Fir Ridge II 2015-09-29 dd...Fir Ridge II 2015-09-29 dd.docx Page 3 EXECUTIVE SUMMARY BACKGROUND...

FIR RIDGE II BELLINGHAM, WASHINGTON

RESERVE STUDY UPDATE WITH SITE VISIT SEPTEMBER, 2015

FOR USE WITH THE 1999 RESERVE STUDY AND 2014 UPDATE

PREPARED BY: DENISE DANA, RESERVE SPECIALIST M. ARCH, REGISTERED ARCHITECT

ERIE STONE B.A. ARCH, REGISTERED ARCHITECT

2015 BY RESERVE CONSULTANTS LLC

Fir Ridge II 2015-09-29 dd.docx Page 2

CONTENTS

EXECUTIVE SUMMARY ........................................................................................................ 3

ESTIMATED REPAIR SUMMARY ............................................................................................ 4

INTRODUCTION .................................................................................................................. 5 PURPOSE OF A RESERVE STUDY

GOVERNMENT REQUIREMENTS FOR A RESERVE STUDY

LIMITATIONS AND ASSUMPTIONS OF A RESERVE STUDY

OUR APPROACH TO A RESERVE STUDY

ASSOCIATION OVERVIEW .................................................................................................. 10

REVIEW OF GENERAL CONDITIONS .................................................................................... 11

FINANCIAL ANALYSIS & RESERVE CONTRIBUTION RECOMMENDATIONS ................................ 15 FUNDING PLANS

FULLY FUNDED BALANCE CALCULATIONS

DISCLOSURES ................................................................................................................. 17

APPENDIX - GLOSSARY OF TERMS ..................................................................................... 18

APPENDIX – EVALUATORS’ CREDENTIALS .......................................................................... 21

APPENDIX - GRAPHS & TABLES ......................................................................................... 22 TABLE – FULLY FUNDED BALANCE CALCULATIONS

GRAPH – PERCENT FULLY FUNDED

GRAPH – INFLATED PERCENT FUNDED AT YEAR END OVER 30 YEARS AT RECOMMENDED CONTRIBUTION RATE

GRAPH – CURRENT CONTRIBUTION & RECOMMENDED CONTRIBUTION YEAR END RESERVE FUND BALANCE COMPARISON

GRAPH – FIR RIDGE II RESERVE PROJECTIONS: 2015 CONSTANT DOLLARS

TABLE – RESERVE STUDY PROJECTIONS: 30-YEAR SPREADSHEET WITH CONSTANT DOLLARS

GRAPH – FIR RIDGE II RESERVE PROJECTIONS: INFLATED DOLLARS

TABLE – RESERVE STUDY PROJECTIONS: 30-YEAR SPREADSHEET ALLOWING FOR INFLATION


EXECUTIVE SUMMARY BACKGROUND

Name Fir Ridge II Date September, 2015 Type of Study Level 2 – Update with Site Visit No. of Units 159 Fir Ridge II is a 159-unit residential community located in Bellingham, Washington. The community has 24 wood framed buildings that are two stories. Construction was completed in about 1998-1999.

FINANCIAL INFORMATION Reserve Account Balance on July 21, 2015 $943,252 Annual Operating Budget $276,286 Component Inclusion Threshold $2,763 Annual Budgeted Contribution Rate (2015) $111,000 Remaining Contribution for the Year $55,500 Planned or Implemented Special Assessment None Fully Funded Balance $1,426,656 Percent Funded at Time of Study 66% Funding Status at Time of Study Well Funded

RECOMMENDATIONS Recommended 2016 Contribution $157,300

Recommended Contribution per Month $13,108 Average Contribution per Unit per Year $ 989 Average Contribution per Unit Per Month $ 82

Recommended Special Assessment None Timeline for Fully Funded Status Not Achieved by Year 30 2016 Baseline Funding Plan Contribution Rate $150,100 2016 Full Funding Plan Contribution Rate $162,300 The recommended reserve contribution represents a Threshold Funding Plan to prevent special assessments over the course of the 30-year study while maintaining a minimum reserve account balance of one year's annual reserve contribution. The fiscal year for the Reserve Study is a calendar year. Cost projection accuracy decreases into the distant future. Assumptions should be reconsidered and updated with each revision.

There is no legal requirement to fund reserves. There is a requirement to have a current Reserve Study to know the recommended reserve contribution rate. Reserve Studies must be updated annually to reflect recent financial information, repairs or replacements, and to adjust for future repair costs. Every three years, the update must be based on a visual on-site inspection conducted by a Reserve Study Professional.

This Reserve Study meets the requirements of the Washington Condominium Act, and was prepared by a Reserve Study Professional.


ESTIMATED REPAIR SUMMARY The following repairs are expected to occur in the next few years at Fir Ridge II. We do not believe the repairs expected to occur through 2017 warrant independent oversight, but a performance inspection or design specification may be prudent depending on the extent of the roof repair work that needs to be done.

EXPENSES RECOMMENDED THROUGH 2017 COMPONENT – REPAIR TO BE MADE YEAR ESTIMATED COST

20.1.1 - Reserve Study W/ Site Visit 0 (2015) $2,300 2.6.1 - Asphalt Paving 1 (2016) $54,310 7.4.1 - Roofing - Repairs 1 (2016) $25,000

The following repairs make up the bulk of the Association’s reserve funding requirements. Changing the timing or costs of these items may result in changes to the recommended contribution. Independent design specifications and oversight are recommended for repairs to the building envelope. We recommend that the planning stages for these repairs start at least one year before the estimated repair to obtain a scope of repair, select and schedule a contractor, and secure financing for the project.

MAJOR EXPENSES OVER THE NEXT 30 YEARS COMPONENT – REPAIR TO BE MADE NEXT IN YEAR ESTIMATED COST

6.2.1 - Exterior Siding - Replace 24 (2039) $1,629,740 8.5.1 - Windows 24 (2039) $872,000 7.4.1 - Roofing - Replace 10 (2025) $417,730 9.8.1 - Exterior Painting 7 (2022) $90,000 7.3.1 - Gutters/Downspouts - Replace 10 (2025) $81,510 2.6.1 - Asphalt Paving 1 (2016) $54,310


INTRODUCTION PURPOSE OF A RESERVE STUDY

The purpose of a Reserve Study is to recommend a reasonable annual reserve Contribution Rate made by an association to its reserve account. Reserve accounts are established to fund major maintenance, repair, and replacement of common elements, including limited common elements, expected to be necessary within the next thirty years. A Reserve Study is intended to project adequate funds for the replacement or major repair of any significant component of the property as it becomes necessary without relying on special assessments. It is a budget planning tool which identifies the current status of the reserve account and a stable and equitable Funding Plan to offset the anticipated future major shared expenditures.

Each reserve component is evaluated to determine the current condition, the remaining useful life, and the estimated replacement cost. This information is combined into a spreadsheet to determine funding requirements and establish the annual contribution rate needed to minimize special assessments. All costs and annual reserve balances are shown in constant dollars, and with adjustments for annual inflation and interest earned. Ideally, an even level of contributions is established that maintains a positive balance in the reserve account over the timeline the study examines.

A Reserve Study also calculates a “Fully Funded Balance”. Fully Funded Balance is the sum total of the reserve components’ depreciated value using a straight line depreciation method. To calculate each component’s depreciated value:

When assessed with the current reserve balance, the Fully Funded Balance yields a Percent Fully Funded. This acts as a measuring tool to assess an association’s ability to absorb unplanned expenses. These expenses could be emergency repairs not covered by insurance, or expenses that differ from the existing Reserve Study in terms of timing or cost.

The Fully Funded Balance is neither the present replacement cost of all of the Association’s reserve components, nor does it have a mathematical relationship to the recommended reserve contribution funding plans.


