deer haven...coating the asphalt. you may hear from your accountant that since painting or seal...
TRANSCRIPT
Deer Haven
Level 2 Reserve Study
Report Period – 1/1/2012 – 12/31/2012
Client Reference Number 10158 Property Type Townhouse Number of Units 121 Fiscal Year End 12/31
Report prepared on – Monday, September 26, 2011
TEL: (888) 356-3783 | Fax: (866) 279-9662
WWW.COMPLEXSOLUTIONSLTD.COM
Date of Property Inspection 9/15/2011 Prepared By Dale Gifford Analysis Method Cash Flow Funding Goal Full Funding
Table of Contents
Introduction
Executive Summary page 1
Introduction page 2
General Information and Frequently Asked Questions page 3 - 4
Reserve Analysis
Funding Summary page 5
Percent Funded – Graph page 6
Component Inventory page 7
Significant Components page 8
Significant Components – Graph page 9
Yearly Summary page 10
Yearly Reserve Contributions – Graph page 11
Component Funding Information page 12
Yearly Cash Flow page 13
Yearly Reserve Expenditures – Graph page 14
Projected Reserve Expenditures by Year page 15 - 16
Component Evaluation
Component Evaluation page 1 - 18
Glossary of Commonly used Words and Phrases
1
Executive Summary – Deer Haven - ID # 10158 Information to complete this Reserve Study was gathered by performing an on-site inspection of the common area elements. In addition, we also obtained information by contacting any vendors and/or contractors that have worked on the property recently, as well as communicating with the property representative (BOD Member and/or Community Manager). To the best of our knowledge, the conclusions and recommendations of this report are considered reliable and accurate insofar as the information obtained from these sources. Projected Starting Balance as of 1/1/2012 $143,780 Ideal Reserve Balance as of 1/1/2012 $459,091
Percent Funded as of 1/1/2012 31% Recommended Reserve Contribution (per month) $5,800 Minimum Reserve Contribution (per month) $5,300 Recommended Special Assessment $0
Deer Haven is a 121-unit Townhome community. The association’s reserve responsibility include the roofing and siding of the buildings, maintenance and replacement of the carports, maintenance and replacement of the community roads and maintenance and replacement of common area fencing. Construction on the community was completed in 1983 for seven of the buildings and 1999-2001 for the other twenty-three buildings.
Currently Programmed Projects There are no projects programmed to occur this fiscal year (FY2012). (See page 15)
Major Reserve Expenditures The first major reserve expenditure is programmed to occur in fiscal year 2016. Projects programmed to occur in fiscal year 2016 include stucco surfaces repaint (Comp# 201), front doors repaint (Comp# 204), carports repaint (Comp# 223), asphalt seal coat (Comp# 402), and exterior wall mount lights replace (Comp# 1602). We have programmed approximately $146,222 in reserve funds or approximately 32% of fiscal year 2016’s recommended starting balance towards the completion of these projects (see pages 10 & 15).
Significant Reserve Projects The association’s significant reserve projects include pitched roof composite shingle replace (Comp# 105), asphalt overlay (Comp# 401), stucco surfaces repaint (Comp# 201), and vinyl fencing replace (Comp# 1008). The fiscal significance of these components is approximately 34%, 12%, 11%, and 8% respectively (see page 9). A component’s significance is calculated by dividing its replacement cost by its useful life. In this way, not only is a component’s replacement cost considered but also the frequency of occurrence. These components most significantly contribute to the total monthly reserve contribution. As these components have a high level of fiscal significance the association should properly maintain them to ensure they reach their full useful lives. Reserve Funding In comparing the projected starting reserve balance of $143,780 versus the ideal reserve balance of $459,091 we find the association’s reserve fund to be approximately 31% funded. This indicates a fair reserve fund position. In order to continue to strengthen the account fund, we suggest adopting a monthly reserve contribution of $5,800 ($47.93/unit) per month. We have also included a minimum reserve contribution of $5,300 ($43.80/unit) per month. If the contribution falls below this rate, then the reserve fund may fall into a situation where special assessments, deferred maintenance, and lower property values are likely at some point in the future.
2
Introduction Reserve Study Purpose The purpose of this Reserve Study is to provide an educated estimate of the necessary reserve balance and allocation. The detailed schedules will serve as an advanced warning that major projects will need to be addressed in the future. This will allow the Board of Directors to have ample time to obtain competitive estimates and bids that will result in cost savings to the individual homeowners. It will also ensure the physical well-being of the property and ultimately enhance each owner’s investment, while limiting the possibility of unexpected major projects that may lead to special assessments. Preparer’s Credentials Mr. Gifford has been working in the community association industry for the last 9 years. Prior to taking a position, as the Regional Project Manager covering the Utah region, at Complex Solutions, he worked in community association management in Utah. While in community association management his positions included, Maintenance Supervisor, Senior Portfolio Manager and Vice President of Community Management. His work in community association management gave him extensive experience with; budget creation, reserves and reserve budgeting, community inspections and analyzing common area components.
Reserve Specialist® (RS®) designation from Community Associations Institute (CAI)
Personally has prepared over 100 reserve studies in Salt Lake City Utah and surrounding areas
Bachelor of Science in Chemistry from Emporia State University
Certified Manager of Community Associations® (CMCA®) designation from the National Board of Certification for
Community Association Managers (NBC-CAM)
Association Management Specialist® (AMS®) designation from Community Associations Institute (CAI)
Professional Community Association Manager® (PCAM®) designation from Community Associations Institute (CAI)
Active member and former Board member and chapter President of the Utah Chapter of Community Associations
Institute (UCCAI)
Recipient of Community Associations Institute’s (CAI) annual award of Excellence In Chapter Leadership for service an achievement in 2010
Budget Breakdown Every association conducts their business within a budget. There are typically two main parts to this budget, operating and reserves. The operating budget includes all expenses that occur on an annual basis. These would include management fees, maintenance expenses, utilities, etc. The reserves is primarily made up of capital replacement items such as roofing, fencing, mechanical equipment, etc., that do not normally occur on an annual basis. Typically, the reserve contribution makes up 15% - 40% of the association’s total budget. Therefore, reserves are considered to be a major part of the overall monthly association assessment.
