LEVEL 3 RESERVE STUDY UPDATE For IRONWOOD AT TUKWILA ...€¦ · Ironwood at Tukwila HOA, Inc. ... Capital Reserve Consultants, LLC makes no ... Common area landscaping & irrigation

LEVEL 3RESERVE STUDY UPDATE

For

IRONWOOD AT TUKWILA HOMEOWNERS ASSOCIATION, INC.

Woodburn, OR

January 1, 2015 – December 31, 2015

Project No: OR‐11101‐0006‐3

Prepared By: ______________________________________Carson M. Horton, RS

Quality Check By: __________________________________ L. Law Broili

Date: March 16, 2015

Copyright 2015 – USA / Canada503‐336‐3719 / 800‐218‐0302

Law Broili

CMH - RS

Law Broili

CMH

Law Broili

LLB Full

TABLE OF CONTENTSIronwood at Tukwila HOA, Inc.

SECTION I ‐ SUMMARIES & FINANCIAL ANALYSIS

Introduc on 1‐1

Property Summary 1‐3

Financial Analysis 1‐4

Distribu on of Accumulated Reserves 1‐7

Current Assessment Funding Method Summary 1‐8

Current Assessment Funding Method Projec on 1‐9

SECTION II ‐ COMPONENT INVENTORY DETAILS

Explana on of Component Reports 2‐1

Component Summary with Comments 2‐2

Component Inventory by Remaining Life Expectancy 2‐4

Component Inventory with Current Costs 2‐5

Component Detail Reports 2‐7

SECTION III ‐ RESERVE EXPENDITURE REPORTS

Explana on of Expenditure Reports 3‐1

Annual Reserve Expenditure Detail 3‐2

Annual Expenditure Spread Sheet 3‐7

Capital & Non‐Capital Expenditures 3‐13

APPENDIX

Physical Analysis ‐ 2011 4‐1

Reserve Study Updates 4‐3

Reserve Study Parameters & Methodology 4‐4

Oregon Statutory Requirements 4‐6

Glossary 4‐7

Component Detail Index 4‐14

Ironwood at Tukwila HOA, Inc. Disclosures

This reserve study document has been provided pursuant to an agreement containing restrictions on its use. No part of the document may be copied or distributed in any form, or disclosed to third parties, without the written permission of Capital Reserve Consultants, LLC. The client shall have the right to reproduce and distribute copies of this report, in whole or in part, as may be required for compliance with the Association’s governing documents or applicable state law.

This reserve study encompasses a period of 30 years beginning with on January 1, 2015 and ending on December 31, 2044. However, the reserve study must be updated annually to remain current. If the reader has obtained this reserve study from anyone other than representatives of Capital Reserve Consultants, LLC, they should verify that this version represents the most recent update of the Association’s reserve study. Alterations made to this reserve study by any individual other than a representative of Capital Reserve Consultants, LLC are not authorized and do not represent the opinion of the reserve advisors who prepared this reserve study.

Carson M. Horton, RS, the person supervising the preparation of this reserve study is a Community Associations Institute Certified Reserve Specialist (RS); recognized for expertise in the preparation and analysis of reserve funding plans.

The authors of this reserve study have no other involvement with Ironwood Homeowner's Association, Inc.other than to prepare or update this reserve study.

The common area components which are the subject of this reserve study were determined by a physical inspection of the subject property; a review of the Association’s governing documents and input from Association representatives.

Information regarding the Expected Useful Life of common area components was obtained primarily from Life Cycle Costing for Facilities ‐ Reed Construction Data Publishers; the 2007 Study of Life Expectancy of Home Components – NAHB & Bank of America; and the Expected Useful Life Tables published by the Federal National Mortgage Association.

The purpose of this reserve study is to provide a planning and budgeting tool to assist in the development of a long range financial plan for the Association. Because this reserve study relies on assumptions regarding future events over which Capital Reserve Consultants, LLC has no control, the accuracy of replacement costs and scheduling cannot be guaranteed.

For the purposes of this reserve study all components and equipment are assumed to have been installed correctly, in a workmanlike manner, using generally accepted construction practices. It is expected routine preventive maintenance will be performed throughout the entire lifecycle of all components whether or not such maintenance expenses are provided for in this reserve funding plan or not.

The component replacement schedules and corresponding funding projections presented in this reserve study assume all components will achieve their normal life expectancy before requiring replacement; unless otherwise noted.

Information regarding the beginning reserve fund balance was provided by the Association’s management company and is assumed to be correct for the purposes of this reserve study.

The authors of this reserve study have no control over whether a special assessment will occur at any time during or after the period of time covered in this reserve study. Capital Reserve Consultants, LLC makes no guarantee, express or implied, that a special assessment will not occur during the time period covered by this reserve study.

The reserve study is a reflection of information provided to Capital Reserve Consultants, LLC by third parties and

Ironwood at Tukwila HOA, Inc. Disclosures

cannot be used for the purpose of performing an audit, forensic analysis or verification of historical records. Information regarding the Association’s financial condition, including the projected reserve fund balance as of the beginning date of the study, has been provided by representatives of the Association. The information is deemed reliable, but is not based on an audit of the Association’s financial condition, and should not be used for purposes other than those intended in this study. An on‐site inspection conducted in conjunction with a reserve study should not be deemed to be a project audit or quality inspection.

Information which has been provided to CRC by third parties is deemed reliable for the purpose of this reserve study. Third party information which is incorrect may have a material impact on the Association’s reserve funding requirements. CRC takes no responsibility for the accuracy of any such information or the impact inaccurate information may have on the findings and conclusions presented in this reserve study.

This reserve study was prepared in accordance with nationally recognized guidelines for the preparation of reserve studies for common interest developments established by the Community Associations Institute; and the rules set forth in the Audit & Accounting Guide Common Interest Realty Associations (May 1, 2008), published by the American Institute of Certified Public Accountants for maintaining a fund for Future Major Repairs and Replacements.

No invasive or destructive testing has been employed in the investigative phase of this study and no environmental assessment of any kind was performed. This reserve study is not intended to address or discover construction defects and no representation is made herein that is meant to imply any such warranty.

SECTION I

SUMMARIES & FINANCIAL ANALYSIS

Ironwood at Tukwila HOA, Inc. Introduc on

Capital Reserve Consultants, LLC Page 1‐1 www.capitalreserveconsultants.com Copyright‐2015 [email protected]

1. Level of Inquiry: This reserve study is an update of a Level 1 Reserve Study. A Level 1 Reserve Study includes a physical inspection of the common area components identified in the Component Inventory.

This reserve study update did not include a site visit.

The study is an analysis of the General Common Elements which are the responsibility of Ironwood Homeowner's Association, Inc. (Association) to maintain and replace, according to the governing documents or as may be required by state law.

Opinions regarding the current condition and remaining life expectancy of the common area components are based on visual observations made during the inspection process. Component quantities may be based on field measurements, a physical inventory and/or association records. This information is intended to be used for developing long term reserve funding projections, but should not be considered adequate for the purpose of ordering materials or formulating repair and replacement project costs.

2. Limitations of the Analysis: The physical condition assessment performed in conjunction with this reserve study is not intended to identify construction defects or other sub‐standard conditions which may require immediate corrective action. The reserve study utilizes information obtained from the following sources to arrive at component replacement costs and useful life estimates for the common area components identified in the component inventory:

RS Means Construction Cost Books –2013‐2015

RS Means Residential Detailed Costs – 2009‐2015

Life Cycle Costing for Facilities – (Reed Construction Publishers)

Study of Life Expectancy of Home Components – 2007 (NAHB)

Preventive Maintenance and Building Operations Efficiency – (BOMA)

Facility Manager’s Maintenance Handbook – (McGraw‐Hill)

RS Means Facilities Maintenance & Repair Cost Data ‐ 16th Edition

Physical condition assessment of common elements performed by Capital Reserve Consultants, LLC in 2011

3. Vendor Supplied Cost Data: Replacement costs obtained from local vendors are used only at the request of the Board of Directors (BOD) and only when supported by current written estimates, proposals or expense records for work completed within the last three years. Vendor pricing is subject to change due to current market conditions and may not reflect accurate repair and replacement costs under normal circumstances.

Vendor replacement cost estimates used in this reserve study are at the request of the BOD and are not based on recommendations by the reserve advisor. CRC reserves the right to reject replacement cost estimates provided by the BOD if we believe they will not result in a realistic level of reserve funding for future repair and replacement expenses.

Ironwood at Tukwila HOA, Inc. Introduc on


4. Funding Timeframe: The funding time frame covered in this reserve study is 30 years; however, the study must be updated annually to remain current. Failure to maintain a current reserve study may affect the ability of owners and prospective buyers to obtain certain types of mortgage financing. The efficacy of any reserve study will be compromised if annual updates are not completed in a timely manner. Reserve studies which are not updated on an annual basis are not considered current by most mortgage lenders and mortgage insurance underwriters, including the Federal Housing Administration.

5. Distribution of Accumulated Reserves: This report provides a summarized listing of how the accumulated reserves have been allocated as of the beginning date of the Association’s upcoming fiscal year. Accumulated reserves are those reserve which have already been collected and are available for spending as of the beginning date of the reserve study.

