Reserve Data Analyst

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1 Honolulu, HI Account Sample -- Version Sample December 20, 2016 Reserve Data Analyst Prepared By Quality Check By

2 TABLE OF CONTENTS Hawaii Sample Condominium Reserve Study Introduc on 3 Summary Page 4 Reserve Analyst Comments 5 Unit Assessment Distribu on - Recommended Funding Model 6 What Components Are Included? 11 The Component List 12 Excluded Components 17 Current Cost by Category Chart 18 How Much To Reserve? 19 About Percent Funded 20 Percent Funded Chart 21 Reserve Account Balance Chart 22 Recommended Funding - Summary 23 Recommended Funding - Projec ons 24 Hawaii Cash Flow Funding - Summary 25 Hawaii Cash Flow Funding - Projec ons 26 Current Funding - Summary 27 Current Funding - Projec ons 28 Hawaii Compliance 50% Funding - Summary 29 Hawaii Compliance 50% Funding - Projec ons 30 Reserve Account Expenditures Chart 31 Annual Expenditure Report 32 Distribu on of Accumulated Reserves Spreadsheet - Component Expenditures 195 Calcula ons Appendix 210 Defini ons Appendix 211 Page 1

3 TABLE OF CONTENTS Hawaii Sample Condominium Reserve Study Disclosures Appendix 217 Component Index 221 Page 2

4 Introduc on Thank you for utilizing the services of Reserve Data Analysis for your reserve study. We strive to create a comprehensive report that can be utilized for your budgeting needs and for future replacement schedules but above all else we place an emphasis on a high level of customer service. If there are any questions, concerns, corrections or revisions needed please do not hesitate to call or us. While this study does have some explanations of the methodology used we have kept it to a minimum for brevity. More detailed explanations of methodology & concepts are explained in our Reserve Study Guidebook which can be found on our website at There are a couple of tips to consider that will help you both navigate this study and understand the different sections within the study: 1. To most easily navigate this study we recommend printing out the Table of Contents page at the beginning of the study and the Component Index pages at the rear of the study. This way you don t need to print out the whole study, you can have the PDF of this study open on the computer and can refer to the printed out Table of Contents and Component Index pages to scroll to or jump to pages within your PDF reader program on the computer. 2. We have created a video summary of a sample study to explain the different pages & reports within this study. You can view this video in a smaller browser window while navigating your study for an explanation of each page in the study. This is extremely helpful and answers the majority of questions that we receive from readers of our reserve studies. Link here: The below section summaries touch on the some of the more sought after sections of this study; these can be found on the following Table of Contents page. Summary Page - The Summary Page is a brief outline of the findings and recommendations found after the due diligence was conducted by the Reserve Analyst. A percent funded and summary of the finding models can be found on this page. Component List - Perhaps the most important section of the study is the Component List which is the basis for the recommendations found within the study. It is important that this list is comprehensive and accurate so that the funding models are helpful and accurate in their projections. Funding Plans & Percent Funded - Following the Component List are the Funding Models, Percent Funded Calculations and Projections. These are based on the component list developed earlier and each have a different goal in mind. Annual Expenditures Report - Following the Funding Plans is the Annual Expenditure Report which shows the projected replacement schedule of the components annually for the next 30 years. - The Component Detail Report section of this study gives recommendations for each component as well as shows the specifics of the component (e.g. quantity, location, special considerations, etc.). Page 3

5 Summary Page Profile Parameters Summary Name Hawaii Sample Condominium Reserve Study Location Honolulu, HI # of Units 156 Base Year / Age June, Fiscal Year Ends December, Level of Service Level I Full Reserve Study (With Site-Visit) Prepared for Fiscal Year 2017 On Site Inspection Date December, Allocation Increase Rate ref. Funding Model Summary Contingency Rate ref. Component Detail Report Inflation Rate 3% Interest Rate 1% Tax Rate ref. Funding Model Summary Funding Plan - Method Cash Flow achieve 100% funded in 30 years *Current Reserve Allocation $365,000 per year *Estimated FY Start Balance $129,066 Fully Funded Balance Percent Funded (Deficit) or Surplus Per Unit *Supplied by Client $5,185,399 (ideal amount in reserve account) -> 2% (-$32,412) per unit (recommended model) per year per month avg per unit a month Recommended Funding - Achieve 100% funded in 30 years $435,000 $36,250 $232 Hawaii Cash Flow Funding - Keeps account above $0 in the 20 years following this study $424,961 $35,413 $227 Current Funding - Current data supplied by Client $365,000 $30,417 $195 Hawaii 50% Funding Model - Minimum 50% funded in the 20 years following this study $2,838,858 $236,572 $1,516 Page 4

6 Reserve Analyst Comments Reserve Analyst Comments Note that there are numerous components in this reserve study which have adjusted useful life expectancies at the Client request for budgeting purposes, as well as costs which are much lower than would be typical due to in-house labor being taken into account. If the useful life of these components are shorter than what the Client has requested then there could be a significant impact on the reserve account balance. The specifics on what items are Unfunded or have Adjusted Remaining Useful Life Expectancies can be found in the Component Details Section (utilize Component Index at rear of study) as well as within the Component List of this study. Special Assessments & Loans The below special assessment / loan information has been supplied by the Client and has not been independently verified. The amount and timing of them have been based on the Client's information supplied to the reserve analyst. Special Assessments Per the Manager, none have been approved for fiscal year Loans Per the Manager, none have been approved for fiscal year Page 5

7 Unit Assessment Distribu on - Recommended Funding Model Unit Month Descrip on Assessment Alloca on 101A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ Page 6

