FINANCE
KHOV currently controls all financials for the Homeowner’s Association and won’t relinquish control of the Association until all the homes are nearly sold.
The Finance volunteers review the monthly Homeowner’s financial statements issued by Associa on Town Square. This includes the recent issuance of a letter (see below) coordinated by John Lisée to KHOV/Associa Finance Board covering the Team’s review of financial statements with detailed questions relating to their review. KHOV’s 2023 budget included approximately $2 million of Operating expenses and $183,000 of planned reserve fundings as laid out in a Full Reserve study.
In addition, the Finance volunteers reviewed the Full Reserve study dated January 21, 2020 and the impact and relationship of it to the financial reserve transactions on the Homeowner’s financial statements. Our HOA dues will eventually pay for ongoing operating expenses of Four Seasons as well as fundings into a reserve fund which are projected to meet anticipated expenditures for the community over a 20 year period.
The Full Reserve study needs to be updated soon with new estimates for future capital repair and replacement costs (and probably higher) and new site improvements including all streets completed after the January 2020 study. The total projected cost of future capital repair expenditures in the initial Full Reserve study totaled over $7.6 million.
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What are OPERATIONAL FUNDS & RESERVED FUNDS?
Great question — this is an important distinction in HOA (Homeowners Association) finances. Here’s a clear breakdown:
🏦 Operational (Operating) Funds
Purpose:
Used for the day-to-day expenses of running the community.
Examples of what it covers:
• Landscaping and lawn care
• Pool and clubhouse maintenance
• Utilities (water, electricity for common areas)
• Insurance premiums
• Management company fees
• Office supplies and administrative costs
Think of it as: the HOA’s checking account — used to pay regular, recurring bills that keep the community running smoothly.
Example of HOA Annual Budget
Operating Fund (Day-to-Day Expenses):
| Category | Annual Cost | Description |
| Landscaping & Irrigation | $25,000 | Weekly mowing, trimming, water system repairs |
| Pool Maintenance | $10,000 | Cleaning, chemicals, and routine upkeep |
| Utilities | $8,000 | Electricity for lighting and clubhouse |
| Insurance | $12,000 | Property and liability coverage |
| Management Fees | $18,000 | HOA management company contract |
| Office/Admin Expenses | $2,000 | Postage, copies, supplies |
| Total Operating Budget | $75,000 |
💰 Reserve Funds
Purpose:
Set aside for major repairs, replacements, or upgrades of common assets — typically long-term, predictable expenses.
Examples of what it covers:
• Roof replacement for clubhouse
• Repaving roads or parking lots
• Repainting buildings or walls
• Replacing pool equipment or playground structures
Think of it as: the HOA’s savings account — money saved for future, larger expenses so the community doesn’t need sudden special assessments.
Example of Reserve Fund (Future Repairs & Replacements):
| Category | Estimated Cost | Replacement Cycle | Annual Contribution |
| Road Resurfacing | $150,000 | Every 10 years | $15,000/year |
| Roof Replacement (Clubhouse) | $40,000 | Every 20 years | $2,000/year |
| Pool Resurfacing | $25,000 | Every 10 years | $2,500/year |
| Playground Equipment | $15,000 | Every 15 years | $1,000/year |
| Total Annual Reserve Contribution | — | — |
SUMMARY
| Type | Purpose | Time Frame | Examples |
| Operational Funds | Routine operations | Short-term / Ongoing | Landscaping, utilities, admin costs |
| Reserve Funds | Major repairs & replacements |
By maintaining both funds properly, we ensure our community stays well-maintained today while being financially prepared for tomorrow - financially healthy HOA.