We’ll be interested to see what the Town Council decides when it comes to the potential establishment of a replacement reserve fund.

Simply having a capital reserve study shows forward thinking, and we’re hopeful that steps will be taken to utilize that information in order to put the Town of Fountain Hills into a better position to absorb maintenance and replacement projects as they become necessary.

Broken down, the benefits of such a fund seem obvious. The Town owns many assets, from the physical buildings where various entities conduct their business to the equipment and fixtures that go into them. But nothing lasts forever and, rather than try to figure out how we’re going to replace an HVAC unit when it reaches the end of its life cycle (or, in a less ideal scenario, fizzles out prematurely) a replacement reserve fund would already have at least some of those needed finances in place.

Casey Arnett of Capital Reserve Analysts, LCC gave a thorough presentation during a Town Council study session last week that looked at what assets would eventually need to be replaced, when (ideally) they’d need to be replaced and how much said replacements are expected to cost. That was all distilled into a formula that, spread out over the course of 30 years, stated that the Town needs to be squirreling away about $1 million a year in order to absorb the expected costs.

Again, emergencies happen and things don’t always go according to plan, but we know that these assets boast a limited life of usefulness and that, eventually, they will definitely need to be replaced. Something like this recent study allows the Town to plan for that eventuality rather than hope to find extra funds lying around (or even look for additional funding) when the time comes.

Now the question remains: Can we afford it? While Arnett’s recommendation was to fund at 100 percent, it might not be financially feasible for the Town to set aside a million dollars a year in this manner.

We agree with Town Manager Grady Miller, who said that the next step is for the Council to come back to this study and consider what sort of investment the Town could reasonably make. Even if Fountain Hills can’t hit that 100 percent funding goal on an annual basis, it’s clear that the current deposit of $100,000 a year isn’t going to cut it when, in about a decade, the flooring, the roof and everything in between starts to need repairs or replacement.