November 30, 2016 - Surfside Homeowners Association · November 30, 2016 Surfside Homeowners ......

November 30, 2016

Surfside Homeowners Association

c/o Laura Frazier

31402 H Street

Ocean Park, Washington 98640

Dear Laura,

We have been engaged by the Board of Directors of Surfside Homeowners Association to create a

reserve study for the Association. At the request of the Association, the reserve study has been

divided into two parts, General Common Elements and Water Pipe Replacement. The

assessment for 2017 is as follows:

General Common Elements $140,000

Water Pipe Replacement $158,000

Total $298,000

If you have any questions concerning this reserve study, please do not hesitate to call.

Sincerely,

Dave Schwindt CPA PRA RS

jwong

Letter Head

jwong

Dave Sig

SCHWINDT & CO. RESERVE STUDY SERVICES

PAGE 1 of 62

SURFSIDE HOMEOWNERS ASSOCIATION

RESERVE STUDY

LEVEL II: UPDATE WITH VISUAL SITE INSPECTION

2017

https://www.schwindtco.com/(503) 227-1165

Revised 3/29/2017


PAGE 2 of 62

SURFSIDE HOMEOWNERS ASSOCIATION

Executive Summary

Year of Report:

January 1, 2017 to December 31, 2017

Number of Units:

2853 Units

Parameters:

Beginning Balance: $930,799

Year 2017 Suggested Contribution: $140,000

Year 2017 Projected Interest Earned: $920

Inflation: 2.50%

Annual Increase to Suggested Contribution: 2.50%

Lowest Cash Balance Over 30 Years (Threshold): $725,889

Average Reserve Assessment per Unit: $49.07

Prior Year’s Actual Contribution: $140,000

RCW 64.38.070(HOA) Section 4.2 Disclosures:(a) A reserve component list: Please see pages 9-11(b) Date of study: November 29, 2016

This reserve study meets the requirements of RCW 64.38.070 (HOA) section 4(c) Level II: Update with Visual Site Inspection(d) Reserve account balance as of January 1, 2017 : $930,799(e) Percent funded as of 2017: 52%(f) Special assessments implemented or planned: Please see page 7(g) Interest rate: 0.1% Inflation rate: 2.50%(h) Current reserve account contribution rate: $140,000(i) 2017 Recommended reserve contribution: $140,000

2017 Fully funded contribution: $277,5232017 Baseline contribution: $113,786

(j) Projected account balance for thirty years: Please see page 8(k) This reserve study was prepared by a reserve study professional.

Revised 3/29/2017

jwong

Letter Head

TABLE OF CONTENTSSurfside Homeowners Association


PAGE 3 of 62

Disclosure Information 4 of 62

Reserve Study

Property Description 7 of 62

Cash Flow Method - Threshold Funding Model Summary 8 of 62

Cash Flow Method - Threshold Funding Model Projection 9 of 62

Component Summary By Category 10 of 62

Component Summary By Name 13 of 62

Annual Expenditure Detail 15 of 62

Detail Report by Category 20 of 62

Appendix

Fully Funded Method Summary 54 of 57

Fully Funded Method Projection 55 of 57

Baseline Method Summary 56 of 57

Baseline Model Projection 57 of 57

Additional Disclosures 58 of 57

Revised 3/29/2017


PAGE 4 of 62

Surfside Homeowners AssociationMaintenance Plan Update

Reserve Study Update – OnsiteDisclosure Information

2017

We have conducted an onsite reserve study update with site visit for the Surfside Homeowners Association for the year beginning January 1, 2017 in accordance with guidelines established by Community Associations Institute and the American Institute of Certified Public Accountants.

This Reserve Study meets the requirements of Washington state statutes.

We have no other involvement with the Association other than providing the Reserve Study.

Schwindt & Company believes that every Association should have a complete building envelope inspection within 12 months of completion of all construction and again after 25 years of existence. This inspection must be performed by a licensed building envelope inspector. Ongoing inspections of the property should be performed by a licensed inspector, with the exception of a roof inspection which may be performed by a licensed roofing contractor.

Assumptions used for inflation, interest, and other factors are detailed in page 7. Income tax factors were not considered due to the uncertainty of factors affecting net taxable income and the election of tax form to be filed.

David T. Schwindt, the representative in charge of this report, is a designated Reserve Study Specialist, Professional Reserve Analyst, and Certified Public Accountant licensed in the State of Oregon, Washington, California, and Arizona.

All information regarding the useful lives and costs of reserve components were derived by the Association, local vendors, and various construction pricing and scheduling manuals.

The terms RS Means, National Construction Estimator, Fannie Mae Expected Useful Life Tables and Forms refer to construction industry estimating databases that are used throughout the industry to establish cost estimates and useful life estimates for common building components and products. We suggest that the Association obtain firm bids for these services.

Due to increased building activity we have seen a dramatic increase in certain vendor pricing during 2016. However,

it currently is not known if this is a temporary or permanent increase. We have not considered this increase in

current cost projections but will monitor these costs on a go forward basis.

We have added a provision to the cost of each component to take in account Washington state sales tax.

According to the Association, the insurance deductible is under $10,000 and will be paid for out of the operating budget in the event a claim is made.

Revised 3/29/2017

jwong

CAI - RS

jwong

APRA

jwong

Letter Head


PAGE 5 of 62

Additional Information:

This reserve study uses information provided by Bill Neal, the General Manager of the North Beach Water District, for information regarding the water system components.

We are not aware of any material issues which, if not disclosed, would cause a material distortion of this report.

According to RCW 64.38.070 (2)(a) “A reserve component list, including any reserve component that would cost more than one percent of the annual budget of the association, not including the reserve account, for major maintenance, repair, or replacement.” At the time of study, the annual budget for the Association is approximately $1,000,000. Therefore all items with an estimated cost under $10,000 are assumed to be paid for out of the operating budget.

According to the Association, the Board is responsible for the maintenance, repair and replacement of the common areas, water pumping and distribution systems. The common areas include a clubhouse, playground area, 3 cabanas, pedestrian bridges, RV lot, trash compactor area, and warehouses. The Association is also responsible for all equipment needed to maintain these systems. That includes vehicles, and excavator, backhoe, dump truck, and water treatment equipment.

*Note: RCW 64.38.070(2)(a) provides that a component with a value of more than one percent of the annual budget may be excluded from the reserve study. The statute suggests that the reserve study provide commentary explaining the basis for it exclusion. The Surfside water distribution system has been excluded from the reserve study. For more information please see the component detail on page 38.

Certain information such as the beginning balance of reserve funds and other information as detailed on the component detail reports were provided by Association representatives and are deemed to be reliable by us. This reserve study is a reflection of the information provided to us and cannot be used for the purpose of performing an audit, quality/forensic analysis, or background checks of historical records.

Site visits should not be considered a project audit or quality inspection of Association property. This site visit does not evaluate the condition of the property to determine the useful life or needed repairs. Schwindt & Company suggests the Association perform a building envelope inspection to determine the condition, performance, and the useful life of all the components.

Certain costs outlined in the reserve study are subjective and as a result are for planning purposes only. All work should be bid out at the time of work. Actual costs will depend upon the scope of work as defined at the time the repair, replacement or restoration is performed. All estimates relating to future work are good faith estimates and projections are based on the estimated inflation rate, which may or may not prove accurate. All future costs and life expectancies should be reviewed and adjusted annually.

This reserve study, unless specifically stated in the report, assumes no fungi, mold, asbestos, lead paint, urea-formaldehyde foam insulation, termite control substances other chemicals, toxic wastes, radon gas, electro-magnetic radiation or other potentially hazardous materials (on the surface or sub-surface), or termites on the property. The existence of any of these substances may adversely affect the accuracy of this reserve study. Schwindt and Company assumes no responsibility regarding such conditions, as we are not qualified to detect substances, determine the impact or develop remediation plans/costs.

Since destructive testing was not performed, this reserve study does not attempt to address latent and/or patent defects, nor does it address useful life expectancies that are abnormally short due either to improper design or installation, or to subsequent improper maintenance. This reserve study assumes all components will be reasonably maintained for the remainder of their life expectancy.

Physical Analysis:

New Projects generally include information provided by developers and/or refer to drawings.

Full onsite reserve studies generally include field measurements and do not include destructive testing. Drawings are usually not available for existing projects.

Onsite updates generally include observations of physical characteristics but do not include field measurements.

The client is considered to have deemed previously developed component quantities as accurate and reliable. The current

Revised 3/29/2017


PAGE 6 of 62

work is reliant on the validity of prior reserve studies.

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

Revised 3/29/2017

Surfside Homeowners Association Property Description


PAGE 7 of 62

Surfside Homeowners Association consists of 2853 lots located in Ocean Park, Washington. The Association consists of several buildings, including an office and 3 cabanas, a water treatment facility and distribution system, RV park, and trash compactors. The individual homeowners are responsible for all maintenance and repairs of their home and the private property adjacent to the homes.

A site visit was performed by Schwindt and Company in 2013 and 2016. Schwindt & Co did not

investigate components for defects, materials, design or workmanship. This would ordinarily be

considered in a complete building envelope inspection. Our condition assessment considers if the

component is wearing as intended. All components are considered to be in fair condition and appear to

be wearing as intended unless noted otherwise in the component detail.

Funds are being accumulated in the replacement fund based on estimates of future need for repairs and replacement of common property components. Actual expenditures, investment income, and provisions for income taxes however, may vary from estimated amounts and the variations may be material. Therefore, amounts accumulated in the replacement fund may not be adequate to meet future funding needs.

