RESERVE STUDY ANNUAL REPORT

RESERVE STUDY ANNUAL REPORT PINELOCH SUN BEACH CLUB LEVEL III RESERVE STUDY UPDATE WITHOUT SITE VISIT Ronald, WA 98940 Report #50510500R FINANCIAL YEAR 01.2016 12.2016 701 Fifth Ave, Suite 4200, Seattle WA 98104 www.reservestudygroup.com (888)-315 2843 03.14.16 Jacksonville FL Portland OR Austin TX Salt Lake City UT Seattle WA

Contact Information Reserve Study Group, LLC 701 Fifth Ave, Suite 4200 Seattle WA 98104 Phone: ( 888) - 315 2843 Fax: ( 888 ) - 316 4587 Email: mail@reservestudygroup.com Web: www.reservestudygroup.com COPYRIGHT 2015 RESERVE STUDY GROUP, LLC This work is copyright and has been supplied under contract to the Association and/or its representatives. Apart from the client s right to reproduce and distribute copies of the report as required by its governing documents or state law, no part of this work may be reproduced by any process without prior written permission from Reserve Study Group, LLC. Requests and inquiries concerning reproduction and rights should be addressed to the Reserve Study Group, 701 Fifth Ave, Suite 4200, Seattle WA 98104. Published By Reserve Study Group, LLC Seattle, WASHINGTON PINELOCH SUN BEACH CLUB 2

TABLE OF CONTENTS REPORT SUMMARY... PROJECT OVERVIEW [REGULAR DIVISION]... FINANCIAL OVERVIEW... FIVE YEAR INVESTMENT SUMMARY...... PROJECT OVERVIEW [WATER DIVISION]. FINANCIAL OVERVIEW... FIVE YEAR INVESTMENT SUMMARY...... METHODOLOGY. PHYSICAL ANALYSIS.. Site Inspection.. Reserve Components.. Component Useful Life.. Component Remaining Useful Life. FINANCIAL ANALYSIS Recommended Funding Rate. Fully Funded Balance Percent Funded. Reserve Component Cost. Inflation Rate. Interest Rate.. Current Reserve Fund Balance.. 4 5 6 7 8 9 10 11 12 12 12 12 13 13 14 14 14 14 14 15 15 FINANCIAL ANALYSIS [REGULAR DIVISION]... Reserve Component List. Projected Reserve Expenses... Reserve Funding Plan.. Thirty Year Reserve Fund Summary FINANCIAL ANALYSIS [WATER DIVISION].... Reserve Component List. Projected Reserve Expenses... Reserve Funding Plan.. Thirty Year Reserve Fund Summary 16 19 21 27 30 31 34 35 38 41 DISCLOSURES GLOSSARY OF TERMS. 42 43 PINELOCH SUN BEACH CLUB 3

REPORT SUMMARY Guide to the Report The Board of Directors is responsible for maintaining common areas of the physical property. They also have a duty to exercise careful planning for the funding of future major repairs and replacement of the Association s common elements or components. This report is intended to assist the Board in making necessary decisions regarding the development of their current and future reserve fund and contributions. This report is intended to be used for budgeting and planning purposes, and provides guidelines and estimates for anticipated repair or replacement events. This reserve study has been completed by a designated Reserve Specialist and adheres to the Community Association Institute s ( CAI ) standards regarding service levels and disclosures. The American Institute of Certified Public Accountants ( AICPA ) guidelines for Common Interest Realty Associations are also considered in the preparation of this report. Recommendations and accompanying assumptions included herein are based on information provided to the Reserve Study Group and assembled for the Association s use. The report has been designed for ease of use and is divided into the following sections: Report Summary Provides an overview of the Association s current physical condition and financial situation, outlining significant findings and conclusions. This section of the report should be used as a quick reference in helping the reader to understand the parameters and results of the study. Methodology Details the framework, methods, and materials used in developing the reserve study and the associated funding plan. This section provides a comprehensive understanding of the methodology and the process taken to develop the report. Financial Analysis Examines report findings and results with projections for individual reserve component expenses and recommended funding. PINELOCH SUN BEACH CLUB 4

PROJECT OVERVIEW [REGULAR DIVISION] Association Name Pineloch Sun Beach Club Location Ronald, WA 98940 Year Constructed 1969 Project Description HOA Type of Study Level III Reserve Study UPDATE Funding Strategy Recommended Full Funding Number of Units 435 Date Prepared 03.14.16 Next Study November 2016 Project Summary Report Period (Fiscal Year) 2016 (January 1, 2016 - December 31, 2016) Inflation Rate ¹ 3.00% Interest Rate 1.00% Projected Starting Reserve Fund Balance ² $175,000 Fully Funded Balance (Ideal Amount) $389,203 Percent Funded 45% Special Assessment ¹ Inflation rate is based upon the average annual increase of the Consumer Price Index (CPI) over the last 30-years, as published by the US Bureau of Labor Statistics (www.labor.gov). ² Information in relation to the association s finances were supplied by the association s representative and is not audited. N/A PINELOCH SUN BEACH CLUB 5

FINANCIAL OVERVIEW [REGULAR DIVISION] Reserve Funding Options The graph below shows the comparison between the current level of reserve contributions as measured against Baseline, Threshold¹ and Full Funding contribution amounts. Full Funding $77,750 Threshold Funding $73,116 Baseline Funding $64,391 Current Funding $48,000 Percent Funded The graph below highlights the movement of the association s reserve fund status (measured as Percent Funded) in relation to the reserve contribution rate chosen (Full, Threshold¹ or Baseline). 100% 80% 60% 40% 20% 0% 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 Full Funding Threshold Funding Baseline Funding Current Funding ¹ The Threshold funding plan outlined in this report sets a goal of reaching and maintaining a 50% funded level. PINELOCH SUN BEACH CLUB 6

