CAI-MN Minnesota Community Living - Jan/Feb 2014

In this Issue: Six Things Not to Miss in 2014 .................... 9

January/February 2014

Pre-Season: It’s All in the Approach Prepare for your new year with legislative & calendar previews as well as timely articles and updates.

Volume 32 • Issue 1

CAI-MN 2014 Session Preview ..................10 PCAM Spotlights: Beth Gassen & Bob MacDonald ........... 13 Nothing to Balk at: How Community Association Membership Benefits You ........................ 21 And Much More!

Visit us online at www.cai-mn.com.

2

Minnesota Communit y Living

From the President

Board of Directors

By Michael Klemm | CAI-MN President

Contracts In July 2014, the Minnesota Twins will host the Major League Baseball All-Star Game.

We picture Target Field, the players and the fans, but behind the scenes, professional baseball is built on a framework of contracts for goods and services. For example, the MLB website displays the 2012-2016 Basic Agreement between the Major League Clubs and the Major League Baseball Players Association regarding scheduling, salaries, expenses, revenue sharing, spring training, postseason, safety, grievances, discipline, assignment of player contracts and termination.

Similarly, when we consider common interest communities, we think of tidy homes and manicured lawns, but the maintenance and operation of common interest communities depends on contracts. This article highlights some common issues in contracts for goods or services.

Parties The parties to the contract should be identified by legal name, home state and type of entity (for example, The Acme Corporation, a Minnesota corporation). Most businesses that operate in Minnesota are required to register with the Minnesota Secretary of State, and information about them is available on the Minnesota Secretary of State website at http:// mblsportal.sos.state.mn.us.

President Michael Klemm, Esq. Phone 952.953.8832 klemmm@dmshb.com

Purpose The contract should include a detailed description of the goods or services to be provided, to ensure that the parties have the same thing in mind, and to provide a basis for enforcement of the agreement.

Vice President Gene Sullivan Phone 952.922.2500 gene@ncmgi.com Treasurer Halo Stafford, CMCA, AMS, PCAM Phone 952.944.2237 edenplacemgr@pinnaclefamily.com

Time for Performance The contract should describe the time for delivery of the goods or services. The association may wish to specify that “time is of the essence.” The vendor may wish to include a “force majeure” provision that excuses delay caused by circumstances outside its control.

Secretary Nancy Polomis, Esq. Phone 952.941.4005 npolomis@hjlawfirm.com Directors Tom Engblom, AMS, ARM, CMCA, CPM, PCAM Phone 866.800.4656 tengblom@cabanc.com

Price The contract should state the price for the goods or services. The contract should identify any equipment or materials that the association must provide, and any expenses that will be passed on to the association.

Steve Hoogenakker Phone 763.213.2410 steve@landscape.pro Joseph Fadell Phone 952.392.9208 fadell.joseph@gmail.com

Billing and Payment Terms The contract should establish a process for billing and payment. The association may wish to require detailed invoices. Any late payment fees or interest charges must be described in the contract.

Russ Lis, CMCA, AMS Phone 612.805.6111 rlis@reconstructionsolutionsgroup.com Jim Rezek Phone 763-424-9984 jimrezek@comcast.net

Insurance and Indemnification

Michelle Stephans, RS Phone 763.754.5500 michelle@reserveadvisors.com

The contract should specify the types and amounts of insurance that are required. Many contracts include indemnification provisions regarding personal injury or property damage caused by negligence.

Term

Warranties

The dates that the contract will start and end should be listed in the contract.

Many contracts provide warranties for goods or services. Minnesota Statutes may establish

Crystal Pingel, CMCA, AMS, PCAM Phone 612.381.8626 crystalp@citiesmanagement.com Joel Starks, CMCA Phone 952.698.2053 joel@sharpermanagement.com

Contracts continued on page 24

Committee Chairs CAVL

Lynn Boergerhoff Phone 651.308.1461 lynnab7@gmail.com

Communications Chair Janice Pyka Phone 612.801.1229 janicepyka@gmail.com

Charitable Outreach Committee Chair

Golf Tournament Chair

Membership Chair

Trade Show Committee Chair

Education Committee Chair

Legislative Action Chair

Social Committee

Vision Awards Chair

Cliff Kurth Phone 763.248.1047 cliff@aemn.co

Nigel Mendez Phone 651.287.8640 nmendez@carlsonassoc.com

Kris Birch Phone 651.481.9180 krisbirch@birchlawn.net

Greg Pettersen Phone 612.616.4817 gregp@RDAmidwest.com

Jared Lawrence Phone 763.449.9100 jlawrence@omega-mgt.com

Tracey Bernier Phone 952.277.2780 Tracey.Bernier@fsresidential.com

Jon Edin Phone 651.222.2155 jedin@mncondodefects.com

Jane Bristow, CMCA, AMS Phone 952.277.2722 jane.bristow@fsresidential.com

January | February 2014

3

Leading Off

By Matt Drewes, Thomsen & Nybeck, P.A., Attorneys

A

s I introduced to you in an article appearing in our CAI-MN’s Community Living magazine’s November/December issue, the gameplan for 2014 is roughly to mimic (in our own way) the calendar of events that occurs for Major League Baseball and its teams in throughout the year. Not every phase of the MLB calendar is going to fit perfectly with a topic we think will serve your interest, but even the best hitters in baseball don’t bat 1.000. We just hope to make good contact throughout the year and drive home a lot of good information for common interest communities.

We’re leading off with our January/February issue. In early to mid-February players start reporting to spring training facilities and, by the end of February, teams will begin their preseason schedules, so the general theme will be that it’s the preseason. But early in January and even through February, baseball teams are finalizing their rosters, exchanging salary proposals and completing the arbitration process with those arbitration-eligible players who haven’t signed a contract, signing those last key free agents, all leading up to spring training and their preparation for the regular season.

Allocating funds and building the team are also timely topics.

Our Minnesota Twins are no exception. At the time I’m writing this (early December) the Twins have already signed two new free agents (Ricky Nolasco and Phil Hughes) to the largest contracts ever handed to any free agent in franchise history before this year (four years/$49 million and three years/$24 million, respectively). Roster construction and resource allocation have begun, and

4

Minnesota Communit y Living

“People ask me what I do in winter when there’s no baseball. I’ll tell you what I do. I stare out the window and wait for spring.” —

Rogers Hornsby

are likely to continue into January as Twins General Manager Terry Ryan has indicated he’s not done wading through the pool of free agents.

