The image of Cuba Gooding, Jr. as Rod Tidwell screaming at Tom Cruise as the titular character in the 1996 movie “Jerry McGuire” is a powerful cinematic moment that launched the catchphrase, “Show Me The Money”! All these later, I barely remember the movie but the catchphrase lingers as virtually everyone I know has said “Show Me The Money” at one time or another. While it is taken entirely out of context here, you had better believe that condominium residents expect you to show them where their money is going. How well you tell that story can be the difference between ending your story with “…and they all lived happily ever after” and “… and so the hull of theTitanic lies sunken on the ocean floor”!
Let’s begin with the state your community’s finances are currently in. Hopefully, they are in good order with all of your residents paying their fees and assessments, all of your vendors being paid on time, a healthy reserve fund, and no lingering financial clouds of doom. That is an easy story to tell – everything is just fine – happy beginning, very little drama in the middle, and a happy ending. While I wish such an ending for each and every community, the reality of hard times has jumped from the national headlines and landed in many communities across the country. If your community is experiencing financial challenges like so many, may I suggest that you get in front of the story and use your communication skills to keep residents informed and avoid adding to the problems by not telling your financial story.
The good news is that there is light at the end of the tunnel. The bad news is that light may be further away than most of us would care for. Many economists are convinced that the days of bailouts, Bernie Madoff scandals, high unemployment, etc. are set to scale back, meaning a lull in the bad news which may allow the economy to stabilize before rebounding. Many associations find themselves facing the unenviable task of taking action against residents – late fees, liens against property, even foreclosure. While these actions may seem harsh or drastic, many BODs find they are bound by their governing documents to take these actions in order to protect the rest of the citizenry. This is a great time to explain to residents how the system works. They can read the full details in the condominium documents but it is a great idea to reiterate the basic concepts so they can fully appreciate what actions are taken against their neighbors. This can go a long way to alleviate fears that the association finances are about to collapse or that some homeowners are being unfairly targeted by the Board.
Many associations are opting to borrow money to meet their financial responsibilities. Again, there is a very positive story to tell about such action. Borrowed monies ensure that the business of the association continues, even though the current economy appears sluggish. Borrowed monies are repaid over a period of years. Surely, all of us have lived through the ups and downs of the American economy before. There is no reason to think that things are not going to get better. A loan is simply an investment in tomorrow being a better day.
Finally, it is a great time to talk about your community’s accounting efforts. Bookkeepers, auditors, CPAs and others are constantly working to assess and manage your association’s finances. Choose a few selected items from your balance sheet and see if there isn’t a positive story to be told. In my community, our insurance premiums DIDN’T go up this year. After several years of increases, I thought this was a story worth telling. We locked in a two year agreement with our property management company so those fees won’t be going up this year either. These may not seem like big deals but for me they were the difference between ending our last newsletter with a listing of delinquent commons fees (where we sink to the ocean floor) and a happy ending (where we all live happily ever after). Look for your happy ending when telling your community’s financial story. And don’t be afraid when they say “Show Me The Money”. Offer them your thanks for continuing to pay their fees and assessments and look forward to your own happy ending.
Originally posted by Bob Gourley on MyEZcondo.com