Re: Saving up for a capital expense
From: Jerry Koch-Gonzalez (
Date: Wed, 4 Nov 2020 15:03:50 -0800 (PST)
Two different kids of reserves.
ReplacementReserves - for big-ticket items that exist already and you need
to save up for. If you are a condo, for example, roofing, siding, roads,
etc. You make a 20-25 year schedule of all the items that fit the
big-ticket label and make a plan for how much you put aside each year into
a separate bank account or least track separately from other funds. This
has to do with taxes. Talk to your community's accountant.
Capital reserves are money you set aside for *new *projects. Yes, you can
carry this over from year to year. But it does not get the special
treatment that replacement reserves get.
The operating budget is what is typically not "carried over" year to year.
If you don't spend what is in your budget for a certain line item you don't
carry it over to the next year in that line item.
Replacement reserves funds must be accounted for separately from capital
reserves, operating funds, and any other funds you set up
While a community member can do the bookkeeping for the community, I
would strongly advise you to get help setting up the books in the first
place from an accountant who does condominium tax returns and from how
other cohousing communities do them.

Jerry Koch-Gonzalez  413-687-5444
, Sociocracy For All <> and  New England NVC
Founding Resident, Pioneer Valley Cohousing Community

To talk to me about sociocracy or NVC, go here:

On Wed, Nov 4, 2020 at 5:45 PM Elizabeth Magill <pastorlizm [at]>

> Do you have a capital expense in mind that wouldn't be in the reserves?
> We have two reserves--HOA reserves for buildings
> and Cohousing reserves for furniture, washing machines, lawnmowers, hot
> tub, etc. Things that cost not very much, more than a year's normal budget,
> and that we want to be able to purchase as needed, without having predicted
> it in the budget.
> But it's still "reserves". Everything else we do not carry over.
> Liz
> On Wed, Nov 4, 2020 at 4:49 PM Linda Hobbet <coho [at]> wrote:
> > Hi,
> >
> > We are working on our first annual HOA budget. Our treasurer, who is
> > experienced with budgets in business, says we can't carry funds over
> > from one year to the next (except for the reserve fund). So how can we
> > save up for a capital improvement that is more expensive than we can
> > collect in one year? Is there a way other communities handle this?
> >
> > Thank you,
> > Linda
> >
> > --
> >
> > 706-202-7278
> > coho [at]
> >
> > _________________________________________________________________
> > Cohousing-L mailing list -- Unsubscribe, archives and other info at:
> >
> >
> >
> >
> >
> --
> -Liz
> (The Rev. Dr.) Elizabeth Mae Magill
> Pastor, Ashburnham Community Church
> Minister to the Affiliates, Ecclesia Ministries
> 508-450-0431
> _________________________________________________________________
> Cohousing-L mailing list -- Unsubscribe, archives and other info at:

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