Reserve Sense
LoginGet Started

Benchmark Overview

A Benchmark Analysis is meant to answer a practical question:

what does fair reserve fund planning look like?

This page explains the idea in plain language. It is here to help readers understand what the Reserve Sense Benchmark Method is trying to do and why it matters.

What a reserve fund study does

A reserve fund study is a long-term budgeting and planning tool. It looks at the major repair, renewal, refurbishment, and replacement projects a property is expected to face that are not easily accounted for in the operating fund. It then estimates when those projects may occur and how much they might cost, and shows how the reserve fund can prepare for them over time.

The study is meant to support planning and decision-making, including the setting of reserve fund contributions in the annual budget.

What the Benchmark Analysis asks

Within a reserve fund study, the Benchmark Analysis asks two connected questions:

  1. How much money should already be in the reserve fund?
  2. If the reserve fund were at that fair level, how much should the property contribute this year?

Both Benchmark balances and contributions depend on long-term interest and inflation rates.

Why interest and inflation matter

A Benchmark Analysis spreads a future cost across a component's lifespan. But it cannot simply divide that cost by the number of years involved: it needs to assign a fair share of the cost to each year of ownership. That means the model has to account for how money changes over time.

A reserve fund typically earns interest. If the model ignores that investment income, it will overstate how much owners need to contribute directly.

Money also loses value over time: this is known as inflation. Because of inflation, paying $1,000 today generally means giving up more real buying power than paying $1,000 ten years from now. The dollar amount is the same, but the economic burden is different.

The Reserve Sense Benchmark Method accounts for both effects. It uses interest and CPI inflation together so that Benchmark balances and contributions are measured consistently over time, rather than treating all dollars as though they have the same value in every year.

This is one important difference from the commonly used Legacy Method. The Legacy Method starts with CRFR as the balance target, but CRFR does not explicitly account for interest or CPI-based purchasing-power fairness.

What Reserve Sense changes

The Reserve Sense Benchmark Method does not change the goal of Benchmark funding. It still aims to identify the reserve fund position that would be fairly funded under the study's assumptions, with costs spread evenly over time.

What Reserve Sense changes is the implementation: our method is designed to calculate that Benchmark in a way that is transparent, internally consistent, and aligned with how reserve funds actually work.

The difference is in the structure of the model. Reserve Sense carries the Benchmark goal forward using balances, contributions, and yearly transitions that all mean the same thing within one coherent framework.

Where to go next