LEVEL 3 RESERVE STUDY UPDATE For IRONWOOD AT TUKWILA HOMEOWNERS ASSOCIATION, INC.

LEVEL 3 RESERVE STUDY UPDATE For IRONWOOD AT TUKWILA HOMEOWNERS ASSOCIATION, INC. Woodburn, OR January 1, 2016 December 31, 2016 Project No: OR 11101 0006 U17 Prepared By: Carson M. Horton, RS Quality Check By: L. Law Broili Date: July 25, 2016 Copyright 2016 USA / Canada 503 336 3719 / 800 218 0302

TABLE OF CONTENTS Ironwood at Tukwila HOA, Inc. SECTION I SUMMARIES & FINANCIAL ANALYSIS Introduc on 1 1 Property Summary 1 3 Financial Analysis 1 4 Distribu on of Accumulated Reserves 1 8 Current Assessment Funding Method Summary 1 9 Current Assessment Funding Method Projec on 1 10 SECTION II COMPONENT INVENTORY DETAILS Explana on of Component Reports 2 1 Component Summary with Comments 2 2 Component Inventory by Remaining Life Expectancy 2 4 Component Inventory with Current Costs 2 5 Component Detail Reports 2 7 SECTION III RESERVE EXPENDITURE REPORTS Explana on of Expenditure Reports 3 1 Annual Reserve Expenditure Detail 3 2 Annual Expenditure Spread Sheet 3 7 Capital & Non Capital Expenditures 3 13 APPENDIX Physical Analysis 2011 4 1 Reserve Study Updates 4 3 Reserve Study Parameters & Methodology 4 4 Oregon Statutory Requirements 4 6 Glossary 4 7 Component Detail Index 4 14

Disclosures This reserve study should be reviewed carefully. It may not include all common and limited common element components which will require major maintenance, repair, or replacement in future years, and may not include regular contributions to a reserve account for the cost of such maintenance, repair, or replacement. The failure to include a component in a reserve study, or to provide contributions to a reserve account for a component, may, under some circumstances, require you to pay, on demand, as a special assessment, your share of common expenses for the cost of major maintenance, repair, or replacement of a reserve component. Period of Inquiry: This repair and replacement funding and cost analysis (Reserve Study) encompasses a period of thirty (30) years beginning on January 1, 2016 and ending on December 31, 2045. Restrictions on Use: This Reserve Study document has been provided pursuant to an agreement containing restrictions on its use. No part of the document may be copied or distributed in any form, or disclosed to third parties, without the written permission of Capital Reserve Consultants, LLC (CRC) or the Association. The Association shall have the right to reproduce and distribute copies of this report, in whole or in part, as may be necessary in the conduct of the Association s business. Current & Final Version: If the reader has obtained this document from anyone other than CRC or the owner of the subject property they should verify that the Reserve Study represents the current, final version of the report. Alterations made to this Reserve Study by any individual other than a representative of CRC are not authorized and do not represent the opinion of the Reserve Specialist who prepared this Reserve Study. Statement of Qualifications: Carson M. Horton, RS, the person supervising the preparation of this Reserve Study, is a Community Associations Institute Certified Reserve Specialist (RS); recognized for expertise in the preparation and analysis of reserve funding plans. Mr. Horton has supervised the preparation of more than eight hundred reserve studies for homeowner s associations; investment property owners and institutional Associations in fourteen states. Objective Analysis: CRC and Carson M. Horton, RS, are independent, third party consultants with no actual or apparent conflict of interest which would prevent them from rendering an objective and impartial opinion regarding the appropriate level of reserve funding for the property which is the subject of this Reserve Study. The authors of this Reserve Study have no other involvement with the Association other than to prepare or update this Reserve Study. Statement of Purpose: The purpose of this Reserve Study is to provide a planning and budgeting tool to assist in the development of a long range financial to pay for the maintenance and renewal of the property which is the subject of the funding analysis. Because this Reserve Study relies on assumptions regarding future events over which CRC has no control, the accuracy of replacement costs and scheduling cannot be guaranteed. Assumptions: This analysis assumes that all components and equipment will be installed correctly, in a workmanlike manner, using generally accepted construction practices. It is expected routine preventive maintenance will be performed throughout the entire lifecycle of all components whether or not such maintenance expenses are provided for in this reserve funding plan. The component replacement schedules and corresponding funding projections presented in this Reserve Study assume all components will achieve their normal life expectancy before requiring replacement, unless otherwise noted. Limitations of the Analysis: Information regarding the reserve fund balance was provided by the Association and has not been confirmed by an independent audit of the Association s financial records. The authors of this Reserve Study have no control over whether the funds allocated for maintenance and renewal of the subject property will be consistent with the recommendations made by this Reserve Study. Reliance on Third Party Information: The Reserve Study is a reflection of information provided to CRC by third parties and cannot be used for the purpose of performing an audit, forensic analysis or verification of historical records. The information is deemed reliable, but is not based on an audit of the Association s financial records,

Disclosures and should not be used for purposes other than those intended in this study. An on site inspection conducted in conjunction with a Reserve Study should not be deemed to be a project audit or quality inspection. Information which has been provided to CRC by third parties is deemed reliable for the purpose of this Reserve Study. Third party information which is incorrect may have a material impact on the Association s reserve funding requirements. CRC takes no responsibility for the accuracy of any such information or the impact inaccurate information may have on the findings and conclusions presented in this Reserve Study. Standards of Analysis: This reserve study was prepared in accordance with the National Reserve Study Standards established by the Community Associations Institute for the preparation of reserve studies for common interest developments; the laws of various states and the rules set forth in the Audit & Accounting Guide Common Interest Realty Associations (American Institute of Certified Public Accountants May 1, 2008). No invasive or destructive testing has been employed in the investigative phase of this study and no environmental assessment of any kind was performed. This reserve study is not intended to address or discover construction defects and no representation is made herein that is meant to imply any such warranty.

