Reserve Fund Study - Silver Oak · Jeremy Bramwell, AACI, ... this Depreciation Report and Reserve...

Depreciation Report and Reserve Fund Study

Strata Corporation – LMS 2058

2890 – 2944 Panorama Drive & 1465 - 1490 Parkway Boulevard, Coquitlam, BC

Prepared For:

Strata Corporation LMS 2058 – Silver Oak

C/O Quay Pacific Property Management Ltd. 535 Front St.

New Westminster, BC, V3L 1A4

Effective Date:

September 30, 2013

Prepared By:

Jeremy Bramwell, AACI, RI, CRP

Bramwell & Associates Realty Advisors Inc.

Strata Reserve Planning

1400-355 Burrard Street

Vancouver, British Columbia, V6C 2G8

VancouverAppraisal.Com

StrataReservePlanning.Com

Appraisals Litigation Support Expropriation Property Tax Insurance Appraisals Depreciation Reports

1400-355 Burrard Street, Vancouver, BC V6C 2G8 Tel: 604-608-6161 Fax: 604-669-6968 Web :VancouverAppraisal.Com

January 10, 2014 File No.: 1214-13-CQ-TH-DR


C/O Gillian Jamieson, Property Manager

Quay Pacific Property Management Ltd.

535 Front St., New Westminster, BC,

V3L 1A4

Dear Strata Council:

Depreciation Report and Reserve Fund Study


2890 – 2944 Panorama Drive & 1465 - 1490 Parkway Boulevard, Coquitlam, BC

Pursuant to your request for a Depreciation Report and Reserve Fund Study of the within described

Strata Corporation, Bramwell & Associates Realty Advisors Inc. has prepared and submits to you

this report.

We recommend that a Reserve Fund plan and strategy be adopted and implemented, and that

Reserve Fund contributions be increased to $144,000 per annum in 2015, and further increased as

per the Schedule C.1 cash flow table each subsequent year. A $5,000,000 Special Levy is also

recommended in 2023, with periodic additional Special Levies to maintain an adequate Reserve

Fund. As outlined in this Depreciation Report, the current Reserve Fund balance, the recommended

Special Levies and the proposed Annual Reserve Fund contributions will ensure that reserve funds

are adequate to cover potential expenditures required to repair or replace common elements or

assets of the Strata Corporation when needed.

Bramwell & Associates Realty Advisors Inc. will be pleased to provide you with complete review

and updating services for the Reserve Fund of your Strata Corporation as required in three years.

We are also able to provide insurance valuation services for your strata corporation. We appreciate

that you trusted us with this opportunity to perform your Reserve Fund study and Depreciation

Report. If you have any questions, please do not hesitate to contact the undersigned.

Respectfully submitted,

Bramwell & Associates Realty Advisors Inc.

Jeremy Bramwell, AACI, P.App.,RI (BC), CRP

Address: 2890–2944 Panorama Drive & 1465-1490 Parkway Blvd. Coquitlam, V3E 3E6 of 120

Applicant: Strata Council - LMS 2058 File No: 1214-13-CQ-TH-DR

Bramwell & Associates Realty Advisors Inc. - Strata Reserve Planning Tel: 604-608-6161

1400-355 Burrard Street, Vancouver North America Toll Free 855-STRATA8 or 855-787-2828

TABLE OF CONTENTS

EXECUTIVE SUMMARY OF FACTS AND CONCLUSIONS 5

1. DEPRECIATION REPORT AND RESERVE FUND STUDY 21

1.1 Purpose of a Depreciation Report 21

1.2 Effective Date of the Report 21

1.3 Definition of Depreciation Report / Reserve Fund Study 21

1.4 British Columbia’s Strata Property Act (1998) – Reserve Fund 21

2. Methodology 21

2.1 Depreciation Report 21

2.2 Real Estate Institute of Canada Reserve Fund Planning Standards 21

2.3 General Conditions and Assumptions 23

2.4 Funding Models 23

2.5 Reserve Fund Projection Factors 25

2.6 Inflation Factors 25

2.7 Interest Rates 27

2.8 Canadian Uniform Standards of Professional Appraisal Practice 28

3. Property Information 29

3.1 Property Description 29

3.2 Building Plans 29

3.3 Property Data, Site Plan and Basic Construction 30

3.4 Bylaws and Charges 35

3.5 Occupant Survey Results 35

4. Reserve Component Analysis 36

4.1 Property Inspection 36

4.2 Reserve Fund Studies 36

4.3 Component Classification 36

4.4 Lifespan Analysis 36

4.5 Current Cost Estimates 37

4.6 Reserve Component Descriptions and Analyses 39

5. Reserve Fund Component Estimates 92

5.1 Bramwell & Associates Realty Advisors Benchmark Analysis 92

5.2 Schedule A –Schedule of Reserve Fund Component Estimates 92

5.3 Summary of Reserve Fund Estimates 94

6. Analysis of Reserve Fund Operations 95

6.1 Strata Corporation Financial Assumptions 95

6.2 Schedule B – Statement of Reserve Fund Operations 95

6.3 Benchmark Deficiency Analysis 95

6.4 Discussion on the Adequacy of a Reserve Fund 97

6.5 Strata Council’s Choice of Funding Model 98

6.6 Discussion on the Strength of the Reserve Fund 99

7. Reserve Fund Management – 30 Year Projection Scenarios 100

7.1 Schedules C.1, C.2 and C.3 – 30 Year Cash Flow and Deficiency Analysis 100

7.2 Projected Reserve Fund Expenditures 101

7.3 Reserve Fund Management 111

8. Recommendations 112

APPENDIX A – WRITER CREDENTIALS 114

APPENDIX B – ASSUMPTIONS AND LIMITING CONDITIONS 115

APPENDIX C – CERTIFICATION 120





IMPORTANT INFORMATION

This document has been provided pursuant to an agreement containing restrictions on its use. No

part of this report shall be reproduced or used in any form or by any means – graphic, electronic

or mechanical; including photocopying, recording, typing or information storage and retrieval –

without the written permission of Bramwell & Associates Realty Advisors Inc. ©Copyright 2011

– 2014 by Bramwell & Associates Realty Advisors.

Notwithstanding the foregoing, the client herein has permission to reproduce the report in whole

or in part for the legitimate purposes of providing information to the Strata Council, strata lot

owners and others who have an interest in the development. Specifically, the client has permission

to provide Depreciation Report and Reserve Fund study information in disclosure documents such

as a Form B.

This Depreciation Report and the parameters under which it has been completed are based upon

information provided to us in part by representatives of the strata corporation, its contractors,

assorted vendors, specialist and independent contractors, the Real Estate Institute of Canada, and

various construction pricing and scheduling manuals including, but not limited to: Marshall &

Swift Valuation Service, RS Means Facilities Maintenance & Repair Cost Data and RS Means

Repair & Remodeling Cost Data and McGraw-Hill Professional. Additionally, costs were obtained

from numerous vendor catalogues, actual quotations or historical costs, and our own experience in

the field of property management and Reserve Study preparation.

It has been assumed, unless otherwise noted in this report, that all assets have been designed and

constructed properly and that each estimated useful life will approximate that of the norm per

industry standards and/or manufacturer’s specifications. In some cases, estimates may have been

used on assets, which have an indeterminable but potential liability to the strata corporation. The

decision for the inclusion of these as well as all assets considered is left to the client.

We recommend that your Depreciation Report be updated regularly due to fluctuating interest

rates, inflationary changes, and the unpredictable nature of the lives of many of the assets under

consideration. All of the information collected during our inspection of the Strata Corporation and

computations made subsequently in preparing this Depreciation Report are retained in our

computer files. Therefore, annual updates may be completed quickly and inexpensively each year.

Preparing the annual budget and overseeing the Strata Corporation’s finances are perhaps the most

important responsibilities of Strata Council members. This Depreciation Report is provided as an

aid for budget planning purposes and not as an accounting tool. Since it deals with events yet to

take place, there is no assurance that the results enumerated within it will, in fact, occur as

described. The annual operating and reserve budgets reflect the planning and goals of the strata

corporation and set the level and quality of service for all of the strata corporation’s activities.

Bramwell & Associates would like to thank you for using our services. We invite you to call us at

any time, should you have questions, comments or need assistance.





EXECUTIVE SUMMARY OF FACTS AND CONCLUSIONS

Overview

This executive summary has been prepared as a reference to the pertinent facts and estimates of

this Depreciation Report and Reserve Fund Study, and it is provided as convenience only. Readers

are advised to refer to the full text of the Depreciation Report and Reserve Fund study that follow

for detailed information.

Client: Strata Corporation LMS 2058 – Silver Oak

C/O Gillian Jamieson, Property Manager

Quay Pacific Property Management Ltd.

535 Front St.,

New Westminster, BC

V3L 1A4

Date of Inspection: September 11, 2013

Effective Date: September 30, 2013

Property: Strata Corporation LMS 2058 – Silver Oak

1465 – 1490 Parkway Boulevard, Coquitlam, BC

Reserve Fund Groups: 14

4

3

5

1

7

12

1

Architectural Reserve Components

Roofing Reserve Components

Mechanical Reserve Components

Electrical Reserve Components

Mechanical Reserve Components

Site Improvements Reserve Components

Amenities Reserve Components

Consultant Report

Construction Inflation Rate: 3.25%

Investments Interest Rate: 1.50%

Year 1 Reserve Adequacy: 13%

Year 30 Reserve Adequacy: 50%

Significant Reserve Fund

Estimates:

Current Replacement Reserves or Costs: $10,876,387

Future Replacement Reserves or Costs: $19,946,995

Current Reserve Fund Requirements: $5,281,984

Future Reserve Fund Accumulations: $6,493,211

Future Reserve Fund Requirements: $13,453,784

Fully Funded Annual Reserve Fund Contributions: $679,791

Recommended Annual Contributions $144,000





What is a Depreciation Report?

A Depreciation Report (which includes a Reserve Fund Study) involves the art and science of

anticipating and preparing for a Strata Corporation’s common areas’ major repair and replacement

expenditures. It is part art, because we are making projections about the future. It is part science,

because our work is a process of research and analysis along well defined methodologies.

All depreciation reports begin with a Reserve Component List that determines what a Strata

Corporation is to reserve for in their Reserve Fund.

The component list contains our estimates for the

Expected Lifespan, the Effective Age, the Remaining

Lifespan, and the current repair or replacement cost for

each component that the Strata Corporation is obligated

to maintain and replace. Based on this Reserve

Component List and your starting Reserve Fund

balance, we calculate the Strata Corporation’s Reserve

Fund strength, measured in terms of its “Reserve

Adequacy” and then recommend a 30 year Reserve Fund plan to offset future Reserve Fund

expenditures.

As the physical assets (buildings and equipment) age and deteriorate, it is important to accumulate

financial assets (money) to keep the two “in balance”. A stable Contingency Reserve Fund that

offsets irregular expenditures will ensure that each owner pays their “fair share” of ongoing

common area deterioration.

Types of Reserve Studies

Most depreciation reports fit into one of the three following categories:

In a Full Depreciation Report, the reserve provider conducts a component inventory, a condition

assessment (based upon on-site visual observations) and life and valuation estimates to determine

both the “fund status” and the “funding plan”.

In an Update with Site Inspection Depreciation Report, the reserve provider conducts a

component inventory (verification only, not quantification unless new components have been

added to the inventory), a condition review assessment (based upon on-site visual observations),

and life and valuation estimates to determine both the “fund status and “funding plan.”

In an Update without Site Inspection Depreciation Report, the reserve provider updates the

expected, observed and remaining life estimates, or the financial section of the Depreciation

Report, to bring up to date the “fund status” and “funding plan” in light of these new data.

This report is a Full Depreciation Report.

Depreciation Report Methodology

1. Reserve Component List

2. Reserve Fund Adequacy

3. Recommended Contributions





The Reserve Fund Study – A Physical and a Financial Analysis

There are two integral parts to a Reserve Fund study: the physical analysis and the financial

analysis. What follows is a brief description of how each part is established for your Depreciation

Report.

Physical Analysis

During the physical analysis, a Reserve Fund study provider evaluates information regarding the

physical status and major repair and replacement cost of the Strata Corporation’s major common

area components (exterior walls, roofing, hallways, elevators, amenity rooms, parking, etc.).

To do so, the provider conducts a component inventory, a condition assessment review and

prepares life and valuation estimates.

How Is the Reserve Component List Established?

The budgeting process begins with this inventory of all the major components for which the Strata

Corporation is responsible. The determination of whether an item should be labelled as operational,

reserve, or excluded altogether is somewhat subjective. As this labelling may have a major impact

on the financial plans of the Strata Corporation, Bramwell & Associates uses the following

considerations when selecting what is to be included in the Reserve Fund study.

We use a standard four-part test to determine what should be funded through the Reserve Fund:

First, the component must be a common area

responsibility. Second, the component must

have a limited life span. Third, the limited life

span must be predictable (or it by definition is

a “surprise” which cannot be accurately

anticipated). Fourth, the component cost must

be above a minimum threshold determined by

the Strata Council. This limits Reserve Fund

Components to major predictable expenditures.

Within this framework, it is inappropriate to include “lifetime” components, unpredictable

expenses (such as damage due to fire, flood, or earthquake), and minor expenses more

appropriately handled from the Operational Fund or as an insured loss.

However, there are allowances in every Reserve Fund for some items based on the possibility that

they may need repair during a Depreciation Report’s thirty year period. An example is

underground service pipes: a Strata Corporation is typically responsible for the section under

roadways or landscaping from the street connection to the development’s main distribution room

within the strata plan property lines. While not predictable, it is prudent to make an allowance

available for deterioration of this component.

Depreciation Report Component Selection

1. Common Area

2. Limited Useful Life

3. Predictable Life Limit

4. Cost must be above a Threshold





Preparing the Reserve Study

Once the Reserve Fund components have been identified and quantified, their respective

replacement costs, expected lifespan, effective age and remaining lifespan must be determined so

that a funding schedule can be established. Replacement costs and life spans can be found in

published manuals from construction estimators, appraisal handbooks and valuation guides.

Remaining lifespans are calculated from the expected lifespan and observed condition of assets

and further adjusted based on consideration of design, manufactured quality, usage, exposure to

the elements and maintenance history.

How are Expected Lifespan and Remaining Lifespan Established?

1) Visual Inspection (observed wear and age)

2) Bramwell & Associates depth of experience

3) Client Component History

4) Vendor Evaluation and Recommendation.

How Are Cost Estimates Established?

Financial projections are based on an average of our Best Case and Worst Case estimates, which

are established with consideration of the following:

1) Client Cost History

2) Comparison to Bramwell & Associates database of work done at similar strata

developments

3) Vendor recommendations

4) Reliable national industry cost estimating guidebooks, such as Marshall & Swift

Valuation Service, RS Means Facilities Maintenance & Repair Cost Data, RS Means

Repair & Remodeling Cost Data and McGraw-Hill Professional.

How Are Cost Allowances Established?

Reserve Funds amounts and/or allowances are calculated as a percentage of the estimated

replacement cost for each component. The percentage is established by the Depreciation Report –

Reserve Fund study provider based on their assessment of the probability of the component’s

repair or replacement needs.

By following the recommendations of an effective Reserve Fund Study, the Strata Corporation is

well placed to avoid major shortfalls. However, to remain accurate, and as mandated by the Strata

Property Act and Regulations, the report should be updated to reflect such changes as shifts in

economic parameters, additional phases/assets or new expenditures. The Strata Corporation can

assist in simplifying the Depreciation Report update process by keeping accurate records of these

changes throughout the year.





Financial Analysis

A Depreciation Report financial analysis assesses the Strata Corporation’s Reserve Fund balance

or “fund status” to determine a recommendation for the appropriate Reserve Fund contributions in

the future, known as the “funding plan”.

What is Covered in the Depreciation Report?

Operating Expenses are Excluded

Expenses that occur at least annually, no matter how large the expense, and can be budgeted for

annually are excluded. These are reasonably predictable, both in terms of frequency and cost.

Operating expenses include all minor expenses, which would not otherwise adversely affect an

Operating Fund from one year to the next. This is where most items end up. Examples of operating

expenses include:

Utilities: Administrative Costs: Scheduled Services: Repair Expenses:

Electricity Supplies Landscaping Roof

Gas Bank Charges Pool Maintenance Equipment

Water Dues and Publications Street Sweeping Concrete (minor)

Telephone Licenses, Permits and Fees Accounting

Cable (TV) Insurance(s)

Reserve Fund Expenditures are Included

These are major financial commitments that occur other than annually, and which must be

budgeted for in advance to ensure the availability of the necessary funds in time for their use.

Reserve expenditures are reasonably predictable both in terms of frequency and cost. However,

they may include significant assets that have an indeterminable but potential liability that may be

demonstrated as a likely occurrence. They are expenditures that, when incurred, would have a

significant effect on the smooth operation of the budgetary process from one year to the next, if

they were not reserved for in advance. Examples of reserve expenditures include:

Roof Replacements Asphalt Seal Coating Park/Playground Equipment

Deck Resurfacing Fencing Replacements Lighting Replacement

Asphalt Repairs Interior and Exterior Painting Depreciation Report

Other Budgetary Exclusions

Replacements of assets that are deemed to have an estimated lifespan equal to or exceeding the

estimated lifespan of the facility or development itself, or exceeding the legal life of the

development as defined in a Strata Corporation’s governing documents, are excluded. Examples

include the replacement of haCQ-wiring and major plumbing. Also excluded are insignificant

expenses or expenditures that may be covered either by an operating contingency, or otherwise

through a general maintenance fund. Expenses that are necessitated by acts of nature, accidents or

other occurrences that are more properly insured for, rather than reserved for, are also excluded.





Funding Strategies

Once a Strata Corporation has established its funding goals, the Strata Council can select an

appropriate funding plan. Bramwell & Associates Realty Advisors has identified five (5) primary

funding models currently in use by Strata Corporations in British Columbia. Depending on current

strata corporations’ finances and financial health, one of these models may be currently in

operation.

Benchmark or Fully Funded Model – setting a reserve funding goal of keeping the Reserve Fund

at or near 100% funded. This means the Strata Corporation is adhering to the simple

and responsible principle that you “replace what you use up”. As this is the responsible

choice, our funding plan will direct you towards achieving a fully funded goal.

Members of fully funded strata enjoy low exposure to the risk of special levies or

deferred maintenance. Strong interest earnings will minimize owners’ Reserve Fund

contributions. Council members thus enjoy peace of mind in knowing that the Strata

Corporation’s physical and financial assets are in balance which also ensures a degree

of insulation from claims of fiscal irresponsibility.

Threshold Funded Model – setting a reserve funding goal of keeping the reserve balance between

0% and 100% of fully funded. Strata Corporations choosing Threshold Funding select

this option in a manner that customizes their risk exposure. Depending on the mix of

common area major components, the threshold model may be more or less

conservative than the fully funded model, as it is dependent on Strata Council input.

Baseline Funded Model – is a "Minimum Funded Model” that sets a reserve funding goal of

keeping the overall projected annual Reserve Fund closing balances at or above a

dollar amount arbitrarily chosen by the Strata Council. This approach is riskier for

strata lot owners, as experience has shown that this method tends to not meet Reserve

Fund requirements, and as such, it is not usually recommended.

Unfunded “Pay As You Go” with Special Levies Model – this is the default current model in

place in most strata today. In this case, the Strata Corporation typically does not have

Reserve Fund balances sufficient to cover expected replacement costs and the only

recourse is to schedule special levies to cover these costs on a reactive basis. Lack of

information about needed special levies is a real problem for some strata lot owners.

These costs impose an additional financial burden on owners who often have chosen

condominium living for perceived reduced cost reasons. This is the riskiest of the

financial models, and could jeopardize the financial viability of the development if

special levies cannot be raised when needed.

Statutory Funded Model – setting a reserve funding goal based on the Strata property Act. Part

6.3 of the Strata Act Regulations states that a Strata Corporation must contribute the

lessor of 10% of a current year’s Operating Budget, or what is required to bring the

Reserve Fund to 25% of the previous year’s Operating Budget. This calculation

method amounts to the greatest disservice the legislation has done to strata lot owners,





as this ratio does not reflect the true cost of repairs and replacements. Moreover, as

buildings get older, the funding requirements get larger, and add more strain on the

Reserve Fund. This method is not based on the real needs for the strata, and therefore

is usually not recommended.

Each of these models is dependent on an analysis of cash flows into and out of the Reserve Fund

over a thirty years period, as mandated by the Strata Property Act. Calculations are then made to

reach strata councils’ and strata corporations’ funding goals.

Obviously, the choice of the funding goal or strategy will have a direct impact on the Reserve Fund

contributions required from each individual owner. The strategy, and the degree to which the Strata

Corporation has funded its reserves should affect property value as well.

British Columbia law currently does not specify which funding model strata are to use, but

obviously the model that reduces or eliminates the Reserve Fund deficit provides the most stability

and is the most conservative. The legislation does require that three (3) models be provided. Strata

Councils should carefully consider and document their choice of a funding plan and make the

details of the plan available to owners in the reserve study portion of the pro forma operating

budget. If the information is adequate and clearly presented, present owners and future buyers

should be in a better position to evaluate the value of units and developments.

What Is The Funding Method?

Bramwell & Associates funding models are based upon the cash flow funding method. The cash

flow method develops a reserve funding plan where contributions to the Reserve Fund are designed

to offset the variable annual expenditures incurred in the Reserve Fund. Different reserve funding

plans are tested against the actual anticipated schedule of reserve expenditures until the desired

funding goal is achieved. This method sets up a “window” in which all future anticipated

replacement costs are computed, based upon the individual life spans of the components of a strata

development under consideration.





