ANNUAL OPERATING BUDGET AND RESERVE FUND
The West Loch Fairways Association (WLFA) operating budget is a projection of the money needed by the association to cover its operating expenses and provide adequate reserves for repair and replacement of the elements of the property WLFA maintains. The WLFA Declaration of Covenants, Conditions and Restrictions (DCC&R) requires that the association adopt an operating budget every year. In practice, this means the association revises its budget from the previous year to take into account changes in its financial position and cost structure. The DCC&R describe the manner in which the association budget is adopted each year. In WLFA, the DCC&R provide that the budget is adopted by the board The Association must distribute its budget to all members annually and at least 30 days prior to an assessment increase.
A reserve study is a careful analysis of the future repair and replacement needs of a homeowners association based on the condition of the elements of the property it maintains, a projection of the remaining useful life of these elements and future cost to repair or replace them, and the amount of money the association has in its reserve fund. A reserve funding plan is an agenda regarding collecting money from the owners through regular and/or special assessments to fund the reserve needs of the association.