Report Sections The Reserve Analysis Section contains the evaluation of the association’s reserve balance, income, and expenses. It includes a finding of the client’s current reserve fund status (measured as percent funded) and a recommendation for an appropriate reserve allocation rate (also known as the funding plan). The Component Evaluation Section contains information regarding the physical status and replacement cost of major common area components the association is responsible to maintain. It is important to understand that while the component inventory will remain relatively “stable” from year to year, the condition assessment and life estimates will most likely vary from year to year.
3
General Information and Frequently Asked Questions
Why is it important to perform a Reserve Study? As previously mentioned, the reserve allocation makes up a significant portion of the total monthly assessment. This report provides the essential information that is needed to guide the Board of Directors in establishing the budget in order to run the daily and long term operations of your association. It is suggested that a third party professionally prepare the Reserve Study since there is no vested interest in the property.
After we have a Reserve Study completed, what do we do with it? Hopefully, you will not look at this report and think it is too cumbersome to understand. Our intention is to make this Reserve Study easy to read and understand. Please take the time to review it carefully and make sure the “main ingredients” (component information) are complete and accurate. If there are any inaccuracies, please inform us immediately so we may revise the report. Once you feel the report is an accurate tool to work from, use it to help establish your budget for the upcoming fiscal year. The reserve allocation makes up a large portion of the total monthly assessment and this report should help you determine the correct amount of money to go into the reserve fund. Additionally, the Reserve Study should act as a guide to obtain proposals in advance of pending projects. This will give you an opportunity to shop around for the best price available. The Reserve Study should be readily available for real estate agents, brokerage firms, and lending institutions for potential future homeowners. As the importance of reserves becomes more of a household term, people are requesting homeowners associations reveal the strength of the reserve fund prior to purchasing a condominium, town home, or any property that belongs to an association.
How often do we update or review the Reserve Study? Unfortunately, there is a misconception that these reports are good for an extended period of time since the report has projections for the next 30 years. Just like any major line item in the budget, the Reserve Study should be reviewed each year before the budget is established. Invariably, some assumptions have to be made during the compilation of this analysis. Anticipated events may not materialize and unpredictable circumstances could occur. Deterioration rates and repair/replacement costs will vary from causes that are unforeseen. Earned interest rates may vary from year to year. These variations could alter the content of the Reserve Study. Therefore, this analysis should be reviewed annually, and a property inspection should be conducted at least once every three years. What is a “Reserve Component” versus an “Operating Component”? A “Reserve” component is an item that is the responsibility of the association to maintain, has a limited useful life (for Reserve purposes less than 30 years), predictable remaining useful life, typically occurs on a cyclical basis that exceeds 1 year, and costs above a minimum threshold amount. An “Operating” expense is typically a fixed expense that occurs on an annual basis as well as general repairs and maintenance. What are the GREY areas of “maintenance” items that are often seen in a Reserve Study? One of the most popular questions revolves around major “maintenance” items, such as painting the buildings or seal coating the asphalt. You may hear from your accountant that since painting or seal coating is not replacing a “capital” item, then it cannot be considered a Reserve issue. However, it is the opinion of several major Reserve Study providers that these items are considered to be major expenses that occur on a cyclical basis. Therefore, it makes it very difficult to ignore a major expense that meets the criteria to be considered a reserve component. Once explained in this context, many accountants tend to agree and will include any expenses, such as these examples, as a reserve component.
What happens during the Site Visit? The Site Visit was conducted of the common areas as reported by client. From our site visit we identified those common area components that we have determined require reserve funding. Based on information provided by the client, client’s vendors, and our assessment of the components we have developed a component list and life and cost estimates. Estimated life expectancies and life cycles are based upon conditions that were readily accessible and visible at the time of the inspection. We did not destroy any landscape work, building walls, or perform any methods of intrusive investigation during the inspection. In these cases, information may have been obtained by contacting the contractor or vendor that has worked on the property. We have assumed any and all components have been properly built and will reach normal, typical life expectancies. In general a reserve study is not intended to identify or fund for construction defects. We did not and will not look for or identify construction defects during our site visit.
4
What is the Financial Analysis? We projected the starting balance by taking the most recent balance statement, adding expected reserve contributions for the rest of the fiscal year, and subtracting any pending projects that will be paid for before the end of the current fiscal year. We compared this number to the ideal reserve balance and arrived at the percent funded level. Measures of strength are as follows: 0% - 30% Funded is generally considered to be a “weak” financial position. Associations that fall into this category are
subject to special assessments and deferred maintenance, which could lead to lower property values. If the association is in this position, actions should be taken to improve the financial strength of the reserve fund.
31% - 69% Funded is generally considered a “fair” financial position. The majority of associations fall into this category. While this doesn’t represent financial strength and stability, the likelihood of special assessments and deferred maintenance is diminished. Effort should be taken to continue strengthening the financial position of the reserve fund.
70% - 99% Funded is generally considered a “strong” financial position. This indicates financial strength of a reserve fund and every attempt to maintain this level should be a goal of the association.
100% Funded is considered an “ideal” financial position. This means that the association has the exact amount of funds in the reserve account.