SECTION I SUMMARIES & FINANCIAL ANALYSIS

Introduc on 1. Level of Inquiry: This reserve study is an update of a Level 1 Reserve Study. A Level 1 Reserve Study includes a physical inspection of the common area components identified in the Component Inventory. This reserve study update did not include a site visit. The study is an analysis of the General Common Elements which are the responsibility of Ironwood Homeowner's Association, Inc. (Association) to maintain and replace, according to the governing documents or as may be required by state law. Opinions regarding the current condition and remaining life expectancy of the common area components are based on visual observations made during the inspection process. Component quantities may be based on field measurements, a physical inventory and/or association records. This information is intended to be used for developing long term reserve funding projections, but should not be considered adequate for the purpose of ordering materials or formulating repair and replacement project costs. 2. Limitations of the Analysis: The physical condition assessment performed in conjunction with this reserve study is not intended to identify construction defects or other sub standard conditions which may require immediate corrective action. The reserve study utilizes information obtained from the following sources to arrive at component replacement costs and useful life estimates for the common area components identified in the component inventory: RS Means Construction Cost Books 2015 2016 Life Cycle Costing for Facilities (Reed Construction Publishers) Study of Life Expectancy of Home Components 2007 (NAHB) Preventive Maintenance and Building Operations Efficiency (BOMA) Facility Manager s Maintenance Handbook (McGraw Hill) RS Means Facilities Maintenance & Repair Cost Data 16 th Edition Physical condition assessment of common elements performed by Capital Reserve Consultants, LLC in 2011 3. Vendor Supplied Cost Data: Replacement costs obtained from local vendors are used only at the request of the Board of Directors (BOD) and only when supported by current written estimates, proposals or expense records for work completed within the last three years. Vendor pricing is subject to change due to current market conditions and may not reflect accurate repair and replacement costs under normal circumstances. Vendor replacement cost estimates used in this reserve study are at the request of the BOD and are not based on recommendations by the reserve advisor. CRC reserves the right to reject replacement cost estimates provided by the BOD if we believe they will not result in a realistic level of reserve funding for future repair and replacement expenses. 4. Funding Timeframe: The funding time frame covered in this reserve study is 30 years; however, the study must be updated annually to remain current. Failure to maintain a current reserve study may Capital Reserve Consultants, LLC Page 1 1 www.capitalreserveconsultants.com

Introduc on affect the ability of owners and prospective buyers to obtain certain types of mortgage financing. The efficacy of any reserve study will be compromised if annual updates are not completed in a timely manner. Reserve studies which are not updated on an annual basis are not considered current by most mortgage lenders and mortgage insurance underwriters, including the Federal Housing Administration. 5. Distribution of Accumulated Reserves: This report provides a summarized listing of how the accumulated reserves have been allocated as of the beginning date of the Association s upcoming fiscal year. Accumulated reserves are those reserve which have already been collected and are available for spending as of the beginning date of the reserve study. Unless regular assessments, including reserve contributions, are collected annually and are due at the beginning of the Association s fiscal year, reserve contributions scheduled for the current fiscal year will not be included in the allocation of accumulated reserves. The allocation of reserves is based on the chronological schedule of reserve expenditures. Hence, reserve expenditures which are scheduled to occur in the near term will be allocated a portion of the accumulated reserves at a sufficient rate so that 100% of the projected replacement cost will be available as of the first day of the budget year in which the expenditure is scheduled to occur. Expenditures scheduled to occur many years into the future may, or may not be allocated a portion of the accumulated reserves, depending on factors unique to each situation. Unless the Association s reserve account is 100% funded in each of the 30 years covered by the reserve study, there will always be reserve expenditures which receive no allocation of accumulated reserves. Funding for these expenses will begin at a future date, in advance of the year when the expenditure is scheduled to occur. Capital Reserve Consultants, LLC Page 1 2 www.capitalreserveconsultants.com

Property Summary The following details pertain to Ironwood Homeowner's Association, Inc. 1. Legal Name: Ironwood Homeowner's Association, Inc. 2. Physical Address: 955 Tukwila Drive Woodburn, OR 97071 3. Property Type: Planned Unit Development (PUD) 4. Number of Units or Lots: 108 total 5. Year Constructed: 2001 6. Incorporation Date: Unknown 7. Association Responsibilities: The association of unit owners is responsible for repair and replacement of common area components including, but not limited to: Common area concrete sidewalks Common area landscaping & irrigation equipment Entrance monuments Park area & playground equipment Common area fencing Masonry retaining wall & columns Park lighting & electrical service equipment Street trees & parking strip grass 8. Owner Responsibilities: Owners are responsible for the maintenance, repair and replacement costs relating to their respective homes up to the boundary of the property as illustrated on the official plat and as described in the Declaration for Ironwood Homeowner's Association, Inc. Capital Reserve Consultants, LLC Page 1 3 www.capitalreserveconsultants.com

Financial Analysis 1. Current Condition: The fiscal year for Ironwood Homeowner's Association, Inc. begins January 1 st of each year. This reserve study covers the 30 year period beginning on: January 1, 2016. The reserve fund contribution for 2015 was: $1,575.00. The estimated reserve fund balance as of January 1, 2016 is: $11,580.00. Based on the funding schedule set forth in this reserve study, and the beginning reserve fund balance indicated above, the percent funded level as of January 1, 2016 will be: 20% 2. Funding Models: This reserve study utilizes a Cash Flow Funding Model known as Current Assessment Funding. Cash Flow Funding Model: Cash Flow Funding is a reserve funding approach which is designed to generate sufficient annual cash flow to meet the funding obligations established in the reserve study. Assuming the cost and frequency of reserve expenditures does not deviate from the schedule set forth in the reserve study; the Association s reserve fund will always contain enough money to meet its funding obligations. All cash flow funding methods result in the pooling of reserves. Pooled reserves occur when all reserve funds are accumulated in one reserve account and the current reserves are allocated to pay for reserve expenditures based on chronological urgency or discretionary action taken by the Board of Directors. Reserves accumulated in a pooled reserve fund may only be used to pay for current or future reserve obligations. Reserves which are collected to pay for specific component replacement expenses may be reallocated to pay for other reserve expenditures should a surplus of funds exist after a scheduled expense has been incurred. Funds collected for the purpose of providing replacement reserves to pay for repair and replacement of common elements may not be used to pay for operating expenses or any expenses which are not specifically identified as reserve expenditures in the current reserve study. Current Assessment Funding: The Current Assessment Funding Projection that appears in this reserve study is a cash flow funding model which begins with a first year reserve contribution equal to the annual contribution approved by the Association for the previous fiscal year. The Current Assessment Funding Projection contained in this reserve study begins with a reserve fund contribution of $1,575.00 in 2016. The annual reserve fund contribution will increase to $4,320.00 in 2017; $4,500.00 in 2018 and 50% per year in 2019 through 2022. From 2023 through 2025 the contribution will increase 3.0% per year. In 2026 the contribution is reduced to $10,000.00 after which it will increase 3.0% for each of the remaining years covered by the study. Capital Reserve Consultants, LLC Page 1 4 www.capitalreserveconsultants.com

