Reserve Study Canyon Park Townhomes · 2017-09-02 · Average Reserve Deficit (Surplus) Per Unit: ... the three results of your Reserve Study. Reserve contributions are not “for

Reserve Study

Canyon Park Townhomes

Washington Office Corporate Office505 South 336th St., Ste 620 Calabasas, CAFederal Way, WA 98003

Regional OfficesTEL 253/661-5437 Phoenix, AZ

FAX 253/661-5430 San Francisco, CA

[email protected] Denver, CO

www.reservestudy.com Honolulu, HILas Vegas, NV

Miami, FL

Update “With Site-Visit” Reserve Study

Canyon Park TownhomesBothell, WA

Report #: 17941-2

For Period Beginning: January 1, 2016

Expires: December 31, 2016

Date Prepared: June 9, 2015

Association Reserves WA, LLC. 6/9/2015

Hello, and welcome to your Reserve Study!

e don’t want you to be surprised. This Report isdesigned to help you anticipate, and prepare for,the major common area expenses yourassociation will face. Inside you will find:

1) The Reserve Component List (the “Scope andSchedule” of your Reserve projects) – tellingyou what your association is Reserving for,what condition they are in now, and what they’llcost to replace.

2) An Evaluation of your current Reserve FundSize and Strength (Percent Funded). This tellsyou your financial starting point, revealing yourrisk of deferred maintenance and specialassessments.

3) A Recommended Multi-Year Reserve FundingPlan, answering the question… “What do we donow?”

More Questions?

Visit our website at www.ReserveStudy.com or call us at:

253/661-5437

Relax, it’s from

W

Association Reserves WA, LLC. 6/9/2015

Table of Contents

3- Minute Executive Summary............................................................................iReserve Study Summary .........................................................................................................iReserve Component List – Table 1......................................................................................... ii

Introduction, Objectives, and Methodology .....................................................1Which Physical Assets are Funded by Reserves?..................................................................2How do we establish Useful Life and Remaining Useful Life estimates? ................................2How do we establish Current Repair/Replacement Cost Estimates?......................................2How much Reserves are enough?..........................................................................................3How much should we contribute? ...........................................................................................4What is our Recommended Funding Goal? ............................................................................4

Projected Expenses ...........................................................................................6Expense Graph – Figure 1 ......................................................................................................6

Reserve Fund Status & Recommended Funding Plan ....................................7Funding Plan Graph – Figure 2...............................................................................................7Cash Flow Graph – Figure 3 ...................................................................................................8% Funded Graph – Figure 4....................................................................................................8

Table Descriptions .............................................................................................9Reserve Component List Detail – Table 2.............................................................................10Contribution & Fund Breakdown – Table 3 ...........................................................................11Component Significance – Table 4 .......................................................................................1230 Year Reserve Plan Summary – Table 5...........................................................................1330 Year Reserve Plan Year by Year Detail – Table 6 ...........................................................14

Accuracy, Limitations, and Disclosures.........................................................20

Terms and Definitions......................................................................................21

Component Details.............................................................................. Appendix

Association Reserves WA, LLC. 6/9/2015i

3- Minute Executive Summary

Association: Canyon Park Townhomes #: 17941-2Location: Bothell, WA # of Units: 81Report Period: January 1, 2016 through December 31, 2016

Findings/Recommendations as-of 1/1/2016:

Projected Starting Reserve Balance: .............................................$193,325Current Fully Funded Reserve Balance: .......................................$823,586Average Reserve Deficit (Surplus) Per Unit:.......................................$7,781100% 2016 Monthly “Full Funding” Contributions:............................$5,755Baseline contributions (minimum to keep Reserves above $0):.......$5,150Recommended 2016 Special Assessment for Reserves: ........................ $0

Most Recent Budgeted Reserve Contribution Rate: ..........................$3,757

Economic Assumptions:Net Annual “After Tax” Interest Earnings Accruing to Reserves...... 1.00%Annual Inflation Rate ............................................................................ 3.00%

This is an “Update With-Site-Visit” Reserve Study, based on our on-site inspection on May 8, 2015 and meets or exceeds all requirementsof the RCW. This study was prepared by a credentialed ReserveSpecialist (RS™).

Your Reserve Fund is 23% Funded. This means the association’sspecial assessment & deferred maintenance risk is currently high.The objective of your multi-year Funding Plan is to fund yourReserves to a level where you will enjoy a low risk of such Reservecash flow problems.

Based on this starting point, your anticipated future expenses, ourrecommendation is to increase your Reserve contributions to 100%level as noted above. 100% “Full” contribution rate is designed toachieve 100% funding by the end of our 30-year report scope.

No assets appropriate for Reserve designation were excluded. Seephoto appendix for component details; the basis of our assumptions.

Association Reserves WA, LLC. 6/9/2015ii

Table 1: Executive Summary 17941-2

Useful Rem. CurrentLife Useful Cost

# Component (yrs) Life (yrs) Estimate

Site / Grounds

120 Asphalt - Resurface 30 29 $93,500121 Asphalt - Seal/Stripe/Repair 5 4 $20,100140 Fence: Wood - Repair/Replace 20 9 $48,000141 Fence: Wood - Prep/Stain/Paint 5 0 $7,200144 Fence: Chain Link - Replace 40 11 $8,000147 Trash Enclosures - Repair/Replace 20 11 $10,200160 Pole Lights - Replace 30 1 $12,500199 Mailboxes - Replace 40 11 $7,200

Building Exterior

500 Roof: Steep Slope (17) - Replace 25 17 $195,000501 Roof: Steep Slope (M & K) - Replace 25 12 $33,500502 Roof: Steep Slope (S & V) - Replace 25 9 $29,400510 Gutters/Downspouts - Repair/Replace 25 17 $42,000523 Siding: Wood - Replace 50 21 $1,020,000534 Exterior Surfaces -Prep/Caulk/Paint 10 6 $105,500537 Windows: Cabana - Repair/Replace 30 1 $9,600

15 Total Funded Components

Note 1: a Useful Life of “N/A” means a one-time expense, not expected to repeat.Note 2: Yellow highlighted line items are expected to require attention in the initial year,

green highlighted items are expected to occur within the first five years.

Cross reference component numbers with photographic inventory appendix.

A reserve-funding threshold of $2,000 is suggested for your association (expenses belowthis level expected to be factored within operating budget)

Assoc. 17941-2

Association Reserves WA, LLC 6/9/20151

Introduction

A Reserve Study is the art and science of anticipating, andpreparing for, an association’s major common area repair andreplacement expenses. Partially art, because in this field weare making projections about the future. Partially science,because our work is a combination of research and well-defined computations, following consistent National ReserveStudy Standard principles.

The foundation of this and every Reserve Study isyour Reserve Component List (what you arereserving for). This is because the ReserveComponent List defines the scope and schedule ofall your anticipated upcoming Reserve projects.Based on that List and your starting balance, wecalculate the association’s Reserve Fund Strength(reported in terms of “Percent Funded”). Then wecompute a Reserve Funding Plan to provide forthe Reserve needs of the association. These formthe three results of your Reserve Study.

Reserve contributions are not “for the future”. Reserve contributions aredesigned to offset the ongoing, daily deterioration of your Reserve assets.Done well, a stable, budgeted Reserve Funding Plan will collect sufficientfunds from the owners who enjoyed the use of those assets, so theassociation is financially prepared for the irregular expenditures scatteredthrough future years when those projects eventually require replacement.

Methodology

For this Update With-Site-Visit ReserveStudy, we started with a review of yourprior Reserve Study, then looked intorecent Reserve expenditures, evaluatedhow expenditures are handled (ongoingmaintenance vs Reserves), and

researched any well-established association precedents. We performedan on-site inspection to evaluate your common areas, updating andadjusting your Reserve Component List as appropriate.

Assoc. 17941-2


Which Physical Assets are Funded by Reserves?

There is a national-standard four-part test todetermine which expenses should appear in yourReserve Component List. First, it must be a commonarea maintenance responsibility. Second, thecomponent must have a limited life. Third, theremaining life must be predictable (or it by definitionis a surprise which cannot be accurately anticipated).Fourth, the component must be above a minimumthreshold cost (often between .5% and 1% of anassociation’s total budget). This limits ReserveComponents to major, predictable expenses. Within this framework, it isinappropriate to include lifetime components, unpredictable expenses (suchas damage due to fire, flood, or earthquake), and expenses moreappropriately handled from the Operational Budget or as an insured loss.

How do we establish Useful Life and Remaining Useful Life estimates?

1) Visual Inspection (observed wear and age)2) Association Reserves database of experience3) Client History (install dates & previous life cycle information)4) Vendor Evaluation and Recommendation

How do we establish Current Repair/Replacement Cost Estimates?

