CAI Winter Edition

Insight and Education for Community Associations Community Associations Institute / Central Arizona Chapter / www.cai-az.org

Forces of Nature

PLUS‌ President’s Message Myths and Misconceptions 2015 CAI CAC Event Calendar

Winter 2015

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*See full Agreement for details Winter 2015

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Forces of Nature

Winter 2015

Community Associations Institute / Central Arizona Chapter / www.cai-az.org

Features 14

Departments From the Chapter Board President ....... 4

When it Rains, It Pours

President’s Letter

By Michael G. Wales, Carpenter Hazlewood, Delgado & Bolen, PLC

16 Mosquitos

From the Chapter Executive Director.... 5

18 When Flooding Isn’t Covered

Community Spotlight .......................... 6

Chapter Executive Director’s Letter

By David L Deeney

Desert Ridge Community Association

By Audra Purdie, CIRMS

16

19 Preventing Storm Damage

By Fernando Torres

22

New Members ................................... 10 Welcome to the Central Arizona Chapter!

20 Hiring a Public Adjuster

By Bruce and Stacy Horowitz

21 Preventative Planning &

Damage Cleanup from a Community Manager’s Perspective

By Tabatha Rook, CMCA, AMS

22 Just In Case

Annual Sponsors ............................... 26 2014 Annual Sponsors

Congratulations Corner ..................... 28

2015 CAI CAC Event Calendar

Diamond Corner ................................ 31

23 “Fool Proof”

Showcase of Top Sponsors

Flood Forecasting

Product and Service Directory .......... 32

By Rebecca Herro

24 Microbursts Can Cause

While efforts to ensure accuracy are exercised, the publisher assumes no liability for the information contained in either editorial or advertising content.

MEGA Challenges

By Saundra McCarrell with Liz Foutz Contributing

By Michael Frank

CAI Events ......................................... 12 December Luncheon Summary 2014 Leisurely Golf Extravaganza

Calendar of Events ............................ 30

By Robert Pocano

25 Knowledge is Power

Myths & Misconceptions ..................... 8

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Valhalla Community Magazines www.Valhalla360.com

For advertising and editorial information, please call Valhalla Community Magazines at (480) 634-1708.

Winter 2015

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From the president Community Associations Institute Central Arizona Chapter

President’s Letter

2015 Board of Directors

By Mark L. Wade, CMCA, AMS, PCAM, LSM

I’m impressed with all that has happened within this organization over the past several years. I think it’s important that we glance in the rear view mirror from time to time and remember our successes and challenges. While it is important to look in the rear view mirror from time to time, we should spend the bulk of our time looking out the windshield watching where we’re going and making plans to get there.

In our CAI chapter, we are fortunate to have many great volunteer leaders – some are association board members, some managers, and some business partners. You have devoted many hours and your skills and expertise to make the Central Arizona Chapter successful.

I would like to thank you for all of your continued efforts.

I issue the challenge for every member of our chapter to be involved this next year. Let us all see your qualities that make you great. Help us to see the vision of where we’re going over the next several years and help us plan how to get there.

I look forward to seeing all of you at the events, activities and luncheons, but I especially look forward to serving with all of you to build wonderful community associations and leaders.

Mark L. Wade, CMCA, AMS, PCAM, LSM

The storms that pounded the Valley in the fall of 2014 will likely go down in the history books and also become a source of community folklore for generations to come: Remember when we went boating in the greenbelt?

Remember when a swimming pool suddenly appeared in our neighbor’s yard? Remember when the board member got stuck underwater on the I-17 and couldn’t make the meeting?

(This last one actually happened to me!)

Chapter President-Elect Linda Van Gelder ALPHA Community Management 623-825-7777• linda@alphacommunitymanagement.com Chapter Vice-President Augustus Shaw, IV, Esq., CCAL Shaw & Lines, LLC 480-456-1500 • ashaw@shawlines.com Chapter Secretary Toni Rudolph First Citizens Bank 480-624-0949 • toni.rudolph@firstcitizens.com Chapter Treasurer Jeff Reynolds, CMCA, AMS Messina HOA 602-549-5369 • jjreyno@gmail.com Chapter Directors Milan Carnes Verde Groves HOA 937-477-8652 • milancarnes@hotmail.com Jenna Perkins, CMCA CCMC 480-905-2762 • jperkins@ccmcnet.com Mary Jo Edel, CMCA, AMS, PCAM PMG Services 480-829-7400 x202 • maryjo@pmg-service.com Josh Bolen, Esq. Carpenter, Hazlewood, Delgado & Bolen, PLC 480-427-2862 • josh.bolen@carpenterhazlewood.com CAI Central Arizona Staff Kayte Comes Executive Director 602-388-1159 • kayte@cai-az.org

From the Editor...

Just when you thought an angry resident was the most unpredictable force facing your association, Mother Nature stormed into your community with a fierce display of her own!

Chapter President Mark Wade CMCA, AMS, LSM, PCAM Leisure World Community Association 480-823-0003 • mwade@leisureworldarizona.com

While the monsoon season undoubtedly spawned many interesting tales, it also caused extensive damage from which some communities are still recovering. As our goal is to keep you safe from the storm, this issue of Community Resource is filled with tips for communities, individuals and businesses to use before, during and after experiencing the forces of nature.

The Magazine Committee wishes everyone a Happy (and safe and healthy) New Year!

Jessica Maceyko, Esq., on behalf of the CAI-CAC Magazine Committee

Chapter Office 1625 E. Northern Ave., Ste. 201 Phoenix, AZ 85020 Tel: 602-388-1159 • Fax: 602-513-7462 info@cai-az.org • www.cai-az.org Community Resource Committee Committee Members Jessica Maceyko, Esq. Ekmark & Ekmark, LLC Jacob Marshall, CMCA CCMC Elaine Anghel, PCAM Tri-City Property Management Services Lindsey O’Connor, Esq. Carpenter Hazlewood Delgado & Bolen, PLC. Audra Gambill, CIRMS CAU Lydia Peirce Linsmeier, Esq. Shaw & Lines Sarah Sukta eUnify, Inc. John Kaye Our House Financial Services, LLC Magazine Editing Subcommittee Dawn Engel, CMCA, AMS Planned Development Services Kerry Lynn Goto, PCAM Great Boards

C E N T R A L A R I ZO N A C H A P T E R

Visit us online at… www.cai-az.org

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Ursula Mancuso, CMCA, AMS PMG Services Kathe Barnes, PCAM Scottsdale Ranch Community Association

From the Director

Your community is waiting to hear from you.

Chapter Executive Director’s Letter

Speak up.

By Kayte Comes, Executive Director CAI – Central Arizona Chapter

Happy New Year! Hope everyone had excellent holidays, and that all are ready to get back into CAI activities.

At the beginning of each year, the Membership/Sponsorship Committee starts an annual campaign for sponsorships. The annual sponsorship program is designed to help support the Chapter throughout the year. The sponsorships consist of marketing and event packages for the entire year. This allows for members to take advantage of the one stop shop for their year of CAI activities.

All sponsorships were created to be well below the “a la carte” price, which is an incentive to sign up early, especially for the tradeshow. Last year we sold out the tradeshow in less than two weeks.

Every annual sponsor that chose the tradeshow as part of their package had a booth. I highly encourage all business and management companies to review the revised 2015 Annual Sponsor Packet. The Committee went through and condensed ten pages into three. Basically, on two sheets you can see a comparison between all the levels. I think most members will find this more convenient and easier to read.

The sponsorship packages included the monthly luncheons, tradeshow, casino night, golf, magazine ads, membership directory ads and advertising on the website. Some even include an app for your business through the CAI app.

The goal for the revised sponsorships is to help our members participate in all events, while saving money at the same time. CAI does not believe in raising activity rates just because it is a new year. The Membership/Sponsorship

Full Color Community Magazines and Newsletters Your communication is our business.

Valhalla Community Magazines To see what our communication tools can do for your community, visit www.valhalla360.com or call (480) 634-1708.

Committee is pleased to offer such great packages below the “a la carte” pricing, and will continue to analyze future sponsorship packages to help save our members money.

CAI would not exist if it wasn’t for our members and the programs they support. This is one way of saying thank you and giving back to the membership.

Kayte Comes Executive Director CAI-Central Arizona Chapter

Winter 2015

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community spotlight

Taxing Authority – Your Association’s Tax Status Matters

By Terrance T. Smith, CMCA, AMS, PCAM and Timothy J. Nitti, Senior Auditor

I am not a tax attorney, CPA or tax expert…but I am an experienced 14 year community management industry professional, and a member of CAI for 12 of those years. During that time, I have been fortunate enough to have managed several tax-exempt, large-scale master planned communities, but prior to the Desert Ridge Community Association, each of those communities had obtained and received tax-exempt status during their inception. Community associations are “not-for-profit” by nature, but community associations with tax-exempt status today are rare, and qualifying for tax-exempt status is very difficult under current IRS requirements. Each year, CPA firms are engaged to prepare community associations’ federal and state tax returns for their board members to review, approve and ultimately file with the appropriate taxing authority, with only a very small fraction of those returns being tax-exempt.