Unless regular assessments, including reserve contributions, are collected annually and are due at the beginning of the Association’s fiscal year, reserve contributions scheduled for the current fiscal year will not be included in the allocation of accumulated reserves.

The allocation of reserves is based on the chronological schedule of reserve expenditures. Hence, reserve expenditures which are scheduled to occur in the near term will be allocated a portion of the accumulated reserves at a sufficient rate so that 100% of the projected replacement cost will be available as of the first day of the budget year in which the expenditure is scheduled to occur.

Expenditures scheduled to occur many years into the future may, or may not be allocated a portion of the accumulated reserves, depending on factors unique to each situation.

Unless the Association’s reserve account is 100% funded in each of the 30 years covered by the reserve study, there will always be reserve expenditures which receive no allocation of accumulated reserves. Funding for these expenses will begin at a future date, in advance of the year when the expenditure is scheduled to occur.

Ironwood at Tukwila HOA, Inc. Property Summary


The following details pertain to Ironwood Homeowner's Association, Inc.

1. Legal Name: Ironwood Homeowner's Association, Inc.

2. Physical Address: 955 Tukwila Drive – Woodburn, OR 97071

3. Property Type: Planned Unit Development (PUD)

4. Number of Units or Lots: 108 total

5. Year Constructed: 2001

6. Incorporation Date: Unknown

7. Association Responsibilities: The association of unit owners is responsible for repair and replacement of common area components including, but not limited to:

Common area concrete sidewalks

Common area landscaping & irrigation equipment

Entrance monuments

Park area & playground equipment

Common area fencing

Masonry retaining wall & columns

Park lighting & electrical service equipment

Street trees & parking strip grass

8. Owner Responsibilities: Owners are responsible for the maintenance, repair and replacement costs relating to their respective homes up to the boundary of the property as illustrated on the official plat and as described in the Declaration for Ironwood Homeowner's Association, Inc.

Ironwood at Tukwila HOA, Inc. Financial Analysis


1. Current Condition: The fiscal year for Ironwood Homeowner's Association, Inc. begins January 1st of each year.

This reserve study covers the 30 year period beginning on: January 1, 2015.

The estimated reserve fund balance on January 1, 2014 was: $13,426.00.

The reserve fund contribution scheduled for the 2014 fiscal year was: $1,575.00.

The estimated reserve fund balance as of January 1, 2015 was: $15,002.00.

Based on the funding schedule set forth in this reserve study, and the beginning reserve fund balance indicated above, the percent funded level as of January 1, 2015 will be: 29%

2. Funding Models: This reserve study utilizes a Cash Flow Funding Model known as Current Assessment Funding.

Cash Flow Funding Model: Cash Flow Funding is a reserve funding approach which is designed to generate sufficient annual cash flow to meet the funding obligations established in the reserve study. Assuming the cost and frequency of reserve expenditures does not deviate from the schedule set forth in the reserve study; the Association’s reserve fund will always contain enough money to meet its funding obligations.

All cash flow funding methods result in the pooling of reserves. Pooled reserves occur when all reserve funds are accumulated in one reserve account and the current reserves are allocated to pay for reserve expenditures based on chronological urgency or discretionary action taken by the Board of Directors. Reserves accumulated in a pooled reserve fund may only be used to pay for current or future reserve obligations.

Reserves which are collected to pay for specific component replacement expenses may be reallocated to pay for other reserve expenditures should a surplus of funds exist after a scheduled expense has been incurred. Funds collected for the purpose of providing replacement reserves to pay for repair and replacement of common elements may not be used to pay for operating expenses or any expenses which are not specifically identified as reserve expenditures in the current reserve study.

Current Assessment Funding: The Current Assessment Funding Projection that appears in this reserve study is a cash flow funding model which begins with a first year reserve contribution equal to the annual contribution approved by the Association for the previous fiscal year.

The Current Assessment Funding Projection contained in this reserve study begins with a reserve fund contribution of $4,500.00 in 2015.

The annual reserve fund contribution will increase 50% in 2016 and 25% in 2017‐2019. After 2019 the



annual increase will be a maximum of 3.5%.

This funding schedule represents the minimum annual funding levels required to meet the obligations as set forth in this reserve study assuming a 2015 reserve contribution of $4,500.00 and a minimum reserve fund balance of $15,002.00 as of January 1, 2015.

The Current Assessment Funding Projection presented in this reserve study represents the minimum level of funding required to meet the funding obligations of the Association based on the component replacement costs and financial parameters set forth in this reserve study.

3. Percent Funded Level: The percent funded level resulting from this reserve study analysis is calculated using the following formula, which is mandated by the Community Associations Institute's Reserve Study Guidelines:

Fully Funded = PV x CA / EUL.

Where PV = present value; CA = current age; and EUL = expected useful life.

Hence the Fully Funded calculation for a component with a current age of 3 years, a present value of $10,000 and an expected useful life of 10 years would be:

$10,000 x 3 / 10 = $3,000.00.

Therefore the total amount of money required to be Fully Funded as of the first day of the current funding cycle would be $3,000.00.

4. Funding Parameters & Projections: Reserve funds will be accumulated in the replacement fund based on the estimated current replacement cost, adjusted for inflation, of the common area components listed in the Component Inventory. If additional funds are required at the time replacement occurs, the Association reserves the right, subject to member approval, to increase regular assessments or levy special assessments, or it may delay repair or replacement of components until funds are available.

Actual costs may vary from the amounts established in this reserve study. Investment income and income tax levels may affect reserve funding levels and the variances may be material. Amounts accumulated in the replacement reserve fund may not be adequate to meet future funding requirements; particularly if updates are not performed in a timely manner, or if reserve contributions are not consistent with the amounts set forth in this reserve study.

The reserve funding projections which result from this reserve study utilize the following financial parameters:

A minimum reserve fund balance of $15,002.00 as of January 1, 2015.



Minimum 2015 reserve fund contribution: $4,500.00.

Earnings on reserve deposits: .02%

Annual inflation rate: 3.0%

Effective income tax rate: 0%*

Reserve fund contingency: 0%

Maximum annual contribution increase in the reserve fund contribution: 50%

*This funding analysis assumes all income tax obligations will be paid out of the Association’s operating fund.

The Annual Reserve Fund Expenditure Detail indicates the next reserve expenditures scheduled to occur will be in the year 2015.

The total amount of these expenditures is estimated to be: $2,000.00.

The percent funded level under the Current Assessment Funding Projection will be 24% at the end of 2015 assuming the reserve fund activity is consistent with the schedule set forth in this study.

The highest percent funded level achieved under this funding projection 79% in 2038 and 2039.

The lowest percent funded level for any year after 2015 is 21% in 2016.

Ironwood at Tukwila HOA, Inc. Distribu on of Accumulated Reserves

Report Date March 16, 2015Beginning Fiscal Year January 01, 2015Account Number OR‐1101‐0006‐3 Version Number LEVEL 3


Descrip on Fully FundedReserves

Remaining Replacement AssignedLife Year Reserves

Bark Chips‐Park Area 0 2015 2,000 2,000Concrete Sidewalks‐Safety Repair 1 2016 3,465 3,465Tree Care‐Pruning & Inocula on 1 2016 4,243 4,243Ornamental Landscaping‐Restora on 6 2021 5,250 5,250Park Fixtures‐Replacement 6 2021 1,750 1,750Park Ligh ng‐Replacement 6 2021 1,050 1,050Play Structure & Swings‐Replacement 6 2021 *1,744 10,500Irriga on Equipment‐Repair & Replacement 9 2024 600Masonry Columns‐Repair & Restora on 11 2026 875Masonry Retaining Wall‐Repair & Restora on 11 2026 3,528Vinyl Post & Rail Fencing‐Replacement 11 2026 2,800Vinyl Stockade Fencing‐Replacement 11 2026 23,296Corner Monuments‐Renova on 16 2031 4,200Entrance Monuments‐Renova on 19 2034 1,000Electric Service Equipment‐Replacement‐Ligh ng

26 2041 2,450

Total Asset Summary $19,502 $67,007

'*' Indicates Par ally Funded

Ironwood at Tukwila HOA, Inc. Current Assessment Funding Method Summary


Report Date March 16, 2015Account Number OR‐1101‐0006‐3Version LEVEL 3Budget Year Beginning January 01, 2015Budget Year Ending December 31, 2015

Total Units 108

Report Parameters

Infla on 3.00%

Interest Rate on Reserve Deposit 0.02%

2015 Beginning Balance $15,002.00

This funding projection utilizes the Current Assessment Funding Model to generate the funding schedule on the following page. Current Assessment Funding is a cash flow funding method which begins with a first year reserve contribution equal to the current annual contribution approved by the Association for the most recent fiscal year or an amount which is specified to meet the funding obligations of the Association.

Current Assessment Funding is often used when an association has already approved the annual reserve contribution for the current fiscal year or when the current level of funding is inadequate to meet the funding obligations set forth in the reserve study, and it is therefore necessary to specify the minimum level of funding which will meet the obligations imposed by the Association's reserve funding plan.

