HomeMy WebLinkAboutRes 2018-73 - Authz CM to Establish a Reserve PolicyRESOLUTION NO. 2018-73
STAFF REPORT
CITY OF PALM DESERT
FINANCE DEPARTMENT
MEETING DATE: September 27, 2018
PREPARED BY: Janet M. Moore, Director of Finance
REQUEST: Adopt Resolution No. 2018- 73 , a Resolution of the City Council of
the City of Palm Desert approving a Reserve Policy
Recommendation
Waive further reading and adopt Resolution 2018- 73 approving a Reserve
Policy and the allocation of fund balance based on the Reserve Policy and this
staff report.
Strategic Plan Obiective/Citv Manager 2018 Goals
This request does not directly apply to a specific strategic plan goal; however, the request will
assist in implementing the goals of the plan. The development of a Reserve Policy is included
in the City's 2018 Department Goals.
Executive Summary
In 2008 the City Council approved a memorandum policy establishing a General Fund
working capital reserve equivalent to one hundred percent (100%) of the annual General
Fund Operating Budget. The existing policy has provided the City with the financial flexibility
it needed over the last ten years, although best practice recommends that levels of reserve
be determined by assessing the needs of, and risks to, the City's revenues and fund balance.
The primary goals of maintaining adequate reserves are for financial stability, operational
liquidity, future needs and potential risks to the City's fund balance. To ensure these goals
are met, staff analyzed the needs of the City and the risks to revenues and identified the
following categories for reserve designations, which are described more fully in the next
sections of this report.
➢ General Fund Operating Reserve
> Contingency/Emergency Reserve
➢ Facilities Maintenance Reserve
> Capital Improvement Projects Reserve
➢ Liability Reserve
➢ Employment Benefits Reserve
➢ Other Fund Stability Reserve
➢ Equipment Replacement Reserve
> Economic Development/Land Acquisition Reserve
September 27, 2018 - Staff Report
Resolution No. 2018- 73 Reserve Policy
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The amounts recommended to be reserved are identified in the Fiscal Analysis at the end of
the report. For illustration, a chart in that section also provides comparisons for reserving fund
balance on three percentage based levels (100%, 75%, and 50%) with the exception of the
General Fund Operating Reserve and the Contingency/Emergency Reserve which shall remain
at one hundred percent (100%) funded for annual operations.
In addition, the Policy sets priorities for the distribution of excess revenue at the end of each
fiscal year to assist in funding and replenishing the identified reserve categories as well as
ensuring that current operating needs are funded.
Background Analysis
In 2008, the nation was faced with one of the worst financial crises in history. In order to
ensure adequate resources were available to provide City services, the City Council approved
a memorandum policy establishing a General Fund working capital reserve equivalent to one
hundred percent (100%) of the annual General Fund operating budget. This policy provided
the City with the financial flexibility it needed to weather the financial crisis that was affecting
the national economy and still maintain service delivery.
While this policy has continued to be sufficient for the last ten years, the Government Finance
Officers Association (GFOA) suggests that as a best practice cities should, from time to time,
consider their own unique circumstances in order to determine adequate reserves. This
includes assessing the needs of, and risks to, the City's revenues and fund balance and
allocating reserves accordingly.
Staff assessed the needs of the City which include ongoing operations for service delivery,
operating cash flow, future capital projects, facilities maintenance, pension obligations and
equipment replacement. The risks to the City's fund balance include rising public safety costs,
fund stability', and unexpected changes in financial condition2 including economic
uncertainties, emergencies, revenue volatility, one-time expenditures, and pension obligation
stability.
Establishing reserves based on these considerations also assists the City to demonstrate to
interested parties, the City's financial strength and stability. This information is also often
considered for financial ratings for debt issuance and annual disclosures.
Identifvina Reserve Categories and Funding Analysis
The primary goal of the Reserve Policy (Policy) is to identify and reserve, or have an ongoing
funding plan to reserve, adequate resources for operational liquidity, future needs and
assessed risks to the City's fund balance. The Policy includes broad reserve categories that
Fund stability includes the risk to the General Fund of other funds that may depend on a transfer from the General Fund if revenues
didn't cover expenses, such as the Palm Desert Aquatic Center.
2
An unexpected change in financial condition could include things such as the economic crisis in 2008, a loss or delay of a major
revenue source, a natural disaster, liabilities not covered by insurance, or change in the pension discount rate for the City's unfunded
pension liability.
September 27, 2018 - Staff Report
Resolution No. 2018- 73 Reserve Policy
Page 3 of 8
are meant to be as inclusive as possible, yet flexible enough to address needs or risks as
they arise. Except as noted, the main funding source for the recommended reserve categories
is the General Fund Unobligated (or unassigned) Reserves. These reserve categories are
similar to having savings accounts for intended uses but still available if something
unexpected surfaces.
➢ General Fund Oaeratina Reserve— The General Fund is the primary fund used to finance
the daily operations of the City, such as public safety, streets maintenance, recreational
parks, and special events. The General Fund accounts for all general revenues of the City
not specifically levied or collected for special or restricted purposes. Because the General
Fund's revenue is received at varying times throughout the year and is not consistent with
the timing of expenditures, operating funds are necessary for cash flow.
Staff recommends initially reserving an amount to equal twenty five percent (25%)
of the projected annual General Fund expenditures. This reserve will be adjusted
at the end of each fiscal year to the recommended level based on the next year's
projected expenditures.
➢ Continaencv/Emeraencv Reserve — In the event of an unexpected change in financial
condition or public emergency, this contingency reserve would be used to supplement
any monetary needs for General Fund operations to ensure service delivery. This could
include a public emergency such as a natural disaster, some other unforeseen
catastrophic event, economic uncertainties, unexpected operating or capital
expenditures, unexpected spike in public safety costs or loss of a major revenue source.
The GFOA recommends a reserve of no less than two months of regular general fund
operating revenues or expenditures to protect against unexpected changes in financial
condition. After the financial crisis in 2008, the fluctuation in the City's revenue was
approximately twenty percent (20%) of the 2007-08 budget or $11 million dollars. While
the City also reduced its budget at that time to offset the reduction in revenues to the
extent possible, the cost of core services was still rising. It took about eight years for the
City's revenue base to recover to pre-2008 levels.
Based on these actual events, twenty percent (20%) of the annual operating revenue
would be prudent as a reserve, understanding that the percentage reserved should be
reviewed from time to time to determine whether the amount should be increased for the
current circumstances.
In order to reserve for these types of uncertainties, staff recommends reserving an
amount equal to twenty percent (20%) of the projected annual General Fund
revenues. This reserve will be adjusted at the beginning of each fiscal year to the
recommended level based on that year's projected revenues.
> Facilities Maintenance Reserve -- In 2017, the City Council authorized a Capital
Replacement Reserve Study ("Study") to identify the Tong -term maintenance and
replacement needs of the City. The Study is now complete and the summary is attached
in Exhibit A. The Study is comprised of over 35 components that include City buildings,
September 27, 2018 - Staff Report
Resolution No. 2018- 73 Reserve Policy
Page 4 of 8
infrastructure, parks and gardens, recreation facilities and hiking trails. The Study contains
a recommendation for an initial deposit as well as annual deposits looking forward 30
years.
Many of the reserve components identified have multiple sources of funding. The total
initial deposit recommendation is $25,000,000. To be fully funded, the Study suggests a
total reserve of $31,489,392. Staff has identified approximately $18,629,783 that is
available from various sources, some of which are restricted for these purposes, to fund
a portion of the reserve. The balance needed from the General Fund to fully fund this
reserve is $12,859,609.
Staff recommends reserving the fully funded amount of $31,489,392 from the
identified sources to fully fund this reserve. Annually, this reserve will be reviewed
to identify projects that have been completed with alternative funding, have been
completed at a lower/higher cost, or are no longer needed. Staff will then compare
the balance along with the recommended Annual Capital Contribution and adjust
the reserve accordingly. If this reserve is not fully funded, it will be the goal to keep
the reserve funded percentage to at least sixty percent (60%).
➢ Capital Improvement Proiects Reserve — With the adoption of the annual budget, the City
Council approves a five year Capital Improvement Program (CIP). Projects included in
the CIP are for major capital projects or improvements to the City's infrastructure including
recreational facilities, undergrounding, roadways, storm drains, parks and gardens,
buildings, and rights of way. Many of these projects have other sources of funding
identified during the annual budget process; however, the future availability of these funds
is limited. For example, the City collects a developer impact fee for new park facilities. As
development slows, the collection of the park fee and other similar fees will diminish.
CIP projects tend to be one-time expenditures unlike facilities maintenance which are
cyclical in nature, i.e. building a bridge vs. painting a building. For purposes of this reserve,
property and land acquisitions, including right of way, easements, or properties for
strategic redevelopment may be considered as an appropriate use of the reserve. To
ensure that projects can be accomplished when they are needed, and are not dependent
on the fluctuations in year to year revenues and expenditures, a reserve of an amount
equal to twenty percent (20%) of the five year CIP project total is practical.
Staff recommends reserving an amount equal to a total of twenty percent (20%) of
the current adopted five year CIP at the end of each fiscal year.
➢ Liability Reserve -- The City is responsible for costs not covered by the City's self-
insurance programs including claim costs within the deductible amounts, certain types of
settlements and judgments, or any claims awarded in excess of $50 million. The City
belongs to a self-insurance pool administered by the California Joint Powers Insurance
Authority. The City has a $10,000 deductible per claim for property damage. Premiums
are determined annually by the City's payroll and claims experience relative to the
members within the risk -sharing pool. Premiums and claims fluctuate from year to year
so the annual cost can often fluctuate as well. This reserve could also be used for
September 27, 2018 - Staff Report
Resolution No. 2018- 73 Reserve Policy
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deductibles, to pay any amount that may be considered a liability to the City consistent
with this category, or to pay any contribution or premium to the pool on behalf of the City.
In order to reserve for these liabilities, staff recommends reserving $4 million which
is the minimum amount of the pooled retention ($2 million each) for both Liability
and Workers' Compensation.
➢ Employment Benefits Reserve — Internal Service Funds have been established for the
purpose of reserving monies for compensated balances and Other Post Employment
Benefits (OPEB), however, several other factors outside of the City's control can affect
the cost of annual employment benefits. For example, a one percent (1 %) change in the
pension discount rate can impact the City's current unfunded liability by almost $16 million
dollars.
On December 21, 2016, the CaIPERS Board of Administration voted to lower the discount
rate from 7.5% to 7% over three years. The City took a proactive approach to leveling the
effects of the change by making additional payments toward its unfunded liability, which
has resulted in an increase in the City's `funded ratio' from 66.2% to 70.7% for the year
ended June 30, 2017. However, the employer's normal contribution rates are still climbing,
which will cause the annual employer payroll contributions to increase by approximately
$100,000. Since this increase would be cumulative, by the end of the 2021 fiscal year, the
City will have paid a total of approximately $600,000 in increased normal contributions. If
the rates continue upward, this amount will continue to cumulatively rise as well.
In order to maintain budget stability which may include these increases or any other
extraordinary change in the cost of employment benefits, this reserve could be used to
offset the increases, retire pension liability so that annual costs are in line with available
revenues or to offset the cost of any other employment benefits during any year. (See
attached Exhibit B - examples of pension amortization schedules and alternatives)
Consistent with current practice, staff recommends on June 30 of each year,
reserving one hundred percent (100%) of existing obligations of accrued unused
vacation, sick leave, and compensatory time as well as the current year's OPEB
requirement in the appropriate internal service funds. In addition, staff recommends
reserving fifty percent (50%) of a one percent (1 %) difference in the Public
Employees Retirement System (PERS) discount rate.
➢ Other Fund Stability Reserve - Some funds are not sufficiently funded by other revenues
(e.g. fire services, aquatic center operations) and require a transfer of funds from the
General Fund each year to cover expenses. While some other funds are currently self-
sustaining, looking forward, this may not always be the case. For example, the City's
affordable housing rental programs are currently self-sustaining as many of the needed
capital improvements are funded from restricted monies reserved prior to the elimination
of redevelopment. These funds, however, are finite and once exhausted, staff will need
to seek alternative funding sources (i.e. General Fund) for deferred maintenance.
September 27, 2018 - Staff Report
Resolution No. 2018- 73 Reserve Policy
Page 6 of 8
In the event the General Fund operating budget, in any year, is not balanced, this reserve
fund could be used to offset transfers to other funds that are not self-sustaining.
Staff recommends initially reserving the expected transfers out for FY 2017-18 of
$3.3 million in this reserve. This amount will be adjusted annually based on the
needed or anticipated transfers out to other funds.
➢ Equipment Replacement Reserve — An Internal Service Fund has been established for
the purpose of equipment replacement. This includes equipment not identified within the
Facilities Maintenance Reserve (generally the items included in the Facilities Maintenance
Reserve are affixed to the facility in some way) including vehicles, office furniture,
information systems, printers, scanners, communication systems, etc. Due to the nature
of the replacements, this reserve will be the most fluid as most items in this category
typically have relatively short life cycles of between 3-10 years.
This reserve is currently funded at 100%. For future years, staff recommends setting
aside at least one hundred percent (100%) of the total historical cost of equipment
assets as noted in the CAFR and may include amounts set aside in excess of one
hundred percent (100%) for any approved one-time expenditures such as those
identified in the Information Technology Master Plan.
➢ Economic Development/Land Acauisition Reserve - This reserve was established to
facilitate economic development partnerships, incentives and property acquisitions to
further the City's economic development goals. This reserve is partially funded by a
portion of the proceeds from the former redevelopment agency's land sales and currently
has a balance of $737,246. As agency properties close escrow the City's portion will be
deposited into this reserve as well. This reserve may be used in connection with any
economic development strategic plan goals adopted by the City that may include
acquiring properties to assist with economic development in the area.
To facilitate the City's economic development goals, staff recommends setting aside
an additional $4,000,000 in this reserve for economic development that may include
the need to acquire strategic land or properties.
Reolenishina Reserve Categories with General Fund Excess Revenue
In addition, the Policy sets guidelines and priorities for the distribution of excess revenue at
the end of each fiscal year to assist in funding and replenishing the identified reserve
categories as well as ensuring that current operating needs are funded.
The proposed priority for distributing or reserving excess revenue at year end is as follows:
1. All excess revenue shall first be used to replenish the General Fund Operating
Reserve until it reaches the Policy designated level.
2. The amount necessary from excess revenue needed to reserve for continuing
appropriations and encumbrances that are not funded by other methods, if any.
