Re: funding your reserves - what percent?
From: Mac Thomson (macheartwoodcohousing.com)
Date: Fri, 5 Oct 2007 06:22:23 -0700 (PDT)
We fund our reserves directly through assessments, but also through operating profits and investment income. Operating profits are everything that we have left over at the end of the year that the teams haven't spent from their team operating budgets. We decided early on to automatically move these profits into reserves instead of refunding them, spending them on special projects, etc. It's a pretty painless way to build up reserves.

Because of stronger than expected operating profits and investment income, we've actually been funding our reserves in excess of what we've calculated that we need to set aside each year. Operating profits and investment income are not predictable, but the thinking is that if we monitor them over time, we can reasonably rely on them. Here's the breakdown:

HOA ASSESSMENTS                 50%
HOA OPERATING PROFIT                    42%
INTEREST & INVESTMENT INCOME                        28%
TOTAL RESERVES FUNDING                  120%

Cheers,
Mac

--
Mac Thomson

Heartwood Cohousing
Southwest Colorado
http://www.heartwoodcohousing.com


"When I was dreaming, I thought the world revolved around me.
 I was wrong,
 And so I sing along,
 And if you dance, then dance with me."
    -Bono
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On Oct 5, 2007, at 4:16 AM, cohousing-l-request [at] cohousing.org wrote:

Date: Thu, 04 Oct 2007 13:15:19 -0700
From: Susan Hedgpeth <hedgpeth [at] berkeley.edu>
Subject: [C-L]_ funding your reserves - what percent?
To: cohousing-l [at] cohousing.org
Message-ID: <7.0.1.0.2.20071004130431.04049778 [at] berkeley.edu>
Content-Type: text/plain; charset="us-ascii"; format=flowed

Hi again,

Still working on our budget.  Question came up, do other cohousing
communities fund their reserves at 100% as we try to do?

We made the decision to do that because of the security it gave us
(i.e., protection against future assessments) as well as being a
selling point for future buyers.  But some community members have
argued that it's not necessary and means our dues are higher than
they would be if we didn't fund at 100%.

So I thought I'd do another little survey.   Can you tell me what
percent you fund your reserves at?   If I can get the info today or
tomorrow, I can take it to our meeting Sat. morning.

The following need not respond because you included the information
in your response to my earlier question about HOA dues amounts:
Swan's Market - 100%
Oak Creek Commons - 95%

Thanks.
-Susan

P.S.  Thanks to everyone who responded to my earlier question about
HOA dues.  This list is such a wonderful resource!



Susan Hedgpeth
Pleasant Hill Cohousing
Pleasant Hill, California, USA
(San Francisco Bay Area)
http://phch.org




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