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© 2017,Onsite Engineering, An MJS Consultants, LLC Company
RESERVE STUDY
MEADOWS OF SEVEN POINTS HOA, SEVEN POINTS TRACE, HERMITAGE, TN 37076
Site-Visit Survey performed
March 10, 2017
FINAL - submitted
March 31, 2017
Prepared For:
C/O Scott Seaman
MEADOWS OF SEVEN POINTS HOA
Prepared By:
Onsite Engineering170-D EAST MAIN ST., STE 129
HENDERSONVILLE, TN 37075
615-264-0505
Project Number:
12785
Reserve Specialist:
Andrew D Hart, EIT, RS
© 2017,Onsite Engineering, An MJS Consultants, LLC Company
TABLE OF CONTENTS
INTRODUCTION ......................................................................................................................................................................................3
EXECUTIVE SUMMARY ......................................................................................................................................................................3
PURPOSE & SCOPE .............................................................................................................................................................................4
REFERENCES ..........................................................................................................................................................................................6
PROPERTY DESCRIPTION ..............................................................................................................................................................7
OBSERVATIONS AND COMMENTS SUMMARY .................................................................................................................14
RESERVE FUND ANALYSIS ..........................................................................................................................................................15
LIMITATIONS ..........................................................................................................................................................................................18
CONCLUSION .........................................................................................................................................................................................20
APPENDIX
RESERVE FUND PROJECTIONS ...............................................................................................................................................21
PROJECT PHOTOGRAPHS ...........................................................................................................................................................22
PROFESSIONAL QUALIFICATIONS ..........................................................................................................................................31
Meadows of Seven Points HOA
Seven Points Trace, Hermitage, TN
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INTRODUCTION
Meadows of Seven Points HOA, through Meadows of Seven Points HOA, authorized Onsite Engineering to
conduct a Building Evaluation and Reserve Fund Study for Meadows of Seven Points HOA, located at
Seven Points Trace, Hermitage, TN 37076.
Studies of this nature are important to ensure that a community has sufficient funds for long-term,
periodic capital expenditure requirements. Anticipating large expenditures over an extended period of
time through a structured analysis and scheduling process assists the Association in meeting financial
requirements without:
increasing the service fees above permitted maximums,
borrowing the funds,
or levying special financial assessments to the owners.
Typically, a community association has two broad cash requirements: the general operating requirements
and the capital replacement reserves. In this report, we will focus on those items falling under the capital
replacement reserve criteria. We have projected a capital repair and replacement reserve for thirty (30)
years. The first ten years are the most reliable.
This report is structured to analyze components of the community for which the Association is responsible
and to assess a useful expected life and useful remaining life of those components. The anticipated
scheduled repair or replacement of the component and the anticipated expense for the activity are then
analyzed in conjunction with the current capital reserves funding program for the community. Funding
program recommendations are made with the objective of limiting substantial cash excesses while
minimizing financial burdens that can result from significant cash inadequacies.
This report is intended to be used as a tool to determine reserve fund allocation requirements for the
community, to manage future Association obligations, and to inform the community of future financial
needs in general. The report that follows has been prepared from the perspective of what an owner of
this property would benefit from knowing. Some items, beyond those of immediate concern, may be
discussed. Therefore, the report should be read in its entirety in order to fully understand all of the
information that has been obtained.
EXECUTIVE SUMMARY
The following is a summary of the issues discussed in this Reserve Study. A detailed discussion of each
topic is provided in each of the noted sections of the report.
In summary, we consider this property to be in average condition when compared to others of similar age
and construction type.
Based upon the information provided to us, and our own estimates of costs and useful lives of capital
assets, the existing Reserve Fund with the current annual contribution rate is projected to be insufficient
to fund the reasonably expected capital expenditures over the 30-year life of this study. In addition, there
Meadows of Seven Points HOA
Seven Points Trace, Hermitage, TN
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are significant expenditures projected to occur after the end of the 30-year study period. Therefore,
because these are not covered under the current reserve fund projections, updates to the reserve study
will be required so that reserves can be accrued for future capital expenditures.
Therefore, a study such as this should be updated from time to time, usually on a three to five-year cycle,
in order to reflect the most accurate needs and obligations of the community.
This report has been prepared in strict confidence with you as our client. No reproduction or re-use will
be undertaken with any third party without your express written consent or oral consent.
We have included two alternatives to your current funding program and recommend that the board adopt
an alternative that best reflects the objectives of the community. They are outlined in narrative form in
the RESERVE FUND ANALYSIS Section and on Page 1 of the RESERVE FUND PROJECTIONS (Financial
Projections) in the Appendices.
PURPOSE & SCOPE
PURPOSE
The purpose of this study is to perform a reserve fund analysis and to determine a capital needs
projection. It is intended to be used as a tool for to determine the allocation requirements for the reserve
fund to meet future anticipated capital expenditures for the community.
This report forecasts obligations for the community thirty years into the future. It should be noted that
events might occur that could have an effect on the underlying component or system useful life
assumptions used in this study. Likewise, inevitable market fluctuations can have an impact on component
or system replacement and repair costs.
We recommend that this report be reviewed and updated periodically. The property conditions should
also be evaluated periodically as part of that review. Also, additional concerns which may have developed
during this time period can be identified and, if planned for early enough, may be coordinated into
current funding budgets with the least impact on the individual homeowners. The National professional
association for CPAs (AICPA) recommends that this type of study be updated every three to five years.
SCOPE
This study has been performed according to the scope as generally defined by Meadows of Seven Points
HOA, Onsite Engineering, and the standards of the Community Associations Institute. The findings and
recommendations are based on interviews with the community's management personnel, a review of
available documents, and an investigation of the buildings and site.
