@JimmyT said:
Do you “get” the capital works fund? No, me neither…
Actually, having done it, it’s not that difficult.
I know that it used to be called the sinking fund and you have to have a 10-year plan but renew it every five years (which sounds like a five-year plan to me).
For those in the ACT it is still called a ‘sinking fund’. Also, must cover at least 10 years but there is nothing to stop you anticipating that something will need doing 20 years from now and planning to accumulate about half the necessary funds over ten years.
Ours is designed for 10 years with 5 year reviews as required by the ACT Act. So, our present plan is for 2015-25 but in 2020 we should review it and extend it to 2030. IE it then becomes the 2020-30 plan.
And it’s for things like lift repairs … but not maintenance (or is it?). Confused? …
Early this year I resigned from our committee after being treasurer after 9 years. My successor stated to the AGM that our sinking fund plan was deficient because it did not provide for a couple of maintenance items. However, it had been noted in the annotation of our plan that these few items were funded instead from a line in the Administrative Fund budget for this category of maintenance. In my view, these were routine items that always cost a few hundred to a few thousand dollars every single year and they did not need to be part of the sinking fund plan. So long as they were being attended to and funded it did not really matter where they were funded – it cost the owners the same amount either way. At our recent AGM, the new treasurer put a motion to amend the sinking fund plan so that these items would be funded from the sinking fund. Consequently the levy for the admin fund was lowered a bit and the sinking fund increased a bit.
A generous interpretation would call this a trivial difference of style about which reasonable minds could differ and of little consequence. A less generous interpretation that was suggested to me was that the new treasurer made the change much as certain animals lift a leg to mark their territory.