Elements of Success By Ted Salgado | Reserve Advisors, Inc.
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uccess stories are all too often hard to find in ways we can apply as community leader volunteers and professional managers. Sometimes we hear about a huge project highlighted by a top-rated contractor, chronicling how the project got off the ground, then encountered and met various challenges to the satisfaction of all. Underpinning these successes, we have found, is something a whole lot deeper that makes the relationships click and the special project or challenge turn to success. We’ll briefly explore three “success stories” and focus on what was common to each success story. These examples include a pool replacement more than 30 stories up, a complete reskinning of a condominium building, and the troubled community that succeeded in remediating defects in new construction. Our first “success story” started with the apparent need to install a swimming pool liner. The swimming pool was located more than 30 stories inside a high-rise tower. Replacement of the entire pool was thought to be out of the question because of its location. Instead, installation of a liner seemed to be the best option. The professional manager suggested and the board formed a committee to assist guiding the community to getting the job “done right.” The association had the good fortune of a dedicated community manager who had been with the property for many years, an active board, and a dedicated volunteer committee. Having a committee means more eyes and brains on the problem. In a sense, these three parties or groups (manager, board, and committee) worked to 1) define the goal, 2) define the problem and 3) work toward defining and implementing a solution to meet the end goal. Working together, the manager used prior expertise in understanding the difference between credible estimates in proposed services. The board evaluated a tremendous amount of information and gathered through the management team in committee. The three groups never lost sight of the end goal. From start to finish, the professional manager worked to identify and build consensus among the stakeholders. The goal was to replace the function of the existing pool with a long-term solution which resulted in the lowest lifecycle cost of ownership for the foreseeable future. The management team gathered information from contractors and compared these data to independent information contained within the reserve study. The committee gathered detailed information from contractors and their proposals. The board listened intently and evaluated all of the information without rushing the decision. Replacement of the entire swimming pool — not repair — became the best solution. The final solution, as often is the case, was not the anticipated solution suggested at the outset. Another community association located in Colorado comprised 10 units in one building, three stories high. Construction dated to the 1980s and lacked an elevator. To make matters worse, the community
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Minnesota Communit y Living
was at a crossroads. Thirty years old and faced with huge expenditures, deferred maintenance, and the real potential of turning completely into a rental income property, the 10 unit owners embarked on a decision-making process with the help of a management team that would secure that community’s future for decades to come. The building, they realized, needed a serious facelift. Old T-1-11 plywood siding and the second life cycle of asphalt shingles were typical of other residential buildings being torn down and re-purposed for other uses. Even with 10 owners, the group was not homogenous with respect to age, long term thinking, commitment or wealth. Some could afford a huge special assessment while others did not want anything to do with the renovation. The association was fortunately blessed with a strong management team, a three-member board and other volunteers who worked to build consensus over three years before the start of the project. Owing to the relatively small size of the association, the management team was typically involved in the financial affairs of the association: collections, payables, and routine financial statements. However, a strong long-term relationship underpinned the need to find alternative methods to fund the project lacking any significant reserves. With the 10 owners understanding that different sources of funding were possible, consensus resulted on the need to renovate the entire building envelope. With this consensus, the group of 10 agreed to replace the entire exterior, doors, windows, plywood siding, the roof system, install an elevator, and replace the exterior balconies and porches. Options for financing for funding for replacements included: 1) special assessment, 2) community association loan, and 3) individual home equity loans. In fact, combinations of all three options were used by the homeowners. Eighteen months passed and the building took on a new character. What didn’t change was the location, just steps from the gondola leading up to the ski lifts. Our last example is a 16-unit duplex, townhome style condominium overlooking a medium-sized downtown area with high rises. Rather than mountains and the view, these homes had a beautiful downtown within walking distance but located in a decidedly quiet residential neighborhood. The problem: major defects in the stucco application on these four-story buildings. I don’t have to tell you that unless you have six or seven figures to argue about, a threatened lawsuit is not an option to resolve defects in construction. Several buildings were at risk of developing mold due to water infiltration. The property was not professionally managed due to its size. Fortunately, several homeowners and a three-member board worked with the developer to understand the nature of the problem, and arrive at a mutually agreed upon long-term solution. The benefit was remediation of the defects in a relatively short period of time — eight months. The committee’s attorney shadowed the process but was never directly