Westwood Landowners Associations Reserve Study

FULL RESERVE STUDY Westwood Landowners' Association Magnolia, Texas June 23, 2022 This Report contains intellectual property developed by Reserve Advisors, LLC and cannot be reproduced or distributed to those who conduct reserve studies without their written consent.

© Reserve Advisors, LLC 2022 Westwood Landowners' Association Magnolia, Texas Dear Board of Directors of Westwood Landowners' Association: At the direction of the Board that recognizes the need for proper reserve planning, we have conducted a Full Reserve Study of Westwood Landowners' Association in Magnolia , Texas and submit our findings in this report. The effective date of this study is the date of our visual, noninvasive inspection, June 23, 2022.

This Full Reserve Study exceeds the Association of Professional Reserve Analysts (APRA) standards fulfilling the requirements of a “ Level I Full Reserve Study .”

An ongoing review by the Board and an Update of this Reserve Study are necessary to ensure an equitable funding plan since a Reserve Study is a snapshot in time. We recommend the Board budget for an Update to this Reserve Study in two- to three -years.

We look forward to continuing to help Westwood Landowners' Association plan for a successful future.

As part of our long- term thinking and everyday commitment to our clients, we are available to answer any questions you may have regarding this study.

Respectfully submitted on July 12, 2022 by Reserve Advisors, LLC Visual Inspection and Report by: Casey M. Lewis , RS1 Review by: Alan M. Ebert, RS, PRA2, Director of Quality Assurance 1 RS (Reserve Specialist) is the reserve provider professional designation of the Community Associations Institute (CAI) representing America's more than 300,000 condominium, cooperative and homeowners

RS (Reserve Specialist) is the reserve provider professional designation of the Community Associations Institute (CAI) representing America's more than 300,000 condominium, cooperative and homeowners associations.

2 PRA (Professional Reserve Analyst) is the professional designation of the Association of Professional Reserve Analysts. Lear n more about APRA at http://www.apra -usa.com.

Reserve Advisors, LLC 735 N. Water Street, Suite 175 Milwaukee, WI 53202 Long-term thinking. Everyday commitment.

Table of Contents 1. RESERVE STUDY EXECUTIVE SUMMARY .................................................. 1.1 2. RESERVE STUDY REPORT ........................................................................... 2.1 3. RESERVE EXPENDITURES and FUNDING PLAN ........................................ 3.1 4. RESERVE COMPONENT DETAIL .................................................................. 4.1 Property Site Elements .................................................................................... 4.1 Asphalt Pavement, Repaving ..................................................................... 4.1 Concrete Flatwork ...................................................................................... 4.3 Fences, Chain Link ..................................................................................... 4.4 Landscap e .................................................................................................. 4.5 Light Poles and Fixtures ............................................................................. 4.6 Playground Equipment ............................................................................... 4.6 Septic Systems ........................................................................................... 4.8

ent ............................................................................... 4.6 Septic Systems ........................................................................................... 4.8 Signage, Entrance Monuments .................................................................. 4.9 Site Furniture .............................................................................................. 4.10 Sport Courts, Color Coat ............................................................................ 4.11 Sport Courts, Fences .................................................................................. 4.12 Sport Courts, Surfaces ............................................................................... 4.13 Truck, Toyota Tacoma ................................................................................ 4.14 Building Elements ............................................................................................ 4.14 HVAC Equipment, Split System .................................................................. 4.14 Light Fixtures, Pavilion ............................................................................... 4.16 Office Building, Interior Renovations .......................................................... 4.16 Rest Rooms, Pool Houses ......................................................................... 4.17 Roofs, Asphalt Shingles ............................................................................. 4.18 Roof Assembly, Metal, Pavilion .................................................................. 4.20 Security System .......................................................................................... 4.21

etal, Pavilion .................................................................. 4.20 Security System .......................................................................................... 4.21 Walls, Siding, Fiber Cement ....................................................................... 4.21 Windows and Doors, Office Building .......................................................... 4.22 Pool Elements .................................................................................................. 4.23 Concrete Decks .......................................................................................... 4.23 Fences, Steel .............................................................................................. 4.25 Mechanical E quipment ............................................................................... 4.27 Pool Finishes, Plaster and Tile ................................................................... 4.28 Structures and Decks ................................................................................. 4.29 Reserve Study Update ..................................................................................... 4.31 5. METHODOLOGY ............................................................................................ 5.1 6. CREDENTIALS ............................................................................................... 6.1 7. DEFINITIONS .................................................................................................. 7.1 8. PROFESSIONAL SERVICE CONDITIONS .................................................... 8.1 Page 1.1 - Executive Summary 1. RESERVE STUDY EXECUTIVE SUMMAR Y Client: Westwood Landowners' Association (Westwood) Location: Magnolia, Texas Reference: 220670

.............................. 8.1 Page 1.1 - Executive Summary 1. RESERVE STUDY EXECUTIVE SUMMAR Y Client: Westwood Landowners' Association (Westwood) Location: Magnolia, Texas Reference: 220670 Property Basics: Westwood Landowners' Association is a homeowners association which is responsible for the common elements shared by approximately 2,122 lots. The community was built from 1979 to 1980. The community contains swimming pools, sport courts, playgrounds and a pavilion.

Reserve Components Identified: 46 Reserve Components.

Inspection Date: June 23, 2022.

Funding Goal: The Funding Goal of this Reserve Study is to maintain reserves above an adequate, not excessive threshold during one or more years of significant expenditures. Our recommended Funding Plan recognizes multiple threshold funding years due to replacement of the sport courts, pool structures, and the playground equipment.

Cash Flow Method: We use the Cash Flow Method to compute the Reserve Funding Plan. This method offsets future variable Reserve Expenditures with existing and future stable levels of reserve funding. Our application of this method also considers: • Current and future local costs of replacement • 0.7% anticipated annual rate of return on invested reserves • 3.5% future Inflation Rate for estimating Future Replacement Costs Sources for Local Costs of Replacement : Our proprietary database, historical costs and published sources, i.e., R.S. Means, Incorporated.

Unaudited Cash Status of Reserve Fund: • The Association does not have an established Reserve Fund • The Association did not budget Reserve Contributions in 2021. (Fiscal year 2021 starts July 1, 2021 and ends June 30, 2022)

Reserve Fund: • The Association does not have an established Reserve Fund • The Association did not budget Reserve Contributions in 2021. (Fiscal year 2021 starts July 1, 2021 and ends June 30, 2022) Project Prioritization: We note anticipated Reser ve Expenditures for the next 30 years in the Reserve Expenditures tables and include a Five-Year Outlook table following the Reserve Funding Plan in Section 3. We recommend the Association prioritize the following projects in the next five years based on the conditions identified: • Replacement of the pool structure at Nickaburr Creek • Replacement of the pool plaster finishes at the north and Oak Bluff pools due to noted deterioration Page 1.2 - Executive Summary Recommended Reserve Funding: We recommend the following in order to achieve a stable and equitable Funding Plan: • Increase to $150,000 in 2022 • Inflationary increases from 2022 through 2029 • Decrease to $161,000 by 2030 due to fully funding for replacement of replacement of the sport courts • Decrease to $152,000 by 2040 due to fully funding for replacement of the north and Oak Bluff pool structures • Inflationary increases through 2051, the limit of this study's Cash Flow Analysis • Initial adjustment in Reserve Contributions of $150,000 represents an average annual increase of $70.69 per lot owner and about a thirty -four percent (34.1%) adjustment in the 2021 total Operating Budget of $439,619.

Westwood Recommended Reserve Funding Table and Graph YearReserve Contributions ($)Reserve Balances ($) YearReserve Contributions ($)Reserve Balances ($) YearReserve Contributions ($)Reserve Balances ($) 2022 150,000 95,249 2032 172,400 416,811 2042 157,300 257,820 2023 155,300 127,676 2033 178,400 451,150 2043 162,800 238,807

s ($)Reserve Balances ($) YearReserve Contributions ($)Reserve Balances ($) 2022 150,000 95,249 2032 172,400 416,811 2042 157,300 257,820 2023 155,300 127,676 2033 178,400 451,150 2043 162,800 238,807 2024 160,700 245,796 2034 184,600 619,936 2044 168,500 381,895 2025 166,300 175,511 2035 191,100 674,433 2045 174,400 187,169 2026 172,100 335,736 2036 197,800 869,240 2046 180,500 357,754 2027 178,100 136,134 2037 204,700 1,000,351 2047 186,800 403,386 2028 184,300 153,504 2038 211,900 1,170,649 2048 193,300 150,835 2029 190,800 68,733 2039 219,300 415,284 2049 200,100 233,056 2030 161,000 223,940 2040 227,000 160,398 2050 207,100 306,444 2031 166,600 355,886 2041 152,000 167,410 2051 214,300 326,475 -1500-1000-500050010001500 Recommended Reserve Contributions Reserve Expenditures Year-End Reserve Balances Page 2.1 - Report 2. RESERVE STUDY REPORT At the direction of the Board that recognizes the need for proper reserve planning, we have conducted a Full Reserve Study of Westwood Landowners' Association Magnolia, Texas and submit our findings in this report. The effective date of this study is the date of our visual, noninvasive inspection, June 23, 2022.

We present our findings and recommendations in the following report sections and spreadsheets: • Identification of Property - Segregates all property into several areas of responsibility for repair or replacement • Reserve Expenditures - Identifi es reserve components and related quantities, useful lives, remaining useful lives and future reserve expenditures during the next 30 years • Reserve Funding Plan - Presents the recommended Reserve Contributions and year -end Reserve Balances for the next 30 years • Five- Year Outlook - Identifies reserve components and anticipated

years • Reserve Funding Plan - Presents the recommended Reserve Contributions and year -end Reserve Balances for the next 30 years • Five- Year Outlook - Identifies reserve components and anticipated reserve expenditures during the firs t five years • Reserve Component Detail - Describes the reserve components, includes photographic documentation of the condition of various property elements, describes our recommendations for repairs or replacement, and includes detailed solutions and procedures for replacements for the benefit of current and future board members • Methodology - Lists the national standards, methods and procedures used to develop the Reserve Study • Definitions - Contains definitions of terms used in the Reserve Study, consistent with national standards • Professional Service Conditions - Describes Assumptions and Professional Service Conditions • Credent ials and Resources Page 2.2 - Report IDENTIFICATION OF PROPERTY Our investigation includes Reserve Components or property elements as set forth in your Declaration. The Expenditure tables in Section 3 list the elements contained in this study. Our analysis begins by segregating the property elements into several areas of responsibility for repair and replacement.

Our process of identification helps assure that future boards and the management team understand whether reserves , the operating budget or Homeowners fund certain replacements and assists in preparation of the annual budget. We derive these segregated classes of property from our review of the information provided by the Association and through conversations with Management and the Board. These classes of property include: • Reserve Components • Long- Lived Property Elements • Operating Budget Funded Repairs and Replacements

on and through conversations with Management and the Board. These classes of property include: • Reserve Components • Long- Lived Property Elements • Operating Budget Funded Repairs and Replacements • Property Maintained by Lot Owners • Property Maintained by Others We advise the Board conduct an annual review of these classes of property to confirm its policy concerning the manner of funding, i.e., from reserves or the operating budget. The Reserve Study identifies Reserve Components as set forth in your Declaration or which were identified as part of your request for proposed services. Reserve Components are defined by CAI as property elements with: Page 2.3 - Report • Westwood responsibility • Limited useful life expectancies • Predictable remaining useful life expectancies • Replacement cost above a minimum threshold Long- Lived Property Elements may not have predictable Remaining Useful Lives or their replacement may occur beyond the 30- year scope of the study . The operating budget should fund infrequent repairs. Funding untimely or unexpected replacements from reserves will necessitate increases to Reserve Contributions. Periodic updates of this Reserve Study will help determine the merits of adjusting the Reserve Funding Plan.

We identify the following Long- Lived Property Elements as excluded from the 30-year Reserve Expenditures at this time.

