RESERVE ANALYSIS

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RESERVE ANALYSIS FUNDING REQUIREMENTS & METHODS TO MEET THEM

description

RESERVE ANALYSIS. FUNDING REQUIREMENTS & METHODS TO MEET THEM. RESERVE FUND-WHY WE HAVE IT. A SEPARATE FUND TO MEET FUTURE CAPITAL EXPENDITURES FOR THE ASSOCIATION TO PROTECT THE ASSOCIATION FROM AN UNFORSEEN CAPITAL EXPENDITURE OR AN EMERGENCY EVENT A BY-LAW REQUIREMENT. - PowerPoint PPT Presentation

Transcript of RESERVE ANALYSIS

Page 1: RESERVE  ANALYSIS

RESERVE ANALYSIS

FUNDING REQUIREMENTS & METHODS TO MEET THEM

Page 2: RESERVE  ANALYSIS

RESERVE FUND-WHY WE HAVE IT

A SEPARATE FUND TO MEET FUTURE CAPITAL EXPENDITURES FOR THE ASSOCIATION

TO PROTECT THE ASSOCIATION FROM AN UNFORSEEN CAPITAL EXPENDITURE OR AN EMERGENCY EVENT

A BY-LAW REQUIREMENT

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WHAT ARE THE RESERVES’ CAPITAL OBLIGATIONS

CURBS AND GUTTERS

SIDEWALKS

DETENTION POND

STREETS: MAINTENANCE & REPAIR

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WHY RESERVE STUDY WAS INITIATED

DID NOT KNOW THE SCOPE OF THE ASSOCIATION’S CAPITAL RESPONSIBILITIES-PARTICULARLY STREETS

DID NOT KNOW THE AMOUNT OF FUNDS NEEDED TO COVER THE MAINTENANCE OF THESE ITEMS

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RESERVE STUDY-RESULTS ASSESSED THE CURRENT STATUS OF THE

RESERVE FUND & FUNDING LEVELS CONCLUDED THAT THE RESERVE IS

CURRENTLY UNDERFUNDED TO MEET PROJECTED FUTURE EXPENSES

CONTENT IS A BLUEPRINT-A TOOL-USED TO PROJECT FUTURE FUNDING LEVELS

PROPOSED THREE SCENARIOS TO MEET FUTURE FUNDING

GIVES THE STATUS OF CAPITAL ITEMS

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RESERVE STUDY SCHEDULE OF CAPITAL EXPENDITURES

YEAR 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

YEAR # 1 2 3 4 5 6 7 8 9 10 11 12 13

EXPENITURES*

RESURFACE ASPHALT PAVEMENT $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $117,733

ASHPHALT PAVEMENT CRACK SEAL/REPAIR $0 $0 $5,250 $0 $0 $0 $0 $5,250 $0 $0 $0 $0 $5,250

CONCRETE REPAIR REPLACEMENT $0 $3,250 $0 $3,250 $0 $3,250 $0 $3,250 $0 $3,250 $0 $3,250 $0

DETENTION AREA MAINTENANCE $0 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000

TOTAL COSTS $0 $5,250 $7,250 $5,250 $2,000 $5,250 $2,000 $10,500 $2,000 $5,250 $2,000 $5,250 $124,983

INFLATION ADJUSTED COSTS $0 $5,434 $7,766 $5,821 $2,295 $6,235 $2,459 $13,359 $2,634 $7,155 $2,821 $7,665 $188,858

INFLATION RATE 3.50%

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RESERVE FUND-CURRENT & PROJECTED STATUS

CURRENT SCENERIO

PROJECTED ANNUAL FUNDING & EXPENTITURES 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

YEAR END RESERVE FUND BALANCE $35,688 $35,130 $32,182 $31,159 $33,712 $32,297 $34,706 $26,045 $28,151 $25,686 $27,593 $24,597 ($160,074

)

CAPITAL EXPENDITURES $0 $5,434 $7,766 $5,821 $2,295 $6,235 $2,459 $13,359 $2,634 $7,155 $2,821 $7,665 $188,858

TOTAL REVENUE-ALL SOURCES $4,887 $4,876 $4,818 $4,798 $4,848 $4,820 $4,868 $4,698 $4,739 $4,691 $4,728 $4,669 $4,187

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PROJECTED YEARLY BALANCES FOR CURRENT LEVEL OF SAVING & INVESTMENT

RETURNS

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

($200,000)

($150,000)

($100,000)

($50,000)

$0

$50,000 RESERVE FUND

YEAR

FUN

D B

ALAN

CE

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STATUS OF CAPITAL ITEMS

WHAT WE NEED TO DO & WHEN

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CURBS & GUTTERS

BASICALLY IN GOOD CONDITION

A FEW NICKS HERE & THERE

NO MAJOR EXPENSES IN NEAR FUTURE

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SIDEWALKS WALKING PATHS IN

GOOD CONDITION-MINOR REPAIRS ONGOING AS NECESSARY

GAPS BETWEEN SIDEWALK & CURB NEED IMMEDIATE REPAIR-A LIABILITY ISSUE

SIDEWALK APRON

CURB

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DETENTION POND GENERALLY GOOD CLEARING AROUND

GRATING NEEDS TO BE ADDRESSED WITHIN THE NEXT YEAR

GENERAL CLEAN-UP ON YEARLY BASIS

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STREETS-ASPHALT SEAL & REPAIR

