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Introduction to the Required Reserve Worksheet

The Required Reserve Worksheet will help you calculate the amount of money that you will need to set aside every year (your annual reserve) to pay for the rehabilitation and replacement of your assets. Standard Operations & Maintenance costs are not included.

The worksheet asks for the estimated cost of rehabilitation and replacement activities associated with your highest-priority assets. Remember to gather information on all of the costs associated with rehabilitation and replacement such as equipment purchase, installation, pilot tests, labor charges, clean up, and disposal of the replaced asset. To determine your estimated costs, you can:

  • Ask local contractors and business for estimated costs
  • Contact equipment manufacturers
  • Talk to neighboring systems about the cost of their rehabilitations or replacements
  • Discuss this with your state, tribal, or local technical assistance organization.

This worksheet can be used to estimate your annual reserves for the next five years. The worksheet uses a five-year forecast to help you think about and begin financial planning for your short-term future needs. Although several of your assets will have remaining useful lives considerably longer than five years, it is unlikely that you will be able to forecast your water system’s situation much farther into the future. You should update the worksheet at least once a year because your system is likely to experience changes in costs, budgeting, and funding.

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Step 3 – How Do I Plan for the Future?   Worksheet Instructions