Management of the Contingency Reserve Fund

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A publication with helpful suggestions on the management of the contingency reserve fund. Includes a CD with software for analyzing and using your depreciation report.
The digital download contains all of the files that are on the CD

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Description

Includes a CD with software for analyzing and using your depreciation report.

The recent introduction of mandatory Depreciation Reports has highlighted the importance of establishing and investing adequate contingency reserve funds (CRFs) to provide for inevitable future repair and renewal expenditures.  Management of a strata corporation’s CRF involves answering four questions:

  1. How big does the CRF have to be, now and in the future, to meet the anticipated future expenditures projected in its depreciation report?
  2. How big do annual contributions have to be, now and in the future, in order to achieve these required CRF levels?
  3. How should the resulting funds in the CRF be invested in order to meet its objectives?
  4. What procedures are required to administer investment decisions efficiently and prudently?

This publication answers all of these questions in a simple but comprehensive manner. It is accompanied by a CD that includes two Excel worksheets, with instructions, that facilitate the strata’s financial planning and investment decisions.  The Depreciation Report Analyzer on the CD is a powerful user-friendly tool for exploring different funding possibilities to meet future expenditures as well as to formulate detailed maintenance plans based on depreciation reports.  No prior knowledge of Excel is required to use it, but users who are familiar with the program will find that it provides a great deal of flexibility to explore and compare alternative plans.

The publication is written by Dr. Cleveland S. Patterson, an Emeritus Professor of Finance and a member of VISOA’s Board.

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