New year, old problems? That seems to be the case, at least when it comes to one of the most relevant topics of the last two years: reserve funding and reserve studies. In the wake of the tragedy at Champlain Towers South came a crop of new legislation and regulations around residential building maintenance, and with it, talks about how reserve funding continues to be an afterthought for so many HOAs.
While it may be a new year facing old problems, it’s not going to be a year spent spinning wheels with the same rusty old tools. New year, old problems…new solution. In 2023, CINC Systems is integrating with a groundbreaking product revolutionizing how community associations handle aging infrastructure and reserve funding: SmartProperty’s The Living Reserve Study®.
Steering Away from Static Reserve Studies
One of the most intriguing results to come from our 2022 State of the Industry survey last year was the realization that while many communities claimed to be 100% funded or in some way adequately contributing to their reserves, not enough communities had performed a reserve study within the last five years (or ever!) to make that claim accurate. Unfortunately, without up-to-date benchmarks and metrics to check against, it’s unlikely these communities are as well-funded as they believe.
Reserve studies are static in nature. They don’t change, and they only tell you what you need to determine your budget contributions in the year they are developed. But the world around you changes constantly, so why would your funding plan remain static? If a reserve study doesn’t account for changes in the economy, community components, or HOA finances, it’s not worth much as a planning tool beyond the initial release.
Imagine if the same real-time understanding of a community’s financials that you gain with CINC were available for your reserves. This new integration provides both managers and boards with a deeper level of insight into reserve spending, future planning, and funding needs, just as you have come to expect from your CINC financials. With real-time financial data and component health histories, you can better predict expenses before they come and are more aware of the community’s financial capability to handle those costs. Knowledge of the true state of their live financials gives boards the power to plan effectively, make data-backed decisions, and fund their reserves accurately, which is exactly what The Living Reserve Study® offers to CINC customers.
Forging the Path Ahead
As more and more states begin to pass laws dictating reserve analysis timelines, funding requirements, and infrastructural health expectations, communities need to be vigilant. Relying on a single study from a decade past isn’t cutting it–for anyone. From the rising cost of living to the ever-climbing inflation rate, costs of goods going up, and insurance rates following suit, prices from even a year ago are no longer viable.
In order for community associations to better manage their reserve funds and combat aging infrastructure, they need more than just a single, unchanging reserve study once every 6+ years. Realistically, they need a tool that helps facilitate cost containment rather than the band-aid solution of increasing monthly fees when unexpected costs arise. Community management tools should also offer issue identification and resolution, including plans of action to accomplish those resolutions.
Without basics like these, HOAs and condo communities are being handed a stack of short-term suggestions that steadily become valueless and act as a detriment to community funding.
Give Your Community the Gift of the Living Reserve Study®
This new year, treat your community to something it greatly deserves: the gift of financial empowerment. Now is the time to get serious about reserve funding and combating aging infrastructure in communities. HOAs can’t afford to make mistakes when it comes to reserve funding. It is important to use the tools available to you to get serious about planning for the long term. HOA boards deserve better tools to support their long-term financial health, and CINC is proud to bring those tools to our clients with this partnership with SmartProperty.
