1. Summer 2011 Edition
TA M PA B AY N E W S L E T T E R
Corporate Headquarters
8200 NW 33rd Street, Ste 300
Miami, FL 33122
800.514.5770 Phone
In This Issue
Tampa Bay Region
2963 Gulf to Bay Blvd, Suite 265
Clearwater, FL 33759
813.448.3982 Phone 1. Words from Kelly Vickers
Southwest Florida Region
2. Reserve Now or Regret Later
3358 Woods Edge Cir, Ste 102
Bonita Springs, FL 34134
3. Out of the Dumps and Into the Future
239.495.3428 Phone
4. Removing the Pain from the Policy
Orlando Region
301 East Pine Street, Suite 150
Orlando, FL 32801
407.705.3236 Phone

2. Dear Board Member
—Kelly Vickers, LCAM, Business Development Manager
KW PROPERTY MANAGEMENT & CONSULTING KW PROPERTY MANAGEMENT & CONSULTING is
specializes in community association management. a management company and it stops there. Unlike
We take pride in maintaining great looking some of our competitors, we do not have a financial
communities and producing on time and error free interest in or affiliation with any of the vendors in our
financial statements; of which all are reviewed by one network. This is a growing problem in the market
of our seven in-house CPA’s. Our licensed place today as many management companies find
Community Association Managers are seasoned themselves not independent when making a decision
professionals with years of experience, which enables that financially impacts the association, rather making
them to efficiently manage the most difficult and a decision that is in the best financial interest of their
complex communities. company.
At KW PROPERTY MANAGEMENT & CONSULTING KW PROPERTY MANAGEMENT & CONSULTING
we believe a successful customer service experience does not want to be the biggest management
begins long before that first phone call is received. We company, only the best. We want to provide you with
have implemented an unrivaled customer service
the quality service you expect and pay for. When we
program that allows us to utilize two of our strongest
are hired, our management team develops a short
tools – our people and technology. This combination
term transition and long term operational plan,
provides our clients with feedback as well as access to
specifically designed to meet your association needs.
information twenty four hours a day seven days a week.
Please feel free to contact me at 727-859-2462 or 941-
Our professional team manages approximately
225-2747 in order to set up a time we can meet with
35,000 units throughout the state. These people
you at your community. After meeting, we will be able
range from Certified Public Accountants (CPA),
to send you a comprehensive proposal on how we can
licensed Community Association Managers (CAM),
Certified Manager of Community Associations best serve your association.
(CMCA®), Association Management Specialist
At your service,
(AMS®), Professional Community Association
Managers (PCAM®), Real Property Administrator Kelly Vickers, LCAM
(RPA®) and certified maintenance personnel. Business Development Manager
KW PROPERTY MANAGEMENT & CONSULTING
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3. Funding for the Future: Reserve Now or Regret Later
—By Will Simons, RS
Picture yourself onboard an airplane for a long-
awaited family vacation. As you watch the clouds float
by, you happily day-dream of the adventures in store
for you and your loved ones. As the flight attendants
hand out the first round of drinks, the pilot makes a
sudden announcement: “Folks, we’re terribly sorry, but
the plane is almost out of fuel. What’s worse, the wings
are barely held together by duct tape, and the landing
gear has needed repair for months now.” He goes on
to tell you and the other shocked passengers that the
plane will need to make an emergency landing, and
everyone will have to pitch in to afford the cost of the
repairs. “But what happened to all the money we paid
for these tickets?!” you exclaim to the attendant.
