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Appropriate Use of Reserve Funds

Started by BruceH9 • 19 replies • 2440 views

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BruceH9 (North Carolina)
Posts: 7
Posted:
Looking for a little bit of a consensus. Given that a reserve fund is set aside to cover the cost of replacements and major repairs, would restrapping pool chairs be an appropriate use of reserve funds?

It costs about $145 to replace a lounge chair and about half that to restrap it (as long as the frames are sound). It seems like it would be a smarter use of the money to restrap when possible as opposed to replace, but then is it falling back into an operational expense?

I guess the main goal is to try to get the money budgeted into the proper "bucket".

Thanks - Bruce H.
SheliaH (Indiana)
Posts: 6,964
Posted:
I think of reserves as something that would be use for major replacements and repairs such as street repaving or roof replacement - something you might do every 10 years or longer. I don't think I'd put re strapping pool chairs in this category, although replacing the chair itself would be a reserve expense.

Would it be possible for your association to consider getting a different type of chair that's easier to maintain and lasts longer (restapping doesn't sound very sturdy)
If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
BruceH9 (North Carolina)
Posts: 7
Posted:
Hi Sheila - Thanks. The majority of the chairs are now 12 years old and the frames are in really good shape (with a couple of exceptions). We've restrapped in the past due to broken straps (people standing on them) and vandalism (a number of them were cut with a knife a few years ago and have been fairly pleased with the results. Time, UV light and suntan lotion over 12 years have begun to take a toll.

We are lucky in the fact that there is only a small parking lot that repaving is a factor for us and the roads are covered by the city (whew!) Our pools and clubhouse are the big ticket items for us.

BH
SteveM9 (Massachusetts)
Posts: 3,699
Posted:
$72 is pretty cheap to re-strap a lounge chair. Usually around $130 to do a chair that large. I'd want to see samples of his work, materials he will use for this job and talk to other customers to see how their chairs are holding up.

Re-strapping is fine, just as good as original as long as quality materials are used.
BruceH9 (North Carolina)
Posts: 7
Posted:
@Tim - Thanks, good point - I'll check the language in the reserve studies, but I think they are included in the study.
BruceH9 (North Carolina)
Posts: 7
Posted:
@Steve - The chairs we've had restrapped before just went through their 5th season and are holding up well. It is pretty thick vinyl strapping - I cannot tell the difference between the manufacturer's strapping and the new strapping.
MikeS1
Posts: 521
Posted:
Strapped chairs are kinda old school. We went through restaping a couple of times, but finally replaced all the old chairs with new sling furniture. It's easier to cling, does not fade and oxidize and it breathes whereas the straps are uncompfortable unless you use a towel. There are some speciality companies out there that we deal with. We've had these commercial grade sling chairs for 3 seasons now and they are holding up well. Our PM's opinion is that restrapping is a repair which would normally come out of operational maintenance funds whereas the cose of replacing the furniture would come out of reserved. It seems like most pools have moved over to slings now.
MikeS1
Posts: 521
Posted:
BTW-Sling chairs can be re-slinged also.
KerryL1 (California)
Posts: 14,550
Posted:
I guess ours are sling lounge chairs as they're not strapped.

Our reserves study has two categories one for re-strapping (even though they aren't) and one for replacing. They are over 13 years old in a sunny sea air environment. We had them reslung in early '10 and paid for it out of reserves.

The are Brown Jordon lounge chairs and look like they'll last another several years!! So we'll have them reslung again in a couple of years. There's a good polish that has taken care of oxidation when used about 2x year.
BruceH9 (North Carolina)
Posts: 7
Posted:
@Mike - Good suggestion on the sling chairs

@Kerry - Very nice chairs for sure, but if I went and got 40 of them, I'd have a torch and pitchfork crowd outside my house for sure! ;)

Thanks to all for the input!

Bruce H.
KerryL1 (California)
Posts: 14,550
Posted:
Oh, Bruce, I'm not saying to buy the new ones, only agreeing that yours may still have a lot of life left that makes rest rapping or redlining them worthwhile. 40 lounge chairs?? Your pool must be huge! We have only 15 + three tables with 4 table chairs each.

But, I also agree with Tim, if restrapping isn't specifically on your list of reserves components, you probably shouldn't use reserves to pay for that.

Still, using the replacement reserve funds to restrap makes sense to me as it's an upgrade, which we've done occasionally even though the item that creates the upgrade isn't listed on our schedule.
KerryL1 (California)
Posts: 14,550
Posted:
So, related to my post of yesterday, I'm going to make a motion at our board meeting a week from today to rescind a decision previously made: Board approval of our reserves study. I think I've found good reason to take a closer look at some line items, get an explanation from the analyst, and even have our attorney give us an opinion on one of CC&Rs.

