What is this new Building Reserve you may ask. Don’t we have an endowment? Yes, we do, but to continue to use endowment funds alone would deplete it only a few years.
Anyone who has lived in or has knowledge about a homeowners’ association knows they have reserve funds to pay for the long term building repairs to avoid special assessments. We now have a reserve very purpose – the Building Reserve Fund. We are trying to avoid periodic Capital Campaigns or major fluctuations in the annual budget. Some years we will need less than $50,000 for our buildings, but other years we require several hundred thousand. By setting aside funds each year it evens out the expenses over time.
We recently completed a detailed spreadsheet showing building maintenance, repair and replacement expenses over the next 25 years. These include the mundane, such as replacing chairs to full roof replacements and everything in between. The total is almost $5,000,000. Now this may not sound like a lot in today’s world, but for East Shore it breaks down to an average need of about $190,000 each year. We hope to have a significant influx of funds once the Holly House property is sold and escrow closed, but that will be only in the 1,000,000 range for the Building Reserve.
By saving as we go, we avoid the need to continually having capital campaigns or dipping into the endowment. The plan is to include a line item in the annual budget every year so we are paying as we go. Those funds will be transferred to a separate account to avoid using them for day-to-day expenses and to assure there are funds for the major expenses on hand when needed.
We all enjoy these facilities so should all be contributing on an ongoing basis through our pledges and other donations to East Shore.
For this first year, we did however opt for a capital campaign to raise the initial $160,000. Thanks to folks donations so far, we are only about $22,000 short of that goal! Please consider making a special donation to the Building Reserve Fund to help us meet or exceed the goal.
If you are interested in seeing the big spreadsheet, just let me know!
by Geri Kennedy, Treasurer