Russell Munz: 0:00

And some cases, I find boards that don't have financial reports for 236, months, even a year, you're trying to operate an organization, and you have no information on how to do that, that loses trust with the homeowners, and then the homeowners then are upset with the board, so that causes a lot of and lost energy and aggravation and negativity. It becomes a whole, whole thing, and the whole time it could have been resolved by being more transparent and following better you know, accounting practices

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Robert Nordlund: 0:51

Welcome back to Hoa Insights, common sense, for common areas. I'm Robert Nordlund, and I'm here today for episode number 110 for conversation with Russell Muns from community financials, one of our sponsors, Russell, is in the enviable position of seeing the Community Association industry as an insider helping associations all across the country monitor their cash and their cash flow. Last week's episode number 109, was another conversation with regular co host Julie adamen, providing insights how the characters and passions and priorities of those individual board members are revealed in ways that serve their community. Now, if you missed that episode or any other prior episode, take a moment after today's program to listen from our podcast website, Hoa insights.org, or watch on our YouTube channel, but better yet, subscribe from any of the major podcast platforms, so you don't miss any future episodes. Well, those of you watching on YouTube can see the HOA insights mug I have here. Have one with a cartoon on it, and you can get one just like it. You can browse through and see what we have at our merch store, which you can see from Hoa insights.org or the link in the show notes, and you'll find that we have some great free stuff there, like board member zoom backgrounds and some specialty items for sale, like the mug. So go to the merch store, download a free zoom background, take a moment look around, find the mug you'd like and email me at podcast, at reserve study.com with your name, shipping address and the mug choice, and if you mention episode 110 mug giveaway, and if you're the 10th person, I'll ship that mug to you free of charge. We enjoy hearing from you responding to the issues you are facing at real life, at your association. So if you have a hot topic, a crazy story, or a question you'd like us to address, you can contact us at 805-203-3130, or email us at podcast at reserve study.com and this episode was prompted by one of those questions. It's Tyler from Cleveland who asked we review our monthly financial report, but I'm not really sure what it's telling me, what decisions I should be making based on it. To me, they're just numbers. Please help. We have Russell here today with us. So Russell, let's get right to it. Welcome to the program. And how would you respond to Tyler?

Russell Munz: 3:18

Thank you, Robert, and great to be here. And I hear questions like Tyler's all the time, how do you bring the numbers to life where it means something, where the board can then take action? So that gets into, you know, the Board may get a stack of a report, if you printed it out, would be a, you know, half an inch thick or something, or an inch thick, and it's filled with all of these tiny numbers, and it can be perplexing, especially if you get it, you know, a day or two before the meeting, and you got a busy life, and you then you're kind of scrambling on, what should I be looking at? Yeah, what

Robert Nordlund: 3:53

do you mean if you've got a busy life? We're talking board members here. They already have a life, and they're

Russell Munz: 3:58

that even assurance that you've got the financial reports. You know, you got financial reports to look at in the first place, and they weren't handed to you at the meeting. Yeah. So a best practice is to review the financial reports, if you can, in advance the meeting, and then have a dialog about the financial reports at your board meeting. That could be the treasurer going over certain items and bringing it to people's attention. But I'll key in a couple of items that Tyler and other board members should be looking at. One is, you want to look and see on there's a report called the balance sheet that shows the assets and liabilities of the community. And the main thing you want to see there is, are your assets, so the money in the bank account going up. So you want to see, you know, if you're saving for a capital improvement item, maybe you have that listed separately as an item in a, you know, one of your bank accounts, specifically, maybe you break it out like you have 50,000 saved for the roof and. 20,000 saved for siding, and that is part of what's in the bank account for, you know, bank XYZ. Want to see if that went up over a period of time, so that maybe your money that you're putting aside and to fund your your savings or reserves are going up, or if they're going down, you know, if you notice that it went down, you know, an amount, you can ask a question, well, how come it went down? Did we pay this vendor out of that account or whatnot? Hey,

Robert Nordlund: 5:30

question, because when I've seen them, they're the monthly financial it's the monthly balance sheet. And so it's January or March, or June, or April, or May, or whatever the month is, and you look at it and you say, by golly, it's $54,000 217

Russell Munz: 5:45

so you're looking at it for just a point in time, but you're getting these reports on a monthly basis. And if you do get it ahead of time, you can take a look at the prior month and your current month and then see if it's going in the right direction. Or if you remember, from looking at it, 30 days ago, you had 100,000 and now you have 110,000

