Board members and Managers often get themselves into a situation where they need to “sell” the value of regular Reserve contributions to their homeowners. It’s often a simple matter of fighting for budget dollars… Reserve contributions don’t keep the lights on, they don’t keep the Association properly insured, and they don’t pay the Management...
FL: Reserves crucial for disasters, renovations
Now that it’s been been just a short time since a near miss by a very large and angry looking Hurricane Irene, we thought we would talk for a moment about reserves. Reserves are money set aside by associations to deal with large renovation, repair and remediation projects – either from catastrophic events, such as storms, or from the natural aging…
IL: Ounce of prevention, coat of paint can save money
Summer closes and budget season opens. Now is the time when community association boards and finance committees start figuring out how much money they spent this year, which projects they’ll take on next year and how high the assessments will go.
Authors: Community Associations Network National
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Recognizing A Failed Reserve Funding Plan
We recently performed a reserve study for a 40-year old condominium association and discovered an all-too-familiar scenario we’ve seen in older projects. The situation? Huge deferred maintenance obligations that should have been resolved long ago, and an assessment structure that is higher than comparable projects.
How did this association get to this place? Forty years ago, reserve studies as we know them today were rare. This association never prepared a complete reserve study. Instead, they prepared an annual budget that included reserve calculations for the major reserve categories; roofing, painting, and paving. The association then created a fixed amount reserve funding plan that fit the “political” assessment climate within the association. This was done in the very early years of the association’s existence, but that was not based on any comprehensive analysis of the actual major repair and replacement needs of the association. There was considerable reluctance to raise the assessment because this “senior” community consisted primarily of fixed income retirees.