FIVE YEAR INVESTMENT SUMMARY [REGULAR DIVISION] Full Funding 2016 2017 2018 2019 2020 Figure 3 Fully Funded Balance $389,203 $336,420 $365,584 $407,970 $448,315 Percentage Funded (%) 45% 38% 44% 51% 56% Beginning Balance $175,000 $126,938 $160,291 $206,429 $250,213 Reserve Contribution $77,750 $80,082 $82,485 $84,959 $87,508 Special Assessment $0 $0 $0 $0 $0 Interest Earned $1,502 $1,429 $1,824 $2,272 $2,674 Reserve Expenditures $127,314 $48,158 $38,171 $43,447 $53,192 ENDING BALANCE $126,938 $160,291 $206,429 $250,213 $287,204 Threshold Funding 2016 2017 2018 2019 2020 Fully Funded Balance $389,203 $336,420 $365,584 $407,970 $448,315 Percentage Funded (%) 45% 36% 41% 47% 51% Beginning Balance $175,000 $122,281 $150,791 $191,893 $230,443 Reserve Contribution $73,116 $75,309 $77,568 $79,895 $82,292 Special Assessment $0 $0 $0 $0 $0 Interest Earned $1,479 $1,359 $1,705 $2,101 $2,450 Reserve Expenditures $127,314 $48,158 $38,171 $43,447 $53,192 ENDING BALANCE $122,281 $150,791 $191,893 $230,443 $261,993 Baseline Funding 2016 2017 2018 2019 2020 Fully Funded Balance $389,203 $336,420 $365,584 $407,970 $448,315 Percentage Funded (%) 45% 34% 36% 40% 43% Beginning Balance $175,000 $113,513 $132,904 $164,525 $193,220 Reserve Contribution $64,391 $66,323 $68,313 $70,362 $72,473 Special Assessment $0 $0 $0 $0 $0 Interest Earned $1,435 $1,226 $1,480 $1,780 $2,029 Reserve Expenditures $127,314 $48,158 $38,171 $43,447 $53,192 ENDING BALANCE $113,513 $132,904 $164,525 $193,220 $214,530 Current Funding 2016 2017 2018 2019 2020 Fully Funded Balance $389,203 $336,420 $365,584 $407,970 $448,315 Percentage Funded (%) 45% 29% 27% 28% 28% Beginning Balance $175,000 $97,039 $99,299 $113,107 $123,288 Reserve Contribution $48,000 $49,440 $50,923 $52,451 $54,024 Special Assessment $0 $0 $0 $0 $0 Interest Earned $1,353 $977 $1,057 $1,176 $1,237 Reserve Expenditures $127,314 $48,158 $38,171 $43,447 $53,192 ENDING BALANCE $97,039 $99,299 $113,107 $123,288 $125,357 PINELOCH SUN BEACH CLUB 7

PROJECT OVERVIEW [WATER DIVISION] Association Name Pineloch Sun Beach Club Location Ronald, WA 98940 Year Constructed 1969 Project Description HOA Type of Study Level III Reserve Study UPDATE Funding Strategy Recommended Full Funding Number of Units 435 Project Summary Report Period (Fiscal Year) 2016 (January 1, 2016 - December 31, 2016) Inflation Rate ¹ 3.00% Interest Rate 1.00% Projected Starting Reserve Fund Balance ² $100,000 Fully Funded Balance (Ideal Amount) $136,833 Percent Funded 73% Special Assessment ¹ Inflation rate is based upon the average annual increase of the Consumer Price Index (CPI) over the last 30-years, as published by the US Bureau of Labor Statistics (www.labor.gov). ² Information in relation to the association s finances were supplied by the association s representative and is not audited. N/A PINELOCH SUN BEACH CLUB 8

FINANCIAL OVERVIEW [WATER DIVISION] Reserve Funding Options The graph below shows the comparison between the current level of reserve contributions as measured against Baseline, Threshold¹ and Full Funding contribution amounts. Full Funding $15,292 Threshold Funding $13,847 Baseline Funding $11,943 Current Funding $55,168 Percent Funded The graph below highlights the movement of the association s reserve fund status (measured as Percent Funded) in relation to the reserve contribution rate chosen (Full, Threshold¹ or Baseline). 100% 80% 60% 40% 20% 0% 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 Full Funding Threshold Funding Baseline Funding Current Funding ¹ The Threshold funding plan outlined in this report sets a goal of reaching and maintaining a 60% funded level. PINELOCH SUN BEACH CLUB 9

FIVE YEAR INVESTMENT SUMMARY [WATER DIVISION] Full Funding 2016 2017 2018 2019 2020 Fully Funded Balance $136,833 $143,587 $143,198 $159,047 $175,718 Percentage Funded (%) 73% 75% 77% 80% 83% Beginning Balance $100,000 $108,328 $109,713 $127,114 $145,178 Reserve Contribution $15,292 $15,750 $16,223 $16,710 $17,211 Special Assessment $0 $0 $0 $0 $0 Interest Earned $1,036 $1,085 $1,178 $1,355 $1,538 Reserve Expenditures $8,000 $15,450 $0 $0 $0 ENDING BALANCE $108,328 $109,713 $127,114 $145,178 $163,927 Threshold Funding 2016 2017 2018 2019 2020 Fully Funded Balance $136,833 $143,587 $143,198 $159,047 $175,718 Percentage Funded (%) 73% 74% 75% 77% 79% Beginning Balance $100,000 $106,877 $106,752 $122,584 $139,017 Reserve Contribution $13,847 $14,263 $14,691 $15,132 $15,585 Special Assessment $0 $0 $0 $0 $0 Interest Earned $1,029 $1,063 $1,141 $1,302 $1,468 Reserve Expenditures $8,000 $15,450 $0 $0 $0 ENDING BALANCE $106,877 $106,752 $122,584 $139,017 $156,071 Baseline Funding 2016 2017 2018 2019 2020 Fully Funded Balance $136,833 $143,587 $143,198 $159,047 $175,718 Percentage Funded (%) 73% 73% 72% 73% 74% Beginning Balance $100,000 $104,963 $102,849 $116,612 $130,894 Reserve Contribution $11,943 $12,302 $12,671 $13,051 $13,443 Special Assessment $0 $0 $0 $0 $0 Interest Earned $1,020 $1,034 $1,092 $1,231 $1,376 Reserve Expenditures $8,000 $15,450 $0 $0 $0 ENDING BALANCE $104,963 $102,849 $116,612 $130,894 $145,713 Current Funding 2016 2017 2018 2019 2020 Fully Funded Balance $136,833 $143,587 $143,198 $159,047 $175,718 Percentage Funded (%) 73% 103% 134% 159% 179% Beginning Balance $100,000 $148,404 $191,468 $252,203 $315,310 Reserve Contribution $55,168 $56,823 $58,528 $60,284 $62,092 Special Assessment $0 $0 $0 $0 $0 Interest Earned $1,236 $1,691 $2,207 $2,823 $3,464 Reserve Expenditures $8,000 $15,450 $0 $0 $0 ENDING BALANCE $148,404 $191,468 $252,203 $315,310 $380,865 PINELOCH SUN BEACH CLUB 10

