As co-op and condo boards struggle to reduce their buildings’ carbon emissions enough to satisfy Local Law 97, many have used generous incentives and tax breaks to defray the cost of installing rooftop solar panels. But a new study suggests that while the well-off are taking advantage of tax incentives, the less-well-off are missing out.
The report from Columbia University and the think tank Win Climate reveals that homeowners with incomes over $50,000 are two-and-a-half times more likely to have rooftop solar panels than those who earn less than that. Additionally, only 5% of the state’s tax credit subsidies for solar panels have gone to households earning less than $50,000, according to an analysis of data from 2010 to 2022.
“The overwhelming majority of that money is going to wealthier people, but it’s actually bypassing the people who need it most,” Juan-Pablo Velez, executive director of Win Climate, tells Gothamist.
Established in 1998 and amended in 2006, the state’s solar tax credit offers homeowners who install rooftop solar panels a credit covering 25% of the cost, up to $5,000. The goal of the credit was to increase the use of a sustainable energy source and make solar more affordable to the most energy-burdened households. The new report shows the latter goal is not being met.
(Under the federal Inflation Reduction Act of 2022, New Yorkers who invest in solar or battery storage for their home may qualify for the Residential Clean Energy Credit, which equals 30% of the cost for projects installed between 2022-2032.)
The state Residential Solar Tax Credit Reform Act, a bill introduced last year in Albany, aims to make the subsidy fully refundable and double the eligible amount to $10,000. The bill has the support of the New York Solar Energy Industries Association, which submitted written testimony to the state Senate in February calling the current credits “inaccessible to low-income families and retirees.”
The new report estimates that legislation reforming the credit could assist more than 60% of the state’s 1.4 million energy-burdened homeowners — people who spend more than 6% of their annual income on energy.
Have you ever met someone and liked them immediately? Not in a romantic way, but in a connected, warm, “gosh, I’d love to have coffee with that person” way?
Some people are just likable. Others seem to think well of them without much effort on their part. And being likable can have its benefits, says Jenny Woo, founder and CEO of Mind Brain Emotion and creator of 52 Essential Relationship Skills, an emotional intelligence training game. “It does have a payoff, and it matters,” she says, noting that being likable helps you connect with others. When you can do that, you can communicate better and connect with people who are different from you, both of which can help you be more effective in the workplace.
But there’s a fine line between working on your likability and ease of connection versus people-pleasing, which can be detrimental, she adds. And it might not be surprising that likable people have some habits and traits that help them connect.
In the workplace, Woo says likability increases when people give credit where it’s due. “It’s about sharing the spotlight,” she says. While someone might not be conventionally gregarious and outgoing or might have a difficult personality, giving credit to someone who worked on a project or came up with an idea makes them feel valued—and that goes a long way toward likability.
THEY ARE AUTHENTIC
Showing up as who you truly are can enhance your likability, says executive coach J. Victor McGuire, founder of Coaching for Everyone, a nonprofit organization that offers affordable, high-quality coaching programs to BIPOC (Black, Indigenous, and people of color) individuals. “People are generally drawn to individuals who are genuine and who are transparent,” he says. “Coaches who are authentic in their interactions, for example, seem to be more trustworthy and relatable.” Authentic people may be seen as more trustworthy and reliable, too.
THEY ARE CARING AND EMPATHETIC
McGuire says that people tend to like others who are caring and empathetic. When you show other people that you care about their well-being and feelings, you become more likable, he says, adding, “This helps build a strong, trusting relationship with others.”
THEY ARE GOOD AND ACTIVE LISTENERS
Being a good listener and helping people feel heard also enhances likability, King says. He builds rapport through listening and being curious. “[N]ever interrupt unless you are adding on to what they are saying and agreeing with them—and after you interrupt, you have to hand the microphone back to them. Many interruptions are self-serving,” he says. Another tip: Make sure that you are asking at least one question about the other person for every three times you talk about yourself. “This helps maintain balance, and creates the feeling that you actually care,” he says.
