ECHO Journal - August 2012

August 2012

A Journal for California Community Association Leaders

echo-ca.org

Reserve Studies

ALSO INSIDE THIS ISSUE:

• Caring for Trees • Employee Misclassification • Board Service is an Honor Change Service Requested ECHO 1602 The Alameda STE 101 San Jose, CA 95126

PRSRT STD U.S. Postage PAID Sundance Press 85719

Contents

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Reserve Studies for CIDs The Davis-Stirling Act was enacted to protect owners (and potential owners) of common interest developments, requiring disclosure and openness in the financial and management process and its practices.

The budget process involves your board processing the information in the reserve study and determining what appropriate and sufficient reserve funding level is realistic and appropriate for your association.

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Results of Incomplete Reserve Analyses The ECHO Maintenance Resource Panel offers case studies to describe, by example, the pitfalls of inaccurate or incomplete reserve study analyses. Careful and thorough reserve studies, while an expense, can save thousands of dollars in construction costs down the road.

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Caring for Trees Trees can add as much as 27 percent to the value of your property. This article describes the many ways to ensure that your trees will flourish and continue to grace your community’s landscape.

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Consequences of Employee Misclassification Employee or independent contractor? The risk of treating your association’s workers as independent contractors, when their work really means they should be employees, can lead to thousands of dollars of tax liability and fines. And the taxing authorities are out to collect.

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Board Service is an Honor HOA board members are so important to the health and well being of the complex in which they serve.

These board members are the guardians of our property values, our relationships with our neighbors, maintenance, safety, and of course, our association finances.

Departments 5

32 Directory Updates 33 Legislation at a Glimpse 34 ECHO Bookstore

The ECHO membership list is never released to any outside individual or organization.

Executive Council of Homeowners, Inc. 1602 The Alameda, Suite 101 San Jose, CA 95126 408-297-3246 Fax: 408-297-3517 www.echo-ca.org info@echo-ca.org Office Hours: Monday–Friday 9:00 a.m. to 5:00 p.m.

Board of Directors and Officers President David Hughes Vice President Karl Lofthouse Treasurer Diane Rossi Secretary Jennifer Allivato Directors Paul Atkins John Garvic Robert Rosenberg Brian Seifert Steven Weil

Jerry L. Bowles David Levy Kurtis Shenefiel Wanden Treanor

Executive Director Brian Kidney Director of Marketing & Membership Jennifer Allivato Director of Communications Tyler Coffin Legislative Consultant Government Strategies, Inc. Design and Production George O’Hanlon

37 ECHO Marketplace

ECHO Mission Statement

37 Advertiser Index

The mission of ECHO is to advance the concept, interests and needs of homeowner associations through education and related services to board members, homeowner members, government officials and the professionals in the industry.

On the Cover August 2012 | ECHO Journal

Copyright 2012 Executive Council of Homeowners, Inc. All rights reserved.

Reproduction, except by written permission of ECHO, is prohibited.

36 ECHO Volunteers

Reserve Studies—page 6 4

Acceptance of advertising does not constitute any endorsement or recommendation, expressed or implied, of the advertiser or any goods or services offered. We reserve the right to reject any advertising copy.

News From ECHO

31 Events Calendar

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The ECHO Journal is published monthly by the Executive Council of Homeowners. The views of authors expressed in the articles herein do not necessarily reflect the views of ECHO. We assume no responsibility for the statements and opinions advanced by the contributors to the magazine. It is released with the understanding that the publisher is not engaged in rendering legal, accounting or other professional service. If legal advice or other expert assistance is required, the services of a competent person should be sought.

News from ECHO Dear ECHO Members, Thank you to everyone who came to our 40th Annual Seminar: your commitment to self-education and to your communities continues to impress me.

As Director of Communications, I’ve talked with many of you over the past five years and I am always eager to meet you in person, and to hear your stories and suggestions. This year, as part of our new Passport Program, I had the opportunity to speak with several of you about your Annual Seminar experience at length.

Here’s what our Passport winners had to say: Dexter, Hayward Renaissance Walk, Kindle Touch “I always learn something new, and meet new people and fellow board members. I learned so much—what you can say in email and what you can’t. Everybody was so friendly, and everyone looks like they are having a good time.”

Johna, Washington St. HOA, Kindle Fire “I really enjoyed it. This was the first time that I have been to any HOA-related seminar. It was difficult to choose which track to take, which is a good problem to have!”

Rosa, Bodega Avenue THA, iPad 3 “The Annual Seminar was a great experience. I had a good time and picked up a lot of valuable information for my association.”

Now, with the Annual Seminar behind us, I am excited to announce that we have turned our focus to developing new services for ECHO. Many of you have asked us to provide more information and service online. We have heard those requests, and are now building a first-class online community. ECHO members will be able to: • Connect with similar associations. Join groups of your peers, discuss best practices, and learn from other board members how to tackle the problems facing your association.

• Find expert advice. Search for answers to specific questions, read past editions of the Journal, watch video instruction, find local vendors and get HOA-focused legislative analysis.

• Manage your membership. Sign up for events, change your member information, manage subscriptions and renew online.

We are very excited about these new services, and I believe that you will find them to be an indispensable tool for your work as board members, and an extraordinary benefit of membership in ECHO. We expect to launch our new community in November. Watch for more announcements in the months to come, and please continue to send your thoughts and suggestions to me: tcoffin@echo-ca.org.

Kind regards,

Tyler Coffin Director of Communications ECHO Journal | August 2012

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August 2012 | ECHO Journal

By John Ceragioli, PRA and Janis Lee, CCAM

Reserve Studies for Common Interest Developments ave you ever wondered what the monthly reserve contribution is and how it is calculated? Let’s discuss reserve studies, their requirements and how your board of directors determines how much of your monthly assessment is going to be delegated to reserve fund contributions.

Each member of a homeowners association receives a document entitled “Annual Budget Disclosure Statement” annually. This document

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includes, amongst other things, a statement as to what your monthly assessments will be for the coming year. Your monthly assessments are calculated to defray expenses such as insurance, landscaping, etc. and to fund your reserve account.

Reserve Study History The State of California enacted the DavisStirling Act in 1986, as part of the California Civil Code. The Act describes the methodologies and

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practices required of all homeowners associations within the State of California. The Davis-Stirling Act was enacted to protect the owners (and potential homeowners) of these properties, requiring disclosure and openness in the financial and management processes and its practices.

Reserve Study Requirements The main emphasis of the Act is for the homeowners association’s board of directors to disclose how they intend to protect the fiduciary investment of the homeowners of the corporation. Section 1365 of the DavisStirling Act requires that “the association shall prepare and distribute to all of its members the following documents”: • A pro forma operating budget which shall include all of the following: A summary of the association’s reserves based upon the most recent review or study conducted pursuant to Section 1365.5 of the act. The required summary is a form as mandated by the Act. Section 1365.5, Subsection (2)(e) states, “At least once every three years, the Board of Directors shall cause to be conducted a reasonably competent and diligent visual inspection of the accessible areas of the major components that the association is obligated to repair, replace, restore or maintain as part of a study of the reserve account requirements of the common interest development.”

