GLOBAL Solution Partners, LLC info@globalreservestudies.com - Toll free phone and fax: (844) 477-7883 - www.globalsolutionpartners.com Funding Reserve Analysis for Oak Crest Farms November 2, 2016 Page 1 of 25 Pages
Funding Reserve Analysis for Oak Crest Farms Table of Contents Pages Subject 1 Report Cover Sheet 2 Table of Contents 3 to 14 Reserve Study Summary 15 to 17 Reserve Item Listing 18 to 19 Cash Flow 20 to 21 Dues Summary 22 to 25 Expense Summary Page 2 of 25 Pages
GLOBAL Solution Partners, LLC info@globalreservestudies.com - Toll free phone and fax: (844) 477-7883 - www.globalsolutionpartners.com November 2, 2016 Mr. Doug Nichols SeaScape Property Management, Inc. 17563 Nassau Commons Blvd. Lewes, DE 19958 Mr. Nichols, Global Solution Partners is pleased to present to Doug Nichols and the Oak Crest Farms Association the requested Reserve Funding Study. We believe that you will find the attached study to be thorough and complete. After you have had an opportunity to review the report you may have questions. Please do not hesitate to write or call - we would be pleased to answer any questions you may have. Project Description REPORT REVISION 1/3/2017 Per the request of the Board of Directors and additional information provided, the following revisions were made to the original report: 1. The beginning reserve fund balance was adjusted to $77,000. 2. A minimum reserve fund balance of $10,000 was established. 3. Reserve fund interest rate was raised to 2 percent. 4. Pool furniture, entry system, and clubhouse exterior surface repairs were removed as reservable items and now considered operational budget items. 5. Storm water pump & controls remaining life expectancies adjusted. 6. Asphalt mill & overlay life expectancy for less trafficked streets was increased. 7. Various remaining life expectancies adjusted based on additional information provided. The recommended funding plan was revised accordingly. NOVEMBER 2, 2016 Oak Crest Farms is a 175 unit single family neighborhood located in Lewes, DE. The neighborhood is approximately 12 years old and is in good condition for its age. Asphalt paved streets access the homes. The community offers an inground pool and clubhouse with a kitchen and baths. Homes throughout the neighborhood are nicely landscaped and appear to be well maintained. Date of Physical Inspection The site visit was conducted by Global Solution Partners on October 27, 2016. Study Start and Study End This Reserve Study encompases 30 Years. The Study Start Date is January 1, 2017 and the study ends on December 31, 2046. Depth of Study A site visit was made to verify the existing condition as it relates to the average life expectancies of the various reserve study components and to verify component quantities. In place testing, laboratory testing, and non- Page 3 of 25 Pages
Oak Crest Farms Funding Study Summary - Continued destructive testing of the reserve study components were not performed. Field measurements of component quantities were made to either verify improvement plan take offs or determine directly the quantities of various components. Photographs were taken of the site improvements. Summary of Financial Assumptions The below table contains a partial summary of information provided by Mr. Doug Nichols for the Oak Crest Farms funding study. Reserve Study by Calendar Year Starting January 1, 2017 Funding Study Length 30 Years Number of Dues Paying Members 175 Reserve Balance as of January 1, 2017¹ $ 77,000 Annual Inflation Rate 2.50% Tax Rate on Reserve Interest ² 30.00% Minimum Reserve Account Balance $ 10,000 Dues Change Period 1 Year Annual Operating Budget $ 0 ¹ See ''Financial Condition of Association'' in this report. ² Taxed as an IRS exempt association Recommended Payment Schedule The below table contains Global Solution Partners recommended schedule of payments for the next five years. Failure to follow the proposed schedule of payments may result in inadequate reserve funds or require the use of Special Assessments in the future. Proposed Modified Dues Calendar Year Member Monthly Reserve Dues Member Total Annual Dues Association Monthly Reserve Dues Association Annual Reserve Dues Proposed Reserve Balance 2017 $ 11.83 $ 142 $ 2,071 $ 24,850 $ 103,099 2018 $ 18.55 $ 223 $ 3,246 $ 38,950 $ 143,758 2019 $ 19.01 $ 228 $ 3,327 $ 39,924 $ 153,638 2020 $ 19.49 $ 234 $ 3,410 $ 40,922 $ 196,997 2021 $ 19.97 $ 240 $ 3,495 $ 41,945 $ 241,998 2022 $ 20.47 $ 246 $ 3,583 $ 42,994 $ 278,410 * Annual Reserve Payments have been manually modified. The recommended reserve fund contributions have been set to meet future capital expenses while avoiding special assessments and minimizing dues increases. Reserve Study Assumptions The below listed assumptions are implicit in this reserve study. Cost estimates and financial information are accurate and current. No unforeseen circumstances will cause a significant reduction of reserves. Sufficient comprehensive property insurance exists to protect from insurable risks. The association plans to continue to maintain the existing common areas and amenities. Reserve payments occur at the end of every calendar month. Expenses occur at the end of the expense year. Page 4 of 25 Pages
Oak Crest Farms Funding Study Summary - Continued Impact of Component The projected life expectancy of the major components and the reserve funding needs of the Association are closely tied. Performing the appropriate routine maintenance for each major component generally increases the component useful life, effectively moving the component expense into the future which reduces the reserve funding payments of the Association. Failure to perform such maintenance can shorten the remaining useful life of the major components, bringing the expense closer to the present which increases the reserve funding payments of the Association. Inflation Estimate Inflation for the last year has been reviewed and a best fit regression analysis for the last 12 months is 2.50 percent. An inflation multiplier of 2.50 percent per annum has been applied to all future expenses. Initial Reserves Initial reserves for this Reserve Study were known to be $ 77,000 on January 1, 2017. Based upon a study start date of January 1, 2017 a total of 0 days of accrued interest at 2.00 percent per annum were compounded to yield an initial reserve balance of $ 77,000. The implicit assumption has been made that the reserve accounts were not drawn down between the date of the known reserve balance and the study start date. Financial Condition of Association It is recommended that the association adjust its reserve fund contributions to align with the cash flow and dues summary pages contained in this study. Special Assessments Special Assessments have not been factored into this Reserve Study. Reserve Funding Goal The reserve fund goal is a minimum account balance consistent with the cash demands of maintenance and of reserve items. (Baseline Funding) Study Method Funding studies may be done in several ways, but we believe that the value of a funding study lies in the details. In this study, we have used the "Component" method because it is the only method which allows scrutiny of the funding details. The method is pragmatic, and allows human judgement and experience to enter into the equation. The present cost of every reserve item in this report has been estimated using a variety of sources including the "National Construction Estimator", a nationally recognized standard, actual costs provided by the client, our proprietary database and the knowledge and experience of our Reserve Analyst. Where possible, known costs have been used. In addition, every reserve item has been given an estimated remaining useful life, an estimated useful life when new, and has been cast into the future to determine the inflated cost. Equal annual payments are calculated for each reserve item based upon a payment starting year and a payment ending year using the end of period payment method. Interest earned, if applicable, on accumulated reserve funds and taxes on the reserve interest are also calculated. Initial reserve funds are consumed as expenses occur until fully depleted, reducing annual reserve payments to a minimum. As you review this report, we are certain that you will appreciate the level of detail provided, allowing you to review each reserve item in detail. Page 5 of 25 Pages
