What are Reserves and why does the association continue to fund this catagory every year?
A-We have several reserve catagories. They are Operating, Insurance Deductable, Replacement, and Capital Improvement. The first two catagories are self explanatory. These are funds that the Board has elected to set aside for use in specific instances. The operating reserve fund is there to insure that we maintain a cash liquidty that is always there should we need to bolster our cash position. The parallel here would belike a savings account that you might have to help manage your own monthly cash flow requirements. The Insurance Deductable on our Master Policy is $3,000 per loss. Therefore, the Board has elected to set aside $6,000 in this reserve account which could be utilized to cover the deductable onany two losses. Reserve Replacements are set aside to pay for necessary repairs or replacement to the common elements when the need arises. The amount that is held aside in this reserve account is determined by having a Reserve Study completed that details the specific funding require
