REPLACEMENTRESERVEREPORT CARRIAGE …...March31,2012balance $111,419 9 monthscontribution Plannedexpenditures2012 HVACscreens Rearyardfences Poolcoping $75,982 $25,000 $125000 FY2013openingbalance

REPLACEMENT RESERVE REPORT

CARRIAGE HOMES AT TOWNE SQUARE

VIRGINIA BEACH, VIRGINIA

Scope. Carriage Homes is a condominium association located inVirginia Beach, Virginia and is part of the Towne Square MasterAssociation. Carriage Homes was constructed from 2001 to 2003. Thecommunity consists of 36 townhome buildings with a total of 144 units.The survey examined the common elements of the property, including:

• Asphalt drives and parking.• Concrete sidewalks and curb and gutter.• Fencing and railings.• Mail shelters, signage, and site lighting.• Water and sanitary sewer mains and laterals.• Storm water systems.••

Swimming pool and community building.Building exteriors.

Level of Service. This study has been performed as a Level II Update,With Site VisitIOn-Site Review as defined under the National ReserveStudy Standards that have been adopted by the CommunityAssociations Institute. As such, the component inventory is based onthe study that was performed by DLM Architects in November 2005.This information was adjusted to reflect changes to the inventory thatwere provided by the community manager, and the quantities wereadjusted accordingly from field measurement andlor quantity takeoffsfrom to-scale drawings. The condition of all commonly-ownedcomponents was ascertained from a site visit and the visual inspection ofeach component by the Analyst The life expectancy and the value ofcomponents are provided based in part on these observations. The fundstatus and funding plan have been derived from analysis of this data.

Note: This update has revised several of the quantities used by DLM ascalculated from the drawings referenced herein or by onsite observation.There are also several items that have been added to the inventory atthe request of the Manager that were not reflected in the study by DLM.

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.:esè.rv$tEs & Funding. Plan -AlGëheral Infomiatton A2cash Flow Method A4

ccash Flow Inflati Adjted Funding A6- Component Method A8

current Funding ançl Reserve AnalysisComments -AtO

Reserve Inventory

&nent Rese&e InventéryGeneral information Bi

placement eserve Inventory- CorfiThents - B2

Schedule ofPrpje&ted Replacenents

Projected Annu..Projected Annual Replcem

General lnform1ation ciResWe Analis andJnventory Policies

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Projected AnnualReplacements C2

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SurnniaryAppendix

Purpose. The purpose of this Replacement Reserve Study is to provide Carriage Homes (hereinaftercalled the Association) with an inventory of the common community facilities and infrastructurecomponents that require periodic replacement The Study includes a general view of the condition ofthese items and an effective financial plan to fund projected periodic replacements.

• Inventory of Items Owned by the Association. Section B Replacement Reserve Inventory lists theProjected Replacements of the commonly owned items that require periodic replacement usingfunding from Replacement Reserves. The Replacement Reserve Inventory also provides informationabout excluded items, which are items whose replacements are not scheduled for funding fromReplacement Reserves.

• Condition of Items Owned by the Association. Section B Replacement Reserve Inventoryincludes our estimates of the normal economic life and the remaining economic life for the projectedreplacements. Section C Calendar of Projected Annual Replacements provides a year-by-year listingof the projected replacements. Section 0 Condition Assessment provides additional detail for itemsthat are unique or deserving of attention because of their condition or the manner in which they havebeen treated in this Study.

• Financial Plan. The Association has a fiduciary responsibility to protect the appearance, value, andsafety of the property and it is therefore essential the Association have a financial plan that providesfunding for the projected replacements. In conformance with American Institute of Certified PublicAccountant guidelines, Section A Replacement Reserve Analysis evaluates the current funding ofReplacement Reserves as reported by the Association and recommends annual funding ofReplacement Reserves by two generally accepted accounting methods; the Cash Flow Method andthe Component Method. Section A Replacement Reserve Analysis includes graphic and tabularpresentations of these methods and current Association funding. An Executive Summary of thesecalculations is provided on Page Al.

Basis. The data contained in this Replacement Reserve Study is based upon the following:

• The Request for Proposal submitted and executed by the Association.

• Our visual evaluation and measurements on April 16, 2012. Miller - Dodson Associates has visuallyinspected the common elements of the property in order to ascertain the remaining useful life and thereplacement costs of these components.

Engineering Drawings. The Site Plan for Carriage Homes (Parcel B of Towne Square) by Hassell &Folks Engineering and dated 4116/2003 was used as the basis for establishing the quantities of asphaltpavement, concrete sidewalk, concrete curb and gutter, and storm water drainage facilities or verifyingand revising quantities provided in the previous study by DLM.

We recommend the Association assemble a library of site and building plans of the entire community.Reproducible drawings should be stored and kept in a secure fireproof location. The Association will findthese drawings to be a valuable resource in planning and executing future projects.

Current Funding. This reserve study has been prepared for Fiscal Year 2013 covering the period fromJanuary 1, 2013 to December31, 2013. The Replacement Reserves on deposit as of March 31, 2012are reported to be $111,419. The planned contribution for the entire fiscal year 2012 is $101,310. Thisresults in a Reserve Fund balance at the start of the fiscal year as follows:

March 31, 2012 balance $111,4199 months contributionPlanned expenditures 2012HVAC screensRear yard fencesPoolcoping

$75,982

$25,000$125000

FY 2013 opening balance$11,500$25,902

The balance and contribution figures have been supplied by the property management agent andconfirmation or audit of these figures is beyond the scope of the study. For the purposes of this study, itis assumed that the annual contribution will be deposited at the end of each month.Acknowledgement. Miller - Dodson Associates would like to acknowledge the assistance and input ofMs. Ashley Brown, the property manager. She provided very helpful insight into the current operations atthe property.

Analyst’s Credentials. Mr. Philip Pointon holds a Bachelors Degree in Architecture from VirginiaPolytechnic Institute and State University and a Masters Degree from Old Dominion University inEngineering Management as well as coursework at U.S. Army Management Staff College. Mr Pointonhas been a Registered Professional Architect in the State of Virginia and Hawaii since 1990, and hasserved in many facilities in an architectural function since 1987. He is currently a Reserve Specialist (RB)for Miller - Dodson Associates, Inc.

Respectfully submitted,MILLER - DODSON ASSOCIATES, INC.

Philip Pointon, AlA, RS, LEED APReserve Specialist

Miller + Dodson Associates, Inc. Replacement Reserve Analysis - Page AlCarriage Homes Condominium Association April 17, 2012

I DOSGO3CARRIAGEI S

EXECUTIVE SUMMARYThe Carriage Homes Condominium Association Replacement Reserve Inventory identifies 115 Projected Replacementsfunding from Replacement Reserves, with an estimated one-time replacement cost of $2,808,834.The Replacement Reserve Analysis calculates recommended funding of Replacement Reserves by the two generallyaccepted methods, the Cash Flow Method and the Component Method. The Analysis also evaluates current fundingof Replacement Reserves, as reported by the Association. The calculations and evaluation are summarized below:

a 1 909 CASH FLOW METHOD MINIMUM ANNUAL FUNDING OF REPLACEMENT RESERVES IN— $ 63, THE STUDY YEAR, 2013.$94.85 Per unit (average), minimum monthly funding of Replacement Reserves

The Cash Flow Method (CFM) calculates Minimum Annual Funding of Replacement Reserves that will fundProjected Replacements identified in the Replacement Reserve Inventory from a common pool of ReplacementReserves and prevent Replacement Reserves from dropping below a Minimum Recommended Balance.CFM - Minimum Annual Funding remains the same between peaks in cumulative expenditures called Peak Years.The first Peak Year occurs in 2028 and the CFM - Minimum Annual Funding of Replacement Reserves in2029 declines to $123,610 ($71.53 per unit, per month), after the completion of $2,507,997 ofreplacements in 2013 to 2028.After 2028 the CFM - Minimum Annual Funding remains constant for the remainder of the Study Period.

241 613 COMPONENT METHOD RECOMMENDED ANNUAL FUNDING OF REPLACEMENT$ RESERVES IN THE STUDY YEAR, 2013.$139.82 Per unit (average), recommended monthly funding of Replacement Reserves

The Component Method is a very conservative funding model developed by HUD in the early 1980’s.The Component Method treats each projected replacement in the Replacement Reserve Inventory as a separateaccount. Deposits are made to each individual account, where funds are held for exclusive use by that item.Based on this funding model, the Association has a Current Funding Objective of $1,138,874.The Association reports having $25,902 on deposit, which is 2.3% funded.

$101 310 CURRENT ANNUAL FUNDING OF REPLACEMENT RESERVES(as reported by the Association).

$58.63 Per unit (average), reported current monthly funding of Replacement ReservesThe evaluation of Current Funding, as reported by the Association, has calculated that if the Associationcontinues to fund Replacement Reserves at the current level, there will NOT be adequate funds for ProjectedReplacements in 17 years of the 30-year Study Period, and a maximum shortfall of $-861,135 occurs in 2028.

Pages A2 and AS explain the study Year. Study Period. Adjustments (interest & inflation), Beginning Balance, and Projected Replacements Pages A4 to A9explain in more detail the calculahons asscciated with the cash Flow Method, component Method, and Current Funding______ -

_J

REPLACEMENT RESERVE STATUS AND FUNDING PLANCurrent funding of Replacement Reserves is inadequate to fund Projected Replacements.We recommend the Association adopt a Replacement Reserve Funding Plan based on the Cash Flow Method or theComponent Method,-to ensure that adequate funding is available throughout the 30-Year Study Period for the$3,070,633 of Projected Replacements listed in the Carriage Homes Condominium Association Replacement Reserve IrThe Funding Plan should be professionally updated every three to five years or after completion of each majorreplacement project. The Board of Directors has a fiduciary responsibility to review the Funding Plan annually andshould consider annual increases in Replacement Reserve funding at least equal to the Producer Price Index.The starting balance for January 2013 is calculated from data provided by the Manager using the March 2012 balance.plus budgeted deposits for the remainder of the year less the cost of replacing HVAC screens, rear yard privacy fencesand the pool coping all to be paid for in 2012.

Miller + Dodson Associates, Inc. Replacement Reserve Analysis - Page A2Carriage Homes Condominium Association April 17, 2012

IOOSGO3CARRIAGEI 3

REPLACEMENT RESERVE ANALYSIS - GENERAL INFORMATIONThe Carriage Homes Condominium Association Replacement Reserve Analysis calculations of recommended funding 01Replacement Reserves by the Cash Flow Method and the Component Method, and the evaluation of the CurrentFunding, are based upon the same General Information; including the Study Year, Study Period, Beginning Balance,and Projected Replacements.STUDY YEARThe Association reports that their accounting year begins on January 1, and the Study Year, the first year evaluatedby the Replacement Reserve Analysis, begins on January 1, 2013.

STUDY PERIODThe Replacement Reserve Analysis evaluates the funding of Replacement Reserves over a 30-year Study Periodthat begins on January 1, 2013.

BEGINNING BALANCEThe Association reports Replacement Reserves on Deposit totaling $25,902 at the start of the Study Year.

ADJUSTMENTS AND INFLATIONThe short term consequences of 4.50% inflation and no constant annual increase in Reserve funding on theCash Flow Method, as calculated by a proprietary model developed by Miller + Dodson Associates. are shown onPages A6 and A7. Other calculations in this Analysis do not account for inflation or a constant annual increase.The calculations in this Analysis do not account for interest earned on Replacement Reserves.

Graph #1 Annual Expenditures for Projected ReplacementsThis bar graph summanzes annual expenditures for the $3 070 633 of Projected Replacements identified in the Replacement Reserve inventory over the30 year Study Period The red line shows the average annual expenditure of 5102 354seoo,ooo

C

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$700,000

$600,000

$500,000

5400.000

5300,000

$200,600

$.too.060

$0 ______

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Miller + Dodson Associates, Inc. Replacement Reserve Analysis - Page A3carnage Homes condominium Association April 17, 2012

I O9S6O3CARRIAGE1 aPROJECTED REPLACEMENTSThe Carriage Homes Condominium Association Replacement Reserve Inventory (Section B) identifies 115 ProjectedReplacements with a one-time Replacement Cost of $2,808,834 and replacements totaling $3,070,633 in the30-year Study Period. Projected Replacements are the replacement of commonly-owned items that:require periodic replacement andwhose replacement is to be funded from Replacement Reserves.

The accuracy of the Carriage Homes Condominium Association Replacement Reserve Analysis is dependent uponexpenditures from Replacement Reserves being made ONLY for the 115 Projected Replacementsspecifically listed in the Replacement Reserve Inventory.To further assist in the identification of items not appropriately funded from Replacement Reserves,the Replacement Reserve Inventory identifies 33 Excluded Items. The rationale behind the exclusion of itemsfrom funding by Replacement Reserves is discussed in detail on Page RI.The Section B - Replacement Reserve Inventory, contains Tables that list each Projected Replacement (and anyExcluded Items) broken down into 12 major categories (Pages B3 to 813). Tables are also included that list eachProjected Replacement by year for each of the 30 years of the Study Period beginning on Page Cl.

Miller + Dodson Associates, Inc. Replacement Reserve Analysis - Page A4Carriage Homes Condominium Association

CASH FLOW METHOD

April 17, 2012IO9SGO3CARRIAGEIS

a 163 909 CASH FLOW METHOD MINIMUM ANNUAL FUNDING OF REPLACEMENT RESERVES IN‘‘ $ ‘ THE STUDYYEAR, 2013.

$94.85 Per unit (average), minimum monthly funding of Replacement Reserves

General. The Cash Flow Method (also referred to as the Straight Line Method) is founded on the concept that theReplacement Reserve Account is solvent if cumulative receipts always exceed cumulative expenses. The Cash FlowMethod calculates a MiNIMUM annual deposit to Replacement Reserves that will:o Fund all Projected Replacements listed in the Replacement Reserve Inventory (see Section B)o Prevent Replacement Reserves from dropping below the Minimum Recommended Balance (see Page A-5)o Allow a constant annual funding level between peaks in cumulative expenditures

$5.000.000

$4,000,000

$3.000,000

$2,000,000

SI 000,000

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Cash Flow Method - Cumulative Receipts Cash Flew Method- Year End Balance Cumulative ExpendKureu

Miller + Dodson Associates, Inc.Carriage Homes Condominium Association

CASH FLOW METHOD (cont’d)

Replacement Reserve Analysis - Page A5April 17, 2012IO96603CARRIAGE13

o Replacement Reserves - Minimum Recommended Balance. The Minimum Recommended Balance is $140,442,which is 5.0 percent of the one-time replacement cost of the Projected Replacements listed in the ReplacementReserve Inventory. Unless otherwise noted in the Comments on Page A-9, the Minimum RecommendedBalance has been established by the Analyst based upon an evaluation of the types of items included in theReplacement Reserve Inventory.

o Peak Years. The Cash Flow Method calculates a constant annual funding of Replacement Reserves betweenpeaks in cumulative expenditures called Peak Years. In Peak Years, Replacement Reserves on Deposit declineto the Replacement Reserves - Minimum Recommended Balance discussed in the paragraph above.First Peak Year. The First Peak Year occurs in 2028, after the completion of $2,507,997 of replacementsin 2013 to 2028. The Cash Flow Method - Minimum Annual Funding of Replacement Reserves declines from$163,909 in 2028 to $123,610 in 2029.Subsequent Peak Years. There are no subsequent Peak Years and after the first Peak Year in 2028, the CashFlow Method - Minimum Annual Funding remains constant for the remainder of the Study Period.

o Study Period. The Cash Flow Method calculates the recommended contributions to Replacement Reserves overthe 30-year Study Period. These calculations are based upon a 40-year projection of expenditures for ProjectedReplacements to avoid the Replacement Reserve balance dropping to the Minimum Recommended Balance in thefinal year of the Study Period.

o Failure to Fund. The Cash Flow Method calculates a MINIMUM annual funding of Replacement Reserves.Failure to fund Replacement Reserves at the minimum level calculated by the Cash Flow Method will result inReplacement Reserves not being available for the Projected Replacements listed in the Replacement ReserveInventory and!or Replacement Reserves dropping below the Minimum Recommended Balance.

o Adjustment to the Cash Flow Method for interest and inflation. The funding recommendations on Pages Mand A5 do not account for interest earned on Replacement Reserves, the effects of inflation of the cost ofProjected Replacements, or a constant annual increase in Annual Funding of Replacement Reserves.

o Comparison of Cash Flow Funding and Average Annual Expenditure. The Average Annual Expenditure forProjected Replacements listed in the Reserve Inventory over the 30-year Study Period is $102,354 (see Graph #1).The Cash Flow Method - Minimum Annual Funding of Replacement Reserves in the Study Year is $163,909.This is 160.1 percent of the Average Annual Expenditure, indicating that the Association is building ReplacementReserves in advance of the first Peak Year in 2028.