This reserve fund study must at a minimum accomplish the following: 1. Identify the major components that the association is obligated to repair, replace, restore or maintain that, as of the date of the study, have a remaining life of less than 30 years.

2. Identify the probable remaining useful life of the components.

3. Estimate the cost of the repair, replacement, restoration or maintenance of the component.

4. Estimate the total annual contribution necessary to defray the cost to repair, replace, restore or maintain these major components.

The description of a major component is “any component that the association is obligated to repair, replace, restore or maintain that has a remaining life of less than 30 years.” What this doesn’t describe is what components are required to be included in a reserve study.

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Major Component Requirements Here are the requirements that the components must meet in order for inclusion in the study. These are: • The component must be a physical component that the association is responsible for repairing, replacing, restoring or maintaining. A “physical component” is understood to mean a component that is part of the association’s common area.

• The component must be visually inspectable. Reserve analysts are not expected to undertake destructive testing.

Other vendors can undertake destructive testing and that information can (and should) be incorporated into the reserve study.

California does not mandate funding, only how the board intends to maintain the property and fund these requirements.

• The component must have a reasonably determinable statistical life expectancy.

Analysts use various sources to determine life expectancy; among these are experience, various state documents such as Department of Real Estate guidelines, and contractor information.

• The component must have a life expectancy of one year or greater. Components with expected lives (and that are paid for) more often than once a year must be included in your operating expenses and paid for out of operating funds. This may include routine maintenance expenses that are paid on an annual basis, such as backflow prevention testing and certification.

To fund for a components replacement it must have a life expectancy of 30 years or less. Components with life expectancies greater than 30 years may be included in the study, but their replacement cannot be funded until their expected life is less than 30 years.

Finally, the state mandates that all major components must be included in the study.

So What is a Reserve Study Really About?

Every association has three documents that provide guidance in the business decisions and help plan the future of the association. These documents are the Covenants, Conditions and Restrictions (CC&Rs), the association bylaws and the reserve study. The reserve study puts your association’s history in context and provides valuable guidance in the long-term care and upkeep of the association.

Your CC&Rs describe the common components that the association is responsible for maintaining, repairing or replacing for the enjoyment of each homeowner. Simply put, reserve studies are nothing more than a complete inventory of, and the past history of the common component replacement. This information is then used to project a timeline for the long term care of the property and calculates a reasonable reserve-funding plan based on the timeline. This long-term funding plan will ultimately determine your association’s monthly reserve fund contribution.

Monthly Reserve Funding Calculations The State of California does not mandate funding, only the disclosure of how the board intends to maintain the property and what methodologies are going to be used to fund these requirements. Generally accepted practice is for the association to fund its reserve accounts from the regular monthly assessments it collects from the members.

This mirrors the intention of the DavisStirling Act which suggests that members who enjoy the benefits of the common area components pay for its accumulated depreciation.

The Davis-Stirling Act states in part “the association shall levy regular and special assessments sufficient to perform its obligations under the governing documents.” The operating budget process involves your board processing the information in the reserve study and determining what appropriate and sufficient reserve funding level is realistic and appropriate for your association.

John Ceragioli is the Director of Community Solutions for Associa Reserves and for Community Reserve Solutions, he has been a licensed architect in the states of California, Illinois and Wisconsin and is currently a member of the Association of Professional Reserve Analysts. Janis Lee is Community Manager for Massingham & Associates, an Associa Company and is a Certified Community Association Manager.

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Results of Incomplete Reserve Analyses he following article is a compilation of actual events that members of the Maintenance Resource Panel (MRP) have experienced as a result of inadequate reserve analyses.

Inaccurate and therefore underfunded reserves do not affect an association until there is a major repair or replace-

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August 2012 | ECHO Journal

ment that must be performed. The impact is even greater if the underfunded component is part of the building envelope that includes the roof, siding or appendages such as stairs and balcony decks. These items represent a substantial part of buildings and common areas in a complex, and

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require sizeable reserve funds to repair. It is the goal of the MRP to educate ECHO members concerning current construction component needs and their real costs to repair.

Incomplete Reserve Analysis Crisis The true costs of servicing and replacing building envelope components are often not known or fully delineated in a reserve study.

This is especially true of roof coverings.

Depending upon the type of material, most roof coverings have an estimated service life of 15–30 years, including tile. Tile roofs are generally described as having a 50-year life, which is true. However, the flashings and water resistant barrier (WRB) under the tile typically have a 25–30 year service life. For an association complex with a tile roof, this can be overwhelming as the buildings reach 30 years of age.

With severely underfunded reserves and a lack of adequate operating capital, an association may be faced with the prospect of passing a special assessment.

A large association recently requested a roof evaluation of their tile roofs in the complex. Over the past three years they had been receiving repeated reports of leakage. The buildings were 30 years old, constructed with a tile roof and suffered from deferred maintenance. Frustrated with spending more money on repairs, the association board finally decided to have the roofs evaluated.

The evaluation revealed the WRB under the roof tiles had failed and many of the flashings had rusted through due to long term exposure to water and lack of periodic maintenance. Unfortunately replacing these items would require a complete removal of the tile roof covering, the installation of a new WRB and flashings and the re-installation the original roof tile. The estimated cost of the repair was about 75 percent of the cost of a completely new roof, but the reserves anticipated another 20 years before roof replacement.

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The association board was shocked when they were presented with this information.

With severely underfunded reserves and a lack of adequate operating capital, the association was faced with the prospect of passing a special assessment, or to continue repairing the leakage for as long as they could. The board was told that delaying the replacement of the WRB and flashings would lead to further damage to the structure, and substantially increase the ultimate cost to replace the roof covering.

Although the board understood the need to immediately fix the roof, they had no easy options for getting the money to pay for the repairs. The fact that the roofing reserves did not delineate a life span or cost for repair of the waterproofing components under the tile roof; the lack of periodic maintenance on the roof, and the continued underfunding of the reserves all contributed to the problems facing the association board.

Misallocation Saves the Day… But Don’t Count on It. A reserve study budgeted $100,000 for repainting an HOAs powder coated perimeter fencing. Even if it were to get repainted with a full prime and two finish coats, the 200 hundred or so feet would cost only 25 percent that much. Moreover, only areas that had seen some damage from sprinkler heads needed repainting at this time, so the vast majority of this reserve budget item could be reallocated. And a good thing that was.

Another reserve study specified that metal downspouts be repainted on a different schedule than the stucco and trim, which weren’t due for repainting for 3 years. This would have added a significant cost to the bid with taping, etc. and with the repaint of the fascia and gutters the downspouts could have stood out from the rest of the building.