When looking at your own budgets, you may be reminded of something Yogi Berra is credited to have said: “A nickel ain’t worth a dime anymore.” In this and upcoming issues we hope to include articles that discuss the importance of having spring and summer contracts in order with service providers who you may not need until the summer.

Get on the schedule with contractors for projects, large or small, before prices increase. Make sure you’ve inked those deals you need to make before contractor availability dries up and their books get full,

taking those free agents off the market.

And, in the spirit of building your own rosters or joining a new club, we want to spread the word about the benefits of becoming members of CAI (I’ve recently learned that a surprising number of you reading this are not already members, especially those of you who are Community Association Volunteer Leaders (CAVLs).

Fortunately for us, we don’t have to just stare out the window and wait for spring.

There is plenty to do to keep ourselves occupied and to prepare for warmer weather. Hopefully this issue will help you prioritize those goals and plan for next season.

2014 MCL Magazine Themes & Editorial Schedule

Are you interested in contributing an article to an edition of the MCL? We take the time to consider each article that is submitted for publication in CAI-MN’s magazine. So if you enjoy writing, enjoy researching industry topics, or want to share your findings on a discovery you’ve made, then feel free to contact us and submit your article. Articles can be sent to montea@cai-mn.com. This year’s magazine themes and article deadlines are listed below.

January/February

July/August

Theme: “Pre-Season” Topics: Contracts, arbitration, member benefits

Theme: “All-Star Game” Topics: Promoting all-stars in HOA, honoring employees, growing business Article Deadline: May 1, 2014

March/April

Theme: “Spring Training” Topics: Training managers and board members, spring walkthroughs, bids

May/June

Theme: “Play Ball” Topics: Operations, putting training into practice, lawn care, community Article Deadline: March 1, 2014

Announcement for Current & Potential Advertisors

September/October

Theme: “Post-Season” Topics: Budgets, finishing the year strong Article Deadline: July 1, 2014

November/December

Theme: “Off-Season” Topics: Evaluating the year, analyzing strategy, looking ahead to next year Article Deadline: September 1, 2014

The 2014 magazine themes will all be focused around a baseball theme. We encourage you to consider using some “baseball creativity” in your advertisements. Keep your eyes and ears open for information on an upcoming advertisement contest during 2014.

Calendar

Index

2014 SAVE the DATE! CAI-MN 2014 Trade Show Thursday, February 20, 2014 1:30 - 7:00 p.m.

Saint Paul RiverCentre Saint Paul, MN

Upcoming Events April Managers Seminar: The Art of Neighboring Tuesday, April 8, 2014 11:30 a.m. - 1:30 p.m.

features 4 Leading Off

3 President’s Message

By Matt Drewes

6 Ask the Attorney

By Nigel H. Mendez

10 CAI-MN 2014 Session Preview

By Nick de Julio

13 PCAM Spotlight: Beth Gassen

By Janice Pyka

15 PCAM Spotlight: Bob MacDonald

May Managers Seminar: The Value of Preventative Maintenance

18 CAI-MN 2014 Tradeshow Preview

Tuesday, May 13, 2014 11:30 a.m. - 1:30 p.m.

May CAVL Education Program: Aging in Place

By Janice Pyka

21 Nothing to Balk at: How Community Association Membership Benefits You

By CAI National

Wednesday, May 21, 2014

23 CAI-MN Committee and Member

For more upcoming events please visit our event calendar at cai-mn.com

26 Get in the Game with a Little

Updates

Volunteerism

By CAI National

Register online at www.cai-mn.com For more information regarding an event, call the office at 651.203.7250 or visit the CAI-MN website. Online registration is available at www.cai-mn.com.

By Nigel H. Mendez

2014 Annual Partners Platinum

Asset Exteriors

Community Development, Inc.

Complete Building Solutions, LLC

Gassen Management

Gaughan Companies

Sela Roofing & Remodeling

Xtreme Exteriors Gold

Community Advantage

FirstService Residential Silver

All Ways Drains American Family Insurance Jeff Mayhew

Benson, Kerrane, Storz & Nelson

Carlson & Associates

Hammargren & Meyer, P.A.

Levin & Edin

Sharper Management

Thomsen & Nybeck

Bronze

American Building Contractors Dougherty, Molenda, Solfest, Hills

& Bauer P.A. Michael P. Mullen, CPA, PLLC Tru Seal America, LLC

Find articles from this issue and archived articles online at cai-mn.com in the Minnesota Community Living (MCL) Resource Library.

Published by Community Associations Institute — Minnesota Chapter, copyright 2014. All articles and paid advertising represent the opinions of authors and advertisers and not necessarily the opinion of either Minnesota Community Living or CAI–Minnesota Chapter. The information contained within should not be construed as a recommendation for any course of action regarding financial, legal, accounting, or other professional services by the CAI–Minnesota Chapter, or by Minnesota Community Living, or its authors. Articles, letters to the editor, and advertising may be sent to Chapter Staff Editor Joanne Penn at joannep@cai-mn.com, or at CAI–Minnesota Chapter, 1000 Westgate Dr., Suite 252, St. Paul, MN 55114.

[ ADS ] All Ways Drains............................................. 19 ADAC-MN, LLC............................................ 12 American Family Insurance – Jeff Mayhew...... 14 Asset Exteriors............................................. 11 Benson, Kerrane, Storz & Nelson, P.C. ........ 19 Birch Lawn.................................................... 19 Carlson & Associates, Ltd ........................... 14 Columbus Exteriors, Inc................................. 2 Community Advantage................................ 12 Community Development, Inc..................... 17 Complete Building Solutions ...................... 22 Felhaber Larson Fenlon & Vogt ................... 24 Final Coat Painting....................................... 26

By Michael Klemm

9 Six Things Not to Miss in 2014

The Essentials of Community Volunteer Leadership - Save the Date!

