall East Side of Furnace Court - Replace 200 SF $30.00 $6, $7, ($45.56) ($546.76) $5, Landscape Wall at End of Foundry Court - Replace 100 SF $30.00 $3, $3, ($22.78) ($273.38) $2, Vinyl Fencing at Community Entrance - Replace 220 FT $40.00 $8, $2, $22.01 $ $1, Building Exterior Building Interior Mechanical Amenities Other Totals $185, $122, $ $4, $81, * Costs are typically 10%± ** Reserve study is based on a 30 year projection of non-annual maintenance Total Over Term $384,200.00

19 Annual Expense By Year Year: Year Number: Site Re-Grade Swale along Northern Boundary 5, Provide Erosion Control Measures on Embankments 6, Maintenance of Stormwater Infiltration Facilities 0 5, , , Asphalt Driveways - Resurface ,200 Asphalt Driveways - Crack Repair and Seal Coat , , , Concrete Sidewalks - Replace (7% every 5 yrs) 13, , , ,000 Main Entrance Sign Replace & and Add Lighting 4, Landscape Wall East Side of Furnace Court - Replace , Landscape Wall at End of Foundry Court - Replace , Vinyl Fencing at Community Entrance - Replace Building Exterior Building Interior Mechanical Amenities Other Total Costs 28,000 5,000 19,200 9, ,000 5,000 19, ,000 5,000 19, ,200 Total Costs Adjusted For 3% Inflation 28,000 5,150 20,369 9, ,071 5,970 23, ,471 6,921 27, ,731 Page 1 of 2

20 Annual Expense By Year Year: Year Number: Site Re-Grade Swale along Northern Boundary Provide Erosion Control Measures on Embankments Maintenance of Stormwater Infiltration Facilities Asphalt Driveways - Resurface Asphalt Driveways - Crack Repair and Seal Coat Concrete Sidewalks - Replace (7% every 5 yrs) Main Entrance Sign Replace & and Add Lighting Landscape Wall East Side of Furnace Court - Replace Landscape Wall at End of Foundry Court - Replace Vinyl Fencing at Community Entrance - Replace Building Exterior Building Interior Mechanical Amenities Other Total Costs Total Costs Adjusted For 3% Inflation , , , , , , , , , , , , ,000 19, ,000 5,000 19,200 9, ,800 5,000 19, ,024 31, ,704 9,301 36,789 17, ,644 10,783 42, Page 2 of 2

21 Existing Funding Levels Beginning Year Reserve Fund Fee Special Investment Capital Ending Year Number Balance Revenue Assessments Earnings Expenditures Balance $122,000 $20,000 $0 $2,850 $28,000 $116, $116,850 $20,000 $0 $3,293 $5,150 $134, $134,993 $20,000 $0 $3,366 $20,369 $137, $137,989 $20,000 $0 $3,704 $9,835 $151, $151,858 $20,000 $0 $4,296 $0 $176, $176,155 $20,000 $0 $4,527 $15,071 $185, $185,611 $20,000 $0 $4,991 $5,970 $204, $204,632 $20,000 $0 $5,025 $23,614 $206, $206,044 $20,000 $0 $5,651 $0 $231, $231,695 $20,000 $0 $6,292 $0 $257, $257,988 $20,000 $0 $6,513 $17,471 $267, $267,030 $20,000 $0 $7,003 $6,921 $287, $287,111 $20,000 $0 $6,993 $27,375 $286, $286,730 $20,000 $0 $7,668 $0 $314, $314,398 $20,000 $0 $8,360 $0 $342, $342,758 $20,000 $0 $4,076 $199,731 $167, $167,103 $20,000 $0 $4,477 $8,024 $183, $183,556 $20,000 $0 $4,296 $31,735 $176, $176,117 $20,000 $0 $4,903 $0 $201, $201,020 $20,000 $0 $5,526 $0 $226, $226,546 $20,000 $0 $5,396 $30,704 $221, $221,238 $20,000 $0 $5,798 $9,301 $237, $237,735 $20,000 $0 $5,524 $36,789 $226, $226,469 $20,000 $0 $5,718 $17,762 $234, $234,425 $20,000 $0 $6,361 $0 $260, $260,785 $20,000 $0 $5,879 $45,644 $241, $241,020 $20,000 $0 $6,256 $10,783 $256, $256,493 $20,000 $0 $5,846 $42,649 $239, $239,690 $20,000 $0 $6,492 $0 $266, $266,182 $20,000 $0 $7,155 $0 $293,337

