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ESTIMATED RESERVEREQUIREMENTS FORLA VISTA CONDOMINIUM ASSOCIATION

Prepared by Huie Services, Inc.June 27, 2017 All rights reserved

[email protected]

© 2017 by Huie Services, Inc. All rights reserved.1

EXECUTIVE SUMMARY

This is a long document containing a lot of information that can be summarized as follows: you

have the money needed for short term projects but not for mid and long term expenses

that can be reasonably foreseen. The graph directly below illustrates (a) where you are now

(year 1), (b) where you need to be (Funds Needed) and (c) where you will be at the present

funding level (No Increase Reserve) and (d) where you will be with the recommended increases

to the contribution to the Reserve (Reserve with increase).

-1,000,000

-800,000

-600,000

-400,000

-200,000

0

200,000

400,000

600,000

800,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Do

llars

Years

La Vista Reserve Funding

Funds Needed

Reserve with increase

No Increase Reserve

The purpose of the Reserve Fund is to protect the value of each owner’s investment by

making it possible to perform all Reserve projects when needed.

La Vista has some expensive items to maintain and a relatively small group of owners from

whom contributions can be received. In the 2010 report it was noted that the Reserve Fund had

a deficit and it was recommended that the funds used for the loan payment be contributed to the

Reserve fund when the loan was paid off in 2013. With that funding and modest increases you

would be in good condition. Unfortunately, that was not done and so the situation now is worse,

but not insurmountable.

The information used to generate this graph can be found in the last two spreadsheets at the

end of this report.


INTRODUCTION

Your Association has two Funds. The first is the Operating Fund that is used to pay your normal,

recurring monthly and annual expenses like landscaping maintenance, insurance, electricity, etc.

This report does not address the Operating Fund. The other is your Capital Reserve

Replacement Fund (i.e. “the Reserve”) for the repair and replacement of the large items that are

the Association's responsibility. Each owner who buys a home "uses up" a month's worth of the

roofs, the pool area, the drainage and all other common items each month and should contribute

to the Reserve an amount equal to what is "used up". In order to know how much this

contribution should be it is necessary to study the property and its long term needs.

The Reserve is not a fund to "make up" for deficits in the normal operating expenses of the

Association. The Reserve is also not a fund to construct new additional elements (fountains,

irrigation, etc.). Such additional elements would be Capital Improvements and would be funded

from the Operating Fund. Once built, their REPLACEMENT cost would be added to and covered

by the Reserve.

The Reserve Fund is very important in preserving the value of everyone’s investment in their

home. Contributions to the Reserve Fund should be made consistently each month according to

a plan. La Vista would essentially pay itself just like you pay the water bill and electricity but this

payment goes into a Reserve account, usually a Money Market Account or some other type of

federally insured savings instrument.

Before looking at the information on the Reserve requirements, there are a few general

comments to be made. First, when a property is new, there is a “honeymoon” period during the

first ten years when some things are new and little maintenance is needed. La Vista has some

items (such as the pool deck and the cabana) that are in the honeymoon period but many items

are considerably beyond that honeymoon period and there are some significant costs in the

short to mid-term.

Second, your choice in regard to maintenance is not between doing something and doing

nothing. The maintenance must be done. Deferring it tends to make the eventual project more

expensive and less effective. Deferring the painting of the property causes problems with the

painted surfaces. Deferring roofing causes additional damage to the roof structure and costly

damage to owners of units with leaks.

Third, the Association is a business and should approach major projects in a business-like

manner. When a project is upcoming, a specification should be written to give to the contractors

submitting a bid. This helps ensure that all contractors are bidding on the same thing. Your

property manager and/or other professionals can assist you with this.


Fourth, make sure that only qualified and properly insured contractors work on the property. This

will cost more but it is well worth the money.

Fifth, this is a budget and every budget will evolve over time. In the included Tables an expense

may be shown for the year 2019. That expense may occur in that year or it may need to be

moved up a year or back a year. Half of it may be spent in 2019 and the other half in another

year. The expense may be a little more or a little less. But, as a whole, this report presents a

plan for your Association to meet its expenses for the next 20 years.

FINDINGS

As to the body of this Report, it is made up of four sections. The brief descriptions below of the

various sections should help you understand the body of the report. It will probably be helpful for

you to flip back to the section being described as you read the descriptions that follow.

Notes to La Vista Reserve For Year Ending 10/ 31/16

The first section on pages 6 through 23 shows a listing of the items for which the Association is

responsible. There is a brief discussion of each item and quantification, if relevant. The

quantification was done by physically measuring the item. For each item there is a best, worst

and an average case for the cost. The costs are estimated by reference to your past

expenditures, by discussions with your present contractors, by discussions with other contractors

and by referral to costs for similar work at communities in the metro Atlanta area.

Table 1 - Calculation of Reserve Requirements

The second section on pages 24 and 25, entitled "Calculation of Reserve Requirements", is a

Table that takes the information from the narrative and determines how your present condition

compares to your needs for the best, worst and average cases. It gives you a “snapshot” of the

Association’s Reserve Fund as of 10/31/16 (the end of the last fiscal year). If you look at the first

category, Roof Replacement, the first column is the End of the Year Balance. This is the

prorated share of the Reserve for this category. The Normal Life, Remaining Life and Cost

Now are self-explanatory. The Cost Then is the cost of doing the work including inflation when it

is done in the future. Today's Balance Should Be is the amount you should have saved toward

doing this work. The Excess(Deficit) is whether you have saved enough money. In the case of

Roof Replacement there is a deficit of $76,288 for the best case and a deficit of $121,321 for

the worst case. The Annual Requirement is the amount that you should be saving each year

while This Year's Budget Provision Including Interest is the prorated share of the Reserve

contributions made through your fees. Note that in the Average Case you should be contributing

$11,795 but in 2017 you plan to contribute $4707.

At the bottom of the spreadsheet are the totals. At the end of the 2016 fiscal year you had

$167,355 in the Reserve Fund. In the average case at that time you should have had $404,166,

which gave a deficit of $236,811 or $4736 per unit. Also, in the average case you should have


been contributing $57,846 per year or $96.41 per unit per month but in 2017 you plan to

contribute $38.53 per unit per month to the Reserve Fund. Therefore, your Reserve Fund has a

significant deficit that will worsen each year.