Robert Nordlund: 6:05

well, then that's going in the right direction. Is there any software, or is it appropriate for the board member to keep their own, you know, piece of scratch paper. So that in January, it was $51,000 in February, it was $59,000 in March, it was $48,000 keep their own kind of track record, or does anything plot it? Oftentimes,

Russell Munz: 6:27

treasurers who want to get into that level of detail or provide that to their board may track the numbers over time of the bank balance, and maybe I've seen some where they do a Treasurer's Report, and they add a graph or something to show that the balance is going up. So that's something that could be done after you get the numbers, then you just plug in the, you know, the balances, and kind of do that sort of thing. The first place I would look at that's usually the first report in the financial report packet is the balance sheet, which is a snapshot in time, usually the end of the month for you know your your assets and your liabilities, then I would switch next from there to your income and expense report. Hopefully you have a report that compares. It shows you for the month, it shows you the actual income and expenses versus the budgeted income and expenses, and then a variance, so you can see if you were over budget for the month. Also, right next to that, there's a year to date column. So you have a couple of columns on this financial report, and the year to date column shows year to date, what the bud, you know, what the actual is, what the budget is, and any variance. And so what you're looking for here, Tyler, is you're looking to see if there was a large variance. You know, you may have a variance in one month, because maybe you paid, you know, you paid a bill for something and it spikes, but you had a budget item for 12 months, but in one month you paid the bill, so it spikes in that one month. But for the year to date, it looks like you're on budget, so you're in good shape. I get this a lot, where people complain that they got unexpected surprise because their water bill doubled or tripled or quadrupled, because, you know, nobody was seeing this on a regular basis. And there was somebody ran over the a pipe in the yard when they were doing tree trimming or something. And now there's a water leak that nobody can see, just as an example. And so that is something that the board can then use and say, I think we need to look into this because, you know, we're double our budget on the water bill, and why is that? Do we have toilets that are, you know, are we paying for water and there's toilets? Do we have an outdoor spigot that's on that somebody's using to run, you know, to do things? Do we have a broken pipe somewhere? So then you can kind of use the numbers as a way of starting the conversation. So you look down these areas where there's variances, and that is really what the board wants to focus on, so that at the end of the year, you stay on budget. You're staying on budget by making these little adjustments and course corrections throughout the year, by looking at this report in particular.

Robert Nordlund: 9:20

Yeah. Yeah, okay. So visually, I'm thinking, we have many board members here listening. Who are they're visual. They may not be. Numbers may not speak to them. So this is going to be report that has a lot of vertical columns. And like you said, the monthly budget, monthly actual, and then the year to date, budget, year to date, actual, and as the year rolls through, and let's talk about December, 31 type property in January, they're all the same. In February, the year to date starts to have more information. And then by the time you get to November and December, you've got a lot of information. But what I hear. Are you saying is that, look at those variances, you'll see, maybe in one month, that you way overspent your monthly budget on tree trimming. But the answer to that is, well, we trim our trees once a year, in June, and in June, you have 12 months worth of expenses, and it looks like you've really shot the budget. But you can tell yourself, Oh, that's okay, because it's going to resolve itself by the time we get to the end of the year, because there will be no tree trimming. This

Russell Munz: 10:29

one report has six columns, and you're looking at the variance. And if you still, you know, you Yes, the monthly variance helps to is where you first kind of ask the question, and then you look at one, you know, a couple row columns over, you've got the annual variance. If there's an annual variance, then there's, why are we really over budget here? Maybe there's something we need to dig into as a board, I would say this report is, you know, when I was a property manager, was the best report. I use to operate a community and stay on budget. And so sometimes boards may not get this comparative that shows the actual versus budget and a P and L, profit and loss or income expense that just has one column and shows numbers that that is you can see that that's telling you, giving you less insight into you know how you're doing versus budget and how to dig in and find things that should rise up to your attention, right?

