healthcare reserve study

At zumBrunnen, we’re a team of experts with unmatched knowledge, experience, and insights in the field of healthcare reserve studies. We’re dedicated to providing the most comprehensive and up-to-date reserve studies in the industry. With a reputation for excellence and a proven track record, we help healthcare facilities make informed decisions regarding capital replacements.

Reserve Studies for Healthcare Facilities

For over three decades, zumBrunnen has been a trusted provider of reserve studies for healthcare facilities. Our studies offer a thorough facility assessment, and provide a clear analysis of the necessary funding for future capital replacements. With our expert guidance, healthcare clients are equipped to make informed decisions about their reserves and ensure proactive asset management.

About Reserve Study

A reserve study serves as an essential part of the annual budgeting process and the funding plan. The study provides a detailed replacement schedule that helps investors and property management staff make informed decisions about capital replacement, both in the short and long-term.

Contact zumBrunnen to do a Reserve Study for Your Healthcare Facility

zumBrunnen is your expert partner for all your healthcare reserve study needs. Our highly dedicated team boasts over three decades of experience in the industry and is committed to providing exceptional service. We recognize the importance of precise reserve studies and we deliver top-notch results. With our unparalleled knowledge and expertise, you can trust us to meet your reserve study needs with the utmost accuracy. Connect with zumBrunnen now and let us support you in making informed decisions for your healthcare facility.

More About Healthcare Reserve Study

At zumBrunnen, we know that every healthcare facility has unique financial constraints. We cater to those constraints by creating tailored, straightforward reserve study reports. Our seasoned project managers are also readily accessible to offer support and counsel throughout the process.

The Healthcare Industry’s #1 Choice for Reserve Studies

Save More Time and Money for Your Healthcare Facility With A Reserve Study

Our healthcare reserve study services benefit facility managers by forecasting future capital needs over the facility’s useful life. zumBrunnen’s exclusive FacilityForecast® software enables users to tailor their data in a variety of ways. For example, users have the ability to alter inflation rates, interest rates, and term lengths, sort or merge budgets, cost categories, and budget item classifications, establish minimum unit cost values, and compute facility condition indices.

Healthcare Reserve Study Funding Plan Descriptions

Current Funding Plan

zumBrunnen examines the client’s current reserve fund balance and their past or projected annual reserve contributions, and presents the findings in the Current Funding Plan reports. These reports offer a thorough understanding of the fund balance and intended contributions.

Funding Plan Line Chart Example:
This report showcases a line chart detailing the client’s yearly contributions, capital expenditures, and reserve balances throughout the given reporting period. It also highlights any possible deficits in the client’s existing funding approach.

Funding Plan Table Example:
This report assesses the efficacy of the Current Funding Plan by considering anticipated capital expenditures. It encompasses information such as the desired fully funded balance, actual reserve balance, funding percentage, ongoing annual contributions under the plan, interest income, capital expenses, and the funding requirement evaluated on a per unit per annum and per month basis. The objective of this report is to identify if there are any years where the Current Funding Plan may experience underfunding.

This plan shows you the status quo if you stick to the 20-year budget and do not change your planned contribution for this year. It displays your financial position at the end of each year for the next 30 years.

example of a capital healthcare reserve study current funding plan
example of a current funding plan capital healthcare reserve study zumbrunnen inc
example of a capital healthcare reserve study fully funded plan
an example of a fully funded funding plan capital healthcare reserve study zumbrunnen inc

Fully Funded Plan

In the early 1980s, the HUD instituted the Fully Funded Plan Component Method, which mandates distinct funding accounts for each component on an annual basis, spread out over the lifespan of the component. For older properties, an expedited funding approach is necessary to pay for the residual life of the components as well as the amortized balance of items slated for replacement in the future. Should there be a budget shortfall, surplus funds or a special assessment can be utilized to cover the gap. Older properties, again, are slightly different. They may require a larger initial contribution but more conservative reserve balances than the Baseline and Threshold Funding Plans.

Funding Plan Line Chart Example:
This bar graph presents the annual contributions, capital expenditures, and estimated reserve balance of the Fully Funded Plan for the National Register of State and Societal Services.

Funding Plan Table Example:
The aim of the Fully Funded Plan is to provide coverage for 99% or more of the accumulated depreciation. The report features annual specifics regarding the necessary NRSS balance, based on depreciation schedules, reserve balance, funding level, NRSS contributions derived from amortization schedules corresponding to the residual life, interest income, capital expenses taken from Table VII-A, and contributions calculated on a per unit, per annum, and per month basis.

The objective of the Fully Funded Plan is to provide financing for 99% or more of the accumulated depreciation for properties that have been in existence for more than a year. This will necessitate substantial initial contributions compared to the Baseline and Threshold Funding Plans, but in turn, it will also result in a more conservative reserve balance.