There are three levels of Reserve Studies:

The first level, an initial Reserve Study, must be based upon a visual site inspection conducted by a Reserve Study Professional. This is also known as a full Level 1 Reserve Study.

At least every three years, an updated Reserve Study must be prepared and based upon a visual site inspection conducted by a Reserve Study Professional. This is also known as a Level 2 Update with Site Visit.

Every year, the Association must update the Reserve Study. Except as noted above, the annual updates do not require a site visit. This is also known as a Level 3 Update without Site Visit.

This study is a Level 2 – Update with Site Visit.

GOVERNMENT REQUIREMENTS FOR A RESERVE STUDY

The content of a Reserve Study for a condominium is regulated by the Washington State government (RCW 64.34.382 §2). The required content is:

(a) A reserve component list, including roofing, painting, paving, decks, siding, plumbing, windows, and any other reserve component that would cost more than one percent of the annual budget for major maintenance, repair or replacement. If one of these reserve components is not included in the Reserve Study, the study should provide commentary explaining the basis for its exclusion. The study must also include quantities and estimates for useful life of each reserve component, remaining useful life of each reserve component, and current repair and replacement cost for each component;

(b) The date of the study and a statement that the study meets the requirements of this section;

(c) The following level of reserve study performed: (i) Level I: Full reserve study funding analysis and plan; (ii) Level II: Update with visual site inspection; or (iii) Level III: Update with no visual site inspection;

(d) The association’s reserve account balance; (e) The percentage of the fully funded balance that the reserve account is funded; (f) Special assessments already implemented or planned; (g) Interest and inflation assumptions; (h) Current reserve account contribution rate; (i) A recommended reserve account contribution rate; a contribution rate for a full

funding plan to achieve one hundred percent fully funded reserves by the end of the thirty-year study period, a baseline funding plan to maintain the reserve balance above zero throughout the thirty-year study period without special assessments, and a contribution rate recommended by a reserve study professional;


(j) A projected reserve account balance for thirty years and a funding plan to pay for projected costs from those reserves without reliance on future unplanned special assessments; and

(k) A statement on whether the reserve study was prepared with the assistance of a reserve study professional.

The Washington State government further requires the following disclosure in every Reserve Study (RCW 64.34.382 §3):

"This reserve study should be reviewed carefully. It may not include all common and limited common element components that will require major maintenance, repair, or replacement in future years, and may not include regular contributions to a reserve account for the cost of such maintenance, repair, or replacement. The failure to include a component in a reserve study, or to provide contributions to a reserve account for a component, may, under some circumstances, require you to pay on demand as a special assessment your share of common expenses for the cost of major maintenance, repair, or replacement of a reserve component."

The full Washington Condominium Act may be reviewed on the Washington State Legislature’s website at http://apps.leg.wa.gov/rcw/default.aspx?cite=64.34 and parts 64.34.380 to 64.34.392 for the Reserve Study Amendment’s portions. In April 2011, the Act was amended to change the required content within the Reserve Studies, add reporting of the Reserve Study results as part of the budget summary to owners, and extend the Reserve Study requirement to homeowners’ associations with significant assets. For questions regarding the Act, we recommend contacting an attorney familiar with condominiums' legal requirements.

LIMITATIONS AND ASSUMPTIONS OF A RESERVE STUDY

This Reserve Study is not a report on the condition of the buildings maintained by the Association, or a detailed report of repairs necessary to the building. It is also not an investigation into or comment on the quality of construction of the reserve components, or whether the construction complies with the building code or the requirements of the Washington Condominium Act.

The observations made by Reserve Consultants LLC are limited to a visual inspection of a sample of the reserve components. Unless informed otherwise, our assumption is that the components are constructed in substantial compliance with the building code and to industry standards, and that it will receive ordinary and reasonable maintenance and repair by the Association. These assumptions include that most reserve components will achieve their normal useful lives for similar components in the Pacific


Northwest, and that they will be replaced when necessary to prevent damage to other reserve components.

This Reserve Study assumes that the Association will be maintained to keep a good level of appearance, with a special emphasis on retaining the original appearance of the Association to the greatest possible extent. The analysis also assumes that the Association will replace materials as they are required with good quality materials, installed by qualified, licensed, contractors. We further assume that the Association will experience the full typical useful life for the new materials installed.

The long term nature of this study requires that certain assumptions and predictions be made about future events. Since there can be no guarantee that these future events will occur as assumed, this analysis must be viewed in light of the circumstances under which it was conducted. Reasonable effort has been made to ensure that the conclusions of this report are based on reliable information and sound reasoning.

This report should be updated annually with actual repair costs, reserve balances, etc. Every three years it should be updated with a site inspection and professional review. Regular updating will allow changes based on actual occurrences and adjustments for the cost of repairs to be incorporated into the annual reserve contributions. This will allow any savings or additional costs to be properly allocated among unit owners. OUR APPROACH TO A RESERVE STUDY

Reserve Consultants LLC employs a “Reasonable Approach” when evaluating reserve components in order to draft a study that is of greatest value to our clients. This means we attempt to predict, based on the costs involved and the client’s objectives, what a reasonable person will decide to have done when maintenance, repairs, or replacement become necessary. For example, a reasonable person will not replace a fence when it only needs to be repainted. The benefit of this is that reserve contributions are minimized to allow for what it most likely to occur. Our studies are not based on a worst case scenario, but rather on what we expect is most likely to occur. Our approach assumes minor problems will be corrected as they occur, before they become major problems.

Many sources were used in drafting this report. These include:

Site visits and inspection of facilities; Conference with association representatives; Review of architectural plans of the buildings, if made available; Review of the declaration for the Association, or a list of components the

Association is responsible for; Generally accepted construction, maintenance, and repair guidelines.

The costs estimated for this Reserve Study are based on several sources:


Costs experienced by Fir Ridge II; Costs experienced by other associations in the area; RS Means Building Construction Cost Data 2015.

Several factors may influence the actual costs that the Association will experience. The quality of replacement materials of items can significantly impact cost, as well as the timing between replacements. The use of Architects or independent construction managers to specify and oversee work may also cause additional expenses. Condominium associations typically experience higher costs than other comparable multifamily projects, in part due to the difficulty contractors have obtaining insurance to work on condominium buildings.

When making estimates on the future inflation and interest rates, we use a staggered approach given the current economic environment. For 2015 and 2016, we use an inflation rate of 3%, and an interest rate of 1%. For the remaining years of the study, we use a 4% inflation rate and a 3% interest rate.


ASSOCIATION OVERVIEW Fir Ridge II is a 159-unit residential community located in Bellingham, Washington. The community consists of 24 two-story wood framed buildings. The buildings have vinyl siding and asphalt composition shingle roofs. Construction of the buildings was completed in approximately 1998-1999.

The Association has asphalt roads and parking areas with asphalt speed bumps. Concrete curbs and sidewalks line the roads. The units feature exterior decks or patios.

In 1999 Reserve Consultants, Ltd. conducted an initial Reserve Study; in 2004, 2009 and 2012 we completed updates to this study with site visits. This is an update to those prior studies with a site visit.

There are items that individual unit owners are responsible to maintain and pay for, including, but not limited to, damage by tenants or their pets and/or interior finishes within their residence. Refer to individual component descriptions for additional components that are the individual unit owners’ responsibility; however, not all components that are the individual unit owners’ responsibility are described in the report. The costs for these items are not included in the reserve account contribution recommendations. Individual owners should remember that they have the responsibility to pay for repairs to these elements and added items. We recommend that associations establish policies and processes regarding the maintenance on these “owner responsibility” items.


