RESERVE FUND STUDY VILLAS OF HUDSON HOMEOWNERS ASSOCIATION HUDSON, OHIO

Transcription

1 RESERVE FUND STUDY VILLAS OF HUDSON HOMEOWNERS ASSOCIATION HUDSON, OHIO Criterium Liszkay Engineers 110 N. High St. Gahanna, OH AUGUST, 2009

2 1.0 INTRODUCTION... 1 CONTENTS 2.0 EXECUTIVE SUMMARY PURPOSE & SCOPE PURPOSE SCOPE SOURCE OF INFORMATION DESCRIPTION OBSERVATIONS RESERVE FUND ANALYSIS CONCLUSION LIMITATIONS APPENDIX A: RESERVE FUND PROJECTIONS... 1

3 1.0 INTRODUCTION. Villas of Hudson Homeowners Association and KareCondo authorized Criterium Liszkay Engineers to conduct a Building Evaluation and Reserve Fund Study for Villas of Hudson Homeowners Association located in Hudson, Ohio. 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. This report is designed to analyze components of the community for which the Association is responsible and to assess a useful expected life and useful remaining life to those components. The anticipated scheduled repair or replacement of each component and the anticipated expense for the activity are then analyzed in conjunction with the current capital reserves funding program for the community. This study should be considered as a full inspection since the entire site was inspected by an on-site inspection. This is not an update to a previous inspection. The attics in six buildings were inspected and further information was taken from a previous report. The present amount of funds in the reserve account is based on information from the Board of Directors of the community and has not been audited. Future project descriptions and funding amounts are based on information from the Association. 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 20 years. The first 10 years are the most reliable. Such a study should be updated every five years. 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, because not including these issues could cause a distortion of the Association s situation. Therefore, the report should be read in its entirety in order to fully understand all of the information that has been obtained. Villas of Hudson Homeowners Association Hudson, Ohio Page 1

4 2.0 EXECUTIVE SUMMARY The community consists of 16 buildings with four units per building for a total of 64 units. All of the buildings are built on slabs. There are attics above each of the units. There are attached garages for each unit. The development was started in approximately 1996 and construction is complete. The second floors are supported with wooden floor joists that span between the supporting walls. The roof framing consists of pre-engineered trusses. Roofing surfaces consist of asphalt singles. The roofs are equipped with aluminum gutters and downspouts. The downspouts are generally routed to underground drains. The exteriors are covered with a combination of brick, faux stone and/or wood shakes, and vinyl siding. All windows have thermal pane glass with metal frames. Steel doors provide access into and out of the residences. The garage doors are made of steel. Electrical, gas and water services are provided underground and are metered individually for each residence. Based on our evaluation, the level of funding of the reserve for this project is adequate. A more detailed analysis of the reserve fund has been provided in Appendix A. Based on our observations, there are no immediate concerns. There are several capital expenditures to be undertaken over the next 20 years. For your convenience, we have prepared the following summary of the condition of the major systems of the property. PROPERTY SUMMARY SITE SYSTEM CONDITION ACTIVITY REQUIRED ANTICIPATED YEAR OF ACTIVITY Roads G-F Replace Driveways G-F Replace BUILDING EXTERIOR Roof G Reroof BUILDING INTERIOR MECHANICAL AMENITIES Signs G Replace 2019 Unit fences G Replace Long fences F Repair/paint OTHER Reserve study G Update Table 2.1: Summary Villas of Hudson Homeowners Association Hudson, Ohio 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 Villas of Hudson Homeowners Association in determining the allocation requirements into the reserve fund in order to meet future anticipated capital expenditures for the community and to comply with Ohio R.C This report forecasts obligations for the community 20 years into the future. This study is not intended to provide a unit by unit inventory of defects. 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 five-year 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 Villas of Hudson Homeowners Association, KareCondo, Criterium Liszkay Engineers and the standards of the Community Associations Institute. The findings and recommendations are based on interviews with the community s management personnel and an investigation of the buildings and site. 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 of the Association to replace. 2. The funding for replacement should be from one source only, not funded from another area of the budget or through a maintenance contract. 3. The cost of replacement should be high enough to make it financially unsound to fund it from the operating budget. 4. Components, such as day to day painting, which are considered deferred maintenance, are most appropriately funded from the Operating Budget instead of Reserves. 5. Components with a useful life expectancy exceeding 20 years are not included. Our reserve study analysis included evaluating the following association property: Site and Grounds: The community consists of 16 buildings with a total of 64 units. All of the buildings are built on slabs. There are attached garages for each unit. The development occupies a rectangular shaped site that is approximately 13.4 acres in size. There is limited signage around the Villas of Hudson Homeowners Association Hudson, Ohio Page 3

