Assessments are comprised of two major components: operating expenses and reserve fund contributions. Operating expenses consist of the cost of goods and services used to operate the association and maintain the common property on an annual basis. Reserve fund contributions consist of funds that are put aside (saved) for the replacement or maintenance of major components of the common property when they begin to deteriorate in the future. The anticipated operating expenses and the annual reserve fund contributions are divided by the number of units or homes in the community to determine the amount of the assessment. Annual budgets are developed by the Board, adjusting the assessment amount to meet the anticipated expenses for the upcoming fiscal year.