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th
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Federal Way, WA 98003
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Update With-Site-Visit Reserve Study
Crestwood Terrace
Washougal, WA
Report #: 20791-3
For Period Beginning: January 1, 2014
Expires: December 31, 2014
Date Prepared: November 15, 2013
Association Reserves, Inc. 11/15/2013
Hello, and welcome to your Reserve Study!
his Report is a valuable budget planning tool, for with it
you control the future of your association. It contains
all the fundamental information needed to understand your
current and future Reserve obligations, the most significant
expenditures your association will face.
ith respect to Reserves, this Report will tell you
where you are, and where to go from here.
In this Report, you will find
1) A List of What youre Reserving For
2) An Evaluation of your Reserve Fund Size and
Strength
3) A Recommended Multi-Year Reserve Funding
Plan
More Questions?
Visit our website at www.ReserveStudy.com or call us at:
253.661.5437
T
W
Association Reserves, Inc. 11/15/2013
Table of Contents
Executive Summary ............................................................................................i
Reserve Study Summary .........................................................................................................i
Reserve Component List Table 1......................................................................................... ii
Introduction, Objectives, and Methodology .....................................................1
Which Physical Assets are Covered by Reserves?.................................................................2
How are Useful Life and Remaining Useful Life established?.................................................2
How are Cost Estimates Established? ....................................................................................2
How much Reserves are enough?..........................................................................................3
How much should we contribute? ...........................................................................................3
What is our Funding Goal? .....................................................................................................4
Site Inspection....................................................................................................5
Projected Expenses ...........................................................................................6
Expense Graph Figure 1......................................................................................................6
Reserve Fund Status & Recommended Funding Plan ....................................7
Funding Plan Graph Figure 2...............................................................................................7
Cash Flow Graph Figure 3...................................................................................................8
% Funded Graph Figure 4....................................................................................................8
Table Descriptions .............................................................................................9
Reserve Component List Detail Table 2.............................................................................10
Contribution & Fund Breakdown Table 3 ...........................................................................11
30 Year Reserve Plan Summary Table 4...........................................................................12
30 Year Reserve Plan Year by Year Detail Table 5...........................................................13
Accuracy, Limitations, and Disclosures.........................................................19
Terms and Definitions......................................................................................21
Photographic Inventory ...................................................................... Appendix
Association Reserves, Inc. 11/15/2013 i
3- Minute Executive Summary
Association: Crestwood Terrace Assoc. #: 20791-3
Location: Washougal, WA
# of Units: 44
Report Period: January 1, 2014 through December 31, 2014
Results as-of 1/1/2014:
Projected Starting Reserve Balance: .............................................$107,000
Fully Funded Reserve Balance: .....................................................$412,330
Average Reserve Deficit (Surplus) Per Unit:.......................................$6,939
Percent Funded: ................................................................................. 26.0%
100% Full Funding 2014 Monthly Reserve Contribution:...................$3,830
70% Threshold Monthly Reserve Contribution:..................................$3,670
Baseline Contribution (min to maintain reserves above $0) .............$3,560
Recommended 2014 Special Assessment for Reserves: ........................ $0
Most Recent Reserve Contribution Rate:............................................$3,500
Economic Assumptions:
Net Annual After Tax Interest Earnings Accruing to Reserves...... 1.00%
Annual Inflation Rate............................................................................ 3.00%
This is an Update With-Site-Visit Reserve Study, based on a prior
Report prepared by Association Reserves for your 2013 Fiscal Year.
The information in this Reserve Study is based on our site inspection
on October 3, 2013 and meets or exceeds all requirements of the
RCW. This Reserve Study was prepared by a credentialed Reserve
Specialist (RS #238).
Your Reserve Fund is 26.0% Funded. Comparatively, the 70-130%
level is where associations statistically enjoy fiscal stability with low
risk of special assessment and/or deferred maintenance.
Based on this starting point and your anticipated future expenses, our
recommendation is to increase your Reserve contributions to within
the 70% to 100% Full Funding level as noted above (Tables and charts
herein reflect Full Funding as recommended contribution). Full and
70% contribution rates are designed to achieve the stated funding
objective by the end of our 30-year report scope. See photo pages for
detailed component information and the basis of our assumptions.
Association Reserves, Inc. 11/15/2013 ii
Table 1: Executive Summary 20791-3
Useful Rem. Current Future
Life Useful Average Average
# Component (yrs) Life (yrs) Cost Cost
Site / Grounds
120 Asphalt - Resurface 30 15 $59,050 $91,998
121 Asphalt - Seal/Repair 5 1 $9,250 $9,528
140 Wood Fence - Replace 20 5 $41,050 $47,588
205 Mailboxes - Replace 20 5 $6,300 $7,303
Building Exterior
500 Roof: Comp Shingle - Repair/Replace 25 24 $152,000 $308,985
501 Roof: Comp Shingle - Repair/Replace 25 0 $30,000 $62,813
502 Roof: Comp Shingle - Repair/Replace 25 1 $35,000 $36,050
510 Gutters/Downspouts - Repair/Replace 30 15 $33,250 $51,802
520 Siding: Vinyl - Repair/Replace 40 25 $499,100 $1,045,005
525 Exterior Surfaces - Paint/Caulk 8 1 $15,400 $15,862
535 Windows/Glass Doors - Replace 40 25 $132,000 $276,379
540 Decks: Wood - Maintain 0 0 $0 $0
560 Exterior Lights - Replace 20 5 $4,600 $5,333
Systems
900 Plumbing - Repair/Replace 0 0 $0 $0
14 Total Funded Components
Note: Cross reference component numbers with photographic inventory appendix.
Highlighting denotes projects either anticipated to occur in the initial year or un-
funded. Components with 0 UL / 0 RUL and no costs were considered per RCW
64.34.382 but did not meet NRSS criteria (see page 2) for reserve funding in the
judgment of the Reserve Specialist. A reserve-funding threshold of $1,000 is
suggested for your association (expenses below this level expected to be factored
within operating budget).
Assoc. 20791-3
Association Reserves, Inc. 11/15/2013 1
Introduction
A Reserve Study is the art and science of anticipating, and preparing for,
an associations major common area repair and replacement expenses.
Partially art, because in this field we are making projections about the
future. Partially science, because our work is a process of research and
analysis along well defined methodologies.
In this Report you will find the Reserve
Component List (what you are reserving for).
It contains our estimates for Useful Life,
Remaining Useful Life, and the current repair
or replacement cost for each major
component the association is obligated to
maintain. Based on that List and your
starting balance we computed the
associations Reserve Fund Strength (measured as Percent Funded), and
created a recommended multi-year Reserve Funding Plan to offset future
Reserve expenses.
As the physical assets age and deteriorate, it is important to accumulate
financial assets to keep the two in balance. A stable Reserve Funding
Plan that offsets the irregular Reserve expenses will ensure that each
owner pays their own fair share of ongoing common area deterioration.
Methodology
First we establish what the projected
expenses are, then we determine the
associations financial status and create a
Funding Plan. For this Update With-Site-
Visit Reserve Study, we started with a
review of your prior Reserve Study, recent
Reserve expenditures, an evaluation of how
expenditures are handled (ongoing
maintenance vs Reserves), and research
into any well-established association precedents. We performed an on-
site inspection to evaluate your common areas, updating and adjusting
your Reserve Component List as appropriate.
Reserve Study
Reserve Study
Component List
Reserve Fund Strength
Recommended Contribs
Reserve Study
Reserve Study
Component List
Reserve Fund Strength
Recommended Contribs
Reserve Study Types
Reserve Study Types
Full
Update With-Site-Visit
Update No-Site-Visit
Reserve Study Types
Reserve Study Types
Full
Update With-Site-Visit
Update No-Site-Visit
Assoc. 20791-3
Association Reserves, Inc. 11/15/2013 2
Which Physical Assets are Covered by Reserves?
There is a national-standard four-part test to
determine which expenses should be funded
through Reserves. First, it must be a common
area maintenance responsibility. Second, the
component must have a limited life. Third,
the limited life must be predictable (or it by
definition is a surprise which cannot be
accurately anticipated). Fourth, the
component must be above a minimum
threshold cost. This limits Reserve
Components to major, predictable expenses. Within this framework, it is
inappropriate to include lifetime components, unpredictable expenses
(such as damage due to fire, flood, or earthquake), and expenses more
appropriately handled from the Operational Budget or as an insured loss.
How are Useful Life and Remaining Useful Life established?
1) Visual Inspection (observed wear and age since last report)
2) Association Reserves database of experience
3) Client Component History
4) Vendor Evaluation and Recommendation
How are Cost Estimates Established?
Financial projections are based on the average of our Best Case and Worst
Case estimates, which are established in this order
1) Client Cost History
2) Comparison to Association Reserves database of work done at
similar associations
3) Vendor Recommendations
4) Reliable National Industry cost estimating guidebooks
Reserve Components
Reserve Components
Common Area
Limited Useful Life
Predictable Life Limit
Cost must be Significant
Reserve Components
Reserve Components
Common Area
Limited Useful Life
Predictable Life Limit
Cost must be Significant
Assoc. 20791-3
Association Reserves, Inc. 11/15/2013 3
How much Reserves are enough?
