Cohousing-L Mailing List: Re: contingency fund questions

[Lynn Nadeau / Maraiah (welcome]

RoseWind Cohousing, Port Townsend WA , long built
We have
a) Annual budget, which includes specific line items for current  
operating expenses, also additions to reserves such as depreciation,  
accruals towards a cap for certain eventual expenses such as mower  
replacement, path maintenance; ten percent of the budget total (about  
$24,000) is the annual Contingency line item.
This contingency money can be applied by the Steering team in  
specified situations such as - a funded item like insurance goes up in  
cost, or something unforeseen that needs prompt attention like the  
well pump breaks. For other uses of that money, community approval is  
needed.

b) Unspent money from the annual budget is rolled over as a credit  
against assessments. This applies not to the very next year, but one  
year later. This is because we are formulating the 2010 budget already  
in September 2009, when the 2009 year-end figures are still  
unavailable. So once we figure our total funding needs for 2010, we  
subtract the unspent budget funds from 2008, then divide the total  
remaining into our per-household assessments for 2010.

This is helpful in allowing line items not to be too scrimpy -- more  
like "up to $---" for X. Knowing that whatever isn't needed will come  
back to us to reduce future assessments.

c) There are ongoing reserve funds. Some, like the common house  
depreciation, just keep getting a few more thousand dollars added each  
year. Others accrue to a cap, and then need no more additions.

d) We also have some Undesignated Funds, which can be accessed with  
community approval for capital projects or other items not foreseen in  
the annual budgeting. Those funds resulted, years ago, when we "found"  
some money -- interest on investments, I think it was -- which had  
accumulated and not been folded into annual budgeting. It's served as  
a handy slush fund. This year we hit it up for $5000 for a greenhouse  
for our vegetable garden.

Lynn Nadeau
www.rosewind.org