If additional funds are needed, the Association has the right, subject to owner approval, to increase regular assessments, levy special assessments, or it may delay repairs or replacements until funds are available.

Revised 3/29/2017

Surfside Homeowners AssociationOcean Park, Washington

Cash Flow Method - Threshold Funding Model Summary


PAGE 8 of 62

Report Date November 29, 2016Account Number 2surfs

Budget Year Beginning January 01, 2017Budget Year Ending December 31, 2017

Total Units 2853

Report Parameters

Inflation 2.50%Annual Assessment Increase 2.50%Interest Rate on Reserve Deposit 0.10%

2017 Beginning Balance $930,799

Threshold Funding Fully Reserved Model Summary

This study utilizes the cash flow method and the threshold funding model, which establishes a reserve funding goal that keeps the reserve balance above a specified dollar or percent funded amount. The threshold method assumes that the threshold method is funded with a positive threshold balance, therefore, "fully reserved".

The following items were not included in the analysis because they have useful lives greater than 30 years: grading/drainage; foundation/footings; storm drains; telephone, cable, and internet lines.

This funding scenario begins with a contribution of $140,000 in 2017 and increases 2.50% each year for the remaining years of the study. A minimum balance of $725,889 is maintained.

The reserve study cash flow model includes an annual increase in the required contribution over the 30 year period. Since the current Board and membership only has the authority to obligate the Association for the current budget year, the cash flow model relies on the actions of future Boards to adhere to the required increase in the annual reserve contribution. Because of the possibility that future Boards, due to budgetary constraints, are not able to increase the reserve contribution to the required amount to provide for adequate funding, the Association may be at risk in the future of special assessing the members to fund needed expenditures.

The purpose of this study is to insure that adequate replacement funds are available when components reach the end of their useful life. Components will be replaced as required, not necessarily in their expected replacement year. This analysis should be updated annually.

Cash Flow Method - Threshold Funding Model Summary of Calculations

Required Annual Contribution $140,000.00$49.07 per unit annually

Average Net Annual Interest Earned $920.03Total Annual Allocation to Reserves $140,920.03

$49.39 per unit annually

Revised 3/29/2017

Surfside Homeowners Association Cash Flow Method - Threshold Funding Model Projection


PAGE 9 of 62

Beginning Balance: $930,799Projected Fully

Annual Annual Annual Ending Funded PercentYear Contribution Interest Expenditures Reserves Reserves Funded

2017 140,000 920 150,765 920,954 1,763,446 52%2018 143,500 1,009 55,191 1,010,273 1,883,515 54%2019 147,087 1,157 1,158,518 2,066,470 56%2020 150,765 1,106 203,659 1,106,729 2,049,980 54%2021 154,534 903 357,799 904,368 1,881,189 48%2022 158,397 1,063 1,063,827 2,078,590 51%2023 162,357 1,167 58,697 1,168,655 2,224,521 53%2024 166,416 1,299 35,945 1,300,426 2,401,274 54%2025 170,576 881 590,439 881,444 2,018,039 44%2026 174,841 975 81,176 976,084 2,147,106 45%2027 179,212 1,031 124,066 1,032,261 2,239,483 46%2028 183,692 1,172 44,336 1,172,789 2,420,040 48%2029 188,284 1,332 28,966 1,333,439 2,626,005 51%2030 192,992 1,321 204,981 1,322,772 2,661,083 50%2031 197,816 1,399 121,729 1,400,257 2,786,860 50%2032 202,762 1,556 46,790 1,557,786 2,997,194 52%2033 207,831 1,630 135,885 1,631,361 3,127,818 52%2034 213,027 1,757 86,978 1,759,167 3,316,712 53%2035 218,352 1,915 62,145 1,917,290 3,541,353 54%2036 223,811 1,949 191,838 1,951,212 3,643,809 54%2037 229,406 1,934 247,045 1,935,507 3,697,503 52%2038 235,141 2,171 2,172,819 4,011,157 54%2039 241,020 1,811 602,532 1,813,118 3,720,587 49%2040 247,045 1,931 129,322 1,932,773 3,913,462 49%2041 253,222 2,059 126,607 2,061,447 4,119,751 50%2042 259,552 2,141 179,684 2,143,456 4,282,750 50%2043 266,041 2,256 153,481 2,258,272 4,482,787 50%2044 272,692 1,675 855,975 1,676,664 3,974,024 42%2045 279,509 725 1,231,010 725,889 3,074,546 24%2046 286,497 824 188,110 825,099 3,228,127 26%

Revised 3/29/2017

Surfside Homeowners Association Component Summary By Category


PAGE 10 of 62

Serv

ice

Dat

e in

Yea

r

Rep

lace

men

tU

sefu

lA

djus

tmen

tR

emai

ning

Uni

ts

Cos

t

Uni

t

Cos

t

Cur

rent

Description

Admin BuildingAdmin Building: Exterior - Repair 2003 2028 25 0 11 1 Total 10,768.91 10,769Admin Building: Interior - Remodel 2003 2028 25 0 11 1 Total 10,768.91 10,769Admin Building: Roof - Replacement 2003 2028 25 0 11 3,250 SF 3.77 12,252Admin Building: Septic System - Replacem.. 2005 2035 20 10 18 1 Total 21,537.81 21,538 Admin Building - Total $55,328

CabanasCabana 15 - Renovation 2003 2023 20 0 6 1 Total 10,768.91 10,769Cabana 16 - Renovation 2003 2023 20 0 6 1 Total 10,768.91 10,769Cabana 17 - Renovation 2003 2023 20 0 6 1 Total 10,768.91 10,769Cabana 15 Septic System - Replacement 2003 2033 20 10 16 1 Total 21,537.81 21,538Cabana 16 Septic System - Replacement 2003 2033 20 10 16 1 Total 21,537.81 21,538Cabana 17 Septic System - Replacement 2003 2033 20 10 16 1 Total 21,537.81 21,538 Cabanas - Total $96,920

BridgesPedestrian Bridges - Replacement 2009 2039 30 0 22 1 Total 349,989.45 349,989 Bridges - Total $349,989

RV/Trash AreasRV/Trash Area: Asphalt - Overlay 2000 2020 20 0 3 7,500 SF 2.15 16,125RV/Trash Area: Buildings - Repair 1990 2020 30 0 3 1 Total 10,768.91 10,769RV/Trash Area: Compactor 2 - Replacement 2010 2020 10 0 3 1 Total 30,239.09 30,239RV/Trash Area: Septic System - Replacem.. 1990 2020 20 10 3 1 Total 16,153.35 16,153RV/Trash Area: Electrical Systems - Repla.. 1979 2021 40 2 4 1 Total 161,533.59 161,534RV/Trash Area: Fence - Replacement 1979 2021 40 2 4 1,800 LF 21.54 38,772RV/Trash Area: Compactor 1 - Replacement 2014 2024 10 0 7 1 Total 30,239.09 30,239 RV/Trash Areas - Total $303,831

WarehouseWarehouse: Building - Replacement 1979 2020 30 11 3 1 Total 105,062.50 105,062 Warehouse - Total $105,062

EquipmentEquipment: Backhoe - Replacement 2000 2017 20 -3 0 1 Total 64,613.44 64,613Equipment: Excavator - Replacement 2008 2021 10 3 4 1 Total 69,997.89 69,998Equipment: Utility Truck - Replacement 2009 2021 12 0 4 1 Total 26,922.26 26,922Equipment: Ford Ranger - Replacement 2011 2023 12 0 6 1 Total 18,307.14 18,307Equipment: Pow-r Mole - Replacement 2016 2026 20 -10 9 1 Total 40,000.00 40,000Equipment: Vermeer Vacuum Excavator - .. 2016 2026 20 -10 9 1 Total 25,000.00 25,000 Equipment - Total $244,841

Revised 3/29/2017



PAGE 11 of 62

Serv

ice

Dat

e in

Yea

r

Rep

lace

men

tU

sefu

lA

djus

tmen

tR

emai

ning

Uni

ts

Cos

t

Uni

t

Cos

t

Cur

rent

Description

Maintenance BuildingMaintenance Building - Replacement 2016 2036 20 0 19 1 Total 120,000.00 120,000 Maintenance Building - Total $120,000

PlaygroundPlayground Area - Repair and Update 2014 2034 20 0 17 1 Total 26,922.26 26,922 Playground - Total $26,922

J- Well Field AreaWater System Area: Booster Building Exte.. 1979 2021 25 17 4 1 Total 26,922.26 26,922Booster Building Septic - Replacement 1979 2029 20 30 12 1 Total 21,537.81 21,538Water System Area: Filter Plant Building E.. 2005 2030 25 0 13 1 Total 32,306.72 32,307Water System Area: Generator - Replacem.. 2005 2030 25 0 13 1 Total 75,382.34 75,382Water System Area: Manifold Building Ext.. Unfunded J- Well Field Area - Total $156,149

