Reserve
Study TutorialHow much do we need to collect and maintain in our reserve account???
Reserve
Study Tutorial
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For most association boards getting to this point is akin to looking at a tax return and checking to see if you will get a refund. In this case our report will tell you how much of a contribution each member will have to make to have an adequate reserve. However, the board and members can determine what adequate is and how much time they will want to take to get there. With our reports we can take a gradual approach or create a funding strategy to get you there as quickly as possible.
Independent of methodology utilized, the
following represents the basic categories of funding plan goals:
Baseline Funding- Baseline Funding means establishing a Funding
Objective of keeping the Reserve cash balance above zero. Although this may
contradict using the component method analysis, the benefit is that it doesn't
tie up a bunch of cash for the association. It keeps only enough cash to fund
the near future expenditures. Obviously this will
expose the association to a higher probability of special assessments as there
is no rainy fund unless the association maintains a minimum balance.
Full Funding- Maintaining a Reserve Balance at or near Percent Funded of
100%. Fully Funding is typically the most conservative Funding Objective due to
the Reserve Fund being "strong", at or near the 100%.
Threshold Funding- Threshold Funding means keeping the Reserve Fund above
a pre-determined dollar (a kind of "middle ground"
objective) Probably the most common method used.
Statutory Funding- Maintaining a specified
minimum Reserve Balance per statutes. (Washington does not stipulate a
funding level so this is not applicable here)
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How is a Fully Funded Balance Calculated? |
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http://www.PacCrestReserves.com
Pacific Crest Reserves is a locally owned company providing reserve studies, commercial inspection and condo inspections in the Mount Vernon, Wa. area. Pacific Crest Reserves is licensed by Washington State and employs Reserve Analysts that meet or exceed the requirements set by Community Association Institute. Pacific Crest Reserves conducts their Washington State building inspections according to the National Association of Home Inspectors Standards of Practice & Code of Ethics. Our professional standards provide a minimum guideline for conducting a Anacortes Washington Reserve Study.