SCT RESERVE CONSULTANTS, INC. P.O. BOX 890129 TEMECULA, CA 92589-0129 PHONE (951) 296-3520 FAX (951) 296-5038 E-MAIL mike.g@sctreserve.com November 23, 2017 Job 2006-127-12 L3 Sunshine Villas Homeowners Association c/o Maryellen Hill & Associates 1111 Tahquitz Canyon Way, Suite 120 Palm Springs, CA 92262 Attn: Ms. Cindy Anderson Subject: Year 2018 Level III Reserve Study Dear Ms. Anderson, SCT Reserve Consultants, Inc. is pleased to submit this 2018 Level III Reserve Study. There are two summary sections (starting at pages 4 and 6) that are required to be included in the Association s year-end mailing to the membership. They are the Reserve Summary and the Assessment and Reserve Funding Disclosure Summary. They are to be mailed 30 to 90 days prior to the Association s year-end. These pages will satisfy the current California Civil Code requirements for homeowner disclosure. The Year 2018 Reserve Budget table of this report is AICPA approved; this may be included in the mailing but is generally not required. Check with legal counsel for greater clarification. We appreciate the opportunity to provide our professional services. Should you have any need for clarification please contact me at (951) 296-3520. Sincerely, Michael C. Graves, R.S. #00039 1SCT Reserve Consultants, Inc. are affiliated with &
Year 2018 Level III Reserve Study (Financial Update Report) For SUNSHINE VILLAS HOMEOWNERS ASSOCIATION Version 2 c/o Maryellen Hill & Associates 1111 Tahquitz Canyon Way, Suite 120 Palm Springs, CA 92262 Attn: Ms. Cindy Anderson SCT RESERVE CONSULTANTS, INC. P.O. Box 890129 TEMECULA, CALIFORNIA 92589-0129 COPYRIGHT 2016 SCT, ALL RIGHTS RESERVED 2SCT Reserve Consultants, Inc. are affiliated with &
Section Table of Contents Page Reserve Summary... 4 Assessment and Reserve Funding Disclosure Summary... 6 Summary... 8 Year 2018 Reserve Budget... 10 Component Identification Report... 11 Component Replacement Cost Chart... 18 Cash Flow and Percent Funded Projections... 19 Cash Flow and Percent Funded Chart... 20 10-Year Expenditure and Cash Flow Projection... 21 Personal Credentials... 25 Disclosure Statements... 26 Definition of Terms... 27 2014 California Civil Code (Selected Sections)... 29 33
Reserve Summary (As required by California Civil Code Section 5565) SUNSHINE VILLAS HOMEOWNERS ASSOCIATION SCT Reserve Consultants, Inc. is pleased to provide this Level III Reserve Study (Financial Update Report). In order to comply with the California Civil Code, specifically the Davis-Stirling Common Interest Development Act, Section 5565, we are providing the following information to the Homeowners within SUNSHINE VILLAS HOMEOWNERS ASSOCIATION. The following study has been prepared with several assumed factors taken into account: a 3.00% inflation rate; interest earned from the reserve account(s) is accounted for in the operating budget; taxes on interest earned is paid for through the operating fund; an estimated remaining life of each reserve component; and an estimated current replacement cost of each reserve component. As of December 31, 2017, the estimated ending reserve fund balance is $412,250 and the estimated current replacement cost is $2,926,613 for the portfolio of reserve components. The projected future replacement cost of the portfolio is $4,726,959, calculated at an annually compounded inflation rate of 3.00%. The Association s level of funding which is based upon the estimated ending reserve fund balance divided by the reserve components fully funded amount is 29.98%. This is referred to as Percent Funded. The Association would be 100.00% funded if there were $1,375,051.00 in the reserve fund. The current deficiency (or surplus if the number is in parenthesis) in reserve funding expressed on a per unit basis is $8,023.34. This is calculated by subtracting the ending balance ($412,250) from the 100% funded figure ($1,375,051.00), then divided by the number of ownership interests (120). There is currently no requirement to be fully funded. Our original analysis of the cash flow for this association indicated future inadequate funding if there were no annual increases to the Reserves. It is our understanding the Board of Directors will allocate a total of $9,901 per month starting in 2018 ($82.51 per unit per month for each of the 120 ownership interests) towards the reserve fund. To offset the future cash shortfall we recommend and have included increases of 20.00% starting in 2019 for 2 years, 11.00% starting in 2021 for 1 year and 3.00% starting in 2022 for 26 years. The increase is scheduled to take effect in the year 2019. The Board of Directors may change the amount; however, it will impact the level of funding on reserves. These numbers, by themselves, are not a clear indicator of financial strength and could indicate underfunding, overfunding, or adequate funding. The following table represents additionally required information pursuant to the Davis-Stirling Common Interest Development Act, Section 5565. Category Fiscal Year: January 1, 2018 through December 31, 2018 Remaining Useful Lives Current Replacement Cost Fund Balance on Dec 31, 2017 Reserve Allocation Special Assessment Allocation Interest Access System 0 to 2 $24,300 $5,657 $1,630.43 $0.00 $0.00 Asphalt & Concrete 0 to 14 $515,644 $88,843 $25,605.47 $0.00 $0.00 Buildings, Plumbing 0 to 0 $6,000 $4,882 $1,407.13 $0.00 $0.00 Buildings, Roof, Flat 2 to 35 $912,175 $36,952 $10,649.75 $0.00 $0.00 Buildings, Roof, Tile 5 to 15 $579,000 $65,141 $18,774.34 $0.00 $0.00 Electrical/Lights 0 to 12 $103,550 $15,066 $4,342.03 $0.00 $0.00 Fence & Gates 0 to 12 $69,760 $13,553 $3,906.19 $0.00 $0.00 Irrigation 0 to 6 $145,000 $39,908 $11,501.79 $0.00 $0.00 Landscape 18 to 18 $100,900 $2,834 $816.80 $0.00 $0.00 44
Reserve Summary (As required by California Civil Code Section 5565) SUNSHINE VILLAS HOMEOWNERS ASSOCIATION Category Remaining Useful Lives Current Replacement Cost Fund Balance on Dec 31, 2017 Reserve Allocation Special Assessment Allocation Interest Mailboxes 0 to 0 $15,450 $12,258 $3,533.00 $0.00 $0.00 Paint 0 to 4 $228,319 $72,939 $21,021.63 $0.00 $0.00 Pool & Spa 1 0 to 10 $38,100 $7,977 $2,298.97 $0.00 $0.00 Pool & Spa 2 0 to 8 $36,600 $11,124 $3,206.01 $0.00 $0.00 Pool & Spa 3 0 to 12 $36,600 $6,353 $1,830.86 $0.00 $0.00 Pool & Spa 4 1 to 11 $36,600 $4,345 $1,252.27 $0.00 $0.00 Pools & Spas, All 0 to 11 $47,440 $19,915 $5,739.58 $0.00 $0.00 Signage 8 to 15 $6,300 $575 $165.68 $0.00 $0.00 Tennis Courts 2 to 7 $23,475 $3,771 $1,086.78 $0.00 $0.00 Water Fountain 5 to 5 $1,400 $157 $45.33 $0.00 $0.00 Totals: $2,926,613 $412,250 $118,814 $0 $0 The complete reserve study is available by request from the Association. SCT Reserve Consultants, Inc. 5