THEY’RE GOOD COMMUNICATORS
People tend to like you more when you’re straight with them—even if the news isn’t great. That’s according to a 2023 study published in the Personality and Social Psychology Bulletin, which also reveals that ambiguity can hurt your likability, as it may be perceived as a way to dodge the truth. The study found that when people are ambiguous with their language, even when it’s to “soften the blow,” others make personality judgments about them, finding them less warm, less extraverted, and more cautious.
WHAT’S NOT TO LIKE ABOUT LIKABILITY?
There is an important point about likability that can’t be ignored, Woo mentions. It’s an area where bias can creep in. “You absolutely have to be mindful” of stereotypes and biases that exist, she says, “whether [they’re related to] your gender, your preferences, your culture, heritage, how you look, your race.”
Some people feel like they need to “code switch” or hide or change some aspect of themselves to fit in or not seem threatening. That can take its toll, Woo says. However, that awareness can also help you handle issues when they arise—and leave a memorable impression when you break through stereotypes or preconceived notions and achieve connection and understanding, she says.
And that concept cuts both ways. We should look for such biases in ourselves. “Being open to new ideas is also about being open to other people’s ideas and opinions,” Woo explains. When we find ourselves not liking a person, it’s important to explore why. Sometimes there are legitimate reasons, Woo adds, but sometimes the issues are rooted in different cultures, communication styles, or other issues that can be overcome when we’re aware of them.
By Madeline Hay, CAMICB’s Director of Exam Administration
The Community Association Managers International Certification Board (CAMICB) is poised to usher in a new era for the Certified Manager of Community Associations (CMCA) exam, offering a revamped blueprint that mirrors the dynamic landscape of association management across the globe. These changes, stemming from a thorough job analysis study conducted between 2021 and 2022, reflect an evolution in the core competencies required by community association managers worldwide.
Job Analysis
Job analysis is the cornerstone of ensuring that the CMCA exam remains an authoritative assessment tool, reflecting the contemporary roles and responsibilities of association managers. This comprehensive study involved a multifaceted approach, dissecting the complexities of association management to chart a revised course for the credential.
The task of redefining the blueprint through job analysis was a colossal undertaking spanning 18 months. The comprehensive study involved 13 project phases, including reviews of over 100 primary source documents, survey responses from 3,000 managers around the world, and more than 90 hours of collaborative meetings with 55 subject matter expert volunteers. Notably, 20 of these experts were sourced internationally, reflecting the global significance and diverse perspectives encompassed in this endeavor. This validation process ensured that the CMCA exam blueprint aligns with the real-world experiences and challenges faced by professionals in the field.
Updated Blueprint
The job analysis study resulted in an updated blueprint that encapsulates the requirements of modern community association management. Notable changes include a reorganization of job tasks and knowledge into six principal categories compared to the previous eight, allowing for a more cohesive representation of the industry’s nuances.
For instance, content previously segregated into distinct categories, such as “Budgets, Reserves, Investments, and Assessments” and “Financial Controls,” will now be consolidated under broader headings like “Financial Management” and “Risk Management.” This streamlined approach better reflects the multifaceted nature of association management, presenting a more cohesive and holistic assessment framework for aspiring CMCA candidates.
One of the findings of the job analysis study was a significant emphasis on meetings and events in the daily responsibilities of early-career managers. Consequently, the exams will see an expansion of the “Meetings and Events” domain from 10% to 18%. Furthermore, “Property Maintenance” and “Risk Management” will increase by 3% and 4% respectively, while “Contracting” reduces from 13% to 10%.
Notably, the human resources domain, constituting 6% of the current exam content, will no longer feature in the revised blueprint.