It’s often easy to follow the status quo, especially with regards to our income taxes, and year after year, many of us charged with managing and governing our respective associations never revisit one of the most basic questions: “What is my association’s income tax status?” If your association is still filing Federal Form 1120 or 1120-H, it might be a good time to revisit whether your association’s current income tax status is still its most advantageous.

When the Desert Ridge Community Association was first established, it was set up as most other Arizona community associations are, as a “not-for-profit” corporation, but a corporation nonetheless. At the suggestion of its managing agent and CPA firm, the Desert Ridge Community Association initially explored its options and eventually pursued an application for tax-exempt status, receiving a determination letter from the IRS granting tax-exempt status as a 501(c)(4) social welfare organization on November 23, 2013. At present, that amounts to a savings of roughly $10,000 per year, but that will only increase as the association approaches build-out!

Now, while the future income tax savings are typically more immediately recognizable, an association receiving an IRS determination letter granting tax exempt status should pay special attention to the “effective date of exemption” listed on the face of the determination letter. In the case of the Desert Ridge Community Association, the IRS had granted tax-exempt status effective March 29, 1994 (the Association’s formal date of incorporation). As a result of the IRS effectively “backdating” the Association’s income tax exemption, the Desert Ridge Community Association, at the suggestion of Butler Hansen, P.C., made the decision to amend its last three previously issued annual income tax returns (IRS rules prohibit the amendment of an information return after three or more years). Why would this matter? Well,

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as a nonprofit corporation filing Federal Form 1120/1120-H, Desert Ridge Community Association had reported significant taxable income in each of those three years. By amending those previously issued tax returns, filing Form 990 in lieu of Form 1120/1120-H, the Association was able to reduce its taxable income to practically nothing, and taxes due on practically nothing are… practically nothing. Now, it is important to note that, much like the application for income tax exemption, there was no guarantee that the IRS would formally approve Desert Ridge’s amended returns.

That being said, Desert Ridge’s board received confirmation from the IRS earlier this year that amendments for all three filing years had been accepted by the IRS, and significant refunds would be issued for each of those three amended years.

As you approach your association’s fiscal year end and your board is deciding upon a CPA firm to prepare the association’s federal and state tax returns, you may want to explore whether or not your association is a good candidate for tax-exempt status. You and/or your board may wish to discuss with your CPA firm, or a CPA firm experienced in filing tax-exempt applications, whether it is likely to qualify under current IRS requirements as a tax-exempt 501(c) (4) social welfare organization, and what degree of benefit your association might expect.

Obtaining tax-exempt status as a 501(c)(4) social welfare organization may prove to be very advantageous for your association with each annual filing of its income tax returns.

Terrance Smith is Community General Manager for FirstService Residential managing Desert Ridge Community Association in Phoenix, AZ. A large-scale, masterplanned community, Desert Ridge presently has 6,388 households and will grow to approximately 19,240 households with over 50,000 residents when fully build-out.

Timothy J. Nitti is Senior Auditor with Butler Hansen P.C., Certified Public Accountants, Mesa, AZ and contributed to this article as co-author. Butler Hansen, P.C. has been providing income tax and financial reporting services to community associations for over 25 years, in addition to successfully preparing applications for income tax exemption, and currently services over 600 communities.

vf-law.com

2333 W University Dr Ste #C103 Tempe, AZ 85281 Phone: 480.448.1334 Email: Arizona@vf-law.com

Winter 2015

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Myths & Misconceptions

Myths and Misconceptions

By Lynn Krupnik, Esq., CCAL and Elaine Anghel, PCAM, AMS, CMCA

Myth: After assessing the damage caused by a significant storm and realizing several trees within the community were damaged or lost as a result of the winds, the association determines the removal and replacement of such trees will be an expense to the association not covered by insurance.

Fact: While it may be determined by an insurance adjustor during the claims process that the cost of damaged or lost trees would not be covered due to a storm, the resultant damage to common areas and or homes may be covered if it is deemed to be a covered peril in the insurance policy (wind, hail, etc.). Also, an association should check with its insurance carrier to determine whether and/or when there is any insurance coverage for damages to landscaping and, if so, what limits (in both the types of covered claims and the amount of coverage) exist. With proper knowledge, an association can take this information into account when establishing its annual budget to determine whether it should budget for contingencies that are not considered covered claims under the association’s insurance policy.

Myth: In a condominium association, the Board of Directors can refuse to file an insurance claim for damages that occurred during a storm to prevent their insurance premiums from being raised and thereby forcing the homeowner to file the claim with their personal insurance carrier.

Fact: Under the condominium act, the association’s insurance policy must contain a provision that, if at the time of the loss there is other insurance in the name of the unit owner covering the same property, the association’s insurance policy must provide primary coverage. Therefore, to the extent insurance coverage exists for the claim, the association cannot deny an owner the right to file a claim.

Myth: Because the association has insurance, all types of claims are covered, and all insurance policies are the same.

Fact: Insurance coverage can vary greatly between insurance policies, so it is very important to understand the association’s insurance coverage. For example, some insurance policies exclude claims relating to water backup coverage. Insurance policies may also have a higher insurance deductible for water claims or a cap on the amount that they will pay for ordinance coverage (which is the coverage needed to bring an old building up to code if it is destroyed to the point where it must meet code requirements when rebuilt). Failing to carry proper insurance coverage in these areas, and others, can either cost the association a significant amount of money in unexpected expenditures or potentially prevent the association from being able to reconstruct some improvements, depending on the circumstances.

The information contained in these Myths & Misconceptions is for informational purposes only and is not specific legal advice or a substitute for specific legal counsel. Readers should not act upon this information without seeking professional counsel.

Lynn Krupnik is an attorney with the law firm of Ekmark & Ekmark, L.L.C., where she has been practicing in the area of community association law since 1997. Ms. Krupnik is a member of the CAI College of Community Association Lawyers, and speaks and writes often on topics that affect community associations.

Elaine Anghel is the Vice President of Management Services of Tri-City Property Management Services, Inc. and has been in the homeowner association industry since 1993.

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This comprehensive community association management course provides a practical overview for new managers, an essential review for veteran managers and an advanced course for board members. You’ll receive a 400-page participant guide filled with dozens of sample forms and time-saving tips for working with homeowners, vendors, managers and other professionals. Successful completion of this course is the first step in obtaining a professional designation in community association management. Topics include:

z Roles and responsibilities of managers, owners, committees

OFFICIAL 2015 SPONSORS HOA Capital Advisors SenEarthCo Union Bank

z z z z z z z z z z z z

and the board Management ethics Developing, implementing and enforcing rules Organizing and conducting board meetings Preparing budgets and funding reserves Assessment collection policies and procedures Collecting delinquent payments Financial statements, reporting methods and operations Evaluating risk management and insurance programs Implementing maintenance programs Preparing bid requests and identifying key contract provisions Recruiting, selecting and managing personnel Managing sustainable and developing communities

COURSE MATERIALS Participant guide and flash drive with bonus readings and materials

COURSE LENGTH 2.5 days | 8:30 a.m.–5:30 p.m. | 8:30 a.m.–5:30 p.m. | 8:30 a.m.–noon

TUITION CAI manager member: $445 | Nonmember: $545

DESIGNATION CREDIT Successful completion of the M-100 can be the first step toward earning the CMCA credential, awarded by CAMICB. Visit www. camicb.org for details.

CONTINUING EDUCATION CREDIT Visit www.caionline.org/managerlicensing for information on continuing education for state licenses.

ADVANCE REGISTRATION IS REQUIRED Visit www.caionline.org and register for this course online.

Register online four weeks ahead and receive a $25 discount.

Winter 2015

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CAI MEMBERSHIP APPLICATION New Members

Welcome to the Central Arizona Chapter!

6402 Arlington Blvd., Ste 500 • Falls Church, VA 22042 Ph: 1-888-224-4321 • Fax: 1-703-970-9558 • Online: www.caionline.org/join MEMBERSHIP CONTACT: (where materials will be sent) Name: Title: Assoc./Company: Address: City/State/Zip:

The Central Arizona Chapter proudly presents and welcomes our new members from August, September and October.

Homeowner/Board Members: Ms. Wanda Simeona

Mr. Rick Temple

Superstition Springs Community Master Assoc.

Superstition Springs Community Master Assoc.

Individual Community Managers: Ms. Simone Brown Ms. Diana Janyne Hanson Ms. Gina Metoyer Ms. Alexandra Kolika Ramos Ms. Ronda Lalli Golden Valley Property Management Ms. Amelia Albrecht DMB Associates, Inc. Ms. Lindsay Herring DMB Associates, Inc.