Assessment and Reserve Funding Disclosure Summary For the Fiscal Year Ending December 31, 2018 (As illustrated by California Civil Code Section 5570(a)) (1) The regular assessment per ownership interest is $460.00 per month, of which approximately $82.51 is allocated to reserves per month. Note: If assessments vary by the size or type of ownership interest, the assessment applicable to this ownership interest may be found on the following page of the attached summary. NOT APPLICABLE (2) Additional regular or special assessments that have already been scheduled to be imposed or charged, regardless of the purpose, if they have been approved by the board and/or members: SEE ANSWER BELOW TO QUESTION #4 WHICH SUGGESTS THERE WILL BE INCREASES IN REGULAR ASSESSMENTS FOR RESERVE FUNDING. Date assessment will be due: SCT Reserve Consultants, Inc. 6 Amount per ownership interest per month or year: Purpose of the assessment: (Intentionally left blank) (Intentionally left blank) (Intentionally left blank) Note: If assessments vary by the size or type of ownership interest, the assessment applicable to this ownership interest may be found on the following page of the attached summary. NOT APPLICABLE (3) Based upon the most recent reserve study and other information available to the board of directors, will currently projected reserve account balances be sufficient at the end of each year to meet the association's obligation for repair and/or replacement of major components during the next 30 years? Yes X No X Yes, if the Association follows the recommended future reserve contribution increases as outlined in the reserve study and disclosed in the table of question (4) with consideration to the note below*. No, if the Association does not follow the recommended future reserve contribution increases as outlined in the reserve study and disclosed in the table of question (4) with consideration to the note below*. *Note: The information contained within the reserve study includes estimates of replacement value and life expectancies of the components and includes assumptions regarding future events based on information provided by and supplied to the Association s Board of Directors and/or management. Some assumptions inevitably will not materialize and unanticipated events and circumstances may occur subsequent to the data of this disclosure summary. Therefore, the actual replacement cost and remaining life may vary from the reserve study and the variation may be significant. Additionally, inflation and other economic events may impact the reserve study, particularly over a thirty (30) year period of time which could impact the accuracy of the reserve study and the funds available to meet the association s obligation for repair and/or replacement of major components during the next thirty (30) years. Furthermore, the occurrence of vandalism, severe weather conditions, earthquakes, floods or other acts of God cannot be accounted for and are excluded when assessing life expectancy of the components. The reserve study only includes items that the Association has a clear and express responsibility to maintain, pursuant to the Association s CC&Rs. (4) If the answer to (3) is No, what additional assessments or other contributions to reserves would be necessary to ensure that sufficient reserve funds will be available each year during the next 30 years that have not yet been approved by the Board or the members? Approximate date assessment(s) will be due: 20.00% starting in 2019 for 2 years, 11.00% starting in 2021 for 1 year and 3.00% starting in 2022 for 26 years Amount per ownership interest per month: (Current amount) X (the increases) (5) All major components are included in the reserve study and are included in its calculations. (6) Based on the method of calculation in paragraph (4) of subdivision (b) of Section 5550, the estimated amount required in the reserve fund at the end of the current fiscal year is $1,369,421.12, as of December 31, 2018, based in whole or in part on the last reserve study or update prepared by SCT RESERVE CONSULTANTS, INC. The projected reserve fund cash balance at the end of the current fiscal year is $330,332.54, resulting in reserves being 24.12% percent funded at this date. If an alternate, but generally accepted, method of calculation is also used, the required amount is $200,732. (See explanation below). Explanation: Cash Flow Methodology - a method of developing a reserve funding plan where contributions to the reserve fund are designed to offset the variable annual expenditures from the reserve fund. Different reserve funding plans are tested against the anticipated schedule of reserve expenses until the desired funding goal is achieved.
Assessment and Reserve Funding Disclosure Summary For the Fiscal Year Ending December 31, 2018 (As illustrated by California Civil Code Section 5570(a)) (continued) 7) See below: 30-Year Reserve Funding Plan Table Based on the method of calculation in paragraph (4) of subdivision (b) of Section 5550 of the Civil Code, the estimated amount required in the reserve fund at the end of each of the next five budget years is $(see 100% Funded column below), and the projected reserve fund cash balance in each of those years, taking into account only assessments already approved and other known revenues, is $(see Cash Flow Balance with Funding Plan column below), leaving the reserve at (see Percent Funded column below) percent funding. If the reserve funding plan approved by the association is implemented, the projected reserve fund cash balance in each of those years will be $(see Cash Flow Balance with Funding Plan column below), leaving the reserve at (see Percent Funded column below) percent funding. Note: The financial representations set forth in this summary are based on the best estimates of the preparer at that time. The estimates are subject to change. At the time this summary was prepared, the assumed long-term before-tax interest rate earned on reserve funds was 0.00% per year, and the assumed long-term inflation rate to be applied to major component repair and replacement costs was 3.00% per year. 30-Year Reserve Funding Plan Table Fiscal Year: January 01, 2018 - December 31, 2018 End of Year Revenue Expenditures Year Cash