Current Blueprint (Remains Until December 2024)
Topic Area
% of Exam
1. Meetings
10
2. Governance, Legal and Ethical Conduct
23
3. Budgets, Reserves, Investments, and Assessments
15
4. Financial Controls
11
5. Risk Management and Insurance
11
6. Property Maintenance
11
7. Contracting
13
8. Human Resources
6
Total
100
Updated Blueprint (Starting in December 2024)
Topic Area
% of Exam
1. Meetings and Events
18
2. Governance and Compliance
23
3. Financial Management
20
4. Risk Management
15
5. Contracting
10
6. Property Maintenance
14
Total
100
The CMCA Candidate Handbook and the CMCA Study Guide have been updated to reflect the revised blueprint. The current Handbook and Study Guide – valid through December 2024 – will remain on http://www.camicb.org through the end of December. The updated Study Guide and Handbook are also now available on the website. After December 2024, only the updated Study Guide and Handbook will be available.
Managers planning to test before December 2024 should refer only to the current Handbook and Study Guide. Managers planning to test after December 2024 should utilize only the updated Handbook and Study Guide.
Looking Ahead
The redefined CMCA exam blueprint, meticulously curated through a comprehensive job analysis study, embodies CAMICB’s commitment to elevating industry standards.
These changes are not merely cosmetic but serve a foundational purpose—to ensure that the CMCA exam genuinely reflects the essentials of community management worldwide. The blueprint revisions align the exam content with the ever-evolving needs of the profession, encapsulating the industry’s best practices, irrespective of geographic nuances.
Stay tuned as CAMICB offers more in-depth exploration of the blueprint throughout the next year leading up to the December 2024 change, symbolizing a leap forward in certifying the finest professionals in community association management.
Questions regarding the launch of updated forms of the CMCA examination may be forwarded to info@camicb.org or call 703-970-9300.
A majority of employees in the United States want employers to cover their commute expenses if they are expected to return to the office, according to a new survey.
Ringover’s survey of 1,038 employees revealed that 96.3% are willing to compromise if provided with benefits that would make the return to work (RTW) more pleasant.
The most sought-after benefit among these employees is a paid commute, according to 83.2% of respondents.
The daily commute is one of remote employees’ “most obvious” challenges when returning to the office, said Ringover, noting that longer commutes can disrupt work-life balance and lead to burnout.
Additional pay requested for office return
In addition to perks, employees in the United States also said they would comply with an office-return policy if this meant getting a higher salary.
According to the Ringover survey, nearly half of employees want to be paid an extra $5,000 to $10,000 annually for returning to the office.
The findings come as 29% of employees reported receiving mandatory office-return instructions, while another 38% said they were “heavily encouraged.”
Only 17% of the respondents haven’t received an office-return mandate, while 14% said their related policy was optional.
A majority of people leaders across the world are starting to evaluate employees based on skill, citing its impact on retention and diversity, according to a new report.
Salesforce data revealed that 82% of people leaders believe that skills-based experience is highly important when evaluating candidates.
It comes as 98% believe that shifting to skills-based hiring provides business benefits that include:
Talent retention (56%)
Increased workforce diversity (48%)
Knowledge sharing (46%)
Skills-based hiring is a growing workplace trend that experts say could widen employers’ talent pools and help fill job vacancies.
Digital skills in demand
According to the report, two in five people leaders name digital skills as the most important candidate attribute, saying that it has a positive impact on:
Increasing productivity (47%)
Better team performance (43%)
Improved problem-solving skills (40%)
They added that in the wake of AI and automation, the following skills will grow more important in the workplace:
Soft skills will also be more important, such as imaginative skills (56%), customer relationship skills (53%), and leadership skills (51%).
Digital skills lag in workforce
However, the report also discovered that the workforce has yet to catch up with evolving skills, particularly on generative AI, looked for by candidates.
Four in five employees said they use digital skills in their daily work, but only a few of them said they have skills beyond collaboration technology, digital administration, and digital project management.
Only one in 10 of the respondents said they use AI in their day-to-day activities, according to the report. It also found that only 14% said their role needs skills such as encryption and cyber security, while a smaller 13% claim to use coding and app development skills.
The findings indicate that upskilling will likely be a necessity in the future, as also predicted by various organisations in the wake of AI and automation.
Salesforce’s report also revealed that 97% of global workers believe businesses should prioritise AI skills in developing them, as about 60% said they feel excited of using generative AI for work.