Funding Options

There are four funding principles that we use to balance

your Reserve Funding Plan. Our first objective is to

design a funding plan that provides you with sufficient

cash reserves to perform your Reserve Fund projects

when required. A stable contribution rate is desirable as

it is the hallmark of a proactive plan.

Reserve Fund contributions that are evenly distributed

across all the owners over the years enable each owner

to pay their “fair share” of the Strata Corporation’s

Reserve expenditures (this means that we recommend special levies only when all other options

have been exhausted). And finally, we develop a financial plan that is fiscally responsible and

“safe” for Council members to recommend to their Strata Corporation membership. Why?

Because when a major repair or replacement is required in a development, a Strata Corporation

has essentially four options available to address the expenditure:

The first, and most logical way that the Strata Council has to ensure its ability to maintain the

assets for which it is obligated, is by assessing an adequate level of reserves as part of the regular

owner’s monthly contributions, thereby distributing the cost of the replacements uniformly over

the entire ownership and life of the complex. The development is not only comprised of present

members, but also future members. Any decision by the Strata Council to adopt a calculation

method or funding plan which would disproportionately burden future members in order to make

up for past reserve deficits, would be a breach of its fiduciary responsibility to those future

members.

Unlike individuals determining their own course of action, the Strata Council is responsible to the

“community” as a whole. If the Strata Corporation had set aside reserves for this purpose, using

regularly assessed contributions, it would have had the full term of the life of the roof, for example,

to accumulate the necessary reserves. Additionally, these contributions would have been evenly

distributed over the entire ownership and would have earned interest as part of that contribution.

The second option is for the Strata Corporation to acquire a loan from a lending institution in

order to cover the required repairs. In many cases, banks or third party providers will lend to a

Strata Corporation using “future homeowner assessments” as collateral for the loan. With this

method, the current Strata Council is pledging the future assets of a Strata Corporation. They are

also incurring the additional expense of interest fees on top of the original principal amount. In the

case of a $250,000 roof replacement, for example, the Strata Corporation may be required to pay

back the loan over a three to eight year period, with interest.

The third option, too often used, is simply to defer the required repair or replacement. This

option, which is not recommended, can create an environment of declining property values due to

expanding lists of deferred maintenance items and the Strata Corporation’s financial inability to

Funding Principles

1. Sufficient Cash

2. Stable Contribution Rate

3. Evenly Distributed

4. Fiscally Responsible





keep pace with the normal aging process of the common area components. This, in turn, can have

a seriously negative impact on sellers in the Strata Corporation by making it difficult, or even

impossible, for potential buyers to obtain financing from lenders. Increasingly, lending institutions

are requesting copies of the Strata Corporation’s most recent Depreciation Report before granting

loans, either for the Strata Corporation itself, a prospective purchaser, or for an individual within

such a strata corporation.

The fourth option is to pass a special levy to the ownership in an amount required to cover the

expenditure. When a special levy is passed, the Strata Corporation has the authority and

responsibility to collect the special levies, even by means of foreclosure, if necessary. However, a

Strata Corporation considering a special levy cannot guarantee that a levy, when needed, will be

passed. Consequently, the Strata Corporation cannot guarantee its ability to perform the required

repairs or replacements to those major components for which it is obligated when the need arises.

Additionally, while relatively new developments require very little in the way of major reserve

expenditures, strata corporations reaching 12 to 15 years of age and older, find many components

reaching the end of their effective lifespans. These required expenditures, all accruing at the same

time, could have a devastating effect on a Strata Corporation’s overall budget.

How much Reserves are enough?

Your Reserve Fund cash balance can measure reserves, but the true measure is whether the funds

are adequate to meet the Strata Corporation’s needs, measured by what is otherwise known as the

“Reserve Adequacy”.

The Reserve Adequacy is measured in a two-step process that involves:

1. Calculating the Strata Corporation’s Fully Funded Balance (FFB) or what would be

required in the bank today to cover all future obligations, given that the contribution

rate was maximized.

2. Comparing the current year’s Reserve Fund balance to the current year’s FFB and

expressing it as a percentage.

The FFB grows as components and other assets age and the financial needs of the Strata

Corporation increase, but shrinks when projects are accomplished and the expenditures of Strata

Corporation decrease. The Fully Funded Reserve Fund Balance changes each year, and is a moving

but predictable target. Buyers should be aware of this important disclosure – section 6.4 of the

report has more details.





Measuring your Reserve Adequacy in terms of a percentage of a fully funded Reserve Fund reflects

how well prepared your Strata Corporation is for upcoming Reserve Fund expenditures (see the

graph below for an explanation).

How Should I Compare One Property to Another?

Comparing one property to another is a personal choice and it is not our place to determine which

is a better property for you or your family. Given this, please keep the following in mind:

1. Lenders may be charging more interest on mortgages for properties without depreciation

reports, when Reserve Adequacy ratios do not improve in the long term, due to a lack of

certainty regarding strata finances. If a Strata Corporation has a Reserve Fund with

increasing strength as illustrated by Reserve Adequacy indicators, you should get lower

mortgage rates.

2. We believe that understanding how the complex is reserved for in the next 5 to 10 years is

important to understand, as this will have a major impact on your personal cash flow and

borrowing capacity. Understanding and planning for increases in monthly Reserve Fund

contributions and Special Levies may lead you to discuss your Loan to Value with your

Lender to ensure that you get the appropriate mortgage.

While a Reserve Adequacy of 100% is

ideal, a Reserve Fund anywhere in the 70%

to 130% is considered “Strong” as in this

range, cash flow problems are rare.

70 to 130%

or more

STRONG

Low Probability of Special Levies

Highly Desirable Developments

A Strata Corporation with a Reserve

Adequacy in the 35% to 70% range is

considered “Average” and can expect a

series of periodical special levies to meet

its’ financial obligations.

35 to 70% AVERAGE

Probability of Occasional Special

Levies

When a Strata Corporation’s Reserve

Adequacy is below 35%, it is considered

“Critical” can expect borrowings, loans or

multiple special levies.

0% to 35%

CRITICAL

Probability of Special Levies on a

Regular Basis





Is A High Reserve Fund Adequacy Required In Older Buildings?

In many buildings the life expectancy of the structure is 60 – 70 years, so the need for large Reserve

Fund balances to pay for items like a third or fourth roof replacement is not reasonable in most

scenarios. However, the strata may have had a poor quality roof or poor installation, which shortens

the life span of the roof. In this case, the strata may require another roof installation, which will

affect the Reserve Fund and planning for expenditures.

As funding models assume a perpetual life for the structure, assistance from Bramwell and

Associates can help the strata work towards a more realistic Reserve Strength target based on the

age of the complex and the condition of its assets or components.

Reserve Fund Status of LMS 2058

The starting point for our financial analysis is your Reserve Fund balance, projected to be $540,106

as of the start of the Strata Corporation’s Fiscal Year end on September 30, 2013. This is based on

your actual balance date and anticipated Reserve contributions and expenses are projected through

the end of your Fiscal Year, with Year 1 contributions to the Reserve Fund of $36,000.

What Is This Property’s Current Reserve Fund Adequacy?

Based on the reserve fund patterns from the Strata Corporation’s financial history – the dark red

bars – it is clear on the graph below that your Reserve Fund would have a declining Reserve

Adequacy over the next 30 years.

Our recommended Reserve Fund plan – the light green bars – indicates that your Reserve Fund

should increase from the current Reserve Adequacy of 9% to 50% in the same 30 years.





Is This An Unusual Reserve Adequacy?

Our research indicates that the majority of strata developments in British Columbia have a Reserve

Adequacy between 10% to 25% of fully funded in this first mandated cycle of depreciation reports

(years 2012–2017). In addition, most strata are currently underfunded and do not have a

Depreciation Report.

It would be unwise to assume that similar aged complexes of similar design are in the same

condition, based on the number of variables that factor into the well-being of a Strata Corporation’s

common assets. As this development’s existing Reserve Adequacy is at 13%, it is technically in

the normal range for most strata corporations. By following the plan laid out in this report, the

Strata Corporation will have its Reserve Fund reach a stronger state over and at the end of 30 years.

Many owners have no idea of the costs and no financial plan to deal with them. This development

has taken the proactive approach and engaged a professional firm to conduct their Depreciation

Report.

What is Our Recommended Funding Plan?

With this approach, we have produced three (3) scenarios for Strata Corporation LMS 2058: the

recommended model – the chosen approach by the Strata Council; the Full Funding model – which

sets the benchmark from which the two other scenarios are constructed and the existing model –

which describes the outlook if the current planning approach is maintained.

The graph below summarizes the Reserve Fund plans. The Total Expenditures are the same for

each plan. The graph illustrates the cumulative implications of each funding plan over 30 years

with respect to the total Reserve Fund contributions, the Possible special levies and the total

interest income. The graph also depicts the Closing Reserve Fund Balance and related Closing

Reserve Fund Cash Shortage at the end of 30 years.





Based on your current Reserve Adequacy and your projected cash flow requirements, as illustrated

in the following graph, we are recommending that your annual Reserve Fund contributions of

$36,000 in 2014 be increased to $144,000 in 2015 in conjunction with possible special levies of

$5,000,000 in 2023 which are required to cover the expenditures in a manner that ensures an

adequate Reserve Fund closing balance over the 30 years.

How will the Recommended Funding Plan Impact your Stata Lot Over the Next 5 to 10 Years?

The recommended plan has been designed to ensure that annual Average Strata Lot (ASL1)

contributions increase in a manner that maximizes annual interest income and minimizes possible

special levies as illustrated in the graph below in terms of the annual ASL Reserve Fund

contributions, interest income and possible special levies.

1 The Average Strata Lot (ASL) is a comparable across Strata Corporations that involves dividing the respective

Reserve Fund variables by the total number of strata lots in a Strata Corporation. A supplementary report may be

produced that provides the information in terms of each strata lot’s number of entitlement units.





The table below provides a snapshot of what current owners and future buyers may look forward

to with regards to their required budgeting for the next ten years to ensure that the Strata

Corporation maximizes the condition, attractiveness and usefulness of its common assets and

components.

Based on the recommended plan, the ASL monthly contributions to the Reserve Fund would

increase from $20.27 monthly in 2014 to $93.86 per month at the end of 5 years in 2018. Special

levies are proposed for 2016 of $3,378 and 2023 at a value of $33,784 per average unit.

Please see the Cash Flow table on the following page for more details.

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Monthly ASL Contributions $20.27 $81.08 $85.14 $89.39 $93.86 $98.55 $103.48 $108.66 $114.09 $119.79 $125.78

Annual ASL Contributions $243 $973 $1,022 $1,073 $1,126 $1,183 $1,242 $1,304 $1,369 $1,438 $1,509

Annual ASL Possible Special Levies $0 $0 $3,378 $0 $0 $0 $0 $0 $0 $33,784 $0

Annual ASL Reserve Fund Interest Income $55 $48 $64 $77 $94 $92 $111 $131 $152 $173 $24

Total Annual ASL Contributions and Special Levies $243 $973 $4,400 $1,073 $1,126 $1,183 $1,242 $1,304 $1,369 $35,221 $1,509





LMS 2058

Fiscal Year

End

30-Sep

2013 $984,519 $36,000 0.00% $20.27

2014 $540,106 $36,000 100.00% $0 $0 $8,102 $106,153 478,054 $243 $20.27 $0

2015 $478,054 $144,000 300.00% $0 $0 $7,171 $0 629,225 $973 $81.08 $0

2016 $629,225 $151,200 5.00% $500,000 $0 $9,438 $527,806 762,057 $4,400 $85.14 $3,378

2017 $762,057 $158,760 5.00% $0 $0 $11,431 $0 932,247 $1,073 $89.39 $0

2018 $932,247 $166,698 5.00% $0 $0 $13,984 $205,535 907,394 $1,126 $93.86 $0

2019 $907,394 $175,033 5.00% $0 $0 $13,611 $4,262 1,091,777 $1,183 $98.55 $0

2020 $1,091,777 $183,785 5.00% $0 $0 $16,377 $0 1,291,938 $1,242 $103.48 $0

2021 $1,291,938 $192,974 5.00% $0 $0 $19,379 $0 1,504,291 $1,304 $108.66 $0

2022 $1,504,291 $202,622 5.00% $0 $0 $22,564 $25,110 1,704,367 $1,369 $114.09 $0

2023 $1,704,367 $212,754 5.00% $5,000,000 $0 $25,566 $6,703,961 238,726 $35,221 $119.79 $33,784

2024 $238,726 $223,391 5.00% $0 $0 $3,581 $0 465,698 $1,509 $125.78 $0

2025 $465,698 $234,561 5.00% $0 $0 $6,985 $5,163 702,081 $1,585 $132.07 $0

2026 $702,081 $246,289 5.00% $0 $0 $10,531 $132,611 826,290 $1,664 $138.68 $0

2027 $826,290 $258,603 5.00% $0 $0 $12,394 $0 1,097,288 $1,747 $145.61 $0

2028 $1,097,288 $271,533 5.00% $0 $0 $16,459 $732,580 652,701 $1,835 $152.89 $0

2029 $652,701 $285,110 5.00% $0 $0 $9,791 $0 947,601 $1,926 $160.53 $0

2030 $947,601 $299,366 5.00% $0 $0 $14,214 $26,373 1,234,808 $2,023 $168.56 $0

2031 $1,234,808 $314,334 5.00% $0 $0 $18,522 $6,255 1,561,408 $2,124 $176.99 $0

2032 $1,561,408 $330,051 5.00% $2,900,000 $0 $23,421 $3,149,478 1,665,402 $21,825 $185.84 $19,595

2033 $1,665,402 $346,553 5.00% $750,000 $0 $24,981 $770,323 2,016,614 $7,409 $195.13 $5,068

2034 $2,016,614 $363,881 5.00% $0 $0 $30,249 $6,885 2,403,858 $2,459 $204.89 $0

2035 $2,403,858 $382,075 5.00% $0 $0 $36,058 $0 2,821,991 $2,582 $215.13 $0

2036 $2,821,991 $401,179 5.00% $0 $0 $42,330 $0 3,265,500 $2,711 $225.89 $0

2037 $3,265,500 $421,238 5.00% $0 $0 $48,982 $7,579 3,728,141 $2,846 $237.18 $0

2038 $3,728,141 $442,299 5.00% $2,300,000 $0 $55,922 $2,761,245 3,765,118 $18,529 $249.04 $15,541

2039 $3,765,118 $464,414 5.00% $0 $0 $56,477 $0 4,286,009 $3,138 $261.49 $0

2040 $4,286,009 $487,635 5.00% $0 $0 $64,290 $8,342 4,829,593 $3,295 $274.57 $0

2041 $4,829,593 $512,017 5.00% $0 $0 $72,444 $0 5,414,053 $3,460 $288.30 $0

2042 $5,414,053 $537,618 5.00% $0 $0 $81,211 $0 6,032,882 $3,633 $302.71 $0

2043 $6,032,882 $564,499 5.00% $200,000 $0 $90,493 $270,240 6,617,634 $5,166 $317.85 $1,351

$9,010,471 $11,650,000 $866,958 $15,449,900 $139,598 $78,716

Average per year over 30 years $4,653 $169.12 $2,624

Strata: 30 YEAR RESERVE FUND CASH FLOW TABLE

Totals over 30 years

Reserve

Fund

Opening

Balance

Recommended

Annual RF

Contributions

Possible

Special

Levies

Borrowings

and Loan

Financing

Estimated

Inflation

Adjusted

Expenditures

Annual ASL

Possible

Special Levies

Estimated

Reserve Fund

Interest

Earned

Percentage

Increase in RF

Contributions

Reserve

Fund Closing

Balance

Total Annual ASL

Contributions

and Special

Levies

Monthly ASL

Contributions





DEPRECIATION REPORT – RESERVE FUND STUDY





DEPRECIATION REPORT AND RESERVE FUND STUDY

1.1 Purpose of a Depreciation Report

The purpose of this Depreciation Report and Reserve Fund Study is to provide cost estimates of

various reserve components in a manner that provides a viable financial model for the Strata

Corporation to meet its fiduciary responsibility. The development is subject to major repairs and/or

replacement over the lifetime of the property. The function of this report is to estimate the funding

required for such major repairs and replacements in accordance with the Reserve Fund report

standards established by the Real Estate Institute of Canada (see their Technical Bulletin No.1).

This report also conforms to the Consulting Standards as set out by the Appraisal Institute of

Canada found in the Canadian Uniform Standards of Professional Appraisal Practice.

1.2 Effective Date of the Report

This Depreciation Report (and Reserve Fund study) applies as of October 1, 2013 or the first year

of the next fiscal year cycle. The first year Reserve Fund contribution assumption is based on

ratification at a future AGM or SGM, and this report may change if this assumption is inaccurate.

1.3 Definition of Depreciation Report / Reserve Fund Study

A Depreciation Report inclusive of a Reserve Fund Study is a detailed financial document for a

strata’s common assets. It is not a structural analysis of the buildings nor does it involve destructive

testing. It does include cost estimates of major repairs and replacement of components and assets.

It provides financial information, estimates and projections all used for making the right decision

about funding the major repairs and replacement of those components and assets for the future.

1.4 British Columbia’s Strata Property Act (1998) – Reserve Fund

Part 6 (Finances) of the Strata Property Act, Division 1 covers the Operating Fund and

Contingency Reserve Fund, and establishes the legal responsibility to have a Reserve Fund,

particularly sections 92 and 93, while the requirements of the Depreciation Report are laid out in

the Strata Property Regulations. We have included the relevant information from both the Act

and the Regulations in the Addenda under Exhibits A and B.





Methodology

2.1 Depreciation Report

The Depreciation Report provides a financial tool which provides the basis for funding major

repairs and replacement of the common elements and assets of the corporation. It is a practical

guide to planning budgets and maintenance programs, and unlike a technical or structural audit, it

deals not in detailed technical matters, but rather takes a business approach to Reserve Fund

management.

This Depreciation Report comprises the following elements:

1) It identifies the reserve components and assesses their quality, Expected Lifespan, and

present condition.

2) It estimates the remaining serviceable years for each of the reserve components and

proposes a time schedule for repairs and/or replacement.

3) It provides current replacement cost estimates including the cost of removing worn-out

items and special safety provisions.

4) It projects the future value of current replacement costs at an appropriate and

compounded inflation rate.

5) It projects the future value of current reserve funds compounded at a long term interest

rate and

6) It calculates current reserve fund contributions required and to be invested in interest

bearing securities in order to fund future reserve fund expenditures.

The salient estimates and conclusions of this Depreciation Report are contained in the various

schedules thereinafter. The Depreciation Report is a practical guide to assist the Strata Council in

planning Reserve Fund budgets and maintenance programs.

2.2 Real Estate Institute of Canada Reserve Fund Planning Standards

Regulations under the Strata Property Act (1998) require that a depreciation report and

Depreciation Report consist of a physical analysis and a financial analysis.

The Real Estate of Canada has established Reserve Fund (Depreciation Report) Planning

Standards that exceed the regulatory requirements and are now recognized and emulated across

Canada. These standards, presented throughout this Report, consist of investigations, analyses

and calculations that provide realistic and supportable reserve fund estimates.





2.3 General Conditions and Assumptions

Reserve fund estimates are subjective, and they are based on an understanding of the life cycle of

building components and our experience gained from observing buildings over a 30 year period.

It must be appreciated that reserve fund budgeting and projections are not exact sciences. They

are, at best, prudent provisions for all possible contingencies, if, as and when they arise. Reserve

fund requirements are subject to change and must be reviewed and modified over time, not less

than every three years.

2.4 Funding Models

Once a Strata Corporation has established its funding goals, the Strata Corporation can select an

appropriate funding plan. Bramwell & Associates Realty Advisors has identified the five (5)

primary funding models strata corporations in British Columbia use. Bramwell & Associates

Realty Advisors has identified the five (5) primary funding models strata corporations in British

Columbia use. Depending on current strata corporations’ finances and financial health, one of these

models may be currently operating.

Benchmark or Fully Funded Model – setting a Reserve funding goal of keeping the

reserves at or near 100% funded. This means the strata corporation is following the

simple and responsible principle that you “replace what you use up”. Believing this

to be the responsible choice, our Funding Plan will direct you to Full Funding.

Members of Fully Funded associations enjoy low exposure to the risk of special

levies or deferred maintenance. Strong interest earnings will minimize their

Reserve contributions. Strata Council members enjoy peace of mind that the

association’s physical and financial assets are in balance, and therefore a degree of

insulation from claims of fiscal irresponsibility.

Threshold Funded Model – setting a Contingency Reserve funding goal of keeping the

Reserve balance above some threshold between 0% and 100% Funded, higher than

100% Funded, or a particular Reserve cash balance. Strata corporations choosing

Threshold Funding select this option to customize their risk exposure. Depending

on the mix of common area major components this model may be more or less

conservative than the fully funded model. The only way to tell is to compare the

two models closely.

Baseline Funded Model or Minimum Funded Model – setting a reserve funding goal of

keeping the reserve cash balance at the end of each year in the overall reserve

funding projection at or above $0 (or an arbitrary number chosen by the Strata

Council). This is a risker situation for strata corporation owners, as experience has

shown that this method tends to not meet requirements, and as such is usually not

recommended.





