SLP Reserve Fund Study

RESERVE STUDY
Sierra Los Pinos Property Owners Association
Prepared by:
Criterium Building Inspection Engineers 4801 Lang Ave NE, Suite 110 Albuquerque, NM 87109
(505) 271-1341 www.criteriumNM.com

Report introduction follows. The full report is attached below.

1 Introduction

Sierra Los Pinos Property Owners Association, hereafter referred to as the Association, has, authorized Criterium Building Inspection Engineers to conduct a Reserve Fund Study. Studies of this nature are important to ensure that a community has sufficient funds for long-term, periodic capital expenditure requirements. Anticipating large expenditures over an extended period of time through a structured analysis and scheduling process assists the Association in meeting financial requirements without increasing the service fees above permitted maximums, borrowing the funds, or levying special financial assessments to the owners.

Typically, a community association has two broad cash requirements: the general operating reserves and the capital repair and replacement reserves. In this report, we will focus on those items falling under the capital repair and replacement reserve criteria. We have projected a capital repair and replacement reserve for thirty (30) years. The first ten years are the most reliable. Such a study should be updated every three to five years.

A reserve study is a budgetary analysis for replacement of long term capital reserve items. Items which occur frequently and periodically are typically accounted for in the operating budget. Items such as painting, landscaping, irrigation are typically included in the operating budget due to their frequent recurrence and predictability.

This report is structured to analyze components of the community for which the Association is responsible and to assess a useful expected life and useful remaining life to those components. The anticipated scheduled repair or replacement of the component and the anticipated expense for the activity are then analyzed in conjunction with the current capital reserves funding program for the community. Funding program recommendations are made with the objective of limiting substantial cash excesses while minimizing financial burdens that can result from significant cash inadequacies.

This report is intended to be used as a tool to determine reserve fund allocation requirements for the community, to manage future Association obligations, and to inform the community of future financial needs in general. The report that follows has been prepared from the perspective of what an owner at this association would benefit from knowing. Some items, beyond those of immediate concern, may be discussed. Therefore, the report should be read in its entirety in order to fully understand all of the information that has been obtained.