In this order…

1) Actual client cost history, or current proposals2) Comparison to Association Reserves database of work done at

similar associations3) Vendor Recommendations4) Reliable National Industry cost estimating guidebooks

Assoc. 17941-2


How much Reserves are enough?

Reserve adequacy is not measured in cash terms. Reserve adequacy isfound when the amount of current Reserve cash is compared to Reservecomponent deterioration (the needs of the association). Having enoughmeans the association can execute its projects in a timely manner withexisting Reserve funds. Not having enough typically creates deferredmaintenance or special assessments.

Adequacy is measured in a two-stepprocess:

1) Calculate the value of deterioration atthe association (called Fully FundedBalance, or FFB).

2) Compare that to the Reserve FundBalance, and express as a percentage.

Each year, the value of deterioration at theassociation changes. When there is more deterioration (as componentsapproach the time they need to be replaced), there should be more cash tooffset that deterioration and prepare for the expenditure. Conversely, thevalue of deterioration shrinks after projects are accomplished. The value ofdeterioration (the FFB) changes each year, and is a moving but predictabletarget.

There is high risk of special assessments and deferred maintenance whenthe Percent Funded is weak, below 30%. Approximately 30% of allassociations are in this high risk range. While the 100% point is Ideal(indicating Reserve cash is equal to the value of deterioration), a ReserveFund in the 70% -130% range is considered strong (low risk of specialassessment).

Measuring your Reserves by Percent Funded tells how well prepared yourassociation is for upcoming Reserve expenses. New buyers should bevery aware of this important disclosure!

Assoc. 17941-2


How much should we contribute?

According to National Reserve StudyStandards, there are four Funding Principles tobalance in developing your Reserve FundingPlan. Our first objective is to design a planthat provides you with sufficient cash toperform your Reserve projects on time.Second, a stable contribution is desirablebecause it keeps these naturally irregularexpenses from unsettling the budget.

Reserve contributions that are evenly distributed over current and futureowners enable each owner to pay their fair share of the association’sReserve expenses over the years. And finally, we develop a plan that isfiscally responsible and safe for Boardmembers to recommend to theirassociation. Remember, it is the Board’s job to provide for the ongoing careof the common areas. Boardmembers invite liability exposure whenReserve contributions are inadequate to offset ongoing common areadeterioration.

What is our Recommended Funding Goal?

Maintaining the Reserve Fund at a level equal tothe value of deterioration is called “Full Funding”(100% Funded). As each asset ages andbecomes “used up”, the Reserve Fund growsproportionally. This is simple, responsible, andour recommendation. Evidence shows thatassociations in the 70-130% range enjoy a lowrisk of special assessments or deferredmaintenance.

Allowing the Reserves to fall close to zero, but not below zero, is calledBaseline Funding. Doing so allows the Reserve Fund to drop into the 0-30% range, where there is a high risk of special assessments & deferredmaintenance. Since Baseline Funding still provides for the timely executionof all Reserve projects, and only the “margin of safety” is different, BaselineFunding contributions average only 10% - 15% less than Full Fundingcontributions. Threshold Funding is the title of all other Cash or PercentFunded objectives between Baseline Funding and Full Funding.

Assoc. 17941-2


Site Inspection Notes

During our site visit on May 8, 2015, we started the site inspectionbeginning with the entry sign. We visually reviewed all visible commonareas while compiling a photographic inventory, noting: current condition,make & model information where appropriate, apparent levels of care andmaintenance, exposure to weather elements and other factors that mayaffect the components useful life.

Assoc. 17941-2


Projected Expenses

While this Reserve Study looks forward 30 years, we have no expectationthat all these expenses will all take place as anticipated. This ReserveStudy needs to be updated annually because we expect the timing of theseexpenses to shift and the size of these expenses to change. We do feelmore certain of the timing and cost of near-term expenses than expensesmany years away. Your first five years of projected Reserve expenses total$52,586. Adding the next five years, your first ten years of projectedReserve expenses are $314,120. Please be aware of your near-termexpenses, which we are able to project more accurately than the moredistant projections.

The figure below summarizes the projected future expenses at yourassociation as defined by your Reserve Component List. A summary ofthese expenses are shown in Table 5, while details of the projects thatmake up these expenses are shown in Table 6.

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$1,600,000

$1,800,000

$2,000,000

2016 2021 2026 2031 2036 2041 2046

Years

Annual Reserve Expenses

Figure 1

Assoc. 17941-2


Reserve Fund Status

The starting point for our financial analysis is your Reserve Fund balance,projected to be $193,325 as-of the start of your Fiscal Year on January 1,2016. As of January 1, 2016, your Fully Funded Balance is computed tobe $823,586 (see Table 3). This figure represents the deteriorated value ofyour common area components. Comparing your Reserve Balance to yourFully Funded Balance indicates your Reserves are 23% Funded. Acrossthe country approx 35% of associations in this range experience specialassessments or deferred maintenance.

Recommended Funding Plan

Based on your current Percent Funded and your near-term and long-termReserve needs, we are recommending budgeted contributions of$5,755/month this Fiscal Year. The overall 30-yr plan, in perspective, isshown below. This same information is shown numerically in both Table 5and Table 6.

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

$180,000

$200,000

2016 2021 2026 2031 2036 2041 2046

Years

Annual Reserve FundingRecommendedAlternate (Minimum)Current Budget

Figure 2

Assoc. 17941-2


The following chart shows your Reserve balance under our recommendedFull Funding Plan, an alternate Baseline Funding Plan, and at your currentbudgeted contribution rate, compared to your always-changing FullyFunded Balance target.

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

2016 2021 2026 2031 2036 2041 2046

Years

30-Yr Cash FlowTarget Fully Funded Balance

Recommended Funding Plan

Alternate (Minimum)

Current Budget

Figure 3

This figure shows this same information, plotted on a Percent Fundedscale.

0%

20%

40%

60%

80%

100%

120%

2016 2021 2026 2031 2036 2041 2046Years

Percent FundedRecommended Funding Plan

Alternate (Minimum) Funding Plan

Current Budget

Figure 4

Assoc. 17941-2


Table Descriptions

The tabular information in this Report is broken down into six tables.

Table 1 is a summary of your Reserve Components (your ReserveComponent List), the information found in Table 2.

Table 2 is your Reserve Component List, which forms the foundation of thisReserve Study. This table represents the information from which all othertables are derived.

Table 3 shows the calculation of your Fully Funded Balance, the measureof your current Reserve component deterioration. For each component, theFully Funded Balance is the fraction of life used up multiplied by itsestimated Current Replacement Cost.

Table 4 shows the significance of each component to Reserve needs of theassociation, helping you see which components have more (or less)influence than others on your total Reserve contribution rate. Thedeterioration cost/yr of each component is calculated by dividing theestimated Current Replacement Cost by Useful Life, then that component’spercentage of the total is displayed.

Table 5: This table provides a one-page 30-year summary of the cashflowing into and out of the Reserve Fund, with a display of the Fully FundedBalance, Percent Funded, and special assessment risk for each year.

Table 6: This table shows the cash flow detail for the next 30 years. Thistable makes it possible to see which components are projected to requirerepair or replacement each year, and the size of those individual expenses.


Table 2: Reserve Component List Detail 17941-2

Rem.

Useful Useful [ --- Current Cost Estimate --- ]