The report surveyed a total of 11,035 working adults across 11 countries, including Australia, Singapore, USA, India, among others.
Q: We live in a small, no-pets Westchester County co-op. Our upstairs neighbors were recently allowed to acquire an emotional support dog. The dog runs back and forth for 30 minutes at a time, and it frequently scratches a bedroom rug, waking us up throughout the night. We have shared our concerns with the neighbors, and they seemed receptive, but the problem persists. How can we balance the rights of people to have emotional support animals with our right to live peacefully?
A: As long as this dog isn’t biting people, it’s probably not going anywhere, replies the Ask Real Estate column in The New York Times. This is borne out by recent events in an Upper West Side rental building, where a tenant has sued two of his neighbors after their emotional support dog allegedly attacked him the building’s elevator — and was involved in altercations with a dozen other residents, staffers and delivery workers. If the lawsuit succeeds, the support dog will surely be living elsewhere.
Support animals are protected accommodations under county, state and federalfair-housing laws. Your co-op board could be liable for discrimination if it is found to be hostile to this dog owner, and so could you. So tread lightly.
“A neighbor can be sued in Westchester,” says Andrew Lieb, a New York housing discrimination lawyer, noting that the law allows your neighbor to sue you for emotional distress and attorneys fees. “If I was the neighbor and wanted to do something (about the support animal’s behavior), I would go on a nice campaign.”
Legally, the building cannot charge extra fees to this resident or limit the dog’s size or breed. Focus any complaints you have on elements of the situation that violate your building’s rules, such as unreasonable noise. You could use a decibel reader to show how loud the noise is and how long it lasts, to establish that it is unreasonable. Then make a complaint to your co-op board so the sound can be mitigated.
You can also check the building’s bylaws to see if your neighbor has sufficient carpeting. Some buildings require residents on upper floors to have 80% of the floor carpeted.
Support animals require no special training, and they’re different from service animals, such as seeing-eye dogs that assist blind people. And despite widespread reports of people seeking approval of emotional support animals in order to circumvent no-pet policies, the laws are loaded in favor of people who seek an accommodation from their co-op or condo board. Yet, there are limits.
“Emotional support animals are protected,” says Jonathan Roman, a real estate lawyer who practices in Westchester, “but they still need to obey any house rules.“
CARROLLWOOD — Dick Woltmann will be at the tennis courts.
Or with his grandkids in St. Petersburg.
Or riding a bike in Portugal this summer.
But his heart will always be in Carrollwood Village.
Woltmann, who will turn 80 this year, is ready to enjoy retirement — from the two jobs to which he’s dedicated the past 40 years.
First, as president and chief executive of Bay Area Legal Services — a nonprofit law firm that provides free civil legal services to low-income Tampa Bay area residents. And secondly, as president of the Carrollwood Village Homeowners Association Board of Directors — which he was for the past 35 years.
“I don’t know if I’ll miss it,” Woltmann said, “but I have three grandkids, I’m going to play tennis, I’m going on a bike ride in Portugal in the summer, so I want to do some things I haven’t done, so I’m freeing my time up with the HOA and my job.
“The job of the president of the homeowner’s association is to lead the board and get a decision made on a topic or an issue or opportunity — the object is to get the discussion going and they make the decision.
“All you can do is identify the opportunities and options, get to a consensus of the board that suits the majority of the community, but do it in a civil, cordial way.
“I tried to help make the best decisions and I thoroughly enjoyed it.”
Carrollwood Village has three phases of the large community, each with thousands of houses encompassing different aspects of the neighborhood. Woltmann spent 37 years on the Phase I board after moving to Carrollwood Village in 1985.
In that time, he has overseen a multitude of changes and improvements to Carrollwood Village, some under Phase I’s purview and others in the nearby adjoining phases.
For Woltmann and Phase I, with its approximately 1,300 homes, some of the things they have undertaken is installing pickleball courts at Dan Ruskiewicz Field or working on aesthetics of Carrollwood Village Drive by planting oak trees that will eventually give the road a canopy effect.