Water SystemsWater Systems: Booster Station Electrical -.. 2005 2017 20 -8 0 1 Total 86,151.25 86,151Water Systems: Booster Station Mechanica.. 2005 2018 40 -27 1 1 Total 53,844.53 53,845Water Systems: Potassium Permanganate F.. 2010 2020 10 0 3 1 Total 10,768.91 10,769Water Systems: ATEC Filtration Plant - Re.. 2005 2025 20 0 8 1 Total 484,600.78 484,601Water Systems: Manifold Building Mechan.. 1991 2031 40 0 14 1 Total 16,153.35 16,153Water Systems: Manifold Building Electric.. 2012 2032 20 0 15 1 Total 32,306.72 32,307Water Maintenance Building - Addition 2015 2045 30 0 28 1 Total 105,062.50 105,062Water Systems: Backwash Basin - Replace.. 2005 2055 50 0 38 1 Total 26,922.26 26,922Water Systems: Distribution - Repair Unfunded Water Systems - Total $815,810

PumpsWater Systems: J-2A Pump - Replacement 2012 2027 15 0 10 1 Total 16,153.35 16,153Water Systems: J-3 Pump - Replacement 2012 2027 15 0 10 1 Total 16,153.35 16,153Water Systems: J-4 Pump - Replacement 2012 2027 15 0 10 1 Total 16,153.35 16,153Water Systems: J-5 Pump - Replacement 2012 2027 15 0 10 1 Total 16,153.35 16,153Water Systems: J-6 Pump - Replacement 2012 2027 15 0 10 1 Total 16,153.35 16,153Water Systems: J-7 Pump - Replacement 2012 2027 15 0 10 1 Total 16,153.35 16,153 Pumps - Total $96,920

ReservoirsWater Systems: Reservoirs #1 - Replaceme.. 1984 2044 60 0 27 1 Total 204,609.22 204,609Water Systems: Reservoirs #2 - Replaceme.. 1984 2044 60 0 27 1 Total 204,609.22 204,609Water Systems: Reservoirs #3 - Replaceme.. 1995 2055 60 0 38 1 Total 204,609.22 204,609Water Systems: Reservoirs #4 - Replaceme.. 2001 2061 60 0 44 1 Total 204,609.22 204,609 Reservoirs - Total $818,437

Revised 3/29/2017



PAGE 12 of 62

Serv

ice

Dat

e in

Yea

r

Rep

lace

men

tU

sefu

lA

djus

tmen

tR

emai

ning

Uni

ts

Cos

t

Uni

t

Cos

t

Cur

rent

Description

WellsWater Systems: J-2A Well - Replacement 1983 2043 60 0 26 1 Total 48,460.07 48,460Water Systems: J-3 Well - Replacement 1991 2051 60 0 34 1 Total 48,460.07 48,460Water Systems: J-4 Well - Replacement 1994 2054 60 0 37 1 Total 48,460.07 48,460Water Systems: J-5 Well - Replacement 1994 2054 60 0 37 1 Total 48,460.07 48,460Water Systems: J-6 Well - Replacement 1996 2056 60 0 39 1 Total 48,460.07 48,460Water Systems: J-7 Well - Replacement 1996 2056 60 0 39 1 Total 48,460.07 48,460 Wells - Total $290,760

Total Asset Summary $3,480,971

Revised 3/29/2017

Surfside Homeowners Association Component Summary By Name


PAGE 13 of 62

Serv

ice

Dat

e in

Yea

r

Rep

lace

men

tU

sefu

lA

djus

tmen

tR

emai

ning

Uni

ts

Cos

t

Uni

t

Cos

t

Cur

rent

Description

Admin Building: Exterior - Repair 2003 2028 25 0 11 1 Total 10,768.91 10,769Admin Building: Interior - Remodel 2003 2028 25 0 11 1 Total 10,768.91 10,769Admin Building: Roof - Replacement 2003 2028 25 0 11 3,250 SF 3.77 12,252Admin Building: Septic System - Replacem.. 2005 2035 20 10 18 1 Total 21,537.81 21,538Booster Building Septic - Replacement 1979 2029 20 30 12 1 Total 21,537.81 21,538Cabana 15 - Renovation 2003 2023 20 0 6 1 Total 10,768.91 10,769Cabana 15 Septic System - Replacement 2003 2033 20 10 16 1 Total 21,537.81 21,538Cabana 16 - Renovation 2003 2023 20 0 6 1 Total 10,768.91 10,769Cabana 16 Septic System - Replacement 2003 2033 20 10 16 1 Total 21,537.81 21,538Cabana 17 - Renovation 2003 2023 20 0 6 1 Total 10,768.91 10,769Cabana 17 Septic System - Replacement 2003 2033 20 10 16 1 Total 21,537.81 21,538Equipment: Backhoe - Replacement 2000 2017 20 -3 0 1 Total 64,613.44 64,613Equipment: Excavator - Replacement 2008 2021 10 3 4 1 Total 69,997.89 69,998Equipment: Ford Ranger - Replacement 2011 2023 12 0 6 1 Total 18,307.14 18,307Equipment: Pow-r Mole - Replacement 2016 2026 20 -10 9 1 Total 40,000.00 40,000Equipment: Utility Truck - Replacement 2009 2021 12 0 4 1 Total 26,922.26 26,922Equipment: Vermeer Vacuum Excavator - .. 2016 2026 20 -10 9 1 Total 25,000.00 25,000Maintenance Building - Replacement 2016 2036 20 0 19 1 Total 120,000.00 120,000Pedestrian Bridges - Replacement 2009 2039 30 0 22 1 Total 349,989.45 349,989Playground Area - Repair and Update 2014 2034 20 0 17 1 Total 26,922.26 26,922RV/Trash Area: Asphalt - Overlay 2000 2020 20 0 3 7,500 SF 2.15 16,125RV/Trash Area: Buildings - Repair 1990 2020 30 0 3 1 Total 10,768.91 10,769RV/Trash Area: Compactor 1 - Replacement 2014 2024 10 0 7 1 Total 30,239.09 30,239RV/Trash Area: Compactor 2 - Replacement 2010 2020 10 0 3 1 Total 30,239.09 30,239RV/Trash Area: Electrical Systems - Repla.. 1979 2021 40 2 4 1 Total 161,533.59 161,534RV/Trash Area: Fence - Replacement 1979 2021 40 2 4 1,800 LF 21.54 38,772RV/Trash Area: Septic System - Replacem.. 1990 2020 20 10 3 1 Total 16,153.35 16,153Warehouse: Building - Replacement 1979 2020 30 11 3 1 Total 105,062.50 105,062Water Maintenance Building - Addition 2015 2045 30 0 28 1 Total 105,062.50 105,062Water System Area: Booster Building Exte.. 1979 2021 25 17 4 1 Total 26,922.26 26,922Water System Area: Filter Plant Building E.. 2005 2030 25 0 13 1 Total 32,306.72 32,307Water System Area: Generator - Replacem.. 2005 2030 25 0 13 1 Total 75,382.34 75,382Water System Area: Manifold Building Ext.. UnfundedWater Systems: ATEC Filtration Plant - Re.. 2005 2025 20 0 8 1 Total 484,600.78 484,601Water Systems: Backwash Basin - Replace.. 2005 2055 50 0 38 1 Total 26,922.26 26,922Water Systems: Booster Station Electrical -.. 2005 2017 20 -8 0 1 Total 86,151.25 86,151Water Systems: Booster Station Mechanica.. 2005 2018 40 -27 1 1 Total 53,844.53 53,845Water Systems: Distribution - Repair UnfundedWater Systems: J-2A Pump - Replacement 2012 2027 15 0 10 1 Total 16,153.35 16,153Water Systems: J-2A Well - Replacement 1983 2043 60 0 26 1 Total 48,460.07 48,460Water Systems: J-3 Pump - Replacement 2012 2027 15 0 10 1 Total 16,153.35 16,153Water Systems: J-3 Well - Replacement 1991 2051 60 0 34 1 Total 48,460.07 48,460Water Systems: J-4 Pump - Replacement 2012 2027 15 0 10 1 Total 16,153.35 16,153

Revised 3/29/2017

Surfside Homeowners Association Component Summary By Name


PAGE 14 of 62

Serv

ice

Dat

e in

Yea

r

Rep

lace

men

tU

sefu

lA

djus

tmen

tR

emai

ning

Uni

ts

Cos

t

Uni

t

Cos

t

Cur

rent

Description

Water Systems: J-4 Well - Replacement 1994 2054 60 0 37 1 Total 48,460.07 48,460Water Systems: J-5 Pump - Replacement 2012 2027 15 0 10 1 Total 16,153.35 16,153Water Systems: J-5 Well - Replacement 1994 2054 60 0 37 1 Total 48,460.07 48,460Water Systems: J-6 Pump - Replacement 2012 2027 15 0 10 1 Total 16,153.35 16,153Water Systems: J-6 Well - Replacement 1996 2056 60 0 39 1 Total 48,460.07 48,460Water Systems: J-7 Pump - Replacement 2012 2027 15 0 10 1 Total 16,153.35 16,153Water Systems: J-7 Well - Replacement 1996 2056 60 0 39 1 Total 48,460.07 48,460Water Systems: Manifold Building Electric.. 2012 2032 20 0 15 1 Total 32,306.72 32,307Water Systems: Manifold Building Mechan.. 1991 2031 40 0 14 1 Total 16,153.35 16,153Water Systems: Potassium Permanganate F.. 2010 2020 10 0 3 1 Total 10,768.91 10,769Water Systems: Reservoirs #1 - Replaceme.. 1984 2044 60 0 27 1 Total 204,609.22 204,609Water Systems: Reservoirs #2 - Replaceme.. 1984 2044 60 0 27 1 Total 204,609.22 204,609Water Systems: Reservoirs #3 - Replaceme.. 1995 2055 60 0 38 1 Total 204,609.22 204,609Water Systems: Reservoirs #4 - Replaceme.. 2001 2061 60 0 44 1 Total 204,609.22 204,609Total Asset Summary $3,480,971