6 site. The development was begun about 1996 and is now complete. Private Streets and Curbs: There is a single entrance into the community off of Morse Road in Hudson, Ohio. There are concrete roads through the community with concrete curbs and storm drains. There are concrete driveways between the roads and the garage doors. Building Common Elements: There are different configurations of buildings; with one story and two story units. The exteriors of all the buildings are covered with a combination of brick, T1-11 siding, vinyl siding, wood shakes and faux stone. The common elements of the buildings generally consist of the window & door trim shutters, roofs, gutters and downspouts and the common elements of the electrical and plumbing systems. There are some wooden fences and retaining walls through out the community. Amenities: There are mailboxes located along the roads. There are some signs and fire hydrants around the community The common elements list was developed from discussions with the association s board. Jim Buxton, Vice President of the Board was interviewed. The interior of six attics were inspected during an inspection. This study estimates the funding levels required for maintaining the long term viability of the development. Our approach involves: 1. Examining association managed equipment, buildings and site facilities. 2. Predicting their remaining service life and approximating how frequently they will require repair or replacement for elements that have a predictable future life. 3. Estimating repair or replacement costs (in 2009 dollars) for each capital item and applying a 3.0% inflation rate. 4. Using data developed in Steps 1, 2 and 3 to project Capital Reserve balances for Years 1 through 20. The statements in this report are opinions about the present condition of the subject community. 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. Villas of Hudson Homeowners Association Hudson, Ohio Page 4

7 3.3 Source of Information Onsite inspections of the property occurred on the following dates: August 3, 2009 August 5, 2009 We based our cost estimates on some or all of the following: R.S. Means Our data files on similar projects Local contractors For your reference, the following definitions may be helpful: 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. All ratings are determined by comparison to other buildings of similar age and construction type. Further, some details of workmanship and materials will be examined more closely in higher quality buildings where such details typically become more relevant. 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. 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 Villas of Hudson Homeowners Association Hudson, Ohio Page 5

8 during that time. 4.0 DESCRIPTION The construction of the Villas of Hudson Homeowners Association started in approximately 2005 and is now complete. The development has 16 buildings with four units per building with a mix of physical configurations. There is an attached garage for each unit. There is a single entrance into the community with a main street and two side streets that lead to the driveways that service the garages. All the roads are constructed of concrete with concrete curbs. Some funds for the maintenance or repair of these roads are included in this study. Limited guest parking is permitted around the site. The development occupies a roughly rectangular shaped site that is approximately 13.4 acres in size. A series of catch basins and storm sewers in the lawns and roads collect the storm water. The downspouts off of the roofs discharge into underground drains. The building foundations consist of concrete slabs. Any upper floors are supported with wooden joists between the outer walls. The roof framing consists of pre-engineered trusses. Roofing surfaces are covered with asphalt shingles with aluminum gutters and downspouts. The exterior walls are covered a combination of vinyl siding, faux stone, wooden shakes and brick. All windows have thermal pane glass with aluminum frames. The garage doors are made of steel. There are some stone retaining walls along the road near the entrance. There are wooden fences around all unit patios and most unit patio fences have gates. There are long wooden fences along the west, south and north sides of the community. All of the fences are painted and the north and south fences are leaning. The west fence was recently repaired to correct a leaning condition, the north fence needs a similar repair (resetting all posts below the frost line), while the south fence is satisfactory. Electrical, gas and water services are provided underground and metered individually for each residence. 5.0 OBSERVATIONS The following key observations were made about the current condition of the common elements of the property. Site and Grounds The slope of ground around the foundation is generally flat as is the ground of the community. The roads that run through the site are constructed of concrete with concrete curbs. They are generally in good condition. The concrete driveways are also in good condition but some cracking and deterioration Villas of Hudson Homeowners Association Hudson, Ohio Page 6

