Planning for Disaster: The Importance of Emergency Procedures

By Christopher Nicosia, CMCA, AMS, MM – Operations Manager

You’re sitting in your living room when your cell phone makes that alarming noise that accompanies an urgent message from a governmental agency, “Hurricane Approaching, Make Preparations Now!”.  What do you do?  You are the Board President and have 1,000 homes and a clubhouse that are all in nature’s destructive path.  What should you do first?  You have retention basins that can overflow during significant rain fall events.  You have a Clubhouse with pool furniture, screens, pretty planters and pergola covers that could blow away.  You have homes with people on vacation and lots of furniture on their patios.  What to do...what to do?!?!

This is just one example of why an emergency plan is so vital to the operation of a community.  A fundamental responsibility of an association, through its governing board and management (if applicable), is to assess and mitigate risk whenever possible.  Specifically, it is essential to identify areas that are vulnerable to damage, that could cause damage, or pose an injury risk or worse and determine a way to minimize the possible negative effects.  Whether it is securing pool furniture, removing screens from windows in the Clubhouse, draining down irrigation ponds and retention basins to allow for flood water mitigation or educating homeowners on proper planning practices and home maintenance, an emergency plan is a comprehensive approach to prepare for, and respond to, a wide variety of emergency conditions and situations.

So what risks are you looking for?  Well, that depends on the scope of your responsibility.  A condominium association may have more risk to assess and mitigate than a single family home development.  A community with a large Clubhouse may have a greater scope of risk than a community that only has a pool.  It is important to understand the scope of your responsibility as delineated by the Association’s governing documents.  Once you understand your responsibilities, you can better assess your risk. 

To identify risk, it is important to understand what various cause and effect relationships can be exacerbated by natural and man-made disasters.  For instance, if a community’s storm drain system ties into retention basins directly adjacent to homes, what is the path of least resistance for that water during a hurricane?  Will the rain water collected in the basin overflow and, if so, which direction will it flow?  Is said retention basin part of a network of basins or does it overflow to a wetland?  Does the wetland run downhill to a stream that borders neighboring properties?  The cause and effect here is – significant water could flood the association’s property or potentially flood neighboring properties downstream in the event of a significant rainfall event.  As part of an emergency plan, what solution mitigates this risk?  Perhaps the Association could use large pumps to draw down retention basin levels ahead of a storm to create additional capacity to prevent overflow.  Each risk requires a detailed assessment and then a practical approach to mitigate it.

It is very important with emergency planning to keep the K.I.S.S. (Keep It Simple Stupid) Principle tantamount.  In an emergency, there are significant strains on existing resources and even greater stress on you – the person responsible for managing the emergency.  Overly complex plans will only lead to failure as it may be nearly impossible to execute a difficult plan in adverse conditions.  Instead, it is important to make a clear and easy to follow plan and do as much of the preparation necessary ahead of an emergency so execution during an event is easy and requires little additional resources or thought.

Included in every emergency management plan should be an evacuation plan of buildings and a vehicular traffic management plan to balance traffic across all available exits, keeping in mind the municipal street capacities the community feeds.  Additionally, plans should have a monetary allowance (emergency spending authorization) in the event the entire Board is not readily available to authorize spending for things like additional security, emergency repairs, etc.  Communication protocols should be defined to ensure streamlined and timely communication within your community as well as with municipal, county, state, and if necessary, federal agencies.  Keeping in touch with local government and communicating all relevant information to homeowners is essential to maintaining order and ensures available resources are directed to the community when needed.   Finally, an emergency plan must prepare all stakeholders and include information for individuals to plan – information on disaster preparedness from the American Red Cross or FEMA are good to include.  Homeowners should be encouraged to make individual plans with their neighbors – the Association cannot address all of its responsibilities and those of the individual homeowners...it needs everyone’s help!

In closing, Emergency Plans are becoming not only important tools for communities in the shadows of disaster, but also a requirement by government agencies of associations that meet certain population and infrastructure thresholds.  All associations should consult with their local and county government officials to determine if an emergency plan is required for their community and what is required to be included.  While this article provides a primer for the construct of an emergency plan, it is important to understand what is required for your community and what meets the needs of your homeowners and the government agencies that have jurisdiction in your area.   Regardless of governmental requirements, proper planning is rarely a negative and having a plan for your community, regardless of size, can help make an emergency situation easier to manage. ###

Christopher Nicosia is the Operations Manager at Prime Management, Inc.  He has nearly 15 years experience in association management and consulting, is a Certified Manager of Community Associations, an Association Management Specialist and has undergraduate and graduate degrees in business and management.  Mr. Nicosia can be reached at (609) 693-0090 or cnicosia@primemanagementinc.com.  Visit Prime Management, Inc. online at www.primemanagementinc.com.  

Small Companies in the 21st Century Business Environment

by Christopher Nicosia, CMCA, AMS, MM - Operations Manager

When we look at the business environment of the 21st century and assess our place within it, we notice a distinct delineation amongst all involved -- size.  Whether it is market dynamics, economics or government doctrine, there is a clear and undeniable difference between the small business and everyone else.  What defines "small business"?  Easy - the magic number -- 50 employees.
 