Summary of Findings Prepared by Global Solution Partners Oak Crest Farms Funding Study Summary - Continued Global Solution Partners has estimated future projected expenses for Oak Crest Farms based upon preservation of existing improvements. The attached funding study is limited in scope to those expense items listed in the attached "Oak Crest Farms Reserve Study Expense Items". Expense items which have an expected life of more than 30 Years are not included in this reserve study unless payment for these long lived items overlaps the 30 Years reserve study envelope. Of primary concern is the preservation of a positive funding balance with funds sufficient to meet projected expenses throughout the study life. Based upon the attached funding study, it is our professional opinion that member monthly fees as shown in the attached "Oak Crest Farms Dues Summary" will realize this goal. Some reserve items in the "Revenue Summary Table" may not contain payments. In this analysis the initial reserves were used to make annual payments for expense items in their order of occurrence until the initial reserve was consumed. As a result reserve items without payments may be expected, particularly in the first few years of the funding study. Reserve items that have been paid with initial reserve funds are identified with a [FP] in the Expense Items Sheets. An item marked [PR] is partially paid with initial reserve funds. Mr. Doug Nichols represents and warrants that the information provided to Global Solution Partners, including but not limited to that information contained in the attached Reserve Study Information Summary, that the maintenance records are complete and accurate, and that Global Solution Partners may rely upon such information and documents without further verification or corroboration.where the age of a particular Reserve Item (as listed in the Reserve Study) is unknown, Mr. Doug Nichols shall provide to Global Solution Partners Mr. Doug Nichols's best-estimated age of that item. If Mr. Doug Nichols is unable to provide and estimate of a Reserve Item's age, Global Solution Partners shall make its own estimate of age of the Reserve Item. The Reserve Study is created for the association's use, and is a reflection of information provided to Global Solution Partners. This information is not for the purpose of performing an audit, historical records, quality or forensic analyses. Any on site inspection is not considered to be a project audit or quality inspection. Keeping Your Reserve Study Current Global Solution Partners believes that funding studies are an essential part of property management. People and property are constantly changing and evolving. As a result, the useful life of a funding study is at best a few years. This reserve study should be updated when any of the following occur: *At least once a year *At changes in interest rates *At changes in inflation rates *At changes in the number of dues paying members *Before starting new improvements *Before making changes to the property *After a flood or fire *After the change of ownership or management *After Annexation or Incorporation Governing Documents The CCR's (conditions,covenants and restrictions) governing documents were not provided and therefor not reviewed as part of this study. Items Beyond the Scope of this Report Building or land appraisals for any purpose. State or local zoning ordinance violations. Building code violations. Soils conditions, soils contamination or geological stability of site. Page 6 of 25 Pages
Oak Crest Farms Funding Study Summary - Continued Engineering analysis or structural stability of site. Air quality, asbestos, electromagnetic radiation, formaldehyde, lead, mercury, or radon. Water quality or other environmental hazards. Invasions by termites and any or all other destroying organisms or insects. Damage or destruction due to birds, bats or animals to buildings or site. This study is not a pest inspection. Adequacy or efficiency of any system or component on site. Specifically excluded reserve items. Septic systems and septic tanks. Buried or concealed portions of swimming pools, pool liners, Jacuzzis and spas or similar items. Items concealed by signs, carpets or other things. Missing or omitted information not supplied by the client for purposes of reserve study preparation. Hidden improvements such as sewer lines, water lines, or other buried or concealed items. Items Considered to be Long Lived Items considered to be Long Lived are intentionally not included in this study. Long Lived items are typically those items that have a useful life expectancy beyond the current study period. The following items have been identified as Long Lived and therefor are not included in this study: Clubhouse structure; and Pool structure. Items Considered to be Operational Items considered to be typically