Financial Analysis 3. Percent Funded Level: The percent funded level resulting from this reserve study analysis is calculated using the following formula, which is mandated by the Community Associations Institute's Reserve Study Guidelines: Fully Funded = PV x CA / EUL. Where PV = present value; CA = current age; and EUL = expected useful life. Hence the Fully Funded calculation for a component with a current age of 3 years, a present value of $10,000 and an expected useful life of 10 years would be: $10,000 x 3 / 10 = $3,000.00. Therefore the total amount of money required to be Fully Funded as of the first day of the current funding cycle would be $3,000.00. 4. Funding Parameters & Projections: Reserve funds will be accumulated in the replacement fund based on the estimated current replacement cost, adjusted for inflation, of the common area components listed in the Component Inventory. If additional funds are required at the time replacement occurs, the Association reserves the right, subject to member approval, to increase regular assessments or levy special assessments, or it may delay repair or replacement of components until funds are available. Actual costs may vary from the amounts established in this reserve study. Investment income and income tax levels may affect reserve funding levels and the variances may be material. Amounts accumulated in the replacement reserve fund may not be adequate to meet future funding requirements; particularly if updates are not performed in a timely manner, or if reserve contributions are not consistent with the amounts set forth in this reserve study. The reserve funding projections which result from this reserve study utilize the following financial parameters: A minimum reserve fund balance of $11,580.00 as of January 1, 2016. A minimum 2016 reserve fund contribution of: $1,575.00. Earnings on reserve deposits:.02% Annual inflation rate: 3% Effective income tax rate: 0%* Reserve fund contingency: 0% Capital Reserve Consultants, LLC Page 1 5 www.capitalreserveconsultants.com

Financial Analysis Maximum annual reserve contribution increase: 50% *This funding analysis assumes income tax obligations will not be paid out of the Association s reserve fund. The Annual Reserve Fund Expenditure Detail indicates the next reserve expenditures scheduled to occur will be in the year 2016. The total amount of these expenditures is estimated to be: $3,712.00. 5. Current Assessment Funding: The 30 year funding projection contained in this Reserve Study utilizes a cash flow funding method known as Current Assessment Funding. Current Assessment Funding is a reserve funding model in which the first year, or current, reserve fund contribution is established by the Board of Directors or the Reserve Specialist. The Current Assessment Funding Projection begins with a 2016 reserve fund contribution of $1,575.00 which equals $14.58 per lot based on 108 lots. 6. Percent Funded Analysis: The percent funded level under the Current Assessment Funding Projection will be 14% at the end of 2016 assuming the reserve fund activity is consistent with the schedule set forth in this Reserve Study. The highest percent funded level after 2016 is 79% in 2025. The lowest percent funded level after 2016 is 12% in 2021. The Current Assessment Funding Projection included in this Reserve Study represents the contribution schedule required to meet the reserve obligations set forth in this Reserve Study for the next thirty years, assuming a beginning reserve fund balance of $11,580.00; a 2016 year contribution of $1,575.00 and a maximum annual increase in the reserve contribution of 50% in any year after 2016. 7. Total Reserve Spending: Assuming the reserve fund expenditures and contributions do not deviate from the schedule set forth in this reserve study the reserve funding and spending obligations for the thirty year period ending on December 31, 2045 are as follows: Total Reserve Spending $334,378.00 Average Annual Reserve Expenditures: $1,146.00 Total Reserve Fund Contributions: $406,470.00 Interest Earnings on Reserve Fund Deposits: $280.00 December 31, 2045 Reserve Fund Balance: $83,952.00 8. Minimum Reserve Fund Balance: Assuming the reserve fund contributions and expenditures do not Capital Reserve Consultants, LLC Page 1 6 www.capitalreserveconsultants.com

Financial Analysis deviate from the schedule set forth in this reserve study, the minimum year end reserve fund balance resulting from the Current Assessment Funding Projection will be $9,444.00 in 2016. 9. Funding Summary: The Current Assessment Funding Projection results in year end percent funded levels which range from a low of 12% to a high of 79%. The Current Assessment Funding Projection will meet the obligations of the Association s reserve fund assuming the reserve fund activity does not deviate from the schedule set forth on this reserve study. Capital Reserve Consultants, LLC Page 1 7 www.capitalreserveconsultants.com

Distribu on of Accumulated Reserves Report Date July 25, 2016 Beginning Fiscal Year January 01, 2016 Account Number OR 1101 0006 U17 Version Number LEVEL 3 Descrip on Remaining Replacement Assigned Life Year Reserves Fully Funded Reserves Concrete Sidewalks Safety Repair 0 2016 3,712 3,712 Bark Chips Park Area 1 2017 1,225 1,225 Tree Care Pruning & Inocula on 3 2019 487 487 Ornamental Landscaping Restora on 5 2021 5,625 5,625 Park Fixtures Replacement 5 2021 1,875 1,875 Park Ligh ng Replacement 5 2021 *230 1,125 Play Structure & Swings Replacement 5 2021 11,250 Irriga on Equipment Repair & Replacement 9 2025 500 Masonry Columns Repair & Restora on 10 2026 1,080 Masonry Retaining Wall Repair & Restora on 10 2026 1,260 Vinyl Post & Rail Fencing Replacement 10 2026 3,000 Vinyl Stockade Fencing Replacement 10 2026 24,960 Corner Monuments Renova on 15 2031 4,500 Entrance Monuments Renova on 18 2034 2,000 Electric Service Equipment Replacement Ligh ng 25 2041 2,625 Total Asset Summary $13,155 $65,225 '*' Indicates Par ally Funded Capital Reserve Consultants, LLC Page 1 8 www.capitalreserveconsultants.com