Your Reserve cash Balance can measure reserves, but the true measure is
whether the funds are adequate. Adequacy is measured in a two-step
process:
1) Calculate the associations Fully Funded Balance (FFB).
2) Compare to the Reserve Fund Balance, and express as a percentage.
The FFB grows as assets age and the Reserve needs of the association
increase, but shrinks when projects are accomplished and the Reserve
needs of the association decrease. The Fully Funded Balance changes
each year, and is a moving but predictable target.
Special assessments and deferred maintenance are common when the
Percent Funded is below 30%. While the 100% point is Ideal, a Reserve
Fund in the 70% -130% range is considered strong because in this range
cash flow problems are rare.
Measuring your Reserves by Percent Funded tells how well prepared your
association is for upcoming Reserve expenses. New buyers should be
very aware of this important disclosure!
Percent Funded
Percent Funded
Ideal
- 100%
- 70%
- 30%
- 0%
Strong
Fair
Weak
- 130%
Percent Funded
Percent Funded
Ideal
- 100%
- 70%
- 30%
- 0%
Strong
Fair
Weak
- 130%
Assoc. 20791-3
Association Reserves, Inc. 11/15/2013 4
How much should we contribute?
There are four Funding Principles that we balance in developing your
Reserve Funding Plan. Our first objective is to design a plan that provides
you with sufficient cash to perform your Reserve projects on time. A stable
contribution rate is desirable because it is a hallmark of a proactive plan.
Reserve contributions that are evenly
distributed over the owners, over the
years, enable each owner to pay their fair
share of the associations Reserve
expenses (this means we recommend
special assessments only when all other
options have been exhausted). And
finally, we develop a plan that is fiscally
responsible and safe for Boardmembers
to recommend to their association.
What is our Recommended Funding Goal?
Maintaining the Reserve Fund at a level equal to the physical deterioration
that has occurred is called Full Funding the Reserves (100% Funded). As
each asset ages and becomes used up, the Reserve Fund grows
proportionally. This is simple, responsible, and our recommendation.
As stated previously, associations in the 100% range rarely experience
special assessments or deferred maintenance.
Allowing the Reserves to fall close to zero,
but not below zero, is called Baseline
Funding. In these associations,
deterioration occurs without matching
Reserve contributions. With a low Percent
Funded, special assessments and
deferred maintenance are common.
Threshold Funding is the title of all other
objectives randomly selected between
Baseline Funding and Full Funding.
Funding Goals
Funding Goals
Full Funding
Threshold Funding
Baseline Funding
Funding Goals
Funding Goals
Full Funding
Threshold Funding
Baseline Funding
Funding Principles
Funding Principles
Sufficient Cash
Stable Contribution Rate
Evenly Distributed
Fiscally Responsible
Funding Principles
Funding Principles
Sufficient Cash
Stable Contribution Rate
Evenly Distributed
Fiscally Responsible
Assoc. 20791-3
Association Reserves, Inc. 11/15/2013 5
Site Inspection Notes
During our site visit on October 3, 2013, we had a brief meeting with
Crestwood Terrace Condominium Board President Ed Wilson, and then
started the site inspection beginning with the asphalt. We visually inspected
the buildings and property, and were able to see all visible common areas.
Early planning for future maintenance projects and following reserve study
recommendations is key to the successful ongoing maintenance of the
community. Protection of the building envelope (roof and wall systems)
should be viewed as your top priority.
Assoc. 20791-3
Association Reserves, Inc. 11/15/2013 6
Projected Expenses
The figure below shows the array of the projected future expenses at your
association. This figure clearly shows the near term and future expenses
that your association will face.
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
2014 2019 2024 2029 2034 2039 2044
Years
Annual Reserve Expenses
Figure 1
A summary of this information is shown in Table 4, while details of the
projects that make up this information are shown in Table 5. Since this is a
projection about future events that may or may not take place as
anticipated, we feel more certain about near-term projects than those
many years away. While this Reserve Study is a one-year document, it is
based on 30 years worth of looking forward into the future.
Assoc. 20791-3
Association Reserves, Inc. 11/15/2013 7
Reserve Fund Status
The starting point for our financial analysis is your Reserve Fund balance,
projected to be $107,000 as-of the start of your Fiscal Year on January 1,
2014. This is based on your actual balance on 9/30/13 of $109,300 and
anticipated Reserve contributions and expenses projected through the end
of your Fiscal Year. As of January 1, 2014, your Fully Funded Balance is
computed to be $412,330 (see Table 3). This figure represents the
deteriorated value of your common area components. Comparing your
Reserve Balance to your Fully Funded Balance indicates your Reserves
are 26% Funded. As indicated earlier in the Executive Summary, this
represents a weak status.
Recommended Funding Plan
Based on your current Percent Funded and your projected cash flow
requirements, we are recommending Reserve contributions of
$3,830/month this Fiscal Year. This represents the first year of the 30-year
Funding Plan shown below. This same information is shown numerically in
both Table 4 and Table 5.
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
M
o
n
t
h
l
y
C
o
n
t
r
i
b
u
t
i
o
n
s
2014 2019 2024 2029 2034 2039 2044
Years
Funding Plan
Recommended
Current
Figure 2
Assoc. 20791-3
Association Reserves, Inc. 11/15/2013 8
The following chart shows your Reserve balance under our recommended
Funding Plan and your current Funding Plan, and your always-changing
Fully Funded Balance target.
30-Yr Cash Flow
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
$1,800,000
$2,000,000
2014 2019 2024 2029 2034 2039 2044
Years
Target Fully Funded Balance
Recommended Funding Plan
Current Funding Plan
Figure 3
In this figure it is easy to see how your Reserve Fund gradually draws
closer to the Fully Funded (100%) level.
Percent Funded
0%
20%
40%
60%
80%
100%
120%
2014 2019 2024 2029 2034 2039 2044
Years
Recommended Funding Plan
Current Funding Plan
Figure 4
Assoc. 20791-3
Association Reserves, Inc. 11/15/2013 9
Table Descriptions
The tabular information in this Report is broken down into five tables.
Table 1 summarizes your funded Reserve Components, and is part of the
Executive Report summary that appeared earlier in this Report.
Table 2 provides the main component description, life, and cost factors for
all components determined to be appropriate for Reserve designation. This
table represents the core information from which all other tables are
derived.
Table 3 is presented primarily as an accounting summary page. The
results of the individual line item Fully Funded Balance computations are
shown. These individual quantities are summed to arrive at the Fully
Funded Balance for the association as of the start date of the Report. The
figures in the Current Fund Balance column and the Monthly Reserve
Contribution column show our distribution throughout the line items. If the
association is underfunded, Reserve Funds are distributed first to
components with a short Remaining Useful Life. If the associations
Reserve Balance is above 100% Funded, funds are distributed evenly for
all components. Contribution rates for each component are a proportionate
distribution of the total contribution on the basis of the components
significance to the association (current cost divided by useful life). This
presentation is not meant to cause clients to redistribute association funds,
it simply presents one way to evenly distribute the total among all the
different line items.
Table 4: This table provides a one-page 30-year summary of the cash
flowing into and out of the association, compared to the Fully Funded
Balance for each year.
Table 5: This table shows the cash flow detail for the next 30 years. This
table makes it possible to see what components are projected to require
repair or replacement each year, and the size of those individual expenses.