He tackled issues such as safety along the streets and sidewalks, including overseeing the initiative of the community raising money to connect all the sidewalks and fill in the gaps. While on the board, they worked to get the Florida Highway Patrol to monitor the roads and get speedy drivers to slow down, as well as get cameras installed to help with incidents along the roads.
In that time, he also saw the installment of amenities such as the Carrollwood Cultural Center, Carrollwood Village Park and VISTA Gardens, though none of these falls under Phase I.
“Without safety,” he added, “all other aspects of what, I think, a board should be about fail. Without all the subcommittees, like the Safety Committee, we wouldn’t have been able to do what was necessary for Carrollwood Village, to improve the neighborhood, to keep it great so people want to continue to live here.”
One of the most significant parts to his HOA career was when the now Carrollwood Village Country Club was going through multiple owners and disarray through the 2000s and into early 2010s.
The course, which was Carrollwood Village Country Club when built in 1972, kept seeing owners switch hands quickly, to the point where the course was very close to being fenced in. However, it was the Phase I board’s work with the current owner, the California-based Concert Golf Partners, which kept the course open, running and thriving.
Woltmann, the board, and Concert Golf chief executive Peter Nanula, a Tampa Jesuit graduate, worked together on the sale, which would need county commission approval. Those leaders would spearhead making sure all Phase I residents’ concerns and questions were addressed before the purchase was finalized, with overwhelming approval from both the community and county commission, in 2013.
“What we have tried to do is improve, continuously, the quality of life of people who live in the Village,” Woltmann said. “The big job of a leader, anywhere, is to look for threats and opportunities.
“In the case of (the golf course), it was both a threat and an opportunity that needed addressing and could improve the Village. The commission had never seen a community and a company work so well together, but it worked out to the benefit of all.”
Woltmann, however, will be missed, as other longtime board members and influential leaders in Carrollwood Village praised his leadership style.
“Dick’s style has always been cool, calm, supportive, reflective,” Phase I VP and president of VISTA Gardens Jennifer Grebenschikoff said. “He encouraged all of us board members to follow our interests and passions, on behalf of our homeowners. Carrollwood Village would not be what it is today without his years of leadership.
“Going forward, newer board members will be able to pick up and continue to build upon the foundation that Dick has laid for us.”
Woltmann, added Grebenschikoff, leaves a legacy of improvements and implementing assets such as “area landscaping and lighting, maintaining the soccer fields and installing pickleball courts,” which gives the community “the energy to thrive and grow.”
But, in the end, Carrollwood is still where one will find Woltmann.
“I won’t give (the new board) unsolicited advice, but if someone asks me, I’ll let them know what I think — I’ll still be around, but I just won’t be someone who is hanging around,” he said with a laugh.
“I’m going to enjoy retirement, but a rocking chair just isn’t part of that equation.”
Silence may be golden, but sometimes it comes at a cost. When you stay quiet, you can’t effect change. Holding your tongue means internalizing your feelings. Silence also keeps you from building meaningful relationships. From physical, emotional, and productivity standpoints, silence can undercut your ability to do things and do them well, says Elaine Lin Hering, author of Unlearning Silence: How to Speak Your Mind, Unleash Talent, and Live More Fully.
“It’s ‘suffering in silence,’” she says. “The feeling of not being able to say something keeps our nervous systems on chronic high alert, which our bodies were not meant to do. You get compromised immune systems or some tangible health impacts.”
Staying silent also keeps you isolated. You internalize the message that you’re the problem. “If we’re staying silent, there is no opportunity for connection,” says Hering. “There is no opportunity for course correction. There is no opportunity for good intentions to translate into positive impact. Until we solve for silence, we’re not actually going to reap the benefits of all that other work and investments around our skills.”
WHY STAY SILENT?
So, why many of us tend to keep quiet? Silence is a control technique, says Hering.
“We learned it far too early,” she says. “From the time you were sitting at the dinner table, and someone shot you a look that said, ‘That’s not appropriate’ or, ‘We don’t do that around to here.’ Some of that is warranted, and other times it teaches you to edit out parts of yourself because they’re not welcome in the context that we’re doing.”
