Issue link: https://imageup.uberflip.com/i/1372795
10 | THE COLONY NEWS | JUNE 2021 | HOA NEWS A Brief Explanation of our Finances By Joanne Deacon Four years ago, as Treasurer, I spent a few minutes of each Board meeting explaining how our finances work. Given the confusion since our Budget meetings this year, I'm repeating some of that information. It is important that we each understand how our monthly assessments are used. OPERATING FUNDS: Our "checkbook" account, funded by monthly assessments and other miscellaneous income, is used to pay the Association's monthly bills. Beginning in May, $222.20 of our monthly assessment is for the Operating Expenses. Capital expenditures (anything new) do not typically come out of this account unless they are identified at the beginning of the budget process. RESERVES: The Budget designates how much of our monthly assessment transfers to Reserves each month. The Association's Reserve study is updated each year. The annual contribution to Reserves is typically determined by the study's Recommended Ideal Monthly/Annual Contribution. This year, $48.30 of our monthly fee has been dedicated to replenish our reserves. By law, an HOA must have a plan in place (a Reserve study) that identifies and provides a way in which to replace its assets as the need arises. Reserves are used to replace, replenish or repair something that already exists. Replacing trees and plants, repairing a spa heater or painting the Clubhouse all come from Reserves. The standard for Reserves is to be funded at 70 percent or higher. We are at 73 percent with $3,929,809 in Reserves. Four years ago, the Landscape Renovation project required transfers out of Reserves, leaving the fund at 68%. Within three years it's at 73 percent. It fluctuates, depending on what items need to be replaced, repaired or replenished that year. EQUITY: Our Equity is often referred to as a "rainy day fund" or "safety net." Maintaining equity is not required by any law. It's just good practice to have money set aside for emergency use, and the industry standard is to keep between two and three months of monthly operating costs as a safety net. Our Equity is determined by monies left over at the end of a fiscal budget year. The Board has never set an exact amount to keep in this account, but has determined that we maintain at least two months of operating expenses to serve as our safety net. This year, a percentage was used to offset our monthly assessment. This overage may also be used to fund capital projects in lieu of an assessment. A good CPA would add several paragraphs to this epistle! In a nutshell: Operating – Checkbook to pay monthly expenses. Reserves – Covers anything that needs to be replaced, repaired or replenished. Equity Fund – This is for emergencies, reducing dues and non-budgeted capital expenditures (anything new). News bits FACE MASKS Do you need a face mask? Please call or email Kara to receive a few. We have received a supply of face coverings from the County of Riverside and will provide them to any Colony resident who needs one. EBLASTS Stay informed with the latest HOA communications! To sign up, send an email to kara. hardy@associa.us or call (951) 677-4341. You may also send your email address by text message: text COLONYHOMEOWNERS to 22828 to get started. WE'RE HERE TO HELP! Are you having trouble accessing the pool area? We have installed a "Call Button" at the side Clubhouse entrance, across from the Tennis Courts. This will alert a maintenance person you are awaiting assistance. We will have a wheelchair ready to help you to the pool area. The General Session meeting on Thursday, June 17, at 1 pm will be live streamed on YouTube at: http://www.thecolonyatcaloakshoa.com/board-meetings http://www.thecolonyatcaloakshoa.com/board-meetings. To comment during the Open Forum portion of the meeting, you may submit your comment to the HOA office at: https:// https:// forms.gle/sRwkydriV4RLpYeX7 forms.gle/sRwkydriV4RLpYeX7. Live comments will be accepted via a Zoom call. Please call or email the HOA Office to obtain the Zoom login credentials. BOARD MEETING GOLF COURSE LITIGATION UPDATE The judge has asked attorneys for both sides, along with The Colony Golf Course committee (Walt Bowman, Joanne Deacon and Del Mitchum), to meet on June 3 at The Colony to come up with a workable plan for the slopes and fingers in order to move forward with the judgment.