# Component Quantity Life Life Best Case Worst Case

Site / Grounds

120 Asphalt - Resurface ~ 67,000 square feet 30 29 $87,000 $100,000

121 Asphalt - Seal/Stripe/Repair ~ 67,000 square feet 5 4 $16,800 $23,400

140 Fence: Wood - Repair/Replace ~ 2,000 linear feet 20 9 $42,000 $54,000

141 Fence: Wood - Prep/Stain/Paint ~ 12,000 square feet 5 0 $6,000 $8,400

144 Fence: Chain Link - Replace ~ 400 linear feet 40 11 $6,000 $10,000

147 Trash Enclosures - Repair/Replace (3) wood/chain link 20 11 $8,400 $12,000

160 Pole Lights - Replace (10) metal 30 1 $10,000 $15,000

199 Mailboxes - Replace ~ (90) boxes 40 11 $6,300 $8,100

Building Exterior

500 Roof: Steep Slope (17) - Replace ~ 50,000 square feet 25 17 $170,000 $220,000

501 Roof: Steep Slope (M & K) - Replace ~ 7,000 square feet 25 12 $28,000 $39,000

502 Roof: Steep Slope (S & V) - Replace ~ 6,200 square feet 25 9 $24,800 $34,000

510 Gutters/Downspouts - Repair/Replace ~ 7,000 linear feet 25 17 $35,000 $49,000

523 Siding: Wood - Replace ~ 85,000 gross square ft 50 21 $850,000 $1,190,000

534 Exterior Surfaces -Prep/Caulk/Paint ~85,000 gross square ft 10 6 $91,000 $120,000

537 Windows: Cabana - Repair/Replace ~ (12) assorted 30 1 $7,200 $12,000

15 Total Funded Components


Table 3: Fully Funded Balance 17941-2

Current Fully

Cost Effective Useful Funded

# Component Estimate X Age / Life = Balance

Site / Grounds

120 Asphalt - Resurface $93,500 X 1 / 30 = $3,117

121 Asphalt - Seal/Stripe/Repair $20,100 X 1 / 5 = $4,020

140 Fence: Wood - Repair/Replace $48,000 X 11 / 20 = $26,400

141 Fence: Wood - Prep/Stain/Paint $7,200 X 5 / 5 = $7,200

144 Fence: Chain Link - Replace $8,000 X 29 / 40 = $5,800

147 Trash Enclosures - Repair/Replace $10,200 X 9 / 20 = $4,590

160 Pole Lights - Replace $12,500 X 29 / 30 = $12,083

199 Mailboxes - Replace $7,200 X 29 / 40 = $5,220

Building Exterior

500 Roof: Steep Slope (17) - Replace $195,000 X 8 / 25 = $62,400

501 Roof: Steep Slope (M & K) - Replace $33,500 X 13 / 25 = $17,420

502 Roof: Steep Slope (S & V) - Replace $29,400 X 16 / 25 = $18,816

510 Gutters/Downspouts - Repair/Replace $42,000 X 8 / 25 = $13,440

523 Siding: Wood - Replace $1,020,000 X 29 / 50 = $591,600

534 Exterior Surfaces -Prep/Caulk/Paint $105,500 X 4 / 10 = $42,200

537 Windows: Cabana - Repair/Replace $9,600 X 29 / 30 = $9,280

$823,586


Table 4: Component Significance 17941-2

Current

Useful Cost Deterioration Deterioration

# Component Life Estimate Cost/yr Significance

Site / Grounds

120 Asphalt - Resurface 30 $93,500 $3,117 5.6%

121 Asphalt - Seal/Stripe/Repair 5 $20,100 $4,020 7.2%

140 Fence: Wood - Repair/Replace 20 $48,000 $2,400 4.3%

141 Fence: Wood - Prep/Stain/Paint 5 $7,200 $1,440 2.6%

144 Fence: Chain Link - Replace 40 $8,000 $200 0.4%

147 Trash Enclosures - Repair/Replace 20 $10,200 $510 0.9%

160 Pole Lights - Replace 30 $12,500 $417 0.8%

199 Mailboxes - Replace 40 $7,200 $180 0.3%

Building Exterior

500 Roof: Steep Slope (17) - Replace 25 $195,000 $7,800 14.0%

501 Roof: Steep Slope (M & K) - Replace 25 $33,500 $1,340 2.4%

502 Roof: Steep Slope (S & V) - Replace 25 $29,400 $1,176 2.1%

510 Gutters/Downspouts - Repair/Replace 25 $42,000 $1,680 3.0%

523 Siding: Wood - Replace 50 $1,020,000 $20,400 36.7%

534 Exterior Surfaces -Prep/Caulk/Paint 10 $105,500 $10,550 19.0%

537 Windows: Cabana - Repair/Replace 30 $9,600 $320 0.6%

15 Total Funded Components $55,549 100.0%


Table 5: 30-Year Reserve Plan Summary 17941-2

Fiscal Year Start: 01/01/16 Interest: 1.0% Inflation: 3.0%

Reserve Fund Strength Calculations Projected Reserve Balance Changes

(All values as of Fiscal Year Start Date)

Starting Fully Special Loans orReserve Funded Percent Assmt Reserve Special Interest Reserve

Year Balance Balance Funded Risk Contribs. Assmts Income Expenses

2016 $193,325 $823,586 23.5% High $69,060 $0 $2,253 $7,200

2017 $257,438 $898,093 28.7% High $73,894 $0 $2,843 $22,7632018 $311,412 $960,523 32.4% Med $79,067 $0 $3,526 $02019 $394,004 $1,050,039 37.5% Med $84,601 $0 $4,383 $02020 $482,989 $1,144,061 42.2% Med $90,524 $0 $5,193 $22,623

2021 $556,083 $1,219,478 45.6% Med $96,860 $0 $6,031 $8,3472022 $650,627 $1,313,794 49.5% Med $103,640 $0 $6,424 $125,9732023 $634,719 $1,291,775 49.1% Med $110,895 $0 $6,933 $02024 $752,548 $1,400,897 53.7% Med $118,658 $0 $8,156 $02025 $879,362 $1,515,403 58.0% Med $126,964 $0 $8,833 $127,215

2026 $887,943 $1,504,487 59.0% Med $135,851 $0 $9,554 $9,6762027 $1,023,673 $1,616,548 63.3% Med $139,927 $0 $10,810 $35,1602028 $1,139,250 $1,708,030 66.7% Med $144,125 $0 $11,929 $47,7632029 $1,247,541 $1,791,651 69.6% Med $148,449 $0 $13,278 $02030 $1,409,268 $1,929,424 73.0% Low $152,902 $0 $14,773 $30,403

2031 $1,546,540 $2,042,536 75.7% Low $157,489 $0 $16,271 $11,2172032 $1,709,083 $2,181,398 78.3% Low $162,214 $0 $17,134 $169,2972033 $1,719,134 $2,164,279 79.4% Low $167,080 $0 $16,142 $391,7252034 $1,510,631 $1,920,300 78.7% Low $172,093 $0 $16,040 $02035 $1,698,764 $2,075,315 81.9% Low $177,255 $0 $17,779 $35,245

2036 $1,858,553 $2,201,600 84.4% Low $182,573 $0 $19,523 $13,0042037 $2,047,644 $2,357,592 86.9% Low $188,050 $0 $11,984 $1,897,5002038 $350,178 $580,333 60.3% Med $193,692 $0 $4,491 $02039 $548,361 $707,374 77.5% Low $199,502 $0 $6,511 $02040 $754,374 $841,516 89.6% Low $150,000 $0 $8,127 $40,859

2041 $871,641 $940,984 92.6% Low $154,500 $0 $9,457 $15,0752042 $1,020,523 $1,073,484 95.1% Low $159,135 $0 $9,909 $227,5202043 $962,046 $994,733 96.7% Low $163,909 $0 $10,488 $02044 $1,136,443 $1,151,668 98.7% Low $168,826 $0 $12,265 $02045 $1,317,534 $1,317,124 100.0% Low $173,891 $0 $12,196 $380,821


