Re: contingency fund questions | <– Date –> <– Thread –> |
From: evdavwes (evdavwesaol.com) | |
Date: Thu, 12 Nov 2009 04:20:13 -0800 (PST) |
Hello, Westwood Cohousing currently has a "General operating reserve fund" (GORF) which is specified in our bylaws. We did not fund this until about 3 years ago. Previous to that, we had a practice of refunding to members any surplus, often by skipping a month's assessment the following year. We have tended to have surpluses most years (usually 5 to 15%). Last year's deficit was the only exception so far. Because we had a General operating reserve by that point, we were able to spend from the reserve rather than require a special assessment to make up the difference. We dug up some advice about how much to fund it with, and I believe it was 10 to 15% of the "budget" (I don't remember whether this was the operating budget or the total budget, including the reserve fund contribution). I have seen (but can't find now) bylaws of a conventional HOA where the Board is directed to maintain a GORF of between 2 and 4 months assessments (assessments by definition include both operating and reserve portions), and to refund to members any surplus beyond that amount. By the way, we are Board-governed, and it is generally assumed that the decisions about reserves and how to spend them will be made by the Board, rather than as a community. In a Board-governed HOA, the rules by which the Board operates are usually contained in the bylaws and other "Governing documents." Here is a link to a professional article covering this topic (which recommends a GORF of 10% of the operating budget (which I would guess does not include the reserve fund contribution), with a minimum of $10,000). http://www.associationtimes.com/articles2006/operatingreserve1106.htm David Clements Westwood Cohousing, Asheville, NC -----Original Message----- Message: 1 Date: Tue, 10 Nov 2009 22:18:00 -0800 From: Jodi Coleman <jodicoleman1000 [at] gmail.com> Subject: [C-L]_ contingency fund questions To: cohousing-L [at] cohousing.org Message-ID: <3ef4d8db0911102218y5dbc7eb8ie64af50e92717ee0 [at] mail.gmail.com> Content-Type: text/plain; charset=ISO-8859-1 Hello all, Last year (our second since moving in), our community created a contingency fund for unexpected and emergency expenses. We took the excess from our first year's budget (and the excess from each budget thereafter) to create the fund. We created the contingency fund so that each work team wouldn't feel the need to have a sizeable miscellaneous/emergency line in their section of our budget, and instead they would know that money could be available to them if they needed it. Going into our third year, we now have a healthy amount of money in this fund, so we are now needing to decide where to cap it. We are wondering how much money (what percent of the budget) other communities have in their contingency funds. I have read that several places have 10% of their budget as a contingency fund. Is this 10% of your operating budget, or is this the whole budget including any additions to the maintenance reserves? Have folks found your systems to be adequate? Any advice folks have would be greatly appreciated! Jodi Coleman Coho Cohousing, Corvallis, OR **********
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contingency fund questions Jodi Coleman, November 10 2009
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Re: contingency fund questions Sharon Villines, November 11 2009
- Re: contingency fund questions Bonnie Fergusson, November 11 2009
- Re: contingency fund questions Larry Miller, November 11 2009
- Re: contingency fund questions evdavwes, November 12 2009
- Re: contingency fund questions Rob Sandelin, November 12 2009
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Re: contingency fund questions Sharon Villines, November 11 2009
- Re: contingency fund questions Mac Thomson, November 12 2009
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Re: contingency fund questions Lynn Nadeau / Maraiah, November 13 2009
- Re: contingency fund questions Rosemary McNaughton, November 14 2009
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