Robert Nordlund: 11:31

Okay, good. I think, I think we got that. So you're focusing on variances, the monthly variances, and the year to date variances, and hopefully you have a good understanding and good explanations for what's what? If the water bill spikes, and you don't have a good reason, then you call the plumber, you have something double checking, and you that's how you capture a leak. If it's tree trimming, it's an easy explanation, because you do your annual tree trimming in June, and no big deal. We get it. Okay. What else? What are we looking for? The next

Russell Munz: 12:04

one is, you know, the delinquency report, and this is for the Board to take a look and see which owners haven't paid. And this report is going to drive what follow up activities that the board will use, whether it's sending late notices, whether it's working with a collections agency or attorney to and following their collection policy. So the age delinquency report is going to show you what owners owe, how much they owe, how old the items are, and it helps bring up the discussion for what should happen next in delinquency, you know, in collections, actions, got

Robert Nordlund: 12:48

it okay. So that helps. You know that Mrs. Smith in unit number 13, who just lost her husband, yeah, she's late, but she's probably give her a little grace. Her life has just changed. And that's very different from somebody who is six months behind. Is on your can we say this deadbeat list?

Russell Munz: 13:11

Yeah, could be. And then also, so in the first report, where I was talking about income and expenses, and you can see if you're over budget on an expense. So then you're, you're you're going, you're blowing your budget by spending too much. This one is you're blowing your budget by not collecting the money because the association is on a fixed budget. And if you have some owners that don't pay, that puts a real hole in your bucket. And if you have many owners that aren't paying, this can lead to where you have to decide which bills to pay and what things you need to put off. And so it be, it can become a problem. And then the longer these go on for, in some cases, they become less and less collectible. And so there's a couple of things, current cash flow to pay current bills and obligations for services for the entire community. And then if you know, some states have a priority lien, which they kind of have, like a locked in amount of money that is protected. But once you go outside of that six month or nine month priority lien, then there, you know, you're opening your spouse self up to maybe not collecting all of the money from the homeowner. And you can talk to your attorney about this, but this report, the delinquency report, is where you want to focus some time and talking about it. And this should be a conversation amongst board members, not with other homeowners there at a board meeting, because that's protected

Robert Nordlund: 14:41

information. Yeah, you don't want to be talking about who's the deadbeat and who's not. Yeah,

Russell Munz: 14:46

you need, though, that needs to be kept private, or it opens the board up to liability suits, which

Robert Nordlund: 14:53

is a really big expense line item that you haven't budgeted for. That's right, okay, so we're talking about protecting the budget. That the income expense report largely helps you track expenditures and the age delinquencies helps you track to make sure your income is coming in as you expect. Is there a magic line? Well, two things come to mind. Sounds like you really do need a collection policy to guide your thinking on this matter, and something that you work through with your attorney or accountant, or who helps you develop that

Russell Munz: 15:25

oftentimes, the the board will do it with in coordination with whether it's an accounting firm, their attorney, collection agency manager, it's all you know. It depends how what they're using, as far as professionals that are supporting the community, but yes, all of them are working together based on the way that selecting money is set up from a, you know, from a process standpoint, and then also legally, what needs to happen in the state?

Robert Nordlund: 16:02

Good, okay, and if you have that policy, the collection policy that helps you to have equal enforcement so you're not well, you can, you can avoid claims you're being friendly and hard.

Russell Munz: 16:15

Yes, you can open yourself up to again, legal liability as a board if you're not enforcing the rules uniformly, and that includes collections.

Robert Nordlund: 16:25

Yeah, okay, a follow up to that is, is there a magic line where it turns from minor to serious, like, if you're 15 days late, obviously you need to collect that, but maybe that's a simple thing, a phone call or a email. When does it become big deal? Is it 30 days? Is it 60 days? Is it 90? Is it 120 or is that different with every Association? It's

Russell Munz: 16:53

I would say it can be a little different than Different states have different things. You know, Florida, for example, you need a notice of late assessment at 30 days. Sometimes it's at 60 days, some other action is being taken. But you know, alarm bells really should be going off if it's 60 or 90 days older be because there should be a process in place to move that along and have it be collected in a timely way.

Robert Nordlund: 17:25

I'm liking that 60 day number because you also said, if you let it go too long, it becomes uncollectible. So the more you, in some cases, it can it can be, yes, yeah, the more you ignore it, the more it becomes old history, and the more it seems like you don't care, and you want to make it clear that you care, this is the income that our association survives on, and we need everyone to be paying their fair share. So you need to be guarding the income, but having that balance of what truth and grace, and I'm hoping that you all have collection policies that start to really ramp things up at the 60 day point. Yes,

Russell Munz: 18:04

I'd also add to that, Robert is when an association needs to go for a loan because they haven't saved enough for a capital improvement project, if their association shows that they have a large number of owners with large amounts of money that have been standing outstanding for a large amount of time, they're going to find it difficult to get a loan. Yeah,

