agenda 03 06 08

Residents Voice 1

LWVMarch 06, 2008Residents Voice

03/06/08

Residents Voice 203/06/08

“Following the Money”

3/06/2008

Tonight’s Subjects !• “Review of our Management

Contracts?”

• “Can the Boards Control Our Assessments?”

Residents Voice 3

Management Contracts

C. Grundke

03/06/08


Management Agreement!

• Each Mutual, 3 housing mutuals and GRF, has a unique Management Agreement. They are all different in such areas as the Incentive Plan.

• At this time, only the Third Housing Mutual has committed to renegotiate the contract with PCM.


% Increase for 2002-2007

0.00% 0.00%2.83% 1.83% 2.70%

5.26%

53.33%

1.63%

0%

10%

20%

30%

40%

50%

60%

2001 2002 2003 2004 2005 2006 2007 2008

% Inc

74%


Total $ per Year$200,000 increase 2006-2007

324 324 333 339 348 367

562 572

$0$50

$100$150$200$250$300$350$400$450$500$550$600

2001 2002 2003 2004 2005 2006 2007 2008

year

K D

oll

ars

K $ Total-


$/M/Mo

$2.12 $2.12 $2.18 $2.22 $2.28 $2.40

$3.68 $3.74

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

2001 2002 2003 2004 2005 2006 2007 2008

$/M/Mo


What Should We Look For?

• Controls:– Duration of Contract:

• Yearly rather than 5 years.

– Justification for increased Management Fee.– Yearly review of Managing Agent

performance.– Incorporate employee perks in Management

Fee.– Common controls across all Mutuals.



• Removal of limitations:– Boards should be able to do the work of agent

in a reasonable manner:• No direct control of employees by Owners.• Review and justification of performance and

service levels should be within the scope of the Resident/Owners/Directors.

• Review of Financial Records should be made available to the Resident/Owners.



• Available Information:– “Red Book” (is now available when asked for)– Complete “Yearly Ledger” data in common

digital form.– “Lag Time” report published in digital form.

Residents Voice 11

Can Boards Control Costs

C. Grundke

03/06/08


Can Boards Control Costs?

• Only if they are aware of the costs;– Current Budget Process is not adequate.– PCM must open the books.– Directors, Board Representatives and Owners

must scrutinize the complete ledger.


What costs are we talking about;

• Credit Cards, • Employee Reimbursements, • Employee Incentives, • Broadband, • Nursery, • Gate Appearance,• Development Planning,• Clubhouse #2,


THE END

agenda 03 06 08

Technology