Realty Times - HOA Diamonds In The Rough

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HOA Diamonds In The Rough

by Richard Thompson

HOA Diamonds in the Rough

Many homeowner associations find it difficult to hold the line on expenses. Inflation erodes endlessly increasing budgets and members scream for relief. But help is on the way. There are practical ways to reduce costs without cutting services. The HOA's budget is like a collection of uncut gems of different type, size and quality. Some of them are diamonds in the rough just waiting to be set free. And like diamonds, your budget, with a bit of cut and polish, can sparkle. Here are a few examples:

Insurance. Raise the deductible and reduce the annual premium. Create a line item in your Operating Budget called "Insurance Deductible" equal to your deductible. If there is no claim during the year (usually the case), the money is saved.

Pools. Check temperature and pump cycle times and adjust for savings. Swimmers may not notice a two degree drop in temperature, but lower temperatures significantly decrease the heating bill.

Lighting. Convert to high lumen-low energy lighting. The conversion expense is usually paid back within only one to two years due to reduced power and labor costs.

Postage & Mailing. Many meeting notices and information can be distributed to residents by way of flyer boxes like the ones used by real estate agents.

Develop an HOA Website. Enjoy HUGE communication savings with your own HOA website. Post important information like the governing documents, newsletters, meeting minutes and rules. Use email for maintenance and information requests so the information is moved quickly to the right person with a date stamped record. Poll your members on important issues or proposed policies. Notify them of meetings and other events. An HOA Website is probably the best move your HOA can make to improve efficiency and reduce costs.

Preventive Maintenance. Catch problems when they are small enough to resolve cheaply by regular property checklist inspections. Of particular importance:

Carpet Cleaning: Professionally clean common area carpet at least once a year to prolong its life.

Elevators: Do an annual inspection of the shaft, pit and equipment room with the contractor to ensure that proper maintenance is being performed.

Gutters & Downspouts: Clean at least annually prior to winter or rainy season; clean out underground drains as needed.

Lighting: Convert to high lumen/low energy bulb alternatives to reduce supply, labor and energy costs.

Moss & Algae Removal: Pressure wash walking areas for slip safety.

Paint: Use only the highest quality paint suitable for the application for maximum performance and durability.

Pool Filters: Replace cartridge type filter with low maintenance sand filter; usually pays for itself within 1-2 years.

Roofs: Inspect and clean annually prior to winter or rainy season; look for obvious problems like missing shingles, breaks in the membrane; contract with a roofing contractor to perform this function automatically prior to winter.

Sidewalks: Inspect annually for tripping hazards; grind down or remove and repour.

Trees: Prune trees every 3-5 years to eliminate deadwood, enhance shaping and identify treatable diseases and pests. Install a "No Turf Circle" around each to protect against landscape equipment damage that will tear the bark and kill the tree.

Energy Savings.

Furnace Filters should be checked every two weeks during cooling seasons and every month during heating season. Dirty filters should be cleaned or replaced.

Heat Pumps require annual checkups to maintain peak efficiency. Research shows that if your refrigerant level is just 10% less than what it should be, your system's efficiency can be decreased up to 50%. Consider obtaining a service agreement with a licensed air conditioning contractor or dealer to assure peak

Efficiency of your heat pump.

Do a side by side usage comparison for all your utilities for previous years/same period to detect fluctuations in usage. This is especially critical with water since underground leaks can go undetected for long and expensive periods of time.

Set air conditioners at 78-80 degrees during the cooling season and 68-70 degrees during the heating season. Install a clock thermostat to reduce night time requirements.

Use ceiling fans, portable fans or whole-house fans instead of air conditioning.

Handyman Services. For HOAs that can't afford a full time maintenance person, contract with a licensed, bonded and insured handyman who can perform a monthly "laundry list" of small repairs. Combine tasks to provide a full day's work.

Wood Fences. Use a stain rather than paint since stain won't peel and requires less frequent maintenance. For cedar & redwood: Leave unpainted to age naturally. No stain, paint or sealer required. Use steel pipe instead of wood fence posts that don't rot.

Paint Supplies. Discuss special pricing options with local paint supply companies. If your HOA is large enough, it may qualify for contractor pricing.

Sidewalk Repair. Use a grinding service to repair walkway uplifts and tripping hazards instead of the replacing the concrete.

Siding.

Hardboard When replacing hardboard siding, consider a cementaceous siding like Hardiplank which is both fireproof and has at least twice the useful life as plywood.

Vinyl The quality, color, selection and durability has improved in recent years. Vinyl eliminates the need for cyclical painting. Keep the color selection neutral as it lasts a long time.

Water Usage - Interior.

Submeter water where possible when the homeowner association is paying the water from a master meter so cost can be allocated accurately to users.

Repair leaking toilets, faucets and shower heads with an association sponsored inspection and annual repair program. The cost to repair a couple of toilets is cheaper than paying for wasted water.

Water Usage - Exterior.

Install a sprinkler system with a rain sensor to eliminate unnecessary cycles.

Early morning sprinkling reduces water loss from evaporation.

Adjust sprinkler heads frequently so water lands on the vegetation, not the paving.

Set mower blades to at least three inches. Grass roots grow deeper and hold soil moisture better than a closely-clipped lawn.

Avoid over fertilizing the lawn Fertilizers increase the need for water. Apply fertilizers which contain slow-release, water-insoluble forms of nitrogen.

Mulch the lawn to retain moisture in the soil and to control weeds that compete with plants for water.

Plant native and drought tolerant grasses, ground covers, shrubs and trees. Group plants together based on similar water needs.

Broom clean paving and sidewalk instead of hosing them down.

As a jeweler carefully examines and sorts his gem stock, consider the ways your homeowner association spends its money. Cut and polish those items that aren't shining like they should. If you look closely, you will indeed find diamonds in the rough.

For more cost cutting hints, see www.Regenesis.net

Published: July 9, 2003

Use of this article without permission is a violation of federal copyright laws.

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Richard Thompson owns Regenesis, a management consulting company that specializes in condominium and homeowner associations. He is a nationally recognized expert on HOA management issues.

Regenesis publishes The Regenesis Report, a monthly newsletter for HOA boards, developers and managers. To subscribe, go to Regenesis.net. He can be contacted by email at .