When you make your assessment payment each quarter, you are not only funding current operating expenses for the Association, but also setting aside a savings account to offset future funding needs.
For example, Repair and Replacement Reserves made up 20% of your 2015 General Assessment each quarter. This meant that approximately $31.00 of each General Assessment quarterly payment made in 2015 was set aside for future repair and replacement costs.
Reserves serve the Association as a savings account by gradually and routinely setting aside funds for future needs related to current assets. By yearend 2014, the value of the Property and General Reserve Fund was $1,631,711. General Reserves include our lakes and dams, marina equipment and docks, entry signs, street signs, pedestrian paths, cluster mailboxes, office building and equipment, maintenance garage, truck, and tree replacements. Clusters have various reserve accounts as well, mostly offsetting future tree replacement costs.
The Association’s Finance Committee takes a careful look each year at reserve funding and expense levels, recommending changes to the next year’s budget. Reserve amounts are based on remaining useful life, projected interest income and future costs. This detailed study helps determine if replacement calculations and funding are on target.
In some ways, however, the Finance Committee’s work in this area requires a crystal ball. While not an exact science, the Finance Committee strives to set reasonable reserve funding goals that will allow minimal additional funding when the replacement or repair comes due. This allows all members to contribute, little by little, to replacement funds as they utilize the current assets and helps the Association and its members minimize the need for special assessments. Under Dan Slattery’s leadership, as our Association Treasurer, the Finance Committee is currently working on recommending updated guidelines to the Board to aid the Association in determining adequate reserve funding. This project was begun in 2015 and is anticipated completion in 2016.
Watch your mail in early December for a detailed letter regarding our 2016 Budgets and Assessments. All budgets are prepared by the Finance Committee and Association Staff and adopted by the Board of Directors. Cluster Committee and Board Committee members are consulted for recommendations, upcoming projects and changes from year to year. All 2016 budget information will be included with your first quarter 2016 invoice. A copy of the 2016 General Budget and applicable cluster budget will also be included for your information. If, at any time, you have questions regarding your budget or quarterly assessment, please contact the Association Office. We are happy to talk with you by phone, email or set a time to meet with you to answer your questions.