The Role PMs Play with Reserve Funds

Started by GrahamO • 7 replies • 1766 views

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GrahamO (Ontario)
Posts: 55

Posted:

We know, of course, that most communities look to Reserve PLANNERS to do reserve fund studies and prepare reserve plans. But we also know that some Property Managers get involved with reserves, and we’d like to know … to what degree.

Please tell us, in the case of your association, does your PM play any kind of a role in CREATING the reserve plan, and/or does your PM play an on-going role in TRACKING AND REPORTING on reserve fund expenditures and balances

We’re a reserves-related resource and your answers would interest us. Thanks … and we’ll post a summary of the replies once they’re in, and compiled.

CyndiK (Texas)
Posts: 2

Posted:

The PM for our HOA in TX worked with the finance committee in creating a plan to fund the reserve account based on projected replacement dates and cost estimations of structural elements- roofs, siding and fences. The plan was then presented to the board for approval. The Association never had a reserve study in the past or a reserve account, but instead, relied on large assessments for such repairs.

GrahamO (Ontario)
Posts: 55

Posted:

Thanks CindiK--
We weren't just imagining that PMs play a part in creating resreves plans. Let's hear from other forum eembers about THEIR particular PMs' involvement.

hoatalk (California)
Posts: 599

Posted:

Hi Everyone,

Graham is a sponsor of HOATalk so it would be great if members could weigh in here and help him gather this information.

Thank you for anything you can provide.

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BonnieE (Illinois)
Posts: 338

Posted:

Hi Graham,

The role of our PM in reserve planning:

• For initial reserve study, provided 2 or 3 “no name” reserve reports to us (as a new BOD) so that we would know what they are/what to expect, along with the reserve planners’ proposals

• provided proposals from 3 reserve planning consultants from which to choose from when we were planning 3rd update (2nd update we stayed with same reserve planner; 3rd time around BOD decided to see if could save $$ by going with someone else)

• acts as “middle person” between BOD and consultant (logistically) during development of reserve study

• includes a recommended Reserve contribution in annual budget developed for BOD’s review (based on reserve study recommendation and reserve fund balance)

• includes reserve fund tracking and reporting in monthly financials our MC produces

• has arranged for investment of reserve funds per BOD direction

Hope this helps,
Bonnie

hoatalk (California)
Posts: 599

Posted:

Thank you Bonnie and Cyndi. Anyone else have any information to share here?

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GlenL (Ohio)
Posts: 5,491

Posted:

Graham, our previous MC did our reserve study for the Association as part of their services until Ohio changed the law requiring every COA to fund their reserves with a minimum of 10% of their yearly budget or have the H/O's vote each year to allow them to be underfunded and risk the possibility of a special assessment. They decided that the potential of a lawsuit should they be wrong was not worth it.

P.S. After comparing the one they did with the one we paid for, they were very much in the ballpark.

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StephenM4 (California)
Posts: 2

Posted:

As a reserve preparer I have seen a growing trend for management companies to bring in additional services in-house. An easy and profitable service is that of reserve studies. As a board who may be concerned with the proficiency of your manager or agent of the management company I recommend checking reserve specific licenses. The Community Associations Institute (CAI) maintains a reserve specialist (RS) designation that is widely recognized as an essential qualification for reserve specialists. The exception to this are state specific licensing requirements such as Nevada who require a license to legally perform reserve studies. If your PM is not licensed then you will be required to utilize someone else.

- Stephen Martin, CCAM, RS, RSS
---------------------------------------------------------
SMA California - Providers of Reserve Studies, Project
Management, and Litigation Support services.
www.smacalifornia.com
---------------------------------------------------------

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