Phone: Fax: Email: Select your Chapter:

TOTAL MEMBERSHIP DUES* Community Association Leaders & Homeowners q Individual Homeowner or Board Member $120 q 2 Member Board $225 q 3 Member Board $300 q 4 Member Board $390 q 5 Member Board $440 q 6 Member Board $495 q 7 Member Board $550 For 2-3 Board Member applications, please list the additional individuals who will receive materials.

For applications exceeding three, please contact CAI Customer Care at 1-888-224-4321.

Name: Address: City/State/Zip:

Management Companies:

Phone:

Mr. Jim Baska Ms. Renee Gauthier

Email:

Trestle Management Group Elan, LLC

Business Partners: Mr. Mr. Robert Bates Ms. Tammie Lewko Mr. Michael Thompson Mr. Trevor Howard Mr. Greg Roberts Mr. Chris Vetter Ms. Liz Foutz Ms. Diana Elston Mr. Clay Jordan

Central Arizona

Recruiter Name/Co. Name:

Fax: Name: Address:

Assurant Specialty Property Benjamin Moore &Co East Valley Office Supply, Inc. Gothic Grounds Management Pop-A-Lock of Phoenix Transcend Security Solutions AAA Landscape Jones, Skelton & Hochuli, PLC ProConsult Asphalt & Paving Consultant

City/State/Zip: Phone: Fax: Email: Individual Managers Management Companies Business Partners q Accountant q Attorney q Builder/Developer q Insurance q Lender/Banker q Reserve Study q Supplier/Landscaper, etc.

Please Specify: q Technology Provider *Membership Dues above include $15 Advocacy Support Fee PAYMENT METHOD q Check Enclosed

q VISA

q MasterCard

$139 $430 $590

q AMEX

Account #: Name: Signature: CENT R A L AR I ZO N A C H A P T E R

Is your membership current?

Contact Kayte Comes at (602) 388-1159 or kayte@cai-az.org.

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IMPORTANT TAX INFORMATION: Under the provisions of section 1070(a) of the Revenue Act passed by Congress in 12/87, please note the following. Contributions or gifts to CAI are not tax-deductible as charitable contributions for federal income tax purposes. However, they may be deductible as ordinary and necessary business expenses subject to restrictions imposed as a result of association lobbying activities.

CAI estimates that the non-deductible portion of your dues is 17%. For specific guidelines concerning your particular tax situation, consult a tax professional. CAI’s Federal ID number is 23-7392984. $39 of annual membership dues is for your non-refundable subscription to Common Ground.

Winter 2015

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CAI Ev e n t s C ENTR AL ARIZO NA C H APTER

December Educational Luncheon

By Marvin Nodiff, Esq., CCAL

Presentation Excerpts CAI’s mission is “to inspire professionalism, effective leadership and responsible citizenship so that associations become preferred places to live.” In the fast-evolving world of community associations, the only constant is learning.

Learning opens the door to fulfilling the mission of becoming better professionals and more effective leaders.

agreement. This will minimize misunderstandings and dissatisfaction between the board and manager. It will help retain clients and, most importantly, your reputation.

3. Create a Community Vision.

Managers should encourage boards to develop a vision for the community: Where does the community want to be in ten years?

Based on 30 years’ experience as a community association attorney, I offer three observations – lessons learned – for managers.

Long-term financial stability must include a reserve study and funding, either through setting aside funds or borrowing, or a combination of these sources.

1. Don’t Be Afraid to Lead.

Managers add value at board meetings where discussions occur that lead to board actions and decisions. The board looks to you for guidance.

Boards must consider the rising costs of energy, and conduct an energy audit to identify systems and components that are more energy efficient, as well as solar and other renewable energy sources.

Managers must have the courage and confidence to tell the board when they’re on the wrong track. Your function, as the professional at the table, is to tell the board what they need to know, not merely what they want to hear.

A “needs assessment” should be conducted to identify the best use of common ground and scope of services to meet changing demographics.

Apply your knowledge, expertise and experience to be a leader for the board in its decision-making process. Don’t be afraid to lead.

2. Be Credible.

To be an effective voice at the table, managers must be a credible source of information. This increases your value at the table and your effectiveness as a leader.

Professional development is what you can do for yourself that will not only increase your value at the table, but also set yourself apart from the competition. Make a personal commitment to earn CAI credentials.

As you engage a new client, discuss mutual expectations and performance evaluation, and put provisions in the management

Branding is a component of strategic planning. Identify how well the community stacks up to the competition, and how to improve your brand in the market.

Mr. Nodiff has concentrated his practice in community association law since 1983, representing hundreds of condominium and homeowner associations, and cooperatives, in St. Louis and out-state Missouri. He was the founding editor of CAI’s Journal of Community Association Law, is a charter member of the College of Community Association Lawyers formed in 1993, and is the only Missouri attorney with this recognition. He organized a local CAI chapter in 1986, was president on two occasions, and served on CAI’s Board of Trustees for six years.

Mr. Nodiff has served on the faculty of the Law Seminar, the premier event for community association lawyers across the country. He has published articles in The Journal of the Missouri Bar, The Journal of Community Association Law, Common Ground magazine, and ABA’s Probate & Property magazine. He was an adjunct professor at St. Louis University School of Law for seven years. He earned a B.A. in History from Arizona State University, M.A. in History from the University of Missouri-Columbia, and J.D. from SLU School of Law. He has published three novels, Special Assessment, which earned CAI’s author of the year award (2002), No Spitting on the Floor (2010), and The Dark Condos (2014).

2014 Leisurely Golf Extravaganza

By Kayte Comes, Executive Director CAI – Central Arizona Chapter

This year on November 14, 2014, our CAI Chapter did something different and played at a private course. Mark Wade and President – Elect of the Chapter let us use both of his courses at Leisure World Arizona. Everyone who participated enjoyed the relaxing courses and had a great time socializing.

To help top off the day we had an amazing Presenting Sponsor, Transcend Security Solutions, who made the event even more fun with his CAN-AM loaded with beverages and goodies for all.

The weather was perfect and the shot gun went off at 9:30am without delay, as compared to the hour and a half frost delay

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the year before. It was nice to be able to wear shorts and not bundle up most of the morning as we registered players and sponsors. Many thanks go out to the volunteers who helped with registration and escorting the sponsors out to their tee boxes. Without their support, the event would not have run as smoothly.

Arizona Taste was the caterer and the food was fabulous. Beverages were complimentary throughout the day, courtesy of the event sponsors and the Chapter. We appreciate the caterer’s support over the years and can’t thank the event sponsors enough for their creative efforts and the variety of beverages to choose from.

The Leisurely Golf Extravaganza ended with raffle prizes, with a grand prize of $1000 donated by CAI. Event awards were given for men’s and women’s closest to the pin, longest drive, and first, second and third place overall scoring. The winner of first place was Arizona Parking Solutions, Inc., second place went to CBI Consulting and Construction Management, and third place was awarded to Trident Security.

A special thank you to the Golf Committee for their efforts organizing the event and soliciting sponsors, asking managers to register and helping the Chapter office conduct the event.

I sincerely appreciate all our volunteers and sponsors who make our Chapter successful and most of all FUN!

When it Rains, It Pours Understanding Surface Water and Flood Exclusions in Commercial and Homeowner Property Damage Policies.

By Michael G. Wales, Carpenter Hazlewood, Delgado & Bolen, PLC

Arizona has experienced a lot of rain lately. With those torrential rains came property damage. With property damage came insurance claims. With the insurance claims, came denials of coverage. The following explains why such denials may have been made.

Virtually all property insurance policies contain exclusions for loss caused by floods and surface water runoff. A typical flood or water damage exclusion found in homeowners’ and commercial property policies using standard Insurance Services Office, Inc. (ISO) policy form language generally provides as follows: We will not pay for loss or damage caused directly or indirectly by any of the following.

Water (1) Flood, surface water, waves, tides, tidal waves, overflow of any body of water, or their spray, all whether driven by wind or not; (2) Water which backs up through sewers or drains or which overflows from a sump; or (3) Water below the surface of the ground, including water which exerts pressure on or seeps or leaks through a building, sidewalk, driveway, foundation, swimming pool or other structure.

The term “surface water” is rarely, if ever, defined.

As described above, water damage generally includes flood, sewer backup and seepage from water below ground. Despite these seemingly self-explanatory categories, disputes often arise regarding whether damages caused by water are covered.

While Arizona courts have yet to weigh in on this issue, the courts in several other jurisdictions have carved out scenarios where property damage claims may not be excluded by the surface water exclusion, such as where the origin of the water was not natural or the flow of the water was channeled by a structure on the ground.

The Colorado Supreme Court held in Heller v. Fire Ins. Exch., 800 P.2d 1006 (Colo. 1990), that spring runoff of melting snow diverted from its regular path onto the Hellers’ property by three parallel trenches constructed behind property was not “surface water” because trenches were “defined channels.” The court held that surface water follows no defined course or channel.