9 was seen. Repairs to these drives and roads are included in the study. In some locations gaps between the concrete patios and the foundations have developed. At these locations water may enter and cause the concrete slab to settle. At most of the units there is no present damage. Over time if water should enter this gap the front patio may settle. These gaps should be filled with cement or caulking. Building Exterior The exteriors of the buildings are covered with a combination of vinyl siding, T1-11 siding, brick, wood shake and faux stone. Over all the siding is generally in good condition. Periodic repainting of the wood siding is included in the study but no funds for its total replacement are in this study. Some of the steel lintels over the windows that are set in the brick are unpainted and rusting. These lintels need to be painted to keep them from damaging the bricks. The roofs were examined by going on the roof surface. The roof surfaces of the buildings are covered with asphalt/fiberglass shingles. The roofing, including the flashing, gutters and downspouts, is generally in good condition. However the nailing patterns on the roofs that were inspected where incorrect. This can be corrected when the roofs are reroofed. All buildings have installed heat trace cables to mitigate ice from forming in the gutters and roof valleys. The heat trace cables are unit owned and maintained by the Association. There are four units that have brick chimneys. The chimney caps are metal and all are rusting. Rust is now running down the brick in one location. These caps should be painted. Attic power vents have been installed in several locations. In some locations the caps on these vents are rusting and staining the shingles. The black stains on the roofs are from fungus in the air. This does not damage the roofs but it is a cosmetic condition. A few clinging plants, such as ivy, are growing near some of the buildings. These plants can grow up and get under the siding allowing mold to grow inside the walls. These plants should be kept away from the exterior walls. In some places the wooden fences and parts of the vinyl siding are covered with mulch. Where the wooden fences are covered the wood will prematurely rot. Where the siding is covered this can introduce dampness under the siding and mold or rotting of the wood sill plates may occur. Villas of Hudson Homeowners Association Hudson, Ohio Page 7

10 Building Interiors In the attics no problems were noted except in the attic of 702 where two pieces of one truss have separated. Mechanical There is no mechanical equipment for which the association is responsible. A few of the chimney flue vents appear too short. These vents should be at least two feet higher than anything within 10 feet. These vents are the unit owner s responsibility. Amenities The mailboxes along the roads are in good condition. Because of the low cost and infrequency of the replacement no funds are included in the study for their replacement. The wooden fences are in need of repair now. The west fence was repaired in Funds to repair the north fence are included in the study. The stone retaining walls are in good condition and no funds are included to perform any upgrade. Funds for the replacement of the main signs are included in the study. 6.0 RESERVE FUND ANALYSIS Using software developed by Criterium Engineers and KPMG Peat Marwick, we have analyzed capital reserves draw-down for the projected capital expenditures to determine the amount needed. The following is a projected reserve fund analysis for non-annual items as discussed in the report. This projection takes into consideration a reasonable return on invested money and inflation. Please review this thoroughly 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 20 years. The capital items listed are those that are typically the responsibility of the condominium association. No formal list was provided but information was provided by the Homeowners Association by-laws. Therefore which components are the responsibility of the owners and which are the responsibilities of the Association can vary. The Villas of Hudson Homeowners Association should confirm that the items discussed should be financed by the reserve fund. No taxes have been accounted for in this study. Villas of Hudson Homeowners Association Hudson, Ohio Page 8

11 This projection provides the following: An input sheet that defines all the criteria used for the financial alternatives, including the assumed inflation rate and rate of return on deposited reserve funds. A table 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 20 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 funding of the reserve is considered adequate when the minor adjustments to the current reserve contribution were made. 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. Currently $40,000, about $52 per unit per month, is annually being contributed into the reserve fund. Based on this information this funding does not comply with the current law and is not fully funding the reserve fund. The annual contribution has been increased by $1.00 per unit per month in 2011 to $53.00 with continuing $1.00 increases until 2013, when the monthly per unit reserve fund contribution would be $ With these increases the association is considered fully funded. Addendum A lists estimated capital reserves from 2010 through CONCLUSION Based on the projections made in this study, the contributions into the reserve fund are adequate and the fund is considered fully funded. If the recommendation contained in this study is followed the reserves can be considered as being fully funded. We trust this answers any questions that may arise. If not, or if we can be of further assistance, please do not hesitate to call. Villas of Hudson Homeowners Association Hudson, Ohio Page 9

