Re: Questions about Reserve Amounts
From: Bob Leigh (bobleightwomeeps.com)
Date: Sun, 8 Jul 2018 11:17:02 -0700 (PDT)
How have other communities coped with the argument that current residents
should not have to contribute to a new roof that they might not be around
to use?

Bob Leigh
Cornerstone Village Cohousing
Cambridge, Massachusetts US

On Sun, Jul 8, 2018 at 2:06 PM Sharon Villines via Cohousing-L <
cohousing-l [at] cohousing.org> wrote:

> To respond to Philip’s question based on Joe’s excellent figures — the
> costs of maintaining, repairing, and replacing the commonly owned elements
> are not particularly related to how many people live in a unit. The cost of
> the unit should include an evaluation of the reserve funds. Healthy
> reserves, higher prices. Low reserves, lower prices and greater risk.
>
> The reasoning behind the condo fee 50/50 split was that some elements are
> equal between units — we all have one parking space, for example. Parking
> is expensive. It is unlikely that a large unit would use the CH more than a
> small unit — the guest rooms are more likely to be used by small units.
>
> But in fact, our large units do not necessarily have more people in them.
> We have a 4br with a full basement with 1 person, and a 3br with a full
> basement with one person. For years we had a 1 bedroom with a single parent
> and child. And a one bedroom with a single parent and 2 children.  Size of
> unit is not necessarily related to the number of people living in the unit.
> Most of our 2 bedrooms have 1 person.
>
> Another way to look at the reserves is to divide by the number of units —
> $93,000/43= ~$180 a month per unit. It seems like a lot but it also covers
> a lot. It has been a great comfort not to have to worry about replacing the
> HVAC system or replacing the roof when we were able to add solar panels.
>
> Having a reserve study with a graph of expenses at least 50 years out—ours
> goes 100 yrs—makes it much easier to convince residents that we need to
> have that much in reserves.
>
> Sharon
>
> > On Jul 8, 2018, at 11:44 AM, Joseph Wheeler <wheeler76 [at] gmail.com> 
> > wrote:
> >
> > We contribute almost half of the annual income from condo fees to our
> > replacement reserve ($93,000) or maintenance reserve ($22,000). In our 18
> > years of operation, we have never had to ask members to pay a special
> > assessment.
> >
> > With 43 units of varying sizes, our monthly condo fees range from
> $357-638
> > with the average being about $455. Of that average fee, about $223 would
> go
> > to reserve accounts.
> >
> > We have commissioned a reserve study every 3-4 years and those studies
> > inform our budget process. Our most recent study recommended continuing
> to
> > increase reserve contributions about 5-6% per year to avoid risk of
> special
> > assessments.
> >
> > The basic formula for calculating our condo fees is that 1/2 is split
> > evenly among all the units and 1/2 is variable based on square footage of
> > the unit.
> >
> > -Joe Wheeler
> > Takoma Village Cohousing
> > Washington, DC
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