REVIEW OF GENERAL CONDITIONS The overall appearance of the buildings is good. The asphalt paving was repaired and seal coated in 2009. The exterior vinyl siding is in good condition; the prefinished siding is weathering as expected. The trim and accent siding are being painted this year. Many of the exterior decks have been reconstructed. There were some potential leak issues reported with the asphalt shingle roofs. Replacing the windows is the responsibility of the Association. The windows are original to the building. No issues were reported with the plumbing or drainage. The grounds and landscaping are regularly maintained. Minor and major repairs have been conducted on a regular basis. Trim and accent siding painting was in progress at the time of our inspection, as was deck reconstruction.

ADJUSTMENTS TO COMPONENT RESERVE RECOMMENDATIONS Construction Component Revisions & Adjustments from 2014 to 2015.

This section provides updated information on the components from prior Reserve Studies and is intended to be used with the component sheets from those studies. Some components have been split on the spreadsheet to more accurately determine the Fully Funded Balance. All cost estimates were adjusted to reflect the actual inflation rate for construction work in the Puget Sound area, and costs actually experienced by the Association or others in the area. If necessary, the spreadsheets and graphs have been adjusted to reflect a 30-year future projection to comply with current law.

The Association provided us with a record of recent expenditures on reserve components. We use those figures, where applicable, for updating component cost projections, applying an appropriate inflation factor. Where updated figures from actual work performed are not available, cost projections from the previous reserve study are updated for inflation and rounded to the nearest $10, using the RS Means 2014 to 2015 inflation figure of 1.76% for construction work. In addition, new estimates are calculated and rounded to the nearest $10.

COMPONENTS INCLUDED IN THE RESERVE STUDY

Reserve Studies for condominiums are required to include components for roofing, painting, paving, decks, siding, plumbing, windows, and any other reserve component that would cost more than one percent of the annual budget for major maintenance, repair or replacement (RCW 64.34.382). While the law defines the inclusion threshold to be $2,763, components valued less than the legal threshold may be included to better capture reserve funding for Fir Ridge II.


UPDATED

2.6.1 ASPHALT PAVING – The roads are due for a seal coat. We recommend 3% repair at each repair cycle. The repair cycle remains at 6 years, with the next repair in Year 1 (2016). The budget has been recalculated.

Seal Coat

, $. $ , Repair

, $ . % $ ,

Total

$ , $ , $ , 3.3.1 CONCRETE PAVING– The sidewalks are in good condition and the

association has replaced walk due to root damage. We recommend an allowance of $5000 to accommodate occasional repairs as needed. The repair cycle remains at 10 years, with the next repair in Year 10 (2025).

6.1.1 EXTERIOR DECKS – The Association has spent $110,000 in 2013 and $23,000 in 2014 on deck repairs and is in the process of major repairs to thirteen decks in 2015. We recommend planning for 20% of the decks to undergo reconstruction each repair cycle. The repair cycle has been adjusted to 5 years, with the next repair in Year 5 (2020).

$ % $ , 6.1.2 DECK INSPECTION– The repair cycle remains at 10 years, with the next repair

in Year 5 (2025). The budget has been set as an allowance at $5000.

6.1.3 TRASH ENCLOSURES– The trash enclosures appear in good condition and with proper maintenance should last some time. The repair cycle has been reset to 5 years, with the next repair in Year 5 (2020). The budget has been adjusted as an allowance to $4000.

6.2.1 EXTERIOR TRIM – REPAIRS – The Association reports spending $21,000 on column and fascia repairs this year, so we have added this component to the Reserve Study. We recommend an allowance of $25,000 each repair cycle. The repair cycle has been set at 7 years, with the next repair in Year 7 (2022).


6.2.2 EXTERIOR SIDING – REPLACE – The exterior siding appears to be weathering as expected. The repair cycle remains at 40 years, with the next repair in Year 24 (2039). The budget has been recalculated.

, $ $ , , 6.4.1 EXTERIOR STAIRS – REPAIRS – The exterior stairs are holding up well, likely

because they are covered from direct rainfall. The repair cycle remains at 10 years, with the next repair in Year 7 (2022). The budget has been set as an allowance to $12,000.

7.3.1 GUTTERS/DOWNSPOUTS – REPAIRS – We recommend an allowance of $4000 each repair cycle. The repair cycle remains at 5 years, with the next repair in Year 5 (2020).

7.3.1 GUTTERS/DOWNSPOUTS – REPLACE – The repair cycle has been adjusted to 30 years to match the roof replacement schedule, with the next repair in Year 10 (2025). The budget has been recalculated.

, $ . $ , 7.4.1 ROOFING – REPAIRS – The Association reports some issues with roof leaks

and are investigating the problems. The repair cycle has been adjusted to 5 years, with the next repair in Year 1 (2016). The budget has been set at $25,000 as an allowance for repairs when needed.

7.4.1 ROOFING - REPLACE– The roofs are weathering as expected. The repair cycle has been adjusted to 30 years, with the next repair in Year 10 (2025). The budget has been recalculated to $504,000.

$ $ ,

8.5.1 WINDOWS – The Association has indicated the COA is responsibility for windows, so this component has been added to the study. The existing windows were installed about 1999 and have a 40-year life if properly maintained. The repair cycle is set at 40 years, with the next repair in Year 24 (2039).

, $ $ , 9.8.1 EXTERIOR PAINTING – The Association is currently painting wood trim and

accent siding in all the building at a cost of $90,000. The repair cycle remains at


7 years, with the next repair in Year 7 (2022). The budget has been adjusted to $90,000 to reflect the current painting contract.

10.4.1 SIGNAGE – The metal signage is durable and should last a long time. The repair cycle remains at 20 years, with the next repair in Year 16 (2031). The budget has been set at $5000.

10.5.1 MAILBOXES – The mailboxes are in good condition. The repair cycle remains at 25 years, with the next repair in Year 19 (2034).

$ $ $ , 15.2.1 PLUMBING – REPAIRS – The repair cycle remains at 10 years, with the next

repair in Year 4 (2019). The budget has been set at $20,000 as an allowance to use as needed for repairs.

15.4.2 STORM DRAINAGE – The repair cycle remains at 10 years, with the next repair in Year 4 (2019). The budget has been set at $10,000 as an allowance to use as needed for repairs.

16.3.1 ELECTRICAL – The Association reports no electrical issues. The repair cycle remains at 10 years, with the next repair in Year 10 (2025). The budget has been set at $20,000 as an allowance to use as needed for repairs.

16.6.1 EXTERIOR LIGHTING – The Association does not anticipate exterior lighting work in the near future and some have been replaced with energy efficient fixtures. The repair cycle remains at 5 years, with the next repair in Year 5 (2020). The budget has been reset to $15,000 to allow replacement of fewer fixtures on a more frequent schedule that the fixture life of 15-20 years.

20.1.1 RESERVE STUDY W/ SITE VISIT – The repair cycle remains at 3 years, with the next update with site visit in Year 3 (2018) at a budget of $2300.

COMPONENT FUNDING EXCLUDED FROM THE RESERVE STUDY

The following components may qualify for inclusion within the Reserve Study but have been excluded from the budget for the following reasons:

Landscaping – Maintained through operating budget.

Rockery Walls – Expected to last longer than 30-year reserve timeline.

Exterior Doors – Maintained through operating budget.


FINANCIAL ANALYSIS & RESERVE CONTRIBUTION RECOMMENDATIONS For budgeting purposes, we recommend that Fir Ridge II set the contribution rate at $157,300 for reserves beginning in 2016. This amount should increase annually with inflation. This amount is determined using the Cash Flow method with a Threshold Funding plan, to provide adequate reserves each time an expense is anticipated, with a minimum level of reserves (the threshold) equal to one year's annual reserve contribution at all times during the study period, so that no special assessments will be required. These figures are based on a reserve balance on July 21, 2015 of $943,252, plus a planned remaining 2015 reserve contribution of $55,500. Figures were provided by an association representative. Fir Ridge II should determine the best reserve funding level for their association based on their maintenance needs and risk aversion.