“Didn’t anyone think to use some of that money to
care for the plane?” As tension rises in the cabin, the
pilot safely makes the emergency landing. After a long
and costly wait, the plane is fixed and you continue on
your trip, but not before your sanity and your routine “Operating” funds which cover everyday
pocketbook have been put to the test. expenses such as insurance, utilities, and management
fees, reserve funds are intended only for repair,
No doubt this is an extreme scenario, but restoration, replacement, and maintenance of the
unfortunately we can draw a comparison to something association’s major physical assets. Typical reserve-
that happens every day in communities around the funded projects include roof replacements, painting,
country. Imagine the feelings of a homeowner who’s pavement resurfacing, replacement or modernization
bought a home in what she thought was a great of HVAC and other mechanical systems, interior
community association, only to find out that her remodeling, amenity area updates, and many more.
building’s elevators are on their last legs, the roof is Because they typically don’t occur every year (and
constantly leaking, and her balcony railing is rusted sometimes not for many years at a time), these large
through. When she raises her concerns at that month’s costs are often underestimated or overlooked
board meeting, she’s told that there’s no money for completely.
the work that needs to be done, and that the residents
will have to cover the replacement costs through a To adequately prepare for these inevitable expenses, a
major special assessment. You can imagine her community association needs to determine how much
disappointment, anger and frustration, all of which money should be contributed to reserves each year so
could have been avoided had the association been that sufficient funds are available when components
planning and preparing for these expenses all along. reach the end of their useful lives. This can quickly
Just like the passengers on the airplane, she’s become a complicated exercise, especially in older
wondering how this could have happened, and who is properties with many projects due (or overdue) for
to blame for the problem. serious work. Combined with a universal desire to keep
assessments as low as possible, this often means that
Surprisingly, this is a very common situation. In every funding of the reserves is put off until “next year.”
community association, a significant portion of the
assessment fees collected from the owners should be As the years go by, and major expenses creep closer,
held in special accounts known as reserves, only to be the association will find itself in increasingly dire
used for specific purposes. Not to be commingled with straits. Eventually, the residents will look around and
—Continued on page 4
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4. Funding for the Future: Reserve Now or Regret Later
—Continued from page 3
notice that the paint is peeling, the streets are
crumbling, and the amenities are sorely in need of
updating. At that point, tough decisions need to be
made. Will the association be able to pass a special
assessment to raise the funds? Will it need to take out a
loan, committing to years of interest payments? Or will
it let the property continue to decline until home values
become negatively affected? Clearly, none of these is a
desirable option. The wisest method of preparing for
major projects is to identify ahead of time what will
need to be done, properly estimate the size and
the possibility of special assessments. A community
frequency of costs, and design a reserve funding plan
association is not an apartment complex; all owners
that will help meet those costs accordingly. In other
collectively share the responsibility of protecting the
words, the association will need to conduct a Reserve
value of the association’s shared assets. Proactive,
Study and incorporate the findings into the annual
responsible board members must embrace their
budget process.
fiduciary duty to do right by the people they represent,
A Reserve Study is done in two parts: the Physical and association managers must help put their clients in
Analysis and the Financial Analysis. The Physical a position to make wise decisions.
Analysis is a thorough, detailed inspection of the
A reliable Reserve Study takes time and expertise to
association’s actual physical assets, such as buildings,
prepare. With the necessary experience and credentials,
streets, amenity areas, and so on. Photographs and
a professional Reserve Study provider is an
measurements are taken to help define the size and
independent third party, able to take responsibility for
scope of all expected projects. Useful Life and
the recommendations shown in the study. While board
Remaining Useful Life estimates are assigned to each
members and property managers often contribute
line item in order to determine when (and how often)
valuable background information, a professional is able
repairs or replacements are likely to be necessary. Using
to give clear, unbiased recommendations grounded in
this framework of data, replacement and/or repair
facts and objective data. As with filing taxes or
costs are estimated, and a schedule of projected
determining insurance requirements, the association
expenses is produced. The Financial Analysis includes a
should always seek the advice of specially trained
review of the association’s current reserve accounts,
experts when it comes to major financial decision-
resulting in a determination of relative reserve fund
making. If your association doesn’t have a current,
strength known as “Percent-Funded.” A recommended
professional Reserve Study, there’s no time to waste.
