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Someone recently asked me a question about our reserve accounts. A couple of other residents in the group wanted to know what we were talking about. I explained it this way. The reserve accounts at a homeowners association are the savings accounts set up to handle the repairs and maintenance of the assets and are mandatory by law. These are our major assets, such as buildings, pools, tennis courts, golf courses, and should have funds set aside to make repairs and maintain the asset. For example, a clubhouse is analyzed and estimates are made as to how much money it would take to repair the plumbing, repair the building, or install new carpeting and so on. An estimate is also made as to when this should take place or when it probably would be needed. Funds are then accumulated in an account to handle the cost at some time in the future. It is a savings account to handle an expense in the future. All of our major assets have reserve accounts and they are reviewed each year and adjusted by professional accountants. The Board of Directors, with the help of the Finance Advisory Committee and the FirstService Residential Financial Advisors, review all of these accounts. Part of our monthly assessment is distributed to these various accounts so money is available when repairs are needed. Therefore, there is a large sum of money accumulated — so what do you do with it? You invest it to make more money. With the advisors, the Board decides how to invest these funds with the least amount of risk and the maximum gain. The funds in the reserve accounts at this time amount to millions of dollars. Most homeowners associations are fortunate if they have half of the reserves funded; we have about 68 percent of our reserves funded. What if you want to add to your asset base or improve an asset? Years ago, we wanted to build bocce ball courts. Since they didn't exist, there was no money available in the reserve accounts. The Board would have to go to the membership and assess each homeowner a sum of money to build the courts. The Board at that time established a special reserve fund called the "Capital Improvement Fund." This reserve fund allowed the Board to have funds available to add a new asset or improve an existing asset. From this fund, the North Clubhouse addition and the bocce ball courts were built. At the present time, this reserve will pay for the improvement to the Lounge if the Board decides to do so. Our Board of Directors is to be commended for the manner in which they handle our assets and monies. We are a solvent and very well-managed homeowners association. It takes a lot of work and dedication to accomplish our status today. DISTRICT DELEGATE ASSEMBLY REPORT | SUN LAKES LIFESTYLES | MAY 2021 | 9 By Joe Formino, Chairman, District Delegate Assembly

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