Recommended 2016 Contribution $157,300Recommended Contribution per Month $13,108Average Contribution per Unit per Year $ 989Average Contribution per Unit Per Month $ 82Average Contribution per Unit per Year as a Percentage of Average Unit Value

0.82%

The contribution as a percentage of average unit value is calculated to provide a way for owners, and prospective owners, to compare the reserve requirements of one association with that of another association or of single-family home ownership. Typically, condominium associations in the Puget Sound area need to set aside from 1/2% to 1% of their average unit value, homeowners’ associations need to put aside 1/3% to 1/2% and single family homeowners should put aside 1% to 2% each year.

See the Tables & Graphs section for additional information on contribution rates, expected expenses, and projected inflated values.

FUNDING PLANS As noted above, an annual contribution of $157,300 is a Threshold Funding plan to provide funding as expenses are incurred over time, while maintaining a minimum reserve balance of one year's annual reserve contribution. Absent specific instructions from clients, or unusual circumstances, this is our recommended funding plan.

An alternative strategy Fir Ridge II could employ is Baseline Funding. This provides for necessary expenditures without maintaining a minimum reserve balance. To pursue such a strategy, the recommended Baseline Funding contribution rate would be $150,100.

Fir Ridge II could also consider contributions to obtain and maintain the level of reserves to be Fully Funded, so that the Percent Fully Funded is 100% by Year 30. The recommended Full Funding contribution rate would be $162,300.


We recommend that Fir Ridge II adopt a policy regarding their reserve funding which would address the level of funding that the Association would strive to maintain, as well as methods of investing reserve funds to best match risk with return and investment length with expected expenses.

FULLY FUNDED BALANCE CALCULATIONS The Fully Funded Balance for Fir Ridge II is $1,426,656. The actual current funding is $943,252. The Association is approximately 66% funded. This means that based on a straight line savings for each reserve component, the Association saved 66% of the accumulated depreciation of the reserve components.

Generally, associations that are

60% or more Funded are considered reasonably well funded; 25% to 60% are considered adequately funded; 25% or less Funded are considered at high risk for special assessment.

At 66%, Fir Ridge II is considered well funded.

See the Fully Funded Balance Calculation table for more detail, and the graph for a visual representation of the current level of funding.


DISCLOSURES 1 – RESERVE CONSULTANTS LLC ALSO PROVIDES CONSTRUCTION INSPECTION SERVICES FOR CONDOMINIUMS, AND DOES DESIGN AND CONSTRUCTION OVERSIGHT FOR MAJOR REPAIR PROJECTS, INCLUDING ROOFING, DECKS AND BUILDING ENVELOPE REPLACEMENT.

2 – NO SHAREHOLDER OR EMPLOYEE OF RESERVE CONSULTANTS LLC HAS ANY INTEREST IN, OR OBLIGATION TO, ANY CONSTRUCTION COMPANY, MANAGEMENT COMPANY, OR DEVELOPMENT ENTITY THAT CREATES CONDOMINIUMS.

3 – RESERVE CONSULTANTS LLC HAS BEEN A MEMBER OF COMMUNITY ASSOCIATION INSTITUTE SINCE ABOUT 1993, AND HAS PERFORMED WORK FOR MANY ASSOCIATION MANAGERS.

4 – THIS REPORT AND ANALYSIS IS BASED UPON OBSERVATIONS OF THE VISIBLE AND APPARENT CONDITION OF THE BUILDING AND ITS MAJOR COMPONENTS ON THE DATE OF THE INSPECTION. ALTHOUGH CARE HAS BEEN TAKEN IN THE PERFORMANCE OF THIS INSPECTION, RESERVE CONSULTANTS LLC (AND/OR ITS REPRESENTATIVES) MAKE NO REPRESENTATIONS REGARDING LATENT OR CONCEALED DEFECTS WHICH MAY EXIST AND NO WARRANTY OR GUARANTEE IS EXPRESSED OR IMPLIED. THIS REPORT IS MADE ONLY IN THE BEST EXERCISE OF OUR ABILITY AND JUDGMENT. CONCLUSIONS IN THIS REPORT ARE BASED ON ESTIMATES OF THE AGE AND NORMAL WORKING LIFE OF VARIOUS ITEMS OF EQUIPMENT AND APPLIANCES. PREDICTIONS OF LIFE EXPECTANCY AND THE BALANCE OF USEFUL LIFE ARE NECESSARILY BASED ON INDUSTRY AND/OR STATISTICAL COMPARISONS. IT IS ESSENTIAL TO UNDERSTAND THAT ACTUAL CONDITIONS CAN ALTER THE USEFUL LIFE OF ANY ITEM. THE PREVIOUS USE OR MISUSE, IRREGULARITY OF SERVICING, FAULTY MANUFACTURE, UNFAVORABLE CONDITIONS, ACTS OF GOD, AND UNFORESEEN CIRCUMSTANCES MAKE IT IMPOSSIBLE TO STATE PRECISELY WHEN EACH ITEM WOULD REQUIRE REPLACEMENT. THE CLIENT HEREIN SHOULD BE AWARE THAT CERTAIN COMPONENTS WITHIN THE ABOVE REFERENCED PROPERTY MAY FUNCTION CONSISTENT WITH THEIR PURPOSE AT THE TIME OF INSPECTION, BUT DUE TO THEIR NATURE, ARE SUBJECT TO DETERIORATION WITHOUT NOTICE.

5 – UNLESS OTHERWISE NOTED, ALL RESERVE COMPONENTS ARE ASSUMED TO MEET THE BUILDING CODE REQUIREMENTS IN FORCE AT THE TIME OF CONSTRUCTION. INFORMATION PROVIDED BY THE CLIENT IS ASSUMED TO BE ACCURATE AND RELIABLE.

6 – CONCLUSIONS REACHED IN THIS REPORT ASSUME RESPONSIBLE OWNERSHIP AND COMPETENT MANAGEMENT OF THE PROPERTY. INFORMATION PROVIDED BY OTHERS IS BELIEVES TO BE RELIABLE, BUT WE ASSUME NO RESPONSIBILITY FOR ACCURACY THEREOF


APPENDIX - GLOSSARY OF TERMS Baseline Funding (contribution rate) – A Reserve Contribution Rate that is constant,

increasing with inflation, to provide funds for all anticipated Reserve Expenses so that no special assessments are required for 30 years, but with no contingency some years.

Building Codes - Nationally recognized standards used to gauge the acceptability of a particular material or building procedure. Typically, if something is built to "code," it is acceptable to all concerned. Some often used codes are International Building Code (IBC) (applicable to most multifamily housing), International Residential Code (IRC)(applicable to one and two family structures), Washington Energy Code, National Electric Code (NEC), Uniform Plumbing Code (UPC) , and the National Fire Protection Association Standards (NFPA). These are usually amended slightly by each city or county.

Building Component – see “Reserve Component”.

Component Number - A number assigned to each building component that allows grouping of like components. Based roughly on Construction Industry Standards.

Common Elements – Those portions of the building which are owned collectively by all Unit owners in a condominium, and for which the association is responsible.

"Contribution Rate" means, in a Reserve Study as described in RCW 64.34, the amount contributed to the reserve account so that the association will have cash reserves to pay major maintenance, repair, or replacement costs without the need of a special assessment. RCW 64.34.020 (10)

Constant Dollars - Pretends that inflation does not exist. Shows all costs and contributions in today’s dollars, no matter how far in the future they occur.