Table 6: 30-Year Income/Expense Detail (yrs 0 through 4) 17941-2

Fiscal Year 2016 2017 2018 2019 2020

Starting Reserve Balance $193,325 $257,438 $311,412 $394,004 $482,989

Annual Reserve Contribution $69,060 $73,894 $79,067 $84,601 $90,524

Recommended Special Assessments $0 $0 $0 $0 $0

Interest Earnings $2,253 $2,843 $3,526 $4,383 $5,193

Total Income $264,638 $334,175 $394,004 $482,989 $578,706

# Component

Site / Grounds

120 Asphalt - Resurface $0 $0 $0 $0 $0

121 Asphalt - Seal/Stripe/Repair $0 $0 $0 $0 $22,623

140 Fence: Wood - Repair/Replace $0 $0 $0 $0 $0

141 Fence: Wood - Prep/Stain/Paint $7,200 $0 $0 $0 $0

144 Fence: Chain Link - Replace $0 $0 $0 $0 $0

147 Trash Enclosures - Repair/Replace $0 $0 $0 $0 $0

160 Pole Lights - Replace $0 $12,875 $0 $0 $0

199 Mailboxes - Replace $0 $0 $0 $0 $0

Building Exterior

500 Roof: Steep Slope (17) - Replace $0 $0 $0 $0 $0

501 Roof: Steep Slope (M & K) - Replace $0 $0 $0 $0 $0

502 Roof: Steep Slope (S & V) - Replace $0 $0 $0 $0 $0

510 Gutters/Downspouts - Repair/Replace $0 $0 $0 $0 $0

523 Siding: Wood - Replace $0 $0 $0 $0 $0

534 Exterior Surfaces -Prep/Caulk/Paint $0 $0 $0 $0 $0

537 Windows: Cabana - Repair/Replace $0 $9,888 $0 $0 $0

Total Expenses $7,200 $22,763 $0 $0 $22,623

Ending Reserve Balance: $257,438 $311,412 $394,004 $482,989 $556,083



Fiscal Year 2021 2022 2023 2024 2025

Starting Reserve Balance $556,083 $650,627 $634,719 $752,548 $879,362




Total Income $658,974 $760,692 $752,548 $879,362 $1,015,159

# Component

Site / Grounds



140 Fence: Wood - Repair/Replace $0 $0 $0 $0 $62,629




160 Pole Lights - Replace $0 $0 $0 $0 $0


Building Exterior



502 Roof: Steep Slope (S & V) - Replace $0 $0 $0 $0 $38,360



534 Exterior Surfaces -Prep/Caulk/Paint $0 $125,973 $0 $0 $0

537 Windows: Cabana - Repair/Replace $0 $0 $0 $0 $0

Total Expenses $8,347 $125,973 $0 $0 $127,215

Ending Reserve Balance: $650,627 $634,719 $752,548 $879,362 $887,943



Fiscal Year 2026 2027 2028 2029 2030

Starting Reserve Balance $887,943 $1,023,673 $1,139,250 $1,247,541 $1,409,268




Total Income $1,033,349 $1,174,410 $1,295,304 $1,409,268 $1,576,943

# Component

Site / Grounds





144 Fence: Chain Link - Replace $0 $11,074 $0 $0 $0

147 Trash Enclosures - Repair/Replace $0 $14,119 $0 $0 $0


199 Mailboxes - Replace $0 $9,966 $0 $0 $0

Building Exterior


501 Roof: Steep Slope (M & K) - Replace $0 $0 $47,763 $0 $0






Total Expenses $9,676 $35,160 $47,763 $0 $30,403

Ending Reserve Balance: $1,023,673 $1,139,250 $1,247,541 $1,409,268 $1,546,540



Fiscal Year 2031 2032 2033 2034 2035

Starting Reserve Balance $1,546,540 $1,709,083 $1,719,134 $1,510,631 $1,698,764




Total Income $1,720,300 $1,888,430 $1,902,356 $1,698,764 $1,893,798

# Component

Site / Grounds









Building Exterior

500 Roof: Steep Slope (17) - Replace $0 $0 $322,305 $0 $0



510 Gutters/Downspouts - Repair/Replace $0 $0 $69,420 $0 $0




Total Expenses $11,217 $169,297 $391,725 $0 $35,245

Ending Reserve Balance: $1,709,083 $1,719,134 $1,510,631 $1,698,764 $1,858,553



Fiscal Year 2036 2037 2038 2039 2040

Starting Reserve Balance $1,858,553 $2,047,644 $350,178 $548,361 $754,374




Total Income $2,060,648 $2,247,679 $548,361 $754,374 $912,501

# Component

Site / Grounds









Building Exterior





523 Siding: Wood - Replace $0 $1,897,500 $0 $0 $0



Total Expenses $13,004 $1,897,500 $0 $0 $40,859

Ending Reserve Balance: $2,047,644 $350,178 $548,361 $754,374 $871,641



Fiscal Year 2041 2042 2043 2044 2045

Starting Reserve Balance $871,641 $1,020,523 $962,046 $1,136,443 $1,317,534




Total Income $1,035,598 $1,189,567 $1,136,443 $1,317,534 $1,503,622

# Component

Site / Grounds

120 Asphalt - Resurface $0 $0 $0 $0 $220,339


140 Fence: Wood - Repair/Replace $0 $0 $0 $0 $113,115






Building Exterior








Total Expenses $15,075 $227,520 $0 $0 $380,821

Ending Reserve Balance: $1,020,523 $962,046 $1,136,443 $1,317,534 $1,122,801

Assoc. 17941-2


Accuracy, Limitations, and Disclosures

Washington disclosures, per RCW:

This reserve study should be reviewed carefully. It may not include all common and limitedcommon element components that will require major maintenance, repair or replacement infuture years, and may not include regular contributions to a reserve account for the cost ofsuch maintenance, repair, or replacement. The failure to include a component in a reservestudy, or to provide contributions to a reserve account for a component, may, under somecircumstances, require you to pay on demand as a special assessment your share ofcommon expenses for the cost of major maintenance, repair or replacement of a reservecomponent.

Because we have no control over future events, we do not expect that all the events weanticipate will occur as planned. We expect that inflationary trends will continue, and weexpect Reserve funds to continue to earn interest, so we believe that reasonable estimatesfor these figures are much more accurate than ignoring these economic realities. We cancontrol measurements, which we attempt to establish within 5% accuracy through acombination of on-site measurements, drawings, and satellite imagery. The startingReserve Balance and interest rate earned on deposited Reserve funds that you provided tous were considered reliable and were not confirmed independently. We have consideredthe association’s representation of current and historical Reserve projects reliable, and wehave considered the representations made by its vendors and suppliers to also be accurateand reliable. Component Useful Life, Remaining Useful Life, and Current Cost estimatesassume a stable economic environment and lack of natural disasters.

Because the physical condition of your components, the association’s Reserve balance, theeconomic environment, and legislative environment change each year, this Reserve Studyis by nature a “one-year” document. Because a long-term perspective improves theaccuracy of near-term planning, this Report projects expenses for the next 30 years. It isour recommendation and that of the Financial Accounting Standards Board (FASB) thatyour Reserve Study be updated each year as part of the annual budget process.

Association Reserves WA, LLC and its employees have no ownership, management, orother business relationships with the client other than this Reserve Study engagement.James D. Talaga R.S., company president, is a credentialed Reserve Specialist (#66). Allwork done by Association Reserves WA, LLC is performed under his Responsible Charge.There are no material issues to our knowledge that have not been disclosed to the clientthat would cause a distortion of the association’s situation.

Component quantities indicated in this Report were found in prior Reserve Studies unlessotherwise noted. No destructive or intrusive testing was performed. This Report and this siteinspection were accomplished only for Reserve budget purposes (to help identify andaddress the normal deterioration of properly built and installed components with predictablelife expectancies). The Funding Plan in this Report was developed using the cash-flowmethodology to achieve the specified Funding Objective.

Association Reserves’ liability in any matter involving this Reserve Study is limited to ourFee for services rendered.

Assoc. 17941-2


Terms and Definitions

BTU British Thermal Unit (a standard unit of energy)

DIA Diameter

GSF Gross Square Feet (area). Equivalent to Square Feet

GSY Gross Square Yards (area). Equivalent to Square Yards

HP Horsepower

LF Linear Feet (length)

Effective Age: The difference between Useful Life and Remaining Useful Life. Notethat this is not necessarily equivalent to the chronological age of thecomponent.

Fully Funded Balance (FFB): The value of the deterioration of the ReserveComponents. This is the fraction of life “used up” of each componentmultiplied by its estimated Current Replacement. While calculated foreach component, it is summed together for an association total.

FFB = (Current Cost X Effective Age) / Useful Life

Inflation: Cost factors are adjusted for inflation at the rate defined in theExecutive Summary and compounded annually. These increasingcosts can be seen as you follow the recurring cycles of a component onTable 6.

Interest: Interest earnings on Reserve Funds are calculated using the averagebalance for the year (taking into account income and expenses throughthe year) and compounded monthly using the rate defined in theExecutive Summary. Annual interest earning assumption appears in theExecutive Summary.

Percent Funded: The ratio, at a particular point in time (the first day of the Fiscal Year),of the actual (or projected) Reserve Balance to the Fully FundedBalance, expressed as a percentage.

Remaining Useful Life (RUL): The estimated time, in years, that a common areacomponent can be expected to continue to serve its intended function.

Useful Life (UL): The estimated time, in years, that a common area component canbe expected to serve its intended function.

Assoc. 17941-2


Component Details

The primary purpose of the photographic appendix is to provide the reader with thebasis of our funding assumptions resulting from our physical analysis and subsequentresearch. The photographs herein represent a wide range of elements that wereobserved and measured against National Reserve Study Standards to determine if theymeet the criteria for reserve funding.

1) Common area maintenance, repair & replacement responsibility.2) Components must have a limited life3) Life limit must be predictable4) Above a minimum threshold cost (board’s discretion – typically ½ to 1% of annual

operating expenses).

Some components are recommended for reserve funding, while others are not. Thecomponents that meet these criteria in our judgment are shown with correspondingmaintenance, repair or replacement cycles to the left of the photo (UL = Useful Life orhow often the project is expected to occur, RUL = Remaining Useful Life or how manyyears from our reporting period) and a representative market cost range termed “BestCost” and “Worst Cost” below the photo. There are many factors that can result in awide variety of potential costs, we are attempting to represent a market average forbudge purposes. Where there is no UL, the component is expected to be a one-timeexpense. Where no pricing, the component deemed inappropriate for Reserve Funding.

