Condo Association Management Blog

I'm a traditionalist, our Association uses a straight line method and set a "useful" life span on large future expenses and funds the reserves accordingly, IMO this is done by most associations. However "pooling" may be useful in some cases, I've included a link that has some useful insight about this issue. They feel as I do that no-one has a crystal ball to predict when any large expenditure will pop up. 
Here it is (just copy and paste into your web browser): http://www.floridacondohoalawblog.com/articles/assessmentscommon-expenses/budgets-reserves/

This may help 
 
 
 
http://www.duanemorris.com/alerts/alert2834.html

The "pooled" method is called the "cash flow" method in National Reserve Study Standards. It is no more or less accurate than the "straight line" method (called the "component method" in National Reserve Study Standards). The difference is that one (cash flow) allows more flexibility with respect to the Funding Plan than the other.  
 
What is significant is the Funding Goal selected. The Cash Flow method can be used to achieve the conservative Full Funding goal, the Funding Goal that is accomplished with the Straight Line method.  
 
Both could use the same Reserve Component List (component, Useful Life, Remaining Useful Life, Replacement Cost). The only difference between the two is the user's conservative or aggressive choice of a Funding Goal.  
 
At our company, for instance, we use the flexible Cash Flow method to recommend Full Funding.  
 
Our understanding is that the choice between "pooled" (Cash Flow) and "Straight Line" should be articulated each year, but that only a change should be announced. But as a Reserve Study provider, we suggest getting legal counsel on that type of matter.