• Electrical Systems, Common • Foundations , Common Buildings • Pipes, Subsurface Utilities , Common Areas • Structural Frames , Common Buildings • Pavilion, Structure, Replacement The operating budget provides money for the repair and replacement of certain Reserve Components. The Association may develop independent criteria for use of

dings • Pavilion, Structure, Replacement The operating budget provides money for the repair and replacement of certain Reserve Components. The Association may develop independent criteria for use of operating and reserve funds. For purposes of calculating appropriate Reserve Contributions, we identify the following list of Operating Budget Funded Repairs and Replacements: • General Maintenance to the Common Elements • Expenditures less than $2 ,000 (These relatively minor expenditures have a limited effect on the recommended Reserve Contributions.)

• Car Stops, Parking Areas • Gutters and Downspouts • Landscape • Paint Finishes, Touch Up • Septic Systems, General Maintenance • Signage, Entrance Monuments, Paint Finishes • Signage, Inform ational • Walls, Masonry, Office Building • Other Repairs normally funded through the Operating Budget Certain items have been designated as the responsibility of the lot owners to repair or replace at their cost. Property Maintained by Lot Owners , including items billed back to Lot Owners , relates to unit: • Homes and L ots Page 2.4 - Report Certain items have been designated as the responsibility of others to repair or replace. Property Maintained by Others relates to: • Street System (Montgomery County ) • Water Infrastructure (Westwood Water Supply Corporation) Page 3.1 - Reserve Expenditures and Funding Plan 3. RESERVE EXPENDITURES and FUNDING PLAN The tables following this introduction present: Reserve Expenditures • Line item numbers • Total quantities • Quantities replaced per phase (in a single year) • Reserve component inventory • Estimated first year of event (i.e., replacement, application, etc.)

• Life analysis showing − useful life − remaining useful life • 2022 local cost of replacement − Per unit − Per phase

t inventory • Estimated first year of event (i.e., replacement, application, etc.)

• Life analysis showing − useful life − remaining useful life • 2022 local cost of replacement − Per unit − Per phase − Replacement of total quantity • Percentage of future expenditures anticipated during the next 30 years • Schedule of estimated future costs for each reserve component including inflation Reserve Funding Plan • Reserves at the beginning of each year • Total recommended reserve contributions • Estimated interest earned from invested reserves • Anticipated expenditures by year • Anticipated reserves at year end • Predicted reserves based on current funding level Five- Year Outlook • Line item numbers • Reserve component inventory of only the expenditures anticipated to occur within the first five years • Schedule of estimated future costs for each reserve component anticipated to occur within the first five years The purpose of a Reserve Study is to provide an opinion of reasonable annual Reserve Contributions. Prediction of exact timing and costs of minor Reserve Expenditures typically will not significantly affect the 30-year cash flow analysis. Adjustments to the times and/or costs of expenditures may not always result in an adjus tment in the recommended Reserve Contributions.

Financial statements prepared by your association, by you or others might rely in part on information contained in this section. For your convenience, we have provided an electronic data file containing the tables of Reserve Expenditures and Reserve Funding Plan.

Reserve Advisors, LLC Years 2021 to 2036 RESERVE EXPENDITURES Explanatory Notes: Westwood 1) 3.5% is the estimated Inflation Rate for estimating Future Replaceme nt Costs.

s and Reserve Funding Plan.

Reserve Advisors, LLC Years 2021 to 2036 RESERVE EXPENDITURES Explanatory Notes: Westwood 1) 3.5% is the estimated Inflation Rate for estimating Future Replaceme nt Costs.

Landowners' Association 2) FY2021 is Fiscal Year beginning July 1, 2021 and ending June 30, 2022.

Magnolia, Texas Estimated Life Analysis, Costs, $ Percentage Line Total Per Phase 1st Year of Years Unit Per Phase Total of Future R U L = 0 123456789 1 0 1 1 1 2 1 3 1 4 1 5 Item Quantity Quantity Units Reserve Com ponent Inventor y Event Useful Remaining (2021) (2021) (2021) Expenditures FY2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 ---------------------------- ------------- ------------------- ------------------------------------------------------------------- --------------------------------------------- --------------- ----------- ---------------- ------------------- ------------------- -- ------------------ ------------------ ---------------- ---------------- ---------------- ---------------- ---------------- ----------- ----- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------- ------ ---------------- ---------------Property Site Elements 4.045 250 250Square Yards Asphalt Pavement, Total Replacement, Nickaburr Creek Parking Area 2025 15 to 20 4 35.00 8,750 8,750 0.6% 10,041 4.120 47,000 2,350 Square Feet Concrete Flatwork, Partial 2022 to 65 1 to 30+ 12.00 28,200 564,000 5.4% 29,187 34,665 41,171 4.220 560 560Linear Feet Fences, Chai n Link, Nickaburr Creek and Pav ilion 2029 to 30 8 21.00 11,760 11,760 0.3% 15,486

ork, Partial 2022 to 65 1 to 30+ 12.00 28,200 564,000 5.4% 29,187 34,665 41,171 4.220 560 560Linear Feet Fences, Chai n Link, Nickaburr Creek and Pav ilion 2029 to 30 8 21.00 11,760 11,760 0.3% 15,486 4.500 1 1Allowance Landscape, Tree Trimming 2022 ongoing 1 5,000.00 5,000 5,000 5.1% 5,175 5,356 5,544 5,738 5,938 6,146 6,361 6,584 6,814 7,053 7,300 7,555 7,820 8,093 8,377 4.560 4 4Each Light Poles and Fixtures 2051 to 35 30 5,000.00 20,000 20,000 1.1% 4.660 1 1Allowance Playground Equipment, North 2028 15 to 20 7 87,000.00 87,000 87,000 6.3% 110,688 4.661 1 1Allowance Playground Equipment, Oak Bluff 2028 15 to 20 7 40,000.00 40,000 40,000 2.9% 50,891 4.780 3 3Each Septic Systems, Control Panels 2029 15 to 20 8 1,200.00 3,600 3,600 0.3% 4,741 4.781 3 3Each Septic Systems, Pumps 2029 20 to 25 8 1,800.00 5,400 5,400 0.4% 7,111 4.782 3 3Systems Septic Systems, Tanks and Sprinklers, Phased 2049 to 40+ 28 8,000.00 24,000 24,000 1.2% 4.800 8 8Each Signage, Entrance Monuments, Replacement 2038 to 35 17 2,800.00 22,400 22,400 0.8% 4.820 2 1Allowance Site Furniture, Phased 2023 15 to 25 2 to 6 19,800.00 19,800 39,600 2.5% 21,210 24,339 4.830 12,000 12,000 Square Feet Sport Courts, Tennis, Color Coat, Nickaburr Creek 2023 4 to 6 2 1.30 15,600 15,600 2.1% 16,711 25,252 4.831 18,000 18,000 Square Feet Sport Courts, Tennis and Basketball, Color Coat, North 2033 4 to 6 12 1.30 23,400 23,400 3.8% 35,359 4.840 200 200Linear Feet Sport Courts, Tennis, Fence, Nickaburr Creek 2029 to 25 8 40.00 8,000 8,000 0.2% 10,534 4.841 540 540Linear Feet Sport Courts, Tennis and Basketball, Fence, North 2027 to 25 6 40.00 21,600 21,600 1.7% 26,552 4.860 12,000 12,000 Square Feet Sport Courts, Tennis, Surface Replacement, Nickaburr Creek 2029 40 to 50 8 13.00 156,000 156,000 3.9% 205,422

Fence, North 2027 to 25 6 40.00 21,600 21,600 1.7% 26,552 4.860 12,000 12,000 Square Feet Sport Courts, Tennis, Surface Replacement, Nickaburr Creek 2029 40 to 50 8 13.00 156,000 156,000 3.9% 205,422 4.861 18,000 18,000 Square Feet Sport Courts, Tennis and Basketball, Surface Replacement, North 2027 40 to 50 6 13.00 234,000 234,000 5.5% 287,646 4.955 1 1Each Truck, Toytoa Tacoma 2041 20 to 25 20 30,000.00 30,000 30,000 1.1% Building Elements 5.070 1 1Each HVAC Equipment, Split System, Office Building 2026 15 to 20 5 6,500.00 6,500 6,500 0.4% 7,720 5.085 14 14Each Light Fixtures, Pavilion 202 9 to 30 8 900.00 12,600 12,600 0.3% 16,592 5.500 1 1Allowance Office Building, Interior Renovation, Complete 2035 to 25 14 30,500.00 30,500 30,500 0.9% 49,370 5.510 1 1Allowance Office Building, Interior Renovation, Partial 2025 10 to 15 4 10,000.00 10,000 10,000 0.7% 11,475 5.580 6 6Each Rest Rooms, Pool Houses 2032 to 20 11 7,500.00 45,000 45,000 3.6% 65,699 5.600 33 33Squares Roof, Asphalt Shingles, Office Building 2035 15 to 20 14 380.00 12,540 12,540 0.4% 20,298 5.601 8 8Squares Roof, Asphalt Shingles, North Pool 2041 15 to 20 20 380.00 3,040 3,040 0.1% 5.602 16 16Squares Roofs, Asphalt Shingles, Nickaburr Creek and Oak Bluff Pools 2024 15 to 20 3 380.00 6,080 6,080 0.4% 6,741 5.605 170 170Squares Roof Assembly, Metal, Pavilio n 2039 to 40+ 18 700.00 119,000 119,000 4.2% 5.720 1 1Allowance Security System 2037 10 to 15 16 13,000.00 13,000 13,000 0.4% 5.760 1 1Allowance Walls, Siding, Fiber Cement, Paint Finishes 2025 8 to 10 4 6,600.00 6,600 6,600 0.6% 7,574 10,683 5.761 3,990 3,990 Square Feet Walls, Siding, Fiber Cement, Replacement 2045 to 50 24 12.00 47,880 47,880 2.1% 5.800 270 270Square Feet Windows and Doors, Office Building 2033 to 35 12 35.00 9,450 9,450 0.3% 14,280

,990 Square Feet Walls, Siding, Fiber Cement, Replacement 2045 to 50 24 12.00 47,880 47,880 2.1% 5.800 270 270Square Feet Windows and Doors, Office Building 2033 to 35 12 35.00 9,450 9,450 0.3% 14,280 Pool Elements 6.200 9,740 9,740 Square Feet Concrete Decks, Inspections, Partial Repl acements and Repairs 2023 8 to 12 2 1.50 14,610 14,610 1.3% 15,651 22,077 6.400 1,500 1,500 Linear Feet Fences, Steel, Paint Finishes 2024 6 to 8 3 14.00 21,000 21,000 1.9% 23,283 29,623 6.401 1,500 750Linear Feet Fences, Steel, Replacement, Phased 2039 to 35 18 to 19 62.00 46,500 93,000 3.4% 6.600 3 1Allowance Mechanical Equipment, Phased 2024 to 15 3 to 13 7,500.00 7,500 22,500 1.5% 8,315 9,876 11,730 6.800 1,540 1,540 Square Feet Pool Finish, Nickaburr Creek, Plaster 2035 8 to 12 14 11.00 16,940 16,940 1.3% 27,421 6.801 180 180Linear Feet Pool Finish, Nickaburr Creek, Tile 2045 15 to 25 24 37.00 6,660 6,660 0.3% 6.802 2,510 2,510 Square Feet Pool Finish, North, Plaster 2023 8 to 12 2 11.00 27,610 27,610 3.8% 29,577 41,721 6.803 240 240Linear Feet Pool Finish, North, Tile 2023 15 to 25 2 37.00 8,880 8,880 0.5% 9,512 Printed on 7/12/2022 Expenditures - Section 3 - 1 of 4 Reserve Advisors, LLC RESERVE EXPENDITURES Westwood Landowners' Association Magnolia, Texas Estimated Life Analysis, Costs, $ Percentage Line Total Per Phase 1st Year of Years Unit Per Phase Total of Future Item Quantity Quantity Units Reserve Com ponent Inventor y Event Useful Remaining (2021) (2021) (2021) Expenditures ---------------------------- ------------- ------------------- ------------------------------------------------------------------- --------------------------------------------- --------------- ----------- ---------------- ------------------- ------------------- -- ------------------ ------------------

