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Capital Reserves and the Future of Your Community

Posted by Bob Gourley on July 23, 2014 in Communication, Newsletter |

By Bob Gourley

I went to see a fortune teller recently. She took me into her reading room and asked me to gaze into her crystal ball. She then predicted my future. “I see wear and tear on your buildings. I see a new roof will be needed. I see aging windows that need replacing. I see… a depleted reserve fund!”

Silliness aside, it really doesn’t take a fortune teller to predict that common elements in any community are going to age and need replacing. It also doesn’t take any magic to predict that communities with more amenities are likely to incur greater expense when maintaining and preserving their community’s assets. So, why is it that so many communities are so far behind in their goals for achieving a sound reserve fund for tomorrow’s expenses?

There are many reasons that reserve funds are not at their proper levels. First and foremost, in my opinion, is the fact that the “here and now” expenses are far easier to comprehend than tomorrow’s expenses. Has your community undergone an assessment recently? Was it for an emergency or one-time expense or was it for a routine expense that could have been easily predicted 5, 10, or even 15 years ago? The term “deferred maintenance” has become all too familiar in the language of community associations. Simply put, when a community doesn’t have the funds available to handle a routine maintenance item, they defer the maintenance until such time as the funds are available. Provided a plan to raise those funds is executed, that may or may not be a problem. More times than not, the path of deferred maintenance leads to the slippery slope of unfunded capital reserves.

How do you steer your community away from the path of depleted reserves and heavy assessments for routine items? The first step is to develop or review your association’s reserve study. Ideally, this job will be handled by a professional reserve study analyst. If your association does not have or cannot afford a reserve study, the Board of Directors should appoint a committee to take inventory of those items which the community holds in common. These items include common elements like grounds, paved roads, amenities (pools, tennis courts, club houses, etc.) and items routinely handled by the association (i.e. – roofs, building exteriors, windows). These items will vary by community so there is not a “one size fits all” approach to this. Once all of the items are inventories, the committee should evaluate each of those items to determine the element’s useful life. A roof that lasts fifteen years that has been in place for five years, still has ten years left. Roads that were paved 25 years ago may need replacement sooner rather than later. This list will ultimately yield the items that a reserve should be able to fund. For communities that have never done this exercise, the results can be a real eye opener.

The next step is to begin to estimate replacement costs for the common items. Inflation will have taken a toll over original costs so be prepared to factor that in. At the conclusion of this process, a realistic budget for a reserve will begin to emerge. At first glance, many of these numbers may seem too large or unmanageable. My advice is to use a technique called “reduce to the ridiculous” to help make the accounting a little easier to swallow. A reserve study that calls for $20,000 per unit to be raised over the next five years may sound better at $4,000 per unit per year or better yet at $333 per unit per month or $77 per unit per week.

The final step is to sell the concept to your fellow homeowners. None of them want to live in a rundown, outdated community. Poorly funded capital reserves will not only affect the quality of their lives but it will very likely damage their ability to attract buyers should they decide to sell their home. Community members need to be “told and sold” the value of a healthy capital reserve and a long range plan of how those reserves will be used. Tell them about the plans for how the money will be used and sell them on the idea of how it is in their best interests to keep the reserve fund healthy. You will be rewarded with a fiscally vibrant community that is never caught off guard without the funds it will need to flourish.

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"A Thing of Beauty is a Joy Forever"

Posted by Bob Gourley on July 22, 2014 in Communication |

By Bob Gourley

You may recognize the above quote from the English poet, John Keats. Condominiums weren’t around in the early 19th century, so it is fair to say that he wasn’t referring to your community’s newsletter or communication efforts. Nonetheless, I hope you will let his words inspire you as you contemplate transforming your communication message into “a thing of beauty” that will be “a joy forever”.

Take a look at the communications you’ve delivered to your community members and how you chose to get that message out. Were your notices delivered on professional stationary? Did your newsletters have the look of polish and professionalism your community deserves? Was your website maintained, kept current, and made beautiful? Were your communication efforts a thing of beauty? Or would Keats take you to task and challenge you to do better?

Are your communication efforts consistent? Have you committed to telling your story often and telling it well? At the heart of any successful communication strategy is a commitment to excellence and consistency. Image and message are both important. Always use professional stationary for notices. Always use a professional-looking newsletter to deliver your news. For the average community member who does not serve on the Board of Directors, the communications they receive are the only official contact they have with the association. Poorly written or delivered messages don’t carry the same impact as a professional presentation.

