senior living reserve study

zumBrunnen is a leader in senior living reserve studies, bringing together a team of experts with in depth knowledge, experience, and insight into the financial and operational aspects of senior living communities. We have a proven track record of providing comprehensive reserve studies that help senior living communities make informed decisions and ensure their financial security.

Reserve Studies for Senior Living Facilities

For more than 33 years, zumBrunnen has provided senior living reserve studies to help clients better understand their current and future capital needs. Our reserve studies provide a comprehensive evaluation of the condition of the common areas, amenities, and other elements of senior living facilities, as well as a detailed analysis of the funding needed for the repair and replacement of these items over time. With our reserve studies, clients can make informed decisions about their reserves, enabling them to better plan for the future and ensure their assets are properly managed.

About Reserve Study

A reserve study is planning tool that helps directors and officers of senior living communities better understand their long term fixed asset replacement needs. An accurate and thorough reserve study is a critical component in the annual budgeting process, and in planning for funding. Properly executed, it can also aid plant managers and facility directors in day-to-day and year-to-year decisions about what assets to replace.

Our reserve study involves a thorough evaluation of a community’s fixed assets making note of each asset’s replacement cost and remaining useful life. Directors can use a reserve study to make informed decisions and gain a valuable window into the future.

Rob Milam, CEO of zumBrunnen, facilitating a senior living reserve study

Contact zumBrunnen to do a Reserve Study for your Senior Living Facility

If you’re looking for an experienced and reliable team to assist you with your senior living reserve study needs, then look no further than zumBrunnen. Our dedicated team of experts has over 30 years of experience in the field, and is committed to delivering the highest quality of service. We understand the importance of accurate reserve studies, and our team of professionals will ensure that you receive the best possible results. With our extensive knowledge and expertise, you can be sure that your reserve study needs will be met with the greatest of accuracy and care. Contact zumBrunnen today and let us help you make the best decisions for your senior living facility.

More About Senior Living Reserve Study

At zumBrunnen, we understand that senior living facilities have unique needs and budgets, and we are committed to meeting those needs through our expertise in producing thorough and easy-to-understand reserve study reports. Plus, our team of experienced project managers are available to provide personalized guidance and advice every step of the way.

The Senior Living Industry’s #1 Choice for Reserve Study

Save More Time and Money for Your Senior Living Facility with A Reserve Study

Our senior living reserve study service offers a comprehensive “value proposition” to facility managers by providing a dynamic process and the essential tools to forecast future capital needs of a senior living facility for the duration of its useful life. This user-friendly capital reserve study solution is powered by zumBrunnen’s proprietary FacilityForecast® software, and allows users to customize their data in various ways. For instance, users can adjust inflation rates, interest rates, terms in years, filter or combine budgets, cost categories, budget item classifications, set minimum unit cost values, and calculate facility condition indices.

Senior Living Reserve Study Funding Plan Descriptions

Current Funding Plan

The Client’s current reserve fund balance, as well as their historical or planned annual reserve contributions, will be reviewed by zumBrunnen and presented in the Current Funding Plan reports. These reports will provide a comprehensive overview of the fund balance and planned contributions.

Funding Plan Line Chart Example:
This report presents a line chart of the client’s Current Funding Plan, depicting their annual contribution, capital expenses, and reserve balance for each year of the specified reporting term. It also identifies any potential shortfall in the client’s current funding model.

Funding Plan Table Example:
This report examines the effectiveness of the Current Funding Plan based on projected capital expenses. It includes data such as the required fully funded balance, actual reserve balance, percent funded, current plan annual contributions, interest income, capital expenses, and the funding requirement on a per unit per year and per month basis. The goal of this report is to determine if there are any years the Current Funding Plan may be underfunded.

This plan displays the status quo if you follow the 20–year budget and make no alterations to your planned contribution for the current year. It shows your financial position at the end of each year over the next 30 years.

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

Fully Funded Plan

In the early 1980s, HUD created the Fully Funded Plan Component Method, which requires separate funding accounts for each component each year, amortized over the component’s lifespan. For properties that are not new, accelerated funding is necessary to pay for the remaining life of said components, as well as the amortized balance of items to be replaced in the future. If there is a budget deficit, savings or a special assessment can be used to make up the difference. For older properties, a Fully Funded Plan would lead to larger initial contributions and a more conservative reserve balance than the Baseline and Threshold Funding Plans.

Funding Plan Line Chart Example:
Here is a bar graph showing the yearly contributions, capital expenses, and projected reserve balance of the Fully Funded Plan for the National Register of State and Societal Services.

Funding Plan Table Example:
The goal of the Fully Funded Plan is to cover 99% or more of the accumulated depreciation. The report includes yearly details on the required NRSS balance based on depreciation schedules, reserve balance, degree of funding, NRSS contributions based on remaining life amortization schedules, interest income, capital expenses from Table VII-A, and contributions calculated on a per-unit, per-year, and per-month basis.

A Fully Funded Plan strives to fund 99+% of the accumulated depreciation for properties that are more than one year old. This will require higher initial contributions than the Baseline and Threshold Funding Plans, but it will also result in a more conservative reserve balance.