”Effective Age” means the difference between the useful life and the remaining useful life. RCW 64.34.020 (19)

"Fully Funded Balance" means the value of the deteriorated portion of all the reserve components. The fully funded balance for each reserve component is calculated by multiplying the current replacement cost of that reserve component by its effective age, then dividing the result by that reserve component's useful life. The sum total of all reserve components' fully funded balances is the association's fully funded balance. RCW 64.34.020 (22)

Fully Funded (contribution rate) - A Reserve Contribution Rate that is constant, increasing with inflation, that will bring the Reserve Account balance up to the “Fully Funded Balance” level and keep it there.

Inflated Dollars - As opposed to constant dollars, inflated dollars recognize that costs in the future will probably be higher than today because each dollar will buy fewer goods and services. A rate of inflation must be assumed and applied to all future costs. Also referred to as future cost.


Inflation Multiplier - 100% plus the assumed rate of inflation. Thus, for an assumed yearly inflation rate of 5%, the "multiplier" would be 105% or 1.05 if expressed as a decimal number rather than as a percentage. Each successive year the previous year's "multiplier" is multiplied by this number to arrive at the next year's "multiplier."

Interest Rate Multiplier - The assumed rate of interest earned on the average annual reserve bank account balance. Thus, 4% interest would be 0.04 expressed as a decimal number. A rate of interest earned must be assumed for all future years. Typically this is lower than the rate of inflation.

Limited Common Element – those common elements which are assigned exclusively to one or some Units. Unit owners may be responsible for the cost to repair and maintain limited common elements, so those costs may not appear in a Reserve Study.

Next Repair – the next time the “Repair Cycle” starts with work on a component.

Percent Fully Funded – The percentage of the “Fully Funded Balance” which the current condominium Reserve Account actually has in it.

RCW – the Revised Code of Washington. RCW 64.34 is the Washington Condominium Act, the statute that governs condominiums.

”Remaining useful life” means the estimated time, in years, that a reserve component can be expected to continue to serve its intended function. RCW 64.34.020 (31)

Repair Cycle – the frequency of repair to maintain a component to reach or extend its Useful Life. Often shorter than the full “Useful Life” for repairs less than complete replacement.

”Replacement cost” means the current cost of replacing, repairing, or restoring a reserve component to its original functional condition. RCW 64.34.020 (32)

Reserve Account - Money set aside for future repair and replacement projects. For condominiums, the RCW requires a separate Reserve Account be maintained to hold reserves to fund repair or replacement of Reserve Components.

"Reserve components" means common elements whose cost of maintenance, repair, or replacement is infrequent, significant, and impractical to include in an annual budget. RCW 64.34.020 (34)

Reserve Contribution - The amount of money saved to fund “replacement Costs” for maintenance and repairs of Common Elements. See “Contribution Rate”. Current contributions and recommended contributions may be different.

Reserve Specialist – A designation for those professionals who have met the standards established by Community Associations Institute (www.caionline.org) for Reserve Study providers.


Reserve Study - A physical assessment of a building and a subsequent report which estimates the anticipated major maintenance, repair, and replacement costs, whose infrequent and significant nature make them impractical to be included in an annual budget, which will need to be repaired or replaced over the next 30 years. It provides estimates of these replacement costs and details expected annual expenditures. It is used to calculate the Reserve Contribution Rate required to maintain a facility in good condition both functionally and cosmetically. The Washington Condominium Act sets out requirements for annual reserve studies.

"Reserve study professional" means an independent person suitably qualified by knowledge, skill, experience, training, or education to prepare a reserve study in accordance with RCW 64.34. RCW 64.34.020 (35)

Special Assessment - A levy against all unit owners that is necessary when a needed repair/replacement/upgrade has not been planned for, and for which insufficient money has been saved.

Threshold Funding (contribution rate) – A Reserve Contribution Rate that is constant, increasing with inflation, to provide funds for all anticipated Reserve Expenses for the life of the study, but leaving a minimum level of Reserves (the “threshold”) at all times. Our default minimum threshold is one year’s contribution.

Typ. - Abbreviation for ‘typical’; used on photographs and in text to refer to a problem that is shown or described once, but applies to many locations.

Typical Life - An average expected life for an average building component. As in any statistical average, there is a range of years over which each individual item might fall. This is the same as “Useful life”

“Useful life” means the estimated time, in years, that a reserve component can be expected to serve its intended function. RCW 64.34.020 (40)

Year End Balance or Reserve Balance - What is projected to be left in the reserve account after the expected yearly expenses and contributions are added to the prior year's carryover balance. Assumes that the reserve contributions and expenses occur as predicted.

Yearly Expenses - The total labor and material costs associated with all of the repairs/maintenance that are scheduled in that particular year.

30 Year Spreadsheet - A summary listing each building component and its yearly cost to maintain/repair over the next 30 years. It also lists the annual reserve balance, reserve contributions, reserve expenses and bank interest earned on any reserve balance.


APPENDIX – EVALUATORS’ CREDENTIALS DENISE DANA PRINCIPAL, RESERVE CONSULTANTS LLC B.S. EDUCATION, M. ARCHITECTURE WASHINGTON REGISTERED ARCHITECT, #8702 LEED ACCREDITED PROFESSIONAL Denise Dana first obtained licensure as an Architect and became a LEED accredited professional in 2003. She is currently a licensed Architect in the State of Washington and is certified by the National Council of Architectural Registration Boards. With over fifteen years of experience in architecture, her resume includes a variety of project types ranging from residential to corporate. She has worked through all phases of construction including design development, construction documentation and construction administration with project budgets varying from a few thousand dollars to over sixty million dollars. Denise has been conducting reserve studies since joining Reserve Consultants in 2008; in 2011 she was recognized as a “Reserve Specialist” by the Community Association Institute.

ERIE STONE ASSOCIATE, RESERVE CONSULTANTS LLC

B.A. ARCHITECTURE WASHINGTON REGISTERED ARCHITECT LEED ACCREDITED PROFESSIONAL

Erie Stone obtained licensure as an Architect over 30 years ago and became a LEED accredited professional in 2007. He is currently a licensed Architect in Washington and is certified by the National Council of Architectural Registration Boards. Erie holds a Bachelor of Architecture degree from Washington State University. An experienced Architect, his resume includes a variety of projects ranging from residential to corporate, with emphasis on remodels. His projects include post offices, VA domiciliary housing, hospital administration buildings, emergency rooms, a courthouse remodel, numerous department stores, specialty retail stores and shopping malls. He has worked in depth through all phases of construction, including design, design development, construction documents, bidding and construction administration. The projects vary from small remodels of a few thousand dollars to a hundred million dollars.


APPENDIX - GRAPHS & TABLES The following pages include the graphs and tables, which illustrate our findings and were used to determine the optimum annual reserve contribution rate to the reserve account. It is important to realize that some of these items have large unknowns for both time and price. The estimates are based upon experience, industry averages and apparent component condition.

There are two categories of graphs and tables Fully Funded Balance related and Reserve Projections related. The Fully Funded Balance material details how Fir Ridge II’s Fully Funded Balance was reached, along with its Percent Fully Funded and how we project they will change over time. The Reserve Projections material details the anticipated repairs and expected financial data over the next 30 years, both in constant dollars at today’s value, and using our inflation forecasts.