---------------------------- --------------------------------------------- --------------- ----------- ---------------- ------------------- ------------------- -- ------------------ -----------------Property Site Elements 4.045 250 250Square Yards Asphalt Pavement, Total Replacement, Nickaburr Creek Parking Area 2025 15 to 20 4 35.00 8,750 8,750 0.6% 4.120 47,000 2,350 Square Feet Concrete Flatwork, Partial 2022 to 65 1 to 30+ 12.00 28,200 564,000 5.4% 4.220 560 560Linear Feet Fences, Chai n Link, Nickaburr Creek and Pav ilion 2029 to 30 8 21.00 11,760 11,760 0.3% 4.500 1 1Allowance Landscape, Tree Trimming 2022 ongoing 1 5,000.00 5,000 5,000 5.1% 4.560 4 4Each Light Poles and Fixtures 2051 to 35 30 5,000.00 20,000 20,000 1.1% 4.660 1 1Allowance Playground Equipment, North 2028 15 to 20 7 87,000.00 87,000 87,000 6.3% 4.661 1 1Allowance Playground Equipment, Oak Bluff 2028 15 to 20 7 40,000.00 40,000 40,000 2.9% 4.780 3 3Each Septic Systems, Control Panels 2029 15 to 20 8 1,200.00 3,600 3,600 0.3% 4.781 3 3Each Septic Systems, Pumps 2029 20 to 25 8 1,800.00 5,400 5,400 0.4% 4.782 3 3Systems Septic Systems, Tanks and Sprinklers, Phased 2049 to 40+ 28 8,000.00 24,000 24,000 1.2% 4.800 8 8Each Signage, Entrance Monuments, Replacement 2038 to 35 17 2,800.00 22,400 22,400 0.8% 4.820 2 1Allowance Site Furniture, Phased 2023 15 to 25 2 to 6 19,800.00 19,800 39,600 2.5% 4.830 12,000 12,000 Square Feet Sport Courts, Tennis, Color Coat, Nickaburr Creek 2023 4 to 6 2 1.30 15,600 15,600 2.1% 4.831 18,000 18,000 Square Feet Sport Courts, Tennis and Basketball, Color Coat, North 2033 4 to 6 12 1.30 23,400 23,400 3.8% 4.840 200 200Linear Feet Sport Courts, Tennis, Fence, Nickaburr Creek 2029 to 25 8 40.00 8,000 8,000 0.2%

Sport Courts, Tennis and Basketball, Color Coat, North 2033 4 to 6 12 1.30 23,400 23,400 3.8% 4.840 200 200Linear Feet Sport Courts, Tennis, Fence, Nickaburr Creek 2029 to 25 8 40.00 8,000 8,000 0.2% 4.841 540 540Linear Feet Sport Courts, Tennis and Basketball, Fence, North 2027 to 25 6 40.00 21,600 21,600 1.7% 4.860 12,000 12,000 Square Feet Sport Courts, Tennis, Surface Replacement, Nickaburr Creek 2029 40 to 50 8 13.00 156,000 156,000 3.9% 4.861 18,000 18,000 Square Feet Sport Courts, Tennis and Basketball, Surface Replacement, North 2027 40 to 50 6 13.00 234,000 234,000 5.5% 4.955 1 1Each Truck, Toytoa Tacoma 2041 20 to 25 20 30,000.00 30,000 30,000 1.1% Building Elements 5.070 1 1Each HVAC Equipment, Split System, Office Building 2026 15 to 20 5 6,500.00 6,500 6,500 0.4% 5.085 14 14Each Light Fixtures, Pavilion 202 9 to 30 8 900.00 12,600 12,600 0.3% 5.500 1 1Allowance Office Building, Interior Renovation, Complete 2035 to 25 14 30,500.00 30,500 30,500 0.9% 5.510 1 1Allowance Office Building, Interior Renovation, Partial 2025 10 to 15 4 10,000.00 10,000 10,000 0.7% 5.580 6 6Each Rest Rooms, Pool Houses 2032 to 20 11 7,500.00 45,000 45,000 3.6% 5.600 33 33Squares Roof, Asphalt Shingles, Office Building 2035 15 to 20 14 380.00 12,540 12,540 0.4% 5.601 8 8Squares Roof, Asphalt Shingles, North Pool 2041 15 to 20 20 380.00 3,040 3,040 0.1% 5.602 16 16Squares Roofs, Asphalt Shingles, Nickaburr Creek and Oak Bluff Pools 2024 15 to 20 3 380.00 6,080 6,080 0.4% 5.605 170 170Squares Roof Assembly, Metal, Pavilio n 2039 to 40+ 18 700.00 119,000 119,000 4.2% 5.720 1 1Allowance Security System 2037 10 to 15 16 13,000.00 13,000 13,000 0.4% 5.760 1 1Allowance Walls, Siding, Fiber Cement, Paint Finishes 2025 8 to 10 4 6,600.00 6,600 6,600 0.6%

00 119,000 4.2% 5.720 1 1Allowance Security System 2037 10 to 15 16 13,000.00 13,000 13,000 0.4% 5.760 1 1Allowance Walls, Siding, Fiber Cement, Paint Finishes 2025 8 to 10 4 6,600.00 6,600 6,600 0.6% 5.761 3,990 3,990 Square Feet Walls, Siding, Fiber Cement, Replacement 2045 to 50 24 12.00 47,880 47,880 2.1% 5.800 270 270Square Feet Windows and Doors, Office Building 2033 to 35 12 35.00 9,450 9,450 0.3% Pool Elements 6.200 9,740 9,740 Square Feet Concrete Decks, Inspections, Partial Repl acements and Repairs 2023 8 to 12 2 1.50 14,610 14,610 1.3% 6.400 1,500 1,500 Linear Feet Fences, Steel, Paint Finishes 2024 6 to 8 3 14.00 21,000 21,000 1.9% 6.401 1,500 750Linear Feet Fences, Steel, Replacement, Phased 2039 to 35 18 to 19 62.00 46,500 93,000 3.4% 6.600 3 1Allowance Mechanical Equipment, Phased 2024 to 15 3 to 13 7,500.00 7,500 22,500 1.5% 6.800 1,540 1,540 Square Feet Pool Finish, Nickaburr Creek, Plaster 2035 8 to 12 14 11.00 16,940 16,940 1.3% 6.801 180 180Linear Feet Pool Finish, Nickaburr Creek, Tile 2045 15 to 25 24 37.00 6,660 6,660 0.3% 6.802 2,510 2,510 Square Feet Pool Finish, North, Plaster 2023 8 to 12 2 11.00 27,610 27,610 3.8% 6.803 240 240Linear Feet Pool Finish, North, Tile 2023 15 to 25 2 37.00 8,880 8,880 0.5%Years 2037 to 2051 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 2051 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- --------------- - ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------19,979 48,898 58,076 68,976 8,670 8,973 9,287 9,613 9,949 10,297 10,658 11,031 11,417 11,816 12,230 12,658 13,101 13,559 14,034 56,136 220,246 101,263 9,433

--------- ---------------- ---------------19,979 48,898 58,076 68,976 8,670 8,973 9,287 9,613 9,949 10,297 10,658 11,031 11,417 11,816 12,230 12,658 13,101 13,559 14,034 56,136 220,246 101,263 9,433 14,14962,884 40,201 39,398 45,21031,041 38,157 43,465 53,430 65,679 60,627 59,694 14,842 24,460 122,035 6,049 12,960 221,041 22,542 15,070 109,326 31,141 47,950 86,373 89,39613,931 16,546 19,651 38,680 15,207 58,851 69,89718,928 Printed on 7/12/2022 Expenditures - Section 3 - 2 of 4 Reserve Advisors, LLC Years 2021 to 2036 RESERVE EXPENDITURES Explanatory Notes: Westwood 1) 3.5% is the estimated Inflation Rate for estimating Future Replaceme nt Costs.

Landowners' Association 2) FY2021 is Fiscal Year beginning July 1, 2021 and ending June 30, 2022.

Magnolia, Texas Estimated Life Analysis, Costs, $ Percentage Line Total Per Phase 1st Year of Years Unit Per Phase Total of Future R U L = 0 123456789 1 0 1 1 1 2 1 3 1 4 1 5 Item Quantity Quantity Units Reserve Com ponent Inventor y Event Useful Remaining (2021) (2021) (2021) Expenditures FY2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 ---------------------------- ------------- ------------------- ------------------------------------------------------------------- --------------------------------------------- --------------- ----------- ---------------- ------------------- ------------------- -- ------------------ ------------------ ---------------- ---------------- ---------------- ---------------- ---------------- ----------- ----- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------- ------ ---------------- ----------------

----------- ----------- ----- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------- ------ ---------------- ---------------6.804 1,570 1,570 Square Feet Pool Finish, Oak Bluff, Plaster 2023 8 to 12 2 11.00 17,270 17,270 2.4% 18,500 26,096 6.805 180 180Linear Feet Pool Finish, Oak Bluff, Tile 2023 15 to 25 2 37.00 6,660 6,660 0.4% 7,134 6.900 1,540 1,540 Square Feet Structure and Deck, Nickaburr Creek, Removal (Budgeted) 2022 to 60 1 13.00 20,020 20,020 0.4% 20,721 6.901 1,540 1,540 Square Feet Structure and Deck, Nickaburr Creek, Replacement 2025 to 60 4 115.00 177,100 177,100 3.9% 203,226 6.902 2,510 2,510 Square Feet Structure and Deck, North, Total Replacement 2039 to 60 18 130.00 326,300 326,300 11.6% 6.903 1,540 1,540 Square Feet Structure and Deck, Oak Bluff, Total Replacement 2040 to 60 19 130.00 200,200 200,200 7.4% ---------------------------------------------------------------------------------------------------------------- --------------- ------------- ---------------- ------------------- --------------------------------------- ------------------ ---------------- ------ ---------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----- ----------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------Anticipated Expenditures, By Year ($5,216,577 over 30 years) 0 55,083 123,651 43,883 238,054 13,658 379,348 167,940 276,346 6,814 36,676 114,170 147,088 19,550 141,117 8,377 Printed on 7/12/2022 Expenditures - Section 3 - 3 of 4 Reserve Advisors, LLC RESERVE EXPENDITURES Westwood Landowners' Association Magnolia, Texas Estimated Life Analysis, Costs, $ Percentage

8,377 Printed on 7/12/2022 Expenditures - Section 3 - 3 of 4 Reserve Advisors, LLC RESERVE EXPENDITURES Westwood Landowners' Association Magnolia, Texas Estimated Life Analysis, Costs, $ Percentage Line Total Per Phase 1st Year of Years Unit Per Phase Total of Future Item Quantity Quantity Units Reserve Com ponent Inventor y Event Useful Remaining (2021) (2021) (2021) Expenditures ---------------------------- ------------- ------------------- ------------------------------------------------------------------- --------------------------------------------- --------------- ----------- ---------------- ------------------- ------------------- -- ------------------ -----------------6.804 1,570 1,570 Square Feet Pool Finish, Oak Bluff, Plaster 2023 8 to 12 2 11.00 17,270 17,270 2.4% 6.805 180 180Linear Feet Pool Finish, Oak Bluff, Tile 2023 15 to 25 2 37.00 6,660 6,660 0.4% 6.900 1,540 1,540 Square Feet Structure and Deck, Nickaburr Creek, Removal (Budgeted) 2022 to 60 1 13.00 20,020 20,020 0.4% 6.901 1,540 1,540 Square Feet Structure and Deck, Nickaburr Creek, Replacement 2025 to 60 4 115.00 177,100 177,100 3.9% 6.902 2,510 2,510 Square Feet Structure and Deck, North, Total Replacement 2039 to 60 18 130.00 326,300 326,300 11.6% 6.903 1,540 1,540 Square Feet Structure and Deck, Oak Bluff, Total Replacement 2040 to 60 19 130.00 200,200 200,200 7.4% ---------------------------------------------------------------------------------------------------------------- --------------- ------------- ---------------- ------------------- --------------------------------------- -----------------Anticipated Expenditures, By Year ($5,216,577 over 30 years) Years 2037 to 2051 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