Association Reserves, Inc. 11/15/2013 10
Table 2: Reserve Component List Detail 20791-3
Rem. Current
Useful Useful Best Worst
# Component Quantity Life Life Cost Cost
Site / Grounds
120 Asphalt - Resurface ~ 36,900 Sq Ft 30 15 $51,700 $66,400
121 Asphalt - Seal/Repair ~ 36,900 Sq Ft 5 1 $7,400 $11,100
140 Wood Fence - Replace ~ 1,866 Lin Ft 20 5 $37,300 $44,800
205 Mailboxes - Replace (6) cluster boxes 20 5 $5,400 $7,200
Building Exterior
500 Roof: Comp Shingle - Repair/Replace ~ 70,400 Sq Ft 25 24 $142,000 $162,000
501 Roof: Comp Shingle - Repair/Replace ~ 9,300 Sq Ft 25 0 $25,000 $35,000
502 Roof: Comp Shingle - Repair/Replace ~ 10,300 Sq Ft 25 1 $30,000 $40,000
510 Gutters/Downspouts - Repair/Replace ~ 5,540 Lin Ft 30 15 $27,700 $38,800
520 Siding: Vinyl - Repair/Replace ~ 71,300 GSF 40 25 $427,800 $570,400
525 Exterior Surfaces - Paint/Caulk Eaves, gables, etc 8 1 $13,200 $17,600
535 Windows/Glass Doors - Replace ~ (342) assorted 40 25 $110,000 $154,000
540 Decks: Wood - Maintain Assorted decks 0 0 $0 $0
560 Exterior Lights - Replace ~ (173) assorted fixtures 20 5 $4,400 $4,800
Systems
900 Plumbing - Repair/Replace Supply, drain systems 0 0 $0 $0
14 Total Funded Components
Association Reserves, Inc. 11/15/2013 11
Table 3: Contribution and Fund Breakdown 20791-3
Rem. Fully Current
Useful Useful Current Funded Fund Reserve
# Component Life Life (Avg) Cost Balance Balance Contributions
Site / Grounds
120 Asphalt - Resurface 30 15 $59,050 $29,525 $0.00 $222.34
121 Asphalt - Seal/Repair 5 1 $9,250 $7,400 $7,400.00 $208.97
140 Wood Fence - Replace 20 5 $41,050 $30,788 $22,525.00 $231.84
205 Mailboxes - Replace 20 5 $6,300 $4,725 $0.00 $35.58
Building Exterior
500 Roof: Comp Shingle - Repair/Replace 25 24 $152,000 $6,080 $0.00 $686.78
501 Roof: Comp Shingle - Repair/Replace 25 0 $30,000 $30,000 $30,000.00 $135.55
502 Roof: Comp Shingle - Repair/Replace 25 1 $35,000 $33,600 $33,600.00 $158.14
510 Gutters/Downspouts - Repair/Replace 30 15 $33,250 $16,625 $0.00 $125.19
520 Siding: Vinyl - Repair/Replace 40 25 $499,100 $187,163 $0.00 $1,409.42
525 Exterior Surfaces - Paint/Caulk 8 1 $15,400 $13,475 $13,475.00 $217.44
535 Windows/Glass Doors - Replace 40 25 $132,000 $49,500 $0.00 $372.76
540 Decks: Wood - Maintain 0 0 $0 $0 $0.00 $0.00
560 Exterior Lights - Replace 20 5 $4,600 $3,450 $0.00 $25.98
Systems
900 Plumbing - Repair/Replace 0 0 $0 $0 $0.00 $0.00
14 Total Funded Components $412,330 $107,000 $3,830
Association Reserves, Inc. 11/15/2013 12
Table 4: 30-Year Reserve Plan Summary 20791-3
Fiscal Year Beginning: 01/01/14 Interest: 1.0% Inflation: 3.0%
Starting Fully Annual Loans or Projected
Reserve Funded Percent Reserve Special Interest Reserve
Year Balance Balance Funded Rating Contribs. Assmts Income Expenses
2014 $107,000 $412,330 26.0% Weak $45,960 $0 $1,155 $30,000
2015 $124,115 $428,724 28.9% Weak $48,718 $0 $1,183 $61,440
2016 $112,576 $414,274 27.2% Weak $51,641 $0 $1,390 $0
2017 $165,607 $463,753 35.7% Fair $54,739 $0 $1,939 $0
2018 $222,285 $515,828 43.1% Fair $58,023 $0 $2,525 $0
2019 $282,833 $570,610 49.6% Fair $61,505 $0 $2,848 $60,224
2020 $286,961 $566,184 50.7% Fair $65,195 $0 $3,155 $11,045
2021 $344,266 $613,494 56.1% Fair $69,107 $0 $3,806 $0
2022 $417,179 $674,851 61.8% Fair $73,253 $0 $4,559 $0
2023 $494,991 $739,337 67.0% Fair $77,648 $0 $5,262 $20,094
2024 $557,807 $786,388 70.9% Strong $82,307 $0 $6,017 $0
2025 $646,132 $856,915 75.4% Strong $83,542 $0 $6,846 $12,804
2026 $723,716 $917,777 78.9% Strong $84,795 $0 $7,696 $0
2027 $816,207 $995,103 82.0% Strong $86,067 $0 $8,632 $0
2028 $910,906 $1,076,243 84.6% Strong $87,358 $0 $9,590 $0
2029 $1,007,854 $1,161,356 86.8% Strong $88,668 $0 $9,848 $143,800
2030 $962,570 $1,102,492 87.3% Strong $89,998 $0 $10,047 $14,844
2031 $1,047,772 $1,176,321 89.1% Strong $91,348 $0 $10,857 $25,454
2032 $1,124,524 $1,243,117 90.5% Strong $92,719 $0 $11,763 $0
2033 $1,229,005 $1,339,866 91.7% Strong $94,109 $0 $12,819 $0
2034 $1,335,934 $1,441,301 92.7% Strong $95,521 $0 $13,901 $0
2035 $1,445,355 $1,547,616 93.4% Strong $96,954 $0 $14,921 $17,208
2036 $1,540,022 $1,641,289 93.8% Strong $98,408 $0 $15,965 $0
2037 $1,654,396 $1,757,446 94.1% Strong $99,884 $0 $17,122 $0
2038 $1,771,402 $1,879,095 94.3% Strong $101,383 $0 $16,753 $308,985
2039 $1,580,552 $1,688,206 93.6% Strong $102,903 $0 $8,734 $1,525,213
2040 $166,977 $241,006 69.3% Fair $104,447 $0 $1,723 $95,429
2041 $177,717 $225,261 78.9% Strong $106,014 $0 $2,318 $0
2042 $286,049 $309,595 92.4% Strong $107,604 $0 $3,414 $0
2043 $397,066 $398,786 99.6% Strong $109,218 $0 $4,538 $0
Association Reserves, Inc. 11/15/2013 13
Table 5: 30-Year Income/Expense Detail (yrs 0 through 4) 20791-3
Fiscal Year 2014 2015 2016 2017 2018
Starting Reserve Balance $107,000 $124,115 $112,576 $165,607 $222,285
Annual Reserve Contribution $45,960 $48,718 $51,641 $54,739 $58,023
Planned Special Assessments $0 $0 $0 $0 $0
Interest Earnings $1,155 $1,183 $1,390 $1,939 $2,525
Total Income $154,115 $174,016 $165,607 $222,285 $282,833
# Component
Site / Grounds
120 Asphalt - Resurface $0 $0 $0 $0 $0
121 Asphalt - Seal/Repair $0 $9,528 $0 $0 $0
140 Wood Fence - Replace $0 $0 $0 $0 $0
205 Mailboxes - Replace $0 $0 $0 $0 $0
Building Exterior
500 Roof: Comp Shingle - Repair/Replace $0 $0 $0 $0 $0
501 Roof: Comp Shingle - Repair/Replace $30,000 $0 $0 $0 $0
502 Roof: Comp Shingle - Repair/Replace $0 $36,050 $0 $0 $0
510 Gutters/Downspouts - Repair/Replace $0 $0 $0 $0 $0
520 Siding: Vinyl - Repair/Replace $0 $0 $0 $0 $0
525 Exterior Surfaces - Paint/Caulk $0 $15,862 $0 $0 $0
535 Windows/Glass Doors - Replace $0 $0 $0 $0 $0
540 Decks: Wood - Maintain $0 $0 $0 $0 $0
560 Exterior Lights - Replace $0 $0 $0 $0 $0
Systems
900 Plumbing - Repair/Replace $0 $0 $0 $0 $0
Total Expenses $30,000 $61,440 $0 $0 $0
Ending Reserve Balance: $124,115 $112,576 $165,607 $222,285 $282,833
Association Reserves, Inc. 11/15/2013 14
Table 5: 30-Year Income/Expense Detail (yrs 5 through 9) 20791-3
Fiscal Year 2019 2020 2021 2022 2023
Starting Reserve Balance $282,833 $286,961 $344,266 $417,179 $494,991
Annual Reserve Contribution $61,505 $65,195 $69,107 $73,253 $77,648
Planned Special Assessments $0 $0 $0 $0 $0
Interest Earnings $2,848 $3,155 $3,806 $4,559 $5,262
Total Income $347,185 $355,311 $417,179 $494,991 $577,901
# Component
Site / Grounds
120 Asphalt - Resurface $0 $0 $0 $0 $0
121 Asphalt - Seal/Repair $0 $11,045 $0 $0 $0
140 Wood Fence - Replace $47,588 $0 $0 $0 $0
205 Mailboxes - Replace $7,303 $0 $0 $0 $0
Building Exterior
500 Roof: Comp Shingle - Repair/Replace $0 $0 $0 $0 $0
501 Roof: Comp Shingle - Repair/Replace $0 $0 $0 $0 $0
502 Roof: Comp Shingle - Repair/Replace $0 $0 $0 $0 $0
510 Gutters/Downspouts - Repair/Replace $0 $0 $0 $0 $0
520 Siding: Vinyl - Repair/Replace $0 $0 $0 $0 $0
525 Exterior Surfaces - Paint/Caulk $0 $0 $0 $0 $20,094