The guidelines used to determine which physical components within the community are to be included in
the component inventory are based on the following general criteria:
The component must be a common element, or otherwise noted to be the responsibility of the
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Seven Points Trace, Hermitage, TN
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Association to replace.
The component has an established estimated useful life (EUL). Organizations such as RSMeans, Fannie
Mae, National Association of Home Builders (NAHB) and Whitestone have established EULs for various
building and property components.
The component is visible such that a remaining useful life (RUL) can be projected. The component
must have an estimated remaining useful life of thirty years or less. As the site ages, additional
components may need to be added.
The cost of replacement should be high enough to make it financially unsound to fund it from the
operating budget or is funded through a maintenance contract. We have established a minimum
reserve component cost of $1,000 for this study.
Components, such as painting, which are considered deferred maintenance, are most appropriately
funded from the Operating Budget instead of Reserves. We have done so unless the painting cost is a
significant portion of the budget or we were requested to do so.
This study estimates the funding levels required for maintaining the long-term viability of the property.
Our approach involves:
1. Examining association-managed equipment, buildings and site facilities.
2. Predicting their remaining service life (RUL) and approximating how frequently they will require repair
or replacement (EUL).
3. Estimating current repair or replacement costs for each capital item.
4. Using data developed in Steps 1, 2 and 3 to project Capital Reserve balances for Years 1 through 30.
The statements in this report are opinions about the present condition of the subject community. They
are based on visual evidence available during a diligent investigation of all reasonably accessible areas
falling under the responsibility of the Association. We did not remove any surface materials, perform any
destructive testing, or move any furnishings. This study is not an exhaustive technical evaluation. Such an
evaluation would entail a significantly larger scope than this effort. For additional limitations, see the
LIMITATIONS SECTION.
As the preparer of this reserve study, Onsite Engineering certifies that we do not have any vested
interests, financial interests, or other interests that would cause a conflict of interest in the preparation of
this study.
Meadows of Seven Points HOA
Seven Points Trace, Hermitage, TN
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REFERENCES
SOURCES OF INFORMATION
The following people were interviewed during our study:
Scott Seaman- Meadows of Seven Points HOA Board President
The following documents were made available to us and reviewed:
Description Source
Pre-Site Visit Questionnare HOA Board President
Past Reserve Project Costs HOA Board President
STANDARDS OF REFERENCE
For your reference, the following definitions may be helpful:
Excellent: Component or system is in "as new" condition, requiring no rehabilitation and should perform
in accordance with expected performance.
Good: Component or system is sound and performing its function, although it may show signs of normal
wear and tear. Some minor rehabilitation work may be required.
Fair: Component or system falls into one or more of the following categories: a) Evidence of previous
repairs not in compliance with commonly accepted practice, b) Workmanship not in compliance with
commonly accepted standards, c) Component or system is obsolete, d) Component or system
approaching end of expected performance. Repair or replacement is required to prevent further
deterioration or to prolong expected life.
Poor: Component or system has either failed or cannot be relied upon to continue performing its original
function as a result of having exceeded its expected performance, excessive deferred maintenance, or
state of disrepair. Present condition could contribute to or cause the deterioration of other adjoining
elements or systems. Repair or replacement is required.
Adequate: A component or system is of a capacity that is defined as enough for what is required,
sufficient, suitable, and/or conforms to standard construction practices.
All ratings are determined by comparison to other buildings of similar age and construction type.
All directions (left, right, rear, etc.), when used, are taken from the viewpoint of an observer standing in
Meadows of Seven Points HOA
Seven Points Trace, Hermitage, TN
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front of a building(s) and facing it. Some comments may refer to left-hand or right-hand when facing a
specific object.
Repair/Replacement Reserves - Non-annual maintenance items that will require significant expenditure
over the life of the buildings. Included are items that will reach the end of their estimated useful life
during the course of this forecast, or, in the opinion of the investigator, will require attention during that
time.
PROPERTY DESCRIPTION
GENERAL
Property Description: The subject property is a residential subdivision with 194 single-family homes
located on public streets.
Year Built: 2000 through 2015
SITE
PROPERTY ACCESS
Description: The main entrance to this property is located near the west perimeter of the property on
Seven Points Trace off of South New Hope Road. There is a second entrance to the property near the east
perimeter of the property on Leona Pass off of Earhart Road.
Observations and Comments: No significant problems were observed.
ENTRANCE MONUMENT AND BRICK WALLS
Description: This property is identified by a block entrance monument with brick veneer located at the
main entrance to the property. Additionally, there are large block walls with brick veneer located on each
side of the entrance to the property.
Observations and Comments: We observed cracks in one of the brick wall pilasters on the north entrance
wall. The horizontal crack on the back side of the pilaster measured an approximate width of 1/16-inch
and the vertical crack in front of the pilaster measured an approximate width of 1/8-inch. Refer to the
following photos.
Meadows of Seven Points HOA
Seven Points Trace, Hermitage, TN
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The pilasters of the south brick entrance wall showed much more significant signs of cracking and freeze-
thaw damage. We observed significant cracking and separation of the brick on the front pilasters. We
observed cracks as wide as 3/4-inch. Refer to the following photos.
Meadows of Seven Points HOA
Seven Points Trace, Hermitage, TN
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We observed similar cracking throughout the pilasters on the back side of the wall. We observed
horizontal cracks as wide as 3/8-inch and vertical cracks as wide as 1/4-inch. Refer to the following
photos.
These cracks indicate significant signs of wall settlement or freeze/thaw damage. We recommend that the
HOA engage an engineer in order to determine the structural significance of the cracking and suggest
methods of correction.
