RFP for Management

We are a 120 home association in SW Florida. After 15 years of self-management, we are considering a professional management company. Our big challenge at this time is to develop a set of specifications defining what we want a management company to do.

We currently have a well-run Association. Most of the Board is running on empty after several years of (un-appreciated) efforts. What we don’t want to do is turn loose of everything. But we know we can’t continue as we are doing.

I am sure some of you have gone thru this process! Could (would) anyone share their RFP/RFQ or specifications? Anyone have a set of lessons learned or things to avoid?

Your input will be greatly appreciated.

peter

Peter,

Good question! I wish I could help, but we have never interviewed a management company. I think we may have to pretty soon as well.
Please do talk to other Associations who hired management companies and see what they say. Bristol is big on the East Coast, not sure if they are in SW. But they are many others am sure. Please post what you find out. I'd be interested.

An experienced full time employee could do everything a HOA needs to have done administration wise. If you had an on site office that would provide standard operating hours for business. The presence of a manager would take a lot off the Board. Robert

__

In Florida, the ‘experienced full time employee’ must be licensed. I think this is what you mean. In fact, I think if the BOD members were paid (of course they would have to be licensed as well) there would probably were more candidates. Don't you agree?

Anna, how many units in your community?

It is not paying the Board members that would solve the problems, it is convincing the owners they made a commitment to serve, a legally binding agreement to serve the association is where the hole is.
__

When I bought a unit here I made a legally binding agreement to serve the association?

Eva,
If your last sentence is a question, the answer is "Yes".

At least, that has been my impression. I have not read all the covenants ever printed so I am not 100% sure. If your covenants directs you pay a fee to live within your association, they got you.
And you got them by signing an agreement to pay the fee. "This "them" I am referring to is a small part you, the rest of "them" is the remaining members of your association. Everybody together makes one (your association).

Anna,
Very interesting, if at first you don't succeed, etc.

Give us a little more info if you would like Anna,

46 units with a management company, and you all are happy.

Can you give estimate of condo fees, your budget, any extras, any other personnel, and what you pay for what.

I am in a 65 unit and very curious to see what estimate a managemnet company would expect. We have a private manager and we are always looking to save money and make things better.

Robert, let me see if I can give you a "ballpark" idea.

Our management company charges around $15.00 per door, per month. Our owners pay $220.00 ($228.00 for eight slightly larger units) per month in maintenance fees. We have one eight-hour per week maintenance employee and everything else is done by outside companies, who we contract with for services.

Our maintenance fees pay for the following:

Audit/tax prep; legal fees; management fees; office supplies/postage; permits/licenses; electricity; water; sewer; trash removal; telephone; cable; landscaping/mulch; sprinkler system; pool contract; pool repairs/supplies; exterminating; fire alarm/security system; maintenance supplies; plumbing repairs; roof repairs; payrol; insurance; reserves.

It's budgeted as such:

1. General and Administration: 9%
2. Utilities: 35%
3. Landscaping: 8%
4. Pool: 3%
5. Building Repairs: 5%
6. Payroll: 3%
7. Miscellaneous: 2%
8. RESERVES/INSURANCE: 35%

Our RESERVES account is for Pool; Paving; Painting; Roof and Insurance. We maintain three bank accounts. One for Operating funds; one for Reserves; and one for the Insurance. That way none of the money is ever mixed and we have a set amount deposited into each account every month.

I'm not sure if this is the information you were looking for but as the treasurer it was a good exercise for me to go back and look at it again, just in case someone here would happen to care and ask me about our financials..............Nah.......that'll never happen.....unless we say, "assessment"....then they'd wake up.

oops....under MEETINGS, I meant to say we do NOT use this

Sorry....my fingers don't keep up with my brain sometimes.

Hey Robert, I forget - what's the prize for your 100th post?

Tell the PM what services you want. They should be able to taylor a package for you. Whatever you do or don't do, make sure that you formulate some good questions for the referrals that listed in their presentation. You can get a really good feel for the quality of work if you call up the clients of your prospective candidates. Ask for the referal names, they usually include them in their written proposal anyway, but check them out. ... Then you'll get the real story.

Robert, you are 100% correct---apples to oranges. We are two, two-story buildings with very little grounds and the only other amenity is a pool. Big whoop. You have to deal with sea salt and everything else. I'm sure you have huge expenses.