Unfunded “Pay As You Go” with Special Levies Model – this is the default current model

in place in most strata today. In this case, the Strata Corporation typically does not

have Reserve Fund balances sufficient to cover expected replacement costs and the

only recourse is to schedule special levies to cover these costs on a reactive basis.

Lack of information about needed special levies is a real problem for some strata

lot owners. These costs impose an additional financial burden on owners who often

have chosen condominium living for perceived reduced cost reasons. This is the

riskiest of the financial models, and could jeopardize the financial viability of the

development if special levies cannot be raised when needed.

Statutory Funded Model – setting a reserve funding goal based on the Strata property Act.

Part 6.3 of the Strata Act Regulations states that a Strata Corporation must

contribute the lessor of 10% of a current year’s Operating Budget, or what is

required to bring the Reserve Fund to 25% of the previous year’s Operating Budget.

This calculation method amounts to the greatest disservice the legislation has done

to strata lot owners, as this ratio does not reflect the true cost of repairs and

replacements. Moreover, as buildings get older, the funding requirements get

larger, and add more strain on the Reserve Fund. This method is not based on the

real needs for the strata, and therefore is usually not recommended.

Each of these models depends on an analysis of cash flows into and out of the Reserve Fund over

a thirty year cycle. Special Levy calculations are then made so that these are sufficient enough to

reach Strata Councils and Strata Corporations stated funding goals.

Obviously, the choice of the funding goal or strategy will have a direct impact on the cash required

of each individual owner. The strategy, and the degree to which the strata corporation has funded

its reserves, should affect property value as well.

The Benchmark or Fully Funded Model is the most preferred goal, while the Unfunded “Pay as

you Go” Model less than adequate. The Threshold Model is typically the working model for most

strata.

British Columbia law currently does not specify one model for funding, but obviously the model

that reduces or eliminates the Reserve Deficit provides the most stability and is the most

conservative. The legislation does demand 3 models be provided. Strata Councils should carefully

consider and document the choice of a funding plan and make the details of the plan available to

owners in the reserve study portion of the pro forma operating budget. If the information is

adequate and clearly presented, present owners and future buyers should be in a better position to

evaluate the value of the unit and the development.





2.5 Reserve Fund Projection Factors

The Regulation 938/2011 under the Strata Property Act, 1998, requires that the financial analysis

include the following:

the estimated cost of major repair or replacement of the common elements and assets

of the corporation at the estimated time of the repair or replacement based on an

assumed annual inflation rate,

the annual inflation rate described above,

the estimated interest that will be earned on the reserve fund based on an assumed

annual interest rate, and

the annual interest rate described above.

In our opinion, the notion of an “assumed” annual inflation rate and an “assumed” interest rate in

the Regulation is not realistic, as assumptions are personal perceptions or judgments, and

therefore, subjective.

What is required is an objective basis for any estimates of inflation factors and interest rates.

Inflation factors and interest rates must be derived from an economic analysis of the marketplace.

The estimated inflation factor and the selected interest rate are powerful factors in projecting

reserve fund contributions and requirements. They can vary dramatically over time and must be

periodically reviewed to ensure their relevance and accuracy.

Although the Regulations require a reserve fund plan to be projected over a period of at least 30

consecutive years, a long-term horizon in every respect, reserve fund projection factors can only

be based on short-term economic conditions because of their volatility over time.

The reserve fund projection factors must be periodically reviewed and adjusted in accordance

with changing economic conditions as part of the reserve fund updating process, as mandated by

the Regulations.

2.6 Inflation Factors

Inflation measurement in Reserve Fund projections must be based on construction indices rather

than the widely quoted Consumer Price Index (CPI). The latter measures the cost of a basket of

consumer goods, not construction costs. The most widely recognized construction cost services

providing periodic cost indices are R.S. Means and Marshall & Swift / Boeckh.





Means Historical Cost Index

The Means Historical Index, used to calculate annual inflation rates, is based on the computed

value as of January 1, 2012, for an average North American construction rate of inflation. While

useful as an overall indication of the construction inflation trend in North America, these rates is

too broadly based, and as such, they do not accurately reflect the inflationary impact on local

construction costs.

Marshall & Swift / Boeckh (MSB) Time-Location Multiplier

MSB publishes its Time-Location Multipliers quarterly for principal Canadian cities (markets).

These multipliers are computer-compiled by combining currently researched wage rates and

material prices with “weighted schedules” that specify how much of each basic cost is in the

models.”

Each building has its own unique combination of basic costs. MSB uses 83 basic types of costs

necessary to build workable weighted schedules, comprising 19 building trades and 64 material

types.

The following are the percentage changes of MSB Time-Location Multipliers for Greater

Vancouver for the past 10 years:

Marshall & Swift / Boeckh Index

High Rises

(Class A)

Office

Buildings

(Class B)

Tilt-Up

concrete

(Class C)

Low Rise

Condos (Class

D)

Index January 2013 1.000 1.000 1.000 1.000

Index January 2012 1.043 1.048 1.042 1.048

Index January 2011 1.083 1.080 1.077 1.081

Index January 2010 1.063 1.084 1.091 1.103

Index October 2009 1.114 1.119 1.131 1.137

Index October 2008 1.114 1.119 1.131 1.137

Index October 2003 1.342 1.310 1.306 1.256

10 Year Cost Increase 34.20% 31.00% 30.60% 25.60%





Annual Increase 3.42% 3.10% 3.06% 2.56%

5 Year Cost Increase 11.40% 11.90% 13.10% 13.70%

Annual Increase 2.28% 2.38% 2.62% 2.74%

The significant cost increases over the past five years are primarily due to large increases in steel,

oil and concrete prices and higher wage costs. Price fluctuations due to the 2008 economic turmoil

are now settling.

Judging by the overall construction cost trends, one may conclude that the longer term rate of

inflation in construction will continue to increase over the foreseeable future.

We have adopted the median rate of 3.25% for annual inflation in calculating the future

replacement costs hereinafter.

2.7 Interest Rates

Investment income can be a significant and increasing source of revenue for reserve funds, and

therefore, it is imperative that reserve funds are continuously and prudently invested.

Under Regulation 6.11 of the Strata Property Act (see Addenda Exhibit A.1), a Strata Corporation

may invest money from the contingency reserve fund in a large selection of investments. Most

Reserve Fund investments are directly or indirectly guaranteed by governments. Bank deposits

and various investment instruments are insured by the Canada Deposit Insurance Corporation up

to a maximum of $100,000, covering principal and interest. In BC, the provincial government

covers credit unions.

Reserve Fund investments must be directly or indirectly guaranteed by governments. Bank

deposits and various investment instruments are insured by the Canada Deposit Insurance

Corporation up to a maximum of $100,000, covering principal and interest.

The ability of condominium corporations to earn the highest rate of interest available in the

marketplace, given the restricted conditions of investments, depends on the expertise of financial

management and the amount of available funds for investment.

Therefore, the reserve fund planner must consider management policies, the historical investment

performance and the size of the reserve fund available for investment.

In selecting an appropriate interest rate for reserve fund investments for a particular condominium

corporation, the balance of the reserve fund is the most critical consideration as it dictates

investment options and their corresponding interest rates.





Investment opportunities are widely advertised, ranging from bank deposits, term deposits and

guaranteed investment certificates (GICs) to money market instruments and government bonds.

Prudent reserve fund investment requires that investments are reasonably matched with

anticipated reserve fund expenditures, ensuring reserve fund liquidity. Therefore, funds should be

in a laddered investment portfolio, which ensures that reserve funds are available when needed.

This would result in a blended return between the short term and the longer term rates.

Some management firms use their “purchasing power” by directing business to a particular

financial institution to negotiate favourable interest rates for all their clients. This approach may

benefit the smaller corporations and is an important consideration when selecting an appropriate

interest rate.

The benchmark calculations and the Reserve Fund projections are based on the assumption that

Reserve Fund contributions are constantly and continuously invested.

LMS 2058 has provided us with the interest income amounts and we have calculated that the

interest income on the Reserve Fund Account has an average return of 1.87% over the last three

years. Typically, strata corporations keep some cash, some short term investments at less than

1.00% and longer tem GIC investments at approx. 1.00 to 2.00%.

Considering the investment opportunities available in the subject instance, and a recommended

management policy of investing in secured guaranteed investments, for the longer term savings,

we have selected a 1.50% interest rate as the basis of our calculations for the future investment

performance of the Corporation’s Reserve Fund.

2.8 Canadian Uniform Standards of Professional Appraisal Practice

Your Depreciation Report was prepared in conformity with the Canadian Uniform Standards of

Professional Appraisal Practice (CUSPAP), with the following comments as clarification. This

report summarizes the “Depreciation Report” or “Contingency Reserve Plan” estimate of the

subject property only. No analysis has been undertaken for any market value consideration. There

are no hypothetical assumptions, other than those listed within this Report. No highest and best

use analysis was completed, as the purpose of the report is to determine the value of replacing the

improvements only. This report was completed as a consulting assignment, and therefore falls

under the Consulting Rules and Standards.





Property Information

3.1 Property Description

Address: 1465, 1485, & 1490 Parkway Boulevard, and 2890 – 2944

Panorama Drive, Coquitlam, BC

Location: South of Panorama Drive, east and west of Parkway Boulevard in

Coquitlam, BC.

Construction Type: 144 Wood Framed townhome buildings built on concrete

foundations with slabs.

Construction Year: 3 phases, 1995, 1996, & 1998

Registered as a strata

on:

July 20, 1995, October 31, 1996, & January 13, 1998

Number of Levels: 3

Number of Strata Lots: 148

Management: Quay Pacific Property Management Ltd.

3.2 Building Plans

The following plans were examined in the performance of this Depreciation Report:

Strata Plans: Reviewed

Building Plans: Reviewed

Site Plans: Reviewed

Plans were used for quantifying site components and other improvements. There were good

drawings for the site. Most quantities were estimated or measured on site or from the plans as well

as the strata plans and are considered estimates.

The buildings and site improvements were inspected on September 11th, 2013. Various

construction details and improvements have been noted for consideration in the cost estimates

herein.

In order to identify any issues that were registered on title that may affect a depreciation report we

pulled the title document of a random townhome in the complex, in this case Strata Lot # 14.





3.3 Property Data, Site Plan and Basic Construction

The following data and information have been compiled from the available plans and the

inspection of the buildings and improvements. The data have been calculated using dimensions

taken from the plans.

Property Statistics

Site Area 177,860 Square Feet

Built Site Coverage 37,670 Square Feet

Paved Areas 58,700 Square Feet

Statutory Right of Way (Easement) 10,468 Square Feet

Residential Gross Floor Area (GFA) 75,340 Square Feet

Building Average Height (Living Space) 17 Feet

Site Improvements

Site Services 2 Systems

Pavement and Curbs (Road) 58,700 Square Feet

6 Parking Stalls 1,080 Square Feet

Patio and Sidewalks 12,700 Square Feet

Cedar Fencing 1,770 System(s)

Exterior Lighting 3 System(s)

Landscaped Area 81,490 Square Feet





Site Plan





Basic Construction

Overview The project was constructed in accordance with applicable

fire codes, city by-laws, and construction practices in

existence at that time. The quality of construction,

materials and workmanship is considered to be good.

Foundations (Excavation,

Footings, Walls, Pads, Slabs

etc.)

The buildings includes excavation and concrete

foundations, footings; slabs, insulation and drainage

system installations; crushed stone and gravel fill etc.

Substructure (Framing etc.) Wood framing construction throughout development.

Exterior Building Enclosure

(Walls, Windows, Penetrations

etc.)

Wood framed covered with cedar siding back up with vinyl

siding, mid boards (wood) covered with flashing. Typical

wall construction would include studs, vapor barrier and

gypsum board.

Roof and Drainage System

(Drains, Gutters, Rain Water

Leaders etc.)

Townhome roofs are sloped wood frame covered with

duroid shingles. Carports are flat roof design with torch-

down membrane. Drainage is aluminum gutters along

townhome roof edges, central drains on carports and

aluminum downpipes.

Electrical Systems (House

Panel etc.)

Electrical services come from the 5 transformers on site

(All are assumed owned by BC Hydro). Incoming metered

service with main disconnects and distribution panel for

different sections; wiring and fixtures for security light

fixtures, pole lights, power; telephone wiring; and conduit

network for security systems; All incoming utilities are

underground.

Services (Water, Sewer and

Sanitary Drainage etc.)

Water, sewer and drainage services are underground. Each

building has a feeder pipe. All of these pipes are the

property of the strata corporation.





3.4 Bylaws and Charges

We reviewed the Strata Corporation’s Bylaws to take into consideration any potential items or

arrangements that might affect the common assets’ reserve planning.

For the subject property, we were able to review the Bylaws and noted that the Strata Council is

using the Standard Bylaws and that this has no impact on this Depreciation Report.

We were advised that Bylaws changes are pending in regards to all electrical devices and services

in the garages and that the Strata Council are to be the responsibility of the Strata Lot owners.

We pulled the Title on one Strata Lot to determine if there are any legal charges affecting the

development. To our knowledge, there are no charges that have a legal effect regarding

expenditures that will affect the Depreciation Report. This is not a legal opinion; it is only the

Depreciation Report provider’s opinion on what we believe the documents state and is limited to

the purpose of completing this Depreciation Report. If a reader wishes a legal interpretation of the

above documents or the Title, they are encouraged to seek legal counsel.

3.5 Occupant Survey Results

As part of our pre-inspection due diligence and to better understand the perspective of occupants

living in the complex we conducted an online, email and mail survey on the issues that occupants

are facing in the one month period prior to the site-visit. We received nineteen responses from the

65 strata lots (29%). The results of the survey were reviewed during the site-visit and we followed-

up on all relevant comments.





Reserve Component Analysis

4.1 Property Inspection

The property was inspected for the purposes of preparing this report on September 11th, 2013, by

Jeremy Bramwell, AACI, P.App., RI (BC), CRP with the assistance of Peter Helmus, BA, CRP.

4.2 Reserve Fund Studies

To our knowledge no other Reserve Fund Studies have been completed for this Strata Corporation.

4.3 Component Classification

Reserve Fund Components are conveniently classified in terms of building groups, common

element facilities and site improvements. The component inventory consists of the reserve

components, described and analyzed hereinafter, and shown in Schedules A, B, C.1, C.2 and C.3.

The complex has 45 reserve components, comprising 14 structural and architectural components,

4 roof components, 3 mechanical components, 5 electrical components, 6 site improvement

components, 12 amenities components and 1 consultant component.

4.4 Lifespan Analysis

Each reserve component has been analyzed in terms of life cycle condition and expected remaining

useful life. The lifespan analysis considers the following factors:

Type of Component

Utilization

Material

Workmanship

Quality

Exposure to Weather Conditions

Functional Obsolescence

Environmental Factors

Regular Maintenance

Preventive Maintenance

Observed Condition.





The critical aspect in a Lifespan Analysis is the observed condition of each reserve component,

which is based on:

Actual age of the component

Maintenance of the component

Observed deficiencies of the component

Repair and replacement experience

Probability of hidden conditions.

The Lifespan Analysis culminates in component lifespan estimates, as follows:

1. Expected Lifespan

Each reserve component is analyzed in terms of component type, quality of

construction, statistical records and normal life experience.

2. Effective Age Condition Analysis

This is the critical analysis of a reserve component and consists of determining the

effective age of the reserve component within its normal life cycle based on the

observed condition of the reserve component. The validity of this analysis depends on

the experience of the reserve fund planner or analyst, as this is a subjective estimate

rather than an objective assessment.

3. Remaining Lifespan

Given an expected lifespan estimate and a sound estimate of the effective age, the

remaining lifespan of a reserve component is determined by subtracting the effective

age estimate from the expected life span estimate. This does not mean that reserve

expenditures should only be made at the end of the remaining life. Reserve

expenditures should and must be made during the remaining life span to maintain

building components and facilities in good condition.

A lifespan analysis is a subjective, or empirical, assessment of the life cycle status of a reserve

component, and as such, it is only as good as the considered opinion of the reserve fund planner.

Furthermore, the life span of a reserve component is subject to change due to numerous factors.

4.5 Current Cost Estimates

Reserve Fund component assessments and current cost estimates are based on our investigation,

observation, analyses and our extensive experience in performing reserve fund studies.





Cost data have been calculated using construction cost services, including Marshall &

Swift/Boeckh Commercial Building Valuation System, and the R.S. Means Repair & Remodelling

Cost Data, modified as to time, location and quality of construction. We also verified some

estimates by seeking quotations from contractors, fabricators and suppliers. Moreover, we have

used our own computer programs and extensive cost compilations and databases.

All costs are strictly estimates and are subject to confirmation at the time competitive bids are

obtained from contractors specializing in the repair or replacement work required.

The following factors have been considered in calculating the Repair and Replacement Cost

Estimates:

1. Quality of Construction

Replacement cost estimates are based on the assumption of using quality materials,

as specified or built, or in the case of older developments, as required under current

building code regulations, at contractors' prices, using union labour and current

construction techniques, and including contractors' overhead and profit.

The cost of repairs and/or replacements of many reserve components are invariably

higher than original building costs when contractors have considerable latitude in

planning their work and can utilize economies of scale to keep costs within

construction budgets. In contrast, repair work must frequently be performed in an

expedient manner with proper safety precautions and within certain constraints.

Cost estimates take into account such additional costs as special construction, safety

installations, limited access, noise abatements, and the convenience of the occupants.

2. Demolition and Disposal Costs

The estimates herein include provisions for demolition and disposal costs including

dumping fees. These costs have been rising in recent years. Particularly, dumping of

certain materials has become problematic and very costly. It appears that certain

codes and environmental regulations will become more stringent in future years, all

of which will further increase disposal costs.

3. Goods and Services Tax

Goods and Services Tax ("GST") applies to all repairs and replacements including

disposal costs. Therefore, these costs are included in the reserve fund estimates

hereinafter.





4. Nature of Contingency

It is frequently impossible to forecast the incidence of repairs or replacements of

various reserve components, particularly, major components, such as road

pavement, sewer and water systems. Therefore, reserve estimates are of a

contingency nature, and as such, they are subject to changing conditions and

repair experience over time.

4.6 Reserve Component Descriptions and Analyses

The following pages list each Reserve Fund component and provides the following information:

A physical description of the component and its elements

A Reserve Fund expenditure financial history

A review of the Potential Deterioration for the component

A Condition Analysis of the component and its elements

A Life Cycle Analysis of the expected lifespan, effective age and

remaining lifespan of the component

Unit Quantity and Cost Estimates

The Current Repair or Replacement Costs for the component

The Estimated Year of Replacement for the component

A Deficiency Analysis of findings and issues if any.

The component boxes typically include images of the components, their elements and some

images of conditions that may require further review.





COMPONENT 1 – Foundations and Footings

Physical Description This component includes all portions of the townhomes below grade including

footings and foundations.

Financial Analysis There have been no known significant expenditures on this component since

construction.

Potential Deterioration One of the most common problems with foundation walls is cracking. Foundation

and floor cracks can be benign or serious, depending on the location of the crack,

the size, and the direction of the crack. Earthquakes, impact and settling of the

underlying ground can result in cracking of the foundation. Water ingress may cause

further cracking and corrosion.

Condition Analysis The component and its elements were in good condition.

Life Cycle Analysis Date of Acquisition:

Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

60 years

15 years

45 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:

Current Repair/Replacement Cost Estimate:

Estimated Year of Repair/Replacement:

Allowance

$75,000

$75,000

2078

Deficiency Analysis Foundations and concrete should outlast the buildings themselves. No major

deficiencies were noted at the time of visual inspection. Proper perimeter drainage

systems help to insure foundation integrity.

Figure 1: Drain rock adjacent to foundation wall.

Figure 2: Retaining wall, drain rock, diverting

water from foundation walls.





COMPONENT 2 – Structural Posts & Beams

Physical Description This component consists of the 5-ply wood beams supporting the balconies as well

as the wood posts positioned underneath these beams.


construction.

Potential Deterioration Exterior beams are wood, and are susceptible to deterioration from exposure to the

elements causing these posts to split and crack when they expand and contract.

Condition Analysis The posts and beams observed seemed to be in good condition.


Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

60 years

15 years

45 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



Allowance

$30,000

$30,000

2058

Deficiency Analysis The beams and posts are exposed to the elements and can rot over time. Steps can

be taken to reduce exposure to the elements including flashing over top of the beams

to prevent water ingress.

Figure 3: Balcony support beams with moisture

on drip through balcony clearly visible.

Figure 4: Support beam is wrapped in cedar in front

of the recreation center.





COMPONENT 3 – Wood Balconies – Deck Replacement

Physical Description This component refers to the balconies constructed in front (or rear) of each unit. The

balconies are framed using pressure-treated lumber and covered with cedar decking

material.

Financial Analysis Some balconies have been re-stained, and other balconies have had new deck boards

installed.

Potential Deterioration The deck material is susceptible to rot over time. The framing material should last

much longer because it is pressure-treated.

Condition Analysis The component and its elements were in fair condition.


Expected Life span:

Effective Age:

Remaining Life span:

1998

25 years

15 years

10 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



20,888 square feet

$10 per square foot

$208,880

2023

Deficiency Analysis The stain (or paint) is peeling on some of the balconies surfaces. It is recommended

to restain the material before any rot begins, and a regular re-staining schedule be

put in place for all balconies.





COMPONENT 4 – Balcony railings – Cedar Siding

Physical Description This component includes the vertical and horizontal cedar siding on the balcony

walls of the complex.

Financial Analysis Balcony siding has been replaced in numerous locations.

Potential Deterioration The cedar siding can be damaged by impact from water ingress causing rot. The

walls under the siding are also at risk from moisture penetration.