Disclosures: We will identify only those major components with a useful life of 30-years or less that generally meet industry standards for reserve funding. The projected life expectancy of the major components and the funding needs of the reserves of the association are based upon the association performing appropriate routine and preventative maintenance for each major component. Failure to perform such maintenance can negatively impact the remaining useful life of the major components and dramatically increase the funding needs of the reserves of the association. This Reserve Study assumes that all construction assemblies and components identified herein are built properly and are free from defects in materials and/or workmanship. Defects can lead to reduced useful life and premature failure. It was not the intent of this Reserve Study to inspect for or to identify defects. If defects exist, repairs should be made so that the construction components and assemblies at the community reach the full and expected useful lives. Information provided to the preparer of a reserve study by an official representative of the association regarding financial, historical, physical, quantitative or reserve project issues will be deemed reliable by the preparer. A reserve study will be a reflection of information provided to the preparer of the reserve study. The total of actual or projected reserves required as presented in the reserve study is based upon information provided that was not audited. A reserve study is not intended to be used to perform an audit, an analysis of quality, a forensic study or a background check of historical records. An on-site inspection conducted in conjunction with a reserve study should not be deemed to be a project audit or quality inspection. The results of this study are based on the independent opinion of the preparer and his experience and research during the course of his career in preparing Reserve Studies. In addition the opinions of experts on certain components have been gathered through research within their industry and with client’s actual vendors. There is no implied warrantee or guarantee regarding our life and cost estimates/predictions. There is no implied warrantee or guarantee in any of our work product. Our results and findings will vary from another preparer’s results and findings. A Reserve Study is necessarily a work in progress and subsequent Reserve Studies will vary from prior studies. Level II (Update) Reserve Studies: Quantities of major components as reported in previous reserve studies are deemed to be accurate and reliable. The reserve study relies upon the validity of previous reserve studies. Insurance: We carry general and professional liability insurance as well as workers’ compensation insurance. Actual or Perceived Conflicts of Interest: There are no potential actual or perceived conflicts of interest that we are aware of. Inflation and Interest Rates: The after tax interest rate used in the financial analysis may or may not be based on the clients reported after tax interest rate. If it is we have not verified or audited the reported rate. The interest rate may also be based on an amount we believe appropriate given the 30-year horizon of this study and may or may not reflect current or historical inflation rates.
Beginning Assumptions
# of units 121Fiscal Year End 31-DecBudgeted Monthly Reserve Allocation $1,800Projected Starting Reserve Balance $143,780Ideal Starting Reserve Balance $459,091
Economic Assumptions
Projected Inflation Rate 3.00%Reported After-Tax Interest Rate 2.00%
Current Reserve Status
Current Balance as a % of Ideal Balance 31%
Recommendations
Funding Summary
5
Recommended Monthly Reserve Allocation $5,800Per Unit $47.93
Future Annual Increases 3.00%For number of years: 16Increases thereafter: 0.00%
Minimum Recommended Monthly Reserve Allocation $5,300Per Unit $43.80
Future Annual Increases 3.00%For number of years: 16Increases thereafter: 0.00%
Changes From Prior Year
Recommended Increase to Reserve Allocation $4,000as Percentage 222%
Minimum Recommended Increase to Reserve Allocation $3,500as Percentage 194%
5
Percent Funded - Graph
60%
80%
100%
120%
of
Fu
nd
ing
6
0%
20%
40%
60%
80%
100%
120%20
12
2014
2016
2018
2020
2022
2024
2026
2028
2030
2032
2034
2036
2038
2040
2042
% L
evel
of
Fu
nd
ing
Recommended Current Minimum
6
Component Inventory
Category ID # Component NameUseful
Life (yrs.)
RemainingUseful Life
(yrs.)
Best Cost Worst Cost
Roofing 105 Carport Roof - Comp Shingle - Replace 25 14 $29,050 $33,200105 Pitched Roof - Comp Shingle - Replace 25 14 $395,500 $452,000120 Rain Gutters/Downspouts - Replace 25 14 $36,675 $44,825123 Carport Roof - Metal - Replace N/A $0 $0
Painted Surfaces 201 Stucco Surfaces - Repaint 12 4 $59,800 $78,200204 Front Doors - Repaint 6 4 $12,100 $18,150207 Metal Railing - Repaint 5 3 $3,850 $5,390223 Carports - Repaint 6 4 $20,000 $25,000
Siding Materials 304 Aluminum Siding - Replace 30 10 $16,000 $19,200
Drive Materials 401 Asphalt - Overlay 25 13 $119,100 $158,800402 Asphalt - Seal Coat 5 4 $10,322 $15,086
Decking 604 Elastomeric Type Deck - Resurface 20 8 $36,800 $46,000
Prop. Identification 803 Mailbox Clusters - Replace N/A $0 $0
Fencing 1008 Vinyl Deck Rail - Replace 25 15 $8,400 $10,0801008 Vinyl Fencing - Replace 25 13 $91,000 $112,0001090 Metal Railing - Replace 25 10 $19,250 $26,950
Light Fixtures 1602 Exterior Wall Mount Light - Replace 16 4 $9,075 $12,1001604 Bollard & Pole Lights - Replace 16 8 $1,000 $1,400
7
A $ A %Component NameID #
Significant Components
Significance: (Curr Cost/UL)
Average Current
Cost
Remaining Useful Life
(yrs )
Useful Life
(yrs )
8
As $ As %
105 Carport Roof - Comp Shingle - Replace 25 14 $31,125 $1,245 2.5093%105 Pitched Roof - Comp Shingle - Replace 25 14 $423,750 $16,950 34.1626%120 Rain Gutters/Downspouts - Replace 25 14 $40,750 $1,630 3.2853%201 Stucco Surfaces - Repaint 12 4 $69,000 $5,750 11.5891%204 Front Doors - Repaint 6 4 $15,125 $2,521 5.0807%207 Metal Railing Repaint 5 3 $4 620 $924 1 8623%
Cost(yrs.)(yrs.)