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In Cochran v. Travelers Ins. Co., 606 So. 2d 22 (La. App. 1992), the Louisiana appellate court held that rainwater that overflowed and seeped from the roof into the interior of the building was not “surface water” because it was not water that collected and lay on the ground.

In Ebbing v. State Farm Fire & Cas. Co., 1 S.W.3d 459 (Ark. App. 1999), the Arkansas appellate court held that water from a burst water main was not “surface water” because it did not accumulate from natural causes.

In Aetna Fire Underwriters Ins. Co. v. Crawley, 207 S.E.2d 666, 668 (Ga. App. 1974), the Georgia appellate court interpreted “surface water” to strictly apply to water on the surface of ground and not to rainwater falling on and flowing from the roof of an insured dwelling.

The majority of courts, however, interpret the surface water exclusion broadly to apply to any damages that are caused by water that ran onto, over, or from some man-made object. For example, In Crocker v. American Nat’l Gen. Ins. Co., 211 S.W.3d 928 (Tex. App. 2007) the Texas court of appeals held that the surface water exclusion applies to damages caused by water that runs over various items even if the flow is altered by items built on top of the ground. The court noted that the term “surface water” was not defined by the policy and referred to other Texas cases that have defined “surface water” in the insurance context as follows: Surface water is defined as water or natural precipitation diffused over surface of the ground until it either evaporates, is absorbed by the land, or reaches channels where water naturally flows.

“Flood water” and “surface water,” therefore, have a terranean nature, i.e., water overflowing its natural banks or which does not form a well-defined body of water—as opposed to water below the surface, whether from a nature or unnatural source. [Citations omitted.]

In the Crocker case, the water entered the house from a raised patio. The parties agreed the resurfacing of the patio caused rainwater to drain into the house instead of into the flower beds as planned. The Crockers argued that because the rain hit the continued on page 15

patio instead of the dirt, and the top of the patio was 8 to 10 inches above the soil, the damage was not caused by water on the surface of the ground. The insurance company argued that it would be a strained interpretation of “surface water” to hold that it does not include rainwater that falls upon concrete and asphalt structures such as patios, roads, driveways, playground blacktops and parking lots—structures which are by their nature placed upon the surface of the ground. The court agreed and held that the ordinary meaning of the words “surface water” reasonably can include rainwater that has collected on the surface of their patio.

The Illinois court in Smith v. Union Auto. Indem. Co., 752 N.E.2d 1261, 1266 (Ill. App. 2001), appeal denied, 763 N.E.2d 778 (Ill. 2001), also discussed whether water could be “surface water” when its flow had been altered by man-made structures. In Smith, during a torrential rainstorm, the window wells in the basement of the Smiths’ home filled with water, causing the windows to break and the basement to fill with 5 feet of water. Water also came into the basement through the sewer drain. The court held that the average reasonable person would not limit surface water to water whose flow has not been altered in any way by paved surfaces, buildings, or other structures. Id. at 1267. Therefore, the court held the water entering the Smiths’ home as a result of a torrential rainstorm was surface water excluded by their homeowner’s insurance policy.

Generally courts have held that a flood means a large-scale inundation or deluge from a natural body of water. However, in Wallis v. Country Mut. Ins. Co., 723 N.E.2d 376 (Ill. App. 2000), the court found that a man-made watercourse was a body of water, and the water exclusion precluded coverage for damage caused when it flooded. Larry and Mae Wallis owned a home with the Rob Roy irrigation canal flowing about 150 feet away.

The canal was not natural but was a manmade irrigation channel used by nearby farms.

complete inundation. Also included as flood are mud slides caused by flooding. Thus, flood insurance aims to cover the traditionally uninsurable natural forces (whether or not set in motion by man) that result in widespread damage verging on or equaling the catastrophic.

It is important that any unit owners’ association use its best efforts to obtain and maintain adequate insurance to protect the association, the association’s property, and common elements.

This includes the obligation to obtain flood insurance for condominiums in a flood zone or an area potentially prone to flooding. While flood insurance is a common coverage type that is foregone by many association boards, negligent failure to obtain flood insurance is typically not covered under a Directors and Officers Insurance Policy. This means that if there is a flood that causes damage to the common area, the board cannot simply cite “board member oversight” as a reason for not purchasing the coverage. If your community is going to forego signing up for flood insurance, be sure the board has an ample supply of reserve funds.

In conclusion, recent extreme weather activity in Arizona has made it clear that any association or homeowner near a canal, lake, drainage basin, river, or even a normally dry stream bed, whether man-made or natural, should be aware of the risk of potential for damage from a flood or from surface water and obtain proper flood insurance.

Michael Wales is an attorney in the Tempe office of Carpenter Hazlewood Delgado & Bolen, PLC and focuses his practice on complex construction defect litigation in the western states. Michael can be reached at michael.wales@ carpenterhazlewood.com.

The insureds argued that the damage did not result from a flood because the water overflowed from a man-made source, which, they claimed, was not how the term “flood” had been interpreted in the past. In contrast, the court said, “The common meaning of a flood is ‘a rising and overflowing of a body of water that covers land not usu[ally] under water.” The creek was a body of water, the insureds’ home was not usually under water—ergo, a flood occurred. The court found no credence in the argument that a man-made body of water cannot cause a flood.

Flood insurance is, of course, available for both residential and commercial risks through the National Flood Insurance Program. In the flood insurance policy, “flood” means either the overflow of inland or tidal waters or the unusual and rapid accumulation or runoff of surface waters from any source. A flood occurs when these waters invade land areas that are normally dry and inflict a condition—that is both general and temporary—of partial or

Winter 2015

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MOSQUITOS

By David L Deeney

This has been a record year for monsoon rains in Arizona.

Some areas have experienced double, and nearly triple, the amount of annual rainfall. We all saw the images of stranded motorists adrift on the I-10 and I-17 freeways. On September 8, 2014 a record rainfall of 3.30 inches of rain was recorded at Phoenix Sky Harbor Airport, breaking the old record set in 1933 at 1.33 inches.1 Flooding became rampant during and immediately following recent storms. Then, within a few days following the rains, we experienced the swarming of millions of mosquitos in nearly every community, statewide and parts of Nevada.

A little bit about the mosquito - they are a part of the family of nematocera flies or culicidaes. There are over 3,500 species identified worldwide. The mosquito has four stages of life egg, larva, pupa and adult. They need water to breed, and their offspring spend their entire larva and pupa stages in stagnant or standing water.

The culex mosquito lay eggs on standing water. Some species of mosquitoes prefer to breed and lay their eggs in natural reservoirs on plants or in holes in tree trunks where water has accumulated. Flood water mosquitos, such as the psorophora & aedes, lay eggs above the water line near irrigation ditches, small ponds and places where water collects during rainfall or watering. These eggs may lie dormant for several months, then, after a heavy rainfall and water levels rise, the eggs hatch. Within a few days of the hatch, hungry, aggressive adult mosquitos emerge. You can usually expect a second wave hatch about 10-14 days later.

Generally, depending on the species of mosquitos, it can take as little as 5 days to go from pupa to adult – but some species take up to 40 days.

As adults, they can live from a week up to a few months, depending on the species. In adults, it is the females of most species that are blood-sucking pests and vectors of diseases such as the West Nile Virus, dengue fever, malaria, yellow fever, and St Louis encephalitis.(1) Most species are dawn or dusk feeders. During the hottest parts of the day they 16

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will rest in a cool place and wait for the evenings, usually in grassy areas, in and around shrubs and other plants and foliage. They are, at best, a nuisance, and at worse, a vector of disease.

Let’s be honest - mosquitos are here to stay. Learning about their life cycle, physiology, habits and habitats can arm you with the knowledge necessary to take the steps to minimize this pest around your home or business. Additionally, there are pest control steps that can help. For example, pest control companies can use a larveacide granular that can be put into standing water that keep mosquitos from maturing from the pupa stage to adulthood. Additionally, there are other steps that can be taken. Personally, using a spray with DEET or picaridin, eucalyptus / oil of lemon on your skin before you go outside (especially in the morning or at dusk) is an option.

Helpful Tips on how to Minimize Mosquitos • Get rid of standing or stagnant water • Stock ornamental ponds with fish that eat mosquitos • Empty or toss out old tires, buckets, empty pots, and saucers • Keep gutters free of debris and emptied of water • Change water in pet dishes daily • Keep circulation pumps running and chemicals at effective levels in the pool & spa • Fill in low areas in the lawn to eliminate standing water • Cover trash bins and containers so that water cannot accumulate • Secure valve box lids and seal the access holes on the lid with duct tape • Check and repair leaking faucets and hoses • Keep ditches and basins free of weeds and overgrown foliage and plants David Deeney is an account executive for Burns Pest Elimination and certified pest control applicator with the State of Arizona. He works exclusively with HOA community managers. David also has extensive experience in management within the hospitality industry and has worked in public broadcasting development at Washington State University.