Finally, a more recent reserve study missed the mark completely on several counts. While the study called out specific elements such as some metal railings, and balconies, it didn’t mention metal accents all along the buildings. And it was the same for wood elements, calling out some specifically and leaving the rest unmentioned. This created a number of issues. First, the study did not account for maintenance on the omitted items, leaving the reserves underfunded. Second, the study created an unreliable repainting specification, rendering competitive bids impossible to compare.

The incomplete reserve analysis, and inconsistent approach caused the board to

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eat up all the excess reserve from the fencing to address issues in other maintenance categories. They were lucky; you might not be.

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August 2012 | ECHO Journal

Deferred Maintenance Nightmare During the initial painting prep process for an HOA in San Jose, numerous locations of dry rot were found. The HOA was well aware of the additional work. However, they did not know that because the previous board had deferred the maintenance, the costs now to do the dry rot repairs were far greater than what they had budgeted in their reserve study.

The HOA had allotted $30,000 for dry rot and wood replacement in their last reserve study 2 years ago. At the time the reserve study was done, this would have covered the amount of work needed. However, the prior board did not complete the project at that time. Over the past two years, the dry rot started to move from the trim pieces into the siding where substantially more materials and labor had to be used to finish the work properly. Now the job will cost over twice as much to complete, and the reserve is insufficient; a special assessment will need to be imposed, or the situation will only get worse.

Conclusion As seen from these case studies, underfunded reserves can have an expensive effect on an association. Often, reserve analysts are blamed for these short falls, however, they are not to be blamed in most cases. Legislation (or lack of it) has failed to dictate a specific level of analysis for reserve studies, leaving boards, management companies and reserve analysts to struggle for the right level of depth and completeness. All too often, in a competitive market and challenging economic times, analysts are cautious not to over price their reserve studies. The result is often reserve studies that do not include thorough inspections of the various construction components and analysis of current costs for repairs. Most respectable reserve study companies prefer to provide thorough and complete information, but this is usually not possible because of the financial limitations placed on these companies. Boards need to understand that a relatively small amount of money spent on a thorough construction component analysis can save huge dollars in the future and the agony of requiring special assessments or acquiring loans to complete now major repairs not slated in the reserve study for many years. Those of you who have experienced either asking the association

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members for a special assessment or having to go through the loan process understand what controversy and often-adversarial viewpoints arise in those heated open board meetings.

ECHO, including our Maintenance Resource Panel, will continue to be a resource for information to ECHO members concerning construction component repairs and their true costs. Stay tuned for future articles on the subject.

Authored by the Maintenance Resource Panel members of ECHO.

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August 2012 | ECHO Journal

By Marc Dunia

Caring for Trees id you know that trees can add as much as 27 percent to the value of your home? They can also reduce your cooling costs by 50 percent and if used as a windbreak cut heating costs by 30 percent. Here are some helpful tips that can help you get the

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most out of your growing investment.

Hire a Certified Arborist and Reputable Tree Care Company Consult with a certified Arborist to review your trees. Some in the

tree industry may have years of experience, but haven’t taken the time or care to study in order to become certified in arboriculture. The International Society of Arboriculture (ISA) has a course that tree care professionals study in order to become ECHO Journal | August 2012

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certified in soil management, tree identification and selection, tree installation and establishment, safe work practices, tree biology, pruning standards, diagnosis and treatment, urban forestry, protection and preservation, and tree risk management. ISA certified Arborists are required to maintain their certification with continuing education.

Hire a reputable, licensed tree care company to perform the work. Contractors are required by law to be licensed and regulated by the Contractor’s State License Board that has jurisdiction to investigate complaints against contractors.

Review Trees Annually Annual reviews will help identify possible issues with your trees. Getting an early start on treatments for insects, disease and in some cases both, could reduce future costs and possible loss of these valuable assets.

Ask your Arborist for written recommendations and a pruning schedule so that you can plan and budget for necessary maintenance. You may find during the annual review that pruning and treatments can be skipped for that year.

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Timing Your Tree Services Trees require different things at different times. Some require winter pruning and some need pruning in summer so trimmers can see the dead material that is to be removed. Winter tends to be the best time for effective systemic insecticide control and the control of Aphids and Whitefly; spring and summer are best for control of beetle infestation. Your certified Arborist can suggest the best time to prune and treat for the most beneficial results for your trees.

Keep track of when the trees were last pruned or treated. These records of the historical maintenance of your tree care will serve as a great reference to the overall health and care of your trees. If purchasing a property, ask for the tree service records from the property owner. This will aid in making sure no gaps in services occur.

Ideally, it will give you a history of who provided the care for your trees and past issues the trees may have had.

Preventive Treatments for your Trees For high value trees that have a history of insect problems or trees in parking lots and front yards, preventive applications are rec-

ommended. Aphids, Scale and Whitefly all produce a sticky sugar by-product (called honeydew) that can drip on cars and walkways. This honeydew attracts ants and bees, sticks to shoes and anything it touches. Many people think it is sap from the tree and do not realize it can be easily controlled with late winter/early spring trunk and/or soil treatment. If you wait to treat for these pests once visible or when the honeydew is being produced in late spring or throughout the summer, a foliar application is an option.

However, the foliar application is less effective and repeated applications are usually required, adding additional costs.

Once you have control of the infestation using preventive treatments such as late winter/early spring trunk and/or soil treatments, ask your Arborist if the service can be skipped next year. This could help reduce product applications and save money.

Know your Tree Types Know what types of trees you have and when they should be pruned. For example, Pine trees should only be serviced from November 15th to March 15th. Beetles are attracted to the pinesap, which is produced

in the warmer months throughout the year.

Once infested, control can be difficult and expensive. Therefore, most pine trees should be serviced before the end of February due to unpredictable weather.

Are your trees susceptible to certain hazards like poor limb attachment, splitting trunk or diseases? Knowing what trees you have and issues to look for will help you know when to ask for help. Your certified Arborist can help identify what trees are on your property and point out types that are more hazardous than others.

When to Prune or When to Remove Trees can grow bigger than expected, or you may have adopted a tree that ended up a poor choice. Find out if pruning can reduce some of the size and shape issues or if removing it is the right choice. Trees that provide shade, privacy or reduce noise should always be reviewed for pruning. Keep in mind, once removed, a new view of the power lines or something else in the line of site may be shocking and a replacement tree can take years to grow.

Keep records of when trees are pruned or treated. These will serve as a reference to the overall health and care of your trees.

Trees that impact views can affect property values, cause heated conversations with neighbors and may be protected by HOA and City laws. Diseased trees or trees that are causing property damage are a liability and show a good case for removal. The city or county may require permits for removal.

Permit fees vary from $50-$200 in contrast to embarrassing fines of over $1000 if permits are not obtained. It is best to first research current regulations and know the rules before you have the tree trucks pull in the driveway.

Your Arborist should be able to point you in the right direction and in most cases prepare a letter to the respective agency to request a permit. If pruning is an option to restore your view, make sure you give the tree room to grow back and perform view mainteECHO Journal | August 2012

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nance. Reductions of 30 percent will cause the tree to grow back as much as 10 feet in the first year.