Saturday, April 26, 2014

series

Index of Advertisers

FirstService Residential................................ 16 Gaughan Companies.................................... 20 Gassen Companies......................................... 8 GW Cross, LLC............................................. 12 Hammargren & Meyer, P.A. ......................... 26 Hellmuth & Johnson, PLLC.......................... 16 Levin & Edin................................................. 12 LS West ........................................................ 14 Michael P. Mullin, LLC ................................... 7 Mutual of Omaha Bank – Community Association Banking & CondoCerts......... 14 Natural Green............................................... 19 New Concepts Management....................... 13

Omega Management, Inc............................ 10 Reserve Advisors.......................................... 14 Reserve Consultants, Inc. .............................. 7 Reserve Data Analysis, Inc. .......................... 26 Russo Consulting, Inc. ................................. 13 Schwickerts Roofing..................................... 14 Sela Roofing ................................................ 25 Sharper Management ................................. 14 Strobel & Hanson ........................................ 14 Thomsen & Nybeck...................................... 12 TruSeal America........................................... 28 Xtreme Exteriors.......................................... 27

January | February 2014

5

Ask the Attorney by

This column is comprised of questions that have been posed to me by homeowners, property managers and related professionals regarding legal issues that they have encountered with respect to their associations. Discussion of these questions, as well as prior questions, can be found on the CAI-MN LinkedIn page: www.linkedin.com/ groups?gid=1769135 What is the difference between a director, a board member and an officer?

Homeowner associations use a variety of terminology. Very often I hear people talking about associations and misusing words that have a specific meaning. This is especially true when it comes to the leadership of an association. Associations are governed by a board of directors. The board usually consists of between three and nine directors depending on the requirements set forth in the bylaws. The directors are elected to serve on the board by the members of the association. The term of service is usually two or three years long. Directors are usually members in the association, but unless stated in the governing documents, are not required to be.

The board of directors has numerous officer positions. Typical officer positions are president, vice president, secretary and treasurer. Generally, at the first meeting of the board of directors following an election, the directors elect officers. Some associations allow for one director to hold more than one officer position, and other associations allow for non-directors to be elected to officer positions.

One of the more confusing aspects of the director/officer connection is how they are elected and removed. Directors are elected by the entire association membership, usually at the annual meeting. Because they are

6

Minnesota Communit y Living

elected by the membership as a whole, they are removed in the same manner — by a vote of the members. Conversely, officers are elected by the directors. Should the directors wish, they can remove a person from an officer position and vote in a new officer.

Simply put, the homeowners vote for a board of directors, the board of directors then determines who will fill each of the officer positions. The homeowners do not directly elect a president, vice president, etc.

Finally, people sometimes believe that the president is the most powerful position in an association. However, all of the directors have equal voting power: there is no additional voting power assigned to any officer.

What are the fiscal responsibilities of the board of directors, and how do we handle conflicts of interest that may arise?

Associations are organized as nonprofit corporations and are governed by the Minnesota Nonprofit Corporation Act. Members of the board of directors are required to abide by the statutes as well as their association’s governing documents.

There are two particular statutes that directors should be aware of: Standard of Conduct (Minn. Stat. §317A) and Director Conflict of Interest (Minn. Stat. §317A.255).

Standard of Conduct Directors should always do what they feel is in the best interest of the association. The law requires that all directors “discharge the duties of the position of director in good faith, in a manner the director reasonably believes to be in the best interest of the [association], and with the care an ordinarily prudent person in a like position would exercise under similar circumstances.” Minn.

Stat. $317A.251, Sub. 1. In attempting to make the right decisions, a director is allowed to rely on information, opinions, reports and statements that were provided

Nigel H. Mendez, Esq., Carlson & Associates, Ltd.

by fellow directors, attorneys, accountants, property managers, other professionals, or were the result of a committee which the directors established.

Directors should always act in a manner that benefits the association as a whole, rather than themselves. For example, a director should not receive complimentary work as a “thank you” from a contractor for awarding a bid to make other repairs in the association. Even if the bid was the best bid for the association, a director should not receive preferential treatment. Of course, every decision made by a director will not be “the best” decision in the eyes of all the homeowners. Provided that the decision was made in good faith, and made with the care expected of a reasonably prudent person, it will be in compliance with the law.

Conflict of Interest Directors have to be alert to any conflicts of interest that may arise while performing their duties on the board of an association.

Minnesota law states that a conflict arises when an association enters into a contract or other transaction with a director or a family member of a director or an organization of which the director, or member of the family of a director, has a material interest or serves as a director. Minn. Stat. §317A.255.

Simply put, associations need to be careful about working directly with an organization in which a director, or member of his/her family, has an interest. The law does not bar such interactions but it does require that they be established in a manner that helps reduce impropriety.

The statute provides that a contract or transaction that is formed between the association and a director or organization that a director has an interest in is permitted as long as: 1) the contract or transaction was fair and reasonable to the association when it was entered into;

2) the material facts of the contract or transaction and the director’s interest were fully disclosed to the members of the association, and were approved by twothirds of the members entitled to vote (not counting the interested director); or 3) the material facts of the contract or transaction and the director’s interest were fully disclosed to the board, and a majority of the board approved the action, with the interested director not voting.

Minn. Stat. §317A.255. It is best for associations to generally avoid contracting with directors (or their families) unless it is clearly disclosed, the interested director abstains from the vote, and the contract is in the best interest of the association. Before entering into such a contract, be sure to obtain competitive bids from companies or individuals who do not have a connection to the board.

Why should you care?

Members of a community association board of directors generally volunteer their time to make their association a better place. Most would probably not undertake such a duty if there was a risk of personal financial liability.

Minnesota law provides that a person who serves without compensation as a director for a nonprofit entity “is not civilly liable for an act or omission by that person if the act or omission was in good faith, was within the scope of the person’s responsibilities as a director [or officer] and did not constitute willful or reckless misconduct” See Minn.

Stat. §317A.257. Accordingly, if a director acts outside of his or her responsibilities, engages in bad faith decisions, etc., the director could be personally liable to the association for such actions.

In summary, directors must always act in the interest of the association as a whole, and not in their own interests. Be cautious about entering into transactions that would directly benefit a director more than the members as

a whole. Boards should avoid situations that appear to an outsider that a director is being treated more favorably than other members of the association.

To have a question answered in a future article, please email it to me at nmendez@carlsonassoc.com with the subject line “Ask the Attorney.” While I can’t promise that all questions will be answered, I will do my best to include questions that have a broad appeal. Questions will also be answered by other attorneys practicing in this area of law. The answers are intended to give the reader a good understanding of the issue raised by the question but are not a substitute for acquiring an opinion from your legal counsel.

CAI-MN is looking for article contributions.

Contact Monte Abeler at (651) 265-7852 or montea@cai-mn.com for further details about joining our list of article contributors.