8 Unit Assessment Distribu on - Recommended Funding Model Unit Month Descrip on Assessment Alloca on 407A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ A % $ PH/A % $ PH/A % $ PH/A % $ PH/A % $ PH/A % $ Page 7

9 Unit Assessment Distribu on - Recommended Funding Model Unit Month Descrip on Assessment Alloca on PH/A % $ PH/A % $ PH/A % $ PH/A % $ PH/A % $ PH/A % $ PH/A % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ Page 8

10 Unit Assessment Distribu on - Recommended Funding Model Unit Month Descrip on Assessment Alloca on 310B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ B % $ Page 9

11 Unit Assessment Distribu on - Recommended Funding Model Unit Month Descrip on Assessment Alloca on 609B % $ B % $ B % $ B % $ PH/B % $ PH/B % $ PH/B % $ PH/B % $ PH/B % $ PH/B % $ PH/B % $ PH/B % $ PH/B % $ PH/B % $ PH/B % $ PH/B % $ Totals: % $36, Page 10

12 What Components Are Included? Included Components Reserve expenses for components are major expenses which must be budgeted for in advance in order to provide the necessary funds in time for their occurrence. Reserve expenses are reasonably predictable both in terms of frequency and cost. They are expenses that when incurred would have a significant impact on the smooth operation of the budgetary process from one year to the next if they were not reserved for in advance. A common concern when beginning this process is what components are to be included and funded for in the Reserve Study. Nationally recognized Reserve Study Standards indicates reserve components need to meet the following criteria: Excluded Common Area Components Some common area components may have been left out of the study or included in the component list but Unfunded and not considered in the mathematical models. These components will typically fall into one or more of the categories listed below. Below Threshold Costs - Component repair and/or replacement costs that are deemed too small to be considered reserve expenses are typically included in the operational or maintenance budget have not been funded for in this study. Operational Expenses - These occur at least annually and can be effectively budgeted for each year. They are characterized as being reasonably predictable both in terms of frequency and cost. Very Long or Unpredictable Useful Life Expectancy - Components which, when properly maintained, have a very long useful life with no predictable replacement cycle. Unit Improvements - Improvements made to the property that fall within the Governing Documents unit description summary (unit owner s responsibility). Other Non-Association/Organization Owned - Improvements installed on the property but which are owned by other parties such as governmental agencies, utility companies, the US Postal Service, etc. Page 11

13 The Component List Descrip on Date in Service Replacement Year Useful Adjustment Remaining A Building Air Handling Unit - A Bldg - Replace ea 24, ,817 Appliances - Sunset Room - Replace , ,800 Bathroom - A Bldg Mens - Refurbish Unfunded Bathroom - A Bldg Womens - Refurbish ea 8, ,000 Doors - A Bldg Exterior - Replace ea 1, ,500 Doors - A Bldg Interior - Replace Unfunded Drain/Waste Lines - A Bldg - Repair Con ng ls 850, ,000 Electrical System - A Bldg - Modernize ls 375, ,000 Elevator - A Bldg - Cab Refurbish ea 21, ,000 Elevator Systems - A Bldg - Replace ls 496, ,080 Entry Access Panel - A Bldg - Replace ea 4, ,500 Exercise Equipment - A Bldg - 33% Replace , ,158 Exterior Surfaces - A Bldg - Paint/Seal ,000 sf ,300 Exterior Surfaces - A Bldg - Repair ,000 sf ,499 Exterior Surfaces - Sunset & Breezeway - P ,000 sf ,300 Fans - Exhaust - A Bldg % Repair Con ea 2, ,024 Fire Alam System - A Bldg - Replace ls 32, ,000 Fire Peripherals - A Bldg - Replace ea ,250 Flooring - A Bldg Carpet - Replace ,651 sf ,212 Flooring - A Bldg Laundry Tile - Replace sf ,892 Flooring - A Bldg Tile - Replace ,148 sf ,712 Interior Surfaces - A Bldg - Paint/Stain ,290 sf ,529 Kitchen - Sunset Room - Refurbish ls 10, ,000 Lanai - A Bldg - Refubish Unfunded Lanai Railing - A Bldg - Replace Unfunded Lights - A Bldg Exterior - Replace , ,375 Lights - A Bldg Interior - 15% Replace ls 53, ,025 Mailboxes - A Bldg - Replace ea ,440 Roof - A Bldg East - Replace ,236 sf ,574 Roof - A Bldg Elevator Tower - Replace sf ,870 Roof - A Bldg North Entry - Replace sf ,568 Roof - A Bldg Stairwells - Replace sf ,851 Roof - A Bldg West - Replace ,976 sf ,089 Roof - Sunset Room/Breezeway - Replace ,871 sf ,971 Roof Hatch - A Bldg - Replace ea 1, ,500 Sauna - A Bldg - Refurbish ls 9, ,000 Staircase - A Bldg Elevator Room - Replace sf ,200 Trash Chute System - A Bldg Doors - Replace ls 6, ,300 Water Lines - A Bldg - Repair Con ngency ls 40, ,000 Windows - A Bldg & Sunset Room - Replace ls 324, ,000 A Building - Total $3,017,335 Units Cost Unit Cost Current Page 12