If the Arborist indicates the tree is declining, budgeting for a replacement is recommended. In addition to the removal and permit costs, keep in mind the costs for irrigation replacement or installation and replacing the removed tree.

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How to Prune Pruning practices should follow industry standards set by the Tree Care Industry Association (TCIA) and the ISA. Pruning requirements vary from site to site, and from year to year within those sites. Pruning requirements will even vary from tree to tree.

For example, during your Arborist’s annual review, one of the first things they note is the accumulation of deadwood from the last pruning. A tree with little to no deadwood will help the Arborist make recommendations for that year and could result in reduced to no pruning costs for you.

Generally, prune trees regularly to remove dead wood and reduce limb weight. Your certified Arborist will identify the tree care pruning need specific to your property.

Attempting to repair the tree in one pruning to save money, can be a costly mistake.

Avoid over-pruning! Removing more than 25 percent of a tree’s foliage will cause stress and increase maintenance. Trees that haven’t been pruned for years can possibly take two or more years to correctly prune to resolve structure and health issues. Attempting to repair the tree in one pruning to save money, can be a costly mistake‌ potentially resulting in excessive internal sprouting, weak limb attachments, and tree decline.

Prune trees away from rooftops and buildings. This is some of the most basic pruning you can do to reduce home maintenance costs and is required by most fire agencies and insurance companies.

Landscaping Before you redo your landscape make sure that you identify trees you want to keep and protect. Trees that are in the middle of your landscape plans and have health or value

issues should be reviewed for removal prior to renovation.

Use Arbor Mulch Use Arbor mulch around the drip line.

Mulch is processed tree debris composed of tree leaves, twigs, wood and bark. Trees’ normal food source is decomposed leaves and twigs. Arbor mulch will help replace the nutrients lost from the removal of debris from under your tree. It also reduces the irrigation frequency and improves the soil composition. Mulch also insulates the tree roots from high temperatures, erosion and soil compaction. Most landscapes benefit from using mulch at a depth of two to three inches so ask your Arborist if they can provide this for you. In many cases, it may be free.

New Tree Installation When installing new trees make sure you know the growth characteristics and make sure the tree has plenty of room to grow.

Then decide the location that will best suit your needs for shade, privacy, noise reduction and energy cost savings.

Before planting in sod make sure your tree can tolerate lawns, and the irrigation frequency is established for proper develop-

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ECHO Journal | August 2012

21

ment. Trees installed in lawn should be three to four inches above lawn grade and be installed on a hard natural soil bottom to avoid settling. Trees that grow well in lawn can easily die if the roots set in water due to planting at or below grade. Trees will require irrigation for the first two to three years.

Once established, most will require infrequent watering.

Remove support stakes as soon as it is appropriate to do so. Most trees should have the support stakes removed after the first 12–18 months. Reduced trunk diameter and damage to the tree could result if left attached. New trees are an investment and when installed properly can pay you back with energy savings, privacy, annual color and property values.

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August 2012 | ECHO Journal

Professional Service – Competitively Priced

Roger Pollard, President

Office: (209) 879-9113 FAX: (209) 879-9252 Email: pollardunlimited@comcast.net

Plant your trees in places that will be easy to establish, can handle wind and will not require too much maintenance.

Plant Appropriate Variety for Location Please remember trees grow at different rates and some continue to grow for hundreds of years. Small yards are a great place for ornamental varieties such as Crape Myrtles, Maytens and Japanese Maples. If you are lucky enough to have large HOA landscaping areas, plant trees in an unused space that will turn into relaxing, shaded areas.

Plant your trees in places that will be easy to establish, can handle wind and will not require too much maintenance.

Choose High Quality Specimens When purchasing new trees, inspect them for defects like trunk damage, circling roots or buried root flair. The most common size of tree to purchase is the 15-gallon. They are low cost, easy to transport and establish quickly. Larger nurseries have a more complete selection of trees and will specialize in cultivars. This will help you find trees that are resistant to insects and diseases common to your zone and microclimate.

OUR FOCUS IS ON YOU! You might think that a big company would not be able to provide you with the personal service that you are looking for. In reality, you can expect better, more responsive – and yes, more service from us. We haven’t forgotten our small company values. We grew because we kept our promise to provide the best service to our clients.

Learn more at www.massingham.com.

Serving Clients from Offices in: Campbell | Concord | Hayward | Roseville | Signal Hill Tel: (800) 863-6277 | Web: www.massingham.com

Resources Available to You An inexpensive resource for homeowners and property managers alike is the Sunset Western Garden Book available at most book stores. This book lists tree and plant types and tells what plant material will work in your zone and climate.

Treesaregood.org and TCIA.org are also great resource websites. Most importantly, build a relationship with a certified Arborist you trust. Don’t be afraid to meet with a few reputable Tree Care companies and get multiple estimates.

Marc Dunia is a certified Arborist with Cagwin & Dorward Landscape Contractors, and an ECHO member.

ECHO Journal | August 2012

23

By Adrian Adams

Consequences of Employee Misclassification

24

August 2012 | ECHO Journal

Boards are tempted to classify workers as independent contractors so they can save money by avoiding payroll taxes, health benefits and workers’ compensation insurance. They also avoid benefits like paid sick leave, vacation or health insurance. Instead, they write the person a check and file a 1099 income form if the check is over $600. However, to do so now is more risky due to the federal government’s implementation of its new initiative: Questionable Employment Tax Practice (QETP).

ECHO Journal | August 2012

25

Amazon customers gave it a 5-star rating

2012 Condominium Bluebook Everything about Homeowner Associations $17.00 Member Price $25.00 Non-Member Price This well-known compact guide for the operation of common interest developments in California now includes a comprehensive index of the book and a chapter containing more than 200 frequently-asked questions about associations along with succinct answers.

Order today from ECHO! Call 408-297-3246, fax at 408-297-3517 or order online at store.echo-ca.org

26

August 2012 | ECHO Journal

Consequences of Misclassification Under QETP, federal and state auditors scrutinize independent contractor agreements. Whenever there is a question about a worker’s classification, governmental agencies start with the presumption that the worker is an employee as defined by Labor Code §3357. If these auditors determine that a worker is improperly classified, the employer may be required to pay penalties, including the following: • Federal and state income tax for the previous three years; • Employee’s share of Federal Insurance Contributions Act (FICA) taxes and the employer’s matching amount; • Federal unemployment taxes of 6.2% of each employee’s compensation up to $7,000, and state unemployment insurance equal to 3.4% of compensation up to $7,000; and • 0.5% of the total amount of the debt per month for up to 50 months (6% annually) with the possibility of additional penalties for substantial understatement or fraud

(applicable in cases where the employer failed to file correct information returns, furnish correct payroll statements, and comply with information reporting requirements).