Reserves accumulated under a Current Assessment Funding Model Projection are pooled. Pooling of reserves refers to the fact that all funds are maintained in one fund and are allocated based on the annual cash flow required to meet the reserve funding obligations of the Association.

Current Assessment Funding Model Summary of Calcula ons

Required Month Contribu on $375.00$3.47 per unit monthly

Average Net Month Interest Earned $0.26Total Month Alloca on to Reserves $375.26

$3.47 per unit monthly

Ironwood at Tukwila HOA, Inc. Current Assessment Funding Method Projec on



Beginning Balance: $15,002Projected Fully

Current Annual Annual Annual Ending Funded PercentYear Cost Contribu on Interest Expenditures Reserves Reserves Funded

2015 133,625 4,500 3 2,000 17,505 72,540 24%2016 137,634 6,750 2 8,922 15,335 74,099 21%2017 141,763 8,437 4 2,122 21,654 82,755 26%2018 146,016 10,547 5 32,207 94,049 34%2019 150,396 13,184 7 2,251 43,147 103,695 42%2020 154,908 13,645 9 5,738 51,062 110,415 46%2021 159,555 14,123 5 34,030 31,159 89,325 35%2022 164,342 14,617 8 45,784 101,922 45%2023 169,272 15,128 10 2,534 58,389 112,661 52%2024 174,350 15,658 11 14,287 59,771 112,274 53%2025 179,581 16,206 13 2,688 73,302 123,791 59%2026 184,968 16,773 1 75,389 14,688 63,278 23%2027 190,517 17,360 4 2,852 29,201 73,822 40%2028 196,233 17,968 6 7,269 39,906 80,609 50%2029 202,120 17,968 9 3,025 54,858 92,198 59%2030 208,183 17,968 13 72,838 107,527 68%2031 214,429 17,968 12 23,609 67,209 100,083 67%2032 220,862 17,968 14 8,182 77,009 108,232 71%2033 227,488 17,968 17 3,405 91,589 121,801 75%2034 234,312 17,968 11 45,591 63,977 94,004 68%2035 241,342 17,968 14 3,612 78,346 107,775 73%2036 248,582 17,968 16 9,208 87,121 116,800 75%2037 256,039 17,968 19 3,832 101,276 131,923 77%2038 263,720 17,968 22 119,266 151,794 79%2039 271,632 17,968 25 4,066 133,193 168,674 79%2040 279,781 17,968 27 10,364 140,823 180,253 78%2041 288,174 17,968 15 76,559 82,247 126,492 65%2042 281,271 17,968 18 100,233 147,420 68%2043 289,709 17,968 21 4,576 113,646 165,315 69%2044 298,400 17,968 20 25,804 105,829 163,060 65%

SECTION II

COMPONENT INVENTORY DETAILS

Ironwood at Tukwila HOA, Inc. Explana on of Component Reports


This section of the reserve study provides a narrative summary and tabular compilations of the common area components which are the subject of this reserve funding analysis. A brief explanation of each report contained in Section II is included here for those readers who may be unfamiliar with the information provided in a reserve study.

1. Component Summary with Comments: This report provides a summary of the component inventory which is a condensed version of the information found in the Component Detail Reports which appears at the end of Section II. The components are grouped by the component category to which they have been assigned, and are listed within each category according to the remaining life expectancy of the component. Other information found in this report includes the in‐service date, current cost, useful life, remaining life, future cost and current cost of each component. Also included are the comments that appear in the Component Detail Reports and which describes the purpose and scheduling parameters of the expenditure.

2. Component Inventory by Remaining Life Expectancy: This report displays the component inventory sorted by the remaining life expectancy of each component which is included in the reserve funding schedule. Expenditures which are scheduled to recur more than one time over the 30 year period covered by the study will only appear one time in this list based on the next scheduled year of occurrence. Other information provided in this report includes the next scheduled year of replacement, useful life, current cost, assigned reserves and the amount required for each component to be fully funded as of the beginning date of the reserve study. If the assigned reserves are equal to the fully funded amount shown in the far right‐hand column then the component in question is said to be fully funded.

3. Component Inventory with Current Costs: This report again displays the component inventory by category and remaining life expectancy. It also includes the component quantity based on the unit of measure (SF, SY, LF, etc,), the unit cost which has been used to arrive at the total replacement cost, and the current replacement cost as of the beginning date of the reserve study.

4. Component Detail Reports: This report reflects all of the component data which has been input into the modeling database to develop the reserve funding projections contained in the reserve study. If a photographic inventory has been included in the reserve study a picture of each component will also appear in this report. Most of the information contained in this report is also displayed in one or more of the Component Inventory reports found in Section II.

Ironwood at Tukwila HOA, Inc. Component Summary with Comments



Asset ID

Service

Date In

Cost

Current

Useful Life

Adjustment

Remaining

Cost

Future

Quanty

Unit Cost

Descrip on

Asphalt & Concrete Pavement

Concrete Sidewalks‐Safety Repair 01/01/01 3,712 15 0 1 9000 @ 8.253,824This component provides funding for periodic repairs to the sidewalk located along Hazlenut Drive and throughout the park area. This funding schedule and the estimated cost of repairs assumes that replacement of any sidewalks sections along Hazlenut Drive which have been damaged by tree roots will have been completed prior to 2016.

Electrical Equipment

Electric Service Equipment‐Replacement‐Ligh ng01/01/01 7,000 40 0 26 2 @ 3,500.0015,096

This component provides funding for replacement of two enclosed meter pedestals and the electric service equipment located in the park and on Hazlenut Drive.

This expense is non‐recurring after 2041.

Exterior Light Fixtures

Park Ligh ng‐Replacement 01/01/01 1,500 20 0 6 1 @ 1,500.001,791This component provides funding for replacement of three pole mounted park lights every 20 years beginning in 2021. The estimtaed cost does not include replacement of the pole.

Fencing, Gates & Retaining Walls

Masonry Columns‐Repair & Restora on01/01/01 1,562 25 0 11 5 @ 1,250.002,163

This component provides funding for repair and restoration of five masonry columns located along the north side of Hazlenut Drive. Repair and restoration costs are based on 25% of the estimated cost to construct new columns.

Masonry Retaining Wall‐Repair & Restora on01/01/01 6,300 25 0 11 350 @ 72.008,721

This component provides funding for repair and restoration of the masonry retaining wall located along the north side of Hazlenut Drive. Repair and restoration costs are based on 25% of the estimated cost to construct a new wall.

Landscaping & Irriga on Equipment

Bark Chips‐Park Area 01/01/13 2,000 2 0 0 1 @ 2,000.002,000Tree Care‐Pruning & Inocula on 01/01/09 4,950 4 3 1 150 @ 100.005,098

This component provides funding for periodic tree pruning and inoculations. The association is responsible for approximately 150 trees located throughout the subdivision. As the trees mature pruning and maintenance costs should be expected to increase. Funding is scheduled to occur every four years beginning in 2016 with 33% of the total funds available during each funding cycle. This funding cycle is recurring throughout the thirty year period covered in this reserve study.

The board of directors may want to revise the funding and schedule for tree maintenance in the future as the

Ironwood at Tukwila HOA, Inc. Component Summary with Comments


Asset ID

Service

Date In

Cost

Current

Useful Life

Adjustment

Remaining

Cost

Future

Quanty

Unit Cost

Descrip on

Landscaping & Irriga on Equipment con nued...

Tree Care‐Pruning & Inocula on con nued...trees mature.

Ornamental Landscaping‐Restora on 01/01/01 7,500 20 0 6 1 @ 7,500.008,955This component provides a lump sum for restoration of ornamental plants and shrubs located in the park and the decorative landscaping along Hazlenut Drive. The amount is discretionary and may be revised at the request of the board of directors.

Irriga on Equipment‐Repair & Replacement01/01/14 6,000 10 0 9 1 @ 6,000.007,829

This component provides funding for reapir and replacement of the landscape irrigation equipment which serve the common area landscaping. Funding is scheduled every 10 years beginning in 2024.

The estimated component cost is based on the actual expenditures incurred by the association in 2009 and 2010 for irrigation system repairs, which totaled $6,009.00.

The amount of funding is discretionary and may be revised at the request of the Board of Directors.

Park & Playground Equipment

Park Fixtures‐Replacement 01/01/01 2,500 20 0 6 1 @ 2,500.002,985This component provides a lump sum for replacement of two stationary park benches and three serpentine painted metal bike racks every 20 years beginning in 2021.

Play Structure & Swings‐Replacement 01/01/01 15,000 20 0 6 1 @ 15,000.0017,911This component provides a lump sum for replacement of all playground equipment every 20 years beginning in 2021.

Vinyl Post & Rail Fencing‐Replacement 01/01/01 5,000 25 0 11 400 @ 12.506,921This component provides funding for replacement of the post & rail vinyl fence located along the north side of the playground area and both sides of the walkway between Hazlenut Drive and Broad More Place. Funding is scheduled every 25 years beginning in 2026. The estimated cost includes installation and removal of the existing fence.

Vinyl Stockade Fencing‐Replacement 01/01/01 41,600 25 0 11 1300 @ 32.0057,584This component provides funding for replacement of the 6' vinyl fencing located along the south and east property lines of the playground area and along Hazlenut Drive. Funding is scheduled every 25 years beginning in 2026. The estimated cost includes installation and removal of the existing fence.