Client: 17941A Canyon Park Townhomes17941A

Component DetailsAssociation Reserves Washington, LLC

100 Concrete - Repair/ReplaceComp # : Quantity: Extensive square feet

Location : Sidewalks, patios, walkways, curbs, etc…

Useful Life:

5 years

Remaining Life:

4 years

Best Case: Worst Case:

Cost Source: ARI Cost Database: Similar Project Cost History

Lower allowance Higher allowance

$3,000 $5,000

Funded? : No Useful life is not predictable

History : 2012 $8,000 verify

Evaluation : Concrete appeared in fair condition with some local areas of deterioration at this time. One trip hazard wasobserved at the front of the cabana.

Due to general age and anticipated ongoing wear, we suggest a rotating funding allowance to supplement theoperating budget for periodic larger scale repair/replacements as reflected below.

Time larger repairs to coincide with Asphalt Seal/Repair (Component #121) and curb painting for cost efficiencywhen possible. As routine maintenance utilizing operating funds, inspect regularly and pressure wash forappearance. Repair promptly as needed to prevent water penetrating into the base, which can cause furtherdamage. Factors affecting the quality of the concrete include; the preparation of the underlying soil and drainage,thickness and strength of concrete used, steel reinforcement (none likely), and amount and weight of traffic, if any.

Additional resource http://www.mrsc.org/subjects/pubworks/sidew.aspx

June 09,2015 Page 1 of 27



120 Asphalt - ResurfaceComp # : Quantity: ~ 67,000 square feet

Location : Roadway and parking areas of association

Useful Life:

30 years

Remaining Life:

29 years


Cost Source: Client Cost History (not incl seal coating)

$1.30/Sq Ft, lower allowance $1.50/Sq Ft, higher allowance

$87,000 $100,000

Funded? : Yes

History : Assumed for 2015 $113,500. 2003 spot repairs/overlay

Evaluation : Asphalt generally appeared in poor condition, with extensive alligator cracking observed during our limited visualreview. Canyon Park reports they have bids for resurfacing in the summer of 2015.

Useful life below assumes regular seal coating and repairs (see component #121). The lack of seal coating andrepairs can greatly decrease the asphalt’s useful life. Resurfacing is typically one of the larger expense items in areserve study. When need to resurface is apparent within a couple of years, consult with geotechnical engineer forrecommendations, specifications / scope of work and project oversight.

As routine maintenance, keep surfaces clean and free of debris, ensure that drains are free flowing, repair cracks,and clean oil stains promptly..

Further resources below:Pavement Surface Condition Field Rating Manual for Asphalt Pavement.http://www.wsdot.wa.gov/NR/rdonlyres/4FE2F96D-BFE0-4484-812E-DD5164EB34F5/0/AsphaltPavementBook.pdf

Washington Asphalt Pavement Associationhttp://www.asphaltwa.com/




121 Asphalt - Seal/Stripe/RepairComp # : Quantity: ~ 67,000 square feet

Location : Roadway and parking areas of association

Useful Life:

5 years

Remaining Life:

4 years


Cost Source: Client Cost History


$16,800 $23,400

Funded? : Yes

History : Assumed for 2015. 2012, 2003

Evaluation : Generally, the surface condition of the asphalt coating appeared to be in poor condition during our visual review.Canyon Park reports they have bids for seal coating in the summer of 2015 after new overlay / resurface.

Regular cycles of seal coating, along with needed repairs is a best practice for the long term care of lower trafficasphalt areas. We recommend regular asphalt seal coating cycles with repair as needed to extend the useful life ofthe asphalt.

The State of Washington Department of Transportation (WSDOT) recommends regular cycles of seal coating forthe long-term care of asphalt paving with low traffic and low speed. The primary reason to seal coat asphaltpavement is to protect the pavement from the deteriorating effects of sun and water. When asphalt pavement isexposed, the asphalt oxidizes or hardens and this causes the pavement to become increasingly brittle. As a result,the pavement will become more likely to crack, as it is unable to bend and flex when subjected to traffic (weight)and temperature changes (thermal expansion and contraction). A seal coat combats this situation by providing awaterproof membrane, which not only slows down the oxidation process, but also helps the pavement shed water.Seal coating also provides uniform appearance and conceals the inevitable patching and repairs which accumulateover time, ultimately extending the useful life of asphalt before more costly resurfacing is needed (see component #120).

Repairing asphalt before seal coating is imperative. Surface preparation and dry weather during and followingapplication, is key to lasting performance. The ideal conditions are when the air and surface temperatures are 50degrees and rising, with low humidity and calm wind. Seal coating should never be done when showers arethreatening. Apply a Catatonic Slow Seal (CSS-1 or CSS-1h) diluted up to 50/50 with water. Application ratesusually ranges from 0.10 to 0.15 gallons per square yard and is dependent on pavement texture, local conditionsand traffic. Incorporate any striping and curb repair into this project. Fill cracks and clean oil stains promptly inbetween cycles as routine maintenance.

For further resources:Best Practices Handbook on Asphalt Pavement Maintenancehttp://www.cee.mtu.edu/~balkire/CE5403/AsphaltPaveMaint.pdf

For a general overview of Asphalt Seal Coat Treatments review this publication:http://www.wsdot.wa.gov/NR/rdonlyres/4A21ECE8-114B-434D-B967-0927541CE042/0/AsphaltSealCoats.pdf

Other references:http://www.pavementinteractive.org/article/bituminous-surface-treatments/




140 Fence: Wood - Repair/ReplaceComp # : Quantity: ~ 2,000 linear feet

Location : Partial perimeter of project

Useful Life:

20 years

Remaining Life:

9 years



$21/Lin Ft, lower allowance $27/Lin Ft, higher allowance

$42,000 $54,000

Funded? : Yes

History : 2005

Evaluation : Six foot tall wood fence appeared in generally fair condition with aging apparent. No extensive decay or damagewas observed in the small sample observed during our limited visual review.

Plan to replace at roughly the time frame below. Typical failures from deterioration through end grains, contact withground and surrounding landscape.

As routine maintenance, inspect regularly for any damage and repair as needed. Avoid unnecessary contact withground, sprinkler patterns and surrounding vegetation. Regular cycles of stain/paint will help to maintainappearance. Painting or staining the fence has a higher overall life cycle cost but may extend life somewhat inaddition to aesthetic benefit.




141 Fence: Wood - Prep/Stain/PaintComp # : Quantity: ~ 12,000 square feet

Location : Partial perimeter of project

Useful Life:

5 years

Remaining Life:

0 years




$6,000 $8,400

Funded? : Yes

History :

Evaluation : The finish on the wood fence appeared in generally fair condition. No recent history of painting/staining wood fencewas reported.

Regular sealer applications are recommended for the appearance, protection, and maximum useful life of thewood. Actual timing of staining will vary based on exposure and quality of material and application. In ourexperience, quality solid-bodied stain typically produces best result.Remove any unnecessary contact with ground and surrounding landscape and sprinkler patterns. Repair asneeded and clean prior to sealer application.

If the wood is cedar, the Western Red Cedar Lumber Association (WRCLA) has additional information available ontheir website at www.wrcla.org.




144 Fence: Chain Link - ReplaceComp # : Quantity: ~ 400 linear feet

Location : Surrounding retention pond and partial west perimeter of property

Useful Life:

40 years

Remaining Life:

11 years



$15/Lin Ft, lower allowance $25/Lin Ft, higher allowance

$6,000 $10,000

Funded? : Yes

History :

Evaluation : Chain link fence appeared in generally fair to poor condition with extensive corrosion on the cross bars observed onthe small areas sampled during our limited visual review.

For financial planning purposes, plan on replacing at roughly the time frame shown below. Evaluate fence asremaining useful life approaches zero years and adjust life accordingly.

Chain link fencing is generally a low maintenance item. Inspect periodically and repair as needed. If corrosion isobserved, apply rust inhibitor to prevent corrosion from decreasing the useful life.




147 Trash Enclosures - Repair/ReplaceComp # : Quantity: (3) wood/chain link

Location : At end of driveways

Useful Life:

20 years

Remaining Life:

11 years



$2,800 each, lower allowance $4,000 each, higher allowance

$8,400 $12,000

Funded? : Yes

History :

Evaluation : Garbage enclosures appeared in fair condition.

A general rotating funding allowance is factored below; track actual expenses for basis within reserve studyupdates.