535 Windows/Glass Doors - Replace $0 $0 $0 $0 $0
540 Decks: Wood - Maintain $0 $0 $0 $0 $0
560 Exterior Lights - Replace $5,333 $0 $0 $0 $0
Systems
900 Plumbing - Repair/Replace $0 $0 $0 $0 $0
Total Expenses $60,224 $11,045 $0 $0 $20,094
Ending Reserve Balance: $286,961 $344,266 $417,179 $494,991 $557,807
Association Reserves, Inc. 11/15/2013 15
Table 5: 30-Year Income/Expense Detail (yrs 10 through 14) 20791-3
Fiscal Year 2024 2025 2026 2027 2028
Starting Reserve Balance $557,807 $646,132 $723,716 $816,207 $910,906
Annual Reserve Contribution $82,307 $83,542 $84,795 $86,067 $87,358
Planned Special Assessments $0 $0 $0 $0 $0
Interest Earnings $6,017 $6,846 $7,696 $8,632 $9,590
Total Income $646,132 $736,520 $816,207 $910,906 $1,007,854
# Component
Site / Grounds
120 Asphalt - Resurface $0 $0 $0 $0 $0
121 Asphalt - Seal/Repair $0 $12,804 $0 $0 $0
140 Wood Fence - Replace $0 $0 $0 $0 $0
205 Mailboxes - Replace $0 $0 $0 $0 $0
Building Exterior
500 Roof: Comp Shingle - Repair/Replace $0 $0 $0 $0 $0
501 Roof: Comp Shingle - Repair/Replace $0 $0 $0 $0 $0
502 Roof: Comp Shingle - Repair/Replace $0 $0 $0 $0 $0
510 Gutters/Downspouts - Repair/Replace $0 $0 $0 $0 $0
520 Siding: Vinyl - Repair/Replace $0 $0 $0 $0 $0
525 Exterior Surfaces - Paint/Caulk $0 $0 $0 $0 $0
535 Windows/Glass Doors - Replace $0 $0 $0 $0 $0
540 Decks: Wood - Maintain $0 $0 $0 $0 $0
560 Exterior Lights - Replace $0 $0 $0 $0 $0
Systems
900 Plumbing - Repair/Replace $0 $0 $0 $0 $0
Total Expenses $0 $12,804 $0 $0 $0
Ending Reserve Balance: $646,132 $723,716 $816,207 $910,906 $1,007,854
Association Reserves, Inc. 11/15/2013 16
Table 5: 30-Year Income/Expense Detail (yrs 15 through 19) 20791-3
Fiscal Year 2029 2030 2031 2032 2033
Starting Reserve Balance $1,007,854 $962,570 $1,047,772 $1,124,524 $1,229,005
Annual Reserve Contribution $88,668 $89,998 $91,348 $92,719 $94,109
Planned Special Assessments $0 $0 $0 $0 $0
Interest Earnings $9,848 $10,047 $10,857 $11,763 $12,819
Total Income $1,106,371 $1,062,616 $1,149,978 $1,229,005 $1,335,934
# Component
Site / Grounds
120 Asphalt - Resurface $91,998 $0 $0 $0 $0
121 Asphalt - Seal/Repair $0 $14,844 $0 $0 $0
140 Wood Fence - Replace $0 $0 $0 $0 $0
205 Mailboxes - Replace $0 $0 $0 $0 $0
Building Exterior
500 Roof: Comp Shingle - Repair/Replace $0 $0 $0 $0 $0
501 Roof: Comp Shingle - Repair/Replace $0 $0 $0 $0 $0
502 Roof: Comp Shingle - Repair/Replace $0 $0 $0 $0 $0
510 Gutters/Downspouts - Repair/Replace $51,802 $0 $0 $0 $0
520 Siding: Vinyl - Repair/Replace $0 $0 $0 $0 $0
525 Exterior Surfaces - Paint/Caulk $0 $0 $25,454 $0 $0
535 Windows/Glass Doors - Replace $0 $0 $0 $0 $0
540 Decks: Wood - Maintain $0 $0 $0 $0 $0
560 Exterior Lights - Replace $0 $0 $0 $0 $0
Systems
900 Plumbing - Repair/Replace $0 $0 $0 $0 $0
Total Expenses $143,800 $14,844 $25,454 $0 $0
Ending Reserve Balance: $962,570 $1,047,772 $1,124,524 $1,229,005 $1,335,934
Association Reserves, Inc. 11/15/2013 17
Table 5: 30-Year Income/Expense Detail (yrs 20 through 24) 20791-3
Fiscal Year 2034 2035 2036 2037 2038
Starting Reserve Balance $1,335,934 $1,445,355 $1,540,022 $1,654,396 $1,771,402
Annual Reserve Contribution $95,521 $96,954 $98,408 $99,884 $101,383
Planned Special Assessments $0 $0 $0 $0 $0
Interest Earnings $13,901 $14,921 $15,965 $17,122 $16,753
Total Income $1,445,355 $1,557,230 $1,654,396 $1,771,402 $1,889,537
# Component
Site / Grounds
120 Asphalt - Resurface $0 $0 $0 $0 $0
121 Asphalt - Seal/Repair $0 $17,208 $0 $0 $0
140 Wood Fence - Replace $0 $0 $0 $0 $0
205 Mailboxes - Replace $0 $0 $0 $0 $0
Building Exterior
500 Roof: Comp Shingle - Repair/Replace $0 $0 $0 $0 $308,985
501 Roof: Comp Shingle - Repair/Replace $0 $0 $0 $0 $0
502 Roof: Comp Shingle - Repair/Replace $0 $0 $0 $0 $0
510 Gutters/Downspouts - Repair/Replace $0 $0 $0 $0 $0
520 Siding: Vinyl - Repair/Replace $0 $0 $0 $0 $0
525 Exterior Surfaces - Paint/Caulk $0 $0 $0 $0 $0
535 Windows/Glass Doors - Replace $0 $0 $0 $0 $0
540 Decks: Wood - Maintain $0 $0 $0 $0 $0
560 Exterior Lights - Replace $0 $0 $0 $0 $0
Systems
900 Plumbing - Repair/Replace $0 $0 $0 $0 $0
Total Expenses $0 $17,208 $0 $0 $308,985
Ending Reserve Balance: $1,445,355 $1,540,022 $1,654,396 $1,771,402 $1,580,552
Association Reserves, Inc. 11/15/2013 18
Table 5: 30-Year Income/Expense Detail (yrs 25 through 29) 20791-3
Fiscal Year 2039 2040 2041 2042 2043
Starting Reserve Balance $1,580,552 $166,977 $177,717 $286,049 $397,066
Annual Reserve Contribution $102,903 $104,447 $106,014 $107,604 $109,218
Planned Special Assessments $0 $0 $0 $0 $0
Interest Earnings $8,734 $1,723 $2,318 $3,414 $4,538
Total Income $1,692,189 $273,146 $286,049 $397,066 $510,822
# Component
Site / Grounds
120 Asphalt - Resurface $0 $0 $0 $0 $0
121 Asphalt - Seal/Repair $0 $19,948 $0 $0 $0
140 Wood Fence - Replace $85,950 $0 $0 $0 $0
205 Mailboxes - Replace $13,191 $0 $0 $0 $0
Building Exterior
500 Roof: Comp Shingle - Repair/Replace $0 $0 $0 $0 $0
501 Roof: Comp Shingle - Repair/Replace $62,813 $0 $0 $0 $0
502 Roof: Comp Shingle - Repair/Replace $0 $75,481 $0 $0 $0
510 Gutters/Downspouts - Repair/Replace $0 $0 $0 $0 $0
520 Siding: Vinyl - Repair/Replace $1,045,005 $0 $0 $0 $0
525 Exterior Surfaces - Paint/Caulk $32,244 $0 $0 $0 $0
535 Windows/Glass Doors - Replace $276,379 $0 $0 $0 $0
540 Decks: Wood - Maintain $0 $0 $0 $0 $0
560 Exterior Lights - Replace $9,631 $0 $0 $0 $0
Systems
900 Plumbing - Repair/Replace $0 $0 $0 $0 $0
Total Expenses $1,525,213 $95,429 $0 $0 $0
Ending Reserve Balance: $166,977 $177,717 $286,049 $397,066 $510,822
Assoc. 20791-3
Association Reserves, Inc. 11/15/2013 19
Accuracy, Limitations, and Disclosures
Washington disclosure, per RCW 64.34.382:
This reserve study should be reviewed carefully. It may not include all common and
limited common element components that will require major maintenance, repair or
replacement in future years, and may not include regular contributions to a reserve
account for the cost of such maintenance, repair, or replacement. The failure to include
a component in a reserve study, or to provide contributions to a reserve account for a
component, may, under some circumstances, require you to pay on demand as a
special assessment your share of common expenses for the cost of major maintenance,
repair or replacement of a reserve component.
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.
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. Your 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. Our projections assume a stable economic environment and
lack of natural disasters.
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 shows expenses 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 and that of the
American Institute of Certified Public Accountants (AICPA) that your Reserve Study be
updated annually.