Reserve Consultants, Inc. Association Property Services Specializing in RESERVE PLANS that are • Easy to Understand • Practical (Around 12 to 13 Pages) • Color Photos Included • Fee will be the Least Expensive Quoted John Russo, Reserve Specialist, has more than 20 Years Experience in Reserve Planning; Is the only Ph.D. Reserve Analyst in the Midwest.

952-944-7137 (Office) 952-935-9647 (Fax)

When your Association’s

MONEY is on the line...

audits reviews

budgets & consulting bookkeeping

tax preparation MCIOA compliance

trust the experts.

952.928.3011

www.cpamullen.com January | February 2014

7

ASSOCIATION MANAGEMENT ———————————————————————————-——————————————–-————

Gassen Companies is a Minnesota owned and operated property management company specializing in Community Association Management and Maintenance for Condominiums, Townhomes and Common Interest Communities.

We have been meeting the unique needs of the real estate and property management industry since 1969.

Our 98% customer retention demonstrates we are serious about service!

———————————————————————————————————————————————————————————— –———————————————————————————————————————————————————————————————— – ————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————

6438 CITY WEST PARKWAY EDEN PRAIRIE, MN 55344

P: 952-922-5575 F: 952-922-2004 WWW.GASSEN.COM 8

Minnesota Communit y Living

Six Things Not to Miss in 2014 by

Nigel H. Mendez, Esq., Carlson & Associates, Ltd.

Everyone knows that membership in CAI Minnesota comes with access to so many great opportunities. Here is a list that the Communication Committee came up with that we think you should not miss in 2014!

Trade Show

Vision Awards

On February 20 CAI-MN takes over the Saint Paul RiverCentre for a newly reformatted trade show. It starts at 2:00 pm with education programs for managers and volunteer leaders, transitions into a networking happy hour and concludes with the always popular vendor trade show. This is one not to be missed!

The night when we recognize the exceptional work of our colleagues is being moved to October 23, 2014. This means you have a few additional months to really shine and get yourself nominated! This year’s Vision Awards is sure to be a classy celebration of people’s accomplishments, along with a pleasant evening of networking with industry peers.

Charitable Silent Auction Keep 4-4-14 open on your calendar! CAIMN will hold its inaugural charitable partner event. This year we have chosen to work with Minnesota Teen & Adult Challenge. Not only will you get to enjoy incredible appetizers and fancy coffee drinks, but you will also get to stand alongside a great organization in our efforts to help people find freedom and a fresh start on life.

More details will be coming soon about this great volunteer opportunity to partake in along with your CAI friends.

Education Seminars

Golf

The CAI website was recently revamped and is ready to help you connect with vendors, see what is going on with CAI, review handouts from past events, keep up to date on legislative action and more. You should make a point of checking the website regularly as it is regularly being updated with information you’ll find valuable.

Not much needs to be said about this! The always popular CAI-MN golf outing will be back again July 23, 2014. Hit the indoor driving ranges this winter and keep sharp. However, I’d recommend working on your long putting skills for a chance to win a big prize.

The manager seminar series continues to get rave reviews. And why not? It showcases speakers who are experts in their fields talking about issues that directly relate to HOAs! For all you volunteer leaders, look to 2014 for even more CAVL programming to help you perform your duties more efficiently and successfully.

Save the Date!

CAI-MN 2014 Vision Awards

International Market Square New time of year!

October 23, 2014 Nomination Information Coming Soon at www.cai-mn.com

CAI-MN Website

Homeowner Members Can Win a Scholarship to CAI Annual Conference We encourage you to run the following in any of your print or electronic publications that will reach members by about February 20. The national CAI organization will award three scholarships to attend CAI’s 2014 Annual Conference and Exposition, May 14-17 in Orlando.

Each Board Member Education Scholarship recipient receives a free conference registration and up to $1,000 in travel and lodging expenses.

The scholarships are available only to CAI homeowner members who currently serve on the governing board of their homeowners association or condominium community. The deadline for applications is Monday, Feb. 28, so apply today. Winners will be notified by March 14. http://www.caionline.org/events/boardmembers/Pages/BoardMemberEducationScholarship.aspx.

January | February 2014

9

CAI-MN 2014 Session Preview by

T Managing to make a

difference 30 years of association management experience Reserve Plans are included in our management program Proactive management, including weekly property visits Smart, expert, professional advice

Omega Management, Inc.

763.449.9100

www.omega-mgt.com

10

Minnesota Communit y Living

he Minnesota Legislature is set to reconvene the 88th Legislative Session on Tuesday, February 25, 2014.

As this is the even-year of the biennium, the session will focus on bonding for construction projects. Other issues that are likely to get attention include minimum wage, school bullying legislation and tax reform. Governor Mark Dayton has dubbed the upcoming session as the “Unsession,” as he has made government reform a top priority for his administration. Dayton’s goal is to improve service, shorten wait times, eliminate old and outdated rules, and undo anything else that makes government difficult for people to understand.

In early December, state officials delivered some good news regarding the state’s economic forecast and what it could mean for the upcoming session. Officials announced that changes in the state’s general fund revenue and expenditures for the current biennium have increased, and the projected balance for FY 2014-15 is $1.086 billion. The first $246 million of the balance will be used to complete repayment of the K-12 school aid payment shift.

Additionally, $15 million is transferred to the state airports fund, restoring money originally borrowed in 2008. This forecast completes repayment of accounting shifts from prior budget solutions, reducing the forecast balance to $825 million.

The State will receive one more forecast in February around the start of session.

Legislative leaders and the governor will

Nick de Julio, Ewald Consulting

use that final forecast number as their base to enact any spending or savings changes for the state during the 2014 Legislative Session.

Over the past few months there has been a lot of discussion about the length of the session. Constitutionally the legislature must adjourn by the third week of May. However, there are some discussions that an eight to ten week session may be desirable to limit the agenda. At this point, no timetable has been agreed upon publicly.

House members and the governor will be up for election next November and many believe that candidates will want to get out and campaign early.

CAI-MN will continue to be a visible entity up at the State Capitol, serving as a resource to legislators and working with other interest groups on public policy issues that may arise. At this time, CAI-MN is not proactively pursuing any new legislative language during the 2014 session. However, as an industry we will be monitoring any bills, amendments or potential language that could affect the community association management industry. Please feel free to contact me if you have any questions or hear of a concern CAI-MN should be tracking.