-------------- --------------------------------------- -----------------Anticipated Expenditures, By Year ($5,216,577 over 30 years) Years 2037 to 2051 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 2051 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- --------------- - ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------36,811 43,720 14,196 606,099 384,885 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- --------------- - ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------80,110 49,174 980,196 483,894 146,131 68,373 183,545 27,577 371,111 11,816 143,823 447,784 119,218 135,594 196,476 Printed on 7/12/2022 Expenditures - Section 3 - 4 of 4 Reserve Advisors, LLC Page 1 of 1 RESERVE FUNDING PLAN CASH FLOW ANALYSIS Westwood Landowners' Association Individual Reserve Budgets & Cash Flows for the Next 30 Years Magnolia, Texas FY2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 Reserves at Beginning of Year (Note 1) N/A 0 95,249 127,676 245,796 175,511 335,736 136,134 153,504 68,733 223,940 355,886 416,811 451,150 619,936 674,433 Total Recommended Reserve Contributions (Note 2) N/A 150,000 155,300 160,700 166,300 172,100 178,100 184,300 190,800 161,000 166,600 172,400 178,400 184,600 191,100 197,800 Estimated Interest Earned, During Year (Note 3) N/A 332 778 1,303 1,469 1,783 1,646 1,010 775 1,021 2,022 2,695 3,027 3,736 4,514 5,384

190,800 161,000 166,600 172,400 178,400 184,600 191,100 197,800 Estimated Interest Earned, During Year (Note 3) N/A 332 778 1,303 1,469 1,783 1,646 1,010 775 1,021 2,022 2,695 3,027 3,736 4,514 5,384 Anticipated Expenditures, By Year N/A (55,083) (123,651) (43,883) (238,054) (13,658) (379,348) (167,940) (276,346) (6,814) (36,676) (114,170) (147,088) (19,550) (141,117) (8,377) ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- -------- --------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ---------------- - ----------------Anticipated Reserves at Year End $0 $95,249 $127,676 $245,796 $175,511 $335,736 $136,134 $153,504 $68,733 $223,940 $355,886 $416,811 $451,150 $619,936 $674,433 $869,240 (NOTE 5) (continued) Individual Reserve Budgets & Cash Flow s for the Next 30 Years, Continued 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 2051 Reserves at Beginning of Year 869,240 1,000,351 1,170,649 415,284 160,398 167,410 257,820 238,807 381,895 187,169 357,754 403,386 150,835 233,056 306,444 Total Recommended Reserve Contributions 204,700 211,900 219,300 227,000 152,000 157,300 162,800 168,500 174,400 180,500 186,800 193,300 200 ,100 207,100 214,300 Estimated Interest Earned, During Year 6,521 7,572 5,531 2,008 1,143 1,483 1,732 2,165 1,985 1,901 2,655 1,933 1,339 1,882 2,207 Anticipated Expenditures, By Year (80,110) (49,174) (980,196) (483,894) (146,131) (68,373) (183,545) (27,577) (371,111) (11,816) (143,823) (447,784) (119,218) (135,594) (196,4 76)

33 1,339 1,882 2,207 Anticipated Expenditures, By Year (80,110) (49,174) (980,196) (483,894) (146,131) (68,373) (183,545) (27,577) (371,111) (11,816) (143,823) (447,784) (119,218) (135,594) (196,4 76) ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- -------- --------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ---------------- Anticipated Reserves at Year End $1,000,351 $1,170,649 $415,284 $160,398 $167,410 $257,820 $238,807 $381,895 $187,169 $357,754 $403,386 $150,835 $233,056 $306,444 $326,475 (NOTE 5) (NOTE 5) (NOTE 4) Explanatory Notes: 1)The Association does not have a Reserve Balance; FY2021 starts July 1, 2021 and ends June 30, 2022.

2)2022 is the first year of recommended contributions.

3)0.7% is the estimated annual rate of return on invested reserves 4)Accumulated year 2051 ending reserves consider the age, size, overall condition and complexity of the property.

5)Threshold Funding Years (reserve balance at critical point).

Printed on 7/12/2022 Funding Plan - Section 3 Reserve Advisors, LLC *Refer to the Reserve Expenditures pages for the full list of reserve elements FIVE-YEAR OUTLOO K Westwood Landowners' Association Magnolia, Texas Line R U L = 0 12345 Item Reserve Com ponent Inventor y FY2021 2022 2023 2024 2025 2026 ----------- ---------------------------------------------------------------------------------------------------------------- ---- ------------ ---------------- ---------------- ---------------- ---------------- ---------------Property Site Elements 4.045 Asphalt Pavement, Total Replacement, Nickaburr Creek Parking Area 10,041

------------ ---------------- ---------------- ---------------- ---------------- ---------------Property Site Elements 4.045 Asphalt Pavement, Total Replacement, Nickaburr Creek Parking Area 10,041 4.120 Concrete Flatwork, Partial 29,1874.500 Landscape, Tree Trimming 5,175 5,356 5,544 5,738 5,9384.820 Site Furniture, Phased 21,210 4.830 Sport Courts, Tennis, Color Coat, Nickaburr Creek 16,711 Building Elements 5.070 HVAC Equipment, Split System, Office Building 7,720 5.510 Office Building, Interior Renovation, Partial 11,475 5.602 Roofs, Asphalt Shingles, Nickaburr Creek and Oak Bluff Pools 6,7415.760 Walls, Siding, Fiber Cement, Paint Finishes 7,574 Pool Elements 6.200 Concrete Decks, Inspections, Partial Replacements and Repairs 15,6516.400 Fences, Steel, Paint Finishes 23,283 6.600 Mechanical Equipment, Phased 8,315 6.802 Pool Finish, North, Plaster 29,577 6.803 Pool Finish, North, Tile 9,512 6.804 Pool Finish, Oak Bluff, Plaster 18,5006.805 Pool Finish, Oak Bluff, Tile 7,134 6.900 Structure and Deck, Nickaburr Creek, Removal (Budgeted) 20,7216.901 Structure and Deck, Nickaburr Creek, Replacement 203,226 ---------------------------------------------------------------------------------------------------------------- --------------- - ---------------- ---------------- ---------------- ---------------- ---------------Anticipated Expenditures, By Year ($5,216,577 over 30 years) 0 55,083 123,651 43,883 238,054 13,658 Printed on 7/12/2022 Five-Year Outlook - 1 of 1 Page 4.1 - Reserve Component Detail 4. RESERVE COMPONENT DETAIL The Reserve Component Detail of this Full Reserve Study includes enhance d soluti ons and procedures for select significant components. This section describes the Reserve Components, document s specific problems and condition

of this Full Reserve Study includes enhance d soluti ons and procedures for select significant components. This section describes the Reserve Components, document s specific problems and condition assessment s, and may include detailed solutions and procedures for necessary capital repairs and replacements for the benefit of current and future board members. We advise the Board use this information to help define the scope and procedures for repair or replacement when soliciting bids or proposals from contractors. However, the Report in whole or part is not and should not be used as a design spec ification or design engineering service .

Property Site Elements Asphalt Pavement, Repaving Line Item: 4.045 Quantity: Approximately 250 square yards at the Nickaburr Creek parking area History: The age was unavailable at the time of our inspection.

Condition: Fair overall Asphalt pavement parking lot overview Asphalt pavement parking lot overview Useful Life: 15- to 20 -years with the benefit of timely crack repairs and patching Component Detail Notes: The ini tial installation of asphalt uses at least two lifts, or two separate applications of asphalt, over the base course. The first lift is the binder course. The second lift is the wearing course. The wearing course comprises a finer aggregate for a smoother more watertight finish. The following diagram depicts the typical components although it may not reflect the actual configuration at Westwood: Page 4.2 - Reserve Component Detail The manner of repaving is either a mill and overlay or total replacement . A mill and overlay is a method of repaving where cracked, worn and failed pavement is mechanically removed or milled until sound pavement is found. A new layer of asphalt is overlaid atop

lacement . A mill and overlay is a method of repaving where cracked, worn and failed pavement is mechanically removed or milled until sound pavement is found. A new layer of asphalt is overlaid atop the remaining base course of pavement. Total replacement includes the removal of all existing asphalt down to the base course of aggregate and native soil followed by the application of two or more new lifts of asphalt. We recommend mill and overlayment on asphalt pavement that exhibits normal deterioration and wear. We recommend total replacement of asphalt pavement that exhibits severe deterioration, inadequate drainage, pavement that has been overlaid multiple times in the past or where the configuration makes overlayment not possible. Based on the apparent visual condition and configuration of the asphalt pavement, we recommend the total replacement method of repaving at Westwood in conjunction with replacement of the pool .

Preventative Maintenance Notes: We note the following select recommended preventative maintenance activities to maximize the remaining useful life: • Annually: o Inspect for settlement, large cracks and trip hazards, and ensure proper drainage o Repair areas which could cause vehicular damage such as potholes • As needed: o Perform crack repairs and patching Priority/Criticality: Defer only upon opinion of independent professional or engineer Expenditure Detail Notes: Expenditure timing and costs are depicted in the Reserve Expenditures table in Section 3.

Page 4.3 - Reserve Component Detail Concrete Flatwork Line Item: 4.120 Quantity: Approximately 47,000 square feet at the parking areas, sidewalks and pavilion History and Condition: Good to fair overall with periodic cracks and settlement evident at the parking areas.

tity: Approximately 47,000 square feet at the parking areas, sidewalks and pavilion History and Condition: Good to fair overall with periodic cracks and settlement evident at the parking areas.

Pavilion concrete flatwork Parking area Concrete parking area Concrete settlement Page 4.4 - Reserve Component Detail Cracks and settlement at office parking area Useful Life: Up to 65 years although interim deterioration of areas is common Preventative Maintenance Notes: We note the following select recommended preventative maintenance activities to max imize the remaining useful life: • Annually: o Inspect and repair major cracks, spalls and trip hazards o Mark with orange safety paint prior to replacement or repair o Repair or perform concrete leveling in areas in immediate need of repair or possible safety hazard Priority/Criticality: Per Board discretion Expenditure Detail Notes: Expenditure timing and costs are depicted in the Reserve Expenditures table in Section 3. We estimate that up to 14,100 square feet of concrete driveways, or thirty percent ( 30%) of the total, will require replacement during the next 30 years.

Fences, Chain Link Line Item: 4.220 Quantity: 560 linear feet at the Nickaburr Creek amenity area and the pavilion History: Original Condition: Good to fair overall Page 4.5 - Reserve Component Detail Chain link fence Chain link fence Useful Life: Up to 30 years Preventative Maintenance Notes: We note the following select recommended preventative maintenance activities to maximize the remaining useful life: • Annually: o Inspect and repair loose sections, and damage o Repair leaning sections and clear vegetation from f ence areas which could cause damage Priority/Criticality: Per Board discretion

life: • Annually: o Inspect and repair loose sections, and damage o Repair leaning sections and clear vegetation from f ence areas which could cause damage Priority/Criticality: Per Board discretion Expenditure Detail Notes: Expenditure timing and costs are depicted in the Reserve Expenditures table in Section 3.

Landscape Line Item: 4.500 Component Detail Notes: The Association contains a large quantity of trees, shrubbery and other landscape elements. Replacement of these elements is an ongoing need.

Many associations budget for these replacements as normal maintenance. Other associations f und ongoing replacements from reserves. Large amounts of landscape may need replacement due to disease, drought or other forces of nature. If the cost of removal and replacement is substantial, funding from reserves is logical. The Association may also desire to periodically update the appearance of the community through major improvements to the landscape.

