Cohousing-L Mailing List: Re: Budget Surplus

[R Philip Dowds (rphilipdowds]

Our Cornerstone “reserve” is our largest “contingency” fund, usually stocked 
with cash in the low to mid six figures.  This cash is now mostly parked in CDs 
and money market funds, which offer better interest rates than ordinary demand 
deposit savings accounts.  Reserves are dedicated to major capital replacement 
projects (new roof, new boilers, new elevator, etc) that happen infrequently, 
but carry a big price tag.  Agreeing that it’s *really* time to replace the 
boilers, and to buy anything other than the cheapest deal offered by the most 
questionable vendor, are some of our biggest chronic challenges.

Occasionally, we do discuss “returning” “surplus” reserves to the member 
households via reductions in the year’s approved monthly dues, and we’ve done 
this at least once.  But given the explosive increase in construction pricing 
since the pandemic of 2020, many of us are reluctant to shortchange the 
reserves.

Apart from figuring out how to pay for a new elevator … Cornerstone is also 
concerned that the overall economy is deforming in ways that make it 
increasingly difficult for some member households to keep up with their housing 
costs.  We have debates about whether a particular expenditure — refinish the 
floor? upgrade to heat pumps? buy more yardwork services? — is “affordable” or 
not.  These debates, however, are impeded by two serious obstacles:
     (1) We do not have, and do not expect to get, any actual information about 
household finances; and …
     (2) We haven’t a clue about what the *community* can or should do, if the 
cost of living at Cornerstone is getting beyond the means of some of our 
households.

————————
Thanks, RPD

> On Aug 23, 2024, at 9:36 PM, Sharon Villines via Cohousing-L <cohousing-l 
> [at] cohousing.org> wrote:
> 
>> On Aug 23, 2024, at 9:20 PM, Main Email <zabaldo [at] earthlink.net> wrote:
>> 
>> Here at Takoma Village in Washington DC I believe all of our unspent funds 
>> for the year whether from the annual budget or someplace else is swept into 
>> our reserves. 
>> 
>> At some point in time, our condo laws allow us to take a part of the 
>> reserves and distribute to the membership or the unit owners. I think it has 
>> to be when the reserve balance far exceeds the need of the condo for its 
>> purposes.
> 
> Ann is right — we have always put it in the Reserves. But in our newly 
> revised bylaws (not yet approved) we have a choice of sweeping into Reserves, 
> rolling over to the next operating budget, or refunding to Owners. 
> 
> The thinking was that during another pandemic or recession, a refund might be 
> helpful to some owners, even if only $500.
> 
> I’m sure I’ve said this before but it is actually very hard to spend money. 
> We budget well, but it’s hard to find the right rug or get a whole painting 
> job bid out in time to do the job and spend the money.
> 
> Sharon
> ----
> Sharon Villines
> Takoma Village Cohousing, Washington DC
> http://www.takomavillage.org
> 
> 
> 
> 
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