14 The Component List Descrip on Date in Service Replacement Year Useful Adjustment Remaining B Building Air Handling Unit - B Bldg - Replace ea 24, ,817 Doors - B Bldg Exterior - Replace ea 1, ,500 Doors - B Bldg Interior - Replace Unfunded Drain/Waste Lines - B Bldg - Repair Con ng ls 850, ,000 Electrical System - B Bldg - Modernize ls 375, ,000 Elevator - B Bldg - Cab Refurbish ea 21, ,000 Elevator Systems - B Bldg - Replace ls 496, ,080 Entry Access Panel - B Bldg - Replace ea 4, ,500 Exterior Surfaces - B Bldg - Paint/Seal ,000 sf ,300 Exterior Surfaces - B Bldg - Repair ,000 sf ,499 Fans - Exhaust - B Bldg % Repair Con ea 2, ,024 Fire Alam System - B Bldg - Replace ls 32, ,000 Fire Peripherals - B Bldg - Replace ea ,250 Flooring - B Bldg Carpet - Replace ,352 sf ,244 Flooring - B Bldg Laundry Tile - Replace sf ,892 Flooring - B Bldg Tile - Replace ,711 sf ,281 Interior Surfaces - B Bldg - Paint/Stain ,210 sf ,021 Lanai - B Bldg - Refubish Unfunded Lanai Railing - B Bldg - Replace Unfunded Lights - B Bldg Exterior - Replace , ,025 Lights - B Bldg Interior - 15% Replace ls 46, ,012 Mailboxes - B Bldg - Replace ea ,440 Roof - A Bldg South Entry - Replace ,680 sf ,464 Roof - B Bldg East - Replace ,236 sf ,574 Roof - B Bldg East Equipment - Removal ls 10, ,000 Roof - B Bldg Elevator Tower - Replace sf ,870 Roof - B Bldg North Entry - Replace sf ,390 Roof - B Bldg South Entry - Replace ,040 sf ,192 Roof - B Bldg Stairwells - Replace sf ,851 Roof - B Bldg West - Replace ,976 sf ,089 Roof Hatch - B Bldg - Replace ea 1, ,500 Sauna - B Bldg - Refurbish ls 9, ,000 Staircase - B Bldg Elevator Room - Replace sf ,200 Trash Chute System - B Bldg Doors - Replace ls 6, ,300 Water Lines - B Bldg - Repair Con ngency ls 40, ,000 Windows - B Bldg - Replace ls 292, ,000 B Building - Total $2,873,316 Units Cost Unit Cost Current Page 13

15 The Component List Descrip on Date in Service Replacement Year Useful Adjustment Remaining Carports/Guard House Carport Structures - Paint , ,760 Downspouts - Carports - Replace Unfunded Exterior Surfaces - Guard House - Paint/Seal sf Flooring - Guard House Tile - Replace sf Guard House - Repair ls 1, ,500 Lights - Carports - Replace ea ,675 Roof - Carport 1-20 & Guard House - Repla ,098 sf ,160 Roof - Carport Replace ,460 sf ,908 Roof - Carport Replace ,642 sf ,892 Roof - Carport & Boiler House - Repl ,500 sf ,900 Roof - Carport Replace ,560 sf ,288 Roof - Carport Replace ,300 sf ,140 Carports/Guard House - Total $290,571 Units Cost Unit Cost Current Grounds Asphalt - Bullpen - Overlay ,984 sf ,565 Asphalt - Bullpen - Sealcoat ,984 sf ,137 Asphalt - North/Breezeway - Replace ,948 sf ,182 Asphalt - North/Breezeway - Sealcoat ,948 sf ,851 Asphalt - South - Overlay ,098 sf ,216 Asphalt - South - Sealcoat ,098 sf ,618 Asphalt - Visitor - Overlay ,875 sf ,125 Asphalt - Visitor - Sealcoat ,875 sf ,037 Benches - Composite - Replace Unfunded Benches - Wood - Replace Unfunded Concrete - Grounds - 3% Repair Unfunded Fence - Privacy - Paint lf ,863 Fence - Privacy - Replace Unfunded Fencing - Chain Link - Replace lf ,184 Flag Pole - Replace ea 2, ,000 Irriga on System - 15% Repair Unfunded Landscaping - 25% Refurbish ,587 sf ,985 Lights - Bollard - Replace ea ,000 Lights - Double Pole - Replace ea 2, ,300 Lights - Landscape - Replace ea ,500 Lights - Single Pole - Replace ea 1, ,750 Pergolas - Grounds - Replace ea 6, ,000 Play Area - Chips - Replenish Unfunded Play Area - Swings - Replace total 2, ,500 Privacy Wall - Concrete - 3% Repair lf ,773 Page 14

16 The Component List Descrip on Date in Service Replacement Year Useful Adjustment Remaining Grounds con nued... Privacy Wall - Concrete - Paint lf ,504 Privacy Wall - North Carports - 5% Repair lf ,704 Privacy Wall - North Carports - Paint ,029 lf ,001 Security System - Replace ls 22, ,000 Signs - Replace , ,750 Storage Shed - Replace total 12, ,000 Storm Drains - Maintain Unfunded Water Fountain - Refurbish ea 7, ,000 Grounds - Total $639,544 Units Cost Unit Cost Current Mechanical Floor Cleaning Equipment - 50% Replace , ,300 Irriga on Controller - Replace ea ,600 Vacuum/Air Machine - Replace ea 3, ,600 Water Heater System - Replace ea 63, ,790 Water Holding Tank - Clean & Sani ze ls 6, ,000 Mechanical - Total $143,290 Pool & Spa Bathrooms - Pool House - Refurbish ea 6, ,000 Benches - Pool - Replace Unfunded Electrical Vehicle Charger - Replace ea 2, ,000 Entry FOB Systems - Pool - Replace ea 1, ,500 Exterior Surfaces - Pool House &- Paint/Seal sf ,280 Fence - Pool - Paint lf ,375 Fence - Pool - Replace lf ,940 Pergola - Pool - Replace ea 10, ,000 Pool - Resurface ,250 sf ,750 Pool - Re le & Recope sf ,500 Pool Deck - Replace & Replumb ,361 sf ,440 Pool Furniture - Replace ls 13, ,875 Pool House - Exterior - Repair ls 2, ,000 Pool House - Interior - Paint Unfunded Roof - Pool House - Replace sf ,969 Skylights - Pool House- Replace ea ,500 Spa - Re le & Recope sf ,740 Water Heater - Instant - Replace ea 3, ,000 Water Heater - Pool - Replace ea 5, ,200 Water Heater - Spa - Replace ea 3, ,600 Pool & Spa - Total $286,669 Page 15