Flow Contribution, Components, 100% Percent Funded Contribution Contribution (Balance with Interest, Taxes, Funded (EOY) Unit/M onth % Cha nge Funding Plan) Spec Assess Deferred Exp 2017 $1,375,051 $412,250 29.98% 2018 $1,369,421 $330,333 24.12% $118,814 $82.51 $200,732 2019 $1,480,807 $386,377 26.09% $142,577 $99.01 20.00% $86,532 2020 $1,572,337 $453,588 28.85% $171,092 $118.81 20.00% $103,881 2021 $1,618,253 $510,548 31.55% $189,912 $131.88 11.00% $132,952 2022 $1,428,681 $316,236 22.13% $195,610 $135.84 3.00% $389,922 2023 $1,480,444 $407,096 27.50% $201,478 $139.92 3.00% $110,618 2024 $1,582,352 $559,772 35.38% $207,522 $144.11 3.00% $54,846 2025 $1,713,463 $752,694 43.93% $213,748 $148.44 3.00% $20,825 2026 $1,685,229 $758,016 44.98% $220,160 $152.89 3.00% $214,839 2027 $1,801,430 $937,556 52.05% $226,765 $157.48 3.00% $47,225 2028 $1,673,557 $791,235 47.28% $233,568 $162.20 3.00% $379,889 2029 $1,495,413 $561,344 37.54% $240,575 $167.07 3.00% $470,467 2030 $1,472,752 $571,190 38.78% $247,793 $172.08 3.00% $237,947 2031 $1,619,081 $797,400 49.25% $255,226 $177.24 3.00% $29,017 2032 $1,497,510 $611,966 40.87% $262,883 $182.56 3.00% $448,316 2033 $1,361,059 $395,207 29.04% $270,770 $188.03 3.00% $487,529 2034 $1,187,379 $188,614 15.88% $278,893 $193.68 3.00% $485,486 2035 $1,319,322 $390,567 29.60% $287,259 $199.49 3.00% $85,307 2036 $1,346,123 $411,654 30.58% $295,877 $205.47 3.00% $274,790 2037 $1,533,666 $696,628 45.42% $304,754 $211.63 3.00% $19,780 2038 $1,519,874 $726,768 47.82% $313,896 $217.98 3.00% $283,756 2039 $1,664,005 $945,715 56.83% $323,313 $224.52 3.00% $104,366 2040 $1,834,707 $1,208,870 65.89% $333,012 $231.26 3.00% $69,857 2041 $2,009,888 $1,486,024 73.94% $343,003 $238.20 3.00% $65,849 2042 $2,020,446 $1,571,840 77.80% $353,293 $245.34 3.00% $267,477 2043 $2,125,993 $1,769,946 83.25% $363,892 $252.70 3.00% $165,785 2044 $2,277,245 $2,043,389 89.73% $374,808 $260.28 3.00% $101,366 2045 $2,474,315 $2,386,408 96.45% $386,053 $268.09 3.00% $43,033 2046 $2,216,877 $2,094,670 94.49% $397,634 $276.13 3.00% $689,372 2047 $2,416,983 $2,432,161 100.63% $409,563 $284.42 3.00% $72,073 30-Year Sum: $8,163,746 $6,143,835 SCT Reserve Consultants, Inc. 7
SCT Reserve Consultants, Inc. Job No. 2006-127-12 L3 Page 8 of 33 Summary In accordance with our proposal, 2006-127, SCT Reserve Consultants, Inc. is pleased to provide this Level III Reserve Study Financial Update Report for SUNSHINE VILLAS HOMEOWNERS ASSOCIATION. Our study was performed in accordance with the Davis-Stirling Common Interest Development Act, specifically 5550, of the California Civil Code. This report included a site inspection on September 8, 2015. This condominium common interest development (CID) is located at Cerritos and Sunshine Way, Palm Springs, California. We are using an inception date for the components of January 1, 1985. This study is for January 1, 2018 through December 31, 2018, the Association s fiscal year. In general, reserve funds are funds set aside from collected association fees paid by owners of a common interest development. These funds earn interest and are disbursed when deemed necessary by the Board of Directors. The purpose of a reserve study is to determine how much money should exist in a reserve fund at a given point in time or to project required future contributions and expenditure amounts so that sufficient reserve funds are available when needed. Our reserve study is generated using proprietary SCT software and a combination of local industry standards and national average replacement costs. The SCT software utilizes the weighted average life (WAL) of the reserve components. The future cost method for the WAL is calculated by using the current replacement cost of each component, as of the analysis date, and the number of years until each reserve component is scheduled to be replaced. This determines the monthly reserve contributions needed and calculates the future reserve balances. A 30-year Cash Flow and Percent Funded Projection analysis and Graph are produced to verify and define the relationship of the Cash Flow (annual beginning balance) with respect to the 100% funded amount. Ideally, the Cash Flow line of the graph should run parallel to and below the Percent Funded line of the graph, see funding goals. The following study has been prepared with several assumed factors taken into account: 3.00% inflation rate; interest earned from the reserve account(s) is accounted for in the operating budget; taxes on interest earned is paid for through the operating fund; an estimated remaining life of each reserve component; and an estimated current replacement cost of each reserve component. Typically, any component that has a life cycle (full life) of less than two years should be budgeted and paid for through normal operating or property maintenance funds and is not included as part of this study. The current deficiency (or surplus if the number is in parenthesis) in reserve funding expressed on a per unit basis is $8,023.34. This is calculated by subtracting the ending balance ($412,250) from the 100% funded figure ($1,375,051.00), then divided by the number of ownership interests (120). There is currently no requirement to be fully funded.
SCT Reserve Consultants, Inc. Job No. 2006-127-12 L3 Page 9 of 33 Summary (continued) As of January 1, 2018, the estimated reserve fund balance is $412,250 and the estimated current replacement cost is $2,926,613 of the portfolio of reserve components. The projected future replacement cost of the portfolio is $4,726,959, calculated at an annually compounded inflation rate of 3.00%. The Davis-Stirling Common Interest Development Act requires the disclosure of the current reserve fund balance divided by the current replacement cost (this is not Percent Funded). Currently, this factor for SUNSHINE VILLAS HOMEOWNERS ASSOCIATION is 14.09%. The Association s level of funding for the fiscal year (January 1, 2018 through December 31, 2018) which is based upon the final estimated reserve fund balance divided by the reserve components fully funded amount is 24.12%, and is referred to as Percent Funded. The Association would be 100.00% funded if there were $1,369,421.12 in the reserve fund. Our original analysis of the cash flow for this association indicated future inadequate funding (see the graph, the square box and/or pink line ). This line represents the cash flow if there were no annual increases to the Reserves. It is our understanding the Board of Directors will allocate a total of $9,901 per month starting in 2018 ($82.51 per unit per month for each of the 120 ownership interests) towards the reserve fund. To offset the future cash shortfall we recommend and have included increases of 20.00% starting in 2019 for 2 years, 11.00% starting in 2021 for 1 year and 3.00% starting in 2022 for 26 years. The increase is scheduled to take effect in the year 2019. The Board of Directors may raise or lower this amount, however, it will impact the level of funding on reserves. These numbers, by themselves, are not a clear indicator of financial strength and could indicate underfunding, overfunding, or adequate funding. Sincerely, Michael C. Graves, R.S. #00039 SCT Reserve Consultants, Inc.