Useful Life: At the request of Management and the Board, we include a landscape allowance for tree trimming annually Priority/Criticality: Per Board discretion Page 4.6 - Reserve Component Detail Expenditure Detail Notes: Expenditure timing and costs are depicted in the Reserve Expenditures table in Section 3. Our cost is based on information provided by the Association.

Light Poles and Fi xtures Line Item: 4.560 Quantity: Four concrete poles with LED light fixtures History: Replaced fr om 2017 through 2021.

Condition: Good overall Light pole and fixtures Light pole and fixtures Useful Life: Up to 25 years Preventative Maintenance Notes: We note the following select recommended preventative maintenance activities to maximize the remaining useful life: • As-needed:

ixtures Useful Life: Up to 25 years Preventative Maintenance Notes: We note the following select recommended preventative maintenance activities to maximize the remaining useful life: • As-needed: o Inspect and repair broken or dislodged fixtures, and leaning or damaged poles o Replaced burned out bulbs as needed Priority/Criticality: Per Board discretion Expenditure Detail Notes: Expenditure timing and costs are depicted in the Reserve Expenditures table in Section 3. Our cost is based on information provided by the Association.

Playground Equipment Line Item s: 4.660 and 4.661 Page 4.7 - Reserve Component Detail Quantity: Playground equipment includes the following elements: • Playsets, swings, and a see- saw • Wood surface with a plastic border History: Varied ages. Added new mulch in recent years.

Condition: Good to fair overall Playground equipment Playground equipment Spring riders Playground equipment Page 4.8 - Reserve Component Detail Playground equipment Useful Life: 15- to 20 -years Component Detail Notes: Safety is the major purpose for maintaining playground equipment. We recommend an annual inspection of the playground equipment to identify and repair as normal maintenance loose connections and fasteners or damaged elements. We suggest the Association learn more about the specific requirements of playground equipment at PlaygroundSafety.org. We recommend the use of a specialist for the design or replacement of the playground equipment environment.

Preventative Maintenance Notes: We note the following select recommended preventative maintenance activities to maximize the remaining useful life: • Annually: o Inspect and repair loose connections and fasteners or damaged elements

We note the following select recommended preventative maintenance activities to maximize the remaining useful life: • Annually: o Inspect and repair loose connections and fasteners or damaged elements o Inspect for safety hazards and adequate coverage of ground surface cover Priority/Criticality: Defer only upon opinion of independent professional or engineer Expenditure Detail Notes: Expe nditure timing and costs are depicted in the Reserve Expenditures table in Section 3. We include an allowance in the unit cost for replacement of the safety surface and border.

Septic System s Line Item s: 4.780 through 4.782 Quantity: Three aerobic septic systems History: The age was unavailable at the time of our inspection.

Condition: Reported in satisfactory overall condition Page 4.9 - Reserve Component Detail Septic system Useful Life: 15- to 20- years for the control panels, 20 - to 25- years for the pumps, and up to 40+ years for the tanks and sprinkler systems Preventative Maintenance Notes: We note the following select recommended preventative maintenance activities to maximize the remaining useful life: • Annually: o Inspect the septic tank o Monitor use of water. High water use may overload the septic system and decrease the system’s efficiency.

o Ensure proper disposal of elements in the septic system • Every three years: o Pumping of the septic tank Priority/Criticality: Defer only upon opinion of independent professional or engineer Expenditure Detail Notes: Expenditure timing and cos ts are depicted in the Reserve Expenditures table in Section 3.

Signage , Entrance Monuments Line Item: 4.800 Quantity: Eight entrance monuments History: Varied ages. Painted in 2019- 2020.

Condition: Good overall Page 4.10 - Reserve Component Detail

n 3.

Signage , Entrance Monuments Line Item: 4.800 Quantity: Eight entrance monuments History: Varied ages. Painted in 2019- 2020.

Condition: Good overall Page 4.10 - Reserve Component Detail Entrance monument Useful Life: Up to 35 years Component Detail Notes: Community signage contributes to the overall aesthetic appearance of the property to owners and potential buyers. Renovation or replacement of community signs is often predicated upon the desire to "update" the perceived identity of the community rather than for utilitarian concerns. Therefore, the specific t imes for replacement or renovation are discretionary.

Preventative Maintenance Notes: We note the following select recommended preventative maintenance activities to maximize the remaining useful life: • Annually: o Inspect and repair damage, vandalism and loose components o Verify lighting is working properly o Touch- up paint finish applications if applicable Priority/Criticality: Per Board discretion Expenditure Detail Notes: Expenditure timing and costs are depicted in the Reserve Expenditures table in Section 3. We recommend the Association apply paint finishes as needed to forestall deterioration and fund these activities through the operating budget.

Site Furniture Line Item: 4.820 Quantity: • Benches (9) • Picnic tables (21) • Trash receptacles (11) History: Original; Considering upgrading tables to concrete at pools.

Page 4.11 - Reserve Component Detail Condition: Fair to poor overall Furniture rust Site furniture Site furniture Useful Life: 15- to 25 -years Priority/Criticality: Per Board discretion Expenditure Detail Notes: Expenditure timing and costs are depicted in the Reserve Expenditures table in Section 3. We depict replacement in a phased manner.

rity/Criticality: Per Board discretion Expenditure Detail Notes: Expenditure timing and costs are depicted in the Reserve Expenditures table in Section 3. We depict replacement in a phased manner.

Sport Courts, Color Coat Line Item s: 4.830 and 4.831 Quantity: 12,000 square feet at the Nickaburr Creek courts and 18.000 square feet at the north courts History: A color coat was applied to the north courts in 2021 and the Nickaburr Creek color coat is unknown in age Page 4.12 - Reserve Component Detail Condition: The north color coat is in good condition and the Nickaburr Creek coat is in poor condition North courts overview North courts overview Nickaburr tennis court overview Court trip hazards and cracks Useful Life: Four - to six -years Priority/Criticality: Not recommended to defer Expenditure Detail Notes: Expenditure timing and costs are depicted in the Reserve Expenditures table in Section 3.

Sport Courts , Fence s Line Item s: 4.840 and 4.841 Quantity: Approximately 200 linear feet at the Nickaburr Creek courts and 540 linear feet at the north courts History: Original Page 4.13 - Reserve Component Detail Condition: Fair overall with warped webbing evident.

Chain link fence Chain link fence Useful Life: Up to 25 years Priority/Criticality: Per Board discretion Expenditure Detail Notes: Expenditure timing and costs are depicted in the Reserve Expenditures table in Section 3.

Sport Court s, Surfaces Line Item: 4.860 and 4.861 Quantity: 12,000 square feet of concrete at the Nickaburr Creek courts and 18.000 square feet of concrete at the north courts History: Original Condition: Fair overall . We were unable to inspect the surface at the north court due to

e at the Nickaburr Creek courts and 18.000 square feet of concrete at the north courts History: Original Condition: Fair overall . We were unable to inspect the surface at the north court due to the recent color coat. We note significant cracks and trip hazards at the Nickaburr Creek courts.

Useful Life: 40- to 50 -years Preventative Maintenance Notes: We note the follo wing select recommended preventative maintenance activities to maximize the remaining useful life: • Annually: o Inspect and repair large cracks, trip hazards and possibly safety hazards o Verify gate and fencing is secure o Verify lighting is working properly if applicable o Inspect and repair standards and windscreens as needed Page 4.14 - Reserve Component Detail Priority/Criticality: Defer only upon opinion of independent professional or engineer Expenditure Detail Notes: Expenditure timing and costs are depicted in the Reserve Expenditures table in Section 3.

Truck, Toyota Tacoma Line Item: 4.995 Quantity: One each History: 2021 Condition: Reported satisfactory Truck Useful Life: 20- to 25 -years Priority/Criticality: Per Board discretion Expenditure Detail Notes: Expenditure timing and costs are depicted in the Reserve Expenditures table in Section 3.

Building Elements HVAC Equipment, Split System Line Item: 5.070 Quantity: One split system at the office building History: Replaced in 2007 Page 4.15 - Reserve Component Detail Condition: Reported satisfactory without operational deficiencies Condensing unit Useful Life: 15- to 20 -years Component Detail Notes: A split system air conditioner consists of an outside condensing unit, an interior evaporator coil, refrigerant lines and an interior air -handling

Life: 15- to 20 -years Component Detail Notes: A split system air conditioner consists of an outside condensing unit, an interior evaporator coil, refrigerant lines and an interior air -handling unit. The condensing unit has a cooling capacity of three- tons.

Preventative Maintenance Notes: We recomm end the Association obtain and adhere to the manufacturer’s recommended maintenance plan. We also recommend the Association maintain a maintenance contract with a qualified professional. The required preventative maintenance m ay vary in frequency and scope based on the unit’s age, operational condition, or changes in technology. We note the following select recommended preventative maintenance activities to maximize the remaining useful life: • Semi- annually: o Lubricate motors and bearings o Change or clean air filters as needed o Inspect condenser base and piping insulation o Inspect base pan, coil, cabinet and clear obstructions as necessary • Annually: o Clean coils and drain pans, clean fan assembly, check refrigerant charge, inspect f an drive system and controls o Inspect and clean accessible ductwork as needed o Clean debris from inside cabinet, inspect condenser compressor and associated tubing for damage Priority/Criticality: Defer only upon opinion of independent professional or engineer Expenditure Detail Notes: Expenditure timing and costs are depicted in the Reserve Expenditures table in Section 3. The condensing unit may require replacement prior to replacement of the related inter ior forced air unit. For purposes of this Reserve Study, we assume coordination of replacement of the interior forced air unit, evaporator coil, refrigerant lines and exterior condensing unit.

Page 4.16 - Reserve Component Detail Light Fixtures, Pavilion

y, we assume coordination of replacement of the interior forced air unit, evaporator coil, refrigerant lines and exterior condensing unit.

Page 4.16 - Reserve Component Detail Light Fixtures, Pavilion Line Item: 5.085 Quantity: 14 each History: Original Condition: Reported satisfactory Pavilion light fixtures Useful Life: Up to 30 years Priority/Criticality: Per Board discretion Expenditure Detail Notes: Expenditure timing and costs are depicted in the Reserve Expenditures table in Section 3.

Office Building, Interior Renovations Line Items: 5.500 and 5.510 Quantity: The office building interior components include: • Tile and vinyl floor coverings • Paint finishes on the walls and ceilings • Plumbing fixtures • Light fixtures • Furnishings • Kitchen cabinets, countertops , and appliances History: Renovated in 2010 Condition: Good to fair overall condition Page 4.17 - Reserve Component Detail Office overview Rest room Meeting room overview Useful Life: Complete renovation every 25 years and partial renovation 10- to 15- years Priority/Criticality: Per Board discretion Expenditure Detail Notes: Expenditure timing and costs are depicted in the Reserve Expenditures table in Section 3. The complete renovation should include replacement of all components listed above and the partial renovations should include t he following: • Paint finish applications • Replacement of up to fifty percent (50%) of the furni shings Rest Rooms , Pool Houses Line Item: 5.580 Quantity: The rest room components include: • Tile floor coverings • Paint finishes at the ceilings Page 4.18 - Reserve Component Detail • Light fix tures • Plumbing fixtures History: Plumbing upgraded in 2019 and repaired in 2021. Water fountains replaced in 2020.

Paint finishes at the ceilings Page 4.18 - Reserve Component Detail • Light fix tures • Plumbing fixtures History: Plumbing upgraded in 2019 and repaired in 2021. Water fountains replaced in 2020.

Condition: The plumbing fixtures are in good condition and the finishes are in fair condition Rest room overview Rest room overview Useful Life: Renovation up to every 20 years Priority/Criticality: Per Board discretion Expenditure Detail Notes: Expenditure timing and costs are depicted in the Reserve Expenditures table in Section 3.

Roof s, Asphalt Shingles Line Item s: 5.600 through 5.602 Quantity: Approximately 33 squares 1 at the office building, 8 squares at the north pool house and 16 squares at the remaining pool houses History: The office roof was replaced in 2016, the north pool house roof was replaced in 2022 and the remaining roofs are unknown in age Condition: Good to fair overall with no significant deterioration evident from our visual inspection from the ground. Management and the Board does not report a history of leaks.