22 Existing Funding Levels Beginning Balance as of start of year beginning Jan 2012: $122,000 CONTRIBUTIONS SPECIAL ASSESSMENTS AMOUNT Totals $20, per year Per Year $0 Per Unit $0 $ per unit per year $1, per month $15.15 per unit per month Projected Annual Funding and Expenditures: Year: Year Number: End of Year Reserve Fund Balance 116, , , , , , , , , , , , , , ,758 Capital Expenditures: 28,000 5,150 20,369 9,835-15,071 5,970 23, ,471 6,921 27, Total Revenue (all sources) 22,850 23,293 23,366 23,704 24,296 24,527 24,991 25,026 25,651 26,292 26,513 27,003 26,993 27,668 28,360 Year: Year Number: End of Year Reserve Fund Balance 167, , , , , , , , , , , , , , ,337 Capital Expenditures: 199,731 8,024 31, ,704 9,301 36,789 17,762-45,644 10,783 42, Total Revenue (all sources) 24,076 24,477 24,296 24,903 25,526 25,396 25,798 25,524 25,718 26,361 25,879 26,256 25,846 26,492 27,155 Existing Funding Levels 400, , , ,000 Dollars 200, , ,000 50, Funding Years

23 Alternative 1: Lower by 10% and Maintain for 30 Years Beginning Year Reserve Fund Fee Special Special Investment Capital Ending Year Number Balance Revenue Assessments 1 Assessments 2 Earnings Expenditures Balance $122,000 $20,000 $0 $0 $2,850 $28,000 $116, $116,850 $18,000 $0 $0 $3,242 $5,150 $132, $132,942 $18,000 $0 $0 $3,264 $20,369 $133, $133,837 $18,000 $0 $0 $3,550 $9,835 $145, $145,553 $18,000 $0 $0 $4,089 $0 $167, $167,642 $18,000 $0 $0 $4,264 $15,071 $174, $174,836 $18,000 $0 $0 $4,672 $5,970 $191, $191,537 $18,000 $0 $0 $4,648 $23,614 $190, $190,571 $18,000 $0 $0 $5,214 $0 $213, $213,786 $18,000 $0 $0 $5,795 $0 $237, $237,580 $18,000 $0 $0 $5,953 $17,471 $244, $244,062 $18,000 $0 $0 $6,379 $6,921 $261, $261,519 $18,000 $0 $0 $6,304 $27,375 $258, $258,448 $18,000 $0 $0 $6,911 $0 $283, $283,360 $18,000 $0 $0 $7,534 $0 $308, $308,894 $18,000 $0 $0 $3,179 $199,731 $130, $130,341 $18,000 $0 $0 $3,508 $8,024 $143, $143,826 $18,000 $0 $0 $3,252 $31,735 $133, $133,343 $18,000 $0 $0 $3,784 $0 $155, $155,127 $18,000 $0 $0 $4,328 $0 $177, $177,455 $18,000 $0 $0 $4,119 $30,704 $168, $168,870 $18,000 $0 $0 $4,439 $9,301 $182, $182,007 $18,000 $0 $0 $4,080 $36,789 $167, $167,299 $18,000 $0 $0 $4,188 $17,762 $171, $171,725 $18,000 $0 $0 $4,743 $0 $194, $194,468 $18,000 $0 $0 $4,171 $45,644 $170, $170,994 $18,000 $0 $0 $4,455 $10,783 $182, $182,666 $18,000 $0 $0 $3,950 $42,649 $161, $161,968 $18,000 $0 $0 $4,499 $0 $184, $184,467 $18,000 $0 $0 $5,062 $0 $207,529

24 Alternative 1: Lower by 10% and Maintain for 30 Years Beginning Balance as of start of year beginning Jan 2012: $122,000 CONTRIBUTIONS SPECIAL ASSESSMENTS SETTINGS (analyzed by unit/month) FIRST YR LAST YR Totals Starting amount ($): $19, $17, per year First Per Year $0 Per Unit $0 Increment by ($): $ $ per unit per year Second Per Year $0 Per Unit $0 Every 1 year $1, $1, per month Frequency: 1 time $15.15 $13.64 per unit per month Projected Annual Funding and Expenditures: Year: Year Number: End of Year Reserve Fund Balance 116, , , , , , , , , , , , , , ,894 Capital Expenditures: 28,000 5,150 20,369 9,835-15,071 5,970 23, ,471 6,921 27, Total Revenue (all sources) 22,850 21,242 21,264 21,550 22,089 22,264 22,672 22,648 23,214 23,795 23,953 24,379 24,304 24,911 25,534 Year: Year Number: End of Year Reserve Fund Balance 130, , , , , , , , , , , , , , ,529 Capital Expenditures: 199,731 8,024 31, ,704 9,301 36,789 17,762-45,644 10,783 42, Total Revenue (all sources) 21,179 21,508 21,252 21,784 22,328 22,119 22,439 22,080 22,188 22,743 22,171 22,455 21,950 22,499 23,062 Alternative 1: Lower by 10% and Maintain for 30 Years 350, , , ,000 Dollars 150, ,000 50, Funding Years