Table 2 - Projected Reserve Funds Flow

The Table entitled "Projected Reserve Funds Flow" on pages 26 and 27 shows how the balance

in your Reserve will fluctuate over the next 20 years. The top portion shows the Reserve

expenditures. The bottom section shows how the balance fluctuates. Notice at the bottom that in

the column under 2017 (that actually began on 11/1/16) you begin with $167,355 (the balance

as of the end of the 2016 fiscal year), you subtract $18,126 (the expenses for 2017), you add

$23,000 (the contribution out of fees for 2017) and you add $1,205 (the interest earned at 1%

after taxes) to give a total of $173,434. Also notice in the line for Increases that there is a $20

per unit per month increase in 2018 and a $10 increase in every year thereafter.

With the increases the bottom line, "Ending Reserve Balance With Increases", shows that there

will be sufficient cash to cover average case expenses in all years. Compare that to the last line,

“Ending Balance with NO INCREASE”. With the increases you will even have a Reserve Fund

of $454,627 at the end of 2036. But is that enough?

Table 3 - Prorated Reserve Requirements

The last Table on pages 28 and 29, entitled "Prorated Reserve Requirements", answers that

question. It is a little intimidating at first glance, but it is really fairly simple. It takes the lump sum

expenses from the first spreadsheet and divides them evenly over the life of each category with

the annual contribution growing by the inflation rate each year. For example, if you look at the

first line for Roof Replacement, in 2017 the Association needs to contribute $21,994 to this

category. In 2018 this goes up by 2% to $22,434. In 2019 it increases to $22,883. By doing this,

both the current and future owners are paying equivalent amounts.

The two bottom lines (Accumulated Requirements and Ending Reserve Balance) are

compared on the last line (Surplus(+)/Deficit(-)) so that you can see whether you are really

saving enough to pay for everything as it is needed. Even with the increases in the fee, the

deficit grows through 2024 and then slowly declines until you are properly funded in 2035.


RECOMMENDATIONS

1. Increase the contribution to the Reserve Fund by $20 per unit per month in 2018 and by

$10 per unit per month in each year thereafter. (Note- there could also be increases in

the Operating Budget.)

2. Re-evaluate the amount contributed to the Reserve every few years to see if the

assumptions are still correct. This report is not a warranty of the condition of the items

included.

3. Provide a copy of this report or a summary to the ownership.


NOTES TO LA VISTA RESERVE FOR YEAR ENDING 12/31/16

Category-Notes

Quantity Unit Cost Extension

Best Case

Worst Case

___________________________________Average Case_____________________________

Roofing - 22-year normal life. Standard three-tab, 25-year fiberglass-reinforced asphalt shingles

are present on all roofs. The life is shown as 22 years because typically shingles do not last as

long as the nominal life.

The roofing appears to be installed correctly, but there are some issues of which you should be

aware. These issues were noted in the 2010 report and are still present. The photo below was

taken on the roof of Unit 2924. The better style of flashing that makes the transition from the

roofing to the firewalls is called step flashing. It is a series of small L-shaped pieces of flashing

under the shingle tabs. This flashing is present but cannot be seen. The black flashing that you

can see (and which covers the leg of the step flashing that turns up onto the firewall) is called

counter-flashing. Ideally, the top edge of this flashing should have a short leg that goes into a

groove cut into the masonry. This counter-flashing does not have that. The weather barrier is the

caulking at the top of the flashing. It is likely that the caulking will fail before the shingles are

replaced. It may be necessary to cut out and re-caulk the counter-flashing at about the halfway

point of the life of the shingles.

Another roof element that has a shorter life than the shingles is the plumbing vent flashing (i.e.

“plumbing boots”). As with the flashing detail, this item was also noted in the 2010 report. These

are pieces that slide down over the plumbing vent pipes and seal around the pipe with a

neoprene (rubber) seal. Over time this neoprene seal deteriorates and allows water to leak in


around the pipes. The best way to address this is to slide a “rain collar” (i.e. another neoprene

collar) over the pipe to cover the deteriorated seal. It was noted during our recent site visit that

these rain collars have already been installed (see next photo of Unit 2924).

It was also noted that the metal “boots” at the base of the gas vents were not replaced or treated

(to eliminate rust and seal at the joints). Some of the vents have pulled loose and need to be

addressed. The best approach is to reattach the base with screws that have rubber washers and

then seal them with caulking.

When replacement of the shingles is again necessary, it is recommended that you continue to

use the "tear off" method, which means that the old shingles are completely removed before the

new shingles are applied. While it is not essential that the old shingles be removed before

applying a second roof, it does give a longer life to the new roof and also allows defects in the

decking and flashing to be clearly seen.


The cost below is for all of the buildings. The cost also includes replacing between 5% and 10%

of the sheets of plywood per building at a cost of $65 per sheet. Plywood needs to be replaced

either because of rot or poor manufacturing.

Roofing is measured in squares (SQ) with 100 square feet equaling one square.

982 SQ

Best case $200 per SQ + 5% of decking $203,844

Worst case $230 per SQ + 10% of decking $240,683

Average case $222,263

Guttering - 33-year normal life. The existing 6-inch aluminum guttering with 3”X4” downspouts

is not the original guttering. The gutters are attached with concealed hangers rather than spikes

(i.e. large nails). These hangers are less likely to pull loose than spikes and should provide a

longer life. The spacing on these hangers varies throughout the property and it may be

necessary to add a few hangers over time.

The gutters and downspouts appear to be in good condition. It was noted that at some sections

of the gutters additional concealed hangers have been installed.

Aluminum gutters do not rust as the galvanized steel gutters do. The principle cause of failure

for aluminum gutters is physical damage from tree limbs and ladders. The normal life for the

gutters is 25 years.

7545 linear feet (LF) of gutters and downspouts

Best case $4/LF $30,180

Worst case $5/LF $37,725


Exterior Rehab - 6-year normal life. This includes carpentry repairs, surface preparation and

painting of all previously painted exterior areas of the buildings. The siding is primarily brick, but

there is a large amount of aluminum siding that has been painted.