These garbage enclosures are subject to abuse. It is reasonable to expect repairs at relatively small intervals dueto misuse, although it is difficult to predict precise scope and timing of repairs. We suggest at next replacement, toconsider a more durable enclosure material such as steel posts and rails. By utilizing such materials, the enclosurecan better withstand regular abuse, reduce repair costs, and increase useful life. A less expensive option is toinstall concrete wheel stops (typically used at the front of parking spaces) to prevent the container from impactingthe enclosure.




156 Rockeries - Repair/ReplaceComp # : Quantity: Extensive linear feet

Location : Scattered common area locations

Useful Life:

Remaining Life:


Cost Source:


History :

Evaluation : Our visual observations of rockery walls were limited, but no widespread deterioration was observed. There wereno obvious signs of recent large scale movement and none were reported. Analysis of a rockery wall, beyondvisual observation, is not within the scope of a reserve study. No information regarding its construction wasavailable to us, which could include how it was installed, including if drainage (critical) was provided, and if thedrainage is still fully functioning.

At this time, no large-scale repairs or replacements are predictable. Funding can be added to future reserve studiesif conditions dictate.

Inspect regularly including drainage, and repair as needed. If movement or other problems are suspected, consultwith an engineer (geo-technical) for evaluation and repair recommendations for walls 4' and higher.




160 Pole Lights - ReplaceComp # : Quantity: (10) metal

Location : Adjacent to parking/driveway areas

Useful Life:

30 years

Remaining Life:

1 years



$1,000 each, lower allowance $1,500 each, higher allowance

$10,000 $15,000

Funded? : Yes

History :

Evaluation : Pole lights appeared in fair condition with no obvious damage or other problems noted. Observed during daylighthours; lights are assumed to be in functional operating condition.

Our recommendation is to plan for a large scale replacement at roughly the time frame below, for both costefficiency and consistent quality/appearance throughout association. There are a variety of materials and stylesavailable and a general mid-range funding allowance is projected below. Cost can vary significantly depend on thequality of the light pole chosen.

As routine maintenance, inspect, repair, and change bulbs as needed.




170 Landscape - RefurbishComp # : Quantity: Extensive square feet

Location : Common areas

Useful Life:

Remaining Life:


Cost Source:

Funded? : No Annual cost best handled within operation budget

History :

Evaluation : Extensive landscape area.

Currently, landscaping is funded out of operational budget. The Association did not request an allowance beincluded for future refurbish projects. This component can be used to supplement the operation landscape budgetfor larger projects that occur less frequently and are not included within the maintenance contract. These types ofprojects can include: tree trimming, major replanting, bark or mulch replacements, turf renovations, etc...

Walk area each year with landscape contractor and perhaps landscape architect to assess overall health, functionand future needs of maintenance and refurbish to determine if supplemental reserve funding should be planned for.

June 09,2015 Page 10 of 27



182 Drainage System - Repair/ReplaceComp # : Quantity: Extensive system

Location : Throughout community

Useful Life:

Remaining Life:


Cost Source:


History :

Evaluation : Analysis of the drainage system is beyond the scope of a reserve study as the vast majority of the drainagesystems are located below ground. Observations were very limited to catch basin areas. No current problems werereported to us. Canyon Park reported some flooding problems in 2011, and that repairs were undertaken todecrease the likelihood of future flooding.

No predictable large-scale repairs/replacement at this time. Local repairs should be performed as part of generalmaintenance. If problems become known from professional evaluation, funding can be included in future reservestudies.

As routine maintenance, inspect regularly and keep drains/grates free of debris to ensure water drains as intended.Maintenance schedules on storm water systems depend on the condition of the system itself and the amount ofsediment and debris moving around on site. Storm water inspections usually consist of inspecting the catch basinsand manholes, ensuring vaults and control structures are properly functioning. Evaluation of drainage can includethe visual review of interior drain lines by use of miniature remote camera. Clean out drain lines and basins asoften as needed in order to prevent decreased drainage capacity. Repair as needed. The responsibility of keepingthe storm water system in good working order falls on the association/owner.

June 09,2015 Page 11 of 27



185 Retention Pond - Maintain/RepairComp # : Quantity: Extensive square feet

Location : Central common area between buildings D & J.

Useful Life:

Remaining Life:


Cost Source:


History :

Evaluation : Storm water detention pond appeared in fair condition during our limited visual review with no excess vegetation;ongoing maintenance assumed.

The state Department of Ecology and local (i.e. county or city) stormwater resources have standards formaintaining and eventually reconstructing the pond to original design parameters. Sediment must be removedwhen the floor depth has reached 10% of original design. Timing is difficult to predict, but in our experience, it maybe in the 10 to 15 year range. Regular maintenance and inspection are keys to extending useful life. Have pondperiodically assessed by professional engineer.

197 Entry Sign - ReplaceComp # : Quantity: (1) wood, carved, painted

Location : Entry location

Useful Life:

Remaining Life:


Cost Source:

Funded? : No Board treats sign as an operational expense

History :

Evaluation : Main sign appeared in good condition.

Inspect periodically, repair, clean, and touch up for appearance as needed using general maintenance funds.

June 09,2015 Page 12 of 27



199 Mailboxes - ReplaceComp # : Quantity: ~ (90) boxes

Location : Central common area

Useful Life:

40 years

Remaining Life:

11 years



$70/box, lower allowance $90/box, higher allowance

$6,300 $8,100

Funded? : Yes

History :

Evaluation : Mailboxes appeared in fair condition. Mailboxes are protected from the rain by a kiosk structure.

In our experience, it is best to plan for total replacement at roughly the time frame below due to constant usage andwear over time.

As routine maintenance, inspect regularly, clean by wiping down for appearance, change lock cylinders, lubricatehinges, and repair as needed from operating budget. Note: USPS has a limited budget for replacement and shouldnot be relied upon for purposes of long term financial planning.

448 Cabana Interiors - Refurbish/UpdateComp # : Quantity: ~ 1,350 gross square ft

Location : Cabana Interiors

Useful Life:

Remaining Life:


Cost Source:

Funded? : No Board projects costs to be too small for reserve funding

History : 2004

Evaluation : No access was provided to the cabana interior. Board reports limited use and they project costs are too small forreserve funding.

June 09,2015 Page 13 of 27



500 Roof: Steep Slope (17) - ReplaceComp # : Quantity: ~ 50,000 square feet

Location : Rooftop of buildings A-J , L, N-U, and Cabana (excludes bldg M & K)

Funded? : Yes

History : 2008

Evaluation : Roof shingles are laminated composition shingle with an open valley. Ventilation (the lack of which can greatlyreduce the roof’s useful life) was observed at eave and ridge. Eave venting consisted of three circular holes inevery other rafter blocking. Ridge venting appeared to be provided by gable end louvers and/or roof jacks. Visibleportions of roof flashing were observed at the rake, headwall, and sidewall conditions. Gutters blocked the view ofeaves, so eave flashing was not confirmed. Debris and moss was observed on the roof surface. A reserve studyconducts only a limited visual review, and many of the critical waterproofing and ventilation items of the roof are notreadily viewable. For a full evaluation have a professional roof consultant/contractor perform a thorough up-closesurvey of your entire roof system, including attic inspection (if any).

Costs below factors replacement with an architectural grade laminated shingle.

As routine maintenance, many manufacturers recommend inspections at least twice annually (once in the fallbefore the rainy season and again in the spring) and after large storm events. Promptly replace anydamaged/missing sections or any other repair needed to ensure waterproof integrity of roof. Keep roof surface,gutters, and downspouts clear and free of moss or debris.

Moss growth can decrease the life of the roofing shingles and should be removed sooner than later. Cleaning mossoff of a roof with high-pressure water can damage the roof and greatly decrease its life. Many roofing consultantsonly allow air cleaning in order to prevent damage caused by water pressure washing. Another option is liquidapplied fungicide (moss killer), which can be used instead of power washing the moss off the shingles. Moss rootsgrow into the shingles. Killing the moss with a fungicide allows the roots to gradually release from the shingles.After roots have died and released, then the moss can be removed (with broom or very low pressure water) withcare not to damage the shingles. Never use high-pressure water to remove moss as the high-pressure can loosengranular surface of shingles and erode the shingle surface, which greatly reduces the remaining useful life. TheNational Roofing Contractors Association (NRCA) has additional information available on their web sitehttp://www.nrca.net/Consumers/

At the time of re-roofing, we recommend that you hire a professional consultant to evaluate the existing roof andspecify the new roof materials/design, provide installation oversight. We recommend that all Associations hirequalified consultants whenever they are considering having work performed on any building envelope(waterproofing) components including; roof, walls, windows, decks, exterior painting, and caulking/sealant.