Association Reserves, Inc., and its employees have no ownership, management, or
other business relationships with the client other than this Reserve Study engagement.
James D. Talaga R.S., company president, is a credentialed Reserve Specialist (#66).
All work done by Association Reserves is performed under his Responsible Charge.
There are no material issues to our knowledge that have not been disclosed to the client
that would cause a distortion of the associations situation.
Assoc. 20791-3
Association Reserves, Inc. 11/15/2013 20
We have relied upon the client to provide the current (or projected) Reserve Balance,
the estimated net-after-tax current rate of interest earnings, and to indicate if those
earnings accrue to the Reserve Fund. In addition, we have considered the
associations 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.
Component quantities indicated in this Report were developed by Association Reserves
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.
Assoc. 20791-3
Association Reserves, Inc. 11/15/2013 21
Terms and Definitions
BTU British Thermal Unit (a standard unit of energy)
DIA Diameter
GSF Gross Square Feet (area)
GSY Gross Square Yards (area)
HP Horsepower
LF Linear Feet (length)
Effective Age: The difference between Useful Life and Remaining Useful Life. Note
that this is not necessarily equivalent to the chronological age of the
component.
Fully Funded Balance (FFB): The Reserve Balance that is in direct proportion to the
fraction of life used up of the current Repair or Replacement cost. This
benchmark balance represents the value of the deterioration of the
Reserve Components. This number is calculated for each component,
then summed together for an association total.
FFB = (Current Cost X Effective Age) / Useful Life
Inflation: Cost factors are adjusted for inflation at the rate defined in the
Executive Summary and compounded annually. These increasing
costs can be seen as you follow the recurring cycles of a component on
Table 5.
Interest: Interest earnings on Reserve Funds are calculated using the average
balance for the year (taking into account income and expenses through
the year) and compounded monthly using the rate defined in the
Executive Summary. Annual interest earning assumption appears in the
Executive Summary, page ii.
Percent Funded: The ratio, at a particular point in time (typically the beginning of the
Fiscal Year), of the actual (or projected) Reserve Balance to the Fully
Funded Balance, expressed as a percentage.
Remaining Useful Life: The estimated time, in years, that a common area component
can be expected to continue to serve its intended function.
Useful Life: The estimated time, in years, that a common area component can be
expected to serve its intended function.
Assoc. 20791-3
Association Reserves, Inc. 11/15/2013 22
Photographic Inventory Appendix
The primary purpose of the photographic appendix is to provide the reader with the
basis of our funding assumptions resulting from our physical analysis and subsequent
research. The photographs herein represent a wide range of elements that were
observed and measured against National Reserve Study Standards to determine if they
meet the criteria for reserve funding:
1) Common area maintenance, repair & replacement responsibility
2) Components must have a limited life
3) Life limit must be predictable
4) Above a minimum threshold cost (boards discretion typically to 1% of annual
operating expenses).
Some components are recommended for reserve funding, while others are not. The
components that meet these criteria in our judgment are shown with corresponding
maintenance, repair or replacement cycles to the left of the photo (UL = Useful Life or
how often the project is expected to occur, RUL = Remaining Useful Life or how many
years from our reporting period) and a representative market cost range termed Best
Cost and Worst Cost below the photo. There are many factors that can result in a
wide variety of potential costs; we are attempting to represent a market average for
budget purposes. Where there is no UL, the component is expected to be a one-time
expense. Where no pricing, the component deemed inappropriate for Reserve Funding.
Client: 20791A Crestwood Terrace
20791A
Inventory Appendix Association Reserves Washington, LLC
100 Concrete - Repair/Replace Comp #:
Quantity: Extensive Sq Ft
Location: Driveways, patios, curbing, etc
Evaluation: We noted concrete to be in good, stable condition with significant damage/deterioration observed. No trip
hazards were observed. Repair any trip and fall hazards (1/2" or larger displacement) immediately to ensure
safety.
In our experience, patterns of deterioration begin to occur as the community continues to age, but it is difficult to
predict timing, cost and scope at this time. Association has not yet reached the condition where we suggest a
rotating funding allowance to supplement the operating / maintenance budget. Incorporate funding as conditions,
actual expense patterns dictate within future reserve study updates. Treat local needs currently as general
maintenance and repair expense.
As routine maintenance, inspect regularly, pressure wash for appearance and repair promptly as needed to
prevent water penetrating into the base and causing further damage. Monitor tree roots nearby; consult with
arborist for best practice.
Useful Life:
Remaining Life:
Best Case: Worst Case:
Cost Source: Does not meet NRSS criteria for reserve funding
November 15,2013 Page 1 of 27
Client: 20791A Crestwood Terrace
20791A
Inventory Appendix Association Reserves Washington, LLC
120 Asphalt - Resurface Comp #:
Quantity: ~ 36,900 Sq Ft
Location: Roadway, parking areas of association
Evaluation: Overall fair condition noted with areas of minor cracking and raveling (loss of binder) throughout, but no major
deterioration observed. We recommend having surface sealed and repaired regularly as directed in component
#121 for maximum design life.
Even with ordinary care and maintenance, plan for eventual large scale resurface (overlay) at roughly the time
frame below. As timing draws nearer, consult with asphalt vendor/consultant for recommendations and complete
scope.
As routine maintenance, keep roadway clean, free of debris and well drained; fill/seal cracks (hot rubberized
crack fill) to prevent water from penetrating into the sub-base and accelerating damage.
Useful Life:
30 years
Remaining Life:
15 years
Best Case: Worst Case:
Cost Source: ARI Cost Database: Similar Project Cost History
$1.40/Sq Ft, Lower allowance to resurface (overlay) $1.80/Sq Ft, Higher allowance to resurface
(overlay)
$51,700.00 $66,400.00
November 15,2013 Page 2 of 27
Client: 20791A Crestwood Terrace
20791A
Inventory Appendix Association Reserves Washington, LLC
121 Asphalt - Seal/Repair Comp #:
Quantity: ~ 36,900 Sq Ft
Location: Roadway, parking areas of association
Evaluation: Asphalt surface is dry and faded with areas of minor cracking and raveling throughout.
Regular cycles of seal coating (along with any needed repair) has proven to be the best program in our opinion
for the long term care of lower traffic asphalt areas such as these. The State of Washington, Department of
Transportation recommends regular cycles of seal coating (they use the term bituminous surface treatment,
BST) for the long-term care of asphalt paving with low traffic and low speed. The primary reason to seal coat
asphalt pavement is to protect the pavement from the deteriorating effects of sun and water. When asphalt
pavement is exposed, the asphalt oxidizes, or hardens which causes the pavement to become more brittle. As a
result, the pavement will be more likely to crack, because it is unable to bend and flex when subjected to traffic
and temperature changes. A seal coat combats this situation by providing a waterproof membrane, which not
only slows down the oxidation process but also helps the pavement to shed water, preventing it from entering
the base material. Seal coat also provides uniform appearance, concealing the inevitable patching and repairs
which accumulate over time. Seal coat ultimately extends useful life of asphalt, postponing the asphalt
resurfacing, which can be one of the larger cost items in the reserve study (see component #120 for asphalt
resurfacing costs). Repair asphalt before seal coating as needed. Surface preparation and dry weather, during
and following application, is key to lasting performance. Apply two coats or flood application of quality asphalt
emulsion. Incorporate any striping and curb repair into this project.
Fill cracks and clean oil stains promptly in between cycles as routine maintenance.
See http://training.ce.washington.edu/wsdot/ for additional information.
Useful Life:
5 years
Remaining Life:
1 years
Best Case: Worst Case:
Cost Source: ARI Cost Database: Similar Project Cost History
$0.20/Sq Ft, Lower allowance to clean/seal/repair $0.30/Sq Ft, Higher allowance, more repairs, etc.
$7,400.00 $11,100.00
November 15,2013 Page 3 of 27
Client: 20791A Crestwood Terrace
20791A
Inventory Appendix Association Reserves Washington, LLC
140 Wood Fence - Replace Comp #:
Quantity: ~ 1,866 Lin Ft
Location: Perimeter of property
Evaluation: Although functional, wood fencing appears to be approaching the end of its typical useful life with areas of
deterioration (mainly at base) and some random instability.
Plan to replace at roughly the time frame below with funding included here for similar style fence. At next
replacement, association might want to consider replacing with lower maintenance products like composite,
vinyl, etc; typical costs at installation about ~40 to 50% higher, but requires less maintenance and has
significantly longer life.
As routine maintenance, inspect regularly for any damage, repair as needed and avoid contact with ground and
surrounding vegetation. It appears that the wood fencing is not being stained or treated and is being allowed to
gray naturally. Regular cycles of stain/paint will help to maintain appearance and maximize life and can be
added to reserve funding in the future if Association desires.
