ISLANDIA
Homeowners Association
1138 Island Drive
Alameda, CA 94502
 tel 510-522-0270
office@islandiahoa.org
 
Reserve Study
 
You will need Adobe Acrobat Reader to view PDF files. You may download it free

 

Every three years or so, the association pays an outside contractor to perform a reserve study. This is an estimate of the major capital expenditures the association will have to undertake in the next thirty years. Each items remaining useful life is estimated, along with the likely cost of replacing that item. The reserve study also includes a funding plan.

If you have a copy of Adobe Acrobat Reader, a draft of the most recent reserve study can be downloaded from here.

You should remember that the reserve study is only an estimate, because who can tell how much materials and labor will cost in  the future. The price of timber may rise dramatically, labor costs may fall, so please do not assume that the reserve study is gospel. (but it should be a good ballpark figure)

When the board and the auditor mention that Islandia is 78% funded, what does this mean? It means that if we were required to do all the things anticipated as necessary in the reserve plan then we would not have enough money to do them. But don't panic for in real life it does not work this way, for instance, we plan on re-roofing beginning in two years. We know that we will not need to re-roof all our 50 buildings in two years; it will probably be a 4-5 year project. By the same token, we plan to resurface the fire lanes on a regular basis and we have found that at times we can extend the time between resurfacing.

The goal is always to have enough in the reserve funds so that when a project comes up, we do not have to levy a special assessment. We are very proud of our record of having only one special assessment in our 30+ years of operation. That special assessment occurred because we wanted to make sure that a contractors defect was remedied properly.

Currently we have a large amount in our reserve funds (and we are funding at the rate of $152,000 this year) because we are looking forward to the roofing project in 2 years. As the roofing project is completed, our Reserve funds will diminish to nearer zero and we will once again begin to accumulate funds for the upcoming necessary projects.

We have, over the last 5 years, completed a number of major projects to improve our property and to limit our costs and liability. This is important because now we do not anticipate any new major projects that have not already been planned for in the Reserve Study.

So hopefully you now have a better appreciation of the reserve funding, but again if you do have any more questions please do not hesitate to contact either the office, or the board members. After all, its your money, be aware of where it goes.