James Hopkins: 0:00

Whatever your board is, don't deal with anything on a personal level. Deal with it as an organization that has personal impact, and try to maintain that type of demeanor and feeling. But I would ask anybody on a board, patience is critical. Patience is critical.

Announcer: HOA Insights: 0:24

Common Sense for Common Areas, exists to help all 2 million volunteer board members nationwide have the right information at the right time to make the right decisions for their future. This podcast is sponsored by for companies that care about board members, association insights and marketplace, association reserves, community financials, and Kevin Davis Insurance Services. You'll find links to their websites and social media in the show notes.

Robert Nordlund: 0:55

thankless job. What comes to your mind when you hear those two words, having served on the board of my condominium association for several years, followed by decades of experience in this industry, there is one job that without a doubt deserves to be at the top of the list, an elected volunteer HOA board member. So a regular feature of our weekly podcast is one episode a month devoted to sharing the stories of real life unsung board heroes, in our eyes, aboard hero was one of the 2 million elected volunteers who are worthy of recognition for simply performing a thankless job. Well, if you match our definition of a board hero, or know someone who does, please reach out to us. Our contact details are provided in the show notes. Well, welcome back to Hoa insights, common sense for common areas. I'm Robert Nordlund, and I'm here to share the story of an unsung board hero named Jim Hopkins. This is episode 69 and if you missed meeting our other board heroes, you can find them easily on our website, Hoa insights.org, on our YouTube channel, or by subscribing to Hoa insights on your favorite podcast platform. But before you hear Jim's story, let me introduce you to one of our sponsors. Hi, I'm

Kevin Davis: 2:09

Hi, I'm Kevin Davis, the president of Kevin Davis Insurance Services. Our experienced team of underwriters will help you when you get that declination. We provide the voice of reason, someone who will stand by you. Our underwriters bring years of knowledge to our clients that can't be automated by technology or driven by price. As a proud NWS company, we bring true value to your community association clients. We are your community association insurance experts.

James Hopkins: 2:38

My name is Jim Hopkins, and I serve as a volunteer on the board of directors at Laguna Woods village for about four years. Now, when I'm not wearing a board member's hat, I'm retired, but I continue to put my financial consulting skills to use often, the three words I would use to describe the job of being a board member are that it is unique, challenging and rewarding. The main story I'd like to tell today is the story of our organization and how we run it. Our governance structure is more challenging than the smaller complexes, because it is and it is rewarding to solve the problems that that it presents to us.

Robert Nordlund: 3:27

Laguna Woods Village is a massive 3.4 square mile, 55 and older community in Orange County, California, made up of over 12,000 units, including condos, cooperatives and high rises. The property is about 60 years old. 72% is owner occupied, and they have an annual budget of 185 million. And I said that correctly, this is a huge Association. Jim has lived in the community for 11 years and has served on the board for four of those years, first as the board treasurer and currently as the board president, we decided to kick off this interview, as we often do, by asking Jim what motivated him to join the board. I

James Hopkins: 4:10

looked at my background and some of the things that were happening, and I decided that my background, with my background, I may be able to assist in the transition from a purchased property manager to a self run property management. I like to contribute, and it makes me feel good that my contributions can make a difference, and that's really the reason I joined the board. I had every notion to retire in and go on a lot of cruises, which I did when I first got here, went on a lot of cruises, and then my wife became ill, so that that kind of went out the window, and I decided to join the board.

Robert Nordlund: 4:56

a great example of a resident that joined the board not to pursue. Their own agenda, but to assist with a project that would benefit the community at large, Jim had more to say about that experience later on, so stay tuned before we get to that however, we wanted to know more about the community structure and the board structure at Laguna Woods village, including the number of members, length of terms, and whether each seat had term limits or not, the