1 We quantify the roof area in squares where one square is equal to 100 square feet of surface area.

Page 4.19 - Reserve Component Detail Office roof overview Nickaburr pool house roof Oak Bluff pool house roof North pool house roof Useful Life: 15- to 20 -years Component Detail Notes: Contractors use one of two methods for replacement of sloped roofs, either an overlayment or a tear -off. Overlayment is the application of new shingles over an existing roof. However, there are many disadvantages to overlayment including hidden defects of the underlying roof system, absorption of more heat resulting in accelerated deterioration of the new and old shingles, and an uneven visual

ny disadvantages to overlayment including hidden defects of the underlying roof system, absorption of more heat resulting in accelerated deterioration of the new and old shingles, and an uneven visual appearance. Therefore, we recommend only the tear -off method of replacement. The tear-off method of replacement includes removal of the existing shingles, flashings if required an d underlayments.

Preventative Maintenance Notes: We recommend the Association maintain a service and inspection contract with a qualified professional and record all documentation of repairs conducted. We note the following select recommended preventative maintenance activities to maximize the remaining useful life: • Annually: o Record any areas of water infiltration, flashing deterioration, damage or loose shingles Page 4.20 - Reserve Component Detail o Implement repairs as needed if issues are reoccurring o Trim tree branches that are near or in contact with roof • As-needed: o Ensure proper ventilation and verify vents are clear of debris and not blocked from attic insulation Priority/Criticality: Defer only upon opinion of independent professional or engineer Expenditure Detail Notes: Expenditure timing and costs are depicted in the Reserve Expenditures table in Section 3.

Roof Assembly, Metal, Pavilion Line Item: 5.605 Quantity: Approximately 170 squares History: Original Condition: Good to fair overall condition Pavilion overview Rust at gutter interface Useful Life: Up to and sometimes beyond 40 years Priority/Criticality: Defer only upon opinion of independent professional or engineer Expenditure Detail Notes: Expenditure timing and costs are depicted in the Reserve Expenditures table in Section 3. Our cost includes replacement of the gutters and

pendent professional or engineer Expenditure Detail Notes: Expenditure timing and costs are depicted in the Reserve Expenditures table in Section 3. Our cost includes replacement of the gutters and downspouts. We recommend the Association budget for interim partial replacement of the gutters and downspouts through the operating budget.

Page 4.21 - Reserve Component Detail Security System Line Item: 5.720 Quantity: Westwood utilizes the following security system components : • Cameras (11) • Recorder (1) History: Replaced in 2022 Condition: Reported satisfactory without operational deficiencies Useful Life: 10- to 15 -years Prev entative Maintenance Notes: We recommend the Association obtain and adhere to the manufacturer’s recommended maintenance plan. The required preventative maintenance may vary in frequency and scope based on the unit’s age, operational condition, or changes in technology. We note the following select recommended preventative maintenance activities to maximize the remaining useful life: • Monthly: o Check cameras for proper focus, fields of view are unobstructed and camera and lenses are clean and dust -free o Check recording equipment for proper operation o Verify monitors are free from distortion with correct brightness and contrast • Annually: o Check exposed wiring and cables for wear, proper connections and signal transmission o Check power connections, and if applicable, functionality of battery power supply systems Priority/Criticality: Per Board discretion Expenditure Detail Notes: Expenditure timing and costs are depicted in the Reserve Expenditures table in Section 3. The Association should anticipate replacement of all of the security system components per event.

Walls, Siding, Fiber Cement

and costs are depicted in the Reserve Expenditures table in Section 3. The Association should anticipate replacement of all of the security system components per event.

Walls, Siding, Fiber Cement Line Item s: 5.670 and 5.761 Quantity: Approximately 3,990 square feet at the office and pool houses History: Unknown, various ages Condition: Good to fair over with periodic siding damage evident Page 4.22 - Reserve Component Detail Fiber cement siding overview Siding damage Fiber cement siding overview Useful Life: Up to 50 years with paint applications every 8- to 10 -years Priority/Criticality: Defer only upon opinion of independent professional or engineer Expenditure Detail Notes: Expenditure timing and costs are depicted in the Reserve Expenditures table in Section 3.

Windows and Doors , Office Building Line Item: 5.800 Quantity: Approximately 270 square feet History: Original Condition: Good to fair condition Page 4.23 - Reserve Component Detail Windows Garage doors Useful Life: Up to 35 years Priority/Criticality: Not recommended to defer Expenditure Detail Notes: Expenditure timing and costs are depicted in the Reserve Expenditures table in Section 3.

Pool Elements Concrete Decks Line Item: 6.200 Quantity: 9,740 square feet History: Original Condition: Fair overall with frequent cracks, settlement and trip hazards evident.

Page 4.24 - Reserve Component Detail Concrete pool deck overview Concrete cracks Concrete pool deck overview Concrete pool deck overview Concrete cracks Useful Life: The useful life of a concrete pool deck is up to 60 years or more with timely repairs. We recommend the Association conduct inspections, partial replacements and repairs to the decks every 8- to 12 -years .

l life of a concrete pool deck is up to 60 years or more with timely repairs. We recommend the Association conduct inspections, partial replacements and repairs to the decks every 8- to 12 -years .

Page 4.25 - Reserve Component Detail Preventative Maintenance Notes: We note the following select recommended preventative maintenance activities to maximize the remaining useful life: • Semi- annually: o Inspect and repair large cracks, trip hazards, and possible safety hazards o Inspect and repair pool coping for cracks, settlement, heaves or sealant deterioration o Repair concrete spalling o Schedule periodic pressure cleanings as needed Priority/Criticality: Defer only upon opinion of independent professional or engineer Expenditure Detail Notes: Expenditure timing and costs are depicted in the Reserve Expenditures table in Section 3. We recommend the Association budget for the following per event: • Selective cut out and replacements of up to ten percent ( 10%) of concrete • Crack repairs as needed • Mortar joint repairs • Caulk replacement Fence s, Steel Line Item s: 6.400 and 6.401 Quantity: 1,500 linear feet History: The age was unavailable at the time of our inspection.

Condition: Fair overall with frequent deterioration and rust evident.

Steel pool fence Steel pool fence Page 4.26 - Reserve Component Detail Fence picket damage Steel pool fence Fence finish deterioration Steel pool fence Useful Life: Six- to eight -years for paint finishes and up to 35 years for replacement Preventative Maintenance Notes: We note the following select recommended preventative maintenance activities to maximize the remaining useful life: • Annually: o Inspect and repair loose fasteners or sections, and damage

ce Notes: We note the following select recommended preventative maintenance activities to maximize the remaining useful life: • Annually: o Inspect and repair loose fasteners or sections, and damage o Repair leaning sections and clear vegetation from fence areas which could cause damage Priority/Criticality: Not recommended to defer Expenditure Detail Notes: Expenditure timing and costs are depicted in the Reserve Expenditures table in Section 3. We depict replacement in a phased manner.

Page 4.27 - Reserve Component Detail Mechanical Equipment Line Item: 6.600 Quantity: The mechanical equipment includes the following: • Controls • Electrical panels • Interconnected pipe, fittings and valves • Pumps and filters Histo ry: Original Condition: Reported satisfactory without operational deficiencies. We note .

Pool filters Pool pumps Pool mechanical equipment Useful Life: Up to 15 years Page 4.28 - Reserve Component Detail Preventative Maintenance Notes: We recommend the Association maintain a maintenance contract with a qualified professional and follow the manufacturer’s specific recommended maintenance and local, state and/or federal inspection guidelines.

Priority/Criticality: Defer only upon opinion of independent professional or engineer Expenditure Detail Notes: Expenditure timing and costs are depicted in the Reserve Expenditures table in Section 3. Failu re of the pool mechanical equipment as a single event is unlikely. Therefore, we include replacement of up to thirty -three percent (33%) of the equipment per event. We consider interim replacement of motors and minor repairs as normal maintenance.

Pool Finishes, Plaster and Tile Line Items: 6.800 through 6.805 Quantity :

rcent (33%) of the equipment per event. We consider interim replacement of motors and minor repairs as normal maintenance.

Pool Finishes, Plaster and Tile Line Items: 6.800 through 6.805 Quantity : • Nickaburr Creek - 1,540 square feet of plaster and 180 linear feet of tile • North – 2,510 square feet of plaster and 240 linear feet of tile • Oak Bluff – 1,570 square feet of plaster and 180 linear feet of tile History: The pool finishes are unknown in age. The Nickaburr Creek structure will be removed in 2022. We include subsequent replacement of the pool at request of the Board.

Condition: Fair to poor overall with frequent cracks, discoloration and peeling evident.

Plaster cracks Plaster cracks Page 4.29 - Reserve Component Detail Plaster chips Pool overview Useful Life: 8- to 12 -years for the plaster and 15- to 25- years for the tile Preventative Maintenance Notes: We note the following select recommended preventative maintenance activities to maximize the remaining useful life: • Semi- annually: o Inspect and patch areas of significant plaster delamination, coping damage and structure cracks o Inspect main drain connection and anti -entrapment covers, pressure test circulation piping and valves o Test handrails and safety features for proper operation Priority/Criticality : Defer only upon opinion of independent professional or engineer Expenditure Detail Notes: Expenditure timing and costs are depicted in the Reserve Expenditures table in Section 3. We recommend the Association budget for full tile replacement every other plaster replacement event. Removal and replacement of the finish provides the opportunity to inspect the pool structures and to allow for partial repairs

budget for full tile replacement every other plaster replacement event. Removal and replacement of the finish provides the opportunity to inspect the pool structures and to allow for partial repairs of the underlying concrete surfaces as needed. To maintain the integrity of the pool structures , we recommend the Association budget for the following: • Removal and replacement of the plaster finishes • Partial replacements of the scuppers and coping as needed • Replacement of tiles as needed • Replacement of joint sealants as needed • Concrete structure repairs as needed Structures and Decks Line Item: 6.900 through 6.903 Quantity : • Nickaburr Creek - 1,540 square feet Page 4.30 - Reserve Component Detail • North – 2,510 square feet • Oak Bluff – 1,570 square feet History: As previously stated, the Association plans to remove the Nickaburr Creek pool structure and deck in 2022. We include subsequent replacement in 2025.

Conditions: The pool structures vary in condition. This finish makes it difficult to thoroughly ins pect the concrete structures during a noninvasive visual inspection.

Nickaburr Creek pool Excessive cracks at the Nickaburr Creek pool Useful Life: Up to 60 years Component Detail Notes: The need to replace a pool structure depends on the condition of the concrete structure, the condition of the embedded or concealed water circulation piping, possible long term uneven settlement of the structure, and the increasing cost of repair and maint enance. Deterioration of any one of these component

embedded or concealed water circulation piping, possible long term uneven settlement of the structure, and the increasing cost of repair and maint enance. Deterioration of any one of these component systems could result in complete replacement of the pool. For example, deferral of a deteriorated piping system could result in settlement and cracks in the pool structure. This mode of failure is more common as the system ages and deterioration of the piping system goes undetected. For reserve budgeting purposes, we recommend The Association plan to replace the following components: • Concrete decks • Pool structure • Subsurface piping Priority/Criticality: Defer only upon opinion of independent professional or engineer Expenditure Detail Notes: Expenditure timing and costs are depicted in the Reserve Expenditures table in Section 3. Our cost is partially based on historical bid provided by the Association.

Page 4.31 - Reserve Component Detail Reserve Study Update An ongoing review by the Board and an Update of this Reserve Study are necessary to ensure an equitable funding plan since a Reserve Study is a snapshot in time. Many variables change after the study is conducted that may result in significant overfunding or underfunding the reserve account. Variables that may affect the Reserve Funding Plan include, but are not limited to: • Deferred or accelerated capital projects based on Board discretion • Changes in the interest rates on reserve investm ents • Changes in the local construction inflation rate • Additions and deletions to the Reserve Component Inventory • The presence or absence of maintenance programs • Unusually mild or extreme weather conditions • Technological advancements

nflation rate • Additions and deletions to the Reserve Component Inventory • The presence or absence of maintenance programs • Unusually mild or extreme weather conditions • Technological advancements Periodic updates incorporate these variable changes since the last Reserve Study or Update. We recommend the Board budget for an Update to this Reserve Study in twoto thr ee-years. Budgeting for an Update demonstrates the Board's objective to continue fulfilling its fiduciary responsibility to maintain the commonly owned property and to fund reserves appropriately.

