Page 10 - Klahanie July-August Magazine Flip\

Hedge

Your Against Special

Assessments

enough in savings to pay for any Following their inspection they
By law, every HOA most
have a Reserve Fund for your

protection. The money set aside replacements. decided that the almost 40-year
old mobile office building has

in “Reserve” is structured to Annually, the Reserve funds reached the end of its safe and
pay for all of the things we own are evaluated by a Reserve useful life. It no longer made
HOA is saving enough money. parts when the entire building
including buildings, pools, park Specialist to ensure that the sense to rate the component
equipment and even irrigation
systems. When those items
doing, each Reserve Account is
need replacement, we pay To gauge how an association is was no longer worth saving. The
wooden building frame has no
for those changes out of the rated with a percent score. The foundation and the supports are
Reserve funds. To make sure lower the score, the more likely rotting. Their decision, which we
that we’ve set enough money it is that a Special Assessment have to abide by, is to move the
aside, we consult with outside could be required to pay for $600,000 cost of replacing the
professionals annually who some costly expense. office building into the Reserve
update a special Reserve plan Plan. This will drop our funding
called a Reserve Study. They For many years, through level to just to 71% because we
estimate how much it will cost strong fiscal management, have a $600,000 building as an
to replace windows, roofs, the KHOA has been rated at unfunded liability.
siding, and plumbing for each 100%, meaning we have saved
thing the Association owns over all the funds needed to cover The Board will be discussing
the next 30-years, and tell us replacement items. Last month the financial strategy to rebuild
how much we should pay into the Reserve specialists did the Reserve fund and will have
the Reserve from the Operating their annual review and made updates to share with you over
Funds of the Association, a significant change in how the summer.
so that there will always be they treat the office building.

1 0 I S S U E #3 WWW.KLAHANIE.COM

Klahanie Magazine July 2019 Issue.indd 10 8/20/2019 10:43:16 PM