Most of the multi-lite wood windows are covered by storm windows and cannot be painted

without removing the storm windows (or at least the storm window sashes), but the wood trim

around the windows does require painting. It is assumed that the storm windows will be

removed by the contractor. Some windows have been replaced with white vinyl windows, which

do not require painting.

It is essential that the painting be done in a timely fashion. This means that painting should be

done while the previous paint film is still in good condition. The paint on aluminum siding should

have a long life, but the large amount of wood on the tudor-style buildings will require painting

more frequently. It was also noted that some pieces of wood trim have been damaged

presumably from birds pecking the wood to reach insect larva (probably carpenter bees).


While conducting our Reserve Report survey we noted that most surfaces are in good condition,

but many of the metal chimneys pans are not well painted. It is recommended that painting of the

metal chimneys be included in this project (see also the Infrastructure category). For a minimal

amount these surfaces can be painted when the buildings are painted. This will significantly

extend the life of the pans and improve the appearance of the chimneys and the overall

appearance of the property in general. It is well worth the cost.

The metal coping along the tops of the firewalls is in good condition. You may also want to

include this coping (see next photo) and the counter-flashing (see photo in roofing category),

either at the next painting project or when the pre-finished surface starts to fade.


The costs below include an allowance for minor repairs (primarily carpentry) to the buildings prior

to painting. The unit cost to paint is somewhat higher than other comparably sized residences

because of the garage and courtyard surfaces and the multi-color scheme. The price is based

on your historical information and assumes that you will paint the property in phases.

50 units

Best case $1700 paint + $400 repairs/unit $105,000

Worst case $2200 paint + $600 repairs/unit $140,000


Asphalt Overlay - 25-year normal life. This category funds the total repaving of the property.

The original asphalt pavement has been overlaid and the new surface continues to be generally

in good condition.

When necessary, the recommended technique for the overlay is known as a Perma-flex Overlay.

This two-layered technique will bridge the existing cracks and give your pavement an attractive

appearance. If you use a simple overlaying technique, the cracks will soon reappear in the new

surface.

The only problem with a Perma-flex overlay is the build-up at the curb-and-gutter. The asphalt

overlay has already filled up the gutter (the flat section originally adjacent to the asphalt) and is

almost as high as the curb (see the photo below). The curb is more than decorative. It holds

water on the asphalt until it can drain through a planned system. A new curb apparently had to

be installed on the entrance side of the property for this reason.


In addition, there are already some drainage issues at garages that will only worsen when the

next overlay is needed, as shown in the below photograph and indicated with a red arrow.

There are several approaches to these issues that have widely varying costs. The option that is

becoming popular for communities facing this issue is milling (i.e. grinding down) the asphalt.

This is done with a very large machine that mills the asphalt, loads it on a conveyor belt and

dumps it into waiting trucks. Your property lends itself to this because the asphalt edges going

down the street and in the alleys are straight. A milling machine is too big to make tight turns.

The costs shown below include the cost of milling two to three inches.

Asphalt is measured in square yards (SY).

5654 SY of asphalt pavement

Best case $15/SY. $ 84,817

Worst case $18/SY. $101,780

Average case $ 93,298

Asphalt Repairs/Seal-coating - 5-year normal life. As the asphalt pavement ages, repairs are

necessary. The cost to have individual repairs made is very high on a per-square-yard basis.


While certain repairs (e.g. after water or sewer lines are repaired in the street) must be made

individually, it is more cost efficient to periodically have all needed repairs made at one time.

The asphalt pavement at La Vista has been seal-coated previously so that cost is included in

this category. Seal-coating is primarily aesthetic but it does tend to extend the life of the asphalt

by shielding it from ultra-violet sunshine. The value of the additional life is probably worth what

the seal-coating costs. That is, you should not expect to receive a cost benefit from sealing, but

it will make the property more attractive.

There are two basic types of seal-coating product. The first is coal-tar based and the other is

asphalt based. The coal-tar product has been widely used in metro Atlanta for thirty years,

probably at La Vista, with no reported problems. It is durable but it does have some organic

chemicals. Concerns have been raised there could be environmental contamination and health

issues. The asphalt-based product is about 20% more expensive and is somewhat less durable

but has no (known) significant environmental issues.

The costs below are for repairs at a cost of 3% of the repaving cost plus seal-coating and

striping.

5654 SY of asphalt pavement

Best case $1.10/SY+ repairs $ 8,764

Worst case $1.30/SY+ repairs $10,404

Average case $ 9,584

Infrastructure - 5-year normal cycle of repairs. There are large plumbing systems on the

property for which the Association is responsible. There are water mains and laterals going to

the buildings. There is the electrical system for the pool area. The Association is responsible for

water lines until they enter the unit boundaries. There are fire hydrants and there are sanitary

sewer lines.

One Infrastructure item that La Vista has that is uncommon is the drainage system for the rear

courtyard areas. These areas drain into a central line for each group of courtyards and then

drain into the entrance side of the driveway. It is unknown whether this system was installed

during the original construction but it is assumed so. As long as the system works acceptably

now, no reason is seen for it to need any significant work, but it would be fairly expensive if any

work were needed due to the difficulty of access.

It is reported that there are occasional breaks in water lines. This is not uncommon for a property

of this age. If an increase in such problems is seen, alternatives should be considered. The two

basic alternatives are replacing the pipe or lining the pipe. Both alternatives are expensive.

Lining the pipe is a less invasive process and is usually less expensive. Sewer lines can also be

lined.

The metal coping on the firewalls should last indefinitely, but occasionally some pieces will need

to be replaced due to physical abuse, generally from falling tree limbs


Also covered in this category would be repairs to structural elements that are the Association’s

responsibility. At La Vista, other than the cabana and pool area, there is little exposure for the

Association because the foundation and walls for each unit are the owner’s responsibility.

The fire hydrants on the property should be checked every year to confirm proper operation. This

inspection is an Operating cost but there would be a Reserve expenditure if significant repairs

are needed.

