New HOA Reserve Law: Oakmont’s Forecast Deserves a Closer Look
A new California law will require HOA reserve funding beginning in 2032. Oakmont’s own forecast already shows reserves falling approximately 69% by 2030—even while assuming increasing annual contributions.
Governor Gavin Newsom signed AB 2050 on September 29, 2026, with its new reserve funding requirements beginning January 1, 2032. By that year, Browning’s forecast assumes OVA’s annual reserve contributions will be about 45% higher than the $900,000 budgeted for 2026. Unless other revenues cover that increase, members would pay more through the reserve portion of their dues.
Yet during the October 20 presentation of the 2027 budget, I did not hear an explanation of this legislation or how OVA intends to prepare for its funding requirements.
That deserves attention before Oakmont makes further substantial financial commitments.
OVA has not adopted a system-wide Master Plan connecting financial capacity, annual budgets, major projects, reserve-study replacements, and additional golf property obligations under a revised contract. That picture also needs to account for a possible office-building purchase and the still-unknown, unpublished costs of the Oakmont 2030 “A Walk in the Park” concept for the Central Area Complex.
Members need to understand how these possibilities fit alongside the facilities we already maintain.
What Browning’s forecast assumes
Browning projects reserves falling from approximately $5.26 million at year-end 2025 to $1.64 million in 2030. At that low point, reserves would be 18.8% funded.
That decline occurs even though the forecast assumes annual reserve contributions increase 5.5% each year through 2035.
Contributions rise from $949,500 in 2026 to approximately $1 million in 2027 and $1.18 million in 2030. Reserves subsequently begin rebuilding, reaching approximately $2.45 million in 2032—but with annual contributions assumed to reach approximately $1.31 million by then.
These are projections from Browning’s study prepared for fiscal year 2026, dated November 14, 2025—not current account balances. Browning concludes that reserves appear adequately funded because projected balances remain positive throughout its 30-year forecast. That conclusion depends on the costs, spending schedule, and increasing contributions used in the study. The study assumes 2.5% annual cost inflation and no interest earnings within its cash-flow forecast; a footnote states that interest is retained in the operating fund. Actual interest credited to ARF must therefore be reconciled separately.
The question is whether OVA’s actual funding and spending decisions support those assumptions.
The 2027 budget keeps regular contributions steady
The October 20 budget resolution identifies planned contributions of $800,000 to the Asset Replacement Fund and $900,000 to the Capital Improvement Fund for 2027—the same regular transfers listed in the 2026 budget.
Browning’s forecast assumes a 2027 reserve contribution of $1,001,722. The resolution’s regular ARF contribution is therefore approximately $202,000 below that assumption. Investment earnings and additional surplus transfers could narrow or close the difference, but the resolution does not specify those amounts.
The packet also records a $471,013 transfer of net income into ARF during 2026. That confirms that surplus transfers can materially supplement regular funding; the $202,000 comparison is not proof of an actual shortfall. Members need a reconciliation showing how regular contributions, investment earnings, and additional transfers compare with Browning’s assumptions, using updated balances and project costs.
Relatively steady base contributions supplemented by surpluses may work in some years. They do not establish that increasing contributions will continue throughout the forecast. Nor does money contributed to CIF and spent on improvements or debt payments replenish ARF.
What the legislation requires
Beginning January 1, 2032, reserve studies must identify the minimum annual contribution needed to prevent projected balances from falling below zero over the following 30 years. Associations must contribute at least that amount.
If a negative balance is projected at any point during that period, the association must transfer at least 15% of its gross annual budget into reserves annually until that projected shortfall is eliminated.
If the budget cannot provide the required funding, AB 2050 requires a reserve funding special assessment under existing assessment rules, including a membership vote when the amount exceeds the applicable cap. This particular assessment cannot be levied more than once every nine years.
A low percentage funded does not automatically trigger an assessment. The law does not require 100% funding; its triggers concern projected cash shortfalls and the ability to provide the required annual funding.
The existing general voting threshold is special assessments totaling more than 5% of the association’s budgeted gross expenses for that fiscal year. That threshold governs member approval, not reserve adequacy.
