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Reserve Funds

Reserve Funds, Funding and Studies

Reserve funds are those funds which are specifically set aside to pay for future anticipated expenses. The subject expenses are those associated with major repairs such as roofing, painting, paving, plumbing or replacement of an item that will last longer than one year. Reserve funds are therefore not utilized for day to day operating expenses.

If Playmor Bernardo HOA failed to plan for and maintain adequate reserve funds, the member could possibly be faced with an assessment to pay for major expenses such as roof replacement, paving or painting. The members of several community associations in the north county area have been assessed several thousand dollars in order to rectify deferred maintenance. An effective reserve study forecasts repairs, plans expenses and hopefully eliminates the need for a special assessment.

Income to the Reserve fund is derived primarily from two sources: Monthly contributions from the operating fund and interest earned by the Reserve fund.

It is important to note that the Reserve Study is a dynamic document in which forecast dates change frequently. For example, although a certain projected expenditure may be planned for eight years from now, that date may change to six years from now if those repairs become necessary earlier. Similarly, that projected expenditure may be delayed to ten years if that item is still functional.

If you have any questions, we encourage you to visit the office at your convenience to discuss the current Reserve Funding plan.