Article Courtesy of The Orlando Sentinel
By Pamela Dittmer McKuen
Published July 22, 2018
As the sights and sounds of swimming pools, landscapers and roofers tell,
community associations are operating in summer mode.
But it’s not too early for boards and finance committees to think about their
2019 budgets. Hiring contractors and experts, writing specifications and
gathering prices take time, and the numbers have to be in order for final
approval before the end of the year.
We asked several industry veterans for advice on how associations can get the
biggest bang from their limited assessment dollars. Here are their thoughts on
insurance, energy savings, reserve investments and more.
Fine-tune your insurance coverage. Your best insurance policy isn’t the cheapest
or the most expensive. It’s the one that precisely matches your association’s
needs and value.
If you haven’t had an insurance appraisal done in the last five years to verify
the dollar limit on your policy, consider having one done, said insurance broker
Karyl Dicker Foray, an association specialist at Rosenthal Brothers Inc., in
“If you are overinsuring your buildings, you are spending too much money,” she
said. “If you are a condominium association, the Illinois Condominium Property
Act requires that you be insured to 100 percent replacement cost at all times.
You might be uninsured.”
More insurance tips: Save money by increasing your deductible to $5,000 or
$10,000 and buying umbrella liability coverage from a carrier that specializes
in associations. Also, a combined fidelity and directors-and-officers policy can
cost less than two separate policies.
Loyalty can pay off more than going out to bid every year, she said.
“Often, your current carrier can offer you lower premiums if you stay with them
for multiple years,” she said.
Hire a construction manager. Repairs and installations are expensive. Do-overs
can double the original cost. Jobs designed to thwart water infiltration are
“On both large and small projects, it’s worth every penny to have someone
knowledgeable making sure the workmanship is done correctly the first time,”
said Daniel Baigelman, architect at Full Circle Architects in Highland Park.
Convert extra square footage to revenue. Empty retail spaces and underutilized
common areas can be repurposed into storage and locker space that can be rented,
Bulk up your internet and cable. Faster speeds and newer technology at lower
price points are appearing on the market. Associations purchasing these services
in bulk can achieve better rates over their residents who pay individually, said
Mark Durakovic, a principal at Kass Management Services in Chicago.
Manage water usage. Durakovic is full of recommendations: Leak detection and
repair, low-flow toilets, low-flow and sensored sinks, water-efficient
irrigation systems and scheduling practices for landscaping.
Overhaul heating and cooling. Replacing aging HVAC systems and boilers with
modern high-energy equipment can pay off.
Energy consultants and utility companies can help identify free auditing
services and potential rebates for energy-efficient upgrades, said Brian Butler,
vice president of property management at FirstService Residential Illinois in
Consult your reserve study. It will tell you what capital projects lie ahead,
how much they’ll cost and how much money you should be setting aside for the
time it is needed. Adjust your budget now, so you can avoid special assessments
and bank loans, said Steven Silberman, certified public accountant and partner
at FSB&W LLC in Lincolnshire.
Add a contingency amount. Having a little extra money on hand means surprises
like heavy snow and utility spikes won’t disrupt your budget, Silberman said.
Borrow money now. Interest rates are expected to continue their upward trend,
barring any economic setback, said Timothy Haviland, senior vice president of
commercial lending and the community association loan program at Inland Bank and
Trust in Oak Brook.
“For associations that do not have sufficient reserve balances on hand, now is
the time to address deferred maintenance with a common element repair loan,” he
Compare investment returns. Some money markets are paying higher interest than
certificates of deposit, Haviland said.