James Hopkins: 5:21

community is made up of three housing mutuals. One would be united that's made up of about 6300 cooperatives. The other one other mutual is third mutual, which are condos. There are about 6100, of those. And then the third mutual is called mutual 50, and it is made up of 214 story towers. And there are about 311 units there. So in total, there's 12,736 units in the community on my board, and this is where the complex management structure, or the board structure, comes in. On my board, there are 11 members. We are called GRF, or golden rain Foundation, board of directors. But there are also three other Jim went on to clarify that his board, the golden rain four other boards. One is the board of directors for the property manager, which is made up of all residents. The other three boards are the mutuals, or housing mutuals, and that's made up of 1111, and five. There are nine on the property managers board, and all of these are managed. Are residents, essentially. So there are 11 on my board, but 47 in total. Each term is three years, but there are no term limits. I believe we had them at one point in time, but I think recent Civil Code says that you really cannot. Civil Code is what we govern. All HOAs are governed by in California, I think Civil Code made those we had to delete that that stat Foundation, or GRF for short, is responsible for the upkeep of all the services and amenities that Laguna Woods Village offers to his residents. We next asked Jim about the relative ease of getting elected to the boards in his community. Well, let's talk about GRF board, because again, there are five boards we are I would say GRF becomes the most difficult because it is essentially voted on by the three mutuals, the Board of Directors of the three mutuals. So you really have, what is it? 27 votes, and we have a pretty rigorous interview process. We're founded by the GRF trust, and so the whole governance structure, you really have to know this the trust, not as an attorney, but you just have to understand how it impacts who does what to whom within the government structure. So there's a lot of questions on that. So our I would say it's more difficult to jump through the hoops for GRF than is for the mutuals, which are which those board members are elected by the residents. And so there's a campaign. And you know, all of the things that go along with the campaign, there's some of them do, do actually go out and get material for to to persuade the the residents. And of course, you're dealing with 6000 residents on each end. So that's that's that can be costly, just to add to that, of course, without TV station, you know, we also their interviews. We have a professional host that is part of our TV six. And there are times when they'll come on and interview the candidates, because everybody has an equal chance. It's quite extensive. Like I said, we're half, but we're 90% 95% of the city of Laguna Woods. So we have to do it right.

Robert Nordlund: 9:15

While many of our listeners and viewers are board members, very few of them live in communities that are as large as Laguna Woods village and that are governed by multiple boards. So this prompted us to ask, how many hours Jim invests every week into the governance of such a large community? Interestingly

James Hopkins: 9:34

enough, I'm spending less time now than I was as treasurer, because I have a tendency to delegate and follow up. And with that said, I still have to be in tune with

Robert Nordlund: 9:47

After Jim had clued us into the board everything. So I do we, we broadcast our meeting so I can access meeting, our committee meetings, so I stay in touch, but I don't have to do as much and to move. Decisions and adding to the process. So I would say between 15 and 40 hours per week depends on the circumstance. structure at Laguna Woods village, we wanted to know more about him as a board member, so we asked Jim about his personality and if he brings any special gifts or talents to his board of directors,

James Hopkins: 10:25

My personality would be pleasant, flexible, but firm on the facts, I usually take a leadership role, and not because I try for it, because people kind of look to me based on how I project or whatever it is to lead, and I end up in leadership roles no matter what, so whatever it is, because you never know how other people see your your personality. I think I'm pleasant and a nice guy. My friends think so, but there are times when my colleagues don't think so.

Robert Nordlund: 11:01

We next want to know whether Jim had any favorite or least favorite aspects of serving on the board of the GRF. Here's what Jim had to say.

James Hopkins: 11:09

Well, my favorite is working with positive, flexible and informed board members and residents, my least favorite is just the opposite, you know, and you get a ton of those. What I found out though through, is that that other side is a relatively small segment of this population. They just make a bigger noise, but they have to be listened to because they're not necessarily raw. They they're seeing something, they're hearing something. And so you do have to listen, and we do, and many times it's it's only their experience which still means something, but we still have to, you know, that's our job. That's our job. In

Robert Nordlund: 11:58

a post covid world, it's become very common for boards to adopt virtual or hybrid formats for their board meetings, and we often ask the board heroes we feature on this program about how they've handled that transition. But Jim mentioned something very interesting in a previous answer about how the boards in his community broadcast their meetings over their own TV station. Naturally, we want to know more, and decide to ask Jim to speak on that.