Current Assessment Funding Method Summary Report Parameters Report Date July 25, 2016 Account Number OR 1101 0006 U17 Version LEVEL 3 Budget Year Beginning January 01, 2016 Budget Year Ending December 31, 2016 Total Units 108 Infla on 3.00% Interest Rate on Reserve Deposit 0.02% 2016 Beginning Balance $11,580.00 This funding projection utilizes the Current Assessment Funding Model to generate the funding schedule on the following page. Current Assessment Funding is a cash flow funding method which begins with a first year reserve contribution equal to the current annual contribution approved by the Association for the most recent fiscal year or an amount which is specified to meet the funding obligations of the Association. Current Assessment Funding is often used when an association has already approved the annual reserve contribution for the current fiscal year or when the current level of funding is inadequate to meet the funding obligations set forth in the reserve study, and it is therefore necessary to specify the minimum level of funding which will meet the obligations imposed by the Association's reserve funding plan. Reserves accumulated under a Current Assessment Funding Model Projection are pooled. Pooling of reserves refers to the fact that all funds are maintained in one fund and are allocated based on the annual cash flow required to meet the reserve funding obligations of the Association. Current Assessment Funding Model Summary of Calcula ons Required Month Contribu on $131.25 $1.22 per unit monthly Average Net Month Interest Earned $0.15 Total Month Alloca on to Reserves $131.40 $1.22 per unit monthly Capital Reserve Consultants, LLC Page 1 9 www.capitalreserveconsultants.com

Current Assessment Funding Method Projec on Report Date July 25, 2016 Beginning Fiscal Year January 01, 2016 Account Number OR 1101 0006 U17 Version Number LEVEL 3 Beginning Balance: $11,580 Projected Fully Current Annual Annual Annual Ending Funded Percent Year Cost Contribu on Interest Expenditures Reserves Reserves Funded 2016 126,112 1,575 2 3,712 9,444 68,792 14% 2017 129,896 4,320 2 2,523 11,243 75,831 15% 2018 133,793 4,500 3 15,745 85,829 18% 2019 137,807 6,750 3 4,808 17,690 91,551 19% 2020 141,941 10,125 5 27,820 102,492 27% 2021 146,199 15,187 33,561 9,447 80,445 12% 2022 150,585 22,781 4 32,233 91,551 35% 2023 155,102 23,465 8 5,411 50,294 97,840 51% 2024 159,756 24,169 13 74,475 109,997 68% 2025 164,548 24,894 16 9,721 89,664 113,075 79% 2026 169,485 10,000 5 67,868 31,801 58,383 54% 2027 174,569 10,300 6 6,091 36,017 64,121 56% 2028 179,806 10,609 8 46,634 76,424 61% 2029 185,200 10,927 10 3,598 53,974 85,810 63% 2030 190,756 11,255 12 65,241 99,396 66% 2031 196,479 11,593 9 26,661 50,182 87,059 58% 2032 202,374 11,941 11 62,134 101,353 61% 2033 208,445 12,299 13 4,049 70,396 112,377 63% 2034 214,698 12,668 9 34,049 49,023 94,093 52% 2035 221,139 13,048 8 16,483 45,596 93,199 49% 2036 227,773 13,439 11 59,046 109,143 54% 2037 234,606 13,842 12 4,558 68,343 121,403 56% 2038 241,645 14,258 15 82,616 138,994 59% 2039 248,894 14,685 16 8,684 88,634 148,848 60% 2040 256,361 15,126 19 103,779 168,112 62% 2041 264,052 15,580 7 75,271 44,095 113,127 39% 2042 256,877 16,047 11 60,152 131,466 46% 2043 264,583 16,528 12 9,774 66,919 141,418 47% 2044 272,521 17,024 15 83,958 161,917 52% 2045 280,696 17,535 15 17,556 83,952 165,961 51% Capital Reserve Consultants, LLC Page 1 10 www.capitalreserveconsultants.com

SECTION II COMPONENT INVENTORY DETAILS

Explana on of Component Reports This section of the reserve study provides a narrative summary and tabular compilations of the common area components which are the subject of this reserve funding analysis. A brief explanation of each report contained in Section II is included here for those readers who may be unfamiliar with the information provided in a reserve study. 1. Component Summary with Comments: This report provides a summary of the component inventory which is a condensed version of the information found in the Component Detail Reports which appears at the end of Section II. The components are grouped by the component category to which they have been assigned, and are listed within each category according to the remaining life expectancy of the component. Other information found in this report includes the in service date, current cost, useful life, remaining life, future cost and current cost of each component. Also included are the comments that appear in the Component Detail Reports and which describes the purpose and scheduling parameters of the expenditure. 2. Component Inventory by Remaining Life Expectancy: This report displays the component inventory sorted by the remaining life expectancy of each component which is included in the reserve funding schedule. Expenditures which are scheduled to recur more than one time over the 30 year period covered by the study will only appear one time in this list based on the next scheduled year of occurrence. Other information provided in this report includes the next scheduled year of replacement, useful life, current cost, assigned reserves and the amount required for each component to be fully funded as of the beginning date of the reserve study. If the assigned reserves are equal to the fully funded amount shown in the far right hand column then the component in question is said to be fully funded. 3. Component Inventory with Current Costs: This report again displays the component inventory by category and remaining life expectancy. It also includes the component quantity based on the unit of measure (SF, SY, LF, etc,), the unit cost which has been used to arrive at the total replacement cost, and the current replacement cost as of the beginning date of the reserve study. 4. Component Detail Reports: This report reflects all of the component data which has been input into the modeling database to develop the reserve funding projections contained in the reserve study. If a photographic inventory has been included in the reserve study a picture of each component will also appear in this report. Most of the information contained in this report is also displayed in one or more of the Component Inventory reports found in Section II. Capital Reserve Consultants, LLC Page 2 1 www.capitalreserveconsultants.com

