Budget Box: Reserve Study

By Shari Haldeman - sharih@landings.org
General Manager/COO, The Landings Association

The Landings Association manages $76 million of assets that are maintained and replaced through the Capital Reserve Fund. One of the most important responsibilities for the Association is to ensure that the existing infrastructure is supported by the Capital Reserve Fund.

In 2011, the Association contracted with Ray Engineering to review the Capital Asset Management Plan (CAMP) and associated reserve plans for the roads and community paths. However, the Reserve Study completed in 2011 was not a full reserve study. The Reserves Subcommittee believes that a full Reserve Study with report and onsite analysis is a beneficial expense to ensure the most accurate level of reserves for future financial planning.

In order to complete a full Reserve Study, the Association will partner with an independent Professional Reserve Analyst starting in October for 10 weeks. During this time, the Analyst will complete an onsite analysis of all components included in the CAMP, including their useful life, condition, and remaining life. Once this analysis is complete, a full report will be provided which will include an Executive Summary, 40-year Funding Plan, Graphic Illustrations, Cash Flow Sheets, Projected Expenditures by Year, Component Inventory, Component Detail with Photographs, and Disclosures. Once the final report is received from the Professional Reserve Analyst, the results will be shared with the Landings community.

The funds for this project come from the Operating Contingency line item. Since this report will provide assurance of appropriate reserve funding levels, this is a beneficial expense at $21,700 for future planning and the 2020 update of the Association’s six-year Strategic Plan.

This article was originally published by The Landings Association on their website.

Visit landings.org to read the original article.