Factors for Determining Status There are a number of factors used to determine whether a worker is an employee or an independent contractor. Following are some of the factors used to evaluate a worker’s status: • Does the association train the worker on his/her job?

• Is the worker required to personally render services or can the worker assign them to others?

• Does the association allow the worker to establish his/her own work hours?

• Is the worker allowed to turn down assignments without penalty?

• Is the worker invited to regular employee meetings or functions?

• Was the worker given an employee manual?

• Are business and/or traveling expenses reimbursed?

• Does the association provide benefits, such as health insurance, vacation or sick days?

• Does the association provide the worker with tools, equipment or other supplies?

• Is the method of payment hourly, weekly, monthly (as opposed to commission or by the job)?

• Does the worker make his/her services available to the general public?

No one factor is conclusive, but, as a general rule, a worker is an independent contractor when the association has the right to control only the result of the work and not the means or methods of performing the work. See IRS Publication 1779.

Example Painters are generally classified as independent contractors because they are hired on a project basis; supply their own painting supplies and equipment; and do not have set working hours where they need to clock in and out. In other words, the painters control the process. However, not all painters are independent contractors. Some (i) work solely for one association and do not seek or advertise for additional work; (ii) the association controls the means by which the painting is performed by instructing the painters where, when, and how to paint; and (iii) the association supplies the painters with supplies. Such painters are employees, not independent contractors.

Avoiding Misclassification To avoid misclassification, associations should limit the use of “full-time” independent contractors, and instead hire workers on a specific project basis. Additionally, associations should treat workers similarly in similar situations. In other words, if the job duties of two employees are the same or similar, do not hire one as an independent contractor and the other as a W-2 employee. Further, keep employment relationships consistent.

Do not convert an independent contractor to a W-2 employee status. Last, use independent contractor agreements that highlight the components of independent contractor status so as to withstand the scrutiny of federal and state auditors.

Adrian Adams is a founding partner of Adams Kessler PLC, and a member of ECHO. This article is reprinted with permission from DavisStirling.com by Adams Kessler PLC.

The How-to Guide for Homeowners Associations Hailed as the most complete and useful reference available for homeowners associations, members, officers and directors.

If you want to learn how to manage, operate and participate effectively in your association, you will want to read this book.

Order the book today from ECHO Call 408-297-3246, fax 408-297-3517 or email: info@echo-ca.org ECHO Journal | August 2012

27

By ArLyne Diamond, Ph.D.

Board Service is an Honor top begging your neighbors to serve on the board. Stop assuming you have to promise a limited time commitment and even more limited responsibility. By doing so, you are demeaning the honor of being on a board and diminishing your chances of recruiting outstanding candidates who will serve you and your community well.

S

Serving on Other Types of Boards If you were invited to serve on the board of your symphony or

28

August 2012 | ECHO Journal

opera you’d consider it a high honor—only for those who are capable of making contributions in knowledge, time commitments, and financial donations.

If you were invited to serve on a corporate board, you would be taught immediately about your responsibilities, especially those that have now been strengthened because of Sarbanes-Oxley (SOX).

If you were invited to serve on a non-profit board you would be told

what responsibilities you had for serving on committees, raising funds, working with volunteers, etc.

Stop Begging and Demeaning the Role of the HOA Board Member So, why is it that so many people tell me that the way they “induce” people to serve on HOA boards is by promising that they wouldn’t have much responsibility and that the monthly meetings would be very brief.

Brevity, for the sake of “getting us out of here fast,� seems to have taken the place of doing the work we volunteered to do.

Sometimes this goes so far as to make it almost impossible for a healthy discussion about a topic. It also significantly reduces the amount of time allotted for members of the community to voice their concerns.

HOA board members are so important to the health and well being of the complex in which they serve. These board members are the guardians of our property

values, our relationships with our neighbors, maintenance, safety, and of course, our association finances.

If serving on a board were seen as the honor and responsibility it really is, there would be many more nominees than seats to fill. In that manner, the members of the complex would have some serious choices and would hopefully select the best of the candidates.

In addition, there needs to be ample opportunity to know the

ECHO Journal | August 2012

29

Don’t Let Your Association Manager Control You If the members of the board don’t know how to manage the HOA or have time to manage it, they defer to the hired property managers, potentially abrogating their own responsibility and attempting to pass it on instead to the paid professionals.

In my complex, a prior board went so far as to give check-signing responsibility to the property manager, without any controls at all. When that firm was fired, they wrote themselves a bunch of unauthorized checks.

I know of other situations where property managers just made up the rules as they went along—saying that their pronouncements were law when indeed they were not.

Is it right to defer to and be controlled by a hired association manager? I think not! I hope not! There are no requirements for association managers to be trained and certified either. Some are good, some are bad; but none has the level of responsibility bestowed upon the board members. These managers are the employees of the HOA, not their leaders or controllers.

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SERVICE Should you need construction help with:

An excellent guide to understanding the rights and responsibilities of condo ownership and homeowner associations operation. The question-and-answer format responds to more than 125 commonly-asked questions in an easy to understand style. A great resource for newcomers and veteran owners.

Order today from ECHO! Call 408-297-3246 Fax 408-297-3517 Email: info@echo-ca.org

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August 2012 | ECHO Journal

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Don’t Make It Too Easy—Have Standards In my years of training boards all over the country, I’ve seen the results of what I am suggesting. In psychology the term is “Cognitive Dissonance”—in this context it means the harder it is to get into the club, the more value people perceive it to be and the more they want membership. Think about the old US Marine Corps or any Special Operations force in the military.

Think about exclusive clubs that have stringent membership requirements.

If we insist on quality representation, well trained and accountable for the standards we set, we will get a much higher caliber board member and much better and more conscious service during their terms of office.

So, stop begging. Recognize and honor the importance of serving on your HOA board and recruit only those people who will offer something valuable and will serve with full awareness and acceptance of their responsibilities.

ArLyne Diamond, Ph.D. is President of Diamond Associates, a management consulting firm. Dr. Diamond trains boards, committees, executive teams, and others throughout the country. Among the books she has written is a Training Manual for Board of Directors of all kinds of groups.

ECHO Events Calendar

Note these important dates...

Wednesday, August 1 Maintenance Resource Panel 12:00 Noon ECHO Office 1602 The Alameda, Suite 101, San Jose Wednesday, August 8 South Bay Resource Panel 12:00 Noon Buca Di Beppo 1875 S. Bascom Ave., Campbell Wednesday, August 15 Wine Country Resource Panel 11:45 a.m.

Eugene Burger Mgmnt. Co. Rohnert Park Thursday, September 6 North Bay Resource Panel 11:45 a.m.

Contempo Marin Clubhouse 400 Yosemite Rd, San Rafael Monday, September 10 Accountants Resource Panel 6:00 p.m.

Francesco’s Restaurant Oakland

Tuesday, September 11 Central Coast Resource Panel 12:00 Noon Pasatiempo Inn, Santa Cruz Wednesday, September 19 Wine Country Resource Panel 11:45 a.m.