James Hopkins: 12:25

30 years ago, the cable company that was supplying us was bankrupt, and we bought him out of bankruptcy. So we actually operate our own cable company. Okay? So we buy the programming, just like any other cable company. The challenge is it's only 12,736 of us forever. So as programming goes up, the price goes up. That's not comfortable for anybody, but we broadcast that over our TV six, which is our channel. We also now with the Internet. We have it's obviously rebroadcast on the internet, through YouTube. We also broadcast during the meetings. The meetings are held in the boardroom. We also broadcast on something called Granicus, so it's being broadcast to all the community at that time, at the time it occurs, and then later on, of course, it's available on TV six at a later time, usually the same day, and it's also available on the internet. So, you know, with 18,000 residents, I mean, communication becomes very critical, because most are out playing golf and enjoying the all the amenities that and services that we we we give them,

Robert Nordlund: 13:37

while the covid 19 pandemic might not have affected the attendance, conduct and distribution of board meetings at Laguna Woods village, it certainly affected and created topics of discussion at their board meetings. Jim provided us with further details on that subject.

James Hopkins: 13:53

Well, the the political aspect of probate, covid notwithstanding, okay, we had inoculations or maybe assignations, I guess you'd say that were free. Quite a few took advantage of that. It did shut down quite a few of the amenities. You know, obviously you had to wear masks, and there's a lot of other things. It also initiated some work from home, thing environments with our HOA property manager. So those things actually helped us to then look at what else do we need in our in our software and administrative system to support the future? These things change quite rapidly now, and we we just start to adapt, of course, since people couldn't take advantage of some of the amenities, we also returned to surplus, because we budgeted a certain surplus, and so that became part of their HOA fees. And for the next two or three years, we actually returned. Some of the surplus. So that's practically done now, and now we're starting to operate, you know, on, uh, on a day to day basis, on a year to year basis.

Robert Nordlund: 15:10

So far, it seemed that Jim had a positive view of the GRF board and the work that he's accomplished as a part of it. We next asked him how he felt about the culture of the board, and here's what he had to say.

James Hopkins: 15:22

Well, I think the the culture of our board is independent, friendly, but we'll debate. We enjoy each other. There are times when we get upset at each other, being on different sides, but it's never personal, and I think that's what makes, or can make a board easy and pleasant to work with. We got some tough decisions at times, and so it's good that people feel free to express themselves, and I'm flexible enough to hear the other side and maybe sometimes agree with the other side. So I enjoy with the board. In fact, the board meetings themselves are almost anti climatic. It's really because of our committee structure. Because for every major for every amenity and or service, there is a committee. My particular board has 16 committees, and a lot of the issues get solved at the committee level. That's that's the difference. So by the time, most of the time, by the time it comes up to the board level, all of the Completed Staff Work, residential input, resident input has been done only very seldom do we hear the whole story and perhaps go against the committee recommendation. Very rarely we have done so, but very rarely. So that's what makes our structure, I think, a little bit different, is that the committee structure and some of the the critical committees that are involved in strategic decisions, I will be, I'll I will be closer to because one of my goals when I got here was to deal with more of the Strategic rather than the everyday issues.

Robert Nordlund: 17:22

Now you may recall that Jim's reasoning and motivation to join the GRF board was that he felt he could help transition Laguna Woods village from retaining an external property management company to a property management company that they own outright. We wanted to know if he had succeeded, and asked if they still retain an external property manager.

James Hopkins: 17:44

We did up till 2016 we then decided to form our own corporation, and because we are so large, many of the people who came from the old property manager decided to go with the new company and and I wasn't part of that, but you think about it, we're so large, it's about 700 of our property manager company has about 700 full time equivalents. When we decided to go on our own, the old property manager now had roughly 700 jobs that it no longer had use for so many of them did come with us, and I don't know the number, but we did hire a CEO. Some of the executives, we hired new executives. Obviously, we hired a new CEO. Okay, and so, and we also created our own, the own board of directors for this particular company. And as a result of that, a lot of the onus and responsibility probably shifts to the board. It is a separate Corporation, by the way, right? And so there has to be a corporate separation. There also has to be some level of oversight through their board, not the HOA board, that corporation that serves as our self owned property manager has a has a board that operates as a business. So we as board members have to be very mindful of our limitations in getting involved in property managers, activities such as personnel management makes it unique. And of course, you know, given the fact that we are young people, set in our ways, telling someone that's you know always been involved, to tell them that, no, you don't have anything to do with that particular person over there. Okay, sometimes that is challenging, but we get it done. We get it done. Well, it seemed