Donald, I remember when I had MY 100th post (I was so excited); and my 200th (so impressed); and 300th (still learning); and 400th (getting worried); 500th (will the problems never end?)....then I look at the Roberts and the Donnas and the Susans and the Marys and the Michelles, and they are in the THOUSANDS, and I groan. I have SO MUCH catching up to do! But every one is a learning experience and I'm glad I'm part of this site!

So how do I find out exactly how may posts I have under your belt? I can only find 500 of mine (and that only goes back to 5/10), so I must be in the 1,000's. A while back Dana said I had over 4,000. Guess my husband is right -- I must have diahhrea of the mouth!

Hahahahahahahahahahahahaha!!!!!!!!!!!!
Hahahahahahahahahaha!!!!!!!!!!!!!!!!!
Hahahahahahahahahahahahahaha!!!!!!!!!

Hi Tracie,
I've attached a sample contract for you that I found on the net....
HTH
Ann

Thanks for the attachment! WOW! That's a BIG contract! It's a huge help to me, though, as I finagle it to our specific needs.

Thanks for the attachment, Roger.

I'd love to resign from either the BOD or the PM position, but apathy runs high here. The potential for conflict of interest has been noted in our minutes from previous meetings.

But...is there really a conflict of interest? As a member of the BOD, and a unit owner, I desire to protect our asset to the best of my ability. As a PM, I desire to run the daily workings in as efficient a way as possible while maintaining high standards. Both goals "seem" to be in line with each other (at least I think so).

With our tiny association filled with apathetic owners, could you point me in the direction of a potential conflict of interest? I know that there is the "appearance", but we think we've handled that to the best of our ability.

I read lots of horror stories where the BOD and the PM butt heads, and I certainly can't butt heads with myself. I'm just asking...not trying to prove anything...just trying to learn.

Tracie,
Aside from the "appearance" factor.

I expect you will find out at some point as you start doing you manager duties.

Being all these things is at best, a short term effect. We understand the pressure you feel you are under, but don't try to do so much good that you get yourself between a rock and a hard place. When you get a miniute, write each owner a message explqaining why you are doing what you are doing and set a deadline on some of your responsibilities. I would not try and rationalize this subject, be direct and distribute the load first chance you get.

Are you being PAID as PM?

That is your "potential conflict of interest."

If you are NOT being paid, then no harm no foul.

But if you are president, an owner, AND a PAID PM, I would have serious problems with that appearance of conflict of interest.

Peter:

First thing is for the board to consider what do you want management to do for the board and community? Here is a list of items that management usually does for the community/board, I hope it helps you in your search for a good management company:

Service and Communications
Assist BOD in administering CC&R's
Prompt response to all telephone calls, emails, and correspondence regarding and problems or concerns.
Assistance with association newsletter
Preparation of special reports and recommendations as requested by Board
Interface with specialists retained by association for specific tasks.
Provide (and assist) CPA with information needed for audit/review and taxes
Assist owners with explanations of policies and procedures in the Declaration of Covenants
Coordinate contract negotiations, prepare Bid specifications per board
Meetings
Assist Board with scheduling, notices and coordinate board meetings
Assist BOD with preparation of the annual meeting agenda
Upon request provide board packages prior to meetings
Assistance with conducting annual meetings and elections
Attend quarterly board meetings and annual meetings.
Distribution/Filing of meeting minutes.
Prepare Notice of Annual Meeting, proxies and ballots.
Legal
Legal liaison, as directed by board
Assist in preparation, passage, and filing of amendments to documents
Distribution of amendments to documents
Records
Maintain master mailing list and labels
Maintain custody of all association records in a professional acceptable manner.
Ensure all records are updated and available for board and owner review. These include: Declaration of Covenants; Bylaws; Rules and Regulations; Plans/Blueprints; Contracts; Roster; Election Results (proxies, ballots, proof of notices), and other documents
Maintenance Management
Help board to oversee association repairs and maintenance
Procure bids and contract services as advised by the board
Assist and prepare specifications for bid procurement
Work with Board to supervise contracts to assure contract fulfillment
Schedule maintenance-set-up schedule and procedures
Preventative maintenance-advise BOD and set-up schedule
Inspect property periodically for both covenant violations and review of vendor work
Contract with dependable (licensed & insured) vendors who perform quality work
Timely response to BOD and homeowner inquiries and maintenance requests.
On-call emergency maintenance services - 24 hours/day and 7 days/week
Property inspections more often when special contracted work is in progress
During major repairs, the inspections will include careful attention given to details as well as to potentially hazardous conditions.
All community contracted services, as well as non-contracted repairs and maintenance are periodically reviewed to ensure that your property will have the neat appearance and high standards which homeowners expect.
Financial
Assist board with annual budget
Assist board with interest rate management of cash reserves
Ensure the Reserve Study is reviewed, undated regularly, and incorporated into the annual budget
Provide financial statements on a cash basis.
Monthly Late charges, monthly collections
Long-term financial planning (cash flow and reserves)
Financial Reporting Package - available by 15th of following month.
Monthly Financial Reporting Package includes: Balance Sheet, Income Statement, Budget Comparison Report, List of Delinquent Accounts, List of Prepaid Accounts, Check Register, and Current Status of all Delinquent Accounts.
Accounts Receivable
Prepare recommendations on policy and procedures for board approval
Facilitate billing with payment coupons
Offer and set up automatic draft from owner's checking account
Offer online payment of dues through e-checks and credit cards
Promptly deposit payments to appropriate association account
Maintain individual unit owner payment records
Diligently and aggressively pursue collection efforts
Collect monthly dues and special assessments from homeowners and builders though various methods of payment (checks, debit, or online)
Collection of delinquent dues via late letters at various set intervals and working with the association's attorney
Monitor association funds for maximum interest income
Legal liaison-Assist with liens, foreclosures. Proceed at board's direction.
Accounts Payable
Prompt payment of all association expenses. Vendors are paid timely - checks are written several times each week. Maintain credibility of association with vendors.
Maintain timely payment schedule, taking advantage of any vendor discounts
Establish and maintain cash flow
Submit abnormal bills to board for approval
Use correct general ledger accounts for proper budget control and auditing
Maintain check register
Maintain detailed records, including filing of paid invoices for proof of expenditure
Insurance
Assist with soliciting bids and securing annual insurance policy
Ensure that insurance coverage is at least the minimum coverage set forth in the Declaration of Covenants
Provide annual review of coverage, costs and obtain competitive bids
Confirm all contractors have appropriate insurance coverage
Assist board with filing association insurance claims

Gloria,
I am glad you posted and wonder if you would comment from the management side as to duties of the PM or Manager.

As you know we get a lot of problems reported here about lack of enforcement of the covenants and rules of conduct, etc.

Where does the manager come in? I don't think I have ever seen it written addressing the responsibility and is the a pecking order as to who has primary responsibility and where do individual owners fit in. I know most documents are very specific as to the owners have full authority to enforce. I have heard "I did not buy this place to be a policeman or I am the manager not a law enforcement officer," a thousand times, and more often the managers, board members and owners turn a blind eye.

Thank you Gloria,
In my case I doubt it will mean much. We have NEVER fined an owner since our inception in 1981.

I guess we are just blessed with selective owners and renters.

The other day they allowed an owner to jackhammer a 18 inch square hole in the concret slab that our condo sit on over the garage. I see they have filled the hole with foam. But maybe I am being premature and the Board is in the middle of corrective action. Sure they are!

There is no conflict of interest; but there can be the appearance of a conflict of interest to some members. One must be careful to keep separate the functions of the management company vs. those related to being a member of the HOA.

Roger, if there is payment involved, there may well be a conflict of interest.

Grace,
May I suggest you be a little more discreet in what you say.
Case in point: It is fine to talk about what constitutes violation of the documents. But to publically omit you are on a fishing trip is not good practice.
I think all can see the problem. We do have on occassion both sides of a story posting on this site. Thewre is also nothing against anyone registered here that restricts them from coping anything posted.

Grace,

I'll give you an example. One of the posters here is a member of an HOA and also serves on the BOD and is the assn's PM. IMO, she should excuse herself from discussions and voting involving her contract and her compensation as it could be construed as a conflict of interest because she would be negotiating her salary and then voting on it. Also, as a board member, she has the means to influence other board members to vote to her benefit. Any time a person stands to benefit monetarily from their position there is a conflict of interest.

I can't see that there would be a conflict of interest involving your PM if she is not a member of your HOA nor does she hold a board position. The fact that your BOD allows her full reign in managing the assn, and perhaps agrees to whatever she puts in her contract, does not equate to a conflict of interest. All that qualifies as is stupidity on the part of your BOD!