GRF Funds: A Basic Framework

GRF FINANCIALS

The Golden Rain Foundation maintains its money in three separate funds—Operating fund, Capital fund and Reserve. The financial health of the Foundation is based on the overall status of these three funds, individually and collectively. The Foundation also determines which fund is assigned to which expense.

The Operatng Fund is used for all day-to-day expenses and most directly connected to the annual budget. These expenses generally impact the Operating Fund’s health if the budget is over or under for the month or the year. These expenses are also the ones most likely to create or reduce pressure to increase the monthly assessment amount. Replacement contributions for the Reserve Fund and Capital Fund come from monthly operating expenses.

Capital Fund is considered a subset of the Operating Fund and used to finance new or upgraded projects, in whole or in part, such as installation of the radar cameras or upgrade of the internet service hardware. Once a new component is installed, it becomes a part of the reserve study, if needed. By GRF rule/policy, Capital Fund is primarily funded through the Trust Property Use Fee (TPUF) money.

The Reserve Fund is used to find expenses related to long-term maintenance and replacement of defined components belonging to the Foundation that occur less often than once per year. Reserve funding is based on the reserve study, which is updated annually by a third-party vendor. Once money is in Reserve Fund, it cannot be used for other purposes, with exceptions that are not common. The Reserve study contains a forecast of all known components, anticipated useful life, and the forecasted cost to replace the component at end of useful life. The annual funding level is recommended by the Board to ensure GRF has money available when needed.

—Dave Potter, CCAM, CMCA, AMS GRF Interim Executive Director