The included Fully Funded Balance graphs and tables are

Table – Fully Funded Balance Calculations

Graph – Percent Fully Funded

Graph – Inflated Percent Funded at Year End Over 30 Years at Recommended Contribution Rate

Graph – Current Contribution & Recommended Contribution Year End Reserve Fund Balance Comparison

The included Reserve Projection graphs and tables are

Graph – Fir Ridge II Reserve Projections: 2015 Constant Dollars

Table – Reserve Study Projections: 30-Year Spreadsheet with Constant Dollars

Graph – Fir Ridge II Reserve Projections: Inflated Dollars

Table – Reserve Study Projections: 30-Year Spreadsheet Allowing for Inflation

Fully Funded Balance Calculations FIR RIDGE II

QUANTITY UNIT REPAIR CYCLEREMAINING

USEFUL LIFECURRENT

REPLACE COST

FULLY FUNDED

BALANCE

2.6.1 ASPHALT PAVING 102800 SF 6 1 54,310$ 45,258$

3.3.1 CONCRETE PAVING 22000 SF 10 10 5,000$ -$

6.1.1 EXTERIOR DECKS 3200 SF 5 5 22,960$ -$

6.1.2 DECK INSPECTION 1 LS 10 5 5,000$ 2,500$

6.1.3 TRASH ENCLOSURES 6 EA 5 5 4,000$ -$

6.2.1 EXTERIOR TRIM - REPAIRS 1 LS 7 7 25,000$ -$

6.2.2 EXTERIOR SIDING - REPLACE 136300 SF 40 24 1,629,740$ 651,896$

6.4.1 EXTERIOR STAIRS - REPAIRS 34 EA 10 7 12,000$ 3,600$

7.3.1 GUTTERS/DOWNSPOUTS - REPAIRS 14310 LF 5 5 4,000$ -$

7.3.1 GUTTERS/DOWNSPOUTS - REPLACE 14310 LF 25 10 81,510$ 48,906$

7.4.1 ROOFING - REPAIRS 854 SQ 5 1 25,000$ 20,000$

7.4.1 ROOFING - REPLACE 854 SQ 30 10 417,730$ 278,487$

8.5.1 WINDOWS 19100 SF 40 24 872,000$ 348,800$

9.8.1 EXTERIOR PAINTING 159 UNITS 7 7 90,000$ -$

10.4.1 SIGNAGE 1 EA 20 16 5,000$ 1,000$

10.5.1 MAILBOXES 14 UNITS 25 19 24,620$ 5,909$

15.2.1 PLUMBING - REPAIRS 159 UNITS 10 4 20,000$ 12,000$

15.4.2 STORM DRAINAGE 1 LS 10 4 10,000$ 6,000$

16.3.1 ELECTRICAL 24 BLDG 10 10 20,000$ -$

16.6.1 EXTERIOR LIGHTING 400 EA 5 5 15,000$ -$

20.1.1 RESERVE STUDY W/ SITE VISIT 1 EA 3 0 2,300$ 2,300$ FULLY FUNDED BALANCE Total 1,426,656$

ACTUAL RESERVE BALANCE = 943,252$ PERCENT FULLY FUNDED = 66% 9/29/2015

EA each LF linear foot SQ roofing square

BLDG building(s) LS lump sum SY square yard

FIXT fixture(s) SF square foot ZN zone

ABBREVIATION KEY

COMPONENT DESCRIPTION

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

TIME OF STUDY PROJECTEDYEAR-END 2016

66% 72%

34% 28%

FIR RIDGE IIPERCENT FULLY FUNDED GRAPH

UNFUNDED BALANCE

ACTUAL RESERVE BALANCE %

0%

20%

40%

60%

80%

100%

120%

140%

INFLATED PERCENT FUNDED AT YEAR END OVER 30 YEARS ATRECOMMENDED CONTRIBUTION RATE

($3,000,000)

($2,000,000)

($1,000,000)

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

CURRENT CONTRIBUTION & RECOMMENDED CONTRIBUTIONYEAR END RESERVE FUND BALANCE COMPARISON

(CONTRIBUTIONS AND EXPENSES INFLATED)

RECOMMENDEDCONTRIBUTIONCURRENTCONTRIBUTION

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

YEARS

FIR RIDGE II RESERVE STUDY PROJECTIONS: 2015 CONSTANT DOLLARS

END BALANCE

CONTRIBUTION

YEARLY COST

Fir Ridge II 2015-09-29 dd.xlsx

DATE:REPAIR NEXT 0 1 2 3 4 5 6 7 8 9 10

# COMPONENT NAME CYCLE EXP. 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

$0.53 2.6.1 ASPHALT PAVING 6 1 $54,310 $54,310

$0.23 3.3.1 CONCRETE PAVING 10 10 $5,000

$7.18 6.1.1 EXTERIOR DECKS 5 5 $22,960 $22,960

####### 6.1.2 DECK INSPECTION 10 5 $5,000

$666.67 6.1.3 TRASH ENCLOSURES 5 5 $4,000 $4,000

####### 6.2.1 EXTERIOR TRIM - REPAIRS 7 7 $25,000

$11.96 6.2.2 EXTERIOR SIDING - REPLACE 40 24

$352.94 6.4.1 EXTERIOR STAIRS - REPAIRS 10 7 $12,000

$0.28 7.3.1 GUTTERS/DOWNSPOUTS - REPAIRS 5 5 $4,000

$5.70 7.3.1 GUTTERS/DOWNSPOUTS - REPLACE 25 10 $81,510

$29.27 7.4.1 ROOFING - REPAIRS 5 1 $25,000 $25,000

$489.15 7.4.1 ROOFING - REPLACE 30 10 $417,730

$45.65 8.5.1 WINDOWS 40 24

$566.04 9.8.1 EXTERIOR PAINTING 7 7 $90,000

####### 10.4.1 SIGNAGE 20 16

####### 10.5.1 MAILBOXES 25 19

$125.79 15.2.1 PLUMBING - REPAIRS 10 4 $20,000

####### 15.4.2 STORM DRAINAGE 10 4 $10,000

$833.33 16.3.1 ELECTRICAL 10 10 $20,000

$37.50 16.6.1 EXTERIOR LIGHTING 5 5 $15,000 $15,000

####### 20.1.1 RESERVE STUDY W/ SITE VISIT 3 0 $2,300 $2,300 $2,300 $2,300

TOTAL EXPENDED BY YEAR $2,300 $79,310 $2,300 $30,000 $50,960 $27,300 $181,310 $2,300 $566,200CARRY OVER RESERVES $943,252 $996,452 $1,069,860 $1,222,579 $1,372,997 $1,495,716 $1,597,474 $1,722,893 $1,694,301 $1,847,020 $1,997,438

ANNUAL RESERVE CONTRIB $55,500 $152,718 $152,718 $152,718 $152,718 $152,718 $152,718 $152,718 $152,718 $152,718 $152,718SPECIAL ASSESSMENT

RESERVE EXPENDITURES $2,300 $79,310 $2,300 $30,000 $50,960 $27,300 $181,310 $2,300 $566,200ACCUMULATED RESERVES $996,452 $1,069,860 $1,222,579 $1,372,997 $1,495,716 $1,597,474 $1,722,893 $1,694,301 $1,847,020 $1,997,438 $1,583,956

INTEREST EARNEDYEAR-END BALANCE $996,452 $1,069,860 $1,222,579 $1,372,997 $1,495,716 $1,597,474 $1,722,893 $1,694,301 $1,847,020 $1,997,438 $1,583,956

NOTES: 1. Year Zero carry over balance is the current actual reserve balance as reported to Reserve Consultants LLC