17 The Component List Descrip on Date in Service Replacement Year Useful Adjustment Remaining Total Asset Summary $7,250,726 Units Cost Unit Cost Current Page 16

18 Excluded Components Unless noted otherwise in this reserve study the below components have been excluded from funding in this reserve study. Note that the inclusion of any of these items at a later date via a revision or update to this study will impact the funding strategies developed by the Reserve Analyst. Long Life Components The below components are long life components at this time, have no predictable useful life, predictable remaining useful life or associated costs within the timeframe of this reserve study. 1. Retaining & Sea Walls - Rock retaining & sea walls in the community are a long life component which have no predictable time period for replacement as long as they were installed correctly. We recommend regular inspections of these walls to determine that they are still functioning as designed. Should a history of repairs come to fruition these cost and useful life estimates can be incorporated into future reserve studies. 2. Pilings & Supports - The concrete pilings and supports are a long life component if installed correctly. At this time we have no recommendations for replacement of these components which are located on the West end of Building A. If a history of repairs comes to fruition or there appears to be a need for repairs at a future date we suggest obtaining a bid and incorporating the expenses into future reserve studies. 3. Interior Staircases and Metal Railings - These are long life components that are not exposed to the elements and have no predictable useful life if properly installed and maintained (e.g paint and cleaning). Not Association Responsibility The below components are the owner responsibility per the governing document and a discussion with Board members. 1. Unit Windows - Unit Owner Responsibility 2. Unit Exterior Doors (Entry, Sliders, Storage) - Unit Owner Responsibility 3. Unit Deck Flooring - Various units have tile or other materials on the concrete decks. These improvements are reportedly the Unit Owner's responsibility so they have been excluded from this reserve study. 4. laundry Room Washers & Dryers - Reportedly owned by a private enterprise which maintains and repairs as necessary. Below a Minimum Threshold Components which have a collective estimated cost of less than $1,500 has been omitted from this reserve study as these smaller expenses will typically be paid for from the Association's Operating Account. Page 17

19 Current Cost by Category Chart The above chart illustrates the current cost breakdown percentage of the Component Categories in this reserve study. Special attention should be given to those component categories which take up a bulk of the % of the current cost as these may require significant planning to adequately budget for their replacement. These large expenses may be well into the future during "Peak Year" cycles. Refer to the Cash Flow Projections and the Annual Expenditure Report for the projected timeline of expected expenditures. Page 18

20 How Much To Reserve? There is no right or wrong answer to How Much Should We Reserve? as the reserve contributions in all the funding models in this study are based on different funding goals. Each Client has different risk tolerances and challenges in enacting whatever funding plan is most appropriate to them. This being said any funding model that projects the reserve account balance to dip into a deficit would not, in our opinion, be appropriate or fiscally responsible as future special assessments, loans or deferred maintains are typically the outcome of any funding model that projects a deficit in the reserve account. Below are some of the more common funding models utilized: Page 19

21 About Percent Funded Percent funded is a calculation of how much is in the reserve account versus an ideal amount known as the Fully Funded Balance. The different ranges in levels of funding are explained below % Funded - Good At this level, the reserve balance is considered to be at a good level of funding. The risk for reliance on special assessments, loans and deferred maintenance is minimized. While the goal is to reach and remain at the 100% funded mark the actual funding level will likely fluctuate above and below 100% due to changing component expenses in any given period of time covered in this reserve study % Funded - Fair A fairly funded reserve account is typically one on the right path to becoming fully funded but one that can also run into trouble if large expenses arise such as unexpected component failures or rapidly rising costs, specifically in years when large expenditures come to fruition. Additionally it is important that the Client is vigilant with their goal to reach a higher percent funded level as there is often pressure to reduce the reserve allocation rate or utilize money elsewhere as the reserve account balance grows to a level which is perceived to be large. Boards often have difficulties in continuing with the longer term goals in years of economic downturn when there is greater difficulty in continuing to allocation to the reserve account with regular annual increases to offset inflationary factors % Funded Low A low funding level often forces an Association/Organization to rely on special assessments and/or loans. With insufficient funds the Client may not be able to meet predictable component project expenditures. At this level of funding many Clients choose to defer component projects which results in condition deficiencies and over time will cause significant deferred maintenance issues which in turn hurt property values and aesthetic appeal of the property. Note that Associations/Organizations can often stay within a poor funding range for many years before any apparent negative impact. The reality of the financial position of the Association/Organization will often become apparent in "peak" expense years when one or several large expense component projects occur (e.g. roofing, asphalt, siding, windows) which will require special assessments to be implemented or loans secured. Page 20

22 Percent Funded Chart The chart above compares three funding models (Recommended Funding Model, Hawaii Compliance 50% Funding Model and the Hawaii Cash Flow Funding Model) by the percentage funded, annually over the 30 year timeframe of this reserve study. Note that the Recommended Funding Plan increases the Client's reserve account Percent Funded Level to 100% funding within the timeframe of this study. Once this 100% funded level is reached it is a good indicator that the Client is on track to meet its future obligations with minimal risk of reliance on loans/special assessments. Page 21