September 27, 2018 - Staff Report
Resolution No. 2018- 73 Reserve Policy
Page 7 of 8
3. The amount necessary from excess revenue to fund an adequate reserve for potential
liabilities, compensated absences, and other post -employment benefits to be paid
during the next fiscal year that are not funded by other methods, if any.
4. The amount necessary to fund the Contingency/Emergency Reserve to maintain
General Fund operations, service delivery and budgetary stabilization in the event of
an unexpected change in financial condition3 or public emergency. Or, if there are
insufficient amounts available to fully fund the Contingency/Emergency Reserve, an
amount necessary to temporarily reserve for any known and/or anticipated economic
downturns during the next fiscal year that are expected to be more than three percent
(3%) of the previous year's General Fund revenues.
5. Other considerations for the allocation of excess revenues will be at the discretion of
the City Manager after review of the City's outstanding obligations, approved goals, or
level of reserves within each category.
Fiscal Analysis
Having adequate reserves for the City's continued fiscal stability, regardless of economic
climate, is the main reason for staff's recommendations below. The chart below provides
comparisons for reserving fund balance based on three percentage levels, although the General
Fund Operating Reserve and the Contingency/Emergency Reserve remain at one hundred
percent funded for annual operations.
Staff reviewed the comparisons in funding levels and staff recommends that, based on the
reasoning and rationale in the Identifying Reserve Categories and Funding Analysis section
of this report, reserves should be funded at the full recommended levels for a total in reserves
of $68,374,953. By comparison, under the current reserve policy, the City would have reserved
$58,009,613 last year for all of the above purposes.
s An unexpected change in financial condition could include things such as the economic crisis in 2008, a loss or delay of a major
revenue source, a natural disaster, liabilities not covered by insurance, or change in the pension discount rate for the City's unfunded
pension liability.
September 27, 2018 - Staff Report
Resolution No. 2018- 73 Reserve Policy
Page 8 of 8
Recommended Reserve Allocations 2018
Recommended
Reserve to be
allocated from % of
Reserve Category General Fund Total
For illustrative Purposes:
75% Funded °A, of 50°/o Funded °/o of
Except * Total Except ' Total
6/30/17 Unassigned Fund Balance 74,259,748
General Fund Operating Reserve*
EmergencylContingency Reserve`
Facilities Maintenance Reserve
Capital Improvement Projects Reserve
Liability Reserve
Employment Benefits Reserve
14,066.311 21%
11,257,255 16%
12,859,609 19%
10,861, 666 16%
4,000,000 6%
8,030,113 12%
74,259,748 74,259,748
14, 066,311 24% 14,066,311 30%
11,253,049 20°I° 11,253,049 24%
9,644,707 17% 6,429, 805 14°/°
8,146,250 14% 5,430, 833 12°%'
3,000,000 5% 2,000,000 4%
6,022,584 10% 4,015,056 9°.0
Other Fund Stability Reserve 3,300,000 5% 2,475,000 4% 1,650,000 4%
Equipment Replacement Reserve'" - 0%
Econ Development/Land Acquisition Reserve 4,000,000 6%
Total Recommended Committed Reserves: 68,374,953 100%
0% 0°A,
3,000,000 5% 2,000,000 4%
57, 607.900 100% 46, 845, 053 100%
Unassigned after Reserve Allocations 5,884,795 16,651,848 27,414,695
▪ Reserves that remain at 100% funded status across all comparisons
• Reserve is currently funded at 100% and has been set aside in an internal service fund.
By adopting the Policy, the City Council is confirming its desire and intent to commit reserves for
the identified purposes. In the event funds are needed for some other extraordinary
circumstance, the City Council may review and adjust the availability of funds in any reserve.
LEGAL R V1EW DEPT. REVIEW FINANCIAL REVIEW CITY MANAGER
4tW&f
. Hargreaves Jarfet M. Moore `yat~Yet M. Moore
Director of Finance
Director of Finance
Lauri Aylaian
City Manager
ATTACHMENTS: Resolution No. 2018-73
Exhibit A -- Replacement Reserve Study Summary
Exhibit B — CaIPERS Actuarial Valuations for Palm Desert - 30 Year
Amortization Schedule and Alternatives
Exhibit C — Example of Capital Replacement Plan for one of the 35+
facilities included in the Study.
RESOLUTION NO. 2018 - 73
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM
DESERT AUTHORIZING THE CITY MANAGER TO ESTABLISH A
RESERVE POLICY
WHEREAS, the City desires to ensure that there is sufficient capital available at all times
to meet its operating, equipment replacement, capital project, employment benefits and other
substantial obligations; and
WHEREAS, the City desires to formalize its reserve policies; and
WHEREAS, the City desires to reserve monies for financial stability, operational liquidity,
unexpected changes in financial condition (including economic uncertainties, emergencies,
liabilities), employment benefits, other fund stability, equipment replacement, Tong -range
maintenance, economic development, anticipated and unanticipated capital expenditures; and
WHEREAS, the City desires to establish a reserve should revenue estimates in any year
not meet projections; and
WHEREAS, the City Council have been presented with a draft Reserve Policy in the form
attached to this Resolution as Exhibit "1" and by this reference incorporated herein.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM DESERT DOES
HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. The above recitals are true and correct.
Section 2. The City Manager is hereby authorized to establish and periodically review
and update the reserve policy.
Section 3. The Reserve Policy shall be added to the Administrative Procedures as
Policy No. FIN-003.
Section 4. This Resolution shall take effect immediately upon adoption.
Section 5. The City Manager, or her designee, are hereby authorized, jointly and
severally, to do all things which they deem necessary or proper in order to effectuate the
purposes of this Resolution and the transactions contemplated hereby, and any such actions
previously taken by such officers are hereby ratified, confirmed and approved.
Section 6. That the City Clerk shall certify the passage and adoption of this resolution
and enter it into the book of original resolutions.
PASSED, APPROVED AND ADOPTED at the regular meeting of the Palm Desert City
Council held on this 27th day of September, 2018, by the following vote, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
SABBY JONATHAN, MAYOR
ATTEST:
RACHELLE D. KLASSEN, CITY CLERK
CITY OF PALM DESERT, CALIFORNIA
RESOLUTION NO. 2018-73
EXHIBIT "1"
Subject
Policy No.
Date
Approved by
Authored by
I. PURPOSE
CITY OF PALM DESERT
ADMINISTRATIVE PROCEDURES
Reserve Policy
FIN - 003
Issued: September 27, 2018
Resolution No. 2018- 73 authorizing a
Reserve Policy
Finance Department
To outline the policy and procedures for establishing reserves for Tong -term city
infrastructure needs, economic uncertainties, economic development, emergency
reserve, equipment replacement, pension and other post -employment obligations.
This Reserve Policy ("Policy") will also set guidelines and priorities for the distribution of
excess revenue at the end of each fiscal year to assist in funding and replenishing the
identified reserve categories as well as ensuring that funds for current operating needs
are available. This Policy will help the City ensure stable service delivery.
II. SCOPE
The City utilizes a variety of government funds for reporting and budgeting revenues and
expenditures of the City that are separated broadly by three fund types: governmental
funds, proprietary funds and fiduciary funds. This Policy will pertain only to governmental
funds and proprietary funds since fiduciary funds are held in trust for others.
Governmental funds include the General Fund, Special Revenue funds, Debt Service
funds and Capital Project funds. Proprietary funds include Enterprise funds and Internal
Service funds.
To effectively utilize and maintain adequate reserves for both known and unknown
contingencies, this Policy establishes reserve categories based on the hierarchy of the
City's needs and risks:
1. General Fund Operating Reserve
2. Contingency/Emergency Reserve
3. Facilities Maintenance Reserve
4. Capital Improvement Projects Reserve
5. Liability Reserve
6. Employment Benefits Reserve
7. Other Fund Stability Reserve
8. Equipment Replacement Reserve
9. Economic Development/Land Acquisition Reserve
RESOLUTION NO. 2018-73
Administrative Procedures Manual
FIN-003
Reserve Policy
Page 2 of 7
III. RESERVE CATEGORY DEFINITIONS (in alphabetical order)
EXHIBIT "1"
a. Capital Improvement Proiects Reserve — A reserve for major capital projects or
improvements to the City's infrastructure including recreational facilities,
undergrounding, roadways, storm drains, parks and gardens, buildings, and
rights of way.
b. Continaencv/Emeraencv Reserve — A reserve to sustain General Fund
operations, service delivery and budgetary stabilization in the event of an
unexpected change in financial condition' or public emergency. This reserve is
not intended to serve as an alternative funding source for new programs.
c. Economic Development/Land Acauisition Reserve -- A reserve to facilitate
economic development partnerships, incentives and property acquisitions to
further the City's economic development goals.
d. Employment Benefits Reserve — A reserve for accumulated compensated leave
balances, pension discount rate changes, pension obligations and other post -
employment benefits (OPEB) including unfunded pension liabilities.
e. Equipment Replacement Reserve -- A reserve for the replacement of equipment
not identified within the Facilities Maintenance Reserve including vehicles, office
furniture, information systems, printers, scanners, communication systems, etc.
f. Facilities Maintenance Reserve — A reserve to maintain existing City buildings
and infrastructure including recreational facilities, parks and gardens, and hiking
trails.
g. General Fund Operating Reserve — A reserve used to finance the daily
operations of the City such as public safety, streets maintenance, recreational
parks, and special events.
h. Liability Reserve — A reserve for costs not covered by the City's insurance
programs including claim costs within the deductible amounts, certain types of
settlements and judgments, or any claims awarded in excess of $50 million. This
reserve may also be used for deductibles, to pay any amount that may be
considered a liability to the City consistent with this category, or to pay any
contribution or premium to the pool on behalf of the City.
i. Other Fund Stability Reserve — A reserve for transfers to funds from the General
Fund to cover expenses.
IV. ACCOUNTING GUIDANCE
The Government Finance Officers Association (GFOA) suggests that as a best practice,
cities should consider their own unique circumstances in order to determine adequate
reserves. This includes assessing the needs of the City as well as the uncertainties that
could impact the City's revenues and fund balance.
1 An unexpected change in financial condition could include things such as the economic crisis in 2008, a loss or delay of a major
revenue source, a natural disaster, liabilities not covered by insurance, or change in the pension discount rate for the City's unfunded
pension liability.
RESOLUTION NO. 2018-73
Administrative Procedures Manual
FIN-003
Reserve Policy
Page 3 of 7
EXHIBIT "1"
Government Accounting Standards Board Statement No. 54 defines five specific
classifications of fund balance. The five classifications are intended to identify whether
the specific components of fund balance are available for appropriation (or available to
reserve) and are therefore considered "spendable." The classifications are also intended
to identify the extent to which fund balance is constrained by special restrictions. The
five classifications2 of fund balance for governmental funds are as follows:
CLASSIFICATIONS
Nonspendable
Restricted
Committed
Assigned
Unassigned
NATURE OF RESTRICTION
Cannot be readily converted to cash
Externally imposed restrictions
City Council imposed commitment
City Manager assigned purpose/intent
Residual balance not otherwise restricted
This Policy is focused only on the reserve designations that will be Committed, Assigned
or identified in Unassigned. Nonspendable and Restricted classifications will be excluded
because they are subject to requirements outside the City's control. The City will,
however, consider restricted fund balance as spent first when both restricted and
unrestricted fund balances are available.
V. RESERVE FUNDING POLICIES
The primary goal of the Policy is to identify and reserve, adequate resources for
operational liquidity, future needs and any uncertainties that might affect the City's fund
balance. The Policy includes broad reserve categories that are meant to be as inclusive
2 Nonspendable Fund Balance (inherently nonspendable) — Assets that cannot be converted to cash (i.e., prepaid items and
inventories of supplies) and assets that will not be converted to cash soon enough to affect the current period. Examples of
nonspendable fund balance are reserves for long term receivables and advances, prepaid assets, City's financial assets which are
not due to be received for an extended period, so are not available for appropriation during the budget year.
Restricted Fund Balance (externally enforceable limitations on use) — Limitations imposed by creditors, grantors, contributors, or
laws and regulations of other governments and limitations imposed by law through constitutional provisions or enabling legislation.
Examples of restricted fund balance are reserves for debt service, developer impact fee, capital bonds and grants.
Committed Fund Balance (self-imposed limitations on use set in place prior to the end of the fiscal year) — Limitation imposed at
the highest level of decision making that requires formal action at the same level to remove (City Council). Examples of committed
fund balance are the aquatic center, energy loan programs and the housing authority capital asset replacement.
Assigned Fund Balance (limitation resulting from intended use) — Intended use is established by highest level of decision -
making, then may be implemented by an official designated for that purpose (delegated by the City Council to the City Manager).
Examples of assigned fund balance are the library fund, building maintenance fund, capital project reserve fund, and economic
development fund.
Unassigned Fund Balance (residual net resources) — Excess of nonspendable, restricted, committed, and assigned total fund
balance. Unassigned Fund Balance reserves are residual positive net resources in excess of what can properly be classified in one
of the other four components. Unassigned General Fund Balance (unobligated general fund reserves) and can be used for any lawful
purpose.
RESOLUTION NO. 2018-73
Administrative Procedures Manual
FIN-003
Reserve Policy
Page 4 of 7
EXHIBIT "1"
as possible, yet flexible enough to address needs or risks as they arise. Each reserve
category may include multiple funds some of which may have a restricted fund balance
component. At the discretion of the City Manager, monies held in reserve may be used in
any year when the General Fund is not balanced in order to offset operating costs
consistent with these reserve categories.
The identified reserve funding policies are as follows:
1. General Fund Operating Reserve — On June 30, the Finance Director shall set
aside twenty five percent (25%) of the projected annual General Fund
expenditures. This reserve will be adjusted at the end of each fiscal year to the
recommended level based on the next year's projected expenditures. This reserve
will be classified in fund balance as ASSIGNED.
2. Contingency/Emergency Reserve — At the beginning of each fiscal year, the
Finance Director shall reserve an amount equal to twenty percent (20%)3 of the
projected annual General Fund revenues. This reserve will be adjusted at the
beginning of each fiscal year to the recommended level based on that year's
projected revenues. This reserve will be classified in fund balance as
COMMITTED.
3. Facilities Maintenance Reserve — Upon the approval of this Policy, the Finance
Director is directed to commit the amount identified in the Capital Replacement
Reserve Study, as the initial deposit, Tess amounts available from other funding
sources to this reserve. The Policy -designated goal for funding this reserve, will
be between sixty and one hundred percent (60-100%) of the `Fully Funded' amount
in the Capital Replacement Reserve Study. The annual recommended funding
amount identified in the Capital Replacement Reserve Study will be considered as
part of the annual budget. This reserve will be classified in fund balance as
COMMITTED.