Baseline Funding Plan

The purpose of this funding plan is to determine what the minimum yearly contributions should be in order to prevent the reserve balance from going below zero dollars over the Reserve Term. This is done by experimenting with various levels of annual contributions in relation to the predicted expenses until the annual contributions are sufficient to keep the reserve balance at zero dollars even in the years with the highest expenses throughout the Reserve Term.

Funding Plan Line Chart Example:
A line graph showing the Baseline Funding Plan for each year’s necessary NRSS annual contribution, capital costs, and the reserve balance.

Funding Plan Table Example:
This report outlines for each year the necessary NRSS fully funded balance based on depreciation schedules, reserve balance, percent funded, necessary NRSS annual contributions based on critical year amortization, interest income, capital expenses, and annual contributions calculated on a per unit per year and per month basis.

Please be aware that the Baseline Funding Plan only guarantees sufficient reserve funds for the Reserve Term years. After the first critical year, contributions may lower, unless there is only one critical year that falls in the last year of the Reserve Term. In most cases, there will be more than one critical year. In this case, the Baseline Funding Plan will lower the annual contributions so that the Reserve Fund does not exceed the necessary amount to keep a cash balance of zero or more. Keep in mind that extending the Reserve Term may cause the annual contributions over the specified Report Term to increase, as another critical year with bigger contributions may occur in a year beyond the specified Reserve Term.

This outlines your position if you adjust your annual contribution so that your reserve fund remains at or above $0.

example of a capital senior living reserve study baseline funding plan
a baseline funding plan capital senior living reserve study zumbrunnen inc
example of a capital senior living reserve study threshold funding plan
a threshold funding plan capital senior living reserve study zumbrunnen inc

Threshold Funding Plan

The Consultant recommends that the Client add a contingency (minimum threshold percentage) to the Baseline Funding Plan to ensure that critical replacements are not deferred or that there is a minimized risk of special assessments. This threshold percentage is a recommendation made by the Consultant based on his experience when considering the risk variables associated with this Property.

The Threshold Funding Plan is the Baseline Funding Plan plus the minimum reserve balance of zero dollars adjusted up by the threshold amount, including inflation adjustments. This threshold dollar amount is calculated by taking the threshold percentage of the total one-time replacement cost of all capital expenses. It is important to note, however, that any expenses not readily apparent or missed, as well as interpretations, means, and methods beyond the control of the Consultant, or pricing changes or variations, and life cycles may vary, are generally not accounted for in the Fully Funded or Baseline Funding Plans.

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

Funding Plan Table Example:
This report will provide the following information for each year: the fully funded balance according to depreciation schedules, the actual reserve balance, the percent funded, the NRSS annual contributions based on the critical year(s) amortization plus the threshold amount, interest income, capital expenses, and the annual contributions calculated both per unit per year and per month.

This plan outlines the necessary contributions for the current year that keeps the reserve fund at or above a minimum balance cushion that is equal to a predetermined percentage of the one-time replacement cost of all items in the capital budget.

Senior Living Reserve Study FAQ’s:

You can’t avert a catastrophic failure if you didn’t see it coming. We have seen too many owners and operators get blindsided by a sudden and unexpected failure of a major piece of HVAC equipment, or a roof that begins leaking in a dozen places during a downpour.

We have known too many property owners who, faced with these problems, did not have the money to address the problem because they did not reserve appropriate funds over the long term. We help owners minimize surprises by cataloging and evaluating their capital assets and developing a plan to save for future replacements – before they become an emergency.

A reserve study should be conducted at least every three to five years, depending on the size and complexity of the development. It’s important to keep a close eye on the condition of your assets and make sure the reserve fund is adequate for any upcoming repairs or replacements. Regular reserve studies can help you plan for the future and stay on top of any maintenance or repair needs.

A reserve study can provide invaluable insight into the condition of your community’s assets and help you make informed decisions about the future. To get the most out of your reserve study, make sure you have all the necessary information ready before the study is conducted and ask the right questions. Also, it’s important to review the findings of the study and develop a plan of action to address any issues that may arise.

zumBrunnen provides great value to its clients – knowledge, expertise, client service, willingness to work together, all at a reasonable price. They can speak both the construction language and the finance language – which is an invaluable asset!

Kenda Laughey
CFO - Southminster

Reserve Study Clients

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

Your Trusted Senior Living Reserve Study Partner

At zumBrunnen, we understand what a senior living facility requires when it comes to reserve studies. In fact, since we have been working in the senior living industry for over 30 years, we provide great insight and often find blind spots that most don’t. We even created an innovative software for your team to use after the reserve study report is produced to make the process more efficient and cost-effective in the long run.

The FacilityForecast® Software is an innovative facility management solution designed to help you plan and manage long-term capital replacement and operating expenses for your senior living facility. Our user-friendly interface allows you to quickly and easily forecast expenses, analyze financial performance, and create detailed reports. Our team is also available to provide personalized guidance and advice.