SCT Reserve Consultants, Inc. Job No. 2006-127-12 L3 Page 10 of 33 Categories 100% Funded Dec 31, 2018 Percent Funded Dec 31, 2018 Year 2018 Reserve Budget (AICPA Approved) Beginning Balance Jan 01, 2018 Annual Reserve Allocation Monthly Reserve Allocation Special Assessment Allocation Annual Interest Allocation Expenditure Ending Balance Dec 31, 2018 Access System $21,920 24.12% $5,657.12 $1,630.43 $135.87 $0.00 $0.00 $2,000.00 $5,287.56 Asphalt & Concrete $297,157 24.12% $88,843.49 $25,605.47 $2,133.79 $0.00 $0.00 $42,768.50 $71,680.46 Buildings, Plumbing $1,200 24.12% $4,882.33 $1,407.13 $117.26 $0.00 $0.00 $6,000.00 $289.47 Buildings, Roof, Flat $197,335 24.12% $36,951.51 $10,649.75 $887.48 $0.00 $0.00 $0.00 $47,601.26 Buildings, Roof, Tile $347,880 24.12% $65,141.47 $18,774.34 $1,564.53 $0.00 $0.00 $0.00 $83,915.81 Electrical/Lights $59,728 24.12% $15,065.59 $4,342.03 $361.84 $0.00 $0.00 $5,000.00 $14,407.62 Fence & Gates $43,527 24.12% $13,553.34 $3,906.19 $325.52 $0.00 $0.00 $6,960.00 $10,499.53 Irrigation $109,483 24.12% $39,907.84 $11,501.79 $958.48 $0.00 $0.00 $25,000.00 $26,409.63 Landscape $15,135 24.12% $2,834.07 $816.80 $68.07 $0.00 $0.00 $0.00 $3,650.87 Mailboxes $1,416 24.12% $12,258.48 $3,533.00 $294.42 $0.00 $0.00 $15,450.00 $341.48 Paint $142,963 24.12% $72,938.92 $21,021.63 $1,751.80 $0.00 $0.00 $59,475.00 $34,485.56 Pool & Spa 1 $26,978 24.12% $7,976.74 $2,298.97 $191.58 $0.00 $0.00 $3,768.00 $6,507.70 Pool & Spa 2 $20,355 24.12% $11,123.92 $3,206.01 $267.17 $0.00 $0.00 $9,420.00 $4,909.93 Pool & Spa 3 $21,488 24.12% $6,352.54 $1,830.86 $152.57 $0.00 $0.00 $3,000.00 $5,183.40 Pool & Spa 4 $23,204 24.12% $4,345.01 $1,252.27 $104.36 $0.00 $0.00 $0.00 $5,597.28 Pools & Spas, All $15,605 24.12% $19,914.67 $5,739.58 $478.30 $0.00 $0.00 $21,890.00 $3,764.25 Signage $3,070 24.12% $574.87 $165.68 $13.81 $0.00 $0.00 $0.00 $740.55 Tennis Courts $20,138 24.12% $3,770.80 $1,086.78 $90.56 $0.00 $0.00 $0.00 $4,857.58 Water Fountain $840 24.12% $157.29 $45.33 $3.78 $0.00 $0.00 $0.00 $202.63 Totals: $1,369,421 24.12% $412,250.00 $118,814.04 $9,901.17 $0.00 $0.00 $200,731.50 $330,332.54 10
SCT Reserve Consultants, Inc. Job No. 2006-127-12 L3 Page 11 of 33 Component Identification Report Identified Major Components Quantity Measurement Basis Full Life In Years Remaining Life In Years Basis Cost Current Replacement Cost Future Replacement Cost (3% inflation) Straight Line Allocation (Annual) 100% Funded Jan 01, 2018 Access System Battery backup system 2 Each 10 2 $900.00 $1,800 $1,910 $180 $1,440 Card reader 1 Each 12 1 $1,000.00 $1,000 $1,030 $83 $917 Entry phone system 1 Each 12 1 $4,500.00 $4,500 $4,635 $375 $4,125 Gate operators 1 Each 10 1 $4,000.00 $4,000 $4,120 $400 $3,600 Gate operators 1 Each 10 2 $4,000.00 $4,000 $4,244 $400 $3,200 Loop systems 2 Each 16 1 $3,500.00 $7,000 $7,210 $438 $6,562 Magnetic locks 2 Each 10 0 $1,000.00 $2,000 $2,000 $200 $2,000 Subtotal: $24,300 $25,149 $2,076 $21,844 Asphalt & Concrete Concrete, repairs 1 Lump Sum 5 3 $5,375.00 $5,375 $5,873 $1,075 $2,150 Repair/overlay/R&R 5,350 Square Feet 28 0 $2.75 $14,713 $14,713 $525 $14,712 Repair/overlay/R&R 6,500 Square Feet 28 2 $2.75 $17,875 $18,964 $638 $16,598 Repair/overlay/R&R 8,500 Square Feet 28 6 $2.75 $23,375 $27,911 $835 $18,366 Repair/overlay/R&R 55,000 Square Feet 28 10 $2.75 $151,250 $203,267 $5,402 $97,232 Repair/overlay/R&R 100,000 Square Feet 28 14 $2.75 $275,000 $415,962 $9,821 $137,500 Seal/stripe/repair/crack fill 175,350 Square Feet 4 0 $0.16 $28,056 $28,056 $7,014 $28,056 Subtotal: $515,644 $714,746 $25,310 $314,614 Buildings, Plumbing Water lines, repair 1 Lump Sum 5 0 $6,000.00 $6,000 $6,000 $1,200 $6,000 Subtotal: $6,000 $6,000 $1,200 $6,000 Buildings, Roof, Flat Ancillary & wood 16 Per Building 20 12 $2,500.00 $40,000 $57,030 $2,000 $16,000 Ancillary & wood 6 Per Building 20 14 $2,500.00 $15,000 $22,689 $750 $4,500 Ancillary & wood 4 Per Building 20 16 $2,500.00 $10,000 $16,047 $500 $2,000 Ancillary & wood 7 Per Building 20 18 $2,500.00 $17,500 $29,793 $875 $1,750 BUR, Certificate hybrid 98 Square 40 32 $425.00 $41,650 $107,252 $1,041 $8,330
SCT Reserve Consultants, Inc. Job No. 2006-127-12 L3 Page 12 of 33 Identified Major Components Quantity Component Identification Report (continued) Measurement Basis Full Life In Years Remaining Life In Years Basis Cost Current Replacement Cost Future Replacement Cost (3% inflation) Straight Line Allocation (Annual) 100% Funded Jan 01, 2018 BUR, Certificate hybrid 513 Square 40 33 $425.00 $218,025 $578,275 $5,451 $38,154 BUR, Certificate hybrid 474 Square 40 34 $425.00 $201,450 $550,342 $5,036 $30,218 BUR, Certificate hybrid 400 Square 40 35 $425.00 $170,000 $478,357 $4,250 $21,250 BUR, Certificate hybrid, Gardeners Shed 1 Each 40 35 $5,500.00 $5,500 $15,476 $138 $688 Coating 98 Square 0 2 $130.00 $12,740 $13,516 $6,370 $0 Coating 513 Square 0 3 $130.00 $66,690 $72,874 $22,230 $0 Coating 474 Square 0 4 $130.00 $61,620 $69,354 $15,405 $0 Coating 400 Square 0 5 $130.00 $52,000 $60,282 $10,400 $0 Subtotal: $912,175 $2,071,287 $74,446 $122,890 Buildings, Roof, Tile Tile/underlayment 481 Square 30 11 $600.00 $288,600 $399,490 $9,620 $182,780 Tile/underlayment 481 Square 30 15 $600.00 $288,600 $449,629 $9,620 $144,300 Tile/underlayment, Gatehouse 3 Square 30 5 $600.00 $1,800 $2,087 $60 $1,500 Subtotal: $579,000 $851,206 $19,300 $328,580 Electrical/Lights Landscape fixtures 100 Each 15 0 $50.00 $5,000 $5,000 $333 $5,000 Landscape fixtures 110 Each 15 5 $50.00 $5,500 $6,376 $367 $3,667 Landscape fixtures 700 Each 15 10 $50.00 $35,000 $47,037 $2,333 $11,667 Meter cabinet 1 Each 30 11 $5,000.00 $5,000 $6,921 $167 $3,167 Pole fixtures, street 25 Each 25 12 $650.00 $16,250 $23,169 $650 $8,450 Poles/fixtures, Tennis Courts 16 Each 30 10 $1,400.00 $22,400 $30,104 $747 $14,933 Wall mount fixtures 240 Each 25 3 $60.00 $14,400 $15,735 $576 $12,672 Subtotal: $103,550 $134,342 $5,173 $59,556 Fence & Gates Fence, chainlink, Tennis Courts 960 Linear Feet 30 10 $25.00 $24,000 $32,254 $800 $16,000 Fence, metal, Pool Areas 174 Linear Feet 24 0 $40.00 $6,960 $6,960 $290 $6,960