Useful Life:
20 years
Remaining Life:
5 years
Best Case: Worst Case:
Cost Source: ARI Cost Database: Similar Project Cost History
$20/Lin Ft, Lower allowance to replace $24/Lin Ft, Higher allowance to replace
$37,300.00 $44,800.00
November 15,2013 Page 4 of 27
Client: 20791A Crestwood Terrace
20791A
Inventory Appendix Association Reserves Washington, LLC
157 Retention Walls - Repair/Replace Comp #:
Quantity: Extensive Lin Ft
Location: Scattered throughout community
Evaluation: Fair condition noted with no significant or widespread deterioration, settling or other problems observed. Key to
long lasting performance is proper design and installation with adequate base and surrounding drainage.
Inspect regularly, repair as needed from operating budget. If any shifting, deterioration, etc is observed,
consult with civil or geotechnical engineer or landscape architect for repair scope. At this time, no predictable
expectation of large scale repair or replacement; no basis for reserve funding.
Useful Life:
Remaining Life:
Best Case: Worst Case:
Cost Source: Does not meet NRSS criteria for reserve funding
November 15,2013 Page 5 of 27
Client: 20791A Crestwood Terrace
20791A
Inventory Appendix Association Reserves Washington, LLC
170 Landscape - Refurbish Comp #:
Quantity: Common landscaping
Location: Common areas
Evaluation: Overall fair condition of common area landscaping noted with no specific problems observed or reported to us.
Although typically funded as ongoing maintenance item, this component may be utilized for setting aside funds
for larger expenses that do not occur on an annual basis, such as large scale plantings, resodding lawn areas,
bark/mulch replenishment, etc... Often times these types of projects can be handled within the annual operating
budget as a separate line item from the landscape maintenance contract. At this time no specific projects
anticipated. Monitor and include funding in reserve study updates if needed / desired.
Useful Life:
Remaining Life:
Best Case: Worst Case:
Cost Source: Does not meet NRSS criteria for reserve funding
November 15,2013 Page 6 of 27
Client: 20791A Crestwood Terrace
20791A
Inventory Appendix Association Reserves Washington, LLC
175 Irrigation System - Repair/Replace Comp #:
Quantity: Common irrigation
Location: Throughout common area landscaping
Evaluation: No problems observed or reported during our inspection.
If properly installed and bedded without defect, the elements within this component are generally low cost and
have a failure rate that is difficult to predict and best suited to be handled thru the operating budget. No basis for
reserve funding at this time. If at some point Association decides to upgrade current system, funding can be
incorporated into future reserve study update
As routine maintenance, inspect regularly, test system and repair as needed. Follow proper winterization and
spring start up procedures.
Useful Life:
Remaining Life:
Best Case: Worst Case:
Cost Source: Does not meet NRSS criteria for reserve funding
November 15,2013 Page 7 of 27
Client: 20791A Crestwood Terrace
20791A
Inventory Appendix Association Reserves Washington, LLC
176 Irrigation Timeclock - Replace Comp #:
Quantity: (1) Rain Bird controller
Location: South side of property
Evaluation: No problems observed or reported of irrigation clock.
Although eventual replacement will be needed due to parts obsolescence, technological upgrades, etc best
suited to be handled as needed within the operating budget and not anticipated as large scale reserve project.
Inspect regularly and repair/replace as needed.
Useful Life:
Remaining Life:
Best Case: Worst Case:
Cost Source: Does not meet NRSS criteria for reserve funding
November 15,2013 Page 8 of 27
Client: 20791A Crestwood Terrace
20791A
Inventory Appendix Association Reserves Washington, LLC
182 Drainage/Stormwater Sys - Maintain Comp #:
Quantity: Common drainage
Location: Common areas, hidden
Evaluation: Our reserve study includes only a visual review, and majority of the drainage system is out of view. Although
there have been past repairs to drainpipes under roadway, there were no current drainage problems observed or
reported.
No expectation of large scale repairs/replacement at this time. No reserve funding suggested.
As routine maintenance, inspect regularly, keep drains and grates free of debris and free flowing to ensure water
drains as designed. Pipes can be 'scoped' to allow visual review of the interior of pipes. Repair as needed,
including pumping out sediment, if needed, utilizing mobile evacuator service. Fund from operating and
maintenance budget.
Useful Life:
Remaining Life:
Best Case: Worst Case:
Cost Source: Does not meet NRSS criteria for reserve funding
November 15,2013 Page 9 of 27
Client: 20791A Crestwood Terrace
20791A
Inventory Appendix Association Reserves Washington, LLC
190 Trees - Trim/Remove Comp #:
Quantity: Numerous, assorted
Location: Throughout community
Evaluation: This component may be utilized for larger tree trimming/removal projects which do not occur on an annual basis.
If the community has not already done so, consult with a qualified arborist to assess the appropriateness of
current plantings and for a long term plan for the care and management of the trees within the community,
balancing aesthetics with protection of association assets. Tree trimming/removal expenses can be incorporated
into future reserve study updates at the discretion of the Board.
Useful Life:
Remaining Life:
Best Case: Worst Case:
Cost Source: Does not meet NRSS criteria for reserve funding
November 15,2013 Page 10 of 27
Client: 20791A Crestwood Terrace
20791A
Inventory Appendix Association Reserves Washington, LLC
200 Entry Sign - Replace Comp #:
Quantity: (1) sign
Location: Entry location
Evaluation: Good, legible condition with no significant damage/deterioration noted, sign was recently replaced.
Basic signage is typically a smaller cost item to replace; at this time, we recommend replacement on as needed
basis, funded through operating/maintenance budget. No reserve funding suggested. Note: if association
desires to upgrade at some point, funding can be incorporated in future reserve study update.
Inspect regularly, clean for appearance, touch up, paint and repair from operating budget.
Useful Life:
Remaining Life:
Best Case: Worst Case:
Cost Source: Does not meet NRSS criteria for reserve funding
November 15,2013 Page 11 of 27
Client: 20791A Crestwood Terrace
20791A
Inventory Appendix Association Reserves Washington, LLC
205 Mailboxes - Replace Comp #:
Quantity: (6) cluster boxes
Location: Scattered throughout community
Evaluation: Although aged in appearance and showing signs of wear, there were no functional problems reported.
Best to plan for total replacement at roughly the time frame below due to constant exposure, usage and wear
over time.
Inspect regularly, clean by wiping down for appearance, change lock cylinders, lubricate hinges and repair as
needed from operating budget.
Useful Life:
20 years
Remaining Life:
5 years
Best Case: Worst Case:
Cost Source: ARI Cost Database: Similar Project Cost History
$1,200/cluster stand (x3) plus $600/parcel stand
(x3), Lower allowance to replace
$1,600/cluster stand (x3) plus $800/parcel stand
(x3), Higher allowance to replace
$5,400.00 $7,200.00
November 15,2013 Page 12 of 27
Client: 20791A Crestwood Terrace
20791A
Inventory Appendix Association Reserves Washington, LLC
500 Roof: Comp Shingle - Repair/Replace Comp #:
Quantity: ~ 70,400 Sq Ft
Location: Rooftops of (17) of (22) buildings
Evaluation: Roofing is laminated shingles, with closed cut valleys. Ventilation (the lack of which can greatly reduce useful
life) was observed at eave and rooftop. Eave venting consisted of openings in blocking between rafters. Rooftop
venting appeared to be provided by roof jacks. Visible portions of roof flashing were observed at the rake,
headwall, and sidewall conditions. Kick-out flashings were also observed. Gutters blocked the view of eaves, so
eave flashing was not confirmed. No debris or moss was observed on roof surfaces.
We were informed that the majority of roofs have recently been replaced, with (5) building remaining (see
components #501 and #502).
Plan for replacement at roughly the time frame indicated below. Costs below include replacing with a similar
shingle to what is currently in place. We suggest that the best value (life cycle cost) might be to spend about
$2/Sq foot more and install a 40 to 50-year shingle.
As routine maintenance, many manufacturers recommend inspections at least twice annually (once in the fall,
before the rainy season, and again in the spring) and after large storm events. Promptly replace any
damaged/missing sections or any other repair needed to ensure waterproof integrity of roof. Keep roof surface,
gutters and downspouts clear and free of moss or debris.
Moss growth can decrease the life of the roofing shingles and should be removed sooner than later. Liquid
applied fungicide (moss killer) is recommended instead of power washing the living moss off the shingles. Moss
roots grow into the shingles. Killing the moss in-place, with a fungicide, allows the roots to gradually release from
the shingles where they can be swept away. Do not use high pressure wash.
There is a wealth of information available through Roofing Organizations such as the Western States Roofing
Contractors Association (WSRCA) http://www.wsrca.com/, Roof Consultant Institute http://www.rci-online.org/
and the National Roofing Contractors Association (NRCA) http://www.nrca.net. NCRA has some very good
information for homeowners, they have an entire section dedicated to "consumer" with valuable information
including this page for getting your monies worth out of your new roof
http://www.nrca.net/consumer/fyi.aspx?homeowners, their page on maintenance is here:
http://www.nrca.net/consumer/maintenance.aspx
At time of re-roof we recommend that you hire a professional roof consultant such as Architect, Engineer, or
building envelope consultant; to evaluate, design, specify, help bid the project, select best bidder, and observe
construction to ensure proper installation. We recommend all Associations seek advice from a qualified
consultant whenever they are considering having work performed on any building envelope components (roof,
walls, windows, decks, exterior painting and caulking/sealant).