METHODOLOGY An important aspect of living in a common area development such as a cooperative, condominium, or homeowner association is the community s ownership and commitment to maintain its common areas. Association members have a vested interest in maintaining and preserving their investment. To meet these obligations, the Association should prudently prepare for the future and contribute funds into a reserve account. Periodic contributions, verses special assessments, provide the freedom to gradually accumulate for anticipated expenditures while limiting the need to raise large sums of money through alternative means. When implementing a policy to fund major repair or replacement, the Board must educate owners about the benefits of accumulating reserve funds in advance through periodic contributions. Benefits of a systematic accumulation of funds include the following: having assurance that funds for major repairs and replacements will be available when needed; development of an equitable method of charging current rather than future owners with the cost of the current use of assets; preservation of the market value of individual units; and compliance with the governing documents, statutes, mortgages, and the like. A reserve study recommends the preferable mode of funding through smaller monthly contributions rather than risking large, unanticipated special assessments. The purpose of a reserve study is to avoid these situations by providing an Association with access to information and materials that will assist them in making informed decisions about their reserve fund and contributions. A reserve study is the sum of two parts: the physical and financial analysis. The physical analysis is a result of the on-site collection and review of data specific to the property s reserve components, common areas, and limited common areas. Through an onsite inspection and the use of source materials, the Reserve Specialist quantifies and establishes the reserve component inventory and assesses the physical condition of the Association s reserve components. Data from the physical analysis is used to define the scope and timing of future anticipated expenses. The financial analysis evaluates the condition of the Association s reserve fund in relation to its income and anticipated expenses. It appraises the adequacy of the reserve fund, and associated member contributions, against the current and future expenditures of the Association. To adequately forecast these expenditures over the 30-year projection period, current costs, projected inflation, and interest rates must be established. Recommendations are then provided to establish a reserve fund that addresses anticipated expenses, without having to resort to special assessments. PINELOCH SUN BEACH CLUB 11

Due to the long-term nature of a reserve study, certain assumptions must be made. Every effort has been made to ensure that the recommendations are based upon reliable and experienced sources in the building industry. However, there can be no guarantee that events will occur at the predicted specific intervals, or that they will occur at all. Any reserve study must be viewed in the light of circumstances existing at the actual time of the study. PHYSICAL ANALYSIS As part of this reserve study a comprehensive list of reserve components ( major common and limited common elements) has been compiled. Estimates for the useful life, remaining life, plus current repair and replacement costs for each of these reserve components have been calculated. This list is not intended to be exhaustive. However, an inaccurate or incomplete list of components can have an adverse impact upon the Association s long-term funding plan. Site Inspection A site inspection is conducted to assess the general condition of the property and its common areas. The on-site inspection is visual in nature, and no destructive or invasive testing is conducted. Observations are recorded using a representative sampling of the Association s common areas and reserve components. The component inventory and associated field measurements are also substantiated as part of the inspection. Reserve Components Determination of what constitutes a reserve component is dependent on a number of factors. A four-part test is generally used to distinguish a reserve item from an operational or maintenance expense. A component is included as a reserve item only if it satisfies ALL criteria outlined below: It is part of the Association s common and limited common area responsibilities. It has a predictable useful service life. Its useful life fits within the projection period. This means that components with a life of 30 years or more may not be included as part of the report if it is determined that they will last beyond the projection period. Its cost for repair or replacement is too high to include as part of the operating budget. The components of common property that an Association includes in its reserve funding plan are also dependent on the type of project, the construction properties and the Association s applicable governing documents and state statutes. Component Useful Life The useful life of a reserve component relates to the number of years it is expected to last, given reasonable care and maintenance. The prediction of reserve and building component life can be no more than an informed estimate based upon information made available at the time of the PINELOCH SUN BEACH CLUB 12

report s development. Consideration is given to vendor recommendations, material warranty information provided at the time of the report s development, along with other published sources. The data and service life estimates in this report are based on information gathered from various groups and industry sources as outlined below: Historical data and feedback from the Association; Management groups and maintenance managers; Manufacturer recommendations and industry standards; Published sources of service life data; Manufacturers and suppliers data. Component Remaining Useful Life The remaining life of a reserve component refers to the number of years left before an item s expected repair or replacement. A component s remaining life is contingent upon the following factors: Age/years in service; Physical condition; Frequency and quality of inspections and maintenance; General use; Environment, impact of weather and building location; Installation methods that meets or exceed industry standards; Design and quality of materials used. In addition to deterioration or anticipated failure of a component, the longevity may be impacted by obsolescence. The accuracy of the estimate is contingent upon reliable information made available at the time of the report s development. It is important to note that even with the highest degree of diligence and experience, outcomes will vary, and no guarantee can be given as to the timing or service life of the reserve components. All service life assessments in this report are based on the assumption that installation is carried out in accordance with manufacturer s recommendations and installation instructions, together with industry standards of workmanship. Consideration is given to visible design and signs of improper installation of components, that will have an impact upon the anticipated service life of the component. FINANCIAL ANALYSIS An Association, like any business entity, must prepare financially for the replacement and repair of its assets. Reserve study funding analysis is an important part of the annual budget process. Reserve funding should be reviewed at least once annually to help determine the annual assessment to be charged to members. The following elements are used in the financial analysis. PINELOCH SUN BEACH CLUB 13

Recommended Funding Rate We advocate a program of regular reserve fund contributions and promote a gradual means of reserving for future repair and replacement expenses. Recommended contributions are set at a level where they require only minor annual increases. The rate is designed to distribute the anticipated cost of common property ownership equitably between all members over the entire projection period. Fully Funded Balance The Fully Funded balance is equal to the total depreciable cost of all the Association s reserve components. It is determined by dividing each reserve component s cost by its useful life, and multiplying that by the number of years the component has been in service ( effectively its age ). The recommendations in this report are based upon a Full Funding plan, which sets the goal of achieving one hundred percent fully funded reserves by the end of the 30-year projection period. We advocate full funding as we feel that this approach provides a solid platform to address future needs, thus dramatically reducing the need for special assessment. Percent Funded An Association s reserve fund status is assessed by comparing the ratio of actual or projected funds available verses how much they s hould have saved. The result is presented as a percentage and is commonly known as p ercent funded. In other words, percent funded is calculated by dividing the Association s current reserve fund balance by the fully funded balance. This equation is an industry measure of how well prepared an Association is to meet its current and future repair and replacement obligations. Percent funded highlights the strength of the association s reserve account in relation to the anticipated costs of repair and replacement. Reserve Component Cost Current cost estimates for reserve components are derived from a variety of sources but typically are based on the latest local vendor pricing acquired from regional contractors and suppliers. When needed, additional information and cost data is sourced from national construction estimators. All cost estimates formulated from national estimators are based upon the latest specific geographical information for the area. Future cost estimates are determined by applying the assumed annual inflation rate to the current cost of each component. Inflation Rate The effect of inflation on the cost of reserve components is a key factor in the financial projections. Historically, the cost of construction materials and labor rise at a higher rate than that experienced by the general economy. RSG has chosen to use an inflationary multiplier that is somewhat higher than the current general consumer index for inflation. The rate used is based upon the historical average of inflation over the last 30 years. This rate reflects a realistic appreciation of future costs for reserve components and assists the Association in adequately budgeting for increasing cost. PINELOCH SUN BEACH CLUB 14