Signs & Monuments

Corner Monuments‐Renova on 01/01/01 9,000 30 0 16 6 @ 1,500.0014,442This component provides funding for renovation of six monuments located at three cross streets which intersect with Hazlenut Drive every 30 years beginning in 2031.

Entrance Monuments‐Renova on 01/01/14 20,000 20 0 19 2 @ 10,000.0035,070This component provides funding for renovation of two identifying monuments located along Hazlenut Drive every 20 years beginning in 2034.

Ironwood at Tukwila HOA, Inc. Component Inventory by Remaining Life Expectancy



Year

Replacem

ent

Life

Useful

Adjustment

Life

Remaining

Cost

Current

Reserves

Assigned

Funded

FullyDescrip on

Bark Chips‐Park Area 2015 2 0 0 2,000 2,000 2,000Concrete Sidewalks‐Safety Repair 2016 15 0 1 3,712 3,465 3,465Tree Care‐Pruning & Inocula on 2016 4 3 1 4,950 4,243 4,243Ornamental Landscaping‐Restora on 2021 20 0 6 7,500 5,250 5,250Park Fixtures‐Replacement 2021 20 0 6 2,500 1,750 1,750Park Ligh ng‐Replacement 2021 20 0 6 1,500 1,050 1,050Play Structure & Swings‐Replacement 2021 20 0 6 15,000 1,744 10,500Irriga on Equipment‐Repair & Replacement 2024 10 0 9 6,000 0 600Masonry Columns‐Repair & Restora on 2026 25 0 11 1,562 0 875Masonry Retaining Wall‐Repair & Restora on 2026 25 0 11 6,300 0 3,528Vinyl Post & Rail Fencing‐Replacement 2026 25 0 11 5,000 0 2,800Vinyl Stockade Fencing‐Replacement 2026 25 0 11 41,600 0 23,296Corner Monuments‐Renova on 2031 30 0 16 9,000 0 4,200Entrance Monuments‐Renova on 2034 20 0 19 20,000 0 1,000Electric Service Equipment‐Replacement‐Ligh ng

2041 40 0 26 7,000 0 2,450

Total Asset Summary $133,625 $19,502 $67,007

Ironwood at Tukwila HOA, Inc. Component Inventory with Current Costs



Service

Date in

Year

Replacem

ent

Useful

Adjustment

Remaining

Units

Cost

Unit

Cost

Current

Descrip on

Asphalt & Concrete PavementConcrete Sidewalks‐Safety Repair 2001 2016 15 0 1 450 SF 8.25 3,712 Asphalt & Concrete Pavement ‐ Total $3,712

Electrical EquipmentElectric Service Equipment‐Replacement‐Ligh ng

2001 2041 40 0 26 2 Total 3,500.00 7,000 Electrical Equipment ‐ Total $7,000

Exterior Light FixturesPark Ligh ng‐Replacement 2001 2021 20 0 6 1 Total 1,500.00 1,500 Exterior Light Fixtures ‐ Total $1,500

Fencing, Gates & Retaining WallsMasonry Columns‐Repair & Restora on 2001 2026 25 0 11 1 EA 1,250.00 1,562Masonry Retaining Wall‐Repair & Restora .. 2001 2026 25 0 11 87 LF 72.00 6,300 Fencing, Gates & Retaining Walls ‐ Total $7,862

Landscaping & Irriga on EquipmentBark Chips‐Park Area 2013 2015 2 0 0 1 Total 2,000.00 2,000Tree Care‐Pruning & Inocula on 2009 2016 4 3 1 49 EA 100.00 4,950Ornamental Landscaping‐Restora on 2001 2021 20 0 6 1 Total 7,500.00 7,500Irriga on Equipment‐Repair & Replacement 2014 2024 10 0 9 1 Total 6,000.00 6,000 Landscaping & Irriga on Equipment ‐ Total $20,450

Park & Playground EquipmentPark Fixtures‐Replacement 2001 2021 20 0 6 1 Total 2,500.00 2,500Play Structure & Swings‐Replacement 2001 2021 20 0 6 1 Total 15,000.00 15,000Vinyl Post & Rail Fencing‐Replacement 2001 2026 25 0 11 400 LF 12.50 5,000Vinyl Stockade Fencing‐Replacement 2001 2026 25 0 11 1,300 LF 32.00 41,600 Park & Playground Equipment ‐ Total $64,100

Signs & MonumentsCorner Monuments‐Renova on 2001 2031 30 0 16 6 EA 1,500.00 9,000Entrance Monuments‐Renova on 2014 2034 20 0 19 2 EA 10,000.00 20,000 Signs & Monuments ‐ Total $29,000

Ironwood at Tukwila HOA, Inc. Component Inventory with Current Costs


Service

Date in

Year

Replacem

ent

Useful

Adjustment

Remaining

Units

Cost

Unit

Cost

Current

Descrip on

Total Asset Summary $133,625

Ironwood at Tukwila HOA, Inc. Component Detail Reports



Bark Chips‐Park Area ‐ 2015

Asset IDNon‐Capital Expenditures

Landscaping & Irriga on EquipmentPlaced in Service January 2013

Useful Life 2Replacement Year 2015

Remaining Life 0

1 Total @ $2,000.00Asset Cost $2,000.00

Percent Replacement 100%Future Cost $2,000.00

Assigned Reserves $2,000.00

Monthly Assessment $23.47Interest Contribu on

Reserve Alloca on $23.47

Concrete Sidewalks‐Safety Repair ‐ 2016


Asphalt & Concrete PavementPlaced in Service January 2001


Remaining Life 1

9,000 SF @ $8.25Asset Cost $3,712.50



Monthly Assessment $7.92Interest Contribu on $0.06


This component provides funding for periodic repairs to the sidewalk located along Hazlenut Drive and throughout the park area. This funding schedule and the estimated cost of repairs assumes that replacement of any sidewalks sections along Hazlenut Drive which have been damaged by tree roots will have been completed prior to 2016.

Tree Care‐Pruning & Inocula on ‐ 2016



Useful Life 4Adjustment 3

Replacement Year 2016Remaining Life 1

150 EA @ $100.00Asset Cost $4,950.00





This component provides funding for periodic tree pruning and inoculations. The association is responsible for approximately 150 trees located throughout the subdivision. As the trees mature pruning and maintenance



Tree Care‐Pruning & Inocula on con nued...

costs should be expected to increase. Funding is scheduled to occur every four years beginning in 2016 with 33% of the total funds available during each funding cycle. This funding cycle is recurring throughout the thirty year period covered in this reserve study.

The board of directors may want to revise the funding and schedule for tree maintenance in the future as the trees mature.

Ornamental Landscaping‐Restora on ‐ 2021

Asset IDCapital Expenditures



Remaining Life 6

1 Total @ $7,500.00Asset Cost $7,500.00





This component provides a lump sum for restoration of ornamental plants and shrubs located in the park and the decorative landscaping along Hazlenut Drive. The amount is discretionary and may be revised at the request of the board of directors.

Park Fixtures‐Replacement ‐ 2021


Park & Playground EquipmentPlaced in Service January 2001


Remaining Life 6

1 Total @ $2,500.00Asset Cost $2,500.00





This component provides a lump sum for replacement of two stationary park benches and three serpentine painted metal bike racks every 20 years beginning in 2021.



Park Ligh ng‐Replacement ‐ 2021

Asset IDCapital ExpendituresExterior Light Fixtures

Placed in Service January 2001Useful Life 20


1 Total @ $1,500.00Asset Cost $1,500.00





This component provides funding for replacement of three pole mounted park lights every 20 years beginning in 2021. The estimtaed cost does not include replacement of the pole.

Play Structure & Swings‐Replacement ‐ 2021




Remaining Life 6

1 Total @ $15,000.00Asset Cost $15,000.00





This component provides a lump sum for replacement of all playground equipment every 20 years beginning in 2021.

Irriga on Equipment‐Repair & Replacement ‐ 2024




Remaining Life 9

1 Total @ $6,000.00Asset Cost $6,000.00


Assigned Reserves none



This component provides funding for reapir and replacement of the landscape irrigation equipment which serve the common area landscaping. Funding is scheduled every 10 years beginning in 2024.

The estimated component cost is based on the actual expenditures incurred by the association in 2009 and



Irriga on Equipment‐Repair & Replacement con nued...

2010 for irrigation system repairs, which totaled $6,009.00.

The amount of funding is discretionary and may be revised at the request of the Board of Directors.

Masonry Columns‐Repair & Restora on ‐ 2026


Fencing, Gates & Retaining WallsPlaced in Service January 2001


Remaining Life 11

5 EA @ $1,250.00Asset Cost $1,562.50





This component provides funding for repair and restoration of five masonry columns located along the north side of Hazlenut Drive. Repair and restoration costs are based on 25% of the estimated cost to construct new columns.

Masonry Retaining Wall‐Repair & Restora on ‐ 2026


Fencing, Gates & Retaining WallsPlaced in Service January 2001


Remaining Life 11

350 LF @ $72.00Asset Cost $6,300.00





This component provides funding for repair and restoration of the masonry retaining wall located along the north side of Hazlenut Drive. Repair and restoration costs are based on 25% of the estimated cost to construct a new wall.