Winter 2015

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When Flooding Isn’t Covered

By Audra Purdie, CIRMS

We’ve all been there, with the blank “deer in the headlights” stare. Your insurance agent is explaining coverage to you, but you have no idea what he’s saying as you don’t speak “insurance.” As your eyes glaze over, and your mind wanders to its happy place, you faintly hear the phrase, “Not Covered” in the background. Suddenly you snap back and say to yourself, “Wait, what’s not covered?”

Unfortunately, most people find out what is, and is not, covered on their insurance policy when it’s time to file a claim.

Although each and every claim is unique, and not all insurance policies are written the same, there are some standard things you should know about the claims process and your insurance policy.

Claims made easy Every insurance policy specifies your duties in the event of a claim, usually found in the conditions section of the policy.

It is important to read this section and become familiar with what is expected from you. The first thing you should know is how your insurance carrier takes claims. If you can call a claim in to your agent or some other party, obtain the proper number. If they require a form be filled out, keep a copy of the form in your insurance file.

Secondly, it is imperative that you notify your insurance agent promptly in the event of a claim or suit. If you’re unsure about whether or not to file a claim, call your agent. You don’t want to run the risk of your claim being denied due to late notice reporting.

Insurance made easy The two most important things to know about your insurance policy are what is covered, and what is not covered. Insurance coverage is based on either named perils or exclusions.

A peril is a cause of loss, so a named peril policy will only cover the losses that are specifically named in its policy.

Named perils are events such as fire, lightning and hail, just to name a few. An exclusion policy, called special form, all risk or open peril, means coverage applies for losses unless excluded in the policy. This type of policy is by far the most comprehensive.

Since insurance policies come in all shapes and sizes, ask your insurance agent to send you some key information about the policy. Having a one or two page document, with items such as what is covered and what is not covered, makes understanding your insurance a whole lot easier.

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Common Misconceptions One of the most common misconceptions about insurance policies is that insureds assume it covers everything. Although your insurance agent would love to cover each and every claim occurrence, the fact of the matter is that the policy only covers what the policy says it covers.

Water damage is one of the most common insurance claims we see. In fact, it accounts for approximately 65% of the property damage claims filed by associations. Water damage is defined as a sudden and immediate release of water that causes damage to covered property. Typical water damage claims are caused by failing pipes, hoses, hot water heaters and plumbing fixtures inside your home. Sounds simple enough, right? But some Arizona residents found out the hard way that their water damage claim was not so cut and dry.

Our cities have been inundated with rain from all of the recent storms passing through the valley. The insurance companies have also been inundated, by phone calls from associations wanting to place claims for their water damage.

The only problem is, it’s not water damage; it’s a flood.

Flood insurance is not the most highly sought after insurance policy in Arizona; after all we live in a desert, right? However, September storms dropped so much rain so fast it caused flash flooding in many different cities across the state. Highways turned into lakes, swimming pools overflowed, and neighborhoods were under water. Those neighborhoods soon found out that the external surface water that rushed into their living room and damaged their home wasn’t going to be covered on their homeowners or master insurance policy. The reason: they didn’t have a flood insurance policy.

Fortunately, flood insurance is available in Arizona. Although it might be too late this year, we can always be proactive before the next monsoon season.

You can obtain information regarding flood insurance in your area and your coverage options by visiting FloodSmart.gov or by contacting your local agent.

Audra Purdie is a licensed property and casualty agent with Community Association Underwriters of America and has been in the insurance industry for over 10 years. She also has her Community Insurance and Risk Management Specialist (CIRMS) designation through CAI.

Preventing Storm Damage

By Fernando Torres

Preventative pruning mitigates the damage inflicted to trees, and also reduces the aftermath when storms occur.

Powerful winds during the monsoon thunderstorm season may cause branches to break off because of the mass of the limbs and the over-abundant foliage. If the limb doesn’t simply break off, the tree may be split apart, unless braced or cabled.

The goal of tree pruning is to maintain a healthy canopy and to produce a mature tree that has a similar size and form to what it would naturally attain. Proper tree pruning will ensure longer life, and healthy structural strength for increased safety. Proper pruning also prevents excessive corrective pruning through its lifespan. Tree pruning also takes into consideration pedestrians, vehicular movement, and visibility of signage and traffic. Trees allowed to develop with minimal pruning will only require correction for obvious structural faults, such as poorly positioned or strongly competing limbs and weak branch attachments.

Only trained personnel, such as certified arborists, should be allowed to prune trees as these experts will be very careful to avoid over-pruning. Tree pruning is a task to complete with a light hand which works with the tree over a period of years. Extreme practices that remove as much as possible, such as lion tailing, are counter-productive and not encouraged at any time.

Another factor leading to storm damage is the soil, which is softened into mud by the rainfall of the monsoon thunderstorms. If the tree branches do not break off, and the limbs do not split the tree apart, the high winds, loose soil, and heavy grouping of leaves can make the tree uproot, especially those trees that have shallow roots. The primary purpose to stake new trees is to hold roots firmly in the soil until they become established and are able to securely anchor the trees in place, enabling them to withstand winds and develop strength. Note that staked trees need to be monitored to remove all staking and associated hardware as there could be severe, detrimental effects like girdling.

For turf and nearly all other landscape plants, the water itself can be the storm damage culprit. Soil that is compacted from irregular irrigation and traffic is only somewhat porous.

Aerating the turf gives the water a place to go and helps to diminish flooding. Also, having dry wells inspected and cleaned out will help to move the water into the ground, further reducing the water levels.

Taking these preventive measures before the monsoon season will help minimize the damage to the landscape and avoid costly repairs.

Fernando Torres is the Chief Business Development Officer at PureGreen Landscape. He has built his career in the client relations field. He received his degree in Business Management from the University of Phoenix and has been mentored by some of the most successful business owners in the Valley.

Winter 2015

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Hiring a Public Adjuster

By Bruce and Stacy Horowitz

Your community or property has suffered property damage resulting from the recent storms, now what?

Your first inclination might be to contact your insurance carrier, but this may not be in your best interests. With all your personal and work commitments, it may not be feasible for you to monitor and ensure your claim is being handled properly. Why not level the playing field with the insurance company?

Why hire a public adjustor?

Your insurance company has professional adjusters to represent their interests. As a policyholder you are entitled to hire a professionally state licensed adjuster to represent your interests. The public adjuster has experience and knowledge to assist in preparing, documenting and negotiating claims. Adjusters have reviewed several policies prior to yours and know where to look in the policy to make sure your claim is filed for all the coverage you have paid for, oftentimes finding money that otherwise would have been overlooked.

The adjuster you hire should be experienced, licensed with the state and working for a reputable company that has a clean record with the insurance department. All adjusters need to be licensed and their company also needs to hold a license with the Arizona Department of Insurance.

Fee for public adjuster The public adjuster is paid a contingency fee of the total monies received from the insurance company. The fee can range from 5% - 20% depending on the size of the claim, and is due at the time money is released from insurance company.

Duties of public adjuster The public adjuster acts as the policyholder’s representative in negotiating and dealing with the insurance company adjuster. The public adjuster relieves your stress by engaging in discussions and negotiations with the insurance company on your behalf to maximize your recovery. The public adjuster brings in their experts/contractors to estimate and measure the damage independent of the insurance company’s estimate. This estimate then provides the framework for the negotiating the adjuster will do with the insurance company.

Some good questions to ask prior to retaining public adjuster: • How many years have you been a licensed Public Insurance Adjuster?

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• May I have references or see testimonials from previous clients?

• Will you personally handle my claim for me?

• Will you keep me in the loop and inform me of all outstanding issues with my claim?

When to engage a public adjuster Ideally, the public adjuster should be involved in the claim from the beginning, including helping you report the claim.

This is not to say you should feel rushed or pressured after a loss occurs to immediately hire the first person that approaches you. Investigate the company and the individual who will be acting as your representative.

Some things to look out for In the State of Arizona, contractors are not authorized to represent you in insurance claim negotiations, nor are they professionally licensed or regulated by the Department of Insurance. Relying on your insurance company to fairly calculate the amount of damage and what you are owed might not result in a full or fair settlement. The company adjuster who is sent out is measuring the loss for the insurance company, not for you. As the policyholder, you are entitled to have the claim loss accurately measured and then be reimbursement for all that you have lost.

Benefits of hiring a good public adjuster: • An experienced and skilled licensed professional to work on your team • Someone who understands intricacies of the policy relating to storm damage, fire, flood, water etc., and assists in recovering all that you are entitled to • Strong advocate on your side to help provide more input and negotiating leverage for the final insurance settlement, more than you may have had on your own.