Page 5.1 - Methodology 5. METHODOLOGY Reserves for replacement are the amounts of money required for future expenditures to repair or replace Reserve Components that wear out before the entire facility or project wears out. Reserving funds for future repair or replacement of the Reserve Components is also one of the most reliable ways of protecting the value of the property’s infrastructure and marketability.

Westwood can fund capital repairs and replacements in any combination of the following: 1. Increases in the operating budget during years when the shortages occur 2. Loans using borrowed capital for major replacement projects 3. Level annual reserve assessments annually adjusted upward for inflation to increase reserves to fund the expected major future expenditures 4. Special assessments We do not advocate special assessments or loans unless near term circumstances dictate otherwise. Although loans provide a gradual method of funding a replacement, the costs are higher than if the Asso ciation were to accumulate reserves ahead of the

ss near term circumstances dictate otherwise. Although loans provide a gradual method of funding a replacement, the costs are higher than if the Asso ciation were to accumulate reserves ahead of the actual replacement. Interest earnings on reserves also accumulate in this process of saving or reserving for future replacements, thereby defraying the amount of gradual reserve collections. We advocate the third method of Level Monthly Reserve Assessments with relatively minor annual adjustments. The method ensures that Homeowners pay their "fair share" of the weathering and aging of the commonly owned property each year. Level reserve assessments preserve the property and enhance the resale value of the homes.

This Reserve Study is in compliance with and exceeds the National standards 1 set forth by the Association of Professional Reserve Analysts (APRA) fulfilling the requirements of a “ Level I Full Reserve Study .” These standards require a Reserve Component to have a “predictable remaining Useful Life.” Estimating Remaining Useful Lives and Reserve Expenditures beyond 30 years is often indeterminate. Long- Lived Property Elements are necessarily excluded from this analysis. We considered the following factors in our analysis: • The Cash Flow Method to compute, project and illustrate the 30- year Reserve Funding Plan • Local 2 costs of material, e quipment and labor • Current and future costs of replacement for the Reserve Components • Costs of demolition as part of the cost of replacement • Local economic conditions and a historical perspective to arrive at our estimate of long- term future inflation for construction costs in Magnolia, Texas at an annual inflation rate 3. Isolated or regional markets of greater

and a historical perspective to arrive at our estimate of long- term future inflation for construction costs in Magnolia, Texas at an annual inflation rate 3. Isolated or regional markets of greater 1 Identified in the APRA “Standards - Terms and Definitions” and the CAI "Terms and Definitions ".

2 See Credentials for additional information on our use of published sources of cost data.

3 Derived from Marshall & Swift, historical costs and the Bureau of Labor Statistics .

Page 5.2 - Methodology construction (development) activity may experience slightly greater rates of inflation for both construction materials and labor.

• The past and current maintenance practices of Westwood and their effects on remaining useful lives • Financial information provided by the Association pertaining to the cash status of the reserve fund and budgeted reserve contribution • The anticipated effects of apprec iation of the reserves over time in accord with a return or yield on investment of your cash equivalent assets . (We did not consider the costs, if any, of Federal and State Taxes on income derived from interest and/or dividend income).

• The Funding Plan excludes necessary operating budget expenditures. It is our understanding that future operating budgets will provide for the ongoing normal maintenance of Reserve Components.

Updates to this Reserve Study w ill continue to monitor historical facts and trends concerning the external market conditions.

Page 6.1 - Credentials 6. CREDENTIALS HISTORY AND DEPTH OF SERVICE Founded in 1991, Reserve Advisors is the leading provider of reserve studies, insurance appraisals, developer turnover transition studies, expert witness services, and other engineering

PTH OF SERVICE Founded in 1991, Reserve Advisors is the leading provider of reserve studies, insurance appraisals, developer turnover transition studies, expert witness services, and other engineering consulting ser vices. Clients include community associations, resort properties, hotels, clubs, non profit organizations, apartment building owners, religious and educational institutions, and office/commercial building owners in 48 states, Canada and throughout the wor ld.

The architectural engineering consulting firm was formed to take a leadership role in helping fiduciaries, boards, and property managers manage their property like a business with a long-range master plan known as a Reserve Study.

Reserve Advisors employs the largest staff of Reserve Specialists with bachelor ’s degrees in engineering dedicated to Reserve Study services. Our founders are also founders of Community Associations Institute's (CAI) Reserve Committee that developed national standards for reserve study providers. One of our founders is a Past President of the Association of Professional Reserve Analysts (APRA). Our vast experience with a variety of building types and ages, on-site examination and historical analyses are keys to determining accurate remaining useful life estimates of building components.

No Conflict of Interest - As consulting specialists, our independent opinion eliminates any real or perceived conflict of interest because we do not conduct or manage capital projects.

TOTAL STAFF INVOLVEMENT Several staff members participate in each assignment. The responsible advisor involves the staff through a Team Review, exclusive to Reserve Advisors , and by utilizing the experience of other staff members, each of whom has served hundreds of clients. We conduct Team

e advisor involves the staff through a Team Review, exclusive to Reserve Advisors , and by utilizing the experience of other staff members, each of whom has served hundreds of clients. We conduct Team Reviews, an internal quality assurance review of each assignment, including: the inspection; building component costing; lifing; and technical report phases of the assignment. Due to our extensive experience with building components, we do not have a need to utilize subcontractors.

OUR GOAL To help our clients fulfill their fiduciary responsibilities to maintain property in good condition.

VAST EXPERIENCE WITH A VARIETY OF BUILDINGS Reserve Advisors has conducted reserve studies for a multitude of different c ommunities and building types . We've analyzed thousands of buildings, from as small as a 3,500-square foot day care center to a 2,600,000-square foot 98-story highrise. We also routinely inspect buildings with various types of mechanical systems such as simple electric heat, to complex systems with air handlers, chillers, boilers, elevators, and life safety and security systems.

We're familiar with all types of building exteriors as well. Our well -versed staff regularly identifies optimal repair and replacement solutions for such building exterior surfaces such as adobe, brick, stone, concrete, stucco, EIFS, wood products, stained glass and aluminum siding, and window wall systems.

OLD TO NEW Reserve Advisors ’ experience includes ornate and vintage buildings as well as modern structures. Our specialists are no strangers to older buildings. We're accustomed to addressing the unique challenges posed by buildings that date to the 1800's. We recognize and consider the

s modern structures. Our specialists are no strangers to older buildings. We're accustomed to addressing the unique challenges posed by buildings that date to the 1800's. We recognize and consider the methods of construction employed into our analysis. We recommend appropriate replacement programs that apply cost effective technologies while maintaining a building's character and appeal.

Page 6.2 - Credentials CASEY M. LEWIS, RS Responsible Advisor CURRENT CLIENT SERVICES Casey M. Lewis, an engineer, is an advisor for Reserve Advisors. Mr. Lewis is responsible for the inspection and analysis of the condition of clients' property, and recommending engineering solutions to prolong the lives of the components.

He also forecasts capital expenditures for the repair and/or replacement of the property components and prepares technical reports on assignments. He is responsible for conducting Life Cycle Cost Analysis and Capital Replacement Forecas t services and the preparation of Reserve Study Reports for condominiums, townhomes and homeowners associations.

The following is a partial list of clients served by Mr. Lewis demonstrating his breadth of experiential knowledge of community associations i n construction and related buildings systems.

Bleu Ciel Condominium Association , Inc. A luxury highrise in Dallas, Texas, Bleu Ceil Condominium comprises a uniquely shaped tower with 136 units. Residents of the Association have access to a swimming pool, plaza deck and multiple interior common areas including a spa, fitness center, wine tasting and storage rooms. The site also includes a garage located at the lower levels of the tower.

Waterside Estates Homeowners Association, Inc. This single fami ly home community contains over

e tasting and storage rooms. The site also includes a garage located at the lower levels of the tower.

Waterside Estates Homeowners Association, Inc. This single fami ly home community contains over 1,400 residential homes and is located in Richmond, Texas. Features of this community include swimming pools, water slides, multiple playgrounds, walking trails, panelized masonry perimeter walls, wood fences, and two tennis courts.

Silver Oaks Condominium Association, Inc. A townhome community in Cedar Park, Texas containing 82 units in 22 buildings. The townhomes consist of stone masonry, stucco siding and asphalt shingle roofs. The features of this community include priv ate asphalt streets, masonry retaining walls, concrete flatwork, wood balconies and metal fences.

Hide -A-Way Lake Club A Homeowners Association located in Hideaway, Texas, containing 1,704 single family homes. Amenities of this community include a 27 hole golf course, multiple lakes, ponds, swimming pools and amenity buildings including a clubhouse, marina and event venue.

Wintergreen Trail Townhomes A townhome style community of 51 units in 12 buildings located in The Woodlands, Texas. The townhomes comprise of fiber cement siding, wood trim and asphalt roofs. Features of the property include concrete flatwork and wood fences surrounding the property.

Camp John Marc A special needs summer camp in Meridian, Texas that comprises over 100 acres that includes 22 cabins, numerous multipurpose use structures, extensive site infrastructure, maintenance buildings and equipme nt, animal storage structures and a packaged sewer treatment facility.

PRIOR RELEVANT EXPERIENCE

numerous multipurpose use structures, extensive site infrastructure, maintenance buildings and equipme nt, animal storage structures and a packaged sewer treatment facility.

PRIOR RELEVANT EXPERIENCE Before joining Reserve Advisors, Mr. Lewis completed his bachelor’s degree in industrial engineering at Texas Tech University. During his summers, he worked in the homebuilding industry where he oversaw and managed the construction of single family homes in the Houston, Texas area. Following the completion of his studies, he worked as an industrial engineer in the space launch industry.

EDUCATION Texas Tech Uni versity - B.S. Industrial Engineering PROFESSIONAL AFFILIATIONS Reserve Specialist (RS) - CAI ZOfg6zo1VuiOvBgA2xIK Page 6.3 - Credentials ALAN M. EBERT, P.E., PRA, RS Director of Quality Assurance CURRENT CLIENT SERVICES Alan M. Ebert, a Professional Engineer, is the Director of Quality Assurance for Reserve Advisors. Mr. Ebert is responsible for the management, review and quality assurance of reserve studies. In this role, he assumes the responsibility of stringent report review analysis to assure report accuracy and the best solution for Reserve Advisors’ clients.

Mr. Ebert has been involved with thousands of Reserve Study assignments. The following is a partial list of clients served by Alan Ebert demonstrating his breadth of experiential knowledge of community associations in construction and related buildings systems.

Brownsville Winter Haven Located in Brownsville, Texas, this unique homeowners association contains 525 units. The Association maintains three pools and pool houses, a community and management office, landscape and maintenance equipment, and nine irrigation canals with associated infrastructure.

ns 525 units. The Association maintains three pools and pool houses, a community and management office, landscape and maintenance equipment, and nine irrigation canals with associated infrastructure.

Rosemont Condominiums This unique condominium is located in Alexandria, Virginia and dates to the 1940's. The two mid -rise buildings utilize decorativ e stone and brick masonry. The development features common interior spaces, multi -level wood balconies and common asphalt parking areas.

Stillwater Homeowners Association Located in Naperville, Illinois, Stillwater Homeowners Association maintains four t ennis courts, an Olympic sized pool and an upscale ballroom with commercial -grade kitchen. The community also maintains three storm water retention ponds and a detention basin.

