What is a Reserve Study?

Watch our Reserve Study video on our YouTube channel!

The association recently received an updated Reserve Study. What it that, and why is it important to you?

First of all, there’s the Reserve Fund. That’s a special account set aside where the association puts money every month for certain maintenance activities on community common areas. The Reserve Study is the association’s complete go-to guide for everything related to that fund, the maintenance activities needed, and how much we should be putting into it each year.

The most recent document is available for you to view and download here.

We’re planning a series of brief videos to explain the general topics of Reserve Funds and Reserve Studies, and also on the details of our own Reserve Study and what it means to you, an owner in Rio Crossing. Our Reserve Study has a description of a lot of this, but it’s in somewhat technical terms, so we’re hoping that the video series will help everyone understand more visually.

But we encourage you to download the study from the link above and read through it. Particularly interesting is the complete list of association assets in the “Component Detail” section on pages 14-65 (the page numbers at the bottom of each page; it’s pages 29-80 in the Adobe Reader window).

Also interesting is the table of annual financial projections on page 4 (page 19 in the Adobe Reader). The Member Contribution column shows how much of members’ assessment dollars will go into the Reserve Fund each year. While it looks like a lot, it’s not as big as you think! Take the number in that column and divide it by 345 (that’s how many owners/members there are); that gives you the annual contribution per owner. Then divide that by 4, and that’s how much of each quarter’s assessment goes into the fund.

Here’s the breakdown for 2020: the full amount is $56,114. Divided by 345 gives you $162.65 per year per owner. Divide that by 4 and you see that only $40.66 of your quarterly assessment goes into the Reserve Fund.

Want to learn more about the Reserve Fund, or other parts of your association’s finances? Let me know what you want to know by filling out the Feedback Form here.