Reserve funds

The recent note on the 2012 budget mentions that the $150 HOA increase will go towards a reserve fund for future major community projects. Building a reserve fund makes good fiscal sense.

What is the amount in the HOA account now? What other assets do we currently have? Also, which lots do we now own? It would be good to know where we currently stand.

Thank you.

In response to your questions regarding assets:

Operating Checking Account (as of 10-31-2011) = $129,341.

Reserve Account = $164,297.

The HOA also owns the common property in the subdivision, including:

Gatehouse
Clubhouse
Pool
Tennis courts
Soccer Field
Walking Trails
Ponds and surrounding areas
Area next to the marina (the RP Boat Slip Owners Association owns the slip area)
Other common green space

These common areas have not been assigned dollar values and are not included on our Balance Sheet. HOA's are unique entities in this respect. According to the American Institute of CPA's (AICPA), to assign dollar values and list HOA common areas and buildings on the Balance Sheet would be misleading because of their highly restricted use based on the typical governing CCR's of the community. These areas cannot be sold, and cannot be used for any purpose other than those determined by the CCR's. Thus, it is common accounting practice to not include the capitalized costs of common areas on the Balance Sheet of the organization. (Thanks to Mary Norris of Brown & Glenn for her research on this topic).

We own the following lots as a result of our foreclosures for non-payment of dues:

4216 Arbors Ford
5020 Hermitage

We could possibly place a value on these lots, although sale prices for RP vacant lots have varied a great deal over the last year.

Let me know if you have further questions.

Leighton Stamps
RPHOA Treasurer

Thank you for your thorough response. What you say all makes good sense.