When we work with HOA, Cooperative and Condominium boards on cutting costs, they often want both significant and immediate results. We understand and want this too- and not just because our compensation is based solely on the amount of realized savings! However, just as with investing, there is no “get rich quick” scheme to saving money. It’s not just big-ticket items that accumulate into greater wealth; it’s the consistency in eliminating the small expenses and wastes that grow into impressive sums over time.
In your HOA, Condo or Cooperative, your association’s expenses should be reviewed on an ongoing basis in order for it to operate efficiently and generate wealth for the owners. Here are some of the small expenses that add up over time that too often are not reviewed and/or renegotiated and some tips on how to change all that.
Bank fees: When we see bank fees that show up in the hundreds of dollars per year, we question them. In today’s environment where there are automatic or electronic payment options for everything, there is no reason for associations to have large bank fees. In our opinion, large bank fees imply either lack of knowledge or negligence. It also raises the question as to what other small details are being overlooked. What large details, too? Boards should look into and implement ACH and other free electronic payment options to reduce their bank fees. Until they do, these fees will continue indefinitely.
Telephone fees: Most buildings have at least one fixed phone line and potentially many more. These are associated with the callbox that is used for the buzzer system, the virtual doorman system, or the doorman station plus elevator emergency phones and fire alarm panels. As telephone services have become more competitive, there are frequently great, and less costly, alternatives to the existing service. One example is in Chicago, “where AT&T charges almost twice what Illinois Telephone Corporation does for the exact same service” says Todd Presnick, president of his Chicago condominium board and an independent representative of ITC.
Payroll fees: While the staff size in a building differs with the size and services of the building itself, the payroll fees can vary tremendously, primarily due to when they were last negotiated. “If the fees were negotiated before the industry became almost completely transparent, due to improved technology and internet connectivity, they could very well be double or triple that of the current industry standards,” says Daniel Marrs of Paychex. If the property manager made a deal with their payroll service 5 years ago, the fees can probably be cut by 50% if they simply revisit and renegotiate today.