Nick de Julio, Government Relations Specialist, Ewald Consulting nickd@ewald.com 651-470-7957

Your Community Association & Multi-Family Property Specialists

PROTECT YOUR # 1 ASSET • Competitive Pricing • Capital Improvements • All Insurance Claims – Interior & Exterior • 24/7 Response • A+ Rating BBB

• • • • • •

Free Estimates Roofing Siding Windows Gutters Decks

Community Association & Multi-Family Award Winners

Giving Back to the Community on Every Project www.AssetExteriors.com | 763-248-1047 January | February 2014

11

ADAC-MN, LLC,

A Minnesota Limited Liability Company

build your reserves with the trusted industry experts Community Advantage is one of the Midwest’s leading providers of financial services to condominium, townhome and homeowner associations. Our lending solutions are tailored to fit each association’s individual needs. We offer a complete suite of financial solutions, including lending options, reserve investments and treasury management services.

Call (952) 835-2780 to speak directly with our local Minnesota contact, Ron Ornatowski or call (866) 328-0008 to speak with any of our Trusted Industry Experts.

GWCross, LLC P.O. Box 270276 Vadnais Heights, MN 55127 gcross71@gmail.com

866-328-0008 | www.communityadvantage.com

@ComAdvantage 110 W. Palatine Rd. , Ste. 2 Palatine, IL 60067 5001 American Blvd. W., Ste. 1000 Bloomington, MN 55437

Community Advantage is the Proud recipient of the 2013 “Leadership Award” from the Institute of Real Estate Management (IREM) recognizing their leadership role in enhancing the reputation of the real estate industry.

Community Advantage is a division of Barrington Bank & Trust Company, N.A.

12

Minnesota Communit y Living

Consulting Services      

over 20 yrs. experience managing CIC’s

Site map creation Resident handbooks Reserve studies conducted & reviewed Management Practices Review Guide Parlimentary procedures Architectural Control procedures

  

Planning calendars Grounds specifications Board orientations

PCAM Spotlight: Beth Gassen, Gassen Company, Inc. by

Janice Pyka

as members of the St. Croix Yacht Club.

They also enjoy cabin life up north with family and friends, to unwind and just relax.

Their girls keep them very busy with dance, hockey, volleyball, theater and piano. Beth believes in letting them figure out what they like, but she’s a stickler about them fulfilling their commitment of an activity — they must finish the session.

Little-Known Personal Facts Beth is a homebody and enjoys baking with her girls. And she sees the balance in health with eating, running and walking, all as a family.

CAI Connections

B

eth Gassen works in her family owned, MN based company and currently holds a leadership position, which she didn’t just step into.

Beth is the second-generation Gassen, a company her father and step-mom started 42 years ago, and Beth started very young working in administrative support roles.

Then she worked her way through the company spending time and working in each department to understand the overall business, which at the time was 32 properties and has grown to 280 properties. Today Gassen has about 50 corporate employees, as well as a number of on-site employees at each of its communities.

Family Beth is married to Rob, and they enjoy life with their 2 little girls, ages 7 and 8, in Prior Lake. Beth is part of a hard working family. She is very tight with her 5 siblings, which she is the youngest — and she’s a twin. Beth enjoys working closely with her brother Kirk to continue the family vision of growth in MN by offering clients the best in customer service.

Hobbies and Interests

She has grown up with CAI. Her father, Reginald, has supported the organization for years and recently received the Lifetime Achievement Award. They encourage employees to attend continual education, as education is a significant piece of their business. They love CAI!

PCAM Experience Education is very important to Beth, and earning her PCAM was a wonderful accomplishment. She visited Lakes of Parkway Association, a community in Houston, Texas. The community has amazing amenities, with a few hundred homes. Beth gained a lot and valued the experience she had while visiting her PCAM destination. The 30 days to complete her thesis was a challenge, especially when she had to say “no” to spending time with her family. Beth was up for the challenge to thoroughly respond to all requirements for the PCAM, and her responses ended up totaling more than 140 pages. It was even more of a challenge dealing with out-ofstate and specific laws that applied to Texas, and she did her research, which paid off and earned her PCAM designation.

Beth, I’m sure your entire family is very proud and excited for you. Congratulations!

Contact John Russo, Ph.D. Reserve Specialist 952-944-7137

MEMBER

• Consulting Services • Specifications, Bidding, Contracts, Inspections of All Exterior Replacement Items including Asphalt, Concrete, Siding, Roofing, Windows, Doors • Litigation Support • Insurance Claims and Appraisal Support • Problem Solving and Investigations CALL THE PROFESSIONALS ASSOCIATION SERVICES

The entire family loves to ski whenever time allows this time of the year, and then they boat on the St. Croix River in the summer January | February 2014

13

612-USA-ROOF (872-7663) www.ProfessionalRoofers.net

14

Minnesota Communit y Living

PCAM Spotlight: Bob MacDonald, Cedar Management by

B

ob MacDonald has a firm handshake, a smile and lots of PASSION! That was my first impression when I met him. He loves to learn, and technology has made his life much easier. Bob could easily retire but enjoys his job just too much. At one point, a few years ago, he was retired, for about 2 seconds. While in the Florida Keys he met his second wife Mary, who was from Minnesota, and they decided to move here so that he could finish his graduate studies and his wife could be with her ailing mother. Bob earned his Bachelor’s degree in Pastoral Studies from Lancaster Bible College in 1976 and his MA in Theological Studies from Bethel Seminary in 2003.

Bob is a Community Association Manager with Cedar Management, his second career, and he thoroughly enjoys working with his communities. His first career was repairing parts for fighter plane armament systems.

Family Bob has 5 children and between him and his wife they have 15 grandchildren, most of whom live on the East Coast. He has been married to Mary, his second wife, for 18 years, and her son lives in Duluth. Bob’s dog, Ranger, is his constant companion. They enjoy weekly walks and while Bob walks about 4 miles, Ranger probably runs a good 8 miles.