2. Year Zero reserve contribution is that estimated for the remainder of the year, following preparation of this report.

FIR RIDGE II

29-Sep-15

Reserve Consultants LLC30-YEAR SPREADSHEET WITH CONSTANT DOLLARS

Reserve Study Projections

COPYRIGHT 2015 Reserve Consultants LLC

PER YEAR EXPENSES IN 2015 DOLLARS


DATE:REPAIR NEXT

# COMPONENT NAME CYCLE EXP.

$0.53 2.6.1 ASPHALT PAVING 6 1

$0.23 3.3.1 CONCRETE PAVING 10 10

$7.18 6.1.1 EXTERIOR DECKS 5 5

####### 6.1.2 DECK INSPECTION 10 5

$666.67 6.1.3 TRASH ENCLOSURES 5 5

####### 6.2.1 EXTERIOR TRIM - REPAIRS 7 7


$352.94 6.4.1 EXTERIOR STAIRS - REPAIRS 10 7

$0.28 7.3.1 GUTTERS/DOWNSPOUTS - REPAIRS 5 5

$5.70 7.3.1 GUTTERS/DOWNSPOUTS - REPLACE 25 10

$29.27 7.4.1 ROOFING - REPAIRS 5 1

$489.15 7.4.1 ROOFING - REPLACE 30 10

$45.65 8.5.1 WINDOWS 40 24

$566.04 9.8.1 EXTERIOR PAINTING 7 7

####### 10.4.1 SIGNAGE 20 16

####### 10.5.1 MAILBOXES 25 19

$125.79 15.2.1 PLUMBING - REPAIRS 10 4

####### 15.4.2 STORM DRAINAGE 10 4

$833.33 16.3.1 ELECTRICAL 10 10

$37.50 16.6.1 EXTERIOR LIGHTING 5 5

####### 20.1.1 RESERVE STUDY W/ SITE VISIT 3 0

TOTAL EXPENDED BY YEARCARRY OVER RESERVES

ANNUAL RESERVE CONTRIBSPECIAL ASSESSMENT

RESERVE EXPENDITURESACCUMULATED RESERVES

INTEREST EARNEDYEAR-END BALANCE

FIR RIDGE II

29-Sep-1511 12 13 14 15 16 17 18 19 20

2026 2027 2028 2029 2030 2031 2032 2033 2034 2035

$54,310 $54,310

$5,000

$22,960 $22,960

$5,000

$4,000 $4,000

$25,000

$12,000

$4,000

$25,000 $25,000

$90,000

$5,000

$24,620

$20,000

$10,000

$20,000

$15,000 $15,000

$2,300 $2,300 $2,300

$25,000 $2,300 $54,310 $145,000 $49,260 $30,000 $12,000 $2,300 $78,930 $70,960$1,583,956 $1,711,675 $1,862,093 $1,960,502 $1,968,220 $2,071,679 $2,194,397 $2,335,116 $2,485,534 $2,559,322

$152,718 $152,718 $152,718 $152,718 $152,718 $152,718 $152,718 $152,718 $152,718 $152,718

$25,000 $2,300 $54,310 $145,000 $49,260 $30,000 $12,000 $2,300 $78,930 $70,960$1,711,675 $1,862,093 $1,960,502 $1,968,220 $2,071,679 $2,194,397 $2,335,116 $2,485,534 $2,559,322 $2,641,081

$1,711,675 $1,862,093 $1,960,502 $1,968,220 $2,071,679 $2,194,397 $2,335,116 $2,485,534 $2,559,322 $2,641,081

NOTES: 1. Year Zero carry over balance is the current actual reserve balance as reported to Reserve Consultants LLC2. Year Zero reserve contribution is that estimated for the remainder of the year, following preparation of this report.



30-YEAR SPREADSHEET WITH CONSTANT DOLLARSReserve Consultants, LLC



DATE:REPAIR NEXT


$0.53 2.6.1 ASPHALT PAVING 6 1

$0.23 3.3.1 CONCRETE PAVING 10 10

$7.18 6.1.1 EXTERIOR DECKS 5 5

####### 6.1.2 DECK INSPECTION 10 5

$666.67 6.1.3 TRASH ENCLOSURES 5 5

####### 6.2.1 EXTERIOR TRIM - REPAIRS 7 7


$352.94 6.4.1 EXTERIOR STAIRS - REPAIRS 10 7

$0.28 7.3.1 GUTTERS/DOWNSPOUTS - REPAIRS 5 5

$5.70 7.3.1 GUTTERS/DOWNSPOUTS - REPLACE 25 10

$29.27 7.4.1 ROOFING - REPAIRS 5 1

$489.15 7.4.1 ROOFING - REPLACE 30 10

$45.65 8.5.1 WINDOWS 40 24

$566.04 9.8.1 EXTERIOR PAINTING 7 7

####### 10.4.1 SIGNAGE 20 16

####### 10.5.1 MAILBOXES 25 19

$125.79 15.2.1 PLUMBING - REPAIRS 10 4

####### 15.4.2 STORM DRAINAGE 10 4

$833.33 16.3.1 ELECTRICAL 10 10

$37.50 16.6.1 EXTERIOR LIGHTING 5 5

####### 20.1.1 RESERVE STUDY W/ SITE VISIT 3 0





FIR RIDGE II

29-Sep-1521 22 23 24 25 26 27 28 29 30

2036 2037 2038 2039 2040 2041 2042 2043 2044 2045

$54,310

$5,000

$22,960 $22,960

$5,000

$4,000 $4,000

$25,000 $25,000

$1,629,740

$12,000

$4,000 $4,000

$25,000 $25,000

$872,000

$90,000 $90,000

$20,000

$10,000

$20,000

$15,000 $15,000

$2,300 $2,300 $2,300 $2,300

$142,300 $2,534,040 $105,270 $25,000 $14,300 $115,000 $73,260$2,641,081 $2,651,499 $2,804,218 $2,956,936 $575,615 $623,063 $750,782 $889,200 $926,918 $1,079,637

$152,718 $152,718 $152,718 $152,718 $152,718 $152,718 $152,718 $152,718 $152,718 $152,718

$142,300 $2,534,040 $105,270 $25,000 $14,300 $115,000 $73,260$2,651,499 $2,804,218 $2,956,936 $575,615 $623,063 $750,782 $889,200 $926,918 $1,079,637 $1,159,095

$2,651,499 $2,804,218 $2,956,936 $575,615 $623,063 $750,782 $889,200 $926,918 $1,079,637 $1,159,095




30-YEAR SPREADSHEET WITH CONSTANT DOLLARSReserve Consultants, LLC


$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

YEARS

FIR RIDGE II RESERVE STUDY PROJECTIONS: INFLATED DOLLARS

END BALANCE

CONTRIBUTION

YEARLY COST


DATE:REPAIR NEXT 0 1 2 3 4 5 6 7 8 9 10

# COMPONENT NAME CYCLE EXP. 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

2.6.1 ASPHALT PAVING 6 1 $55,939 $70,781

3.3.1 CONCRETE PAVING 10 10 $7,330

6.1.1 EXTERIOR DECKS 5 5 $27,666 $33,660

6.1.2 DECK INSPECTION 10 5 $6,025

6.1.3 TRASH ENCLOSURES 5 5 $4,820 $5,864

6.2.1 EXTERIOR TRIM - REPAIRS 7 7 $32,582

6.2.2 EXTERIOR SIDING - REPLACE 40 24

6.4.1 EXTERIOR STAIRS - REPAIRS 10 7 $15,639

7.3.1 GUTTERS/DOWNSPOUTS - REPAIRS 5 5 $4,820

7.3.1 GUTTERS/DOWNSPOUTS - REPLACE 25 10 $119,495

7.4.1 ROOFING - REPAIRS 5 1 $25,750 $31,329

7.4.1 ROOFING - REPLACE 30 10 $612,397

8.5.1 WINDOWS 40 24

9.8.1 EXTERIOR PAINTING 7 7 $117,295

10.4.1 SIGNAGE 20 16

10.5.1 MAILBOXES 25 19

15.2.1 PLUMBING - REPAIRS 10 4 $23,172

15.4.2 STORM DRAINAGE 10 4 $11,586

16.3.1 ELECTRICAL 10 10 $29,320

16.6.1 EXTERIOR LIGHTING 5 5 $18,074 $21,990

20.1.1 RESERVE STUDY W/ SITE VISIT 3 0 $2,300 $2,562 $2,882 $3,242

TOTAL EXPENDED BY YEAR $2,300 $81,689 $2,562 $34,758 $61,404 $34,211 $236,297 $3,242 $830,056CARRY OVER RESERVES $943,252 $1,006,151 $1,092,201 $1,291,013 $1,499,830 $1,689,140 $1,864,268 $2,079,722 $2,104,292 $2,377,522 $2,664,062