In adulthood, silence can be taught in the workplace, often subconsciously. For example, you may learn to keep your ideas to yourself if you offer them during a meeting and they go unacknowledged. Another way silence is valued at work is if your boss or your boss’s boss never pushes back on the CEO.
“It’s what organizational psychologists call ‘organizational silence,’” says Hering.
UNLEARNING SILENCE
The first step is to understand that silence is a learned behavior. Then you can start to challenge your assumptions and figure out which are operating as norms, says Hering. Ask yourself, “What assumptions do I hold about when it’s okay to use my voice or whether I even have a voice?” Also ask, “What behavior around speaking up is allowed or valued here?”
Once you call attention to the assumptions that have been driving your actions, ask yourself, “How well do these assumptions suit the person I want to be? The leader I want to be? And the workplace team I want to create?”
“What am I perpetuating?” asks Hering. “In what ways am I actually silencing myself that I might not have realized? What requests might I make of the people around me to build more of a culture of voice rather than silence? Then, make intentional choices going forward from there.”
LEARNING TO SPEAK UP
Speaking up involves courage, but courage alone is not sufficient. “Traditional speak-up advice says, ‘Be more courageous. Be more confident,’” says Hering. “I’d argue it is also a matter of calculation. Does it make sense for me to speak up? Is it worth it? To me, that is the power of unlearning silence.”
Hering says you can determine if it’s worth it by asking yourself three questions: What are the costs of choosing voice? What are the benefits of staying silent? What makes sense for me?
“As we look at the cost of choosing voice, we often overprioritize the immediate short-term discomfort,” she says. “We think, ‘I don’t like the feeling of that awkwardness or that potential discomfort, therefore, I’m not going to have the conversation.’ What we fail to realize in that calculation is, what are the costs if I don’t have the conversation now? Because usually problems don’t go away by themselves, and things get worse over time.”
Instead of just weighing short-term costs, Hering suggests looking at long-term costs, too. There are times when silence makes sense, such as preserving your own peace, energy, self-care, and survival.
“All of that is legitimate,” she says. “Each of us gets to have agency to make our own choices, because only we know all that we’re carrying.”
Whether you choose to speak up or make a calculated decision to stay quiet, understanding and challenging the silence you’ve been taught is an ongoing process. But it’s a worthy one. By learning your unconscious patterns, you can make a intentional decision about how you want to show up at work and at home.
If inflation continues to cool, the Federal Reserve could cut interest rates again this summer. While that might persuade some co-op and condo owners to get off the sidelines and put their apartments up for sale, the shortage of inventory will probably persist for years, according to Jonathan Miller, president and chief executive at the appraisal firm Miller Samuel.
“Interest rates can’t fall low enough for inventory to flood into the market,” Miller tells Brick Underground. “Because rates will be lower, there’s going to be an increase in demand. We’re running at such a deficit that in terms of supply, I think this is going to take years for existing inventory [to catch up].”
New York City’s sales market slumped in 2023 as increased mortgage rates limited financing options for buyers and encouraged sellers to stick with their lower rates. Those factors are still at play today, even as the 30-year fixed mortgage rate has dropped, sinking below 7% this week to 6.95%, Bankrate reported.
“There’s already more inventory coming in because rates are lower,” Miller says. “But at the same time that rates are falling and enticing more sellers to come in, there’s more buyers because rates are lower. It’s offsetting.”
There were 14,740 homes available for sale in January of this year, well below the 15-year peak in October 2020 of 22,153 units, according to StreetEasy data cited by the New York City Comptroller Brad Lander. Over the same period, the median home price has risen from $675,000 to $785,000.
As Miller sees it, the good old days of historically low interest rates are history — the kind that’s unlikely to repeat itself. “It’s a better year in the sense that rates are coming down or have come down from 2023 highs,” he says, “but it seems wildly optimistic to think that they’re going to go anywhere near where they were during the pandemic, in the neighborhood of 3% or 4%.”
