By Jessica Towles, CMCA, AMS, PCAM, Hammersmith Management
Owners and Board Members across the country have been shaken to the core by the tragedy at Champlain Towers South in Surfside, Florida. It is hard to believe it was several months ago. As with all disasters, time will continue to pass. We will change our vernacular from “months ago” to “earlier this year” to “last year” to “several years ago,” and with those changes, the fear will fade further and further into the past. More likely than not, we will again become complacent. Keep reading for lessons you can take from this tragedy to help your communities today.
What lessons can we take away from the building collapse at Champlain Towers South?
#1 – Do the right thing even when no one else is doing it.
It is completely human for us to want to return to a place that feels "normal" and to want to reestablish our routines. It is also human for us to stop pushing specific issues or discussion points after being told no over and over again. As Board Members and Community Association Managers, we often receive pushback when raising assessments, discussing major structural repairs, and making recommendations or decisions that benefit the greater good but may be temporarily painful. We have to be vigilant that our return to normal includes a continued focus on best practices, following our fiduciary responsibilities, and heightened awareness around our aging communities and infrastructures.
#2 – Ask questions.
There are no stupid questions. If you're concerned about building safety, cracking, the reserve study for your building, an engineering report, etc., – ASK questions. Are you a Board Member? Ask your manager to set up meetings with the appropriate business partners to help break down issues or reports. Ask to do a physical tour. Are you a manager? Talk to your coworkers, ask your supervisor, talk to your business partners. And my number one recommendation for any manager is to be curious. If you haven't seen a particular issue before and have someone come out and look at the situation, join them, bring a notebook to take notes, and ask questions. Not only will you learn more about the specific problem, but you will also gain knowledge about the physical components of your building(s). Knowledge is power. Ask questions so you can make knowledge your SUPERPOWER!
#3 – Know your Reserve Study.
Undoubtedly, having a Reserve Study helps minimize Board Member liability, assists in long-term planning, and helps provide transparency with your community membership. It is just as important to read, review, understand this report, and plan to implement the recommendations it presents. Your Reserve Study is an essential tool that sometimes contains bad news. Either a building component is failing sooner than initially anticipated, or your funding needs have changed, and you need to increase how much the Association is putting into reserves. Regardless of the situation, your Board needs to plan to address the issues, so the community is in the best position possible in the long run. It isn't mandatory to raise your assessments 150% when you have to increase reserve contributions drastically. You can plan to increase the contribution incrementally over a few years to meet the community's long-term needs. However, your Board chooses to get there, the most critical piece is communicating the plan to your owners!
#4 – Budget appropriately.
Many line items within the Reserve Study will have both operating and reserve line items. For example, concrete repairs might be performed annually or semi-annually based on inspections and reported issues. If a particular piece of concrete heaves or becomes a trip hazard immediately following that year's phase, do you wait an entire year or 24 months before repairing it? No. It would be best to have funds set aside for those repairs either in a general maintenance line or a specific concrete operating line.
In addition to ensuring you have the appropriate operating and reserve lines planned for, you need to budget appropriately for all of your operating expenses. Sound financial planning begins with expenses. Determine the needs and desires of the community members to determine the level of service you will provide to the community. Has your Association always pulled weeds from your plant beds weekly? Changing that to monthly may save money in the landscape contract, but what are the unintended consequences? Once you've determined the expenses, you can then calculate your assessments. Labor rates and materials continue to increase. It often is not reasonable to have a zero increase in assessments year over year. You will have to cut services in some areas to accommodate increases in others. That often leads to deferred maintenance and reduced curb appeal.
If you are interested in additional resources on Aging Infrastructures and our Fiduciary Responsibilities, please visit www.caionline.org/CondoSafety.
Jessica Towles, Vice President of Community Management, has been in the community association management industry since 2000 with experience maintaining all aspects of community associations and management company administration, including facilities management, financial management and customer retention. In addition to her role with Hammersmith Management, Inc., Ms. Towles currently serves on the Community Associations Institute (CAI) Board of Trustees and is the 2021 President Elect. As a member of the National Faculty for CAI, specializing in the M:100 The Essentials of Community Association Management, she is well equipped to provide continuing education and leadership development to staff, board members, and owners. Ms. Towles ishonored to have received CAI’s Rising Star Award at the National Conference, as well as the Barbara Wick Award recognizing her work both locally and nationally to improve our industry and profession.