One issue that will eventually require a sizeable outlay from La Vista is the installation of a back-

flow preventer at the water main on the Association’s side of the water meter. The purpose of

this device is to prevent contamination in the Association’s water lines from flowing backward

into the county’s water lines during periods of low pressure (i.e. when the main water is turned

off by the county to repair a large water main). The back-flow preventer device that is housed in

a separate vault will cost up to $25,000. This is a mandate through the county water system from

the federal government. The timing of this requirement is very uncertain. You could be notified

tomorrow or it could be ten years from now.

While small problems are generally considered to be normal general maintenance, this is a fund

to provide for large problems (more than $3,000) to the water distribution system, the storm

sewer, fire hydrants or sewer lines.

Best case $ 8,000

Worst case $16,000


Landscape Rehab - 5-year normal life. This category provides a fund for major landscape

issues (i.e. landscape renovations and tree removal) at the property entrance, the pool area and

throughout the property. The plant material at La Vista has matured since it was originally

planted and some of the plant material is no longer appropriate. The shade created by trees and

shrubs that have grown large often hinders grass and shrubs underneath.

The landscaping at the front entrance is important to the aesthetic appeal of the property. Much

of the frontage along La Vista is now turf (see next photo) that has been added since the 2010

report after removal of tree cover. This area is now more cosmetically appealing but, more

importantly, you no longer need to spend large sums to apply pinestraw in the area.

Removal of dead trees is also covered in this category. In your case it may also be advisable to

remove some of trees along the granite wall on the northwest side of the property by the

driveway as discussed below in the Masonry Rehab category.


This category also covers the irrigation system for the entrance area. The system has one

controller located behind the mail center building. In speaking with Hector Soto, your irrigation

contractor for the past 2 years, the system is working properly.

One issue to consider with the irrigation system is the need to reconfigure the system.

Periodically you should evaluate the system to see whether it is still functioning correctly. Some

plants require watering when first planted but do not need watering once established. In some

cases (as in the previous photo) the entire landscaping nature of an area is changed which

requires a change to the irrigation system. Without evaluation, the system can become

unproductive and wasteful.

The amounts below are not intended to fund a complete replacement of the common plant

material, but will allow necessary larger-scale work to be done. This amount may need to be

adjusted to match a more conservative or more aggressive approach.

Best case $10,000

Worst case $20,000


Signage - 20-year normal life. The entrance signage and most of the other signs for La Vista are

sandblasted foam board. Foam board does not crack and rot like wood signs, but it is

susceptible to physical damage. One of the good qualities of sandblasted signs is that the signs

can be repainted periodically. The main entrance signs, along with the majority of the other

property signage, is in good condition but it was noted that the main sign on the exit side of the

entrance has become loose along the top.

It was noted during our recent site visit that one of the smaller building unit signs has been

damaged (see next photo).


The amount shown below is to replace the existing signage. If the signs are to be painted they

can be painted during the Exterior Rehab or by a sign contractor.

2 Main entrance signs (~20SF each) @$80/SF $3200

@$100/SF $4000

10 Unit number and misc. signs $2250

$2650

Totals Best case $5450

Worst case $6650

Average case $6050

Drainage - 5-year normal life between repairs. This category funds repairs of the surface

drainage issues. Most were in the common areas between buildings where water ponds and

leaves mud on the sidewalks, but the area to the right of the sidewalk leading to the pool area

still has some issues. This issue was also noted in the 2010 reserve report, and the pathway for

the rock-swale appears to have been corrected since 2010. The current issue is the condition

below the concrete flume. The area below the flume should also be lined with rock until it

connects with the rock-swale. It is indicated with two red lines in the photograph below.


The rock-lined swale could also use some minor rehab to make sure that the swale is properlyformed to ensure better drainage.

This category funds major repairs to drainage systems and installation of additional or expanded

systems. This category assumes that a large-scale project will be planned so that an economy of

scale can be attained.

Best case $3000

Worst case $5000

Average case $4000

Fencing – 20-year normal life. The privacy fences and the decks at the rear of the units are the

maintenance responsibility of the Association. These fences are in relatively good condition, but

there are some sections that need minor repairs (as an Operating expense), as shown in the

next photo.

The wood fencing along the right side of the property has been replaced since the 2010 report

and is in good condition.

The steel fencing along Lavista Road is in good condition and should not need to be replaced if

properly maintained, but there is a section missing (see next photo). An allowance is included for

repairs during this 20-year period.

The chain-link fencing around the pool has also been replaced with pre-fab aluminum fencing,

and the wood fencing along the top of the retaining wall at the rear of the property above the

pool area has also been replaced with aluminum fencing.


.

710 LF of privacy fencing $20/LF $14,200

$25/LF $17,750

400 LF wood property line fencing $15/LF $ 6,000

$20/LF $ 8,000

200 LF of aluminum fencing at pool area $25/LF $ 5,000

$35/LF $ 7,000

Allowance for remedial work on steel fencing $ 3,000

$ 4.000

Totals - Best case $28,200

Worst case $36,750


Masonry Rehab - 5-year normal life for repairs. This is a non-specific amount for periodic

repairs to the curbing, sidewalks, the pool deck, the concrete stairs, front porch areas, the

granite retaining walls, the brick veneer and the brick columns at the steel fence at the front of

the property.

The concrete areas are generally in good condition, but there are some minor concrete areas

that need repair or replacement with the sidewalks in the common areas between units.

The pavers around the pool were replaced in 2013 at a cost of approximately $25,000 and are in

good condition.

Another issue that has arisen in numerous areas is the cracking in the brick veneer, primarily at

the brick firewalls, but some cracks along the side of a unit have been repaired. The Documents

state that the Association is responsible for the exterior surfaces, including brick, but the owner

is responsible for the building foundation that supports the brick veneer. In some areas (like at

2903) a repair has been made with mortar that does not match. This accentuates the problem

but could be corrected by reworking or staining the mortar.