Condition Analysis The component and its elements were in poor condition.


Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998 & 2013

35 years

20 years

15 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



35,392 square feet

$10.22 per square foot

$361,706

2028

Deficiency Analysis The cedar siding should normally last 35 years, however, it only lasted 15 years on

the balcony railing areas. Therefore, the effective age is 20 years from the outset.

B.C. Building code changes in 2006 included requirements for 2 layers of 30-minute

tar paper (minimum) and 10mm of rain screen space, as well as horizontal peel &

stick membrane across the balcony railings. However, the siding refits on the

balcony (shown in following figure) did not follow these 3 code requirements. To

get the expected life span from this component all further work should be done to

code.

Figure 5: Balcony siding deteriorating after 15

years.

Figure 6: New balcony siding installed identical to

original flawed design.





Figure 7: Cedar siding refit procedure included no

tar paper, rain screen, or top layer peel & stick

application. The existing beams are still wet from

vertical water penetration.

Figure 8: Board and Batten, vertical siding pulling

away from wall allowing for water ingress.





COMPONENT 5 – Exterior walls – Cedar Siding

Physical Description This component includes the vertical and horizontal cedar siding on all the outside

walls except the balcony walls of the complex.

Financial Analysis There has been no known significant expenditures on this component since

construction.

Potential Deterioration The cedar siding can be damaged by impact from water ingress causing rot. The

walls under the siding are also at risk from moisture penetration.



Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

35 years

25 years

10 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



360,000 square feet


$3,679,200

2023

Deficiency Analysis The cedar siding should normally last 35 years, however, due to poor quality

installation techniques including no flashing between horizontal boards (was a code

requirement at the time of construction) and the siding above them (see Figure 5

below) deterioration is quite evident. There is presently no rain screen underneath

the cedar siding either. The siding needs to be replaced within the next 5 years to

prevent the cost of replacement to include the studs, insulation, and framing

underneath the substrate.

B.C. Building code changes in 2006 included requirements for 2 layers of 30-minute

tar paper (minimum) and 10mm of rain screen space. To get the expected life span

from this component any future work should be done to code.

Several residents reported ant infestations near their exterior walls.





Figure 9: Siding close-up; no flashing above

horizontal trim board.

Figure 10:.No flashing above trim board causing

rot. Threshold rotting because outside ground

level is nearly even with floor level inside.





COMPONENT 6 – Exterior Walls - Wood Trim

Physical Description This component includes the wood trim boards installed around doors, windows as

well as horizontal trim boards at the bottom of walls, and the tops of chimneys

throughout the complex.

Financial Analysis There have been some replacement of trim boards during balcony renovations,

however, most of the trim boards appear to be original.

Potential Deterioration The wood can rot from water ingress, including moss from air borne spores.



Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

35 years

25 years

10 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



57,600

$11.37 per lineal foot

$654,912

2023

Deficiency Analysis The wood trim boards are rotting and deteriorating in many locations, and a

complete wood trim replacement project should be undertaken in conjunction with

cedar siding replacement (See comments in Component #5).

Figure 11: Trim boards around the top of the

chimney stack are covered in mould and rot is

setting in.

Figure 12: Window trim board rotting from water

ingress because of no flashing above trim board.





Figure 13: Horizontal trim boards separating at

bay window outside corner.

Figure 14: Lower horizontal trim boards (center)

and mid-band boards (right) are installed without

top flashings leaving the walls open to moisture

penetration.





COMPONENT 7 – Soffits – Cedar

Physical Description This component refers to the vented cedar soffits under the overhangs.


construction.

Potential Deterioration Cedar soffits may become stained from moisture born contaminants from above

such as blown in attic insulation, or from dryer vents. Regular inspection of dryer

vent exhausts is recommended at least once a year.

Condition Analysis The soffits were in good condition.


Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

50 years

15 years

35 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



46,600 square feet


$407,750

2048

Deficiency Analysis No significant deficiencies noted.

Figure 15: Soffit on gable end.

Figure 16: The center vent outlet is clogged a bit,

however, the vent strip on the left is very clogged,

perhaps from insulation overblown from the attic.





COMPONENT 8 – Electrical Closets

Physical Description This component refers to the approximately 17 electrical closets in the complex. Each

closet, or room, contains distribution equipment, wiring sources for cable and

telephone systems.

Financial Analysis This component has no known expenditures since construction.

Potential Deterioration The closets themselves are typically finished with concrete walls, plywood for

mounting meters and drywall on fire rated walls.

Condition Analysis The one closet we observed was in fair condition.


Expected Life span:

Effective Age:


1996

60 years

15 years

45 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



Allowance

$20,000

$20,000

2058

Deficiency Analysis One of the closets observed was being used for storage as well. The bags of salt,

however, could be dangerous since they were laying on the floor. Salt water is a

conductor of electricity, and the threshold was rotting from water ingress.

Figure 17: Bags of road salt laying on the concrete

floor near the electrical wires running

underground.

Figure 18: Threshold of electrical room showing

signs of moisture ingress.





COMPONENT 9 – Window Assemblies

Physical Description This component includes aluminum and vinyl framed windows, and screens replaced

or original in the complex.


construction.

Potential Deterioration The windows are primarily susceptible to impact damage. Failure or deterioration

of the seals can cause moisture to enter the sealed units. Windows can begin to leak

along the sides where there is no caulking.

Condition Analysis The windows were in good condition.


Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

35 years

10 years

25 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



1,820 windows

$570

$1,037,400

2038

Deficiency Analysis None noted.

Figure 19: Sliding windows.

Figure 20: Aluminum windows with separation

bars, sliding section and window screen.





COMPONENT 10 – Patio Sliding Doors

Physical Description This component consists of standard style aluminum framed sliding doors with one

fixed pane, and one sliding pane. The doors are approximately six feet wide.


construction.

Potential Deterioration Sliding patio doors are subject to wear and tear from use and damage could occur

from excessive force. The hinges and latch mechanisms are all items that are prone

to breakage. Bottom roller can wear out from frequent use, or warp from infrequent

use



Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

35 years

15 years

20 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



148 sliding doors

$1,370

$202,670

2033

Deficiency Analysis The sliding doors observed were operating well.

Figure 21: A view of a sliding door between two

windows and beneath a sloped window on an

average balcony.

Figure 22: A view of the sliding track for the

sliding door.





COMPONENT 11 – Front Entry Doors

Physical Description This component includes the front entry doors for each unit as well as French, double

and single doors on the amenities building.


construction.

Potential Deterioration The doors have overhangs protecting them except for the amenities building. The

wood frames and thresholds can rot from moisture content.

Condition Analysis The door frames and thresholds were mostly in average condition.


Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

40 years

25 years

15 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



157 doors

$470

$73,790

2028

Deficiency Analysis Some of the thresholds were exposed to the rain and absorbing moisture.

Figure 23: A front entry door with top glass and

roll over screen.

Figure 24: A close up of the brick mould for one

exposed door.





COMPONENT 12 – Metal Service Doors

Physical Description This component includes the metal service doors accessing the electrical closets,

mechanical rooms, storage rooms and secondary entrance doors.


construction.

Potential Deterioration These doors are exposed to the elements, with no overhangs protecting them. The

wood frames and thresholds can rot from moisture content.

Condition Analysis The door frames and thresholds were mostly in poor condition.


Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

40 years

25 years

15 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



35 doors

$350

$12,250

2028

Deficiency Analysis Some of the thresholds were exposed to the rain and absorbing moisture.

Figure 25: A six-panel steel door open to an

electrical closet.

Figure 26: Threshold is moist, and needs to be

replaced and sealed.





COMPONENT 13 – Garage Doors

Physical Description This component refers to the wood garage doors opening into each unit’s garage.

The opening mechanisms including the motor and fobs are reported to be individual

owner’s


construction.

Potential Deterioration This includes such problems as accidental damage by residents and commercial

customers. The finishing or paint can deteriorate from weathering.



Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

30 years

20 years

10 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



148 doors

$1,200 per door

$177,600

2023

Deficiency Analysis Some garage doors observed were in good condition and others had paint peeling.

Figure 27: Typical front entry door.

Figure 28: Recreation center front entry doors.





COMPONENT 14 – Sealants and Weatherproofing

Physical Description This component includes flexible sealant and weatherstripping around doors,

windows and protrusions through the walls.


construction.

Potential Deterioration Exposed flexible sealant has a limited lifespan, much less than the materials it is

adhered to, therefore periodic inspections need to be made to ensure cracking or

peeling is not occurring.



Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

12 years

11 years

1 year

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



35,000 lineal feet


$87,500

2014

Deficiency Analysis Gaps are visible between windows and trim in many areas. The seal between building

paper and window flanges is the more important seal and it is not visible underneath

the siding. Judging by the lack of sealant visible it is reasonable to assume that the

seal between window flanges and building paper is not adequate either. An

exploratory examination of a few windows is recommended to assess the overall

moisture protectiveness of the complex, especially the vertical siding because it lacks

the natural shingling overlap effect of the horizontal bevel siding.

Figure 29: Paint peeling, caulking cracking, and

gaps between trim boards.

Figure 30: Gap between trim and window appears

never to have been sealed.





COMPONENT 15 – Exterior Painting and Staining

Physical Description This component refers to the painting and staining of exterior wood in the complex.


construction.

Potential Deterioration Potential deterioration is predominantly from age and exposure to elements. UV

radiation and water are key contributors to the breakdown of this component. Stain

can wash away over time, and the dried out timbers can shrink and split.

Condition Analysis The paint was in poor to average condition.


Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

10 years

7 years

3 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



340,000 square feet


$476,000

2016

Deficiency Analysis The paint condition is in varying quality on different walls, however, the overall

condition is poor to average so a painting program should begin soon. The buildings

could be painted in stages according to which walls are most affected first.

Figure 31: The trim board paint looks fine, but the stain

is peeling off the cedar siding.

Figure 32: On the north elevation there is

moisture building up allowing spores to

invade.





COMPONENT 16 – Roofs – Sloped Cedar Shingles

Physical Description The roof consists of a sloped design, finished with cedar shingles. The shingles were

to be nailed over 15 lb. felt roofing paper, (30 lb. felt along edges). The underlayment

was specified to be dry 1” x 4” material, nailed tight together for the first 3 feet as

per specifications attached in this report.

Financial Analysis The shingles were replaced in 2013.

Potential Deterioration Cedar shingles are susceptible to damage and deterioration from hot, unvented attic

areas and moss build-up from excessive moisture and air borne spores.



Expected Lifespan:

Effective Age:

Remaining Lifespan:

2013

20 years

1 year

19 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



325,000 square feet

$5.27

$1,712,750

2032

Deficiency Analysis The specifications on the roof installation included the re-use of flashings. This

constitutes a false economy, as these re-used flashings are typically damaged during

the removal and re-installation process, as well as having numerous additional holes

from original installation to the point of causing additional water ingress than egress.

An accelerated deterioration to the building itself may result.

Figure 33: An old section of roof, with built up

slime and moss.

Figure 34: A newly installed shingle roof.





COMPONENT 17 – Roofs – Skylights

Physical Description This component includes roof mounted sloped glass skylights mounted on raised

wood frames, and protected from water ingress by metal flashings.

Financial Analysis This component has no known expenditures since 1998.

Potential Deterioration The neoprene gaskets and sealant are prone to deterioration due to the elements are

sometimes repaired before the skylights are replaced.

Condition Analysis The skylights observed were in good condition.


Expected Life span:

Effective Age:


1998

25 years

15 years

10 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



184 skylights

$250

$46,000

2023

Deficiency Analysis The flashing along the edge of the skylights is crumpled and dented impacting its

functionality. The flashing should be replaced when new skylights are installed.

Figure 35: A set of skylights above an A style unit.

Figure 36: A close-up of the same photo shows the

re-used flashing from the original roof.





COMPONENT 18 – Gutters and Downpipes

Physical Description This component includes aluminum gutters, outlets, and downpipes.


construction.

Potential Deterioration Aluminum gutters tend to fail initially at outlets, outside corners, inside corners, and

end caps. This is where caulking is used to seal gutters from leaking.



Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

35 years

15 years

20 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



8,100 lineal feet of gutter


$111,213

2033

Deficiency Analysis The aluminum gutters are beginning to show some deterioration, however, as long as

they are functioning well, there is no need to replace them.

Figure 37: Dented and warped gutters.

Figure 38: Gutter and downpipes. Note the new

angled diverters installed on the cedar shingles to

redirect the water from the edge to the gutter.





COMPONENT 19 – Chimney Caps

Physical Description This component consists of the metal cap and stack protruding from the chimney

structure.


construction.

Potential Deterioration The chimney stacks can rust from exposure to the rain and elements.



Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

35 years

15 years

20 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



254 chimney caps

$275 per chimney cap

$111,213

2033

Deficiency Analysis The galvanized metal chimney caps are in fair condition, and will eventually require

replacement. They have been painted in a colour to match the siding, however, this

paint needs to be a rust inhibitor type to prevent rust from setting in and reducing the

overall life of this component.

Figure 39: A typical chimney protruding from the

cedar sloped roof. Figure 40: Dark stains are evident along the edge

of the cap. The vent stack is in better condition.





COMPONENT 20 – Sanitary and Storm Drainage Systems

Physical Description This component includes the sewer and storm sewer drainage system throughout the

complex.


construction.

Potential Deterioration Deterioration of substrate, settling and damage to paving around catch basins are

key contributors to deterioration.

Condition Analysis The sewage, sanitary and rainwater drainage condition are impossible to know for

sure without destructive testing, but there have been no historical issues. Typically

they will last the life of the complex, and an allowance is applicable for potential

damage


Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

60 years

15 years

45 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



Allowance

$100,000

$100,000

2058


Figure 41: A clean out drain just above a rain water

leader.

Figure 42: A storm drain along the internal

roadway.





COMPONENT 21 –Fire loop and Hydrant System

Physical Description Commonly referred to the fire hydrant loop system and repairs or replacements on

the property.


construction.

Potential Deterioration Deterioration can be caused by the corrosion of piping and failure of mechanical

components. Tree roots can interfere with underground piping as well.

Condition Analysis The component and its elements were in average condition.


Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

60 years

15 years

45 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



Allowance

$45,000

$45,000

2058


Figure 43: Interior roadway fire hydrant





COMPONENT 22 – Domestic Water Loop, Connections and Hose Bibs

Physical Description This component refers to the internal water distribution system as well as the

external hose bibs.


construction.

Potential Deterioration The water distribution system can typically last the life of the complex. The hose

bibs can be affected by freezing external temperatures. The internal shut-off should

be turned off during winter months.

Condition Analysis The component was in average condition.


Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

50 years

15 years

35 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



Allowance

$100,000

$100,000

2048


Figure 44: Hose bib attached to a hose on the lower

level of the recreation center.

Figure 45: Hose bib adjacent to an entry door.





COMPONENT 23 – Electrical Distribution Systems

Physical Description This component includes the electrical conduit, wiring, and distribution system for

the 43 buildings in the complex, including house panels, and external wiring for

outside lights.


construction.

Potential Deterioration Potential deterioration is caused by overloading, improper phase balance, single

phasing or power failure causes heat from built up resistance to possibly damage

insulation or melt conductors. Improper or loose connections could also shorten life

or melt conductors.



Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

60 years

15 year

45 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



Allowance

$40,000

$40,000

2038


Figure 46: Large distribution center for 18 units

and a house panel.

Figure 47: A smaller distribution center.





COMPONENT 24 – Exterior Lights – Lampposts

Physical Description This component includes all exterior lampposts.


construction.

Potential Deterioration Ground water can penetrate the conduit underground. Water can infiltrate light

fixtures above ground as well.



Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

25 years

15 years

10 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:

Unit Quantity:

Cost Estimate:



16 tall lampposts

$695 per lamppost

40 ground level lights

$475 each light

$30,120

2023

Deficiency Analysis There was no significant deterioration. Tall lampposts observed had some debris or

slime inside the globes (see figure below). Since the wiring comes in from below

this could cause short circuiting problems.

Figure 48: Some lampposts are located on poles

with fixtures which stand high and away from

most potential vandalism or damage.

Figure 49: Others are of the shorter, ground level

variety for smaller visibility.





COMPONENT 25 – Exterior Lights – Wall Fixtures

Physical Description This component includes all exterior wall-mounted light fixtures of various types.


construction.

Potential Deterioration Theses outdoor lights are open to the elements, however generous overhangs protect

many of them from rainfall.



Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

25 years

15 years

10 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



301 wall sconces

$125 per fixture

$37,625

2023


Figure 50: Typical wall sconce beside a garage door.

Figure 51: Floodlights hanging above the

entrance to the recreation center.





COMPONENT 26 – Exterior GFCI Outlets

Physical Description This component includes all Ground-Fault Circuit Interrupter exterior (GFCI)

outlets.


construction.

Potential

Deterioration

These outlets are typically installed on top of the siding with no direct seal to the

building paper underneath, and are exposed to the weather year round. The water

from rain can get into the outlet. The ultraviolet rays of the sunshine can deteriorate

the resins in the cover of the outlet. The spring mechanism can deteriorate from

water ingress.



Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

25 years

15 years

10 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



298 exterior outlets

$85 per outlet

$25,330

2023

Deficiency Analysis Some of the outlets were in good condition. Other outlets were pulling away from

the wall.

Figure 52:.The outlet cover is pulling away

from the wood, which is splitting and cracking

as well. Figure 53: Typical exterior GFCI outlet.





COMPONENT 27 – Access and Security Control Systems

Physical Description This component includes all access devices for the security gates into the complex

and pool and amenities area, as well as closed circuit television devices mounted

near the entrance and amenity areas.


construction.

Potential Deterioration As in most electrical devices, there is susceptibility to water causing rust and

deterioration of the electrical wires. Upgrades will, occasionally be installed as

technological advances occur.



Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

25 years

15 years

10 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



1 system

$20,000

$20,000

2023


Figure 54: Security camera focused on the front

gate at Parkway Boulevard.

Figure 55: Remote controlled security camera

beside the recreation center.





COMPONENT 28 – Concrete Patios and Sidewalks

Physical Description This component includes concrete sidewalks and patios.


construction.

Potential

Deterioration

The concrete sidewalks and patios are subject to damage from substrate erosion;

freeze thaw cycles, impacts and wear and tear.

Condition Analysis The concrete was in average condition for its age.


Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

45 years

15 years

30 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



27,780 square feet

$12 per square foot

$100,000

$2043

Deficiency Analysis Some repairs and replacements are necessary. It is not necessary or recommended

to replace all the concrete at the same time. The cost per square foot is multiplied

by a factor of 30% of the total area of concrete that may require replacement

during the next 30 years. Figure 57 below illustrates a situation that needs

remediation for safety concerns where someone could trip over the heaving

sidewalk.

Figure 56: Sidewalk and patio entering a side yard.

Figure 57: Walkway towards a front door,

lifting up from frost heaving.





COMPONENT 29 – Wood Fencing – Replacement

Physical Description This component refers to the cedar fences and gates installed in the back yards as

dividers and at property perimeters along Panorama Drive and Parkway Boulevard

including gates and arbors.


construction.

Potential Deterioration Wood fences are exposed to the elements and need to be stained on a regular basis

to prevent rot and decay.



Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

20 years

15 years

5 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



2,370 lineal feet

$50 per lineal foot

$118,500

2018


Figure 58: Northwest facing fence panels showing

signs of paint peeling, and some rot.

Figure 59: Simple railing fences on the complex’s

interior.





Figure 60: Perimeter fence along Parkway

Boulevard.

Figure 61: Privacy screen blocking out

transformer from view.

Figure 62: Back yard dividing fences

Figure 63: Alternate style picket fences and gates

along Panorama Drive





COMPONENT 30 – Wood Fencing – Staining

Physical Description This element encompasses the staining of all wooden fencing in the complex.

Financial Analysis The fences were painted in 2006.

Potential Deterioration Potential deterioration is predominantly from age and exposure to elements. UV

radiation and water are key contributors to the breakdown of this component.



Expected Lifespan:

Effective Age:

Remaining Lifespan:

2006

8 years

7 years

1 year

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



19,140 square feet


$15,312

2014

Deficiency Analysis The faint is deteriorating where heavy moisture is concentrated, along the top edges

and bottom near the grass. The bottom of the posts are especially susceptible since

they are in constant contact with the wet grass on the ground.

Figure 64: Green slime building up on north facing

fences.

Figure 65: Paint peeling from fence panels and

fence posts.





COMPONENT 31 – Landscaping

Physical Description This component describes all landscaped areas including hard and soft landscaping

areas, trees shrubs, hedges, and flowerbeds.


construction.

Potential Deterioration Inclement weather, freeze thaw cycles, improper maintenance, impact damage and

lack of proper soil are factors that drive deterioration of these components.

Condition Analysis The component and its elements were in fair to good condition.


Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

60 years

15 years

45 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



Allowance

$75,000

$75,000

2058


Figure 66: Ground foliage between buildings.

Figure 67: Sitting area with bench and

surrounding plants and shrubbery.





COMPONENT 32 – Asphalt Roadways

Physical Description This component includes the asphalt roadways, brick roadways, concrete curbs and

separation strips.


construction.

Potential Deterioration The asphalt is subject to damage from substrate erosion; freeze thaw cycles, impacts

and wear and tear. The single most significant cause of failure is poor drainage.

Water that ponds on the surface accelerate the deterioration process by causing

breakdown of the asphalt, thus contributing to a reduction in the flexibility of the

pavement and causing the development of cracks.



Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

50 years

15 years

35 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



105,600 square feet


$543,840

2048

Deficiency Analysis None noted. Options to replacement include repairing heavy traffic areas using

infrared asphalt restoration to restore asphalt to near original condition.

Figure 68: The roadways include asphalt, concrete

dividers and road bricks.

Figure 69: Most of the roadways are covered in

asphalt.





COMPONENT 33 – Entrance Sign and Monuments

Physical Description This component includes the entrance sign and monument at 1485 Parkway

Boulevard, as well as the pillars adjacent to the entrance at 1428 Parkway Boulevard.


construction.

Potential Deterioration The sign is wood and can crack or rot. There is a top beam, and the tops of the posts

exposed which are wood. The pillars and walls are clad in manufactured stone, and

should last the life of the complex.



Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

80 years

15 years

65 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



Allowance

$10,000

$10,000

2078






COMPONENT 34 – Entrance Gates

Physical Description This component includes the entrance gates at 1485, 1465, and 1428 Parkway

Boulevard. They are activated by codes adjacent to the gate and in fobs.


construction.

Potential Deterioration The gates themselves will require regular maintenance because they open and close

frequently, so there is wear and tear to the moving parts.

Condition Analysis The component and its elements were in good condition for their age.


Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

15 years

10 years

5 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



3 gates

$14,000

$42,000

2018






COMPONENT 35 – Recreation Center – Painting and Decorating

Physical Description This component includes wall decorations such as artwork, sconces, and paint and

wall coverings. This complex has flat painted walls with baseboards. The ceilings

are typically not included in the estimate since most painting companies will include

the ceilings with the estimate.


construction.

Potential Deterioration Deterioration of this component is typically caused by wear and tear, vandalism or

impact damage. Ceilings will typically outlast the walls.

Condition Analysis The recreation center hallways and rooms have a paint finish. Aesthetics and style

changes typically dictate when this component is replaced rather than deterioration.


Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

10 years

5 years

5 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:


Estimated Year of Replacement:

4,320 square feet


$2,160

2018


Figure 70: Walls and ceilings painted finish.

Figure 71: Interior of recreation center displaying

wall paintings, and wall light fixtures.





COMPONENT 36 – Recreation Center –Interior Doors and Windows

Physical Description This component includes the interior entry and closet doors, as well as reinforced

non-opening windows.


construction.

Potential Deterioration The interior doors are susceptible to impact damage, and deterioration of handles

and locking mechanisms.



Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

40 years

15 years

25 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



13 interior doors & windows

$250 each

$3,250

2038


Figure 72: Reinforced glass window separating the

workshop from the stairwell.

Figure 73: Door with inset glass into the workshop.





COMPONENT 37 – Recreation Center – Flooring

Physical Description This component includes all the floor coverings in the recreation center including

foyer, washrooms, exercise room, meeting and office rooms.


construction.

Potential Deterioration The flooring is subject to extensive wear and tear from regular pedestrian traffic.



Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

25 years

15 years

10 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



2,638 square feet


$9,233

2023

Deficiency Analysis The flooring was some signs of wear. Regular deep cleaning of the carpets will

maintain good appearance, as well as preserve the quality of this component.

Figure 74: Linoleum floor covering in the

recreation center kitchen area.

Figure 75: Carpeting in the main room of the

recreation center.





COMPONENT 38 – Recreation Center –Interior Lighting

Physical Description This component includes all the interior light fixtures and electrical outlets in the

recreation center. These include ceiling fixtures of hanging, recessed lights, ceiling

fans, wall sconces and so on.


construction.

Potential Deterioration Fixtures are susceptible to impact damage, vandalism, and misuse by recreation

center users.



Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

60 years

15 years

45 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



Allowance

$5,000

$5,000

2058


Figure 76: Hanging fixtures in the foyer of the

recreation center.

Figure 77: Potlights and ceiling fan in the main

room of the recreation center.





COMPONENT 39 – Recreation Center –Interior Cabinetry

Physical Description This component includes the cabinetry and countertops in the recreation center.


construction.

Potential Deterioration The cabinetry can become damaged through impact and wear and tear on moving

parts such as hinges. Aesthetics is a common reason for updating cabinetry in strata

developments.



Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

50 years

10 years

40 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



12 lineal feet of cabinets

$200 per lineal foot

$2,400

2053


Figure 78: Kitchen area showing all cabinetry.

Figure 79: Close up of the kitchen area showing

bar fridge, microwave and sink.





COMPONENT 40 – Recreation Center –Washrooms

Physical Description This component includes the three washrooms in the recreation center and the

plumbing fixtures contained within them, as well as the downstairs lockers.


construction.

Potential Deterioration The washroom components fail mainly due to wear and tear, and extensive use.

Plumbing fixtures can cease to function properly but are typically repaired

immediately and through a repairs and maintenance budget.



Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

35 years

15 years

20 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



3 washrooms

$7,500 per washroom

$22,500

2033


Figure 80: Main floor washroom

Figure 81: Lower level men’s washroom with

lockers, sink, shower and toilet.





COMPONENT 41 – Recreation Center - Workshop and Tools

Physical Description This component includes the workshop cabinets, power tools, hand tools, and

associated cleaning equipment. It does not include supplies that would be replaced

on a less than yearly basis.

Financial Analysis Owners and residents may donate or use these tools in the workshop, however, once

they are contained within the workshop they become the property and responsibility

of the strata corporation.

Potential Deterioration Electrical power tools, as well as hand tools can become worn and damaged through

regular and/or improper use. Impact, vandalism, and accidents can all contribute to

the deterioration of these items.



Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998 and various other dates

20 years

15 years

5 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



One set of workshop tools

$5,000

$5,000

2018

Deficiency Analysis Most of the tools and equipment appear to be used regularly, therefore, they can be

expected to wear out, and require replacement within the limited lifespans indicated

above.

Figure 82: Table saw, shop vacuum, drill press and

hand tools in the workshop.

Figure 83: Band saw, work horse, and cleaning

tools are shown in the workshop.





COMPONENT 42 – Recreation Center – Furniture, Fixtures and Equipment

Physical Description This component includes any items of furniture, fixtures and equipment in the

recreation center inside the building, such as tables, chairs, couches, pillows and

fireplace.


construction.

Potential Deterioration Wear and tear is the most common reason for deterioration of this component.

Excessive use will reduce the life of any and all of these items.



Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

20 years

15 years

5 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



Allowance

$7,500

$7,500

2018


Figure 84: Full size couch, plants, paintings, and

coffee table are shown in the main recreation center

room.

Figure 85: Various chairs, tables, love seat, plant

table, as well as window coverings are shown in

the main room of the recreation center.





COMPONENT 43 – Recreation Center – Pool Equipment and Filtration System

Physical Description This component describes the system through which clean, temperature regulated

water is provided for the pool and hot tub, including the filtration system.


construction.

Potential Deterioration The plumbing system can break down from pipe failures, and equipment failures.

Detailed maintenance routines and cathode protection are important in these systems

to lengthen the lifespan and insure years of good service.



Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

20 years

15 years

5 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



1 system

$5,000

$5,000

2030


Figure 86: The mechanical room for the pool.





COMPONENT 44 – Recreation Center – Pool and Hot Tub Concrete Deck

Physical Description This component includes the concrete patio surrounding the pool and hot tub area,

as well as the concrete ramp leading up to the pool, as well as the below ground

concrete supporting foundational structure..


construction.

Potential Deterioration The concrete surface can crack, and heave, dependent on the compaction of the soil

underneath the concrete. The pool is in a fixed position adjacent to it.

Condition Analysis The pool deck was in average condition.


Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

50 years

15 years

35 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



1,800 square feet


$33,030

2048

Deficiency Analysis The concrete deck was in overall good condition, however, there was a chip of

concrete missing near the entrance stairs to the pool.

Figure 87: A chip is shown at the entrance to the

pool.

Figure 88: The hot tub.





COMPONENT 45 – Recreation Center – Wood Decks, Stairs and Railings

Physical Description This component refers to the wood decks, railings and stairs constructed adjacent to

the recreation center and the pool deck.


construction.

Potential Deterioration The deck and railing material is susceptible to rot over time. The framing material

should last much longer because it is pressure-treated.



Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

50 years

15 years

35 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



400 square feet.

$55 per square foot

$22,000

2038

Deficiency Analysis There is a lot of moisture present on and around the wood deck area. Some of the

supporting posts are showing signs of minor rot, and paint non-adherence.

Figure 89: The underside of the recreation center

wood deck.

Figure 90: A view of the recreation center from the

pool, showing the deck, and railing system.





Figure 91: Wood supporting post resting on the wet

concrete. Nails showing some rust. Paint not

adhering anymore and rust beginning.

Figure 92: Paint is not adhering, and the rot is

beginning.





COMPONENT 46 – Recreation Center – Glass and Aluminum Railing System

Physical Description This component includes the glass and aluminum railing system around the pool

area.


construction.

Potential Deterioration Aluminum railings are built to last for a long time. Deterioration risks include rust,

and impact damage.



Expected Lifespan:

Effective Age:

Remaining Lifespan:

1998

50 years

15 years

35 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



220 lineal feet

$50 per lineal foot

$11,000

2048


Figure 93: Aluminum railing leading up the ramp

to the pool.

Figure 94: Aluminum and glass railing along the

edge of the pool deck area.





COMPONENT 47 – Depreciation Report

Description This component reserves for future Depreciation Reports in the Reserve Fund rather

than out of the Operating Fund. This component builds reserves on an annual basis

for meeting the Strata Property Act mandate of renewing the Depreciation Report

every three year cycle. We are assuming at this time that all future reports will be

updated reports although we may anticipate that a full report may be required in the

future as legislative changes occur.

Financial Analysis This component has no known expenditures since 1997.


Expected Life span:

Effective Age:


2013

3 years

0 year

3 years

Unit Quantity

and Cost Estimates

Unit Quantity:

Cost Estimate:



1 consultant report

$7,035

$7,035

2016





Reserve Fund Component Estimates

5.1 Bramwell & Associates Realty Advisors Benchmark Analysis

Bramwell & Associates Realty Advisors’ Benchmark Analysis presents the various reserve

components in light of their physical aspects, including their life cycle analysis and the cost

estimates, all on a single sheet, for convenient examination and easy reference.

The cost estimates are pursuant to prudent reserve fund practices, which provide for inflationary

cost increases over time and take in consideration interest income from Reserve Fund investments

(see Section 5.2 below).

The Reserve Fund estimates have been prepared without regard to the current financial position of

the corporation or the current reserve fund contributions by unit owners, and as such, they represent

the optimum reserve fund operation, which assumes that the corporation has continuously assessed

adequate reserve funding from the beginning.

This Benchmark Analysis is the foundation of the Bramwell & Associates Realty Advisors

Reserve Fund Planning system, as it provides the basis for comparison of models to the optimal

Reserve Fund operation. The Benchmark Analysis provides the standard for Reserve Fund

planning and property maintenance, and as such, it is a valuable management and maintenance

resource document.

The foregoing program represents the practical application of Reserve Fund budget planning and

management. When applied, as outlined, the reserve fund will cover anticipated Reserve Fund

expenditures and any contingencies.

5.2 Schedule A –Schedule of Reserve Fund Component Estimates

The following Schedule of Reserve Fund Component Estimates presents detailed computations

for the reserve items using the projection factors explained in Section 2.4 of this Report. For the

purpose of this Depreciation Report, the following values are used in the projections:

Long-term inflation rate: 3.25%

Long-term interest rate: 1.50%.





LMS 2058

RESERVE COMPONENTS

YEAR OF

ACQUISITIONEXPECTED LIFESPAN EFFECTIVE AGE

REMAINING

LIFESPANUNIT QUANTITY UNIT MEASURE UNIT COST

CURRENT

REPLACEMENT COST

FUTURE REPLACEMENT

COST

CURRENT RESERVE

FUND REQUIREMENT

FUTURE RESERVE FUND

ACCUMULATION

FUTURE RESERVE FUND

REQUIREMENT

RESERVE FUND ANNUAL

CONTRIBUTIONS

RESERVE FUND ANNUAL

CONTRIBUTIONS PERCENT

ALLOCATION

Structural and Architectural1 Foundations and Footings 1998 60 15 45 1 allowance 75,000 $75,000 $316,311 $18,750 $36,641 $279,669 $4,396 0.65%2 Structural Posts & Beams 1998 60 15 45 1 allowance 30,000 $30,000 $126,524 $7,500 $14,657 $111,868 $1,759 0.26%3 Wood Balconies 1998 25 15 10 20,888 s.f. 10 $208,880 $287,606 $125,328 $145,448 $142,157 $13,282 1.95%4 Balcony Railings - Cedar Siding 1998 35 20 15 35,392 s.f. 10 $361,706 $584,396 $206,689 $258,410 $325,986 $19,541 2.87%5 Exterior Walls - Cedar Siding 1998 35 25 10 360,000 s.f. 10 $3,679,200 $5,065,870 $2,628,000 $3,049,901 $2,015,968 $188,360 27.71%6 Exterior Walls - Wood Trim 1998 35 25 10 57,600 l.f. 11 $654,912 $901,745 $467,794 $542,894 $358,850 $33,529 4.93%7 Soffits - Cedar 1998 50 15 35 46,600 s.f. 9 $407,750 $1,248,953 $122,325 $205,981 $1,042,972 $22,876 3.37%8 Electrical Closets 1998 60 15 45 1 allowance 20,000 $20,000 $84,350 $5,000 $9,771 $74,578 $1,172 0.17%9 Window Assemblies 1998 35 10 25 1,820 window 570 $1,037,400 $2,307,798 $296,400 $430,060 $1,877,738 $62,460 9.19%10 Patio Sliding Doors 1998 35 15 20 148 doors 1,370 $202,760 $384,400 $86,897 $117,038 $267,362 $11,562 1.70%11 Front Entry Doors 1998 40 25 15 157 doors 470 $73,790 $119,220 $46,119 $57,659 $61,561 $3,690 0.54%

12 Metal Service Doors 1998 40 25 15 35 doors 350 $12,250 $19,792 $7,656 $9,572 $10,220 $613 0.09%

13 Garage Doors 1998 30 20 10 148 doors 1,200 $177,600 $244,536 $118,400 $137,408 $107,128 $10,009 1.47%14 Sealants and Weatherproofing 1998 12 11 1 35,000 l.f. 3 $87,500 $90,344 $80,208 $81,411 $8,932 $8,932 1.31%15 Exterior Painting and Staining 1998 10 7 3 340,000 s.f. 1 $476,000 $523,935 $333,200 $348,420 $175,515 $57,636 8.48%

Roofing16 Sloped Cedar Shingles 1998 20 1 19 325,000 s.f. 5 $1,712,750 $3,144,888 $85,638 $113,637 $3,031,251 $139,069 20.46%17 Roof Skylights 1998 25 15 10 184 skylights 250 $46,000 $63,337 $27,600 $32,031 $31,306 $2,925 0.43%18 Gutters and Downpipes 1998 35 15 20 8,100 l.f. 14 $111,213 $210,842 $47,663 $64,195 $146,647 $6,342 0.93%19 Chimney Caps 1998 35 15 20 254 unit 275 $69,850 $132,424 $29,936 $40,319 $92,105 $3,983 0.59%

Mechanical Systems20 Sanitary and Storm Drainage Systems 1998 60 15 45 1 allowance 100,000 $100,000 $421,748 $25,000 $48,855 $372,892 $5,862 0.86%21 Fire Loop and Hydrant System 1998 60 15 45 1 allowance 45,000 $45,000 $189,786 $11,250 $21,985 $167,802 $2,638 0.39%22 Domestic Water Loop, Connections and Hose Bibs 1998 50 15 35 1 allowance 100,000 $100,000 $306,304 $30,000 $50,516 $255,787 $5,610 0.83%

Electrical Systems23 Electrical Distribution Systems 1998 60 15 45 1 allowance 40,000 $40,000 $168,699 $10,000 $19,542 $149,157 $2,345 0.34%24 Exterior lights - Lampposts 1998 25 15 10 1 system 30,120 $30,120 $41,472 $18,072 $20,973 $20,499 $1,915 0.28%25 Exterior Lights - Wall Fixtures 1998 25 15 10 301 lites 125 $37,625 $51,806 $22,575 $26,199 $25,606 $2,393 0.35%26 Exterior - GFCI Outlets 1998 25 15 10 298 outlet 85 $25,330 $34,877 $15,198 $17,638 $17,239 $1,611 0.24%27 Access and Security Control Systems 1998 25 15 10 1 system 20,000 $20,000 $27,538 $12,000 $13,926 $13,611 $1,272 0.19%

Site Improvements28 Concrete Patios and Sidewalks 1998 45 15 30 8,334 sq. ft. 12 $100,008 $261,058 $33,336 $52,107 $208,951 $5,566 0.82%29 Wood Fencing - Replacement 1998 20 15 5 2,370 l.f. 50 $118,500 $139,049 $88,875 $95,744 $43,306 $8,405 1.24%30 Wood Fencing - Staining 1998 8 7 1 19,140 s.f. 1 $15,312 $15,810 $13,398 $13,599 $2,211 $2,211 0.33%31 Landscaping 1998 60 15 45 1 allowance 75,000 $75,000 $316,311 $18,750 $36,641 $279,669 $4,396 0.65%32 Asphalt Roadways and Brick roadways and curbs 1998 50 15 35 105,600 s.f. 5 $543,840 $1,665,802 $163,152 $274,729 $1,391,073 $30,511 4.49%33 Entrance Signs & Monuments 1998 80 15 65 1 allowance 10,000 $10,000 $79,957 $1,875 $4,935 $75,021 $690 0.10%34 Entrance Gates 1998 15 10 5 3 gates 14,000 $42,000 $49,283 $28,000 $30,164 $19,119 $3,711 0.55%

Amenities35 Recreation Center - Painting & Decorating 1998 10 5 5 4,320 s.f. 1 $2,160 $2,535 $1,080 $1,163 $1,371 $266 0.04%36 Recreation Center - Interior Doors & Windows 1998 40 15 25 13 doors 250 $3,250 $7,230 $1,219 $1,768 $5,462 $182 0.03%37 Recreation Center - Flooring 1998 25 15 10 2,638 s.f. 4 $9,233 $12,713 $5,540 $6,429 $6,284 $587 0.09%38 Recreation Center - Interior Lighting 1998 60 15 45 1 allowance 5,000 $5,000 $21,087 $1,250 $2,443 $18,645 $293 0.04%39 Recreation Center - Interior Cabinetry & Finishings 1998 50 10 40 12 l.f. 200 $2,400 $8,626 $480 $871 $7,755 $143 0.02%40 Recreation Center - Washrooms 1998 35 15 20 3 rooms 7,500 $22,500 $42,656 $9,643 $12,988 $29,669 $1,283 0.19%41 Recreation Center - Workshop & Tools 1998 20 15 5 1 allowance 5,000 $5,000 $5,867 $3,750 $4,040 $1,827 $355 0.05%42 Recreation Center - Furniture, Fixtures and Equipment 1998 20 15 5 1 allowance 7,500 $7,500 $8,801 $5,625 $6,060 $2,741 $532 0.08%43 Recreation Center - Pool Equipment & Filtration System 1998 20 1 19 1 system 5,000 $2,500 $4,590 $125 $166 $4,425 $203 0.03%44 Recreation Center - Pool & Hot Tub Concrete Deck 1998 50 15 35 1,800 s.f. 18 $33,030 $101,172 $9,909 $16,686 $84,487 $1,853 0.27%45 Recreation Center - Wood Decks, Stairs & Railings 1998 50 15 35 400 s.f. 55 $22,000 $67,387 $6,600 $11,114 $56,273 $1,234 0.18%46 Recreation Center - Glass & Aluminum Railing Systems 1998 50 15 35 220 l.f. 50 $11,000 $33,693 $3,300 $5,557 $28,137 $617 0.09%

Consultant Reports47 Depreciation Report 1998 3 0 3 1 studies 3,518 $3,518 $3,872 $879 $920 $2,952 $969 0.14%

TOTAL RESERVES $10,876,387 $19,946,995 $5,281,984 $6,493,211 $13,453,784 $679,791 100%

STRATA: Schedule A – RESERVE FUND BENCHMARK





5.3 Summary of Reserve Fund Estimates

Based on Schedule A, the Reserve Fund position and estimated requirements for Strata

Corporation LMS 2058 are as follows:

Current Replacement Reserves or Costs

$10,876,387

Which are provisions for all major repairs and replacements at current prices

Future Replacement Reserves or Costs

$19,946,995 Which are provisions for all major repair and replacement costs in the future at the end of the

expected life span

Current Reserve Fund Requirements

$5,281,984 Which are reserve fund estimates based on the notion of effective age and should have been

contributed by unit owners

Future Reserve Fund Accumulations

$6,493,211 Which are the current reserve fund requirements together with interest compounded over the

Remaining Lifespan

Future Reserve Fund Requirements

$13,453,784 Which are to be funded by unit owners' payments to the reserve fund plus any interest earned

Annual Reserve Fund Contributions

$679,791 Which are the annual reserve fund payments to be made by unit owners

In accordance with these estimates, the Strata Corporation should have $5,281,984 in its Reserve

Fund at the end of its current fiscal year, and the assessed annual payments or contributions to the

Reserve Fund by unit owners should be $679,791 based on the stated assumptions.

The above calculations are required to analyze the Strata Corporation’s financial status and are not

to be interpreted as being the recommended model.

What follows in the rest of the report are three scenarios based on Schedule A, with Scenario C.1

being our recommended strategy for this development.