Interest Rate The interest rate used in this report is formulated on a conservative rate of return. Unless otherwise advised by the Association, an assumed net interest rate of 1.00% is used. RSG offers no guarantee or opinion in relation to investment decisions made by the Association or the rate of return achieved. Current Reserve Fund Balance The analysis, recommendations, and financial projections made within this report are heavily reliant on information provided by the Association and its representatives. The starting reserve fund balance ( current or projected ) and member contribution totals are supplied by these sources. This information has not been audited nor have the financial projections or recommendations. PINELOCH SUN BEACH CLUB 15

FINANCIAL ANALYSIS [REGULAR DIVISION] This section of the report is intended to provide the association with the awareness to adequately plan for the ongoing major maintenance, repair and replacement of their common property components. The recommendations included within this report represent one scenario, and are not intended to represent the only means of achieving the association s goals. We recommend that the Board of Directors use the following information as a guide in planning for their future objectives. PERCENT FUNDED The Percent Funded equation is the industry measure of how well prepared an association is to meet its current and future repair and replacement obligations. Percent funded highlights the strength of the association s reserve account in relation to its anticipated costs of repair and replacement. The higher the funded level, the less exposed an association is to market conditions, unanticipated expenses or events, and fluctuations in the general economy. An Association at or below a funding level of 30% has an increased risk of requiring special assessments to meet their ongoing obligations, as compared to Associations with higher funding levels. A level of funding at and above 60% is categorized as good or well funded. We recommend that associations look to achieve and maintain funding levels at and above 60%, with a preference to being 100% funded. CURRENT PERCENT FUNDED STATUS The Association is currently 45% funded. Highlighted below, the current funding level is shown in relation to the recommended level of 60-100%. 0% 20% 40% 60% 80% 100% FUNDING GOALS There is a range of funding alternatives available to the association. In our opinion the strategy chosen should not only meet the immediate needs and risk tolerance of current members, but also the longer term needs of the association. PINELOCH SUN BEACH CLUB 16

The association needs to establish a reserve contribution rate which, at a minimum, meets their anticipated financial needs without having to resort to special assessment or deferred maintenance. In addition, the funding goal needs to be prudent enough to meet the expectations of current members while not unfairly burdening future owners. The minimum funding goal needed to meet planned expenditure is Baseline Funding. Baseline Funding maintains the reserve account at or above zero dollars, but leaves the association with no contingency to address unanticipated outcomes. Threshold funding is a strategy designed to provide for this contingency by keeping cash reserves above a specific dollar amount or percent funded level. The reserve fund plan highlighted in this report is based upon the Full Funding program of reserve contributions. The Full Funding plan highlights an ideal level of contributions which will enable an association to be 100% funded by the end of the projection period. As stated previously, we recommend that the association implement a program that moves them toward and maintains a funding level of 60-100%. Funding Alternatives Annual Contribution Monthly Contribution Per Unit Per Month Full Funding $77,750 $6,479 $14.89 Threshold Funding ¹ $73,116 $6,093 $14.01 Baseline Funding $64,391 $5,366 $12.34 Current Funding $48,000 $4,000 $9.20 ¹ The Threshold funding plan outlined in this report sets a goal of reaching and maintaining a 50% funded level. FULL FUNDING THRESHOLD FUNDING BASELINE FUNDING STATUTORY FUNDING Establishes a goal of achieving one hundred percent fully funded reserves by the end of the projection period. Sets out to keep the cash reserves above a specified dollar or percent funded amount for the duration of the projection period. Establishes a goal of maintaining a reserve account balance above zero dollars throughout the study period. Sets aside a minimum amount of reserves as required by local statutes. PINELOCH SUN BEACH CLUB 17

RESERVE FUND ACCOUNT Projected Reserve Contributions Typically recommended contributions are set at a level where they will likely require minor annual increases in line with inflation. $200,000 Chart $150,000 $100,000 $50,000 $0 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 Full Funding Threshold Funding Baseline Funding Current Funding Projected Reserve Account Balance The growth of the Association s reserve account is largely dependent upon the level of reserve funds contributed (see figure above) and the funding objective chosen (Full, Threshold and Baseline). $800,000 $600,000 $400,000 $200,000 $0 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 Full Funding Threshold Funding Baseline Funding Current Funding Projected amounts based upon a starting balance of $175,000 and annual contribution increases of 3.00%. PINELOCH SUN BEACH CLUB 18

