Reserve Study Software for Reserve Professionals by Reserve Professionals

Fully Funded Balance Age Adjustments
The Fully Funded Balance (FFB) age calculations (effective ages) for each component will be adjusted if a component received a positive or negative age adjustment, has been set to be delayed, a repeat limit function has been applied, a delay function has been implemented and/or a future date has been utilized. These adjustments are needed so that the fully funded balance mathematical calculation for each component is accurate and appropriately contributes to the total fully balance calculation (located on the executive summary page, projection pages, fully funded balance calculation page, and component details pages) for all components in this reserve study.

Note that the FFB age element of the formula is a cycling number, and the adjustments simply change where in the cycle the age number is. Example: A 20-year-old roof that is lasting longer than what was originally projected may receive a positive age adjustment of 2 years in the reserve study to match a Roof Vendor’s recommendation/opinion of having “a couple more years until replacement is needed”. This adjustment simply pushes out the date we recommend having the money fully allocated towards the roof project and which is based on the advice/opinion of a roofing professional.

Install / Allocation / Delay Year
In this reserve study you will find reference to a heading which shows Install, Allocation, or Delay Year. This refers to the date that allocation to this component was started (typically the approximate year it was last built and/or replaced). However, sometimes allocation towards a component is not based on the install date and may be a date that is based on a future year (often so when projects coincide with one another) regardless of when they were last constructed or if the last replacement date is not known but a future project is planned or projected. If the delay function is utilized the allocation towards the component is not started until the year specified in this column (i.e., the fully funded balance has been set to zero through until the year specified - see below "Delay Funding" comments).

An initial allocation year may be the current year or a future year and therefore would a have a zero effective age (at the start of the fiscal year). An example of this could be sealcoating roadways which is not currently present but will be when the roads receive a fresh resurfacing.

Adjustments
Adjustment may be utilized for a variety of scenarios including a component is deteriorating faster or slower than is typical and/or initially projected, to align projects dates so that they may coincide with one another for cost efficiencies, to align the reserve study with approved budgeting scenarios (e.g., Vendor approved project phasing), Vendor recommendations, etc. Adjustments alter a component's effective age and will move the projected component project backward in time (a negative adjustment) or forward in time (a positive adjustment).

Delay Funding
When the delayed funding function has been used for any specific component the corresponding fully funded balance is set to zero in subsequent years until funding is to begin. Note that delaying a component's funding in the reserve account is typically done so that projects are not being double funded in any specific time period (e.g., paying for immature tree care from the operational account until they reach an age and size that their expense is large enough to cause issues budgeting for them operationally, a road replacement component that cycles before a future overlay - typical in an older community).

The delay funding function is also extremely useful in States that have minimum, reserve study standards with respect to percentage funded and/or a timeframe of when components should be included in the reserve study. Examples: 

Hawaii - Hawaii reserve study companies must include components with projected replacement dates within 30 years of projections. Inclusion of longer life components (those with a remaining useful life of over 30 years) is recommended for inclusion but there is no a requirement to fund them until they reach 30 years of age. Note, this is a minimum report standard that most software we have have seen does not calculate correctly. Calculating based on the interpretation of the law explained here: Hawaii Reserve Study Law Explained

Washington - A Washington State reserve study must include components with projected replacement dates within 30 years of projections. Inclusion of longer life components (those with a remaining useful life of over 30 years) is recommended for inclusion but there is no a requirement to fund them until they reach 30 years of age. Note, this is a minimum report standard. 

State Reserve Study Requirements - CAI Reserve Study State Standard Link

Repeat Function
The repeat function is most often utilized when we are seeking to limit the number of cycles a component has in the future. This can be due to decommissioning a component at a particular date, a repair component date that comes before a replacement component date, when we are seeking to target a specific period for funding, but which ends after completion (e.g., a tree removal project over several years but that ends at a particular date). Our repeat function allows the user to choose the number of cycles the component should repeat in the future; it is not limited to just repeating once or repeating forever. The Repeat function being used along with the Delay function can also be helpful when choosing to repeat only a specific number of times between two dates (e.g., funding for a project based on a code compliance project but that will not take effect for a number of years and will not need to be repeated).

Percent Replace
The percent replace option is utilized when we recommend funding for something other than total replacement. This is most often done with components which do not tend to all fail in a similar time frame (e.g., concrete sidewalks which are most often damaged by underlying root intrusion and drainage issues than actual deterioration. Problem areas tend to be a reoccurring problem while other areas have little to no need to fund for replacement.) We will also utilize the percent replace option if the Client is responsible for less than 100% of the project cost (e.g., a shared fence where costs for replacement are being split with a neighboring parcel 50%-50%).

Risk Indicator
We utilize a risk indicator on the Executive Summary page which is an average Percent Funded over the initial years of the reserve study (typically 5 years). We have found an average over time to be a more accurate reflection of risk in the near future than just the Percent Funded calculation. While Percent Funded is a very reliable indicator of risk in the fiscal year the study has been developed for, it can often be misleading as the years pass. Examples of this would be a community which has a good funded level but which has an allocation rate that is too low; the Percent Funded calculation can fall into the low funded range in a very short period. Conversely a community can rapidly go from a low funded level to a good funded level in a short time period with significant changes to their reserve budgeting.

Unlimited Funding Models

There are essentially unlimited potential models to choose from, when creating a reserve study, so software that allows you to add in how ever many models you feel are relevant to the situation can be helpful when making tough budgeting decisions. If you can copy and paste, you can add in another reserve funding model... simple. 