207 Metal Railing - Repaint 5 3 $4,620 $924 1.8623%223 Carports - Repaint 6 4 $22,500 $3,750 7.5581%304 Aluminum Siding - Replace 30 10 $17,600 $587 1.1824%401 Asphalt - Overlay 25 13 $138,950 $5,558 11.2021%402 Asphalt - Seal Coat 5 4 $12,704 $2,541 5.1210%604 Elastomeric Type Deck - Resurface 20 8 $41,400 $2,070 4.1721%
1008 Vinyl Deck Rail - Replace 25 15 $9,240 $370 0.7449%1008 Vinyl Fencing - Replace 25 13 $101,500 $4,060 8.1829%1090 Metal Railing - Replace 25 10 $23,100 $924 1.8623%1602 Exterior Wall Mount Light - Replace 16 4 $10,588 $662 1.3337%1604 Bollard & Pole Lights - Replace 16 8 $1,200 $75 0.1512%
8
Significant Components - Graph
9
105 Pitched Roof - Comp Shingle - Replace
201 Stucco Surfaces - Repaint
401 Asphalt - Overlay
1008 Vinyl Fencing - Replace
All Oth
105 Pitched Roof - Comp Shingle - Replace
201 Stucco Surfaces - Repaint
401 Asphalt - Overlay
1008 Vinyl Fencing - Replace
All Other
34%35%
105 Pitched Roof - Comp Shingle - Replace
201 Stucco Surfaces - Repaint
401 Asphalt - Overlay
1008 Vinyl Fencing - Replace
All Other
34%
12%11%8%
35%
105 Pitched Roof - Comp Shingle - Replace
201 Stucco Surfaces - Repaint
401 Asphalt - Overlay
1008 Vinyl Fencing - Replace
All Other
As $ As %ID #
Significance: (Curr Cost/UL)
Average Current
Cost
Remaining Useful Life
(yrs )
Useful Life
(yrs )Component Name
34%
12%11%8%
35%
105 Pitched Roof - Comp Shingle - Replace
201 Stucco Surfaces - Repaint
401 Asphalt - Overlay
1008 Vinyl Fencing - Replace
All Other
As $ As %105 Pitched Roof - Comp Shingle - Replace 25 14 $423,750 $16,950 34%201 Stucco Surfaces - Repaint 12 4 $69,000 $5,750 12%401 Asphalt - Overlay 25 13 $138,950 $5,558 11%1008 Vinyl Fencing - Replace 25 13 $101,500 $4,060 8%
All Other See Expanded Table For Breakdown $17,298 35%
Cost(yrs.)(yrs.)
9
YearFully
Funded Balance
Starting Reserve Balance
Percent Funded
Reserve Contributions
Interest Income
Reserve Expenses
Yearly Summary
10
Balance BalanceFunded Contributions Income Expenses
2012 $459,091 $143,780 31% $69,600 $3,605 $02013 $523,968 $216,985 41% $71,688 $5,103 $02014 $592,325 $293,776 50% $73,839 $6,675 $02015 $664,311 $374,289 56% $76,054 $8,271 $5,0482016 $734,883 $453,566 62% $78,335 $8,470 $146,2222017 $663,839 $394,149 59% $80,685 $8,770 $02018 $742,997 $483,604 65% $83,106 $10,600 $02019 $826,308 $577,310 70% $85,599 $12,517 $02020 $913,949 $675,426 74% $88,167 $13,919 $59,8172021 $944,493 $717,696 76% $90,812 $15,235 $16,5762022 $1,022,434 $807,167 79% $93,537 $16,174 $105,2622023 $1,013,367 $811,616 80% $96,343 $17,354 $02024 $1 114 508 $925 313 83% $99 233 $19 678 $02024 $1,114,508 $925,313 83% $99,233 $19,678 $02025 $1,220,805 $1,044,224 86% $102,210 $18,476 $359,8942026 $961,787 $805,017 84% $105,276 $9,551 $768,8932027 $275,980 $150,951 55% $108,435 $3,996 $14,3962028 $349,051 $248,986 71% $111,688 $4,426 $171,1022029 $265,294 $193,998 73% $111,688 $5,043 $02030 $357,720 $310,728 87% $111,688 $7,320 $7,8652031 $447 352 $421 870 94% $111 688 $9 418 $22 2772031 $447,352 $421,870 94% $111,688 $9,418 $22,2772032 $527,439 $520,699 99% $111,688 $11,444 $19,1222033 $615,866 $624,708 101% $111,688 $13,737 $02034 $729,411 $750,132 103% $111,688 $15,541 $72,0932035 $774,958 $805,267 104% $111,688 $17,289 $9,1182036 $889,673 $925,125 104% $111,688 $19,515 $28,2642037 $991,136 $1,028,064 104% $111,688 $21,878 $0$ , $ , , $ , $ , $2038 $1,127,870 $1,161,630 103% $111,688 $24,574 $02039 $1,271,917 $1,297,891 102% $111,688 $27,324 $02040 $1,423,591 $1,436,903 101% $111,688 $26,606 $349,2412041 $1,223,504 $1,225,955 100% $111,688 $25,570 $29,938
10
Reserve Contributions - Graph
Monthly Reserve Contributions
11
$8 000
$9,000
$10,000
Monthly Reserve Contributions
$6,000
$7,000
$8,000
$9,000
$10,000
Monthly Reserve Contributions
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
Monthly Reserve Contributions
$
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
Monthly Reserve Contributions
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
2032
2034
2036
2038
2040
2042
Year
Monthly Reserve Contributions
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
2032
2034
2036
2038
2040
2042
Year
Monthly Reserve Contributions
Recommended Current Minimum
11
ID Component Name UL
RU
L
QuantityAverage Current
Ideal Balance
Current Fund Balance
Monthly
Component Funding Information
12
U R
yCost
Balance Balancey
105 Carport Roof - Comp Shingle - Replace 25 14 Approx 8,300 Sq.ft. $31,125 $13,695 $0 $145.54105 Pitched Roof - Comp Shingle - Replace 25 14 Approx 113,000Sq.Ft. $423,750 $186,450 $0 $1,981.43120 Rain Gutters/Downspouts - Replace 25 14 Approx 8,150 Linear ft. $40,750 $17,930 $0 $190.54201 Stucco Surfaces - Repaint 12 4 (23) Buildings $69,000 $46,000 $46,000 $672.17( ) g204 Front Doors - Repaint 6 4 (121) Front Doors $15,125 $5,042 $5,042 $294.68207 Metal Railing - Repaint 5 3 Approx 770 Linear Ft. $4,620 $1,848 $1,848 $108.01223 Carports - Repaint 6 4 Approx 1,756 Linear ft. $22,500 $7,500 $7,500 $438.37304 Aluminum Siding - Replace 30 10 Approx 6,400 Sq.ft. $17,600 $11,733 $11,733 $68.58401 Asphalt - Overlay 25 13 Approx 79,400 Sq.ft. $138,950 $66,696 $21,876 $649.72
02 S C 9 00 S f $12 0 $2 1 $2 1 $29 02402 Asphalt - Seal Coat 5 4 Approx 79,400 Sq.ft. $12,704 $2,541 $2,541 $297.02604 Elastomeric Type Deck - Resurface 20 8 Approx 2,300 Sq.ft. $41,400 $24,840 $24,840 $241.98
1008 Vinyl Deck Rail - Replace 25 15 Approx 420 Linear ft. $9,240 $3,696 $0 $43.211008 Vinyl Fencing - Replace 25 13 Approx 3,500 Linear ft. $101,500 $48,720 $0 $474.611090 Metal Railing - Replace 25 10 Approx 770 Linear Ft. $23,100 $13,860 $13,860 $108.011602 E t i W ll M t Li ht R l 16 4 (121) Li ht $10 588 $7 941 $7 941 $77 351602 Exterior Wall Mount Light - Replace 16 4 (121) Lights $10,588 $7,941 $7,941 $77.351604 Bollard & Pole Lights - Replace 16 8 (4) Lights $1,200 $600 $600 $8.77
$963,152 $459,091 $143,780 $5,800.00
Current Fund Balance as a percentage of Ideal Balance: 31%
