Know what it costs

Your reserve study provides replacement costs, but understanding what drives those numbers helps the board make better decisions.

Costs are not static. A roof that costs $500,000 to replace today will cost more in ten years. Materials prices fluctuate. Labor costs rise. Building codes change, sometimes requiring more expensive solutions than what was originally installed.

This is why annual reserve study updates matter. A study from five years ago may significantly underestimate what you'll actually pay. Underfunding based on outdated numbers is still underfunding.

When reviewing costs, consider:

• Inflation. Construction costs typically rise faster than general inflation.
• Scope changes. Code requirements may expand the scope of work beyond simple replacement.
• Access and logistics. Some repairs cost more due to building design or location.
• Timing. Emergency repairs cost more than planned maintenance.

Your reserve study should mark assets to current market value. If your engineer is using old estimates or generic national averages, push for local, current pricing. Accurate cost information is the only way to know if your funding is actually adequate.