Understanding ORPS Reserves
Owners also frequently ask how reserve funds are used and why reserve contributions are so important. It is important to know that the Davis-Sterling Act requires every HOA to maintain a reserve fund to cover the repair and replacement of existing infrastructure and equipment. ORPS currently maintains approximately $9.8 million in resort assets that will eventually require repair or replacement. These include infrastructure, buildings, mechanical systems, vehicles, equipment, roads, and recreational facilities.
At present, the reserve fund contains approximately $4.6 million , representing approximately 48% funded reserves. The long-term goal established for ORPS is a 70% funded reserve level .
How Reserve Planning Works
ORPS engages professional reserve analysts who evaluate the expected useful life and future replacement cost of all resort assets.
For example: •
The air conditioning units at the La Palma Clubhouse were originally installed with an estimated useful life of 12 years; they are now approximately 11 years old. Since installation, reserve funds have been set aside each year to ensure replacement can occur. • The recently renovated Satellite C restrooms have an estimated useful life of 20 years and an estimated future replacement cost of approximately $130,000. Reserve funding for that future replacement is already being set aside. Before any reserve-funded replacement is approved, the asset is visually inspected by the maintenance team and the General Manager. If replacement is necessary, it is added to the reserve schedule; if not, it continues to be monitored each year until it is replaced.
The Purpose of the Reserve Fund
The reserve fund functions as the resort’s long-term savings account. Its purpose is to ensure that ORPS can maintain the quality, safety, and functionality of its infrastructure and amenities over time without relying on large special assessments to owners. Every asset within the resort will eventually require repair or replacement. Consistent reserve funding ensures that future obligations can be met responsibly while protecting both the resort's financial stability and the value of owners’ investments. It is our hope that the information provided presents a clear picture of our approved budget and our current reserve funding. If you have any other questions about the budget or our reserve fund, please do not hesitate to ask one of your Board of Directors members, email us at boardofdirectore@orps.com, or ask your question at the open forum at our next board meeting on June 15.
Respectfully submitted, The Board of Directors Outdoor Resort Palm Springs
69411 Ramon Road, Cathedral City, CA 92234 - (p)760-328-3834; (f)760-328-7852; orps.com
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