Bruce and Stacy Horowitz, AJR Public Adjusters. Bruce has over 28 years licensed experience in the Public Adjusting field handling claims of all dollar amounts for losses due to fire, flood, water, hail, dust, theft, etc. AJR is named after our children, Ashleigh, Jamie and Ross. www.betterclaimresults.com

Preventative Planning & Damage Cleanup from a Community Manager’s Perspective

By Tabatha Rook, CMCA, AMS

The Verrado community in Buckeye, Arizona, adjacent to the White Tank Mountains, is a large scale, masterplanned community developed by DMB Associates, Inc. and managed by the Verrado Community Association, Inc. (VCA). With over 221 acres of common areas, including 16,500 trees and 66 parks, and 55 acres of natural washes, the VCA works closely with its landscape and maintenance contractor on preventative maintenance practices to ensure these valuable assets are protected in cases of severe weather, particularly ahead of the summer monsoons.

Trees: The summer monsoons in Arizona bring much needed rain and aid in keeping water costs low during the hottest months, but rains also pose a risk to Verrado’s most valuable asset, trees. Proper tree pruning is essential for the health of the tree and if not pruned properly, trees are more likely to succumb to the high monsoon winds. Tree pruning in Verrado is ongoing throughout the year, but ahead of monsoon season particular species - such as Mesquites and Palo Verdes- are selected for specialized pruning due to their thicker, faster growing foliage. Professional, licensed arborists ensure: • The tree canopy is thinned so wind can pass through easily.

• Any damage that may have occurred from previous storms is corrected.

• Dead or structurally unsound branches are removed.

Water Conservation: In anticipation of heavy rain, our irrigators suspend all watering through the central control irrigation station. Once the rain has diminished, the irrigators are able to determine based on volume of rain fall, how long the irrigation can remain off. This suspension of irrigation in the community can result in up to a $5,000 per day savings in water cost for the community.

Storm Drains and Washes: The 55 acres of natural washes running through Verrado guide the water from heavy monsoon rains out of the community. In order for the washes to flow properly, inspections and preventative maintenance are performed

on the storm drains and box culverts throughout the year.

It is important that any silt buildup or debris is removed so the storm drains and box culverts can allow rain water to flow into the washes. The ongoing preventative maintenance on the storm drains and regular monitoring of the washes prevent flooding during the most severe monsoon rains.

Monsoon Season - Summer of 2014: The monsoon season of 2014 was unprecedented, and even referred to as the 100-Year Flood by some. Verrado experienced 4.5 inches of rainfall in September 2014, 60% of our normal annual rainfall. Our preventative maintenance efforts were put to the test and our team’s awareness was heightened; ready to respond to fallen trees, flooding, runoff and resident concerns.

Our landscape and maintenance contractor provided an employee on-call 24 hours per day with crews ready to dispatch for reports of fallen trees blocking roadways, public sidewalks and common areas. Landscape and facility maintenance team members strategically assessed the damage in the community and prioritized areas needing immediate response. Onsite construction crews who were delayed due to the rain were quickly mobilized to remove runoff from sidewalks and private drives quickly and efficiently. Office staff was available and responsive to residents who submitted a damage report online and through our established work order system, and we were able to quickly notify contractors to address concerns.

Through preventative maintenance practices and the expertise of our contractors, consultants, and staff, Verrado experienced a successful monsoon season in 2014. Approximately 20 trees (.001%) were lost during the September 2014 storm and the washes flowed as they are designed to do. The irrigation system was suspended for 10 days with water cost savings approaching $50,000. Overall, the impact to the community was low and the VCA team is ready for monsoon season 2015.

Tabatha Rook is the Community Operations Manager for DMB Associate’s Inc.’s Verrado, Marley Park and Eastmark Community Associations with oversight of the governance, community standards and operations for the communities. She holds a Bachelor’s of Science degree from Michigan State University and Master of Business Administration degree from the University of Phoenix.

Winter 2015

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Just In Case

By Robert Pocano

A Good Plan Should Be Thorough and Recovery Oriented Your board is up to speed with all necessary plans. You have building maintenance plans, landscaping plans, and reserve fund plans. But do you have the most critical of all plans the disaster plan? Many associations don’t have a disaster plan. Of course you know you should have one, but we never seem to find the time to prepare one.

Disasters are here to stay. Disasters happen to the best communities. In Arizona, it can be extreme heat, dust storms, earthquakes, tornados, micro-bursts, flash floods, thunderstorms, and even wildfires. Different types of communities have different risks and planning needs. For example, multi-story buildings have higher risks of fire and internal flooding. Amenities such as golf courses, tennis courts, pools, detention ponds, retention ponds and dams can have a significant impact on the plan. During most storm events, the retention or detention ponds are some of the first areas impacted.

Disaster planning is all about saving lives, reducing suffering, and minimizing damage. The key elements of a good plan are thoroughness, well-considered preparation, and being recovery oriented. This post-disaster management aspect is often overlooked.

How Do You Start?

The board should create and appoint a disaster team made up of a member of the property management staff and a board member(s). Residents with skills in insurance, legal matters, electrical systems, HVAC, plumbing, and emergency response should be sought to join the committee. There are many sources for general outlines for disaster plans.

Your insurance company may have pre-prepared templates of these types of plans for easy customization for your community.

The written plan needs to be approved by the board. The plan should be located in multiple easy-to-access locations and be periodically reviewed and rehearsed. A good plan will have a checklist of steps to be taken, procedures to follow, and basic supplies to have on hand.

The association’s insurance carrier may also be able to provide disaster training guidance and other resources.

You may also want to consider seeking training grants or funding through CERT (Community Emergency Response Training). CERT information can be found at http://www. fema.gov/community-emergency-response-teams.

The basic disaster plan outline should consider the following: 1. Assessment of disaster risks - both past experience and potential 22

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2.

3.

4.

5.

6.

Planning - budget and financing Property management coordination Safeguarding important community documents Ledger of assets - written and digital Communication plan - elderly and special needs, absentees, etc.

7. Emergency equipment available - community and resident owned 8. Lines of authority 9. Evacuation plan 10. Insurance audit 11. Vendor and contractor call list 12. Recovery plan By recovery, it is not simply the cleanup after the disaster, but rather, a proactive real estate marketing plan. Whether it be a simple sprinkler pipe leak causing flooding and mold in an empty building or a fire destroying a building or a wing of a complex, the planning for what should be done after the final repair contractor has left is also important.

The common denominator need of all community owners is protection of their net worth. After any disaster, the impact on market value and sale potential must be considered. The standard should not be “as good as it was” before the disaster.

The association may need to make positive steps to approach the local real estate professionals to clearly demonstrate the physical state of the current community. This could include certified inspection reports, lab test results, or other confirmations to make market perception the reality.

Although we know we should have one, many associations do not take the time needed for a thorough and recoveryoriented plan.

Robert N. Pocano P.E, General Manager and Senior Engineer, is a licensed, professional engineer in Arizona and has over 20 years’ experience in construction and consulting. For more information, please visit www.criterium-arizona. com or email Robert at rpocano@criterium-engineers.com.

“Fool Proof” Flood Forecasting

By Rebecca Herro

Unfortunately, there is no way to tell what the future has in store or what path flood waters will take. Take Monsoon Season 2014 for example. It’s impossible to predict whether Arizona will ever see rains that heavy and frequent in coming years. But it’s probably safe to say more rains are inevitable, and you never know when they can cause major damage to your community.

That’s why it’s important to take a few steps now — before heavy rains and floods hit — to help keep your washes, drains and culverts in good working order. A little preparation now can make clean-up easier and safer for your community. That way, when unexpected heavy rains come, you’ll be ready.

First, know your community and its history. This will help determine exactly how much preparation you need. If flooding is common in your area, more preparation might be a good idea.

If you rarely get flooded, you may not want to devote too many resources to flood prevention — though some preparation may still be helpful.

Determine where your problem areas are. Have a good idea of where water generally backs up and why, where erosion usually occurs and which culverts are most prone to back-ups. Also, know how your drainage mechanisms should be performing and make sure they’re performing as designed. This information will help inform your community’s plan and help you be more proactive when it comes to damage prevention. For

example, if you know certain trash racks get obstructed easily, you’ll be able to monitor them when rain is in the forecast.

Build and maintain a relationship with an engineer or contractor who can help with repair work. This way, your community won’t be scrambling to find a contractor you can trust.

When choosing an engineer or contractor, make sure they have proper certifications and licenses and are qualified to do the type of work you require.

Have some sort of budget for flood damage built into your operating budget. How big this budget should be depends on your community and its history. While budgeting for something as unpredictable as weather is extremely difficult, having some sort of budget is better than having no budget at all.

When floods do occur, don’t panic. Take a moment to fully assess any damage. Don’t rush to repair anything before determining exactly what needs to be done. Prioritize work by considering risk to residents’ safety and their property. This will help determine whether permanent, durable fixes are actually needed or if more cost-effective measures are sufficient.