12 8.0 LIMITATIONS The observations described in this study are valid on the dates of the investigation and have been made under the conditions noted in the report. We prepared this study for the exclusive use of Villas of Hudson Homeowners Association. Criterium Liszkay 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 Liszkay Engineers harmless for any damages, losses or expenses they may incur as a result of its use. 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: Buried utilities or infrastructure Concealed structural members or systems All attic areas Any individual components None of the individual utilities 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. We have performed no design work as part of this study, nor have we obtained competitive quotations or estimates from contractors since 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. Villas of Hudson Homeowners Association Hudson, Ohio Page 10

13 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, Art Wickerham P.E. RS, CBIE Criterium-Liszkay Engineers Villas of Hudson Homeowners Association Hudson, Ohio Page 11

14 Appendix A: RESERVE FUND PROJECTIONS

15 Reserve Study Worksheet General Information: 1 Organization: Villas of Hudson 2 Address: Hudson, OH 3 Number of Units 64 4 Age of Building (in years) a Study Period (in years) 20 5b Normal Fiscal Year starts: January 1, c Partial Fiscal Year starts: January 1, d Partial Year Length: 12 months 6 Site Inspection Date August 3, Reserve Funds at start $191,650 8 Rate of Return on invested Reserve Funds (%) 1.8% 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... $3,333 $40,000 $52.08 $ Years Out Total Annual Per Unit Planned Special Assessment... 0 $0 $0 Balance Computed... $280, Alternative Reserve Fund Contribution Level Funding with Steps Total/Month Total Annual Per Unit/Month Per Unit/Year Monthly Amount, (First Year)... $3,328 $39,936 $52.00 $ Monthly Amount, (Last Year)... $3,520 $42,240 $55.00 $ Balance Required Final Year... $39,003 Special Assessments: Years Out Total/Year Per Unit First Assessment... 0 $0 $0 Second Assessment... 0 $0 $0 Balance Computed... $328,181 Alternative 2 Escalating Funding at 0% per Year 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... $39,003 Base Escalation % % Special Assessments: Years Out Total/Year Per Unit First Assessment... 0 $0 $0 Second Assessment... 0 $0 $0 Balance Computed... ($569,656) Alternative 3 Escalating Funding with Special Assessments 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... $39,003 Base Escalation % % Special Assessments: Years Out Total/Year Per Unit First Assessment... 0 $0 $0 Second Assessment... 0 $0 $0 Balance Computed... Criterium Engineers ($569,656) Page 1 of 10 3/19/2010

16 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 Information Source Site Replace 3% of the roads 480 sf $5.25 $2, $1, $0.00 $0.00 $2, Replace 1% of the driveways 555 sf $4.50 $2, $1, $0.00 $0.00 $2, Building Exterior Reroof 4 bldgs in sq $ $122, $53, $ $11, $85, Reroof 3 bldgs in sq $ $92, $37, $ $7, $59, Reroof 3 bldgs in sq $ $92, $34, $ $7, $55, Reroof 3 bldgs in sq $ $88, $30, $ $6, $48, Reroof 3 bldgs in sq $ $90, $28, $ $6, $45, Building Interior Mechanical Amenities Sign replacement 1 ls $2, $2, $ $15.18 $ $1, Unit fence replacement 2 ea $1, $2, $ $33.33 $ $0.00 Repair long wooden fence 1 ls $5, $5, $2, $ $2, $4, Other Upgrade reserve study 1 ea $1, $1, $ $30.00 $ $0.00 Total Over Term $610, * Costs are typically 10%± ** Reserve study is based on a 20 year projection of non-annual maintenance Totals $502, $191, $3, $42, $306, Criterium Engineers Page 2 of 10 3/19/2010

17 Itemized Graph Categories Totals Site $100,350 Building Exterior $486,600 Building Interior $0 Mechanical $0 Amenities $18,500 Other $5,400 Total $610,850 Itemized Graph Site Building Exterior Building Interior Site, $100,350 Mechanical Amenities Other Other, $5,400 Amenities, $18,500 Building Exterior, $486,600 Mechanical, $0 Building Interior, $0 Criterium Engineers Page 3 of 10 3/19/2010