There are areas in the granite retaining walls where the mortar has deteriorated and should be

replaced. The mortar in this “gravity-type” retaining wall does not serve the same purpose as the

mortar in a brick wall. In a gravity wall the stones are placed and then the joints are filled with a

very dry mortar mix. Over time, this mortar tends to disintegrate and must be replaced. Some

repairs that have been made to this mortar tried to use a mortar that was too wet. It is important

to use a mason for repairs who is familiar with the mortar for this type of wall. There are also

some minor issues with the poured concrete top to these walls. In a few sections the concrete

has cracked, as shown in the below photograph.

In another area there is a “volunteer” sweet gum growing just behind the wall. This tree will grow

to twice its present size. It already appears to be pushing the wall (see the next photo).


When at the property it was noted that masons were applying synthetic stone to the concrete

retaining walls along the road and the walls leading to the pool area. The cost of this project is

$7477.

This category assumes that you will have a qualified mason do a group of repairs so that you

can achieve an economy of scale. Masons do not necessarily do all types of masonry so more

than one contractor will probably be needed. The first occurrence of this category is three times

the normal size because it includes the pool deck, the pool sidewalk and various other deferred

masonry projects.

Best case $5000

Worst case $8000

Average case $6500

Pool Area Rehab - 5-year normal life. This category includes work on the pool building with the

restroom, the lighting at the pool and the pool furniture. The painting and roofing of the pool

cabana is covered in the relevant categories with the rest of the property. It is reported that the

pool cabana was completely rehabbed in 2016. The restroom is also in very good condition.

Whether correct or not, many residents (and potential purchasers) judge a property by the

condition of the pool furniture. It is difficult to squeeze sufficient funding from the Operating

budget to replace all of the furniture at one time, so the furniture is often mismatched. This

category funds the replacement of all the chaise lounges, umbrellas and the cushioned chairs at

the same time. The steel chairs and tables have a longer life (estimated as 10 years) so the

costs below include half their cost. The furniture is in good condition.

Pool Furniture

6 chaise lounges @$100 each $600

@$150 each $900

11 metal chairs @$30 each $330

@$40 each $440

3 metal tables @$75 each $255

@$85 each $525

4 umbrellas @$75 each $300

@$100 each $400

4 cushioned chairs @$80 each $320

@$100 each $400

Pool Cabana/restroom $1000

$1500

Lighting, miscellaneous $500864

$700


Worst case $4595

Average case $3935

Pool Surface - 8-year normal life. Most pools in a condominium setting have plaster surfaces.


The La Vista pool has a plaster surface but that surface had been painted in the past. In

speaking with William Mims of Sun Fun Pools, the La Vista pool contractor for approximately the

last 15 years, since the last reserve report the paint coating was removed by sandblasting and

the pool surface was re-plastered. However, the plaster did not last very long due to improper

sandblasting, so the surface was replaced approximately 3 years ago. The pool surface is in

good condition.

The pool coping was also recently replaced and is in good condition.

Mr. Mims reports that the waterline tiles are also in good condition, but they will probably need to

be replaced at the next occurrence of re-plastering the pool. The tiles are usually replaced every

second time the pool is re-plastered. The cost below covers the normal re-plastering of the pool

plus half the cost of the tiles because they are typically replaced every second plastering.

Plastering $5000

$7000

Half the cost of water-line tile $1500

$1750


Worst case $8750

Average case $7625

Pool Equipment - 8-year normal life. Includes replacement of the pump, pump motor,

chlorinator, filter and pool cover. The equipment is contained in a pump room in the pool

building.

This equipment is replaced as needed, so this category assumes that this amount will be spent

over an 8-year period. William Mims reports that all of the equipment was replaced in 2016, with

the exception of the erosion feeder. He also reported that the “salt” system will need to have the

cell replaced in the next year at a cost of $400-500.

Mr. Mims also reported that the pool safety cover has another 5-7 years of useful life, with a

replacement cost of approximately $2500. The filter cost and pool cover cost below are one

third and two thirds the total cost respectively because they should last 24 and 12 years.

pump and motor $1200

$1800

sand filter $ 700

$ 900

Misc. – Skimmers, piping, electrical $1000

$1500

Salt system chlorination $2000

$3000

Pool cover $1600

$2000



Worst case $9200

Average case $7850

Decks – 20-year normal life. The cantilevered private decks and the pool deck (including the

attached wood fencing and horizontal railing) were constructed out of pressure treated pine

lumber. These decks have a life of twenty to twenty-five years. The decks on the fronts of the

units with roofs over them generally last longer, but the ceilings below the decks can collect

organic material and cause deterioration of the floor joists.

During our recent site inspection, we noted that the covered decks are in good condition. In the

costs below, a much smaller cost is used for the covered decks because they typically require

much less work. We did note at some units the absence of any trim along the bottom of the door

leading out to the covered deck. The following photograph was taken at Unit 2925. During a

hard, blowing rain event, it is possible that water could get under the deck treads from the inner

side of the deck.

At the time of the previous report when we spoke with Joe Chao (now retired) of Chao Constant

Construction, the contractor who performed the work, during the previous deck replacement

project about sixteen years ago, considerable work was done on the floor joists for the

uncovered decks in the row that overlooks the pool area. This involved extending the new joist

through the exterior wall and into the garage ceiling. It was necessary in many instances to

remove and then reinstall wiring that ran through that ceiling area. This was considerably more

expensive ($7000 per deck) than merely replacing the deck boards. This significant work on

joists is typically needed every second deck project with only the deck flooring boards replaced

at every project.


During our recent site inspection for this report, it was noted that many of the decks have flooring

boards that are beginning to show signs of warping. It was also noted that some of the outer

deck bands have come loose or are in the process of coming loose. The following photograph

shows the outer deck band at Unit 2948, which had the most significant case of this issue. In the

photograph the outer deck band has come loose due to the nails backing out from the inner

deck band. This issue runs the entire length of this deck.

At Unit 2945, there were nails backing out of the outer band. In the photograph below, the nails

that are backing out are indicated with red arrows.


It was also noted that all of the uncovered decks had flooring boards that were significantly

weathered (see next photo) due to their age, and they should be replaced in the next 1-2 years.

This is sooner than expected so the expected life on this category has been lowered to 20 years.

It is reported that the pool deck was replaced in 2014 at a cost of approximately $25,000, and it

is currently in good condition. The support posts are all sitting on concrete bases and the joists

were all installed using joint hangers.