Analysis of Reserve Fund Operations

Reviewing and analyzing the reserve fund operation of Strata Corporation LMS 2058, we were

provided of ledger documents, operating budgets and balance sheets.

No other financial documents (audited statements) were available.

Balance sheets and summaries of income and expenses were provided for the periods of 2009-

2010, up to Jan 13, 2013.

6.1 Strata Corporation Financial Assumptions

Based on the data provided, we determined the Reserve Fund and we used that as the values

provided in the financials as the basis for the Reserve Fund opening balance. Council budgeted

$14,000 for interest in 2013.

6.2 Schedule B – Statement of Reserve Fund Operations

On the following page is presented a breakdown of expenditures for the Reserve Fund for the last

three years as per the financial information provided and based on the Strata Corporation’s fiscal

year-end cycle.

Based on the data provided it appears that there are no expenditures from the Reserve Fund. It is

our belief that most expenditures are coming out of the Operating Fund which is not abnormal.

We recommend that in the future, expenditures on the items included in this Reserve Fund Study

(the components and their items) be paid out of the Reserve Fund.

Component descriptions in section 4 provide spending details with regards to expenditures

undertaken from the Operating Fund or the Reserve Fund, based on historical financial and other

documents provided by the Strata Council and or their representatives.

6.3 Benchmark Deficiency Analysis

The Benchmark Deficiency Analysis presents the difference between the actual Reserve Fund

balance and the current Reserve Fund requirement, as calculated in the Benchmark Analysis.

The current Reserve Fund requirement is an estimate of a fully funded Reserve Fund, based on the

Benchmark Deficiency Analysis calculations. The Benchmark Deficiency Analysis has been

developed by Bramwell & Associates as a guide for the Strata Council to ensure that the Reserve

Fund is adequately funded, neither under-funded nor over-funded.





LMS 2058

Fiscal Year-end:

2011 2012 2013 3 Year Total

$331,968 $852,209 $984,520

$36,000 $36,000 $36,000 $108,000

$493,104 $845,321 $352,217 $1,690,642

$0 $0 $0 $0

$6,087 $17,232 $14,000 $37,319

1.83% 2.02% 1.42% 1.76%

$867,160 $1,750,762 $1,386,737

1 $0

2 $0

3 $0

4 $0

5 $0

6 $0

7 $0

8 $0

9 $0

10 $0

11 $0

12 $0

13 $0

14 $0

14 $0

15 $0

16 $766,242 $835,358 $1,601,600

17 (estimated) $0

18 $0

19 $0

20 $0

21 $0

22 $0

23 $0

24 $0

25 $0

26 $0

27 $0

28 $0

29 $0

30 $0

31 $0

32 $0

33 $0

34 $0

35 $0

36 $0

37 $0

38 $0

39 $0

40 $0

41 $0

42 $0

43 $14,951 $4,239 $19,190

44 $0

45 $0

46 $0

47 $7,035 $7,035

$14,951 $766,242 $846,632 $1,627,825

$852,209 $984,519 $540,106

Sealants and Weatherproofing

Sloped Cedar Shingles

Roof Skylights

Window Assemblies

Patio Sliding Doors

Front Entry Doors

Total Reserve Fund Expenditures

Reserve Fund Closing Balance

Entrance Signs & Monuments

Recreation Center - Painting & Decorating

Recreation Center - Interior Doors & Windows

Recreation Center - Flooring

Landscaping

Asphalt Roadways and Brick roadways and curbs

Depreciation Report

Exterior Walls - Wood Trim

Soffits - Cedar

Electrical Closets

Garage Doors

Sealants and Weatherproofing

STRATA: Schedule B – STATEMENT OF RESERVE FUND EXPENDITURES

Foundations and Footings

Structural Posts & Beams

Wood Balconies

Balcony Railings - Cedar Siding

Transfer from Operating Fund

30-Sep

Recreation Center - Glass & Aluminum Railing Systems

Domestic Water Loop, Connections and Hose Bibs

Exterior Walls - Cedar Siding

Interest Percentage

Total Cash Reserves

Reserve Fund Expenditures

Fire Loop and Hydrant System

Recreation Center - Interior Lighting

Reserve Fund Opening Balance

Reserve Fund Contributions

Special Levies

Interest Income

Gutters and Downpipes

Chimney Caps

Wood Fencing - Replacement

Wood Fencing - Staining

Sanitary and Storm Drainage Systems

Exterior Lights - Wall Fixtures

Exterior - GFCI Outlets

Concrete Patios and Sidewalks

Electrical Distribution Systems

Exterior lights - Lampposts

Entrance Gates

Metal Service Doors

Exterior Painting and Staining

Access and Security Control Systems

Recreation Center - Interior Cabinetry & Finishings

Recreation Center - Washrooms

Recreation Center - Workshop & Tools

Recreation Center - Furniture, Fixtures and Equipment

Recreation Center - Pool Equipment & Filtration System

Recreation Center - Pool & Hot Tub Concrete Deck

Recreation Center - Wood Decks, Stairs & Railings





The Reserve Fund of Strata Corporation LMS 2058 is showing a shortfall at the end of the 2014

fiscal year as described below, based on the Fully Funded Model:

Opening Balance as of: October 1, 2013 $540,106

Current Budgeted Annual Reserve Fund Contributions: $36,000

Special Levies: $4,697,777

Borrowings: $0

Loan Refinancing: $0

Reserve Fund Tax Free Annual Interest Income: $8,102

Less: Repayment of Financing Loan: $0

Less: Reserve Fund Budgeted Expenditures for the Current Fiscal Year: $106,153

Projected Reserve Fund Balance as of: September 31, 2014 $5,175,830

Estimated Reserve Fund Requirements after Expenditures (shortfall): $5,175,830

Estimated Reserve Fund Deficiency / Surplus: $0

The Reserve Fund deficiency should be eliminated over time, as illustrated in Schedule C.2 – Fully

Funded Model – 30 Year Reserve Fund Cash Flow Projection and Deficiency Analysis and related

Deficiency Analysis hereinafter.

6.4 Discussion on the Adequacy of a Reserve Fund

The adequacy of a Reserve Fund may be defined as the Reserve Fund balance together with regular

contributions and investment income, which constitutes sufficient cash resources available for all

possible and potential Reserve Fund expenditures required for repairing or replacing common

elements or assets of the Strata Corporation when needed.

The most direct and stringent measure of the adequacy of Reserve Fund is the Reserve Fund

deficiency analysis, whereby the actual closing Reserve Fund balance is compared with the

currently required Reserve Fund balance, as estimated by a competent Reserve Fund planner.

Any significant difference between the actual Reserve Fund balance and the required Reserve Fund

balance will indicate the amount of a Reserve Fund surplus or Reserve Fund deficiency (shortfall).





A Reserve Fund surplus, particularly when such surplus is increased by excessive Reserve Fund

contributions, means that unit owners have contributed too much to the Reserve Fund, a situation

which should be corrected to eliminate over-contributions.

A Reserve Fund deficit or shortfall indicates that unit owners have not contributed enough to the

Reserve Fund, resulting in a discrepancy between a fully funded Reserve Fund and the actual

Reserve Fund balance.

There is no regulation in the Strata Property Act that requires that strata corporations run tests to

ensure that their Reserve Fund is adequate for the purpose for which it has been established, only

that a Reserve Fund be in place with minimum payments based on a percentage of the last year’s

Operating Budget.

The adequacy of a Reserve Fund does not require the test of an estimated fully funded Reserve

Fund. The test as to the adequacy of a Reserve Fund is that there be available sufficient cash

resources to fund all potential repairs and replacements, including unforeseen events and

contingencies.

Therefore, a Reserve Fund deficiency or shortfall does not automatically mean that the Reserve

Fund is not adequate. It is up to the judgment of the Depreciation Report / Reserve Fund planner

in concert with the Property Manager and the Strata Council to determine whether the Reserve

Fund is adequate to meet the Strata Council’s fiduciary responsibility to the Strata Corporation.

In our opinion, the current Reserve Fund and proposed contributions, Special Levies and loans for

Strata Corporation LMS 2058 require adherence to the recommendations listed in this report to be

adequate for future Reserve Fund expenditures.

6.5 Strata Council’s Choice of Funding Model

Reserve Fund deficiencies should be eliminated over time, as stated above. However, this is not

always possible for financial or other reasons and/or the Strata Council may make a decision based

on their risk analysis with the Property Manager and the Depreciation Report Reserve Fund

planner.

The Threshold Funding Model is a percentage based funding scenario with the Reserve Fund

expenditures taken from the Benchmark Deficiency Analysis. The goal is to achieve a suitable

Reserve Fund at a level less than fully funded. The use of the Threshold Funding Model will result

in a Reserve Fund deficiency liability as indicated below:





Opening Balance as of: October 1, 2013 $540,106

Current Budgeted Annual Reserve Fund Contributions: $36,000

Special Levies: $0

Borrowings: $0

Loan Refinancing: $0

Reserve Fund Tax Free Annual Interest Income: $8,102

Less: Repayment of Financing Loan: $0

Less: Budgeted Reserve Fund Expenditures for Current Fiscal Year: $106,153

Projected Reserve Fund Balance as of: September 30, 2014 $478,054

Estimated Reserve Fund Requirements after Expenditures: $5,175,830

Estimated Reserve Fund Deficiency / Surplus: -$4,697,777

Reserve Strength: 9%

The Reserved Fund Deficiency established above is for the current year only and will change over the

30 year period.

The Unfunded “Pay as you Go” Reserve Fund model has been determined by the Strata Council

to be an unacceptable risk. The projected cash flows are provided in Schedule C.3 – Unfunded

‘Pay as you Go’ Model – 30 years Reserve Fund Cash Flow Projection and Deficiency Analysis.

6.6 Discussion on the Strength of the Reserve Fund

The Threshold Reserve Fund deficiency has been determined by the Strata Council to be an

acceptable risk. The chosen Threshold projected cash flows are shown in Schedule C.1 – Threshold

Model – 30 Year Reserve Fund Cash Flow Projections and Deficiency Analysis.

At this time, the Strata Council will recommend that the Strata Corporation LMS 2058 will

work to improve their Reserve Strength from 9% towards 50% at the end of the 30 year

period.





Reserve Fund Management – 30 Year Projection Scenarios

7.1 Schedules C.1, C.2 and C.3 – 30 Year Cash Flow and Deficiency Analysis

The Reserve Fund – Projected Cash Flow and Deficiency Analysis that follow presents a 30 year

Reserve Fund projection for each funding model showing cash positions, cash flows and cash

expenditures in a form, and detail which conforms to the financial statement presentation of

Reserve Fund operations.

What follows are definitions of the terms used in the three schedules:

Opening Cash Balance

This is the reserve fund position at the beginning of each and every fiscal

year showing the cash resources available, which consist of (1) bank

deposits, (2) qualified investments, and (3) accrued interest earned.

Cash Flows

These are the regular reserve fund contributions, special levies, loans, and

interest income based on the opening balance.

Opening Cash Funds

These represent the total cash resources available in any fiscal year and

include the current year's cash flow.

Cash Expenditures

These are annual expenditures listed in the categories established by the

Reserve Fund Study. Records or ledger accounts of these expenditure

categories should be kept showing reserve fund allocations and charges in a

chronological order for control and reference.

Closing Cash Fund

This is the reserve fund position at the end of each and every fiscal year,

which is carried forward to the next year.





Deficiency Analysis

The Reserve Deficiency has been projected by formula taking into account

the inflation factor, interest rates and reserve fund expenditures. Therefore,

any reserve fund expenditures will not affect the reserve fund deficiency

because such expenditures will also affect the reserve requirements.

Unit Analysis

Bramwell & Associates takes the payment per average strata lot, both

contributions and special levies, on an annual basis for the reader.

We then separate the types of revenue, and determine the monthly

contribution per average strata lot, as well as the average special levy per

unit.

Deficit per Unit

Bramwell & Associates has isolated and included the Deficit per Unit for each

year in our scenarios. This would be the amount that a typical buyer could

expect to have taken off the sales price due to the deferred contributions.

Deferred contributions are best defined as payments not in the past, as well as

lost interest, which will have to be made up in the future by potential buyers

or existing strata lot owners.

7.2 Projected Reserve Fund Expenditures

The Reserve Fund scenarios’ 30 Year Cash Flow Projection and Deficiency Analysis presented on

the next pages – both in table form and graphically – are mere guidelines in terms of the timing of

expenditures based on the remaining lifespan analysis.





LMS 2058 Years 1 - 15



Fiscal Year End: 30-Sep 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

$540,106 $478,054 $629,225 $762,057 $932,247 $907,394 $1,091,777 $1,291,938 $1,504,291 $1,704,367 $238,726 $465,698 $702,081 $826,290 $1,097,288

$36,000 $144,000 $151,200 $158,760 $166,698 $175,033 $183,785 $192,974 $202,622 $212,754 $223,391 $234,561 $246,289 $258,603 $271,533

$0 $0 $500,000 $0 $0 $0 $0 $0 $0 $5,000,000 $0 $0 $0 $0 $0

Possible Borrowings $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Annual Reserve Fund Interest Income $8,102 $7,171 $9,438 $11,431 $13,984 $13,611 $16,377 $19,379 $22,564 $25,566 $3,581 $6,985 $10,531 $12,394 $16,459

Total Cash Resources $584,207 $629,225 $1,289,863 $932,247 $1,112,929 $1,096,038 $1,291,938 $1,504,291 $1,729,477 $6,942,686 $465,698 $707,244 $958,901 $1,097,288 $1,385,281

1 Foundations and Footings $18,750

2 Structural Posts & Beams $7,500

3 Wood Balconies $125,328 $287,606

4 Balcony Railings - Cedar Siding $206,689 $584,396

5 Exterior Walls - Cedar Siding $2,628,000 $5,065,870

6 Exterior Walls - Wood Trim $467,794 $901,745

7 Soffits - Cedar $122,325

8 Electrical Closets $5,000

9 Window Assemblies $296,400

10 Patio Sliding Doors $86,897

11 Front Entry Doors $46,119 $119,220

12 Metal Service Doors $7,656 $19,792

13 Garage Doors $118,400 $244,536

14 Sealants and Weatherproofing $80,208 $90,344 $132,611

15 Exterior Painting and Staining $333,200 $523,935

16 Sloped Cedar Shingles $85,638

17 Roof Skylights $27,600 $63,337

18 Gutters and Downpipes $47,663

19 Chimney Caps $29,936

20 Sanitary and Storm Drainage Systems $25,000

21 Fire Loop and Hydrant System $11,250

22 Domestic Water Loop, Connections and Hose Bibs $30,000

23 Electrical Distribution Systems $10,000

24 Exterior lights - Lampposts $18,072 $41,472

25 Exterior Lights - Wall Fixtures $22,575 $51,806

26 Exterior - GFCI Outlets $15,198 $34,877

28 Concrete Patios and Sidewalks $33,336

29 Wood Fencing - Replacement $88,875 $139,049

30 Wood Fencing - Staining $13,398 $15,810 $20,419

31 Landscaping $18,750

32 Asphalt Roadways and Brick roadways and curbs $163,152

33 Entrance Signs & Monuments $1,875

34 Entrance Gates $28,000 $49,283

35 Recreation Center - Painting & Decorating $1,080 $2,535 $3,490

36 Recreation Center - Interior Doors & Windows $1,219

37 Recreation Center - Flooring $5,540 $12,713

38 Recreation Center - Interior Lighting $1,250

39 Recreation Center - Interior Cabinetry & Finishings $480

40 Recreation Center - Washrooms $9,643

41 Recreation Center - Workshop & Tools $3,750 $5,867

42 Recreation Center - Furniture, Fixtures and Equipment $5,625 $8,801

43 Recreation Center - Pool Equipment & Filtration System $125

44 Recreation Center - Pool & Hot Tub Concrete Deck $9,909

45 Recreation Center - Wood Decks, Stairs & Railings $6,600

46 Recreation Center - Glass & Aluminum Railing Systems $3,300

47 Depreciation Report $879 $3,872 $4,262 $4,691 $5,163 $5,683

$5,281,984 $106,153 $0 $527,806 $0 $205,535 $4,262 $0 $0 $25,110 $6,703,961 $0 $5,163 $132,611 $0 $732,580

$478,054 $629,225 $762,057 $932,247 $907,394 $1,091,777 $1,291,938 $1,504,291 $1,704,367 $238,726 $465,698 $702,081 $826,290 $1,097,288 $652,701

$5,175,830 $5,933,258 $6,174,242 $6,946,646 $7,525,101 $8,313,507 $9,118,000 $9,934,561 $10,738,260 $4,875,164 $5,628,082 $6,387,130 $7,030,117 $7,815,360 $7,879,801

-$4,697,777 -$5,304,034 -$5,412,185 -$6,014,398 -$6,617,707 -$7,221,730 -$7,826,062 -$8,430,270 -$9,033,893 -$4,636,438 -$5,162,384 -$5,685,050 -$6,203,827 -$6,718,072 -$7,227,100

9% 11% 12% 13% 12% 13% 14% 15% 16% 5% 8% 11% 12% 14% 8%

$20.27 $81.08 $85.14 $89.39 $93.86 $98.55 $103.48 $108.66 $114.09 $119.79 $125.78 $132.07 $138.68 $145.61 $152.89

$243 $973 $1,022 $1,073 $1,126 $1,183 $1,242 $1,304 $1,369 $1,438 $1,509 $1,585 $1,664 $1,747 $1,835

$0 $0 $3,378 $0 $0 $0 $0 $0 $0 $33,784 $0 $0 $0 $0 $0

$243 $973 $4,400 $1,073 $1,126 $1,183 $1,242 $1,304 $1,369 $35,221 $1,509 $1,585 $1,664 $1,747 $1,835


Monthly ASL Contributions

Annual ASL Possible Special Levies

Schedule C.1 – THRESHOLD MODEL – 30 Year RESERVE FUND CASH FLOW PROJECTION AND DEFICIENCY ANALYSIS

Possible Special Levies

Current Reserve

Fund

Requirements

RESERVE FUND EXPENDITURES

Strata:


Reserve Fund Requirements

Reserve Surplus (Deficiency)

Reserve Adequacy

RESERVE FUND OPENING BALANCE

Annual ASL Contributions

TOTAL EXPENDITURES

Total Annual ASL Contributions and Special Levies





LMS 2058 Years 16-30




$652,701 $947,601 $1,234,808 $1,561,408 $1,665,402 $2,016,614 $2,403,858 $2,821,991 $3,265,500 $3,728,141 $3,765,118 $4,286,009 $4,829,593 $5,414,053 $6,032,882

$285,110 $299,366 $314,334 $330,051 $346,553 $363,881 $382,075 $401,179 $421,238 $442,299 $464,414 $487,635 $512,017 $537,618 $564,499

$0 $0 $0 $2,900,000 $750,000 $0 $0 $0 $0 $2,300,000 $0 $0 $0 $0 $200,000



Total Cash Resources $947,601 $1,261,181 $1,567,664 $4,814,880 $2,786,936 $2,410,744 $2,821,991 $3,265,500 $3,735,720 $6,526,363 $4,286,009 $4,837,934 $5,414,053 $6,032,882 $6,887,874

1 Foundations and Footings $18,750

2 Structural Posts & Beams $7,500

3 Wood Balconies $125,328

4 Balcony Railings - Cedar Siding $206,689

5 Exterior Walls - Cedar Siding $2,628,000

6 Exterior Walls - Wood Trim $467,794

7 Soffits - Cedar $122,325

8 Electrical Closets $5,000

9 Window Assemblies $296,400 2,307,798

10 Patio Sliding Doors $86,897 384,400

11 Front Entry Doors $46,119

12 Metal Service Doors $7,656

13 Garage Doors $118,400

14 Sealants and Weatherproofing $80,208 132,611

15 Exterior Painting and Staining $333,200

16 Sloped Cedar Shingles $85,638 3,144,888

17 Roof Skylights $27,600

18 Gutters and Downpipes $47,663 210,842

19 Chimney Caps $29,936 132,424

20 Sanitary and Storm Drainage Systems $25,000

21 Fire Loop and Hydrant System $11,250

22 Domestic Water Loop, Connections and Hose Bibs $30,000

23 Electrical Distribution Systems $10,000

24 Exterior lights - Lampposts $18,072

25 Exterior Lights - Wall Fixtures $22,575

26 Exterior - GFCI Outlets $15,198

28 Concrete Patios and Sidewalks $33,336 261,058

29 Wood Fencing - Replacement $88,875 263,615

30 Wood Fencing - Staining $13,398 26,373 34,063

31 Landscaping $18,750

32 Asphalt Roadways and Brick roadways and curbs $163,152

33 Entrance Signs & Monuments $1,875

34 Entrance Gates $28,000

35 Recreation Center - Painting & Decorating $1,080 4,805

36 Recreation Center - Interior Doors & Windows $1,219 7,230

37 Recreation Center - Flooring $5,540

38 Recreation Center - Interior Lighting $1,250

39 Recreation Center - Interior Cabinetry & Finishings $480

40 Recreation Center - Washrooms $9,643 42,656

41 Recreation Center - Workshop & Tools $3,750 11,123

42 Recreation Center - Furniture, Fixtures and Equipment $5,625

43 Recreation Center - Pool Equipment & Filtration System $125 4,590

44 Recreation Center - Pool & Hot Tub Concrete Deck $9,909

45 Recreation Center - Wood Decks, Stairs & Railings $6,600

46 Recreation Center - Glass & Aluminum Railing Systems $3,300

47 Depreciation Report $879 6,255 6,885 7,579 8,342 9,182

$5,281,984 $0 $26,373 $6,255 $3,149,478 $770,323 $6,885 $0 $0 $7,579 $2,761,245 $0 $8,342 $0 $0 $270,240