Robert Nordlund: 19:47

like starting their own property management company was the best solution for the community at large. It did come with its own challenges for the board as well. We were curious if maintaining this new company on top of their own. Cable company and all of the amenities at Laguna Woods village was putting any financial strain on their board. So we asked Jim if he considered their association to be well funded. Yes, yes,

James Hopkins: 20:15

we have done a pretty good job of obviously, we make our budgets every year, the operating budget on the reserve side. We are also well funded. In fact, when I first became into GRF, one of the first things I looked at was the reserve and it occurred to me that we were and I had no knowledge of the reserve study and all those kind of things, but it just occurred to me, given the amount of assets that we managed, that we may or may not be funded adequately. And then when I got into become the treasurer, what I found out is we have been funded adequately, however, given the age of the structures, etc, etc, perhaps we were growing our fund the way it needed to grow or needed to be funded. So that's when we actually got a professional we had actually been doing our own we it's not required. First of all, it's not required to have a reserve. It But secondly, it's not required to have a professional study. But I thought we would have a professional study. It turns out we did. Our property management company had been structuring its own reserve approach, and it turns out it pretty much matched what professional people were doing. The one thing they didn't do is they had something called a a threshold, and their threshold was fairly low, given the fact that we could be hit with a fairly large expense at any time, or a or something that we wanted to do, some sort of amenity that we wanted to get into. So at that point, I started looking at it, do the do analysis on it, and that's when we decided to increase, not the HOA contribution, but there's something called a transfer facilities fee. Upon buying into Laguna Woods, the new owner pays a one time fee, and what we did is we increased that. And of course, most of the people are coming in retired. The fee increase did not dissuade anybody from coming in. And it's also done in other communities, and our sister communities, Walnut Creek and Seal Beach, both in California, they've been doing it for years as

Robert Nordlund: 22:43

a community association reserve specialist and the founder of a company that performs reserve studies. I was very happy to hear that Jim and the rest of the GRF reached out to a professional to see how they could bolster the financial health of their association, and they accomplished that without needing to increase the monthly HOA obligations of the homeowners. With all that being said, we are curious as to how much the GRF was setting aside in reserves. So we asked Jim what their percent funded was. Currently,

James Hopkins: 23:12

we're well over 50% okay, the thing is, though, because, and again, this is GRF. So these are amenities. If you're in housing, you're spending a pretty more predictable amount each year, because it's basically to make sure rules and other things are done, especially when you talk about 3.4 square miles. So it's a basically continuing maintenance, and it's not technically maintenance, but it is basically enhancing or continuing to maintain the house values while operating at the same time with the operating fund. So you so there's a continuing spending level within those with ours that is GRF. We're dealing with amenities and buildings sometimes, for instance, where we are just starting the renovation of the first clubhouse building, it's 60 years old, never been renovated. So, yeah, I mean, it's been juiced up, but never been renovated. So here we are. We're going to renovate it right now. It's closed. It'll be open in August. It's scheduled to be reopened in August. It's closed in March, and that's about a three, three and a half million dollar renovation. So when you got three, three and a half million dollars that's going to be spent in six months, you got to be prepared for that. And so ours is more start stock than steady. That's why we have to maintain a pretty good, abundant balance. We also own our own TV company. We also own the cable network, which means the underground, which means at some point in time, perhaps. That's going to need to be replaced. So we have a lot of these things that. And by the way, all of this is part of the understanding and study, even though it has not occurred yet. We start to when we have an asset, the first thing we start to do for is to reserve for its replacement, error or and or enhancement. And that starts at the beginning the purchase of that asset, or the completion of that asset. That's why, when I understood that and looked at our quote threshold, I said, we're not operating we need to look at this differently. And so we we now group our the first five years. We know more about what's going to happen within five years, then after that, and obviously we we budget for the first year or allocate for the first year. So our our planning system of planning approaches now, first year, obviously, is the allocation years two through five, we kind of know what's coming down the pike. So that's more appropriately planned. After that becomes projection.