After repairs have been made, we recommend that the HOA have the cracks tuck-pointed and sealed to
prevent water from entering the cracks and causing further freeze/thaw damage to the walls.
We have included an allowance toward future repairs of the entrance monument and walls on a 5-year
cycle beginning in 2022. We have also included an estimate for a repair project for the cracked pilasters
anticipated in 2018.
Meadows of Seven Points HOA
Seven Points Trace, Hermitage, TN
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COMMON AREAS
Description: During our site visit, the Board President identified multiple common areas throughout the
property. The common areas are primarily located at the two entrances to the property, around four
detention ponds, and along Seven Points Trace and Seven Points Circle. Additionally, there is a large open
field area located off of Kaylee Meadow Lane.
Observations and Comments: No significant problems were observed. Based on a conversation with the
HOA Board President, the HOA maintains the grounds and trees around the common areas. We also
understand that the large field area off of Kaylee Meadow Lane may be re-purposed as an amenities area
in the future.
STORM DRAINAGE
Description: Surface drainage around the homes is generally directed toward drainage swales located
behind the homes which connect to one of four detention ponds located on the property. Surface
drainage in the roadways is directed toward grated drains which connect to an underground storm water
system that ultimately discharges drainage into one of the four detention ponds. One retention pond is
located just south of Leona Pass, one retention pond is located to the east of the north cul-de-sac on
Amanda Meadow Drive, and the remaining two detention ponds are located on Seven Points Trace.
Observations and Comments: No significant problems were observed.
EARTHWORK/GRADING/EROSION CONTROL
Description: The ground of the common areas is covered with grass.
Observations and Comments: No significant problems were observed. Grading throughout the common
areas appears adequate to direct water to the detention ponds.
SIDEWALKS
Description: Based on a conversation with the Board President, we understand that the HOA seals
approximately 971 feet of city-owned concrete sidewalks located in front of the common areas of the
property. These common areas are located at the two property entrances, in front of the two detention
ponds on Seven Points Trace, and in front of the metro-service area on Seven Points Circle.
Observations and Comments: No significant problems were observed.
Based on a conversation with the Board President, we understand that the HOA plans to seal the
sidewalks in 2017. We have included a line item for sealing the sidewalks on a 3-year cycle beginning in
2017.
Meadows of Seven Points HOA
Seven Points Trace, Hermitage, TN
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WALKING PATH
Description: There is a concrete walking path located on the east side of the detention pond located near
5863 Seven Points Trace. Based on a conversation with the Board President, we understand that the
Meadows of Seven Points HOA is responsible for maintaining approximately 300 feet of the concrete
walking path as well as a wood bridge on the path.
Observations and Comments: We observed typical signs of cracking in the concrete walking path. Refer
to the following photo.
We observed deteriorated paint and algae growth on the wood bridge. Refer to the following photo.
Meadows of Seven Points HOA
Seven Points Trace, Hermitage, TN
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We observed missing boards and broken balusters on the outer side of the bridge railing. Refer to the
following photos.
Concrete sidewalks have an estimated useful life of over 50 years. Because they are generally not
replaced all at once, but are replaced as sections fail, we have included an allowance for repair of 2% of
the concrete walking path on a 10-year cycle beginning in 2023.
We anticipate that the wood bridge would be pressure washed and re-painted as an operations and
maintenance budget item. We have included a line item for the replacement of the wood bridge
anticipated in 2022.
PROPERTY SIGNAGE
Description: There are combination street/stop signs, speed limit signs, and dead end signs located along
the roadways throughout the property.
Observations and Comments: Based on a conversation with the Board President, we understand that the
street identification signs were replaced in 2016 and the street sign posts were painted in 2016.
We have included the following projections in the financials for this study:
Property Signage Component Year
Street Identification Signs - Replace 2031
Stop, Speed Limit, & Dead End - Replace 2023
Property Signage Posts - Paint 2021 (5-year cycle)
Meadows of Seven Points HOA
Seven Points Trace, Hermitage, TN
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LANDSCAPING
Description: Landscaping around this property consists of trees, bushes, and flowers planted around the
entrance monuments and brick walls at the west entrance to the property. There are landscape lights
installed in the ground around the entrance monument and brick walls.
Observations and Comments: No significant problems or deterioration which would indicate other
problems were observed.
Maintenance of the landscaping is typically considered an operations and maintenance budget iteml
however, based on a conversation with the Board President, we understand that the HOA anticipates
significant tree trimming expenses on a regular basis. Therefore, we have included an allowance toward
tree trimming and removal on an annual cycle beginning in 2018.
Based on a conversation with the Board President, we understand that the landscape lighting was
replaced in 2016. We have included a line item for the future replacement of the landscape lighting in
2031.
IRRIGATION
Description: There is a lawn irrigation system on the property which serves the landscaped areas around
the entrance monument and brick walls at the east entrance to the property. This system was not
operated or tested as a part of this inspection. The irrigation controller is located behind the north brick
wall.
Observations and Comments: No significant problems were observed.
We have included an allowance for landscaping irrigation upgrade/repair on a 3-year cycle beginning in
2019.
OTHER
UPDATES
Description: An estimate for the update of the Reserve Study has been included in the financial
projections.
Meadows of Seven Points HOA
Seven Points Trace, Hermitage, TN
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OBSERVATIONS AND COMMENTS SUMMARY
Following is a summary of the Observation and Comments grouped according to their report Section(s):
We observed cracks in one of the brick wall pilasters on the north entrance wall. The horizontal crack
on the back side of the pilaster measured an approximate width of 1/16-inch and the vertical crack in
front of the pilaster measured an approximate width of 1/8-inch.
The pilasters of the south brick entrance wall showed much more significant signs of cracking and
freeze-thaw damage. We observed significant cracking and separation of the brick on the front pilasters.
We observed cracks as wide as 3/4-inch.
We observed similar cracking throughout the pilasters on the back side of the wall. We observed
horizontal cracks as wide as 3/8-inch and vertical cracks as wide as 1/4-inch.
We observed typical signs of cracking in the concrete walking path.
We observed deteriorated paint and algae growth on the wood bridge.
We observed missing boards and broken balusters on the outer side of the bridge railing.
Meadows of Seven Points HOA
Seven Points Trace, Hermitage, TN
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RESERVE FUND ANALYSIS
We have analyzed the projected capital expenditures and calculated a reserve cash flow need. The
following is a reserve fund financial analysis for non-annual items as discussed in the report. These
financial worksheets take into consideration a reasonable return on invested moneys and inflation.
Please review this thoroughly and let us know of any changes that may be desired. The intent of this
reserve fund financials is to help the Association develop a reserve fund to provide for anticipated repair
or replacements of various system components throughout the term of the study. Many different
variables, such as season, locale, and inflation, affect the final cost of any project. Consultation with a
competent contractor capable of performing this work will provide you with an actual estimate.
Lacking actual estimates from contractors bidding on the work, costs are developed through our own
experience and from published cost indexes such as Means Construction Cost Data. Useful life information
is obtained from published information provided by the Federal National Mortgage Association (FNMA),
other authoritative sources and our own experience. This information lists national averages for
component useful lives.
The capital items listed are those that are typically the responsibility of the association and are derived
from a list provided by the HOA Board. However, association by-laws vary, and therefore, which
components are the responsibility of the owner and which are the responsibility of the Association can
vary. You should confirm that the items listed should be financed by the reserve fund.
The Board President provided the following information for this study.
Reserve Fund Balance as of January 1, 2017 $0
Reserve Contributions to be collected until Study Effective Date $0
Less Projected Reserve Expenditures $0
Projected Year-End Reserve Balance before the Effective Date $0
The Reserve Fund Projections (financials) in the Appendix provides the following:
An input sheet that defines all the criteria used for the financial alternatives, including the assumed
inflation rate and rate of return on deposited reserve funds.
A table that lists anticipated replacement and/or repair items complete with estimated remaining life
expectancies, projected costs of replacement and/or repair, a frequency in years of when these items
require replacement and/or repair, and a projection based on this frequency.
A table and graph that represent end-of-year balances versus capital expenditures based on your
current funding program and reserve balances, and alternatives to your current program. The
provided graphs illustrate what effects the funding methods will have over the presented life of the
study versus the anticipated capital expenditures. Care should be taken in analyzing the graphs due to
Meadows of Seven Points HOA
Seven Points Trace, Hermitage, TN
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varying graphic scales that occur within each graph and between graphs.
This study is based upon a Cash Flow Method using a Threshold Funding goal. The Cash Flow Method
looks at reserve requirements each year and then calculates what the cash requirements will be each
year. Our funding goal is to maintain a positive balance in the reserve fund at or above the threshold
amount with an additional goal of achieving 100 percent funding throughout the study term.
We have defined the threshold or minimum allowed reserve balance as the average annual expenditure.
In addition, as an additional measure of Association reserve funding health, we have included information
about percent of Full Funding. The funding alternatives we have provided are based on maintaining a
minimum reserve balance above a threshold value using Cash Flow Method. They are also based on
keeping the percent funding as close to the goal as possible. By doing so, there is less of a possibility of a
special assessment.
To show these methods, we have included the percent funding values on the Alternative Funding Charts
as well as a target percent funding level line. This can be informative because there may be years when
even though the minimum cash flow requirements are met, future years would have a large projected
cash outlay, which would be shown by the percent funding measurement.
As a result, we do not expect or anticipate to rigidly meet a particular percent funding target. We do
expect and anticipate, however, to meet the Reserve threshold cash flow requirements throughout the
entire 30-year term of the study and to use the percent funding target as a reserve balance positioning
tool.
Note that based upon the information provided to us, and our own estimates of costs and useful lives
of capital assets, and taking inflation and return on investment into account, the current funding rate
will not be adequate to fund the reasonable, expected capital expenditures over the 30-year life of the
study.
The association should bear in mind that unanticipated expenditures can always arise and maintenance of
a significant reserve fund balance can be viewed as an important way to avoid special assessments.
Meadows of Seven Points HOA
Seven Points Trace, Hermitage, TN
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We have included two alternatives to your current funding program and recommend that the board adopt
an alternative that best reflects the objectives of the community.
All funding alternatives are based on a revised funding amount beginning January 1, 2018. They are based
on the entire Association as a single unit.
We have used an inflation rate of 2.8% based on CPI over the last 30 years, and a rate of return on
investment of 1.0%.
We have used the projected average annual expenditure rate of $10,393 as our threshold for the reserve
fund account balance.
In summary, the funding alternatives are as follows:
2017 Funding Rate: Based on a conversation with the Board President, we understand that Reserve
expenses are currently being handled as Operations and Maintenance budget items
Alternative 1: Beginning January 1, 2018, transfer $25,000 into the Reserve Fund Account and set the
annual contribution to the reserves at $6,500 per year. Every following year, beginning in 2019 through
2047, increase the annual contribution to the reserves by $225 per year.
Alternative 2: Beginning January 1, 2018, transfer $25,000 into the Reserve Fund Account and set the
annual contribution to the reserves at $6,500 per year. Every following year, beginning in 2019 through
2047, increase the annual contribution to the reserves by 3.0% per year.