Variable Percentage Changes to the Annual Allocation Rate 

Our software allows us to change the percentage annual allocation increase (or decrease) from year to year in each funding model. This allows us to give recommendations that better suite or Client’s expectations while also taking into account actual decisions being made by the community (e.g., a community votes to increase an allocation rate by 10% per year for 5 and then decreasing the annual increase to 3.5% to match historical inflation rates for the remainder of the projections in the reserve study). 

Variable Annual Interest / APR Rate

We can adjust the annual return rate to whatever the Client is receiving for invested and non-invested accounts. This can be helpful to more accurately represent projections related to investments that may mature in a specific year or if investment is to start after a certain reserve account balance mark is met (e.g., a community would like to reserve $50,000 at 0% APR before investing additional funds in an investment at 3.5% after a five-year period).

Note that the variable interest/APR rate is specific to each funding model, and each year within each funding model, not the study as a whole. Creating scenarios with different potential returns on investment (invested reserve funds) can better suit our clients who are often thinking of investing funds for a period (e.g., investing in a higher return investment for 10 years and then having the funds available for a roof replacement project that is projected to occur 15 years from now).

Variable Annual Inflation Rate to the Reserve Study and to Specific Components

We can adjust the annual construction cost inflation rate in the reserve study across all components in the reserve study as well as adjust to specific components in specific years of the reserve study. We have found this to be very helpful during periods of high inflation in the overall economy as well as when there may be high inflation only in specific industries.

Example: Lumber prices have seen very high inflation in recent years, so we have been able to adjust the inflation rate for lumber specific components at a higher rate and for a specified period into the future. Inflating a fence project at a Vendor recommended rate and matching their bid/estimate is very helpful in the reserve study process.

Not only will the projected cost be inflated at the specified rate and at the specified time period, but the fully funded balance (current and projected) will be inflated at the specified rate within the specified time period. 

Variable Annual Tax Rate

We can adjust the annual rate in each year of each funding model to whatever the Client is or will be paying. This is helpful for communities which may have a low current reserve account balance (minimal return on investments/interest) but which will be higher returns in the future and have a higher tax liability when it reaches a certain annual amount.

Include Alternate Scenario Funding Model(s)

Include alternate scenario models in the reserve study with simple copy and paste. Common alternate scenario models we have used this function for are: 

> higher inflation to some or all components in initial years of the reserve study, specifically for this alternate model

> specific components are left out of the reserve study mathematical calculation in this alternate model (e.g., excluding windows and doors)

 > alternate cost and useful life based on a different material being used in this alternate model (e.g., include cost and useful life for a metal roof replacement in the alternate scenario vs. an asphalt shingle in the other models of the reserve study)

Charts... Charts... Chart...

While a reserve professional's eyes may overflow with glee when looking at a 10-page spreadsheet, most people are much less enthusiastic about reading through page after page of numbers, no matter how much the size or font is changed. We have found charts to be very helpful to relay visual messages like; "you have a lot of expenses coming up", "inflation is real", this funding scenario is not realistic long term", etc., etc., etc.

Verifiable Projected Fully Funded Balance Calculations

As odd as it may seem rarely have we seen reserve study software that allows a user to verify the projected calculations are accurate as time progresses. In our opinion this is important for a reserve study professional who may want verification that that math adds up to what it should. It's very easy to get lost in the numbers and assume that things are being accurately calculated just because someone tells you they are. We provide verification - the proof is in the pudding, not buried under layer after layer of inaccessible and unverifiable calculation on a component specific mathematical basis.

Are we going to give away our propriety methods? No way… but we will provide verification sources so you know what you're providing is accurate and it something you can share with your client.  

Add Multiple Pictures Easily

Pictures can be added into the reserve study from an online directory, from your computer or directly from a mobile device such as a phone or tablet. Pictures can be added as a single image or multiple images into multiple components, all at once, into the reserve study.

Add Comments With Spell Check

Add comments to components as well as any comment pages and spell check all those comments with one click. 

Table of Contents and Component Index

Out table of contents pages and component index pages automatically enters page numbers so you can easily and professionally navigate your own reports as well as provide your client's reserve study that is navigable, digestible and understandable. Whether on a phone call, an online meeting, or in person, it has been our experience that having a page number to point people to is dramatically better than flipping, scrolling and hoping. Your professionalism and success starts with you and sweating it out in front of an HOA Board is simply not the answer. Tough questions can be go from hmmm, Lets see?... to... Page 23!

Customize the Software to Your Brand - Your Niche - Your Success

Ideas, processes, data points, a color scheme that will knock their socks off?... Go for it. Looking to provide a light airy feel to a report?... done. Looking to throw in so much supporting data there is no denial?... done. Depends on the Client?... also done. How do we know our software provides so much?... because we do this every day. We encounter scenario after scenario and opinion after opinion. Your success will come from what you contribute and what you offer and advice as a reserve study professional.  

Keep Tour Reserve Study Data Private!

Here is a blog post about this topic Keep Your Reserve Data Private. These days people have gotten very creative in disguising their true intentions with respect to data collection and data sharing. Many people and companies are willing to pay very good money to get access to this information and for the most part communities are unwilling participants in these money making "partnerships". Keeping your organization’s data, or your customer data (if you are a reserve study provider), is in our minds paramount in providing independent advice as well as having competitive estimates and bids.