Robert Nordlund: 26:03

We thought it was great that the GRF was starting to reserve for a components replacement as soon as it was first purchased. Proactive. Reserve planning is good. Reserve planning. We next asked Jim what the board's focus will be in the coming year. One

James Hopkins: 26:18

of the things that I'm focused on, besides all of the day to day stuff, and many of the officers are focused in on, too, is understanding the processes that need to be firmed in order to get better outcomes. For instance, communicating to 18,000 residents and have them be interested is a challenge, okay? And so we're working on that. When we send out an email to all the residents, we look at open rates. We look at all of these things. What are they interested in? What gets when you put this particular item in, what's the open rate? Well, obviously some people never open but sometimes the when something starts to information starts to travel that they're interested in, you'll see the open rate go up maybe a week later. So you see all of these things happening. The so and also structure. The governance structure is the government structure, but there's some working with the other boards, and some limitations and ground rules that we need to make sure that we all agree to so that we can have a good, a system that benefits the community, not just board a, board B, board C. So we're looking at that the financial planning, we made some changes in it, just in in how it's done, to the point where we used to reach the end of the financial planning process and there'd be no disagreement. Now, wish we've done we've changed the meeting process around so that you get a great you get agreement on certain things up front, so by the time you get to the end, it's kind of like a smooth landing, okay, even if the the issues or the the number is not a good number. It's still understood. So again, I would say structure and process are our main goals. The day to day stuff is usually handled well at the committee level, we property manager handles the data, the day to day, service level amenities. They handle that fantastically well. We listen to complaints and hear them. We also know that they're between five and 7% of the population, the 95 97% of the community. Is happy with what they have. They're busy playing golf, tennis, pickleball, whatever it is they like, okay, and we have over 250 clubs here.

Robert Nordlund: 28:52

Finally, we wanted to close out this episode, as we often do, by asking Jim if he had any words of advice to impart on any board members tuning into this program, whatever

James Hopkins: 29:03

your board is, don't deal with anything on a personal level. Deal with it as an organization that has personal impact, but and try to maintain that type of demeanor and feeling it's very difficult. I'm a corporate person, and we would debate things, but it's more difficult in this environment a because of the age and stage of the residents and the board members, the organizational structure. When it comes down to those things I have to I don't get anger, I don't get mad. I can get firm, because I can never lose lose it because of what people say or how they say it. It's always a job. It's not who I am that's tough to maintain that difference. I've had corporate training to do that, and that's part of who I am, but I would ask anybody on the board, patience is. Critical. Patience is critical.

Robert Nordlund: 30:03

We want to publicly acknowledge Jim for performing a thankless job well, and compliment the board of directors at Laguna Woods village for taking their responsibility seriously to act in the best interests of their individual associations. We hope you gain some HOA insights from Jim's story, and that it helps you bring common sense to your common area. Thank you for joining us, and we look forward to another great episode next week. And remember, if you match our definition of a bored hero, or know someone who does, please reach out to us. Our contact details are provided in the show notes

Announcer: 30:41

You've been listening to HOA Insights: Common Sense for Common Areas, you can listen to the show on our podcast website, Hoainsights.org, or subscribe on any of the most popular podcast platforms. You can also watch the show on our YouTube channel. Check the show notes for helpful links. If you like the show and want to support the work we do, you can do so in a number of ways. The most important thing that you can do is engage in the conversation. leave a question in the comment section on our YouTube videos. You can also email your questions or voice memos to podcast@reservestudy.com Or leave us a voicemail at 805-203-3130. If you gained any insights from the show, please do us a HUGE favor by sharing the show with other board members that you know. You can also support us by supporting the brands that support this program. Please remember that the views and opinions expressed by the podcast do not constitute legal advice. You'll want to consult your own legal counsel before making any important decisions. Finally, this podcast was expertly mixed and mastered by Stoke Light Video & Marketing. With Stoke Light on your team. You will reach more customers with marketing expertise that inspires action. See the shownotes to connect with Stoke Light.