25 Alternative 2: Lower by 20% and Maintain for 30 Years Beginning Year Reserve Fund Fee Special Special Investment Capital Ending Year Number Balance Revenue Assessments 1 Assessments 2 Earnings Expenditures Balance $122,000 $20,000 $0 $0 $2,850 $28,000 $116, $116,850 $16,000 $0 $0 $3,192 $5,150 $130, $130,892 $16,000 $0 $0 $3,163 $20,369 $129, $129,686 $16,000 $0 $0 $3,396 $9,835 $139, $139,248 $16,000 $0 $0 $3,881 $0 $159, $159,129 $16,000 $0 $0 $4,001 $15,071 $164, $164,060 $16,000 $0 $0 $4,352 $5,970 $178, $178,442 $16,000 $0 $0 $4,271 $23,614 $175, $175,099 $16,000 $0 $0 $4,777 $0 $195, $195,877 $16,000 $0 $0 $5,297 $0 $217, $217,173 $16,000 $0 $0 $5,393 $17,471 $221, $221,095 $16,000 $0 $0 $5,754 $6,921 $235, $235,928 $16,000 $0 $0 $5,614 $27,375 $230, $230,168 $16,000 $0 $0 $6,154 $0 $252, $252,322 $16,000 $0 $0 $6,708 $0 $275, $275,030 $16,000 $0 $0 $2,282 $199,731 $93, $93,581 $16,000 $0 $0 $2,539 $8,024 $104, $104,096 $16,000 $0 $0 $2,209 $31,735 $90, $90,570 $16,000 $0 $0 $2,664 $0 $109, $109,235 $16,000 $0 $0 $3,131 $0 $128, $128,366 $16,000 $0 $0 $2,842 $30,704 $116, $116,503 $16,000 $0 $0 $3,080 $9,301 $126, $126,282 $16,000 $0 $0 $2,637 $36,789 $108, $108,130 $16,000 $0 $0 $2,659 $17,762 $109, $109,027 $16,000 $0 $0 $3,126 $0 $128, $128,152 $16,000 $0 $0 $2,463 $45,644 $100, $100,971 $16,000 $0 $0 $2,655 $10,783 $108, $108,842 $16,000 $0 $0 $2,055 $42,649 $84, $84,249 $16,000 $0 $0 $2,506 $0 $102, $102,755 $16,000 $0 $0 $2,969 $0 $121,724

26 Alternative 2: Lower by 20% and Maintain for 30 Years Beginning Balance as of start of year beginning Jan 2012: $122,000 CONTRIBUTIONS SPECIAL ASSESSMENTS SETTINGS (analyzed by unit/month) FIRST YR LAST YR Totals Starting amount ($): $19, $15, per year First Per Year $0 Per Unit $0 Increment by (%): -20 $ $ per unit per year Second Per Year $0 Per Unit $0 Step (%): $1, $1, per month Every 1 year $15.15 $12.12 per unit per month Frequency: 1 time Projected Annual Funding and Expenditures: Year: Year Number: End of Year Reserve Fund Balance 116, , , , , , , , , , , , , , ,030 Capital Expenditures: 28,000 5,150 20,369 9,835-15,071 5,970 23, ,471 6,921 27, Total Revenue (all sources) 22,850 19,192 19,163 19,396 19,881 20,001 20,352 20,271 20,777 21,297 21,393 21,754 21,614 22,154 22,708 Year: Year Number: End of Year Reserve Fund Balance 93, ,096 90, , , , , , , , , ,842 84, , ,724 Capital Expenditures: 199,731 8,024 31, ,704 9,301 36,789 17,762-45,644 10,783 42, Total Revenue (all sources) 18,282 18,539 18,209 18,664 19,131 18,842 19,080 18,637 18,659 19,126 18,463 18,655 18,055 18,506 18,969 Alternative 2: Lower by 20% and Maintain for 30 Years 300, , ,000 Dollars 150, ,000 50, Funding Years

27 Appendix B: PROJECT PHOTOGRAPHS

28 Location: Photo Taken by: Date: Ashland HOA Craig Smith, P.E. Nov. 2, and Cockeysville, MD Reserve Fund Study Dec. 13, 2012 Community entrance signage 1 Ornamental building located at the community entrance 2

29 Location: Photo Taken by: Date: Ashland HOA Craig Smith, P.E. Nov. 2, and Cockeysville, MD Reserve Fund Study Dec. 13, 2012 Stormwater outfall to Loch Raven Reservoir located at the northeast corner of the site 3 Above ground stormwater infiltration facility located at the northeast corner of the site 4

30 Location: Photo Taken by: Date: Ashland HOA Craig Smith, P.E. Nov. 2, and Cockeysville, MD Reserve Fund Study Dec. 13, 2012 Below ground storm water infiltration facility located at the southwest corner of the site 5 Stormwater outfall to Western Run located at the northeast corner of the site 6

