HOW-TO GUIDE

Plug-in to the RCL process and energize your reserve study by applying it as a budgeting tool to make your job as a board member or association manager easier!

PREPARE

Start Early: First/Second Month of Fiscal Year

Update contact Information

Help us stay in contact with you. Email us your Association Manager’s and Board representative’s information.

Clarify responsibility

Review your governing documents and possibly consult with legal counsel to ensure responsibility is defined.

Construct/review a responsibility matrix that clearly documents which components are maintained by the Association and which are maintained by the individual Unit Owners.

Identify goals

Meet with the Board and Association Manager to review the current approved budget, planned projects for the fiscal year, and the 5-year project list from the most recent reserve study.

Discuss the future; include the “wants” as well as the “needs” of the Association.

- be cognizant of new code or legal issues that impact the Association
- determine if there is deferred maintenance that needs to be addressed
- balance the cost of repairs with the cost of replacement

Define a scope of work for each project; hire consultants for technically complex projects.

Collect Data

Acquire bids for planned work. Having a clear scope of work will allow vendors to accurately provide pricing so that the Association can compare the bids side by side. Ideally, three bids should be gathered for each major project.

Review the Association’s maintenance history, focusing on timing and costs. Document this information to include in the reserve study for future Boards and Unit Owners to reference.

Compile Questions

Generate a list of questions to discuss with the Reserve Specialist during the update process.

LAUNCH

Initiate the Reserve Study Update – Fourth/Fifth month of fiscal year

Allow ample time from start to finish

- approximately 6 weeks for a Level 3 update without a site visit.
- approximately 8 weeks for a Level 2 update with a site visit.

Complete necessary paperwork; return signed contract

- select services wanted and forward a signed contract
- complete the Input Form in its entirety with accurate data

Designate a single point of contact who can respond to the Reserve Specialist’s questions promptly.

Share budgeting goals and gathered information with the Reserve Specialist for incorporation into the reserve study update.

Coordinate the site visit so that someone with knowledge of past maintenance and the Association’s goals can provide useful information to the Reserve Specialists while on site.

Share questions and concerns with the Reserve Specialist before the draft is compiled.

Discuss budgeting options with Reserve Specialists to help ensure that goals are attainable.

Establish and clearly communicate the Association’s deadlines to the Reserve Specialists.

REVIEW

Review the draft report – Seventh/Eighth month of fiscal year

A draft of the report will be issued to the Association’s contact to distribute to the appropriate Board members.

Encourage the Board to review the report, ensuring that the report correctly reflects:

- dates that maintenance has been completed
- costs for past maintenance
- costs for future maintenance based on bids received
- components that are maintained with funds from the reserve fund, the operating budget and by individual homeowners
- the starting reserve fund balance for the next fiscal year, which is detailed in the report

Establish a meeting date for the Board and Association Manager to discuss draft report after they have had an opportunity to thoroughly review the report.

The Association’s contact should send a list of questions and comments to the Reserve Specialist within 2 weeks of receiving the draft report. Be sure to resolve any conflicting opinions prior to delivering the list to the Reserve Specialist.

FINALIZE

Keep a copy of the finalized reserve study on hand for quick reference.

PROPOSE BUDGET

Prepare a Budget – Ninth/Tenth month of fiscal year

The Board proposes a budget for the next fiscal year.

- refer to the most recent reserve study to provide guidance on future reserve account funding goals and maintenance projects
- balance current and future needs with funding demands.

Set ratification meeting within 30 days of drafting the proposed budget.

Notify all Unit Owners 14 to 50 days prior to the ratification meeting. Provide a Budget Packet in compliance with RCW 64.90.525

- submit required information to Reserve Specialist for the Reserve Disclosure to be included with the Budget Packet a week before it is needed
- be aware of the timeframe requirements for notification. Allow time for compiling the information in Budget Packet, including the Reserve Disclosure, and delivering the Budget Packet

RATIFY BUDGET

Ratify Budget – Eleventh/Twelfth month of fiscal year

Information from the reserve study provides a third-party opinion to support the Board’s proposed budget.

The reserve study establishes a thirty-year forecast, as required by Washington State Law. Standard reserve studies provide a more detailed five year summary.

The Reserve Disclosure complying with RCW 64.34 & 64.38 illustrates

- anticipated reserve funding at current, recommended and proposed reserve contribution rates
- years that a special assessment may be possible at the current and proposed contribution rates.

The Reserve Disclosure complying with RCW 64.90 lists the current discrepancy between the current reserve account balance and the fully funded balance.

IMPLEMENT

Implement Fiscal Plans – throughout the fiscal year

The budget and reserve study provide a road map for projects to be completed during the current fiscal year.

The reserve study provides a financial buffer to allow for unexpected maintenance that may be needed.

Keep a detailed record of maintenance projects to be included in the next reserve study update. Information to include:

- what work was completed
- how much the work cost
- bids received for planned maintenance

TIPS

Track progress on the 5-year plan included in your reserve study and identify components that need to be modified in the next reserve study.