GM—’Reserve Fund Rules-Don’t be confused, it’s not that complicated’
April 16, 2018
The most recent claim by proponents of a petition to reverse very sensible and productive Rules concerning the Reserve Fund is that the Board recently spent Reserve Fundsinappropriately by approving the replacement of the Clubhouse dumpster enclosure. This claim has nothing to do with the proposed amendments to the Reserve Fund Rules.
However, it may result in some confusion among the Members as to the purpose of the proposed Rules amendments, which once again are simply to consolidate two Reserve Funds into one Reserve Fund, not to change how Reserve Funds will be used.
Here's the real story behind the Clubhouse dumpster enclosure:
1.Fact one: A Clubhouse dumpster enclosure actually exists near the backyard of residential properties.
2.Fact two: The County ordered that a plan is developed and the dumpster is moved away from residential property due to health issues.
3.Fact three: The Clubhouse dumpster was overlooked and had not been included in the Reserve Fund.
4.Fact four: The Board acknowledged that the dumpster enclosure needed to be replaced and should have been included in the Reserve Fund as it is an existing Association component.
5.Fact five: The Board approved adding the dumpster enclosure to the Reserve Fund.
6.Fact six: The Board approved replacing the dumpster enclosure as required.
All of the above facts are accurate and are completely allowable under the Davis Stirling Act (Civil code that primarily regulate homeowners associations) andthe existing and proposed Rules,due to the fact that any board of directors may add any existing component to a reserve fund at any time.
Reserve funds are dynamic documents, not set budgets that may only be changed annually. The Association's Reserve Fund is similar to a savings account you may have where you put money away a little at a time for something you want to purchase in the future. Although you have a plan for that savings account, on occasion something unexpected may arise and a small portion of that account may have to be used for that unexpected item.
You hope that doesn't occur often, but the fact is that every once in awhile things occur that simply were not anticipated.
—Bob Mariani, General Manager