Revised 3/29/2017

Surfside Homeowners Association Annual Expenditure Detail


PAGE 15 of 62

Description Expenditures

Replacement Year 2017Equipment: Backhoe - Replacement 64,613Water Systems: Booster Station Electrical - Replacement 86,151

Total for 2017 $150,765

Replacement Year 2018Water Systems: Booster Station Mechanical - Replacement 55,191

Total for 2018 $55,191

No Replacement in 2019

Replacement Year 2020RV/Trash Area: Asphalt - Overlay 17,365RV/Trash Area: Buildings - Repair 11,597RV/Trash Area: Compactor 2 - Replacement 32,564RV/Trash Area: Septic System - Replacement 17,395Warehouse: Building - Replacement 113,141Water Systems: Potassium Permanganate Feed System - Replacement 11,597

Total for 2020 $203,659

Replacement Year 2021Equipment: Excavator - Replacement 77,265Equipment: Utility Truck - Replacement 29,717RV/Trash Area: Electrical Systems - Replacement 178,303RV/Trash Area: Fence - Replacement 42,797Water System Area: Booster Building Exterior 29,717

Total for 2021 $357,799


Replacement Year 2023Cabana 15 - Renovation 12,489Cabana 16 - Renovation 12,489Cabana 17 - Renovation 12,489Equipment: Ford Ranger - Replacement 21,231

Total for 2023 $58,697

Revised 3/29/2017



PAGE 16 of 62


Replacement Year 2024RV/Trash Area: Compactor 1 - Replacement 35,945

Total for 2024 $35,945

Replacement Year 2025Water Systems: ATEC Filtration Plant - Replacement 590,439

Total for 2025 $590,439

Replacement Year 2026Equipment: Pow-r Mole - Replacement 49,955Equipment: Vermeer Vacuum Excavator - Replacement 31,222

Total for 2026 $81,176

Replacement Year 2027Water Systems: J-2A Pump - Replacement 20,678Water Systems: J-3 Pump - Replacement 20,678Water Systems: J-4 Pump - Replacement 20,678Water Systems: J-5 Pump - Replacement 20,678Water Systems: J-6 Pump - Replacement 20,678Water Systems: J-7 Pump - Replacement 20,678

Total for 2027 $124,066

Replacement Year 2028Admin Building: Exterior - Repair 14,130Admin Building: Interior - Remodel 14,130Admin Building: Roof - Replacement 16,076

Total for 2028 $44,336

Replacement Year 2029Booster Building Septic - Replacement 28,966

Total for 2029 $28,966

Replacement Year 2030RV/Trash Area: Compactor 2 - Replacement 41,685Water System Area: Filter Plant Building Exterior 44,535

Revised 3/29/2017



PAGE 17 of 62


Replacement Year 2030 continued...Water System Area: Generator - Replacement 103,915Water Systems: Potassium Permanganate Feed System - Replacement 14,845

Total for 2030 $204,981

Replacement Year 2031Equipment: Excavator - Replacement 98,905Water Systems: Manifold Building Mechanical - Replacement 22,824

Total for 2031 $121,729

Replacement Year 2032Water Systems: Manifold Building Electrical - Replacement 46,790

Total for 2032 $46,790

Replacement Year 2033Cabana 15 Septic System - Replacement 31,973Cabana 16 Septic System - Replacement 31,973Cabana 17 Septic System - Replacement 31,973Equipment: Utility Truck - Replacement 39,966

Total for 2033 $135,885

Replacement Year 2034Playground Area - Repair and Update 40,965RV/Trash Area: Compactor 1 - Replacement 46,012

Total for 2034 $86,978

Replacement Year 2035Admin Building: Septic System - Replacement 33,592Equipment: Ford Ranger - Replacement 28,553

Total for 2035 $62,145

Replacement Year 2036Maintenance Building - Replacement 191,838

Total for 2036 $191,838

Revised 3/29/2017



PAGE 18 of 62


Replacement Year 2037Equipment: Backhoe - Replacement 105,877Water Systems: Booster Station Electrical - Replacement 141,169

Total for 2037 $247,045


Replacement Year 2039Pedestrian Bridges - Replacement 602,532

Total for 2039 $602,532

Replacement Year 2040RV/Trash Area: Asphalt - Overlay 28,454RV/Trash Area: Compactor 2 - Replacement 53,360RV/Trash Area: Septic System - Replacement 28,504Water Systems: Potassium Permanganate Feed System - Replacement 19,003

Total for 2040 $129,322

Replacement Year 2041Equipment: Excavator - Replacement 126,607

Total for 2041 $126,607

Replacement Year 2042Water Systems: J-2A Pump - Replacement 29,947Water Systems: J-3 Pump - Replacement 29,947Water Systems: J-4 Pump - Replacement 29,947Water Systems: J-5 Pump - Replacement 29,947Water Systems: J-6 Pump - Replacement 29,947Water Systems: J-7 Pump - Replacement 29,947

Total for 2042 $179,684

Replacement Year 2043Cabana 15 - Renovation 20,464Cabana 16 - Renovation 20,464Cabana 17 - Renovation 20,464

Revised 3/29/2017



PAGE 19 of 62


Replacement Year 2043 continued...Water Systems: J-2A Well - Replacement 92,088

Total for 2043 $153,481

Replacement Year 2044RV/Trash Area: Compactor 1 - Replacement 58,900Water Systems: Reservoirs #1 - Replacement 398,538Water Systems: Reservoirs #2 - Replacement 398,538

Total for 2044 $855,975

Replacement Year 2045Equipment: Utility Truck - Replacement 53,750Water Maintenance Building - Addition 209,757Water Systems: ATEC Filtration Plant - Replacement 967,503

Total for 2045 $1,231,010

Replacement Year 2046Equipment: Pow-r Mole - Replacement 81,856Equipment: Vermeer Vacuum Excavator - Replacement 51,160Water System Area: Booster Building Exterior 55,094

Total for 2046 $188,110

Revised 3/29/2017

Surfside Homeowners Association Detail Report by Category


PAGE 20 of 62

Admin Building: Exterior - Repair

Asset ID 1002Capital

Admin BuildingPlaced in Service January 2003

Useful Life 25Replacement Year 2028

Remaining Life 11

1 Total @ $10,768.91Asset Cost $10,768.91

Percent Replacement 100%Future Cost $14,129.74

This provision is for the repair of the exterior on the admin building. This includes the windows, doors, and exterior siding.

The cost and useful life assumptions are based on accepted industry estimates as established by RS Means and/or The National Construction Estimator.

The Association should obtain a bid to confirm this estimate.

Note: This is a provision for an anticipated expense. Should the Association find that the cost of this item is greater than or less than the amount provided for herein, this study should be updated to reflect the actual component cost.

Admin Building: Interior - Remodel




Remaining Life 11

1 Total @ $10,768.91Asset Cost $10,768.91


This provision is for the remodel of the interior of the admin building.

The cost is based on information from the Association.

The useful life assumption is based on accepted industry estimates as established by RS Means and/or The National Construction Estimator.


Note: This is a provision for an anticipated expense. Should the Association find that the cost of this item is greater than or less than the amount provided for herein, this study should be

Revised 3/29/2017



PAGE 21 of 62

Admin Building: Interior - Remodel continued...

updated to reflect the actual component cost.

Admin Building: Roof - Replacement




Remaining Life 11

3,250 SF @ $3.77Asset Cost $12,252.50


This provision is for the replacement of the shingle roof on the admin building.

Schwindt and Company estimated the roof to measure 3,250 square feet.



Admin Building: Septic System - Replacement



Useful Life 20Adjustment 10

Replacement Year 2035Remaining Life 18

1 Total @ $21,537.81Asset Cost $21,537.81


This provision is for the replace the septic system of the admin building.

The useful life of this component is dependent on routine maintenance and inspections.

The cost and useful life are based on information from DPR Buildings and Developers.

Revised 3/29/2017



PAGE 22 of 62

Admin Building - Total Current Cost $55,328

Revised 3/29/2017



PAGE 23 of 62

Cabana 15 - Renovation


CabanasPlaced in Service January 2003


Remaining Life 6

1 Total @ $10,768.91Asset Cost $10,768.91


This provision is for the replacement and repair of cabana 15. This includes replacement of the roof, repair of the exterior siding, 2 bathrooms, and chimney.

Schwindt and Company estimate the roof to measure 1,200 square feet.




Cabana 15 Septic System - Replacement





1 Total @ $21,537.81Asset Cost $21,537.81


This provision is for the replacement of the septic system on cabana 15.



Revised 3/29/2017



PAGE 24 of 62





Remaining Life 6

1 Total @ $10,768.91Asset Cost $10,768.91


This provision is for the replacement and repair of cabana 16. This includes replacement of the roof, repair of the exterior siding, 2 bathrooms, and chimney.










1 Total @ $21,537.81Asset Cost $21,537.81





Revised 3/29/2017



PAGE 25 of 62





Remaining Life 6

1 Total @ $10,768.91Asset Cost $10,768.91


This provision is for the replacement and repair of cabana 17. This includes replacement of the roof, repair of the exterior siding, and 2 bathrooms.