SCT Reserve Consultants, Inc. Job No. 2006-127-12 L3 Page 13 of 33 Identified Major Components Quantity Component Identification Report (continued) Measurement Basis Full Life In Years Remaining Life In Years Basis Cost Current Replacement Cost Future Replacement Cost (3% inflation) Straight Line Allocation (Annual) 100% Funded Jan 01, 2018 Fence, metal, Pool Areas 800 Linear Feet 24 8 $40.00 $32,000 $40,537 $1,333 $21,333 Gates, metal, pedestrian 2 Each 20 8 $400.00 $800 $1,013 $40 $480 Gates, metal, vehicle 2 Each 24 12 $3,000.00 $6,000 $8,555 $250 $3,000 Subtotal: $69,760 $89,319 $2,713 $47,773 Irrigation Backflow valves 6 Each 20 1 $1,200.00 $7,200 $7,416 $360 $6,840 Controllers 8 Each 12 4 $800.00 $6,400 $7,203 $533 $4,267 Controllers 8 Each 12 6 $800.00 $6,400 $7,642 $533 $3,200 Irrigation retrofit project (TBD) 1 Each 20 0 $25,000.00 $25,000 $25,000 $1,250 $25,000 Irrigation retrofit project (TBD) 1 Each 20 1 $25,000.00 $25,000 $25,750 $1,250 $23,750 Irrigation retrofit project (TBD) 1 Each 20 2 $25,000.00 $25,000 $26,522 $1,250 $22,500 Irrigation retrofit project (TBD) 1 Each 20 3 $25,000.00 $25,000 $27,318 $1,250 $21,250 Irrigation retrofit project (TBD) 1 Each 20 4 $25,000.00 $25,000 $28,138 $1,250 $20,000 Subtotal: $145,000 $154,989 $7,676 $126,807 Landscape Renovation 1 Lump Sum 20 18 $100,900.00 $100,900 $171,775 $5,045 $10,090 Subtotal: $100,900 $171,775 $5,045 $10,090 Mailboxes Mailbox posts 33 Each 16 0 $250.00 $8,250 $8,250 $516 $8,250 Mailboxes 120 Each 8 0 $60.00 $7,200 $7,200 $900 $7,200 Subtotal: $15,450 $15,450 $1,416 $15,450 Paint Buildings, stucco 120 Per Unit 12 4 $1,300.00 $156,000 $175,579 $13,000 $104,000 Buildings, trim/fascia/doors 120 Per Unit 4 0 $475.00 $57,000 $57,000 $14,250 $57,000 Fence, metal, Pool Areas 974 Linear Feet 4 1 $6.00 $5,844 $6,019 $1,461 $4,383 Mailboxes & posts 33 Each 4 0 $75.00 $2,475 $2,475 $619 $2,475 Poles/lights/fence, chainlink, Tennis 1 Lump Sum 8 3 $7,000.00 $7,000 $7,649 $875 $4,375
SCT Reserve Consultants, Inc. Job No. 2006-127-12 L3 Page 14 of 33 Co Identified Major Components Quantity Component Identification Report (continued) Measurement Basis Full Life In Years Remaining Life In Years Basis Cost Current Replacement Cost Future Replacement Cost (3% inflation) Straight Line Allocation (Annual) 100% Funded Jan 01, 2018 Subtotal: $228,319 $248,722 $30,205 $172,233 Pool & Spa 1 Deck coating, color seal 1,884 Square Feet 5 0 $2.00 $3,768 $3,768 $754 $3,768 Deck coating, texture 1,884 Square Feet 20 10 $3.00 $5,652 $7,596 $283 $2,826 Deck skimmers 3 Each 24 7 $1,600.00 $4,800 $5,903 $200 $3,400 Pool autofill 1 Each 10 6 $1,500.00 $1,500 $1,791 $150 $600 Pool filter 1 Each 12 2 $1,150.00 $1,150 $1,220 $96 $958 Pool heater 1 Each 10 1 $3,000.00 $3,000 $3,090 $300 $2,700 Pool pumpset, variable speed 1 Each 8 2 $1,315.00 $1,315 $1,395 $164 $986 Pool resurface 1 Each 12 5 $8,000.00 $8,000 $9,274 $667 $4,667 Spa filter 1 Each 12 2 $1,100.00 $1,100 $1,167 $92 $917 Spa heater 1 Each 10 1 $2,700.00 $2,700 $2,781 $270 $2,430 Spa pumpset, circulation, variable speed 1 Each 8 3 $1,315.00 $1,315 $1,437 $164 $822 Spa pumpset, jet 1 Each 12 5 $800.00 $800 $927 $67 $467 Spa resurface 1 Each 8 1 $3,000.00 $3,000 $3,090 $375 $2,625 Subtotal: $38,100 $43,439 $3,582 $27,166 Pool & Spa 2 Deck coating, color seal 1,884 Square Feet 5 0 $2.00 $3,768 $3,768 $754 $3,768 Deck coating, texture 1,884 Square Feet 20 0 $3.00 $5,652 $5,652 $283 $5,652 Deck skimmers 3 Each 24 8 $1,600.00 $4,800 $6,080 $200 $3,200 Pool filter 1 Each 12 5 $1,150.00 $1,150 $1,333 $96 $671 Pool heater 1 Each 10 8 $3,000.00 $3,000 $3,800 $300 $600 Pool pumpset, variable speed 1 Each 8 1 $1,315.00 $1,315 $1,354 $164 $1,151 Pool resurface 1 Each 12 4 $8,000.00 $8,000 $9,004 $667 $5,333 Spa filter 1 Each 12 2 $1,100.00 $1,100 $1,167 $92 $917
SCT Reserve Consultants, Inc. Job No. 2006-127-12 L3 Page 15 of 33 Identified Major Components Quantity Component Identification Report (continued) Measurement Basis Full Life In Years Remaining Life In Years Basis Cost Current Replacement Cost Future Replacement Cost (3% inflation) Straight Line Allocation (Annual) 100% Funded Jan 01, 2018 Spa heater 1 Each 10 7 $2,700.00 $2,700 $3,321 $270 $810 Spa pumpset, circulation, variable speed 1 Each 8 1 $1,315.00 $1,315 $1,354 $164 $1,151 Spa pumpset, jet 1 Each 12 5 $800.00 $800 $927 $67 $467 Spa resurface 1 Each 8 1 $3,000.00 $3,000 $3,090 $375 $2,625 Subtotal: $36,600 $40,850 $3,432 $26,345 Pool & Spa 3 Deck coating, color seal 1,884 Square Feet 5 2 $2.00 $3,768 $3,997 $754 $2,261 Deck coating, texture 1,884 Square Feet 20 12 $3.00 $5,652 $8,058 $283 $2,261 Deck skimmers 3 Each 24 8 $1,600.00 $4,800 $6,080 $200 $3,200 Pool filter 1 Each 12 2 $1,150.00 $1,150 $1,220 $96 $958 Pool heater 1 Each 10 6 $3,000.00 $3,000 $3,582 $300 $1,200 Pool pumpset, variable speed 1 Each 8 2 $1,315.00 $1,315 $1,395 $164 $986 Pool resurface 1 Each 12 8 $8,000.00 $8,000 $10,134 $667 $2,667 Spa filter 1 Each 12 5 $1,100.00 $1,100 $1,275 $92 $642 Spa heater 1 Each 10 1 $2,700.00 $2,700 $2,781 $270 $2,430 Spa pumpset, circulation, variable speed 1 Each 8 2 $1,315.00 $1,315 $1,395 $164 $986 Spa pumpset, jet 1 Each 12 5 $800.00 $800 $927 $67 $467 Spa resurface 1 Each 8 0 $3,000.00 $3,000 $3,000 $375 $3,000 Subtotal: $36,600 $43,844 $3,432 $21,058 Pool & Spa 4 Deck coating, color seal 1,884 Square Feet 5 1 $2.00 $3,768 $3,881 $754 $3,014 Deck coating, texture 1,884 Square Feet 20 11 $3.00 $5,652 $7,824 $283 $2,543 Deck skimmers 3 Each 24 9 $1,600.00 $4,800 $6,263 $200 $3,000 Pool filter 1 Each 12 1 $1,150.00 $1,150 $1,184 $96 $1,054 Pool heater 1 Each 10 6 $3,000.00 $3,000 $3,582 $300 $1,200 Pool pumpset, variable speed 1 Each 8 1 $1,315.00 $1,315 $1,354 $164 $1,151
