|Re: Use of Reserves||<– Date –> <– Thread –>|
|From: Jerry Koch-Gonzalez (jerrysociocracyforall.org)|
|Date: Fri, 13 Nov 2020 09:56:06 -0800 (PST)|
Pay for the Drainage and Paths DEFERRED MAINTENANCE out of replacement reserves. And update your replacement reserve schedule to come up with a new yearly amount to add into the replacement reserves so that you have the funds you need for the next items you need to replace. Jerry Koch-Gonzalez 413-687-5444 Co-Founder , Sociocracy For All <http://sociocracyforall.org/> and New England NVC <http://newenglandnvc.org/> Founding Resident, Pioneer Valley Cohousing Community <http://cohousing.com/> To talk to me about sociocracy or NVC, go here: https://talktojerry.youcanbook.me On Fri, Nov 13, 2020 at 10:01 AM Bonnie Fergusson via Cohousing-L < cohousing-l [at] cohousing.org> wrote: > In California the HOA is allowed to borrow from the Reserve funds for > improvements as long as you pay it back within 1 year. You might need to > check with your state laws about this since they vary from state to state. > Bonnie FergussonSwans Market CohousingOakland, CA > > > Sent from Yahoo Mail for iPad > > > On Friday, November 13, 2020, 6:39 AM, Sharon Villines via Cohousing-L < > cohousing-l [at] cohousing.org> wrote: > > > On Nov 12, 2020, at 10:31 AM, pam gilchrist <pamgilchrist1 [at] gmail.com> > wrote: > > > We have a healthy Reserve of about $200,000 with a line item of $5000 > every > > three years for Path's maintenance - due this year but no line item for > > this additional expense of about $40,000. > > From my studies and discussions with Reserve Specialists, this is an > entirely ordinary expense for Reserve Funds. The amounts required for items > in the Reserve Study are estimated costs. Real costs may be higher or > lower, be needed sooner or later or never. This is why funds are > recalculated annually. It balances out the guesses with actual costs. > > That you are doing extra work is a normal expense. The purpose of the > Capital Replacement funds are to maintain the value of the property. > Ideally, the fund balance plus the value of the property would be equal to > market rate. A condo that needs some work but has a large reserve fund is > more valuable than a condo with inadequate or no reserves. > > So the issue is whether the expenditure of the funds is to preserve value. > “Preserving value” also means keeping the property up to market standards. > No one would replace the HVAC system with one that was made when the > building was built. You replace to current standards, but that is not > considered an improvement in the same way as adding a pool might be. > > In this instance the design of the walkways is inadequate and they require > high maintenance costs. Doing the serious work would maintain the value of > the property at market rate. And might save maintenance costs in the > future. > > We borrowed from our Reserve Fund to install solar panels. We put the > money back each month that we used to spend on electricity and the money we > get from producing more electricity than we use. > > There are certain tax laws that apply in some situations. They are related > to how you pay taxes on the interest income on the reserve account—probably > for very large funds or larger condos. A tax person could say whether this > is an issue. Otherwise, fiscally sensible practices apply to the Reserve > funds just like the operating budget. > > Sharon > ---- > Sharon Villines > Takoma Village Cohousing, Washington DC > http://www.takomavillage.org > > > > > _________________________________________________________________ > Cohousing-L mailing list -- Unsubscribe, archives and other info at: > http://L.cohousing.org/info > > > > > > > _________________________________________________________________ > Cohousing-L mailing list -- Unsubscribe, archives and other info at: > http://L.cohousing.org/info > > > >
Results generated by Tiger Technologies Web hosting using MHonArc.