Expenditures — $11245 $9,520 $705,200 $660836 $606,690 $157,500 $9,520 $65,628 $74,904Year end balmice $1,472,025 $1,825,413 31,004.122 $557,194 $144,423 $140,442 $254,532 $312,515 $361,221

dinimum recommended bala,,ce 5140,442 $140,442 $140,442 $140,442 $140,442 $140,442 $140,442 5140.442 $140,442Cumulatiseenpendftnrea $355,572 $356,392 $1,072,591 $1,733,427 $2.349.107 52,507.997 52517.517 32,563.145 $2,656,049

Cumldatiwsrecdpla 51.625,556 $1,992,905 $2,156,713 $2,330,522 52,454,530 52,649.439 $2,772,049 32.995.660 $3,019,270H,s’PeakYear -

Year 2033 2034 2035 2035 2037 2036 2039 2040 2041Minimum annual lundin9 $122,610 $123,510 $123,610 $123,510 $123510 $123,510 $122,610 $123,610 $123,610

Be5innlng balanceMinimum annual funditig

E,,pandituras $25,372 $31,693 $31,375 $6,795 $2,205 $15,699 $47,872 $175,105 $6,310Yearandbelance $161,459 $293,664 $426,197 $553,321 $745,024 $992,245 $1,009,292 $997,094 $1,155,683

%llnlmum recommended balance $140,442 $140,442 $140,442 $140,442 $140,442 $140,442 $140,442 $140,442 $140,442Cumulallnear,pendllurea $29,372 $60,055 $31,431 $95,216 $100,421 $117,109 $164,960 $340,097 $345,397

Cumulatinareceipln $180,911 $353,719 $517,529 $551,539 $945,445 $1,006,393 $1,173,252 $1,337,171 $1,501,079 $1,564,965

Year 2023 2024 2025 2026 2027 2025 2029 2030 2031 aMinimum annual funding $163,955 $153,909 $163,509 $163,955 $153,909 $153,909 $123,510 $123,610 $123,610

ExpendituresYear end balance

Slnlmum recommended bulanneCunluralivs enpenditumu

Cumulaliva raceipta

$17,653$553,496$140,442

$2,712,993$3,255,491

$9,750$667,256$140,442

52,722,743$3,390,101

$40,565$750,050-$140,442$2,763,631$3,513,711

S140,44

$3,420$870,270$140,442

$2,767,051$2,537,322

535,352$955,529$140,442

$2,905,403$3,760,932

$179,374$559,765$140,442

$2,994,777$3,964,542

$5,520$1,013,955$140,442

$2,994,297$4,009,153

$67,154$1,070,252$140,442

$3,561,461$4,131,763

$9,152$1,154,740$140,442

$3,070,53334.255.374

Miller + Dodson Associates, Inc. Replacement Reserve Analysis - Page AGCarriage Homes Condominium Association April 17, 2012

IO9O6O3CARRPAGEI3

CASH FLOW METHOD - INFLATION ADJUSTED FUNDINGThe Miller + Dodson ModelGeneral. The Cash Flow Method funding recommendations shown on pages A4 and AS have been calculated intoday’s dollars with no adjustment for inflation. Recent swings in construction costs demonstrate the risk facing anAssociation that does not consider the effects of inflation when funding Replacement Reserves.Cash Flow Method - Inflation Adjusted Funding. Below is an outline of the proprietary model developed byMiller + Dodson Associates to forecast the short-term consequences of inflation on Replacement Reserves.O Study Year. The Unit Replacement Costs in the Study Year (listed in Section B Inventory) reflect current

construction costs. Appropriate adjustments to account for any time lag between when the Study is conductedand the Study Year have been made by the Reserve Analyst.

O Year Two Inflation Adjusted Funding calculation. The Year Two Starting Balance is calculated assumingAssociation compliance with the Study Year funding and replacement data listed on Page A7.Next, the Projected Replacement Costs are adjusted using the Construction Cost inflation Rate (see detailedinformation below).The adjusted data is then evaluated using the Cash Flow Method, calculating the Year Two Inflation AdjustedMinimum Annual Funding of Replacement Reserves.

O Year Three Inflation Adjusted Funding Calculation. The same methodology has been used to develop the InflationAdjusted Cash Flow Method Minimum Annual Funding of Replacement Reserves in Year Three. Simplecompounding has been used to calculate the Year Three Projected Replacement Costs.

o Year Four and Beyond. We have not calculated adjusted funding recommendations beyond the third year of theStudy nor do we believe it is appropriate to do so. Inflation adjusted funding recommendations are not intended tobe a substitute for the periodic evaluation of the common elements by an experienced Reserve Analyst. Werecommend the common elements of the community be evaluated by a Reserve Analyst every 3 to 5 years and atthe completion of each major replacement project.

Base Construction Cost Inflation Rate. We have utilized a 4.50 percent base rate of inflation in our calculation ofsecond and third year inflation adjusted funding. The rate of inflation is based upon our review of the Producer PriceIndexes for Construction Materials, Structure Types & Subcontractors as published by the Bureau of Labor Statisticsand our experience with recent pricing trends in your area.”Assumptions. Cash Flow Method, Inflation Adjusted Funding in Year Two and Year Three is calculated based uponthree assumptions discussed below and quantified on Page A7. Prior to approving a budget based upon thecalculations, the Association should review the accuracy of the assumptions. If discrepancies are noted, contactMiller + Dodson Associates to arrange for a Replacement Reserve Study Update.o Replacement Reserve Funding. We have assumed the Association will fund Replacement Reserves as

recommended in the Study.o Scheduled Replacements. We have assumed the Association will make Scheduled Replacements as discussed in

the Study (listed on Page C2) and that the cost of these replacements is in substantial compliance with theestimated replacement costs. We have further assumed that no Replacement Reserves will be used to fundreplacements other than those specifically listed in the Replacement Reserve Inventory.

o Construction Cost Inflation Rate evaluation. Prior to approving a budget based upon the Year Two and Year ThreeAdjusted Replacement Reserve Funding calculations, the 4.50 percent base rate of inflation used in ourshould be compared to rates published by the Bureau of Labor Statistics. If a significant discrepancy (over1 percent) is noted, contact Miller Dodson Associates prior to using the funding calculations.

Interest. The calculations do not account for interest earned on Replacement Reserves on Deposit. If earned interestis to be attributed to Replacement Reserves, our funding recommendation should be reduced by the actual amount ofearned interest placed into Replacement Reserves.

Miller + Dodson Associates, Inc. Replacement Reserve Analysis - Page A7Carriage Homes Condominium Association

CASH FLOW METHODTHREE-YEAR FUNDING RECOMMENDATIONS WITH INFLATION

ADJUSTMENT

$163,909 MINIMUM ANNUAL FUNDING$94.85 Per unit (average), minimum monthly funding of ReplacementReserves

The $163,909 funding of Replacement Reserves in the Study Year has beencalculated using current construction costs (listed in Section B Inventory).The Analyst has adjusted the costs to account for any time iag between thepreparation of the Study and the Study Year.

• $171,769 INFLATION ADJUSTED MINIMUM ANNUAL FUNDING$99.40 Per unit (average), minimum monthly funding of ReplacementReserves

The $171,769 inflation adjusted funding of Replacement Reserves in 2014represents a 4.80 percent increase over the non-inflation adjusted fundingrecommendation of $163,909 in the Study Year.The specific assumptions used to calculate the Year Two Inflation AdjustedFunding are listed below. If the assumptions are inaccurate, do not use thedata and contact Miller Dodson Associates to arrange for a ReplacementReserve Study Update. The assumptions are:O Replacement Reserves on Deposit totaling $161,439 on January 1, 2014.o All 2013 Projected Replacements scheduled in the Replacement ReserveInventory and listed on Page C2, having been accomplished in 2013 ata cost of $28372.

o An average annual Construction Cost Inflation Rate of 4.50 percentover the previous 12 month period.

• $180,463 INFLATION ADJUSTED MINIMUM ANNUAL FUNDING$104.43 Per unit (average), minimum monthly funding of ReplacementReserves

The $180,463 inflation adjusted funding of Replacement Reserves in 2015represents a 10.10 percent increase over the non-inflation adjusted fundingrecommendation of $163,909 in the Study Year.The specific assumptions used to calculate the Year Two Inflation AdjustedFunding are listed below. If the assumptions are inaccurate, do not use thedata and contact Miller Dodson Associates to arrange for a ReplacementReserve Study Update. The assumptions are:o Replacement Reserves on Deposit totaling $293,664 on January 1, 2014.o All 2014 Projected Replacements scheduled in the Replacement ReserveInventory and listed on Page C2, having been accomplished in 2014 ata cost of $33,109.

o An average annual Construction Cost Inflation Rate of 4.50 percentover the previous 24 month period.

April 17, 2012IO98SO3CARRIAGEI3

1ANNUAL FUNDING GRAPHThe bar graph below shows the cash FlowMethod Annual Funding calculated in todaysdollars (lighter bars) and the Ihflation AdjustedCash Flow Method Annual Funding (dark bars)

51 00,000

550.000

$0

U Cash flow Method Annual FundingInifailon Adjusted Cash Flow Method Annual Funding

$200,000

$150,000

Miller + Dodson Associates, Inc. Replacement Reserve Analysis - Page A8Carhage Homes Condominium Association

COMPONENT METHOD

April 17, 2012IOSS8OSCARRIAGEI3

• $241,613 COMPONENT METHOD RECOMMENDED ANNUAL FUNDING OF REPLACEMENTRESERVES IN THE STUDY YEAR, 2013.$139.82 Per unit (average), recommended monthly funding of Replacement Reserves

General. The Component Method (also referred to as the Full Funded Method) is a very conservativemathematical model developed by HUD in the early 1980s. Each of the 115 Projected Replacements listed in theReplacement Reserve Inventory is treated as a separate account The Beginning Balance is allocated to each of theindividual accounts, as is all subsequent funding of Replacement Reserves. These funds are “locked” in theseindividual accounts and are not available to fund other Projected Replacements. The calculation of RecommendedAnnual Funding of Replacement Reserves is a multi-step process outlined in more detail on Page A9.

$s,000I000

$5,000,000

$4,000,000

$3,000,000

$2,000,000

$1000000

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Miller + Dodson Associates, Inc. Replacement Reserve Analysis - Page A9Carriage Homes Condominium Association April 17, 2012

1 O986O3CARRIAGEI 3

COMPONENT METHOD (cont’d)

0 Current Funding Objective. A Current Funding Objective is calculated for each of the Projected Replacementslisted in the Replacement Reserve Inventory. Replacement Cost is divided by the Normal Economic Life todetermine the nominal annual contribution. The Remaining Economic Life is then subtracted from theNormal Economic Life to calculate the number of years that the nominal annual contribution should havebeen made. The two values are then multiplied to determine the Current Funding Objective. This is repeated foreach of the 115 Projected Replacements. The total, $1,138,874, is the Current Funding Objective.For an example, consider a very simple Replacement Reserve Inventory with one Projected Replacement, a fencewith a $1,000 Replacement Cost, a Normal Economic Life of 10 years, and a Remaining Economic Life of 2 years.A contribution to Replacement Reserves of $100 ($1,000 + 10 years) should have been made in each of theprevious 8 years (10 years - 2 years). The result is a Current Funding Objective of $800 (8 years x $100 per year).

o Funding Percentage. The Funding Percentage is calculated by dividing the Beginning Balance ($25,902)by the Current Funding Objective ($1,138,874). At Carriage Homes Condominium Association the Funding Percenta

o Allocation of the Beginning Balance. The Beginning Balance is divided among the 115 Projected Replacementsin the Replacement Reserve Inventory. The Current Funding Objective for each Projected Replacement ismultiplied by the Funding Percentage and these funds are then “locked” into the account of each item.If we relate this calculation back to our fence example, it means that the Association has not accumulated $800in Reserves (the Funding Objective), but rather at 2.3 percent funded, there is $18 in the account for the fence.

o Annual Funding. The Recommended Annual Funding of Replacement Reserves is then calculated for eachProjected Replacement. The funds allocated to the account of the Projected Replacement are subtracted from theReplacement Cost. The result is then divided by the number of years until replacement, and the result isthe annual funding for each of the Projected Replacements. The sum of these is $241,613, the Component MethodRecommended Annual Funding of Replacement Reserves in the Study Year (2013).In our fence example, the $18 in the account is subtracted from the $1,000 Total Replacement Cost and dividedby the 2 years that remain before replacement, resulting in an annual deposit of $491. Next year, the depositremains $491, but in the third year, the fence is replaced and the annual funding adjusts to $100.

o Adjustment to the Component Method for interest and inflation. The calculations in the Replacement ReserveAnalysis do not account for interest earned on Replacement Reserves, inflation, or a constant annual increasein Annual Funding of Replacement Reserves. The Component Method is a very conservative method andif the Analysis is updated regularly, adequate funding will be maintained without the need for adjustments.

$11,245$1,670,459

89,52052,044.972

$706,200$1,522,604

$880,836$1,023,612

$606,660$888,026

$157,660$517,545

$9,520$535,057

$65,628$596,451

$74,904

$556,672 $366,352 $1,072,591 $1,733,427 62.340,107 $2,507,997 $2,517,517 $2,563,145 $2,959,049$2,227,331 $2,411,393

.r:$2599396 $2,757,239 $2899133 $3,025,542.v, =..-...:.-- :-/::-: .-.--.

$3,152,574-.

93.279,806 $3,408,896

‘t erBeginning balance

Recommended annual funding

E52endfltaeeYear and balance

Cumulative EnperidfiurenCnmulative Recp1a

Enpendlturen $29,372 $31,683 $31,378 $6,798 $2,295 518.688 547.872 6175,108 $5,310Yearendbalanee $239,143 $423,949 $997,489 $789,101 $984,295 51.184,719 $1,313,472 $1334985 $1,513,900

CumulatIve Expendlturen $28,372 $60,055 $91,431 $96,215 $100,421 $117,109 5164.960 $340,087 $345,397Cumulatine Recelpta $267,515 $483,993 $688,620 $557,318 $1,004,716 $1,281,828 $1,478,452 $1,675,072 $1,959,2974 4

Year 2023 2024 2025 2026 2027 2028 2029 2030 2031Recnrnnended annual fundIng 5184.017 5154,032 $184,032 $161,944 $141,854 $126,409 $127,033 $127,032 $126,290

YearRacnmmended annnul funding

$1,,

EnpendilurnuYear end balance

Canndullve EapendlturenCuniulatiun RacalpIe

$17,8538952.338

52,712.993$3,665,329

$9,750$1,070,435$2,722,743$3,783,178

2033 2034 2035 203$ 2037 2038--

2039 2040-

204$127,836 9127,845 5127.649 $127,849 $127,549 $127,708 $128,533 5126.522 $128,822

540.88551.187.38652.783,631$3,921,027

$3,420$1,281 82$$2,767,051$4,048,678

$38,352$1,371,3235.2,805.403$4,176,726

$179,374$1319856$2,984,777$4,304,434

$9,52051.438,855$2,994,297$4,430,955

$67,18451.485.888$3.081,481$4,557,477

$9,152$1,613,38583,070,83354,683,998

Miller + Dodson Associates, Inc. Replacement Reserve Analysis - Page Al 0carriage Homes condominium Association April 17, 2012

1 O9S6O3CARRIAGE1 3

CURRENT FUNDING

a 101 310 CURRENT ANNUAL FUNDING OF REPLACEMENT RESERVESW $ (as reported by the Association).

$58.63 Per unit (average), reported current monthly funding of Replacement Reserves

General. Our evaluation of the Current Association Funding assumes that the Association will continue to fundReplacement Reserves at the current level of $101,310 per year in each of the 30 years of the Study Period.Our evaluation is based upon this Replacement Reserve Funding Level, a $25,902 Beginning Balance, theProjected Annual Replacement Expenditures shown in Graph #1 and listed in the Replacement Reserve Inventory,and any interest, inflation rate, or constant annual increase in annual contribution adjustments discussed below.a Evaluation. Our calculations have determined that Current Annual Funding of Replacement Reserves, as reported

by the Association, is inadequate to fund Projected Replacement beginning in 2026.The Current Annual Funding of Replacement Reserves results in insufficient funds to make Projected Replacementsin 17 years of the 30-year Study Period, and a maximum shortfall of $-861,135 occurs in 2028.

O Adjustment to the Current Association Funding for interest and inflation. The Calculations in the ReplacementReserve Analysis do not account for interest earned on Replacement Reserves, the effects of inflation of thecost of Projected Replacements, or a constant annual increase in Annual Funding of Replacement Reserves.

a Comparison of Current Association Funding and Average Annual Expenditure. The average annual expenditure forProjected Replacements listed in the Reserve Inventory over the 30-year Study Period is $102,354 (see Graph #1).Current Association annual funding of Replacement Reserves is $101,310, or approximately 99 percent ofthe Average Annual Expenditure.

$4,000,000

63.000,000

62,000.000

si,aoo,ooa

$0

(61.000,000)

($2,000,000)

ct t Co I’- 00 0) 0 — flF CO U) co I’- 0) 0) 0 — (N C’) to CO P- 0) 0) 0 r (N— — — t r (N C’S (N (N (N (N (N (N (N (N CO CO CV) CO C’) 0) ) C’) CO 0)o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0(N (N (N (N (N (N C’S (N (N (N (N (N (N (N (N (N (N (N (N (N (N (N (N (N (N C’S (N (N (N (N

Miller + Dodson Associates, lnc Replacement Reserve Analysis - Page AllCarriage Homes condominium Association AprIl 17, 2012

IOO6603CARR1AGEI3

CURRENT FUNDING (cont’d)

fl#3.GurrntFngaa‘

g3o ‘WCO1[ Year 2013 2014 2015 2016 2017 2018 2019 2020 2021Be9innir.g balance $25,902

Meualdepusit $101,310 $101,510 $101,310 $101,310 $101,310 0101,310 $101,310 5101,310 $101,310 $101,310,]Espenditures $28,372 931,683 531,376 $6,785 02,205 $15,688 547.872 $175,106 $5,310 S230r Year end balance $88,841 $168,467 $236,401 $332,626 $432,031 $516,653 $670,062 $496,295 $592,295 $693,375 FEICumdatiee Eapendflurea $28,372 $60,055 $91,431 $98,216 $100A21 $117,109 $164,980 $340,087 5340,307 $345,627Cumulative Receipts $127,212 $228,522 $529,832 $431,142 $632,462 5633,762 9725,072 9830.382 5937,662 91,038.002H

Year 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032Mvueideposit $101,210 3101.310 5101,310 $101,310 5101,310 $101,310 5101,310 5101,310 $101,310 $101,310EspendttLres $11,249 58,520 5706,200 $660,838 $606,690 $157,880 $9,520 985,628 $74,904 537.291Yesrendbaiance $783,440 $875,220 $270,341 ($289,189) (8794,555) ($861,135) ($769,545) (5733,853) (5707.267) ($643,238

[jj Cuniuiativeespenddarea $356,872 $368,392 $1,072,591 $1,733,427 52.340.107 $2,507,997 92.617,917 $2,583,145 62,668,040 52,685,340Cumutativereceipte 81.140,312 $1,241,622 $1,342,932 $1,444,242 51,549,002 51,849.862 51,749,172 $1,849,452 $1,850,792 S2.052,102Year 2033 2034 2035 2036 2037 2038 2030 2049 2041 2042)

Avvueideposit $101,310 5101,310 3101.310 $101,310 $101,310 $101,310 $101,310 $101,310 9101,310 $101,310Eupendfturea $47,653 $8,756 $40,886 $3,420 $58,362 $179,374 $9,520 $67,164 $9,192

Year end batattce (9598,991) ($465,021) ($407,598) ($309,709) ($246,751) ($324,515) ($235,325) ($180,999) ($105,741) (S9,431ICumulative Espeudftureu $2,712,993 52,723,743 $2,763,831 52.797,051 82.865,403 62,994.777 02,994,297 53,081,491 53,070,833 53,070,633 Ff11Cumulative Receipts 52.153,412 52,264,722 92.356,032 52,457.342 82.e58.652 92.659.962 02,781,272 92.862,582 52,863,002 $2,065,202V1

COMMENTS ON THE REPLACEMENT RESERVE ANALYSIS• This Replacement Reserve Study has been developed in compliance with the Community Associations Institute,

National Reserve Study Standards, for a Level One Study - Full Service.• Carriage Homes Condominium Association has 144 units. The type of property is a condominium association.• Our calculations assume that Replacement Reserves are not subject to tax.