SCT Reserve Consultants, Inc. Job No. 2006-127-12 L3 Page 16 of 33 Identified Major Components Quantity Component Identification Report (continued) Measurement Basis Full Life In Years Remaining Life In Years Basis Cost Current Replacement Cost Future Replacement Cost (3% inflation) Straight Line Allocation (Annual) 100% Funded Jan 01, 2018 Pool resurface 1 Each 12 8 $8,000.00 $8,000 $10,134 $667 $2,667 Spa filter 1 Each 12 11 $1,100.00 $1,100 $1,523 $92 $92 Spa heater 1 Each 10 7 $2,700.00 $2,700 $3,321 $270 $810 Spa pumpset, circulation, variable speed 1 Each 8 1 $1,315.00 $1,315 $1,354 $164 $1,151 Spa pumpset, jet 1 Each 12 5 $800.00 $800 $927 $67 $467 Spa resurface 1 Each 8 1 $3,000.00 $3,000 $3,090 $375 $2,625 Subtotal: $36,600 $44,437 $3,432 $19,774 Pools & Spas, All Deck safety signs 4 Each 10 6 $750.00 $3,000 $3,582 $300 $1,200 Equipment pit removals 2 Each 0 0 $10,000.00 $20,000 $0 $0 $20,000 Furniture, chairs, replace 28 Each 20 9 $150.00 $4,200 $5,480 $210 $2,310 Furniture, chairs, replace 29 Each 20 11 $150.00 $4,350 $6,021 $218 $1,958 Furniture, chairs, restrap (20%) 11 Each 1 0 $90.00 $990 $990 $990 $990 Furniture, loungers, replace 21 Each 20 9 $200.00 $4,200 $5,480 $210 $2,310 Furniture, loungers, replace 22 Each 20 11 $200.00 $4,400 $6,091 $220 $1,980 Furniture, loungers, restrap (20%) 9 Each 1 0 $100.00 $900 $900 $900 $900 Furniture, tables, large 11 Each 20 11 $400.00 $4,400 $6,091 $220 $1,980 Furniture, tables, small 8 Each 20 9 $125.00 $1,000 $1,305 $50 $550 Subtotal: $47,440 $35,940 $3,318 $34,178 Signage Monuments/lettering 2 Each 20 8 $1,600.00 $3,200 $4,054 $160 $1,920 Signs, street 5 Each 20 15 $500.00 $2,500 $3,895 $125 $625 Signs, traffic 3 Each 15 10 $200.00 $600 $806 $40 $200 Subtotal: $6,300 $8,755 $325 $2,745 Tennis Courts Benches & chairs 1 Lump Sum 12 7 $1,075.00 $1,075 $1,322 $90 $448
SCT Reserve Consultants, Inc. Job No. 2006-127-12 L3 Page 17 of 33 Identified Major Components Quantity Component Identification Report (continued) Measurement Basis Full Life In Years Remaining Life In Years Basis Cost Current Replacement Cost Future Replacement Cost (3% inflation) Straight Line Allocation (Annual) 100% Funded Jan 01, 2018 Courts resurface 4 Each 8 2 $5,600.00 $22,400 $23,764 $2,800 $16,800 Subtotal: $23,475 $25,086 $2,890 $17,248 Water Fountain Water fountain 1 Each 10 5 $1,400.00 $1,400 $1,623 $140 $700 Subtotal: $1,400 $1,623 $140 $700 Totals: $2,926,613 $4,726,959 $195,111 $1,375,051
SCT Reserve Consultants, Inc. Job No. 2006-127-12 L3 Page 18 of 33 Component Replacement Cost Chart (by category) Current and Future Replacement Cost by Category Access System Asphalt & Concrete Buildings, Plumbing Buildings, Roof, Flat Buildings, Roof, Tile Electrical/Lights Fence & Gates Irrigation Landscape Mailboxes Paint Pool & Spa 1 Pool & Spa 2 Pool & Spa 3 Pool & Spa 4 Pools & Spas, All Signage Tennis Courts Water Fountain Current Replacement Cost Future Replacement Cost
SCT Reserve Consultants, Inc. Job No. 2006-127-12 L3 Page 19 of 33 Year 100% Funded Cash Flow (Balance with Funding Plan) End of Year Cash Flow and Percent Funded Projections Percent Funded (EOY) Fiscal Year: January 01, 2018 - December 31, 2018 Revenue Cash Flow (Balance without Funding Plan) Contribution Annual Contribution Unit/M onth Contribution % Change Special Assessment, Bank & Litigation Interest Components Expenditures Deferred & Non- Recurring 2017 $1,375,051 $412,250 29.98% 2018 $1,369,421 $330,333 24.12% $330,332 $118,814 $82.51 $0 $0 $200,732 $0 $0 2019 $1,480,807 $386,377 26.09% $362,614 $142,577 $99.01 20.00% $0 $0 $86,532 $0 $0 2020 $1,572,337 $453,588 28.85% $377,547 $171,092 $118.81 20.00% $0 $0 $103,881 $0 $0 2021 $1,618,253 $510,548 31.55% $363,409 $189,912 $131.88 11.00% $0 $0 $132,952 $0 $0 2022 $1,428,681 $316,236 22.13% $92,301 $195,610 $135.84 3.00% $0 $0 $389,922 $0 $0 2023 $1,480,444 $407,096 27.50% $100,497 $201,478 $139.92 3.00% $0 $0 $110,618 $0 $0 2024 $1,582,352 $559,772 35.38% $164,465 $207,522 $144.11 3.00% $0 $0 $54,846 $0 $0 2025 $1,713,463 $752,694 43.93% $262,454 $213,748 $148.44 3.00% $0 $0 $20,825 $0 $0 2026 $1,685,229 $758,016 44.98% $166,429 $220,160 $152.89 3.00% $0 $0 $214,839 $0 $0 2027 $1,801,430 $937,556 52.05% $238,018 $226,765 $157.48 3.00% $0 $0 $47,225 $0 $0 2028 $1,673,557 $791,235 47.28% ($23,057) $233,568 $162.20 3.00% $0 $0 $379,889 $0 $0 2029 $1,495,413 $561,344 37.54% ($374,710) $240,575 $167.07 3.00% $0 $0 $470,467 $0 $0 2030 $1,472,752 $571,190 38.78% ($493,843) $247,793 $172.08 3.00% $0 $0 $237,947 $0 $0 2031 $1,619,081 $797,400 49.25% ($404,046) $255,226 $177.24 3.00% $0 $0 $29,017 $0 $0 2032 $1,497,510 $611,966 40.87% ($733,548) $262,883 $182.56 3.00% $0 $0 $448,316 $0 $0 2033 $1,361,059 $395,207 29.04% ($1,102,263) $270,770 $188.03 3.00% $0 $0 $487,529 $0 $0 2034 $1,187,379 $188,614 15.88% ($1,468,935) $278,893 $193.68 3.00% $0 $0 $485,486 $0 $0 2035 $1,319,322 $390,567 29.60% ($1,435,428) $287,259 $199.49 3.00% $0 $0 $85,307 $0 $0 2036 $1,346,123 $411,654 30.58% ($1,591,404) $295,877 $205.47 3.00% $0 $0 $274,790 $0 $0 2037 $1,533,666 $696,628 45.42% ($1,492,370) $304,754 $211.63 3.00% $0 $0 $19,780 $0 $0 2038 $1,519,874 $726,768 47.82% ($1,657,312) $313,896 $217.98 3.00% $0 $0 $283,756 $0 $0 2039 $1,664,005 $945,715 56.83% ($1,642,864) $323,313 $224.52 3.00% $0 $0 $104,366 $0 $0 2040 $1,834,707 $1,208,870 65.89% ($1,593,907) $333,012 $231.26 3.00% $0 $0 $69,857 $0 $0 2041 $2,009,888 $1,486,024 73.94% ($1,540,942) $343,003 $238.20 3.00% $0 $0 $65,849 $0 $0 2042 $2,020,446 $1,571,840 77.80% ($1,689,605) $353,293 $245.34 3.00% $0 $0 $267,477 $0 $0 2043 $2,125,993 $1,769,946 83.25% ($1,736,576) $363,892 $252.70 3.00% $0 $0 $165,785 $0 $0 2044 $2,277,245 $2,043,389 89.73% ($1,719,128) $374,808 $260.28 3.00% $0 $0 $101,366 $0 $0 2045 $2,474,315 $2,386,408 96.45% ($1,643,347) $386,053 $268.09 3.00% $0 $0 $43,033 $0 $0 2046 $2,216,877 $2,094,670 94.49% ($2,213,905) $397,634 $276.13 3.00% $0 $0 $689,372 $0 $0 2047 $2,416,983 $2,432,161 100.63% ($2,167,164) $409,563 $284.42 3.00% $0 $0 $72,073 $0 $0 Totals: $8,163,746 $0 $0 $6,143,835 $0 $0 Taxes
SCT Reserve Consultants, Inc. Job No. 2006-127-12 L3 Page 20 of 33 Cash Flow and Percent Funded Chart (December 31, 2018) $2,500,000 100% Funded Cash Flow (Funding Plan) Cash Flow (No Funding Plan) Revenue Expenditure $2,250,000 $2,000,000 $1,750,000 $1,500,000 $1,250,000 $1,000,000 $750,000 $500,000 $250,000 $0 ($250,000) ($500,000) ($750,000) ($1,000,000) ($1,250,000) ($1,500,000) ($1,750,000) ($2,000,000) ($2,250,000)
