The Communicator - Volume 1, Issue 4 - (Page 15)

Deferred Maintenance – What Do We Do Now? By Rolf Crocker, AMS, CCAM LIKE MANY ASSOCIATIONS today, your board has found itself in the unenviable position of needing significant capital replacement projects done, but are underfunded in its reserves to commence them. After much discussion, you believe there is no other alternative than seeking a special assessment to get the needed work done. What does the board do now? All decisions have two components. The first component is economic. Usually the economic component is straight-forward – it is what it is. The economic factors are: 1) What is the scope of the necessary work? 2) How much is the work going to cost? 3) Which mechanisms will be used to fund the work (special assessment, bank loan, segmenting over a longer period of time, etc.)? 4) What will be the short- and longterm financial impact to the association and its members? The second component is political. Here is where the true art of passing any kind of funding mechanism can be found. This component is far more complex than the economic component for a whole host of reasons, most of which can be summed up in the following: 1) You’re dealing with people’s homes; 2) You’re dealing with people’s money; 3) Both of these decisions can significantly impact the owner’s quality of life and consequently are of passionate concern to the homeowner member. Having attended several dozen board and member meetings regarding special assessments, I have found that there are maintenance program, unwillingness to raise the assessments commensurate with needed repairs and so on. Areas where the board can find this information are: 1) Past minutes of the association 2) Past budgets of the association 3) Talking to former board members 4) Talking to past and current vendors Be prepared to share your timeline and findings with the membership, being as transparent as you can while not throwing past board members and/or vendors “under the bus.” This is the first step in a successful outcome. three basic questions that are consistently asked by the membership. The board’s ability to answer these questions honestly, with understanding and with transparency, is critical to the successful passing of any special assessment. In fact, I have found that this process is not unlike the grieving process, including shock, anger, and denial. Here, in chronological order, are the three questions. QUESTION #2: HAS THE BOARD DONE ITS HOMEWORK? In other words, “Has Has the board chosen the best option of all possible options?” This is a broad-ranging discussion limited only by the imagination of the audience as to what could go wrong. Here is a small list of possible questions: 1) Will this “fix” actually FIX the issues? 2) Is the scope and specifications of the work correct? 3) Have the materials been tested? What is the warranty? 4) Has the project been competitively bid by qualified and competent contractors? 5) What safeguards have been put in place to ensure the board is getting the work done correctly? 6) Is this a holistic approach? In other words, we do the siding and trim The Communicator • 15 QUESTION #1: HOW DID WE GET HERE? “We pay assessments each month – where is our ur money?” “I thought the litigation tigation proceeds were supposed to take care of that.” “Past boards were ds aware of the issues – why didn’t y they take care of it?” The board e board, along with management, needs to take an honest appraisal of the past to be able to answer (without being pejorative of past boards) the question, “How did we get here?” There is rarely a single contributing factor. It is usually a combination of factors such as initial sub-standard construction, lack of a preventive

Table of Contents Feed for the Digital Edition of The Communicator - Volume 1, Issue 4

The Communicator - Volume 1, Issue 4 Contents President’s Message The Art of Maintenance Deferred Maintenance – What Do We Do Now? What’s New in Paint Products and Building Materials 2008/2009 Events & Educational Calendar Welcome to CAI BayCen Index to Advertisers

The Communicator - Volume 1, Issue 4

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