Robert Nordlund: 18:26

the bank's going to say, Well, why are you asking for money from me and not the Johnsons in unit number 27

Russell Munz: 18:32

Well, the banks get repaid off of the funds that the the owners pay to the association, and if you have a block of those owners that aren't paying that that's troublesome. That makes the bank nervous. The next one I would take a look at is, and this is, might not be at the top of list for many, but it's, it's the bank reconciliation report. So you can give financial statements, but you need to reconcile them, meaning that you need to go through and make sure that it matches, that what is on the financial reports, in a way, is is reality is true, and so the bank reconciliation report will show you whether those line up and match, or if there's some sort of difference in Between. I'll give you real life example that is a nightmare, but basically, there was a competitor of mine when I was running a management company that the person who worked there stole funds and they did not provide bank statements and they did not provide a bank reconciliation report. So they were manufactured financial reports with no basis in reality, nothing proving that it wasn't real, and that's how it was doctored so that the person could steal money. And I'm not saying this happens everywhere, but it is something that could happen. And. We hope that it doesn't happen to any of the boards that are listening to this, but it is one of those reports that often go unnoticed and unlock, you know, unrecognized, but you want to take a look at that, and that's a way, if you're working, you know, if you're doing this in a professional way, you want to make sure that the bank statements are reconciled, because that means that they're, they're the most accurate,

Robert Nordlund: 20:22

right? Yeah, well, Russell, I got a grin on my face because you're reminding me of a car I had in college. Didn't have a lot of money at that point in time, and the fuel gage on that car was absolutely broken, just didn't run. And I bought the car used. The person who sold it to me said, no worries, just track your trip odometer, and when you get to a couple 100 miles, fill up tank. And that always made me nervous, because I never really knew how much fuel I had in the car. And that sounds like what you're talking about here. You've got these reports, and they're making you pretty comfortable that things are okay. But you haven't seen the bank statement to say, actually, do you really have $52,000 in the bank or not?

Russell Munz: 21:11

Yeah, and the reconci bank reconciliation, that is your fuel gage, that it's, you know, it's matching up, and everything looks like it's good, right? Your quality control? Yeah. Well,

Robert Nordlund: 21:22

this is, this is fun stuff. Well, I'm looking at the clock, and I realized that we need to take a quick break here to hear from one of our generous sponsors, and we'll be back right after that with more from Russell to hear common sense for common areas.

Russell Munz: 21:38

Is your HOA or condo self managed and you don't want to work as hard volunteering? Are you full managed and looking to save money, or are you looking to split the accounting from a manager's role for better service, let community financials handle the monthly accounting for you. We collect dues, pay bills, produce financial reports, include portals and help with other support services, all while providing awesome service. We love the opportunity to help you make your community accounting stress free with our industry leading systems and expert team. Visit our website, communityfinancials.com to learn more, and

Robert Nordlund: 22:10

we're back. Well, during the break Russell and I were talking about some more stories about what we've seen in the past. But let's start with Russell. How do you know you can really trust these numbers, are there some indications that make you feel good about what you're seeing, or what makes them trustworthy or untrustworthy? Well,

Russell Munz: 22:29

tying it back to what we were talking about previously, you're looking at the bank reconciliation report, and you want to see that there's not a lot of you know unaccounted for money on that report. Also as a backup to this, you're we're going to get, want to have bank statements for the board, usually part of the financial report packet, so you'll see the bank balance and check images and transactions. Be able to see it that way.

Robert Nordlund: 22:54

Let me stop you there. Would it be appropriate to have the bank email it to you as board members? Or do you wait for that to go through the manager's hands? Usually

Russell Munz: 23:04

it gets added to the financial report packet and it's included there. And if the financial report packet has the bank reconciliation report, everything is tied together. Also, I would say that typically in modern accounting systems, the account balance transactions and check images are also going to be kind of brought into this board portal, where it's the same access to information that the both the staff uses to and the the board members get access to view. So every everything is transparent for for all parties.

Robert Nordlund: 23:36

Got it? Okay? I like that. Transparent, open, clear. What about timing? Whether the other indications, if you hear that Mrs. Smith in unit 92 says that they're always missing my payments, or something like that, is, are those big deals or little deals?