23 Reserve Account Balance Chart The chart above compares the annual year end balance of the funding models (Recommended Funding Model, Hawaii Compliance 50% Funding Model and the Hawaii Cash Flow Funding Model) over the 30 years covered in this reserve study. Page 22

24 Recommended Funding - Summary Report Parameters Report Date December 20, 2016 Account Number Sample Version Sample Budget Year Beginning January 01, 2017 Budget Year Ending December 31, 2017 Total Units 156 Phase Development 1 of 1 Infla on 2.75% Interest Rate on Reserve Deposit 1.00% Tax Rate on Interest 30.00% 2017 Beginning Balance $129,066 We have developed a funding plan which will help steer the reserve account into a high funded range over a period of 30 years. This Recommended Funding Model requires the Client to allocate the recommended allocation amount into the reserve account with annual increases over the 30 years covered in this study. In the following pages you will find the recommended allocation rates to the reserve account, annual projected expenditures and the percent funded of the reserve account if following this Recommended Funding Model. This Recommended Funding Plan Takes into Account 4 Basic Principles: 1. There are adequate reserves when needed. 2. The budget should remain stable but increasing to offset inflationary factors. 3. The costs are fairly distributed over time. 4. The funding plan must allow the Client to be fiscally responsible. Recomended Funding Model Summary of Calcula ons Required Month Contribu on $36, $ per unit monthly Average Net Month Interest Earned Total Month Alloca on to Reserves $36, $ per unit monthly Page 23

25 Recommended Funding - Projec ons Beginning Balance: $129,066 Projected Fully Current Annual Annual Annual Ending Funded Percent Year Cost Contribu on Interest Expenditures Reserves Reserves Funded ,250, , , ,412 5,105,977 3% ,403, ,050 2,391 42, ,529 5,424,935 10% ,560, ,491 2, , ,273 5,315,734 10% ,721, ,336 3, , ,961 5,424,487 14% ,886, ,596 6,431 93,071 1,146,918 5,723,457 20% ,057, ,284 8, ,923 1,458,839 5,926,158 25% ,231, ,413 7, ,441 1,244,829 5,586,600 22% ,411, ,995 10, ,367 1,685,499 5,897,993 29% ,596, ,045 9, ,383 1,659,974 5,729,674 29% ,785, ,576 11, ,020 1,979,519 5,899,953 34% ,980, ,604 14, ,048 2,397,926 6,163,542 39% ,180, ,342 6,476 1,799,442 1,203,302 4,825,837 25% ,386, ,403 6, ,029 1,189,007 4,657,674 26% ,597, ,794 1,660, ,826 3,440,488 5% ,815, ,524 3,109 59, ,247 3,850,522 19% ,038, ,600 7,213 68,463 1,335,596 4,271,180 31% ,267, ,030 7, ,559 1,395,650 4,146,274 34% ,503, ,823 12,053 51,465 2,044,061 4,611,040 44% ,745, ,986 15, ,600 2,596,299 4,979,272 52% ,994, ,530 9,287 1,663,767 1,662,349 3,865,060 43% ,249, ,463 11, ,908 1,995,458 4,013,602 50% ,494, ,793 16,335 77,793 2,688,793 4,488,864 60% ,763, ,531 14,726 1,009,893 2,466,157 4,049,013 61% ,040, ,685 19, ,153 3,142,070 4,508,613 70% ,325, ,266 20, ,319 3,344,752 4,486,781 75% ,617, ,284 24, ,968 3,887,527 4,802,862 81% ,917, ,749 28, ,427 4,428,015 5,114,276 87% ,225, ,671 30, ,302 4,725,560 5,175,268 91% ,542, ,061 33, ,145 5,193,853 5,402,696 96% ,868, ,930 39,680 35,244 6,107,220 6,079, % Page 24

26 Hawaii Cash Flow Funding - Summary Report Parameters Report Date December 20, 2016 Account Number Sample Version Sample Budget Year Beginning January 01, 2017 Budget Year Ending December 31, 2017 Total Units 156 Phase Development 1 of 1 Infla on 2.75% Annual Assessment Increase 3.00% Interest Rate on Reserve Deposit 1.00% Tax Rate on Interest 30.00% 2017 Beginning Balance $129,066 The Hawaii Cash Flow Plan (Hawaii Statute) also known as a Baseline Funding Model, is considered a minimal approach which has a goal of only keeping the reserve account cash balance above $0 for a minimum twenty year time period (Hawaii Statute) following the date of the reserve study. This funding model assumes all reserve allocation is spent towards the project expenses in any given year. Note: We do not suggest following this funding model due to the higher risk of the reserve account reaching a $0 balance or falling into a projected deficit, specifically in years when there are large expenses or due to components failing earlier than projected. When components fail earlier than projected or costs rise faster than projected the results can lead to a reliance on special assessments, loans or deferred maintenance. Hawaii Cash Flow Plan Funding Model Summary of Calcula ons Required Month Contribu on $35, $ per unit monthly Average Net Month Interest Earned Total Month Alloca on to Reserves $35, $ per unit monthly Page 25