1 Total @ $21,537.81Asset Cost $21,537.81





Revised 3/29/2017



PAGE 26 of 62

Cabanas - Total Current Cost $96,920

Revised 3/29/2017



PAGE 27 of 62

Pedestrian Bridges - Replacement

Asset ID 1011CapitalBridges

Placed in Service January 2009Useful Life 30


1 Total @ $349,989.45Asset Cost $349,989.45


This provision is for the replacement of the pedestrian bridges. The bridges should be inspected regularly to ensure they are wearing as intended.

According to the Association, the bridges were replaced in 2009 for $325,000.

The useful life is based on information from the Association.

Bridges - Total Current Cost $349,989

Revised 3/29/2017



PAGE 28 of 62

RV/Trash Area: Asphalt - Overlay


RV/Trash AreasPlaced in Service January 2000


Remaining Life 3

7,500 SF @ $2.15Asset Cost $16,125.00


This provision is for the overlay of the asphalt at the trash compactor.

Schwindt and Company estimated 7,500 square feet of asphalt.



RV/Trash Area: Buildings - Repair




Remaining Life 3

1 Total @ $10,768.91Asset Cost $10,768.91


This provision is for the repair of the RV and trash compactor area buildings. This includes replacement of the roofs and repair of the siding.

Schwindt and Company estimated 1,400 square feet of roofing on the dry box building and compactor building.



Revised 3/29/2017



PAGE 29 of 62

RV/Trash Area: Compactor 1 - Replacement




Remaining Life 7

1 Total @ $30,239.09Asset Cost $30,239.09


This provision is for the replacement of trash compactor 1.



RV/Trash Area: Compactor 2 - Replacement




Remaining Life 3

1 Total @ $30,239.09Asset Cost $30,239.09


This provision is for the replacement of trash compactor 2.



Revised 3/29/2017



PAGE 30 of 62

RV/Trash Area: Electrical Systems - Replacement





1 Total @ $161,533.59Asset Cost $161,533.59


This provision is for the replacement of electrical system at the RV park.

The cost is based on information from Doug's Electric. (541)265-8630. This is a preliminary number. The actual cost will depend on the level of service desired.

The Association should obtain an actual bid and the reserve study should be updated when the information is available.

RV/Trash Area: Fence - Replacement





1,800 LF @ $21.54Asset Cost $38,772.00


This provision is for the replacement of the RV and trash compactor area chain link fence.

Schwindt and Company estimated 1,800 linear feet on fencing.



Revised 3/29/2017



PAGE 31 of 62

RV/Trash Area: Septic System - Replacement





1 Total @ $16,153.35Asset Cost $16,153.35


This provision is for the replacement of the RV and trash area septic system.



RV/Trash Areas - Total Current Cost $303,831

Revised 3/29/2017



PAGE 32 of 62

Warehouse: Building - Replacement


WarehousePlaced in Service January 1979



1 Total @ $105,062.50Asset Cost $105,062.50


This provision is for the replacement of the warehouse building and area.

Schwindt and Company estimated 1,500 square feet of roofing and 192 linear feet of fencing.



Warehouse - Total Current Cost $105,062

Revised 3/29/2017



PAGE 33 of 62

Equipment: Backhoe - Replacement


EquipmentPlaced in Service January 2000

Useful Life 20Adjustment -3


1 Total @ $64,613.44Asset Cost $64,613.44


This provision is for the replacement of the backhoe. The Association may replace it with a Skid Steer.


Equipment: Excavator - Replacement





1 Total @ $69,997.89Asset Cost $69,997.89


This provision is for the replacement of the excavator.


Equipment: Ford Ranger - Replacement




Remaining Life 6

1 Total @ $18,307.14Asset Cost $18,307.14


This provision is for the replacement of the Ford Ranger.


Revised 3/29/2017



PAGE 34 of 62

Equipment: Pow-r Mole - Replacement





1 Total @ $40,000.00Asset Cost $40,000.00


This provision is for the replacement of the Pow-r Mole. Model PD-4 w/ P-1 pusher box.


Equipment: Utility Truck - Replacement




Remaining Life 4

1 Total @ $26,922.26Asset Cost $26,922.26


This provision is for the replacement of the Chevy Utility Truck.


Equipment: Vermeer Vacuum Excavator - Replacement





1 Total @ $25,000.00Asset Cost $25,000.00


This provision is for the replacement of the Vermeer Vacuum Excavator model V500LT.


Revised 3/29/2017



PAGE 35 of 62

Equipment - Total Current Cost $244,841

Revised 3/29/2017



PAGE 36 of 62

Maintenance Building - Replacement


Maintenance BuildingPlaced in Service January 2016


Remaining Life 19

1 Total @ $120,000.00Asset Cost $120,000.00


This provision is for the replacement for maintenance building including the siding, roof, doors and all other components. It is a metal building with a metal roof.

Schwindt and Company estimated the building to measure 77 feet x 33 feet.



Maintenance Building - Total Current Cost $120,000

Revised 3/29/2017



PAGE 37 of 62

Playground Area - Repair and Update


PlaygroundPlaced in Service January 2014


Remaining Life 17

1 Total @ $26,922.26Asset Cost $26,922.26


This provision is for the replacement of the playground equipment. At the time of site visit there was a swing set and jungle gym.



In 2014, the Association spent $3,825.27 on playground equipment.

Playground - Total Current Cost $26,922

Revised 3/29/2017



PAGE 38 of 62

Booster Building Septic - Replacement


J- Well Field AreaPlaced in Service January 1979



1 Total @ $21,537.81Asset Cost $21,537.81


This provision is for the replacement of the septic system at the J- Well Field Area.



Water System Area: Booster Building Exterior





1 Total @ $26,922.26Asset Cost $26,922.26


This provision is for the repair of the booster building exterior (including the roof).

The cost and useful life assumptions are based on estimates from the Association.


Revised 3/29/2017



PAGE 39 of 62

Water System Area: Filter Plant Building Exterior




Remaining Life 13

1 Total @ $32,306.72Asset Cost $32,306.72


This provision is for the repair of the filter plant building exterior (including the roof).



Water System Area: Generator - Replacement




Remaining Life 13

1 Total @ $75,382.34Asset Cost $75,382.34


This provision is for the replacement of the emergency generator.

The cost and useful life are based on information from the Association.

Revised 3/29/2017



PAGE 40 of 62

Water System Area: Manifold Building Exterior





1 Total @ $16,153.35Asset Cost $16,153.35


This provision is for the repair of the manifold building exterior (including the roof).

This will be moved to the new building once it is built. Therefor this is unfunded.



J- Well Field Area - Total Current Cost $156,149

Revised 3/29/2017



PAGE 41 of 62

Water Maintenance Building - Addition


Water SystemsPlaced in Service January 2015


Remaining Life 28

1 Total @ $105,062.50Asset Cost $105,062.50


This provision is for the addition of a water maintenance building. According to the Association it will be 4,400 square foot metal sided, metal roofed pole barn built to Pacific County specification.


Water Systems: ATEC Filtration Plant - Replacement




Remaining Life 8

1 Total @ $484,600.78Asset Cost $484,600.78


This provision is for the replacement of the ATEC Filtration Plant.


Water Systems: Backwash Basin - Replacement




Remaining Life 38

1 Total @ $26,922.26Asset Cost $26,922.26


This provision is for the replacement of the backwash basin.

Revised 3/29/2017



PAGE 42 of 62

Water Systems: Backwash Basin - Replacement continued...


Water Systems: Booster Station Electrical - Replacement





1 Total @ $86,151.25Asset Cost $86,151.25


This provision is for the replacement of the booster station electrical systems.


Water Systems: Booster Station Mechanical - Replacement





1 Total @ $53,844.53Asset Cost $53,844.53


This provision is for the replacement of the booster station mechanical systems.


Revised 3/29/2017



PAGE 43 of 62

Water Systems: Distribution - Repair





100,660 Each @ $30.16Asset Cost $3,035,905.60

Percent Replacement 100%Future Cost $3,035,905.60

*Note: RCW 64.38.070(2)(a) provides that a component with a value of more than one percent of the annual budget may be excluded from the reserve study. The statute suggests that the reserve study provide commentary explaining the basis for it exclusion. The Surfside water distribution system has been excluded from the reserve study for the following reasons:

This provision is for the repair of the distribution system. According to the Association, repairs will be made as needed and paid for out of the operating budget.


Surfside has approximately 22 miles of water distribution system (water mains). The water mains consist of 8-inch, 6-inch, and 4-inch diameter pipes. The water mains are mostly asbestos cement (AC) pipe. In 2008 the Surfside Board of Trustees authorized and initiated a water main replacement program. The program’s goal is to replace all 22 miles of AC water main with high quality PVC C-900 water mains. The plan calls for the replacement of one mile of water main a year. The original plan authorized an annual $50.00 per lot assessment to pay for the water main replacement program. The Board of Trustees, through the annual budget process, reviews the annual assessment and makes recommendations for adjustments. The Board of Trustees increased the annual assessment to $52.00 per lot in 2013.

Surfside is replacing the water main in-house. Surfside has taken the following steps to assure they will be able to professionally replace their water mains in-house: purchased specialized equipment, hired experienced tradesman, and contracted with a water system manager with underground utilities project management experience.

From 2008 through 2012 Surfside crews have been replacing water main for an average of $28.00 per linear foot. At $28.00 per linear foot the current value of the water distribution system is $3,252,480.00.

Revised 3/29/2017



PAGE 44 of 62

Water Systems: Manifold Building Electrical - Replacement




Remaining Life 15

1 Total @ $32,306.72Asset Cost $32,306.72


This provision is for the replacement of the manifold building electrical systems.


