Summer 2011 Tampa Newsletter
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    Summer 2011 Tampa Newsletter Summer 2011 Tampa Newsletter Document Transcript

    • Summer 2011 EditionTA M PA B AY N E W S L E T T E RCorporate Headquarters8200 NW 33rd Street, Ste 300Miami, FL 33122800.514.5770 Phone In This IssueTampa Bay Region2963 Gulf to Bay Blvd, Suite 265Clearwater, FL 33759813.448.3982 Phone 1. Words from Kelly VickersSouthwest Florida Region 2. Reserve Now or Regret Later3358 Woods Edge Cir, Ste 102Bonita Springs, FL 34134 3. Out of the Dumps and Into the Future239.495.3428 Phone 4. Removing the Pain from the PolicyOrlando Region301 East Pine Street, Suite 150Orlando, FL 32801407.705.3236 Phone
    • Dear Board Member —Kelly Vickers, LCAM, Business Development Manager KW PROPERTY MANAGEMENT & CONSULTING KW PROPERTY MANAGEMENT & CONSULTING is specializes in community association management. a management company and it stops there. Unlike We take pride in maintaining great looking some of our competitors, we do not have a financial communities and producing on time and error free interest in or affiliation with any of the vendors in our financial statements; of which all are reviewed by one network. This is a growing problem in the market of our seven in-house CPA’s. Our licensed place today as many management companies find Community Association Managers are seasoned themselves not independent when making a decision professionals with years of experience, which enables that financially impacts the association, rather making them to efficiently manage the most difficult and a decision that is in the best financial interest of their complex communities. company. At KW PROPERTY MANAGEMENT & CONSULTING KW PROPERTY MANAGEMENT & CONSULTING we believe a successful customer service experience does not want to be the biggest management begins long before that first phone call is received. We company, only the best. We want to provide you with have implemented an unrivaled customer service the quality service you expect and pay for. When we program that allows us to utilize two of our strongest are hired, our management team develops a short tools – our people and technology. This combination term transition and long term operational plan, provides our clients with feedback as well as access to specifically designed to meet your association needs. information twenty four hours a day seven days a week. Please feel free to contact me at 727-859-2462 or 941- Our professional team manages approximately 225-2747 in order to set up a time we can meet with 35,000 units throughout the state. These people you at your community. After meeting, we will be able range from Certified Public Accountants (CPA), to send you a comprehensive proposal on how we can licensed Community Association Managers (CAM), Certified Manager of Community Associations best serve your association. (CMCA®), Association Management Specialist At your service, (AMS®), Professional Community Association Managers (PCAM®), Real Property Administrator Kelly Vickers, LCAM (RPA®) and certified maintenance personnel. Business Development Manager KW PROPERTY MANAGEMENT & CONSULTING-2-
    • Funding for the Future: Reserve Now or Regret Later—By Will Simons, RS Picture yourself onboard an airplane for a long- awaited family vacation. As you watch the clouds float by, you happily day-dream of the adventures in store for you and your loved ones. As the flight attendants hand out the first round of drinks, the pilot makes a sudden announcement: “Folks, we’re terribly sorry, but the plane is almost out of fuel. What’s worse, the wings are barely held together by duct tape, and the landing gear has needed repair for months now.” He goes on to tell you and the other shocked passengers that the plane will need to make an emergency landing, and everyone will have to pitch in to afford the cost of the repairs. “But what happened to all the money we paid for these tickets?!” you exclaim to the attendant. “Didn’t anyone think to use some of that money to care for the plane?” As tension rises in the cabin, the pilot safely makes the emergency landing. After a long and costly wait, the plane is fixed and you continue on your trip, but not before your sanity and your routine “Operating” funds which cover everyday pocketbook have been put to the test. expenses such as insurance, utilities, and management fees, reserve funds are intended only for repair, No doubt this is an extreme scenario, but restoration, replacement, and maintenance of the unfortunately we can draw a comparison to something association’s major physical assets. Typical reserve- that happens every day in communities around the funded projects include roof replacements, painting, country. Imagine the feelings of a homeowner who’s pavement resurfacing, replacement or modernization bought a home in what she thought was a great of HVAC and other mechanical systems, interior community association, only to find out that her remodeling, amenity area updates, and many more. building’s elevators are on their last legs, the roof is Because they typically don’t occur every year (and constantly leaking, and her balcony railing is rusted sometimes not for many years at a time), these large through. When she raises her concerns at that month’s costs are often underestimated or overlooked board meeting, she’s told that there’s no money for completely. the work that needs to be done, and that the residents will have to cover the replacement costs through a To adequately prepare for these inevitable expenses, a major special assessment. You can imagine her community association needs to determine how much disappointment, anger and frustration, all of which money should be contributed to reserves each year so could have been avoided had the association been that sufficient funds are available when components planning and preparing for these expenses all along. reach the end of their useful lives. This can quickly Just like the passengers on the airplane, she’s become a complicated exercise, especially in older wondering how this could have happened, and who is properties with many projects due (or overdue) for to blame for the problem. serious work. Combined with a universal desire to keep assessments as low as possible, this often means that Surprisingly, this is a very common situation. In every funding of the reserves is put off until “next year.” community association, a significant portion of the assessment fees collected from the owners should be As the years go by, and major expenses creep closer, held in special accounts known as reserves, only to be the association will find itself in increasingly dire used for specific purposes. Not to be commingled with straits. Eventually, the residents will look around and —Continued on page 4 -3-
