Reading a 30-Year Funding Projection: A Board's Walkthrough

The Document Everyone Signs Off On But Few Actually Read

Every reserve study includes a 30-year funding projection. It is usually a wide spreadsheet with dozens of columns and rows, printed in a font size that seems designed to discourage close reading. Most board members glance at the recommended contribution figure, approve the budget, and move on.

That is a mistake. The 30-year projection tells you whether your association is headed toward stable finances or a special assessment. Learning to read it takes about 20 minutes. Let me walk you through a realistic example so you can do it with your own study.

Meet Maplewood Commons

Maplewood Commons is a 96-unit condominium association built in 2004. Their most recent reserve study was completed in 2024. The board received a 30-year projection covering 2025 through 2054. Here are the key numbers from the summary page:

• Starting reserve balance (Jan 2025): $412,000
• Fully funded balance: $968,000
• Percent funded: 43%
• Recommended 2025 contribution: $186,000 per year
• Current contribution: $142,000 per year
• Assumed inflation: 3%
• Assumed interest earnings: 2%

Those six lines already tell a story. Maplewood is funded below half of where it should be, and the reserve specialist recommends raising annual contributions by roughly 31%. The board wanted to know why, and whether they could soften that increase. The projection has the answers.

Column by Column: What You Are Looking At

A funding projection has one row per year. Read left to right, the standard columns are:

1. Beginning Balance

The reserve cash on hand at the start of the year. Year one matches your actual bank balance. Every year after is calculated by the software.

2. Annual Contribution

How much the association plans to add to reserves that year. In Maplewood's recommended plan, this starts at $186,000 and rises about 3% each year to keep pace with inflation.

3. Interest Earned

Investment income on the reserve balance. At 2%, a $400,000 balance earns roughly $8,000. This number matters more than boards expect, because in later years the balance can be large.

4. Expenditures

The money spent that year on repairs and replacements. This is the column that swings wildly. Some years show $15,000. Others show $340,000 when the roofs or the parking lot come due.

5. Ending Balance

Beginning balance, plus contributions, plus interest, minus expenditures. This becomes next year's beginning balance.

6. Percent Funded

The ending balance divided by the fully funded balance for that year. This is your health score. Watch how it moves.

Following the Story Across the Years

Here is where reading pays off. On the Maplewood recommended-funding page, the numbers moved like this:

• 2025-2028: Small expenditures, mostly paint and minor concrete work. The balance climbs from $412,000 toward $620,000. Percent funded rises from 43% to about 51%.
• 2029: A big year. Roof replacement at $310,000 and exterior painting at $95,000. The balance drops from $620,000 to roughly $250,000. Percent funded falls to 38%.
• 2030-2037: Recovery. Contributions keep flowing, expenses stay modest, and the balance rebuilds to about $780,000.
• 2038-2040: Asphalt reconstruction and elevator modernization hit together. Another deep dip.
• 2041-2054: Steady climbing again, with the balance never dropping below $180,000 and percent funded ending near 62%.

That pattern, called a saw-tooth, is normal and healthy. Reserve balances rise steadily and then drop when large projects happen. What you never want to see is a line that dips toward or below zero. If the ending balance goes negative in any year, the association runs out of money and faces a special assessment or a loan.

The Test That Matters: Does the Line Ever Cross Zero?

The board at Maplewood asked the natural question. Could they keep contributions at $142,000 instead of raising them to $186,000? The reserve specialist ran that as a second scenario, and the projection showed the answer plainly.

Under the $142,000 plan, the 2029 roof year pulled the ending balance down to $61,000. That survived. But the combined 2038 to 2040 projects pushed the balance to negative $94,000. The line crossed zero. That means in 2039, Maplewood would not have enough cash to pay for the asphalt work. A special assessment of roughly $1,000 per unit would be required, or the board would need a bank loan with interest costs on top.

Seeing the negative number changed the conversation. The board was not choosing between $142,000 and $186,000 today. They were choosing between a manageable annual increase and a five-figure crisis in 2039.

What to Check on Your Own Projection

Pull your study and look for these five things in order:

• The lowest ending balance across all 30 years. Find the worst year. If it is comfortably positive, you have a cushion. If it is near zero or negative, you have a funding gap.
• The direction of percent funded. It should trend upward or hold steady over the full period. A steady decline signals underfunding.
• The biggest expenditure years. Know when your roofs, paving, elevators, and mechanical systems come due. Those are the years that stress the plan.
• The inflation and interest assumptions. Small changes here move the ending numbers a lot over 30 years. Ask your provider what rates they used and whether they are reasonable.
• The contribution increase schedule. Most plans build in annual increases. Confirm your budget actually follows them. A plan that assumes 3% yearly increases fails if the board freezes dues.

The Projection Is a Living Document

One projection is a snapshot based on today's estimates. Costs shift, projects get deferred, and interest rates change. The value of the 30-year view is not precision in year 27. It is the early warning it gives you about the years that will hurt. Maplewood now knows that 2029 and 2039 are their pressure points, and they can plan a decade ahead instead of scrambling.

Read the projection every year when you review your study. The worst-year balance and the percent-funded trend are the two numbers that tell you almost everything about your financial trajectory.

ReservePath helps associations manage their reserve studies, track components, and model funding scenarios so boards can read these projections with confidence and plan for the years that matter most.