$947,601 $1,234,808 $1,561,408 $1,665,402 $2,016,614 $2,403,858 $2,821,991 $3,265,500 $3,728,141 $3,765,118 $4,286,009 $4,829,593 $5,414,053 $6,032,882 $6,617,634

$8,677,788 $9,461,372 $10,276,828 $7,961,293 $7,990,181 $8,782,939 $9,594,474 $10,418,181 $11,246,666 $9,333,912 $10,153,711 $10,977,466 $11,821,918 $12,679,038 $13,278,774

-$7,730,187 -$8,226,565 -$8,715,420 -$6,295,891 -$5,973,567 -$6,379,080 -$6,772,482 -$7,152,682 -$7,518,525 -$5,568,794 -$5,867,702 -$6,147,873 -$6,407,865 -$6,646,156 -$6,661,140

11% 13% 15% 21% 25% 27% 29% 31% 33% 40% 42% 44% 46% 48% 50%

$160.53 $168.56 $176.99 $185.84 $195.13 $204.89 $215.13 $225.89 $237.18 $249.04 $261.49 $274.57 $288.30 $302.71 $317.85

$1,926 $2,023 $2,124 $2,230 $2,342 $2,459 $2,582 $2,711 $2,846 $2,989 $3,138 $3,295 $3,460 $3,633 $3,814

$0 $0 $0 $19,595 $5,068 $0 $0 $0 $0 $15,541 $0 $0 $0 $0 $1,351

$1,926 $2,023 $2,124 $21,825 $7,409 $2,459 $2,582 $2,711 $2,846 $18,529 $3,138 $3,295 $3,460 $3,633 $5,166

TOTAL EXPENDITURES

Schedule C.1 – THRESHOLD MODEL – 30 Year RESERVE FUND CASH FLOW PROJECTION AND DEFICIENCY ANALYSISStrata:




Current Reserve

Fund

Requirements





Reserve Adequacy









LMS 2058 Years 1-15

Inflation rate: 3.25%

Interest rate: 1.50%


$540,106 $5,175,830 $5,933,258 $6,174,242 $6,946,646 $7,525,101 $8,313,507 $9,118,000 $9,934,561 $10,738,260 $4,875,164 $5,628,082 $6,387,130 $7,030,117 $7,815,360

$36,000 $679,791 $679,791 $679,791 $679,791 $679,791 $679,791 $679,791 $679,791 $679,791 $679,791 $679,791 $679,791 $679,791 $679,791

$4,697,777 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0



Total Cash Resources $5,281,984 $5,933,258 $6,702,048 $6,946,646 $7,730,636 $8,317,769 $9,118,000 $9,934,561 $10,763,370 $11,579,124 $5,628,082 $6,392,294 $7,162,728 $7,815,360 $8,612,381

1 Foundations and Footings $18,750 - - - - - - - - - - - - - - -

2 Structural Posts & Beams $7,500 - - - - - - - - - - - - - - -

3 Wood Balconies $125,328 - - - - - - - - - 287,606 - - - - -

4 Balcony Railings - Cedar Siding $206,689 - - - - - - - - - - - - - - 584,396

5 Exterior Walls - Cedar Siding $2,628,000 - - - - - - - - - 5,065,870 - - - - -

6 Exterior Walls - Wood Trim $467,794 - - - - - - - - - 901,745 - - - - -

7 Soffits - Cedar $122,325 - - - - - - - - - - - - - - -

8 Electrical Closets $5,000 - - - - - - - - - - - - - - -

9 Window Assemblies $296,400 - - - - - - - - - - - - - - -

10 Patio Sliding Doors $86,897 - - - - - - - - - - - - - - -

11 Front Entry Doors $46,119 - - - - - - - - - - - - - - 119,220

12 Metal Service Doors $7,656 - - - - - - - - - - - - - - 19,792

13 Garage Doors $118,400 - - - - - - - - - 244,536 - - - - -

14 Sealants and Weatherproofing $80,208 90,344 - - - - - - - - - - - 132,611 - -

15 Exterior Painting and Staining $333,200 - - 523,935 - - - - - - - - - - - -

16 Sloped Cedar Shingles $85,638 - - - - - - - - - - - - - - -

17 Roof Skylights $27,600 - - - - - - - - - 63,337 - - - - -

18 Gutters and Downpipes $47,663 - - - - - - - - - - - - - - -

19 Chimney Caps $29,936 - - - - - - - - - - - - - - -

20 Sanitary and Storm Drainage Systems $25,000 - - - - - - - - - - - - - - -

21 Fire Loop and Hydrant System $11,250 - - - - - - - - - - - - - - -

22 Domestic Water Loop, Connections and Hose Bibs $30,000 - - - - - - - - - - - - - - -

23 Electrical Distribution Systems $10,000 - - - - - - - - - - - - - - -

24 Exterior lights - Lampposts $18,072 - - - - - - - - - 41,472 - - - - -

25 Exterior Lights - Wall Fixtures $22,575 - - - - - - - - - 51,806 - - - - -

26 Exterior - GFCI Outlets $15,198 - - - - - - - - - 34,877 - - - - -

28 Concrete Patios and Sidewalks $33,336 - - - - - - - - - - - - - - -

29 Wood Fencing - Replacement $88,875 - - - - 139,049 - - - - - - - - - -

30 Wood Fencing - Staining $13,398 15,810 - - - - - - - 20,419 - - - - - -

31 Landscaping $18,750 - - - - - - - - - - - - - - -

32 Asphalt Roadways and Brick roadways and curbs $163,152 - - - - - - - - - - - - - - -

33 Entrance Signs & Monuments $1,875 - - - - - - - - - - - - - - -

34 Entrance Gates $28,000 - - - - 49,283 - - - - - - - - - -

35 Recreation Center - Painting & Decorating $1,080 - - - - 2,535 - - - - - - - - - 3,490

36 Recreation Center - Interior Doors & Windows $1,219 - - - - - - - - - - - - - - -

37 Recreation Center - Flooring $5,540 - - - - - - - - - 12,713 - - - - -

38 Recreation Center - Interior Lighting $1,250 - - - - - - - - - - - - - - -

39 Recreation Center - Interior Cabinetry & Finishings $480 - - - - - - - - - - - - - - -

40 Recreation Center - Washrooms $9,643 - - - - - - - - - - - - - - -

41 Recreation Center - Workshop & Tools $3,750 - - - - 5,867 - - - - - - - - - -

42 Recreation Center - Furniture, Fixtures and Equipment $5,625 - - - - 8,801 - - - - - - - - - -

43 Recreation Center - Pool Equipment & Filtration System $125 - - - - - - - - - - - - - - -

44 Recreation Center - Pool & Hot Tub Concrete Deck $9,909 - - - - - - - - - - - - - - -

45 Recreation Center - Wood Decks, Stairs & Railings $6,600 - - - - - - - - - - - - - - -

46 Recreation Center - Glass & Aluminum Railing Systems $3,300 - - - - - - - - - - - - - - -

47 Depreciation Report $879 - - 3,872 - - 4,262 - - 4,691 - - 5,163 - - 5,683

TOTAL EXPENDITURES $5,281,984 $106,153 $0 $527,806 $0 $205,535 $4,262 $0 $0 $25,110 $6,703,961 $0 $5,163 $132,611 $0 $732,580

$5,175,830 $5,933,258 $6,174,242 $6,946,646 $7,525,101 $8,313,507 $9,118,000 $9,934,561 $10,738,260 $4,875,164 $5,628,082 $6,387,130 $7,030,117 $7,815,360 $7,879,801

$5,175,830 $5,933,258 $6,174,242 $6,946,646 $7,525,101 $8,313,507 $9,118,000 $9,934,561 $10,738,260 $4,875,164 $5,628,082 $6,387,130 $7,030,117 $7,815,360 $7,879,801

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

$20.27 $382.77 $382.77 $382.77 $382.77 $382.77 $382.77 $382.77 $382.77 $382.77 $382.77 $382.77 $382.77 $382.77 $382.77

$243 $4,593 $4,593 $4,593 $4,593 $4,593 $4,593 $4,593 $4,593 $4,593 $4,593 $4,593 $4,593 $4,593 $4,593

$31,742 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0





Schedule C.2 – FULL FUNDING MODEL – 30 Year RESERVE FUND CASH FLOW PROJECTION AND DEFICIENCY ANALYSISStrata:

Current Reserve

Fund

Requirements







Reserve Adequacy









$7,879,801 $8,677,788 $9,461,372 $10,276,828 $7,961,293 $7,990,181 $8,782,939 $9,594,474 $10,418,181 $11,246,666 $9,333,912 $10,153,711 $10,977,466 $11,821,918 $12,679,038

$679,791 $679,791 $679,791 $679,791 $679,791 $679,791 $679,791 $679,791 $679,791 $679,791 $679,791 $679,791 $679,791 $679,791 $679,791

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0



Total Cash Resources $8,677,788 $9,487,746 $10,283,084 $11,110,771 $8,760,503 $8,789,824 $9,594,474 $10,418,181 $11,254,245 $12,095,157 $10,153,711 $10,985,808 $11,821,918 $12,679,038 $13,549,014



3 Wood Balconies $125,328 - - - - - - - - - - - - - - -

4 Balcony Railings - Cedar Siding $206,689 - - - - - - - - - - - - - - -

5 Exterior Walls - Cedar Siding $2,628,000 - - - - - - - - - - - - - - -

6 Exterior Walls - Wood Trim $467,794 - - - - - - - - - - - - - - -

7 Soffits - Cedar $122,325 - - - - - - - - - - - - - - -


9 Window Assemblies $296,400 - - - - - - - - - 2,307,798 - - - - -

10 Patio Sliding Doors $86,897 - - - - 384,400 - - - - - - - - - -

11 Front Entry Doors $46,119 - - - - - - - - - - - - - - -

12 Metal Service Doors $7,656 - - - - - - - - - - - - - - -

13 Garage Doors $118,400 - - - - - - - - - - - - - - -

14 Sealants and Weatherproofing $80,208 - - - - - - - - - 132,611 - - - - -

15 Exterior Painting and Staining $333,200 - - - - - - - - - - - - - - -

16 Sloped Cedar Shingles $85,638 - - - 3,144,888 - - - - - - - - - - -

17 Roof Skylights $27,600 - - - - - - - - - - - - - - -

18 Gutters and Downpipes $47,663 - - - - 210,842 - - - - - - - - - -

19 Chimney Caps $29,936 - - - - 132,424 - - - - - - - - - -





24 Exterior lights - Lampposts $18,072 - - - - - - - - - - - - - - -

25 Exterior Lights - Wall Fixtures $22,575 - - - - - - - - - - - - - - -

26 Exterior - GFCI Outlets $15,198 - - - - - - - - - - - - - - -

28 Concrete Patios and Sidewalks $33,336 - - - - - - - - - - - - - - 261,058

29 Wood Fencing - Replacement $88,875 - - - - - - - - - 263,615 - - - - -

30 Wood Fencing - Staining $13,398 - 26,373 - - - - - - - 34,063 - - - - -

31 Landscaping $18,750 - - - - - - - - - - - - - - -



34 Entrance Gates $28,000 - - - - - - - - - - - - - - -

35 Recreation Center - Painting & Decorating $1,080 - - - - - - - - - 4,805 - - - - -

36 Recreation Center - Interior Doors & Windows $1,219 - - - - - - - - - 7,230 - - - - -

37 Recreation Center - Flooring $5,540 - - - - - - - - - - - - - - -



40 Recreation Center - Washrooms $9,643 - - - - 42,656 - - - - - - - - - -

41 Recreation Center - Workshop & Tools $3,750 - - - - - - - - - 11,123 - - - - -

42 Recreation Center - Furniture, Fixtures and Equipment $5,625 - - - - - - - - - - - - - - -

43 Recreation Center - Pool Equipment & Filtration System $125 - - - 4,590 - - - - - - - - - - -





TOTAL EXPENDITURES $5,281,984 $0 $26,373 $6,255 $3,149,478 $770,323 $6,885 $0 $0 $7,579 $2,761,245 $0 $8,342 $0 $0 $270,240

$8,677,788 $9,461,372 $10,276,828 $7,961,293 $7,990,181 $8,782,939 $9,594,474 $10,418,181 $11,246,666 $9,333,912 $10,153,711 $10,977,466 $11,821,918 $12,679,038 $13,278,774

$8,677,788 $9,461,372 $10,276,828 $7,961,293 $7,990,181 $8,782,939 $9,594,474 $10,418,181 $11,246,666 $9,333,912 $10,153,711 $10,977,466 $11,821,918 $12,679,038 $13,278,774

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

$382.77 $382.77 $382.77 $382.77 $382.77 $382.77 $382.77 $382.77 $382.77 $382.77 $382.77 $382.77 $382.77 $382.77 $382.77

$4,593 $4,593 $4,593 $4,593 $4,593 $4,593 $4,593 $4,593 $4,593 $4,593 $4,593 $4,593 $4,593 $4,593 $4,593

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

$4,593 $4,593 $4,593 $4,593 $4,593 $4,593 $4,593 $4,593 $4,593 $4,593 $4,593 $4,593 $4,593 $4,593 $4,593




Reserve Adequacy





Current Reserve

Fund

Requirements


Schedule C.2 – FULL FUNDING MODEL – 30 Year RESERVE FUND CASH FLOW PROJECTION AND DEFICIENCY ANALYSISStrata:








LMS 2058 Years 1-15




$540,106 $478,054 $521,585 $103,326 $141,966 $106,023 $141,188 $181,520 $222,840 $240,055 $99,068 $140,321 $177,426 $108,043 $150,635

$36,000 $36,360 $36,724 $37,091 $37,462 $37,836 $38,215 $38,597 $38,983 $39,373 $39,766 $40,164 $40,566 $40,971 $41,381

$0 $0 $65,000 $0 $130,000 $0 $0 $0 $0 $6,520,000 $0 $0 $20,000 $0 $640,000



Total Cash Resources $584,207 $521,585 $631,132 $141,966 $311,557 $145,449 $181,520 $222,840 $265,165 $6,803,029 $140,321 $182,589 $240,653 $150,635 $834,275



3 Wood Balconies $125,328 - - - - - - - - - 287,606 - - - - -

4 Balcony Railings - Cedar Siding $206,689 - - - - - - - - - - - - - - 584,396

5 Exterior Walls - Cedar Siding $2,628,000 - - - - - - - - - 5,065,870 - - - - -

6 Exterior Walls - Wood Trim $467,794 - - - - - - - - - 901,745 - - - - -

7 Soffits - Cedar $122,325 - - - - - - - - - - - - - - -


9 Window Assemblies $296,400 - - - - - - - - - - - - - - -

10 Patio Sliding Doors $86,897 - - - - - - - - - - - - - - -

11 Front Entry Doors $46,119 - - - - - - - - - - - - - - 119,220

12 Metal Service Doors $7,656 - - - - - - - - - - - - - - 19,792

13 Garage Doors $118,400 - - - - - - - - - 244,536 - - - - -

14 Sealants and Weatherproofing $80,208 90,344 - - - - - - - - - - - 132,611 - -

15 Exterior Painting and Staining $333,200 - - 523,935 - - - - - - - - - - - -

16 Sloped Cedar Shingles $85,638 - - - - - - - - - - - - - - -

17 Roof Skylights $27,600 - - - - - - - - - 63,337 - - - - -

18 Gutters and Downpipes $47,663 - - - - - - - - - - - - - - -

19 Chimney Caps $29,936 - - - - - - - - - - - - - - -





24 Exterior lights - Lampposts $18,072 - - - - - - - - - 41,472 - - - - -

25 Exterior Lights - Wall Fixtures $22,575 - - - - - - - - - 51,806 - - - - -

26 Exterior - GFCI Outlets $15,198 - - - - - - - - - 34,877 - - - - -

28 Concrete Patios and Sidewalks $33,336 - - - - - - - - - - - - - - -

29 Wood Fencing - Replacement $88,875 - - - - 139,049 - - - - - - - - - -

30 Wood Fencing - Staining $13,398 15,810 - - - - - - - 20,419 - - - - - -

31 Landscaping $18,750 - - - - - - - - - - - - - - -



34 Entrance Gates $28,000 - - - - 49,283 - - - - - - - - - -

35 Recreation Center - Painting & Decorating $1,080 - - - - 2,535 - - - - - - - - - 3,490

36 Recreation Center - Interior Doors & Windows $1,219 - - - - - - - - - - - - - - -

37 Recreation Center - Flooring $5,540 - - - - - - - - - 12,713 - - - - -



40 Recreation Center - Washrooms $9,643 - - - - - - - - - - - - - - -

41 Recreation Center - Workshop & Tools $3,750 - - - - 5,867 - - - - - - - - - -

42 Recreation Center - Furniture, Fixtures and Equipment $5,625 - - - - 8,801 - - - - - - - - - -

43 Recreation Center - Pool Equipment & Filtration System $125 - - - - - - - - - - - - - - -





TOTAL EXPENDITURES $5,281,984 $106,153 $0 $527,806 $0 $205,535 $4,262 $0 $0 $25,110 $6,703,961 $0 $5,163 $132,611 $0 $732,580

$478,054 $521,585 $103,326 $141,966 $106,023 $141,188 $181,520 $222,840 $240,055 $99,068 $140,321 $177,426 $108,043 $150,635 $101,695

$5,175,830 $5,933,258 $6,174,242 $6,946,646 $7,525,101 $8,313,507 $9,118,000 $9,934,561 $10,738,260 $4,875,164 $5,628,082 $6,387,130 $7,030,117 $7,815,360 $7,879,801

-$4,697,777 -$5,411,674 -$6,070,916 -$6,804,680 -$7,419,079 -$8,172,319 -$8,936,480 -$9,711,721 -$10,498,204 -$4,776,095 -$5,487,761 -$6,209,704 -$6,922,075 -$7,664,725 -$7,778,106

9% 9% 2% 2% 1% 2% 2% 2% 2% 2% 2% 3% 2% 2% 1%

$20.27 $20.47 $20.68 $20.88 $21.09 $21.30 $21.52 $21.73 $21.95 $22.17 $22.39 $22.61 $22.84 $23.07 $23.30

$243 $246 $248 $251 $253 $256 $258 $261 $263 $266 $269 $271 $274 $277 $280

$0 $0 $439 $0 $878 $0 $0 $0 $0 $44,054 $0 $0 $135 $0 $4,324

$243 $246 $687 $251 $1,131 $256 $258 $261 $263 $44,320 $269 $271 $409 $277 $4,604


Strata:


Reserve Adequacy






Schedule C.3 – UNFUNDED 'PAY AS YOU GO' MODEL – 30 Year RESERVE FUND CASH FLOW PROJECTION AND DEFICIENCY ANALYSIS




Current Reserve

Fund

Requirements

RESERVE EXPENDITURES









$101,695 $145,015 $163,030 $201,855 $108,466 $103,263 $141,853 $188,347 $235,982 $277,201 $105,825 $153,580 $194,171 $244,179 $295,408

$41,795 $42,213 $42,635 $43,061 $43,492 $43,927 $44,366 $44,810 $45,258 $45,710 $46,168 $46,629 $47,096 $47,566 $48,042

$0 $0 $0 $3,010,000 $720,000 $0 $0 $0 $0 $2,540,000 $0 $0 $0 $0 $30,000



Total Cash Resources $145,015 $189,403 $208,111 $3,257,944 $873,585 $148,739 $188,347 $235,982 $284,780 $2,867,069 $153,580 $202,513 $244,179 $295,408 $377,881



3 Wood Balconies $125,328 - - - - - - - - - - - - - - -

4 Balcony Railings - Cedar Siding $206,689 - - - - - - - - - - - - - - -

5 Exterior Walls - Cedar Siding $2,628,000 - - - - - - - - - - - - - - -

6 Exterior Walls - Wood Trim $467,794 - - - - - - - - - - - - - - -

7 Soffits - Cedar $122,325 - - - - - - - - - - - - - - -


9 Window Assemblies $296,400 - - - - - - - - - 2,307,798 - - - - -

10 Patio Sliding Doors $86,897 - - - - 384,400 - - - - - - - - - -

11 Front Entry Doors $46,119 - - - - - - - - - - - - - - -

12 Metal Service Doors $7,656 - - - - - - - - - - - - - - -

13 Garage Doors $118,400 - - - - - - - - - - - - - - -

14 Sealants and Weatherproofing $80,208 - - - - - - - - - 132,611 - - - - -

15 Exterior Painting and Staining $333,200 - - - - - - - - - - - - - - -

16 Sloped Cedar Shingles $85,638 - - - 3,144,888 - - - - - - - - - - -

17 Roof Skylights $27,600 - - - - - - - - - - - - - - -

18 Gutters and Downpipes $47,663 - - - - 210,842 - - - - - - - - - -

19 Chimney Caps $29,936 - - - - 132,424 - - - - - - - - - -





24 Exterior lights - Lampposts $18,072 - - - - - - - - - - - - - - -

25 Exterior Lights - Wall Fixtures $22,575 - - - - - - - - - - - - - - -

26 Exterior - GFCI Outlets $15,198 - - - - - - - - - - - - - - -

28 Concrete Patios and Sidewalks $33,336 - - - - - - - - - - - - - - 261,058

29 Wood Fencing - Replacement $88,875 - - - - - - - - - 263,615 - - - - -

30 Wood Fencing - Staining $13,398 - 26,373 - - - - - - - 34,063 - - - - -

31 Landscaping $18,750 - - - - - - - - - - - - - - -



34 Entrance Gates $28,000 - - - - - - - - - - - - - - -

35 Recreation Center - Painting & Decorating $1,080 - - - - - - - - - 4,805 - - - - -

36 Recreation Center - Interior Doors & Windows $1,219 - - - - - - - - - 7,230 - - - - -

37 Recreation Center - Flooring $5,540 - - - - - - - - - - - - - - -



40 Recreation Center - Washrooms $9,643 - - - - 42,656 - - - - - - - - - -

41 Recreation Center - Workshop & Tools $3,750 - - - - - - - - - 11,123 - - - - -

42 Recreation Center - Furniture, Fixtures and Equipment $5,625 - - - - - - - - - - - - - - -

43 Recreation Center - Pool Equipment & Filtration System $125 - - - 4,590 - - - - - - - - - - -





TOTAL EXPENDITURES $5,281,984 $0 $26,373 $6,255 $3,149,478 $770,323 $6,885 $0 $0 $7,579 $2,761,245 $0 $8,342 $0 $0 $270,240

