Component Analysis is Key to Reserve Study
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The document discusses the component analysis process for reserve studies. It begins by explaining that the component analysis is the foundation that other sections of the reserve study are based on. It then provides details on determining components, research and data compilation, and special considerations. The document outlines the steps taken in a component analysis, which include reviewing governing documents, conducting site inspections, interviewing representatives, researching costs and useful lives, developing a comprehensive component list and timeline of expenditures. It emphasizes that the analysis requires thorough research and quantification of components to fully establish the reserve needs.
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Component Analysis is Key to Reserve Study
- 1. Component Analysis Reserve Data Analysis est. 1983 www.rdanorthwest.com
- 2. About Reserve Data Analysis Since 1983 we have provided thousands of thorough and well thought out catered reserve studies and have offices through the US.
- 3. Component Analysis Topics 2 3 4 The Component Analysis is the foundation for the Reserve Study. 1 Determine what components to include in the study Special considerations during the Component Analysis Research and compile necessary data for components.
- 4. Component Analysis is the Foundation Reserve Study Funding Strategy Financial Analysis Component Analysis All other sections of the Reserve Study are based on the Components Analysis which includes costs figures and a timeline of expenditures in the study.
- 5. Process - The Reserve Study Step 1 Step 2 Step 4 Step 3 Component Analysis Financial Analysis Develop Financial Strategy Completed Reserve Study Developing a reserve study report requires numerous important steps.
- 6. Choosing Components Governing Documents Statutory Requirements National Reserve Study Standards Historical Components are chosen based on National Reserve Study Standards, a review of governing documents, how historically a community has treated them and statutory requirements.
- 7. Review Governing Documents A review of the governing documents and maps are important steps in the reserve study process. Questions may come up about the interpretation of the governing documents or map referneces. If governing documents are not clear as to who maintains a component the historical treatment and the Boards interpretation of the governing documents is typically followed.
- 8. National Reserve Study Standards Association Responsibility Limited Useful Life Predictable Remaining Life Above Minimum Cost Does the component meets the four part test outlined in National Reserve Study Standards (CAI).
- 9. Washington State Statutes WA State RCW 64.34.382 – Reserve Study - Contents (a) A reserve component list, including roofing, painting, paving, decks, siding, plumbing, windows, and any other reserve component that would cost more than one percent of the annual budget for major maintenance, repair, or replacement. If one of these reserve components is not included in the reserve study, the study should provide commentary explaining the basis for its exclusion.
- 10. Comprehensive Site Inspection Picture Inventory • Many pictures taken • Deferred maintenance items photos Interview Representative • Meet and interview representative • Walk property with representative Access Mechanical Areas • Visual inspection of mechanical equipment an equipment rooms necessary Measurements • Itemized List • Fixtures Counted • Square Footage Condition Assessment • Visual Inspection • Condition Level • Remaining Useful life Locations • Location in Community • Different Phases Indicated when Applicable
- 11. Component Research Back at the office research for current costs and historical records of the components is completed. Phone interviews of Vendors, Board Members and others may be necessary. Utilizing bids obtained, cost manuals, interviews and historical costs data to create to finished list.
- 12. Component Analysis Quantify Useful Life Remaining Useful Life Current Replacement Cost Component List Fully Developed
- 13. Special Considerations • Phasing multiple components in the study – different condition levels (e.g. roofs are different ages on different building). • Partial replacement or contingency – (e.g. concrete repair - 5% contingency every 3 years). • Significant non-annual maintenance expenses to extend useful life of components may be a separate component. (e.g. mechanical equipment cleaning)
- 14. Refining the Component List Some component repairs & replacement are covered by insurance. Fire, acts of nature, poor component installs, etc. No need to be overly detailed. Similar components with similar useful life and costs can be bundled into one component. (e.g. pool furniture) IRS & Accounting interpretations of components often should not be utilized. Usually these are for tax purposes and not long term budget planning. Update the Reserve Study to update the component list – Some items that were once not included can be aged into the study. (e.g. plumbing failures in an older community).
- 16. Timeline of Expenditures for Components Created
- 17. Recap – Component Analysis • Review Community Documents • Site Inspection Visual Site Inspection • Interview Boards members, vendors • Research costs data and useful life's with costs manuals and prior interviews Research in Office • Develop the comprehensive list • Develop the timeline of expenses and repair / replacement schedule • Confirm list with Client Finalize Component Analysis
- 18. Do you have any questions? ??Contact Us Ph: 866-574-5115 www.rdanorthwest.com