SCT Reserve Consultants, Inc. Job No. 2006-127-12 L3 Page 21 of 33 10-Year Expenditure and Cash Flow Projection 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Beginning Balance $412,250 $330,333 $386,377 $453,588 $510,548 $316,236 $407,096 $559,772 $752,694 $758,016 Contribution (+) $118,814 $142,577 $171,092 $189,912 $195,610 $201,478 $207,522 $213,748 $220,160 $226,765 Average/Month/Unit $82.51 $99.01 $118.81 $131.88 $135.84 $139.92 $144.11 $148.44 $152.89 $157.48 Percent Change 20.00% 20.00% 11.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Special Assessments (+) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Interest Earned (+) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Tax on Interest (-) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Net Interest $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Access System Battery backup system $1,910 Card reader $1,030 Entry phone system $4,635 Gate operators $4,120 $4,244 Loop systems $7,210 Magnetic locks $2,000 Asphalt & Concrete Concrete, repairs $5,873 $6,809 Repair/overlay/R&R $14,713 $18,964 $27,911 Seal/stripe/repair/crack fill $28,056 $31,577 $35,541 Buildings, Plumbing Water lines, repair $6,000 $6,956 Buildings, Roof, Flat Ancillary & wood BUR, Certificate hybrid BUR, Certificate hybrid, Gardeners Shed Coating $13,516 $72,874 $69,354 $60,282 Buildings, Roof, Tile Tile/underlayment Tile/underlayment, Gatehouse $2,087 Electrical/Lights Landscape fixtures $5,000 $6,376 Meter cabinet Pole fixtures, street
SCT Reserve Consultants, Inc. Job No. 2006-127-12 L3 Page 22 of 33 10-Year Expenditure and Cash Flow Projection (continued) 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Poles/fixtures, Tennis Courts Wall mount fixtures $15,735 Fence & Gates Fence, chainlink, Tennis Courts Fence, metal, Pool Areas $6,960 $40,537 Gates, metal, pedestrian $1,013 Gates, metal, vehicle Irrigation Backflow valves $7,416 Controllers $7,203 $7,642 Irrigation retrofit project (TBD) $25,000 $25,750 $26,523 $27,318 $28,138 Landscape Renovation Mailboxes Mailbox posts $8,250 Mailboxes $7,200 $9,121 Paint Buildings, stucco $175,579 Buildings, trim/fascia/doors $57,000 $64,154 $72,206 Fence, metal, Pool Areas $6,019 $6,775 $7,625 Mailboxes & posts $2,475 $2,786 $3,135 Poles/lights/fence, chainlink, Tennis Co $7,649 Pool & Spa 1 Deck coating, color seal $3,768 $4,368 Deck coating, texture Deck skimmers $5,903 Pool autofill $1,791 Pool filter $1,220 Pool heater $3,090 Pool pumpset, variable speed $1,395 Pool resurface $9,274 Spa filter $1,167 Spa heater $2,781
SCT Reserve Consultants, Inc. Job No. 2006-127-12 L3 Page 23 of 33 10-Year Expenditure and Cash Flow Projection (continued) 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Spa pumpset, circulation, variable speed $1,437 Spa pumpset, jet $927 Spa resurface $3,090 $3,914 Pool & Spa 2 Deck coating, color seal $3,768 $4,368 Deck coating, texture $5,652 Deck skimmers $6,081 Pool filter $1,333 Pool heater $3,800 Pool pumpset, variable speed $1,354 $1,716 Pool resurface $9,004 Spa filter $1,167 Spa heater $3,321 Spa pumpset, circulation, variable speed $1,354 $1,716 Spa pumpset, jet $927 Spa resurface $3,090 $3,914 Pool & Spa 3 Deck coating, color seal $3,997 $4,634 Deck coating, texture Deck skimmers $6,081 Pool filter $1,220 Pool heater $3,582 Pool pumpset, variable speed $1,395 Pool resurface $10,134 Spa filter $1,275 Spa heater $2,781 Spa pumpset, circulation, variable speed $1,395 Spa pumpset, jet $927 Spa resurface $3,000 $3,800 Pool & Spa 4 Deck coating, color seal $3,881 $4,499 Deck coating, texture Deck skimmers $6,263
SCT Reserve Consultants, Inc. Job No. 2006-127-12 L3 Page 24 of 33 10-Year Expenditure and Cash Flow Projection (continued) 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Pool filter $1,185 Pool heater $3,582 Pool pumpset, variable speed $1,354 $1,716 Pool resurface $10,134 Spa filter Spa heater $3,321 Spa pumpset, circulation, variable speed $1,354 $1,716 Spa pumpset, jet $927 Spa resurface $3,090 $3,914 Pools & Spas, All Deck safety signs $3,582 Equipment pit removals $20,000 Furniture, chairs, replace $5,480 Furniture, chairs, restrap (20%) $990 $1,020 $1,050 $1,082 $1,114 $1,148 $1,182 $1,218 $1,254 $1,292 Furniture, loungers, replace $5,480 Furniture, loungers, restrap (20%) $900 $927 $955 $983 $1,013 $1,043 $1,075 $1,107 $1,140 $1,174 Furniture, tables, large Furniture, tables, small $1,305 Signage Monuments/lettering $4,054 Signs, street Signs, traffic Tennis Courts Benches & chairs $1,322 Courts resurface $23,764 Water Fountain Water fountain $1,623 Component Exp (-) $200,732 $86,532 $103,881 $132,952 $389,922 $110,618 $54,846 $20,825 $214,839 $47,225 Non-recurring Exp (-) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Ending Balance $330,333 $386,377 $453,588 $510,548 $316,236 $407,096 $559,772 $752,694 $758,016 $937,556
SCT Reserve Consultants, Inc. Job No. 2006-127-12 L3 Page 25 of 33 Personal Credentials Michael C. Graves R.S. Reserve Funding Specialist Designations R.S., 2000, Community Association Institute Distinctions 2013 Educated Business Partner, Community Association Institute Degrees B.A., Economics, 1983, San Diego State University A.S., Business Administration, 1980 Citrus College Associations Community Associations Institute (CAI), Affiliate Member: Coachella Valley Chapter (CV) Greater Inland Empire Chapter (GRIE) - Past President, Orange County Regional Chapter (OCRC) - Past Board Treasurer San Diego Chapter (SD) - Past Board Treasurer Publications Ask The Experts, O.C. View, May/June 2004. Fiduciary Responsibility Forum, CondoManagement, December 2003. Does Our Association Have Money Or Not, Quorum, June 2001. How Do You Use Your Reserve Study To Finance Remodeling Work, Quorum, April 2000. Numerous Speaking and Panel Engagements Awards Community Associations Institute, GRIE, 2012 Hall of Fame 2000 Committee Member of the Year Community Associations Institute, OCRC, 2009 Committee Member of the Year 2006 Ellen Ellish Award 2006 Presidents Award California Association of Community Managers, 2001, Vision Award, Excellence in Service Professional Responsibilities As Reserve Fund Specialist for SCT Reserve Consultants, Inc. Mr. Graves: Manages reserve study site inspections and funding analyses Prepares reserve study reports and proposals Markets reserve study services through professional contacts and trade associations meetings and shows Professional Experience Mr. Graves reserve study experience includes: Numerous Levels I, II, and III reserve studies throughout San Diego, Los Angeles, Orange, Riverside, San Bernardino, and Imperial Counties. Familiar with components that go into a reserve study. Able to assist Associations in determining a well-suited funding plan that fits their reserve goals. Utilizing Property Reserve Analysis (PRA) System software to generate Component definition files. Developing SCT Reserve Analysis System software to calculate elements used in the Rough Draft and Final Reports. Meet with Association s Board of Directors to review the draft of the reserve study. Consideration of Board s input with respect to incorporate component replacement and funding policies.