$145,015 $163,030 $201,855 $108,466 $103,263 $141,853 $188,347 $235,982 $277,201 $105,825 $153,580 $194,171 $244,179 $295,408 $107,642

$8,677,788 $9,461,372 $10,276,828 $7,961,293 $7,990,181 $8,782,939 $9,594,474 $10,418,181 $11,246,666 $9,333,912 $10,153,711 $10,977,466 $11,821,918 $12,679,038 $13,278,774

-$8,532,773 -$9,298,342 -$10,074,973 -$7,852,827 -$7,886,918 -$8,641,086 -$9,406,127 -$10,182,199 -$10,969,465 -$9,228,087 -$10,000,132 -$10,783,295 -$11,577,740 -$12,383,630 -$13,171,133

2% 2% 2% 1% 1% 2% 2% 2% 2% 1% 2% 2% 2% 2% 1%

$23.53 $23.77 $24.01 $24.25 $24.49 $24.73 $24.98 $25.23 $25.48 $25.74 $26.00 $26.26 $26.52 $26.78 $27.05

$282 $285 $288 $291 $294 $297 $300 $303 $306 $309 $312 $315 $318 $321 $325

$0 $0 $0 $20,338 $4,865 $0 $0 $0 $0 $17,162 $0 $0 $0 $0 $203

$282 $285 $288 $20,629 $5,159 $297 $300 $303 $306 $17,471 $312 $315 $318 $321 $527




Reserve Adequacy




Schedule C.3 – UNFUNDED 'PAY AS YOU GO' MODEL – 30 Year RESERVE FUND CASH FLOW PROJECTION AND DEFICIENCY ANALYSISStrata:





Current Reserve

Fund

Requirements

RESERVE EXPENDITURES





Schedule C.1 – THRESHOLD MODEL – SCENARIO SUMMARY

Schedule C.2 – FULLY FUNDED MODEL – SCENARIO SUMMARY

Schedule C.3 – UNFUNDED 'PAY AS YOU GO' MODEL – SCENARIO SUMMARY





RESERVE ADEQUACIES OVER 30 YEARS

RESERVE FUNDING PLAN FINANCIAL SUMMARIES





7.3 Reserve Fund Management

The Act and Regulations provides that the Strata Council prepare their own plan for future funding

of the reserve fund, and they are not bound by the recommendations of the Reserve Fund planner.

The Province of British Columbia has passed the Strata Property Act, Statutes of British Columbia

1998, Chapter C 43, with amendments in force as of November 18, 2009. Part 6 mandates that

Strata / Condominium Corporations must establish and maintain reserve funds, to wit:

6.1 For the purposes of section 93 of the Act, the amount of the annual contribution to the

contingency reserve fund for a fiscal year, other than the fiscal year following the first

annual general meeting, must be determined as follows:

(a) if the amount of money in the contingency reserve fund at the end of any fiscal year

after the first annual general meeting is less than 25% of the total amount budgeted for

the contribution to the operating fund for the fiscal year that has just ended, the annual

contribution to the contingency reserve fund for the current fiscal year must be at least

the lesser of

(i) 10% of the total amount budgeted for the contribution to the operating fund for the

current fiscal year, and

(ii) the amount required to bring the contingency reserve fund to at least 25% of the total

amount budgeted for the contribution to the operating fund for the current fiscal year;

(b) if the amount of money in the contingency reserve fund at the end of any fiscal year

after the first annual general meeting is equal to or greater than 25% of the total

amount budgeted for the contribution to the operating fund for the fiscal year that has

just ended, additional contributions to the contingency reserve fund may be made as

part of the annual budget approval process after consideration of the depreciation

report, if any, obtained under section 94 of the Act.

This means that the Strata Council can vary the recommended funding. The Council must only

take into consideration the Depreciation Report if they wish to have contributions over 25% of the

annual Operation Budget. However, the Strata Council does have a fiduciary duty to ensure that

the Reserve Fund is adequate for financing all future major repairs and replacements.

In the subject instance, rather than increasing Reserve Fund contributions, the Board may elect to

pass a Special Levy or several levies to eliminate the Reserve Fund shortfall.





Recommendations

Due to its past performance, the reserve fund for Strata Corporation LMS 2058 is deficient.

There is no legislated rule to eliminated or run a test for Strength of the Reserve Fund in B.C. As

per the fiduciary duty of the Council members, as well as the intent of the British Columbia Strata

Property Act, 1998, the deficiency should be managed and eliminated over time in order to be

adequate to repair, replace and restore common area assets as required.

Bramwell & Associates Realty Advisors Inc. recommendations, set out below and detailed in this

report, will assist the Strata Corporation in achieving and maintaining an adequate Reserve Fund.

In our opinion, the current Reserve Fund balance, recommended annual contributions and earned

investment income will adequately fund immediate and future Reserve Fund expenditures.

1. The corporation should prepare and implement a long-term reserve fund strategy.

2. Major repairs and replacements should be recorded in, and funded from, the reserve

fund account. The use of the operating budget should be limited. Issues of what is

covered in FF & E (furniture, fixtures, and equipment) should be clarified.

3. The combined reserve fund contribution of $36,000 per annum in 2014 should be

increased to $144,000 per annum in 2015 and thereafter by the amounts detailed in the

cash flow table, each subsequent year.

4. The reserve fund will require a set of special assessments, starting with $500,000 in

2016 and $5,000,000 in 2023 to fund the immediate replacements set out in the 30 year

projections and insure adequacy targets set out by the strata council.

5. The reserve fund should be fully invested in guaranteed securities, yielding at least

1.50% per annum.

6. The corporation should make such expenditures, as necessary to maintain the property

in optimum condition.

7. The reserve fund should be reviewed every year to ensure that the underlying

assumptions are still valid and that the estimates remain current.

8. The Strata Corporation should update the Reserve Fund Study every three (3) years.





APPENDICES





APPENDIX A – WRITER CREDENTIALS

This report has been prepared with input from all of Bramwell & Associates Realty Advisors’

Depreciation Report team members. Our team is unmatched as our experts are experienced in

the repair and renovation of strata buildings. This edge affords us realistic component lifespan

condition analysis which is key to reliable Depreciation Reports. Our team has completed

Depreciation Reports on dozens of developments of all types and sizes. We know from firsthand

knowledge and experience how buildings function, how they are to be inspected, how financial

records are to be analysed and which solutions meet Strata Councils’ Depreciation Report and

Reserve Fund Study needs. We aim to facilitate budgeting and to maximize the usefulness of

Depreciation Reports.

Jeremy Bramwell, AACI, P.App, RI, CRP

Jeremy is President of Bramwell & Associates Realty Advisors Inc., a commercial

real estate firm with dedicated staff for Valuation as well as Depreciation Reports.

Bramwell & Associates has completed Depreciation Reports throughout the Lower

Mainland as well as on Vancouver Island.

Jeremy oversees all files and participates in their preparation. Jeremy is a CRP

(Certified Reserve Planner), the only nationally accredited designation for

conducting Depreciation Reports.

As a Board member of the Real Estate Institute of Canada’s Vancouver Chapter as

well as the Chair of the CRP Task Force in BC, Jeremy is responsible for promoting

the CRP designation and the standard use of the functional Depreciation Report

approach.

Peter Helmus, B.A., CRP

Peter is a Certified Reserve Planner with Bramwell & Associates’ Depreciation

Report team. After 30 years in the construction industry building roofs and

installing windows as well as siding, as both an installer and a general contractor,

Peter decided to leave the outdoors and come inside.

We all benefit from speaking with Peter about construction and Depreciation

Reports, as his depth of knowledge is based on his extensive experience developed

specifically on strata developments throughout the GVRD, as well as his prior

education and accounting background. With Peter, getting a Depreciation Report is

informative and his guidance through the process ensures a reliable product.

Jean-François Proulx, M.Sc.

Jean-François (JF) is our newest Certified Reserve Planner. JF has one of the

longest records of Depreciation Reports experience in BC, recently as a Building

Envelope Consultant with JSD Envelope Engineering and then as Normac’s

Depreciation Report lead consultant.

This specialized expertise, added to his construction experience developed over the

last 30 years, together with his academic work on many projects, make JF a well-

rounded Depreciation Report / Reserve Study Planner, comfortable with

stakeholders on all sides of construction industry’s proverbial fence.

JF lives in a strata and is its President. He was also a keynote speaker at the CHOA

organized Depreciation Report Seminar during Buildex Vancouver 2013.





APPENDIX B – ASSUMPTIONS AND LIMITING CONDITIONS

1. The Depreciation Report / Reserve Fund planner assume no responsibility for matters of a

legal nature affecting the property appraised or the title thereto, nor does the Depreciation

Report / Reserve Fund planner render any opinion as to the title, which is assumed to be

good and marketable. The property is appraised as though under responsible ownership.

2. The Depreciation Report / Reserve Fund planner has made no survey of the property. The

building plan and / or sketches in this report are included to assist the reader to visualize

the subject property and the Depreciation Report / Reserve Fund planner assumes no

responsibility for their accuracy. Unless otherwise stated in this report the Depreciation

Report / Reserve Fund planner has assumed the utilization of the land and improvements

is within the boundaries or property lines of the property described and there is no

encroachment or trespass.

3. The Depreciation Report / Reserve Fund planner is not required to give testimony or appear

in court because of having made the depreciation report with reference to the property in

question, unless arrangements have been previously made. If this report is entered in as

expert evidence, and the writer is required to appear, the Client agrees upon submission of

the report to Court, to compensate the writer, or indemnify the writer in the case of

opposition counsel, at the rate of $150.00 per hour for Court research, preparation, travel

and availability time.

4. The Depreciation Report / Reserve Fund planner has not inspected or tested the soil or

subsoil and the Depreciation Report / Reserve Fund planner is unable to report any such

part of the subject property is free from defect or in such condition as to render the subject

property less valuable. For the purpose of this report, the Depreciation Report / Reserve

Fund planner has assumed there are no inadequacies, insufficiencies, or faults in the subject

property, which are not easily detectable and assume no responsibility for such conditions

or any inspection, which might be required to discover such conditions.

5. Information, estimates and opinions furnished to the Depreciation Report / Reserve Fund

planner contained in the report were obtained from sources considered reliable and

believed to be true and correct. However, the Depreciation Report / Reserve Fund planner

does not assume responsibility for the accuracy of such items furnished to the Depreciation

Report / Reserve Fund planner. The Depreciation Report / Reserve Fund planner reserve

the right to make adjustments to the Depreciation Report herein reported, as may be

required by the consideration of additional data or more data made available. Such

amendment may be subject to an additional charge if the data was not available until after

the report is presented for review to the Strata Council.

6. In order to arrive at supportable replacement cost estimates, it was found necessary to

utilize both documented and other cost data. A concerted effort has been put forth to verify

the accuracy of the information contained herein. Accordingly, the information is believed





to be reliable and correct, and it has been gathered to standard professional procedures, but

no guarantee as to the accuracy of the data is implied.

7. Disclosure of the contents of the appraisal report is governed by the By-Laws and

Regulations of the Professional Appraisal and Reserve Study Organizations with which the

Depreciation Report / Reserve Fund planner is affiliated.

8. No liens or encumbrances were considered unless otherwise stated in this report.

9. The function of this report is for use by Strata Corporation LMS 2058 for Depreciation

Report / Reserve Fund planning purposes only, as required under British Columbia

legislation. This report was ordered by the addressed client, and prepared to meet their

content expectations. In accepting this report, the client expressly agrees not to use or rely

on the report for any other purposes.

10. Neither all, nor any part of the contents of the report or copy thereof (including conclusions

as to the property value, the identity of the Depreciation Report / Reserve Fund planner,

professional designations, reference to any professional organizations, or the firm with

which the Depreciation Report / Reserve Fund planner is connected) shall be used for any

purposes by anyone but the client specified in the report. This includes any strata lot

mortgagee or its successors and assigns, mortgage insurers, consultants, professional

reserve planner or appraisal organizations, agency or instrumentality of the Canadian

Government or any province without the previous written consent of the Depreciation

Report / Reserve Fund planner; nor shall it be conveyed by anyone to the public through

advertising, public relations, news, sales, or other media without written consent and

approval of the Depreciation Report / Reserve Fund planner. Notwithstanding the

foregoing, the applicant herein has permission to reproduce the report in whole or in part

for the legitimate purposes of providing information to the board of directors, unit owners

and others, who have an interest in the project. Specifically, the applicant has permission

to provide depreciation report / Reserve Fund study information in disclosure documents,

such as a Form B.

11. Unless otherwise stated in this report, the existence of hazardous substances, including, but

without limitation to, mould and mildew, asbestos, polychlorinated biphenyls, petroleum

leakage, or agricultural chemicals, which may be present on the property, or other

environmental conditions, were not called to the attention of nor did the Depreciation

Report / Reserve Fund planner become aware of such during the Depreciation Report /

Reserve Fund planner’s inspection. The Depreciation Report / Reserve Fund planner has

no knowledge of the existence of such materials on or in the property unless otherwise

stated. The Depreciation Report / Reserve Fund planner is not qualified to test such

substances or conditions. If the presence of such substances, such as mould and mildew,

asbestos, urea formaldehyde foam insulation, or other hazardous substances or

environmental conditions, may affect the value of the property, the value estimated is

predicated on the assumption there is no such condition on or in the property or in such

proximity thereto that it would cause a loss in value. No responsibility is assumed for any





such conditions, or for any expertise or engineering knowledge required to discover them.

The Depreciation Report / Reserve Fund planner urges the client to retain an expert if

desired.

12. Further, the Depreciation Report / Reserve Fund planner has not carried out any

investigation into the past or present uses of either the subject property or of any adjacent

properties to establish whether there is any potential for contamination from any uses on

any sites adjacent to the subject and therefore assume that none exists.

13. The Depreciation Report / Reserve Fund planner has assumed the subject property is and

has been constructed, occupied and used in full compliance with, and without

contravention of, all federal, provincial and municipal laws and regulations, including, but

not limited to, all zoning bylaws, building codes and regulations, environmental laws and

regulations, health regulations and fire regulations, except only where otherwise stated.

The Depreciation Report / Reserve Fund planner has further assumed, for any use of the

subject property upon which this report is based, any and all required licenses, permits,

certificates, and authorizations have been or can be obtained and renewed, except only

where otherwise stated.

14. The reported analyses, opinions and conclusions were developed, and this report has been

prepared, in conformity with the requirements of the Code of Professional Ethics and the

Standards of Professional Appraisal Practice of the Appraisal Institute of Canada, as well

as the Real Estate Institute of Canada. This Depreciation Report was completed in

conformity with the Canadian Uniform Standards of Professional Appraisal Practice

(CUSPAP) as regulated by the Appraisal Institute of Canada.

15. Component quantities indicated in this Report were developed by Bramwell & Associates

Realty Advisors Inc. – Strata Reserve Planning Services, unless otherwise noted in our site

inspection notes comments. No destructive or intrusive testing was performed, nor should

the site inspection be assumed to be anything other than for budget purposes. We are not

responsible for identifying latent construction defects.

16. Because we have no control over future events, we cannot claim that all the events we

anticipate will occur as planned. We expect that inflationary trends will continue, and we

expect that financial institutions will provide interest earnings on funds on deposit as they

have historically.

17. We believe that reasonable estimates for these figures are much more accurate than

ignoring these economic realities. The things we can control are measurements, which we

attempt to establish within 5% accuracy. The starting Reserve Balance and current Reserve

interest earnings are also numbers that can be identified with a high degree of certainty.

These figures have been provided to us, and were not confirmed by our independent

research. In addition, we have considered the Strata Corporation’s representation of current

and historical Reserve projects reliable, and we have considered the representations made





by its vendors and suppliers to also be accurate and reliable. Our projections assume a

stable economic environment and lack of natural disasters.

18. Reserve Fund expenditures may be varied to conform to actual management and

maintenance plans, and therefore, they should not be dogmatically interpreted. In essence,

Reserve Fund expenditures are the responsibility of the Strata Council and any targeted

expenditure found herewith is a guideline.

19. Because both the physical status and financial status of the association change each year,

this Reserve Study is by nature a “one-year” document. This information can and should

be adjusted annually as part of the Reserve Study Update process so that more accurate

estimates can be reflected in the Reserve plan. Reality often differs from even the best

assumptions due to changing economic factors, physical factors, or ownership

expectations. Because many years of financial preparation help the preparation for large

expenses, this Report projects expenditures for the next 30 years. We fully expect a number

of adjustments will be necessary through the interim years to both the cost and timing of

distant expense projections. It is our recommendation that your Reserve Study be updated

annually.

20. Unless otherwise noted, all estimates are expressed in Canadian currency.

21. Bramwell & Associates Realty Advisors Inc. and its employees have no ownership,

management, or other business relationships with the client other than this Reserve Study

engagement.

22. Liability of Bramwell & Associates Realty Advisors Inc. to your company or organization,

you individually or affiliated parties for any claim related to professional services provided

pursuant to this engagement, including the partners, officers, employees or contractors of

Bramwell & Associates Realty Advisors Inc. shall be strictly limited to the amount of any

professional liability insurance the firm may have available at the time such claim is made.

Current liability insurance carried by the firm is $2,000,000 per claim (as an extension of

the Professional Liability Program of the Appraisal Institute of Canada). No claim shall

be brought against the appraisal firm, or its partners more than three years after the services

were completed.

23. The Personal Information Protection Act (PIPA) of British Columbia sets out requirements

for how organizations may collect, use, disclose and secure personal information. The

preparation of this report and/or retention of records are subject to the requirements of

PIPA, and restricts the use of this report to only the intended use and user(s) outlined within

the report. Written authorization in advance must be requested for any proposed use in

aggregated data model development, which must be done in conformity with PIPA and the

Privacy Policy. For further information on the Act, contact the office of the Information &

Privacy Commissioner for British Columbia, or access through the website:

http://www.oipc.bc.ca/.

http://www.oipc.bc.ca/





24. Bramwell & Associates Realty Advisors Inc. takes privacy very seriously. We collect

personal information to better serve our customers, for security reasons, and to provide

customers and potential customers with information about our services. We would like to

have a lifelong relationship of good service with our clients, and for that reason we may

retain personal information provided for as long as necessary to provide our services and

respect our obligations to governmental agencies and other third parties. The information

will remain confidential to Bramwell & Associates Realty Advisors Inc., to businesses

working for us, and to any organization that acquires part or all of our business, provided

that they agree to comply with our privacy policy. By accepting this report, you are

agreeing to maintain the confidentiality and privacy of any personal information contained

herein and to comply in all material respects with the contents of our Privacy Policy. As

stated above, written authorization in advance must be requested for any proposed use in

aggregated data model development, which must be done in conformity with PIPA and the

Privacy Policy. If you wish to see a copy of our Privacy Policy, or have privacy questions

or concerns, please contact the Privacy Officer by e-mail at: [email protected].

mailto:[email protected]





APPENDIX C – CERTIFICATION

I certify to the best of my knowledge and belief that:

1. The statements of fact contained in this report are true and correct;

2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions

and limiting conditions, and are my personal impartial, and unbiased professional analyses,

opinions, and conclusions;

3. I have no present or prospective interest in the property that is the subject of this report, and

no personal interest with respect to the parties involved;

4. My engagement in and compensation for this assignment were not contingent upon

developing or reporting predetermined results, the amount of the value estimate, or a conclusion

favoring the client;

5. My analyses, opinions, and conclusions in this Depreciation Report and Reserve Fund Study

were developed in conformity with the Reserve Fund Study Standards, published by the Real

Estate Institute of Canada, and in conformity with the Canadian Uniform Standards of Professional

Appraisal Practice, and complies with the BC Strata Property Act 1998, and Regulations, as

amended up to date;

6. I have the knowledge and experience to complete the assignment competently;

7. No one provided professional assistance to the persons signing this report;

8. As of the date of this report the undersigned has fulfilled the requirements of The Appraisal

Institute of Canada Mandatory Recertification Program for designated members;

9. I made a personal inspection of the subject property on September 11th, 2013, and personally

examined the building plans and/or documents as identified herein.

January 10th, 2014

Date Jeremy Bramwell, AACI, P.App. RI, CRP

Reserve Fund Study - Silver Oak · Jeremy Bramwell, AACI, ... this Depreciation Report and Reserve...

Documents

Transcript of Reserve Fund Study - Silver Oak · Jeremy Bramwell, AACI, ... this Depreciation Report and Reserve...