READING & UNDERSTANDING YOUR RESERVE STUDY

Your reserve study has numerous sections within it that are listed below with explanations as to what they are for and how to read them. Below are screenshots and comments on each section of the report. *(click picture to enlarge)*

Table of Contents

The Table of Contents lists each section of the reserve study report with the corresponding page number the section begins on. Utilize it to easily navigate throughout the reserve study.

Summary Page

The findings of the reserve study are summarized for the reader. This includes a percent funded calculation and an ideal reserve account balance (Fully Funded Balance). A five year summary of the main four funding models are summarized here.

Reserve Study Knowledge Base

This section of the study goes over the basics of the percent funded calculation, the fully funded model calculation and answers most of the questions we receive regarding topics like inflation rates, useful life estimates, cost estimates, etc. This section will give the reader a basic understanding of the reserve study process and methods.

Reserve Analyst Comments

This page list the components which have been excluded from the component list due to a variety of reasons such as, a component being a long life component, due to the component being the owners responsibility, due to the component expense being treated is a operational expense and due to a component that has been or will be decommissioned.

The Component List

The Component List shows the funded (and unfunded when applicable) components which are the Association's responsibility. The components are listed alphabetically (within their respective groups when applicable) and have their projected replacement years, useful life, remaining useful life, unit cost and current total cost.

Current Cost by Category

This chart illustrates the current cost breakdown of the Component Categories in the community. Special attention should be given to those component categories which take up a bulk of the % of the current cost as these may require significant planning to adequately budget for their replacement.

Percent Funded Chart

This chart compares three funding models (typically the 100% Fully Funded Model, the Recommended Funding Model and the Baseline Funding Model) by the percentage funded, annually over the timeframe of the reserve study. Note that the Recommended Funding Plan increases the Association's percent funded level to 100% funding within the timeframe of this study.

Reserve Account Balance Chart

This chart compares the annual year-end balance of the funding models (typically the 100% Fully Funded Model, the Recommended Funding Model and the Baseline Funding Model) over the timeframe covered in the reserve study. Note that while the reserve account balance could not realistically be in a negative territory it is reported this way as a visual representation of the amount that the community is projected to be in shortfall (if applicable).

Reserve Account Expenditures Chart

This annual expenditure chart shows the projected expenses over the 30 year period of the reserve study. Special note should be made of years when there are very large expenses (peak years) as these have proved to be most difficult for most communities to budget for. These large expense years are generally infrequent but make up the bulk of the expenses for most communities.

Funding Model - Summary

Funding Model Summary for each reserve funding model in the study. Typically at a minimum Recommended, Baseline and Current Funding Models will be included. Includes comments about the adequacy for the funding plan plus positive and negative factors for each. Again broken down to month contribution amounts.

Funding Model - Projections

Funding Model Projections for each reserve funding model in the study. Typically at a minimum Recommended, Baseline and Current Funding Model Projections will be included. The list includes annual contributions, interest earned, annual expenditures, projected year-end balance the fully funded balance and percent funded for each year of the study.

Fully Funded Balance Calculations

This page shows the Fully Funded Balance for each component which when added up equals the Fully Funded Balance (ideal balance) provided in the reserve study. Note that this is not the total cost of replacement or the cost to rebuild the building but is a number that is an ideal reserve account balance as of a specific point in time.

Annual Expenditures Report

Annual expenditures indicated by components repair / replacement projects in each year of the reserve study as well as total accumulated projected costs associated with them in each of those years. The expenditure reports are provided in various formats including a spreadsheet over the thirty years covered in the study.

Component Detail Reports

Detailed commentary for each component including current costs, useful life, remaining useful life, next replacement year, location, measurement information, maintenance, repair and replacement suggestions. Photographic inventory – Will include pictures of condition deficiencies noted or areas of concern.

Spreadsheet - Component Expenditures

This spreadsheet format is commonly utilized by accountants or bookkeepers and shows the components, their respective replacement years and their projected costs in those years.

Calculations, Definitions & Disclosures Indexes

These indexes show the mathematically formulas utilized in the reserve study, definitions utilized and disclosures for the reserve study which include statutory requirements and designation requirements.

Component Index

Utilize the Component Index page at the end of the study to easily look up component detail locations in the report. This is extremely useful for larger communities as reports can be hundreds of pages long.