27 Hawaii Cash Flow Funding - Projec ons Beginning Balance: $129,066 Projected Fully Current Annual Annual Annual Ending Funded Percent Year Cost Contribu on Interest Expenditures Reserves Reserves Funded ,250, , , ,373 5,105,977 3% ,403, ,710 2,282 42, ,039 5,424,935 10% ,560, ,841 2, , ,949 5,315,734 9% ,721, ,366 3, , ,405 5,424,487 13% ,886, ,297 6,089 93,071 1,092,721 5,723,457 19% ,057, ,646 8, ,923 1,392,579 5,926,158 23% ,231, ,425 6, ,441 1,166,071 5,586,600 21% ,411, ,648 9, ,367 1,593,795 5,897,993 27% ,596, ,328 9, ,383 1,554,860 5,729,674 27% ,785, ,478 11, ,020 1,860,518 5,899,953 32% ,980, ,112 13, ,048 2,264,546 6,163,542 37% ,180, ,245 5,501 1,799,442 1,058,850 4,825,837 22% ,386, ,893 5, ,029 1,037,007 4,657,674 22% ,597, ,069 1,660, ,440,488 0% ,815, ,868 1,123 59, ,880 3,850,522 9% ,038, ,014 3,540 68, ,971 4,271,180 16% ,267, ,525 2, , ,127 4,146,274 12% ,503, ,411 4,909 51, ,982 4,611,040 20% ,745, ,683 6, ,600 1,201,989 4,979,272 24% ,994, ,353 1,663,767 7,575 3,865,060 0% ,249, , ,908 75,100 4,013,602 2% ,494, ,937 1,873 77, ,118 4,488,864 11% ,763, ,875 1,009, ,049,013 0% ,040, ,261 1, , ,275 4,508,613 9% ,325, , , ,503 4,486,781 7% ,617, ,433 2, , ,115 4,802,862 12% ,917, ,246 3, , ,740 5,114,276 16% ,225, ,563 3, , ,738 5,175,268 16% ,542, ,400 4, , ,817 5,402,696 18% ,868, ,772 8,981 35,244 1,577,326 6,079,723 26% Page 26

28 Current Funding - Summary Report Parameters Report Date December 20, 2016 Account Number Sample Version Sample Budget Year Beginning January 01, 2017 Budget Year Ending December 31, 2017 Total Units 156 Phase Development 1 of 1 Infla on 2.75% Annual Assessment Increase 3.00% Interest Rate on Reserve Deposit 1.00% Tax Rate on Interest 30.00% 2017 Beginning Balance $129,066 The Current Funding Model does not adequately fund the reserve account within the timeframe of this reserve study. This funding model assumes a 3% increase to the Current reserve allocation rate annually which still does not meet the projected obligations over the 30 years of this study. Continuing with this funding model will likely lead to a high risk for reliance on special assessments, loans and/or deferred maintenance. Note that while reserve account balance and percent funded could not realistically be in a negative territory it has been reported this way as a visual representation of the amount that the reserve account is projected to be in shortfall. Current Assessment Funding Model Summary of Calcula ons Required Month Contribu on $30, $ per unit monthly Average Net Month Interest Earned Total Month Alloca on to Reserves $30, $ per unit monthly Page 27

29 Current Funding - Projec ons Beginning Balance: $129,066 Projected Fully Current Annual Annual Annual Ending Funded Percent Year Cost Contribu on Interest Expenditures Reserves Reserves Funded ,250, , ,654 70,412 5,105,977 1% ,403, ,950 1,626 42, ,663 5,424,935 7% ,560, , , ,859 5,315,734 6% ,721, ,845 1, , ,232 5,424,487 8% ,886, ,811 4,048 93, ,020 5,723,457 13% ,057, ,135 5, , ,829 5,926,158 17% ,231, ,829 3, , ,674 5,586,600 12% ,411, ,904 5, ,367 1,046,069 5,897,993 18% ,596, ,371 4, , ,043 5,729,674 16% ,785, ,242 6, ,020 1,149,759 5,899,953 19% ,980, ,529 8, ,048 1,467,908 6,163,542 24% ,180, ,245 1,799, ,711 4,825,837 4% ,386, , ,029 61,085 4,657,674 1% ,597, ,015 1,660,976-1,063,876 3,440,488-31% ,815, ,095 59, ,993 3,850,522-15% ,038, ,658 68,463-70,798 4,271,180-2% ,267, , , ,639 4,146,274-3% ,503, ,289 1,196 51, ,382 4,611,040 10% ,745, ,388 4, , ,503 4,979,272 18% ,994, ,030 1,663, ,234 3,865,060-3% ,249, , , ,088 4,013,602 3% ,494, ,008 2,919 77, ,222 4,488,864 16% ,763, , ,009, ,400 4,049,013 10% ,040, ,359 4, ,153 1,011,354 4,508,613 22% ,325, ,970 5, ,319 1,131,521 4,486,781 25% ,617, ,229 8, ,968 1,594,455 4,802,862 33% ,917, ,156 11, ,427 2,058,017 5,114,276 40% ,225, ,770 13, ,302 2,281,803 5,175,268 44% ,542, ,094 16, ,145 2,679,766 5,402,696 50% ,868, ,146 21,840 35,244 3,526,508 6,079,723 58% Page 28

30 Hawaii Compliance 50% Funding - Summary Report Parameters Report Date December 20, 2016 Account Number Sample Version Sample Budget Year Beginning January 01, 2017 Budget Year Ending December 31, 2017 Total Units 156 Phase Development 1 of 1 Infla on 2.75% Annual Assessment Increase 3.00% Interest Rate on Reserve Deposit 1.00% Tax Rate on Interest 30.00% 2017 Beginning Balance $129,066 Hawaii Compliance 50% Funding Model Summary of Calcula ons Required Month Contribu on $236, $1, per unit monthly Average Net Month Interest Earned $ Total Month Alloca on to Reserves $237, $1, per unit monthly Page 29