included in the Operational Budget are intentionally not included in this study. Operational Budget items typically include routine maintenance and lower cost items. The following items have been identified as Operational Budget items and therefor are not included in this study: Sewage system (has it's own reserve study); Clubhouse plumbing and electrical systems; Pool cover; Pool maintenance; Landscaping; Irrigation; Bulletin boards; pool furniture; building and gate entry systems; and clubhouse exterior surface repair allowance. Items Maintained by Others Items maintained by other entities or individuals i.e. municipalities, individual dwelling unit owners, other associations, utility companies, etc... are intentionally not included in this study. The following items have been identified as being maintained by others and therefor are not included in this study: Water supply system, Street lighting, Single family homes & driveways. Statement of Qualifications Global Solution Partners is a professional in the business of preparing reserve studies and other related property services for resorts, hotels, and community associations. We are familiar with construction practices, construction costs, and contracting practices. Conflict of Interest As the preparer of this reserve study, Global Solution Partners certifies that we do not have any vested interests, financial interests, or other interests that would cause a conflict of interest in the preparation of this reserve study. Global Solution Partners would like to thank SeaScape Property Management, Inc. for the opportunity to be of service in the preparation of the attached Funding Study. Again, please feel free to write or call at our letterhead address if you have any questions. Page 7 of 25 Pages
Oak Crest Farms Funding Study Summary - Continued Prepared by: Keith Ruehl Solution Partner Enclosures: 1 Page of Photographs Attached Category Photograph of Clubhouse Category Photograph of Paving and concrete Category Photograph of Pool area Category Photograph of Site Elements Page 8 of 25 Pages
Oak Crest Farms Funding Study Summary - Continued Clubhouse left elevation Clubhouse rear elevation Clubhouse roof Heat pumps Clubhouse kitchen Clubhouse air handler in basement Page 9 of 25 Pages
Oak Crest Farms Funding Study Summary - Continued Reserve Category - Clubhouse Item Name Category Photograph with Reserve Items in the Category: Clubhouse Present Cost Remaining Expected First Expense Year First Expense Repeating Item? 4' Vinyl fencing $ 3,136.00 13 Yrs 25 Yrs 2030 $ 4,448.58 Yes 6' Vinyl fencing $ 558.00 22 Yrs 25 Yrs 2039 $ 991.05 Yes Roofing $ 13,965.00 8 Yrs 20 Yrs 2025 $ 17,484.59 Yes Clubhouse interior refurbish $ 4,000.00 12 Yrs 22 Yrs 2029 $ 5,534.25 Yes Bathrooms refurbish $ 8,550.00 8 Yrs 20 Yrs 2025 $ 10,704.85 Yes Rear composite deck $ 29,290.00 15 Yrs 25 Yrs 2032 $ 43,677.37 Yes Rain gutters $ 1,188.00 12 Yrs 24 Yrs 2029 $ 1,643.67 Yes HVAC systems - Train 1.5 ton units $ 14,550.00 6 Yrs 14 Yrs 2023 $ 17,329.48 Yes Furniture $ 5,200.00 5 Yrs 10 Yrs 2022 $ 6,040.60 Yes Appliances $ 3,650.00 5 Yrs 10 Yrs 2022 $ 4,240.03 Yes Flooring carpet $ 2,024.00 6 Yrs 10 Yrs 2023 $ 2,410.64 Yes Flooring ceramic tile $ 1,350.00 16 Yrs 24 Yrs 2033 $ 2,064.03 Yes Flooring hardwood refinish $ 2,015.52 30 Yrs 40 Yrs 2047 $ 4,371.35 Yes Exterior surfaces repairs allowance $ 2,500.00 8 Yrs 10 Yrs 2025 $ 3,130.07 Yes Windows $ 5,880.00 18 Yrs 30 Yrs 2035 $ 9,450.45 Yes Exterior doors $ 4,600.00 18 Yrs 20 Yrs 2035 $ 7,393.21 Yes Pergola refurbish $ 6,600.00 18 Yrs 30 Yrs 2035 $ 10,607.65 Yes Page 10 of 25 Pages
Oak Crest Farms Funding Study Summary - Continued Item Name Present Cost Remaining Expected First Expense Year First Expense Repeating Item? Front exterior wood deck $ 8,484.00 17 Yrs 20 Yrs 2034 $ 13,299.33 Yes Clubhouse structural repair allowance $ 10,000.00 10 Yrs 10 Yrs 2027 $ 13,161.54 Yes Page 11 of 25 Pages
Oak Crest Farms Funding Study Summary - Continued Reserve Category - Paving and concrete Category Photograph with Reserve Items in the Category: Paving and concrete Item Name Present Cost Remaining Expected First Expense Year First Expense Repeating Item? Concrete sidewalks $ 1,176.00 30 Yrs 40 Yrs 2047 $ 2,550.56 Yes Asphalt paved streets mill and overlay $ 200,380.00 13 Yrs 25 Yrs 2030 $ 284,249.25 Yes Asphalt paved streets patch & repair allowance $ 14,023.80 8 Yrs 8 Yrs 2025 $ 17,558.21 Yes Asphalt paved parking areas mill and overlay $ 8,580.00 13 Yrs 25 Yrs 2030 $ 12,171.17 Yes Asphalt paved parking areas patch & repair allowance $ 1,235.52 8 Yrs 8 Yrs 2025 $ 1,546.91 Yes Asphalt paved streets mill and overlay - Farmview - Ridge - Oak Leaf - Knoll $ 91,782.50 18 Yrs 30 Yrs 2035 $ 147,514.66 Yes Page 12 of 25 Pages