Other resources:NRCA discuss maintenance and warranties here: http://staticcontent.nrca.net/consumer/maintenance.pdf#duplicateNRCA discusses warranties here: http://staticcontent.nrca.net/consumer/warranties.pdfNRCA discusses getting your money’s worth when buying a new roofhttp://www.nrca.net/roofing/F-Y-I-Buying-a-new-roof-and-getting-your-money-s-worth-874NRCA discusses selecting a contractor here http://staticcontent.nrca.net/consumer/steep.pdfNRCA Frequently Asked Questions (FAQ): http://www.nrca.net/roofing/Homeowners-FAQs-875Here is a brochure on the lifecycle of roofing by Certainteed, who manufactures roof shingles:https://www.certainteed.com/resources/LifeCycleofRoof.pdf

There is a wealth of information available through Roofing Organizations such as:National Roofing Contractors Association (NRCA) http://www.nrca.net.Asphalt Roofing Manufacturers Association (ARMA) http://www.asphaltroofing.org/Roof Consultant Institute (RCI) http://www.rci-online.orgWestern States Roofing Contractors Association (WSRCA) http://www.wsrca.com/

June 09,2015 Page 14 of 27



Useful Life:

25 years

Remaining Life:

17 years


Cost Source: Client Cost History, inflated


$170,000 $220,000

501 Roof: Steep Slope (M & K) - ReplaceComp # : Quantity: ~ 7,000 square feet

Location : Rooftop of buildings M and K

Useful Life:

25 years

Remaining Life:

12 years




$28,000 $39,000

Funded? : Yes

History : 2003

Evaluation : This component reflects buildings with roofs that were reported replaced in 2003. Waviness in the roof surface ofbuilding M was noted during our limited visual review. For typical notes, see component #500.

June 09,2015 Page 15 of 27



502 Roof: Steep Slope (S & V) - ReplaceComp # : Quantity: ~ 6,200 square feet

Location : Rooftop of buildings S and V

Useful Life:

25 years

Remaining Life:

9 years




$24,800 $34,000

Funded? : Yes

History : 2000

Evaluation : This component reflects buildings with roofs that were reported replaced in 2000.For typical notes, see component #500.

510 Gutters/Downspouts - Repair/ReplaceComp # : Quantity: ~ 7,000 linear feet

Location : Perimeter of roofs

Useful Life:

25 years

Remaining Life:

17 years



$5.00/Lin Ft, Lower allowance $7.00/Lin Ft, Higher allowance

$35,000 $49,000

Funded? : Yes

History : 2008

Evaluation : Based on our limited visual review, metal gutters and downspouts appeared in fair condition.

We suggest planning for a total replacement of gutter and downspouts at the same intervals as roof replacementfor cost efficiency. Evaluate at time of project to determine if replacement or re-use is the better value.

As routine maintenance, inspect regularly and keep gutters and downspouts free of debris.

June 09,2015 Page 16 of 27



515 Chimney Caps/Covers – ReplaceComp # : Quantity: (82)caps (44)cover/shroud

Location : Chimney Chases

Useful Life:

Remaining Life:


Cost Source:

Funded? : No Costs are reported handled as part of general maintenance

History :

Evaluation : Observation of top of chimney was very limited to viewing from distance. Metal chimney shrouds appeared in faircondition with no corrosion. Chimney covers and flue caps were difficult to observe.

Board requested to handle this component as a general maintenance item. No reserve funding requested.

As routine maintenance, inspect and clean during roof maintenance. Repair locally as needed.

June 09,2015 Page 17 of 27



523 Siding: Wood - ReplaceComp # : Quantity: ~ 85,000 gross square ft

Location : Exterior walls

Useful Life:

50 years

Remaining Life:

21 years



$10/Sq Ft lower allowance $14/Sq Ft, higher allowance

$850,000 $1,190,000

Funded? : Yes

History :

Evaluation : Siding is horizontal clapboard with some installed at an diagonal. Siding has a four and a half inch exposure.Surface was painted. No view of the critical underlying waterproofing was available as part of our limited visualreview.

Replacement may be needed due to the failure of the underlying waterproofing degrading over the decades, and/orthe end of the useful life of the siding materials from general aging. Evaluate the siding and the critical underlyingwaterproofing (typically building paper or house wrap) more frequently as the remaining useful life approaches zeroyears. Adjust remaining useful life as dictated by the evaluation. Align with window replacement for costefficiencies.

Inspect and repair as needed using operation and maintenance funds. Keep wood siding painted to protect thewood from decay caused by water, see component # 533. Many factors influence the useful life, including exposureto (or protection from) wind driven rain and quality of the waterproofing and flashing beneath the siding. Almost allwaterproofing systems will degrade over time (decades) as it ages.

Another item that greatly influences useful life is the thoroughness of the original painting. Wood siding will lastlonger if each piece was painted on all six sides. Typically, wood siding is painted on the two sides that areexposed and not on the back, ends, or top. Since we perform only a visual review, we were unable to confirm theextents of the painting. It is reasonable to presume that not all six sides are painted. If the siding is not painted onall sides, water can infiltrate and be absorbed into the wood on the unpainted sides, which over time will lead tocupping, warping and decay, limiting its useful life.

June 09,2015 Page 18 of 27



534 Exterior Surfaces -Prep/Caulk/PaintComp # : Quantity: ~85,000 GSF

Location : Exterior surfaces

Useful Life:

10 years

Remaining Life:

6 years


Cost Source: Prior estimate Provided by Client, inflated

Lower allowance Higher allowance

$91,000 $120,000

Funded? : Yes

History : 2012/11, 1995

Evaluation : The painted surface of the siding and trim appeared in generally good to fair condition with no peeling or blisteringobserved.

As routine maintenance, inspect regularly (including sealants) repair locally, and touch-up paint as needed. TypicalNorthwest paint cycles vary greatly depending upon many factors including type of material painted, surfacepreparation, quality of primer/paint/stain, application methods, weather conditions during application, moisturebeneath paint, and exposure to weather conditions. Repair areas as needed prior to painting/caulking.

Proper sealant/caulking is critical to keeping water out of the walls and preventing water damage. Incorrectinstallations of sealant are very common and can greatly decrease its useful life. Inspect sealant (more frequentlyas it ages) to determine if it is failing. Typical sealant problems include failure of sealant to adhere to adjacentmaterials and tearing/splitting of the sealant itself. As sealants age and due to exposure to ultra-violet sunlight,they will dry out, harden, and lose their elastic ability. Remove and replace all sealant at the time sealant failurebegins to appear. Proper cleaning, prep work, and installation technique (shape, size, tooling of joint) are criticalfor a long lasting sealant/caulking. Do not install sealant in locations that would block water drainage from behindthe siding (e.g. at head flashings).

Additional information on painting is available through:American Coatings Association at http://www.paint.org/Master Paint Institute at http://www.paintinfo.com/Paint Quality Institute at http://www.paintquality.com/

June 09,2015 Page 19 of 27



535 Windows & Sliding Doors - ReplaceComp # : Quantity: ~(520) metal frames


Useful Life:

Remaining Life:


Cost Source:

Funded? : No Board reports the component is not the Association’s responsibility

History :

Evaluation : Metal framed windows consisted of mostly horizontal sliders and fixed operation. Head flashing was installedinconsistently. The pattern of head flashing installed/not installed appeared to not be installed if the window is'protected' from the rain by either the roof overhang or recessed entry Windows typically had wood trim at all foursides. Weep holes at exterior lower corners were observed to be clear in the few windows sampled for our study.No observation of the critical underlying waterproofing details and flashing was part of our limited visual review. Theunderlying details and flashing are critical to maintaining the waterproofing of the building envelope and preventingstructural damage as a result of water infiltration.

Board reports the windows are not the association's responsibility. Article 6.2 appears to indicate windows arecommon elements, and therefore are association responsibility. We highly recommend you have this issueresolved by your attorney. If no action is taken by the time of our next reserve study we will include reserve fundingfor window replacement.

Even if windows are determined to be individual owner’s responsibility, we suggest it is in the Associations bestinterests to control the quality of windows installed as well as the installation, waterproofing requirements. Boardsare typically charged with setting the standard of care for the association. At minimum, we strongly recommend theboard develop an architectural control process that includes standard specifications for window quality (designpressure rating), window frame type (acceptable manufacturer(s) and model numbers), and waterproofing and/orflashing, other installation details. This should include integrating the new window and flashing with the existingwaterproof system. Architectural control specifications should increase the likelihood of consistent qualityinstallation and lessen the chance of poor materials and/or installation leading to water infiltration and causingwater damage to the common structural wood framing and ancillary components. Water damage of structural woodframing is usually the Association’s responsibility and typically very expensive to remedy.