12
Year 2012 2013 2014 2015 2016Starting Balance $143,780 $216,985 $293,776 $374,289 $453,566 Reserve Income $69,600 $71,688 $73,839 $76,054 $78,335 Interest Earnings $3,605 $5,103 $6,675 $8,271 $8,470
S $ $ $ $ $
Yearly Cash Flow
13
Special Assessments $0 $0 $0 $0 $0Funds Available $216,985 $293,776 $374,289 $458,614 $540,371Reserve Expenditures $0 $0 $0 $5,048 $146,222Ending Balance $216,985 $293,776 $374,289 $453,566 $394,149
Year 2017 2018 2019 2020 2021Starting Balance $394,149 $483,604 $577,310 $675,426 $717,696 Reserve Income $80,685 $83,106 $85,599 $88,167 $90,812 Interest Earnings $8,770 $10,600 $12,517 $13,919 $15,235 Special Assessments $0 $0 $0 $0 $0Funds Available $483,604 $577,310 $675,426 $777,513 $823,743Reserve Expenditures $0 $0 $0 $59,817 $16,576Ending Balance $483,604 $577,310 $675,426 $717,696 $807,167
Year 2022 2023 2024 2025 2026Starting Balance $807,167 $811,616 $925,313 $1,044,224 $805,017 Reserve Income $93,537 $96,343 $99,233 $102,210 $105,276 Interest Earnings $16,174 $17,354 $19,678 $18,476 $9,551 Special Assessments $0 $0 $0 $0 $0Funds Available $916,878 $925,313 $1,044,224 $1,164,910 $919,844Reserve Expenditures $105,262 $0 $0 $359,894 $768,893Ending Balance $811,616 $925,313 $1,044,224 $805,017 $150,951
Year 2027 2028 2029 2030 2031Starting Balance $150,951 $248,986 $193,998 $310,728 $421,870 Reserve Income $108,435 $111,688 $111,688 $111,688 $111,688 Interest Earnings $3,996 $4,426 $5,043 $7,320 $9,418 Special Assessments $0 $0 $0 $0 $0Funds Available $263,381 $365,099 $310,728 $429,735 $542,975Reserve Expenditures $14,396 $171,102 $0 $7,865 $22,277Ending Balance $248,986 $193,998 $310,728 $421,870 $520,699
Year 2032 2033 2034 2035 2036Starting Balance $520,699 $624,708 $750,132 $805,267 $925,125 Reserve Income $111,688 $111,688 $111,688 $111,688 $111,688 Interest Earnings $11,444 $13,737 $15,541 $17,289 $19,515 Special Assessments $0 $0 $0 $0 $0Funds Available $643,830 $750,132 $877,360 $934,243 $1,056,328Reserve Expenditures $19,122 $0 $72,093 $9,118 $28,264Ending Balance $624 708 $750 132 $805 267 $925 125 $1 028 064Ending Balance $624,708 $750,132 $805,267 $925,125 $1,028,064
Year 2037 2038 2039 2040 2041Starting Balance $1,028,064 $1,161,630 $1,297,891 $1,436,903 $1,225,955 Reserve Income $111,688 $111,688 $111,688 $111,688 $111,688 Interest Earnings $21,878 $24,574 $27,324 $26,606 $25,570 Special Assessments $0 $0 $0 $0 $0Funds Available $1,161,630 $1,297,891 $1,436,903 $1,575,196 $1,363,213R E dit $0 $0 $0 $349 241 $29 938Reserve Expenditures $0 $0 $0 $349,241 $29,938Ending Balance $1,161,630 $1,297,891 $1,436,903 $1,225,955 $1,333,275
13
Yearly Reserve Expenditures - Graph
$800,000
$600,000
$700,000
$800,000
$500,000
$600,000
$700,000
$800,000
Tota
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$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
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$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
An
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$-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
2032
2034
2036
2038
2040
2042
An
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$-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
2032
2034
2036
2038
2040
2042
An
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Year
14
Year ID # Component NameProjected
CostTotal Per Annum
2012 No Expenditures Projected $0
Projected Reserve Expenditures by Year
15
2013 No Expenditures Projected $02014 No Expenditures Projected $02015 207 Metal Railing - Repaint $5,048 $5,0482016 201 Stucco Surfaces - Repaint $77,660
204 Front Doors - Repaint $17,023223 Carports - Repaint $25,324402 Asphalt Seal Coat $14 298402 Asphalt - Seal Coat $14,298
1602 Exterior Wall Mount Light - Replace $11,916 $146,2222017 No Expenditures Projected $02018 No Expenditures Projected $02019 No Expenditures Projected $02020 207 Metal Railing - Repaint $5,852
604 Elastomeric Type Deck - Resurface $52,444yp $ ,1604 Bollard & Pole Lights - Replace $1,520 $59,817
2021 402 Asphalt - Seal Coat $16,576 $16,5762022 204 Front Doors - Repaint $20,327
223 Carports - Repaint $30,238304 Aluminum Siding - Replace $23,653
1090 Metal Railing - Replace $31,044 $105,2622023 No Expenditures Projected $02023 No Expenditures Projected $02024 No Expenditures Projected $02025 207 Metal Railing - Repaint $6,785
401 Asphalt - Overlay $204,0531008 Vinyl Fencing - Replace $149,056 $359,894
2026 105 Carport Roof - Comp Shingle - Replace $47,079105 Pitched Roof - Comp Shingle - Replace $640,960p g p $ ,120 Rain Gutters/Downspouts - Replace $61,638402 Asphalt - Seal Coat $19,216 $768,893
2027 1008 Vinyl Deck Rail - Replace $14,396 $14,3962028 201 Stucco Surfaces - Repaint $110,725
204 Front Doors - Repaint $24,271223 Carports - Repaint $36,106 $171,102
2029 No Expenditures Projected $02029 No Expenditures Projected $02030 207 Metal Railing - Repaint $7,865 $7,8652031 402 Asphalt - Seal Coat $22,277 $22,2772032 1602 Exterior Wall Mount Light - Replace $19,122 $19,1222033 No Expenditures Projected $02034 204 Front Doors - Repaint $28,981
223 Carports - Repaint $43,112 $72,093223 Carports Repaint $43,112 $72,0932035 207 Metal Railing - Repaint $9,118 $9,1182036 402 Asphalt - Seal Coat $25,825
1604 Bollard & Pole Lights - Replace $2,439 $28,264
15
Year Comp ID Component Name Projected CostTotal Per Annum
2037 No Expenditures Projected $02038 No Expenditures Projected $02039 No Expenditures Projected $02040 201 Stucco Surfaces - Repaint $157,867
204 F t D R i t $34 605
16
204 Front Doors - Repaint $34,605207 Metal Railing - Repaint $10,570223 Carports - Repaint $51,478604 Elastomeric Type Deck - Resurface $94,720 $349,241
2041 402 Asphalt - Seal Coat $29,938 $29,9382042 No Expenditures Projected $0
16
Component Evaluation
Comp #: 105
Source of Information: CSL Costs Database
Best Cost: $29,050
Worst Cost: $33,200
Location: Carport Roofs
Quantity: Approx 8,300 Sq.ft.