Useful Life:
25 years
Remaining Life:
24 years
Best Case: Worst Case:
Cost Source: Client Cost History
Lower allowance to remove and replace roof Higher allowance to remove and replace roof
$142,000.00 $162,000.00
November 15,2013 Page 13 of 27
Client: 20791A Crestwood Terrace
20791A
Inventory Appendix Association Reserves Washington, LLC
501 Roof: Comp Shingle - Repair/Replace Comp #:
Quantity: ~ 9,300 Sq Ft
Location: Rooftops of (3) of (22) buildings
Evaluation: This component represents the replacement of roofing at (3) of the remaining (5) buildings. This project is
tentatively scheduled to be completed in 2014. See component #500 for detailed roof maintenance
recommendations.
Useful Life:
25 years
Remaining Life:
0 years
Best Case: Worst Case:
Cost Source: Estimate Provided by Client
Lower allowance to remove and replace roof Higher allowance to remove and replace roof
$25,000.00 $35,000.00
502 Roof: Comp Shingle - Repair/Replace Comp #:
Quantity: ~ 10,300 Sq Ft
Location: Rooftops of (2) of (22) buildings
Evaluation: This component represents the replacement of roofing at (2) of the remaining (5) buildings. This project is
tentatively scheduled to be completed in 2015. See component #500 for detailed roof maintenance
recommendations.
Useful Life:
25 years
Remaining Life:
1 years
Best Case: Worst Case:
Cost Source: Estimate Provided by Client
Lower allowance to remove and replace roof Higher allowance to remove and replace roof
$30,000.00 $40,000.00
November 15,2013 Page 14 of 27
Client: 20791A Crestwood Terrace
20791A
Inventory Appendix Association Reserves Washington, LLC
510 Gutters/Downspouts - Repair/Replace Comp #:
Quantity: ~ 5,540 Lin Ft
Location: Perimeter of buildings
Evaluation: Generally the metal gutters and downspouts appeared in fair condition with some grime buildup, but no
significant damage noted.
It is our understanding that gutters and downspouts are not being replaced as part of the recent roof
replacement project.
We suggest planning for eventual total replacement of gutter and downspouts at roughly the 30-year mark of life,
due to typical wear and deterioration caused by exposure and usage over time. Evaluate gutters and
downspouts as remaining useful life approaches zero to determine if replacement is necessary or if useful life
can be extended.
As routine maintenance, inspect regularly, keep gutters and downspouts free of debris. National Roofing
Contractor Association (NRCA) roofing standard includes installing eave flashings at the gutters.
Useful Life:
30 years
Remaining Life:
15 years
Best Case: Worst Case:
Cost Source: ARI Cost Database: Similar Project Cost History
$5.00/Lin Ft, Lower allowance to replace $7.00/Lin Ft, Higher allowance to replace
$27,700.00 $38,800.00
November 15,2013 Page 15 of 27
Client: 20791A Crestwood Terrace
20791A
Inventory Appendix Association Reserves Washington, LLC
520 Siding: Vinyl - Repair/Replace Comp #:
Quantity: ~ 71,300 GSF
Location: Exterior building surfaces: vinyl siding
Evaluation: Generally the siding appeared in fair condition, with no missing pieces, significant damage or unusual wear
observed. Vinyl siding is mainly horizontal clapboard style. No view of the underlying waterproofing was
undertaken as part of this limited visual review.
Vinyl siding will fade over the years and when replacing pieces it may be difficult to match the faded color. A 40-
year life cycle is used for financial planning purposes. Evaluate the siding, and the critical underlying
waterproofing (building paper or house wrap), as the remaining useful life approaches zero years. Adjust
remaining useful life as dictated by the evaluation of performance of the underlying waterproofing. Cost
allowance below is for siding only. Professional architectural specifications and project oversight may add
significantly to total project if elected. See next component for cleaning and inspection.
Useful Life:
40 years
Remaining Life:
25 years
Best Case: Worst Case:
Cost Source: ARI Cost Database: Similar Project Cost History
$6.00/Sq Ft, Lower allowance to replace $8.00/Sq Ft, Higher allowance to replace
$427,800.00 $570,400.00
November 15,2013 Page 16 of 27
Client: 20791A Crestwood Terrace
20791A
Inventory Appendix Association Reserves Washington, LLC
521 Siding: Vinyl - Clean/Inspect Comp #:
Quantity: ~ 71,300 GSF
Location: Exterior building surfaces: vinyl siding
Evaluation: The majority of exterior vinyl siding surfaces appeared in fair condition, no significant areas of grime or organic
growth.
We were informed that the Association has elected to perform this as an operating / maintenance item,
therefore, reserve funding is not required at this time.
Clean vinyl siding as needed to maintain appearance and maximize useful life. When washing be careful to not
spray high-pressure water beneath the vinyl. Two types of washing are typically available: Power washing is the
least expensive - hand washing is also available, but a more expensive alternative.
Useful Life:
Remaining Life:
Best Case: Worst Case:
Cost Source: Does not meet NRSS criteria for reserve funding
November 15,2013 Page 17 of 27
Client: 20791A Crestwood Terrace
20791A
Inventory Appendix Association Reserves Washington, LLC
525 Exterior Surfaces - Paint/Caulk Comp #:
Quantity: Eaves, gables, etc
Location: Exterior building surfaces: trim, eaves, railing, doors, etc throughout association
Evaluation: The painted exterior surfaces appeared in fair condition, no significant deterioration observed. Painted exterior
surfaces consist mainly of eaves and gables.
Last reported total exterior painting project was done in 2007 with touch-up painting completed in 2012. Useful
life shown below is for financial planning purposes at 8-year cycles. Evaluate and adjust remaining useful life if
needed as it approaches zero years.
As routine maintenance, inspect regularly (including sealants) repair locally and touch-up paint as needed.
Typical Northwest paint cycles vary greatly depending upon many factors including; type of material painted,
surface preparations, quality of primer/paint/stain, application methods, weather conditions during application,
moisture beneath paint, and exposure to weather conditions.
Proper sealant/caulking is critical to keeping water out of the walls, and preventing water damage. Two common
types of sealants/caulking are urethane and silicone. If properly installed, urethane has a life of approximately 6-
8 years and silicones life can be 16-20 years. Incorrect installations of sealant are common, and can greatly
decrease its useful life. Inspect sealant, more frequently as it ages, to determine if it is failing. Typical sealant
problems include failure of sealant to adhere to adjacent materials and tearing/splitting of the sealant itself. As
sealants age and are exposed to ultra-violet sunlight, they will dry out, harden, and lose their elasticity. Remove
and replace sealant as signs of failure begin to appear. Proper cleaning, prep work, and proper installation are
critical for a long lasting sealant/caulking. Do not install sealant in locations that would block water drainage from
behind the siding. Repair areas as needed prior to painting/caulking.
Additional information on painting is available through American Coatings Association at http://www.paint.org/
Useful Life:
8 years
Remaining Life:
1 years
Best Case: Worst Case:
Cost Source: Client Cost History, Adjusted for Inflation
$600/unit (x22), Lower allowance to prep and paint /
caulk
$800/unit (x22), Higher allowance, more prep
work
$13,200.00 $17,600.00
November 15,2013 Page 18 of 27
Client: 20791A Crestwood Terrace
20791A
Inventory Appendix Association Reserves Washington, LLC
535 Windows/Glass Doors - Replace Comp #:
Quantity: ~ (342) assorted
Location: Building exteriors
Evaluation: Windows are vinyl framed with horizontal and vertical sliders. Head flashing was not observed. Sealant joint at
jambs and sills between window frame and cladding was not visible due to vinyl trim. Weep holes, at exterior
lower corners, were observed to be clear, in the few windows sampled for our report. No condensation was
observed between window panes, which is typically indicative of failed glazing seals.
Factors effecting useful life include: quality of windows and installation, waterproofing flashing details, exposure
to wind driven rain, building movement over time, structural details, etc... We recommend financially planning for
a 40-year useful life range timed with other large scale building exterior projects for efficiency and proper
integration into waterproofing systems. Note: there are many types of glazing and windows types, material and
quality, available in today's market; and costs can vary greatly. A mid-range funding allowance is presented
below.
Inspect regularly, including sealant, and repair as needed. Keep weep holes free and clear to allow proper
drainage of water that gets into window frame. Do not block (caulk or seal) gap at top of head flashing, if any, as
this allows water that gets behind the siding to drain out.