STREETS ARE FOR MOST PART IN GOOD CONDITION

NEED TO IMPLEMENT AN ASPHALT CRACK SEALING PROGRAM

INTERSECTION AT RIVERBED AND VALLEY STREAM NEEDS IMMEDIATE ATTENTION

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STREETS-REFACING CURBS STRONGLY

ADVOCATED BY OCRC AND BIRMINGHAM SEALCOAT

DISCOURAGED BY ULTIMATE CONCRETE

SUPPOSEDLY LENGTHENS THE LIFE OF STREET

ROUTE & INSERT SEALER

STREET CURB

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REFACING CURBS: EXAMPLE COST: $15,000-

$20,000 DURATION: 5YRS+

FROM ULTIMATE SEAL-10YRS+ FROM BIRMINGHAM SEALCOAT

PURPOSE IS TO PREVENT DAMAGE BETWEEN STREET & CURB

SHERMAN STREET

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PROS & CONS ON REFACING CURBS

PROS COULD LENGTHEN

LIFE OF STREETS COULD

POTENTIALLY DELAY COSTLY RESURFACING

CONS ULTIMATE

CONCRETE HAS DOUBTS ABOUT PROCESS

IS NOT WIDELY PRACTICED

EXPENSE PERSONAL

OBSERVATION

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PARK STREET-EXAMPLES OF REFACING CURBS-A NEGATIVE

RESULT

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BOARD INITIATIVES TO RESERVE STUDY RESULTS

FORM A COMMITTEE TO VERIFY CONCLUSIONS

HAVE THE COMMITTEE CHOOSE A METHOD FROM THE RESERVE STUDY TO BEST MEET FUTURE FUNDING

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RESERVE COMMITTEE COMMITTEE CONSISTED OF

JOHN VON ALLMEN RICHARD WOODMANSEE MIKE GOULD JEFF BUCHOLZ

PURPOSE: ASSESS THE RESULTS OF THE RESERVE STUDY

RECOMMENDATIONS ASSESS THE CONDITION OF ASSOCIATIONS’

CAPITAL ITEMS RECOMMEND A FUNDING METHOD TO MEET

FUTURE CAPITAL EXPENSES

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THREE SCENARIOS TO MEET FUNDING NEEDS

STEPWISE INCREASES

24% ANNUAL INCREASES TO RESERVE FUND PORTION OF ASSOCIATION DUES

ADDITIONAL ASSESSMENTS

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STEPWISE INCREASES

BEGINNING FUND BALANCE $30,802 $35,692 $38,035 $40,946 $48,801 $63,311 $76,992 $97,700 $110,605 $134,708 $154,681 $179,473 $199,822

FEE REVENUE $4,190 $7,031 $9,875 $12,719 $15,563 $18,407 $21,251 $24,095 $24,095 $24,095 $24,095 $24,095 $24,095

INVESTMENT EARNINGS $700 $746 $803 $957 $1,241 $1,510 $1,916 $2,169 $2,641 $3,033 $3,519 $3,918 $701

CAPITAL EXPENTITURES $0 $5,434 $7,766 $5,821 $2,295 $6,235 $2,459 $13,359 $2,634 $7,155 $2,821 $7,665 $188,858

ENDING BALANCE $35,692 $38,035 $40,946 $48,801 $63,311 $76,992 $97,700 $110,605 $134,708 $154,681 $179,473 $199,822 $35,760

ANNUAL FUNDING PER UNIT $53 $89 $125 $161 $197 $233 $269 $305 $305 $305 $305 $305 $305

YEAR 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

PERCENT RATE OF RETURN OF INVESTMENTS 2.00%

INCREASED FUNDING PER UNIT (2010-2017) $36

TOP FUNDING LEVEL (YRS. 2018-2029) $305

TOTAL BALANCE-MUST BE GREATER THAN 0** $20,760

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STEPWISE CHART20

10

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

$0

$50,000

$100,000

$150,000

$200,000

$250,000 FUND BALANCE

YEAR

YR. E

ND

BAL

ANCE

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CONCLUSIONS OF COMMITTEE ALL WERE IN AGREEMENT THAT A

FUNDING SOLUTION TO ADDRESS THE RESERVE SHORTFALL SHOULD BE IMPLEMENTED IMMEDIATELY

FOUR CAPITAL PROJECTS SHOULD BE ADDRESSED IMMEDIATELY FIRST: SIDEWALK SEPARATION AT CURBS SECOND: CRACK & SEAL OF ASPHALT THIRD: CLEARING OF DETENTION POND FOURTH:SOLICIT BIDS FOR REFACING OF CURBS

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WHERE DO WE GO FROM HERE?

RECOGNIZE THAT THE COMMON ELEMENTS ARE OUR RESPONSIBILITY COLLECTIVELY-WHICH INCLUDES ROADS

RECOGNIZE THAT CURRENT DUES ARE NOT SUFFICIENT TO MAINTAIN THE COMMON ELEMENTS IN THEIR CURRENT CONDITION

STRIKE A BALANCE BETWEEN THE NEEDS OF THE COMMUNITY TO THE ABILITY OF THE HOMEOWNER TO PAY

RE-ASSESS ON A YEARLY BASIS-USING SPREADSHEET AS A MONITORING TOOL