Review/update responsibility

Revision

Reference

Florida Statute 720.303

Background

1. A Capital Reserve was originally established by the Board in the late 1990’s and funded by property owners. Subsequent funding came from: developer contributions paid at the time of property transfers from the developer to property owners; fees charged to lot/home buyers at property closings; and Construction Impact Fees (CIF) charged to builders/contractors for home construction / renovation. Special Assessments of property owners augmented funds when required.
2. The Capital Reserve was renamed the Major Repair and Replacement (MRR) Reserves in 2006 and use was restricted to funding major expenditures (over $10,000) for repair and replacement only (whether capital or expense), thereby precluding utilization of the MRR Reserves for the funding of new assets or improvements to existing assets. A separate Major Improvement (MI) Reserves was established in 2007 for these types of expenditures.
3. MRR Sub-Reserves are established when the source or duration of funding or the magnitude of spending warrant segregation of the funds for control purposes. In 2008 the MRR Reserves was subdivided into four sub-reserves:
   • Marina Sub-Reserves – provides funding for on-going MRR expenditures and the replacement of Marina assets.
   • Harbor/Lock/Dredging (HLD) Sub-Reserves – provides funding for MRR expenditures related to the Harbor and lock and for the periodic dredging of the Pablo Creek access channel to the Intracoastal Waterway.
   • Road System Sub-Reserve – funds road repaving, resurfacing and reconstruction (including, curbs and gutters, pavers and drainage) of Association’s roads and parking lots.   A separate reserve was created due to the large amount of the expenditure and the long-term cycle of the paving plan.
   • MRR Other Sub-Reserves – funds all MRR expenditures not covered by specific reserves.
4. The primary source of MRR Reserves funds prior to 2008 was closing fees and ARB Construction Impact Fees (CIF). However, by 2007, the decrease in construction due to the “build–out” of the community resulted in decreased revenues from those sources. In addition, MRR spending requirements were projected to increase as Association common property aged to levels that exceeded the potential from current funding sources. During the 2008 Budget preparation it was determined that closing fees and CIF revenue would no longer be adequate for MRR Reserves funding requirements. Beginning in 2008, prompted by the authorization of a 10-year, $5.3 million road paving plan, an annual MRR Assessment was initiated to address overall MRR Reserves funding requirements.