Intentionally Left Blank

Miller + Dodson Associates, Inc. Replacement Reserve Inventory - Page BIcarriage Homes Condominium Association April 17, 2012I O9S6O3CARRIAGEI 3

REPLACEMENT RESERVE INVENTORYGENERAL INFORMATION

Carriage Homes Condominium Association - Replacement Reserve Inventory identifies 148 items. Two types of items aidentified, Projected Replacements and Excluded Items:

• PROJECTED REPLACEMENTS. 115 of the items are Projected Replacements and the periodicreplacements of these items are scheduled for funding from Replacement Reserves. The Projected Replacementshave an estimated one-time replacement cost of $2,808,834. Replacements totaling $3,070,633 are scheduledin the Replacement Reserve Inventory over the 30-year Study Period.Projected Replacements are the replacement of commonly owned physical assets that require periodicreplacement and whose replacement is to be funded from Replacement Reserves.

• EXCLUDED ITEMS. 33 of the items are Excluded Items, and expenditures for these items are NOTscheduled for funding from Replacement Reserves. The accuracy of the calculations made in the ReplacementReserve Analysis is dependent on expenditures NOT being made for Excluded items. The Excluded Itemsare listed in the Replacement Reserve Inventory to identify specific items and categories of items thatare not to be funded from Replacement Reserves. There are multiple categories of items that are typicallyexcluded from funding by Replacement Reserves, including but not limited to:

Tax Code. The United States Tax Code grants very favorable tax status to Replacement Reserves, conditionedon expenditures being made within certain guidelines. These guidelines typically exclude maintenanceactivities, minor repairs and capita! improvements.Value. Items with a replacement cost of less that $1,000 and/or a normal economic life of less than 3 yearsare typically excluded from funding from Replacement Reserves. This exclusion is made to accurately reflecthow Replacement Reserves are administered. If the Association has selected an alternative levels, it will benoted in the Replacement Reserve Inventory - General Comments on Page B2.Long-lived Items. Items that when properly maintained, can be assumed to have a life equal to the propertyas a whole, are typically excluded from the Replacement Reserve Inventory.Unit improvements. Items located on property owned by a single unit and where the items serve a singleunit are generally assumed to be the responsibility of that unit, not the Association.Other non-common improvements, Items owned by the local government, public and private utility companies,the United States Postal Service, Master Associations, state and local highway authorities, etc., may beinstalled on property that is owned by the Association. These types of items are generally not theresponsibility of the Association and are excluded from the Replacement Reserve Inventory.

The rationale for the exclusion of an item from funding by Replacement Reserves is discussed in more detail inthe ‘Comments’ sections of the Section B - Replacement Reserve Inventory.

• CATEGORIES. The 148 items included in the Carriage Homes Condominium Association Replacement Reserve Irare divided into 12 major categories. Each category is printed on a separate page, Pages B3 to BI 3.

• LEVEL OF SERVICE. This Replacement Reserve Inventory has been developed in compliance with the standardsestablished for a Level One Study - Full Service1 as defined by the National Reserve StudyStandards, established in 1998 by Community Associations Institute, which states:

A Level! - Full Service Reserve Study includes the computation of complete component inventoryinformation regarding commonly owned components provided by the Association, quantitiesderived from fieldmeasurements and/or quantity takeoffs from to-scale engineering drawings thatmay be made available. The condition ofall components is ascertained from a visual inspectionof each component by the analyst The remaining economic life and the value of the componentsare provided based on these observations and the funding status and funding plan are thenderived from analysis of this data.

Miller + Dodson Associates, Inc. Replacement Reserve Inventory - Page B2Carriage Homes Condominium Association April 17, 2012

I O986OSCARRIAGEI 3

REPLACEMENT RESERVE INVENTORY - GENERAL INFORMATION (cont’d)

• INVENTORY DATA. Each of the 115 Projected Replacements listed in the Replacement Reserve Inventoryincludes the following data:

Item Number. The Item Number is assigned sequentially and is intended for identification purposes only.Item Description. We have named each item included in the Inventory. Where the name of the itemand the category are not sufficient to specifically identify the item, we have included additionalinformation in the Comments section at the bottom of the page.Units. We have used standard abbreviations to identify the number of units including SF-square feet,LF-Iineal feet, SY-square yard, LS-Iump sum, EA-each, and PR-pair. Nonstandard abbreviations arenoted in the Comments section on the page on which the abbreviation is used.Number of Units. The methods used to develop the quantities are discussed in “Level of Service” above.Unit Replacement Cost. We use three sources to develop the unit cost data shown in the Inventory; actualreplacement cost data provided by the client, industry standard estimating manuals, and a cost databasethat we have developed based upon our detailed interviews with contractors and service providers who arespecialists in their respective lines of work. In addition, trends in the Producers Price Index (PPI), laborrates, and transportation costs are monitored and considered. This cost database is reviewed andupdated regularly by Miller Dodson and biannually by an independent professional cost estimating firm.Normal Economic Life (Yrs). The number of years that a new and properly installed item should beexpected to remain in service.Remaining Economic Life (Yrs). The estimated number of years before an item will need to bereplaced. In “normal” conditions, this could be calculated by subtracting the age of the item from theNormal Economic Life of the item, but only rarely do physical assets age “normally”. Some itemsmay have longer or shorter lives depending on many factors such as environment, initial quality of theitem, maintenance, etc.Total Replacement Cost This is calculated by multiplying the Unit Replacement Cost by the Number of Units.

Each of the 33 Excluded Items includes the Item Description, Units, and Number of Units. Many of theExcluded Items are listed as a ‘Lump Sum’ with a quantity of 1. For the Excluded Items, this indicates thatall of the items identified by the ‘Item Description’ are excluded from funding by Replacement Reserves.

• REVIEW OF EXPENDITURES. This Replacement Reserve Study should be reviewed by an accountingprofessional representing the Association prior to implementation.

• PARTIAL FUNDING. Items may have been included in the Replacement Reserve Inventory at less than100 percent of their full quantity andlor replacement cost This is done on items that will never be replacedin their entirety, but which may require periodic replacements over an extended period of time. The assumptionsthat provide the basis for any partial funding are noted on in the Comments section.

• REMAINiNG ECONOMIC LIFE GREATER THAN 40 YEARS. The calculations do not include funding for initialreplacements beyond 40 years. These replacements are included in this Study for tracking and evaluation. Theyshould be included for funding in future Studies, when they enter the 40-year window.

Miller + Dodson Associates, Inc. Replacement Reserve Inventory - Paqe B3Carriage Homes Condominium Association April 17, 20121 OSS803CARRIAGEI 3

2 Asphalt pavement, mill & overlay (30%)3 Asphalt pavement, overlay (70%)

4 Street lighting, poles, fiberglass5 Street lighting, fixtures

S Traffic & street signage (partial)7 Traffic & street signage (partial)8 Traffic & street signage (partial)

9 Bulletin board10 Mailboxes, outdoor, cluster

11 Wood lattice I-IVAC screens12 Wood fence, rear yard privacy

Sf 40,996 $1.40

ea 11 $1,477.00ea 11 $377.00

ea 15 $147.00ea 15 $147.00ea 15 $147.00

ea 2 $329.00ea 144 $82.00

Is 1 $25,000.00If 4,500 $27.65

18 7 $32,85618 7 $57,395

15 5 $65825 13 $11,808

15 15 $25,00015 15 $124,425

13 Picnic table & benches14 Trash receptacles, metal15 Trash resceptacles, wood

SITE COMPONENT - Replacement Costs - Subtotal $295,881

• We have assumed that the Association will replace the asphalt pavement by the installation of a 2 inch thick overlay. Thepavement will need to be milled prior to the installation of the overlay. Milling and the cost of minor repairs (5 to 10percent of the total area) to the base materials and bearing soils beneath the pavement are included in the cost shownabove.

• It is noted that several of the components above were not accurately depicted in the previous study by DLM. We haverevised quantities according to the approved site plans and observations on site.

1 Asphalt pavement, seal coat sf 58,566 $0.20 6 1 $11,713

30 1815 13

iS none15 415 8

$16,247$4,147

$2,205$2,205$2,205

ea 2 $1,450.00 15 3 $2,900ea 2 $644.00 20 12 $1,288ea 2 $415.00 15 3

Miller + Dodson Associates, Inc. Replacement Reserve Inventory - Page B4Carriage Homes Condominium Association

16 Concrete driveway (6%)17 Concrete driveway (6%)16 Concrete driveway (6%)19 Concrete driveway (6%)20 Concrete driveway (6%)21 Concrete driveway (6%)22 Concrete driveway (6%)23 Concrete driveway (6%)24 Concrete driveway (6%)25 Concrete driveway (6%)

April 17, 2012IO9BGOSCARRIAGEI3

60 7 $23,37360 13 $23,37360 19 $23,37360 25 $23,37360 31 $23,37360 37 $23,37360 43 $23,37360 49 $23,37360 55 $23,37360 61 $23,373

SITE COMPONENT (cont.) - Replacement Costs - Subtotal $233,731


2,687sf 2,687sf 2,687sf 2,687sf 2,687Sf 2,687sf 2,68751 2,687sI 2,687sf 2,687

$8.70$8.70$8.70$8.70$8.70$8.70$870$8.70$8.70$8.70

MiIIert Dodson Associates, Inc. Replacement Reserve Inventory - Page B5Carriage Homes Condominium Association April 17, 2012

IO9BCDSCARRFAGEI 3

SITE COMPONENT (colt) - Replacement Costs - Subtotal $165,189

• For concrete components and other roadway shoulder work, we have assumed that the Association will conduct concretecomponent replacement projects in conjunction with the asphalt pavement and other concrete or right-of-way replacementprojects.

26 Concrete curb & gutter (20%) ft 1,012 $34.00 54 7 $34,40827 Concrete curb & gutter (20%) ft 1,012 $34.00 54 25 $34,40828 Concrete curb & gutter (20%) ft 1,012 $34.00 54 43 $34,408

29 Concrete sidewalk (6%) sf 729 $8.50 60 none $6,1973° Concrete sidewalk (6%) Sf 729 $8.50 60 6 $6,19731 Concrete sidewalk (6%) sf 729 $8.50 60 12 $6,19732 Concrete sidewalk (6%) Sf 729 $8.50 60 18 $6,19733 Concrete sidewalk (6%) sf 729 $8.50 60 24 $6,19734 Concrete sidewalk (6%) sf 729 $8.50 60 30 $6,19735 Concrete sidewalk (6%) sf 729 $8.50 60 36 $6,19736 Concrete sidewalk (6%) Sf 729 $8.50 60 42 $6,19737 Concrete sidewalk (6%) sf 729 $8.50 60 48 $6,19738 Concrete sidewalk (6%) Sf 729 $8.50 60 54 $6,197

Miller + Dodson Associates, Inc. Replacement Reserve Inventory - Page B6

SITE COMPONENT (cent) - Replacement Costs Subtotal $75,799

• Comprehensive drawings detailing the components of the underground systems listed above were available for our reviewWe have included the estimated cost allowance based upon our experience with other similar facilities. In the future,

this assumption and the estimated costs should be adjusted based upon actual experience.

Carriage Homes Condominium Association April 17, 2012IO9SGOSCARRIAGEIS

39 4” Domesticwater main (10%) If 188 $53.90 10 17 $10,11240 8” Domestic water main (10%) If 92 $58.70 10 17 $5,42441 2” Domestic water lateral (10%) If 130 $51.55 10 17 $6,681

42

43

8” Sanitary main (10%)6” Sanitary lateral (10%)

IfIf

281144

$49.45$42.20

1010

1212

$13,886$6,077

44

45

45

47

46

15” RCP Stormwater pipe (10%)21” RCP Stormwater pipe (10%)24” RCP Stormwater pipe (10%)Curb inlet, drainage structure (10%)Drop inlet, drainage structure (10%)

IfIfIfeaea

201461732

$39.90$47.70$52.30

$4,790.00$3,645.00

1010101010

1717171717

$8,032$2,189$868

$12,454$5,832

49

50SI

52

Irrigation, zone controllerIrrigation, well pumpIrrigation, laterals (partial)Irrigation, heads (partial)

eaeaIIea

I1

1002

$910.00$1,890.00

$12.15$115.00

152053

3833

$910$1,890$1,215$230


Miller + Dodson Associates, Inc. Replacement Reserve Inventory - Page B7Carriage Homes Condominium Association April ‘17, 2012

IO986OSCARRFAGEI 3

59 Chimney Caps (33%)60 Chimney Caps (33%)61 Chimney Caps (33%)

eaeaea

48 $388.0048 $388.0048 $388.00

25 12 $22,77025 13 $22,77025 14 $22,770

25 12 $18,43825 13 $18,43825 14 $18,438

53 Shingle asphalt/fiberglass (33%) sf 78,080 $4.25 25 12 $331,84254 Shingle asphalt/fiberglass (33%) sf 78,080 $4.25 25 13 $331,84255 Shingle asphalt/fiberglass (33%) sf 78,080 $4.25 25 14 $331,842

56 Gutter & downspout, 5” aluminum (33%) ft 3,795 $6.0057 Gutter & downspout, 5” aluminum (33%) ft 3,795 $6.0058 Gutter & downspout, 5” aluminum (33%) ft 3,795 $6.00

62 Exterior lighting (33%) ea 48 $1.69 20 7 $8063 Exterior lighting (33%) ea 48 $1.69 20 7 $8064 Exterior lighting (33%) ea 48 $1.69 20 7 $80

BUILDING EXTERIOR - Replacement Costs - Subtotal $1,119,389

Miller + Dodson Associates, Inc. Replacement Reserve Inventory - Page B8Carriage Homes condominium Association

68 Trim (partial)69 Soffits (partial)

70 Front entry stoop decking (33%)71 Front entry stoop decking (33%)72 Front entry stoop decking (33%)

73 Front entry stoop railing (33%)74 Front entry stoop railing (33%)75 Front entry stoop railing (33%)

April 17, 2012IO98SO3CARRIAGEIS

6 6 $149406 6 $16,985

BUILDING EXTERIOR (cont.) - Replacement Costs - Subtotal $792,726

F _

85 Siding & trim, vinyl, standard (33%) sf 35,145 $5.70 25 12 $200,32766 Siding & trim, vinyl, standard (33%) sf 35,145 $5.70 25 13 $200,32767 Siding & trim, vinyl, standard (33%) sf 35,145 $5.70 25 14 $200,327

II 3,600Sf 4,300

$4.15$3.95

$18.80$18.80$18.80

$27.88$27.88$27.88

855855855

618618618

sfSfSf

ifIfIf

pairpairpaireseaea

20 12 $16,08120 13 $16,08120 14 $16,081

20 12 $17,22320 13 $17,22320 14 $17,223

76 Porch columns (partial)77 Porch cotumns (partial)78 Porch columns (partial)79 Elec meter closet doors80 Elec meter closet doors61 EIec meter closet doors

8 $1,190.008 $1,190.008 $1,190.00

10 $1,045.0010 $1,045.0010 $1,045.00

5 none5 15 230 none30 130 2

$9,520$9.520$9,520

$10,450$10,450$10,450

Miller + Dodson Associates, Inc. Replacement Reserve Inventory - PageB9Carriage Homes Condominium Association April 17,2012

IO9BGO3CARRPAGEI3

96 Pool House1 cermic tile flooring97 Pool House cabinet & counter98 Pool House furnishings

99 Mail shelter roofing, asphalt100 Mail shelter siding and trim

82 Pool House roofing, asphalt shingle83 Pool House Siding and Trim84 Pool House Exterior Doors85 Pool House Exterior Doors86 Pool House Windows

sfiseapairIs

280132

$4.25$3,390.00$729.00

$1,235.00$1,300.00

25 1225 1225 1225 1225 12

87 Pool House toilets88 Pool House lavatory89 Pool House Janitor sink90 Pool House fountain91 Pool House hot water heater92 Pool HVAC, heat pump93 Pool HVAC, compressor94 Pool House interior lighting & fan95 Pool House exterior lighting

$1,190$3,390$2,187$2,470$1,300

eaeaeaeaeaeaeaIsIs

IslsIs

SfIs

2 $379.002 $355.00I $415.00

$229.001 $288.00I $1,690.00I $995.00

$1,600.00$700.00

I $1,400.00I $2,200.00

$1,900.00

280 $4.25I $2,095.00

25 1225 1225 1225 1225 1220 720 730 1715 3

30 2530 2515 13

25 1225 12

$758$710$415$229$288

$1,690$995

$1,600$700

$1,400$2,200$1,900

$1,190$2,095

BUILDINGS (POOL HOUSE & MAIL SHELTERS) - Replacement Costs - Subtotal $26,707

Miller + Dodson Associates, Inc. Replacement Reserve Inventory - Page BlOCarriage Homes Condominium Association

101 Swimming pool, structure102 Swimming pool, whitecoat103 Swimming pool, waterline tile104 Swimming p001, coping105 Swimming pool, cover

April 17, 2012109860SCARRIAOE13

109 Swimming pool pump (less than 2 hp)110 Swimming pool filter

111 Pool furniture, chaise lounge112 Pool furniture, chair113 Pool furniture, table

114 Pergola115 Perimeter lènce - 6’ (metal)

1 $1,200.00 5 2I $1,800.00 10 2

$2,770.00250 $44.00

25 12 $2,77030 18 $11,000

SWiMMING POOL - Replacement Costs Subtotal $99,411

Sf 800Sf 1,240ft 115ft 115sf 880

$65.00$5.25$15.00$50.00$1.95

106 Swimming pool, concrete deck (25%)107 Swimming pool, concrete deck (25%)108 Swimming pool, concrete deck (25%)

45 3310 510 1020 205 2

$52,000$6,510$1,725$5,750$1,716

250250250

$11.00$11.00$11.00

15 1815 3315 48

SISfSf

eaea

eaeaea

Isft

$2,750$2,750$2,750

$1,200$1,800

$2,400$2,640$1,650

8 $300.0024 $110.005 $330.00

10 210 210 2

• We have assumed that the project to replace the pool deck will include the replacement of the plumbing and electricalsystems installed beneath the pavement.

