Image Up Advertising & Design

4 | OHCC LIVING | JANUARY 2026 | What's Up with the Reserves? A CPA friend of mine gets almost giddy talking about numbers. I realize most of you probably don't — but you'd likely agree with her on one thing: numbers tell a story. So, let's look at the real story behind reserves. When we say "reserves," let's simplify it so we're all on the same page: Reserves are NOT for major emergencies covered by insurance. They are for known, predictable future expenses. Let's bring this home, literally, by comparing reserves to your own family budget. A Family Budget Example Imagine you and your spouse are healthy, steadily employed, and have predictable income for the next 30 years. You have good insurance on your home and belongings. Now you sit down to plan for future expenses: • College for three young children • A new roof in about 10 years • A special vacation for your 20th anniversary • A new car in about 5 years Let's say you want to save: • $50,000 for each child's college ($150,000 total) • $15,000 for the roof • $10,000 for the trip • $50,000 for the car That's $225,000 total — but the money is needed at different times. You could dump all $225,000 into a "reserve account" today… But would you? Of course not. You'd instead plan out how much to save each month, so the money is there when you need it — not decades early. That keeps your everyday budget healthy. So, you save monthly. In the beginning, your reserves might only be 1% of what you eventually need. Do you panic? No. You're following the plan. Year 5 You've saved enough to fully pay for the car and have made progress toward the other goals. You buy the car. Your reserves go down. Is this bad? Not at all — you planned for it, and you have a new car; an asset. Year 10 You replace the roof. Reserves DROP again, in both actual money and percentage! But you now have a new roof — a major asset. College Time You move $50K from the general reserve into a college fund for your oldest child. Child #2 panics: "The account dropped! We can't afford my college!" But you reassure him: "We're still fully on track. We're no longer saving for your older sibling, so the funds for you will continue right on schedule. When it's time for you to enter college, we will have 100% of the funds you need." Each family is different. Some may need a bigger cushion because of uncertain income or poor health. Others may save faster because they expect leaner years ahead. But the principle is the same: You save gradually, use the funds when needed, and the reserve balance naturally rises and falls. All of that is normal AND healthy. Now Let's Talk about our HOA Unlike a family, an HOA doesn't have to worry about losing its "job" or its health. We have: • steady monthly dues from 1,632 homeowners • insurance for certain covered catastrophic events • predictable long-term replacement costs that are budgeted for with reserves Our priority is keeping the community attractive, functional, and well-maintained so our property values increase and our community is desirable. And just like your family budget, HOA reserves are meant to go up and down as we use money for roofs, roads, buildings, pools, and other scheduled replacements. This is exactly how reserves are supposed to work. About at 100% Funding Idea… Some people hear "100% funded" and think it must be the gold Treasurer's Report By Van Rametta, OHCC Treasurer Continued on next page

• Cover