Vinyl Post & Rail Fencing‐Replacement ‐ 2026




Remaining Life 11

400 LF @ $12.50Asset Cost $5,000.00





This component provides funding for replacement of the post & rail vinyl fence located along the north side of the playground area and both sides of the walkway between Hazlenut Drive and Broad More Place. Funding is scheduled every 25 years beginning in 2026. The estimated cost includes installation and removal of the existing fence.

Vinyl Stockade Fencing‐Replacement ‐ 2026




Remaining Life 11

1,300 LF @ $32.00Asset Cost $41,600.00





This component provides funding for replacement of the 6' vinyl fencing located along the south and east property lines of the playground area and along Hazlenut Drive. Funding is scheduled every 25 years beginning in 2026. The estimated cost includes installation and removal of the existing fence.

Corner Monuments‐Renova on ‐ 2031

Asset IDCapital ExpendituresSigns & Monuments



6 EA @ $1,500.00Asset Cost $9,000.00





This component provides funding for renovation of six monuments located at three cross streets which



Corner Monuments‐Renova on con nued...

intersect with Hazlenut Drive every 30 years beginning in 2031.

Entrance Monuments‐Renova on ‐ 2034

Asset IDCapital ExpendituresSigns & Monuments



2 EA @ $10,000.00Asset Cost $20,000.00





This component provides funding for renovation of two identifying monuments located along Hazlenut Drive every 20 years beginning in 2034.

Electric Service Equipment‐Replacement‐Ligh ng ‐ 2041

Asset IDCapital ExpendituresElectrical Equipment



2 Total @ $3,500.00Asset Cost $7,000.00





This component provides funding for replacement of two enclosed meter pedestals and the electric service equipment located in the park and on Hazlenut Drive.

This expense is non‐recurring after 2041.



Detail Report Summary

Grand Total

Assigned Reserves $19,502.00Monthly Contribu on $375.00Monthly Interest $0.33Monthly Alloca on $375.33

SECTION III

RESERVE EXPENDITURE REPORTS

Ironwood at Tukwila HOA, Inc. Explana on of Expenditure Reports


This section of the reserve study includes a series of reports which detail how the Association’s reserve funds will be spent over the next 30 years. A brief explanation of each report contained in Section III is included here for those readers who may be unfamiliar with the information provided in a reserve study.

1. Annual Reserve Expenditure Detail: This report provides a year by year summary of the reserve fund expenditures scheduled for each year covered in the reserve study. Expenditures are listed alphabetically in each year when they are scheduled to occur. Hence, an expenditure which is scheduled to occur every 5 years beginning in 2015 will appear for the first time under the 2015 heading and again in years 2020, 2025, 2030 and so on. The projected costs listed for each year take into account the effect of inflation on future replacement costs. Therefore, the replacement cost for a recurring expenditure will be higher each time it appears in this schedule.

2. Annual Expenditure Spread Sheet: This spreadsheet displays the same information as the Annual Reserve Expenditure Detail in a spreadsheet format. The component expenditures are listed by the Component Category to which each component has been assigned, and within each category the components are listed by remaining life expectancy.

3. Capital & Non‐Capital Expenditures: This report groups the scheduled reserve expenditures under one of two categories, Capital Expenditures or Non‐Capital Expenditures. In the context of a reserve study capital expenditures are generally defined as expenditures which are for the purpose of replacing, improving or prolonging the life expectancy of a common area asset. Non‐capital expenditures are expenses incurred to maintain or repair common area assets, but which are not necessarily expected to improve or extend the life expectancy of the asset.

Ironwood at Tukwila HOA, Inc. Annual Reserve Expenditure Detail



Descrip on Expenditures

Replacement Year 2015

Landscaping & Irriga on EquipmentBark Chips‐Park Area 2,000

Total for 2015 $2,000


Asphalt & Concrete PavementConcrete Sidewalks‐Safety Repair 3,824

Landscaping & Irriga on EquipmentTree Care‐Pruning & Inocula on 5,098

Total for 2016 $8,922



Total for 2017 $2,122

No Replacement in 2018



Total for 2019 $2,251



Total for 2020 $5,738





Exterior Light FixturesPark Ligh ng‐Replacement 1,791

Landscaping & Irriga on EquipmentBark Chips‐Park Area 2,388Ornamental Landscaping‐Restora on 8,955

Park & Playground EquipmentPark Fixtures‐Replacement 2,985Play Structure & Swings‐Replacement 17,911

Total for 2021 $34,030




Total for 2023 $2,534


Landscaping & Irriga on EquipmentTree Care‐Pruning & Inocula on 6,459Irriga on Equipment‐Repair & Replacement 7,829

Total for 2024 $14,287



Total for 2025 $2,688


Fencing, Gates & Retaining WallsMasonry Columns‐Repair & Restora on 2,163Masonry Retaining Wall‐Repair & Restora on 8,721




Replacement Year 2026 con nued...

Park & Playground EquipmentVinyl Post & Rail Fencing‐Replacement 6,921Vinyl Stockade Fencing‐Replacement 57,584

Total for 2026 $75,389



Total for 2027 $2,852



Total for 2028 $7,269



Total for 2029 $3,025



Asphalt & Concrete PavementConcrete Sidewalks‐Safety Repair 5,957


Signs & MonumentsCorner Monuments‐Renova on 14,442

Total for 2031 $23,609



Total for 2032 $8,182






Total for 2033 $3,405


Landscaping & Irriga on EquipmentIrriga on Equipment‐Repair & Replacement 10,521

Signs & MonumentsEntrance Monuments‐Renova on 35,070

Total for 2034 $45,591



Total for 2035 $3,612



Total for 2036 $9,208



Total for 2037 $3,832




Total for 2039 $4,066






Total for 2040 $10,364


Electrical EquipmentElectric Service Equipment‐Replacement‐Ligh ng 15,096

Exterior Light FixturesPark Ligh ng‐Replacement 3,235

Landscaping & Irriga on EquipmentBark Chips‐Park Area 4,313Ornamental Landscaping‐Restora on 16,174

Park & Playground EquipmentPark Fixtures‐Replacement 5,391Play Structure & Swings‐Replacement 32,349

Total for 2041 $76,559




Total for 2043 $4,576


Landscaping & Irriga on EquipmentTree Care‐Pruning & Inocula on 11,665Irriga on Equipment‐Repair & Replacement 14,139

Total for 2044 $25,804

Ironwood at Tukwila HOA, Inc. Annual Expenditure Spread Sheet


2015 2016 2017 2018 2019 2020 2021 2022 2023 2024Descrip onAsphalt & Concrete PavementConcrete Sidewalks‐Safety Repair 3,824Asphalt & Concrete Pavement Total: 3,824

Electrical EquipmentElectric Service Equipment‐Replacement‐Ligh ngElectrical Equipment Total:

Exterior Light FixturesPark Ligh ng‐Replacement 1,791Exterior Light Fixtures Total: 1,791

Fencing, Gates & Retaining WallsMasonry Columns‐Repair & Restora onMasonry Retaining Wall‐Repair & Restora onFencing, Gates & Retaining Walls Total:

Landscaping & Irriga on EquipmentBark Chips‐Park Area 2,000 2,122 2,251 2,388 2,534Tree Care‐Pruning & Inocula on 5,098 5,738 6,459Ornamental Landscaping‐Restora on 8,955Irriga on Equipment‐Repair & Replacement 7,829Landscaping & Irriga on Equipment Total: 2,000 5,098 2,122 2,251 5,738 11,343 2,534 14,287

Park & Playground EquipmentPark Fixtures‐Replacement 2,985Play Structure & Swings‐Replacement 17,911Vinyl Post & Rail Fencing‐ReplacementVinyl Stockade Fencing‐ReplacementPark & Playground Equipment Total: 20,896

Signs & MonumentsCorner Monuments‐Renova onEntrance Monuments‐Renova onSigns & Monuments Total:



2015 2016 2017 2018 2019 2020 2021 2022 2023 2024Descrip on

Year Total: 2,000 8,922 2,122 2,251 5,738 34,030 2,534 14,287



2025 2026 2027 2028 2029 2030 2031 2032 2033 2034Descrip onAsphalt & Concrete PavementConcrete Sidewalks‐Safety Repair 5,957Asphalt & Concrete Pavement Total: 5,957

Electrical EquipmentElectric Service Equipment‐Replacement‐Ligh ngElectrical Equipment Total:

Exterior Light FixturesPark Ligh ng‐ReplacementExterior Light Fixtures Total:

Fencing, Gates & Retaining WallsMasonry Columns‐Repair & Restora on 2,163Masonry Retaining Wall‐Repair & Restora on 8,721Fencing, Gates & Retaining Walls Total: 10,884

Landscaping & Irriga on EquipmentBark Chips‐Park Area 2,688 2,852 3,025 3,209 3,405Tree Care‐Pruning & Inocula on 7,269 8,182Ornamental Landscaping‐Restora onIrriga on Equipment‐Repair & Replacement 10,521Landscaping & Irriga on Equipment Total: 2,688 2,852 7,269 3,025 3,209 8,182 3,405 10,521

