Condominium Board members discuss approaches to sound reserve planning using reserve studies.
Conclusions of the Reserve Study
An Analysis of Present Funds (spreadsheet) is the bottom line of the reserve study. It measures how well the amount now in the reserve account will be able to capitalize the computed replacement of all common area components. Any shortfall/overage is immediately apparent. This leads into the Cash Flow Analysis (spreadsheet) detailing the predicted year-to-year replacements of component, the summations of annual costs and, most important – the annual contribution to reserve needed to capitalize asset replacements.
Financial Summary - Work Product
- An opinion of the reserve advisor of the present financial health of the condo reserve fund relative to commonly accepted standards.
- Advice on immediate steps to take
- A long-range schedule of annual contributions to reserve funds that will sustain the market value of the property.
- Advice for maintenance in order to minimize operating costs.
A kickoff meeting allows the client to convey the expectations for the reserve study. The meeting initiates the collaborative style of the reserve study. It will allow directing the project in such a way that the delivered work product will answer the client's needs as accurately as possible.
The Reserve Study as prepared by a Reserve Specialist ...
is a collaborative practice - one that combines the client's knowledge base with the reserve advisor's experience.
Using the data collected during the Condition Survey, the future service lives and costs of replacement of all components are computed. A Performance Based Analysis yields the most cost effective actions for both replacement and maintenance. A Commentary on the Condition Survey explains the survey findings for each individual component. Its Planning Strategy section presents the rationale for the recommendations of the reserve study.
Satellite imaging is used to precisely compute the surface areas of components yielding accurate cost computations. Its work product can be used to solicit bids from vendors.
A survey is made of the condition of all the commonly owned physical assets of the association. All past maintenance/replacement actions and their costs are analyzed . Every configuration of condominium buildings and sites is unique- each one has its own “DNA”. Analyzing how a condominium's capital assets have performed under known conditions and time periods allows the design of accurate, rational predictive models for their future performance.
Burns Associates - Engineers
PO Box 8268 Portsmouth, NH 03802