Oak Crest Farms Funding Study Summary - Continued Reserve Category - Pool area Item Name Category Photograph with Reserve Items in the Category: Pool area Present Cost Remaining Expected First Expense Year First Expense Repeating Item? Pool liner $ 7,600.00 12 Yrs 12 Yrs 2029 $ 10,515.08 Yes Pool deck stamped concrete resurface $ 28,224.00 12 Yrs 24 Yrs 2029 $ 39,049.68 Yes Pool fencing $ 10,569.00 21 Yrs 25 Yrs 2038 $ 18,308.27 Yes Pool pumps and filtration equipment $ 5,400.00 6 Yrs 10 Yrs 2023 $ 6,431.56 Yes Page 13 of 25 Pages
Oak Crest Farms Funding Study Summary - Continued Reserve Category - Site Elements Category Photograph with Reserve Items in the Category: Site Elements Item Name Entrance and monuments upgrades allowance Present Cost Remaining Expected $ 3,500.00 13 Yrs 25 Yrs First Expense Year 2030 First Expense Repeating Item? $ 4,964.93 Yes Storage shed refurbish $ 6,500.00 8 Yrs 20 Yrs 2025 $ 8,138.19 Yes Community signage Storm water pumping stations Storm water generator system Storm water pump control system Storm water ponds dredging allowance Swale maintenance allowance - Includes storm water ponds - drain pipes & driveway repairs $ 5,600.00 8 Yrs 20 Yrs $ 60,000.00 14 Yrs 14 Yrs $ 22,400.00 23 Yrs 35 Yrs $ 6,600.00 20 Yrs 20 Yrs $ 8,000.00 6 Yrs 8 Yrs $ 30,000.00 2 Yrs 12 Yrs 2025 2031 2040 2037 2023 2019 $ 7,011.37 Yes $ 87,265.44 Yes $ 40,790.00 Yes $ 11,150.94 Yes $ 9,528.24 Yes $ 32,334.00 Yes Page 14 of 25 Pages
Reserve Items Unit Cost No Units 4' Vinyl fencing 6' Vinyl fencing Roofing Clubhouse interior refurbish Bathrooms refurbish Rear composite deck Rain gutters HVAC systems - Train 1.5 ton units Furniture Appliances Flooring carpet Flooring ceramic tile Flooring hardwood refinish Exterior surfaces repairs allowance Prepared by Global Solution Partners Oak Crest Farms Reserve Study Expense Item Listing Current Cost When New $ 14.00 / lnft 224 lnft $ 3,136 $ 18.00 / lnft 31 lnft $ 558 Clubhouse $ 5.25 / sqft 2660 sqft $ 13,965 $ 4,000 / Lump sum 1 Lump sum $ 4,000 $ 2,850 ea 3 $ 8,550 $ 29.00 / SF 1010 SF $ 29,290 $ 6.00 / lnft 198 lnft $ 1,188 $ 4,850 ea 3 $ 14,550 $ 5,200 / Lump sum 1 Lump sum $ 5,200 $ 3,650 / Lump sum 1 Lump sum $ 3,650 $ 2.00 / sqft 1012 sqft $ 2,024 $ 5.00 / sqft 270 sqft $ 1,350 Estimated Remaining Expected When New Calendar Year Estimated Future Cost Raw Annual Payment 13 Years 2030 $ 4,449 $ 275.61 25 Years 25 Years 2055 $ 8,306 $ 256.33 22 Years 2039 $ 991 $ 33.97 25 Years 25 Years 2064 $ 1,850 $ 57.11 8 Years 20 Years 20 Years 2025 $ 17,485 $ 1,774.74 2045 $ 28,812 $ 1,172.83 2065 $ 47,479 $ 1,932.67 12 Years 2029 $ 5,534 $ 373.12 22 Years 22 Years 2051 $ 9,587 $ 347.26 8 Years 20 Years 20 Years 2025 $ 10,705 $ 1,086.58 2045 $ 17,640 $ 718.06 2065 $ 29,069 $ 1,183.26 15 Years 2032 $ 43,677 $ 2,318.57 25 Years 25 Years 2057 $ 81,547 $ 2,516.75 12 Years 2029 $ 1,644 $ 110.82 24 Years 24 Years 2053 $ 2,993 $ 97.27 6 Years 14 Years 5 Years 10 Years 5 Years 10 Years 6 Years 10 Years 14 Years 10 Years 10 Years 10 Years 2023 $ 17,329 $ 2,308.45 2037 $ 24,583 $ 1,522.99 2051 $ 34,872 $ 2,160.44 2022 $ 6,041 $ 948.41 2032 $ 7,754 $ 701.11 2042 $ 9,954 $ 900.01 2052 $ 12,778 $ 1,155.33 2022 $ 4,240 $ 665.71 2032 $ 5,443 $ 492.13 2042 $ 6,987 $ 631.74 2052 $ 8,969 $ 810.96 2023 $ 2,411 $ 321.12 2033 $ 3,095 $ 279.79 2043 $ 3,972 $ 359.17 2053 $ 5,099 $ 461.06 16 Years 2033 $ 2,064 $ 102.04 24 Years 24 Years 2057 $ 3,759 $ 122.14 $ 3.12 / sqft 646 sqft $ 2,016 30 Years 40 Years 2047 $ 4,371 $ 101.90 $ 2,500 / Lump sum 1 Lump sum $ 2,500 8 Years 10 Years 10 Years 2025 $ 3,130 $ 317.71 2035 $ 4,018 $ 363.30 2045 $ 5,158 $ 466.36 2055 $ 6,621 $ 598.66 Page 15 of 25 Pages
