As the economy seems to be emerging from the inflationary period we’ve been experiencing, the Board recognized the continued need for an updated professional outlook to help with reserve planning. The inflation rate over the past few years has made long term budgeting extremely challenging. Past Reserve Studies are functionally obsolete.
As budgeted, Reserve Advisors was hired to conduct a new Reserve Study for the Association. The effective date of this study is the date of their visual noninvasive inspection in July. Certainly, the minute that was done things can begin changing. However, it gives the Board and management a point of time to start from to help determine whether reserve funding is reasonable and adequate, and recommends how to fund it going forward.
As Reserve Advisors explain, our Reserve Study exceeds the Association of Professional Reserve Analysts (APRA https://www.apra-usa.com/) standards, and fulfills the requirements of a “Level II Reserve Study Update.” It is with the help of such studies over the years, that the Association has avoided the need for Special Assessments. And in the past 20 years the reserve balance has grown from hovering around $1 Million, to where it stands now at just over $4 Million. Inflation over the past couple years has made it difficult to determine if what we are holding is enough to fund needs down the road. To meet that challenge, the Board increased the frequency of these studies starting in 2020. A new one was conducted in 2022 and now the latest this year to help continue help assuring we are funding for proper maintenance and care of Park Tower.
To learn more about Reserve Studies and why they are so important, the team at Reserve Advisors explains it extremely well:
As we gear up to put together the budget for the next fiscal year, this will be heavily relied upon to guide efforts at solid planning.
Owners are welcome to request a copy of the Reserve Study. Hard copies are free for the first 5 pages, and $1 per page after that – it is 124 pages long…so of course we encourage e-copies. Just e-mail me your request at tpatricio@habitat.com.
If you are registered on PTCondo, you can also find a copy in the online Library at https://www.ptcondo.com/useful-forms-documents/.
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