It's Condo Budget Season - Do You Know Where Your Reserves Are?

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Ready Reserve$™ program makes budgeting reserve assessments an easy task for those responsible for preparing their community association annual financial plan.

When changes in the Reserve Plan go unchecked, then good luck come budget time

As a follow-on to its recently announced Ready Reserve$™ program on June 26, 2009 (search: Condo Boards Offered New Reserve Management Tool) Guidance Association Services points to the program's utility when budget time arrives for community association leaders. Thousands of community associations across the U.S. are entering budget season when the Board of Directors must produce a financial plan or budget for the coming year.  The budget consists of a forecast of expenses related to day-to-day operations of the association and a reserve assessment for long term expenses related to capital replacements, deferred maintenance, and community improvements.

Calculating the reserve assessment that owners must pay is often a daunting task when the community's Reserve Plan is not up to snuff.  And, there are many reasons for a Reserve Plan to go off track.  Unforeseen expenses, insurance requirements, safety and security issues, and changes to a project's timing or scope are just a few. "When changes in the Reserve Plan go unchecked, then good luck come budget time," said Gerry Alfiero, founder of Guidance Association Services.  "It's not uncommon for a reserve assessment to be derived from one of two methods.  The first is called a 'WAG' (or 'wild a?? guess' in the vernacular) and the second is 'Ready - Fire - Aim.'  The value of either method is Slim to None, and Slim left town," quipped Mr. Alfiero. 

On the other hand, the Ready Reserve$™ program continuously monitors an association's Reserve Plan.  It accounts for actual inflows and expenses throughout the year and incorporates changing project outlooks by the Board of Directors.  So, the Reserve Plan status is always accurate with up to date data.  Armed with reliable information, it's easy for a Board to decide whether to maintain or adjust reserve assessments for the coming year. 

You can learn more about Ready Reserve$™ by visiting http://www.readyreserves.net. About Guidance Association Services.Guidance Association Services specializes in working with community associations primarily through the Board of Directors to help assess, develop, and implement management solutions that enable the Board to better serve the association members and all community stakeholders. Contact: Gerry Alfiero, CAMGuidance Association ServicesTelephone: 941-592-6927 Website: http://www.readyreserves.net

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Gerald Alfiero
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