As mentioned above, the floor joists do not need to be replaced during each project. Usually

they have a life twice as long as the flooring boards. The cost to replace just the flooring boards

is half the cost to replace the decks completely so the two costs are averaged in the prices

shown below. This does not include the covered decks where the joists are considered to have

an indefinite life. The prices shown below for the covered deck do include an allowance for

replacement of an occasional joist and also assume that the flooring boards will have a much

longer life.

742 SF of wood pool deck $20/SF $14,840

$24/SF $17,808

864 SF of uncovered decks $24/SF $20,736

$30/SF $25,920

2016 SF of covered decks $6/SF $12,096

$10/SF $20,160

Totals Best case $47,672

Worst case $63,888



LA VISTA CONDOMINIUM, Established 1978

Table 1 - Calculation of Reserve Requirements

For the Budget Year Ending: October 31,2016

End of Yr Normal Remaining Cost Cost Today's Excess Annual This Year's

Balance Life Life Now Then Balance (Deficit) Requirement Budget

Should be Provision

with Interest

Roof Replacement Best Case 68,258 24 10 203,844 248,000 144,667 -76,409 10,333

50 residences and 44 garages Average Case 68,258 22 8 222,263 259,500 165,136 -96,879 11,795 4,713

with 3-tab fiberglass reinforced Worst Case 68,258 20 6 240,683 271,000 189,700 -121,442 13,550

asphalt shingles. (2003)

Guttering Best Case 8,970 33 19 30,180 44,000 18,667 -9,697 1,333

7545 linear feet of 6" aluminum Average Case 8,970 30 16 33,953 46,500 21,700 -12,730 1,550 619

guttering w/3"X4" downspouts Worst Case 8,970 27 13 37,725 49,000 25,407 -16,438 1,815

(in 2003)

Exterior Rehab Best Case 26,867 7 4 105,000 114,000 48,857 -21,990 16,286

Exterior repairs and painting of Average Case 26,867 6 3 122,500 130,000 65,000 -38,133 21,667 8,658

all previously painted exterior Worst Case 26,867 5 2 140,000 146,000 87,600 -60,733 29,200

surfaces

Asphalt Overlay Best Case 23,908 27 15 84,817 114,000 50,667 -26,759 4,222

Overlay of existing 5654 square Average Case 23,908 25 13 93,298 120,500 57,840 -33,932 4,820 1,926

yards of asphalt driveway Worst Case 23,908 23 11 101,780 127,000 66,261 -42,353 5,522

(in 2003)

Asphalt Repair/Striping Best Case 2,096 6 3 8,764 9,300 4,650 -2,554 1,550

Asphalt repairs and striping to the Average Case 2,096 5 2 9,584 8,450 5,070 -2,974 1,690 675

5654 square yards of asphalt Worst Case 2,096 4 1 10,404 7,600 5,700 -3,604 1,900

driveway

Infrastructure Best Case 1,066 6 5 8,000 8,800 1,467 -400 1,467

Replacement of common Average Case 1,066 5 4 12,000 12,900 2,580 -1,514 2,580 1,031

plumbing, fire hydrant, storm Worst Case 1,066 4 3 16,000 17,000 4,250 -3,184 4,250

sewer and electrical systems

Landscape Rehab Best Case 2,645 6 4 10,000 11,000 3,667 -1,021 1,833

Replacement of horticulturally Average Case 2,645 5 3 15,000 16,000 6,400 -3,755 3,200 1,279

inappropriate plant material Worst Case 2,645 4 2 20,000 21,000 10,500 -7,855 5,250

and dead trees

Signage Best Case 1,748 22 10 5,450 6,600 3,600 -1,852 300

Replace main entrance signage Average Case 1,748 20 8 6,050 7,050 4,230 -2,482 353 141

and unit signage. Worst Case 1,748 18 6 6,650 7,500 5,000 -3,252 417

Drainage Best Case 355 6 5 3,000 3,300 550 -195 550

Major work on surface drainage Average Case 355 5 4 4,000 4,300 860 -505 860 344

and water flow Worst Case 355 4 3 5,000 5,300 1,325 -970 1,325


Page 2 End of Yr Normal Remaining Cost Cost Today's Excess Annual This Year's

Balance Life Life Now Then Balance (Deficit) Requirement Budget

Should be Provision

with Interest

Fencing Best Case 8,163 22 12 28,200 36,000 16,364 -8,200 1,636

Replacement of privacy wood Average Case 8,163 20 10 32,475 39,500 19,750 -11,587 1,975 789

fencing and pool fencing Worst Case 8,163 18 8 36,750 43,000 23,889 -15,725 2,389

Masonry Rehab Best Case 1,133 6 4 5,000 5,400 1,800 -667 900

Fund for replacement of Average Case 1,133 5 3 6,500 6,850 2,740 -1,607 1,370 547

concrete sidewalks, curbs, pool Worst Case 1,133 4 2 8,000 8,300 4,150 -3,017 2,075

deck, granite and brick structures

Pool Area Rehab Best Case 1,017 6 3 3,275 3,500 1,750 -733 583

Replacement of the pool furniture Average Case 1,017 5 2 3,935 4,100 2,460 -1,443 820 328

and rehab of the pool building and Worst Case 1,017 4 1 4,595 4,700 3,525 -2,508 1,175

miscellaneous items

Pool Surface Best Case 1,598 10 6 6,500 7,900 3,160 -1,562 790

Replastering the pool Average Case 1,598 9 5 7,625 8,700 3,867 -2,268 967 386

surface and replacement of Worst Case 1,598 8 4 8,750 9,500 4,750 -3,152 1,188

waterline tiles

Pool Equipment Best Case 465 9 8 6,500 7,600 844 -379 844

Replacement of the pump, Average Case 465 8 7 7,850 9,000 1,125 -660 1,125 450

motor, filters, chemical pumps and Worst Case 465 7 6 9,200 10,400 1,486 -1,021 1,486

pool cover.

