Re: Saving for future repairs and projects
From: Judy Baxter (BAXTERepivax.epi.umn.edu)
Date: Tue, 3 Aug 1999 13:10:42 -0600 (MDT)
If I remember right, our reserves are based on the following process:

identify the items that will wear out/need replacement  (I don't think it is
framed  in terms of maintenance, though that could be included, similarly).

identify the useful life (estimated, of course) and the current cost of the
project or replacement.  (I think that is what the consultant helped with, plus
pointing out items we had missed).

Divide replacement cost by time it will last to get the annual contribution
to the reserves for that item.

Income on the money set aside is assumed, in these calculations, to compensate
for inflation.

Then you add it up for all the items.

For us, we could have taken into account that some things were already well
into their useful lives  (called fully funding), but we didnt.

Judy

Judy Baxter, Monterey Cohousing Community,(MoCoCo) Twin Cities Area, Mpls.,MN
-- e-mail:      baxter [at] epivax.epi.umn.edu
        (usually checked on Monday, Tuesday, and Friday)
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