Have you developed a budget for your communication needs? A casual attitude towards your community’s communication needs will come back to haunt you. Newsletters, websites, etc. cost real money and should be addressed in your annual budget. If your property management company does not expressly offer communication services, you should develop a plan to handle the communication needs of the community in another way. Don’t leave it to chance.

Finally, avail yourself of the tools that Keats didn’t have in his day. Parchment paper and quill pens have been replaced with keyboards, ink jets, and web pages. Modern software conveniences, like word processors and desktop publishers, make communicating far easier today than it was in Keats’ time.

The poems of John Keats have left us much beauty to enjoy forever. It is hard to believe that he lost his father when he was 8 and his mother when he was 15. He wrote three books of poems before his death at age 25. Almost 200 years later, he is still considered a literary great. You may not have the same fortune as the poet but surely you can draw some inspiration from him the next time you set pen to paper or fingers to keyboard. Once you have mastered the tools, creating beauty is simply a matter of effort. Craft your message well and you will be rewarded with a thing of beauty that will be a joy forever.

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Condominium Newsletters from MyEZCondo Keep Condominium Unit Owners Informed and Involved in Their Communities

Posted by Bob Gourley on July 21, 2014 in Communication, Newsletter |

By Bob Gourley

Frequent and open communications are often indications that a condominium association is being run by leaders who strive to create a connection between the Board of Directors, the Property Management Company, and the condominium unit owners who reside in the condominium association. These leaders are not just building properties. They are building strong, well-connected, and vibrant communities. They have learned the secret power of the condominium newsletter to be more than a throw-away piece of paper with warnings and fines and violation notices. They have embraced the power of the condominium newsletter to unite their communities and foster a bond that encourages neighborly behavior and can even call volunteers to action from projects as simple as a Spring Planting Day to as important to finding new community members to serve on the Board of Directors.

Why is it important to provide information and connectivity to condominium unit owners? Quite simply, the stronger the bond between condominium residents to their community and to each other, the more likely they are to behave in ways that are positive for themselves and the community. A positive and vibrant community carries other benefits as well, including increased property values and a strong sense of civic duty and awareness. When condominium unit owners take pride in their community, they are much more likely to report problems, suspicious activity, and other problems that might otherwise go unnoticed.

Printed condominium newsletters are a simple solution. However, more and more condominium associations are embracing technology such as email and websites to distribute their materials. Whichever method of newsletter distribution you choose the challenge of creating a top-notch, good-looking newsletter remains. That’s where MyEZCondo comes in. Our talented writing and graphic design team members will work hard to make your condominium newsletter look fantastic. It takes a fantastic-looking newsletter to get your readers’ attention. A MyEZCondo condominium newsletter will be well-read and well-received by your condominium association members. Since 2004, we’ve been “building better communities through better communication”. Contact us today and we’ll produce a great-looking newsletter for your condominium association.

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Using Better Communications to Attract Community Leaders

Posted by Bob Gourley on July 19, 2014 in Communication |

By Bob Gourley

Excellent community governance is the difference between a good community and a great one. Poor community governance can lead to the downfall or outright collapse of a community association. Finding and keeping qualified and interested volunteers within your community is a real challenge. Are you using your communication tools to help with this daunting task?

Is there a more difficult story to share with your fellow homeowners than the story of governance? How many times have you heard about the Board needing volunteers for this project or that committee? How often have you heard about a seat on the BOD going vacant for lack of interest? Used properly, your community newsletter and website can be a crucial tool in finding and developing your community’s future leaders.

Rarely, have I heard stories about an outstanding BOD President whose first involvement with community leadership was serving as BOD President. While there are instances where a community seems to “magically” find new leaders, it has been my experience that the best-run communities actually “grow their own” leaders. They involve community members in projects and cultivate their residents to become their future community leaders. In more vital communities, Board Members are tasked with finding future leaders from the moment they join the Board themselves. This is an excellent strategy for long term governance success.

Altruism aside, public recognition for a job well done is very motivational for most individuals. While it may not be the same as making the front page of the New York Times, being written about in the pages of a community newsletter is rewarding to those being written about. It also inspires others to contribute as they seek the same recognition for themselves. It’s just human nature to want to do well and be recognized for a job well done.

The uninformed remain the uninvolved. If you are not using the resources available to you to tell your story well, you will likely have poor results in finding new leaders. If you find that your community is lacking in leadership prospects, take a look at how you are communicating with those potential leaders. If the only communication with the typical homeowner is to remind them to send in their common fees, pick up their pet’s waste, and stop parking in the fire zones, you can’t be too surprised when they don’t volunteer to be a part of the community leadership efforts.