Hobbies and Interests At the time of my interview with Bob, deer season was approaching and that was all that

Janice Pyka

Bob could think about. He (of course) loves to travel to the East Coast to visit his children and grandchildren, which happens too infrequently. In 1986, while out for a run and training for a marathon, a motorcycle hit Bob, and that changed his life. Of course, there is nothing that can slow Bob down. Mary and Bob enjoy art shows, such as the Edina Art Fair and the Uptown Art Fair. He’s also a passionate gardener and loves to stack rocks; you will have to ask him about that. Every year, after “the season” ends, he and Mary head to Captiva, FL for a few weeks for a time of relaxation. Yet, while he’s gone, he still manages to take care of his associations, as he loves his communities.

in the $2 to $5 million range, are an eclectic mix of people from all over the world. One of Bob’s key contributors to the success of earning his PCAM was the significant research he did on social media and how it affects association management. Bob was very honest with details including his suggestions, when responding to the 10 questions. For example, Bob and those who joined him for the case study observed that the brick perimeter wall of the association was only 1 layer thick and was falling apart. After returning from Texas, Bob did some research and determined that the property was in a flood plain and therefore the perimeter wall should have been built differently.

Little-Known Personal Facts

To make this determination Bob talked with Houston city planners, city inspectors, and local brick fence experts to gain a better understanding of the situation. Armed with this knowledge, a corrective action for rebuilding the wall was submitted to the Houston Association as part of his PCAM paper. The community included beautiful lakes, extensive irrigation and tennis courts, to name a few of the amenities, with hightech 24-hour security guards. One guard was certified to use a radar gun (for speeding).

Another problem Bob found was that that the community manager had too much control, and claimed she was very busy. The office was closed every Wednesday with calls being transferred off-site. She needed to delegate to her staff more than she did. Bob prefers to empower his staff, which demonstrates trust in your team. He also noticed that the security guards were not properly trained to deal with the residents and this created a variety of problems.

When he was 50 years old, he was the Florida state Tae Kwon Do champion in fighting and he placed second in forms.

CAI Connections While in the Florida Keys, recovering from an accident and visiting family, Bob was offered an opportunity to manage a condominium and yacht club complex in Islamorada, Florida. The rest is history.

Instead of continuing a career in electronics, Bob moved into the field of Community Association Management. And, while in the Keys, he was president of the Florida Keys Condominium Managers Association for 5 years. While employed with a Minnesotabased Management Company Bob was very active with CAI. Today, his focus is on Cedar Management and all of the community boards of directors that he works with. Bob looks forward to the opportunity to someday teach M series courses here in Minnesota.

Also, he especially enjoys conducting training seminars for the properties he manages. From his perspective, training is vital to the success of his communities.

PCAM Experience Bob traveled to Houston, Texas, and visited a very wealthy private community of 1000 detached homes, which was located in the “energy corridor” of Houston. The individuals in the homes, which are valued

Bob finished his assessment in less than 3 weeks; typically PCAM Candidates are given 30 days and they use all of this time to answer the questions. Bob stressed the value of being a proficient writer, which he says is very important in dealing with residents, boards, and completing his PCAM. Congratulations for earning your PCAM Designation, Bob! January | February 2014

15

The Easiest Maintenance Decision You Can Make Associations face numerous maintenance decisions.

However, when it comes to maintaining your association’s legal affairs, look no further than Hellmuth & Johnson.

Hundreds of associations and property managers look to us as the definitive source for legal expertise, education and counsel. As one of the first firms in Minnesota to focus on this specialized area of law, we know the many challenges of running and managing an effective home owners association.

For attorneys who know associations, call us or visit our web site www.mncommunityassociation.com.

8050 West 78th Street, Edina, MN 55439 952-941-4005 • www.hjlawfirm.com

EXCEPTIONAL SERVICE AND SOLUTIONS. Managing Community Associations in Minnesota for over 40 years.

FirstService Residential Minnesota delivers best-in-class property management solutions with local leadership and nationally-supported technology, training, and best practices. We have successfully partnered with more than 270 properties and communities in Minnesota, building and maintaining longstanding relationships with Board members, residents, and vendors. Our awardwinning Association Managers are highly trained and certified, and they have manageable portfolios enabling them to provide exceptional customer service to each and every one of our clients. Call us to learn more about how we may serve your association.

FirstService Residential Minnesota is an Accredited Association Management Company 1801 American Boulevard E. Ste. 21 | Bloomington MN 55425 952.277.2700 | www.fsresidential.com

16

Minnesota Communit y Living

BEYOND MANAGEMENT At CoMMuNity DeVelopMeNt, first-class community management services are just the beginning. We offer lifestyle products and services, unparalleled in the industry, designed to improve your life.

• Expert 24 hours a day, 7 days a week, 365 days a year maintenance services • Discounts and savings on the products and services you use every day • Family-friendly programs promoting health, safety, and “green” living

7100 Madison Avenue West | Golden Valley, MN 55427 (763) 225-6400 | www.developcommunity.com

Delivering unsurpassed management and lifestyle services to communities worldwide.

January | February 2014

17

cai-mn

The

NEW TRADEShow

SAVE the DATE!

Thursday, February 20, 2014

O

n Thursday, February 20, the Saint Paul RiverCentre will be the location of CAI-MN’s annual trade show event. This year’s trade show is taking on a new schedule designed to provide focused education, enhanced networking opportunities, and extended trade show time. The education sessions will be split into two tracks, one for homeowner board members/volunteers and the other for managers. More information about the event and attendee registration can be found online at www.cai-mn.com!

Thank You 2014 Sponsors!

18

When:

Saint Paul RiverCentre

Thursday, February 20, 2014

175 West Kellogg Boulevard

1:30 – 7:00pm

Saint Paul, MN 55102

List as of Jan. 17, 2014 3M ACI Asphalt Contractors, Inc. Advanced Waterproofing & Advanced Sandjacking Advanced Waterproofing & Foundation Repairs, Inc. Alliance Association Financial Services Allied Blacktop Company AMBE LTD. American Building Contractors, Inc. Asphalt Associates, Inc. Asset Restoration,Inc Association Capital Bank Association Dues Assurance Corporation Birch Lawn Maintenance Breiwick Companies, Inc. Building Reserves Inc. Carlson & Associates, Ltd. CertaPro Painters, Ltd. Cityview Property Services Clean Response, Inc. Columbia Building Services, Inc. Columbus Exteriors, Inc. Community Advantage Complete Building Solutions Construct-All Corporation

Where:

Agenda: Coverall Health-Based Cleaning System Energy Squared Engineering Final Coat Painting, Inc. FirstService Residential Gassen Company Gaughan Companies Giertsen Company Homewisedocs.com Jeffrey Mayhew Agency, Inc. Levin & Edin Metro Paving Inc. Mickman Brothers, Inc. Minnesota Exteriors Mutual of Omaha Bank Community Association Banking & CondoCerts Paul Davis Restoration Rental History Reports Reserve Advisors, Inc. Restoration Technologies, Inc. Roofing Consultants, LTD Schoenfelder Renovations, Inc. Service Master Clean

