I feel the POA has a responsibility to establish a reserve for replacement. Reserves are necessary and should be placed in a ‘Trust Account’ and used for what they are intended; the replacement of infrastructure in a community.
Reserves should not be co-mingled with operating funds. I read in the Smoke Signals that the POA plans to use some of the money raised for interest and other operating expenses. Let’s pay operating expenses from the Operating Budget. If the Operating Budget needs to be raised, raise the Operating Budget.
All residents should be equally responsible for reserves. The person who lives in a $200,000 home depends on the same security and drives on the same roads as the person in a $500,000 home. I feel the only fair way to establish a Reservc for Replacement is to add it to the monthly fees so that the residents who are using the infrastructure pay for the infrastructure. Lets not pass it on to someone who is either moving to or leaving Big Canoe.
3 users commented in " Proper Use of Reserves? "
Follow-up comment rss or Leave a TrackbackJim,
I agree with your philosophy. I also feel it is a poor introduction of our community when we are asking for funds to help finish the projects we started. It’s equivalent to being caught with your pants down.
The real estate market is hurting enough without adding to the closing costs for a buyer! What this tells the buyer is that the Big Canoe POA has mismanaged funds and needs to build up reserves. That brings up a big red flag as to what for! It would seem a lot more fair if monthly fees are increased for everyone. Current and future Buyer’s should not have to pay a “surcharge” for previous financial decisions of the POA. I would certainly hope that the idea of an impact fee for new buyers is not imposed!
While I agree with you on the issue of additional closing costs for a buyer not being the way to go - if this gets passed, then it will be us sellers paying this fee. Some of us are calling it the “Exit Fee”! During this “dip” or slump, we need to keep in mind that there are less than 10 homes right now in “pending sale” status. We do not need any further negative issues facing this market at this time. Thanks for reminding us of this with your comments.