Eugene Burger Mgmnt. Co. Rohnert Park Wednesday, October 3 Maintenance Resource Panel 12:00 Noon ECHO Office, 1602 The Alameda, Suite 101, San Jose Wednesday, October 10 South Bay Resource Panel 12:00 Noon Buca Di Beppo 1875 S. Bascom Ave., Campbell Friday, October 12 East Bay Resource Panel 12:00 Noon Massimo Restaurant Walnut Creek

Wednesday, October 17 Wine Country Resource Panel 11:45 a.m.

Eugene Burger Mgmnt. Co. Rohnert Park

Wednesday, November 21 Wine Country Resource Panel 11:45 a.m.

Eugene Burger Mgmnt. Co. Rohnert Park

October 20, 2012 Peninsula Fall Seminar 8:30 a.m.

Crowne Plaza Foster City 1221 Chess Dr., Foster City Thursday, November 1 North Bay Resource Panel 11:45 a.m.

Contempo Marin Clubhouse 400 Yosemite Rd, San Rafael Monday, November 12 Accountants Resource Panel 6:00 p.m.

Francesco’s Restaurant Oakland Tuesday, November 13 Central Coast Resource Panel 12:00 Noon Pasatiempo Inn, Santa Cruz

Regularly Scheduled ECHO Resource Panel Meetings Resource Panel Maintenance North Bay East Bay Accountants Central Coast South Bay Wine Country Legal

Meeting First Wednesday, Even Months First Thursday, Odd Months Second Friday, Even Months Second Monday, Odd Months Second Tuesday, Odd Months Second Wednesday, Even Months Third Wednesday, Monthly Quarterly

Location ECHO Office, San Jose Contempo Marin Clubhouse, San Rafael Massimo Restaurant, Walnut Creek Francesco’s Restaurant, Oakland Pasatiempo Inn, Santa Cruz Buca Di Beppo, Campbell Eugene Burger Management Co., Rohnert Park Varies ECHO Journal | August 2012

31

Directory UPDATES Updates for listings in the ECHO Directory of Businesses and Professionals, now available online at www.echo-ca.org.

candidates.

Town Hall meetings, interviews New Members in the newsletters, and the ability for self-proBay Community Management motion are all methods candidates can use to persuade their neighbors that they have 2261 Market St., Suite 1200 much to offer and should San Francisco, CA 94114 be selected.

Tel: 415-361-5553 Nominating Committees— Fax: 415-361-5553 Candidate Selection and Campaigning www.bay-management.com Those associations that create nominating Marcello Lara, CPA & Consultant committees tend to find better and more 303 Twin board Dolphin Dr., Suite 600 of begqualified members.

Instead Redwood City, CA 94065 ging, they interview their neighbors and Tel: 650-632-4211 select those members of the community that Fax: 650-551-9901 have something to offer and are willing to give theCost timeManagement and attentionLLC needed. They act Utility as a marketing arm of the community by sell6475 N. Palm Ave., Suite 105 ing nominees on the belief that there is value Fresno, CA 93704 to be given and to be gained by serving on Tel: 559-261-9230 the They act as a screening device, not Fax:board.

559-261-9231 recommending those who just want the stawww.utilitycostmanagment.com tus of being on a board, or worse even, have a specific axe to grind to the exclusion of looking at the bigger issues.

Serving on a board is not the same as being a member of a committee in your typical large high technology company. It requires knowledge of the laws, the governing documents of the complex, group process, dealing with the people in the audience and in the community who have issues to be resolved, understanding group decision making and problem solving, consensus building, Roberts Rules of Order (when the meeting is formal), presentations and public speaking. It requires training.

Become an ECHO Business and Yet, how many board members of HOAs Professional Member and receive actually go for training? How many recognize the many benefits of membership. that there is much they could—and should— learn if they arevisit to be responsible andpage at To learn more, our membership effective? www.echo-ca.org 32

August 2012 | ECHO Journal

Legislation at a Glimpse As of July 17, 2012 Bill No.

Author

Subject

Status

Position

Summary

AB 805

Torres

Davis-Stirling Revision Part 1

Amended 6/11. In Senate Judiciary.

Support

This is the first of two bills from the California Law Revision Commission that restate and clarify the Davis-Stirling Act.

AB 806

Torres

Davis-Stirling Revision Part 2

In Senate Judiciary.

Support

This is the second of two bills from the California Law Revision Commission that restate and clarify the Davis-Stirling Act.

AB 1547

Eng

Extend “Blight” Fines

Missed deadline.

Dead.

Support

This bill would remove the sunset provision in a law that allows local municipalities to fine owners of foreclosed units for failing to maintain their properties.

AB 1557

Skinner

Extend “Blight” Fines

Missed deadline.

Dead.

Support

This bill would extend the sunset provision to 2018 for a law that allows local municipalities to fine owners of foreclosed units for failing to maintain their properties.

AB 1720

Torres

Gated Communities

Signed by the Govenor.

Support

This bill requires that gated communities grant access to licensed private detectives for the purpose of service of process, provided they produce required documentation.

AB 1726

Allen

Pool Maintenance

Failed passage.

Dead.

Oppose Unless Amended

This bill would require that all public pools (including CID pools) use a “qualified pool operator” as defined by law. The operator must take state-mandated courses.

AB 1745

Torres

Short Sales

In Senate Finance.

Watch

This bill would regulate short sales.

AB 1838

Calderon

Association Records

Amended 5/7. In Senate Housing.

Support as Amended

This bill would require that a financial disclosure form be provided in at least 10-point type. It would also prohibit cancellation fees for document requests under specified circumstances.

AB 1963

Huber

Tax on Services Missed deadline.

Dead.

Watch

TThis bill would require the Legislative Analyst’s Office to assess potential changes to the tax code.

AB 2273

Wieckowski

Purchaser Information

Amended 5/14. In Senate Judiciary.

Support

When requested by the association, this bill would require that an owner who is selling his or her unit provide information about the purchasing owner to the association within 15 business days..

SB 1244

Harman

Foreclosure Procedures

Missed deadline.

Dead.

Support

This bill eases the notice requirements for units sold in a foreclosure sale. If a unit owner is not able to be served, the bill would, among other requirements, allow the association to post notice in a reasonable location.

ECHO Journal | August 2012

33

Netwion Edi

Beyond Privatopia $20.00 Non-Member Price: $25.00 The rise of residential private governance may be the most extensive and dramatic privatization of public life in U.S. history. In Beyond Privatopia, attorney and political science scholar Evan McKenzie explores emerging trends in private governments and competing schools of thought on how to operate them, from state oversight to laissez-faire libertarianism.

Condominium Bluebook 2012 Edition $17.00 Non-Member Price: $25.00

Condos, Townhomes and Homeowner Associations Member Price: $29.00 Non-Member Price: $45.00

Community Association Statute Book—2012 Edition Member Price: $15.00 Non-Member Price: $25.00

To make these a sustainable investment, new buyers, owners and board members need to understand “best practices basics” of how this form of housing works and have more realistic expectations of this form of “carefree, maintenance free” living.

