Oak Landing at Imperial Lakes, Inc.

Reserve Study

Conducted on November 11, 2011

A full reserve study was authorized by the Oak Landing Board of Directors in the fourth quarter of 2011. An on-site inspection was performed on November 11, 2011 and has provided our association with a very comprehensive plan for the future of our community. This report will assist both the current, and future, Board of Directors with maintaining fiscal responsibility for the next 30 years. Key points are summarized below. Please keep in mind that this is only a brief summary. For full explanation, please refer to the study itself. A copy of the study is available in the manager’s office at Above and Beyond.

12 Reserve Components (major common elements) were identified. These are items that our community is financially responsible for repairing and replacing.

1. Asphalt Pavement, Crack Repair and Patch

2. Asphalt Pavement, Mill and Overlay

3. Catch Basins, Inspections and Capital Repairs

4. Concrete Curbs and Gutters, Partial

5. Concrete Sidewalks, Partial

6. Fences, Aluminum

7. Fences, Vinyl

8. Gates, Bi-Folding

9. Gates, Intercom Panel

10. Gates, Operators

11. Irrigation System

12. Signage, Renovation

Taking useful life into consideration, the report recommends our first reserve expenditures will occur in 2015. This will include:

1. Asphalt Pavement, Crack Repair and Patch, estimated cost $6,045

2. Gates, Intercom Panel, estimated cost $3,789

3. Gates, Operators, estimated cost 14,288

The report continues with various recommended expenditures through 2041.

The report provides a “Reserve Funding Plan,” which takes into account our reserve balance each year, reserve contributions for that year, and anticipated expenditures for that year. The goal is to maintain reserves at an adequate, but not excessive threshold. The Cash Flow method was used, current and future local costs of replacement were considered., a 1.5% annual rate of return was assumed on invested reserves, and a 2% inflation rate was used in these calculations.

The recommended reserve contribution is as follows:

2012 $15,500

2013 $15,800

2014 $16,100

2015 $16,400

2016 $16,700

2017 $17,000

2018 $17,300

2019 $17,600

2020 $18,000

2021 $18,400

The report continues with recommended reserve contributions through 2041.

Following this schedule when preparing future yearly budgets can certainly help to avoid special assessments, loans or drastic dues increases. It ensures that homeowners pay “their fair share” of the weathering and aging of the commonly owned property each year. These reserve assessments also preserve the property and enhance the resale value of our homes.

The report also includes a “Condition Assessment,” which can be used by the Board to solicit bids or proposals from contractors. I have summarized the information below:

Asphalt Pavement

- Good to fair overall condition at an age of 5 years

- Future crack repairs and patching every 3-5 years, cost $6,045 in 2015

- Useful life of pavement in Mulberry is 15-20 years

- Milling and overlay by 2025 at a cost of $162,124

Catch Basins

- 19 catch basins, condition is good, no visual settling is apparent

- Useful life up to 60 years with interim capital repairs or partial replacements

- Erosion can cause entire catch basin to shift and need replacement

- Plan to repair or replace in conjunction with repaving event, cost $16,296

Curbs, Gutters, Sidewalks

- Settlement, chips, and cracks caused by weather, inadequate subsurface, improper concrete mixture

- Periodic partial replacement of curbs and gutters at a cost of $13,525 in 2025.

- Periodic partial replacement of sidewalks at a cost of $7,710 in 2019.

- Sidewalks need to be inspected each year for potential trip hazards and marked with orange paint prior to replacement.

Fences

- Condition is good at an age of 5 years

- Vinyl fence to be replaced in 2022 at a cost of $26,807

- Aluminum fence to be replaced in 2027 at a cost of $3,604

Gates, Intercom panel and Operators

- Condition is good at an age of 5 years

- Intercom panel and operator replacement by 2015 at a cost of $3,789 and $14,288 respectively

- Gates to be replaced by 2027 at a cost of $12,355

Irrigation System

- Condition is good at an age of 5 years

- Interim partial replacements should be funded through the operating budget

- Complete replacement by 2041 at a cost of $36,227

Comprehensive details are included in the full report on all of these components. This report is available to view in the Manager’s office at Above and Beyond.

Prepared by:

CW

Secretary/Treasurer

March 29, 2012