funding plan is then created, intended to prepare the
Whether it’s an airline ensuring the safety of its
association for the various projects identified in the
passengers or a community association planning ahead
study.
for care of its most important assets, crossing fingers
Reserve Studies have become an integral part of the and hoping for the best is no substitute for diligent,
annual budgeting process for associations across the responsible planning.
country. Associations that are well-prepared for large
expenses are easier to manage and are more desirable To learn more about reserve studies or Association Reserves
to prospective buyers. More importantly, current contact Will Simons, President of Association Reserves –
residents of these associations will be less exposed to Florida, LLC at 800-706-4560 or wsimons@reservestudy.com.
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5. Out of the Dumps and Into the Future
A fresh look at the budget process
—By Marlene Niemeier, LCAM, CMCA, AMS
When the gavel drops to adjourn the annual budget meeting community together? What are the changes in financial
directors typically exhale a sigh of relief that yet another conditions, physical facilities, services and activities that will
budget season is over. Of course, the new fiscal year is just enhance market value and quality of life -- one, three and five
beginning! Adopting the budget is a critical board task.
years from now?
When this milestone feels more like a millstone, a fresh look
at the process is in order. The answers to these questions are the foundation of an
action plan that the budget brings to life. Some may argue
that since large portions of the budget are non-discretionary
– insurance, utilities, essential contracted services and payroll
for core staff – this exercise is not worth the effort, especially
in tough economic times. However, when owners have to
stretch to make their assessment payments they need to know
and see that every dollar builds value now and in the future.
Instead of simply rolling forward last year’s plan take a fresh
looks at what staff, services, equipment and technology can
best achieve the vision. At the same time do not overlook the
basics. Walk the property like you are seeing it for the very
first time. Note the small things that can make every day at
the property better. Start with aesthetics at the front entrance
-replace the bent or missing letters on the entry monument,
reshape the bushes and replace the greasy traffic cones.
In the garage or parking areas determine if the wheel stops
should be reset or repaired. Does the lighting work and is it
The typical budget process begins with analyzing the year-to- energy efficient? If the goal is a remodeled clubhouse, start
date financial statement to estimate funds needed to by refinishing the front door and replacing the mismatched,
continue the status quo operations for another year. Florida sticking hardware. At tree trimming time, order an extra
state statute also requires a reserve schedule that projects the dumpster, including one for hazardous waste, and invite the
cost of periodic replacement of capital improvements.
residents to clean out those storage lockers. Then have a mid-
The predictable result is yet another cost increase with no year resident event to review and celebrate progress, hear
apparent benefit to the unit owners footing the bill. In from your owners and readjust plans and priorities.
addition, unit owners who pay assessments also pay a
premium to cover the cost of those who do not. This is all the With the foundation of an action plan based on values and
more reason for the board to build a budget that looks vision, you can elevate your budget process from a grinding
forward rather than back. exercise in cost-cutting to an engaging process that maintains
Rather than dive head first into historical data, the initial the essentials, provides tangible payback in the short-term
focus of the Board of Directors or Budget Committee should and builds value for the future.
be to understand and articulate the vision, values and needs
To learn more about how a professional management company can
of the community. Who has purchased in the community and
why? What are the tangible/intangible features and services assist your association in its financial goals contact KW
that attract and retain owner residents? What brings the PROPERTY MANAGEMENT & CONSULTING at 727-859-2462
or 941-225-2747.