Contains the 2011 version of the Davis-Stirling Common Interest Development Act, the Civil Code sections that apply to common interest developments and selected provisions from other codes important to associations.

Robert’s Rules of Order $7.50 Non-Member Price: $12.50

The Board’s Dilemma $10.00 Non-Member Price: $15.00

A step-by-step guide to the rules for meetings of your association, the current and official manual adopted by most organizations to govern their meetings. This guide will provide many meeting procedures not covered by the association bylaws or other governing documents.

In this essay, attorney Tyler Berding confronts the growing financial problems for community associations. Mr. Berding addresses board members who are struggling to balance their duty to protect both individual owners and the corporation, and gives answers to associations trying to avoid a funding crisis.

2012 Community Association Treasurer’s Handbook Member Price: $29.00 Non-Member Price: $35.00

This well-known compact guide for operation of common interest develop ments in California now includes a comprehensive index of the book and a chapter containing more than 200 frequently-asked questions about associations, along with succinct answers.

Netwion Edi

cial e p S rice P

Homeowners Associations— How-to Guide for Leadership Member Price: $15.00 Non-Member Price: $25.00 This well-known guide and reference is written for officers and directors of homeowner associations who want to learn how to manage and operate the affairs of their associations effectively.

FOR Board Members Reserve Fund Specialists Property Managers Unit-Owners, Accountants Lawyers, Builders

NEW

2 CHAP TERS ON OP ERATI BUDGETS NG

The Handbook is an in-depth guide to all aspects of association finances, including accounting methods, financial statements, reserves, audits, taxes, investments and much more.

Not for the accounting novice, this is a tool for the treasurer or professional looking for specific information about association finances.

RESERVE FUND

ESSENTIALS THIRD EDITION FIFTH PRINTING JONATHAN H.

JUFFS Reserve Fund Specialist

Two experts discuss reserve fund planning and control in a refreshingly readable and exceptionally levelheaded style.

GRAHAM D.

OLIVER Board President (ret.), Reserve Fund Aficionado

INCLUDES RESERVE FUNDS FOR CONDOMINIUMS COMMUNITY ASSOCIATIONS HOAs CO-OPS MEMBER-OWNED PROPERTIES MUNICIPAL FACILITIES

Questions & Answers About Community Associations Member Price: $18.00 Non-Member Price: $25.00 For 12 years, Jan Hickenbottom answered homeowners’ questions in her Los Angeles Times column on community associations. Now collected in one volume, readers can find answers to almost any question about CIDs.

Reserve Fund Essentials Member Price: $18.00 Non-Member Price: $25.00

The Condo Owner’s Answer Book $15.00 Non-Member Price: $20.00

This book is an easy to read, musthave guide for anyone who wants a clear, thorough explanation of reserve studies and their indispensable role in effective HOA planning. The author gives tips to help board members mold their reserve study into a useful financial tool.

An excellent guide to understanding the rights and responsibilities of condo ownership and operation of homeowner associations. The question-and-answer format responds to more than 125 commonly-asked questions in an easy to understand style. A great resource for newcomers and veteran owners.

Board Member Handbook Member Price: $20.00 Non-Member Price: $25.00 This publication is the essential guidebook for HOA Board members, dealing with governance, finances, insurance and maintenance issues.

Revised and updated in June 2012.

Dispute Resolution in Homeowner Associations Member Price: $20.00 Non-Member Price: $25.00 This publication has been completely revised to reflect new requirements resulting from passage of SB 137.

Publications to answer your questions about common interest developments Now Order Online at www.echo-ca.org

Bookstore Order Form Board Member’s Guide for Contractor Interviews $20.00 Non-Member Price: $25.00

Executive Council of Homeowners 1602 The Alameda, Suite 101, San Jose, CA 95126 Phone: 408-297-3246 Fax: 408-297-3517 TITLE

QUANTITY

This report is a guide for directors and managers to use for interviews with prospective service contractors.

Questions to find out capabilities and willingness of contractors to provide the services being sought are included for most of the contractor skills that associations use.

SUBTOTAL CALIFORNIA SALES TAX (Add 8.375%) TOTAL AMOUNT

Yes! Place my order for the items above.

Board Member’s Guide for Management Interviews Member Price: $20.00 Non-Member Price: $25.00 This guide for use by boards for conducting complete and effective interviews with prospective managers takes the guesswork out of the interview process. Over 80 questions covering every management duty and includes answer sheets matched to the questions.

q Check q Visa q MasterCard Credit Card Number Exp. Date

Signature

Name (please print) Association (or company) Address City Daytime Telephone

State

Zip

AMOUNT

ECHO Honor Roll

About

ECHO Honors Volunteers

ECHO What is ECHO? Serving Homeowners to Build Strong Community Associations

ECHO Resource Panels Accountant Panel Marco Lara, CPA 650-632-4211 Central Coast Panel John Allanson 831-685-0101 East Bay Panel Beth Grimm, Esq., 925-746-7177 Mandi Newton, 415-225-9898 Legal Panel Mark Wleklinski, Esq. 925-280-1191 Maintenance Panel Brian Seifert, 831-708-2916 North Bay Panel Diane Kay, CCAM, 415-846-7579 Stephany Charles, CCAM 415-458-3537 San Francisco Panel Jeff Saarman, 415-749-2700 South Bay Panel Toni Rodriguez, 408-848-8118 George Engurasoff, 408-295-7767 Wine Country Panel Maria Birch, CCAM, 707-584-5123

Legislative Committee Paul Atkins Jeffrey Barnett, Esq. Sandra Bonato, Esq. Jerry Bowles Oliver Burford Joelyn Carr-Fingerle, CPA Chet Fitzell, CCAM John Garvic, Esq., Chair Geri Kennedy, CCAM Wanden Treanor, Esq.

36

August 2012 | ECHO Journal

Regional Seminar Speakers Marin: David F. Feingold, Esq. Wanden P. Treanor, Esq. Glenn H. Youngling, Esq. Central Coast: John Allanson Sharon Glenn Pratt, Esq. Wanden P. Treanor, Esq. Glenn H. Youngling, Esq. Wine Country: Kirk Denebeim David Hughes Roger Doncaster Mark Dunia Bill Mann Barbara Zimmerman, Esq. Bill Gillis, Esq. South Bay: Sandra Bonato, Esq. Stephanie Hayes, Esq. Rick Coats & Sandra Long Alan Crandall Larry Russell, Esq.

Annual Seminar Speakers June 23, 2012 ECHO Annual Seminar Dawn Anderson, AIA Jeffrey Barnett, Esq. Brad Barroso Tyler Berding, Esq. Sandra Bonato, Esq. Wendy Buller Ian Brown Jeff Draeger Tom Fier, Esq. Kevin Frederick, Esq. John Garvic, Esq. Vic Giacalone Sandra Gottlieb, Esq. Beth Grimm, Esq.

