RESERVE FUNDING
WHY UPDATES MATTER Had the association performed more frequent reserve study updates, the early signs of plaza deck membrane failure could have been identified when the scope of work was smaller, costs lower, and funding options more flexible. This case illustrates a common challenge in older communities: reserve studies conducted too infrequently can limit a board’s ability to proactively manage deterioration, forcing decisions under compressed timelines and financial pressure. THE RESERVE STRATEGY AND COURSE CORRECTION Following the 2011 reserve study update, the age and condition of the property revealed the need for approximately $4.2 million in critical capital projects. Given the reserve shortfall, the board worked closely with its reserve study provider to develop a phased and prioritized funding and repair strategy.
Key elements of the approach included:
• Performing limited repairs to the failing plaza deck membrane to safely defer full replace- ment for seven to eight years. • Redirecting available reserve funds toward other critical infrastructure needs. • Establishing a more realistic reserve funding baseline aligned with the property’s actual condition and the useful lives of remaining components. Just as importantly, the board committed to treating reserve studies as an ongoing planning tool rather than a one-time exercise. After 2011, reserve study updates were commissioned again in 2018 and 2023.
These subsequent updates allowed the board to:
• Engage a building envelope specialist to monitor deterioration and refine scope, timing, and cost projections. • Integrate evolving repair strategies directly into the reserve funding plan. • Prioritize remaining building service elements in coordination with the eventual plaza deck replacement. • Restore adequate reserve funding levels by 2023. RESULTS AND OUTCOMES By committing to regular reserve study updates and aligning funding decisions with professional recommendations, the association achieved several important outcomes:
• Regained control over its long-term financial planning. • Improved the quality and timing of capital project decisions.
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