SSR Capital Reserve Analysis - How do I read this?

[RWeThereYetJJ]

Can someone help me understand how to read the Capital Reserve Analysis from the Annual Meeting Notice?

Below is a picture of the 2023, 2024, and 2025 Capital Reserve Analyses for SSR from the Annual Meeting Notices I received in the mail. The 2025 Estimated Funded Balance of $95.8m seems low to my uneducated eye at 27% of the $352.7m Current Replacement Costs (right side of picture) with a soft-goods refurb coming in the next year or two. The Estimated Remaining Useful Lives column appears to be counting down over time. Take the External Building Painting row as an example: It goes from 1-7 in 2023 to 1-6 in 2024 to 1-5 in 2025. How does that help determine the cash that should be on hand?

 

[RWeThereYetJJ]

Adding these pictures since the first looks blurry.

 

[Carouselofplanning]

I think the easiest answer is they don’t plan on doing all of the work listed at the same time so there’s no need to keep a full reserve on hand. If damage of that scale were to be incurred all at once there would likely be an insurance claim involved anyway.

 

[OKW Lover]

The capital reserve would almost never show being fully funded. The expectation is that $x will be incurred at some point in the future and that amount is spread out over the years involved. So, if something will be replaced five years from now the associated capital reserve should be 20% today.

 

[RWeThereYetJJ]

I have tried to make sense of this myself with the below visual. I turned the Useful life ranges into a simple average and then calculated the % total of the Estimated Useful Lives Used. From there, I broke up the Interior Refurbishment amount assuming soft good expenses will be 1/3 of the total replacement cost and hard goods refurbishment will be 2/3 of the total replacement cost. I assumed everything else would be evenly distributed between the refurbishment cycles. Since we are coming up on a Soft Goods refurbishment, my calculations look like we would have enough reserves to complete that cycle without any problems. However, it looks like the hard goods cycle would require additional reserves. This is why I am questioning the numbers and what may be in store when it comes to future dues increases. And this is why I am asking whether I am reading / interpreting the Capital Reserves analysis correctly. Let me know your thoughts.