Baseline Funding

The goal of this funding strategy is to keep the reserve cash balance above zero

Chart of Accounts

An organized list of titles, descriptions and asigned numbers of all accounts in an organization's general ledger.  the assigned number helps you locate the account.  the title describes the purpose of the account.

Discretionary Budget Line Items

These are items based on owner, board and committe desires.  they are items people would like to have  given their values, lifestyle, and preferred level of service

i.e social and recreational expenses.

Expenses

Are the cost of goods and services used to operate and maintain the community property

FHA

Federal Housing Administration. regulates and influences suvch items as the amount of insurance a community association must carry, procedures for financial operations and requirements for the upkeep of property

FHLMC

Federal Home Loan Mortgage Corporation.

Buys mortgages from lenders and in doing so require certain types of insurance to be in place

FNMA

Federal National Mortgage Association Federally established secondary mortgage institution that may set requirements that your community association will have to meet if owners are to participate in their financing programs

Full funding

The goal of this funding strategy is to attain and maintain the reserves at or near 100 percent as called for on the commponent inventory

Historical Trend Budgeting

This method begins with the assumption that existing line items are needed. The amount of funds allotted to each during the current year is adjusted for expected changes in the coming year.

Major improvement expenses

Consist of items that are not necessarily required, but are added to improve the overall welfare, safty or life of the residents or to enchance the value of the community association as reflected in the resale value of units.

Operating Budget

The section of a budget devoted to operating activities includes operating expenses and major improvement expenses but not the replacement fund.

Operating Expenses

Items that occur on a regular basis day to day week to week month to month and year to year

Reconciliation of Expenses and Revenue

After you draft both your operating and replacement fund budgets for the coming year, you must reconcile your estimated expenses with your community's anticipated revenue.  To \reconcile means to bring together after a difference.

replacement Fund

This fund consists of funds put aside in reserve  for the replacement of major components of community's common property

Reserve Cash Flow Statement

Shows the amount to be funded and the amount to be expended from the replacement fund over a given period of time

Reserve Study

Is a budget planning tool that considers the current status of the replacement fund and determines a stable and quitbable funding plan to offset the anticipated future major common area expenditures

Revenue

Consists of the collective items or amounts of income which, in the case of a community association are appropriated for public expenses

Threshold funding

This method is based on the baseline funding concept.  the minimum reserve cash balance in threshold funding is set at a predetermined dollar amount

Zero based Budgeting

With this method, all line items are set to zero and the amoun of funds alloted to each must be justified

Acceleration

The collection of all assess.ments due through the end of the fiscal year.  I.E. If an owner's payments on the annual assessment are due monthly and become delinquent at the end of march, all monthly payment through december of that year are due immediately

Assessment 

is the owner's financial obligation to the community association during a given period of time usually one year.  It covers the owner's share of the common exense, also known as common expense liabilities in some states.

Bad debt write off

consists of recording an uncollectible debt as an expense that the association must absorb.  This usually requires a resolution of the board

Chaper 7 Bankruptcy

Is called straight banruptcy of liquidation.  It involves the prompt conversion of all the individual's or corporation's non -exempt property to cash, and payment of creditiors to the extent possible

Chapter 11 bankruptcy

Is called a reorganization because it is designed to allow for an orderly payment to creditors that enable a corporation to continue

Chaper 13 Bankruptcy

Is used to reorganize personal or non corporate debt a plan is submitted to a judge for paying off all or nearly all of the debt over a specified period of time

Fair Debt Collection Practices Act

Requires that the person who owes a debt receive written notice

Foreclosure

Is a legal proceeding filed in court whereby a party witha claim against an owner can claim ownership of the unit involved in order to recover the money it is owed.  The unit is usually auctioned by the court and sold to the highest bidder.

lien

Is a legal claim by one party (community association) on the property of another (delinquent owner) to obtain the payment of a debt or the satisfaction of an obligation.  Placing a lien on an owner's property protects the community association's interest