Water Systems: Manifold Building Mechanical - Replacement




Remaining Life 14

1 Total @ $16,153.35Asset Cost $16,153.35


This provision is for the replacement of the manifold building mechanical systems.


Water Systems: Potassium Permanganate Feed System - Replacement




Remaining Life 3

1 Total @ $10,768.91Asset Cost $10,768.91


This provision is for the replacement of the Potassium Permanganate Feed System.


Revised 3/29/2017



PAGE 45 of 62

Water Systems - Total Current Cost $815,810

Revised 3/29/2017



PAGE 46 of 62

Water Systems: J-2A Pump - Replacement

Asset ID 1046CapitalPumps



1 Total @ $16,153.35Asset Cost $16,153.35


This provision is for the replacement of the J-2A Pump.


Water Systems: J-3 Pump - Replacement




1 Total @ $16,153.35Asset Cost $16,153.35


This provision is for the replacement of the J-3 Pump.






1 Total @ $16,153.35Asset Cost $16,153.35




Revised 3/29/2017



PAGE 47 of 62





1 Total @ $16,153.35Asset Cost $16,153.35








1 Total @ $16,153.35Asset Cost $16,153.35








1 Total @ $16,153.35Asset Cost $16,153.35




Revised 3/29/2017



PAGE 48 of 62

Pumps - Total Current Cost $96,920

Revised 3/29/2017



PAGE 49 of 62

Water Systems: Reservoirs #1 - Replacement


ReservoirsPlaced in Service January 1984


Remaining Life 27

1 Total @ $204,609.22Asset Cost $204,609.22


This provision is for the replacement of reservoir #1.






Remaining Life 27

1 Total @ $204,609.22Asset Cost $204,609.22








Remaining Life 38

1 Total @ $204,609.22Asset Cost $204,609.22




Revised 3/29/2017



PAGE 50 of 62





Remaining Life 44

1 Total @ $204,609.22Asset Cost $204,609.22




Reservoirs - Total Current Cost $818,437

Revised 3/29/2017



PAGE 51 of 62

Water Systems: J-2A Well - Replacement


WellsPlaced in Service January 1983


Remaining Life 26

1 Total @ $48,460.07Asset Cost $48,460.07


This provision is for the replacement of the J-2A Well.


Water Systems: J-3 Well - Replacement




Remaining Life 34

1 Total @ $48,460.07Asset Cost $48,460.07


This provision is for the replacement of the J-3 Well.






Remaining Life 37

1 Total @ $48,460.07Asset Cost $48,460.07




Revised 3/29/2017



PAGE 52 of 62





Remaining Life 37

1 Total @ $48,460.07Asset Cost $48,460.07








Remaining Life 39

1 Total @ $48,460.07Asset Cost $48,460.07








Remaining Life 39

1 Total @ $48,460.07Asset Cost $48,460.07




Revised 3/29/2017



PAGE 53 of 62

Wells - Total Current Cost $290,760

Revised 3/29/2017


Fully Funded Method Summary


PAGE 54 of 57



Total Units 2853

Report Parameters

Inflation 2.50%

Interest Rate on Reserve Deposit 0.10%


Full Funding 100% Funded Model Summary

This scenario uses the fully funded method. A goal of being 100% funded is used.


This funding scenario begins with an initial contribution of $277,523 in 2017 and varies each year for the remaining years of the study. A goal of being 100% funded is used.


Fully Funded Method Summary of Calculations


Average Net Annual Interest Earned $1,057.56Total Annual Allocation to Reserves $278,580.97


Revised 3/29/2017

Surfside Homeowners Association Fully Funded Method Projection


PAGE 55 of 57



2017 277,523 1,058 150,765 1,058,615 1,763,446 60%2018 267,277 1,271 55,191 1,271,972 1,883,515 68%2019 266,312 1,538 1,539,822 2,066,470 75%2020 270,404 1,607 203,659 1,608,174 2,049,980 78%2021 278,667 1,529 357,799 1,530,571 1,881,189 81%2022 279,410 1,810 1,811,790 2,078,590 87%2023 282,051 2,035 58,697 2,037,180 2,224,521 92%2024 284,860 2,286 35,945 2,288,381 2,401,274 95%2025 292,190 1,990 590,439 1,992,122 2,018,039 99%2026 291,686 2,203 81,176 2,204,835 2,147,106 103%2027 278,308 2,359 124,066 2,361,436 2,239,483 105%2028 268,265 2,585 44,336 2,587,951 2,420,040 107%2029 263,040 2,822 28,966 2,824,847 2,626,005 108%2030 270,368 2,890 204,981 2,893,124 2,661,083 109%2031 276,838 3,048 121,729 3,051,282 2,786,860 109%2032 274,263 3,279 46,790 3,282,034 2,997,194 110%2033 278,594 3,425 135,885 3,428,167 3,127,818 110%2034 281,102 3,622 86,978 3,625,913 3,316,712 109%2035 281,223 3,845 62,145 3,848,837 3,541,353 109%2036 288,992 3,946 191,838 3,949,937 3,643,809 108%2037 299,012 4,002 247,045 4,005,905 3,697,503 108%2038 294,644 4,301 4,304,850 4,011,157 107%2039 316,645 4,019 602,532 4,022,982 3,720,587 108%2040 317,345 4,211 129,322 4,215,216 3,913,462 108%2041 317,516 4,406 126,607 4,410,531 4,119,751 107%2042 322,567 4,553 179,684 4,557,967 4,282,750 106%2043 325,584 4,730 153,481 4,734,801 4,482,787 106%2044 364,205 4,243 855,975 4,247,273 3,974,024 107%2045 423,862 3,440 1,231,010 3,443,565 3,074,546 112%2046 423,548 3,679 188,110 3,682,682 3,228,127 114%

Revised 3/29/2017


Baseline Method Summary


PAGE 56 of 57



Total Units 2853

Report Parameters



Baseline Funding Fully Reserved Model Summary

This study utilizes the cash flow method and the threshold funding model, which establishes a reserve funding goal that keeps the reserve balance above 0 dollars. This scenario represents the minimum funding requirement.


This funding scenario begins with a contribution of $113,786 in 2017 and increases 3.00% each year for the remaining years of the study. A minimum balance of $1 is maintained.


Baseline Method Summary of Calculations




Revised 3/29/2017

Surfside Homeowners Association Baseline Model Projection


PAGE 57 of 57



2017 113,786 894 150,765 894,715 1,763,446 51%2018 117,200 957 55,191 957,681 1,883,515 51%2019 120,716 1,078 1,079,475 2,066,470 52%2020 124,338 1,000 203,659 1,001,154 2,049,980 49%2021 128,068 771 357,799 772,194 1,881,189 41%2022 131,910 904 905,008 2,078,590 44%2023 135,867 982 58,697 983,161 2,224,521 44%2024 139,943 1,087 35,945 1,088,246 2,401,274 45%2025 144,141 642 590,439 642,590 2,018,039 32%2026 148,466 710 81,176 710,590 2,147,106 33%2027 152,920 739 124,066 740,183 2,239,483 33%2028 157,507 853 44,336 854,207 2,420,040 35%2029 162,232 987 28,966 988,461 2,626,005 38%2030 167,099 951 204,981 951,530 2,661,083 36%2031 172,112 1,002 121,729 1,002,915 2,786,860 36%2032 177,276 1,133 46,790 1,134,534 2,997,194 38%2033 182,594 1,181 135,885 1,182,424 3,127,818 38%2034 188,072 1,284 86,978 1,284,802 3,316,712 39%2035 193,714 1,416 62,145 1,417,788 3,541,353 40%2036 199,525 1,425 191,838 1,426,900 3,643,809 39%2037 205,511 1,385 247,045 1,386,751 3,697,503 38%2038 211,676 1,598 1,600,026 4,011,157 40%2039 218,027 1,216 602,532 1,216,736 3,720,587 33%2040 224,567 1,312 129,322 1,313,294 3,913,462 34%2041 231,304 1,418 126,607 1,419,409 4,119,751 34%2042 238,244 1,478 179,684 1,479,447 4,282,750 35%2043 245,391 1,571 153,481 1,572,928 4,482,787 35%2044 252,753 970 855,975 970,675 3,974,024 24%2045 260,335 1,231,010 1 3,074,546 0%2046 268,145 80 188,110 80,116 3,228,127 2%

Revised 3/29/2017


PAGE 58 of 57

Additional Disclosures

Levels of Service

The following three categories describe the various types of Reserve Studies from exhaustive to minimal.

I. Full: A Reserve Study in which the following five Reserve Study tasks are performed: ■ Component Inventory ■ Condition Assessment (based upon on-site visual observations) ■ Life and Valuation Estimates ■ Fund Status ■ Funding Plan

II. Update, With Site Visit/On-Site Review: A Reserve Study update in which the following five Reserve

Study tasks are performed: ■ Component Inventory (verification only, not quantification) ■ Condition Assessment (based on on-site visual observations) ■ Life and Valuation Estimates ■ Fund Status ■ Funding Plan

III. Update, No Site Visit/Off Site Review: A Reserve Study update with no on-site visual observations in

which the following three Reserve Study tasks are performed: ■ Life and Valuation Estimates ■ Fund Status ■ Funding Plan

Terms and Definitions

CASH FLOW METHOD: A method of developing a reserve Funding Plan where contributions to the reserve

fund are designed to offset the variable annual expenditures from the reserve fund. Different reserve Funding

Plans are tested against the anticipated schedule of reserve expenses until the desired Funding Goal is achieved.

