How Your Reserve Analyst Can Make You Look Like a Rockstar
Mike Walker
First, a little personal background. I began my adult life in the mid- seventies as a glassy-eyed surf bum on Maui and the Big Island where I lived and played for 30 years. When I finally woke up from the daydream of finding the perfect wave I was dang near 40, suntanned for sure, living paycheck to paycheck, and not really that great a surfer. Over the years Hawaii provided me with plenty of jobs that ranged from husking coconuts in Lahaina, to commercial fishing off the Hilo coast, to archaeology in Kapalua, but I’d have to say my first “real” job was a Facility Manager at a small oceanfront resort in Napili, Maui. After four years of backbreaking work rearranging pool furniture, cleaning barbecues, lighting tiki torches at sunset, and attending weekly “pupu parties” with the tourists, I was rewarded with an upgrade of managing a handful of condo associations on the Big Island. “What’s this?” I wondered, scratching my nappy head; “It feels like I’m swimming with sharks, but it smells a little bit like, a . . . career?” So for a couple years I dutifully managed my little portfolio of Community Associations from a home office in Waikoloa, learning how to herd cats, write their budgets and enforce their House Rules as I went along. Then, for some inexplicable reason (which I still don’t fully understand) I got the itch to move back to the mainland. So I sold my house, picked up my little family, and moved them to Seattle where I promptly landed a job at one of Seattle’s premier management companies. So all in all, I managed resorts and Homeowner Associations for about 20 years.
So back to you and the real reason for writing this article: As a Community Association Manager, when one of those pesky emails lands in your Inbox from your Reserve consultant, with all of its questions and requests for documents, followed by a few more questions, I can picture you asking, “Does this guy know how incredibly busy I am? Does he know how much time I spend putting out fires? Does he know what it’s like to receive over a hundred emails and ten phone calls every day? Does he know what it’s like to show up to work bright-eyed Monday morning and find there’s been a water leak at one of his properties that damaged three units including one with the Owner from hell living inside? Does he know how it feels to come back from vacation to find over five hundred emails in his Inbox? Does he know how complicated it is to gain access to every single unit for a much- needed inspection? Does he know what it’s like to be on-call over Christmas? And does he know that if my work demands would lighten up for more than just a few hours I might actually be able to cultivate a meaningful personal life?”
Well, yes Virginia. Yes I do.
So let’s get to the purpose of this article. When that little ghost email from the Reserve person slinks up the right side of your monitor for two seconds and then vanishes away, is your first impulse to think, “Ah, help is on the way,” or is it something more like, “Oh, great. More demands on my time. Well, he’s just gonna have to wait (and wait, and wait) cause I’ve got WAY bigger fish to fry right now.” And before you know it, ten days have got behind you and that email from me is now completely buried.
I do feel your pain, I really do, but here are a few reasons why you could legitimately see that little pop-up email as “mother’s little helper.”
The small amount of time it takes to give the Reserve guy his information can pay rich dividends. An accurate component list provides Managers
with an engraved invitation to be proactive rather than reactive in the maintenance of their Communities. A proactive Manager, and a Board making decisions based on your proactivity, will look to Homeowners like Mick Jagger owning the LA Coliseum at the World Tour in 1974. (Trust me, I was there.)
When an approaching Reserve project is put out to bid it can become a great source of “high profile” projects that tell your Board & Homeowners that you are actually doing something, (thereby eliminating a common misconception). It tells them that you not only have a plan, but you’re also working your plan, like Rod Stewart working a standing-room-only crowd with a microphone stand and a neck scarf. (Yep, been there too!)
Now for some quick and dirty math: (done dirt cheap). There are two numbers in a reserve study that are of supreme importance: the Starting Balance, and your Fully-Funded Balance (or total accumulated deterioration). It is my belief that most Boards, and many Managers, make the common mistake of focusing only on the current reserve balance, thinking of it mostly as a savings account with a thermometer pasted on top to remind you how cold you are. This picture mostly ignores the concept of Accumulated Deterioration and its key role in the percent-funded equation. Let’s take a quick look at Elevator Modernization for example. (Note: If your Association doesn’t have an elevator you can use the roof or any other high-dollar, long-life component.) Let’s say the cost of elevator modernization is going to be $180,000. When your elevator is fifteen years old, in the middle of its useful life, the accumulated deterioration is $90,000. When it’s 30 years old, at the end of its useful life, the accumulated deterioration is the full $180,000. To be fully funded, or 100% funded, doesn’t mean you have all the money you need, right now, to upgrade your elevator at any time, it means you’re exactly where you’re supposed to be on the time- line towards that eventual replacement. It means you can currently be 100% funded and still only have only half the money you’ll eventually need to modernize your elevator. Being fully funded means that when the day finally comes for that monster upgrade, your elevator won’t be “Free Fallin” like Tom Petty and the Heartbreakers, instead you’ll be livin’ it up, like Aerosmith, and “Love in an Elevator” modernization, not only for what is does to upgrade your building, but also what it says to Homeowners about your expert style of management.
Lastly, if you, or a Board member, don’t happen to like one of our cost estimates or useful life calculations, whether the cost seems too high or low, or the time frame for replacement is too short or long: Push us back! A reserve analyst would much rather work with someone who cares about these things than with someone who doesn’t. And when your Board finds out that you pushed us back and got us to make a healthy revision, you’ll truly look like a rock star to them.
The bottom line is this: Managers—you are not alone. And your Reserve guy (or gal) is not the pest you might think she/he is. To manage Homeowner Associations really well, it takes a team of experts. Your Reserve consultant is an important member of your team, so work with me people. Party on Dudes!
. . . and be excellent to each other.
www.wscai.org 15
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32