Miller + Dodson Associates, Inc. Replacement Reserve Inventory - Page BI ICarriage Homes Condominium Association

Is I

April 17, 2012I O9SSOSCARRIAGEI 3

Fire extinguisher cabinetToilet accessories in Pool HouseEmergency lighting, exit light, etc.BBQ

EXCLUDEDEXCLUDEDEXCLUDEDEXCLUDED

Accent Site lighting fixturesProperty identification signageMiscellaneous signageMisc pool rails

IsIsIs

1II

EXCLUDEDEXCLUDEDEXCLUDEDEXCLUDED

IsIsIsIs

I1I1

• Valuation Exclusions. For ease of administration of the Replacement Reserves and to reflect accurately howReplacement Reserves are administered, items with a dollar value less than $1,000.00 have not been scheduled forfunding from Replacement Reserves. Examples of items excluded from funding by Replacement Reserves by thisstandard are listed above.

• The list above exemplifies exclusions by the cited standard(s) and is not intended to be comprehensive.


isIsIs

IsIsIsIsIsIs

I11

I1IIII

April 17, 2012I O9S6O3CARRIAGEI 3

EXCLUDEDEXCLUDEDEXCLUDED

EXCLUDEDEXCLUDEDEXCLUDEDEXCLUDEDEXCLUDEDEXCLUDED

Masonry features Is I EXCLUDED

EXCLUDEDExterior brick veneer Is 1

Building foundation(s)Concrete floor slabs (interior)Wall, floor, & roof structure

Fire protection/security systemsCommon element electrical servicesElectrical wiringWater piping at common facilitiesWaste piping at common facilitiesGas services at common facilities

Stainless steel pool fixtures Is I EXCLUDED

• Long Life Exclusions. Components that when properly maintained, can be assumed to have a life equal to the property asa whole, are normally excluded from the Replacement Reserve Inventory. Examples of items excluded from funding byReplacement Reserves by this standard are listed above.

• Exterior masonry is generally assumed to have an unlimited economic life but periodic repointing is required and we haveincluded this for funding in the Replacement Reserve Inventory.



Domestic water pipes serving one unitSanitary sewers serving one unitElectrical wiring serving one unitCable TV service serving one unitTelephone service serving one unitGas service serving one unit

April 17, 20121O986O3CARRAGE13

Stairs on an individual lotUnit windowsUnit doorsUnit skylightsUnit deck, patio, and/or balconyUnit interiorUnit [WAG system

IsIsIsIsIsIsIs

1¶1II¶

EXCLUDEDEXCLUDEDEXCLUDEDEXCLUDEDEXCLUDEDEXCLUDEDEXCLUDED

IsIsisIsIsIs

I¶I1I

EXCLUDEDEXCLUDEDEXCLUDEDEXCLUDEDEXCLUDEDEXCLUDED

• Unit improvement Exclusions. We understand that the elements of the project that relate to a single unit are theresponsibility of that unit owner. Exampres of items excluded from funding by Replacement Reserves by this standard arelisted above.


Intentionally Left Blank

Miller + Dodson Associates, Inc. Projected Annual Replacements - Page ClCarriage Homes Condominium Association April 17, 2012

IOSG8G3CARRIAGEI3

PROJECTED ANNUAL REPLACEMENTSGENERAL INFORMATION

CALENDAR OF ANNUAL REPLACEMENTS. The 115 Projected Replacements in the Carriage Homes Condominium AReplacement Reserve Inventory whose replacement is scheduled to be funded from Replacement Reserves arebroken down on a year-by-year basis, beginning on Page C2.

REPLACEMENT RESERVE ANALYSIS AND INVENTORYPOLICIES, PROCEDURES, AND ADMINISTRATION

• REVISIONS. Revisions will be made to the Replacement Reserve Analysis and Replacement Reserve Inventoryin accordance with the written instructions of the Board of Directors. No additional charge is incurred for thefirst revision, if requested in writing within three months of the date of the Replacement Reserve Study. It is ourpolicy to provide revisions in electronic (Adobe PDF) format only.

• TAX CODE. The United States Tax Code grants favorable tax status to a common interest development (CID)meeting certain guidelines for their Replacement Reserve. If a CID files their taxes as a ‘Corporation’ onForm 1120 (IRC Section 277), these guidelines typically require maintenance activities, partial replacements,minor replacements, capital improvements, and one-time only replacements to be excluded from Reserves.A CID cannot commingle planning for maintenance activities with capital replacement activities in the Reserves(Revenue Ruling 75-370). Funds for maintenance activities and capital replacements activities must be held inseparate accounts. If a CID files taxes as an “Exempt Homeowners Association” using Form I 120H (IRCSection 528), the CID does not have to segregate these activities. However, because the CID may elect tochange their method of filing from year to year within the Study Period, we advise using the more restrictiveapproach. We further recommend that the CID consult with their Accountant and consider creating separateand independent accounts and reserves for large maintenance items, such as painting.

• CONFLICT OF INTEREST. Neither Miller - Dodson Associates nor the Reserve Analyst has any prior or existingrelationship with this Association which would represent a real or perceived conflict of interest.

• RELIANCE ON DATA PROVIDED BY THE CLIENT. Information provided by an official representative of theAssociation regarding financial, physical conditions, quality, or historical issues is deemed reliable.

• INTENT. This Replacement Reserve Study is a reflection of the information provided by the Association and thevisual evaluations of the Analyst. It has been prepared for the sole use of the Association and is not for thepurpose of performing an audit, quality/forensic analyses, or background checks of historical records.

• PREVIOUS REPLACEMENTS. Information provided to Miller - Dodson Associates regarding prior replacementsis considered to be accurate and reliable. Our visual evaluation is not a project audit or quality inspection.

• UPDATING. In the first two or possibly three years after the completion of a Level One Replacement ReserveStudy, we recommend the Association review and revise the Replacement Reserve Analysis and Inventoryannually to take into account replacements which have occurred and known changes in replacement costs.This can frequently be handled as a Level Two or Level Three Study (as defined by the Community AssociationsInstitute), unless the Association has completed major replacement projects. A full analysis (Level One)based on a comprehensive visual evaluation of the site should be accomplished every three to five years orafter each major replacement project.

• EXPERIENCE WITH FUTURE REPLACEMENTS. The Calendar of Annual Projected Replacements, listsreplacements w have projected to occur over the next thirty years, begins on Page C2. Actual experience inreplacing the items may differ significantly from the cost estimates and time frames shown because of conditionsbeyond our control. These differences may be caused by maintenance practices, inflation, variations in pricingand market conditions, future technological developments, regulatory actions, acts of God, and luck. Someitems may function normally during our visual evaluation and then fail without notice.

• REVIEW OF THE REPLACEMENT RESERVE STUDY. For this study to be effective, it should be reviewed bythe Carriage Homes Condominium Association Board of Directors, those responsible for the management of the iteincluded in the Replacement Reserve Inventory, and the accounting professionals employed by the Association.

Miller + Dodson Associates, Inc.carriage Homes Condominium Association

Projected Annual Replacements - Page C2April 11, 2012109S80SCARRIAGEI3

S Traffic & street signage (pan $2,20529 Concrete sidewalk (8%) $8,19776 Porch columns (partial) $9,52079 Eec meter closet doors $10,450

I Asphalt pavement, seal coat $11,71377 Ponth columns (partial) $9,52080 Elec meter closet doors $1 0.450

78 Porch columns (partial) $9,52081 Eec meter closet doors $10,450105 Swimming pool, cover $1,716109 Swimming pool pump (less I $1,200110 Swimming pool filter $1,800ill Pool turniture, chaise loungc $2,400112 Pool turniture, chair $2,640113 Pool furniture, table $1,650

Total Schaduled Replacements $28,372 Total Scheduled Replacements $31,883 Total Scheduled Replacements $31,376

Miller + Dodson Associates, Inc. Projected Annual Replacements - Page C3Carriage Homes Condominium Association April 17, 2012

IOSS5O3CARRIAGEIS

tOQiflflL aawaonesaiawiqt 1ao,ajJfl13 Picnic table & benches $2,900 7 Traffic & street signage (par $2,205 9 Bulletin board $65815 Trash resceptacles, wood $830 76 Porch columns (partial) $9,52049 Irrigation, zone controller $910 102 Swimming pool, whitecoat $6,51051 Inigation, laterals (partial) $1,21552 Irrigation, heads (partia $23095 Pool House exterior lighting $700

Total Scheduled Replacements $6,785 Total Scheduled Replacements $2,205 Total Scheduled Replacements $16,688

Miller + Dodson Associates, IncCarriage Homes Condominium Association

Projected Annual Replacements - Page C4April 17, 2012

1 AsprIalt pavement, seal coal2 Asphalt pavement1 mill & ov3 AsphaLt pavement1 overlay (16 Concrete driveway (6%)26 Concrete curb & gutter (203162 Exterior lighting (33%)63 Exterior lighting (33%)64 Exterior lighting (33%)78 Porch columns (partial)92 Pool HVAC, heat pump93 Pool HVAC, compressor105 Swimming pool, coverjog Swimming pool pump (less

1 1,713$32,856$57,395$23,373$34,408

$80$80$80

$9,520$1,890$995

$1,716$1,200

$2,205$1,890$1,215

30 Concrete sidewalk (6%)52 Irrigation, heads (partial)68 Trim (partial)69 Soflits (partial)77 Porch columns (partlal)

$6,197$230

$14,940$18,985$9,520

8 Traffic & street signage (par50 Irrigation, well pump51 Irrigation, laterals (partial)


Miller + Dodson Associates, Inc. Projected Annual Replacements - Page C5Carriage Homes Condominium Association April 17, 2012

_______ IOSS6O3CARR1AGEI3

nggzwnr j52 Irrigation, heads (partial) 3230 76 Porch columns (partial) $9520 77 Porch columns (partial) $9,520

103 Swimming pool, waterline til $1,725

Total Scheduled Replacements $230 Total Scheduled Replacements $11,245 Total Scheduled Replacements $9,520

Miller + Dodson Associates, Inc. Projected Annual Replacements - Page C6carriage Homes Condominium Association April 17, 2012

lflOArflflAOPIAfll

14 Trash receptacles, metal $1,26831 Concrete sidewalk (6%) $6,19742 8” Sanitary main (10%) $1 3,88643 6” Sanitary lateral (10%) $6,07752 Irrigation, heads (partial) $23053 Shingle asphaltltiberglass (2 $33184256 Gutter & downspout, 5” alun $22,77059 Chimney Caps (33%) $1843865 Siding & trim, vinyl, atandarc $200,32768 Trim (partial) $14,94069 Softlts (partial) $18,98570 Front entry stoop decking (3 $16,08173 Front entry stoop railing (33’ $17,22378 Porch columns (partial) $9,52082 Pool House roofing, asphalt $1,19083 Pool House Siding and Trim $3,39084 Pool House Exterior Doors $2,18785 Pool House Exterior Doors $2,47086 Pool House Windows $1,30087 Pool House toilets $75888 Pool House lavatory $71089 Pool House Janitor sink $41590 Pool House fountain $22991 Pool House hot water heate’ $28899 Mail shelter roofing, asphalt 31,190100 Mail shelter siding and trim $2,095105 Swimming pool, cover $1,716109 Swimming pool pump (less I $1,200110 Swimming pool filter $1,800111 Pool ftimiture, chaise loung $2,400112 Pool fumiture, chair $2,840113 Poolfumiture, table $1,850114 Pergola $2,770

I Asphalt pavement, seal coal $11,7135 Street lighting, fixtures $4,14710 Mailboxes, outdoor, cluster $11,80817 Concrete driveway (6%) $23,37351 IrrigatIon, laterals (partial) $1,21554 Shingle asphaltlfiberglass (2 3331,84257 Gutter & downspout, 5” akin $22,77050 Chimney Caps (33%) 318,43866 Siding & trim, vinyl, standarc $200,32771 Front entry stoop decking (3 $18,08174 Front entry stoop railing (33’ $17,22398 Pool House fumishings $1,900

55 Shingle aaphaltlfiberglaas (2 $331,84258 Gutter & downspout, 5” alun $22,77081 Chimney Caps (33%) 518,43857 Siding & trim, vinyl, standarc $200,32772 Front entry stoop decking (3 516,08175 Front entry stoop railing (33’ $17,223

Total Scheduled Replacements $708,200 Total Scheduled Replacements $660,836 Total Scheduled Replacemants $606,680

Miller + Dodson Associates, Inc. frojected Annual Replacements - Page C7Carriage Homes condominium Association April 17, 2012

iflQRfirflflAPflIAflF1

8 Traffic & street signage (par11 Wood lattice HVAC screens12 Wood fence, rear yard priva’52 Irrigation, heads (partial)76 Porch columns (partial)102 Swimming pool, whitecoat

$2,205$25,000$124,425

$230$9,520$6,510

Total Scheduled Replacements $167,890 Total Scheduled Replacements $9,520

$10,112$5,424$6,681$8,032$2,189$868

$12,454$5,832$9,520$1,600$1,716$1,200

77 Porch columns (partial) $9,520 39 4” Domestic water main (10’40 8” Domestic water main (10’41 2” Domestic water lateral (1144 15” RCP Stormwater pipe (145 21” RCP Stormwater pipe (146 24” RCP Stormwater pipe (147 Curb inlet drainage stnictur48 Drop inlet, drainage structur78 Porch columns (partial)94 Pool House interior lighting105 SwImming pool, cover109 Swimming pool pump (less I

$65,628Total Scheduled Replacements

Miller + Dodson Associates, Inc.Carriage Homes Condominium Association

Projected Annual Replacements - Page CSApril 17, 2012I 09S6OSCARRIAGEI3

4 Street lighting, poles, tibergh13 Picnic table & benches15 Trash resceptacles, wood32 Concrete sidewalk (6%)49 Irrigation, zone controller51 Irrigation, laterals (partial)52 Irrigation, heads (partial)68 TrIm (partial)89 Soffits (partial)95 Pool House exterior lighting106 Swimming pool1 concrete de115 Perimeter rence - 6’ (metal)

$16,247$2,900$830

$6197$910

$1215$230

$14,940$18,985

$700$2750$11,000

$858$9,520$1,725$5,750

1 Asphalt pavement, seal coal $11,7137 Traffic & street signage (per $2,20518 Concrete driveway (6%) $23,373

9 Bulletin board78 Porch columns (partial)103 Swimming pool, waterline til’104 Swimming pool, coping


Miller + Dodson Associates Inc. Projected Annual Replacements - Page C9carriage Homes condominium Association April 17, 2012

______ IO98GOSCARRPAGEI3

!awwnasi __52 Irrigation, heads (partial) $230 42 8” Sanitary main (10%) $13,886 6 Traffic & street signage (par $2,20577 Porch columns (partial) $9,520 43 8’ Sanitary lateral (10%) $8,077 51 irrigation, laterals (partia $1,215

78 Porch columns (partial) $9,520105 Swimming pool, cover $1,716109 Swimming pool pump (less I $1,200110 SwimmIng pool filter $1,600111 Pool furniture, chaise loungE $2,400112 Pool furniture, chair $2,640113 Pool furniture, table $1,650

çtaI Scheduled Replacements $9,750 Total Scheduled Replacements $40,888 Total Scheduled Replacements $3,420

Miller + Dodson Associates, Inc. Projected Annual Replacements - Page ClOcarriage Homes Condominium Association April 17, 2012

lflQRfl2flAPPIAflrfl

1 Asphalt pavement, seal coal $11,7132 Asphalt pavement, mill & Qv $32,8583 Asphalt pavement, overlay ( $67,39519 Concrete driveway (6%) $23,37327 Concrete curb & gutter (209i $34,40876 Porch columns (pariwi) $9,52096 Pool House, cermic tile floor $1,40097 Pool House cabinet & count $2,200102 Swimming pool, whitecoat $6,510

33 Concrete sidewalk (6%)52 IrrIgation, heads (partial)68 Trim (partial)69 Soflits (partial)

$6,197$230

$14,940$16,985

77 Porch columns (partial) $9,520


Miller + Dodson Associates, Inc. Projected Annual Replacements - Page CIIcarnage Homes condominium Association April 11, 2012

39 ‘DomesIic water main (1 QC

40 8” Domestic water main (1041 2” Domestic water lateral (Ii44 15” ROP Stormwater pipe (145 21” HOP Stormwater pipe (146 24” RCP Stormwater pipe (147 Curb inlet, drainage structun48 Drop inlet, drainage structun52 Irrigation, heads (partial)62 Exterior lighting (33%)63 Exterior lighting (33%)64 Exterior lighting (33%)78 Porch columns (partial)92 Pool HVAC, heat pump93 Pool HVAC, compressor105 Swimming pool, cover109 Swimming pool pump (least

5 Street lighting, fixtures50 Irrigation, wall pump51 Irrigation, laterals (partial)98 Pool House furnishings

$4,147$1,890$1,215$1,900

$10, 112$5,424$6,881$8,032$2,189$868

$12,454$5,832$230$80$80$80

$9,520$1,690$995

$1,716$1,200

$9,152 No Scheduled ReplacementsTotal Scheduled Replacements $67,184 Total Scheduled Replacements

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Miller - Dodson Associates, Inc.Carriage Homes Condominium Association

CONDITION ASSESSMENT

Condition Assessment - Page DlApril 17, 2012

General Comments. Miller - t3odson Associates conducted a Reserve Study at Carriage Homes in April2012. Carriage Homes is in average condition for a condominium constructed in 2001 - 2003. A reviewof the Replacement Reserve Inventory will show that we are anticipating most of the componentsachieving their normal economic lives. It is noted that remarks by the Manager andmembers of theBoard ofDirectors indicated that numerous Hems have been replacedprematurely orhaverequired abnormally high levels ofmaintenance due to original quality and workmanship.The following comments pertain to the larger, more significant components in the Replacement ReserveInventory and to those items that are unique or deserving of attention because of their condition or themanner in which they have been treated in the Replacement Reserve Analysis or Inventory.