4. Capital Improvement Projects Reserve — At the financial closing of each fiscal year,
the Finance Director shall set aside twenty percent (20%) of the total Capital
Improvement Program projects for the next five years. The Finance Director will
adjust this amount annually to the Policy -designated level plus any additional
amounts so directed by the City Council under Section VI of this Policy. This
reserve will be classified in fund balance as both RESTRICTED and COMMITTED
depending on the project funding. Unless otherwise specified, at such time as a
project or any portion thereof has been awarded the amount will be allocated
(committed) to the project and will not be available for other projects.
3 After the financial crisis in 2008 the fluctuation in the City's revenue was approximately twenty percent (20%) of the 2007-08 budget
or $11 million dollars. While the City also reduced its budget at that time to offset the reduction in revenues to the extent possible, the
core services were still rising. It took approximately eight years to reestablish the revenue base to pre-2008 levels. Based on these
actual events staff believes that 20% of the annual operating revenue would be prudent as a reserve, with a consideration to review
from time to time as information becomes available to the City that might suggest the amount to be increased.
RESOLUTION NO. 2018-73
Administrative Procedures Manual
FIN-003
Reserve Policy
Page 5 of 7
EXHIBIT "1"
5. Liability Reserve -- The Finance Director shall commit at least the pooled retention
requirement for both Liability and Workers' Compensation, which is currently $4
million ($2 million each). This reserve will be classified in fund balance as
COMMITTED.
6. Employment Benefits Reserve — Internal Service Funds have been established for
the purpose of reserving monies for compensated balances and Other Post -
Employment Benefits (OPEB). On June 30 of each year, the Finance Director
shall set aside one hundred percent (100%) of the compensable accrued unused
vacation, sick leave, and compensatory time and the current year's OPEB
requirements to the appropriate internal service funds. This amount will be
COMMITTED. The Finance Director shall also set aside fifty percent (50%) of a
one percent (1 %) difference in the Public Employees Retirement System (PERS)
discount rate. This amount will be COMMITTED in the General Fund.
7. Other Fund Stability Reserve - Upon the approval of this Policy, the Finance
Director shall be directed to commit $3.3 million to this reserve. At the end of each
fiscal year, the Finance Director shall adjust the amount to be the projected annual
transfers to other funds. This reserve will be classified in fund balance as
COMMITTED.
8. Equipment Replacement Reserve — An Internal Service Fund has been
established for the purpose of equipment replacement. At the financial closing of
each fiscal year, the Finance Director shall adjust this reserve to be at least 100%
of the total historical cost of equipment assets as noted in the CAFR and may
include amounts set aside in excess of 100% for any approved one-time
expenditures. This reserve will be classified in fund balance as COMMITTED.
9. Economic Development/Land Acquisition Reserve -- Upon approval of this Policy,
the Director of Finance shall deposit an additional $4,000,000 as a reserve for
land/property acquisitions. In addition, within a reasonable amount of time from
when the City receives its share of the proceeds of the former redevelopment
agency's land sales, from the County of Riverside, the Finance Director shall
commit the City's share to this reserve. This reserve will be classified in fund
balance as COMMITTED.
VI. CITY COUNCIL DESIGNATION OF RESERVES
The City Council will take action to COMMIT fund balance and unless otherwise specified
in this Policy, hereby designates the City Manager or his/her designee to ASSIGN fund
balance when appropriate. The City Council may designate portions of General Fund
unassigned or unobligated fund balance for any other municipal purpose that the City
Council deems prudent or necessary.
RESOLUTION NO. 2018-73
Administrative Procedures Manual
FIN-003
Reserve Policy
Page 6 of 7
VII. ANNUAL DISTRIBUTION OF EXCESS REVENUE
EXHIBIT "1"
The distribution of excess revenue at the end of each fiscal year will be according to the
following guidelines and priorities. Excess revenue, for purposes of this Policy, is the
difference between revenues and expenses in the General Fund at the end of a fiscal
year after all required transfers are made to other funds.
The priority for distributing or reserving excess revenue at year end is as follows:
1. All excess revenue shall first be used to replenish the General Fund Operating
Reserve until it reaches the Policy -designated level.
2. The amount necessary to reserve for continuing appropriations and encumbrances
that are not funded by other methods, if any.
3. The amount necessary to fund an adequate reserve for potential liabilities,
compensated absences, and other post -employment benefits to be paid during the
next fiscal year that are not funded by other methods, if any.
4. The amount necessary to fund the Contingency/Emergency Reserve to maintain
General Fund operations, service delivery and budgetary stabilization in the event
of an unexpected change in financial condition4 or public emergency. Or, if there
is insufficient amounts available to fully fund the Contingency/Emergency Reserve,
an amount necessary to temporarily reserve for any known and/or anticipated
economic downturns during the next fiscal year that are expected to be more than
three percent (3%) of the previous year's General Fund revenues.
5. Other considerations for the allocation of excess revenues will be at the discretion
of the City Manager after review of the City's outstanding obligations, approved
goals, or level of reserves within each category.
VIII. REPLENISHMENT OF RESERVES
After consideration of the use of excess revenue in Section VI., the City Manager will
annually review the level of each approved reserve category, and after determining what
is reasonably necessary and appropriate for the City's needs, may direct replenishment
of critical reserves (General Fund Operating Reserve and Contingency/Emergency
Reserve) from other reserves or may assign any remaining excess revenues accordingly.
If a transfer is required from one reserve to another, the City Manager shall notify the City
Council at the next regularly scheduled City Council meeting of such transfer.
4 An unexpected change in financial condition could include things such as the economic crisis in 2008, a Toss or delay of a major
revenue source, a natural disaster, liabilities not covered by insurance, or change in the pension discount rate for the City's unfunded
pension liability.
RESOLUTION NO. 2018-73
Administrative Procedures Manual
FIN-003
Reserve Policy
Page 7 of 7
EXHIBIT "1"
When reserves are used for any intended purpose, or as allowed under this Policy, and
a replenishment source is not identified at the time of use, the City Manager will advise
the City Council during the annual budget process as to the status of reserves including
any recommendations for replenishment.
IX. COMPREHENSIVE ANNUAL FINANCIAL REPORT
In accordance with generally accepted accounting principles and practices, all
classifications of General Fund fund balance will appear in the Notes to Financial
Statements of the CAFR and be classified in accordance with GASB 54.
EXHIBIT A
Inland Empire/Coachella Vailey
3200 Guasti Road, Suite #100
Ontario, CA 91761
Tel (909) 210-0342
Fax (909) 354-3310
www.reservestudy.com
SSOCIATIOII
ESERVES
Est. 1986
Over 25,000 Reserve Studies nationwide
Capital Reserve Study
"Full"
City of Palm Desert
Palm Desert, CA
Report #: 32499-0
For Period Beginning: July 1, 2018
Ending: June 30, 2019
Date Prepared: June 21, 2018
Regional Offices
Arizona
Cal iforni a
Colorado
Florida
Hawaii
Nevada
Washington
3- Minute Executive Summary
Property:
Location:
Report Period:
City of Palm ❑esert
Palm Desert, CA
July 1, 2018 through June 30, 2019
EXHIBIT A
Assoc. #: 32499-0
Results
Projected Starting Capital Account Balance: $0
Fully Funded Capital Account Balance: $31,489,392
Percent Funded: 0.0%
Recommended 2018 Annual Capital Contribution: $8,200,000
Recommended Special Funding this year• $25,000,000
Most Recent Capital Reserve Contribution Rate: $0
Economic Assumptions:
Net Annual "After Tax" Interest Earnings - Capital Funds.. 1.00%
Annual Inflation Rate 3.00%
• This is a "Full" Capital Reserve Study (original, created "from
scratch").
• The information in this Capital Replacement Plan is based on our site
inspections between July 2017 and February 2018.
• Because your Capital Replacement Fund is at 0.0% Funded, this
represents a weak position. In perspective, Capital Reserve accounts
over 70% funded are considered to be in the strong range. Your multi-
year Funding Plan is designed to bring you to the 100% level, or
"Fully Funded".
• Based ❑n this starting point and your anticipated future expenses, our
recommendation is to contribute to your Capital Reserve Fund at a
rate of $8,200,000 per year. An initial $25,000,000 of special funding
should be included this year to provide funding for 2018/2019
projects.
Association Reserves, Inc. i 612112018
EXHIBIT A
Assoc. 32499-0
Which Physical Assets are Covered by Capital Replacement Funds?
There is a national -standard four-part test to
determine which expenses should be funded
through Capital Replacement Funds. First, it
must be the city's maintenance responsibility.
Second, the component must have a limited
life. Third, the limited life must be predictable
(or it by definition is a "surprise" which cannot
be accurately anticipated). Fourth, the
component must be above a minimum
threshold cost. This limits Capital
Replacement Fund Components to major, predictable expenses. Within
this framework, it is inappropriate to include "lifetime" components,
unpredictable expenses (such as damage due to fire, flood, or earthquake
and expenses more appropriately handled from the Operational Budget or
as an insured loss.
How are Useful Life and Remaining Useful Life established?
1) Visual Inspection (observed wear and age)
2) Association Reserves database of experience
3) Client Component History
4) Vendor Evaluation and Recommendation
How are Cost Estimates Established?
Capital Assets
• Common Area
• Limited Useful Life
• Predictable Life Limit
• Cost must be Significant
),
Financial projections are based on the average of our Best Case and Worst
Case estimates, which are established in this order...
1) Client Cost History
2) Comparison to Association Reserves database of work done at
similar properties
3) Vendor Recommendations
4) Reliable National Industry cost estimating guidebooks
Association Reserves, Inc, 2 6/21/2018
EXHIBIT A
Assoc. 32499-0
How much should we contribute?
There are four Funding Principles that we balance in developing your
Capital Replacement Funding Plan. Our first objective is to design a plan
that provides you with sufficient cash to perform your Capital Replacement
projects on time. A stable contribution rate is desirable because it is a
hallmark of a proactive plan.
Capital Replacement Fund contributions
that are evenly distributed over the years,
enable the city to make stable
contributions to fund the property's Capital
Replacement expenses (this means we
recommend special funding only when all
other options have been exhausted). And
finally, we develop a plan that is fiscally
responsible.
Funding Principles
• Sufficient Cash
• Stable Contribution Rate
• Evenly Distributed
• Fiscally Responsible
What is our Recommended Funding Goal?
Maintaining the Capital Replacement Fund at a level equal to the physical
deterioration that has occurred is called "Full Funding" the Capital
Replacement Funds (100% Funded). As each asset ages and becomes
"used up", the Capital Replacement Fund grows proportionally. This is
simple, responsible, and our recommendation. As stated previously,
properties in the 1 00% range rarely experience the need for special funding
or deferred maintenance.
Allowing the Capital Replacement Funds
to fall close to zero, but not below zero, is
called Baseline Funding. In this case,
deterioration occurs without matching
Capital Replacement Fund contributions.
With a low Percent Funded, additional
special funding and deferred maintenance
are common.
Funding Goals
1--I> • Full Funding
• Threshold Funding
• Baseline Funding
Threshold Funding is the title of all other
objectives randomly selected between Baseline Funding and Full Funding.
Association Reserves, Inc. 4 6/21/201 S
EXHIBIT A
Assoc. 32499-0
Capital Replacement Fund Status
The starting point for our financial analysis is your Capital Replacement
Fund balance, projected to be $0 as -of the start of your Fiscal Year on July
1, 2018. Your Fully Funded Balance is computed to be $31,489,392 (see
Table 4). This figure represents the deteriorated value of your major
components. Comparing your Capital Replacement Fund Balance to your
Fully Funded Balance indicates your Capital Replacement Funds are 0%
Funded. As indicated earlier in the Executive Summary, this represents a
weak status.
Recommended Funding Plan
Based on your current Percent Funded and your projected cash flow
requirements, we are recommending Capital Replacement Fund
contributions of $8,200,000/year as well as $25,000,000 of additional
funding this Fiscal Year. This represents the first year of the 30-year
Funding Plan shown below. This same information is shown numerically in
both Table 4 and Table 5.
Annual Contributions
$25,000,000
$20,000,000
$15, 000,000
$10, 000,000
$5,000,000
$0
2018
Funding Plan
2023
2028
Figure 2
Association Reserves, Inc- 6
2033
Years
■Recommended
® Current
2038
2043
2048
6/2112018
EXHIBIT A
Table 4: 3❑-Year Reserve Plan Summary 32499-0
Fiscal Year Beginning: 07/01118
Starting
Reserve
Year Balance
2018 $0
2019 $19,623,013
2020 $21,122,747
2021 $22,086,327
2022 $22,412,913
2023 $21,955,994
2024 $19,654,636
2025 $21,497,879
2026 $23,759,760
2027 $24,855,905
2028 $28,499,593
2029 $27,480,983
2030 $30,477,602
2031 $31,697,026
2032 $32,880,015
2033 $36,325,102
2034 $29,954,093
2035 $34,148,886
2036 $37,080,094
2037 $40,231,857
2038 $41,514,506
2039 $41,680,495
2040 $46,111,716
2041 $48,053,944
2042 $49,502,750
2043 $52,724,056
2044 $54,047,432
2045 $58,489,557
2046 $63,038,711
2047 $67,113,093
Fully
Funded
Balance
$31,489,392
$26,487,446
$28,258,279
$29,462,847
$29,983,171
$29,651,819
$27, 360, 539
$29,203,774
$31,440,532
$32,450,586
$36, 010, 54 5
$34,777,310
$37,543,726
$38,447,313
$39,293,353
$42,435,108
$35,538,722
$39,291,439
$41,779,440
$44,497,642
$45,307,870
$44,942,037
$48,890,720
$50,316,037
$51,211,717
$53,887,786
$54,616,316
$58,498,286
$62,508,092
$66,050,630
1
Interest:
Annual
Percent Reserve
Funded Rating Contribs.