The bottom line of the city’s chronic shortage of apartments for sale?
“Housing is, in the near term, going to be more expensive than it has been over the last decade or so,” Miller says.
Community association managers wear many hats and have to be well-versed in a wide range of skills, all of which are equally important. One component of a manager’s role is to completely understand the financial aspects of running a business – this means knowing and interpreting the financial pieces as well as the nuances that come along with the decisions being made.
“As an agent for our clients, a manager’s duty includes providing advice and direction to those clients regarding their financial health and trends,” said Rob Felix, CMCA, PCAM, RS, Owner of The Felix Reserve Group. “Without such action by a manager, there can be a disconnect between what a client wants, and what they’re willing to spend to get it. Matching a client’s expectations with their willingness to raise the money to do so prevents financial paralysis in communities.”
The financial element of a manager’s job include the following actions:
Develop and implement accounts payable/receivable procedures;
Analyze and interpret the financial statements and report significant variances from the budget;
Manage association operations within the budget;
Assist in the development of the reserve study;
Assist the board in identifying funding sources for reserve expenditures;
Implement the reserve funding model approved by the board;
Provide regularly scheduled financial statements and reports to the board and members;
Provide the association financial records to the independent auditor and/or accountant;
Distribute audited financial statements to the membership and the board;
Implement investment policies of the board;
Identify investment products; and,
Document transfer of funds.
“Knowing how the money works is one of the most important services a manager provides to a Board,” said Cat Carmichael, PCAM who is the CEO of Strategy 123. First, she suggests the manager ask the Board to describe the type of community they want to have and provide the manager with a budget that is adequate to meet the mandatory and discretionary expenses to achieve the Board’s goals. Paying close attention to the monthly financial reporting tells the manager and the Board whether the plan they created when they developed the budget is working. “If the monthly income and expense statement has large variances to the budget, the manager should investigate why and report to the Board,” said Carmichael. “That way, the Board can make decisions to reduce or change expenses to align with the expected budget. In some cases, there could be a good reason why a variance exists, and the Board may decide to do nothing to change its plan. That’s OK too. It’s their community.”
Ron Duprey, CMCA, AMS, PCAM, who is a Senior Vice President at Associa explains a strong understanding of an association’s financial information is particularly important for the portfolio manager. “The portfolio manager, working with several different community associations, will likely work with many different financial situations for each of the associations in their portfolio,” said Duprey. “Each may experience different financial challenges and require multiple solutions to solve those problems. The ability to grasp and understand the financial problems, suggest solutions and help the Board reach the best outcome can impact the financial stability and value of the properties in a community association well into the future.” Duprey noted that he believes the most important situation impacting community associations falls under the budgeting assessments for owners.
Demonstrating Financial Acumen
Budgets are the business plan for the year, but Boards can amend their plans throughout the year. For example, an association may want to host social events and lifestyle programs, but none have been provided for in the budget. Carmichael says, “It’s incumbent on the manager to help the Board understand how to achieve their goals, while assuring that the association is financially viable. For example, some solutions a manager might suggest are to reallocate funds from other discretionary expenses, or determine if ticket sales and sponsorships can cover the costs of the events.”
Felix adds, “If a client determines they’ll be short in operating income for the year and are determined to withhold funding of their reserves instead of raising the assessment, a professional manager should be able to point out the potential pitfalls of taking such action and make a recommendation to the Board to avoid the negative impact.” Further, Felix explains, “Or, should a Board decide to add a costly program mid-financial year without considering how it may impact other programs, a professional manager must be able to interpret how the community is currently spending its funds, and make recommendations on how to achieve their goals and what areas may need to be adjusted accordingly.”