Reserve Items Unit Cost No Units Windows Exterior doors Oak Crest Farms Reserve Study Expense Item Listing - Continued Current Cost When New $ 5,880 / Lump sum 1 Lump sum $ 5,880 $ 4,600 / Lump sum 1 Lump sum $ 4,600 Pergola refurbish $ 6,600 / Lump sum 1 Lump sum $ 6,600 Front exterior wood deck Clubhouse structural repair allowance $ 21.00 / sf 404 sf $ 8,484 Estimated Remaining Expected When New $ 10,000 / lump sum 1 lump sum $ 10,000 10 Years 10 Years Calendar Year Estimated Future Cost Raw Annual Payment 18 Years 2035 $ 9,450 $ 409.27 30 Years 30 Years 2065 $ 19,991 $ 486.87 18 Years 2035 $ 7,393 $ 320.18 20 Years 20 Years 2055 $ 12,183 $ 495.92 18 Years 2035 $ 10,608 $ 459.38 30 Years 30 Years 2065 $ 22,439 $ 546.48 17 Years 2034 $ 13,299 $ 614.43 20 Years 20 Years 2054 $ 21,915 $ 892.09 2027 $ 13,162 $ 1,070.70 2037 $ 16,895 $ 1,527.61 2047 $ 21,688 $ 1,960.98 Paving and concrete Concrete sidewalks $ 9.80 / sqft 120 sqft $ 1,176 30 Years 40 Years 2047 $ 2,551 $ 59.46 Asphalt paved streets mill and overlay $ 1.25 / sqft 160304 sqft $ 200,380 13 Years 2030 $ 284,249 $ 17,610.31 25 Years 25 Years 2055 $ 530,702 $ 16,378.81 Asphalt paved streets patch & repair allowance Asphalt paved parking areas mill and overlay Asphalt paved parking areas patch & repair allowance Asphalt paved streets mill and overlay - Farmview - Ridge - Oak Leaf - Knoll 2025 $ 17,558 $ 1,782.22 $ 0.06 / sqft 233730 sqft $ 14,024 8 Years 8 Years 2033 $ 21,441 $ 2,473.68 2041 $ 26,183 $ 3,020.73 2049 $ 31,973 $ 3,688.76 13 Years 2030 $ 12,171 $ 754.05 $ 1.25 / sqft 6864 sqft $ 8,580 25 Years 25 Years 2055 $ 22,724 $ 701.32 2025 $ 1,547 $ 157.02 $ 0.18 / sqft 6864 sqft $ 1,236 8 Years 8 Years 2033 $ 1,889 $ 217.94 2041 $ 2,307 $ 266.13 2049 $ 2,817 $ 324.99 18 Years 2035 $ 147,515 $ 6,388.38 $ 1.25 / sqft 73426 sqft $ 91,783 30 Years 30 Years 2065 $ 312,045 $ 7,599.65 Pool area Pool liner Pool deck stamped concrete resurface 2029 $ 10,515 $ 708.92 $ 7,600 / lump sum 1 lump sum $ 7,600 12 Years 12 Years 2041 $ 14,189 $ 1,047.21 2053 $ 19,148 $ 1,413.14 12 Years 2029 $ 39,050 $ 2,632.72 $ 11.76 / sqft 2400 sqft $ 28,224 24 Years 24 Years 2053 $ 71,109 $ 2,310.87 Page 16 of 25 Pages
Oak Crest Farms Reserve Study Expense Item Listing - Continued Reserve Items Unit Cost No Units Pool fencing Pool pumps and filtration equipment Current Cost When New $ 39.00 / lnft 271 lnft $ 10,569 $ 5,400 / lump sum 1 lump sum $ 5,400 Estimated Remaining Expected When New Calendar Year Estimated Future Cost Raw Annual Payment 21 Years 2038 $ 18,308 $ 663.18 25 Years 25 Years 2063 $ 34,182 $ 1,054.95 6 Years 10 Years 10 Years 2023 $ 6,432 $ 856.74 2033 $ 8,256 $ 746.49 2043 $ 10,598 $ 958.26 2053 $ 13,605 $ 1,230.11 Site Elements Entrance and monuments upgrades allowance $ 3,500 / Lump sum 1 Lump sum $ 3,500 13 Years 2030 $ 4,965 $ 307.60 25 Years 25 Years 2055 $ 9,270 $ 286.09 Storage shed refurbish Community signage Storm water pumping stations Storm water generator system Storm water pump control system Storm water ponds dredging allowance Swale maintenance allowance - Includes storm water ponds - drain pipes & driveway repairs $ 6,500 / Lump sum 1 Lump sum $ 6,500 $ 5,600 / Lump sum 1 Lump sum $ 5,600 8 Years 20 Years 8 Years 20 Years 20 Years 20 Years $ 30,000 ea 2 $ 60,000 14 Years 14 Years $ 22,400 / Lump sum 1 Lump sum $ 22,400 $ 6,600 / Lump sum 1 Lump sum $ 6,600 20 Years 20 Years $ 8,000 / Lump sum 1 Lump sum $ 8,000 $ 30,000 / Lump sum 1 Lump sum $ 30,000 2025 $ 8,138 $ 826.05 2045 $ 13,411 $ 545.89 2065 $ 22,099 $ 899.56 2025 $ 7,011 $ 711.68 2045 $ 11,554 $ 470.31 2065 $ 19,039 $ 775.00 2031 $ 87,265 $ 4,993.42 2045 $ 123,790 $ 7,669.28 2059 $ 175,603 $ 10,879.27 23 Years 2040 $ 40,790 $ 1,325.58 35 Years 35 Years 2075 $ 97,761 $ 1,930.93 6 Years 8 Years 2 Years 12 Years 8 Years 12 Years Raw Annual Payments do not include earned interest, tax adjustments or payments made with inital reserves. Months Remaining in Calendar Year 2017: 12 Expected annual inflation: 2.50% Interest earned on reserve funds: 2.00% Initial Reserve: $ 77,000 2037 $ 11,151 $ 427.71 2057 $ 18,375 $ 747.98 2023 $ 9,528 $ 1,269.25 2031 $ 11,635 $ 1,342.38 2039 $ 14,209 $ 1,639.25 2047 $ 17,351 $ 2,001.76 2019 $ 32,334 $ 10,466.87 2031 $ 43,633 $ 3,220.18 2043 $ 58,880 $ 4,345.44 2055 $ 79,454 $ 5,863.90 Page 17 of 25 Pages
