Cohousing-L Mailing List: Re: Re: Community finances/ reserves

[David Mandel (dlmandel]

Much of our reserves are in bonds: some individual municipals purchased a
few years ago that are getting around 5-6% tax free, I believe, and tax-free
bond mutual funds of varying lengths, quite a bit lower now. These are
fairly safe and have done very well in recent years. If inflation jumps up,
however, they'll drop some in value.
We are in the midst of our second formal reserve study and have tentatively
decided to assume an average return of 3%. If that gets higher, we'll have a
little windfall to spend or to lower fees.
----- Original Message -----
From: "Danny Milman" <danny [at] cohousingco.com>
To: <cohousing-l [at] cohousing.org>
Sent: Wednesday, July 24, 2002 2:50 PM
Subject: [C-L]_Re: Community finances/ reserves


> Hello.
>
> At Berkeley Cohousing, we have just had a consultant complete a reserve
> study that assumes that we will make 3.5% after taxes in interest on our
> reserve account.
>
> Our current account is in a "very safe" investment and therefore is making
> less than 1% in the current economy.
>
> This is probably a bad week to ask these questions, but:
>
> 1)  What types of accounts do other communities keep their reserves in?
>
> 2)  How "risky" are the investment instruments being used?  (I guess all
of
> them are right now given the market.)
>
> 3)  What interest rates are other communities using as the assumption in
> their reserve studies?
>
> with money in hand,
> Danny Milman
> Berkeley Cohousing - California
>
> danny [at] cohousingco.com
>
>
>
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