SITE IMPROVEMENTS

Asphalt Pavement. The site includes asphalt pavement forvehicle access and parking. In general, the asphaltpavement is in fair condition with multiple areas of defects.The Association maintains an inventory of approximately58,566 square feet of asphalt pavement, including thestreets and parking areas. The quantity was estimated fromthe site plans provided.The defects noted include the following:

• Open Cracks. There are multiple locations whereopen cracks are allowing water to penetrate to theasphalt base and the bearing soils beneath thepavement. This water will erode the baseaccelerating the deterioration of the asphaltpavement. If the cracks have allowed the deterioration of the base materials and the bearing soil,the damaged areas should be removed and replaced. All other cracks should be cleaned andfilled.

• Improper Grading. The asphalt pavement is notproperly graded in a number of areas, resulting inthe pond ing of water on the pavement Waterponding on asphalt pavement accelerates thedeterioration of the pavement and will result in theformation of potholes. Proper grading of the asphaltpavement will require replacement of portions of theasphalt It may also require replacement of some ofthe adjacent segments of curb and gutter that arenot properly sloped to move water to the stormwater management system.

Photo 2 - Significant cracks were notedin several areas

Photo I - View of typical roadway

Miller - Dodson Associates, Inc. Condition Assessment - Page D2Carriage Homes Condominium Association April 17, 2012

• Alligatoring. There are multiple locations where theasphalt has developed a pattern of cracking knownas alligatoring. Alligatoring is the result of anunstable base under the asphalt. Shifting in thebase causes the asphalt to crack and shift, formingthe cracks that resemble the skin of an alligator.Once these cracks extend through the asphalt, theywill allow water to penetrate to the base,accelerating the rate of deterioration. The onlysolution is to remove the defective asphalt andcompact the base before new asphalt is installed.

Photo 3 -Water valves in severallocations displayed suspected movement

and cracking of pavement

• Depressions. There are areas where the asphaltsurface is depressed due to deformation in thesurface or underlying layers. These depressionsmay continue to grow with exposure to traffic. Waterponding was noted in several of these areas.Repair will require removal of the asphalt and basematerial, installation and compaction of new basematerial, and resurfacing with asphalt.

Photo 4 - The asphalt shows signs ofstress typically of a very thin wearing

surfaceAs a rule of thumb, asphalt should be overlayed when approximately five percent of the surface area hasbecome cracked or has failed. The normal service life of asphalt pavement is typically 18 to 20 years. Asignificant concern for the Association that will impact the normal life of the asphalt is theapparent thickness of the wear surface. It appears in numerous places to be much thinner thanindicated in the site plans based on observation of stresses visible in the pavement

In order to maintain the condition of the pavement throughout the community and to ensure the longestlife of the asphalt, we recommend a systematic and comprehensive maintenance program that includes:

• Crack Sealing. All cracks should be sealed with an appropriate sealing compound to preventwater infiltration through the asphalt compound into the base. This repair should be doneannually. This is an entirely different process from the seal coating discussed below. Cracksealing is normally considered a maintenance activity and is not funded from Reserves. Areas ofextensive cracking or deterioration that cannot be made watertight by crack sealing should be cutout and patched.

• Cleaning. Long-term exposure to oil or gas breaks down asphalt Because this asphalt pavementis generally not used for long term parking, it is unlikely that frequent cleaning will be necessary.When necessary spill areas should be cleaned, or if deterioration has penetrated the asphaltpatched. This is a maintenance activity, and we have assumed that it will not be funded fromReserves.


Condition Assessment - Page D3April 17, 2012

• Seal Coating. The asphalt should be seal coated every three to five years. For this maintenanceactivity to be effective in extending the life of the asphalt, the crack sealing and cleaning of theasphalt as discussed above should be completed first.

Pricing used in the study is based on a recent contract for a two-inch overlay and reflects the current localmarket.

Asphalt Seal Coat The asphalt pavement was reported tohave been seal coated within the past five years. The sealcoating is in good condition overall however there is noindication that crack filling was performed. We recommendfollowing a crack filling and recoating cycle of five years forasphalt surfaces.

Photo 5 - Seal coating also requirescrack filling to be effective

Concrete Flatwork. The concrete fiatwork includes the community sidewalks, unit lead walks, anddriveways. The Association maintains an inventory of approximately 44,776 square feet of concretedriveways and approximately 18,875 square feet of concrete sidewalks. The overall condition of theconcrete flatwork is good.

Photo 6 - Typical concrete driveway

The standards we used for recommending replacement are as follows:

1. Trip hazard, 0.5 inch height difference.2. Severe cracking.3. Severe spalling4. Uneven riser heights on steps.5. Steps with risers in excess of 8.25 inches.

Photo 7 -Concrete walk


Photo 8 - Minor cracking of slabs wasnoted


Photo 9 - Spalling of driveways or curbat drives was noted in several areas

Because it is highly unlikely that all of the community’s concrete components will fail and requirereplacement in the period of the study, we have programmed funds for the replacement of 60% of theinventory and spread those funds over a 60-year timeframe to reflect the incremental nature of this work.This approach assumes a failure rate of 1% per year.

Curb and Gutter. The Association maintains an inventoryof 5,060 linear feet of concrete curb and gutter. Allcomponents have been well maintained and are in excellent•condition. Any problems noted are in the form of minorcracks, spalling or settlement that can be repaired bycontinued periodic replacement of broken sections.

Because it is highly unlikely that all of the community’sconcrete curb and gutter sections will fail and requirereplacement in the period of the study, we haveprogrammed funds for the replacement of 60 percent of theinventory and spread those funds over a 60-year timeframeto reflect the incremental nature of this work. This approachassumes a failure rate of one percent per year. Photo 10 - Typical rolled curb & gutter

Photo 11 - Significant cracks are presentin some areas

Photo 12 - Broken and spalled sectionsare present in some areas

Miller - Dodson Associates. Inc. Condition Assessment- Page D5Carriage Homes Condominium Aésociation April 17, 2012

Storm Water System. We have included the catch basins and underground piping portions of the stormwater system in the Reserve Analysis. Our estimate for the replacement costs for the storm water systemis based on the drawings that were provided to us and our inspection of the visible components of thesystem. It is important to visually inspect these annually for signs of breakage or accumulated siltsediment, yard waste, tree roots or other debris and obstructions. When breakage is suspected a cameracan be used to investigate more thoroughly for extents of damage.

Photo 13 - Standing water in a drop inlet Photo 14 - The storm water ponds aremay indicate a blockage the Master Associations responsibility

Curb and Drop Inlets. The storm water system includes a number of curb and inlets that are designedto collect storm water from the open spaces or streets and parking areas and direct it into the storm watersystem. Quantities are taken from the site plans provided for our use.

Photo 15 - Typical curb inlet Photo 16 - Typical drop inlet

While storm inlets are typically long life items, soil movement can result in displacement of the structure.Openings between the inlets and the surrounding pavement and other surfaces can result in erosion andsettlement of the pavement surrounding the curb inlet This movement results in additional settlementand erosion. Uncorrected, the entire curb inlet will require replacement or rebuilding.

Not all inlets will require rebuilding or replacement at the same time. Therefore we have included fundingin the Reserve Analysis for replacement on a periodic basis. We have assumed that a portion of dropand curb inlets will require rebuilding or replacement in the future.

Water and Sewer Laterals. The water and sewer laterals are those portions of the underground utilitysystem that extend from the individual units to the water and sewer mains, typically located under oralong the street. We have used the drawings to determine sizes and approximate lengths of thesecomponents and have indicated 10% of these to require replacement every 10-to 15-years.


Photo 17 - Ganged water meters aregenerally located in the driveway slabs


Photo 18 - Sanitary lateral cleanouts aretypically in the driveways

The water meters themselves have been excluded but may be appropriate to include for replacement inthe future. Note: This component was not included in the previous study by DLM.

Water Mains. The Association is responsible for the replacement of the water mains located under theroadways within the community. Our estimate for the replacement costs for the water system is based onthe drawings that were provided to us and our inspection of the visible components of the system.

Note: This component was not included in the previous study by DLM.

Sanitary Sewer Mains. The Association is responsible for the replacement of the sanitary sewer mainslocated under the roadways within the community. Our estimate for the replacement costs for thesanitary system is based on the drawings that were provided to us and our inspection of the visiblecomponents of the system.

Note: This component was not included in the previous study by DLM.

Site Lighting. The Association is responsible for the replacement of the community’s street and walkwaylights. The lighting system was not on at the time of our site visit We understand that the lighting systemis in good operating condition. The quantity of pole mounted lighting was revised from the previousamount indicated in the study by DLM.

The front entrance lights, balcony and rear patio lights are the Owners responsibility, but each buildingalso has area lighting mounted on the siding. Many of these fixture show finish deterioration but are allbelieved to be in proper working condition. These should be replaced as needed but may becomeunavailable and would require complete replacement to maintain uniformity of appearance. The Managerrequested the building mounted site lighting be included in this update.


Condition Assessment - Page DYApril 17, 2012

Photo 20 - The typical building mountedlighting

Signage. The community has private street, traffic and information signage. The signs are metal andtypically in good overall condition and are mounted to anodized aluminum poles. Several signs werenoted to be loose which can result in damage from winds. Partial replacement is anticipated on an asneeded basis. Bulletin boards located at the mail shelters are in good overall condition.

The main entrance signage monument into the community is understood to be the responsibility of theMaster Association and has been excluded.

Wood Board Fencing. Wood board fencing is installed as privacy fencing at the rear yards of buildingsin the community. We have estimated the quantity of wood board fencing from the site plans althoughsome as-built conditions are believed to vary slightly. The condition of the fencing varies from good topoor due to original installation with soil graded up to the fence boards causing rot as well as apparentgrounds keeping damage.

Photo 19 - Typical site lighting

Photo 21 - Bulletin boards are in goodoverall condition

Photo 22 - Signage is in good overallcondition

‘.arriage nomes uonoominium association April 1 , ZU1

Photo 23 - Perimeter fencing is Photo 24 - Some fencing boards areunderstood to be the Master broken, loose or missing

Associations and has been deleted

The defects noted include the following:

• Loose boards. Several boards are currently loose and need to be retailed.

• Warped boards. Several Numerous sections of the fencing have boards that are badly warped.Warped boards should be replaced to maintain the integrity of the fencing.

• Damaged Fence Posts. Several fence posts hsve been damaged by mowing and trimming. Thisdamage has weakened the posts at their base.

• Rot. Although the fencing is constructed from treated and stained lumber, we noted a number oflocations where the boards are rotting due to ground contact allowing the wood to pick up moisture.

The Manager reports that the Association intends to replaceall of the rear yard fences in 2012. Therefore the inventoryshows the fences to be brand new for 2013. In the event thefences are not replaced nor are not all replaced in 2012 thequantities and remaining life should be adjusted. Also,future revisions should reflect the actual cost paid.

Note: This component was not included in the previousstudy by DLM and has been added per the request of theManager. The DLM study included perimeter fencing whichit has been determined is the responsibility of the TowneSquare Master Association and not the Carriage Homes.

Photo 25 - Rear yard fencing has beenadded and shows widespreaddeterioration in many locations

HVAC Screens. The outdoor compressor units for each residence are typically screened behind apainted lattice and wood screen. These screens are currently being replaced. It is noted that thesescreens will require priming and painting of all lumber to achieve the normal economic life that has beenindicated.

Miller - Dodson Associates, Inc.Carnage Homes Condominium Association


Photo 26 - HVAC screens are currentlybeing replaced

VPhoto 27 - Screens that have not been

replaced show deterioration

Note: This component was not included in the previous study by DLM and has been added per therequest of the Manager.

BUILDING EXTERIORS

Asphalt Shingle Roofing. The asphalt shingle roofs are in good condition. We have estimated theremaining useful life of the roofs based on the conditions seen at the site as well as the age of the roofs.We have assumed that when the roofs eventually will require replacement, all roofs will be replaced with25-year roofs. We have assumed that the gutters and downspouts will be replaced when the roofs arereplaced.

A large number of the roofs have extensive shingle over hang that results in the shingle bending. Thisleads to a weakening of the shingle as well as vulnerability to wind damage. The edges of roofs (botheave and gable ends) will begin to display tearing, broken and missing tabs as this deteriorationprogresses and may result in a significantly shortened life for the roofing.

IPhoto 28 - Roofing appears to be in

good overall conditionPhoto 29 - Roofing should be inspected

regularly for damage


Due to the large inventory and the varying rates at which theroofing materials will age and require replacement, we havedivided the roof inventory into three equal components andspread their replacement over a three-year period.

Condition Assessment - Page D1OApril 17, 2012

Photo 30 - Severe shingle overhang iswidespread

Vinyl Siding. The vinyl siding on the buildings is in good overall condition. We have estimated theremaining useful life of the siding based on the conditions seen at the site as well as the age of the siding.

Photo 31 - Typical view of building sidingsiding

Due to the large inventory and the varying rates at which the siding materials will age and requirereplacement, we have divided the siding inventory into three equal components and spread theirreplacement over a three-year period.

Trim, Softits, and Accessories. The vinyl shutters, fascia, friezes, cornices and soffits are all typically ingood condition. We have anticipated that partial replacements of these items will begin to be requiredevery five to seven years.

Photo 32 - Typical view of building


Photo 33 - The buildings have extensivetrim, soffits and accents that will requireincremental and full replacement in the

future

Condition Assessment - Page DIIApril 11, 2012

Photo 34 - Shutters and other accentswill require replacement when the siding

Columns and Entry Porch Decking. The unit entrances are typically accented with a pair of tuscanstyle columns of synthetic (fiberglass or PVC). While these would typically be considered a long-livedcomponent (and therefore excluded), the manager reports that the Association has to replaceapproximately 10 pairs of these per year due to deterioration of the substrates at these columns.

Note: This component was not included in the previousstudy by DLM and has been added per the request of theManager.

Electrical Meter Closet Doors. The buildings are designed with ganged meter bases located within anexterior closet at the end of each building. These are pairs of doors with painted wood trim framedopenings and the majority of them show very poor conditions. The metal doors typically do not closeproperly resulting in possible wind damage. The frames display roiled and loose trim from the moistureinfiltration entering these openings due to improper hanging and omitted flashings. This is a significantdefect with potential moisture deterioration issues to the entire exterior wall framing at the closetlocations. The manager reports that the Association has to replace approximately 7 to 8 of these doorsper year due to deterioration or damage.

is replaced

Photo 36 - Ground floor entrances

Photo 35 - Upper floor entrances

Miller - Dodson Associates, Inc. Condition Assessment - Page D12Carriage Homes Condominium Association April 17, 2012

Photo 37 - Doors to meters do not closeproperly

Note: This component was not included in the previous study by DLM and has been added per therequest of the Manager.

POOL HOUSE AND MAIL SHELTERS

Mail Shelters. There are two mail shelters serving thecommunity. These shelters have asphalt shingle roofing,vinyl siding, soffits and trim and are in fair to good overallcondition. The lighting is expected to be replaced as neededand is excluded due to the small value of these fixtures.Other components would be anticipated to be replaced whenthe residential buildings are undergoing roofing and sidingreplacements.

Mailboxes. The cluster mailboxes located in the sheltersare in good condition, with virtually no oxidation visible onany of the units. We have assumed that when themailboxes are replaced, fiberglass units will be installed.

Photo 39 - Mail shelters are in goodoverall condition

Pool House Exteriors. The pool house is a small structure with asphalt shingle roofing, vinyl siding, vinylwindows, painted wood doors and vinyl soffits. The materials are in fair to good overall condition andshould be anticipated to be replaced when the residential buildings undergo their replacements.

Photo 38 - Several display trimdeterioration

Photo 40 - View of the pool house Photo 41 - View of the pool house


door


Pool House Interiors. The house interior is a modestly finished and furnished meeting room and twosparse toilet rooms as well as a pool equipment room and storage room. The major interior finishesincluded in the study are the relatively new ceramic tile flooring and wood base cabinets with laminatecounter; both in very good condition. Other interior components we have included are the plumbingfixtures and interior lighting and ceiling fan as an allowance for replacement as needed. A smallallowance is included for pool house furnishings to be replaced as needed.

Photo 42 - The louver in the pump room Photo 43 - Door hardware showsextensive corrosion

Photo 44 - Counters, cabinets andceramic tile was recently installed

Photo 45 - Lighting and ceiling fan are ingood condition

Photo 46 - Typical toilet Photo 47 - Typical lavatory


HVAC. The pooi building is served by a single heat pumpunit. The outdoor compressor shows corrosion but isunderstood to be in good operating condition. Annualserving of the units should allow them to meet their fullnormal life potential.


Photo 48 - Compressor has corrosionson the housing

RECREATIONAL FACILITIES

Pool Furnishings. The pool furnishings were stored indoors which helps extend the life of the items.Furniture includes vinyl chaise lounges, chairs and tables that are in fair to good overall condition. Due tothe tightly stacked storage conditions and accurate count and assessment of condition was not feasibleand therefore quantities and remaining life may be subject to revision.

