Joyce DabbsFor Immediate Release
January 17, 2023
To: All Association Members
From: Bill Shaw, President GSA COA
As this board moves forward into 2023 it is clear we have reached a critical inflection point as an association. We will either make the fundamental changes required to thrive or we will expose our owners to the potential of significant financial liability in the future. At our annual meeting, attorney Lynn Perry said we are a big business, and he was correct. I’ll explain why we need to transform to protect our big business and what that transformation may look like.
Before any of us purchased a condo we likely anguished over where we would buy. We did due diligence comparing the value of the condo and expected return and examining the financial stability of the COA. We didn’t take the decision to buy lightly. For most of us, other than our home, our condo represents the biggest investment in our lives. Would any of you take $350,000 and put it in a shoe box and sit it outside on your front lawn? Of course not, that would be foolish. You’d take the money to a bank where it would be safe and secure. Yet so many condo owners make a $350,000 investment and then turn it over to a board to guard its safety and never give it a second thought. Some owners think our condo association operates like their neighborhood HOA. Your neighborhood associations handle pennies compared to our budget and make decisions that will have zero impact on your investment. This association is different, it’s a big business and even one bad decision by a board could erase your investment like the thief that picks up shoe boxes full of money left unattended.
It’s been said, if you don’t understand history, you’ll make the same mistake time and time again. Our glaring fault with the model we use to operate is our inability to archive and transfer knowledge from one board to the next, building on an ever-growing foundation. Without knowledge of what happened in the past we are unable to clearly chart a course for the future. We end up repeating the same costly mistakes, reinventing the wheel, and exposing us to more and more liability. We can break that cycle once and for all.
Our association collectively owns a property worth more than $100,000,000 generating nearly $3,000,000 of revenue while burdened with nearly $3,000,000 of expense. I’ll be proposing to the Board we discuss, modify, and implement the following changes to create additional checks and balances, and to assist future Boards with their decisions.
1. Establish an Executive Committee comprised of the immediate past president, owners with law, accounting, and executive management experience.
2. Identifying other Committees to engage more of our ownership, tapping into talented people that can help provide input and move us forward together.
3. Bring the bylaws in compliance with the 1991 Condominium Act.
4. As part of the revised bylaws require all contracts exceeding either 12 months and, or more than a $100,000 commitment be reviewed by the Executive Committee. Their input is non-binding; however, they may publish a letter of dissent if the Board decides to move forward, providing transparency to members.
5. Require all non-budgeted expenditures exceeding $50,000 to be reviewed by the Executive Committee.
6. Require the sale of any asset exceeding $2,500 be reviewed by the Executive Committee.
7. Create a facility asset position statement to guide with decisions. We identify our legal property footprint, points of egress and ingress and their importance and relationship to Alabama law, common shared property assets such as the high-pressure fire suppression pump shared by B4 and the Dunes, and the pump house station located on our property but used exclusively by all the other phases.
8. The creation of a comprehensive communication plan that details all channels and frequency of communication. Providing guidance for our outbound communication from administrative, maintenance and Board as well as inbound communication channels and contacts for our ownership to resolve issues.
I’m sure the other board members will have additional ideas to ensure we create a sustainable framework for future boards.
During the first quarter we intend to resolve the Claremont issue, close the loan for outdoor pool and glass reconstruction, initiate both the outdoor pool and glass project, review and publish the reserve study, begin the repair of subfloors, resolve shared services, and implement changes as required, determine the annual assessment, create an insurance loss mitigation report, determine the scope and cost of unfinished reconstruction, release, and reallocate cash on hand, initiate unfinished construction, finish the migration and full implementation of AppFolio, and implement the new in unit maintenance plan.
All Board members share a common fiduciary responsibility regardless of title or office. While the Treasurer focuses primarily on budgetary items, the ultimate financial responsibility falls to the President. During the year I’ll work closely with Joel to involve him in the financial processes and monthly budget reviews.
We are fortunate to have surrounded ourselves with the very best people in our space. Kyle, his team, Debbie, Brenda, and Lynn bring decades of quality experience in condo management and risk mitigation. We couldn’t have a better group to work with as our Board transitions from an operating role in recovery to its intended purpose to supervise and evaluate performance.
My very best wishes for a safe and happy 2023.
Bill Shaw