Lastly, learn from previous storms. Assess where damage occurred and what caused it (e.g. a backed up culvert or storm drain), then determine what steps could be taken in the future to prevent the same sort of damage. Use this information to inform your future plans and help keep you prepared for next year’s monsoon season.

Rebecca Herro leads DLC’s Client Relations Team. As a member of the DLC family for the past 5 years, Rebecca’s team supports the needs of DLC’s 28 Community Partners as well as implementing the company’s growth strategy for future clients.

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Winter 2015

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Microbursts Can Cause MEGA Challenges

By Saundra McCarrell with Liz Foutz Contributing

Thankfully, Arizona is home to some of the world’s most temperate and enjoyable weather. Without the fear of natural disasters such as hurricanes or tornados, the notoriously dry summer heat is the primary health and safety concern faced throughout our state. One climate challenge faced by Arizonans and Arizona communities is the monsoon season and, more specifically, the microburst.

For those who may be new to the Valley of the Sun, the National Oceanic and Atmospheric Administration (NOAA) defines a microburst as “A convective downdraft with an affected outflow area of less than 2½ miles wide and peak winds lasting less than 5 minutes. Microbursts may induce dangerous horizontal/vertical wind shears, which can adversely affect aircraft performance and cause property damage.” In fact, Accuweather.com describes a microburst as “a small column of exceptionally intense and localized sinking air that results in a violent outrush of air at the ground. It is capable of producing damaging straight-line winds of more than 100 mph that are similar to that in some tornadoes, but without the tornado’s rotation.”

Recently during the 2014 monsoon season, a signature master-planned community managed by Associa Arizona located in south Chandler was slammed by a microburst, wreaking havoc on the community’s more than 1,000 common area trees. In all, 17 trees were lost with only a handful of additional trees being affected by lost limbs. Of course, the damage could have been substantially greater if ongoing, preventative steps were not actively taken by the community’s board, management team and landscape maintenance experts.

In this case, the professional management and landscape teams, have been engaging in proactive steps to properly maintain trees and guard against potential storm damage for well over a decade. The tree loss experienced during the recent microburst serves to underscore the need for a strong partnership between the community management and landscape professionals, as well as the importance of a strategically-minded community board of directors.

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Here are a few preventative actions that can be taken by all communities to help minimize potential landscape damage during next year’s storms.

• Tree Pruning in general. The annual dormant period during December, January and February is best for major thinning or crown reductions. For overall maintenance pruning that must be done during the growing season, never remove more than 25% of the foliage and always make proper cuts. Remember, the first rule of pruning is, “do no harm to the tree.”

• Monsoon “proofing” your trees. Generally speaking, most trees blow over because of poor root development.

Be sure to move drip irrigation emitters outwards from the trunks of the trees as they grow to ensure they roots continue to develop correctly.

• Thinning the trees. Thinning will likely be necessary in most cases, especially if the foliage is dense and located higher up in the tree; however, it is important to remember that the foliage should be distributed evenly throughout the tree. This means throughout the entire crown with no more than 25% of the foliage removed per growing season. Trees that are raised too high without proper thinning are the first to blow over.

• Time of year. If you make a practice of doing your major thinning during the dormant months in December, January or February, you will be that much better off coming into monsoon season.

While communities can never fully eliminate the potential for storm damage, by following these tips and thinking strategically, much of the damage can be avoided.

Additionally, hiring an experienced, certified professional community manager can provide your board with the necessary best practices and industry knowledge to keep your community beautiful all year round.

Saundra McCarrell is Vice President of Associa Arizona and holds her CMCA, AMS and CAAM. Liz Foutz is Director of Client Services, for AAA Landscape. Liz holds her ACLP and SLM.

Knowledge is Power

By Michael Frank

Arizona has experienced some of the most intense storm events that I can recall in my 48 years of residing here. These storms have dramatically impacted the way Arizonans are now looking at storm water management of their properties. Our office has received dozens of calls over the past month regarding this damage and whether it could have been prevented.

The answer to this question is yes and no. That being said, the most crucial factor of storm water management is knowledge. That knowledge is to understand what storm water components you have, how they function, and how they should be maintained. Unfortunately, since “it doesn’t rain in Arizona”, many communities fail to monitor and maintain these critical components. Thus, major events like we have recently experienced create havoc on their properties. Here are a couple of important tips and notes for you to consider.

The maximum amount of rainfall initial civil engineering designs in Arizona are required to account for is a 100 year event. That doesn’t mean that an engineer is required to design for a 100 year event. This type of design can be reduced to as little as a 10 year event provided that in the case of a 100 year event, there is no more than 1’0” of “freeboard” above the top of the conveyance device.

Therefore, when you receive a 600 year event, there are very few engineering designs that will account for that. In this type of occurrence, pipe culverts cannot accept storm water rapidly enough and subsequently overtop, flooding adjacent downstream areas. Retentions will fill up and can possibly overtop, should they not be capable of percolation rapidly enough. Erosion protection will fail due to excessive water velocity and volume. In other words, it is practically impossible to “plan” for these types of events.

However, not all events are out of our control. If proper monitoring and maintenance is not achieved, similar

types of results will occur. Most every time we complete a study of our client’s roads and related infrastructure, it is determined that their storm water systems have been neglected.

Pipe culverts filled with sediment and debris, spillways breached with sod, catch basins and dry wells not cleaned out, and sediment build up in drainage corridors are normal observations when completing our studies. You cannot rely on your landscape contractor to understand or maintain these components. That isn’t necessarily their level of expertise. It is important to understand what “pass through” water is present, what “retained” water is present and what “co-mingle” water is designed for. Ensuring the proper maintenance and monitoring of these components and understanding what they serve is important information to appropriately deal with storm water management of your properties.

So what can you do to address these conditions in your communities? A bi-annual inspection (or after every major rain event) should be completed to understand and ensure optimal performance of these components, subsequently reducing the risk of future events severely impacting your properties and their residents. This will assist you in developing the needed maintenance strategy and budgeting required for optimal storm drain performance. Bottom line: knowledge is power!

Michael Frank is the Principal/Owner of Frank Civil Consulting - The Pavement, Drainage and Infrastructure Specialist in the industry with over 38 years experience. He can be contacted at Michael@FrankCivilConsulting.com.

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Annual Sponsors

CAI - Central Arizona Chapter

2014 Annual Sponsors

DIAMOND SPONSORS Arizona Parking Solutions, Inc. Carpenter Hazlewood Delgado & Bolen, PLC CCMC Maxwell & Morgan, PC

Glow in the Dark

SPRING NIGHT GOLF March 6, 2015 Continental Golf Course 7920 E. Osborn Rd., Scottsdale

copper SPONSORS Alliance Association Bank Brown|Olcott, PLLC Vial Fotheringham, LLP GOLD SPONSORS CBI Consulting & Construction Mgmt.

Community Association Underwriters of American Dicks Coglianese & Shuquem, LLP DLC Resources, Inc. Metro Phoenix Bank SILVER SPONSORS Burns Pest Elimination Butler Hansen, PC Caretaker Landscape and Tree Management COIT Cleaning & Restoration Desert Classic Landscaping Dynamite Paving & Sealcoat Goodwill of Central Arizona, Inc. Kasdan Weber Turner, LLP Mutual of Omaha Bank Paramount Roofing Republic Services Roofing Southwest Shaw & Lines, LLC Sherwin-Williams Paint Southwest Slurry Seal, Inc. Universal Protection Services Valley Protective Services BRONZE SPONSORS ALPHA Community Management APM Contracting Services (Allscape) BlueStar Landscape Brown Community Management CLC Enterprise Painting FirstService Residential Ginsburg & Dwaileebe CPA’s, LLP Holbrook Asphalt Jomar Association Service, Inc. Jon Wayne Construction & Consulting Metro Property Services Nautilus General Contractors PMG Services RENCO Roofing TLC - The Landscape Company Tri-City Property Management Services, Inc. Union Bank HOA Services 26

www.caicommunityresource.com

Central Arizona Chapter of CAI

Save the Date!

TRADE SHOW April 17, 2015

GLENDALE CIVIC CENTER 5750 W. Glenn Dr., Glendale

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C o n g r at u l at i o n s Corner

AMS Designations Vision Community Management Ms. Jen Amundson Associated Asset Management, LLC Mr. Brian Quillen Westbrook Village Association Mrs. Karen Jones Associa Arizona Mr. Jacob Hoffman CMCA Designations Mr. Samuel Paparazzo Recreation Centers of Sun City West Mrs. Cindy Knowlton PCAM Designations CCMC Mr. Brandon Exline

MEMBER OF MERIT Member has contributed extraordinary service and time to the growth of the Chapter. This award may be given to a manager or a business partner who displays integrity, reliability and the ability to interface with managers, business partners, homeowners and other industry professionals.