Observations:
The carport roofs are in good condition. No problems were noted at the time of the inspection. Typically this type of roofing material has a useful life of approximately 25 years. Inspect roofs regularly and make local repairs as necessary as an operating expense to ensure full life from this component. Remaining life based on current age and condition.
Life Expectancy: 25 Remaining Life: 14
$3.50/Sq.ft.; Estimate to replace
$4.00/Sq.ft.; Higher estimate for more labor costs
Carport Roof - Comp Shingle - Replace
General Notes:
Roof Dimensions:
(6) - 18 ft. x 73 ft. - Carport
Page 1 of 18
Comp #: 105
Source of Information: CSL Costs Database
Best Cost: $395,500
Worst Cost: $452,000
Location: Building Rooftops
Quantity: Approx 113,000Sq.Ft.
Observations:
The roofs are in good condition. No problems were noted at the time of the inspection. Typically this type of roofing material has a useful life of approximately 25 years. Inspect roofs regularly and make local repairs as necessary as an operating expense to ensure full life from this component. Remaining life based on current age and condition.
Life Expectancy: 25 Remaining Life: 14
$3.50/Sq.ft.; Estimate to replace roof
$4.00/Sq.ft.; Higher estimate for more labor costs
Pitched Roof - Comp Shingle - Replace
General Notes:
Page 2 of 18
Comp #: 120
Source of Information: CSL Cost Database
Best Cost: $36,675
Worst Cost: $44,825
Location: Building & Carport Roofs
Quantity: Approx 8,150 Linear ft.
Observations:
The rain gutters and downspouts are in good condition. No problems were noted at the time of the inspection. We recommend replacing the rain gutters and downspouts at the same time as the roof replacement (see Comp# 105 Pitched Roof - Comp Shingle - Replace) to ensure proper function and to take advantage of the cost savings benefits. We recommend funding to replace these gutters and downspouts every 25 years. Remaining life based on current age and condition.
Life Expectancy: 25 Remaining Life: 14
$4.50/Linear ft.; Estimate to replace
$5.50/Linear ft.; Higher estimate to replace
Rain Gutters/Downspouts - Replace
General Notes:
Page 3 of 18
Comp #: 123
Source of Information:
Best Cost: $0
Worst Cost: $0
Location: Adjacent to Community Buildings
Quantity: Approx 28,100 Sq.ft.
Observations:
The carport roofs are in good condition. No expectation to completely replace the carport roofs. Due to minimal replacement cost and an extended useful life, reserve funding is not appropriate. Repair and replace this component as necessary as an operating expense. No reserve funding necessary.
Life Expectancy: N/A Remaining Life:
Carport Roof - Metal - Replace
General Notes:
Quantity description:
(1) - 16 ft. x 55 ft. - Carport (1) - 16 ft. x 61 ft. - Carport(15) - 16 ft. x 74 ft. - Carport (3) - 16 ft. x 80 ft. - Carport (1) - 16 ft. x 90 ft. - Carport (1) - 16 ft. x 200 ft. - Carport
(22) - Total Carports
Page 4 of 18
Comp #: 201
Source of Information: CSL Costs Database
Best Cost: $59,800
Worst Cost: $78,200
Location: Building Exteriors
Quantity: (23) Buildings
Observations:
The painted stucco surfaces are generally in good to fair condition. Minor cracking and discoloration were noted at the time of the inspection. Stucco surfaces should typically be repainted approximately every 10 to 12 years to protect the stucco surface and maintain appearance. Remaining life based on current condition.
Life Expectancy: 12 Remaining Life: 4
$2,600/Building; Estimate to repaint stucco surfaces
$3,400/Building; Higher estimate for more prep costs
Stucco Surfaces - Repaint
General Notes:
Page 5 of 18
Comp #: 204
Source of Information: CSL Costs Database
Best Cost: $12,100
Worst Cost: $18,150
Location: Unit Front Doors
Quantity: (121) Front Doors
Observations:
The painted door surfaces are generally in good condition. Some scuffing and marking noted throughout. Repaint doors approximately every 6 years to maintain appearance and protect surfaces. Remaining life based on current average condition.
Life Expectancy: 6 Remaining Life: 4
$100/Door; Estimate to repaint doors
$150/Door; Higher estimate for more prep work
Front Doors - Repaint
General Notes:
Page 6 of 18
Comp #: 207
Source of Information: CSL Costs Database
Best Cost: $3,850
Worst Cost: $5,390
Location: Building Railings
Quantity: Approx 770 Linear Ft.