Decks Best Case 19,065 22 7 47,672 55,000 37,500 -18,435 2,500

Repair of covered and uncovered decks.Average Case 19,065 20 5 55,780 61,500 46,125 -27,060 3,075 1,229

Repairs/replacement of wood Worst Case 19,065 18 3 63,888 68,000 56,667 -37,601 3,778

deck and railings at pool

TOTALS Best Case 167,355 338,209 -170,854 45,129

Average Case 404,883 -237,528 57,846 23,115

Worst Case 490,210 -322,855 75,318

Per UNIT for AVERAGE case 3,347 8,098 -4,751 1,157 462

Per UNIT Per Month Contribution THIS YEAR 96.41 38.53


LA VISTA CONDOMINIUM, Established 1978Table 2 - Projected Reserve Funds Flow

2017 through 2036 of Average Case

YEARSRESERVE NORMAL REMAINING COST 2017 2018 2019 2020 2021 2022 2023 2024 2025CATEGORIES LIFE LIFE NOW

Roof Replacement 22 8 222,263 259,500Guttering 30 16 33,953Exterior Rehab 6 3 122,500 6,000 42,484 43,333 43,334 47,712Asphalt Overlay 25 13 93,298Asphalt Repair/Striping 5 2 9,584 8,450 9,300Infrastructure 5 4 12,000 12,900Landscape Rehab 5 3 15,000 16,000 17,500Signage 20 8 6,050 7,050Drainage 5 4 4,000 4,300Fencing 20 10 32,475Masonry Rehab 5 3 6,500 12,126 6,850 7,600Pool Area Rehab 5 2 3,935 4,100 4,500Pool Surface 9 5 7,625 10,300Pool Equipment 8 7 7,850 9,000Decks 20 5 55,780 22,000------------------------------------------ ----------- ----------- ----------- ----------- ----------- ------------ ------------ ------------ ------------

Yearly Expenditures 18,126 0 77,034 66,183 60,534 10,300 0 22,800 339,362

Prior Reserve Balance 167,355 173,434 209,893 175,076 156,984 150,496 200,590 267,449 317,858Yearly Expenditures 18,126 0 77,034 66,183 60,534 10,300 0 22,800 339,362Yearly Contribution 23,000 23,000 23,000 23,000 23,000 23,000 23,000 23,000 23,000Interest Added 1,205 1,459 1,217 1,091 1,046 1,394 1,859 2,209 388Increases needed - $20 per unit per month in 2018 and $10 in 0 12,000 18,000 24,000 30,000 36,000 42,000 48,000 54,000----------------------------- every year thereafter ----------- ----------- ----------- ----------- ----------- ------------ ------------ ------------ ------------Ending Reserve Balance 173,434 209,893 175,076 156,984 150,496 200,590 267,449 317,858 55,883

Ending Reserve Balance with NO INCREASE 173,434 197,809 144,781 102,309 71,270 84,557 108,309 109,268 -208,544


LA VISTA CONDOMINIUM, Established 1978Table 2 - Projected Reserve Funds Flow ASSUMPTIONS- Interest Rate=1%2017 through 2036 of Average Case Tax Rate=30%Page 2 Inflation Rate=2%

RESERVE 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036CATEGORIES

Roof ReplacementGuttering 46,500Exterior Rehab 48,667 48,668 53,922 55,000 55,001Asphalt Overlay 120,500Asphalt Repair/Striping 0 11,500Infrastructure 14,000 15,500 17,500Landscape Rehab 19,500 215,000SignageDrainage 4,700 5,200 5,800Fencing 39,500Masonry Rehab 8,350 9,200Pool Area Rehab 5,000 5,500Pool Surface 7,900Pool Equipment 10,500Decks 20,000 21,000

------------ ------------ ------------ ------------ ------------ ------------ ------------ -------------- -------------- ------------- --------------Yearly Expenditures 67,367 88,168 0 25,000 148,350 82,522 65,500 101,501 38,000 224,200 23,300

Prior Reserve Balance 55,883 72,017 73,358 169,536 247,254 207,345 239,487 295,037 320,765 416,661 331,767Yearly Expenditures 67,367 88,168 0 25,000 148,350 82,522 65,500 101,501 38,000 224,200 23,300Yearly Contribution 23,000 23,000 23,000 23,000 23,000 23,000 23,000 23,000 23,000 23,000 23,000Interest Added 500 509 1,178 1,718 1,441 1,664 2,050 2,229 2,896 2,306 3,160Increases needed - $20 per unit per month in 2018 and $10 in60,000 66,000 72,000 78,000 84,000 90,000 96,000 102,000 108,000 114,000 120,000

------------ ------------ ------------ ------------ ------------ ------------ ------------ -------------- -------------- ------------- --------------Ending Reserve Balance 72,017 73,358 169,536 247,254 207,345 239,487 295,037 320,765 416,661 331,767 454,627

Ending Reserve Balance with NO INCREASE-254,680 -322,086 -301,179 -305,301 -433,665 -496,639 -542,912 -625,762 -645,247 -852,372 -858,640





** EXPENSES ** YEARS

NORMAL REMAINING COST COST TODAY'S 2017 2018 2019 2020 2021 2022 2023 2024

RESERVE CATEGORIES LIFE LIFE NOW THEN BALANCE

Roof Replacement 22 8 222,263 259,500 68,258 22,010 22,450 22,899 23,357 23,824 24,300 24,786 25,282

Guttering 30 16 33,953 46,500 8,970 1,993 2,032 2,073 2,115 2,157 2,200 2,244 2,289

Exterior Rehab 6 3 122,500 130,000 26,867 33,790 34,466 35,155 23,460 23,929 24,408 24,896 25,394

Asphalt Overlay 25 13 93,298 120,500 23,908 6,512 6,642 6,775 6,910 7,048 7,189 7,333 7,480

Asphalt Repair/Striping 5 2 9,584 8,450 2,096 3,530 3,601 1,811 1,847 1,884 1,921 1,960 1,999

Infrastructure 5 4 12,000 12,900 1,066 2,903 2,961 3,020 3,080 2,744 2,799 2,855 2,912

Landscape Rehab 5 3 15,000 16,000 2,645 4,371 4,458 4,547 3,417 3,485 3,555 3,626 3,699