MIKE KUZMIN RISING STAR A volunteer who has risen to new challenges and going above and beyond their normal volunteer assignments.

REBECCA HERRO – DLC RESOURCES CATHY LATONA – CCMC KARRI LYNN – DYNAMITE PAVING JESSICA MACEYKO – EKMARK & EKMARK

Volunteer Awards Corner The Central Arizona Chapter will be highlighting the 2014 Volunteer Award Winners in each issue in 2015.

Starting in the 2015 spring issue, we will have the individual picture and bio of each recipient for 2014.

Congratulations to: HALL OF FAME Recognizes an individual who has significantly contributed to the overall success of CAI, its vision, goals and objectives. Who has promoted the growth of our industry, helped to educate others and is a constant champion for CAI. AMBER WELCH – METRO PHOENIX BANK BUSINESS PARTNER OF THE YEAR Created to recognize business partners in good standing for their contributions in time and resources for the betterment of the Chapter.

Thank you for helping us make our first

25 years

successful!

JENI MEYERS – GOODWILL OF CENTRAL ARIZONA SUZANNE WHITE – Paramount 911 Restoration and Construction www.dlcresources.com 28

www.caicommunityresource.com

Parking Enforcement

& Courtesy Patrols For Your Community

Arizona Parking Solutions, Inc. Community Patrols

www.arizonaparking.com

866.506.5759

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C a l e n d a r o f Ev e n t s

Keep your money where your house is ...

2015 CAI-CAC Event Calendar

January 13th

CAI – Central Arizona Educational Lunch – New Look for the New Year Location: Glendale Civic Center 5750 W. Glenn Dr., Glendale, AZ

22nd

PCAM Roundtable Discussion (Lunch) Topic: Social Media

28th-31st

Annual Community Association Law Seminar Location: San Francisco, CA

29th

New Member Breakfast Club Meeting – 9 AM Sponsored By Advanced Painting and Contracting/Builders Choice for HOAs Location: Scottsdale Ranch Community Association 10585 N. 100th St., Scottsdale, AZ 85258

February 10th

CAI-Central Arizona Educational Luncheon- Community Management as a Business Location: Glendale Civic Center 5750 W. Glenn Dr., Glendale, AZ

26th-28th

PMDP Course M-100 Phoenix, AZ Location: Sheraton Crescent Hotel

March 6th

Spring Night Golf Continental Golf Course 7920 E. Osborn Rd., Scottsdale, AZ 85251

10th

CAI – Central Arizona Educational Lunch 2015 Priceless Legal Advice Location: Glendale Civic Center 5750 W. Glenn Dr., Glendale, AZ

13th

Essentials Class – The Essentials of Community Association Volunteer Leadership

26th-27th

PMDP Course M-202 Phoenix, AZ Location: Pointe Hilton Squaw Peak Resort

26th

New Member Happy Hour Meeting Sponsored by – Metro Phoenix Bank Location: 4686 E. Van Buren Phoenix, AZ 85008

For more information, visit the chapter website at www.cai-az.org or call the office at 602-388-1159.

Items in red are CAI National events.

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www.caicommunityresource.com

Amber Welch

Relationship Manager Give your associations the satisfaction of banking locally by keeping their investment in Arizona!

Whether you are looking for a full service banking relationship or a great return on your reserve accounts, Metro Phoenix Bank is sure to meet all of your association’s financial needs.

Call us Today!

602-346-1816

Metro Phoenix Bank

4686 E. Van Buren #150 Phoenix, AZ 85008 602-346-1816 awelch@metrophoenixbank.com

Diamond Corner

Diamond Corner The CAI Central Arizona Chapter wants to thank our Diamond Sponsors, whose contributions assist us in preserving, protecting, and enhancing the industry. Our Diamond Sponsors contribute at the top level to our organization and are recognized in each issue by providing helpful information to our members.

Carpenter, Hazlewood, Delgado & Bolen, PLC Natural Disaster Planning – the Legal Perspective As attorneys for community associations, we are usually at the tail end of natural disasters that strike associations. Where can they get relief or funds? Associations should carefully go over their insurance coverage in advance, particularly with respect to floods and other water issues. Flood insurance can be a tremendous benefit.

Having engineers and the applicable city or county give advice about correcting potential problems also can help.

If an association is in a fire-prone area, it should adopt rules or restrictions on keeping property safe, such as “fire-wise” programs. After a disaster occurs, attorneys are here to help sort out potential remedies and liabilities and sources of funds.

CCMC We Can See Clearly Now the Rain is Gone This past August, parts of Arizona were hit very hard by monsoon rains that generated significant amounts of rain (and significant amounts of damage) in many of the communities CCMC manages. One of the strategies that helped our managers weather this storm was consistent, regular and transparent communications to their residents. Because strong verbal and written communications skills are key to the success of CCMC’s community managers, it is a topic we regularly discuss at our manager meetings and provide training on throughout the year. Our goal is to ensure our managers are prepared to handle any communications situation that is presented to them, whether it is an in-person discussion with a resident, informing residents of upcoming events or road maintenance projects, or, very recently, keeping our residents informed of how their associations were handling the heavy rains and clean-up efforts.

I strongly encourage you to continue transparent, regular and consistent communications with your residents. While this is easy to do when communicating good news, it is vitally important when communicating news that is not as good. By being open, direct and honest – regardless of the situation – not only do you create a sense of collaboration and trustworthiness with the residents in your care, you avoid the unpleasant surprises and distrust that can undermine all of the progress you have made in your community.

Maxwell & Morgan, P.C. Even in the tranquil Sonoran Desert, extreme weather events can occur, such as major thunderstorms with heavy rain and hurricane force winds. Because of this reality, community associations should prepare by working their management and vendors to ensure roofs are inspected routinely to prevent leaks; drainage areas are properly cleared and maintained; and large trees are properly trimmed and staked.

Arizona Parking Solutions, Inc. When it comes to protecting your vehicle in a natural disaster and the forces of Mother Nature, there may not be much you can do. But it is the one mode of transportation that you will need to escape from the natural disaster.

Keeping items in the vehicle for the emergencies is really a must. Within Arizona, we have different climates ranging from extreme heat to snow, so make sure that when you travel you have what you need to survive should the unexpected happen.

As a former highway patrolman, these were my essentials while on patrol in case I came upon those who were stranded and needed help. Make sure your vehicle is in good working condition and take along the following items. ➢ Blanket, water, food roll of toilet paper, gloves, hat, change of clothes, flashlight (extra batteries), lighter, first aid kit, charger for cell phone, and a leatherman tool.

Not a lot, but enough to keep me prepared for a couple of days should I become stranded due to whatever Mother Nature sent may way, and things that may keep me alive until help can arrive.

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Product and Service Directory

Full Service Commercial Landscape Maintenance Apm is a full service commercial landscape maintenance contractor providing services throughout the valley. Our company partners with management companies to establish the highest level of services required by h.O.A. communities.

Scott Haas, President A.P.M. Contracting Services scott@apmcontractingservices.com ( 623) 340-2760

If your business is interested in advertising, please call (602) 388-1159.

Ginsburg & Dwaileebe CPAs LLP Audits, Reviews, Compilations, Tax Preparation, Forensic Accounting, Board Financial Statements and Accounting training, Expert Witness Testimony, Superior Court Special Master Assignments Our practice is exclusively devoted to homeowner associations.

Contact us for our new “one fee for all” pricing.

No charge for phone calls and board meeting attendance.

(602) 826-8640 mike@gadcpas.com

Metro Property Services Metro Property Services has been providing full service management to Homeowner Associations across the Valley for the past 24 years. Master planned, single-family homes, condominiums, active adult, and new developer communities. Efficient service with state of the art reporting, timely and accurate information.

Our relationships with the associations we serve are long-term with some clients being with us for over 15 years. We are a leader in Fountain Hills.

Galaxy has the highest quality products, installation, service, and maintenance throughout Arizona. We offer up-to-date technology in access control, automatic gates & video surveillance. Our projects consist of: gates, access controls, retrofits, renovations, surveillance; all of which our expertise and value engineering customizes to provide a turn-key experience. Galaxy prides itself on superb fabrication of steel, iron, and aluminum fence and gates; from the very simple to the ornate.

www.metropropertyservicesaz.com

(480) 654-3839

I do not know you.

your I doAdvertise not know your company.

I do not know your company’s services. business for only I do not know your company’s reputation.

Now, what is$100.00! it you want to sell me?

Advertise your business for only $100.00!

Call (602) 388-1159 today!

Call (602) 388-1159 today!

Advertise your business for only $100.00!

Advertise your business for only $100.00!

Sales start before your salesperson calls… by advertising in CAI’s Community Resource Magazine.

Call (602) 388-1159 today!

Call 480.634.1708 to advertise.

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Galaxy Gates

www.caicommunityresource.com

Call (602) 388-1159 today!

Winter 2015

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