18 Itemized Funding Monthly Annual Balance Reserve Reserve Full Reserve Beginning Requiring Funding Funding Funding Percent Categories Requirement Balance Funding Required Required Balance Funded Site $100,350 $3,140 $97,210 $0 $0 $5,018 Building Exterior $486,600 $184,832 $301,768 $3,267 $39,199 $295,305 Building Interior $0 $0 $0 $0 $0 $0 Mechanical $0 $0 $0 $0 $0 $0 Amenities $18,500 $3,677 $14,823 $230 $2,766 $5,875 Other $5,400 $0 $5,400 $30 $360 $0 Totals $610,850 $191,650 $419,200 $3,527 $42,325 $306, % Criterium Engineers Page 4 of 10 3/19/2010

19 Annual Expense By Year Year: Year Number: Site Replace 3% of the roads 2,520 2,520 2,520 2,520 2,520 2,520 2,520 2,520 2,520 2,520 2,520 2,520 2,520 2,520 2,520 2,520 Replace 1% of the driveways 2,498 2,498 2,498 2,498 2,498 2,498 2,498 2,498 2,498 2,498 2,498 2,498 2,498 2,498 2,498 2,498 Building Exterior Reroof 4 bldgs in , Reroof 3 bldgs in , Reroof 3 bldgs in , Reroof 3 bldgs in , Reroof 3 bldgs in , Building Interior Mechanical Amenities Sign replacement , Unit fence replacement , , ,000 Repair long wooden fence 0 5, , Other Upgrade reserve study , , ,800 Total Costs 5,018 10,018 5,018 5,018 5,018 8, ,718 97,118 97,118 96,318 99,718 10,018 5,018 5,018 5,018 8,818 Total Costs Adjusted For 3% Inflation 5,018 10,318 5,323 5,483 5,647 10, , , , , ,012 13,867 7,154 7,368 7,589 13,737 Criterium Engineers Page 5 of 10 3/19/2010

20 Annual Expense By Year Site Replace 3% of the roads Replace 1% of the driveways Building Exterior Reroof 4 bldgs in 2016 Reroof 3 bldgs in 2017 Reroof 3 bldgs in 2018 Reroof 3 bldgs in 2019 Reroof 3 bldgs in 2020 Building Interior Mechanical Amenities Sign replacement Unit fence replacement Repair long wooden fence Other Upgrade reserve study Total Costs Total Costs Adjusted For 3% Inflation Year: Year Number: ,520 2,520 2,520 2,520 2,498 2,498 2,498 2, ,018 5,018 5,018 5,018 8,052 8,293 8,542 8,798 Criterium Engineers Page 6 of 10 3/19/2010

21 Existing Funding Levels Beginning Year Reserve Fund Fee Special Investment Capital Ending Year Number Balance Revenue Assessments Earnings Expenditures Balance $191,650 $40,000 $0 $3,966 $5,018 $230, $230,599 $40,000 $0 $4,555 $10,318 $264, $264,835 $40,000 $0 $5,241 $5,323 $304, $304,754 $40,000 $0 $5,937 $5,483 $345, $345,208 $40,000 $0 $6,642 $5,647 $386, $386,203 $40,000 $0 $7,280 $10,222 $423, $423,261 $40,000 $0 $5,438 $152,501 $316, $316,198 $40,000 $0 $4,143 $119,442 $240, $240,899 $40,000 $0 $2,763 $123,026 $160, $160,636 $40,000 $0 $1,312 $125,672 $76, $76,275 $40,000 $0 $0 $134,012 ($17,737) ($17,737) $40,000 $0 $147 $13,867 $8, $8,544 $40,000 $0 $724 $7,154 $42, $42,114 $40,000 $0 $1,308 $7,368 $76, $76,054 $40,000 $0 $1,898 $7,589 $110, $110,362 $40,000 $0 $2,391 $13,737 $139, $139,016 $40,000 $0 $2,992 $8,052 $173, $173,956 $40,000 $0 $3,599 $8,293 $209, $209,262 $40,000 $0 $4,213 $8,542 $244, $244,933 $40,000 $0 $4,832 $8,798 $280,967 Criterium Engineers Page 7 of 10 3/19/2010

