What I Didn't Say About Equipment Reserves

In my previous article I wrote briefly about equipment reserves.  In fairness to the Board and LLC, I think I should elaborate briefly in order to avoid misinterpretation of the data and my position.  [to elaborate in a single article would have been too unwieldy]

It is not fair to say that anyone has lied to us, so if my article led any reader to this conclusion, I apologize.  The data I discussed was presented nearly two years ago in our annual CA meeting.  I do think it's fair to say, however, that the CA Board was remiss in making the presentation materials available to owners, either via the community web site or by email.  This level of transparency, at a minimum, is required in order for all members to have equal access to relevant information, especially since it's impossible for all owners to attend any single meeting, and especially since this presentation had so much relevant information about the collaboration between the LLC and the CA.

Today, it's easy to see that turning a large sum of money over to the LLC was a mistake, but the concept of the CA's contribution is probably fair.  I can't speak to the specific percentage of contribution, that would require detailed analysis.  However, it's reasonable and common for service providers to include equipment maintenance and replacement costs into their hourly fees.

In our case, our sole service provider must set this dedicated money aside to assure it is available for its stated purpose.  That was the only justification the LLC had to collect this money.  Again, it's easy to say now, but future agreements like this should detail our required contribution, and we should build and manage a reserve in our CA account in order to meet that future commitment.  My previous comments are reasonable, so I personally consider this to be an open issue.

The presentation I referenced in my article answered a number of long-standing questions.  Not that I always liked the answers, but at least I was able to satisfy my curiosity.  If you too have questions about the history of how we got here, I recommend reading through the presentation slides.  To find links to the file, see my comment below the original article. I specifically suggest reading slide 26 to learn the history of the initiative to purchase the resort. 

As a final comment, I mentioned a few other transactions between the CA and LLC that I disagreed with.  I don't believe there's any realistic way to undo these transactions.  They are probably binding, legally, but for the reasons I stated earlier I think they did more harm than good, and they were unreasonable from a business perspective.