These funding alternatives are projected to maintain a positive balance at or near the threshold while
targeting a 100% funding goal.
The Reserve Fund Projections in the Appendix lists estimated capital reserves from 2018 through 2047.
Meadows of Seven Points HOA
Seven Points Trace, Hermitage, TN
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LIMITATIONS
The observations described in this study are valid on the date of the investigation and have been made
under the conditions noted in the report. We prepared this study for the exclusive use of . Onsite
Engineering does not intend any other individual or party to rely upon this study without our express
written consent. If another individual or party relies on this study, they shall indemnify and hold Onsite
Engineering harmless for any damages, losses, or expenses they may incur as a result of its use.
Information provided by the representatives of the association regarding financial, physical, quantity or
historical issues will be deemed reliable by Onsite Engineering. The reserve study will be a reflection of
the information provided to us and assembled for the association's use. An independent audit or
verification of the information provided to us is beyond the scope of this study. The purpose of this study
is not to perform an audit, quality/forensic analyses or to perform background checks of historical
records. This study relies on data provided to us by the client, the client’s representative, contractors
and/or management company. It also assumes that the property will be properly maintained in order to
obtain industry acceptable property component estimated useful lives.
All measurements or quantities are approximate. Any quantities are based upon field measurements
when plans of the buildings or site are not provided to us. Unless specifically described above, no
construction documents were reviewed, and no comments are made regarding conformance or non-
conformance to plans and specifications. No guarantee or warranty as to future life, performance, or
need for repair of any item inspected is intended or implied.
Please keep in mind that our review of this property focuses on the structural, mechanical and functional
conditions of the common areas. While some mention within this report may be made regarding life
safety issues, this report is not to be considered a life safety/code compliance review of this property.
Further, issues regarding handicap accessibility and other related issues adopted under the Americans
with Disabilities Act (ADA) or the Fair Housing Amendments Act are not included in this report, since this
was beyond the intended scope of services. Some comments about ADA or Fair Housing Act compliance
may be mentioned in the "General" section of this report.
This study is limited to the visual observations made during our inspection. We did not remove surface
materials, conduct any destructive or invasive testing, move furnishings or equipment, or undertake any
digging or excavation. Accordingly, we cannot comment on the condition of systems that we could not
see, such as buried structures and utilities, nor are we responsible for conditions that could not be seen or
were not within the scope of our services at the time of the investigation. We did not undertake to
completely assess the stability of the buildings or the underlying foundation soil since this effort would
require excavation and destructive testing. Likewise, this is not a seismic assessment.
Meadows of Seven Points HOA
Seven Points Trace, Hermitage, TN
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We did not investigate the following areas:
Buried utilities or infrastructure
Concealed structural members or systems
We do not render an opinion on uninvestigated portions of the community.
We did not perform any computations or other engineering analysis as part of this evaluation, nor did we
conduct a comprehensive code compliance investigation. This study is not to be considered a warranty of
condition, and no warranty is implied. The appendices are an integral part of this report and must be
included in any review.
In our Reserve Fund Analysis, we have provided estimated costs. These costs are based on our general
knowledge of building systems and the contracting and construction industry. When appropriate, we have
relied on standard sources, such as Means Building Construction Cost Data, Craftsman Construction Books
etc. to develop estimates. Any costs or other comments contained herein do not necessarily infer that
subcontracts, quotes or opinions of other professionals were solicited or obtained. However, for items
that we have developed costs (e.g.: structural repairs), no standard guide for developing such costs exists.
Actual costs can vary significantly, based on the availability of qualified contractors to do the work, as well
as many other variables. We cannot be responsible for the specific cost estimates provided.
Meadows of Seven Points HOA
Seven Points Trace, Hermitage, TN
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CONCLUSION
In summary, we consider this property to be in generally average condition when compared to others of
similar age and construction type. We recommend that this report be reviewed and updated periodically.
The property conditions should also be evaluated periodically as part of that review. This updating is to
identify additional concerns which may have developed and, if planned for early enough, may be
coordinated into current funding budgets with the least impact on the individual homeowners. An
estimate for the update of the Reserve Study has been included in the financial projections.
This report has been prepared in strict confidence with you as our client. No reproduction or reuse will be
undertaken with any third party without your express written or oral consent.
If you have any questions about this study or the reserve fund analysis, please feel free to contact us.
Thank-you for the opportunity to be of assistance to you.