Component Summary with Comments Report Date July 25, 2016 Beginning Fiscal Year January 01, 2016 Account Number OR 1101 0006 U17 Version Number LEVEL 3 Descrip on Asphalt & Concrete Pavement Asset ID Date In Service Cost Current Useful Life Adjustment Concrete Sidewalks Safety Repair 01/01/01 3,712 15 0 0 3,712 9000 @ 8.25 This component provides funding for periodic repairs to the sidewalk located along Hazlenut Drive and throughout the park area. This funding schedule and the estimated cost of repairs assumes that replacement of any sidewalks sections along Hazlenut Drive which have been damaged by tree roots will have been completed prior to 2016. Remaining Cost Future Quan ty Unit Cost Electrical Equipment Electric Service Equipment Replacement Ligh ng 01/01/01 7,000 40 0 25 14,656 2 @ 3,500.00 This component provides funding for replacement of two enclosed meter pedestals and the electric service equipment located in the park and on Hazlenut Drive. This expense is non recurring after 2041. Exterior Light Fixtures Park Ligh ng Replacement 01/01/01 1,500 20 0 5 1,739 1 @ 1,500.00 This component provides funding for replacement of three pole mounted park lights every 20 years beginning in 2021. The estimtaed cost does not include replacement of the pole. Fencing, Gates & Retaining Walls Masonry Columns Repair & Restora on 01/01/01 1,800 25 0 10 2,419 5 @ 1,440.00 This component provides funding for repair and restoration of five masonry columns located along the north side of Hazlenut Drive. Repair and restoration costs are based on 25% of the estimated cost to construct new columns. Masonry Retaining Wall Repair & Restora on 01/01/01 2,100 25 0 10 2,822 350 @ 24.00 This component provides funding for repair and restoration of the masonry retaining wall located along the north side of Hazlenut Drive. Landscaping & Irriga on Equipment Bark Chips Park Area 01/01/15 2,450 2 0 1 2,523 1 @ 2,450.00 Tree Care Pruning & Inocula on 01/01/15 1,950 4 0 3 2,131 1 @ 1,950.00 This component provides funding for periodic tree pruning and inoculations. The association is responsible for approximately 150 trees located throughout the subdivision. As the trees mature pruning and maintenance costs should be expected to increase. Funding is scheduled to occur every four years beginning in 2019. This funding cycle is recurring throughout the thirty year period covered in this reserve study. Capital Reserve Consultants, LLC Page 2 2 www.capitalreserveconsultants.com

Component Summary with Comments Descrip on Asset ID Landscaping & Irriga on Equipment con nued... Date In Service Cost Current Useful Life Adjustment Ornamental Landscaping Restora on 01/01/01 7,500 20 0 5 8,695 1 @ 7,500.00 This component provides a lump sum for restoration of ornamental plants and shrubs located in the park and the decorative landscaping along Hazlenut Drive. The amount is discretionary and may be revised at the request of the board of directors. Irriga on Equipment Repair & Replacement 01/01/15 5,000 10 0 9 6,524 1 @ 5,000.00 This component provides funding for reapir and replacement of the landscape irrigation equipment which serve the common area landscaping. Funding is scheduled every 10 years beginning in 2025. Remaining Cost Future Quan ty Unit Cost Park & Playground Equipment Park Fixtures Replacement 01/01/01 2,500 20 0 5 2,898 1 @ 2,500.00 This component provides a lump sum for replacement of two stationary park benches and three serpentine painted metal bike racks every 20 years beginning in 2021. Play Structure & Swings Replacement 01/01/01 15,000 20 0 5 17,389 1 @ 15,000.00 This component provides a lump sum for replacement of all playground equipment every 20 years beginning in 2021. Vinyl Post & Rail Fencing Replacement 01/01/01 5,000 25 0 10 6,720 400 @ 12.50 This component provides funding for replacement of the post & rail vinyl fence located along the north side of the playground area and both sides of the walkway between Hazlenut Drive and Broad More Place. Funding is scheduled every 25 years beginning in 2026. The estimated cost includes installation and removal of the existing fence. Vinyl Stockade Fencing Replacement 01/01/01 41,600 25 0 10 55,907 1300 @ 32.00 This component provides funding for replacement of the 6' vinyl fencing located along the south and east property lines of the playground area and along Hazlenut Drive. Funding is scheduled every 25 years beginning in 2026. The estimated cost includes installation and removal of the existing fence. Signs & Monuments Corner Monuments Renova on 01/01/01 9,000 30 0 15 14,022 6 @ 1,500.00 This component provides funding for renovation of six monuments located at three cross streets which intersect with Hazlenut Drive every 30 years beginning in 2031. Entrance Monuments Renova on 01/01/14 20,000 20 0 18 2 @ 10,000.00 34,049 This component provides funding for renovation of two identifying monuments located along Hazlenut Drive every 20 years beginning in 2034. Capital Reserve Consultants, LLC Page 2 3 www.capitalreserveconsultants.com

