Reserve Fund Study
Criterium-Bustamante Engineers (CBE) offers a comprehensive Reserve Fund Study designed to help establish and maintain a stable and equitable funding plan to offset the anticipated future major common-area expenditures. The Reserve Fund Study generally consists of two parts: the physical analysis and the financial analysis, both performed by experienced professionals. We offer two types of Reserve Fund Studies:
Our Approach
In the physical analysis phase of the Reserve Fund Study we review the specific condition of the property. This will give us an opportunity to develop an inventory of the existing major components, evaluate their current condition and the quality of installation, and estimate expected remaining useful life of each. This phase allows us to create an understanding of your buildings and your Association thoroughly.
The financial analysis phase begins with the compilation of data from Phase I. This data is then used as a basis for projecting a Reserve Fund that will be adequate for handling expenses related to non-annual maintainence and repair items over a 20 - 30 year period, as decided upon by the Association. This fund will take into consideration a reasonable return on invested monies and inflation. We would expect you to consult with your accountant prior to our finalizing the reserve budget analysis. There will be alternatives presented for the reserve fund based on fixed annual payments to the fund, uniform payments with an annual escalation, and uniform payments with periodic special assessment. A sample of this presentation is offered in Appendix A of the report. Other alternatives that the condominium association finds attractive will also be analyzed. The final decision on how to gather funds for the reserve fund will, of course, be determined by the association. For a description of the types of Reserve Fund Studies we offer, please read below.
Full Reserve Study
In a Full Reserve Study we determine which components comprise the common and limited common elements of the Association (based upon the documents provided to us) and then select which of these should be included within the Component Inventory. This selection is generally based upon those components that will require significant replacement in the coming 20 - 30 year period (Association to choose timeframe). We then perform visual field inspections to determine the anticipated remaining useful life of each component based upon its overall condition.
Enhanced Reserve Study
In addition to the scope of work included in our Full Reserve Study, Criterium-Bustamante Engineers is also pleased to offer you our Enhanced Reserve Study. Our Full Reserve Study meets the standards established by CAI, AICPA, and is comparable in many ways to other reserve studies you may be familiar with. When you choose an Enhanced Reserve Study, our field inspection includes not only a more in-depth analysis of each of the Reserve Components, but also an analysis of building and site systems, which may not be included within the schedule. This inspection will provide recommendations for ongoing maintenance of all systems as well as a more complete condition evaluation of each in a detailed narrative report. Items needing immediate remediation, options for upgrades and improvements, and various funding alternatives may also be considered. Our financial analysis incorporates an engineering review to achieve as close to level funding as possible, rather than simply use industry standard data. Our Enhanced Reserve Study is for the association that would like more of a planning tool, requires more in-depth knowledge of their systems, and is considering upgrades or other changes to the way their association is managed.