Respectfully submitted,
Andrew Hart, EIT, RS
Engineering Technician
Reviewed By:
Mark J. Smith, P.E., RS
Certified Building Inspection Engineer
Meadows of Seven Points HOA
Seven Points Trace, Hermitage, TN
Page 21
RESERVE FUND PROJECTIONS
FINANCIALS
Components List and CostsAge: 17 Effective Date: 1/1/2018
No. Homes: 194 Fiscal Year Start: 1/1/2018
Report Date: 3/31/2017
1 SITE
2 Entrance Brick Walls - Repair Project 1 LS 12,000.00$ 12,000.00$ 1000000 0
3 Entrance Monument & Brick Walls - Allowance 1 LS 5,000.00$ 5,000.00$ 5 4
4 Concrete Sidewalks - Seal 1 LS 3,085.00$ 3,085.00$ 3 2 Meadows of Seven Points HOA
5 Concrete Walking Path - Repair Allowance 1 LS 1,500.00$ 1,500.00$ 10 5
6 Walking Path Bridge - Replace 1 LS 5,000.00$ 5,000.00$ 20 4
7 Street Identification Signs - Replace 1 LS 2,115.00$ 2,115.00$ 15 13 Meadows of Seven Points HOA
8 Stop, Speed Limit, & Dead End - Replace 1 LS 2,250.00$ 2,250.00$ 15 5
9 Property Signage Posts - Paint 1 LS 2,115.00$ 2,115.00$ 5 3 Meadows of Seven Points HOA
10 Tree Trimming - Allowance 1 LS 2,000.00$ 2,000.00$ 1 0
11 Landscape Lighting - Replace 1 LS 6,340.00$ 6,340.00$ 15 13 Meadows of Seven Points HOA
12 Irrigation System - Allowance 1 LS 1,000.00$ 1,000.00$ 3 1
13 OTHER
14 Reserve Study Update 1 EA 1,000.00$ 1,000.00$ 3 2
Abbreviations: EA - Each, LF- Linear Feet, LS - Lump Sum, SF - Square Feet, SQ - Square, SY - Square Yard, U/M - Unit of Measure
The Meadows of Seven Points HOASeven Points Trace
Hermitage, TN 37076
# Remaining
Useful Life
(RUL)
Comment / ReferenceComponent Qty U/M Unit Cost Reserve
Requirement
Estimated
Useful Life
(EUL)
Components List and Costs Page 1 ©2014 Onsite Engineering
Projected Reserve Expenses by Year
# Reserve Component 1 2 3 4 5 6 7 8 9 10
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
1 SITE
2 Entrance Brick Walls - Repair Project 12,000$
3 Entrance Monument & Brick Walls - Allowance 5,584$ 6,411$
4 Concrete Sidewalks - Seal 3,260$ 3,542$ 3,848$
5 Concrete Walking Path - Repair Allowance 1,722$
6 Walking Path Bridge - Replace 5,584$
7 Street Identification Signs - Replace
8 Stop, Speed Limit, & Dead End - Replace 2,583$
9 Property Signage Posts - Paint 2,298$ 2,638$
10 Tree Trimming - Allowance 2,000$ 2,056$ 2,114$ 2,173$ 2,234$ 2,296$ 2,360$ 2,427$ 2,494$ 2,564$
11 Landscape Lighting - Replace
12 Irrigation System - Allowance 1,028$ 1,117$ 1,213$
13 OTHER
14 Reserve Study Update 1,057$ 1,148$ 1,247$
Inflated Total For Each Year 14,000$ 3,084$ 6,431$ 4,470$ 14,518$ 11,291$ 2,360$ 3,640$ 10,227$ 8,975$
The Meadows of Seven Points HOASeven Points Trace
Hermitage, TN 37076
Projected Reserve Expenses by Year, Page 2 ©2014 Onsite Engineering
Projected Reserve Expenses by Year
# Reserve Component
1 SITE
2 Entrance Brick Walls - Repair Project
3 Entrance Monument & Brick Walls - Allowance
4 Concrete Sidewalks - Seal
5 Concrete Walking Path - Repair Allowance
6 Walking Path Bridge - Replace
7 Street Identification Signs - Replace
8 Stop, Speed Limit, & Dead End - Replace
9 Property Signage Posts - Paint
10 Tree Trimming - Allowance
11 Landscape Lighting - Replace
12 Irrigation System - Allowance
13 OTHER
14 Reserve Study Update
Inflated Total For Each Year
The Meadows of Seven Points HOASeven Points Trace
Hermitage, TN 37076
11 12 13 14 15 16 17 18 19 20
2028 2029 2030 2031 2032 2033 2034 2035 2036 2037
7,360$ 8,450$
4,180$ 4,541$ 4,933$
2,270$
3,028$
3,028$ 3,477$
2,636$ 2,710$ 2,786$ 2,864$ 2,944$ 3,026$ 3,111$ 3,198$ 3,288$ 3,380$
9,078$
1,318$ 1,432$ 1,556$ 1,690$
1,355$ 1,472$ 1,599$
3,954$ 8,245$ 2,786$ 19,431$ 16,317$ 5,296$ 4,667$ 9,731$ 6,765$ 13,519$
Projected Reserve Expenses by Year, Page 3 ©2014 Onsite Engineering
Projected Reserve Expenses by Year
# Reserve Component
1 SITE
2 Entrance Brick Walls - Repair Project
3 Entrance Monument & Brick Walls - Allowance
4 Concrete Sidewalks - Seal
5 Concrete Walking Path - Repair Allowance
6 Walking Path Bridge - Replace
7 Street Identification Signs - Replace
8 Stop, Speed Limit, & Dead End - Replace
9 Property Signage Posts - Paint
10 Tree Trimming - Allowance
11 Landscape Lighting - Replace
12 Irrigation System - Allowance
13 OTHER
14 Reserve Study Update
Inflated Total For Each Year
The Meadows of Seven Points HOASeven Points Trace
Hermitage, TN 37076
21 22 23 24 25 26 27 28 29 30
2038 2039 2040 2041 2042 2043 2044 2045 2046 2047
9,701$ 11,137$
5,359$ 5,822$ 6,325$ 6,872$
2,992$
9,701$
4,583$
3,909$
3,992$ 4,583$
3,474$ 3,572$ 3,672$ 3,775$ 3,880$ 3,989$ 4,101$ 4,215$ 4,333$ 4,455$
13,737$
1,836$ 1,994$ 2,167$