Photo 49 - Pool tables Photo 50 - Pool chairs

Site Furnishings. There are several trash receptacles benches, picnic tables and BBQ grills located inthe common area near the pool. These are of various quality and condition and would be anticipated tobe replaced as needed.

k

Miller - Dodson Associates, Inc. Condition Assessment -Paqe D15Carriage Homes Condominium Association April 17, 2012

Swimming Pool. The community operates an outdoor poolof concrete construction with a concrete deck. The concretedeck is not coated. The pool was winterized at the time ofthe site visit and therefore we are relying upon conditions asreported by the Manager. Listed below are the majorcomponents of the pool facilities:

• Pool Shell. The shell for the swimming pool is ingood condition. Pool shells normally have a finitelife of approximately 45 years. At that time it maynot be necessary to replace the entire structure.However, it is prudent to anticipate a majorexpenditure for replacement of underground linesand sections of the pool. Based on our research,we have found it to be prudent to program $60-$70needs.

• Pool Deck. The pool has a concrete deck. Theoverall condition of the deck is good. Because it ishighly unlikely that all of the community’s concretepool deck sections will fail and require replacementat the same time, we have divided the deck intoequal components in the Reserve Analysis and havespread their replacement over a number of years.

• Whitecoat The pool whitecoat is in good condition.We have assumed a service life of eight to ten yearsfor the pool whitecoat.

• Coping. The pool is edged with masonry coping. Photo 54 - Pool equipment is reported toThe coping is in good condition as it was just be in good conditionreplaced prior to the site visit. We have used the cost of the coping replacement as reported bythe Manager.

• Pump and Filter System. The filter system is in good operating condition. We have assumed aservice life of 20 years for the filter system, and 10 years for the pump.

Pool Fence. The pooi fence is a six-foot tall metal fence that is in good overall condition. Fencing isanticipated to last 20 to 25 years unless damaged.

ka

Photo 51 - Site furnishings Photo 52 - Trash receptacle

Photo 53 - View of the poolper square foot of pool surface to cover these

Miller - Dodson Associates. Inc. Condition Assessment - Paae DIGCarriage Homes Condominium Association

Photo 55 - Pool fence is in goodcondition

April 17, 2012

Photo 56 - Pergola is in good overallcondition

Pool Pergola. There is a painted pergola in the pool deck are to provide shade for sunbathers at thepool. This structure includes synthetic tuscan columns that could have an indefinite life; however thepainted wood lumber columns supporting the pergola will typically last only 18- to 20-years even withproper maintenance.

:.Thjs .: :.o1idiricAAssmant:js.based rvisua of:visual survey was an evaluation of the common elements of the property to ascertain the remaining usefullife and the replacement costs of these common elements Our evaluation assumed that all componentsmet building code requirements in force at the time of construction Our visual survey was conductedwith care by experienced persons1 but no warranty or guarantee is expressed or implied

End of Condition Assessment ‘s i’

Miller + Dodson Associates! Inc. Cash Flow Method Accounting Summary - Page CF-ICarriage Homes Condominium Association AprIl 17, 2012

1O9SBaSCARRIAGEIS

CASH FLOW METHOD ACCOUNTING SUMMARYThis Carriage Homes Condominium Association - Cash Flow Method Accounting Summary is an attachment to theCarriage Homes Condominium Association - Replacement Reserve Study dated April 17, 2012 and is for use byaccounting and reserve professionals experienced in Association funding and accounting principles.This Summary consists of four reports, the 2013, 2014, and 2015 Cash Flow Method Category FundingReports (3) and a Three-Year Replacement Funding Report.

0 CASH FLOW METHOD CATEGORY FUNDING REPORT, 2013,2014, and 2015. Each of the 115 ProjectedReplacements listed in the Carriage Homes Condominium Association Replacement Reserve Inventory has beenassigned to one of B categories. The following information is summarized by category in each report:O Normal Economic Life and Remaining Economic Lilè of the Projected Replacements.O Cost of all Scheduled Replacements in each category.O Replacement Reserves on Deposit allocated to the category at the beginning and end

of the report period.O Cost of Projected Replacements in the report period.O Recommended Replacement Reserve Funding allocated to the category during the

report period as calculated by the Cash Flow Method.

o THREE-YEAR REPLACEMENT FUNDING REPORT. This report details the allocation of the $25,902Beginning Balance (at the start of the Study Year) and the $491,726 of additional Replacement ReserveFunding in 2013 through 2015 (as calculated in the Replacement Reserve Analysis) to each of the 115Projected Replacements listed in the Replacement Reserve Inventory. These allocations have been madeusing Chronological Allocation, a method developed by Miller Dodson Associates, Inc., and discussed below.The calculated data includes:O Identification and estimated cost of each Projected Replacement schedule in years 2013 through 2015.O Allocation of the $25,902 Beginning Balance to the Projected Replacements by Chronological Allocation.o Allocation of the $491,726 of additional Replacement Reserve Funding recommended in the

Replacement Reserve Analysis in years 2013 through 2015, by Chronological Allocation.

o CHRONOLOGICAL ALLOCATION. Chronological Allocation assigns Replacement Reserves to ProjectedReplacements on a “first come, first serve” basis in keeping with the basic philosophy of the Cash Flow Method.The Chronological Allocation methodology is outlined below.O The first step is the allocation of the $25,902 Beginning Balance to the Projected Replacements in the

Study Year. Remaining unallocated funds are next allocated to the Projected Replacements in subsequentyears in chronological order until the total of Projected Replacements in the next year is greater than theunallocated funds. Projected Replacements in this year are partially funded with each replacementreceiving percentage funding. The percentage of funding is calculated by dividing the unallocated fundsby the total of Projected Replacements in the partially funded year.At Carriage Homes Condominium Association the Beginning Balance funds 91.3% of Scheduled Replacemeithe Study Year.

O The next step is the allocation of the $163,909 of 2013 Cash Flow Method Reserve Funding calculatedin the Replacement Reserve Analysis. These funds are first allocated to fund the partially fundedProjected Replacements and then to subsequent years in chronological order as outlined above.At Carriage Homes Condominium Association the Beginning Balance and the 2013 Replacement ReserveFunding, funds replacements through 2019 and partial funds (14.2%) replacements in 2020!

o Allocations of the 2014 and 2015 Reserve Funding are done using the same methodology.O The Three-Year Replacement Funding Report details component by component allocations made by

Chronological Allocation.

Miller + Dodson Associates, Inc. Cash Flow Method Accounting Summary - Page CF-2Carriage Homes Condominium Association April 17, 2012

IO9B6O3CARRIAGEI3

2013 - CASH FLOW METHOD CATEGORY FUNDING REPORTEach of the 115 Projected Replacements included in the Carriage Homes Condominium Association Replacement ReseInventory has been assigned to one of the 8 categories listed in TABLE CF-I below. This calculated data is asummary of data provided in the Three-Year Replacement Funding Report and Replacement Reserve Inventory.The accuracy of this data is dependent upon many factors including the following critical financial data:O A Beginning Balance of $25,902 as of the first day of the Study Year, January 1, 2013.O Total reserve funding (including the Beginning Balance) of $189811 in the Study Year.O No expenditures from Replacement Reserves other than those specifically listed in the

Replacement Reserve Inventory.O All Projected Replacements scheduled in the Replacement Reserve Inventory in 2013 being

accomplished in 2013 at a cost of $28,372.If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associatesto arrange for an update of the Replacement Reserve Study.

SITE COMPONENT 6 to 30 yearsSITE COMPONENT (cont) 80 yearsSITE COMPONENT (cant.) 54 to 60 yearsSITE COMPONENT (cant.) 3 to 20 yearsBUILDING EXTERiOR 20 to 25 yearsBUILDING EXTERIOR (cant.) 5 to 30 yearsBUILDINGS (POOL HOUSE & MAIL SHELTE 15 to 30 yearsSWMMING POOL 5 to 60 years

0 to 18 years7to61 years0 to 54 years3 to 17 years7 to 14 yearsOto 14 years3 to 25 years0 to 48 years

$295,881$233,731$165,189$75,799

$1,119,389$792,726$28,707$99,411

$32,785$3,314$11,076$2,585

$34($19,970) $92,255

$1,081$18,329

Miller + Dodson Associates, Inc._____________ Cash Flow Method Accounting Summary - Page CF-Scarriage Homes Condominium Association April 17, 2012IO9S8O3CARRIAGE13

2014 - CASH FLOW METHOD CATEGORY FUNDING REPORTEach of the 115 Projected Replacements included in the Carriage Homes Condominium Association Replacement ReseInventory has been assigned to one of the 8 categories listed in TABLE CF-2 below. This calculated data is asummary of data provided in the Three-Year Replacement Funding Report and Replacement Reserve Inventory.The accuracy of this data is dependent upon many factors including the following critical financial data:o Replacement Reserves on Deposit totaling $161,439 on January 1, 2014.o Total reserve funding (including the Beginning Balance) of $353,719 in 2013 through 2014.o No expenditures from Replacement Reserves other than those specifically listed in the


*****

If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associatesto arrange for an update of the Replacement Reserve Study.

($11,713) $110,781$23,373$40,605$5,920$241

($19,970) $87,306$3,385$22,073

SITE COMPONENT 8±030 yearsSITE COMPONENT (cont) 80 yearsSITE COMPONENT (cont.) 54 to 60 yearsSITE COMPONENT (cont.) 3±020 yearsBUILDING EXTERIOR 20 to 25 yearsBUILDING EXTERIOR (cont) S to 30 yearsBUILDINGS (POOL HOUSE & MAIL SHELTE 15 to 30 yearsSWIMMING POOL 5 to 60 years

0±0 l7years6 to 60 years5 to 59 years2 to 16 years8 to 13 years0 to 29 years2 to 24 years1 to47years

$295,881$233,731$165,189$75,799

$1,119,389$792,726$28,707$99,411

$32,765$3,314$11,076$2,585

$34$92,255$1,081$18,329

$89,710$20,059$29,529$3,335$207

$15,021$2,304$3,744

Miller + Dodson Associates, Inc. Cash Flow Method Accounting Summary - Page CF4Carriage Homes Condominium Association April 17, 2012

IO9880SCARRJAGEI3

2015 - CASH FLOW METHOD CATEGORY FUNDING REPORTEach of the 115 Projected Replacements included in the Carriage Homes Condominium Association Replacement ReseInventory has been assigned to one of the 6 categories listed in TABLE CF-S below. This calculated data is asummary of data provided in the Three-Year Replacement Funding Report and Replacement Reserve Inventory.The accuracy of this data is dependent upon many factors including the following critical financial data:O Replacement Reserves on Deposit totaling $293,664 on January 1, 2015.O Total Replacement Reserve funding (including the Beginning Balance) of $517,628 in 2013 to 2015.O No expenditures from Replacement Reserves other than those specifically listed in the


accomplished in 2015 at a cost of $31376.If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associatesto arrange for an update of the Replacement Reserve Study.

SITE COMPONENT 6 to 30 yearsSITE COMPONENT (cont.) 60 yearsSITE COMPONENT (cant) 54 to 60 yearsSITE COMPONENT (cant) 3 to 20 yearsBUILDING EXTERIOR 20 to 25 yearsBUILD1NG EXTERIOR (cant.) 5 to 30 yearsBUILDINGS (POOL HOUSE & MAIL SHELTE 15 to 30 yearsSWiMMING POOL Sto6oyears

ito l8years5 to 59 years4 to 58 yearsIto l5years5 to 12 years0 to 29 yearsIto 23 years0 to 46 years

$295,881$233,731$165,189$75,799

$1,119,389$792,726$25.707$99,411

$111,037$23,373$41,932$10,244$80,131

($19,970) $138,434$6,859

($11,406) $14,187

Miller + Dodson Associates, inc.Carriage Homes Condominium Association

Cash Flow Method Accounting Summary - Page CF-5April 17, 2012I098603CARRIAGE1 a

CASH FLOW METHOD - THREE-YEAR REPLACEMENT FUNDING REPORT

Replacement Reserves on Deposit totaling $161,439 on January 1, 2014.Replacement Reserves on Deposit totaling $293,664 on January 1, 2015.

TABLE 4 below details the allocation of the $25,902 Beginning Balance, as reported by the Association and the$491,726 of Replacement Reserve Funding calculated by the Cash Flow Method in 2013 to 2015, to the 115Projected Replacements listed in the Replacement Reserve Inventory. These allocations have been made byChronological Allocation, a method developed by Miller Dodson Associates, Inc., and outlined on Page CF-I.The accuracy of the allocations is dependent upon many factors including the following critical financial data:o Replacement Reserves on Deposit totaling $25,902 on January 1, 2013.00O Total Replacement Reserve funding (including the Beginning Balance) of $517,628 in 2013 to 2015.O No expenditures from Replacement Reserves other than those specifically listed in the

Replacement Reserve Inventory.O All Projected Replacements scheduled in the Replacement Reserve Inventory in 2013 to 2015 being

accomplished as scheduled in the Replacement Reserve Inventory at a cost of $91,431.

If any of these critical factors are inaccurate, do not use the data and please contact Miller DodsonAssociates, Inc., to arrange for an update of the Replacement Reserve Study.

13,3744,6598,139

1 Asphalt pavement seal coat2 Asphalt pavement, mill & overlay (363 Asphalt pavement, overlay (70%)4 Street lighting, polaa, fiberglass5 Street lighting, fixtures6 Traffic & street aignage (partial)7 Traffic & street aignege (partial)8 Traffic & street aignage (partial)9 Bulletin board10 Mailbmcea, outdoor, seaterii Wood lattice IIVAC acrccna12 Wood fence, rear yawl privacy13 Picnic tahle & benches14 Trash receptacles, metal15 Trash reeceptacles, wood

2,013

11,71332,85657.39516,2474,1472,2652,2052,205658

11,80825,000124,4252,9001,288830

(2,205)

10,052 (11.713) 11.713 11,71328,197 32,856 32.85649,256 57,395 57,395

13,3744,6598,i39

2,205

658

2,900

830

3,314

2205

1922,205

658

2,900

830

3,314

2,2052,205658

2,900

830

SLTE COMPONENT (cent)

16 Concrete driveway (6%)17 Concrete driveway (6%)IS Concrete driveway (6%)19 Concrete driveway (6%)20 Concrete driveway (6%)21 Concrete driveway (6%)22 Concrete driveway (6%)23 Concrete driveway (6%)24 Concrete driveway (6%)25 Concrete driveway (6%)

SITE COMPONENT (cont)

26 Concrete cacb& gutter (20%)27 Concrete cash & getter (20%)28 Concrete curb & gutter (20%)29 Concrete sidewalk (6%)30 Concrete sidewalk (6%)31 Cuncretesidewalk(6%)32 Concrete sidewalk (6%)33 Concrete sidewalk (6%)34 Concrete sidewalk (6%)35 Concrete sidewalk (6%)36 Concrete sidewalk (6%)37 Concrete eidewallc (6%)38 Concrete aidewallc (6%)

23,37323,37323,37323,37323,37323,37323,37323,37323,37323,373

34,40834,40834,4686,1676,1976,1976,1976,1976,1976,1976,1976,1976,197

4,879 4,879

20,059

29,529

23,373

34,408

539 (6,197)6,197 6,197 6,197

2,2052,205658

2,900276830

23,373

34,408

6,1671,327

276

1,327

5,657

Miller + Dodson Associates, Inc. Cash Flow Method Accounting Summary - Page CF-6Carriage Homes Condominium Association April 17,2012

‘I098003CARRIAGEI3

4W:Ssaiist T!ffn%ZSITE COMPONENT (cent.)

39 4” Domenticwater main (10%) 10,11240 S’Domesticwatersuatn(Io%) 5,42441 2’ Domestic waterlateral (10%) 6,68142 8’ Sanitary main (10%) 13,88643 6” Sanitary lateral (10%) 6,07744 15W RCP Slormwatcr pipe (10%) 8,03245 21” RCPSlosmwalorpipc(19%) 2,18946 24” RCP Stonnwater pipe (10%) 86847 Curls inlet, dialnage atructure (10%) 12,45448 Drop inlet, drainage scssrcture (10%) 5,83249 Irrigation, zone controller 910 91030 Irrigation, well pump 1,890 1,89051 Irrigation, laterals (partial) 1,215 2,43052 Irrigation, hands (partial) 230 690

BUILDING E3CEEROOR

53 Shingle aaphalt/flberglear (33%) 331.84254 Shingle asplralllflberglaaa (33%) 331,84255 Shlngleasphaltlflhcrglasa(33%) 331,84256 Guttcr& doweapout, 5” aluminum (3 22,77057 Gnttnr& downspout, 5” aluminum (3% 22,77058 Guttnr& downspout, 5” aluminum (3 22,77059 Chimney Cups (33%) 18,43860 Chimney Capt (33%) 18,43861 Chimney Cups (33%) 18,43862 Exterior lighting (33%) 8063 Exterior lighting (33%) 0064 Exlrrlorlighllrtg(33%) 80

BUILDING E3JEROOR (coat.)