Component Inventory by Remaining Life Expectancy Report Date July 25, 2016 Beginning Fiscal Year January 01, 2016 Account Number OR 1101 0006 U17 Version Number LEVEL 3 Descrip on Year Replacement Life Useful Adjustment Life Remaining Cost Current Assigned Reserves Fully Funded Concrete Sidewalks Safety Repair 2016 15 0 0 3,712 3,712 3,712 Bark Chips Park Area 2017 2 0 1 2,450 1,225 1,225 Tree Care Pruning & Inocula on 2019 4 0 3 1,950 487 487 Ornamental Landscaping Restora on 2021 20 0 5 7,500 5,625 5,625 Park Fixtures Replacement 2021 20 0 5 2,500 1,875 1,875 Park Ligh ng Replacement 2021 20 0 5 1,500 230 1,125 Play Structure & Swings Replacement 2021 20 0 5 15,000 0 11,250 Irriga on Equipment Repair & Replacement 2025 10 0 9 5,000 0 500 Masonry Columns Repair & Restora on 2026 25 0 10 1,800 0 1,080 Masonry Retaining Wall Repair & Restora on 2026 25 0 10 2,100 0 1,260 Vinyl Post & Rail Fencing Replacement 2026 25 0 10 5,000 0 3,000 Vinyl Stockade Fencing Replacement 2026 25 0 10 41,600 0 24,960 Corner Monuments Renova on 2031 30 0 15 9,000 0 4,500 Entrance Monuments Renova on 2034 20 0 18 20,000 0 2,000 Electric Service Equipment Replacement Ligh ng 2041 40 0 25 7,000 0 2,625 Total Asset Summary $126,112 $13,155 $65,225 Capital Reserve Consultants, LLC Page 2 4 www.capitalreserveconsultants.com

Component Inventory with Current Costs Report Date July 25, 2016 Beginning Fiscal Year January 01, 2016 Account Number OR 1101 0006 U17 Version Number LEVEL 3 Descrip on Date in Service Replacement Year Useful Asphalt & Concrete Pavement Concrete Sidewalks Safety Repair 2001 2016 15 0 0 450 SF 8.25 3,712 Asphalt & Concrete Pavement Total $3,712 Adjustment Remaining Units Cost Unit Cost Current Electrical Equipment Electric Service Equipment Replacement Ligh ng 2001 2041 40 0 25 2 Total 3,500.00 7,000 Electrical Equipment Total $7,000 Exterior Light Fixtures Park Ligh ng Replacement 2001 2021 20 0 5 1 Total 1,500.00 1,500 Exterior Light Fixtures Total $1,500 Fencing, Gates & Retaining Walls Masonry Columns Repair & Restora on 2001 2026 25 0 10 1 EA 1,440.00 1,800 Masonry Retaining Wall Repair & Restora.. 2001 2026 25 0 10 87 LF 24.00 2,100 Fencing, Gates & Retaining Walls Total $3,900 Landscaping & Irriga on Equipment Bark Chips Park Area 2015 2017 2 0 1 1 Total 2,450.00 2,450 Tree Care Pruning & Inocula on 2015 2019 4 0 3 1 Total 1,950.00 1,950 Ornamental Landscaping Restora on 2001 2021 20 0 5 1 Total 7,500.00 7,500 Irriga on Equipment Repair & Replacement 2015 2025 10 0 9 1 Total 5,000.00 5,000 Landscaping & Irriga on Equipment Total $16,900 Park & Playground Equipment Park Fixtures Replacement 2001 2021 20 0 5 1 Total 2,500.00 2,500 Play Structure & Swings Replacement 2001 2021 20 0 5 1 Total 15,000.00 15,000 Vinyl Post & Rail Fencing Replacement 2001 2026 25 0 10 400 LF 12.50 5,000 Vinyl Stockade Fencing Replacement 2001 2026 25 0 10 1,300 LF 32.00 41,600 Park & Playground Equipment Total $64,100 Signs & Monuments Corner Monuments Renova on 2001 2031 30 0 15 6 EA 1,500.00 9,000 Entrance Monuments Renova on 2014 2034 20 0 18 2 EA 10,000.00 20,000 Signs & Monuments Total $29,000 Capital Reserve Consultants, LLC Page 2 5 www.capitalreserveconsultants.com

Component Inventory with Current Costs Descrip on Date in Service Replacement Year Useful Total Asset Summary $126,112 Adjustment Remaining Units Cost Unit Cost Current Capital Reserve Consultants, LLC Page 2 6 www.capitalreserveconsultants.com

Component Detail Reports Report Date July 25, 2016 Beginning Fiscal Year January 01, 2016 Account Number OR 1101 0006 U17 Version Number LEVEL 3 Concrete Sidewalks Safety Repair 2016 Asset ID Non Capital Expenditures Asphalt & Concrete Pavement Placed in Service January 2001 Useful Life 15 Replacement Year 2016 Remaining Life 0 9,000 SF @ $8.25 Asset Cost $3,712.50 Percent Replacement 5% Future Cost $3,712.50 Assigned Reserves $3,712.50 Monthly Assessment $2.85 Interest Contribu on Reserve Alloca on $2.85 This component provides funding for periodic repairs to the sidewalk located along Hazlenut Drive and throughout the park area. This funding schedule and the estimated cost of repairs assumes that replacement of any sidewalks sections along Hazlenut Drive which have been damaged by tree roots will have been completed prior to 2016. Bark Chips Park Area 2017 Asset ID Non Capital Expenditures Landscaping & Irriga on Equipment Placed in Service January 2015 Useful Life 2 Replacement Year 2017 Remaining Life 1 1 Total @ $2,450.00 Asset Cost $2,450.00 Percent Replacement 100% Future Cost $2,523.50 Assigned Reserves $1,225.00 Monthly Assessment $9.61 Interest Contribu on $0.02 Reserve Alloca on $9.63 Tree Care Pruning & Inocula on 2019 Asset ID Non Capital Expenditures Landscaping & Irriga on Equipment Placed in Service January 2015 Useful Life 4 Replacement Year 2019 Remaining Life 3 1 Total @ $1,950.00 Asset Cost $1,950.00 Percent Replacement 100% Future Cost $2,130.82 Assigned Reserves $487.50 Monthly Assessment $4.05 Interest Contribu on Reserve Alloca on $4.06 This component provides funding for periodic tree pruning and inoculations. The association is responsible for approximately 150 trees located throughout the subdivision. As the trees mature pruning and maintenance Capital Reserve Consultants, LLC Page 2 7 www.capitalreserveconsultants.com