0.0% Weak $8,200,000
74.1% Strong $8,487,000
74.7% Strong $8,784,045
75.0% Strong $9,091,487
74.8% Strong $9,409,689
74.0% Strong $9,739,028
71.8% Strong $10,079,894
73.6% Strong $10,432,690
75.6% Strong $10,797,834
76.6% Strong $11,175,758
79.1% Strong $11,566,910
79.0% Strong $11,971,752
81.2% Strong $12,390,763
82.4% Strong $12,762,486
83.7% Strong $13,145,360
85.6% Strong $13,539,721
84.3% Strong $13,945,913
86.9% Strong $14,364,290
88.8% Strong $14,795,219
90.4% Strong $15,239,076
91.6% Strong $15,696,248
92.7% Strong $16,167,135
94.3% Strong $16,652,149
95.5% Strong $17,151,714
96.7% Strong $17,666,265
97.8% Strong $18,196,253
99.0°/° Strong $18,742,141
100.0% Strong $19,304,405
100.8% Strong $19,883,537
101.6°% Strong $20,480,043
1.0% 1 Inflation:
Loans or
Special
Assmts
$25,000,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$o
$o
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$o
$0
Interest
Income
$98,073
$203,642
$215,954
$222,402
$221,750
$207,965
$205,675
$226,192
$242,975
$266,664
$279,784
$289,670
$310,741
$322, 748
$345,879
$331,255
$320,379
$355,994
$386,396
$408,558
$415,798
$438, 775
$470,628
$487, 5 76
$510,917
$533,631
$562,446
$607,383
$650,483
$696, 302
3.0%
Projected
Reserve
Expenses
$13,675,060
$7,190,909
$8,036,418
$8,987, 303
$10,088,358
$12,248,351
$8,442, 326
$8,397,001
$9,944,665
$7,798,734
$12,865,305
$9,264,802
$11,482,080
$11,902,245
$10,046,152
$20,241,985
$10,071,499
$11,789, 076
$12,029,852
$14,364,985
$15,946,057
$12,174,689
$15,180,550
$16,190,485
$14,955,876
$17,406,508
$14,862,461
$15,362,635
$16,459,638
$16,083,029
Association Reserves, Inc. 8 612112018
EXHIBIT A
Table 5: 30-Year Income/Expense Detail (yrs 5 through 9) 32499.0i
Fiscal Year
2023
2024
2025 2026 2027
Starting Reserve Balance
Annual Reserve Contribution
Planned Special Assessments
Interest Earnings
Total Income
Aquatic Center
Cahuilla Hills Park
City Hall
$21,955.994 $19,654,636 $21,497,879 $23,759,760 $24,855,905
$9,739,028 $10,079,894 $10,432,690 $10,797,834 $11,175,758
$0 $0 $0 $0 $0
$207,965 $205,675 5226,192 $242,975 $266,664
$31,902.987 $29,940,205 $32.156,761 $34,800,569 $36,298,327
$929,738 $0 $110,689 $989,930 115,657
$20,867 $4,119 $0 $8,551 $0
$424,642 $26,866 $41.939 $196,033 $13,048
Civic Center Park & Grounds $395,805 $550,040 $391,038 $57,005 $0
Corporation Yard $512,747 $32,717 $87,321 $83,353 $114,168
Fire Station #33 $587,056 $285,378 $0 $237,519 $0
Fire Station #67 $14,375 $62,091 $211,661 $146,629 $0
Fire Station #71 $277,623 $56,120 $0 $215,984 $0
Freedom Park $267,207 $14,926 $22,138 $30,402 $0
Freedom Park Gardens $0 $0 $3,929 $0 $0
General $4,637 $4,776 $4,919 $5,067 $5,219
Hiking Trails $11.593 $11,941 $12.299 $12,668 $13,048
Historical Society of Palm desert $65,366 $6,328 $32,776 $0 $0
HommefAdams Park $0 $4,179 $0 $0 $0
Hovley Soccer Park $17,969 $7,284 $37,234 $289,584 $0
Infrastructure $6,243,271 $6,583,407 $6.584,130 $6,857,660 $7,115,581
Ironwood Park $339,088 $114,629 $10,331 $0 $0
Jean Benson Center $1,971 $0 $0 S0 $27,009
Joe Mann Park $0 $15,439 $49,195 $0 $0
Joslyn Center $0 $0 $0 $0 $0
Magnesia Falls Park $4,985 $101,285 $0 $221,685 $0
Palma Village Park $418,382 $9,457 $0 $0 $0
Parkview Office Building $743.906 $0 $33,822 $18,241 $76,982
Parkview Office Complex - State of CA Building $381,517 $0 $0 $53,014 $78,286
Portola Community Center $44,342 $0 $3 136 $0 $2,610
PSAM & Gardens $36,053 $101,494 $431,686 $0 $135,540
Henderson Building & Parking Lots $37,503 $17,911 $166,279 $22,865 $77,308
San Pabfo Gardens $0 $9,403 $44,669 $0 $0
Sheriff Substation $441,857 $41,792 $110,504 $93,108 $121,344
University Parks $25,852 $17,612 $0 $405,366 $0
Wallaroo Center $0 $0 $0 $0 $0
Washington Charter School Park _ $0 $363,129 $7,305 $0 $2,936
Total Expenses ,o,2,248,351 $8,442,326 $8.397,001 $9,944,665 $7,798,734
Ending Reserve Balance $19,654,636
$21,497,879
Reserves, Inc.
$23,759.760 $24,855,905 $28,499,593
Page 2 of 6
EXHIBIT A
Table 5: 30-Year Income/Expense Detail (yrs 15 through 19) 32499-01
Fiscal Year 2033 2034 2035
Starting Reserve Balance S35.325,102 $29,954,093 $34.148,886
Annual Reserve Contribution $13,539.721 $13,945,913 $14,364,290
Planned Special Assessments $0 $0 $0
Interest Earnings $331,255 $320,379 $355,994
Total Income $50.196.078 $44,220,385 $48,869,170
Aquatic Center $9,348 $0 $1,290,254
Cahuilla Hills Park $0 $0 $0
City Hall $673,899 $20,059 $16,528
Civic Center Park & Grounds $200.199 $739,208 $40,412
Corporation Yard $158,134 $34,020 $261.315
Fire Station #33 $363.630 $0 50
Fire Station #67 $19,319 $0 $284.455
Fire Station #71 $369,441 $8,826 $0
Freedom Park $643,285 $80,235 $40.495
Freedom Park Gardens $22,123 $0 $5.281
General $6.232 $6,419 $6.611
Hiking Trarls $15.580 $16,047 $16,528
Historical Society of Palm Desert $21,477 $0 $41,321
Homme/Adams Park $0 $5,857 $27,148
Hovley Soccer Park $91,492 $0 $54,627
Infrastructure $16.286212 $8,687,078 $8,848,520
Ironwood Park $17,527 $0 $0
Jean Benson Center $0 $0 $2,810
Jae Mann Park $0 $11,121 $7,768
Joslyn Center $0 $0 $0
Magnesia Falls Park $3,895 $0 $0
Palma Village Park $48,609 $52,747 $0
Parkview Office Building $110,460 $195,774 $6,198
Parkview Office Complex - State of CA Building $206,664 $93,875 $13.223
Portola Community Center $51,039 S24,071 $7,520
PSAM & Gardens $59,327 $0 $151,236
Henderson Building & Parking Lots $63,923 $0 $521,060
San Pablo Gardens $0 . $12,637 $0
Sheriff Substation $678,105 $56,165 $135,947
University Parks $122.067 $23,669 $0
Wallaroo Center $0 $0 $D
Washington Charter School Park $0 $3,691 $9,818
Total Expenses $20,241,985 $10,071,499 $11,789,076
Ending Reserve Balance $29,954,093
$34,148,886
$37,080,094
2036
$37,080,094
$14,795,219
$0
$386,396
$52,261, 708
$45, 370
$27,239
$238,341
$39,207
$807,634
$4,256
$299,288
$329,421
$62,139
$0
$6,810
$17,024
$0
$0
$62,479
$9,386,365
$4,767
$0
$20,599
$0
$8,640
$9,534
$95,762
$109,381
$11,491
$102,146
$30,729
$100,444
$203,781
$0
$0
$7,006
$12,029,852
$40,231,857
2037
$40,231, 857
$15.239,076
$0
$408.558
$55,879,490
529,810
$18,938
$3,177.265
$441, 884
$135.020
$325,275
$9,907
$0
$7, 014
$8, 768
$7, 014
$17, 535
$0
$0
$20,911
$9, 387.395
$5, 787
$0
$0
$0
$5, 480
$964
$82, 415
$4, 384
$41,207
$26,127
$467,134
$13,151
$130,636
$0
50
$964
$14,364, 985
$41,514,506
Association Reserves, inc. 711912018 Page 4 of 6
EXHIBIT A
ITable 5: 30-Year Income/Expense Detail (yrs 25 through 30) 32499-01
Fiscal Year 2043 2044 2045 2046 2047 2048
Starting Reserve Balance $52.724,056 $54,047,432 $58,489.557 $63,038,711 $67,113,093 $72,206,409
Annual Reserve Contribution $18,196,253 $18,742,141 $19,304,405 $19,883,537 $20,480,043 $21,094,445
Planned Special Assessments $0 $0 $0 $0 $0 $0
Interest Earnings $533,631 $562,446 $607,383 $650,483 $696,302 $658,000
Total income $71,453,940 $73,352,019 $78,401,346 $83.572,731 $88,289,438 $93,958,853
Aquatic Center $12.563 $0 $0 $296,573 $1,845.191
$245,882
Cahwlla Hills Park $43,969 $34,505 $0 $0 $39,178 $15.777
City Hall $1,015,901 $30,731 $456,475 $510,780 $23,566 $598,927
Civic Center Park & Grounds $125,527 $1,043,100 $706,259 $192,186 $15,318 $470,525
Corporation Yard $164,571 $49,386 $18,881 $685,806 $317,429 $66,507
Fire Station #33 $338,355 $367,699 $584,199 $12,584 $428,895 $312,874
Fire Station #67 $38,316 $17,253 $101.291 $637,760 $0 $49,759
Fire Station #71 $584,436 $0 $97,737 $0 $401,794 $314,792
Freedom Park $388.500 $38,279 $48.868 $54,910 $41,240 $2,037,444
Freedom Park Gardens $0 $0 $7 097 $0 $0 $0
General $8.375 $8,626 $8,885 $9,152 $9,426 $9,709
Hiking Trails $20.938 $21,566 $22.213
$22,879 $23.566 $24,273
Historical Society of Palm Desert $137,739 $3,774 $7,775 $0 $0 $57,041
Homme/Adams Park $0 $16 174 $0 $0 $0 $0
Hovley Soccer Park $51,298 $13,155 $67,250 $0 $0 $108,984
Infrastructure $11,209,040 $11,674,707 $12,113.800 $12,385,696 $12,615.873 $28,014,250
Ironwood Park $615,571 $6,038 $18,659 $6,864 $0 $23,787
Jean Benson Center $3,559 $0 $0 $0 $4.006 $0
Joe Mann Park $18.844 $27,885 $0 $0 $0 $14,564
Joslyn Center $188,440 $0 $0 $0 $0 $0
Magnesia Falls Park $18.844 $10,945 $0 $400,387 $0 $21,057
Palma Village Park $783.031 $17,080 $0 $0 $0 $0
Parkview Office Building $216.287 $347,750 $0 $181,661 $8,248 $498,560
Parkview Office Complex - State of CA Building $385,569 $122,926 $0 $98,381 $0 $436,543
Portola Community Center $20,938 $15,096 $5.654 $22,422 $4,713 $79,517
PSAM & Gardens $50,983 $0 $465,871 $0 $0 $219667
Henderson Building & Parking Lots $67,734 $0 $300.318 $41,297 $139.627 $313,724
San Pablo Gardens $5,234 $16,983 $0 $0 $0 $0
Sheriff Substation $881,376 $252,321 $318,200 $168,163 $164,960 $250,736
University Parks $10,469 $70,628 $0 $732,137 $0 $270,870
Wallaroo Center $0 $0 $0 $0 30 $43,569
Washington Charter School Park $0 $655,852 $13,194 $0 $0 $9 988
Total Expenses $17,406,508 $14,862,461 $15,362,635 $16,459,638 $16,083,029 $34,509,325
Ending Reserve Balance
Association Reserves, Inc.
$54.047,432 $58,489,557 $63,038,711 $67,113,093 $72,206.409 $59,449,528
7/19/2018 Page 6 of 6
EXHIBIT B
CaIPERS Actuarial Valuation - June 30, 2017
Miscellaneous Plan of the City of Palm Desert
CalPERS ID: 6627708364
Amortization Schedule and Alternatives
Alternate Schedules
Current Amortization
Schedule*
Date Balance Payment Balance Payment Balance Payment
6/30/2019 34,160,183 3,317,374 34,160,183 3,106,217 34,160,183 4,236,523
6/30/2020 33,201,272 3,579,910 33,419,949 3,195,520 32,249,387 4,358,323
6/30/2021 31,900,953 3,728,625 32,533,565 3,287,392 30,073,920 4,483,624
6/30/2022 30,352,350 3,265,645 31,487,774 3,381,904 27,610,967 4,612,529
6/30/2023 29,170,942 3,359,533 30,268,284 3,479,134 24,835,955 4,745,139
6/30/2024 27,806,651 2,963,469 28,859,689 3,579,159 21,722,421 4,881,561
6/30/2025 26,753,617 2,887,871 27,245,383 3,682,060 18,241,875 5,021,906
6/30/2026 25,702,529 2,970,898 25,407,474 3,787,919 14,363,645 5,166,286
6/30/2027 24,489,253 3,056,311 23,326,688 3,896,822 10,054,722 5,314,817
6/30/2028 23,099,560 3,144,179 20,982,263 4,008,855 5,279,582 5,467,618
6/30/2029 21,518,117 3,234,574 18,351,843 4,124,110
6/30/2030 19,728,406 3,327,570 15,411,359 4,242,678
6/30/2031 17,712,632 2,793,885 12,134,898 4,364,655
6/30/2032 16,103,407 2,701,871 8,494,573 4,490,139
6/30/2033 14,472,804 2,300,792 4,460,371 4,619,230
6/30/2034 13,139,346 2,118,355
6/ 30 / 2035 11, 898,147 1,923, 525
6/ 30/ 2036 10,768,730 1,715,742
6/30/2037 9,772,614 1,693,000
6/30/2038 8,727,830 1,667,533
6/30/2039 7,633,674 1,715,474
6/30/2040 6,410,543 1,764,794
6/ 30/ 2041 5,047,659 1,815, 531
6/30/2042 3,533,422 1,867,728
6/ 30/ 2043 1,855,347 1,921,426
6/30/2044
6/30/2045
6/30/2046
6/30/2047
6/30/2048
15 Year Amortization 10 Year Amortization
Totals 64,835,615 57,245,794 48,288,326
Interest Paid 30,675,432 23,085,611 14,128,143
Estimated Savings 7,589,821 16,547,289
* This schedule does not reflect the impact of adopted discount rate changes that will become effective
beyond June 30, 2017. For Projected Employer Contributions, please see Page 5.