31 Hawaii Compliance 50% Funding - Projec ons Beginning Balance: $129,066 Projected Fully Current Annual Annual Annual Ending Funded Percent Year Cost Contribu on Interest Expenditures Reserves Reserves Funded ,250,726 2,838,858 8, ,654 2,552,989 5,105,977 50% ,403, ,092 18,733 42,325 2,819,489 5,424,935 52% ,560, ,789 17, ,996 2,671,915 5,315,734 50% ,721, ,107 18, ,315 2,793,996 5,424,487 52% ,886, ,300 20,428 93,071 3,105,653 5,723,457 54% ,057, ,829 21, ,923 3,322,461 5,926,158 56% ,231, ,704 19, ,441 3,009,405 5,586,600 54% ,411, ,170 22, ,367 3,354,232 5,897,993 57% ,596, ,985 21, ,383 3,228,943 5,729,674 56% ,785, ,184 22, ,020 3,444,678 5,899,953 58% ,980, ,780 24, ,048 3,755,103 6,163,542 61% ,180, ,783 15,561 1,799,442 2,452,004 4,825,837 51% ,386, ,189 15, ,029 2,591,815 4,657,674 56% ,597, ,904 9,500 1,660,976 1,720,244 3,440,488 50% ,815, ,353 12,631 59,212 1,928,016 3,850,522 50% ,038, ,762 14,566 68,463 2,270,881 4,271,180 53% ,267, ,561 13, ,559 2,167,390 4,146,274 52% ,503, ,638 16,826 51,465 2,650,389 4,611,040 57% ,745, ,167 19, ,600 3,035,417 4,979,272 61% ,994, ,162 11,719 1,663,767 1,932,530 3,865,060 50% ,249, ,059 12, ,908 2,032,243 4,013,602 51% ,494, ,151 15,694 77,793 2,488,295 4,488,864 55% ,763, ,695 12,410 1,009,893 2,024,507 4,049,013 50% ,040, ,571 15, ,153 2,373,981 4,508,613 53% ,325, ,777 14, ,319 2,244,543 4,486,781 50% ,617, ,541 15, ,968 2,449,601 4,802,862 51% ,917, ,527 16, ,427 2,645,503 5,114,276 52% ,225, ,963 16, ,302 2,591,540 5,175,268 50% ,542, ,862 17, ,145 2,701,348 5,402,696 50% ,868,575 18,723 35,244 2,684,827 6,079,723 44% Page 30

32 Reserve Account Expenditures Chart The above chart provides a visual of the reserve account projected expenditures over the 30 years covered in this study. We suggest making a note of large expenditure years (peak years) when there will be significant projected expenditures related to one or more costly component that will require repair/replacement. These large but infrequent component expenses during peak years are typically the most difficult to budget for as they are often overlooked or ignored due to the perception that the expenses are far in the future and there will be time to budget for them at a later date. Page 31

33 Annual Expenditure Report Descrip on Expenditures Replacement Year 2017 Asphalt - Bullpen - Sealcoat 4,137 Asphalt - North/Breezeway - Sealcoat 13,851 Carport Structures - Paint 2,760 Exterior Surfaces - A Bldg - Paint/Seal 111,300 Exterior Surfaces - A Bldg - Repair 41,499 Exterior Surfaces - B Bldg - Paint/Seal 111,300 Exterior Surfaces - B Bldg - Repair 41,499 Exterior Surfaces - Sunset & Breezeway - Paint/Seal 6,300 Lights - A Bldg Interior - 15% Replace 8,025 Lights - B Bldg Interior - 15% Replace 7,012 Roof - Sunset Room/Breezeway - Replace 75,971 Total for 2017 $423,654 Replacement Year 2018 Entry FOB Systems - Pool - Replace 1,541 Fence - Pool - Paint 3,468 Fence - Privacy - Paint 1,914 Roof - A Bldg South Entry - Replace 16,917 Roof - B Bldg North Entry - Replace 5,538 Trash Chute System - A Bldg Doors - Replace 6,473 Trash Chute System - B Bldg Doors - Replace 6,473 Total for 2018 $42,325 Replacement Year 2019 Exercise Equipment - A Bldg - 33% Replace 4,390 Exterior Surfaces - Guard House - Paint/Seal 785 Exterior Surfaces - Pool House &- Paint/Seal 1,351 Fans - Exhaust - A Bldg % Repair Con ngency 1,081 Fans - Exhaust - B Bldg % Repair Con ngency 1,081 Floor Cleaning Equipment - 50% Replace 4,540 Flooring - A Bldg Carpet - Replace 187,092 Flooring - A Bldg Tile - Replace 26,090 Flooring - B Bldg Carpet - Replace 150,175 Flooring - B Bldg Tile - Replace 22,468 Page 32

34 Annual Expenditure Report Descrip on Expenditures Replacement Year 2019 con nued... Guard House - Repair 1,584 Pool House - Exterior - Repair 2,112 Privacy Wall - Concrete - Paint 2,644 Privacy Wall - North Carports - Paint 5,280 Roof - Carport Replace 35,799 Roof - Carport Replace 27,335 Roof - Pool House - Replace 4,190 Total for 2019 $477,996 Replacement Year 2020 Appliances - Sunset Room - Replace 1,953 Asphalt - South - Sealcoat 3,924 Asphalt - Visitor - Sealcoat 3,295 Bathrooms - Pool House - Refurbish 13,017 Entry Access Panel - A Bldg - Replace 4,882 Entry Access Panel - B Bldg - Replace 4,882 Landscaping - 25% Refurbish 29,273 Lights - Bollard - Replace 16,272 Lights - Landscape - Replace 8,136 Lights - Single Pole - Replace 23,594 Pool Furniture - Replace 15,051 Roof - Carport & Boiler House - Replace 111,625 Security System - Replace 23,865 Vacuum/Air Machine - Replace 3,905 Water Heater - Pool - Replace 5,641 Total for 2020 $269,315 Replacement Year 2021 Electrical Vehicle Charger - Replace 2,229 Entry FOB Systems - Pool - Replace 1,672 Water Lines - A Bldg - Repair Con ngency 44,585 Water Lines - B Bldg - Repair Con ngency 44,585 Total for 2021 $93,071 Page 33