Proper sealant/caulking is critical to keeping water out of the walls, and preventing water damage. Two common
types of sealants/caulking are urethane and silicone. If properly installed, urethane has a life of approximately 6-
8 years and silicones life can be 16-20 years. Incorrect installation of sealant is common, and can greatly
decrease its useful life. Inspect sealant, more frequently as it ages, to determine if it is failing. Typical sealant
failures include; lack of adherence to adjacent materials, tearing/splitting of the sealant itself, and loss of
elasticity. Loss of elasticity can be caused by exposure to ultra-violet light and general aging. Remove and
replace all sealants as signs of failure begin to appear. Proper cleaning, prep work, and proper installation are
critical for a long lasting sealant/caulking.
One of the most important factors in window selection is the design pressure rating. The design pressure rating
(DP) is the ability of the window to withstand wind blown rain, and a few other criteria. Manufacturers can choose
to have a sample of their windows tested. Independent third parties perform testing following American
Architectural Manufacturers Association (AAMA) standards and procedures. AAMA stickers are placed on
windows with the specific DP rating (psf) and largest size of the window that meets the design pressure.
Useful Life:
40 years
Remaining Life:
25 years
Best Case: Worst Case:
Cost Source: ARI Cost Database: Similar Project Cost History
$2,500/unit (x44), Lower allowance to replace $3,500/unit (x44), Higher allowance to replace;
upgraded
$110,000.00 $154,000.00
November 15,2013 Page 19 of 27
Client: 20791A Crestwood Terrace
20791A
Inventory Appendix Association Reserves Washington, LLC
538 Doors: Exterior - Repair/Replace Comp #:
Quantity: ~ (44) doors
Location: Main entrance to each unit
Evaluation: Exterior doors appeared in fair condition. No wide spread problems were observed.
No predictable expectation of large scale repair or replacement of doors at this time. Therefore, reserve funding
is not required.
Inspect periodically and repair as needed to maintain appearance, security and operation within maintenance
funds. Clean and paint as needed along with other exterior building surfaces, no need for separate funding.
Useful Life:
Remaining Life:
Best Case: Worst Case:
Cost Source: Does not meet NRSS criteria for reserve funding
November 15,2013 Page 20 of 27
Client: 20791A Crestwood Terrace
20791A
Inventory Appendix Association Reserves Washington, LLC
540 Decks: Wood - Maintain Comp #:
Quantity: Assorted decks
Location: Decks throughout association
Evaluation: Majority of decks viewed are wood framed structures with open board decking that allow water to drain off in
between.
We were informed that decks are the responsibility of the individual unit owner to maintain, repair and replace;
therefore, reserve funding is not required under this pattern of care.
As routine maintenance, inspect deck, steps, and railings regularly and repair as needed. Almost all exterior
wood in the Pacific Northwest will decay over time and require replacement. Current building code requires
flashing of the ledger joist (at the exterior building wall) to prevent decay from compromising its structural
integrity.
Useful Life:
Remaining Life:
0 years
Best Case: Worst Case:
Cost Source: Does not meet NRSS criteria for reserve funding
November 15,2013 Page 21 of 27
Client: 20791A Crestwood Terrace
20791A
Inventory Appendix Association Reserves Washington, LLC
560 Exterior Lights - Replace Comp #:
Quantity: ~ (173) assorted fixtures
Location: Exterior common area locations
Evaluation: Exterior wall lights appeared in fair condition, with areas of corrosion, but no significant damage noted. Observed
during daylight hours and assumed to be in functional operating condition.
Best to plan for eventual large scale replacement, for cost efficiency and consistent quality/appearance
throughout association. A mid-range replacement allowance is factored below for planning purposes.
As routine maintenance, inspect, repair/change bulbs as needed.
Useful Life:
20 years
Remaining Life:
5 years
Best Case: Worst Case:
Cost Source: Estimate Provided by Client
Lower allowance to replace Higher allowance to replace
$4,400.00 $4,800.00
November 15,2013 Page 22 of 27
Client: 20791A Crestwood Terrace
20791A
Inventory Appendix Association Reserves Washington, LLC
605 Garage Doors - Replace Comp #:
Quantity: ~ (44) metal doors
Location: At each garage
Evaluation: Garage doors appeared in fair condition with some random damage, but no significant deterioration noted.
These doors can last for many years if properly serviced and not damaged or abused. No reserve funding
recommended at this time, as there is no predictable time frame for total replacement. If need becomes
apparent to replace in large scale, funding can be incorporated into future reserve study updates.
Regular maintenance, inspection and service as needed is recommended for maximum life. Clean and paint as
needed along with other exterior building surfaces, no need for separate funding. Note: expect some smaller
cost items as periodic repair/replacement of peripheral components (i.e. - springs, motors, sensors, etc)
funded as general operating/maintenance expense.
Useful Life:
Remaining Life:
Best Case: Worst Case:
Cost Source: Does not meet NRSS criteria for reserve funding
November 15,2013 Page 23 of 27
Client: 20791A Crestwood Terrace
20791A
Inventory Appendix Association Reserves Washington, LLC
900 Plumbing - Repair/Replace Comp #:
Quantity: Supply, drain systems
Location: Throughout common areas of association
Evaluation: Analysis of plumbing system(s) beyond visual inspection is not within the scope of a reserve study as majority of
systems are hidden. No reported problems at this time.
Treat minor local repairs as ongoing maintenance expense. If patterns of significant repair costs emerge,
funding may be incorporated into reserve study updates to supplement the operating budget. No predictable
basis for reserve funding at this time.
Some types of piping used historically are known to be life limited. Manufacturing defects also become apparent
from time to time and certain site conditions can contribute to premature deterioration of system components.
Regular professional inspections should be conducted.
Typically, if installed per architectural specifications and local building codes, there is no predictable time frame
for large scale repair/replacement expenses within the scope of our report. If leaks, poor flow, sediments,
defective material and/or installation become evident, have qualified plumber and / or engineer inspect closely
and develop scope of any repair/replacement needed; funding for even one time projects can be incorporated
within reserve study updates if basis exists.
Useful Life:
Remaining Life:
0 years
Best Case: Worst Case:
Cost Source: Does not meet NRSS criteria for reserve funding
November 15,2013 Page 24 of 27
Client: 20791A Crestwood Terrace
20791A
Inventory Appendix Association Reserves Washington, LLC
905 Electrical System - Maintain/Repair Comp #:
Quantity: Main, branch systems
Location: Throughout common areas of association
Evaluation: Analysis of electrical system(s) beyond visual inspection is not within the scope of a reserve study. No reported
problems at this time.
Typically, if installed per architectural specifications and local building codes, there is no predictable time frame
for large scale repair/replacement expenses within the scope of our report. Service life typically lasts well beyond
rated life of components. Treat minor repairs as ongoing maintenance expense. Periodic inspections of
distribution system by qualified electrician are wise to clean and tighten, exercise breakers, etc Some
associations employ infrared or other testing methodologies to ward off trouble spots and potential hazards. A
good resource book available for purchase is NFPA 70B Recommended Practices for Electrical Equipment
Maintenance. Funding may be incorporated into future reserve study updates if conditions dictate. No basis for
reserve funding at this time.
Some electrical system components used historically are known to be life limited. Manufacturing defects become
apparent from time to time and certain site conditions can contribute to premature deterioration of system
components.
Useful Life:
Remaining Life:
Best Case: Worst Case:
Cost Source: Does not meet NRSS criteria for reserve funding
November 15,2013 Page 25 of 27
Client: 20791A Crestwood Terrace
20791A
Inventory Appendix Association Reserves Washington, LLC
998 Association Annual Inspection Comp #:
Quantity: Annual inspection
Location: Common elements of association
Evaluation: Many Associations are required to have annual inspections by a qualified engineer or architect to assess the
physical condition of the improvements. The inspection typically covers, at a minimum, the building envelope,
including: roofs, exterior, waterproofing / sealants, flashings, windows, decks and doors. Forensic evaluation is
beyond the scope of a typical reserve study.
Although your Associations governing documents do not appear to have such a requirement, we recommend the
Board provide for periodic building envelope inspections, funded from the operating budget, to help ensure
critical areas are functioning properly.
Useful Life:
Remaining Life:
Best Case: Worst Case:
Cost Source: Does not meet NRSS criteria for reserve funding
November 15,2013 Page 26 of 27
Client: 20791A Crestwood Terrace
20791A
Inventory Appendix Association Reserves Washington, LLC
999 Reserve Study - Update Comp #:
Quantity: Annual update
Location: Common areas of association
Evaluation: Per Washington law (RCW 64.34.380), reserve studies are to be updated annually, with site inspections by an
independent reserve study professional to occur no less than every three years to assess changes in condition
(i.e., physical, economic, governmental, etc...) and the resulting effect on the community's long-term reserve
plan. Most appropriately factored within operating budget, not as reserve component.
Useful Life:
Remaining Life:
Best Case: Worst Case:
Cost Source: Does not meet NRSS criteria for reserve funding
November 15,2013 Page 27 of 27

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