Cohousing-L Mailing List: Re: Replacement Reserve Funds

[Sharon Villines (sharon]

On 4/5/04 8:34 PM, "Harriet Lewis" <hlewis [at] sonic.net> wrote:

> 
> I live in a 27 unit housing cooperative in Santa Rosa.  We have a
> $50,000 replacement reserve fund.  The fund is to cover all indoor and
> outdoor needs other than routine maintenance. Our housing cooperative
> is i22 years old .  Therefore ,the buildings are beginning to show
> wear, refrigerators and heaters are probably on their last legs, etc.
> We are asking the question "Do we have enough in Replacement Reserves?"

The best thing is to have a reserve study done. These are done by companies
who employ engineers who really look at your property and determine how long
all your structural elements will last and how much it will cost to replace
them. They know stuff about materials that you and most contractors won't
know.

Our reserve study has a list of all the elements that will have to be
replaced including less obvious things like sidewalks and sewage ejectors
and when we should expect to replace them. Ours also includes floor
coverings in the commonhouse, furniture, kitchen appliances, gutters --
everything!

Then it estimates given a rate of inflation how much it will cost to replace
each of these things.

Then there is a calculation based on how long each thing will last and how
much it will cost to replace that tells us how much we have to save each
year for each thing in order to have enough to replace each thing. Voila, a
round number that we save each year.

I'm currently looking at doing some calculations like Rosewind does. They
have an account for each thing so when it is filled, they don't have to save
more for that item. This encourages saving money by deferring replacements
when it is possible. I'm hoping this will also encourage us to do better
maintenance awareness so systems will last longer.

Sharon
-- 
Sharon Villines
Takoma Village Cohousing, Washington DC
http://www.takomavillage.org

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