COMPONENT: The individual line items in the Reserve Study developed or updated in the Physical Analysis.

These elements form the building blocks for the Reserve Study. Components typically are: 1) association

responsibility; 2) with limited Useful Life expectancies; 3) predictable Remaining Useful Life expectancies; 4)

above a minimum threshold cost; and 5) as required by local codes.

COMPONENT INVENTORY: The task of selecting and quantifying reserve Components. This task can be

accomplished through on-site visual observations, review of association design and organizational documents, a

review of established association precedents, and discussion with appropriate association representative(s) of

the Association or cooperative.

COMPONENT METHOD: A method of developing a reserve Funding Plan where the total contribution is

based on the sum of contributions for individual Components. See Cash Flow Method.

Revised 3/29/2017


PAGE 59 of 57

CONDITION ASSESSMENT: The task of evaluating the current condition of the Component based on

observed or reported characteristics.

CURRENT REPLACEMENT COST: See Replacement Cost.

DEFICIT: An actual or projected Reserve Balance that is less than the Fully Funded Balance. The opposite

would be a Surplus.

EFFECTIVE AGE: The difference between Useful Life and Remaining Useful Life. Not always equivalent to

chronological age since some Components age irregularly. Used primarily in computations.

FINANCIAL ANALYSIS: The portion of a Reserve Study where current status of the reserves (measured as

cash or Percent Funded) and a recommended reserve contribution rate (reserve Funding Plan) are derived, and

the projected reserve income and expense over time is presented. The Financial Analysis is one of the two parts

of a Reserve Study.

FULLY FUNDED: 100% Funded. When the actual or projected Reserve Balance is equal to the Fully Funded

Balance.

FULLY FUNDED BALANCE (FFB): Total accrued depreciation, an indicator against which actual or

projected Reserve Balance can be compared. The Reserve Balance that is in direct proportion to the fraction of

life “used up” of the current repair or Replacement Cost. This number is calculated for each Component, then

added together for an association total. Two formulas can be utilized, depending on the provider’s sensitivity to

interest and inflation effects. Note: Both yield identical results when interest and inflation are equivalent.

FFB = Current Cost X Effective Age / Useful Life

or

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

Useful Life) / (1 + Interest Rate) ^ Remaining Life] - [(Current Cost X Effective Age / Useful

Life) / (1 + Inflation Rate) ^ Remaining Life]

FUND STATUS: The status of the reserve fund as compared to an established benchmark such as percent

funding. The Association appears to be adequately funded as the threshold method.

FUNDING GOALS: Independent of methodology utilized, the following represent the basic categories of

Funding Plan goals:

■ Baseline Funding: Establishing a reserve funding goal of keeping the reserve cash balance above zero.

■ Full Funding: Setting a reserve funding goal of attaining and maintaining reserves at or near 100%

funded.

■ Statutory Funding: Establishing a reserve funding goal of setting aside the specific minimum amount of

Revised 3/29/2017


PAGE 60 of 57

reserves required by local statues.

■ Threshold Funding: Establishing a reserve funding goal of keeping the Reserve Balance above a

specified dollar or Percent Funded amount. Depending on the threshold, this may be more or less

conservative than fully funding.

The baseline method involves preparing a funding model that funds all expected costs over a specified period, in most cases 30 years. Although this model funds the replacement reserve bank account for all expected costs, it does not include a contingency amount should any components cost more than expected. Proponents of this method only want to fund expected costs to maintain, repair and replace common area components. It should be noted that this is the bare amount needed to fund expenditures and has no provision for unexpected costs.

The threshold method involves preparing a funding model that funds all expected costs much like the baseline method, but also includes a contingency amount for unexpected costs. Reserve study specialists refer to this contingency as the “threshold”. Over a 30 year period, the baseline model would show a funding schedule that would allow the replacement reserve cash balance to drop to zero at some point in a 30 year period. The threshold method would provide an amount that the projected replacement reserve cash balance would not fall below, say $100,000. The $100,000 is called the threshold and provides for unexpected costs. Proponents of this method realize that over a 30 year period, unexpected costs may arise and it may be prudent to have extra cash to pay for these costs.

The fully funded model uses a formula for computing the threshold. This formula mirrors the method used for computing depreciation. It computes a threshold that in some cases allows funding for twice the amount of expected costs. The fully funded model also allows for not being 100% fully funded. If you are 50% funded, the threshold or contingency would theoretically be half of what it would be if the Association is 100% funded. Proponents of this method realize Associations have “surprises” and it is prudent to have as much cash as you can as a contingency to provide for these costs. Many Association managers have seen their Associations run into trouble when surprises occur which may lead to special assessments to pay for needed repairs and replacements.

FUNDING PLAN: An association’s plan to provide income to a reserve fund to offset anticipated expenditures

from that fund.

FUNDING PRINCIPLES: ■ Sufficient Funds When Required ■ Stable Contribution Rate over the Years ■ Evenly Distributed Contributions over the Years ■ Fiscally Responsible

FUTURE REPLACEMENT COST: The estimated cost to repair or replace the asset at the end of its estimated useful life based upon the current replacement cost and inflation.

LIFE AND VALUATION ESTIMATES: The task of estimating Useful Life, Remaining Useful Life, and repair or Replacement Costs for the reserve Components.

PERCENT FUNDED: The ratio at a particular point of time (typically the beginning of the Fiscal Year) of the

Revised 3/29/2017


PAGE 61 of 57

actual or projected Reserve Balance to the Fully Funded Balance, expressed as a percentage.

PHYSICAL ANALYSIS: The portion of the Reserve Study where the Component Inventory, Condition

Assessment, and Life and Valuation Estimate tasks are performed. This represents one of the two parts of the

Reserve Study.

REMAINING USEFUL LIFE (RUL): Also referred to as “Remaining Life” (RL). The estimated time, in years,

that a reserve Component can be expected to continue to serve its intended function. Projects anticipated to

occur in the initial year have “zero” Remaining Useful Life.

REPLACEMENT COST: The cost of replacing, repairing, or restoring a reserve Component to its original

functional condition. The Current Replacement Cost would be the cost to replace, repair, or restore the

Component during that particular year.

RESERVE BALANCE: Actual or projected funds as of a particular point in time that the Association has

identified for use to defray the future repair or replacement of those major Components which the Association is

obligated to maintain. Also known as reserves, reserve accounts, or cash reserves. Based upon information

provided and not audited.

RESERVE PROVIDER: An individual that prepares Reserve Studies.

RESERVE STUDY: A budget planning tool which identifies the current status of the reserve fund and a stable

and equitable Funding Plan to offset the anticipated future major common area expenditures. The Reserve Study

consists of two parts: the Physical Analysis and the Financial Analysis.

RESPONSIBLE CHARGE: A reserve specialist in Responsible Charge of a Reserve Study shall render regular and effective supervision to those individuals performing services which directly and materially affect the quality and competence rendered by the reserve specialist. A reserve specialist shall maintain such records as are reasonably necessary to establish that the reserve specialist exercised regular and effective supervision of a Reserve Study of which he was in Responsible Charge. A reserve specialist engaged in any of the following acts or practices shall be deemed not to have rendered the regular and effective supervision required herein:

■ The regular and continuous absence from principal office premises from which professional services are rendered, except for performance of field work or presence in a field office maintained exclusively for a specific project;

■ The failure to personally inspect or review the work of subordinates where necessary and appropriate;

■ The rendering of a limited, cursory, or perfunctory review of plans or projects in lieu of an appropriate detailed review;

■ The failure to personally be available on a reasonable basis or with adequate advance notice for consultation and inspection where circumstances require personal availability.

SPECIAL ASSESSMENT: An assessment levied on the members of an association in addition to regular assessments. Special Assessments are often regulated by governing documents or local statutes.

Revised 3/29/2017


PAGE 62 of 57

SURPLUS: An actual or projected Reserve Balance greater than the Fully Funded Balance.The opposite would be a Deficit.

USEFUL LIFE (UL): Total Useful Life or depreciable life. The estimated time, in years, that a Reserve Component can be expected to serve its intended function if properly constructed in its present application or installation.

Revised 3/29/2017


PAGE 1 of 14

SURFSIDE HOMEOWNERS ASSOCIATION: WATER PIPES

RESERVE STUDY

LEVEL II: UPDATE WITH VISUAL SITE INSPECTION

2017

https://www.schwindtco.com/(503) 227-1165

Revised 3/29/2017


PAGE 2 of 14

SURFSIDE HOMEOWNERS ASSOCIATION: WATER PIPES

Executive Summary

Year of Report:

January 1, 2017 to December 31, 2017

Number of Units:

2853 Units

Parameters:

Beginning Balance: $163,727

Year 2017 Suggested Contribution: $158,000

Year 2017 Projected Interest Earned: $164

Inflation: 2.50%

Annual Increase to Suggested Contribution: 2.50%

Lowest Cash Balance Over 30 Years (Threshold): $163,727

Prior Year’s Actual Contribution: $158,000

RCW 64.38.070(HOA) Section 4.2 Disclosures:(a) A reserve component list: Please see pages 6(b) Date of study: November 29, 2016

This reserve study meets the requirements of RCW 64.38.070 (HOA) section 4(c) Level II: Update with Visual Site Inspection(d) Reserve account balance as of January 1, 2017 : $163,727(e) Percent funded as of 2017: 101%(f) Special assessments implemented or planned: Please see page 4(g) Interest rate: 0.1% Inflation rate: 2.50%(h) Current reserve account contribution rate: $158,000(i) 2017 Recommended reserve contribution: $158,000

2017 Fully funded contribution: $3,7882017 Baseline contribution: $147,117

(j) Projected account balance for thirty years: Please see page 4(k) This reserve study was prepared by a reserve study professional.