Enhancing These Critical Skills
Carmichael, Felix and Duprey all offer excellent advice and insight into how professional managers can enhance their financial management skills. In their words:
Cat Carmichael: Managers should begin reviewing their management agreement and understand specifically what financial services the management company provides to its clients. If you’re self-managed, discuss the scope of work that your finance department provides. Staff accountants are seldom recognized for the work they do for a community; to the observer, financial management is less visible than strictly property management. Financial professionals really like to understand how their work benefits communities, because they rarely see their efforts translate to outcomes. Ask the accounting team to describe all aspects of the financial management services they provide, including explaining how they actually do the work. How are duties separated? What other internal controls do they implement? How does that desktop check scanner actually turn a paper check into a deposit? Ask about the accounts receivable process and to show you the life of a homeowner payment, from billing to receipt to posting. Then, ask about accounts payable from the receipt of an invoice, coding to the proper general ledger accounts, and the many ways payments to vendors are made. Ask the accountants to walk you through the financial report so you can clearly understand how the results are presented, and how the different reports relate to one another. It is also very important to understand how the primary banking relationship works, from operating accounts to reserve and investment accounts.
Rob Felix: Be sure to read and fully understand each financial report a Board receives. Often times, managers are unaware of the financial position of their client because they don’t take the time to fully understand the financial reports presented to them. Ask questions of your financial manager. Prepare a variance report to the financials to explain the differences between what they’re actually spending versus what they budgeted, and why! Also, thoroughly read the last audit (if any) that was performed on the client’s financials and pay close attention to the notes section of the audit. It’s imperative that a professional manager know more than their client – that’s the value add. Nearly every manager is working with a non-profit entity, so understanding the language associated with the appropriate financial information being tracked and presented is critical, as many clients are not trained in this area.
Ron Duprey: Not everyone is a “numbers person,” which is why it’s so important to really understandbalance sheets and income statements. For a pragmatic approach to really grasping the basics I suggest a manager, not comfortable with spreadsheets or financial statements in general, first sit down and prepare a balance sheet and income statement for their own “business” of life. Thinking about their own assets or what they own that has value and liabilities of what they owe to others is a great way to understand a balance sheet. Assets less liabilities equals net worth. Net worth plus liabilities balances with assets. Hence a balance sheet. The income statement is simply the income or revenue they bring in from all sources deposited into the checking account. The check book identifies all that they spend. The difference is net income. Mentally referencing their personal financial situation is a great start to understanding business balance sheets and income statements.
Resource Corner
Making use of the wide variety of professional development resources available to managers is critical to staying on top of industry news, events, and any changes arising in the profession. Below is a sampling of industry resources.
CAI’s Education for Managers – CAI offers a series of courses specific to financial management, risk management and other topics which are covered in detail in the following courses M-100, M-200, M-205, M-206 and others. Upcoming offerings and dates can be found here: https://www.caionline.org/LearningCenter/Education-for-Managers/Pages/default.aspx
Foundation for Community Association Research (FCAR) – The Foundation supports research and develops publications on a variety of topics that can help managers develop more effective and harmonious community associations. For example, its Best Practices Reports on Financial Operations and Reserve Studies can be downloaded for free here: https://foundation.caionline.org/publications/best-practices-reports/
HOAleader.com – HOAleader.com was created to support the dedicated community of association managers and other professionals who work to realize the potential of their association—Board and committee members, property managers, attorneys, financial professionals, insurance professionals, developers, vendors, and homeowners. A free, downloadable white paper entitled HOA Finances: Best Practices For Getting Your Homeowners Association Through Difficult Economic Times is available on HOALeader.com in addition to a special report on HOA Reserves, Special Assessments, Loans & More: A Homeowners Association Board Member’s Guide To HOA Funding Options.
CAI Exchange – An online forum that allows members to collaborate and connect with colleagues. These informal discussions are extremely helpful in sharing innovative approaches to common and uncommon situations as well as best practices and advice. Financial topics range from issues arising from unexpected major expenses, to the misappropriation of funds, to reserve studies using component method funding.
Community Managers With Strong Financial Management Skills Drive Sound Decision Making For Associations And Boardsis the third in a series of articles, produced by CAMICB staff, that delve into the important issues and topics affecting community association managers.
Lydia Pelliccia is a freelance writer.Matthew Green is executive director of Community Associations Managers International Certification Board.
CMCAcorner.com 