Reserve Funds and Reserve Fund Studies
Reserve Fund Study Report Cards
From the Spring 2022 issue of CCI Toronto Condovoice Magazine, Volume 26, Issue Number 3
Beware of Unfamiliar Systems - Grade: D
The site consists of an eight-storey condo with a two-level underground parking garage, constructed in about 2015.
The building contains a ground-source geothermal system that provides the heating and cooling for the heat pump units throughout the building. The system includes extensive underground piping that was likely installed before the building was constructed above the system. There are also solar panels installed over the majority of the roof.
Reserve Fund Assumptions
The reserve fund study did not include budgets for the eventual replacement of the solar panels or below-grade portions of the geothermal system.
Although the geothermal system is likely to have a long service life, the eventual replacement must be considered by the reserve fund study. The study should consider challenges presented by the fact that the building was constructed above the system, meaning that any new pipes that need to be drilled in will be very challenging to install, because the drill rig will be limited to something that can fit inside a single-storey garage.
The solar panels also seemed to have been overlooked.
Lessons Learned for Reserve Fund Planners
As buildings evolve to become environmentally friendly, we will come across systems that are new and unfamiliar and these may not be in your standard reserve fund template. Despite not having much information or cost data, the reserve fund study must consider replacement of these systems. For atypical items, a reserve fund planner will need to take extra steps to sufficiently capture these systems in the study. For example, you may need to call specialty contractors to understand required maintenance, as well as replacement costs and service lives.
Takeaways for Board of Directors and Property Managers
Managers will also need to do extra homework to learn about the maintenance procedures for these less familiar systems. It is not uncommon to see buildings with solar panels installed that are not operational or not properly connected, because they fall outside the purview of the traditional HVAC contractors.
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