Common use of Capital Reserve Clause in Contracts

Capital Reserve. The collaborative may create a capital reserve fund to support costs associated with the acquisition, maintenance, and improvement of fixed assets, including real property, pursuant to a capital plan. In order to create a capital reserve fund, (a) a capital plan must be developed and approved by the collaborative board, (b) two-thirds (2/3) of the member districts must approve the establishment of the fund and (c) the request for approval must state the reason for the reserve and a limit on the balance that may be held in the reserve. 603 CMR 50.07(10). The establishment of a capital plan and a capital reserve fund should be approved outside of the collaborative agreement process. Deposits into the capital reserve fund shall be proposed and approved through the annual budget process. Expenditures from the capital reserve fund must be authorized by the board and may be used only for the project or purpose for which the account was established. In the event that the purpose for which the capital reserve was created requires modification, the collaborative board must revise its capital plan and provide notice to all member districts. If a member district does not vote to disapprove the revised capital plan within a 45 day period, that member shall be deemed to have approved the revised capital plan. Two-thirds (2/3) approval of the member districts is required to revise the capital plan. 603 CMR 50.07(10). Annual Budget Preparation and Assessment of Costs

Capital Reserve. The collaborative may create a capital reserve fund to support costs associated with the acquisition, maintenance, and improvement of fixed assets, including real property, pursuant to a capital plan. In order to create a capital reserve fund, (a) a capital plan must be developed and approved by the collaborative board, (b) two-thirds (2/3) of the member districts must approve the establishment of the fund and (c) the request for approval must state the reason for the reserve and a limit on the balance that may be held in the reserve. 603 CMR 50.07(10). The establishment of a capital plan and a capital reserve fund should be approved outside of the collaborative agreement process. Deposits into the capital reserve fund shall be proposed and approved through the annual budget process. Expenditures from the capital reserve fund must be authorized by the board and may be used only for the project or purpose for which the account was established. In the event that the purpose for which the capital reserve was created requires modification, the collaborative board must revise its capital plan and provide notice to all member districts. If a member district does not vote to disapprove the revised capital plan within a 45 day period, that member shall be deemed to have approved the revised capital plan. Two-thirds (2/3) approval of the member districts is required to revise the capital plan. 603 CMR 50.07(10). Annual Budget Preparation and Assessment of Costs.