REGULAR DIV. RESERVE COMPONENT LIST Useful Service Remaining Unit of Component Life Useful Life Quantity Measure Unit Cost Current Cost Current Fully Funded Balance Lodge - Building Exterior, Roof [Metal Standing Seam] 30 16 63 Squares $870.00 $54,810 $25,578 Lodge - Building Exterior, Skylights 30 16 3 Each $645.00 $1,935 $903 Lodge - Building Exterior, Flue/Flue Caps 30 16 2 Each $155.00 $310 $145 Lodge - Building Exterior, Siding [Replace] 50 17 6,300 SF $10.50 $66,150 $43,659 Lodge - Building Exterior, Paint & Seal 8 1 6,300 SF $1.75 $11,025 $9,647 Lodge - Building Exterior, Windows [25% Replace] 10 1 25 Each $840.00 $5,250 $4,725 Lodge - Building Exterior, SGDs, Poolside [Replace] 40 28 1 Each $1,750.00 $1,750 $525 Lodge - Building Exterior, SGDs [Replace] 40 5 2 Each $1,750.00 $3,500 $3,063 Lodge - Deck, Wrap-around [Replace] 20 0 2,100 SF $24.00 $50,400 $50,400 Lodge - Interior Flooring, Carpet 10 6 143 SY $42.00 $6,006 $2,402 Lodge - Interior Flooring, Hardwood [Refinish] 12 8 1,430 SF $5.00 $7,150 $2,383 Lodge - Interior Flooring, Tile 30 5 465 SF $12.00 $5,580 $4,650 Lodge - Interior Flooring, Resilient 30 22 510 SF $4.50 $2,295 $612 Lodge - Interior, Restroom - Front [Remodel] 30 18 1 Allowance $10,000.00 $10,000 $4,000 Lodge - Interior, Kitchen [Remodel] 20 16 1 Allowance $20,000.00 $20,000 $4,000 Lodge - Interior, Shower Rooms [Remodel] 30 22 1 Allowance $35,000.00 $35,000 $9,333 Lodge - Interior, Fixtures & Furnishings 10 6 1 Allowance $30,000.00 $30,000 $12,000 Lodge - Equipment, Fireplace 30 26 2 Each $1,600.00 $3,200 $427 Lodge - Equipment, Kitchen 15 11 1 Lump Sum $14,500.00 $14,500 $3,867 Lodge - Equipment, Office 5 4 1 Allowance $3,000.00 $3,000 $600 Lodge - Equipment, BBQ 10 6 1 Each $2,060.00 $2,060 $824 Lodge - Plumbing, Water Heater, Showers 12 2 1 Each $4,000.00 $4,000 $3,333 Shop & Garage - Building Exterior, Roof [Metal Standing Seam] 30 23 25 Squares $870.00 $21,750 $5,075 Shop & Garage - Building Exterior, Paint 8 4 1,800 SF $1.50 $2,700 $1,350 Shop & Garage - Building Exterior, Siding [Replace] 40 17 1,800 SF $6.50 $11,700 $6,728 Shop & Garage - Building Exterior, Garage Doors 20 5 3 Each $900.00 $2,700 $2,025 Shop & Garage - Equipment, General 10 4 1 Allowance $5,080.00 $5,080 $3,048 Shop & Garage - Equipment, Backhoe [Backhoe] 25 18 1 Each $40,640.00 $40,640 $11,379 Shop & Garage - Equipment, Snow Groomer 25 7 1 Each $15,240.00 $15,240 $10,973 Shop & Garage - Equipment, Vehicle [4x4] 25 6 2 Each $5,080.00 $10,160 $7,722 Shop & Garage - Firehouses 10 8 1 Allowance $6,000.00 $6,000 $1,200 Equipment - Propane Tank [Replace] 20 14 1 Each $1,372.00 $1,372 $412 Equipment - Diesel Tank [Replace] 40 39 1 Each $1,800.00 $1,800 $45 Equipment - Emergency Power Station 40 0 1 Lump Sum $30,000.00 $30,000 $30,000 Manager Residence - Roof [Metal Standing Seam] 30 23 1 Lump Sum $13,000.00 $13,000 $3,033 Manager Residence - Siding, Paint 8 4 1 Lump Sum $6,000.00 $6,000 $3,000 Manager Residence - Siding & Windows [Replace] 30 18 1 Lump Sum $15,240.00 $15,240 $6,096 Manager Residence - Interior Upgrades 15 13 1 Allowance $8,128.00 $8,128 $1,084 Manager Residence - Interior, Paint 8 6 1 Lump Sum $1,500.00 $1,500 $375 Manager Residence - Interior, Carpet 12 0 1 Lump Sum $1,000.00 $1,000 $1,000 Swimming Pool - Equipment, Heaters 5 0 1 Lump Sum $5,000.00 $5,000 $5,000 Swimming Pool - Equipment, Filter 15 3 1 Lump Sum $3,500.00 $3,500 $2,800 Swimming Pool - Equipment, Pump 12 2 1 Lump Sum $1,500.00 $1,500 $1,250 Swimming Pool - Solar Cover 15 0 1 Lump Sum $1,000.00 $1,000 $1,000 Swimming Pool - Decking, Wood 2 x 6 [Replace] 20 18 2,100 SF $24.00 $50,400 $5,040 PINELOCH SUN BEACH CLUB 19

REGULAR DIV. RESERVE COMPONENT LIST Useful Service Remaining Unit of Component Life Useful Life Quantity Measure Unit Cost Current Cost Current Fully Funded Balance Swimming Pool - Furniture [Replace] 20 3 1 Allowance $5,000.00 $5,000 $4,250 Swimming Pool - Surface [Resurface] 15 11 1 Lump Sum $16,850.00 $16,850 $4,493 Swimming Pool - Surface Tile [Retile] 25 14 160 LF $40.00 $6,400 $2,816 Tennis Court - Resurface 6 0 7,080 SF $1.05 $7,434 $7,434 Tennis Court - Replace 40 6 7,080 SF $4.20 $29,736 $25,276 Basketball Court - Equipment 15 9 2 Each $2,500.00 $5,000 $2,000 General Site - Asphalt, Renewal & Repair 1 0 1 Lump Sum $30,480.00 $30,480 $30,480 General Site - Fence & Gates, Vinyl [Pool] 25 14 265 LF $29.50 $7,818 $3,440 General Site - Fence, Chainlink [Court] 30 5 356 LF $32.50 $11,570 $9,642 General Site - Fence, Split Rail 20 3 60 LF $13.00 $780 $663 General Site - Flagpole 30 0 1 Each $2,000.00 $2,000 $2,000 TOTALS $716,399 $389,203 PINELOCH SUN BEACH CLUB 20

