TELLICO VILLAGE RESERVE STUDY
By Teresa Reed, VP Advocacy
A Reserve Study is a tool that allows a community to proactively manage their finances for anticipated repair/replacement costs of assets.
In 2022, Tellico Village conducted their first reserve study to determine the amount of money needing to be in the reserve. The study is being revisited this year and is applying a new fluid accounting method. Previously, a Baseline Funding approach was used, requiring a need to keep $10M in reserve above and beyond projected money to be spent in the account. Moving forward, the reserve fund will operate using a Fully Funded Plan of accounting.
In this method, each asset is assigned a value and useful life. For example, a $100,000 truck with a 10-year useful life expectancy that is 3 years old is fully funded at $30,000. Each year, $10,000 needs to be added to the reserve to be fully funded. Tellico Village has outstanding standards about the care and maintenance of village assets, so as long as this exceptional maintenance continues, this funding plan makes sense for the Village Reserve. Roads, buried pipes, greens and fairways have been removed from the reserve balances due to the excellent maintenance standards of our employees. The reserve study is nearly complete, and final results are being prepared for residents’ review in the near future.
In light of the changes made to the reserve funding model, an anticipated reduction in project costs and timelines, and the strong financial performance of our accounts, the POA Board voted unanimously to suspend the WAISF $80 fee effective July 1, 2025.
Moving forward, leadership sees significant reliance on LUB/TASS to ensure feasible infrastructure solutions for the village water/sewer projects only. This plan will be reviewed annually to ensure we stay on track for our funding needs. Let’s thank our leadership for all their hard work and volunteer hours to keep the village running efficiently.