SCT Reserve Consultants, Inc. Job No. 2006-127-12 L3 Page 26 of 33 Disclosure Statements SCT Reserve Consultants, Inc. endeavors to provide the most accurate reserve study possible. However, the current replacement costs of the listed components are based on estimates utilizing; local trades, contractor interviews, and national cost databases. Regular maintenance of reserve components is required to realize the full useful life of each component. Changes in fees for labor and materials, acts of God, extraordinary weather conditions, vandalism and unusual wear of the reserve components may have an adverse impact on the useful life and the cost to replace a particular reserve component. SCT Reserve Consultants, Inc. did not identify, nor did it purport to expound on, any possible construction defects on the project. All dollar figures are subject to rounding errors. The completeness of this reserve study relies heavily on information provided to us by the Association s representative(s). Incomplete or missing information may cause a distortion of the Association s financial condition. The reserve balance presented in this reserve study is based on information provided and was not audited. SCT Reserve Consultants, Inc. assumes that the information provided to us by the Association s representative(s) is both reliable and accurate and for a Level II study (update with-sitevisit) and Level III study (update with no-site-visit) the Association is to have considered previously developed component quantities and/or lump sum expenditures as accurate and reliable. Information provided about reserve projects is also understood to be reliable. Any on-site inspection should not be considered a project audit or quality inspection. In the event we have performed an on-site inspection of the community, the data compiled has been used with financial, physical, quantity, and historical information provided by the Association s representative(s). Our physical inspection would consist primarily of visual inspection, measurement, drawing take-offs, and photographic documentation. No destructive testing methods were used. SCT Reserve Consultants, Inc. has prepared this reserve study in conformance with the requirements laid out by the California Civil Code ( 5550) and the Community Association Institute (CAI). We have no other current involvement with SUNSHINE VILLAS HOMEOWNERS ASSOCIATION and have no actual or perceived conflicts of interest with SUNSHINE VILLAS HOMEOWNERS ASSOCIATION. This reserve study is a reflection of the information provided to us by the Association s representative(s) and is assembled for the budgeting and planning purposes of the Board of Directors only. Information provided about reserve projects will be considered reliable. The reserve study is not to be used for the purpose of performing an audit, quality/forensic analyses, or background checks of historical records.
SCT Reserve Consultants, Inc. Job No. 2006-127-12 L3 Page 27 of 33 Definition of Terms 100% Funded from the Component Identification Report, see Fully Funded Balance (FFB). Basis Cost - the estimated unit (of measurement basis) replacement cost. Cash Flow Method - a method of developing a reserve funding plan where contributions to the reserve fund are designed to offset the variable annual expenditures from the reserve fund. Different reserve funding plans are tested against the anticipated schedule of reserve expenses until the desired funding goal is achieved. Contingency Fund typically 3.0% to 5.0% of annual reserve allocation may be established to pay for incidental and miscellaneous reserve expenditures (optional). Current Replacement Cost (estimated) - the total estimated cost of a component s replacement or longterm maintenance action at the time of the study. This amount is calculated by multiplying the measurement basis quantity times the basis cost. Davis-Stirling Common Interest Development Act - the name for the sections of the California Civil Code (4000 through 6150) that are the framework for the operation and management of common interest developments in California. Fully Funded Balance (FFB) - total accrued depreciation. This number is calculated for each reserve component, then summed together for a total dollar value. Expressed as FFB = ( Used Life) / ( Full Life) x (Current Replacement Cost) Full Life (estimated) - the original estimate of a period of time that a component will last before major long-term maintenance or replacement is required. Funding Goals there are four basic categories of funding plan goals: Baseline Funding establishing a reserve-funding goal of keeping the reserve cash balance above zero. Full Funding setting a reserve-funding goal of attaining and maintaining reserves at or near 100% funded. Statutory Funding establishing a reserve-funding goal of setting aside the specific minimum amount of reserves required by local statutes. Threshold Funding establishing a reserve-funding goal of keeping the reserve balance above a specified dollar or percent funded amount. Future Replacement Cost (estimated) the current replacement cost multiplied by an inflation factor (compounded annually). Level I Reserve Study - is considered a full study, it consists of: Component Inventory - quantification and verification of the reserve components. Condition Assessment the task of evaluating the current condition of the component based on observed or reported conditions. Life and Valuation Estimates the task of estimating Full Life, Remaining Life and repair and replacement costs for the components. Fund Status status of the reserve fund as compared to an established benchmark such as percent funding. Funding Plan an Association s plan to provide income to the reserve fund to offset anticipated expenditures from that fund. Level II Reserve Study - is considered an update (on-site) study, it consists of: Component Inventory - verification of the reserve components only, no quantification. Condition Assessment the task of evaluating the current condition of the component based on observed or reported conditions. Life and Valuation Estimates the task of estimating Full Life, Remaining Life and repair and replacement costs for the components.