REGULAR DIV. PROJECTED RESERVE EXPENSES (Years 1-10) Component 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Lodge - Building Exterior, Roof [Metal Standing Seam] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Lodge - Building Exterior, Skylights $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Lodge - Building Exterior, Flue/Flue Caps $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Lodge - Building Exterior, Siding [Replace] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Lodge - Building Exterior, Paint & Seal $0 $11,356 $0 $0 $0 $0 $0 $0 $0 $14,385 Lodge - Building Exterior, Windows [25% Replace] $0 $5,408 $0 $0 $0 $0 $0 $0 $0 $0 Lodge - Building Exterior, SGDs, Poolside [Replace] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Lodge - Building Exterior, SGDs [Replace] $0 $0 $0 $0 $0 $4,057 $0 $0 $0 $0 Lodge - Deck, Wrap-around [Replace] $50,400 $0 $0 $0 $0 $0 $0 $0 $0 $0 Lodge - Interior Flooring, Carpet $0 $0 $0 $0 $0 $0 $7,171 $0 $0 $0 Lodge - Interior Flooring, Hardwood [Refinish] $0 $0 $0 $0 $0 $0 $0 $0 $9,057 $0 Lodge - Interior Flooring, Tile $0 $0 $0 $0 $0 $6,469 $0 $0 $0 $0 Lodge - Interior Flooring, Resilient $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Lodge - Interior, Restroom - Front [Remodel] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Lodge - Interior, Kitchen [Remodel] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Lodge - Interior, Shower Rooms [Remodel] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Lodge - Interior, Fixtures & Furnishings $0 $0 $0 $0 $0 $0 $35,822 $0 $0 $0 Lodge - Equipment, Fireplace $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Lodge - Equipment, Kitchen $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Lodge - Equipment, Office $0 $0 $0 $0 $3,377 $0 $0 $0 $0 $3,914 Lodge - Equipment, BBQ $0 $0 $0 $0 $0 $0 $2,460 $0 $0 $0 Lodge - Plumbing, Water Heater, Showers $0 $0 $4,244 $0 $0 $0 $0 $0 $0 $0 Shop & Garage - Building Exterior, Roof [Metal Standing Seam] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Shop & Garage - Building Exterior, Paint $0 $0 $0 $0 $3,039 $0 $0 $0 $0 $0 Shop & Garage - Building Exterior, Siding [Replace] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Shop & Garage - Building Exterior, Garage Doors $0 $0 $0 $0 $0 $3,130 $0 $0 $0 $0 Shop & Garage - Equipment, General $0 $0 $0 $0 $5,718 $0 $0 $0 $0 $0 Shop & Garage - Equipment, Backhoe [Backhoe] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Shop & Garage - Equipment, Snow Groomer $0 $0 $0 $0 $0 $0 $0 $18,743 $0 $0 Shop & Garage - Equipment, Vehicle [4x4] $0 $0 $0 $0 $0 $0 $12,132 $0 $0 $0 Shop & Garage - Firehouses $0 $0 $0 $0 $0 $0 $0 $0 $7,601 $0 Equipment - Propane Tank [Replace] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Equipment - Diesel Tank [Replace] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Equipment - Emergency Power Station $30,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 Manager Residence - Roof [Metal Standing Seam] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Manager Residence - Siding, Paint $0 $0 $0 $0 $6,753 $0 $0 $0 $0 $0 Manager Residence - Siding & Windows [Replace] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Manager Residence - Interior Upgrades $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Manager Residence - Interior, Paint $0 $0 $0 $0 $0 $0 $1,791 $0 $0 $0 Manager Residence - Interior, Carpet $1,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 Swimming Pool - Equipment, Heaters $5,000 $0 $0 $0 $0 $5,796 $0 $0 $0 $0 Swimming Pool - Equipment, Filter $0 $0 $0 $3,825 $0 $0 $0 $0 $0 $0 Swimming Pool - Equipment, Pump $0 $0 $1,591 $0 $0 $0 $0 $0 $0 $0 Swimming Pool - Solar Cover $1,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 Swimming Pool - Decking, Wood 2 x 6 [Replace] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 PINELOCH SUN BEACH CLUB 21

REGULAR DIV. PROJECTED RESERVE EXPENSES (Years 1-10) Component 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Swimming Pool - Furniture [Replace] $0 $0 $0 $5,464 $0 $0 $0 $0 $0 $0 Swimming Pool - Surface [Resurface] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Swimming Pool - Surface Tile [Retile] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Tennis Court - Resurface $7,434 $0 $0 $0 $0 $0 $8,877 $0 $0 $0 Tennis Court - Replace $0 $0 $0 $0 $0 $0 $35,506 $0 $0 $0 Basketball Court - Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $6,524 General Site - Asphalt, Renewal & Repair $30,480 $31,394 $32,336 $33,306 $34,306 $35,335 $36,395 $37,487 $38,611 $39,769 General Site - Fence & Gates, Vinyl [Pool] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 General Site - Fence, Chainlink [Court] $0 $0 $0 $0 $0 $13,413 $0 $0 $0 $0 General Site - Fence, Split Rail $0 $0 $0 $852 $0 $0 $0 $0 $0 $0 General Site - Flagpole $2,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 Annual Expenditure $127,314 $48,158 $38,171 $43,447 $53,192 $68,200 $140,153 $56,230 $55,269 $64,593 YEARS 1 THROUGH 10 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 PINELOCH SUN BEACH CLUB 22

REGULAR DIV. PROJECTED RESERVE EXPENSES (Years 11-20) Component 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Lodge - Building Exterior, Roof [Metal Standing Seam] $0 $0 $0 $0 $0 $0 $87,954 $0 $0 $0 Lodge - Building Exterior, Skylights $0 $0 $0 $0 $0 $0 $3,105 $0 $0 $0 Lodge - Building Exterior, Flue/Flue Caps $0 $0 $0 $0 $0 $0 $497 $0 $0 $0 Lodge - Building Exterior, Siding [Replace] $0 $0 $0 $0 $0 $0 $0 $109,336 $0 $0 Lodge - Building Exterior, Paint & Seal $0 $0 $0 $0 $0 $0 $0 $18,223 $0 $0 Lodge - Building Exterior, Windows [25% Replace] $0 $7,267 $0 $0 $0 $0 $0 $0 $0 $0 Lodge - Building Exterior, SGDs, Poolside [Replace] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Lodge - Building Exterior, SGDs [Replace] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Lodge - Deck, Wrap-around [Replace] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Lodge - Interior Flooring, Carpet $0 $0 $0 $0 $0 $0 $9,638 $0 $0 $0 Lodge - Interior Flooring, Hardwood [Refinish] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Lodge - Interior Flooring, Tile $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Lodge - Interior Flooring, Resilient $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Lodge - Interior, Restroom - Front [Remodel] $0 $0 $0 $0 $0 $0 $0 $0 $17,024 $0 Lodge - Interior, Kitchen [Remodel] $0 $0 $0 $0 $0 $0 $32,094 $0 $0 $0 Lodge - Interior, Shower Rooms [Remodel] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Lodge - Interior, Fixtures & Furnishings $0 $0 $0 $0 $0 $0 $48,141 $0 $0 $0 Lodge - Equipment, Fireplace $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Lodge - Equipment, Kitchen $0 $20,071 $0 $0 $0 $0 $0 $0 $0 $0 Lodge - Equipment, Office $0 $0 $0 $0 $4,538 $0 $0 $0 $0 $5,261 Lodge - Equipment, BBQ $0 $0 $0 $0 $0 $0 $3,306 $0 $0 $0 Lodge - Plumbing, Water Heater, Showers $0 $0 $0 $0 $6,050 $0 $0 $0 $0 $0 Shop & Garage - Building Exterior, Roof [Metal Standing Seam] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Shop & Garage - Building Exterior, Paint $0 $0 $3,850 $0 $0 $0 $0 $0 $0 $0 Shop & Garage - Building Exterior, Siding [Replace] $0 $0 $0 $0 $0 $0 $0 $19,338 $0 $0 Shop & Garage - Building Exterior, Garage Doors $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Shop & Garage - Equipment, General $0 $0 $0 $0 $7,684 $0 $0 $0 $0 $0 Shop & Garage - Equipment, Backhoe [Backhoe] $0 $0 $0 $0 $0 $0 $0 $0 $69,187 $0 Shop & Garage - Equipment, Snow Groomer $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Shop & Garage - Equipment, Vehicle [4x4] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Shop & Garage - Firehouses $0 $0 $0 $0 $0 $0 $0 $0 $10,215 $0 Equipment - Propane Tank [Replace] $0 $0 $0 $0 $2,075 $0 $0 $0 $0 $0 Equipment - Diesel Tank [Replace] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Equipment - Emergency Power Station $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Manager Residence - Roof [Metal Standing Seam] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Manager Residence - Siding, Paint $0 $0 $8,555 $0 $0 $0 $0 $0 $0 $0 Manager Residence - Siding & Windows [Replace] $0 $0 $0 $0 $0 $0 $0 $0 $25,945 $0 Manager Residence - Interior Upgrades $0 $0 $0 $11,936 $0 $0 $0 $0 $0 $0 Manager Residence - Interior, Paint $0 $0 $0 $0 $2,269 $0 $0 $0 $0 $0 Manager Residence - Interior, Carpet $0 $0 $1,426 $0 $0 $0 $0 $0 $0 $0 Swimming Pool - Equipment, Heaters $6,720 $0 $0 $0 $0 $7,790 $0 $0 $0 $0 Swimming Pool - Equipment, Filter $0 $0 $0 $0 $0 $0 $0 $0 $5,959 $0 Swimming Pool - Equipment, Pump $0 $0 $0 $0 $2,269 $0 $0 $0 $0 $0 Swimming Pool - Solar Cover $0 $0 $0 $0 $0 $1,558 $0 $0 $0 $0 Swimming Pool - Decking, Wood 2 x 6 [Replace] $0 $0 $0 $0 $0 $0 $0 $0 $85,803 $0 PINELOCH SUN BEACH CLUB 23