Allan Henderson David Kuivanen David Levy, CPA Helen Loorya Richard Lowenthal Kerry Mazzoni Mike Muilenburg Andrea O’Toole, Esq. Ann Rankin, Esq. Larry Russell, Esq. John Schneider Brian Seifert Jim Shepherd Dean Shibler Richard Tippett Steven Weil, Esq.

Recent ECHO Journal Contributing Authors April 2012 Kenneth Carlisle Colletta Ellsworth-Wicker, CMCA, AMS, PCAM Graham Oliver Debra A. Warren, CMCA, PCAM May 2012 Tyler P. Berding, J.D., Ph.D. Robert Booty Larry Mesplé Mary Anne Sayler John Schneider June 2012 Tyler P. Berding, J.D., Ph.D. Burt Dean Hilary Lape, CMCA, AMS, PCAM Steven T. O’Brien Daniel E. Villalobos July 2012 Paul Collins, PCAM, CCAM Beth A. Grimm, Esq. Steven O’Brien Richard Tippett

The Executive Council of Homeowners (ECHO) is a nonprofit membership corporation dedicated to assisting California homeowners associations.

ECHO provides help to homeowners associations on many fronts: finances, legal issues, insurance, maintenance and management. Members receive help through conferences, trade shows, seminars, a monthly full-color magazine and discounted publications.

Who Should Join ECHO? If your association manages condominiums or a planned development, it can become a member of ECHO and receive all of the benefits designated for homeowner associations.

Benefits of ECHO Membership • Subscription to monthly magazine for every board member • Yearly copy of the Association Statute Book for every board member • Frequent educational seminars • Special prices for CID publications • Legislative advocacy in Sacramento

ECHO Membership Dues HOA Size 2 to 25 units 26 to 50 units 51 to 100 units 101 to 150 units 151 to 200 units 201 or more units Business/Professional

Rate $120 $165 $240 $315 $390 $495 $425

ECHO Journal Subscription Rates Members Non-members/Homeowners Businesses & Professionals

$50 $75 $125

How Do You Join ECHO? Over 1,800 members benefit each year from their membership in ECHO. Find out what they’ve known for years by joining ECHO today. To apply for membership, call ECHO at 408-2973246 or visit the ECHO web site (www.echo-ca.org) to obtain an application form and for more information.

ECHO Marketplace

Advertiser Index

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A collection of “Condo Q&A” published in the Los Angeles Times Questions & Answers About Community Associations

By Jan Hickenbottom

Ace Property Management . . . . . . . .20 American Management Services . . . .9 Angius & Terry . . . . . . . . . . . . . . . . .3 A.S.A.P. Collection Services . . . . . . .14 Association Reserves . . . . . . . . . . .27 Berding | Weil . . . . . . . . . . . . . . . . .40 BTC Bob Tedrick Construction . . . . .30 Collins Management . . . . . . . . . . . . .8 Common Interest Management . . . .22 Community Management Services . .30 Compass Management . . . . . . . . . .13 Cool Pool Service . . . . . . . . . . . . . . .8 Cornerstone Community Mgmnt. . . .32 Ekim Painting . . . . . . . . . . . . . . . . . .8 Eugene Burger Management Co. . . .18 First Bank Association Bank Srvcs . .13 First Guardian Community . . . . . . . .12 Flores Painting . . . . . . . . . . . . . . . .32 Helsing Group, The . . . . . . . . . . . . .20 Massingham and Associates . . . . . .23 Mutual of Omaha Bank . . . . . . . . . .20 PML Management Corp. . . . . . . . . .19 Pollard Unlimited . . . . . . . . . . . . . .22 Professional Gutter Services . . . . . .12 R. E. Broocker Co. . . . . . . . . . . . . .19 Ram, Olson, Cereghino & Kopczynski .2 Rebello’s Towing Service . . . . . . . . .20 REMI Company . . . . . . . . . . . . . . . .27 Saarman Construction . . . . . . . . . .14 Statcomm . . . . . . . . . . . . . . . . . . .22 Steve Tingley Painting . . . . . . . . . . .39 Varsity Painting . . . . . . . . . . . . . . . .15

Member Price: $18.00 Non-Member Price: $25.00 For 12 years, Jan Hickenbottom answered homeowners’ questions in her Los Angeles Times column on community associations. Now collected in one volume, readers can find answers to almost any question about CIDs. Order today from ECHO! Call 408-297-3246, fax at 408-297-3517 or order online at store.echo-ca.org

ECHO Journal | August 2012

37

New election rules: $500 In today’s economic crisis, there may be some items that associations can cut to reduce costs. ECHO membership is not one. Let’s face it, educated board members are better fiduciaries, which helps them to avoid costly law suits and possibly personal liability.

ECHO is the premier resource in California for board member education. ECHO offers new articles each month with practical and easy to understand advice about current California requirements, and what may be on the horizon. ECHO staff is available by phone or E-mail to answer members’ questions about association problems or to recommend competent professional services when necessary.

And with discounted member rates at more than a dozen educational events throughout the year, ECHO is simply the best educational resource for California homeowners.

Avoid Litigation Each year, as a member benefit, ECHO sends every board member a copy of the updated Community Association Statute book. Every issue of the ECHO Journal and every seminar examine one or more aspects of compliance with association law, because one of the major causes of expensive litigation is ignorance of the law.

Mailing ballots: $200 Make Better Financial Choices Many associations struggle to understand reserve funding requirements and strategies, the benefits and disadvantages of using special assessments, proper collections practices, and even how to determine what components the association is required to maintain.

At a time when wise financial planning is essential, ECHO members have access to a wealth of articles about reserve funding, budgeting, insurance, collections, and much more.

Fight Costly Regulation Every year, Sacramento legislators introduce more legislation that confuses the job of California board members and increases the costs of compliance. ECHO is committed to fighting unnecessary regulation in California and promoting the interests and welfare of common interest developments.

Hire Competent Professionals ECHO offers a variety of articles and publications to help members evaluate their service providers, including questions to ask prospective management firms and contractors. All ECHO Journal articles are available to members at no cost, and publications are sold to members at a discount.

Avoiding a lawsuit: Priceless.

Spend a Little, Get a Lot The cost of ECHO membership is minimal. In a worsening economy, associations are looking to cut big expenses from their budgets. Yet, ECHO membership is as little as 25¢ per unit each month. For that small cost, here’s what every board member receives as part of being a member of ECHO: • A subscription to the ECHO Journal • An annual copy of the current Community Association Statute book • Unlimited access to ECHO’s library of past articles • Telephone consultations with ECHO staff about their problems • Reduced fees for ECHO events • Discounted prices on publications • And much more…

In These Tough Economic Times, ECHO Membership is a Necessity As the only California organization devoted exclusively to board member and homeowner education, ECHO is a one-of-a-kind resource that your association can’t afford to lose.