Review/update responsibility

Revision

Reference

Florida Statute 720.303

MRR reserve funding requirements

1. Funding of the Reserve must meet the funding requirements specified in Florida Statute 720.303.
2. The Association has elected to fund the total MRR Reserve based on the Pooled Account option specified in Florida Statute 720.303 incorporating all Reserve assets. The total annual funding established by this methodology is allocated to the sub-reserves based on target balances established for each sub-reserve.
3. Funding requirements for the MRR Reserve are based on multi-year revenue and spending plans and Reserve Target balances. The funding required for MRR projects can vary significantly from one budget year to the next based on updated revenue projections and costs and/or revisions to project scheduling. When it is determined that additional MRR Reserve funds will be needed, one or more of the following funding alternatives will be utilized:
   • Restructure the MRR spending plan to align with the current funding plans.
   • Increase MRR Annual Assessments.
   • Levy MRR Special Assessments.
   • Increase MRR related fees.
4. Target and Minimum Reserve Balances
   • A Total MRR Reserve Target Balance range of 60% to 85% “Fully Funded” with a Minimum Balance of “60% Fully Funded” has been established by the BOD,
     • It is not mandatory to fund the MRR Reserves to achieve the Target Balance. Projected balances that fall below the Target Balance shall be evaluated to determine the implications for the current year and following years as well as compliance with regulatory requirements for maintenance reserve funding.
       • The Board will review MRR Reserve Target Balances vs. projected balances (end of current year, ten (10) year and thirty (30) year projections) at least annually.
       • Board MRR Reserve reviews will normally during the budgeting process in conjunction with the review/approval of the budget year MRR spending and revenue plans.
     • The Board shall ensure adequate reserve levels are maintained to minimize, if not eliminate, the need for unplanned MRR assessments.
   • The methodology for establishing the Target Balances and assessing Reserve funding risks may be revised to best meet the needs of the Association or to meet regulatory requirements for maintenance reserve management. Any such revision must be approved by the Board and the MRR Policy updated to reflect changes.
5. Compliance with Regulatory Requirements for Reserve Funding.
   • At the time the annual budget and assessments are established, the Board of Directors must verify that the planned funding of the MRR Reserves complies with regulatory requirements.