For Oakmont, the practical question is whether an updated forecast will remain positive after incorporating current commitments and realistic contributions.
Berger and the pool are only part of the bill
At the October 20 Board meeting, Treasurer Tom Kendrick estimated the Berger project at approximately $4–5 million, with no new loan anticipated. General Manager Christel Antone presented preliminary Central Pool options costing approximately $300,000–$400,000.
Together, those estimates suggest $4.3–$5.4 million in project spending, before additional golf infrastructure expenses or costs outside those estimates. Members need to know whether professional fees and contingencies are included.
OVA also announced responsibility for golf property insurance, taxes, and some grounds and waterway maintenance in exchange for reduced social membership payments. The specific obligations, their costs, and the net financial effect need to be explained.
Meanwhile, other amenities continue to need their share.
Browning schedules approximately $2.06 million for East and West recreation centers during 2026–2030, including approximately $1.40 million during 2027–2030 alone. Work includes paving, pool resurfacing, HVAC systems, kitchen rehabilitation, bridge maintenance, accessibility equipment, and other replacements.
The study also schedules approximately $498,000 for major Central Activities Center parking-lot asphalt repairs in 2027 and $349,000 for rebuilding Central Pool decking in 2030. Members need to understand how proposed deck resurfacing relates to that later replacement.
These expenses are already included in Browning’s projected balances and should not be counted twice. Some work may have been completed or changed. What members need is a comparison showing how today’s proposals alter the forecast.
A Walk in the Park adds another layer of spending
The Board adopted Oakmont 2030’s “A Walk in the Park” concept for exploration, not construction approval. Its costs remain unknown and unpublished. Members need to know what has already been spent or committed, what future redevelopment could cost, and whether today’s pool and facility repairs would later be removed or redone. These costs belong in the same financial plan as Berger, reserves, and golf obligations so members can understand the combined effect on future dues.
“No loan” does not settle affordability
Avoiding new borrowing could save interest costs. Spending accumulated funds, however, reduces the cash available for other work.
OVA should show which project expenses Browning already included, which are additional or accelerated, which account pays, and what balances remain afterward. The budget resolution itself states that major project expenditures and contracts remain subject to any separate approvals required.
An association-wide financial capacity report would connect those decisions with current balances, realistic contributions, existing debt, remaining replacements, new golf obligations, a possible office-building purchase, and the full costs of exploring and potentially carrying out A Walk in the Park. Members should be able to see what those choices mean for future dues.
There is no basis to declare a special assessment inevitable. Necessary replacements are an appropriate use of reserves. But members deserve to understand the financial consequences before commitments are made.
Browning already projects a substantial reserve decline even with increasing contributions. The new law makes it more important for OVA to demonstrate that it can fund the projects being discussed, maintain its other amenities, and keep future dues predictable.
This article reflects my own independent analysis and commentary as an OVA member and does not speak for the Oakmont Village Association.
Sources
Browning Reserve Group, study prepared for fiscal year 2026, dated November 14, 2025; expenditure schedules and funding forecasts, printed pages 5–24 and 49–51:
https://oakmontvillage.com/article/reserve-study-2026/
OVA October 20, 2026 Board packet, 2027 Budget Approval Resolution, printed page 43; September 2026 ARF financial statement, account 35720, Transfer Net Income to Rsrvs, supplied by the author.
https://oakmontvillage.com/article/10-20-2026-board-agenda-resolution-packet/
OVA 2026 Annual Budget Report, November 18, 2025.
https://oakmontvillage.com/article/annual-budget-report-2026/
OVA, “Board Approves 2027 Budget,” October 20, 2026, and Board meeting presentations:
https://oakmontvillage.com/article/board-approves-2027-budget/
AB 2050, Chapter 796, Statutes of 2026, particularly Sections 3–4:
https://legiscan.com/CA/text/AB2050/id/3460955
Governor’s signing message:
https://www.gov.ca.gov/wp-content/uploads/2026/09/Sign-Msg-AB-2050.pdf
California Department of Real Estate, Civil Code §5605:
https://dre.ca.gov/files/pdf/relaw/excerpts.pdf
Some OVA source materials require member sign-in.
Reserve study analysis aided by ChatGPT PRO.