ANNUAL RESERVE CONTRIB $55,500 $157,300 $163,592 $170,136 $176,941 $184,019 $191,380 $199,035 $206,996 $215,276 $223,887SPECIAL ASSESSMENT

RESERVE EXPENDITURES $2,300 $81,689 $2,562 $34,758 $61,404 $34,211 $236,297 $3,242 $830,056ACCUMULATED RESERVES $996,452 $1,081,761 $1,255,793 $1,458,586 $1,642,013 $1,811,755 $2,021,437 $2,042,459 $2,311,288 $2,589,556 $2,057,893

INTEREST EARNED $9,699 $10,440 $35,220 $41,244 $47,128 $52,513 $58,286 $61,833 $66,234 $74,506 $70,829YEAR-END BALANCE $1,006,151 $1,092,201 $1,291,013 $1,499,830 $1,689,140 $1,864,268 $2,079,722 $2,104,292 $2,377,522 $2,664,062 $2,128,723

0-1 2-10 11-30INFLATION MULTIPLIER 1.03 1.04 1.04 1.00 1.03 1.07 1.11 1.16 1.20 1.25 1.30 1.36 1.41 1.47INTEREST RATE MULTIPLIER 0.01 0.03 0.03 0.01 0.01 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03


FIR RIDGE II

29-Sep-15


Reserve Study ProjectionsReserve Consultants LLC

30-YEAR SPREADSHEET ALLOWING FOR INFLATIONPER YEAR EXPENSES (adjusted for inflation)


DATE:REPAIR NEXT


2.6.1 ASPHALT PAVING 6 1

3.3.1 CONCRETE PAVING 10 10

6.1.1 EXTERIOR DECKS 5 5

6.1.2 DECK INSPECTION 10 5

6.1.3 TRASH ENCLOSURES 5 5

6.2.1 EXTERIOR TRIM - REPAIRS 7 7


6.4.1 EXTERIOR STAIRS - REPAIRS 10 7

7.3.1 GUTTERS/DOWNSPOUTS - REPAIRS 5 5

7.3.1 GUTTERS/DOWNSPOUTS - REPLACE 25 10

7.4.1 ROOFING - REPAIRS 5 1

7.4.1 ROOFING - REPLACE 30 10

8.5.1 WINDOWS 40 24

9.8.1 EXTERIOR PAINTING 7 7

10.4.1 SIGNAGE 20 16


15.2.1 PLUMBING - REPAIRS 10 4

15.4.2 STORM DRAINAGE 10 4

16.3.1 ELECTRICAL 10 10

16.6.1 EXTERIOR LIGHTING 5 5

20.1.1 RESERVE STUDY W/ SITE VISIT 3 0





0-1 2-10 11-30INFLATION MULTIPLIER 1.03 1.04 1.04INTEREST RATE MULTIPLIER 0.01 0.03 0.03

FIR RIDGE II

29-Sep-1511 12 13 14 15 16 17 18 19 20

2026 2027 2028 2029 2030 2031 2032 2033 2034 2035

$89,561 $113,323

$10,850

$40,952 $49,824

$8,918

$7,135 $8,680

$42,876

$23,150

$8,680

$38,116 $46,374

$154,352

$9,275

$51,372

$34,301

$17,150

$43,401

$26,754 $32,551

$3,647 $4,102 $4,615

$38,116 $3,647 $89,561 $248,679 $87,861 $55,649 $23,150 $4,615 $164,695 $153,987$2,128,723 $2,390,231 $2,704,025 $2,949,862 $3,051,794 $3,330,647 $3,661,620 $4,047,010 $4,474,738 $4,765,256

$232,842 $242,156 $251,842 $261,916 $272,393 $283,288 $294,620 $306,405 $318,661 $331,407

$38,116 $3,647 $89,561 $248,679 $87,861 $55,649 $23,150 $4,615 $164,695 $153,987$2,323,449 $2,628,740 $2,866,307 $2,963,099 $3,236,325 $3,558,286 $3,933,090 $4,348,801 $4,628,704 $4,942,676

$66,783 $75,285 $83,555 $88,694 $94,322 $103,334 $113,921 $125,937 $136,552 $145,619$2,390,231 $2,704,025 $2,949,862 $3,051,794 $3,330,647 $3,661,620 $4,047,010 $4,474,738 $4,765,256 $5,088,295

1.52 1.59 1.65 1.72 1.78 1.85 1.93 2.01 2.09 2.170.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03




30-YEAR SPREADSHEET ALLOWING FOR INFLATIONReserve Consultants, LLC

PER YEAR EXPENSES (adjusted for inflation)


DATE:REPAIR NEXT


2.6.1 ASPHALT PAVING 6 1

3.3.1 CONCRETE PAVING 10 10

6.1.1 EXTERIOR DECKS 5 5

6.1.2 DECK INSPECTION 10 5

6.1.3 TRASH ENCLOSURES 5 5

6.2.1 EXTERIOR TRIM - REPAIRS 7 7


6.4.1 EXTERIOR STAIRS - REPAIRS 10 7

7.3.1 GUTTERS/DOWNSPOUTS - REPAIRS 5 5

7.3.1 GUTTERS/DOWNSPOUTS - REPLACE 25 10

7.4.1 ROOFING - REPAIRS 5 1

7.4.1 ROOFING - REPLACE 30 10

8.5.1 WINDOWS 40 24

9.8.1 EXTERIOR PAINTING 7 7

10.4.1 SIGNAGE 20 16


15.2.1 PLUMBING - REPAIRS 10 4

15.4.2 STORM DRAINAGE 10 4

16.3.1 ELECTRICAL 10 10

16.6.1 EXTERIOR LIGHTING 5 5

20.1.1 RESERVE STUDY W/ SITE VISIT 3 0





0-1 2-10 11-30INFLATION MULTIPLIER 1.03 1.04 1.04INTEREST RATE MULTIPLIER 0.01 0.03 0.03

FIR RIDGE II

29-Sep-1521 22 23 24 25 26 27 28 29 30

2036 2037 2038 2039 2040 2041 2042 2043 2044 2045

$143,389

$16,061

$60,619 $73,752

$13,201

$10,561 $12,849

$56,421 $74,247

$4,137,351

$34,268

$10,561 $12,849

$56,421 $68,645

$2,213,709

$203,117 $267,288

$50,773

$25,387

$64,244

$39,603 $48,183

$5,191 $5,839 $6,568 $7,388

$321,151 $6,433,059 $277,934 $68,645 $40,836 $341,535 $235,327$5,088,295 $5,264,809 $5,786,581 $6,338,558 $392,676 $531,608 $903,508 $1,331,816 $1,485,470 $2,008,805

$344,664 $358,450 $372,788 $387,700 $403,208 $419,336 $436,109 $453,554 $471,696 $490,564

$321,151 $6,433,059 $277,934 $68,645 $40,836 $341,535 $235,327$5,111,808 $5,623,260 $6,159,369 $293,199 $517,949 $882,299 $1,298,782 $1,443,835 $1,957,166 $2,264,042

$153,002 $163,321 $179,189 $99,476 $13,659 $21,209 $33,034 $41,635 $51,640 $64,093$5,264,809 $5,786,581 $6,338,558 $392,676 $531,608 $903,508 $1,331,816 $1,485,470 $2,008,805 $2,328,135

2.26 2.35 2.44 2.54 2.64 2.75 2.86 2.97 3.09 3.210.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03




30-YEAR SPREADSHEET ALLOWING FOR INFLATIONReserve Consultants, LLC

PER YEAR EXPENSES (adjusted for inflation)

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