The well informed become the most involved. If you learn how to project a positive image within your community, you are much more likely to succeed in finding volunteers who want to be a part of that success. Most communities take on tremendous challenges and they do so in the form of volunteer efforts on the parts of Board Members and Committee volunteers. You need to tell their story and celebrate their achievements.

Your regularly scheduled communications should have at least one volunteer success story each and every issue. You should also routinely ask for new volunteers for existing and future projects. The worst thing that could happen is that you will have told a positive story and rewarded a volunteer for their efforts. The best thing that could happen is that you will find success has inspired another volunteer to come forward. That new volunteer is likely to get active and stay active. That may just be how you find your next Landscape Committee member, who also joins the Board and two years later becomes Board President. At least, that’s how it happened for me…

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Informing Unit Owners About Painting Projects: A Colorful Story!

Posted by Bob Gourley on July 18, 2014 in Uncategorized |

By Bob Gourley

Five years ago, my HOA decided to take on the project of changing colors and painting all 20 units in the association. We are a modest community consisting of four buildings built back in the late 1970’s. Brown on brown was the original color palette and the board decided that those colors were not truly reflective of the nautical nature of our Long Island Sound shore side community. The challenge of changing color palettes was tricky but with a proper action plan to aid us, we were able to win over most residents and pull off a smooth transition.

The first order of business was involving the unit owners. Over the years, owners had seen their buildings painted several times. For a brief time, before I was a member of this community, the buildings were painted a shade of brown and grey that I can only describe as the color of an army barracks. Apparently, the painting contractor “got a deal” on some surplus paint that the sitting board agreed to let him apply for a discounted price. That was a bad idea that cost a few board members their seats and a mistake the current board would not repeat. We set out an action plan to assure success. Here’s what it looked like:

  • Announce the building painting project
  • Inform unit owners
  • Select colors
  • Inform unit owners
  • Send out bids for work
  • Inform unit owners
  • Hire contractor
  • Inform unit owners
  • Plan the work with the contractor
  • Inform unit owners
  • Get status reports from contractor
  • Inform unit owners
  • Finish job and Celebrate!
  • Inform unit owners

You may have noticed a step that was repeated throughout the project. Informing the unit owners is the single most important step to assuring a successful painting project. While the contractor was only on property three days applying the paint, more than 12 months went into the plan and execution of the painting project.

Thrusting a painting project upon owners without their consent and involvement is a sure way to thwart your painting project’s success. Even if every other aspect of the project goes smoothly and as planned, if you fail to inform and involve unit owners, you will very likely have freshly painted buildings and freshly minted animosity towards the board and manager for not properly communicating all aspects of the project.

I should point out that this painting project was a major financial undertaking for the community, as I expect a project of this scope would be for any community. We took a potentially divisive issue and used it to unite the unit owners. We also purchased a new entry way sign to reflect the new colors and nautical theme of the buildings. Painting buildings gave us better curb appeal; communication and involvement between board and unit owners gave us a better community.

Bob Gourley is founder of MyEZCondo, a communications firm that produces newsletter and website content material for condominiums and homeowner associations throughout the USA. He also serves as board president of his local HOA.

As originally appeared in CondoManagement Magazine

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When a Community Has No Newsletter…

Posted by Bob Gourley on July 16, 2014 in Communication |

By Bob Gourley

A colleague recently asked for comments on a communication issue within an HOA. A non-Board Member volunteer offered to create an electronic newsletter for the community. Here are my comments.

I have been publishing community newsletters since 2004, paper and electronic. May I assume that part of this person’s request comes from a lack of an existing community newsletter? If so, I would suggest that the Board begin producing regularly scheduled newsletters either on their own or (pardon the plug) via an outside firm, such as MyEZCondo.

Whether the newsletter is hard copy and/or electronic is secondary to the importance of keeping residents informed of the important decisions being made on behalf of their community.

As a BOD president, I would like to echo Ruth’s sentiments of accepting volunteer help any day. In fact, there are very few BOD members that didn’t begin their service as volunteers for their communities. Today’s volunteer is likely to be tomorrow’s active BOD member, maybe even the future president. I wrote an article for Condo Management magazine that addresses much of the issue. If anyone is interested, the full PDF is on my website – http://www.myezcondo.com/News-Feb05.pdf

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