REGULAR DIV. PROJECTED RESERVE EXPENSES (Years 11-20) Component 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Swimming Pool - Furniture [Replace] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Swimming Pool - Surface [Resurface] $0 $23,324 $0 $0 $0 $0 $0 $0 $0 $0 Swimming Pool - Surface Tile [Retile] $0 $0 $0 $0 $9,681 $0 $0 $0 $0 $0 Tennis Court - Resurface $0 $0 $10,599 $0 $0 $0 $0 $0 $12,656 $0 Tennis Court - Replace $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Basketball Court - Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 General Site - Asphalt, Renewal & Repair $40,963 $42,191 $43,457 $44,761 $46,104 $47,487 $48,911 $50,379 $51,890 $53,447 General Site - Fence & Gates, Vinyl [Pool] $0 $0 $0 $0 $11,825 $0 $0 $0 $0 $0 General Site - Fence, Chainlink [Court] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 General Site - Fence, Split Rail $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 General Site - Flagpole $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Annual Expenditure $47,682 $92,854 $67,886 $56,697 $92,494 $56,835 $233,647 $197,276 $278,678 $58,707 YEARS 11 THROUGH 20 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 PINELOCH SUN BEACH CLUB 24

REGULAR DIV. PROJECTED RESERVE EXPENSES (Years 21-30) Component 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 Lodge - Building Exterior, Roof [Metal Standing Seam] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Lodge - Building Exterior, Skylights $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Lodge - Building Exterior, Flue/Flue Caps $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Lodge - Building Exterior, Siding [Replace] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Lodge - Building Exterior, Paint & Seal $0 $0 $0 $0 $0 $23,084 $0 $0 $0 $0 Lodge - Building Exterior, Windows [25% Replace] $0 $9,767 $0 $0 $0 $0 $0 $0 $0 $0 Lodge - Building Exterior, SGDs, Poolside [Replace] $0 $0 $0 $0 $0 $0 $0 $0 $4,004 $0 Lodge - Building Exterior, SGDs [Replace] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Lodge - Deck, Wrap-around [Replace] $91,028 $0 $0 $0 $0 $0 $0 $0 $0 $0 Lodge - Interior Flooring, Carpet $0 $0 $0 $0 $0 $0 $12,952 $0 $0 $0 Lodge - Interior Flooring, Hardwood [Refinish] $12,914 $0 $0 $0 $0 $0 $0 $0 $0 $0 Lodge - Interior Flooring, Tile $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Lodge - Interior Flooring, Resilient $0 $0 $4,397 $0 $0 $0 $0 $0 $0 $0 Lodge - Interior, Restroom - Front [Remodel] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Lodge - Interior, Kitchen [Remodel] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Lodge - Interior, Shower Rooms [Remodel] $0 $0 $67,064 $0 $0 $0 $0 $0 $0 $0 Lodge - Interior, Fixtures & Furnishings $0 $0 $0 $0 $0 $0 $64,698 $0 $0 $0 Lodge - Equipment, Fireplace $0 $0 $0 $0 $0 $0 $6,901 $0 $0 $0 Lodge - Equipment, Kitchen $0 $0 $0 $0 $0 $0 $31,271 $0 $0 $0 Lodge - Equipment, Office $0 $0 $0 $0 $6,098 $0 $0 $0 $0 $7,070 Lodge - Equipment, BBQ $0 $0 $0 $0 $0 $0 $4,443 $0 $0 $0 Lodge - Plumbing, Water Heater, Showers $0 $0 $0 $0 $0 $0 $8,626 $0 $0 $0 Shop & Garage - Building Exterior, Roof [Metal Standing Seam] $0 $0 $0 $42,926 $0 $0 $0 $0 $0 $0 Shop & Garage - Building Exterior, Paint $4,877 $0 $0 $0 $0 $0 $0 $0 $6,177 $0 Shop & Garage - Building Exterior, Siding [Replace] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Shop & Garage - Building Exterior, Garage Doors $0 $0 $0 $0 $0 $5,653 $0 $0 $0 $0 Shop & Garage - Equipment, General $0 $0 $0 $0 $10,327 $0 $0 $0 $0 $0 Shop & Garage - Equipment, Backhoe [Backhoe] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Shop & Garage - Equipment, Snow Groomer $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Shop & Garage - Equipment, Vehicle [4x4] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Shop & Garage - Firehouses $0 $0 $0 $0 $0 $0 $0 $0 $13,728 $0 Equipment - Propane Tank [Replace] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Equipment - Diesel Tank [Replace] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Equipment - Emergency Power Station $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Manager Residence - Roof [Metal Standing Seam] $0 $0 $0 $25,657 $0 $0 $0 $0 $0 $0 Manager Residence - Siding, Paint $10,837 $0 $0 $0 $0 $0 $0 $0 $13,728 $0 Manager Residence - Siding & Windows [Replace] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Manager Residence - Interior Upgrades $0 $0 $0 $0 $0 $0 $0 $0 $18,596 $0 Manager Residence - Interior, Paint $0 $0 $2,874 $0 $0 $0 $0 $0 $0 $0 Manager Residence - Interior, Carpet $0 $0 $0 $0 $2,033 $0 $0 $0 $0 $0 Swimming Pool - Equipment, Heaters $9,031 $0 $0 $0 $0 $10,469 $0 $0 $0 $0 Swimming Pool - Equipment, Filter $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Swimming Pool - Equipment, Pump $0 $0 $0 $0 $0 $0 $3,235 $0 $0 $0 Swimming Pool - Solar Cover $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Swimming Pool - Decking, Wood 2 x 6 [Replace] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 PINELOCH SUN BEACH CLUB 25