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6. Association Insurance– Removing the Pain from the Policy
— By Phil Gambrell, Co-Owner, Gambrell & Sturges Insurance
Now more than ever associations are searching for that couples an insurance policy from an A Rated
ways to trim their annual budgets. Being that carrier with unparalleled collections support.
insurance premiums represent a large percentage of Associations submit delinquent units to the
the budget for most associations below are a few insurance carrier and the association is advanced
proven tips and techniques to minimize your its uncollected maintenance fees, going forward,
insurance expenses: for up to six months. All fees associated with the
collections process are paid by the insurance
• Make Sure your Property Policy Limits are carrier. Best of all, the premium for the policy is
Accurate – Obtaining annual appraisal updates is taken out of the payment made to the association
the only sure way of knowing if the policy limits are each month so there is no out-of-pocket expense. It
appropriate. If the association’s property appraisal is well worth obtaining a proposal to see how the
is more than eighteen months old, there may be a program would benefit your association.
reduction in its realized value which could equate
to a lower premium. At the end of the day, your insurance agent should be
your business partner who recognizes the association’s
• Don’t risk a Claim Payment Penalty - If the policy desire to fulfill its fiduciary responsibility to its
has a coinsurance clause review the policy carefully membership. An effective agent should submit the
to ensure that the policy limits equal or exceed the association’s account to all available markets to obtain
requirement. If the policy has a 90% coinsurance the best possible price and coverage, provide alternate
clause but the policy limit is only 80% of the deductible options to allow the association to choose
current replacement cost, the association will face one that is conducive to their budget, and include in
a penalty at the time of a claim. the proposal a market summary that lists the carriers
• Don’t Overlook Potential Premium Savings – If that were contacted including their underwriting
your association is in a VE Flood Zone you may be decision, terms, conditions and pricing.
able to obtain a Letter of Map Amendment Lastly, don’t forget the impact of premium financing
(LOMA) from FEMA rezoning you to an X Zone . on the budget. Most premium finance companies
The process is lengthy and quite involved, with the allow agents to add to the base rate offered by the
average effort taking between twelve and eighteen finance company. If an agent sells insurance; they
months, but it has the ability of providing a should not receive additional compensation for
potential savings of between eighty and ninety arranging an association’s financing. Check the rate
percent on the premium for the association. on the current finance contract; if the APR is more
than 3.09% then the association is paying more than it
• Budget for Your Deductibles – The amount of probably should.
deductible varies by type of policy and carrier.
Make sure the association budget includes a Phil Gambrell, Co-Owner, Gambrell & Sturges Insurance
provision for payment of deductibles in the event G&S specializes in residential condominium associations in FL,
of a claim, or establish a Letter of Credit with your AL & MS. For more information please contact Phil at 850-547-
0065 or 850-232-8102 or pgambrell@gambrellsturges.com.
financial institution to cover that potential liability.
• Protect Your Association Against Unpaid
1
FEMA Rating – VE relates to areas subject to 100 yr flood and additional velocity
hazards (wave action).
Assessments – A limited number of agents in the
2
FEMA Rating – X relates to areas outside the 500 yr flood plain with less than
state have access to an innovative product available 0.2% annual probability of flooding.
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7. JOI N OU R MAI LI NG LIST
Yes, I am interested in learning more about KW PROPERTY MANAGEMENT & CONSULTING.
Please include me on your mailing list for the items selected below:
J Electronic Email Newsletter containing news and information relevant to serving on a board of directors.
J Electronic Invitations to upcoming complimentary educational seminars.
J Electronic Copy of Quarterly Tampa Bay Newsletter
J Hard Copy of the Quarterly Tampa Bay Newsletter
J Information Packet on the services provided by KW PROPERTY MANAGEMENT & CONSULTING
Name:________________________________________________________________________________________________________________
Address: ______________________________________________________________________________________________________________
_____________________________________________________________________________________________________________________
Association Name: ______________________________________________________________________________________________________
Position on the Board of Directors: ______________________________________________________________Number of Units: _____________
Email Address: ____________________________________________________________________________________
Please mail to: Kelly Ann Vickers
KW PROPERTY MANAGEMENT & CONSULTING
2963 Gulf to Bay Blvd Ste 265
Clearwater FL 33759
or send your preferences via email to kvickers@kwpropertymanagement.com
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8. A Professional and Independent
Approach to Management
2963 Gulf to Bay Blvd, Suite 265 • Clearwater, FL 33759