Sierra Canyon, Somersett, Villages, The Vue – Your Community Forum

Money Changing Hands

Courtesy of freedigitalphotos.net

Submitted by Ed Hardy

A “MEMORANDUM ON THE STATUS OF SOMERSETT OWNERS ASSOCIATION RESERVES“ was prepared by Somersett Owners Association (SOA) resident Ed Hardy and submitted to the SOA Board of Directors (BOD) and Budget Committee for consideration in further actions regarding reserve funding. It is the BOD’s responsibility to unit owners to insure that upon Developer (Somersett Development Company) transition, the BOD review the reserve funding, as well as any other Developer subsidies and verify that any amounts due from the Developer are paid. Mr. Hardy’s assessments and conclusions are his own based on Reserve Reviews prepared by the Browning Reserve Group for the SOA. The intention of the Reserve Reviews being to forecast the SOA’s ability to repair or replace major components as they wear out in future years.

It should be noted that Mr. Hardy is a CPA whose professional background includes public accounting experience and Financial Management/Controller positions at major corporations..

Mr. Hardy’s memorandum addresses the following:

  • Responsibilities of the Developer with regard to funding of SOA Reserves at the transition to homeowner control.  This in compliance with Nevada Law governing Common Interest Communities.
  • A summary of the Fully Funded and Actual Reserve Balances as of December 31, 2012.
  • Transfer of funds from the SOA Capital Contributions Account to the SOA Reserves by the previous BOD. There is some question whether this transfer was permissible under the SOA CC&R’s.
  • Adequate funding of SOA Reserve Accounts, including discussions on fully funded amounts, methodology, estimated reserves and % funding levels.
  • A summary of the Fully Funded and Estimated Reserve Balances for the 2013 fiscal year.
  • Conclusions on SOA reserve status and potential monies owed to the SOA by the Developer.

In his memorandum, Mr. Hardy notes that the SOA maintains three separate reserve funds:  1) General Common including Canyon 9, 2) The Club at Town Center, and 3) Streets & Gates.  Separate reserve studies are prepared for each of these reserve funds.  Homeowner assessments include designated amounts for each reserve, which are accounted for in separate fund accounts.

The Fully Funded Balance and Actual Reserve Amounts as of December 31, 2012 for each of the above areas were as follows:

General Common including Canyon 9

Fully Funded Balance:  $1,305,434    Actual Reserve Amount: $886,471    Funding Level:  68%

The Club at Town Center

Fully Funded Balance:  $1,226,028    Actual Reserve Amount:  $607,870    Funding Level:  50%

Streets and Gates                                  

Fully Funded Balance:  $1,694,241    Actual Reserve Amount:  $1,572,322    Funding Level:  93%

The above summary indicates that the General Common Area and The Club at Town Center are inadequately funded.  Also,  if the final Audited Actual Reserve Balances as of December 31, 2012, total $3,066,663, the Developer will be required to turn over to the SOA $1,159,040 to Fully Fund the Reserves (i.e., the difference between the total Fully Funded Balance of $4,225,703, and the Actual Reserve Amounts totaling $3,066,663). 

Mr. Hardy’s complete document may be accessed by clicking on the following link: MEMORANDUM ON STATUS OF SOA RESERVES

Advertisements

Comments on: "SOA Reserve Funds Analysis" (1)

  1. Joe Bower said:

    The developer of Somersett, Blake Smith, owes our Association $1,159,040 in order for the reserves to be fully funded. The new board of directors has not acknowledged this fact nor has it told owners how they will go about seeing that it is collected. This matter should not be allowed to be swept under the rug. Rather it needs to be brought up during the Owner Comments portion of board meetings. Thank you.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: