What is Involved in a GAB Robins Reserve Study?

• A full consultation with a representative of the property to identify the major replacement or repair components to be included in the study
• In-depth on-site inspection of the property by a reserve specialist
• Examination of all construction plans and a review of historic information available on components included in the reserve study
• Establish a useful life, remaining useful life and current replacement cost for each of the components identified
• Develop the estimated future replacement cost and replacement schedule
• 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.