22 Existing Funding Levels Beginning Balance as of start of year beginning Jan 2010: $191,650 CONTRIBUTIONS SPECIAL ASSESSMENTS AMOUNT Totals $39, per year Per Year $0 Per Unit $0 $ per unit per year $3, per month $52.08 per unit per month Projected Annual Funding and Expenditures: Year: Year Number: End of Year Reserve Fund Balance 230, , , , , , , , ,636 76,275 (17,737) 8,544 42,114 76, ,362 Capital Expenditures: 5,018 10,318 5,323 5,483 5,647 10, , , , , ,012 13,867 7,154 7,368 7,589 Total Revenue (all sources) 43,966 44,555 45,241 45,937 46,642 47,280 45,438 44,143 42,763 41,312 40,000 40,147 40,724 41,308 41,898 Year: Year Number: End of Year Reserve Fund Balance 139, , , , ,967 Capital Expenditures: 13,737 8,052 8,293 8,542 8,798 Total Revenue (all sources) 42,391 42,992 43,599 44,213 44,832 Existing Funding Levels 450, , , , ,000 Dollars 200, , ,000 50, (50,000) Funding Years Criterium Engineers Page 8 of 10 3/19/2010

23 : Level Funding with Steps Beginning Year Reserve Fund Fee Special Special Investment Capital Ending Year Number Balance Revenue Assessments 1 Assessments 2 Earnings Expenditures Balance $191,650 $39,936 $0 $0 $3,965 $5,018 $230, $230,533 $40,704 $0 $0 $4,566 $10,318 $265, $265,486 $41,472 $0 $0 $5,279 $5,323 $306, $306,913 $42,240 $0 $0 $6,014 $5,483 $349, $349,685 $42,240 $0 $0 $6,760 $5,647 $393, $393,037 $42,240 $0 $0 $7,438 $10,222 $432, $432,494 $42,240 $0 $0 $5,639 $152,501 $327, $327,871 $42,240 $0 $0 $4,387 $119,442 $255, $255,056 $42,240 $0 $0 $3,050 $123,026 $177, $177,320 $42,240 $0 $0 $1,643 $125,672 $95, $95,531 $42,240 $0 $0 $66 $134,012 $3, $3,824 $42,240 $0 $0 $563 $13,867 $32, $32,761 $42,240 $0 $0 $1,187 $7,154 $69, $69,035 $42,240 $0 $0 $1,818 $7,368 $105, $105,725 $42,240 $0 $0 $2,457 $7,589 $142, $142,832 $42,240 $0 $0 $2,998 $13,737 $174, $174,333 $42,240 $0 $0 $3,649 $8,052 $212, $212,170 $42,240 $0 $0 $4,307 $8,293 $250, $250,424 $42,240 $0 $0 $4,972 $8,542 $289, $289,095 $42,240 $0 $0 $5,644 $8,798 $328,181 Criterium Engineers Page 9 of 10 3/19/2010

24 : Level Funding with Steps Beginning Balance as of start of year beginning Jan 2010: $191,650 CONTRIBUTIONS SPECIAL ASSESSMENTS SETTINGS (analyzed by unit/month) FIRST YR LAST YR Totals Starting amount ($): 52 $39, $42, per year First Per Year $0 Per Unit $0 Increment by ($): 1 $ $ per unit per year Second Per Year $0 Per Unit $0 Every 1 year $3, $3, per month Frequency: 3 time $52.00 $55.00 per unit per month Projected Annual Funding and Expenditures: Year: Year Number: End of Year Reserve Fund Balance 230, , , , , , , , ,320 95,531 3,824 32,761 69, , ,832 Capital Expenditures: 5,018 10,318 5,323 5,483 5,647 10, , , , , ,012 13,867 7,154 7,368 7,589 Total Revenue (all sources) 43,901 45,270 46,751 48,254 49,000 49,678 47,879 46,627 45,290 43,883 42,306 42,803 43,427 44,058 44,697 Year: Year Number: End of Year Reserve Fund Balance 174, , , , ,181 Capital Expenditures: 13,737 8,052 8,293 8,542 8,798 Total Revenue (all sources) 45,238 45,889 46,547 47,212 47,884 : Level Funding with Steps 500, , , , ,000 Dollars 250, , , ,000 50, Funding Years Criterium Engineers Page 10 of 10 3/19/2010