Observations:
The painted metal railing surfaces are in good condition. Minor areas of rust were noted at the time of the inspection. Repaint this component approximately every 5 years to maintain appearance and protect metal surfaces. Remaining life based on current condition.
Life Expectancy: 5 Remaining Life: 3
$5.00/Linear ft.; Estimate to repaint metal railing
$7.00/Linear ft; Higher estimate for additional prep work
Metal Railing - Repaint
General Notes:
Quantity description:
170 Linear ft. - Balconies550 Linear ft. - Buildings 50 Linear ft. - Common Area
770 Linear ft. - Total
Page 7 of 18
Comp #: 223
Source of Information: CSL Costs Database
Best Cost: $20,000
Worst Cost: $25,000
Location: Adjacent to Community Buildings
Quantity: Approx 1,756 Linear ft.
Observations:
The paint on the carport structure is in good condition. No problems were noted at the time of the inspection. Repaint this component approximately every 6 years to maintain appearance and protect metal surfaces. Remaining life based on current condition.
Life Expectancy: 6 Remaining Life: 4
Estimate to repaint
Higher estimate for more prep work
Carports - Repaint
General Notes:
Quantity description:
(1) - 16 ft. x 55 ft. - Carport (1) - 16 ft. x 61 ft. - Carport(15) - 16 ft. x 74 ft. - Carport (3) - 16 ft. x 80 ft. - Carport (1) - 16 ft. x 90 ft. - Carport (1) - 16 ft. x 200 ft. - Carport
(22) - Total Carports
Page 8 of 18
Comp #: 304
Source of Information: CSL Costs Database
Best Cost: $16,000
Worst Cost: $19,200
Location: 7 Building in Souwthwest Park of Community
Quantity: Approx 6,400 Sq.ft.
Observations:
The aluminum siding is in fair condition. Repair sections and clean siding as necessary as an operating expense. Although this component may reach an extended life, we recommend funding to replace this siding every 30 years to maintain appearance. Remaining life based on current condition.
Life Expectancy: 30 Remaining Life: 10
$2.50/Sq.ft.; Estimate to replace
$3.00/Sq.ft.; Higher estimate
Aluminum Siding - Replace
General Notes:
Page 9 of 18
Comp #: 401
Source of Information: CSL Costs Database
Best Cost: $119,100
Worst Cost: $158,800
Location: Community Streets
Quantity: Approx 79,400 Sq.ft.
Observations:
The asphalt streets are in good condition. Asphalt overlay generally has a useful life of 20 - 25 years. Maintain seal coat schedule to ensure full useful life (see Comp# 402 Asphalt - Seal Coat). Remaining life based on current age and condition.
Life Expectancy: 25 Remaining Life: 13
$1.50/sq.ft.; Estimate for overlay
$2.00/Sq.ft.; Higher estimate for overlay
Asphalt - Overlay
General Notes:
Page 10 of 18
Comp #: 402
Source of Information: CSL Costs Database
Best Cost: $10,322
Worst Cost: $15,086
Location: Community Streets
Quantity: Approx 79,400 Sq.ft.
Observations:
The asphalt seal coat is in good condition. No problems were noted at the time of the inspection. Seal asphalt surfaces regularly to prevent premature overlay (see Comp# 401 Asphalt - Overlay). Asphalt surfaces should be sealed every 3 to 5 years. Remaining life based on current condition.
Life Expectancy: 5 Remaining Life: 4
$0.13/Sq.ft.; Estimate for seal coat
$0.19/Sq.ft.; Higher estimate for local repairs
Asphalt - Seal Coat
General Notes:
Page 11 of 18
Comp #: 604
Source of Information: CSL Costs Database
Best Cost: $36,800
Worst Cost: $46,000
Location: Balcony Decks
Quantity: Approx 2,300 Sq.ft.
Observations:
Unable to inspect the deck surfaces at the time of the inspection. For the purposes of this report we will assume the deck surfaces are in good condition and aging normally. We recommend funding to replace this component approximately every 15 to 20 years. Remaining life based on current age and condition.
Life Expectancy: 20 Remaining Life: 8
$16/Sq.ft.; Estimate to resurface decks
$20/Sq.ft.; Higher estimate for more prep work
Elastomeric Type Deck - Resurface
General Notes:
Page 12 of 18
Comp #: 803
Source of Information:
Best Cost: $0
Worst Cost: $0
Location: Common Area
Quantity: (9) Clusters
Observations:
The mailboxes are in good condition. Typically these mailboxes are owned and maintained by the postal service. No reserve funding necessary.
Life Expectancy: N/A Remaining Life:
Mailbox Clusters - Replace
General Notes:
Quantity Breakdown:
(1) - 12 box - Cluster(2) - 16 box - Cluster(5) - 16 box, 1 outgoing, 1 parcel - Cluster(1) - 2 parcel - Cluster
(9) - Total Clusters
Page 13 of 18
Comp #: 1008
Source of Information: CSL Cost Database
Best Cost: $8,400
Worst Cost: $10,080
Location: Building Decks
Quantity: Approx 420 Linear ft.
Observations:
The vinyl deck railing is in good condition. No problems were noted at the time of the inspection. This type of railing material has a relatively long useful life. Reserve to replace the vinyl railing every 25 years. Remaining life based on current age and condition.
Life Expectancy: 25 Remaining Life: 15
$20/Linear ft.; Estimate to replace railing
$24/Linear ft.; Higher estimate
Vinyl Deck Rail - Replace
General Notes:
Page 14 of 18
Comp #: 1008
Source of Information: CSL Costs Database
Best Cost: $91,000
Worst Cost: $112,000
Location: Unit Backyards & Dumpster Enclosures
Quantity: Approx 3,500 Linear ft.
Observations:
The vinyl fencing is in good condition. No warped or broken areas were noted at the time of the inspection. This type of fencing material has a relatively long useful life. Reserve to replace the vinyl fencing every 25 years. Remaining life based on current age.