Park & Playground EquipmentPark Fixtures‐ReplacementPlay Structure & Swings‐ReplacementVinyl Post & Rail Fencing‐Replacement 6,921Vinyl Stockade Fencing‐Replacement 57,584Park & Playground Equipment Total: 64,505

Signs & MonumentsCorner Monuments‐Renova on 14,442Entrance Monuments‐Renova on 35,070Signs & Monuments Total: 14,442 35,070



2025 2026 2027 2028 2029 2030 2031 2032 2033 2034Descrip on

Year Total: 2,688 75,389 2,852 7,269 3,025 23,609 8,182 3,405 45,591



2035 2036 2037 2038 2039 2040 2041 2042 2043 2044Descrip onAsphalt & Concrete PavementConcrete Sidewalks‐Safety RepairAsphalt & Concrete Pavement Total:

Electrical EquipmentElectric Service Equipment‐Replacement‐Ligh ng 15,096Electrical Equipment Total: 15,096

Exterior Light FixturesPark Ligh ng‐Replacement 3,235Exterior Light Fixtures Total: 3,235

Fencing, Gates & Retaining WallsMasonry Columns‐Repair & Restora onMasonry Retaining Wall‐Repair & Restora onFencing, Gates & Retaining Walls Total:

Landscaping & Irriga on EquipmentBark Chips‐Park Area 3,612 3,832 4,066 4,313 4,576Tree Care‐Pruning & Inocula on 9,208 10,364 11,665Ornamental Landscaping‐Restora on 16,174Irriga on Equipment‐Repair & Replacement 14,139Landscaping & Irriga on Equipment Total: 3,612 9,208 3,832 4,066 10,364 20,488 4,576 25,804

Park & Playground EquipmentPark Fixtures‐Replacement 5,391Play Structure & Swings‐Replacement 32,349Vinyl Post & Rail Fencing‐ReplacementVinyl Stockade Fencing‐ReplacementPark & Playground Equipment Total: 37,740

Signs & MonumentsCorner Monuments‐Renova onEntrance Monuments‐Renova onSigns & Monuments Total:



2035 2036 2037 2038 2039 2040 2041 2042 2043 2044Descrip on

Year Total: 3,612 9,208 3,832 4,066 10,364 76,559 4,576 25,804

Ironwood at Tukwila HOA, Inc. Capital & Non‐Capital Expenditures



Cost

Future

Life

Remaining

Life

Useful

Adjustment

Distribuon

Contribuon

Required

Funded

Ideally

Descrip on

Capital ExpendituresOrnamental Landscaping‐Restora on 8,955 20 6 5,250 14 5,250Park Fixtures‐Replacement 2,985 20 6 1,750 5 1,750Park Ligh ng‐Replacement 1,791 20 6 1,050 3 1,050Play Structure & Swings‐Replacement 17,911 20 6 1,744 60 10,500Irriga on Equipment‐Repair & Replacement

7,829 10 9 0 19 600Masonry Columns‐Repair & Restora on

2,163 25 11 0 4 875Masonry Retaining Wall‐Repair & Restora on

8,721 25 11 0 18 3,528Vinyl Post & Rail Fencing‐Replacement 6,921 25 11 0 14 2,800Vinyl Stockade Fencing‐Replacement 57,584 25 11 0 116 23,296Corner Monuments‐Renova on 14,442 30 16 0 20 4,200Entrance Monuments‐Renova on 35,070 20 19 0 41 1,000Electric Service Equipment‐Replacement‐Ligh ng

15,096 40 26 0 13 2,450 Capital Expenditures ‐ Total $179,468 $9,794 $325 $57,299

Non‐Capital ExpendituresBark Chips‐Park Area 2,000 2 0 2,000 23 2,000Concrete Sidewalks‐Safety Repair 3,824 15 1 3,465 8 3,465Tree Care‐Pruning & Inocula on 5,098 4 1 3 4,243 19 4,243 Non‐Capital Expenditures ‐ Total $10,922 $9,708 $50 $9,708

Grand Total: $190,391 $19,502 $375 $67,007

APPENDIX

Ironwood at Tukwila HOA, Inc. Physical Analysis ‐ 2011


1. Physical Assessment Summary: The preparation of this reserve study included a physical assessment of the General Common Elements identified in the Component Inventory for Ironwood at Tukwila Homeowner's Association, Inc. The purpose of the physical assessment was to verify the current condition of components; inventory component quantities and obtain field measurements; and observe the specific conditions which the components are subjected to under normal use.

It is beyond the scope of a reserve study to perform forensic investigations, destructive testing or other invasive inspection techniques designed to identify defective conditions which cannot be seen during a non‐invasive visual inspection of the property.

Components which were observed during the physical inspection include, but may not be limited to, the following items:

Common area concrete sidewalks

Common area landscaping & irrigation equipment

Entrance monuments

Park area & playground equipment

Common area fencing

Masonry retaining wall & columns

Park lighting & electrical service equipment

Street trees & parking strip grass

The in‐service date for all original components is assumed to be January 1st of the year indicated. The in‐service dates for components which have been replaced over the life of the Association are based on information provided by the BOD and it representatives.

2. Component Inventory: This reserve study includes an estimate of the expected useful life, remaining life, current replacement cost, and current condition for the common area components listed in the Component Inventory, as required by the National Reserve Study Guidelines published by the Community Associations Institute.

The component inventory includes only those items which have been determined to be the responsibility of the Association to repair and replace as described in the governing documents; or as indicated by the BOD. Maintenance, repair and replacement expenditures not funded from the reserve fund should be provided for in the Association’s annual operating budget.

3. Components Not Included in This Reserve Study: Common area components which are not typically included in the reserve funding schedule include the following:

Components which do not have a readily determined and generally accepted life expectancy of thirty years or less from the beginning date of the reserve study.

Ironwood at Tukwila HOA, Inc. Physical Analysis ‐ 2011


Components which may require repair or replacement due to natural disasters, accidents or intentional damage.

Components which do not have a minimum replacement cost of $500.00 in the aggregate, during any one year are not included in this reserve study.

4. Components Included in This Reserve Study: Components which may have a useful life expectancy greater than 30 years, but due to their effective age are expected to wear out within the next thirty years are included in this reserve study. Components funded in this reserve study include only those common elements which meet the following criteria:

Must be the responsibility of the Association to maintain, repair or replace according to the governing documents.

Are generally considered to have a finite remaining life expectancy of between three and thirty years from the beginning date of the reserve study.

The repair or replacement cost exceeds a minimum dollar amount which is established by the Board of Directors or state law.

Are required by state law to be included in the reserve funding schedule.

Ironwood at Tukwila HOA, Inc. Reserve Study Updates


1. Annual Updates: All reserve studies should be updated annually. The annual update does not require a physical onsite assessment. The update must include a review of the funding parameters and component replacement costs; and verification of the current reserve fund balance as of the beginning date of the updated reserve funding projection. Annual updates may be performed by the Board of Directors or a reserve study professional.

2. Level 2 Reserve Study Update: A Level 2 reserve study update should be performed every three years, or as required by state law. A Level 2 update is an update which includes a new physical condition assessment performed by an independent reserve study professional.

Ironwood at Tukwila HOA, Inc. Reserve Study Parameters & Methodology


Parameters: This reserve study was prepared using information provided by the Association and its representatives. Any such information is assumed to be true for the purposes of this reserve study. Representations of fact are assumed to be true and made in good faith by all parties associated with the development of this study.

Opinions and conclusions stated herein are based solely on the representations made in the information described in the previous paragraph. Capital Reserve Consultants, LLC (CRC) reserves the right to conduct a field evaluation of the property subsequent to completion of construction to verify as‐built conditions. Changes made to this reserve study as a result of such an inspection are at the sole discretion of CRC.

Inflation: Replacement reserve funds will be accumulated by the Association based on the estimated current replacement cost of General and Limited Common Elements; which are the responsibility of the Association to repair and replace.

Annual inflation of 3.0% is assumed in this reserve study.

The replacement cost figures presented in this reserve study are intended to be used for long range capital planning and budgeting purposes. The amounts should not be assumed to be correct with respect to actual replacement costs which may be incurred at the time replacement is required. Actual repair and replacement costs may vary from the amounts scheduled in this reserve study due to factors which cannot be predicted in advance.

This reserve study should be updated annually to allow for revisions to the replacement cost estimates, should they be warranted. If additional replacement funds are required, beyond the amounts suggested in this study, the association reserves the right, subject to member approval, to increase regular assessments or levy special assessments, or it may delay repairs or replacement of components until funds are available.

Interest Earnings: Investment income and income tax levels may affect reserve funding levels. The funding parameters established for this reserve study assume all reserve funds will be held in FDIC insured interest‐bearing accounts.

Interest earnings of .02% are assumed in reserve study.

Income Taxes: This reserve funding analysis assumes all income tax obligations will be paid out of the Association’s operating fund.

2. Methodology: The authors of this reserve study have attempted to maintain an equitable approach to developing the replacement reserve funding schedule for the Association by establishing reasonable expectations for the expected useful life and replacement schedule of common area components.