Minnesota Communit y Living

SERVPRO of Brooklyn Park/Champlin Sharper Management, LLC St. Croix Tree Service Stone Valley Painting LLC Thomsen & Nybeck, P.A. Trans Alarm Treecology TruNorth Painting U.S. Bank Union Bank Homeowners Association Services Waldman Engineering Consultants Xtreme Exteriors

Register online at www.cai-mn.com

1:30pm

Registration Opens

2:00pm

Education Sessions: Manager’s Tracks Who Let the Dogs In? Reasonable Accommodations to Animal Restrictions | Nigel Mendez

Denied Again? Recertification FHA/HUD Approval | Michelle Gaskill

CAVL Track Meetings, Bloody Meetings | Michael Klemm & Joel Starks

3:30pm

Networking Reception

4:30pm

Trade show: Tapas Stations, Bar, and Exhibit

7:00pm

Closing Remarks & Door Prizes

Property Managers call us when...

They are trying to meet budget numbers, have Service concerns with their current vendor, and if they are looking for a vendor who knows Associations.

Phone 763-425-8400

January | February 2014

19

20

Minnesota Communit y Living

Nothing to Balk at: How Community Association Membership Benefits You

by

C

CAI National

ommunity associations offer one of the best opportunities for Americans to own their own homes. They are for the 21st century what land grants were in the 19th century, and what the New Deal and GI Bill were in the 20th. Why?

This privatization of public services has allowed local jurisdictions to continue developing needed housing without increasing local taxes. Instead, the developer must build the infrastructure and create an association to maintain it after it’s developed.

that local government is seldom, if ever, needed to resolve assessment disputes.

Many associations use alternative dispute resolution because it’s a faster and cheaper way to solve problems than legal action.

Collective Management Protects Value

Community Associations Make Owning a Home Affordable

Americans have accepted, for the most part, the collective management structure of community association living. Covenants and rules are no longer a new concept to most of us: renters are used to lease agreements with restrictions; single-family, detached-home owners are used to zoning ordinances and building codes. The difference is that in traditional, single-family housing, restrictions are administered by public bodies rather than by private boards.

Almost from their inception in the 1960s, condominiums have provided housing for low-to-moderate income Americans. In fact, in some areas, builders are required to include a certain percentage of affordable homes in new developments.

Many community associations—especially condominiums—have greatly reduced urban sprawl. Because of their collective management and protective covenants, they are precisely what the Housing Act of 1949 intended when it called for “decent home(s) and suitable living environments.”

Community associations, as alternatives to traditional single-family homes, are shining examples of free-market efficiency.

Most Americans have accepted private governance because they understand that collective management and architectural controls protect and enhance the value of their homes.

Privatizing Public Service Allows Growth Wherever a new community is built, local infrastructures are stretched. School populations, snow removal, storm water management, road maintenance, utilities, traffic — everything increases, leaving the local jurisdiction unable to support new community development. Yet housing is sorely needed. Therefore, local jurisdictions often require community associations to assume many responsibilities that traditionally belonged to local and state government.

Also, converting rental apartments and commercial buildings into condominiums not only revitalizes many decaying neighborhoods, it’s also made ownership more affordable for those wanting to live in urban centers.

Community associations have made home ownership possible for millions of Americans partly because 21st century families tend to be smaller, the number of single-parent homes has increased, and more retirees are staying in their homes after retirement.

Community Associations Make the Market Efficient

The factors that make community associations great places to live are easily ignored or misunderstood. Critics prefer to look at a few sensational issues instead of the whole picture. But for many community associations are affordable, enjoyable, efficient places to live.

Community Associations Minimize Social Costs Community associations also minimize social costs. Because they have mandatory covenants that require certain obligations from homeowners and the association, associations ensure that all who benefit pay their share and everyone is equally responsible. Community associations have sufficient enforcement authority January | February 2014

21

bS

C

Reputable consultants you can trust

“The remedy for ice dams is a twofold process. First, you must stop all heat loss at the ceiling.

All bypasses must be identified and sealed. Second, you must achieve proper ventilation; intake and exhaust. If you can accomplish this balanced approach you can add life to your roof and protect your home from unnecessary water damage and lower your energy bills!”

–Mike Baker Residential Energy Auditor, Complete Building Solutions

Since inception, Complete Building Solutions has helped hundreds of homeowners deal with their ice dams using industry leading products and vendors to stop heat loss in attics. These homeowners have been able to mitigate ice dams and reduce their energy costs by using the system created

by Complete Building Solutions.

Go to cbsmn.com to read more or give us a call at 763.544.3355

22

Minnesota Communit y Living

CAI-MN Committee & Member Updates CAI-MN Member Update Sarah Fjellanger Retires After 40 Years of Service Sarah Fjellanger has announced her retirement from Marsh & McLennan Agency (formerly RJF) in January, highlighting the culmination of her 40 years serving associations through insurance protection. As an agent, agency owner and community association specialist, Sarah has made an indelible mark on CAI-MN over the years. Sarah served on the Legislative Action Committee, Education Committee, Board of Directors, and as Chapter President in 2002. Sarah earned her Community Insurance Risk Management Specialist (CIRMS) Designation in 2003. Reflecting on her career working with CAI-MN members, Sarah says, “It has been my pleasure to get to know all of you and, with many, I have the added joy of securing a lifetime friendship.”

In her retirement, Sarah will enjoy time with her children and grandchildren, attending college courses, and completing the authorship of her first book. Please join CAI-MN in thanking Sarah for her service to the community association industry in Minnesota and helping grow our CAI community.

Community Association Volunteer Leader (CAVL) Committee Update Lynn Boergerhoff Accepts CAVL Chair Position “Hello. My name is Lynn Boergerhoff. I recently accepted the position as Chair of CAI-MN’s CAVL Committee. I am currently president of a large self-managed condominium association in Bloomington. The CAVL committee exists to serve the volunteer board members and other leaders of community associations throughout Minnesota with useful information in welcoming formats. Our Committee’s work in 2014 will focus on planning and offering four quarterly seminars on topics of broad interest to you and your community associations.