Component Detail Reports Tree Care Pruning & Inocula on con nued... costs should be expected to increase. Funding is scheduled to occur every four years beginning in 2019. This funding cycle is recurring throughout the thirty year period covered in this reserve study. Ornamental Landscaping Restora on 2021 Asset ID Capital Expenditures Landscaping & Irriga on Equipment Placed in Service January 2001 Useful Life 20 Replacement Year 2021 Remaining Life 5 1 Total @ $7,500.00 Asset Cost $7,500.00 Percent Replacement 100% Future Cost $8,694.56 Assigned Reserves $5,625.00 Monthly Assessment $4.53 Interest Contribu on $0.09 Reserve Alloca on $4.63 This component provides a lump sum for restoration of ornamental plants and shrubs located in the park and the decorative landscaping along Hazlenut Drive. The amount is discretionary and may be revised at the request of the board of directors. Park Fixtures Replacement 2021 Asset ID Capital Expenditures Park & Playground Equipment Placed in Service January 2001 Useful Life 20 Replacement Year 2021 Remaining Life 5 1 Total @ $2,500.00 Asset Cost $2,500.00 Percent Replacement 100% Future Cost $2,898.19 Assigned Reserves $1,875.00 Monthly Assessment $1.51 Interest Contribu on $0.03 Reserve Alloca on $1.54 This component provides a lump sum for replacement of two stationary park benches and three serpentine painted metal bike racks every 20 years beginning in 2021. Capital Reserve Consultants, LLC Page 2 8 www.capitalreserveconsultants.com

Component Detail Reports Park Ligh ng Replacement 2021 Asset ID Capital Expenditures Exterior Light Fixtures Placed in Service January 2001 Useful Life 20 Replacement Year 2021 Remaining Life 5 1 Total @ $1,500.00 Asset Cost $1,500.00 Percent Replacement 100% Future Cost $1,738.91 Assigned Reserves $230.00 Monthly Assessment $2.23 Interest Contribu on Reserve Alloca on $2.24 This component provides funding for replacement of three pole mounted park lights every 20 years beginning in 2021. The estimtaed cost does not include replacement of the pole. Play Structure & Swings Replacement 2021 Asset ID Capital Expenditures Park & Playground Equipment Placed in Service January 2001 Useful Life 20 Replacement Year 2021 Remaining Life 5 1 Total @ $15,000.00 Asset Cost $15,000.00 Percent Replacement 100% Future Cost $17,389.11 Assigned Reserves none Monthly Assessment $25.72 Interest Contribu on Reserve Alloca on $25.73 This component provides a lump sum for replacement of all playground equipment every 20 years beginning in 2021. Irriga on Equipment Repair & Replacement 2025 Asset ID Capital Expenditures Landscaping & Irriga on Equipment Placed in Service January 2015 Useful Life 10 Replacement Year 2025 Remaining Life 9 1 Total @ $5,000.00 Asset Cost $5,000.00 Percent Replacement 100% Future Cost $6,523.87 Assigned Reserves none Monthly Assessment $5.36 Interest Contribu on Reserve Alloca on $5.36 This component provides funding for reapir and replacement of the landscape irrigation equipment which serve the common area landscaping. Funding is scheduled every 10 years beginning in 2025. Capital Reserve Consultants, LLC Page 2 9 www.capitalreserveconsultants.com

Component Detail Reports Masonry Columns Repair & Restora on 2026 Asset ID Capital Expenditures Fencing, Gates & Retaining Walls Placed in Service January 2001 Useful Life 25 Replacement Year 2026 Remaining Life 10 5 EA @ $1,440.00 Asset Cost $1,800.00 Percent Replacement 25% Future Cost $2,419.05 Assigned Reserves none Monthly Assessment $1.79 Interest Contribu on Reserve Alloca on $1.79 This component provides funding for repair and restoration of five masonry columns located along the north side of Hazlenut Drive. Repair and restoration costs are based on 25% of the estimated cost to construct new columns. Masonry Retaining Wall Repair & Restora on 2026 Asset ID Capital Expenditures Fencing, Gates & Retaining Walls Placed in Service January 2001 Useful Life 25 Replacement Year 2026 Remaining Life 10 350 LF @ $24.00 Asset Cost $2,100.00 Percent Replacement 25% Future Cost $2,822.22 Assigned Reserves none Monthly Assessment $2.09 Interest Contribu on Reserve Alloca on $2.09 This component provides funding for repair and restoration of the masonry retaining wall located along the north side of Hazlenut Drive. Vinyl Post & Rail Fencing Replacement 2026 Asset ID Capital Expenditures Park & Playground Equipment Placed in Service January 2001 Useful Life 25 Replacement Year 2026 Remaining Life 10 400 LF @ $12.50 Asset Cost $5,000.00 Percent Replacement 100% Future Cost $6,719.58 Assigned Reserves none Monthly Assessment $4.97 Interest Contribu on Reserve Alloca on $4.97 This component provides funding for replacement of the post & rail vinyl fence located along the north side of the playground area and both sides of the walkway between Hazlenut Drive and Broad More Place. Funding is Capital Reserve Consultants, LLC Page 2 10 www.capitalreserveconsultants.com

Component Detail Reports Vinyl Post & Rail Fencing Replacement con nued... scheduled every 25 years beginning in 2026. The estimated cost includes installation and removal of the existing fence. Vinyl Stockade Fencing Replacement 2026 Asset ID Capital Expenditures Park & Playground Equipment Placed in Service January 2001 Useful Life 25 Replacement Year 2026 Remaining Life 10 1,300 LF @ $32.00 Asset Cost $41,600.00 Percent Replacement 100% Future Cost $55,906.92 Assigned Reserves none Monthly Assessment $41.33 Interest Contribu on Reserve Alloca on $41.34 This component provides funding for replacement of the 6' vinyl fencing located along the south and east property lines of the playground area and along Hazlenut Drive. Funding is scheduled every 25 years beginning in 2026. The estimated cost includes installation and removal of the existing fence. Corner Monuments Renova on 2031 Asset ID Capital Expenditures Signs & Monuments Placed in Service January 2001 Useful Life 30 Replacement Year 2031 Remaining Life 15 6 EA @ $1,500.00 Asset Cost $9,000.00 Percent Replacement 100% Future Cost $14,021.71 Assigned Reserves none Monthly Assessment $6.91 Interest Contribu on Reserve Alloca on $6.91 This component provides funding for renovation of six monuments located at three cross streets which intersect with Hazlenut Drive every 30 years beginning in 2031. Capital Reserve Consultants, LLC Page 2 11 www.capitalreserveconsultants.com