Page 1
EXHIBIT C
2018 Capital Reserve Study
City Hall
Full Detail
City of Palm Desert
For Peri." : • k mg July 1, 2018
EXHIBIT C
3- Minute Executive Summary
Property:
Location:
Report Period:
City of Palm Desert
City Hall
Palm Desert, CA
July 1, 2018 through June 30, 2019
Property #: 32499-0
# of U n its:1
Fully Funded Balance $2,886,0121
Economic Assumptions:
Net Annual "After Tax" Interest Earnings Accruing to Reserves 1.00 %
Annual Inflation Rate 3.00 %
This is an inventory report without funding plan. The fundi
City of Palm Desert Capital Reserve Study. The fully fund
balance the city should have reserved for this particular f
Fully Funded Balance (FFB): The Capital Replace
proportion to the fraction of life "used up" of th
This benchmark balance represents the valu
Replacement Fund Components. This num
summed together for a property total.
FFB = (Current Cost X Effective As Use
Ian in included with The
e is the theoretical
e that is in direct
or Replacement cost.
ion of the Capital
for each component, then
Association Reserves, 32499-0 1 3/1/2018
EXHIBIT C
Executive Summary
32499-0
# Component
Useful Life {yrs)
Rem. Useful
Life (yrs)
Current Average
Cost
City Hall
302 Emergency Generator - Replace
303 Air Handler (visitor) - Replace
303 Ductless Split Sys (chamber) - Repl
303 Ductless Split System (IT)- Replace
303 Heat Pump (visitor) - Replace
303 Rooftop Package Sys (1996)- Replace
303 Rooftop Package Sys (2004)- Replace
303 Rooftop Package Sys (2007)- Replace
303 Rooftop Package Sys (2008)- Replace
303 Rooftop Package Sys (2013)- Replace
303 Rooftop Package Sys (2015)- Replace
303 Rooftop Package Sys (2016)- Replace
305 Security Camera System - Replace
306 Ventilator Fan - Replace
329 Fire Alarm System - Replace
331 Water Heater (a) - Replace
331 Water Heater (b) - Replace
331 Water Heater (c) - Replace
333 Water Storage Tank - Replace
410 Refuse Bins/Benches - Replace
411 Drinking Fountains - Replace
450 Accordion Doors - Replace
30
15
15
15
15
15
15
15
15
8
5
8
13
6
0
1
4
5
10
12
13
0
10
3
$140,000
$3,500
$6, 000
$5,000
$6,500
$34,500
$34.50❑
$57, 500
$115,000
$34,500
$195,500
$11,500
$35,000
$1,750
$100, 000
0 $1,750
15 11 $1,750
15 0 $1,750
15 0 $4,000
25 10 $12,300
20 5 $8.000
20 5 $2,500
601 Carpet (A) - Replace 10 2 $108,150
601 Carpet (B) - Replace 10 5 $23,300
506 Vinyl Flooring - Replace 15 10 514,400
61 ❑ Tire Floor - Replace 30 10 $106,900
700 Glass/Metal Entry Doors - place 30 10 $62.500
702 Gates/Garage Doors - Re 25 12 $10.000
710 Card/FOB Reader System - Rep 10 3 $50,000
715 Exterior Metal Doors - Replace 35 18 83,500
716 Automatic Doors - Replace
719 Windows - Replace
790 Chamber Desks - Replace
800 Check -In Desks - Refurbish
900 AV Equipment - Upgrade
900 Chamber Broadcasting Sys - Upgrade
901 ArtiMarkerboards/Signage - Replace
901 Exterior Signage&Letters - Replace
30 10 $48,000
50 25 $185,000
20 15 $32,000
20 5 S12,500
2 1 S10,000
5 0 $75,000
15 4 $18,600
20 4 $9,600
902 Built -In Seats (Chamber) -Refurbish
8
0 $38,000
902 Furniture (Chamber) - Replace 15 4 5313:000
902 Furniture (Offices) - Replace 15 4 $313,000
902 Furniture (Public Works) - Replace 15 4 $313,000
902 Furniture (Visitor Ctr) - Replace 15 4 $313,000
903 Kitchen Appliances - Replace 15 7 S22,600
903 Laundry Appliances - Replace 15 7 $1,500
905 Built -In Shelving - Replace 30 20 $14,500
Association Reserves, 32499-0 2 3/1/2018
EXHIBIT C
# Component
906 Built -In Cabinetry - Replace
907 Acoustic Ceiling Tiles - Replace
908 Window Treatments (A) - Replace
908 Window Treatments (B) - Replace
909 Restrooms - Refurbish
909 Sinks - Replace
912 Cubicles - Replace
6,950 Wallpaper -Replace
1110 Interior Surfaces - Repaint
1115 Building Exteriors - Repaint
1117 Wood Panel Walls - Repair/Repaint
1306 Flat Roofs (cool) - Recoat
1311 Skylights - Replace
1330 Roof Access Hatches - Replace
1850 Bel! Chime System - Replace
2550 Telephone System - Replace
62 Total Funded Components
Useful Life [yrs] Rem. Useful Current Average
Life (yrs) Cost
Note 1 Yellow highlighted line items are expected to require attention in this intial yeaNtifie
20 15 $55,000
50
20
10
15
15
15
15
10
10
25
10
25
25
f°`
20 $148,500
15 $15,500
6 $12,500
3 $81,000
3 $21,000
4 $459,000
0 $14,850
2 $55,900
5 $120,000
10 $11,250
0 $175,000
3 539,000
8 $8,750
3 $28,000
10 $35,000
Association Reserves, 32499-0 3 3/1/2018
EXHIBIT C
Terms and Definitions
BTU
DIA
GSF
GSY
HP
LF
Effective Age
Fully Funded Balance (FFB)
Inflation
Interest
Percent Funded
British Thermal Unit (a standard unit of energy)
Diameter
Gross Square Feet (area). Equivalent to Square Feet
Gross Square Yards (area). Equivalent to Square Yards
Horsepower
Linear Feet (length)
The difference between Useful Life and Remaining Useful Life.
Note that this is not necessarily equivalent to the chronological
age of the component.
The value of the deterioration of • ' es e Components.
This is the fraction of life "used . of = component
multiplied by its estimated Current .cem- . While
calculated for each comp.nent, it is ogether for an
property total.
Cost factors are . • or t the rate defined in the
Executive Sum - . .repo •ed annually. These
increasing c• .ts • een as you follow the recurring cycles
of a compo •n "30-yr Income/Expense Detail" table.
Inter -arnin. • 'es-rve Funds are calculated using the
aver- • 1.. or e year (taking into account income and
expens- roe - he year) and compounded monthly using
d in the Executive Summary. Annual interest
ption appears in the Executive Summary.
ratio, at a particular point in time (the first day of the Fiscal
, of the actual (or projected) Reserve Balance to the Fully
nded Balance, expressed as a percentage.
Remaining Useful Life (RULThe estimated time, in years, that a common area component
can be expected to continue to serve its intended function.
Useful Life (UL) The estimated time. in years, that a common area component
can be expected to serve its intended function.
Association Reserves, 32499-0 4 3/1/2018
EXHIBIT C
Component Details
The primary purpose of the Component Details appendix is to provide the reader with the basis of our
funding assumptions resulting from our physical analysis and subsequent research. The information
presented here represents a wide range of components that were observed and measured against National
Reserve Study Standards to determine if they meet the criteria for reserve funding.
1) Common area repair & replacement responsibility
2) Component must have a limited useful life
3) Life limit must be predictable
4) Above a minimum threshold cost (board's discretion — typically % to 1% of Annual operating expenses).
Not all your components may have been found appropriate for reserve funding. In our judgment, the
components meeting the above four criteria are shown with the Useful Life (how often the project is
expected to occur), Remaining Useful Life (when the next instance of the expense will be) and representative
market cost range termed "Best Cost" and "Worst Cost". There are many f tors that can result in a wide
variety of potential costs, and we have attempted to present the cost ran n which your actual expense will
occur.
Where no Useful Life, Remaining Useful Life, or pricing exists, the comment w eemed inappropriate
for Reserve Funding.
Association Reserves, 32499-0 5 3/1/2018
EXHIBIT C
City Hall
Comp #: 301 Electrical System - Replace
Location: Throughout building
Funded?: No. Too indeterminate for Reserve designation - handle as an Operational Expense.
History:
Evaluation: Detailed analysis of electrical infrastructure is not included within the scope of this Reserve Study. Some electrical
system components used historically have been found to be life -limited, but even when component failures occur, the predictability
of such failures in terms of frequency and scope is very difficult to determine. Manufacturing defects may become apparent from
time to time and certain site conditions can contribute to premature deterioration of system components. Typically. if installed per
architectural specifications and local building codes, there is no predictable time frame for large scale repair/replacement
expenses within the scope of our report. In our experience working with similar Associations, service life typically lasts well beyond
rated life of components. Treat minor repairs as ongoing maintenance expense. Periodic inspections of distribution system by
qualified electrician are wise to clean and tighten, exercise breakers. etc. Some Associations employ infrared or other testing
methodologies to identify trouble spots and potential hazards. Funding may be incorporated into future Reserve Study updates if
conditions dictate. Keep track of any relevant expenses and include information during future Reserve Study updates as
necessary. No basis for Reserve funding at this time.
Useful Life:
Remaining Life:
Best Case:
Quantity: Extensive System
Association Reserves, 32499-0 7 3/1/2018
EXHIBIT C
Comp #: 302 Emergency Generator - Replace
Location: Utility enclosure
Funded?: Yes. Meets National Reserve Study Standards four-part test.
History:
Evaluation Model #3412. Vendors typically report that with ongoing maintenance (e.g. fluids, batteries, tune ups), useful life can
be extended for many years. However, funding for complete replacement is often warranted due to lack of available replacement
parts rather than failure of the generator as a whole. Treat periodic service and inspect as general maintenance expense within
Operating budget, not Reserves. Generator is a key building element in this location due to risk of severe storms and power
outages, and should be tested evaluated regularly to ensure proper function.
Useful Life:
30 years
Remaining Life:
8 years
Best Case: $ 130,000
Quantity: (1) Catepiliar Generator
Lower estimate to replace 'her estimate
Comp #: 303 Air Handler (visitor) - Replace
Location: Utility room at visitor center
Funded?: Yes. Meets National Reserve Study Stan
History: 2009
Evaluation: The air handler is functional a
#303 Heat Pump (visitor) for exterior unit.
Useful Life:
15 years
Remaining Life:
6 years
Best Case: $ 3,000
Lower estimate to replace
Quantity: (1) Carrier Air Handler
onnected to rooftop heat pump. Serial # 4808A82598. Refer to
Worst Case: $ 4,000
Cost Source: ARI Cost Database
Higher estimate
Association Reserves, 32499-0 8 3/1/2018
EXHIBIT C
Comp #: 303 Ductless Split Sys (chamber) - Repl Quantity: (1) Payne, 2 Ton
Location: Compressor an chamber rooftop, air handler located in chamber broadcasting equipment room
Funded?: Yes. Meets National Reserve Study Standards four-part test.
History:
Evaluation: The HVAC system is functional and aging normally. No reported problems. Seria # 1211 V63548.
ifseful Life:
15 years
Remaining Life:
6 years
Best Case: $ 5,000
Lower estimate to replace compressor & air
handler (plus crane)
Cost Source. ARI
Comp #: 303 Ductless Split System (IT)- Replace
Location: Compressor on "Section D" rooftop, air handler Iility room
Funded?: Yes. Meets National Reserve Study Standards fo
History: 201612017
Evaluation: The HVAC system is newer and in go • •� on. ria :116V14569.
Worst Case:
Useful Life:
15 years
Remaining Life:
13 years
Best Case: $ 4,000
Lower estimate to replace, including crane
costs
Quantity: (1) Carrier, 1 Ton
Worst Case: $ 6,000
Cost Source. ARI Cast Database
Higher estimate
Association Reserves, 32499-0 9 3/1/2018
EXHIBIT C
Comp #: 303 Heat Pump (visitor) - Replace
Location: Visitor center roof
Funded?: Yes. Meets National Reserve Study Standards four-part test.
History: 2009
Evaluation System #15. No reported problems. System is functional. (refer to #303, Air Handler for interior system).
Useful Life:
15 years
Remaining Life:
6 years
Best Case: $ 6,000
Lower estimate to replace, including crane
costs
Cost Source: ARI
Comp #: 303 Rooftop Package Sys (1996)- Replace
Location. Building rooftops
Funded?: Yes. Meets National Reserve Study Standards fo
History: 1996
Evaluation: (Council Chambers) Rooftop packag
useful lives. Anticipate the need to replace in the ne
Costs shown factor in crane expenses.
Useful Life:
15 years
Remaining Life:
0 years
Best Case: $ 30,000
Lower estimate to replace, including crane
costs
Worst Case:
Quantity: (1) Carrier
Quantity: (3) Carrier, 5 Tons
instated in 1996. Systems have reached extended
ms should be serviced annually as an Operating expense.
Worst Case: $ 39,000
Cost Source: ARI Cost Database
Higher estimate
Association Reserves, 32499-0 10 3/1/2018
EXHIBIT C
Comp #: 303 Rooftop Package Sys (2004)- Replace Quantity: (3) Carrier, 5 Tons
Location: Building rooftops
Funded?: Yes. Meets National Reserve Study Standards four-part test.
History: 2004
Evaluation. (Public Works) Rooftop package systems 17 & 22, (Visitor Center) system # 2 were installed in 2004. Anticipate the
need to replace in the near future based an age. Systems should be serviced annually as an Operating expense. Costs shown
factor in crane expenses.
Useful Life
15 years
Remaining Life:
1 years
Best Case: $ 30,000
Worst Case: $ 3
Lower estimate to replace, including crane High= estimate
costs
Cost Source: Cost ► -base
Comp #: 303 Rooftop Package Sys (2007)- Replace
Location: Building rooftops
Funded?: Yes. Meets National Reserve Study S
History: 2007
Evaluation: These systems were installed 007. Pa
component includes (Public Works) roofta
should be serviced annually as an Operatin
Useful Life:
15 years
Remaining Life:
4 years
Best Case: $ 50,000
Lower estimate to replace, including crane
costs
Quantity: (5) Carrier, 5 Tons
s contain both the heating and cooling elements. This
13, 15, & 20, (Council Offices) 8, (Visitor Center) 14. Systems
shown factor in crane expenses.
Worst Case: $ 65,000
Cost Source: ARI Cast Database
Higher estimate
Association Reserves, 32499-0 11 3/1/2018
EXHIBIT C
Comp #: 303 Rooftop Package Sys (2008)- Replace
Location: Building rooftops
Funded?: Yes. Meets National Reserve Study Standards four-part test.