Birchfield Community Services Association This extensive Association comprise s seven separate parcels which include 505 townhome and single family homes. This Community Services Association is located in Mt. Laurel, New Jersey. Three lakes, a pool, a clubhouse and management office, wood carports, aluminum siding, and asphalt shi ngle roofs are a few of the elements maintained by the Association.

Oakridge Manor Condominium Association Located in Londonderry, New Hampshire, this Association includes 104 units at 13 buildings. In addition to extensive roads and parking areas, the Association maintains a large septic system and significant concrete retaining walls.

Memorial Lofts Homeowners Association This upscale high rise is located in Houston, Texas. The 20 luxury units include large balconies and decorative interior hallways. The 10- story building utilizes a painted stucco facade and TPO roof, while an on- grade garage serves residents and guests.

PRIOR RELEVANT EXPERIENCE

rge balconies and decorative interior hallways. The 10- story building utilizes a painted stucco facade and TPO roof, while an on- grade garage serves residents and guests.

PRIOR RELEVANT EXPERIENCE Mr. Ebert earned his Bachelor of Science degree in Geological Engineering from the University of Wiscons in-Madison. His relevant course work includes foundations, retaining walls, and slope stability.

Before joining Reserve Advisors , Mr. Ebert was an oilfield engineer and tested and evaluated hundreds of oil and gas wells throughout North America.

EDUCATION University of Wisconsin- Madison - B.S. Geological Engineering PROFESSIONAL AFFILIATIONS/DESIGNATIONS Professional Engineering License – Wisconsin , North Carolina, Illinois , Colorado Reserve Specialist (RS) - Community Associations Institute Professional Reserve Analyst (PRA) - Association of Professional Reserve Analysts Page 6.4 - Credentials RESOURCES Reserve Advisors utilizes numerous resources of national and local data to conduct its Professional Services. A concise list of several of these resources follows: Association of Construction Inspectors , (ACI) the largest professional organization for those involved in construction inspection and construction project management. ACI is also the leading association providing standards, guidelines, regulations, education, training, and professional recognition in a field that has quickly become important procedure for both residential and commercial construction, found on the web at www.iami.org .

American Society of Heating, Refrigerating and Air- Conditioning Engineers, Inc ., (ASHRAE) the American Society of Heating, Refrigerating and Air -Conditioning Engineers, Inc., devoted to the arts and

merican Society of Heating, Refrigerating and Air- Conditioning Engineers, Inc ., (ASHRAE) the American Society of Heating, Refrigerating and Air -Conditioning Engineers, Inc., devoted to the arts and sciences of heating, ventilation, air conditioning and refrigeration; recogni zed as the foremost, authoritative, timely and responsive source of technical and educational information, standards and guidelines, found on the web at www.ashrae.org . Reserve Advisors actively participates in its lo cal chapter and holds individual memberships.

Community Associations Institute, (CAI) America's leading advocate for responsible communities noted as the only national organization dedicated to fostering vibrant, responsive, competent community associatio ns. Their mission is to assist community associations in promoting harmony, community, and responsible leadership.

Marshall & Swift / Boeckh , (MS/B) the worldwide provider of building cost data, co- sourcing solutions, and estimating technology for the property and casualty insurance industry found on the web at www.marshallswift.com .

R.S. Means CostWorks , North America's leading supplier of construction cost information. As a member of the Construction Market Data Group, Means provides accurate and up- to-date cost information that helps owners , developers, architects, engineers, contractors and others to carefully and precisely project and control the cost of both new building construction and renovation projects found on the web at www.rsmeans.com .

Reserve Advisors’ library of numerous periodicals relating to reserve studies, condition analyses, chapter community associations, and historical costs from thousands of capital repair and replacement projects,

isors’ library of numerous periodicals relating to reserve studies, condition analyses, chapter community associations, and historical costs from thousands of capital repair and replacement projects, and product literature from manufacturers of building products and building systems.

Page 7.1 - Definitions 7. DEFINITIONS Definitions are derived from the standards set forth by the Community Associations Institute (CAI) representing America's 305,000 condominium and homeowners associations and cooperatives, and the Association of Profession al Reserve Analysts, setting the standards of care for reserve study practitioners.

Cash Flow Method - A method of calculating Reserve Contributions where contributions to the reserve fund are designed to offset the variable annual expenditures from the r eserve fund. Different Reserve Funding Plans are tested against the anticipated schedule of reserve expenses until the desired funding goal is achieved.

Component Method - A method of developing a Reserve Funding Plan with the total contribution is based on the sum of the contributions for individual components.

Current Cost of Replacement - That amount required today derived from the quantity of a Reserve Component and its unit cost to replace or repair a Reserve Component using the most current technology and construction materials, duplicating the productive utility of the existing property at current local market prices for materials , labor and manufactured equipment, contractors' overhead, profit and fees, but without provisions for building permits, overtime, bonuses for labor or premiums for material and equipment. We include removal and disposal costs where applicable.

rs' overhead, profit and fees, but without provisions for building permits, overtime, bonuses for labor or premiums for material and equipment. We include removal and disposal costs where applicable.

Fully Funded Balance - The Reserve balance that is in direct proportion to the fraction of life "used up" of the current Repair or R eplacement cost similar to Total Accrued Depreciation.

Funding Goal (Threshold) - The stated purpose of this Reserve Study is to determine the adequate, not excessive, minimal threshold reserve balances.

Future Cost of Replacement - Reserve Expenditure derived from the inflated current cost of replacement or current cost of replacement as defined above, with consideration given to the effects of inflation on local market rates for materials, labor and equipment.

Long- Lived Property Component - Property comp onent of Westwood responsibility not likely to require capital repair or replacement during the next 30 years with an unpredictable remaining Useful Life beyond the next 30 years.

Percent Funded - The ratio, at a particular point of time (typically the beginning of the Fiscal Year), of the actual (or projected) Reserve Balance to the Fully Funded Balance, expressed as a percentage.

Remaining Useful Life - The estimated remaining functional or useful time in years of a Reserve Component based on its age, condition and maintenance.

Reserve Component - Property elements with: 1) Westwood responsibility; 2) limited Useful Life expectancies; 3) predictable Remaining Useful Life expectancies; and 4) a replacement cost above a minimum threshold.

Reserve Component Inventory - Line Items in Reserve Expenditures that identify a Reserve Component .

ctable Remaining Useful Life expectancies; and 4) a replacement cost above a minimum threshold.

Reserve Component Inventory - Line Items in Reserve Expenditures that identify a Reserve Component .

Reserve Contribution - An amount of money set aside or Reserve Assessment contributed to a Reserve Fund for future Reserve Expenditures to repair or replace Reserve Components .

Reserve Expenditure - Future Cost of Replacement of a Reserve Component.

Reserve Fund Status - The accumulated amount of reserves in dollars at a given point in time, i.e., at year end.

Reserve Funding Plan - The portion of the Reserve Study identifying the Cash Flow Analysis and containing the recommended Reserve Contributions and projected annual expenditures, interest earned and reserve balances.

Reserve Study - A budget planning tool that identifies the current status of the reserve fund and a stable and equitable Funding Plan to offset the anticipated future major common area expenditures.

Useful Life - The anticipated total time in years that a Reserve Component is expected to serve its intended function in its present application or installation.

Page 8.1 – Professional Service Conditions 8. PROFESSIONAL SERVICE CONDITIONS Our Services - Reserve Advisors, LLC (RA) performs its services as an independent contractor in accordance with our professional practice standards and its compensation is not contingent upon our conclusions. The purpose of our reserve study is to provide a budget planning tool that identifies the current status of the reserve fund, and an opinion recommending an annual funding plan to create reserves for anticipated future replacement expenditures of the property.

ning tool that identifies the current status of the reserve fund, and an opinion recommending an annual funding plan to create reserves for anticipated future replacement expenditures of the property.

Our inspection and analysis of the subject property is limited to visual observations , is noninvasive and is not meant to nor does it include investigation into statutory, regulatory or code compliance. RA inspects sloped roofs from the ground and inspects flat roofs where safe access (stairs or ladder permanently attached to the structure) is available. The report is based upon a “snapshot in time” at the moment of inspection. RA may note visible physical defects in our report. The inspection is made by employees generally familiar with real estate and building construction but in the absence of invasive testing RA c annot opine on, nor is RA responsible for, the structural integrity of the property including its conformity to specific governmental code requirements for fire, building, earthquake, and occupancy, or any physical defects that were not readily apparent during the inspection.

RA is not responsible for condit ions that have changed between the time of inspection and the issuance of the report. RA does not investigate, nor assume any responsibility for any existence or impact of any hazardous materials, such as asbestos, urea- formaldehyde foam insulation, other chemicals, toxic wastes, environmental mold or other potentially hazardous materials or structural defects that are latent or hidden defects which may or may not be present on or within the property. RA does not make any soil analysis or geological study as part of its services; nor does RA investigate water , oil, gas, coal, or other subsurface mineral and use rights or such

within the property. RA does not make any soil analysis or geological study as part of its services; nor does RA investigate water , oil, gas, coal, or other subsurface mineral and use rights or such hidden conditions. RA assumes no responsibility for any such conditions. The Report contains opinions of estimated costs and remaining useful lives which are neither a guarantee of the ac tual costs of replacement nor a guarantee of remaining useful lives of any property element.

RA assumes, without independent verification, the accuracy of all data provided to it. You agree to indemnify and hold RA harmless against and from any and all los ses, claims, actions, damages, expenses or liabilities, including reasonable attorneys' fees, to which we may become subject in connection with this engagement, because of any false, misleading or incomplete information which we have relied upon supplied b y you or others under your direction, or which may result from any improper use or reliance on the Report by you or third parties under your control or direction. Your obligation for indemnification and reimbursement shall extend to any director, officer, employee, affiliate, or agent of RA. Liability of RA and its employees, affiliates, and agents for errors and omissions, if any, in this work is limited to the amount of its compensation for the work performed in this engagement.

Report - RA completes the services in accordance with the Proposal. The Report represents a valid opinion of RA’s findings and recommendations and is deemed complete. RA, however, considers any additional information made available to us within 6 months of issuing the Report if a timely request for a revised Report is

gs and recommendations and is deemed complete. RA, however, considers any additional information made available to us within 6 months of issuing the Report if a timely request for a revised Report is made. RA retains the right to withhold a revised Report if payment for services was not tendered in a timely manner. All information received by RA and all files, work papers or documents developed by RA during the course of the engagement shall remain the property of RA and may be used for whatever purpose it sees fit.

Your Obligations - You agree to provide us access to the subject property for an on- site visual inspection You agree to provide RA all available, historical and budgetary information, the governing documents, and other information that we request and deem necessary t o complete the Report. You agree to pay actual attorneys’ fees and any other costs incurred to collect on any unpaid balance for RA’s services.

Use of Our Report and Your Name - Use of this Report is limited to only the purpose stated herein.

You hereby acknowledge that any use or reliance by you on the Report for any unauthorized purpose is at your own risk and you shall hold RA harmless from any consequences of such use. Use by any unauthorized third party is unlawful. The Report in whole or in part is not and cannot be used as a design specification for design engineering purposes or as an appraisal. You may show our Report in its entirety to the following third parties: members of your organization, your accountant, attorney, financial institution and property manager who need to revie w the information contained herein. Without the written consent of RA, you shall not disclose the Report to

on, your accountant, attorney, financial institution and property manager who need to revie w the information contained herein. Without the written consent of RA, you shall not disclose the Report to any other third party. The Report contains intellectual property developed by RA and shall not be reproduced or distributed to any party that conducts reserve studies without the written consent of RA.

RA will include your name in our client lists. RA reserves the right to use property information to obtain estimates of replacement costs, useful life of property elements or otherwise as RA, in its sole discretion, deems appropriate.

Payment Terms, Due Dates and Interest Charges - Retainer payment is due upon authorization and prior to inspection. The balance is due net 30 days from the report shipment date. Any balance remaining 30 days after delivery of the Report shall accrue an interest charge of 1.5% per month. Any litigation necessary to collect an unpaid balance shall be venued in Milwaukee County Circuit Court for the State of Wisconsin.