Forest Rim Informational Meeting Deferred Maintenance October 11, 2015

Agenda Introductions This is an informational meeting – no voting/no motions Background Board actions to date Findings Corrective action Discussion

Background Board identified deferred maintenance at 2014 Annual Meeting Proposal to spend $1.3M over 5 years discussed Estimated deferred maintenance from Team Engineering (TE) study Association asked Board for more information create summary of expense by year from TE study prioritize buildings and units look for root cause issues (roof leaks, siding, decks, drainage)

Board actions to date Authorized Anderson Construction to provide a detailed 5 year maintenance plan by building and unit (no cost to Forest Rim) Retained Black Diamond Builders to identify root cause issues for roofs and windows on selected repairs Allowed unit owner funded deck repair to identify deficiencies Summarized Team Engineering study by expense and year

Findings Anderson Construction created 5 year maintenance plan estimate is $1.2M (exceeds TE study for like items) photographs, written description and 5 year summary on FR website Black Diamond Builders found material and craftsmanship issues on roofs and siding Deck repair by unit owner also identified poor craftsmanship and inferior material Identified an error in the TE study (staining estimate) saving $246k (TE total now $1,121k versus $1,367k)

Conclusion of Findings Both Team Engineering and Anderson Construction studies support Board assertion of 5 year deferred maintenance restitution in range of $1.1M - $1.3M Real world examples of roofs and decks illustrate some poor craftsmanship and inferior materials Reasonable expectation that estimated costs are low failed septic pumps and associated equipment recurring flooding issues poor building drainage more sewer issues have been raised

How do we fund deferred maintenance? One time special assessment Spread over 5 years Pro’s no future special assessments Con’s current owner pays for everything significant cost could cause hardship cost ahead of improvements Pro’s improves timing of cost/benefit owners can plan accordingly adjust on an annual basis Con’s special assessments could be required

What does this mean for me? Doubling condo fees raises $1.2M in 5 years for Capital Improvements Increase starts with 2016 Budget Ability to adjust on annual basis if necessary

Where do our condo fees go? What would change? Roofs 30,000 Trees 5,000 Siding 2,000 Landscaping 30,800 Snow plowing 25,000 Staining 15,000 Utilities 9,500 Parking lots 6,000 Siding, roofs & trim 4,700 Chimney inspections 3,000 No significant change Virtually entire fee increase allocated to Capital Improvements Insurance 35,000 Property Management 22,200 Accounting 5,000 Other Admin 2,800 Legal 1,000 Budget increases from 37,000 to 234,000 No significant change

Is $1.2M over 5 years the right amount? No one can predict with 100% accuracy how much is needed Estimates from 2 independent sources range between $1.1M – $1.3M Board believes $1.2M estimate is reasonable Plenty of evidence illustrating deferred maintenance issues Board has deferred action for 1 year Irresponsible to delay addressing issues any longer Fees should return to a more normalized level at end of 5 years

Discussion

Backup Slides - Anderson Construction study on website O2-1. Replace 1x4 18" on propane box 2.7' one row of siding next to propane box 3. Reside under the window above the back porch 4x4 4. Re-nail top left side of the chimney box and reside the front 5x20 5. From top of window to right of entry and up new siding 14x16 6. Touch up the stucco 7.6x9+5x12 siding above and to left of the entry 8. One fully split pork chop will get replaced

Backup Slides - Anderson Construction study on website Index of /owners/Unit_Photos/O2 Icon Name Last modified Size Description -------------------------------------------------------------------------------- [DIR] Parent Directory - [IMG] DSC00601.jpg 15-Sep-2015 13:12 433K [IMG] DSC00602.jpg 15-Sep-2015 13:12 449K [IMG] DSC00603.jpg 15-Sep-2015 13:12 546K [IMG] DSC00604.jpg 15-Sep-2015 13:12 515K [IMG] DSC00605.jpg 15-Sep-2015 13:12 462K [IMG] DSC00606.jpg 15-Sep-2015 13:13 535K [IMG] DSC00607.jpg 15-Sep-2015 13:13 454K [IMG] DSC00608.jpg 15-Sep-2015 13:13 421K [IMG] DSC00609.jpg 15-Sep-2015 13:13 543K

Backup Slides - Black Diamond Builders roof

Backup Slides - Pictures of deck rot

Backup Slides - Team Engineering Summary