My question: How do I word the name of this agenda item?

And, I assume it would be listed under Unfinished Business??

I'm hopping someone knows, and that Bruce of CT checks in!

SheliaH (Indiana)
Posts: 6,964
Posted:
Quote:
Posted By KerryL1 on 09/16/2014 10:07 AM
So, related to my post of yesterday, I'm going to make a motion at our board meeting a week from today to rescind a decision previously made: Board approval of our reserves study. I think I've found good reason to take a closer look at some line items, get an explanation from the analyst, and even have our attorney give us an opinion on one of CC&Rs.

My question: How do I word the name of this agenda item?

And, I assume it would be listed under Unfinished Business??

I'm hopping someone knows, and that Bruce of CT checks in!


Since the decision to approve the study was already made, I think this qualifies as new business. You might call this topic "Request to reconsider reserve study approval" or something like that.
If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
RichardP13 (California)
Posts: 1,767
Posted:
Kerry

Sheila is correct, this would be considered new business and her wording of the agenda item is correct also.
KerryL1 (California)
Posts: 14,550
Posted:
Wow, I'm so sorry. I meant to write a whole new topic!! So thanks for replying!

I've learned that what I want to do is make a motion to rescind not reconsider. My understanding is that one may make a motion to rescind a prior decision at any time and a director who didn't vote for approval may move to rescind. Reconsideration takes place at the meeting when the decision was made (I think) and must be made by someone on the prevailing side. Oh, I'm making such a mess! Here:

“RIGHT OF ANY MEMBER TO MAKE THE MOTION WITHOUT TIME LIMIT. In contrast to the case of the motion to Reconsider, there is no time limit on making these motions [e.g., to rescind] after adoption of the measure to which they are applied, and they can be moved by any member, regardless of how he voted on the original question [my emph., other emph. in the orig.]” RONR, 11th ed., p. 307, 17-18. Brackets are my insertions.

Thank, Sheila & Richard, for the heads up on New Biz--sounds right to me.
BruceH9 (North Carolina)
Posts: 7
Posted:
@Kerry - It is actually 3 pools, so 40 actually looks like less that that, but with 10 umbrella tables that have 4 chairs each and 3 picnic tables under one of those huge umbrellas, there is plenty of seating. We'll definitely be sticking with restrapping for now as the frames are in good shape and if we only have to restrap every 8-10 years, they'll do for a while longer.

Anyway, I can certainly see that there can be good arguments made on both sides and I've gotten excellent feedback here, so the rest of the board and I will discuss a little further. The main goal is to make sure we're getting the best bang for the buck.

I think that we'll look at splitting that expense out as its own item and budget for restrapping a percentage of the chairs every year in an 8 year cycle. Based on current wear and tear, that will keep us looking good. (now we'll have to put some kind of ID number on the chairs so we can track them)

Anyway, thanks everyone!
KerryL1 (California)
Posts: 14,550
Posted:
Glad we could help, BruceH!
KellyM3 (North Carolina)
Posts: 2,239
Posted:
Quote:
Posted By BruceH9 on 09/16/2014 12:51 PM
@Kerry - It is actually 3 pools, so 40 actually looks like less that that, but with 10 umbrella tables that have 4 chairs each and 3 picnic tables under one of those huge umbrellas, there is plenty of seating. We'll definitely be sticking with restrapping for now as the frames are in good shape and if we only have to restrap every 8-10 years, they'll do for a while longer.

Anyway, I can certainly see that there can be good arguments made on both sides and I've gotten excellent feedback here, so the rest of the board and I will discuss a little further. The main goal is to make sure we're getting the best bang for the buck.

I think that we'll look at splitting that expense out as its own item and budget for restrapping a percentage of the chairs every year in an 8 year cycle. Based on current wear and tear, that will keep us looking good. (now we'll have to put some kind of ID number on the chairs so we can track them)

Anyway, thanks everyone!

Bruce,

Since you are replacing pool chair straps, it could qualify as a reserve fund item. But, there is a debate here, for sure.
I agree with you in taking advantage of the deal on re-strapping right now. Yes, this rate is available in North Carolina on a once-per-year basis.

In the future, adjust your reserve fund list if you need to. I like paying for pool strapping in my operations budget BUT will reduce the annual Reserve Fund deposit to cover the cost. It's six of one/half-dozen of the other.
JC7
Posts: 31
Posted:
Hi Bruce,

Are you saying you list pool chairs has a reserve item? Normally this would be an operating expense. Unless you have 1000 pool chairs?

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