Oak Crest Farms Funding Study Modified Cash Flow Analysis Calendar Year Annual Dues Annual Interest Annual Expenses Annual Income Tax Net Reserve Funds 2017 $ 24,850 $ 1,784 $ 535 $ 103,099 2018 $ 38,950 $ 2,442 $ 732 $ 143,758 2019 $ 39,924 $ 3,272 $ 32,334 $ 982 $ 153,638 2020 $ 40,922 $ 3,481 $ 1,044 $ 196,997 2021 $ 41,945 $ 4,366 $ 1,310 $ 241,998 2022 $ 42,994 $ 5,285 $ 10,281 $ 1,585 $ 278,410 2023 $ 44,068 $ 6,030 $ 35,700 $ 1,809 $ 290,999 2024 $ 45,170 $ 6,295 $ 1,888 $ 340,576 2025 $ 46,299 $ 7,306 $ 65,574 $ 2,192 $ 326,415 2026 $ 47,457 $ 7,031 $ 2,109 $ 378,794 2027 $ 48,643 $ 8,100 $ 13,162 $ 2,430 $ 419,945 2028 $ 49,859 $ 8,942 $ 2,683 $ 476,064 2029 $ 51,106 $ 10,088 $ 56,743 $ 3,026 $ 477,489 2030 $ 52,383 $ 10,128 $ 305,834 $ 3,038 $ 231,128 2031 $ 53,693 $ 5,164 $ 142,534 $ 1,549 $ 145,902 2032 $ 55,035 $ 3,455 $ 56,875 $ 1,036 $ 146,481 2033 $ 56,411 $ 3,479 $ 36,745 $ 1,044 $ 168,583 2034 $ 57,821 $ 3,938 $ 13,299 $ 1,182 $ 215,862 2035 $ 59,267 $ 4,907 $ 178,984 $ 1,472 $ 99,579 2036 $ 60,749 $ 2,571 $ 771 $ 162,128 2037 $ 62,267 $ 3,849 $ 52,629 $ 1,155 $ 174,461 2038 $ 63,824 $ 4,112 $ 18,308 $ 1,234 $ 222,855 2039 $ 65,420 $ 5,105 $ 15,200 $ 1,531 $ 276,649 2040 $ 67,055 $ 6,206 $ 40,790 $ 1,862 $ 307,258 2041 $ 68,732 $ 6,840 $ 42,679 $ 2,052 $ 338,099 2042 $ 70,450 $ 7,479 $ 16,941 $ 2,244 $ 396,843 2043 $ 72,211 $ 8,682 $ 73,450 $ 2,605 $ 401,681 2044 $ 74,016 $ 8,796 $ 2,639 $ 481,855 2045 $ 75,867 $ 10,433 $ 200,365 $ 3,130 $ 364,660 2046 $ 77,763 $ 8,083 $ 2,425 $ 448,081 2047 $ 79,708 $ 9,786 $ 45,961 $ 2,936 $ 488,678 Totals : $ 1,734,860 $ 187,435 $ 1,454,387 $ 56,230 ¹ Cash Reserves minus Fully Funded Value The cash distribution shown in this table applies to repair and cash reserves only. Basis of Funding Study - Modified Cash Flow Cash reserves have been set to a minimum of $ 10,000 Cash Flow has been modified with the forced Fixed Payments. Months Remaining in Calendar Year 2017: 12 Inflation = 2.50 % Interest = 2.00 % Study = 30 years Initial Reserve Funds = $ 77,000.00 Final Reserve Value = $ 488,677.74 Page 18 of 25 Pages
Oak Crest Farms Funding Study Cash Flow by Calendar Year - Continued Percent Funded Cash Reserves Expenses $ 10,000 Minimum Cash Reserve 480.0 80% Cash Reserves in Thousands of Dollars 420.0 360.0 300.0 240.0 180.0 120.0 70% 60% 50% 40% 30% 20% Percent Funded 60.0 10% 0.0 2017 2022 2027 2032 2037 2042 2047 0% Calendar Years Page 19 of 25 Pages
Calendar Year Member Monthly Reserve Payment Prepared by Global Solution Partners Oak Crest Farms Modified Reserve Dues Summary Projected Dues by Month and by Calendar Year Member Total Monthly Payment Member Total Annual Payment Monthly Reserve Payment Annual Reserve Payment 2017 $ 11.83 $ 11.83 $ 142.00 $ 2,071 $ 24,850 2018 $ 18.55 $ 18.55 $ 222.57 $ 3,246 $ 38,950 2019 $ 19.01 $ 19.01 $ 228.14 $ 3,327 $ 39,924 2020 $ 19.49 $ 19.49 $ 233.84 $ 3,410 $ 40,922 2021 $ 19.97 $ 19.97 $ 239.69 $ 3,495 $ 41,945 2022 $ 20.47 $ 20.47 $ 245.68 $ 3,583 $ 42,994 2023 $ 20.98 $ 20.98 $ 251.82 $ 3,672 $ 44,068 2024 $ 21.51 $ 21.51 $ 258.11 $ 3,764 $ 45,170 2025 $ 22.05 $ 22.05 $ 264.57 $ 3,858 $ 46,299 2026 $ 22.60 $ 22.60 $ 271.18 $ 3,955 $ 47,457 2027 $ 23.16 $ 23.16 $ 277.96 $ 4,054 $ 48,643 2028 $ 23.74 $ 23.74 $ 284.91 $ 4,155 $ 49,859 2029 $ 24.34 $ 24.34 $ 292.03 $ 4,259 $ 51,106 2030 $ 24.94 $ 24.94 $ 299.33 $ 4,365 $ 52,383 2031 $ 25.57 $ 25.57 $ 306.82 $ 4,474 $ 53,693 2032 $ 26.21 $ 26.21 $ 314.49 $ 4,586 $ 55,035 2033 $ 26.86 $ 26.86 $ 322.35 $ 4,701 $ 56,411 2034 $ 27.53 $ 27.53 $ 330.41 $ 4,818 $ 57,821 2035 $ 28.22 $ 28.22 $ 338.67 $ 4,939 $ 59,267 2036 $ 28.93 $ 28.93 $ 347.14 $ 5,062 $ 60,749 2037 $ 29.65 $ 29.65 $ 355.81 $ 5,189 $ 62,267 2038 $ 30.39 $ 30.39 $ 364.71 $ 5,319 $ 63,824 2039 $ 31.15 $ 31.15 $ 373.83 $ 5,452 $ 65,420 2040 $ 31.93 $ 31.93 $ 383.17 $ 5,588 $ 67,055 2041 $ 32.73 $ 32.73 $ 392.75 $ 5,728 $ 68,732 2042 $ 33.55 $ 33.55 $ 402.57 $ 5,871 $ 70,450 2043 $ 34.39 $ 34.39 $ 412.63 $ 6,018 $ 72,211 2044 $ 35.25 $ 35.25 $ 422.95 $ 6,168 $ 74,016 2045 $ 36.13 $ 36.13 $ 433.52 $ 6,322 $ 75,867 2046 $ 37.03 $ 37.03 $ 444.36 $ 6,480 $ 77,763 2047 $ 37.96 $ 37.96 $ 455.47 $ 6,642 $ 79,708 Dues Summary has been modified with forced Fixed Payments. In the context of the Reserve Payment Summary, the ''Annual Reserve Payment'' corresponds with the ''Annual Revenue'' in the Cash Flow report. Operations Payments Include an annual inflation factor of 2.50% Number of Payment Months in Calendar Year 2017: 12 Number of Years of Constant Payments: 1 Page 20 of 25 Pages
Oak Crest Farms Funding Study Payment Summary by Calendar Year - Continued No of Dues Paying Members: 175 Page 21 of 25 Pages