35 Annual Expenditure Report Descrip on Expenditures Replacement Year 2022 Asphalt - Bullpen - Sealcoat 4,738 Asphalt - North/Breezeway - Sealcoat 15,863 Fans - Exhaust - A Bldg % Repair Con ngency 1,172 Fans - Exhaust - B Bldg % Repair Con ngency 1,172 Guard House - Repair 1,718 Interior Surfaces - A Bldg - Paint/Stain 7,477 Interior Surfaces - B Bldg - Paint/Stain 6,896 Lights - A Bldg Interior - 15% Replace 9,191 Lights - B Bldg Interior - 15% Replace 8,031 Pergolas - Grounds - Replace 13,743 Pool House - Exterior - Repair 2,291 Roof - A Bldg East - Replace 122,056 Spa - Re le & Recope 6,574 Total for 2022 $200,923 Replacement Year 2023 Fence - Pool - Paint 3,972 Fence - Privacy - Paint 2,192 Play Area - Swings - Replace 2,942 Privacy Wall - Concrete - 3% Repair 2,087 Privacy Wall - North Carports - 5% Repair 4,359 Windows - A Bldg & Sunset Room - Replace 381,273 Windows - B Bldg - Replace 343,616 Total for 2023 $740,441 Replacement Year 2024 Air Handling Unit - A Bldg - Replace 42,098 Air Handling Unit - B Bldg - Replace 42,098 Entry FOB Systems - Pool - Replace 1,814 Exercise Equipment - A Bldg - 33% Replace 5,028 Exterior Surfaces - Guard House - Paint/Seal 900 Exterior Surfaces - Pool House &- Paint/Seal 1,548 Water Heater - Instant - Replace 3,627 Water Holding Tank - Clean & Sani ze 7,255 Total for 2024 $104,367 Page 34

36 Annual Expenditure Report Descrip on Expenditures Replacement Year 2025 Asphalt - Bullpen - Overlay 62,821 Asphalt - South - Overlay 54,933 Asphalt - South - Sealcoat 4,494 Asphalt - Visitor - Overlay 46,123 Asphalt - Visitor - Sealcoat 3,774 Carport Structures - Paint 3,429 Exterior Surfaces - A Bldg - Paint/Seal 138,277 Exterior Surfaces - B Bldg - Paint/Seal 138,277 Exterior Surfaces - Sunset & Breezeway - Paint/Seal 7,827 Fans - Exhaust - A Bldg % Repair Con ngency 1,272 Fans - Exhaust - B Bldg % Repair Con ngency 1,272 Fence - Pool - Replace 17,319 Floor Cleaning Equipment - 50% Replace 5,342 Guard House - Repair 1,864 Lights - A Bldg Exterior - Replace 12,890 Lights - B Bldg Exterior - Replace 5,001 Lights - Carports - Replace 30,656 Lights - Double Pole - Replace 7,827 Pergola - Pool - Replace 12,424 Pool House - Exterior - Repair 2,485 Roof Hatch - A Bldg - Replace 4,348 Roof Hatch - B Bldg - Replace 4,348 Storage Shed - Replace 14,909 Water Heater - Spa - Replace 4,473 Total for 2025 $586,383 Replacement Year 2026 Pool - Resurface 23,935 Pool - Re le & Recope 13,404 Pool Deck - Replace & Replumb 222,681 Total for 2026 $260,020 Replacement Year 2027 Asphalt - Bullpen - Sealcoat 5,426 Page 35

37 Annual Expenditure Report Descrip on Expenditures Replacement Year 2027 con nued... Asphalt - North/Breezeway - Sealcoat 18,167 Entry FOB Systems - Pool - Replace 1,967 Irriga on Controller - Replace 2,099 Lights - A Bldg Interior - 15% Replace 10,526 Lights - B Bldg Interior - 15% Replace 9,198 Privacy Wall - Concrete - Paint 3,284 Privacy Wall - North Carports - Paint 6,559 Staircase - A Bldg Elevator Room - Replace 9,444 Staircase - B Bldg Elevator Room - Replace 9,444 Water Lines - A Bldg - Repair Con ngency 52,466 Water Lines - B Bldg - Repair Con ngency 52,466 Total for 2027 $181,048 Replacement Year 2028 Doors - A Bldg Exterior - Replace 33,019 Doors - B Bldg Exterior - Replace 33,019 Drain/Waste Lines - A Bldg - Repair Con ngency 850,000 Drain/Waste Lines - B Bldg - Repair Con ngency 850,000 Fans - Exhaust - A Bldg % Repair Con ngency 1,380 Fans - Exhaust - B Bldg % Repair Con ngency 1,380 Fence - Pool - Paint 4,549 Fence - Privacy - Paint 2,511 Guard House - Repair 2,022 Pool House - Exterior - Repair 2,695 Water Fountain - Refurbish 18,868 Total for 2028 $1,799,442 Replacement Year 2029 Exercise Equipment - A Bldg - 33% Replace 5,758 Exterior Surfaces - Guard House - Paint/Seal 1,030 Exterior Surfaces - Pool House &- Paint/Seal 1,773 Flooring - A Bldg Carpet - Replace 245,400 Flooring - B Bldg Carpet - Replace 196,977 Privacy Wall - North Carports - 5% Repair 5,130 Page 36