Why do we have a reserve fund?
A reserve fund is to prevent increasing dues because of an unforeseeable issue. When an HOA without money in a reserve fund faces expenses outside its general operations budget, the HOA will likely have two choices: increase dues significantly right away, or levy special assessments. So it is recommended to have a reserve fund.
So what can it be used for and what can it not be used for?
The reserve fund sets aside money for covering unscheduled expenses and capital projects. If a storm comes through and destroys most of the fencing in the common areas, the reserve funds can be used for this. If a large community improvement project is wanted, it can be used for that too. Each the HOA and Master have their own reserve fund and they may not be shared. Money in the reserve fund cannot be used for typical costs such as scheduled/routine expenses (yearly landscaping, utility bills, etc.)
Why is there so much money in the account?
Simply put, to be the best prepared and have the least risk of needing special assessments levied. Two great examples of this is the need for the fountain to be completely rebuilt and a previously unknown piece of wetland area that the HOA needs to maintain. Both of these expenses came in the same year and totaled over $30,000. Without the adequate funds, the residents would have needed to pay an unexpected assessment to cover the costs to properly handle these situations.