    • Funding for the Future: Reserve Now or Regret Later —Continued from page 3 notice that the paint is peeling, the streets are crumbling, and the amenities are sorely in need of updating. At that point, tough decisions need to be made. Will the association be able to pass a special assessment to raise the funds? Will it need to take out a loan, committing to years of interest payments? Or will it let the property continue to decline until home values become negatively affected? Clearly, none of these is a desirable option. The wisest method of preparing for major projects is to identify ahead of time what will need to be done, properly estimate the size and the possibility of special assessments. A community frequency of costs, and design a reserve funding plan association is not an apartment complex; all owners that will help meet those costs accordingly. In other collectively share the responsibility of protecting the words, the association will need to conduct a Reserve value of the association’s shared assets. Proactive, Study and incorporate the findings into the annual responsible board members must embrace their budget process. fiduciary duty to do right by the people they represent, A Reserve Study is done in two parts: the Physical and association managers must help put their clients in Analysis and the Financial Analysis. The Physical a position to make wise decisions. Analysis is a thorough, detailed inspection of the A reliable Reserve Study takes time and expertise to association’s actual physical assets, such as buildings, prepare. With the necessary experience and credentials, streets, amenity areas, and so on. Photographs and a professional Reserve Study provider is an measurements are taken to help define the size and independent third party, able to take responsibility for scope of all expected projects. Useful Life and the recommendations shown in the study. While board Remaining Useful Life estimates are assigned to each members and property managers often contribute line item in order to determine when (and how often) valuable background information, a professional is able repairs or replacements are likely to be necessary. Using to give clear, unbiased recommendations grounded in this framework of data, replacement and/or repair facts and objective data. As with filing taxes or costs are estimated, and a schedule of projected determining insurance requirements, the association expenses is produced. The Financial Analysis includes a should always seek the advice of specially trained review of the association’s current reserve accounts, experts when it comes to major financial decision- resulting in a determination of relative reserve fund making. If your association doesn’t have a current, strength known as “Percent-Funded.” A recommended professional Reserve Study, there’s no time to waste. funding plan is then created, intended to prepare the Whether it’s an airline ensuring the safety of its association for the various projects identified in the passengers or a community association planning ahead study. for care of its most important assets, crossing fingers Reserve Studies have become an integral part of the and hoping for the best is no substitute for diligent, annual budgeting process for associations across the responsible planning. country. Associations that are well-prepared for large expenses are easier to manage and are more desirable To learn more about reserve studies or Association Reserves to prospective buyers. More importantly, current contact Will Simons, President of Association Reserves – residents of these associations will be less exposed to Florida, LLC at 800-706-4560 or wsimons@reservestudy.com.-4-
    • Out of the Dumps and Into the FutureA fresh look at the budget process—By Marlene Niemeier, LCAM, CMCA, AMSWhen the gavel drops to adjourn the annual budget meeting community together? What are the changes in financialdirectors typically exhale a sigh of relief that yet another conditions, physical facilities, services and activities that willbudget season is over. Of course, the new fiscal year is just enhance market value and quality of life -- one, three and fivebeginning! Adopting the budget is a critical board task. years from now?When this milestone feels more like a millstone, a fresh lookat the process is in order. The answers to these questions are the foundation of an action plan that the budget brings to life. Some may argue that since large portions of the budget are non-discretionary – insurance, utilities, essential contracted services and payroll for core staff – this exercise is not worth the effort, especially in tough economic times. However, when owners have to stretch to make their assessment payments they need to know and see that every dollar builds value now and in the future. Instead of simply rolling forward last year’s plan take a fresh looks at what staff, services, equipment and technology can best achieve the vision. At the same time do not overlook the basics. Walk the property like you are seeing it for the very first time. Note the small things that can make every day at the property better. Start with aesthetics at the front entrance -replace the bent or missing letters on the entry monument, reshape the bushes and replace the greasy traffic cones. In the garage or parking areas determine if the wheel stops should be reset or repaired. Does the lighting work and is itThe typical budget process begins with analyzing the year-to- energy efficient? If the goal is a remodeled clubhouse, startdate financial statement to estimate funds needed to by refinishing the front door and replacing the mismatched,continue the status quo operations for another year. Florida sticking hardware. At tree trimming time, order an extrastate statute also requires a reserve schedule that projects the dumpster, including one for hazardous waste, and invite thecost of periodic replacement of capital improvements. residents to clean out those storage lockers. Then have a mid-The predictable result is yet another cost increase with no year resident event to