The goal of a fair and equitable funding plan is deemed to be in the interest of current

Ironwood at Tukwila HOA, Inc. Reserve Study Parameters & Methodology


unit owners by not over funding the reserve account while at the same time ensuring, in later years, the owners will have adequate replacement reserves to meet the repair and replacement needs of the association. The result of such an approach will, by necessity, require certain assumptions to be made regarding the lifespan and replacement requirements of certain components.

Replacement funds for certain components may be accumulated based on the theory that partial replacement will be satisfactory to restore the component to an acceptable condition. Partial replacement funding is expressed as a percentage of the total replacement cost. Components which are scheduled for 100% replacement assume complete replacement of the component will be required.

In some instances, replacement funding may be scheduled to occur over a successive period of years, if it is reasonable to assume the work in question may actually be performed over a period of years. Hence, if it is reasonable to assume exterior painting may be scheduled over a four year period, the painting expenditures may be scheduled to occur 25% per year over the four year timeframe.

The Association may wish to review this approach at some point and should it be determined partial replacement reserve funding is not satisfactory, this reserve study should be updated to reflect the additional funding required for complete replacement of all components in the scheduled year of replacement.

This reserve study assumes any product or service warranties for common area components will be maintained through the efforts of the association and all specialty trade work will be performed by qualified, duly licensed personnel.

Ironwood at Tukwila HOA, Inc. Oregon Statutory Requirements


1. Reserve Studies: Planned unit developments (PUD) in the State of Oregon are governed by Oregon Revised Statute 94 also known as the Oregon Planned Development Act. ORS 94.595 requires all PUD’s formed after October 1999 to conduct a reserve study and to maintain a reserve fund account for common area repair and replacement expenses.

The reserve study must include a funding schedule for future reserve fund expenditures for a minimum period of 30 years. All common area exterior painting expenses must be included in the reserve funding schedule, regardless of the amount or frequency of any individual expenditure.

The act requires all reserve studies to be updated annually. The annual update may be performed by the Association or a professional reserve study provider. The act does not specifically require a new reserve study to be performed at any future date. Older associations formed prior to October 1999 are not required to comply with ORS 94.595 unless, by a formally adopted resolution of the Board of Directors, the Association has chosen to conduct a reserve study.

Any association which does voluntarily choose to conduct a reserve study, but which would otherwise not be required to comply with the provisions of ORS 94.595 must, from that point forward comply with all provision of ORS 94.595 with regard to the preparation of reserve studies and maintenance plans.

Periodic reserve study updates, which include a new property condition assessment (Level 2 Reserve Study), are highly recommended to ensure adequate reserve funds are being accumulated to pay for major repair and replacement expenses of Common Elements.

A Level 2 Reserve Study is recommended every three to five years depending on the age and condition of the subject property.

2. Maintenance Plans: ORS 94.595 also requires any association which is obligated under the statute to conduct a reserve study to also prepare a written maintenance plan which details the recurring preventive maintenance for all common area components. The maintenance plan must include a schedule of projected maintenance tasks for a period of 30 years.

Ironwood at Tukwila HOA, Inc. Glossary


Abbreviations

Btu – British thermal unit

CFM – Cubic feet per minute

CY – Cubic yard

EA – Each

GPM – Gallons per minute

LBS – Pounds

LF – Lineal foot

MBH – Thousand Btu’s per hour

NCE – National Construction Estimator CostBooks® construction cost estimating database

RSM – RS Means CostWorks® construction cost estimating database

SF – Square foot

SQ – 100 square feet (commonly used unit of measure for roofing)

SY – Square yard

TSF – Total square feet

YR – Year

Definition of Key Reserve Study Terms

Accumulated Reserves – The total reserve fund balance as of the beginning date of the reserve study in question. When calculating accumulated reserves the only funds which should be included in the total are cash on hand and receivables which are due to be collected before the beginning date of the reserve study. Only funds which can be expected to generate interest earnings from the beginning date of the reserve study should be included in the calculation of accumulated reserves.

Cash Flow Funding Method – Cash flow funding is a reserve funding approach which is designed to generate sufficient annual cash flow to meet the funding obligations established in the reserve study. When cash flow funding is used to produce the annual reserve funding projection accumulated



reserves, and reserve contributions scheduled for the current fiscal year, are allocated to pay for reserve expenditures based on the chronological urgency of the expense rather than an amortized allocation based on the remaining life expectancy of the replacement expenditures which are scheduled to be paid for out of the reserve fund.

Assuming the cost and frequency of reserve expenditures does not deviate from the schedule set forth in the reserve study the Association’s reserve fund will always contain enough money to meet its funding obligations even if the percent funded level is less than 100%.

All cash flow funding methods result in the pooling of reserves. Pooled reserves occur when all reserve funds are accumulated in one reserve account and the current reserves are allocated to pay for reserve expenditures based on chronological urgency or discretionary action taken by the BOD. Reserves accumulated in a pooled reserve fund may only be used to pay for current or future reserve obligations.

Reserves which are collected to pay for specific component replacement expenses may be reallocated to pay for other reserve expenditures should a surplus of funds exist after a scheduled expense has been incurred. Funds collected for the purpose of providing replacement reserves to pay for repair and replacement of common elements may not be used to pay for operating expenses or any expenses which are not specifically identified as reserve expenditures in the current reserve study.

Different cash flow funding models may be utilized to achieve different funding objectives. These funding models are defined elsewhere in the glossary.

Common Area Components ‐ Common area components refers to assets commonly owned and used by all association members and will be maintained, repaired and replaced at the association’s expense.

Component –When used in the context of a reserve study a component is one or more items which comprise a common area asset. Components may be thought of as objects, as in the case of roofing or guttering, and they may be thought of as a repair or replacement process, as in the case of painting. A component may refer to a fixed part of the building or grounds such as an elevator or fencing, but it is also used in the context of loose physical assets such as common area furnishings, exercise equipment, etc.

When used in the context of a reserve study, a component will typically have a readily identifiable useful life generally accepted as a fixed period of time. The maximum useful life or remaining life of any component included in a reserve study will be 30 years from the current date of the reserve study, unless other criteria have been established by the parties involved in the reserve study process.

The replacement cost of components included in a reserve funding schedule will generally be set at a minimum dollar amount by mutual agreement of the parties to the reserve study. A typical minimum dollar amount for a small association is $1,000.00.



Component Funding Method – Component Funding is a funding method which allocates reserves to each component based on the projected replacement cost and remaining life expectancy from the date when the funding calculation is performed.

Future replacement costs are calculated by applying the financial parameters to the current estimated replacement cost of the component. Financial parameters are variable values which are determined by the BOD or the reserve analyst. These parameters may include current accumulated reserves; inflation, interest earnings on reserve deposits, income taxes on interest earnings, and the Funding Velocity required for achieving a Fully Funded reserve account.

Component Funding does not result in the pooling of reserves. Instead each component is assigned a percentage of all current and future reserves until 100% of the replacement cost has been accumulated. When a Component Funding Model Projection results in a 100% funding level for the current fiscal year, the reserves are said to be Fully Funded.

Component Inventory – A list of all common area components included in the replacement reserve funding schedule, when developing a reserve study for a common interest development.

Condition Assessment – A physical inspection of the association’s common area components to determine the present condition of the assets and the likelihood they will achieve their useful life expectancy based on current levels of use and ongoing maintenance.

In the case of large planned communities and high‐rise condominium buildings it may be advisable to retain the services of a consulting architect or engineer to assist in the preparation of the condition assessment. Particularly when older properties are the subject of the reserve study and estimating the remaining useful life of common area components is a more critical task; or when significant deferred or corrective maintenance issues are a factor.

Some reserve study practitioners believe it is advisable to undertake a building envelope inspection, and/or to have a licensed architect or engineer perform a condition assessment each time a reserve study is conducted. This practice is generally designed to benefit the reserve study practitioner by limiting their potential liability in cases where they may not possess the ability or expertise to pass judgment on critical technical issues which may materially affect the funding requirements of the association.

The use of architectural or engineering consultants when conducting reserve studies should be limited to specific instances wherein the highest level of technical expertise may be warranted. A competent reserve study practitioner should be qualified to pass judgment on the technical subject matter typically addressed in the majority of reserve studies; and should be willing to recommend the engagement of third party consultants when, in their own judgment, the use of such consultants is well advised.

Current Assessment Funding Model ‐ Current Assessment Funding is a cash flow funding method



which begins with a first year reserve contribution equal to the current annual reserve contribution which has been scheduled by the Association.

Current Assessment Funding does not maintain a minimum balance in the reserve fund. If the first year contribution is insufficient to prevent a negative year end balance during the 30 year funding projection, the annual contribution must be increased in future years to prevent a negative fund balance from occurring.

Current Assessment Funding is often used when an association has already approved the annual reserve contribution for the upcoming fiscal year; or when the BOD has determined the reserve contribution required under an alternative funding projection represents an unrealistic funding goal for the Association.

Reserves accumulated under a Current Assessment Funding Model Projection are pooled. Pooling of reserves refers to the fact that all funds are maintained in one fund and are allocated based on the annual cash flow required to meet the reserve funding obligations of the Association.