Baseline Funding Plan

The objective of this funding plan is to establish the minimum yearly contributions necessary to maintain the reserve balance above zero dollars throughout the Reserve Term. This is achieved by experimenting with different annual contribution amounts in relation to anticipated expenses, until the contributions are sufficient to preserve a zero-dollar reserve balance, even during the years with the highest expenses during the Reserve Term.

Funding Plan Line Chart Example:
A line graph displays the Baseline Funding Plan’s yearly required NRSS contributions, capital expenses, and reserve balance.

Funding Plan Table Example:
This report outlines the yearly requirements for the NRSS fully funded balance, including the balance based on depreciation schedules, actual reserve balance, degree of funding, necessary annual contributions based on critical year amortization, interest income, capital expenses, and contributions calculated per unit, per year, and per month.

It is important to note that the Baseline Funding Plan only ensures sufficient reserve funds for the years in the Reserve Term. Once the first critical year is reached, contributions may decrease, unless there is only one critical year that occurs in the final year of the Reserve Term. In most cases, there will be multiple critical years. In these cases, the Baseline Funding Plan will reduce the annual contributions to prevent the Reserve Fund balance from exceeding zero. Keep in mind that extending the Reserve Term may result in increased annual contributions over the specified Report Term if additional critical years with higher contributions arise beyond the specified Reserve Term.

This report details your financial position if you make annual contributions sufficient to maintain a reserve balance of $0 or higher.

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example of a capital healthcare reserve study threshold funding plan
a threshold funding plan capital healthcare reserve study zumbrunnen inc

Threshold Funding Plan

The Consultant suggests that the Client incorporates a contingency into their Baseline Funding Plan to prevent the deferment of critical replacements or reduce the likelihood of special assessments. This suggestion is based on the property owner/manager’s risk tolerance.

The Threshold Funding Plan builds upon the Baseline Funding Plan by incorporating a minimum reserve balance of $0, adjusted upward by the threshold amount, and factoring in inflation adjustments. The threshold amount is determined by multiplying the threshold percentage by the total one-time replacement cost of all capital expenses. However, it’s worth noting that the Fully Funded or Baseline Funding Plans may not account for unforeseen expenses, changes in interpretation, life cycle variations, or pricing changes beyond the control of the Consultant.

Funding Plan Line Chart Example:
A bar graph that depicts the yearly NRSS contributions, capital expenses, and the reserve balance for each year of the Threshold Funding Plan is required.

Funding Plan Table Example:
This report will present yearly data on the NRSS balance that is required based on depreciation schedules, the actual reserve balance, the degree of funding, the annual contributions calculated using the critical year amortization schedule, including the threshold amount, interest income, capital expenses, and contributions calculated on a per unit, per year, and per month basis.

This plan sets forth the necessary yearly contributions to maintain the reserve fund balance at or above a predetermined minimum level, which is calculated as a specified percentage of the total cost of replacement for all capital expenses.

Healthcare Reserve Study FAQs:

We are aware of the detrimental consequences that can arise for healthcare facilities from unforeseen equipment failures, such as a malfunctioning HVAC system or a leaky roof. Far too often, people are caught off guard by these incidents and are unable to address the issue due to a lack of proper long-term financial planning. 

Our goal is to prevent such surprises by thoroughly examining the property’s capital assets and creating a comprehensive funding plan that ensures adequate savings for future replacements. This approach helps owners proactively address potential problems and maintain the financial stability of the facility.

It’s recommended that a comprehensive reserve study be carried out every three to five years, depending on the scope and complexity of the healthcare facility’s property. Monitoring the condition of your assets and ensuring that the reserve fund is sufficient for future repairs and replacements is crucial. Regular reserve studies can assist in long-term planning and proactively address any maintenance needs.

Conducting a reserve study can give you a comprehensive understanding of the state of your facility’s assets and support informed decision-making. To maximize the benefits of the study, ensure you have all the relevant data prior to its initiation and pose the appropriate questions. Additionally, it’s crucial to assess the study’s results and create a plan to address any identified concerns.

Reserve Study Clients

  • greystone
  • ziegler
  • hjsims
  • beacon-1
  • woodward
  • covenant
  • grayco
  • kennesaw-state-university
  • fiftythirdbank1
  • abhow

“Our key contact, James, listened and REALLY heard our needs. He was responsive, helpful and knowledgeable. The report was thorough, easy to understand and conveyed well into grant “asks” which converted to dollars to fulfill the priorities.”

Alice Lutz
CEO - Triangle Family Services

Your Trusted Healthcare Reserve Study Partner

At zumBrunnen, we are knowledgeable in the specific needs of healthcare facilities when it comes to reserve studies. With over three decades of experience in the industry, we bring valuable insight and can often identify potential issues others may miss. To make the process more streamlined and cost-effective, we have created the FacilityForecast® Software. This innovative facility management tool helps you plan for long-term capital replacements and operating expenses with ease. With its user-friendly interface, you can easily forecast expenses, evaluate financial performance, and generate detailed reports. Our dedicated team is also available to provide tailored guidance and support.