Many factors effect useful life, including quality of window (design pressure rating), waterproofing and flashingdetails, building movement and exposure to the elements including wind driven rain. Those same variables, alongwith glazing and frame materials can also greatly affect the appropriate choice, replacement costs. You can learnmore about window design here: http://www.rci-online.org/interface/2010-04-hinjosa.pdf

June 09,2015 Page 20 of 27



537 Windows: Cabana - Repair/ReplaceComp # : Quantity: ~ (12) assorted

Location : Exterior walls of cabana building

Useful Life:

30 years

Remaining Life:

1 years



$600 each, Lower allowance $1,000 each, Higher allowance

$7,200 $12,000

Funded? : Yes

History :

Evaluation : This component is specifically for windows at the common area cabana building; windows at individual units are inprevious component (#535).

Mostly horizontal sliders and fixed operation. Head flashing was not observed. Windows had wood trim on all foursides. Weep holes at exterior lower corners were observed to be clear in the few windows sampled for our study.No observation of the critical underlying waterproofing details and flashing was part of our limited visual review. Theunderlying details and flashing are critical to maintaining the waterproofing of the building envelope and preventingstructural damage as a result of water infiltration.

Many factors effect useful life, including quality of window (design pressure rating), waterproofing and flashingdetails, building movement and exposure to the elements including wind driven rain. Those same variables, alongwith glazing and frame materials can also greatly affect the appropriate choice, replacement costs. You can learnmore about window design here: http://www.rci-online.org/interface/2010-04-hinjosa.pdf

Inspect regularly, including sealant, if any, and repair as needed. Typical sealant failures include a lack of adhesionto adjacent materials, tearing/splitting of the sealant itself, and lose of elastic ability. Loss of elastic ability can becaused by exposure to ultra-violet light and general aging. Remove and replace all sealants as signs of failurebegin to appear. Proper cleaning, prep work, and installation of specified joint design are critical for lastingperformance.Keep weep holes free and clear to allow proper drainage of water that gets into window frame. Do not block (caulkor seal) gap at top of head flashing, as this allows water that gets behind the siding, to drain out.

We recommend the Board conduct research well in advance of this project to help better define timing and costs(scope of work, material specifications, etc.). Further, we recommend that you hire a professional consultant(Architect, Engineer, building envelope consultant) to evaluate the existing windows, design and specify newinstallation requirements, assist with bid process and observe construction to increase the likelihood of properinstallation. We recommend all Associations hire qualified consultants whenever they are considering having workperformed on any high-risk building envelope components (roof, walls, windows, decks, exterior painting andcaulking/sealant).

June 09,2015 Page 21 of 27



568 Doors: Unit Entry - Repair/ReplaceComp # : Quantity: (81) metal doors


Useful Life:

Remaining Life:


Cost Source:


History :

Evaluation : Exterior doors are six panel metal with wood frames. Doors appeared in fair condition. No wide spread problemswere observed. Doors are typically recessed and protected by entry roof.

No predictable large-scale repair or replacement of doors.

Individual unit doors are expected to receive limited use (wear and tear). Door painting is included as partcomponent #533. Inspect periodically and repair as needed to maintain appearance, security and operation withmaintenance funds. Touch up paint as needed between painting cycles.

569 Doors: Utility - ReplaceComp # : Quantity: (81) wood doors

Location : Storage room doors

Useful Life:

Remaining Life:


Cost Source:


History :

Evaluation : Storage doors are flush with a painted finish.

No predictable large scale replacement at this time. Paint as part of component #533 Exterior Painting.

June 09,2015 Page 22 of 27



572 Lights: Exterior - ReplaceComp # : Quantity: ~ (160) assorted

Location : Exterior common area locations

Useful Life:

Remaining Life:


Cost Source:

Funded? : No Costs are projected to be too small for reserve funding

History :

Evaluation : Light fixtures appeared in fair condition. Lights were observed during daylight hours so operation was notconfirmed.

Board reports they replace fixtures individually, as needed, using general maintenance funds. Cost of fixtures wasreported to be less than $50 and labor was provided by handy man.

June 09,2015 Page 23 of 27



599 Building Envelope - InspectionComp # : Quantity: Every year

Location : Common elements throughout association

Useful Life:

Remaining Life:


Cost Source:


History :

Evaluation : Multi-family buildings in the Puget Sound area, constructed between 1985 and 2005, have relatively highoccurrence of needing repairs due to water infiltration. Types of building materials prevalent in this era along withcode requirements and construction quality have likely been contributing factors.

Many Associations are required by their declarations to have annual inspections by a qualified Architect orEngineer to assess the physical condition of the building envelope enclosure. The building envelope inspectiontypically covers the roofs, decks, siding, windows, doors, sealants/caulking, and flashings. Although yourAssociation’s governing documents do not appear to have such a requirement, we strongly recommend the Boardprovide for periodic building envelope inspections funded from the operating budget, to ensure weatherproofing andstructural integrity are maintained.

Two of the factors that can generally affect the potential for water infiltration are exposure to wind driven rains andthe height of the building. Winds tend to be typically from the South and West, but can be site specific. Protectionfrom wind can be in the form of large roof overhangs or decks. Taller buildings are generally exposed to higherwind at the upper levels.

Provide more frequent inspection as the buildings age and the waterproofing typically deteriorates. Buildingenvelope inspections can be either visual or intrusive. An intrusive investigation (where finish materials areremoved to view and better understand the underlying waterproofing systems and their performance) should be ofgreater benefit, since a visual review provides only a limited amount of information derived from surfaceobservation.

June 09,2015 Page 24 of 27



900 Plumbing - Repair/ReplaceComp # : Quantity: Extensive systems

Location : Throughout association

Useful Life:

Remaining Life:


Cost Source:


History :

Evaluation : Periodic plumbing issues reported in the past but no ongoing/repetitive issues that would suggest predictable, largescale reserve project. The vast majority of the plumbing system is hidden and not visible for review. A reserve studyconducts only a limited visual review. No testing was conducted and no problems were observed or reported.

Typically, if installed per architectural specifications and local building codes without defect, there is no predictabletime frame for large-scale repair/replacement expenses within the scope of our report. Current Washington statereserve study law requires plumbing to be considered in the reserve study. Patterns of significant repair expenses,leaks, poor flow, sediments in line should be evaluated promptly by qualified plumber and / or engineer.

Some types of piping used historically are known to be life limited. Manufacturing defects become apparent fromtime to time and certain site conditions (e.g. galvanic corrosion, certain minerals in contact with piping, chemicalreactions, etc…) can contribute to premature deterioration of plumbing system. We highly recommend you have aqualified plumber or consultant provide an evaluation of your system to assess condition, material types and noteany deficiencies.

Treat minor repairs as ongoing maintenance expense.

June 09,2015 Page 25 of 27



905 Electrical - Maintain/RepairComp # : Quantity: Extensive systems

Location : Throughout association

Useful Life:

Remaining Life:


Cost Source:


History :

Evaluation : Our Board had previously reported some replacement of main feeds to buildings. The majority of the electricalsystem was not visible for review. Analysis of the electrical system beyond a limited visual review is not within thescope of a reserve study. No large issues or problems/defects were reported.

Typically, if installed per architectural specifications and local building codes, there is no predictable time frame forlarge-scale repair/replacement expenses within the scope of our review. Some electrical system components areknown to be life limited. Manufacturing defects become known from time to time and certain site conditions cancontribute to premature deterioration of electrical components. Periodic inspections and maintenance by a masterelectrician may become necessary. Some associations employ infrared or other testing methodologies to identifypotential trouble spots.A good resource book available for purchase is NFPA 70B Recommended Practices for Electrical EquipmentMaintenance. http://www.nfpa.org/catalog/product.asp?title=&category%5Fname=&pid=70B13&target%5Fpid=70B13&src%5Fpid=&link%5Ftype=search&icid=&Page=1

June 09,2015 Page 26 of 27



999 Reserve Study - UpdateComp # : Quantity: Annual

Location : Throughout common area locations

Useful Life:

Remaining Life:


Cost Source:


History :

Evaluation : Per Washington law, chapter 64.34 RCW Article 3, Section 1 reserve study updates with site inspections are tooccur every three years (and updated annually) to assess changes in condition (I.e., physical, economic,governmental, etc...) and the resulting effect on the community's long-term reserve plan. Most appropriatelyfactored within operating budget, not as reserve component.

June 09,2015 Page 27 of 27

Documents

Reserve Study Canyon Park Townhomes · 2017-09-02 · Average Reserve Deficit (Surplus) Per Unit: ... the three results of your Reserve Study. Reserve contributions are not “for