History: 2008
Evaluation' Installed in 2008. No reported problems. Systems consists of (Public Works) 16, 19, 21, 23, (Visitor Center) 1, 5, 9, 10,
11, & 12. Systems should be serviced annually as an Operating expense. Costs shown factor in crane expenses.
Useful Life:
15 years
Remaining Life:
5 years
Best Case: $ 100,000
Quantity: (10) Carrier, 5 Tons
Lower estimate to replace, including crane Higher ate
costs
Comp #: 303 Rooftop Package Sys (2013)- Replace Quantity: (2) Carrier 1(1) Day & N
Location: Building rooftops
Funded?. Yes. Meets National Reserve Study Sta • -rds fou
History: 2013
Evaluation: (Public Works) rooftop package system cil Offices) #3 were installed in 2013. No reported problems.
Good condition. Systems should be servi nnually - O•' =Ling expense. Costs shown factor in crane expenses.
Useful Life:
15 years
Remaining Life:
10 years
Best Case' $ 30,000
Lower estimate to replace, including crane
costs
Worst Case: $ 39,000
Cost Source: ARI Cost Database
Higher estimate
Association Reserves, 32499-0 12 3/1/2018
EXHIBIT C
Comp #: 303 Rooftop Package Sys (2015)- Replace Quantity: (17) Carrier, 5 Tons
Location: Building rooftops
Funded?: Yes. Meets National Reserve Study Standards four-part test.
History2015
Evaluation: These systems were installed in 2015. Package systems contain both the heating and cooling elements. This
component includes (Public Works) rooftop package systems 1, 2, 3, 4, 5, 7 & 8, (Council Chamber) 4, (Council Offices) 1, 2, 4, 5,
6, 7, 9 (Visitor Center) 4 & 13. Systems should be serviced annually as an Operating expense. Costs shown factor in crane
expenses.
Useful Life:
15 years
Remaining Life:
12 years
Best Case: $ 170,000
Lower estimate to replace, including crane \ Hig'estimate
costs
Comp #: 303 Rooftop Package Sys (2016)- Re
Location: Building rooftops
Funded?: Yes. Meets National Reserve Study Stan
History: 2016/2017
Evaluation: System #14 (Public Works) w
Operating expense. Costs shown factor in
Useful Life:
15 years
Remaining Life:
13 years
Best Case: $ 10,000
Lower estimate to replace, including crane
costs
Quantity: (1) Carrier, 5 Tons
Good condition. Systems should be serviced annually as an
Worst Case: $ 13,000
Cost Source: ARI Cost Database
Higher estimate
Association Reserves, 32499-0 13 3/1/2018
EXHIBIT C
1
1
I
Comp #: 305 Security Camera System - Replace
Location: Throughout City Hall
Funded?: Yes.
History:
Evaluation: Reported there are plans to instal cameras in the Lobby areas, with a projected cost of about $16,800 + $16,000 for
the server. Systems should be monitored closely to ensure proper function. Whenever possible, camera locations should be
protected and isolated to prevent tampering andlor theft. Typical modernization projects may include addition andlor replacement
of cameras, recording equipment, monitors, software, etc...We will plan for periodic system upgrade projects of a similar scope as
the 2018/2019 anticipated project.
Useful Life:
10 years
Remaining Life:
0 years
Best Case: $ 30,000
Lower estimate to replace
Cost Source:
Comp #: 306 Ventilator Fan - Replace
Location: Building rooftop
Funded?: Yes. Meets National Reserve Study Stan
History:
Evaluation: Fans should be inspected and
to help attain full life expectancy. Motor rep
recommend complete replacemen . all fan
on replacement with same ty■ - • - - as th
Useful Life:
25 years
Remaining Life
10 years
Best Case: $ 1,500
Lower estimate to replace
ed by Client
test.
Quantity: (1) System
0
er estimate
Quantity: (1) Fan
y HVAC vendor or maintenance staff to ensure proper function and
typically completed as an Operating expense. At longer intervals, we
tain better pricing through economies of scale. Pricing shown is based
currently in place.
Worst Case: $ 2,000
Cost Source: ARI Cost Database
Higher estimate
Association Deserves, 32499-0 14 3/1/2018
EXHIBIT C
Comp #: 329 Fire Alarm System - Replace Quantity: (1) System
Location: Throughout building interiors
Funded?: Yes. Meets National Reserve Study Standards four-part test.
History:
Evaluation: This component consists of (361) Sprinklers; (22) Fire Extinguishers; (26) Smoke Detectors: (6) Ringers Our
inspection is for planning and budgeting purposes only; fire alarm equipment is assumed to have been designed and installed
properly and is assumed to comply with all relevant building codes. Regular testing and inspections should be conducted as an
Operating expense. In many cases, manufacturers discontinue support of equipment after a certain number of years, which may
limit availability of replacement parts as the system ages. Cost estimates assume that existing wiring can be re -used and that only
panel and devices will be replaced. If wiring requires replacement, estimates should be increased accordingly, but in our
experience wiring should have an indefinite useful life. Cost estimates are based an quantity and type of existing equipment, not
including any expansion or upgrades, which may be required. We recommend reviewing system components with fire alarm
vendor on a regular basis. If expansion of system is found to be required, the Reserve Study should be updated and any
additional costs should be factored accordingly.
Useful Life:
25 years
Remaining Life:
3 years
Best Case: $ 80,000
Lower estimate to replace
Comp #: 330 AED Fixtures - Replace
Location: Local walls
Funded?: No. Too small for Re
History:
Evaluation: No testing compl
via Operating Funds.
Useful Life:
Remaining Life:
Best Case:
t Case $ 120,000
Cost Database
Higher estimate
Quantity: (2) Fixtures
pection. Assumed functional. Due to the low cost of completion, plan to execute
Worst Case:
Cost Source:
Association Reserves, 32499-0
15 3/1/2018
EXHIBIT C
Comp #: 331 Water Heater (a) - Replace
Location: Utility room adjacent to Public Works offices
Funded?: Yes. Meets National Reserve Study Standards four-part test.
History:
Evaluation. 30 Gal. 32,000 BTUs. Serial # XH4970244. Water heater life expectancies can vary greatly depending on level of use.
location within a building. etc. Should be inspected and repaired as needed by servicing vendor or maintenance staff. Unless
otherwise noted, expected to be functional. Plan to replace at the approximate interval shown below. When evaluating
replacements, we recommend choosing high -efficiency or tankless models if possible in order to minimize energy usage.
Useful Life:
15 years
Remaining Life:
0 years
Best Case: $ 1.500
Lower estimate to replace
Comp #: 331 Water Heater (b) - Replace
Location: Utility room adjacent to Council Chamber
Funded?: Yes. Meets National Reserve Study S
History:
Evaluation: 30 Gal. 30K BTU's. Serial # 1 1002403
use, location within a building. etc. Shoul
otherwise noted, expected to be functional.
replacements, we recommend cho• - g high
Useful Life:
15 years
Remaining Life:
11 years
Best Case: $ 1,500
Lower estimate to replace
Quantity: (1 ) Bradford White Heater
Quantity: (1) Whirlpool Heater
ate -ater life expectancies can vary greatly depending on level of
paired as needed by servicing vendor or maintenance staff. Unless
the approximate interval shown below. When evaluating
ankless models if possible in order to minimize energy usage.
Worst Case- $ 2.000
Cost Source: ARI Cost Database
Higher estimate
Association Reserves, 32499-0 16 3/1/2018
EXHIBIT C
Comp #: 331 Water Heater (c) - Replace
Location: Utility closet, Council Offices
Funded?: Yes. Meets National Reserve Study Standards four-part test.
History:
Evaluation: This heater is older and has reached an extended useful life. Anticipate the need to replace in the near future based
on age.
Useful Life:
15 years
Remaining Life:
0 years
Best Case: $ 1,500
Lower estimate to replace Higher • ate
Cost Source: ARI
Quantity: (1) American, 30 Gal
Comp #: 331 Water Heater (sm) - Replace Quantity: (1) Bradford White Heater
Location: Public Works employee kitchen
Funded,: No. Too indeterminate for Reserve designation - ' ". -s operational Expense.
History.
Evaluation. The replacement value of this heater II f. -e a designation. Replace as needed as an Operating
expense. No Reserve funding required.
Useful Life:
Remaining Life:
Best Case:
Worst Case:
Cost Source:
Association Reserves, 32499-0 17 3/1/2018
EXHIBIT C
Comp #: 333 Water Storage Tank - Replace
Location: Utility room adjacent to Public Works offices
Funded?: Yes. Meets National Reserve Study Standards four-part test.
History:
Evaluation: Hot water storage tanks should be inspected for leaks and other problems routinely by servicing vendor or
maintenance staff. Small repairs and cleaning should be considered an Operating expense and conducted as needed. Plan to
replace at the approximate interval shown below, ideally coordinated with replacement of the boilerlhot water heater itself in order
to achieve better pricing and minimize system downtime.
Useful Life:
15 years
Remaining Life:
0 years
Best Case: $ 3,000
Lower estimate to replace
Cost Source: Cost P base
Comp #: 410 Refuse Bins/Benches - Replace
Location: Throughout the building
Funded?. Yes.
History.
Evaluation: Good condition overall. Shauloy
Useful Life:
25 years
Remaining Life:
10 years
Best Case: $ 10,300
Lower estimate
Quantity: (1 ) 120 Gal Tank
estimate
Quantity: (31) Bins; (4) Benches
life before replacement is necessary.
Worst Case: $ 14,300
Cost Source: ARI Cost Database
Higher estimate
Association Reserves, 32499-0 18 3/1/2018
EXHI BIT C
Comp #: 411 Drinking Fountains - Replace
Location Central hallways
Funded?: Yes.
History:
Evaluation: Tested to be functional. Some visible wear. Plan to replace on the schedule below.
Useful Life
20 years
Remaining Life:
5 years
Best Case' $ 7,500
Lower estimate
Cost Source: ARI Cost Da
Quantity: (4) Dual Stainless Set
Comp #: 412 Ornate Fountains - Replace Quantity: (2) Pieces
Location: Visitor Center
Funded?: No. Historical pieces not anticipated for replace
History'
Evaluation: Unique, attractive pieces notable. The - -ppear - on eal pieces and we will assume that they carry a
historical value and will not set aside separate fu •, 1 n - - n • lacement.
IV.A ~-,
Useful Life:
Remaining Life:
ir
Best Case:
Worst Case:
Cost Source:
Association Reserves, 32499-0 19 3/1/2018
EXHIBIT C
Comp #: 450 Accordion Doors - Replace
Location: Adjacent to cafeteria
Funded?' Yes- Meets National Reserve Study Standards four-part test.
History:
Evaluation: The room dividers were intact and in good condition. No damage or deterioration noted. based on current age,
anticipate the need to replace following the schedule below.
Useful Life:
20 years
Remaining Life:
5 years
Best Case: $ 2,000
Worst Case:
Quantity: (2) 7 LF Dividers
Lower estimate to replace Higher - ate
Cost Source: ARI
Comp #: 503 Metal Pipe Rail - Replace
Location: Local stair
Funded?: No. Too small for Reserve designation.
History:
Evaluation: Determined to be in fair condition typi
of age, which may include corrosion, loose or unsta
vegetation. Overall, appears to be in servi - • •le
Funds.
Useful Life:
Remaining Life -
Best Case:
Quantity: 6 LF
or to moderate amounts of surface wear and other signs
ons or hardware, andlor overgrowth by surrounding
the low cost of completion, plan to use general Operating
Worst Case:
Cost Source:
1 Association Reserves, 32499-0 20 3/1/2018
EXHI BIT C
Comp #: 601 Carpet (A) - Replace Quantity: — 3,090 GSY
Location: Throughout interiors of city hall, cafeteria, and chamber
Funded?: Yes. Meets National Reserve Study Standards four-part test.
History:
Evaluation: The carpet was showing isolated areas of fraying and deterioration. Staining was evident throughout the interior
surfaces. Best to cycle replacements with interior repainting projects in order to prevent damage to new installations (refer to
#1110). In fair and declining condition at this time.
Useful Life
10 years
Remaining Life:
2 years
Best Case: $ 92,700
Lower estimate
Cost Source: A
Comp #: 601 Carpet (B) - Replace
Location: Throughout interiors
Funded?: Yes. Meets National Reserve Study Sta
History:
Evaluation: This carpet was intact and in good con
Useful Life:
10 years
Remaining Life:
5 years
Best Case $ 20,700
Lower estimate
estimate
Quantity: — 517 GSY
of damage or staining at this time. Good condition.
Worst Case: $ 25,900
Cost Source: ARI Cost Database
Higher estimate
Association Reserves, 32499-0 21 3/1/2018
EXHIBIT C
Comp #: 606 Vinyl Flooring - Replace
Location: Flooring
Funded?. Yes. Meets National Reserve Study Standards four-part test.
History:
Evaluation: The flooring surfaces were in fair condition. Normal wear and aging noted at this time. No major scuffing or damage
observed.
Useful Life:
15 years
Remaining Life:
10 years
Best Case: $ 10,800
Lower estimate
Cost Source: ARI
Comp #: 610 Tile Floor - Replace
Location: Flooring
Funded?: Yes. Meets National Reserve Study Standards fo
History:
Evaluation: The interior tile was in good condition
maintain a uniforrn appearance and receive better
Useful Life:
30 years
Remaining Life:
10 years
Best Case: $ 91,800
Lower estimate
Worst Case:
Quantity: — 1,800 GSF
ate
Quantity: — 5,100 GSF
Best to replace all of the tile at the same time in order to
Worst Case: $ 122,000
Cost Source: ARI Cost Database
Higher estimate
Association Reserves, 32499-0 22 3/1/2018
EXHIBIT C
Comp #: 700 Glass/Metal Entry Doors - Replace
Location: Exterior locations on buildings
Funded?: Yes.
History:
Evaluation: The doors were intact and in fair condition. No damage or abuse noted. No reported problems. Funding provided for
eventual replacement in order to maintain appearance and functionality.
Useful Life:
30 years
Remaining Life:
10 years
Best Case $ 50,000
Lower estimate to replace
Cost Source: ARI
Comp #: 702 Gates/Garage Doors - Replace
Location Entry/exit gates
Funded?: Yes. Meets National Reserve Study Standards fo
History:
Evaluation: The gates were intact and in good co
order to maintain reliability.