31 Location: Photo Taken by: Date: Ashland HOA Craig Smith, P.E. Nov. 2, and Cockeysville, MD Reserve Fund Study Dec. 13, 2012 Typical storm water inlet located along the northern boundary of the site 7 Drainage swale running along the northern boundary of the site 8

32 Location: Photo Taken by: Date: Ashland HOA Craig Smith, P.E. Nov. 2, and Cockeysville, MD Reserve Fund Study Dec. 13, 2012 Discharge from asphalt driveway toward drainage swale - improvements required 9 Discharge from asphalt driveway toward drainage swale - improvements required 10

33 Location: Photo Taken by: Date: Ashland HOA Craig Smith, P.E. Nov. 2, and Cockeysville, MD Reserve Fund Study Dec. 13, 2012 Typical asphalt paved driveway for garage-style townhouses 11 Slight settlement of the asphalt pavement due to new segmental retaining wall installation 12

34 Location: Photo Taken by: Date: Ashland HOA Craig Smith, P.E. Nov. 2, and Cockeysville, MD Reserve Fund Study Dec. 13, 2012 Cracking in asphalt paved driveway 13 Cracking in asphalt paved driveway 14

35 Location: Photo Taken by: Date: Ashland HOA Craig Smith, P.E. Nov. 2, and Cockeysville, MD Reserve Fund Study Dec. 13, 2012 Typical concrete sidewalk to townhouse lead walks 15 Typical concrete sidewalk located along the public streets with accessible dropped curbs located at the intersections 16

36 Location: Photo Taken by: Date: Ashland HOA Craig Smith, P.E. Nov. 2, and Cockeysville, MD Reserve Fund Study Dec. 13, 2012 Slight settlement in some areas creating tripping hazards 17 Settlement of sidewalk relative to the curb at the end of Foundry Court 18

37 Location: Photo Taken by: Date: Ashland HOA Craig Smith, P.E. Nov. 2, and Cockeysville, MD Reserve Fund Study Dec. 13, 2012 Settlement and previous replacement 19 Partial replacement due to utility work 20

38 Location: Photo Taken by: Date: Ashland HOA Craig Smith, P.E. Nov. 2, and Cockeysville, MD Reserve Fund Study Dec. 13, 2012 New segmental retaining wall installed behind the houses on the west side of Furnace Court 21 New segmental retaining wall installed behind the houses on the west side of Furnace Court 22

39 Location: Photo Taken by: Date: Ashland HOA Craig Smith, P.E. Nov. 2, and Cockeysville, MD Reserve Fund Study Dec. 13, 2012 Existing timber landscape wall located at the end of Foundry Court 23 Existing timber landscape wall located behind the houses on the east side of Furnace Court 24

40 Location: Photo Taken by: Date: Ashland HOA Craig Smith, P.E. Nov. 2, and Cockeysville, MD Reserve Fund Study Dec. 13, 2012 Vinyl fencing located along Ashland Road 25 Typical wood carved informational signage 26

41 Location: Photo Taken by: Date: Ashland HOA Craig Smith, P.E. Nov. 2, and Cockeysville, MD Reserve Fund Study Dec. 13, 2012 Rust at the community sign support 27 Rusting at the base of a cluster mailbox unit 28

42 Appendix C: REFERENCE DOCUMENTS

43

44 Appendix D: PROFESSIONAL QUALIFICATIONS

45 PROFESSIONAL QUALIFICATIONS AND EXPERIENCE Craig D. Smith, P.E. Area of Expertise Mr. Smith is the Principal of Criterium-Harbor Engineers, located in Baltimore, Maryland. This consulting engineering firm provides building investigative and due diligence services for residential, commercial, institutional and industrial markets. Mr. Smith is an Architectural Engineer with a broad background in all aspects of building systems and construction technology. Primary services provided by Criterium-Harbor Engineers include; property condition assessments, energy audits, homeowner association reserve studies and construction quality assurance. Qualifications Before founding Criterium-Harbor Engineers, Mr. Smith gained over twenty years of experience in building design and facilities management, including; seven years as an HVAC design engineer, six years as a facilities engineer and eight years as owner of a consulting engineering firm specializing in building automation systems. Mr. Smith has performed many building inspections and investigations, including; over 100 property condition assessments of commercial properties and over 500 structural inspections of residential properties. Mr. Smith has also provided quality assurance inspections for the construction of over 300 new homes. Education and Affiliations Bachelor of Architectural Engineering - The Pennsylvania State University 1983 Professional Engineer - State of Maryland - registration # Leadership in Energy and Environmental Design Accredited Professional LEED-AP Member National Society of Professional Engineers Member American Society of Heating Refrigeration and Air Conditioning Engineers