Life Expectancy: 25 Remaining Life: 13
$26/Linear ft.; Estimate for vinyl fence replacement
$32/Linear ft.; Higher estimate for better quality material
Vinyl Fencing - Replace
General Notes:
Page 15 of 18
Comp #: 1090
Source of Information: CSL Costs Database
Best Cost: $19,250
Worst Cost: $26,950
Location: Building Railings
Quantity: Approx 770 Linear Ft.
Observations:
The metal railing is in generally good condition. Minor areas of rust were noted at the time of the inspection. With regular painting and maintenance, expect a useful life of 20 to 25 years from this component. Remaining life based on current condition.
Life Expectancy: 25 Remaining Life: 10
$25/Linear ft.; Estimate to repaint metal railing
$35/Linear ft; Higher estimate for additional prep work
Metal Railing - Replace
General Notes:
Quantity description:
170 Linear ft. - Balconies550 Linear ft. - Buildings 50 Linear ft. - Common Area
770 Linear ft. - Total
Page 16 of 18
Comp #: 1602
Source of Information: CSL Costs Database
Best Cost: $9,075
Worst Cost: $12,100
Location: Unit Entrances
Quantity: (121) Lights
Observations:
The exterior wall mount lights are in fair to poor condition. Discoloration and broken fixtures were noted at the time of the inspection. Expect to replace these lights approximately every 16 years to maintain appearance. Remaining life based on current age and condition.
Life Expectancy: 16 Remaining Life: 4
$75/Fixture; Estimate to replace lights
$100/Fixture; Higher estimate for better quality
Exterior Wall Mount Light - Replace
General Notes:
Page 17 of 18
Comp #: 1604
Source of Information: CSL Costs Database
Best Cost: $1,000
Worst Cost: $1,400
Location: Buildings 12/14 & 15
Quantity: (4) Lights
Observations:
The bollard and pole lights are in good condition. We recommend funding to replace these light fixtures, poles and to refurbish the electrical approximately every 18 years. Remaining life based on current age.
Life Expectancy: 16 Remaining Life: 8
$250/Fixture; Estimate to replace
$350/Fixture; Higher estimate for more installation costs
Bollard & Pole Lights - Replace
General Notes:
Quantity description:
(2) - Bollard(2) - Pole
(4) - Total Lights
Page 18 of 18
Glossary of Commonly Used Words And Phrases (Provided by the National Reserve Study Standards of the Community Associations Institute) 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. Component – Also referred to as an “Asset.” Individual line items in the Reserve Study developed or updated in the physical analysis. These elements form the building blocks for the Reserve Study. Components typically are: 1) Association responsibility, 2) with limited useful life expectancies, 3) have predictable remaining life expectancies, 4) above a minimum threshold cost, and 5) required by local codes. Component Full Funding – When the actual (or projected) cumulative reserve balance for all components is equal to the fully funded balance. Component Inventory – The task of selecting and quantifying reserve components. This task can be accomplished through on-site visual observations, review of association design and organizational documents, a review of established association precedents, and discussion with appropriate association representatives. Deficit – An actual (or projected reserve balance), which is less than the fully funded balance. Effective Age – The difference between useful life and remaining useful life (UL - RUL). Financial Analysis – The portion of the Reserve Study where current status of the reserves (measured as cash or percent funded) and a recommended reserve contribution rate (reserve funding plan) are derived, and the projected reserve income and expenses over time is presented. The financial analysis is one of the two parts of the Reserve Study. Fully Funded Balance – An indicator against which the actual (or projected) reserve balance can be compared. The reserve balance that is in direct proportion to the fraction of life “used up” of the current repair or replacement cost of a reserve component. This number is calculated for each component, and then summed together for an association total. FFB = Current Cost * Effective Age / Useful Life Fund Status – The status of the reserve fund as compared to an established benchmark, such as percent funded. Funding Goals – Independent of calculation methodology utilized, the following represent the basic categories of funding plan goals:
• Baseline Funding: Establishing a reserve-funding goal of keeping the reserve balance above zero.
• Component Full Funding: Setting a reserve funding goal of attaining and maintaining cumulative reserves at or near 100% funded.
• Threshold Funding: Establishing a reserve funding goal of keeping the reserve balance above a specified dollar or percent funded amount.
Funding Plan – An association’s plan to provide income to a reserve fund to offset anticipated expenditures from that fund.
Funding Principles – • Sufficient funds when required • Stable contributions through the year • Evenly distributed contributions over the years • Fiscally responsible
GSF - Gross Square Feet Life and Valuation Estimates – The task of estimating useful life, remaining useful life, and repair or replacement costs for the reserve components. LF - Linear Feet Percent Funded – The ratio, at a particular point in time (typically the beginning of the fiscal year), of the actual (or projected) reserve balance to the ideal fund balance, expressed as a percentage. Physical Analysis – The portion of the Reserve Study where the component evaluation, condition assessment, and life and valuation estimate tasks are performed. This represents one of the two parts of the Reserve Study. Remaining Useful Life (RUL) – Also referred to as “remaining life” (RL). The estimated time, in years, that a reserve component can be expected to continue to serve its intended function. Projects anticipated to occur in the current fiscal year have a “0” remaining useful life. Replacement Cost – The cost of replacing, repairing, or restoring a reserve component to its original functional condition. The current replacement cost would be the cost to replace, repair, or restore the component during that particular year. Reserve Balance – Actual or projected funds as of a particular point in time (typically the beginning of the fiscal year) that the association has identified for use to defray the future repair or replacement of those major components that the association is obligated to maintain. Also known as “reserves,” “reserve accounts,” or “cash reserves.” In this report the reserve balance is based upon information provided and is not audited. Reserve Study – A budget-planning tool, which identifies the current status of the reserve fund and a stable and equitable funding plan to offset the anticipated future major common area expenditures. The Reserve Study consists of two parts: The Physical Analysis and the Financial Analysis. Special Assessment – An assessment levied on the members of an association in addition to regular assessments. Governing documents or local statutes often regulate special assessments. Surplus – An actual (or projected) reserve balance that is greater than the fully funded balance. Useful Life (UL) – Also known as “life expectancy.” The estimated time, in years, that a reserve component can be expected to serve its intended function if properly constructed and maintained in its present application of installation.