Revised 3/29/2017

jwong

Letter Head

TABLE OF CONTENTSSurfside Homeowners Association: Water Pipes


PAGE 3 of 14

Reserve Study

Cash Flow Method - Threshold Funding Model Summary 4 of 14

Cash Flow Method - Threshold Funding Model Projection 5 of 14

Component Summary By Category 6 of 14

Component Summary By Name 7 of 14

Annual Expenditure Detail 8 of 14

Detail Report by Category 10 of 14

Appendix

Fully Funded Method Summary 11 of 14

Fully Funded Method Projection 12 of 14

Baseline Method Summary 13 of 14

Baseline Model Projection 14 of 14

Revised 3/29/2017

Surfside Homeowners Association: Water PipesOcean Park, Washington

Cash Flow Method - Threshold Funding Model Summary


PAGE 4 of 14



Total Units 2853

Report Parameters

Inflation 2.50%



Threshold Funding Fully Reserved Model Summary

This study utilizes the cash flow method and the threshold funding model, which establishes a reserve funding goal that keeps the reserve balance above a specified dollar or percent funded amount. The threshold method assumes that the threshold method is funded with a positive threshold balance, therefore, "fully reserved".


This funding scenario begins with a contribution of $158,000 in 2017 and increases 2.50% each year until 2029. In 2029 the contribution is $0 and remains constant for the remaining years of the study. A minimum balance of $163,727 is maintained.


Cash Flow Method - Threshold Funding Model Summary of Calculations




Revised 3/29/2017

Surfside Homeowners Association: Water Pipes Cash Flow Method - Threshold Funding Model Projection


PAGE 5 of 14



2017 158,000 164 158,000 163,891 161,950 101%2018 161,950 164 161,950 164,055 165,999 99%2019 165,999 164 165,999 164,219 170,149 97%2020 170,149 164 170,149 164,383 174,402 94%2021 174,402 164 174,402 164,547 178,762 92%2022 178,762 165 178,762 164,712 183,232 90%2023 183,232 165 183,232 164,877 187,812 88%2024 187,812 165 187,812 165,041 192,508 86%2025 192,508 165 192,508 165,206 197,320 84%2026 197,320 165 197,320 165,372 202,253 82%2027 202,253 165 202,253 165,537 207,310 80%2028 207,310 166 207,310 165,703 212,492 78%2029 212,492 166 212,492 165,868 217,805 76%2030 166 166,034 inf2031 166 166,200 inf2032 166 166,366 inf2033 166 166,533 inf2034 167 166,699 inf2035 167 166,866 inf2036 167 167,033 inf2037 167 167,200 inf2038 167 167,367 inf2039 167 167,534 inf2040 168 167,702 inf2041 168 167,870 inf2042 168 168,038 inf2043 168 168,206 inf2044 168 168,374 inf2045 168 168,542 inf2046 169 168,711 inf

Revised 3/29/2017

Surfside Homeowners Association: Water Pipes Component Summary By Category


PAGE 6 of 14

Serv

ice

Dat

e in

Yea

r

Rep

lace

men

tU

sefu

lA

djus

tmen

tR

emai

ning

Uni

ts

Cos

t

Uni

t

Cos

t

Cur

rent

Description

Water SystemsWater Pipes - Replacement 2016 2017 1 0 0 1 Total 158,000.00 158,000 Water Systems - Total $158,000

Total Asset Summary $158,000

Revised 3/29/2017

Surfside Homeowners Association: Water Pipes Component Summary By Name


PAGE 7 of 14

Serv

ice

Dat

e in

Yea

r

Rep

lace

men

tU

sefu

lA

djus

tmen

tR

emai

ning

Uni

ts

Cos

t

Uni

t

Cos

t

Cur

rent

Description

Water Pipes - Replacement 2016 2017 1 0 0 1 Total 158,000.00 158,000Total Asset Summary $158,000

Revised 3/29/2017

Surfside Homeowners Association: Water Pipes Annual Expenditure Detail


PAGE 8 of 14


Replacement Year 2017Water Pipes - Replacement 158,000

Total for 2017 $158,000


Total for 2018 $161,950


Total for 2019 $165,999


Total for 2020 $170,149


Total for 2021 $174,402


Total for 2022 $178,762


Total for 2023 $183,232


Total for 2024 $187,812


Total for 2025 $192,508

Revised 3/29/2017

Surfside Homeowners Association: Water Pipes Annual Expenditure Detail


PAGE 9 of 14



Total for 2026 $197,320


Total for 2027 $202,253


Total for 2028 $207,310


Total for 2029 $212,492

Revised 3/29/2017

Surfside Homeowners Association: Water Pipes Detail Report by Category


PAGE 10 of 14

Water Pipes - Replacement




Remaining Life 0

1 Total @ $158,000.00Asset Cost $158,000.00


This provision is for the replacement of the water piping system. According to the Association they have 21 miles of piping. The Associations plans to replace 1 mile of pipe every year until all piping has been replaced. This process began in 2009.


Water Systems - Total Current Cost $158,000

Revised 3/29/2017


Fully Funded Method Summary


PAGE 11 of 14



Total Units 2853

Report Parameters

Inflation 2.50%



Full Funding 100% Funded Model Summary

This scenario uses the fully funded method. A goal of being 100% funded is used.


This funding scenario begins with an initial contribution of $3,788 in 2017 and varies each year for the remaining years of the study. A goal of being 100% funded is used.


Fully Funded Summary of Calculations




Revised 3/29/2017

Surfside Homeowners Association: Water Pipes Fully Funded Method Projection


PAGE 12 of 14



2017 3,788 649 158,000 650,041 161,950 401%2018 3,883 492 161,950 492,465 165,999 297%2019 3,980 330 165,999 330,777 170,149 194%2020 13,600 174 170,149 174,402 174,402 100%2021 178,584 179 174,402 178,762 178,762 100%2022 183,049 183 178,762 183,232 183,232 100%2023 187,625 188 183,232 187,812 187,812 100%2024 192,315 192 187,812 192,508 192,508 100%2025 197,123 197 192,508 197,320 197,320 100%2026 202,051 202 197,320 202,253 202,253 100%2027 207,103 207 202,253 207,310 207,310 100%2028 212,280 212 207,310 212,492 212,492 100%2029 212,492 -0 217,805 0%2030 -0 inf2031 -0 inf2032 -0 inf2033 -0 inf2034 -0 inf2035 -0 inf2036 -0 inf2037 -0 inf2038 -0 inf2039 -0 inf2040 -0 inf2041 -0 inf2042 -0 inf2043 -0 inf2044 -0 inf2045 -0 inf2046 -0 inf

Revised 3/29/2017


Baseline Method Summary


PAGE 13 of 14



Total Units 2853

Report Parameters



Baseline Funding Fully Reserved Model Summary

This study utilizes the cash flow method and the threshold funding model, which establishes a reserve funding goal that keeps the reserve balance above 0 dollars. This scenario represents the minimum funding requirement.


This funding scenario begins with a contribution of $147,117 in 2017 and increases 2.50% each year for the remaining years of the study. A minimum balance of $0 is maintained.


Baseline Method Summary of Calculations




Revised 3/29/2017

Surfside Homeowners Association: Water Pipes Baseline Model Projection


PAGE 14 of 14



2017 147,117 153 158,000 152,997 161,950 94%2018 150,795 142 161,950 141,984 165,999 86%2019 154,565 131 165,999 130,681 170,149 77%2020 158,429 119 170,149 119,081 174,402 68%2021 162,390 107 174,402 107,176 178,762 60%2022 166,450 95 178,762 94,958 183,232 52%2023 170,611 82 183,232 82,420 187,812 44%2024 174,876 69 187,812 69,553 192,508 36%2025 179,248 56 192,508 56,350 197,320 29%2026 183,729 43 197,320 42,802 202,253 21%2027 188,323 29 202,253 28,900 207,310 14%2028 193,031 15 207,310 14,636 212,492 7%2029 197,857 212,492 0 217,805 0%2030 202,803 203 203,006 inf2031 207,873 411 411,290 inf2032 213,070 624 624,984 inf2033 218,397 843 844,224 inf2034 223,857 1,068 1,069,149 inf2035 229,453 1,299 1,299,900 inf2036 235,189 1,535 1,536,624 inf2037 241,069 1,778 1,779,471 inf2038 247,096 2,027 2,028,593 inf2039 253,273 2,282 2,284,148 inf2040 259,605 2,544 2,546,297 inf2041 266,095 2,812 2,815,205 inf2042 272,747 3,088 3,091,040 inf2043 279,566 3,371 3,373,977 inf2044 286,555 3,661 3,664,192 inf2045 293,719 3,958 3,961,870 inf2046 301,062 4,263 4,267,195 inf

Revised 3/29/2017

Date post:	07-Sep-2018
Category:	Documents
Upload:	habao
View:	214 times
Download:	0 times

November 30, 2016 - Surfside Homeowners Association · November 30, 2016 Surfside Homeowners ......

Documents