#37861
Sir Humphrey
Strataguru

    I agree that a good capital works (aka sinking fund) plan has a schedule of anticipated annual levies for the duration of the plan. The levy in any given year is decided by that year’s AGM’s budget resolutions.

    The point of the plan is to meet infrequent, lumpy expenses more equitably among owners who come and go by contributing to the fund about the same each year.

    So, a variation on what I suggested would be that the plan could include several variations on the schedule of levies to accumulate sufficient reserves of cash for expenses anticipated at various times into the future and the owners could vote on which to use. One might start lower but consequently rises higher later in the plan period. Another might start a bit higher and rise more gradually and yet another might start higher still and stay the same for every year of the plan. If you give people three options, they then tend to go for the middle one.