GLOBAL Solution Partners, LLC info@globalreservestudies.com - Toll free phone and fax: (844) 477-7883 - www.globalsolutionpartners.com November 2, 2016 Year Category Item Name Expense 2019 Site Elements Swale maintenance allowance - Includes storm water ponds - drain pipes & driveway repairs $ 32,334 2019 Annual Expense Total = $ 32,334 2022 Clubhouse Furniture $ 6,041 Appliances $ 4,240 Clubhouse Subtotal = $ 10,281.00 2022 Annual Expense Total = $ 10,281 2023 Clubhouse HVAC systems - Train 1.5 ton units $ 17,329 Flooring carpet $ 2,411 Clubhouse Subtotal = $ 19,740.00 Pool area Pool pumps and filtration equipment $ 6,432 Site Elements Storm water ponds dredging allowance $ 9,528 2023 Annual Expense Total = $ 35,700 2025 Clubhouse Paving and concrete Site Elements Roofing $ 17,485 Bathrooms refurbish $ 10,705 Exterior surfaces repairs allowance $ 3,130 Clubhouse Subtotal = $ 31,320.00 Asphalt paved streets patch & repair allowance $ 17,558 Asphalt paved parking areas patch & repair allowance $ 1,547 Paving and concrete Subtotal = $ 19,105.00 Storage shed refurbish $ 8,138 Community signage $ 7,011 Site Elements Subtotal = $ 15,149.00 2025 Annual Expense Total = $ 65,574 2027 Clubhouse Clubhouse structural repair allowance $ 13,162 2027 Annual Expense Total = $ 13,162 2029 Clubhouse Clubhouse interior refurbish $ 5,534 Rain gutters $ 1,644 Clubhouse Subtotal = $ 7,178.00 Page 22 of 25 Pages
Year Category Item Name Expense 2029 Pool area Pool liner $ 10,515 Pool deck stamped concrete resurface $ 39,050 Pool area Subtotal = $ 49,565.00 2029 Annual Expense Total = $ 56,743 Clubhouse 4' Vinyl fencing $ 4,449 2030 Paving and concrete Asphalt paved streets mill and overlay $ 284,249 Asphalt paved parking areas mill and overlay $ 12,171 Paving and concrete Subtotal = $ 296,420.00 Site Elements Entrance and monuments upgrades allowance $ 4,965 2030 Annual Expense Total = $ 305,834 2031 Site Elements Storm water pumping stations $ 87,265 Storm water ponds dredging allowance $ 11,635 Swale maintenance allowance - Includes storm water ponds - drain pipes & driveway repairs Site Elements Subtotal = $ 142,533.00 $ 43,633 2031 Annual Expense Total = $ 142,533 2032 Clubhouse Rear composite deck $ 43,677 Furniture $ 7,754 Appliances $ 5,443 Clubhouse Subtotal = $ 56,874.00 2032 Annual Expense Total = $ 56,874 2033 Clubhouse Flooring carpet $ 3,095 Flooring ceramic tile $ 2,064 Clubhouse Subtotal = $ 5,159.00 Paving and concrete Asphalt paved streets patch & repair allowance $ 21,441 Asphalt paved parking areas patch & repair allowance $ 1,889 Paving and concrete Subtotal = $ 23,330.00 Pool area Pool pumps and filtration equipment $ 8,256 2033 Annual Expense Total = $ 36,745 2034 Clubhouse Front exterior wood deck $ 13,299 2034 Annual Expense Total = $ 13,299 Exterior surfaces repairs allowance $ 4,018 2035 Clubhouse Windows $ 9,450 Exterior doors $ 7,393 Pergola refurbish $ 10,608 Page 23 of 25 Pages
Year Category Item Name Expense Clubhouse Subtotal = $ 31,469.00 Paving and concrete Asphalt paved streets mill and overlay - Farmview - Ridge - Oak Leaf - Knoll $ 147,515 2035 Annual Expense Total = $ 178,984 2037 Clubhouse HVAC systems - Train 1.5 ton units $ 24,583 Clubhouse structural repair allowance $ 16,895 Clubhouse Subtotal = $ 41,478.00 Site Elements Storm water pump control system $ 11,151 2037 Annual Expense Total = $ 52,629 2038 Pool area Pool fencing $ 18,308 2038 Annual Expense Total = $ 18,308 2039 Clubhouse 6' Vinyl fencing $ 991 Site Elements Storm water ponds dredging allowance $ 14,209 2039 Annual Expense Total = $ 15,200 2040 Site Elements Storm water generator system $ 40,790 2040 Annual Expense Total = $ 40,790 2041 Paving and concrete Asphalt paved streets patch & repair allowance $ 26,183 Asphalt paved parking areas patch & repair allowance $ 2,307 Paving and concrete Subtotal = $ 28,490.00 Pool area Pool liner $ 14,189 2041 Annual Expense Total = $ 42,679 2042 Clubhouse Furniture $ 9,954 Appliances $ 6,987 Clubhouse Subtotal = $ 16,941.00 2042 Annual Expense Total = $ 16,941 Clubhouse Flooring carpet $ 3,972 2043 Pool area Pool pumps and filtration equipment $ 10,598 Site Elements Swale maintenance allowance - Includes storm water ponds - drain pipes & driveway repairs $ 58,880 2043 Annual Expense Total = $ 73,450 2045 Clubhouse Roofing $ 28,812 Bathrooms refurbish $ 17,640 Exterior surfaces repairs allowance $ 5,158 Clubhouse Subtotal = $ 51,610.00 Page 24 of 25 Pages
Year Category Item Name Expense Storage shed refurbish $ 13,411 2045 Site Elements Community signage $ 11,554 Storm water pumping stations $ 123,790 Site Elements Subtotal = $ 148,755.00 2045 Annual Expense Total = $ 200,365 Page 25 of 25 Pages