The Board has a fiduciary responsibility to request a periodic reserve study that inventories the state of the association's capital assets, and projects costs for their continued maintenance and repair, both short and long-term. The normal interval for updating a reserve study is five years, and we are due.
At last year's annual meeting, a presentation explained cost estimates to fully fund our community's financial needs, based on the most recent reserve study in 2011. At that meeting, we noted that the annual funding requirements seemed to be somewhat high, compared to the far smaller assessment for the recent capital assets program of 2014-15. We also estimated that unit owner failure to approve fully funding was attributable in part to the large financial burden it would add to monthly fees.
At that meeting, we also promised to catalog the capital improvements effected during 2014-15, and include them in a detailed request for a more targeted 2016 reserve study update. The goal: to derive fair estimates for fully funding that are more affordable but equally effective.
To that end, the Board has recently assembled and submitted a proposal to Reserve Advisers, asking them to conduct a reserve study update that better represents our current and long term needs, based on local costs. Since the update is a renewal, the fee for the service is one-half that of the original study, and is already included in the 2016 budget.
Fully funding simply means that we set aside enough money to properly repair, maintain, and replace our capital assets. Fully funding helps maintain property values, makes units more desirable and easier to finance for prospective buyers, and ensures that we can maintain the association as a viable, attractive community, without the need for special assessments, some of which may be quite large and painful.
The choice to fully fund or not to fully fund is, of course, up to the unit owners, and cannot be implemented without their vote. But the Board wants to provide sound actionable information so each of us can make an informed decision.
Those who are interested in the details, can download these pdf documents from our website: (Both links are case sensitive.)
These two documents catalog recent capital asset repairs and replacements, many of which were originally recommended by the 2011 study. It also lists many of the preventive maintenance measures implemented to extend the service life of our assets.