Component Detail Reports Entrance Monuments Renova on 2034 Asset ID Capital Expenditures Signs & Monuments Placed in Service January 2014 Useful Life 20 Replacement Year 2034 Remaining Life 18 2 EA @ $10,000.00 Asset Cost $20,000.00 Percent Replacement 100% Future Cost $34,048.66 Assigned Reserves none Monthly Assessment $13.97 Interest Contribu on Reserve Alloca on $13.97 This component provides funding for renovation of two identifying monuments located along Hazlenut Drive every 20 years beginning in 2034. Electric Service Equipment Replacement Ligh ng 2041 Asset ID Capital Expenditures Electrical Equipment Placed in Service January 2001 Useful Life 40 Replacement Year 2041 Remaining Life 25 2 Total @ $3,500.00 Asset Cost $7,000.00 Percent Replacement 100% Future Cost $14,656.44 Assigned Reserves none Monthly Assessment $4.33 Interest Contribu on Reserve Alloca on $4.33 This component provides funding for replacement of two enclosed meter pedestals and the electric service equipment located in the park and on Hazlenut Drive. This expense is non recurring after 2041. Capital Reserve Consultants, LLC Page 2 12 www.capitalreserveconsultants.com

Component Detail Reports Detail Report Summary Grand Total Assigned Reserves $13,155.00 Monthly Contribu on $131.25 Monthly Interest $0.17 Monthly Alloca on $131.42 Capital Reserve Consultants, LLC Page 2 13 www.capitalreserveconsultants.com

SECTION III RESERVE EXPENDITURE REPORTS

Explana on of Expenditure Reports This section of the reserve study includes a series of reports which detail how the Association s reserve funds will be spent over the next 30 years. A brief explanation of each report contained in Section III is included here for those readers who may be unfamiliar with the information provided in a reserve study. 1. Annual Reserve Expenditure Detail: This report provides a year by year summary of the reserve fund expenditures scheduled for each year covered in the reserve study. Expenditures are listed alphabetically in each year when they are scheduled to occur. Hence, an expenditure which is scheduled to occur every 5 years beginning in 2015 will appear for the first time under the 2015 heading and again in years 2020, 2025, 2030 and so on. The projected costs listed for each year take into account the effect of inflation on future replacement costs. Therefore, the replacement cost for a recurring expenditure will be higher each time it appears in this schedule. 2. Annual Expenditure Spread Sheet: This spreadsheet displays the same information as the Annual Reserve Expenditure Detail in a spreadsheet format. The component expenditures are listed by the Component Category to which each component has been assigned, and within each category the components are listed by remaining life expectancy. 3. Capital & Non Capital Expenditures: This report groups the scheduled reserve expenditures under one of two categories, Capital Expenditures or Non Capital Expenditures. In the context of a reserve study capital expenditures are generally defined as expenditures which are for the purpose of replacing, improving or prolonging the life expectancy of a common area asset. Non capital expenditures are expenses incurred to maintain or repair common area assets, but which are not necessarily expected to improve or extend the life expectancy of the asset. Capital Reserve Consultants, LLC Page 3 1 www.capitalreserveconsultants.com

Annual Reserve Expenditure Detail Report Date July 25, 2016 Beginning Fiscal Year January 01, 2016 Account Number OR 1101 0006 U17 Version Number LEVEL 3 Descrip on Expenditures Replacement Year 2016 Asphalt & Concrete Pavement Concrete Sidewalks Safety Repair 3,712 Total for 2016 $3,712 Replacement Year 2017 Landscaping & Irriga on Equipment Bark Chips Park Area 2,523 Total for 2017 $2,523 No Replacement in 2018 Replacement Year 2019 Landscaping & Irriga on Equipment Bark Chips Park Area 2,677 Tree Care Pruning & Inocula on 2,131 Total for 2019 $4,808 No Replacement in 2020 Replacement Year 2021 Exterior Light Fixtures Park Ligh ng Replacement 1,739 Landscaping & Irriga on Equipment Bark Chips Park Area 2,840 Ornamental Landscaping Restora on 8,695 Park & Playground Equipment Park Fixtures Replacement 2,898 Play Structure & Swings Replacement 17,389 Total for 2021 $33,561 Capital Reserve Consultants, LLC Page 3 2 www.capitalreserveconsultants.com

Annual Reserve Expenditure Detail Descrip on Expenditures No Replacement in 2022 Replacement Year 2023 Landscaping & Irriga on Equipment Bark Chips Park Area 3,013 Tree Care Pruning & Inocula on 2,398 Total for 2023 $5,411 No Replacement in 2024 Replacement Year 2025 Landscaping & Irriga on Equipment Bark Chips Park Area 3,197 Irriga on Equipment Repair & Replacement 6,524 Total for 2025 $9,721 Replacement Year 2026 Fencing, Gates & Retaining Walls Masonry Columns Repair & Restora on 2,419 Masonry Retaining Wall Repair & Restora on 2,822 Park & Playground Equipment Vinyl Post & Rail Fencing Replacement 6,720 Vinyl Stockade Fencing Replacement 55,907 Total for 2026 $67,868 Replacement Year 2027 Landscaping & Irriga on Equipment Bark Chips Park Area 3,391 Tree Care Pruning & Inocula on 2,699 Total for 2027 $6,091 No Replacement in 2028 Replacement Year 2029 Landscaping & Irriga on Equipment Bark Chips Park Area 3,598 Total for 2029 $3,598 Capital Reserve Consultants, LLC Page 3 3 www.capitalreserveconsultants.com