Cohousing-L Mailing List: Re: Reserves versus operational repairs/replacements, and earlier, Reserve Studies

[Sarah Lesher (sarah.lesher]

*From: *Sarah Lesher <sarah.lesher [at] gmail.com>

Date: Sun, 5 Feb 2023


> On 6 Dec 2021 18:43:43

> Sharon Villines (sharon [at] sharonvillines.com)

> Cohousing-L <cohousing-l [at] cohousing.org> wrote an extended >
explanation of capital reserves vs.    > annual operations.

> “Most of us are oblivious of the importance of the Reserves

> but they are as valuable as your unit.

> In essence they are part of the value of your unit.”

> In a much earlier post on reserve studies , 9 Aug 2006

> 04:29:52 Dahako (Dahakoaol.com) wrote

> Another way of thinking about reserve funds is that they are a > way to
make sure that the people who are "using up" a

> community resource, like the commonhouse roof

> or the access road are the people who pay for it.

> So, as you live in a community, you are paying each month in

> your condo or HOA fee for the wear-and-tear happening while

> you are there.  When a physical  resource is

> completely worn out, then the accumulated financial resource

> is available to re-make the physical resource

> and the cycle starts again.

> That way, the total value of the physical and financial

> resources available never wanes.  It is actually very elegant.



> In my opinion, making the balance of community resources

> decrease is not only selfish and irresponsible, it isn't very >
"cohousing".  Most communities are about taking care of each

> other and stewarding resources.

> To me, this doesn't mean just in the now, but through time.”



Our community, Cantine’s Island, Saugerties, NY, was founded as an HOA in
NY state which has/had almost no regulation of HOA’s, certainly not
requirements about reserves (except for NY City, which does).


How many other communities are concerned enough about the status of their
reserve funds to seek a formal reserve study with regular updates
disseminated to members?  This is required in 30 states (plus NYC), but do
cohousing groups in states where it is not required do it as part of being
responsible and future-thinking?  (See Dahako above.)


Half of the adults in our community are over 70.  Others are young
families, or even more financially stressed, single mothers.  It will be
very difficult to compensate for the lack of long term investment in a
reserve fund substantial enough for dealing with some special challenges we
face (including a crumbling iron foundry from the 1800’s).


But developers are pouncing where they can in our region, and some of us
fear they may start coming for the 10 lovely riverside acres of Cantine’s
Island.


How have other communities handled this?  Or even if not, does anyone have
suggestions?