Why Are Reserve Fund Studies Wrong 18 Out Of 25 Times?

Sounds like a university math problem, but it isn’t. Math problems have answers. Reserve fund studies are subject to numerous assumptions beyond anyone’s reasonable control. One such assumption made by far too many reserve fund planners (one that has been for many years) is that the cost of work and expenses from reserve should change at a percentage rate equal to the rate of change that the annual contributions to reserve do. The available evidence illustrates that correlation simply does not happen often enough to justify being used in, or forming the basis of, 30-year or longer cash flow plans.    Read the article…………….


Related Articles

Ontario judge applies correctness standard to Condominium Act arbitrations

On an appeal from an arbitration under the Condominium Act, in 90 George Street Ltd. v. Ottawa Carleton Standard Condominium

Allocating Risk When Hiring Professionals

We frequently review contracts between associations and licensed professionals, like Architects and Engineers. One common provision that many of these

Reader Feedback Q and A (re Robert’s Rules)

Over the past few weeks I posted about the types of motions under Robert’s Rules of Order. I had several