“Please contact me with topics you’d like to see at our CAVL quarterly seminars. My email is: lynnab7@gmail.com. My phone number is: 651-308-1461.

“I look forward to meeting as many or you as I can in the coming year. Thank you.”

January | February 2014

23

Contracts continued from page 3 warranties even if they are not mentioned in the contract.

Remedies The contract should describe the remedies of each party if the other party fails to perform its obligations (known as a “breach” or “default”). Many contracts require written notice of a breach and an opportunity to cure (correct) the breach within a specified period of time before remedies can be imposed. Remedies might include the right to withhold payment, the right to withhold goods or services, the right to sue for specific performance (to require the other party to perform its obligations), the right to sue for damages (monetary compensation), or the right to terminate the contract.

Remedies might include “liquidated damages,” a specific amount that a party agrees to pay if they breach the contract, based on an estimate of the actual damages

that would result from a breach. A contract also may provide that a party that breaches the contract will be responsible for the other party’s attorneys’ fees and costs of enforcement.

Notice The contract should state the address for notice to each party, the method for giving notice (such as by personal delivery, mail, express courier or fax) and the time when notice is effective (such as three days after deposit in the mail).

Amendment Most contracts provide that they can be amended only by a written document signed by both parties.

Assignment

cannot assign the contract without their prior written consent.

Termination Many contracts give either party the right to terminate if the other party breaches the contract and fails to cure the default within the specified time. Some contracts also allow a party to terminate for convenience.

Termination clauses generally state how many days’ notice is required prior to termination, and what rights and obligations the parties will have if the contract is terminated.

The information in this article is general information and is not legal advice regarding action to be taken in any matter, which may vary depending on the circumstances.

Associations, management companies and vendors should consult with their attorneys regarding contracts for particular transactions.

The general rule is that contracts are freely assignable (transferable). One or both parties may wish to provide that the other party

member of:

The Community Associations Institute & The Minnesota Multi Housing Association

Providing LegaL advice to

Homeowners associations since 1975 • General corporate matters, enforcement of covenants, restrictions and management issues • Document interpretation and amendments

Fred Krietzman 612.373.8418

Mark Radke Timothy Hassett Jake Hendricks 612.373.8409 651.312.6006 612.373.8575

• Replacement reserve analysis • Collection of assessments and foreclosure of assessment liens • Dispute resolution and litigation, including construction defect litigation • Applicability and options under the Minnesota Common Interest Ownership Act (MCIOA) • Project development and documents • Turnover of developer control

Steve Yoch 612.373.8559

Molly Gherty 612.373.8453

Marnie Fearon 612.373.8405

220 South 6th Street, Suite 2200 Minneapolis, MN 55402-4504 444 Cedar Street, Suite 2100 St. Paul, MN 55101-2136

www.felhaber.com

24

Minnesota Communit y Living

January | February 2014

25

Get in the Game with a Little Volunteerism by

C

ommittees are an important part of our association operations.

Committee members help keep our community vibrant; and, by augmenting paid staff, they save the association thousands of dollars each year. The association just wouldn’t be what it is without our active and effective committees. They deserve our sincerest thanks.

However, to be successful, our association needs to cultivate fresh ideas and encourage additional resident involvement in our committees; so, we’d like your help on one of our committees.

Committees give the board a way to gather information, offer new ideas and opinions and provide a training ground for future board members. All committees are advisory

to the board unless given specific decisionmaking authority by the board or CC&Rs. The board provides each committee with a job description, goal and mission statement to help it succeed as a community resource.

Our association has three types of committees: • Administrative committees are set out in our association’s bylaws and CC&Rs. They are ongoing, permanent and often have clearly defined power and authority.

• Standing committees, such as our CAVL and Education committees, are established by the board for an ongoing and specific purpose. These committees generally make recommendations to and act under the supervision of the board.

CAI National

• Ad-hoc committees, such as our Golf Tournament committee, are established by the board as needed for specific projects and tasks. When the task is complete, the committee is disbanded.

So, if you’re thinking about running for the board and want to learn a little more about association operations first, or if you’re interested in helping improve your state association or just want to get out and meet new people, we would be thrilled to talk to you about our committees and how you might be able to help. Contact any member of the board or call the Executive Director for more information.

For the CAI-MN board of directors listing and committee volunteer chairs see page 3 or visit www.cai-mn.com.

SMART & DECISIVE The Best Value in Construction Law for Community Associations

That’s what our clients tell us.

At Hammargren & Meyer, we’re smart, decisive lawyers focused exclusively in the areas of law that we know best.

For prompt responses and straightforward answers, call Hammargren & Meyer.

(952) 844-9033 www.hammarlaw.com

26

Minnesota Communit y Living

CAI-MN is looking for article contributions.

Contact Monte Abeler at (651) 265-7852 or montea@cai-mn.com for further details about joining our list of article contributors.

Who Can You Turn To When Winter Snow Becomes Extreme?

Turn to Xtreme Exteriors, Your Solution for Expert Roof Top Snow Removal.

UUU An overnight snow can be beautiful in the morning and great for making snowmen, but more than six inches of snow plied on your roof tops can lead to costly ice dams and water damage. Turn to Xtreme Exteriors to expertly remove excess roof top snow to preserve the integrity of your roofs throughout the winter.

Want To Learn More About Preserving The Integrity of Your Roofs? At Xtreme Exteriors, we like to share what we know from our years of experience. There is more to a roof than just shingles. Asphalt shingle roofs are meant to shed water, not hold it. When areas of your home’s attic ventilation and roofing aren’t functioning properly, problems such as ice dams can occur. To learn more about ice dam formation or other informational topics related to your home’s exterior, sign up for one our free educational presentations at http://www.xtremeexteriors.com/presentations.html

Your Contractor for All Seasons. From Roofing, Siding, Gutters, Windows, Decks, Insulation, Inspections and more, come to know Xtreme Exteriors as your dependable, quality year-round resource for your entire home envelope.

To learn more, visit us on the web at www.xtremeexteriors.com or call today for a free estimate at 763.441.1334.

MN License: BC362463

•

WI License: 962215

Jeff and Jeannie Sigler, Owners of Xtreme Exteriors — Your Dependable Single-Source Solution for Your Entire Home Envelope. Working in Your Community. Serving All of Minnesota and Western Wisconsin.

Call Us Today At 763.441.1334.

Visit Us at www.xtremeexteriors.com

January | February 2014

27

28

Minnesota Communit y Living