1,737$ 1,887$ 2,050$ 2,227$
14,480$ 3,572$ 5,508$ 15,476$ 23,282$ 8,975$ 12,476$ 4,215$ 29,403$ 24,691$
Projected Reserve Expenses by Year, Page 4 ©2014 Onsite Engineering
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032
(14,000)$ (17,084)$ (23,515)$ (27,985)$ (42,503)$ (53,794)$ (56,155)$ (59,795)$ (70,022)$ (78,997)$ (82,951)$ (91,196)$ (93,982)$ (113,413)$ (129,729)$
-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
14,000$ 3,084$ 6,431$ 4,470$ 14,518$ 11,291$ 2,360$ 3,640$ 10,227$ 8,975$ 3,954$ 8,245$ 2,786$ 19,431$ 16,317$
-80% -80% -107% -112% -235% -372% -283% -246% -310% -355% -306% -325% -271% -450% -691%
16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047
(135,026)$ (139,692)$ (149,423)$ (156,188)$ (169,707)$ (184,187)$ (187,759)$ (193,267)$ (208,743)$ (232,024)$ (240,999)$ (253,476)$ (257,691)$ (287,094)$ (311,785)$
-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
5,296$ 4,667$ 9,731$ 6,765$ 13,519$ 14,480$ 3,572$ 5,508$ 15,476$ 23,282$ 8,975$ 12,476$ 4,215$ 29,403$ 24,691$
-450% -691% -576% -480% -495% -453% -523% -620% -493% -428% -489% -710% -651% -661% -533%
Projected January/1/2018 Reserve Fund Balance: -$ Inflation: 2.80% Threshold: 10,393$
Present Total Annual Deposit to Reserves: -$ Return on Investment: 1.00% Funding Percent Target: 60%
RESERVE FUND ANALYSIS - EXISTING FUNDING RATE
Annual Deposits
Special Assessments
Actual Percent Funding
Ending Year Balance
Ending Year Balance
Special Assessments
Annual Deposits
Actual Percent Funding
Inflated Annual Expenditures
Inflated Annual Expenditures
$-
$50,000
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
20
31
20
32
20
33
20
34
20
35
20
36
20
37
20
38
20
39
20
40
20
41
20
42
20
43
20
44
20
45
20
46
20
47
RESERVE FUND ANALYSIS - EXISTING FUNDING RATE
Ending Year Balance $s at 60% Funding Target Threshold:
Financials Page 5 ©2014 Onsite Engineering
$(350,000)
$(300,000)
$(250,000)
$(200,000)
$(150,000)
$(100,000)
$(50,000)
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
20
31
20
32
20
33
20
34
20
35
20
36
20
37
20
38
20
39
20
40
20
41
20
42
20
43
20
44
20
45
20
46
20
47
Do
lla
rs
Funding Years
Financials Page 5 ©2014 Onsite Engineering
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032
17,675$ 21,529$ 22,269$ 25,223$ 18,286$ 14,766$ 20,458$ 25,142$ 23,447$ 23,227$ 28,303$ 29,324$ 36,095$ 26,351$ 19,880$
6,500$ 6,725$ 6,950$ 7,175$ 7,400$ 7,625$ 7,850$ 8,075$ 8,300$ 8,525$ 8,750$ 8,975$ 9,200$ 9,425$ 9,650$
14,000$ 3,084$ 6,431$ 4,470$ 14,518$ 11,291$ 2,360$ 3,640$ 10,227$ 8,975$ 3,954$ 8,245$ 2,786$ 19,431$ 16,317$
101% 101% 101% 101% 101% 102% 103% 103% 104% 105% 104% 104% 104% 105% 106%
16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047
24,704$ 30,439$ 31,343$ 35,480$ 33,063$ 29,879$ 37,907$ 44,288$ 40,892$ 29,805$ 33,285$ 33,490$ 42,268$ 25,922$ 14,399$
9,875$ 10,100$ 10,325$ 10,550$ 10,775$ 11,000$ 11,225$ 11,450$ 11,675$ 11,900$ 12,125$ 12,350$ 12,575$ 12,800$ 13,025$
5,296$ 4,667$ 9,731$ 6,765$ 13,519$ 14,480$ 3,572$ 5,508$ 15,476$ 23,282$ 8,975$ 12,476$ 4,215$ 29,403$ 24,691$
105% 105% 104% 103% 102% 101% 99% 98% 96% 91% 90% 87% 87% 77% 60%
Increase Period (Years) : 1
Projected January/1/2018 Reserve Fund Balance: 25,000$ Number of Increases : 29 Threshold: 10,393$
First Year Contribution : 6,500$ Return on Investment: 1.00% Periodic Increase : $225 Funding Percent Target: 60%
RESERVE FUND ANALYSIS - ALTERNATIVE 1 - Escalating Funding at $225 Every Year Through 2047
Ending Year Balance
Actual Percent Funding
Ending Year Balance
Inflated Annual Expenditures
Actual Percent Funding
Annual Deposits
Special Assessments
Annual Deposits
Special Assessments
Inflated Annual Expenditures
$45,000
$50,000
RESERVE FUND ANALYSIS - ALTERNATIVE 1 - Escalating Funding at $225 Every Year Through 2047
Ending Year Balance $s at 60% Funding Target Threshold
Financials Page 6 ©2014 Onsite Engineering
$-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
Do
llars
Funding Years
Financials Page 6 ©2014 Onsite Engineering
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032
17,675$ 21,499$ 22,184$ 25,064$ 18,040$ 14,427$ 20,027$ 24,625$ 22,858$ 22,587$ 27,642$ 28,679$ 35,512$ 25,883$ 19,592$
6,500$ 6,695$ 6,896$ 7,103$ 7,316$ 7,535$ 7,761$ 7,994$ 8,234$ 8,481$ 8,735$ 8,998$ 9,267$ 9,545$ 9,832$
14,000$ 3,084$ 6,431$ 4,470$ 14,518$ 11,291$ 2,360$ 3,640$ 10,227$ 8,975$ 3,954$ 8,245$ 2,786$ 19,431$ 16,317$
101% 101% 101% 100% 100% 100% 101% 101% 101% 102% 102% 102% 102% 103% 104%
16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047
