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Reserve Study
A reserve study is a tool used by the Locust Lake Board of Directors and the Manager to assist in the preparation of our budget. The reserve study identifies those village assets that require reserve funding and then projects their associated costs into the future. The reserve study will evaluate the current status of the reserve fund, and provide a recommended contribution rate that should be going in the reserve fund on an annual basis. The reserve study is comprised of two parts, financial analysis and physical analysis. The financial analysis section includes information on the current status of the reserve fund and the recommendations for the future life of the fund. The physical analysis section refers to the current conditions and estimated replacement cost for the individual components. The physical analysis is based upon a physical “inspection” of the asset. Spring 2021 Big Bass LakeViews 5 General speaking, a reserve component must pass a four-point test.
1: Must be a LLVPOA asset
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2: Must have a limited life 3: Must have a predictable remaining useful life 4: Must be above a minimum cost $1,000 in LLV The financial analysis section of the reserve study uses the cost and life estimate information gained from the physical analysis and cost to come up with a funding plan that provides for each component’s reserve funding needs. The present status of the reserve fund is general expressed in the terms “percent funded.” The amount that an association should ideally have in its reserve fund, is called the fully funded balance. The percentage of the actual amount in the reserve fund versus the ideal is said the be the account’s percent funded. For instance, an association with an actual reserve fund balance of $50,000 and a theoretical fully funded balance of $100,000 is said to be 50% funded. We are currently funded at 69% Once the present status of the reserve fund is determined, a sound funding plan must be put together. A sound funding plan must provide enough cash when necessary to meet the needs of each reserve component. A funding plan should not require reserve contributions that vary greatly from year to year. Any funding plan should be prudent and financially sound. A sound funding plan is the association’s best bet to ensure that our community will always be the ready for future large replacement needs.
Locust Lake Village is pleased to announce a new program called “Helping Hand”. It is a small group of volunteers who will be on call to assist those who are elderly, disabled, recovering from surgery, or not feeling well enough to accomplish a task. Here are a couple of examples we can help with: 1) Pick up something at a local store if the resident is unable to do so.
2) Correct something on the outside of the home if they have been unable to do so, for example change a light bulb at the front door.
You can text, phone, or e-mail Bob Gettis at 570-517-6251 or rbgettis@comcast.net Let us know if you need a “Helping Hand”!
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