Signage 20 8 6,050 7,050 1,748 612 624 637 650 663 676 689 703

Drainage 5 4 4,000 4,300 355 968 987 1,007 1,027 918 936 955 974

Fencing 20 10 32,475 39,500 8,163 2,838 2,895 2,953 3,012 3,072 3,133 3,196 3,260

Masonry Rehab 5 3 6,500 6,850 1,133 1,884 1,922 1,961 1,474 1,503 1,533 1,564 1,595

Pool Area Rehab 5 2 3,935 4,100 1,017 1,530 1,561 877 895 913 931 950 968

Pool Surface 9 5 7,625 8,700 1,598 1,339 1,366 1,393 1,421 1,449 1,060 1,081 1,102

Pool Equipment 8 7 7,850 9,000 465 1,160 1,183 1,207 1,231 1,255 1,281 1,306 1,243

Decks 20 5 55,780 61,500 19,065 8,073 8,235 8,399 8,567 8,739 3,889 3,967 4,046

----------------------------------- ------------- ------------- --------------- -------------- -------------- ------------- ------------- ------------- ------------- ------------- -------------

Yearly Requirement 167,355 93,512 95,382 94,713 82,462 83,584 79,812 81,408 82,947

Less Expenses Paid 18,126 0 77,034 66,183 60,534 10,300 0 22,800

----------------------------------- ------------- ------------- --------------- -------------- -------------- ------------- ------------- ------------- ------------- ------------- -------------

Accumulated Requirement 242,741 338,124 355,803 372,081 395,131 464,642 546,050 606,197

** INCOME **

Prior Reserve Balance Beg. Bal. 167,355 173,434 209,893 175,076 156,984 150,496 200,590 267,449

Yearly Contribution 23,000 35,000 41,000 47,000 53,000 59,000 65,000 71,000

Yearly Expenditures 18,126 0 77,034 66,183 60,534 10,300 0 22,800

Interest Added 1,205 1,459 1,217 1,091 1,046 1,394 1,859 2,209

----------------------------------- -------------- -------------- ------------- ------------- ------------- ------------- ------------- -------------

Ending Reserve Balance 173,434 209,893 175,076 156,984 150,496 200,590 267,449 317,858

Surplus(+)/Deficit(-) -69,307 -128,231 -180,727 -215,097 -244,635 -264,053 -278,601 -288,339





Page 2

2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036

RESERVE CATEGORIES

147989

Roof Replacement 15,312 15,618 15,930 16,249 16,574 16,905 17,243 17,588 17,940 18,299 18,665 19,038

Guttering 2,333 2,380 2,428 2,476 2,526 2,576 2,628 2,680 2,219 2,263 2,308 2,354

Exterior Rehab 25,902 26,420 26,948 27,487 28,037 28,598 29,170 29,753 30,348 30,955 31,574 32,206

Asphalt Overlay 7,626 7,778 7,934 8,092 8,254 8,419 8,588 8,759 8,935 9,113 9,295 9,481

Asphalt Repair/Striping 2,039 2,080 2,121 2,164 2,207 2,137 2,180 2,223 2,268 2,313 2,359 2,406

Infrastructure 2,970 3,029 3,090 3,152 3,215 3,279 3,345 3,412 3,480 3,549 3,620 3,693

Landscape Rehab 3,773 3,848 3,925 4,004 4,084 4,165 4,249 4,334 4,420 4,509 4,599 4,691

Signage 448 456 466 475 484 494 504 514 524 535 546 556

Drainage 994 1,014 1,034 1,054 1,076 1,097 1,119 1,141 1,164 1,188 1,211 1,236

Fencing 3,323 3,390 2,512 2,562 2,613 2,665 2,719 2,773 2,829 2,885 2,943 3,002

Masonry Rehab 1,627 1,660 1,693 1,727 1,761 1,797 1,833 1,869 1,907 1,945 1,984 2,023

Pool Area Rehab 988 1,008 1,028 1,048 1,069 1,091 1,113 1,135 1,157 1,181 1,204 1,228

Pool Surface 1,245 1,270 1,295 1,321 1,347 1,374 1,402 1,430 1,458 1,488 1,517 1,548

Pool Equipment 1,268 1,293 1,319 1,346 1,373 1,400 1,428 1,457 1,486 1,515 1,546 1,577

Decks 4,127 4,209 4,293 4,379 4,467 4,556 4,647 4,740 4,835 4,932 5,031 5,131

------------- ------------- ------------- ------------- --------------- --------------- -------------- -------------- -------------- -------------- -------------- ----------------

Yearly Requirement 73,973 75,453 76,016 77,536 79,087 80,554 82,165 83,809 84,969 86,669 88,402 90,170

Less Expenses Paid 339,362 67,367 88,168 0 25,000 148,350 82,522 65,500 101,501 38,000 224,200 23,300

------------- ------------- ------------- ------------- --------------- --------------- -------------- -------------- -------------- -------------- -------------- ----------------

Accumulated Requirement 341,020 349,106 336,954 414,490 468,577 400,782 400,425 418,734 402,202 450,871 315,073 381,944

** INCOME **

Prior Reserve Balance 317,858 55,883 72,017 73,358 169,536 247,254 207,345 239,487 295,037 320,765 416,661 331,767

Yearly Contribution 77,000 83,000 89,000 95,000 101,000 107,000 113,000 119,000 125,000 131,000 137,000 143,000

Yearly Expenditures 339,362 67,367 88,168 0 25,000 148,350 82,522 65,500 101,501 38,000 224,200 23,300

Interest Added 388 500 509 1,178 1,718 1,441 1,664 2,050 2,229 2,896 2,306 3,160

------------- ------------- ------------- ------------- --------------- --------------- -------------- -------------- -------------- -------------- -------------- ----------------

Ending Reserve Balance 55,883 72,017 73,358 169,536 247,254 207,345 239,487 295,037 320,765 416,661 331,767 454,627

Surplus(+)/Deficit(-) -285,137 -277,090 -263,596 -244,954 -221,323 -193,437 -160,938 -123,697 -81,437 -34,210 16,694 72,684