910 910

1,215 1,215460 4601

11 II11 II11 11

14,940 14,94016,905 16,985

10,349 (9.520) 9,52019,040 19,04010,870 io,gio

910 (10,450)10,450 10,45010,450 10,450

240 241141 141

700 70t

1,3901,215230

696969

6,851

8,170

1,450854

8,691

9,540

2,974 2,9741,301 1,301

9101,8902,430

49 739

71,066 71,066

4,876 4,876

3.949 3.949

808080

42,901 42,901

3,199 18,1393,637 20,6223.444 3.444

3,638

2,669 19,0409,520 19,0402,039 (9,520) 11,559

(10,450)

255 255726 726463 468529 529278 278162 162152 15289 8949 4962 62

1,690995

700

255 255443 449

65 Siding& trim, vinyl, standard (33%) 200,32766 Siding & trim, vinyl, standard (33%) 200,32767 Siding & trim, vinyl, standard (33%) 200,32768 Trim (partial) 14,94069 SoffIta (partial) 16,98570 Front entry stonp decking (33%) 16,08171 Frontenlryrteop decking (33%) 16,0817273

Frontentryutoopdecklng(33%) 16,081Frootcutry stoop railing (33%) 17,223

7475

Front entry sloop raIling (33%) 17,223Front entry sloop railing (33%) 17,223

76 Porch columns (purlial) 9,52077 Porch columns (partial) 9,52078 Porch columns (pnrtisl) 9,52079 Elmmeterclosetdnorn 10,45080 Elecmcterclosetdnom 10,45081 Elecmcterclosctdoom 10,450

82

BUILDINGS (POOL HOUSE & MAE

Pool Houteron{lrtg, asphalt shingle 1 1,19083 Fool House Siding and Trim 3,39084 Foal House ExteriorDoors 2,18785 Pool HouseExtesiorDoors 2,47056 Pool House Windows 1,30057 Pool House toilecs 75888 Pool Ilouse lavatory 71089 Pool House Janitor sink 41590 Pool House fountain 22991 Pool Houre hot warerheatnr 28892 Pool HVAC, heat pump 1,63093 Pool HYAC, compressor 90594 Pool House interior lighting& fan 1,60095 Pool House exterior lighting 70096 Fool House, cermio tile flooring 1,40097 Pool House cahinel & counter 2,20098 Poolllausnftrmishings 1,90099 Mail shelterronfing, esphalt 1,190100 Mail shelter siding and trim 2,095

SWIMMING POOL

(9,520)

(10,450)

ScScSc

14,94016,985

16,3719,52019,040

10,450

1,630995

700

Miller + Dodson Associates, Inc. Cash Flow Method Accounting Summary - Page CF-7Carriage Homes Condominium Association April 17, 2012________________________ _____________ I O98602CARRIAGEIS

b jq,Lt2’a!th 4&p’(&&À& Stlnce

101 Swioommg pool, otnicinre 52,000102 Swimmingpnol,wliitecoat 6,510 6,510 6,510 6,510 6,510103 Swimming pool, waterline tile 1,725 1,241 1,241 484 1,725104 Swimming pool, roping 5,750105 Swimming pool, cover 1,716 1,959 1,473 3,432 367 (1,716) 2,083106 Swimming pool, concrete deck (25%) 2,750107 Swimming pool, concrete deck (25%) 2,750ios Swimming pooi, concrete deck (25%) 2,750109 Swlmoilng pool pomp Qeoothan 2 hp) 1,200 1,370 1,370 1,030 2,400 257 (1,200) 1,457110 Swimming pool filter 1,800 1,800 1,800 1,800 385 (1.800) 385Ill Pool fitrniture, choloe lounge 2,400 2,400 2,400 2,400 514 (2,400) 514112 Pool fttrollttro, choIr 2,640 2,640 2,640 565 (2,640) 565113 Pool titreilore, table 1,650 1,650 1,650 1,650 353 (1,650) 353114 Pergola 2,770 593 593115 Perimetort’eoce-6’(metal) 11,000

Miller + Dodson Associates, Inc. Component Method Accounting Summary - Page CM-Icarriage Homes Condominium Association April 17, 2012

IO9BBOSCARRIAGEIS

COMPONENT METHOD ACCOUNTING SUMMARYThis Carriage Homes Condominium Association - Component Method Accounting Summary is an attachment to theCarriage Homes Condominium Association - Replacement Reserve Study dated April 17, 2012 and is for use byaccounting and reserve professionals experienced in Association funding and accounting principals.This Summary consists of four reports, the 2013, 2014, and 2015 Cash Flow Method Category FundingReports (3) and a Three-Year Replacement Funding Report.

0 COMPONENT METHOD CATEGORY FUNDING REPORT, 2013, 2014, and 2015. Each of the 115 ProjectedReplacements listed in the Carriage Homes Condominium Association Replacement Reserve Inventory has beenassigned to one of 8 categories. The following information is summarized by category in each report:o Normal Economic Life and Remaining Economic Life of the Projected Replacements.O Cost of all Scheduled Replacements in each category.O Replacement Reserves on Deposit allocated to the category at the beginning and end

of the report period.O Cost of Projected Replacements in the report period.O Recommended Replacement Reserve Funding allocated to the category during the

report period as calculated by the Component Method.

o THREE-YEAR REPLACEMENT FUNDING REPORT. This report details the allocation of the $25,902Beginning Balance (at the start of the Study Year) and the $663,018 of additional Replacement Reservefunding in 2013 through 2015 (as calculated in the Replacement ReserveAnalysis) to each of the 115Projected Replacements listed in the Replacement Reserve Inventory. These allocations have been madeusing the Component Method as outlined in the Replacement Reserve Analysis.The calculated data includes:O Identification and estimated cost of each Projected Replacement schedule in years 2013 through 2015.O Allocation of the $25,902 Beginning Balance to the Projected Replacements by the Component Method.O Allocation of the $663,018 of additional Replacement Reserve Funding recommended in the

Replacement Reserve Analysis in years 2013 through 2015, by the Component Method.

Miller + Dodson Associates, Inc. Component Method Accounting Summary - Page CM-2Carriage Homes condominium Association April 17, 2012

I 098GO3CARRIAGEI 3

2013 - COMPONENT METHOD CATEGORY FUNDING REPORTEach of the 115 Projected Replacements included in the Carriage Homes Condominium Association Replacement ReseInventory has been assigned to one of the 8 categories listed in TABLE CM-I below. This calculated data is a summaryof data provided in the Three-Year Replacement Funding Report and Replacement Reserve Inventory. Theaccuracy of this data is dependent upon many factors including the following critical financial data:O A Beginning Balance of $25,902 as of the first day of the Study Year, January 1, 2013.O Total reserve funding (including the Beginning Balance) of $267,515 in the Study Year.O No expenditures from Replacement Reserves other than those specifically listed in the



SITE COMPONENT 6 to 30 yearsSITE COMPONENT (contj 50 yearsSiTE COMPONENT (cord.) 54 to 60 yearsSITE COMPONENT (cont) 3 to 20 yearsBUILDING EXTERIOR 20 to 25 yearsBUILDING EXTERIOR (cont.) 5 to 30 yearsBUILDINGS (POOL HOUSE & MAIL SHELTE 15 to 30 yearsSWIMMING POOL 5 to 60 years

Gb 18 years7 to 61 years0 to 54 years3 to 17 years7to l4yearsOto 14 years3 to 25 years0 to 46 years

$295,861$233,731$165,189$75,799

$1,119,389$792,726$26,707$99,411

$2,205 $31,738$11,895

$6,197 $10,781$5,237$90,639

$19,970 $78,027$2,353$8,473

Miller + Dodson Associates, Inc. Component Method Accounting Summary - Page CM-Scarriage Homes condominium Association April 17, 2012

IOS86D3CARRIAGE13

2014 - COMPONENT METHOD CATEGORY FUNDING REPORTEach of the 115 Projected Replacements included in the Carriage Homes Condominium Association Replacement ReseInventory has been assigned to one of the 8 categories listed in TABLE CM-2 below. This calculated data is asummary of data provided in the Three-Year Replacement Funding Report and Replacement Reserve Inventory.The accuracy of this data is dependent upon many factors including the following critical financial data:O Replacement Reserves on Deposit totaling $239,143 on January 1, 2014.o Total reserve funding (including the Beginning Balance) of $483,903 in 2013 through 2014.O No expenditures from Replacement Reserves other than those specifically listed in the


If any of these critical factors are inaccurate, do not use the data and please contact Miller Dodson Associatesto arrange for an update of the Replacement Reserve Study._______ -

2014 - COMPONENT METHOD CATEGORY FUNDING - TABLE CM-2NORMAL REMflNII%S EST MATED 2014 2014 2014 2014

ECONOM C ECONOMIC REPLACEMENT EEGIN\ING RESERVE PROJECTEO ENO 0 YEARCATEGORY UFE LIFE COST BALANCE FUNDING REPLACEMENFE BALANCE

SFrEcOMP0NENT 6to3oyears Otol7years 5295,881 $31,736 $30,172 $11,713 $50,195SITE COMPONENT (cant) 60 years 6 to 80 years $233,731 $11,895 $9,663 $21,558SITE c0MP0NENT(cont) S4to60years 5to59years $165,189 $10,781 $9054 $19,835SITE COMPONENT (cont.) 3to2oyears 2to 16 years $75,799 $5,237 $5,193 $10,430BUILDING EXTERIOR 20 to 25 years 8 to 13 years $1,119,389 $90,839 $79,438 $170,075BUILDING EXTERIOR (cont.)BUILDINGS (POOL HOUSE & MAIL

5 to 30 yearsSHELTE 15 to 30 years

0 to 29 years2 to 24 years

5792,726$26,707

$78,027$2,353

$72,931$2,099

$19,970 5130,98854,452

SWiMMING POOL Sto6oyears 1 to47 years $99,411 $8,473 $7,841 $16,315

Miller + Dodson Associates, Inc. Component Method Accounting Summary - Page CM-4Carriage Homes Condominium Association April 17, 2012

IO986O3CARRPAGEI3

2015 - COMPONENT METHOD CATEGORY FUNDING REPORTEach of the 115 Projected Replacements included in the Carriage Homes Condominium Association Replacement ReseInventory has been assigned to one of the 8 categories listed in TABLE CM-S below. This calculated data is asummary of data provided in the Three-Year Replacement Funding Report and Replacement Reserve Inventory.The accuracy of this data is dependent upon many factors including the following critical financial data:o Replacement Reserves on Deposit totaling $423,849 on January 1, 2015.o Total Replacement Reserve funding (including the Beginning Balance) of $688,920 in 2013 to 2015.o No expenditures from Replacement Reserves other than those specifically listed in the



SITE COMPONENT 6 to 30 yearsSITE COMPONENT (cont) 60 yearsSITE COMPONENT (cont.) 54 to 80 yearsSITE coMPoNENT (cont) 3 to 20 yearsBUILDING EXTERIOR 20 to 25 yearsBUILDING EXTERIOR (cont) 5 to 30 yearsBUILDINGS (POOL HOUSE & MAIL SHELTE 15 to 30 yearsSWIMMING POOL 5 to 80 years

Ito 16 years5 to 59 years4 to 58 yearsIto 15 years5 to 12 years0 to 29 yearsIto 23 years0 to 46 years

$295,881$233,731$1 65.169$75,799

$1,119,389$792,726$25,707$99411

$26,356$9,663$9,054$5,193

$79,436$85,375$2,099$7,841

$76,552$31,221$28,889$15,623$249511

$1 9,970 $176,393$8,551$12,750$11,406

Miller + Dodson Associates, Inc. Component Method Accounting Summary - Page CM-5Carriage Homes Condominium Association April 17, 2012

IOOB8O3CARRFAGE13

COMPONENT METHOD - THREE-YEAR REPLACEMENT FUNDING REPORTTABLE CM-4 below details the allocation of the $25,902 Beginning Balance, as reported by the Association and the$663,018 of Replacement Reserve Funding calculated by the Cash Flow Method in 2013 to 2015, to the 115Projected Replacements listed in the Replacement Reserve Inventory. These allocations have been made byChronological Allocation, a method developed by Miller Dodson Associates, Inc., and outlined on Page CF-I.The accuracy of the allocations is dependent upon many factors including the following critical financial data:O Replacement Reserves on Deposit totaling $25,902 on January 1, 2013.O Replacement Reserves on Deposit totaling $239,143 on January 1, 2014.O Replacement Reserves on Deposit totaling $423,849 on January 1, 2015.O Total Replacement Reserve funding (including the Beginning Balance) of $688,920 in 2013 to 2015.O No expenditures from Replacement Reserves other than those specifically listed in the

Replacement Reserve Inventory.O All Projected Replacements scheduled in the Replacement Reserve Inventory in 2013 to 2015 being

accomplished as scheduled in the Replacement Reserve Inventory at a cost of $91,431.

If any of these critical factors are inaccurate, do not use the data and please contact Miller DodsonAssociates, Inc., to arrange for an update of the Replacement Reserve Study.

I Asphalt pavement. seal coat 11,713 178 5,768 5,945 5,760 (11.713) 1,952 1,9522 Asphalt pavement, mill & overlay (304 32,856 415 4,055 4,470 4,055 8,525 4,055 12,5803 Asphalt pavement, overlay (70%) 57,395 725 7,004 7,809 7,084 14,893 7,084 21,9764 Street lighting, poles, tiberglsas 16,247 135 848 983 848 1,831 848 2,6795 Streetlighting,finteres 4,147 6 206 302 296 598 296 8946 TraffIc & street sigenge (partIal) 2,205 50 2,155 (2,205) 147 147 147 2047 Traffic & street aignage (partial) 2,205 33 434 468 434 902 434 1,3368 Traffic & street signage (partial) 2,205 20 243 263 243 506 245 7489 Bulletin board 658 9 100 117 108 225 108 33310 Mailboxes, otttdoor, cluster 11,808 118 835 953 835 1,788 835 2,62311 Wood lattIceitVAC screen 25,000 1,563 1,563 1,563 3,125 1,553 4,68812 Wood fence, rearyanl privacy 124,425 7,777 7.777 7,777 15,553 7,777 23,33013 Picnictable&benchea 2,900 48 713 761 713 I474 713 2,18714 Trash seceptaclea, metal 1,288 10 98 109 98 207 98 30515 Trash resceptacles, wood 830 14 204 218 204 422 204 626

SITE COMPONENT (cons.)

16 Concrete driveway (6%) 23,373 461 2,864 3,325 2,884 6.180 2.864 9,053I? Concrete driveway (6%) 23,373 400 1640 2,048 1,640 3.688 1.640 5.329IS Concrete driveway (6%) 23,373 354 1,151 1,505 1,151 2656 1.151 380719 Concrete driveway (6%) 23,373 501 887 1,189 887 2,076 887 2,96320 Concrete driveway (6%) 23,373 248 723 971 723 1693 723 241621 Concrete driveway (6%) 23,373 195 610 805 610 1,415 610 2,02522 Concrete driveway (6%) 23,373 142 528 670 528 1,198 528 1,72623 Concrete driveway (6%) 23,373 89 466 554 466 1,020 466 1,48624 Concrete driveway (6%) 23,373 35 417 452 417 869 417 1,28625 Concrete driveway (6%) 23,373 377 377 377 754 377 1,131

811ff COMPONENT (cent)

26 Concrete cwtr & gutter(20%) 34,408 667 4,218 4,804 4,218 0,102 4,218 13,32027 Coeeretacttrh& gutter(20%) 34.408 406 1.308 1,714 1,300 3,021 1,308 4,32928 Concrete each & gutter (20%) 34,408 145 779 924 779 1,702 779 2,48129 Conereteaidewalk(6%) 6,197 141 6,056 (6.197) 103 103 103 20730 Coocretesidewslk(6%) 6.197 124 867 992 867 1,859 067 2,72731 Cooereteaidewalk(6%) 6,197 110 460 579 468 1,047 468 1,51532 Concrete sidewalk (6%) 6t97 96 321 417 321 738 321 1,05933 Concrete sidawalk (6%) 6I97 82 245 327 245 571 245 81634 Corarmte sidewalk (6%) 6,197 60 198 266 106 463 198 66135 Concrete sidewalk (6%) 6,197 54 166 220 166 386 166 55236 Concrete sidewalk (6%) 6,197 40 143 103 143 326 143 46937 Concrete aidewalk (6%) 6,197 26 126 152 126 270 126 40438 Concrete aidewalk (6%) 6,197 12 112 124 112 237 112 349

Carriage Homes Condominium Association

SITE COMPONBI. cont.)

39 4I Domeslir water main (10%)40 8” Domestic water main (10%)41 2”Domeatrrwaterleteral(IO%)42 8’ Sanitary main (10%)43 6’ Sanitary lateral (10%)44 1S’RCP Stomrwaterpipo(lO%)45 21’ RCP Storarrwatorpipe(l0%)46 24”ltCPStonnwaterpipo(IO%)47 Curb inlet, drainage structure (10%)48 Drop inlet, drainage structure (10%)49 Irrigation, none controller50 Irrigation, well pomp51 Irrigation, laterals (partial)52 Irrigation, heads (partial)

BUILDINGEXTERIOR

April 17, 2012IO986OSCARR1AGEI3

Miller + Dodson Associates, Inc. Component Method Accounting Summary - Page CM-S

10,1125,4246,68113,8866,0778,0322,189868

12,4545,832910

1,8901,215230

562301371

1,06846744612248692324

15 22424 2076 302

58

562301371

1,06846744612248

69232423923130858

562301371

1,0684674461224869232422420730258

1,124603742

2,13693589224396

1,384648463438610115

562301371

1,0684674461224869232422420730258

1,685904

1,1133,2041,4021,339365145

2,076972686646913173

3,6233,3213,019249228207201185168

25,24823,46621,9221.7321,6101,5041,4031,3041,218

101010

28,87026,78724,9401,0811,8381,1111,6041,4881,386II1111

17,42816,17115,0562.1342,4261,3551,2511,1571,4511,3391,240

(9.520)4,8253,231

(10,450)5,3363,626

25,24823,46621,9221,7321,6101,5041,4031,3041,218

I01010

15,24214,16613,2342,1342,4261,2271,1411,0661,3141,2221,1421,9044,6953,144348

5,1143,412

54,11850,25246,8623,7133,4483,2163,0872,7922,604

212121

32,67030,33628,2904,2694,8532,5822,3912,2232,7662,5612,3811,904

(9,520)6,376348

(10.450)7,038

25,24823,46621,9221,7321,6101,5041,4011,3041,218

I0I0I0

15,24214,16613,2342,1342,4261,2271,1411,0661,3141,2221,1421,9041,9043,144348348

3,412

53 Shingle esphnlttflberglsua (33%)54 Shingle anphsltllibrrglsss (33%)55 Shingle aeplralt/flberglass (33%)56 Gutter & downspout, 5” aluminum (3357 Gotlrr& dowesprut, 5” aluminum (3358 Gutter & downspout, 5’ aleminum (3159 Chimney Capa (33%)60 Chimney Copo (33%)61 Chimney Capn (33%)62 Extcriorlighlieg(33%)63 Exterisrlighthtg (33%)64 Extcriorliglrting(33%)

BUILDING EXTERIOR (coot.)