24,667$ 30,735$ 32,065$ 36,730$ 34,955$ 32,537$ 41,467$ 48,898$ 46,713$ 37,011$ 42,062$ 44,040$ 54,805$ 40,677$ 31,617$
10,127$ 10,431$ 10,744$ 11,066$ 11,398$ 11,740$ 12,092$ 12,455$ 12,828$ 13,213$ 13,610$ 14,018$ 14,438$ 14,872$ 15,318$
5,296$ 4,667$ 9,731$ 6,765$ 13,519$ 14,480$ 3,572$ 5,508$ 15,476$ 23,282$ 8,975$ 12,476$ 4,215$ 29,403$ 24,691$
105% 106% 106% 107% 108% 109% 109% 108% 110% 113% 114% 115% 113% 120% 132%
Increase Period (Years) : 1
Projected January/1/2018 Reserve Fund Balance: 25,000$ Number of Increases : 29 Threshold: 10,393$
First Year Contribution : 6,500$ Return on Investment: 1.00% Periodic Increase : 3.0% Funding Percent Target: 60%
RESERVE FUND ANALYSIS - ALTERNATIVE 2 - Escalating Funding at 3% Every Year Through 2047
Ending Year Balance
Annual Deposits
Special Assessments
Inflated Annual Expenditures
Percent Funding
Percent Funding
Ending Year Balance
Annual Deposits
Special Assessments
Inflated Annual Expenditures
$50,000
$60,000
RESERVE FUND ANALYSIS - ALTERNATIVE 2 - Escalating Funding at 3% Every Year Through 2047
Ending Year Balance $s at 60% Funding Target Threshold
Financials Page 7 ©2014 Onsite Engineering
$-
$10,000
$20,000
$30,000
$40,000
$50,000
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
Do
llars
Funding Years
Financials Page 7 ©2014 Onsite Engineering
Meadows of Seven Points HOA
Seven Points Trace, Hermitage, TN
Page 22
PROJECT PHOTOGRAPHS
Meadows of Seven Points HOA
Seven Points Trace, Hermitage, TN
Page 23
No. Image
1
Entrance monument
2
Typical brick wall at east
entrance to property
Meadows of Seven Points HOA
Seven Points Trace, Hermitage, TN
Page 24
3
Irrigation controller and
electric meter
4
Typical landscape light
Meadows of Seven Points HOA
Seven Points Trace, Hermitage, TN
Page 25
5
Typical sealed common
sidewalk
6
Typical property signage
Meadows of Seven Points HOA
Seven Points Trace, Hermitage, TN
Page 26
7
Common area across
Seven Points Trace from
Seven Points Cove
8
Common area detention
area and drainage swale
along Seven Points
Trace between West
Point Cove and East
Point Cove
Meadows of Seven Points HOA
Seven Points Trace, Hermitage, TN
Page 27
9
Detention pond near
5863 Seven Points Trace
10
Concrete walking path
Meadows of Seven Points HOA
Seven Points Trace, Hermitage, TN
Page 28
11
Walking path bridge
12
Common area on Seven
Points Circle near metro-
serviced area
Meadows of Seven Points HOA
Seven Points Trace, Hermitage, TN
Page 29
13
Common area field off
of Kaylee Meadow Lane
14
Detention pond at the
end of Kaylee Meadow
Lane field
Meadows of Seven Points HOA
Seven Points Trace, Hermitage, TN
Page 30
15
Detention area south of
Leona Pass
Meadows of Seven Points HOA
Seven Points Trace, Hermitage, TN
Page 31
PROFESSIONAL QUALIFICATIONS
Meadows of Seven Points HOA
Seven Points Trace, Hermitage, TN
Page 32
ANDREW HART, EIT
ONSITE ENGINEERING
PROFESSIONAL ENGINEER REGISTRATIONS:
EIT Tennessee
EXPERIENCE
Engineering Technician, Onsite Engineering
Engineering Technician, Criterium-Smith Engineers
Construction Materials Technician, S&ME
Professional Intern, CEMEX
PROFESSIONAL:
Reserve Specialist (RS) Designation, By Community Associations Institute (CAI)
ACI Concrete Field Testing Technician - Grade 1
EDUCATION:
Middle Tennessee State University
BS Concrete Industry Management
Tennessee State University
BS Civil Engineering
Meadows of Seven Points HOA
Seven Points Trace, Hermitage, TN
Page 33
MARK J. SMITH, P.E.
ONSITE ENGINEERING
PROFESSIONAL ENGINEER REGISTRATIONS:
Tennessee - No. 107733
Illinois - No. 62-043214
Kentucky No. 27136
EXPERIENCE
Owner, Onsite Engineering
Owner, Criterium-Smith Engineers
Director of Engineering, American Permanent Ware Company
Director of Engineering, Southbend A Middleby Company
Project Engineer, Anetsberger Brothers
Project Engineer, Underwriters Laboratories
PROFESSIONAL:
Board Certified Building Inspection Engineer (BCBIE), By the Building Inspection Engineers
Certification Institute.
Member, National Society of Professional Engineers (NSPE)
Professional Member, National Academy of Building Inspection Engineers (NABIE)
Board Member, National Academy of Building Inspection Engineers (NABIE)
Member of Community Associations Institute (CAI)
Reserve Specialist (RS) Designation, By Community Associations Institute (CAI)
LEED Accredited Professional
Passed National Home Inspection Exam (NHIE)
EDUCATION:
University of Illinois, Champaign-Urbana, Illinois
BS Mechanical Engineering
Wheaton College, Wheaton, Illinois
BA Liberal Arts Engineering