What Is a Reserve Study?
A reserve study is a budgetary planning tool that identifies a
property’s necessary major repairs and/or replacements and
establishes a funding plan to insure that adequate monies are available
for planned expenditures. A reserve study has two primary analyses:
the physical analysis and the financial analysis. The physical analysis
consists of a component study that identifies the major replacement
or repair components of a property, their estimated costs and their
estimated useful and remaining lives. The financial analysis is
a funding study that incorporates information from the component
study into a budget plan to fund the anticipated future expenditures.
What is Involved in a GAB Robins Reserve Study?
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A full consultation with a representative
of the property to identify the major replacement or repair
components to be included in the study
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In-depth on-site inspection of the property
by a reserve specialist
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Examination of all construction plans and
a review of historic information available on components included
in the reserve study
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Establish a useful life, remaining useful
life and current replacement cost for each of the components
identified
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Develop the estimated future replacement
cost and replacement schedule
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Develop a funding study that will estimate
the annual funding needed to meet the required replacement reserve
amount.
What Type of Funding Analyses
Methodology is Utilized?
GAB Robins reserve studies employ two separate
and distinct analysis methodologies to calculate reserve contributions;
the Component Funding Analysis and the Cash Flow Analysis methodologies.
The Component Funding Analysis method is a straight-line
accounting procedure that calculates the annual contribution amount
for each individual line item component and then sums these components
to calculate the total annual contribution rate for this analysis.
This type of analysis was previously mandated in the State of Florida
for all condominiums and cooperatives.
Changes (December 2002) to the administrative code
now allow the Cash Flow, or Pooling, Analysis method as a fully
funded method of estimating reserve funding. The Cash Flow Analysis
is a method of calculating reserve contributions where contributions
to the reserve funds are designed to offset the variable annual
expenditures from the reserve fund. Unlike the Component Funding
Analysis, which is essentially a snapshot for one fiscal year, the
Cash Flow Analysis is a long term reserve analysis that considers
such factors as interest income, construction cost and/or inflationary
increases for individual components, and an association’s
preference with regard to minimum reserve fund balances during the
study period. In many cases, conversion to the Cash Flow Analysis
method provides full reserve funding at a lower annual contribution
rate compared to the Component Funding Analysis method.
What makes a GAB Robins Reserve
Study Superior?
Expertise &
Credibility
- GAB Robins has been providing professional services for more
than 125 years. This demonstrates to our clients our financial
stability and longevity.
- Our reserve specialists are professionals with years of experience
in valuing and developing funding analyses for multiple property
types.
- Our team has in-depth experience in the Florida Statute requirements
for establishing reserve budgets, as well as in-depth experience
with market standards for reserve budget analysis in multiple
property types.
- All GAB Robins’ reserve studies are completed by a Community
Associations Institute designed Reserve Specialist.
Detailed Data
Collection
The GAB Robins Reserve Specialist compiles detailed
data about your property from a thorough on-site inspection, field
measurements, and examination of building construction plans provided
by the client. Appropriate and accurate component sizes and counts
are derived from these data sources. Without accurate factual data,
the accuracy of the analysis will be compromised.
Repair/Replacement cost information is taken from
a variety of sources, including national and regional cost estimating
indexes, interviews with developers, builders, consultants and contractors,
as well as actual costs from similar properties within multiple
market areas. Furthermore, an association’s actual historical
reserve expenditures are carefully considered in every GAB Robins
reserve study.
State-of-the-Art
Software
GAB Robins utilizes a nationally recognized reserve
study software program in completion of all reserve studies. This
software provides in depth breakdowns of each and every components’
cost, total and remaining useful lives, as well as a year by year
schedule for all planned reserve expenditures. Also provided is
an annual summary of beginning reserve fund balances, ending reserve
fund balances, planned expenditures, cumulative interest income,
and graphical information.
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RESERVE
STUDY SCREEN SHOTS
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The following
are various screen shots from our condominium reserve study
sample report. These screen shots only represent a portion
of the overall report. To see the full sample report in a
PDF format, click here. |
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Project Overview - Property Description |

Project Overview - Component Details |

Reserve Study Analysis
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Executive Summary |

Reserve Budget Conclusions |

Component Funding Analysis |
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Cash Flow Analysis - Analysis Definition |

Cash Flow Analysis - Projected Expenditures |

Cash Flow Analysis - Cash Flow Projections |
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Cash Flow Analysis - Cash Flow Projection Graph |
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