65 Siding & trim, vinyl, standard (33%)66 Stding& trim, vinyl, standard (33%)67 Siding & trim, vinyl, sleodard (33%)68 Thm (partial)69 Soffitu (partial)70 Front entry stoop derklng (33%)71 Front entry stoop decking (33%)72 Front entry ntoop decking (33%)73 Front entry stoop railing (33%)74 Front entry stoop railing (33%)75 Fronteetsy stoop railing (33%)76 Porch ralsmrts (partial)77 Porch mlumne (partial)78 Porch colurrms (partial)79 Thor meter cloeet doora80 RIco meter cloud doora61 Bloc meterclaartdoore

BUILDINGS (POOL HOUSE & leN

82 Pool Hsose roofing, asphalt shingle83 Pool House Siding and Trim84 Pool House Exterior Doors85 Fool House Exterior Doors66 Pool HouseWindows87 Fool Estate toilets88 Pool hose lavatory89 Pool House Janitor sink90 Pool Houan fountain

-

91 Pool Hotmo hot water hearer92 Pool HVAC, heat pump93 Pool HVAC, compressor94 Pool House interior lighting & fan95 Pool House exterior ligirting96 Pool Hour, mrrnio tile flooring97 Pool House cohinel & reorder98 Pool House furnishings99 Mail aheltermofing asphalt100 Mail sheller aiding and trim

SWIMMINGPOOL

331,842331,842331,84222,77022,77022,77018,43818,43818,438

808080

200,327200,327200,32714,94016,98516,08116,08116,08117,22317,22317,2239,5209,5209,52010,45010,45010,450

1,1903,3902,1872,4701,300758710415229268

1,690995

1,600700

1,4002,2001,9001,1902,095

2,187 15,2422,005 14,1661,822 13,234

2,1342,426

128 1,227110 1,14191 1,066

137 1,314118 1,22298 1,142217 9,303130 4,69587 3,144

238 10,212222 5,114214 3,412

13 9137 25824 16627 18814 998 588 545 322 173 22

23 20814 12315 6812 1724 547 843 136

13 9123 159

79,36673,71868,7835,4465,0584,7204,4104,0863,822

313131

47,91144,50241,5236,4037,2793,8093,5323,2894,0803,7833,5233,8081,904

(9,520)697348

(10,450)

285gil52359131118!170985569648382279528165260409285501

104 91295 258190 166215 188113 9966 5862 5436 3220 1725 22231 208136 123103 88184 17258 5491 84138 136104 91182 159

194 91553 258357 166403 188212 99124 59116 5468 3237 1747 22440 208259 123191 88356 172112 54175 84274 136194 91342 159

April 17, 2012I098SO3CARRLkGEIS

Carriage Homes Condominium AssociationMiller + Dodson Associates, Inc. Component Method Accounting Summary - Page CM-7

101 Swimming pool, structure 52,000 289 1,521:nrpU&

1,810 1,521 3,331 1,52! 4,852102 Swlmmingpool,whitccoot 6,510 59 1,075 1,134 1,075 2,209 1,075 3,205103 Swimming pool, weterlire tile 1,725 157 157 157 314 157 470104 Swimming pool, coping 5,750 274 274 274 545 274 821105 Swimming pool, cover 1,716 16 567 552 567 1,149 567 (1,716)106 Swlnunlng pool, concmtedeck(25%) 2,750 145 145 145 259 145 434107 Swimming pool, concrete deck (25%) 2,750 SI • SI 61 162 81 243108 Swimming pool, concrete deck (25%) 2,750 56 56 56 112 56 169109 Swimming pool pump (lees tliao2 lip) 1,200 11 396 407 396 804 396 (1,200)110 Swimming pool filter 1,800 29 590 619 590 1,210 590 (1,500)111 Poolflrrnilrrre,clislsclermge 2,400 38 787 825 787 1,613 787 (2,400)112 Pool tinniture, choir 2,640 42 866 908 866 1,774 866 (2,640)113 Pool flimitum, table 1,650 26 541 568 541 1,109 541 (1.650)114 Pergola 2,770 30 211 241 211 452 211 662115 Perimeterfence-6’(metnl) 11,000 92 574 666 574 1,240 574 1,614

Miller - Dodson Associates, Inc. Attachments - Page ElAppendix

1. COMMON INTEREST DEVELOPMENTS - AN OVERVIEW

Over the past 40 years, the responsibility for community facilities and infrastructure around many of our homes has shifted fromthe local government to Community Associations. Thirty years ago, a typical new town house abutted a public street on the frontand a public alley on the rear. Open space was provided by a nearby public park and recreational facilities were purchased alacarte from privately owned country clubs, swim clubs, tennis clubs, and gymnasiums. Today, 60% of all new residentialconstruction, i.e. townhouses, single family homes, condominiums, and cooperatives, is in Common Interest Developments(CID). In a CID, a home owner is bound to a Community Association that owns, maintains, and is responsible for periodicreplacements of various components that may include the roads, curbs, sidewalks, playgrounds, street lights, recreationalfacilities, and other community facilities and infrastructure.

The growth of Community Associations has been explosive. In 1965 there were only 500 Community Associations in the UnitedStates. According to the U.S. Census, there were 130,000 Community Associations in 1990. Community Associations Institute(CAl), a national trade association, estimates there were more than 200,000 Community Associations in the year 2000, and thatthe number of Community Associations will continue to multiply.

The shift of responsibility for billions of dollars of community facilities and infrastructure from the local govemment and privatesector to Community Associations has generated new and unanticipated problems. Although Community Associations havesucceeded in solving many short term problems, many Associations have failed to properly plan for the tremendous expenses ofreplacing community facvities and infrastructure components. When inadequate replacement reserve funding results in less thantimely replacements of failing components, home owners are exposed to the burden of special assessments, major increases inAssociation fees, and a decline in property values.

2. REPLACEMENT RESERVE STUDY

The purpose of a Replacement Reserve Study is to provide the Association with an inventory of the common community facilitiesand infrastructure components that require periodic replacement, a general view of the condition of these components, and aneffective financial plan to fund projected periodic replacements. The Replacement Reserve Study consists of the following:• Replacement Reserve Study Introduction. The introduction provides a description of the property, reviews theintent of the Replacement Reserve Study, and lists documents and site evaluations upon which the Replacement

Reserve Study is based.

• Section A Replacement Reserve Analysis. Many components owned by the Association have a limited life andrequire periodic replacement. Therefore it is essential the Association have a financial plan that provides fundingfor the timely replacement of these components in order to protect the safety, appearance, and value of thecommunity. In conformance with American Institute of Certified Public Accountant guidelines, Section AReplacement Reserve Analysis evaluates the current funding of Replacement Reserves as reported by theAssociation and recommends annual funding of Replacement Reserves by two generally accepted accountingmethods; the Cash Flow Method and the Component Method. Section A Replacement Reserve Analysis includesgraphic and tabular presentations of these methods and current Association funding.

• Section B Replacement Reserve Inventory. The Replacement Reserve Inventory lists the commonly-ownedcomponents within the community that require periodic replacement using funding from Replacement Reserves.The Replacement Reserve Inventory also provides information about components excluded from the ReplacementReserve Inventory whose replacement is not scheduled for funding from Replacement Reserves.Replacement Reserve Inventory includes estimates of the normal economic life and the remaining economic lifefor those components whose replacement is scheduled for funding from Replacement Reserves.

• Section C Projected Annual Replacements. The Calendar of Projected Annual Replacements provides a year-by-year listing of the Projected Replacements based on the data in the Replacement Reserve Inventory.• Section D Condition Assessment. Several of the items listed in the Replacement Reserve Inventory are discussedin more detail. The Condition Assessment includes a narrative and photographs that document conditions at theproperty observed during our visual evaluation.

• Section E Attachments. The Appendix is provided as an attachment to the Replacement Reserve Study.Additional attachments may include supplemental photographs to document conditions at the property andadditional information specific to the property cited in the Conditions Assessment (i.e. Consumer Product SafetyCommission, Handbook for Public Playground Safety, information on segmental retaining walls, manufacturerrecommendations for asphalt shingles or siding, etc).

Miller - Dodson Associates Inc. Attachments - Page E2Appendix

3. METHODS OF ANALYSIS

The Replacement Reserve industry generally recognizes two different methods of accounting for Replacement Reserve Analysis.Due to the difference in accounting methodologies, these methods lead to different calculated values for the Minimum AnnualContribution to the Reserves. The results of both methods are presented in this report. The Assodation should cbtain the adviceof its accounting professional as to which method is more appropriate for the Association. The two methods are:

• Component Method. This method is a time tested mathematical model developed by HUD in the early I 980s. Ittreats each item in the replacement schedule as an individual line item budget Generally, the Minimum AnnualContribution to Reserves is higher when calculated by the Component Method. The mathematical model for thismethod works as fellows:

First, the total Current Objective is calculated, which is the reserve amount that would have accumulated had all ofthe items on the schedule been funded from initial construction at their current replacement costs. Next, theReserves Currently on Deposit (as reported by the Association) are distributed to the components in the schedulein proportion to the Current Objective. The Minimum Annual Deposit for each component is equal to the EstimatedReplacement Cost, minus the Reserves on Hand, divided by the years of life remaining.

• Cash Flow Method. The Cash Flow Method is sometimes referred to as the “Pooling Method.” It calculates theminimum constant annual contribution to reserves (Minimum Annual Deposit) required to meet projectedexpenditures without allowing total reserves on hand to fall below the specified minimum level in any year. Thismethod usually results in a calculated requirement for annual contribution somewhat less than that arrived at bythe Component Method of analysis.

First, the Minimum Recommended Reserve Level to be Held on Account is determined based on the age,condition, and replacement cost of the individual components. The mathematical model then allocates theestimated replacement costs to the future years in which they are projected to occur. Based on theseexpenditures, it then calculates the minimum constant yearly contribution (Minimum Annual Deposit) to thereserves necessary to keep the reserve balance at the end of each year above the Minimum RecommendedReserve Level to be Held on Account The Cash Flow Analysis assumes that the Association will have authority touse all of the reserves on hand for replacements as the need occurs. This method usually results in a MinimumAnnual Deposit which is less than that arrived at by the Component Method.

• Adjusted Cash Flow Analysis. This program has the ability to modify the Cash Flow Method to take into accountforecasted inflation end interest rates, thereby produdng an Adjusted Cash Flow Analysis. Attempting to forecastfuture inflation and interest rates and the impact of changing technology is highly tenuous. Therefore, in mostcases it is preferable to make a new schedule periodically rather than attempt to project far into the future. We willprovide more information on this type of analysis upon request.

4. REPLACEMENT RESERVE STUDY DATA

• Identification of Reserve Components. The Reserve Analyst has only two methods of identifying ReserveComponents; 1) information provided by the Association and 2) observations made at the site. It is important thatthe Reserve Analyst be provided with all available information detailing the components owned by the Association.It is our policy to request such information prior to bidding on a project and to meet with the individuals responsiblefor rneintaining the community after acceptance of our proposal. After completion of the Study, the Study shouldbe reviewed by the Board of Directors, individuals responsible for maintaining the community, and theAssociation’s accounting professionals. We are dependent upon the Association for correct information,documentation, and drawings.

• Unit Costs. Unit costs are developed using nationally published standards end estimating guides and are adjustedby state or region. In some instances, recent data received in the course of our work is used to modify thesefigures.

Contractor proposals or actual cost experience may be available as part of the Association records. This is usefulinformation which should be incorporated into your report. Please bring any such available data to our attention,preferably before the report is commenced.

• Replacement vs. Repair and Maintenance. A Replacement Reserve Study addresses the required funding forCapital Replacement Expenditures. This should not be confused with operational costs or cost of repairs ormaintenance.

Miller - Dodson Associates, Inc. Attachments - Page E3Appendix

5. DEFINITIONS

Adjusted Cash Flow Analysis. Cash flow analysis adjusted to take into account annual cost increases due to inflation andinterest earned on invested reserves. In this method, the annual contribution is assumed to grow annually at the inflation rate.Annual Deposit if Reserves Were Fully Funded. Shown on the Summary Sheet Al in the Component Method summary, thiswould be the amount of the Annual Deposit needed if the Reserves Currently on Deposit were equal to the Total CurrentObjective.

Cash Flow Analysis. See Cash Flow Method, above.

Component Analysis. See Component Method, abpve.

Contingency. An allowance for unexpected requirements. Roughly the same as the Minimum Recommended Reserve Level tobe Held on Account used in the Cash Flow Method of analysis.

Critical Year. In the Cash Flow Method, a year in which the reserves on hand are projected to fall to the established minimumlevel. See Minimum Recommended Reserve Level to be Held on Account.Current Objective. This is the reserve amount that would have accumulated had the item been funded from initial construction atits current replacement cost. It is equal to the estimated replacement cost divided by the estimated economic life, times thenumber of years expended (the difference between the Estimated Economic Life and the Estimated Life Left). The Total CurrentObjective can be thought of as the amount of reserves the Association should now have on hand based on the sum of all of theCurrent Objectives.

Cyclic Replacement Item. A component item that typically begins to fail after an initial period (Estimated initial Replacement), butwhich will be replaced in increments over a number of years (the Estimated Replacement Cycle). The Reserve Analysis programdivides the number of years in the Estimated Replacement Cycle into five equal increments. It then allocates the EstimatedReplacement Cost equally over those five increments. (As distinguished from Normal Replacement Items, see below)Estimated Economic Life. Used in the Norma! Replacement Schedules. This represents the industry average number of yearsthat a new item should be expected to last until it has to be replaced. This figure is sometimes modified by climate, region, ororiginal construction conditions.

Estimated Economic Life Left. Used in the Normal Replacement Schedules. Number of years until the item is expected to needreplacement. Normally, this number would be considered to be the difference between the Estimated Economic Life and the ageof the item. However, this number must be modified to reflect maintenance practice, climate, original construction and quality, orother conditions. For the purpose of this report, this number is determined by the Reserve Analyst based on the present conditionof the item relative to the actual age.

Estimated Initial Replacement For a Cyclic Replacement Item (see above), the number of years until the replacement cycle isexpected to begin.

Estimated Replacement Cycle. For a Cyclic Replacement Item, the number of years over which the remainder of thecomponent’s replacement occurs.

Minimum Annual Deposit Shown on the Summary Sheet Al. The calculated requirement for annual contribution to reserves ascalculated by the Cash Flow Method (see above).

Minimum Deposit in the Study Year. Shown on the Summary Sheet Al. The calculated requirement for contribution to reservesin the study year as calculated by the Component Method (see above).

Minimum Recommended Reserve Level to be Held on Account. Shown on the Summary Sheet Al, this number is used in theCash Flow Method only. This is the prescribed level below which the reserves will not be allowed to fall in any year. This amountis determined based on the age, condition, and replacement cost of the individual components. This number is normally given asa percentage of the total Estimated Replacement Cost of all reserve components.

Normal Replacement Item. A component of the property that, after an expected economic life, is replaced in its entirety. (Asdistinguished from Cyclic Replacement Items, see above.)

Normal Replacement Schedules. The list of Normal Replacement Items by category or location. These items appear on pagesdesignated.

Number of Years of the Study. The number of years into the future for which expenditures are projected and reserve levelscalculated. This number should be large enough to include the projected replacement of every item on the schedule, at leastonce. This study covers a 40-year period.

Miller - Dodson Associates, Inc Attachments - Page E4Appendix

One Time Deposit Required to Fully Fund Reserves. Shown on the Summary Sheet Al in the Component Method summary, thisis the difference between the Total Current Objective andthe Reserves Currently on Deposit.

Reserves Currently on Deposit Shown on the Summary Sheet Al1 this is the amount of accumulated reserves as reported bythe Association in the current year.

Reserves on Hand. Shown in the Cyclic Replacement and Normal Replacement Schedules, this is the amount of reservesallocated to each component item in the Cyclic or Normal Replacement schedules. This figure is based on the ratic of ReservesCurrently on Deposit divided by the total Current Objective.

Replacement Reserve Study. An analysis of all of the components of the common property of the Association for which a needfor replacement should be anticipated within the economic life of the property as a whole. The analysis involves estimation foreach component of its estimated Replacement Cost, Estimated Economic Life, and Estimated Life Left. The objective of thestudy is to calculate a recommended annual contribution to the Association’s Replacement Reserve Fund.

Total Replacement Cost. Shown on the Summary Sheet Al, this is total of the Estimated Replacement Costs for all items on theschedule if they were to be replaced once.

Unit Replacement Cost. Estimated replacement cost for a single unit of a given item on the schedule.

Unit (of Measure). Non-standard abbreviations are defined on the page of the Replacement Reserve Inventory where the itemappears. The following standard abbreviations are used in this report:

EA: each FT: feet LS: lump sum PR: pair SF: square feet SY: square yard

6. LIST OF RECOMMENDED REPAIRS - PROCEDURES

A List of Recommended Repairs is offered as a supplemental report to the Replacement Reserve Study (at an additional fee) toassist the Association in understanding the financial implications of all items owned by the Association, not just the itemsincluded for funding by Replacement Reserves listed in the Replacement Reserve Inventory. The following information relates tothe List of Recommended Repairs:

• Repair costs. Cost range estimates given in the repair list assume that all work by a given trade will be donetogether as a single project. If repairs are done piece-meal, the costs would be significantly higher. The costs ofany repairs to be funded out of the Reserve Fund should be subtracted from the Reserves Currently on Depositfigure. The Board or Property Manager should coordinate this decision with the Reserve Analyst as part of therevision process.

• Completion of repairs. The Replacement Reserve Analysis assumes that all repairs cited in the Repair List will becompleted within a twelve-month period of time. Estimated Life Left in the Replacement Reserve Study has beenfactored under this assumption. Any deletions or delays of the projects included in the List of RecommendedRepairs may result in major inaccuracies in the Replacement Reserve Analysis.

• Safety issues. If safety issues have been cited, they should be given the highest priority and should be doneimmediately upon receipt of this report. The Board must recognize that from a liability standpoint, they have beenmade aware of the existence of these unsafe conditions, if any, once the report is delivered for their review.

• Unit costs. Nationally published standards and standard estimating manuals have been used in the developmentof this report. Contractor proposals or actual cost experience may be available as part of the Association records.We will adjust our figures to conform to your experience if the material or information is disclosed to us and!ormade available for our use.

Documents

REPLACEMENTRESERVEREPORT CARRIAGE …...March31,2012balance $111,419 9 monthscontribution Plannedexpenditures2012 HVACscreens Rearyardfences Poolcoping $75,982 $25,000 $125000 FY2013openingbalance