Useful Life:
25 years
Remaining Life:
12 years
Best Case: $ 8,000
Lower estimate
Quantity: (25) Doors
ate
Quantity: (5) Assorted pieces
corrosion noted. Best to fund for eventual replacement in
Worst Case: $ 12,000
Cost Source: ARI Cost Database
Higher estimate
Association} Reserves, 32499-0 23 3/1/2018
EXHIBIT C
Comp #: 705 Garage Door Motor - Replace
Location: Utility cart garage
Funded?: No. Too indeterminate for Reserve designation - handle as an Operational Expense.
History:
Evaluation: Replacement value is too small for Reserve designation. Replace as needed as an Operating expense.
Useful Life:
Remaining Life:
Best Case: Worst Case:
Cost Source:
Comp #: 710 Card/FOB Reader System - Replace
Location: Entry/exits
Funded?: Yes. Meets National Reserve Study Standards four -
History:
Evaluation: Card/fob reader devices are assumed to be fu
to replace devices and control systems at the approximate
Operating expense due to damage or localized fail -s. To e
an replacing all devices together as one project.
Useful Life
10 years
Remaining Life:
3 years
Best Case: $ 40,000
Lower estimate to replace
Quantity: (1) Genie Motor
1\40,0
entity:
(14) Access Points
o use, exposure, and advancements in technology, plan
ere. Individual readers can often be replaced as an
nal, compatible system and obtain better pricing, plan
Worst Case: $ 60,000
Cost Source. ARI Cost Database
Higher estimate
Association Reserves, 32499-0 24 3/1/2018
EXHIBIT C
Comp #: 715 Exterior Metal Doors - Replace
Location: Building exterios
Funded?: Yes. Meets National Reserve Study Standards four-part test.
History:
Evaluation: Utility doors determined to be in fair condition typically exhibit more signs of wear and tear, and noticeable aesthetic
decline. Doors are still functional. At this stage, framework sometimes has issues with rust and expansion, causing doors to stick.
Plan to replace following the schedule below.
Useful Life:
35 years
Remaining Life:
18 years
Best Case: $ 3,000
Lower estimate
Cost Source: A
Comp #: 716 Automatic Doors - Replace
Location: Building Exteriors
Funded?: Yes. Meets National Reserve Study Sta
History:
Evaluation: Plan to replace at the approximate inte
Should be inspected regularly as an Ope - •/mainte
promptly when needed to maintain good a
Useful Life:
30 years
Remaining Life:
10 years
Best Case: $ 44,000
Lower estimate
Quantity: (3) Doors
estimate
Quantity: (8) Doors
due to use, exposure, and advancements in technology.
se to ensure proper function. Clean frequently and repair
Worst Case: $ 52,000
Cost Source: ARI Cost Database
Higher estimate
Association Reserves, 32499-0 25 3/1/2018
EXHIBIT C
Comp #: 717 ADA Door Opener - Replace
Location Building Exteriors
Funded?: No. Meets National Reserve Study Standards four-part test.
History:
Evaluation: This door opener was not tested during inspection. No reported issues at this time. Based on current age and
condition it's should be anticipated that replacement occurs in the near future. Poor condition.
Useful Life:
20 years
Remaining Life:
0 years
Best Case Worst Case:
Lower estimate H
Cost Source: ARI Cost Da
Comp #: 719 Windows - Replace
Location: Building exteriors
Funded?: Yes. Meets National Reserve Study Standards
History:
Evaluation: This includes (60) 6x8, (1 ) 3x4, (1 ) 4x8 3
recaulked in order to prevent water intrusion. Thi
building exterior seal/paint project. Funding has bee
Useful Life
50 years
Remaining Life:
25 years
Best Case: $ 180,000
Lower estimate to replace
Quantity: (1) Opener
Quantity: (75) Windows
, and (2) 6x7 pieces. Windows should be periodically
r as an operational expense, or in conjunction with the
a complete replacement of the windows.
Worst Case: $ 190,000
Cost Source: ARI Cost Database
Higher estimate
Association Reserves, 32499-0 26 3/1/2018
EXHIBIT C
Comp #: 790 Chamber Desks - Replace
Location: Along streets and drives
Funded?: Yes. Meets National Reserve Study Standards four-part test.
History:
Evaluation: The desks were intact and in good condition. No chipping or damage noted that would warrant replacement at this
time. Funding provided for eventual replacement in order to maintain interior aesthetics.
Useful Life:
20 years
Remaining Life:
15 years
Best Case: $ 25,600
Worst Case:
Quantity: — 64 LF
Lower estimate Higher . ate
Cost Source: ARI
Comp #: 800 Check -In Desks - Refurbish ` Quantity: —104 LF
Location: Throughout interiors
Funded?: Yes. Meets National Reserve Study Standards fo
History:
Evaluation: The built-in desks were in fair conditi• ifi• ,td- =ge or problems at this time. There's no expectation to
completely replace these pieces. Funding has been • r• . • • riodically refurbish the exterior surfaces following the schedule
below. Refurbishment can include replaci - d repai of • panels.
Useful Life:
20 years
Remaining Life:
5 years
Best Case: $ 10,000
Lower estimate to refurbish
Worst Case $ 15,000
Cost Source: ARI Cost Database
Higher estimate
Association Reserves, 32499-0 27 3/1/2018
EXHIBIT C
Comp #: 813 Exterior Service Lights - Replace
Location: Non -ornate lighting throughout the exterior elevations.
Funded?: No. Operating expense.
History:
Evaluation: This component consists of (143) Wall/Ceiling Lights; (2) Flood Lights . No atypical damage or wear conditions. Plan
to replace these non -ornate fixtures as -needed via Operating Funds.
Useful Life:
Remaining Life:
Best Case: Worst Case:
Cost Source:
Comp #: 813 Interior Service Lights - Replace
Location: Non -ornate lighting throughout the interiors.
Funded?: No. Operating expense.
History
Evaluation: This component consists of (423) Fluorescent L
or wear conditions. Plan to replace these non-orna - fixtures
Useful Life:
Remaining Life:
Best Case:
Quantity: Assorted Fixtures
uantity:
Assorted Fixtures
Lights; (274) Wall/Ceiling Lights. No atypical damage
Operating Funds.
Worst Case:
Cost Source:
Association Reserves, 32499-0 28 3/1/2018
EXHIBIT C
Comp #: 900 AV Equipment - Upgrade
Location: Council chambers and throughout offices
Funded?: Yes.
History:
Evaluation: Council Chambers: (3) Sanyo ❑LP digital projector, (3) 7'x10' projector screen, (12) microphone stations, (24) ceiling
speakers, (1) Samsung 48" TV. Admin Conference Room: (15) microphone stations, (2) ceiling speakers, (1) 7 LF projector
screen, (1) Pioneer 6D" TV. Council Offices: (4) ceiling speakers. Admin Offices: (19) ceiling speakers, (1) 60" Samsung TV, (1)
Polycom phone system. North Wing (visitor center): (1) 36" LG TV, (1) Pelycom phone system, (15) ceiling speakers, (1) Philips
TV, (1) 36" Samsung TV, (1) 30" flat screen TV, (1) 70" flat screen TV . The digital projectors were not tested during inspection but
are believed to be functional and aging normally. No reported problems. There is no expectation to replace all pieces in one
project. Funding for ongoing partial replacements and upgrades.
Useful Life:
2 years
Remaining Life:
1 years
Best Case: $ 8,00D
Lower allowance for upgrades
Cost Sour
Comp #: 900 Chamber Broadcasting Sys - Upgr
Location: Council Chamber
Funded?. Yes. Meets National Reserve S
History:
Quantity: Projectors, Audios Sys
Higher allowance
Quantity: Extensive System
Evaluation: The system was not to durin. T-ction. o reported problems. Funding for the periodic replacement of the
cameras, recording and broad quipm- System includes (4) Vaddio cameras. There is no expectation for complete
replacement of all system co vents in• +r periodic partial replacements and upgrades.
Useful Life:
5 years
Remaining Life:
0 years
Best Case: $ 65,000 Worst Case: $ 85,000
Lower allowance to upgrade
Cost Source: ARI Cost Database
Higher allowance
Association Reserves, 32499-0 29 3/1/2018
EXHIBIT C
Comp #: 901 ArtlMarkerboardsl5ignage - Replace
Location: Throughout the interiors
Funded?: Yes.
History: 2007 replacement for $13,400
Evaluation: This component consists of (180) Art/Decor Pieces; (15) Signage Pieces: Approx 170 GSF of Markerboard. Generally
attractive and complimentary pieces notable throughout the buildings. Plan for periodic refreshment to maintain an attractive
aesthetic.
Useful Life:
15 years
Remaining Life:
4 years
Best Case: $ 17,600
Lower estimate
Cost Source: Client C
Comp #: 901 Exterior SignagelLetters - Replace
Location. Exterior elevations
Funded?: Yes.
History:
Evaluation: Generally attractive and complimentary
maintain an attractive aesthetic.
Useful Life:
20 years
Remaining Life:
4 years
Best Case: $ 8,600
Lower estimate to replace
Quantity: Assorted Pieces
estimate
Quantity: (8) Signs; (40) Letters
throughout the buildings. Plan for periodic refreshment to
Worst Case: $ 10,600
Cost Source: ARI Cost Database
Higher estimate
Association Reserves, 32499-0 30 3/1/2018
EXHIBIT C
Comp #: 902 Built -In Seats (Chamber) -Refurbish
Location: Council Chambers
Funded?: Yes. Meets National Reserve Study Standards Four-part test.
History:
Evaluation: The built-in seats are intact and functional. There is no expectation for replacement within the 30-year scope of this
Study. The seat fabric is worn and aged in appearance. Funding for the reupholstering of the seat fabric to maintain an attractive
appearance.
Useful Life:
8 years
Remaining Life:
0 years
Best Case: $ 30,000
Lower estimate to reupholster seats
Cost Source:
Comp #: 902 Furniture (Chamber) - Replace
Location: Council Chamber & rear meeting/conference roo
Funded?: Yes. Meets National Reserve Study Sta • . rds fou
History:
Evaluation: Chamber areas: (12) upholstered chairs,
flag poles. Chamber Meeting Room: (1) 1 'od con
5 LF leather bench, (1) 2-drawer file cabin
Furniture is in good condition. Funding the
the Chamber.
Useful Life:
15 years
Remaining Life:
4 years
Best Case: $ 300,000
Lower allowance to replace
Quantity: (152) Upholstered Seats
Quantity: (78) Assorted Pieces
tables, (1) folding buffet table, (16) upholstered chairs & (2)
, (10) upholstered swivel chairs, (6) upholstered side chairs, (1)
n: (3) round dining tables. (20) upholstered chairs, (1) folding table.
nt of the majority of pieces to maintain an attractive appearance in
Worst Case: $ 326.000
Higher allowance
Cost Source: Client Cost History, plus Inflation
Association Reserves, 32499-0 31 3/1/2018
EXHIBIT C
Comp #: 902 Furniture (Offices) - Replace Quantity: (194) Assorted Pieces
Location: Council administrative offices and meeting rooms
Funded?: Yes. Meets National Reserve Study Standards four-part test.
History
Evaluation: Admin Conference Room (1) 64 LF of wood conference table, (20) upholstered swivel chairs, (1) flag pole, (15)
upholstered side chairs. Lobby area: (1) wood pamphlet shelf, (1) 4'x12' decorative rug, (1) metal pamphlet display, (2)
upholstered wood chairs, (4) strapped side chairs, (2) wood sideboards, (1) leather sofa, (2) arm chairs, (1) wood coffee table, (1)
wood end table, (1) 9'x13' rug, (4) display cases, (1) 5'x23' rug, (2) planters, (1) swivel chair. Council Offices: (1) leather sofa, (2)
arm chairs, (1) table lamps, (1) floor lamps, (1) glass wall shelf, (1) Ig bookshelf, (7) Ig wood desk stations, (6) swivel chairs, (1)
leather desk chair, (9) upholstered side chair, (2) sm bookshelve, (1) Ig decorative mirror, (1) 6ft conference table, (6) upholstered
metal swivel chairs, (2) flag poles, (1) 2-drawer file cabinet, (2) planter pots, (1) square woad table, (6) desk chairs. City Manager
Office: (1) Ig wood desk, (1) swivel chair, (1) electric stand-up desk, (4) upholstered chairs, (2) wood end tables, (1) 8 LF wood
conference table, (8) upholstered conference chairs, (1) leather bench, (1) wood sideboard. Admin Offices: (5) Ig wood desk
stations, (1) wood square table, (8) wood upholstered chairs, (9) swivel chairs, (3) sm bookshelves, (4) 4-drawer file cabinets, (5)
2-drawer files cabinets, (1) coffee table, (4) arm chairs, (1) woad end table, (11) metal file cabinets, (1) side table, (2) Ig wood file
cabinets, (2) round tables, (4) decorative swivel chairs.
Useful Life:
15 years
Remaining Life:
4 years
Best Case: $ 300,000
Lower allowance to replace
orst Case: $ 326,000
Higher allowance
Cost History, plus Inflation
Association Reserves, 32499-0 32 3/1/2018
EXHIBIT C
Comp #: 902 Furniture (Public Works) - Replace
Location: Common area
Funded?: Yes. Meets National Reserve Study Standards four-part test.
History: 2007 completion for $905,202
Evaluation: This component consists of Approx. (45) Desks; (195) Chairs; (16) Tables; (63) Filing Cabinets; Approx 104 LF Desk
Cabinetry; Approx 158 LF of Lower Cabinetry; (27) Wheeled File Storage Fixtures; (6) Drafting Tables;
Useful Life:
15 years
Remaining Life:
4 years
Best Case: $ 300,000
Lower estimate Higher ate
Cost Source: Client Cost
Quantity: Assorted Pieces
111111111111'111
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-, 7 ....
•
Comp #: 902 Furniture (Visitor Ctr) - Replace
Location: Visitor Center (North Wing)
Funded?: Yes. Meets National Reserve Study Standards fo
History:
Quantity: (196) Assorted Pieces
Evaluation: (3) planter pats, (30) upholstered sid 1) I• oo• = mphlet shelf, (4) wood stools, (5) woad desks, (13) Ig
wood desk stations, (22) swivel chairs, (11) sm boo . -door wood file cabinets, (3) 2-door metal file cabinet, (4) round
tables, (4) upholstered swivel chairs, (4) a hairs, (3 con - -nce tables, (12) conference chairs, (17) cubicle work stations,
(17) cubicle chairs, (2) 6-drawer metal fife 1. 1) e - l le, (1) 10'x13' conference table wl(14) swivel chairs, (4) strap
chairs, (1 ) Ig cabinet, (5) 4-door file cabinet, inet, (1) 5-door file cabinet, (2) 6-door file cabinet.