The real grey area in this environment is not over 50 or under 50...that is clear.  The grey area is under 50 employees but larger than sole proprietorship.  When it comes to human resource management, health insurance, worker's compensation insurance, etc., the laws of the land dictate that if a company is over 50 employees, it is bound by all the federal and state laws and guidelines for medical benefits, employee rights, time off, leave, FMLA, discipline and the list goes on.  However, when under 50 employees, nearly every federal and state law goes to the wayside in favor of employer-defined practices.  Sure, there are still laws that prevent small businesses from employing a 12-year old that works 70 hours a week, however, the protections employees receive and employers must comply with are largely dismissed unless a company breaches the 50-employee mark.  The question is - what about a company with 49 employees and a fairly public image, what tack does it take? 
 

Some would argue that the 50 employee cut-off established by the federal government for most of its employment and health insurance regulations is a burden to companies that fall close to that size.  The cost of providing ACA-compliant health insurance, FMLA, paid leave, military leave, maternity leave is high, especially when you must not only find a suitable replacement in order to continue operations but must also ensure the employee has a position to come back to at their same salary and benefits level.  This becomes compounded for companies that fall just short of the threshold amount but are still public enough to feel the pressure of public opinion.  How does a company that is not required to comply with the federal regulations but is close in size to a company that does compete to hire talented individuals?  What can they offer that will attract talent away from the safety net of a 50+ company bound by federal employment regulations?  In general, how does a small business compete in this 21st century business environment?
 

The answer lies in the foundation of small business success -- a family environment with mutual respect and intangible benefits.  Most small businesses cannot beat out larger companies for benefits such as higher salary, paid time off, leave, daycare, vehicle lease programs, etc.  However, small businesses can offer a family atmosphere, flexible benefits to meet the particular employee's needs, the feeling that the employee is not just a number, but a valued and integral part of the company.  Additionally, experience is also a valuable negotiating tool.  Small companies have opportunities to mentor, coach and groom new talent that some larger companies may not.  Whether it is a structural issue, an industry-specific limitation or simply an expectation issue, larger companies may not be able to provide the one-on-one experience that a small company can.  Small businesses have a "loyalty equals success" attitude.  Loyalty, above all else, can be a deal breaker when trying to acquire talent.
 

While the 21st century business environment is one that comes laden with regulations and imbalance, it can present opportunities for success.  It requires forward thinking, an understanding of limitations and an ability to leverage intangible benefits against flashy tangibles.  Small businesses thrive in this environment...small and nimble can beat large and clumsy if the strategy is right.

 

Christopher Nicosia is the Operations Manager at Prime Management, Inc.  He has nearly 15 years experience in association management and consulting, is a Certified Manager of Community Associations, an Association Management Specialist and has undergraduate and graduate degrees in business and management.  Mr. Nicosia can be reached at (609) 693-0090 or cnicosia@primemanagementinc.com.  Visit Prime Management, Inc. online at www.primemanagementinc.com. 

Financial Controls in the Community Association Environment

by Christopher Nicosia, CMCA, AMS, MM

Financial controls are at the cornerstone of all successful businesses operating in the litigious and financial minefield of the 21st century.  Historically, some of the largest and most successful corporations have been brought to their knees by less than adequate financial controls and reporting standards.

In the community management industry, management companies are held to a high standard when it comes to financial controls and reporting.  Planned unit developments that have associations managing its day to day affairs of the community are required to contract for a 3rd party audit annually (based on governing document requirements) that reviews the association's financial records as well as the management company's policies and procedures for financial controls and reporting.  This review evaluates everything from separation of check signing privileges from account reconciliation, personal information confidentiality, segregation of funds in separate accounts and evaluates the strength of those controls against industry standards and published regulations.  The independent auditor (a CPA firm) issues an audit with an opinion on the financials and provides a management representation letter, which provides a summary of their analysis of the controls, the financials as they are presented and suggestions for changes, if necessary.  This document becomes part of the public record of the association and is an important part of the overall management and governance of the association.

In the association environment, there is always speculation regarding the transparency and adequacy of fiscal management and financial controls.  All too often, especially when a maintenance fee increase is necessary or a special assessment is approved, the integrity of the financial process is brought into question.  The political pressures placed on a Board to justify the financial position of the association and the management of funds becomes overwhelming.  It is imperative that associations have professionals on their side to provide support, ensure that all financial controls are in place and all documentation is in compliance with all applicable standards and regulations.  This provides a board of directors with the ability to explain to their constituents with irrefutable proof that the finances of the association are properly managed, well maintained and protected.  While proper financial management and 3rd party oversight is not without a cost, the necessity and benefit of having proper preparation of financials and third party verification of the work of those in charge of financial management is undeniable.  Having a strong team of professionals working together to provide comprehensive preparation, review and oversight of the financial process will help avoid unnecessary fodder by stakeholders regarding board decisions of financial matters.

Bottom line -- professional financial preparation and management by a qualified management company or accountant in conjunction with 3rd party oversight and evaluation provides protection for an association and a strong position for financial decision making and justification of decisions to stakeholders within the community.

Christopher Nicosia is the Operations Manager at Prime Management, Inc.  He has nearly 15 years experience in association management and consulting, is a Certified Manager of Community Associations, an Association Management Specialist and has undergraduate and graduate degrees in business and management.  Mr. Nicosia can be reached at (609) 693-0090 or cnicosia@primemanagementinc.com.  Visit Prime Management, Inc. online at www.primemanagementinc.com.