Effective Age – The difference between useful life and remaining useful life of a component. Not always equivalent to the chronological age of the component; due to the tendency for similar components to age at differing rates because of unique characteristics of the individual components.

Expected Useful Life (EUL) ‐ The estimated life expectancy of a common area component from the time it is placed into service as a new component. A component that is not new and therefore cannot be expected to have a remaining service life equal to a new component is said to have a “remaining life” or “remaining useful life.”

Useful life projections used in reserve studies are based on industry standards and the opinion of vendors, architects and engineers associated with this project. It is assumed common area components will be maintained according to manufacturer's recommendations and/or the maintenance guidelines detailed in the maintenance program.

Estimates of useful life for common elements are typically based on accepted industry standards for component life spans derived from sources such as RS Means Construction Publishers & Consultants; the Federal National Mortgage Association and The Department of Housing & Urban Development.

Financial Analysis – In the context of a reserve study for a homeowner’s association or other type of common interest development the financial analysis involves the process of evaluating the current financial status of the association’s reserve fund, and establishing the annual contribution schedule required to meet the funding obligations of the association reserve fund.

The current analysis reflects the status of the reserve fund as of the beginning date of the reserve study. Depending on the funding practices of the association the current funding status can change almost immediately as in the case of an association which collects assessments annually on the first



day of each fiscal year. In this instance the reserve fund balance will theoretically change on the beginning date of the study and interest earnings will be different than those of an association which collects assessments on a monthly basis and makes reserve transfers on an intermittent schedule throughout the fiscal year. Some reserve study software will allow the analyst to assign the reserve contributions for the current year to the distribution of accumulated reserves, if the association maintains the practice of collecting assessments at the beginning of the fiscal year. This feature allows reserves contributed during the current year to be used to pay for expenses scheduled to occur during that same year. Funding projections which utilize this feature will generate percent funded levels that are higher than they would be if reserve contributions are collected and deposited to the reserve account periodically throughout the year.

Fully Funded Balance – The term Fully Funded means that the amount of money allocated to pay for each funded reserve expense is equal to the accumulated loss in value of all reserve components, as of the date when the reserve funding calculation was performed. The replacement cost value is always the inflation adjusted replacement cost, as of the year when each reserve fund expenditure is scheduled to occur. Hence a component which is expected to cost $10,000 to replace, and has a life expectancy of ten years, would require a reserve allocation of $5,000 at year five of the component’s life cycle in order to be Fully Funded.

It is important to note that full funding does not mean that 100% of the projected replacement cost is available to pay for the expense in question at any particular point in time. Rather it means the current funding schedule is on track to generate the amount of money projected to pay for the expense in the year when the expenditure is scheduled to occur; when the projected replacement cost is amortized equally each year over the remaining life expectancy of the component in question. The only year when the Fully Funded amount and the replacement cost will be the same is in the year when replacement is scheduled to occur.

Funding Velocity – Funding Velocity is a dynamic value utilized when Component Funding is used to generate the annual reserve funding projection. The Funding Velocity controls the percent funded level and determines how quickly the reserve fund will reach fully funded status; with 100% used as a baseline. If a Funding Velocity greater than 100% is required to achieve a Fully Funded reserve fund balance, the current funding levels would be considered low. If a Funding Velocity less than 100% is sufficient to accomplish full funding of the reserve account then the current funding levels are considered strong. The degree to which the Funding Velocity deviates from 100% is considered a relative measurement of the strength of an association’s reserve funding plan.

Percent Funded Level ‐ The percent funded level measures the relationship between the accumulated reserves and amount of money required to achieve a Fully Funded reserve account at a given point in time. When the reserve account is Fully Funded the percent funded level is 100%. Therefore, if 100% represents a Fully Funded level of reserves, then a reserve fund which is 60% funded would contain actual cash reserves equal to 60% of the amount necessary to be 100% funded.

The formula for calculating the amount required to achieve Full Funding is expressed as:



Fully Funded = PV x CA / EUL.

Where PV = present value; CA = current age; and EUL = expected useful life.

Hence the Fully Funded calculation for a component with a current age of 3 years, a present value of $10,000 and an expected useful life of 10 years would be:

$10,000 x 3 / 10 = $3,000.00.

Therefore the total amount of money required to be Fully Funded as of the first day of the current funding cycle would be $3,000.00.

In this calculation present value is defined as the current replacement cost of the component at the time the calculation is performed. Therefore a component which is acquired for $10,000 will be assigned a current cost of $10,000 in year one of the reserve funding projection. If inflation is scheduled to occur at a rate of 5% per year, then at the beginning of year two the $10,000 asset will now be assigned a replacement cost of $10,500. The current replacement cost will continue to increase in this manner for each year throughout the life expectancy of the component in question.

In this respect the calculation differs from accumulated depreciation calculations used in financial accounting, where the asset cost at the time of acquisition is used to establish the value of the asset or assets being depreciated. The projected funding schedules contained in most reserve studies take into account interest, inflation and the effect of income taxes on interest earnings, when calculating the projected replacement cost of a component and the annual contributions necessary to meet the funding obligations set forth in the reserve study.

To calculate the percent funded level for a reserve fund containing more than one component expenditure this calculation is performed for each component and the sum total is the amount required to achieve Full Funding. When the total amount of accumulated reserves is less than the amount required to achieve Full Funding, the percent funded level will be expressed as a figure less than 100%.

Physical Analysis – In the context of a reserve study for a homeowner’s association or other type of common interest development the physical analysis involves the inspection of common area components which are the subject of the reserve study. The physical analysis involves an inspection process generally referred to as a property condition assessment or condition assessment by industry professionals.

In addition to the physical inspection of the subject property, the physical analysis includes the component inventory which is contained in the reserve study; the expected useful life and remaining useful life of the components included in the inventory; and the replacement cost analysis which is used to determine the recommended reserve contributions required to meet the funding obligations



based on the conclusions of the reserve study.

Remaining Useful Life (RUL) ‐ The remaining life expectancy for common area components in service prior to the date the analysis was performed and therefore can not be expected to have a remaining service life equal to that of a new component.

Replacement Reserves ‐ Replacement reserves are funds collected from association members that will be used to pay for repair and replacement of common area components according to the repair and replacement schedules contained in the reserve study. These funds should be held in a separate account and not co‐mingled with operating funds.

Statutory Funding – Funding of the reserve account in an amount required by local or state statutes which may govern the association’s financial practices.

Threshold Funding Method ‐ This funding approach establishes a minimum balance for the association’s reserve account and creates a funding projection which results in the fund balance never dropping below the predetermined minimum balance.

While this results in lower reserve assessments for association members it will also result in under‐funding if major component expenditures are required prior to the year the expense is scheduled to occur. This situation could require a special assessment to maintain the minimum fund balance and keep the remaining reserve funding schedule in line with projections.

When Threshold Funding is employed it is imperative the reserve study be updated annually to ensure accurate component replacement costs and timing of replacement expenditures.

Transition Inspection – The inspection of association property at or near the time period when control of the Board of Directors passes from the developer to a board comprised of unit owners other than the original declarant. The transition inspection is an extremely important process which should be undertaken by a qualified architect or engineer to ensure the interests of the community are best served.

The statute of limitations concerning construction defects varies from one jurisdiction to another. The association’s right to legal recourse for defective products and installations may be compromised if they fail to document the current condition of their property during this transitional period. In addition, warranties in effect could be impacted by the failure to perform timely inspections of components under warranty.

Building technology professionals, who are experienced in the inspection process and the preparation of a written narrative of their findings, should be retained to perform such an inspection. Reserve studies prepared prior to this time should be updated in conjunction with the completion of a transition inspection.

Ironwood at Tukwila HOA, Inc. Component Detail Index


Asset ID Descrip on Replacement Page

Asphalt & Concrete PavementConcrete Sidewalks‐Safety Repair 2016 2‐7

Electrical EquipmentElectric Service Equipment‐Replacement‐Ligh ng

2041 2‐12

Exterior Light FixturesPark Ligh ng‐Replacement 2021 2‐9

Fencing, Gates & Retaining WallsMasonry Columns‐Repair & Restora on 2026 2‐10Masonry Retaining Wall‐Repair & Restora on

2026 2‐10

Landscaping & Irriga on EquipmentBark Chips‐Park Area 2015 2‐7Tree Care‐Pruning & Inocula on 2016 2‐7Ornamental Landscaping‐Restora on 2021 2‐8Irriga on Equipment‐Repair & Replacement 2024 2‐9

Park & Playground EquipmentPark Fixtures‐Replacement 2021 2‐8Play Structure & Swings‐Replacement 2021 2‐9Vinyl Post & Rail Fencing‐Replacement 2026 2‐11Vinyl Stockade Fencing‐Replacement 2026 2‐11

Signs & MonumentsCorner Monuments‐Renova on 2031 2‐11Entrance Monuments‐Renova on 2034 2‐12

Total Funded Assets 15Total Unfunded Assets 0Total Assets 15

Documents

LEVEL 3 RESERVE STUDY UPDATE For IRONWOOD AT TUKWILA ...€¦ · Ironwood at Tukwila HOA, Inc. ... Capital Reserve Consultants, LLC makes no ... Common area landscaping & irrigation