REGULAR DIV. PROJECTED RESERVE EXPENSES (Years 21-30) Component 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 Swimming Pool - Furniture [Replace] $0 $0 $0 $9,868 $0 $0 $0 $0 $0 $0 Swimming Pool - Surface [Resurface] $0 $0 $0 $0 $0 $0 $36,339 $0 $0 $0 Swimming Pool - Surface Tile [Retile] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Tennis Court - Resurface $0 $0 $0 $0 $15,112 $0 $0 $0 $0 $0 Tennis Court - Replace $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Basketball Court - Equipment $0 $0 $0 $0 $10,164 $0 $0 $0 $0 $0 General Site - Asphalt, Renewal & Repair $55,050 $56,702 $58,403 $60,155 $61,960 $63,818 $65,733 $67,705 $69,736 $71,828 General Site - Fence & Gates, Vinyl [Pool] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 General Site - Fence, Chainlink [Court] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 General Site - Fence, Split Rail $0 $0 $0 $1,539 $0 $0 $0 $0 $0 $0 General Site - Flagpole $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Annual Expenditure $183,736 $66,468 $132,738 $140,144 $105,693 $103,024 $234,197 $67,705 $125,969 $78,898 YEARS 21 THROUGH 30 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 PINELOCH SUN BEACH CLUB 26

REGULAR DIV. RESERVE FUNDING PLAN (Years 1-10) 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Fully Funded Balance $389,203 $336,420 $365,584 $407,970 $448,315 $482,020 $503,528 $453,888 $491,589 $533,870 Percentage Funded (%) 45% 38% 44% 51% 56% 60% 62% 59% 63% 67% Beginning Balance $175,000 $126,938 $160,291 $206,429 $250,213 $287,204 $312,118 $267,687 $309,953 $356,491 Reserve Contribution $77,750 $80,082 $82,485 $84,959 $87,508 $90,133 $92,837 $95,622 $98,491 $101,446 Avg Unit Contribution (mth)¹ $14.89 $15.34 $15.80 $16.28 $16.76 $17.27 $17.78 $18.32 $18.87 $19.43 Contribution Increase (%) 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Special Assessment Interest Earned $1,502 $1,429 $1,824 $2,272 $2,674 $2,982 $2,885 $2,874 $3,316 $3,749 Reserve Expenditures $127,314 $48,158 $38,171 $43,447 $53,192 $68,200 $140,153 $56,230 $55,269 $64,593 ENDING BALANCE $126,938 $160,291 $206,429 $250,213 $287,204 $312,118 $267,687 $309,953 $356,491 $397,093 YEARS 1 THROUGH 10 100% 80% 60% 40% 20% 0% 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Percent Funded $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Fully Funded Balance Beginning Balance ¹ The per unit calculation is an average and does not take into consideration percentage ownership. PINELOCH SUN BEACH CLUB 27

REGULAR DIV. RESERVE FUNDING PLAN (Years 11-20) 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Fully Funded Balance $570,350 $627,953 $643,444 $687,886 $748,037 $776,060 $844,678 $736,355 $665,454 $511,887 Percentage Funded (%) 70% 73% 74% 76% 79% 80% 82% 80% 79% 75% Beginning Balance $397,093 $458,155 $477,579 $525,536 $588,560 $619,680 $690,495 $587,974 $524,743 $382,944 Reserve Contribution $104,489 $107,624 $110,852 $114,178 $117,603 $121,131 $124,765 $128,508 $132,364 $136,335 Avg Unit Contribution (mth)¹ $20.02 $20.62 $21.24 $21.87 $22.53 $23.21 $23.90 $24.62 $25.36 $26.12 Contribution Increase (%) 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Special Assessment Interest Earned $4,255 $4,655 $4,991 $5,543 $6,011 $6,518 $6,361 $5,536 $4,516 $4,218 Reserve Expenditures $47,682 $92,854 $67,886 $56,697 $92,494 $56,835 $233,647 $197,276 $278,678 $58,707 ENDING BALANCE $458,155 $477,579 $525,536 $588,560 $619,680 $690,495 $587,974 $524,743 $382,944 $464,789 YEARS 11 THROUGH 20 100% 80% 60% 40% 20% 0% 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Percent Funded $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Fully Funded Balance Beginning Balance ¹ The per unit calculation is an average and does not take into consideration percentage ownership. PINELOCH SUN BEACH CLUB 28

REGULAR DIV. RESERVE FUNDING PLAN (Years 21-30) 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 Fully Funded Balance $583,689 $532,372 $603,915 $613,066 $618,697 $663,928 $717,332 $641,418 $739,027 $783,995 Percentage Funded (%) 80% 80% 84% 86% 89% 91% 94% 96% 98% 100% Beginning Balance $464,789 $425,909 $508,728 $530,135 $548,804 $606,910 $673,044 $612,919 $724,573 $783,995 Reserve Contribution $140,425 $144,637 $148,976 $153,446 $158,049 $162,791 $167,674 $172,704 $177,886 $183,222 Avg Unit Contribution (mth)¹ $26.90 $27.71 $28.54 $29.40 $30.28 $31.19 $32.12 $33.09 $34.08 $35.10 Contribution Increase (%) 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Special Assessment Interest Earned $4,431 $4,650 $5,168 $5,368 $5,750 $6,368 $6,398 $6,654 $7,505 $8,362 Reserve Expenditures $183,736 $66,468 $132,738 $140,144 $105,693 $103,024 $234,197 $67,705 $125,969 $78,898 ENDING BALANCE $425,909 $508,728 $530,135 $548,804 $606,910 $673,044 $612,919 $724,573 $783,995 $896,681 YEARS 21 THROUGH 30 100% 80% 60% 40% 20% 0% 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 Percent Funded $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 Fully Funded Balance Beginning Balance ¹ The per unit calculation is an average and does not take into consideration percentage ownership. PINELOCH SUN BEACH CLUB 29