|reserve funds/retrofit cohousing||<– Date –> <– Thread –>|
|From: Hungerford, David (dghungerforducdavis.edu)|
|Date: Mon, 15 Aug 94 16:19 CDT|
Judy Baxter wrote: > We are working on setting up reserves for replacement costs, and >looking for efficient ways to get expected useful life and replacement costs. >So far we have considered asking contractors, a consultant on property >management, and the service people who have been dealing with the elevator, >furnace, plumbing, etc. >Any ideas on the relative merits of such sources (I know, this is stretching >it) or better ideas will be welcome. This is something all groups, even those with new construction, need to understand. Because we are set up legally as a condominium with extensive common facilities, the state Department of Real Estate calculated our monthly reserve contributions based on (who knows) some standard formulas they use. Many of us have since expressed some concern that the reserves may not be sufficient to cover future expenditures, and we have a "reserves study ad hoc committee" which is supposed to be looking into this. As one of the members of this committee, I can tell you that we have stalled, mainly due to the great uncertainty about replacement/repair costs. Our first cut, where we assumed complete replacement of things like sidewalks and site lighting in rough future years (e.g. tear out and replace sidewalks in 25 years) came out to be a huge monthly contribution per household. Our major problem has been deciding which things last essentially forever, given routine maintenance, and which things that realistically will require replacement. For instance, will we ever replace the kitchen cabinets? Will we have to dig up, regrade, and rebuild our parking lots? What assumptions do we make about inflation and rate of return on our reserve fund? (small changes in rates make large differences 30 years down the road). Those of us working on this have expert skills in the mechanics of economic analysis (e.g. determining the present value of future costs etc.) but still get mired up in estimating which things we'll need to fix or replace. I'll throw in with Judy, is there anybody out there who has had experience with this and can make suggestions? I'd be happy to post present value equations and such if that would help anyone else. David Hungerford dghungerford [at] ucdavis.edu
reserve funds/retrofit cohousing Judy, August 15 1994
- reserve funds/retrofit cohousing Hungerford, David, August 15 1994
Results generated by Tiger Technologies Web hosting using MHonArc.