A few folks have asked about a Reserve Study and where our model came from. For those interested, I am providing some basic information. Reserve Studies are big business for thousands of HOA consultants and accounting firms across the country. Studies can be expensive endeavors if consultants are engaged to do the work. Due to significant legal issues that have evolved with boards and members, some states now require Reserve Studies for HOAs.
Our Bridge Pointe study fit between a “full” and “update” study as described below. Our community property (assets) are limited so our board of directors decided to undertake this work internally. A committee of five neighbors met at least 3 times for approximately 9 hours. We looked at each asset line item and in some cases (pool and pool wall) we consulted with outside expertise. Our study is also connected to a 5-Year Financial Plan.
Types of Reserve Studies
Reserve studies typically fit into one of three categories: Full Update,With-Site-Visit/On-Site Review and Update, No-Site-Visit/Off Site Review (listed from exhaustive to minimal).
- Full reserve study, the reserve provider conducts a component inventory, a con- dition assessment (based upon on-site visual observations), and life and valuation estimates to determine both a fund status and a funding plan.
- Update, With-Site-Visit/On-Site Review, the reserve provider conducts a component inventory (verification only, not quantification), a condition assessment (based on on-site visual observations), and life and valuation estimates to determine both a fund status and a funding plan.
- Update, No-Site-Visit/Off Site Review, the reserve provider conducts life and valu- ation estimates to determine a fund status and a funding plan.
We look forward to the opportunity to discuss any and all details of our findings. Many of our neighbors have looked at the study and the related 5-Year Plan and have suggested changes or proposed options for timing of expenses or types of replacement items. We are open to those discussions and understand that the end result for our neighborhood will be better the more we collaborate.
The documents referred to in this story are in the hands of our board of directors for review, discussion, recommendations, and, at some point, approval.