review and celebrate progress, hearapparent benefit to the unit owners footing the bill. In from your owners and readjust plans and priorities.addition, unit owners who pay assessments also pay apremium to cover the cost of those who do not. This is all the With the foundation of an action plan based on values andmore reason for the board to build a budget that looks vision, you can elevate your budget process from a grindingforward rather than back. exercise in cost-cutting to an engaging process that maintainsRather than dive head first into historical data, the initial the essentials, provides tangible payback in the short-termfocus of the Board of Directors or Budget Committee should and builds value for the future.be to understand and articulate the vision, values and needs To learn more about how a professional management company canof the community. Who has purchased in the community andwhy? What are the tangible/intangible features and services assist your association in its financial goals contact KWthat attract and retain owner residents? What brings the PROPERTY MANAGEMENT & CONSULTING at 727-859-2462 or 941-225-2747. -5-
    • Association Insurance– Removing the Pain from the Policy— By Phil Gambrell, Co-Owner, Gambrell & Sturges Insurance Now more than ever associations are searching for that couples an insurance policy from an A Rated ways to trim their annual budgets. Being that carrier with unparalleled collections support. insurance premiums represent a large percentage of Associations submit delinquent units to the the budget for most associations below are a few insurance carrier and the association is advanced proven tips and techniques to minimize your its uncollected maintenance fees, going forward, insurance expenses: for up to six months. All fees associated with the collections process are paid by the insurance • Make Sure your Property Policy Limits are carrier. Best of all, the premium for the policy is Accurate – Obtaining annual appraisal updates is taken out of the payment made to the association the only sure way of knowing if the policy limits are each month so there is no out-of-pocket expense. It appropriate. If the association’s property appraisal is well worth obtaining a proposal to see how the is more than eighteen months old, there may be a program would benefit your association. reduction in its realized value which could equate to a lower premium. At the end of the day, your insurance agent should be your business partner who recognizes the association’s • Don’t risk a Claim Payment Penalty - If the policy desire to fulfill its fiduciary responsibility to its has a coinsurance clause review the policy carefully membership. An effective agent should submit the to ensure that the policy limits equal or exceed the association’s account to all available markets to obtain requirement. If the policy has a 90% coinsurance the best possible price and coverage, provide alternate clause but the policy limit is only 80% of the deductible options to allow the association to choose current replacement cost, the association will face one that is conducive to their budget, and include in a penalty at the time of a claim. the proposal a market summary that lists the carriers • Don’t Overlook Potential Premium Savings – If that were contacted including their underwriting your association is in a VE Flood Zone you may be decision, terms, conditions and pricing. able to obtain a Letter of Map Amendment Lastly, don’t forget the impact of premium financing (LOMA) from FEMA rezoning you to an X Zone . on the budget. Most premium finance companies The process is lengthy and quite involved, with the allow agents to add to the base rate offered by the average effort taking between twelve and eighteen finance company. If an agent sells insurance; they months, but it has the ability of providing a should not receive additional compensation for potential savings of between eighty and ninety arranging an association’s financing. Check the rate percent on the premium for the association. on the current finance contract; if the APR is more than 3.09% then the association is paying more than it • Budget for Your Deductibles – The amount of probably should. deductible varies by type of policy and carrier. Make sure the association budget includes a Phil Gambrell, Co-Owner, Gambrell & Sturges Insurance provision for payment of deductibles in the event G&S specializes in residential condominium associations in FL, of a claim, or establish a Letter of Credit with your AL & MS. For more information please contact Phil at 850-547- 0065 or 850-232-8102 or pgambrell@gambrellsturges.com. financial institution to cover that potential liability. • Protect Your Association Against Unpaid 1 FEMA Rating – VE relates to areas subject to 100 yr flood and additional velocity hazards (wave action). Assessments – A limited number of agents in the 2 FEMA Rating – X relates to areas outside the 500 yr flood plain with less than state have access to an innovative product available 0.2% annual probability of flooding.-6-
    • JOI N OU R MAI LI NG LISTYes, I am interested in learning more about KW PROPERTY MANAGEMENT & CONSULTING.Please include me on your mailing list for the items selected below: J Electronic Email Newsletter containing news and information relevant to serving on a board of directors. J Electronic Invitations to upcoming complimentary educational seminars. J Electronic Copy of Quarterly Tampa Bay Newsletter J Hard Copy of the Quarterly Tampa Bay Newsletter J Information Packet on the services provided by KW PROPERTY MANAGEMENT & CONSULTINGName:________________________________________________________________________________________________________________Address: ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________Association Name: ______________________________________________________________________________________________________Position on the Board of Directors: ______________________________________________________________Number of Units: _____________Email Address: ____________________________________________________________________________________Please mail to: Kelly Ann Vickers KW PROPERTY MANAGEMENT & CONSULTING 2963 Gulf to Bay Blvd Ste 265 Clearwater FL 33759 or send your preferences via email to kvickers@kwpropertymanagement.com -7-
    • A Professional and Independent Approach to Management2963 Gulf to Bay Blvd, Suite 265 • Clearwater, FL 33759