Useful Life:
15 years
Remaining Life:
4 years
Best Case: $ 300,000
Lower allowance for partial replacement
Worst Case: $ 326,000
Higher allowance
Cast Source Client Cost History, plus Inflation
Association Reserves, 32499-0 33 3/1/2018
EXHIBIT C
Comp #: 903 Kitchen Appliances - Replace
Location: Kitchen areas
Funded?: Yes.
History:
Evaluation: This component consists of (9) Refrigerators; (6) Coffee Makers; (3) Microwaves; (2) Ice Machines; (2) Water
Dispensers: (1) Oven/Range Set; (1) Dishwasher. Functional conditions overall with normal surface grime. No visible damage. No
testing completed.
Useful Life
15 years
Remaining Life:
7 years
Best Case: $ 20,600 Worst Case: $
Lower estimate High estimate
Cost Source: A
Quantity: Assorted Appliances
Comp #: 903 Laundry Appliances - Replace
Location: Utility roam adjacent to Public Works offices
Funded?: Yes. Meets National Reserve Study Star rds fou
History:
Evaluation: The washer and dryers were not tested
Useful Life:
15 years
Remaining Life
7 years
Best Case: $ 1,200
Lower estimate to replace
Quantity: (1) Washer/Dryer Set
be functional.
Worst Case: $ 1,800
Cost Source: ARI Cost Database
Higher estimate
Association Reserves, 32499-0 34 3/1/2018
EXHIBIT C
Comp #: 903 Vending Machines - Replace
Location: Employee breakroom
Funded?: No. Assumed leased.
History:
Evaluation: We assume these units are leased. Funding not appropriate.
Useful Life:
Remaining Life:
Best Case: Worst Case:
Cost Source:
Comp #: 905 Built -an Shelving - Replace
Location: Administration offices
Funded? Yes. Meets National Reserve Study Standards four
History:
Evaluation: The wood shelving was intact and in good con
order to maintain aesthetics.
Useful Life:
30 years
Remaining Life:
20 years
Best Case: $ 13,000
Lower estimate
Quantity: (2) Units
I‘Ni/lik
antity:
—33LF
of concern. Best to fund for eventual replacement in
Worst Case: $ 16,000
Cost Source: ARI Cost Database
Higher estimate
Association Reserves, 32499-0 35 3/1/2018
EXHIBIT C
Comp #: 906 Built -In Cabinetry - Replace
Location: Throughout interiors
Funded?: Yes. Meets National Reserve Study Standards four-part test.
History:
Evaluation: The cabinetry includes 104 LF of upper cabinets and 86 LF of lower cabinets. There were no areas of concern. No
damage or broken hinges observed. Good condition.
Useful Life:
20 years
Remaining Life:
15 years
Best Case: $ 50,000
Lower estimate
Cost Source: ARI
Comp #: 907 Acoustic Ceiling Tiles - Replace
Location: Interior walls
Funded?. Yes. Meets National Reserve Study Standards to
History:
Evaluation: The ceiling tiles varied in condition a
indicative of roofing leaks at this time. In serviceable
Useful Life:
50 years
Remaining Life:
20 years
Best Case $ 118,800
Lower estimate
Worst Case:
Quantity: — 190 LF
ate
Quantity: — 29,700 GSF
ditions were noted. No major staining that would be
time.
Worst Case: $ 178,200
Cost Source ARI Cost Database
Higher estimate
Association Reserves, 32499-0 36 3/1/2018
EXHIBIT C
Comp #: 908 Window Treatments (A) - Replace
Location: Interior walls
Funded?: Yes. Meets National Reserve Study Standards four-part test.
History:
Evaluation: The shutters were intact and in good condition. No major damage or deterioration noted. No reported issues. Best to
fund for eventual replacement.
Useful Life:
20 years
Remaining Life:
15 years
Best Case $ 14,000
Lower estimate
Cost Source: ARI
Comp #: 908 Window Treatments (B) - Replace
Location. Interior walls
Funded?: Yes, Meets National Reserve Study Standards fo
History:
Evaluation: The window blinds were in fair Condit
order to maintain functionality.
Useful Life:
10 years
Remaining Life:
6 years
Quantity: (18) Wood Shutters
ate
Quantity: — 41 LF
amage observed. Best to fund for eventual replacement in
Best Case: $ 10,000 Worst Case: $ 15,000
Lower estimate Higher estimate
Cost Source: ARI Cost Database
Association Reserves, 32499-0 37 3/1/2018
EXHIBIT C
Comp #: 909 Restrooms - Refurbish
Location: Bathrooms
Funded?: Yes. Meets National Reserve Study Standards four-part test.
History
Evaluation: The bathrooms include 1,611 GSF of tiled floors, 1,916 GSF of tiled walls, painted surfaces, 3,279 GSF of painted
surfaces, (19) toilets, (6) urinals, (19) toilet paper dispensers, (14) paper towel dispensers, Approx 95 LF partitions, (9) mirrors,
(19) toilet seat cover dispensers, (1) feminine hygiene dispensers, Generally serviceable conditions, though an outdated aesthetic
was noted. Plan for periodic refurbishment to maintain an attractive aesthetic.
Useful Life:
15 years
Remaining Life:
3 years
Best Case: $ 80,000
Lower estimate
Comp #: 909 Sinks - Replace
Location: Throughout the buildings
Funded?: Yes.
History:
Evaluation: Normal elements of grime and
Remodel efforts in the Kitchens and Bath
Useful Life:
15 years
Remaining Life:
3 years
Best Case $ 19,000
Lower estimate
Cost Source: Cost P -base
Quantity; (9) Restrooms
estimate
Quantity: (21) Fixtures
r visible co' tent usage. Plan for normal cycles of replacement along with
Worst Case: $ 23,060
Cost Source: ARI Cost Database
Higher estimate
Association Reserves, 32499-0 38 3/1/2018
EXHIBIT C
Comp #: 912 Cubicles - Replace
Location: Throughout the interiors
Funded?: Yes. Meets National Reserve Study Standards four-part test.
History: 2007 completion for $459,000
Evaluation: No atypical wear or damage issues visible. Normal elements of wear from consistent staff usage. We will plan for a
similar project in future years.
Useful Life:
15 years
Remaining Life:
4 years
Best Case: $ 439,000
Lower estimate
Comp #: 912 IT Equipment - Replace
Location. Throughout building interiors
Funded?: No.
History:
Evaluation: The IT equipment not included as pa
funding required.
Useful Life:
Remaining Life:
Best Case:
Cost Source: AR1
Worst Case:
Quantity: (51) Cubicles
ate
Quantity: Servers, Routers, Etc
tudy and is handled under a separate budget. No Reserve
Worst Case:
Cost Source:
Association Reserves, 32499-0 39 3/1/2018
EXHIBIT C
Comp #: 950 Wallpaper - Replace
Location: Clubhouse Interior
Funded?: Yes. Meets National Reserve Study Standards four-part test.
History:
Evaluation: The wallpaper was in poor condition. Areas of peeling and discoloration observed. Best to replace in the near future in
order to restore appearance.
Useful Life
15 years
Remaining Life:
0 years
Best Case $ 12,400
Lower estimate
Cost Source: ARI
Comp #: 1110 Interior Surfaces - Repaint
Location: Interiors
Funded?: Yes. Meets National Reserve Study Standards fo
History
Evaluation: The interiors were in fair condition. R
Small touch-up projects can be conducted as neede
restore a consistent look and quality to all . •- - s. Best
furnishings, lighting, etc.} whenever poss
Useful Life
10 years
Remaining Life:
2 years
Best Case $ 46,000
Lower estimate to repaint
Worst Case:
Quantity: — 2,470 GSF
Higher - ate
Quantity: — 65,800 GSF
pro ional painting are recommended to maintain appearance.
ance expense, but comprehensive painting of interior areas will
coordinate at same time as other interior projects (flooring,
time and maintain consistent quality standard.
Worst Case $ 65,800
Cost Source: ARI Cost Database
Higher estimate
Association Reserves, 32499-0 40 3/1/2018
EXHIBIT C
Comp #: 1115 Building Exteriors - Repaint Quantity: Approx 80,000 GU
Location Building exteriors and entry perimeter arch structures (including Sheriff Station arches)
Funded?: Yes. Meets National Reserve Study Standards four-part test.
History:
Evaluation: The building exteriors are in fair condition. No signs of heavy staining or peeling. Funding for periodic repainting
projects to maintain an attractive appearance.
Useful Life:
10 years
Remaining Life:
5 years
Best Case: $ 100,000
Lower estimate to repaint
Comp #: 1117 Wood Panel Walls - Repair/Repaint
Location: Building exteriros
Funded?: Yes. Meets National Reserve Study Standards fo
History:
Evaluation: The wood surfaces were in good con
Repainting of these surfaces has been included with
Useful Life:
25 years
Remaining Life:
10 years
Best Case: $ 10,000
Lower estimate
ate
Quantity:--1,250 GSF
sues that would warrant replacement at this time.
Worst Case: $ 12,500
Cost Source: AR! Cost Database
Higher estimate
Association Reserves, 32499-0 41 3/1/2018
EXHIBIT C
Comp #: 1305 Flat Roofs (cool) - Recoat
Location: Building rooftop
Funded?: Yes. Meets National Reserve Study Standards four-part test.
History
Evaluation: Signs of soft -spots and tears. Roof coatings determined to be in poor condition typically exhibit significant, easily
noticeable inconsistency in color and/or texture, and may have more advanced signs of age such as increased frequency and
severity of cracking and peeling, in some cases exposing lower sections of roof system. If present, texture elements may have
worn thin or deteriorated completely leading to higher risks of slipping. At this stage, coating has effectively failed to provide
adequate protection and needs to be re -coated to reinstate good appearance and to provide protection for lower surface layers.
Useful Life:
10 years
Remaining Life:
0 years
Best Case $ 145,000
Lower estimate to recoat , er estimate
Cost Sour' - A • • atabase
Quantity: Approx 58,200 GSF
Comp #: 1311 Skylights - Replace
Location: Rooftops
Funded?: Yes. Meets National Reserve Study Stan
History
Evaluation: The skylights consists of (4) 5'
wear and tear, most often beginning at sea
fading/discoloration is more preval- • at this
Useful Life:
25 years
Remaining Life:
3 years
Best Case: $ 31,000
Lower estimate to replace
Quantity: (31) Assorted Skylights
es. Skylights determined to be in fair condition typically exhibit some
nd glass/panels. Appearance remains generally consistent, but
Worst Case: $ 47,000
Cost Source: ARI Cast Database
Higher estimate
Association Reserves, 32499-0 42 3/1/2018
Comp #: 1330 Roof Access Hatches - Replace
Location: Building rooftop
Funded?: Yes. Meets National Reserve Study Standards four-part test.
History:
Evaluation The roof access hatches are intact and functional. There are no signs of advanced deterioration. Fair condition.
Useful Life:
30 years
Remaining Life:
8 years
Best Case: $ 7,500
Lower estimate to replace
Worst Case:
Cost Source: ARI Cost Da
Comp #: 1850 Bell Chime System - Replace
Location: Building rooftop
Funded?: Yes. Meets National Reserve Study Standards
History:
Evaluatrorr The bell chime system was functional
Useful Life:
25 years
Remaining Life:
3 years
Best Case: $ 24,000
Lower estimate to replace
EXHIBIT C
Quantity: (5) Metal Hatches
Quantity: (4) University Horns
reported problems.
Worst Case: $ 32,000
Cost Source: ARI Cost Database
Higher estimate
Association Reserves, 32499-0 43 3/1/2018
EXHIBIT C
Comp #: 2550 Telephone System - Replace
Location: Building interiors
Funded?: Yes. Meets National Reserve Study Standards four-part test.
History
Evaluation: The telephone system was not tested during inspection but reported to be functional. Funding for periodic system
replacements.
Useful Life
20 years
Remaining Life:
10 years
Best Case: $ 30,000
Lower estimate to replace
Worst Case:
Cost Source ARI
Quantity: (1) System
ate
Association Reserves, 32499-0 44 3/1/2018
EXHIBIT C
Accuracy, Limitations, and Disclosures
Association Reserves and its employees have no ownership, management, or other business relationships
with the client other than this Reserve Study engagement. Kevin Leonard, R.S.• president, is a credentialed
Reserve Specialist (#294). All work done by Association Reserves is performed under his Responsible
Charge and is performed in accordance with National Reserve Study Standards (NRSS). There are no
material issues to our knowledge that have not been disclosed to the client that would cause a distortion of
the client's situation.
Per NRSS, information provided by official representatives) of the client, vendors, and suppliers regarding
financial details, component physical details and/or quantities, or historical issues/conditions will be deemed
reliable, and is not intended to be used for the purpose of any type of audit, quality/forensic analysis, or
background checks of historical records. As such, information provided to us has not been audited or
independently verified.
Estimates for interest and inflation have been included, because including ch estimates are more accurate
than ignoring them completely. When we are hired to prepare Update re■ s, the client is considered to
have deemed those previously developed component quantities as a - ate - : reliable, whether
established by our firm or other individuals/firms (unless specifically i• . in o Site Inspection Notes).
During inspections our company standard is to establish measurements in 5°/ curacy, and our scope
includes visual inspection of accessible areas and compone and does n. de any destructive or other
testing. Our work is done only for budget purposes. Uses or tations o t de our expertise and scope
of work include, but are not limited to, project audit, qua •e a e identification of construction
defects, hazardous materials, or dangerous conditio denti g h issues such as but not limited to
plumbing or electrical problems are also outside o r .e • ork. Our estimates assume proper original
installation & construction, adherence to recom entive maintenance, a stable economic
environment, and do not consider frequency or s- o ral disasters. Our opinions of component
Useful Life, Remaining Useful Life, and c - t or _ .st •stimates are not a warranty or guarantee of
actual costs or timing.
Because the physical and financial
expectations, and usage are all in a
expect that the events prole in thi
nature a "one-year docurneed
incorporated. it is only b
this Report projects expe
through the interim years to th
for those estimated expenses
erty, legislation, the economy, weather. owner
of change over which we have no control, we do not
me will all occur exactly as planned. This Reserve Study is by
being updated annually so that more accurate estimates can be
perspective improves the accuracy of near -term planning that
uture. We fully expect a number of adjustments will be necessary
nd timing of expense projections and the funding necessary to prepare
In this engagement our compensation is not contingent upon our conclusions, and our liability in any matter
involving this Reserve Study is limited to our fee for services rendered.
Association Reserves, 32499-0 45 3/1/2018