Hello Berni,
Here are a couple things you may want to think about.
What is your total condo fee revenue amount?
What amount of that goes to the Reserve Fund?
What minimum amount have the BOD set for the Reserve Fund Balance?
You should always have an "emergency balance" like this...
$1. - $300,000. for catastrophic emergencies - fire, flood, etc. (never use this except of true emergencies -- it is your safety-net. A good rule of thumb is... this amount should equal the market value of one/two condo units.)
Your "working balance" is above that amount.
$300,001. - $800,000. for regular Reserve Fund projects.
That gives you a 1/2 million to conduct regular RF projects each year.
(You should do the same for your general expense account too. You pick the numbers. Extra snow or a pipe break can cost you tons from your general expense account.)
Too many folks in condos have a self-defeating attitude of.. "we have little or no money." This is completely false. (What home owner wouldn't like to have: A) the revenue your Reserve Fund gets every year;
a 1/2 million in the bank for repairs/replacements?)
Try to use only about 2/3 of your "working amount." The balance may/will bring in enough "interest" to cover a yearly cost of living increase and help reduce condo fee increases.
These figures can vary with the size of your condo and what the BOD deems reasonable given the condo age and projects to do. It is not unusual to have $2 million in the Reserve Fund for larger condos.
Also, be aware that spreading a project over 5-10 years is NOT cost effective. If your engineer recommends this type of time-line -- find another engineer -- fast. Focus only on one major project each year. This reduces work for everyone and leaves you with sufficient funds to do one or two small replacement projects -- and limit yourself to only 1-2 of these. Projects should be completed as quickly as possible to take advantage of economy of scale.
As well, owners get upset if some owners got new windows last year and others have to wait 2-3 more years. Strive to complete all projects within 1 year, 2 years if necessary; 3 years at the absolute worst. Remember... prices, sizes, colours, styles, and product lines change or are discontinued. You don't want to have 3-4-5 different items when you want consistency. Also, having warranties for various units/buildings spread over 5-10 years is a total nightmare! .. and makes replacement next time even more difficult!
Understanding and implementing best business management practices and good project management practices are keys to good condo governance. Saves time, money, workload and headaches, and reduces missed opportunities.