Russell Munz: 23:57

Well, the board is going to get these, you know, the tea leaves, so to speak, of where they're getting information from different owners, and the board will be able to kind of put together a little bit of a picture of what's happening. Plus the board is also going to get information from vendors, or they're going to talk to each other. So there's going to be all of this information. And let's go into why boards change the way that they're doing things. It's because of two main reasons. One is whoever they're working with is not responsive, and they're not getting back to them. And the second reason is they've lost trust in the accounting. They don't get financial reports on time. There's inaccuracies. Bills aren't getting paid to vendors. So that's the vendor complaining homeowners, you know, their check isn't being cashed or whatnot. It's not showing up on their account that the payment was received. So you get all of these different items. So. These kind of work together, where, if you lose trust, right, and you have inaccuracy on inaccuracies on financial reports, so you're not getting financial reports monthly, or they're coming in two, three months late, and when you have questions or want to correct the inaccuracies, the no one's getting back to you. Those are the times when you know, those are the flags that come up, where you feel maybe they're not being 100% truthful with me. Maybe they don't. They either don't know what they're doing and they're incompetent. Maybe there's something else where you know, that's where it gets to be, where people feel like maybe some shenanigans are happening, and that would be probably a much smaller percentage. I would say the great percentage is, you know, whoever they're working with isn't familiar with accounting best practices, doesn't have good systems, doesn't have enough staff, and then all of this financial information, and the delivery of financial information, the delivery of these, you know, paying bills, and accepting and depositing money just starts to, you know, fall apart a little bit. And that's, that's when you start getting more and more chatter from vendors, from homeowners, and so the board has to make a hard decision on what they're going to do next.

Robert Nordlund: 26:19

Yeah. Well, I think of it like driving a car. If my steering wheel would ever get sloppy, I'm pulling over because I need to be able to know where I'm going to feel like I have control of the situation. And if you lose trust in the numbers being accurate, getting it on time, how am I you're driving blind into the future, that would be red flags. And I'm going to give management companies the benefit of the doubt that maybe somebody in accounting moved to a different job and they're scrambling to replace that staff position. It could be as simple as that. It could be that you've got a new manager, and the manager themselves doesn't know even like the conversation we've had today, to them, it may just be papers or reports and they don't have any meaning to it, so maybe they don't understand. But as a board member, yes, you need your hands on this information so you can make decisions to guide your association forward. You don't want to get sloppy behind on why something is over, the variances, the variance reports make sure things match. Boy, being a board member is hard enough without trying to do it blind,

Russell Munz: 27:32

yeah. And also, it could be, you know, if they have a health issue or something comes up in their professional life that takes them away from doing this. And then it becomes, you know, we're waiting on this information. And some cases, I find boards that don't have financial reports for 236, months, even a year or more, that is crazy, because you're, you're trying to operate an organization, and you have no information on how to do that, and so that loses trust with the homeowners, and then the homeowners then are upset with the board, so that causes a lot of and lost energy and aggravation and negativity. So board members are either going to resign or they're going to get voted off at the next meeting, because you've got this infighting, and, you know, some homeowners take the social media, it becomes a whole, whole thing, and the whole time it could have been resolved by being more transparent and following better, you know, accounting practices. That is a huge disruption for the association when it could be focused on taking care of the leaky roof or or, you know, other issues that are more important? Yeah,

Robert Nordlund: 28:43

no, I get that you don't want to be in hot water for something that somebody else did. If someone else isn't feeding you the information to be able to run the association, then you need to make a change and to get that but I want to follow up on that homeowners are always going to be suspicious. Whatever your assessments are, the homeowners are generally going to think they're too high. And so how do you maximize transparency so the homeowners get an understanding that, yeah, you're running a tight budget, you're running a tight ship here at the association, and that there is no skimming, there is no kickbacks. How you proactively make it clear that off? Yeah.

Russell Munz: 29:29

So there's a there's a couple of things here. One is most modern accounting and software, or management software for this industry, is going to have what a homeowner's portal, where the owner can see their account balance, see the history of their charges, see the history of their payments, and download or print a ledger for their account. So there's complete transparency there. I think that helps with a lot of this too, to see that their money is being accounted for properly. Yeah, it's the, you know, the reality and the perception that so you work with a system that has something like that, secondarily, when the owners have questions about their payments or their accounts, you know, whether they feel like there's charges that they should have, that they paid, that there's a response that happens in a timely way, because then they feel like they're getting serviced and there's nothing being hidden, right? The next part, someone's on the ball. They're actually someone. Someone's Yeah, yeah. And if it takes you two or three weeks for whether it's a volunteer board member, a manager or management company, accounting company, to get back to that owner, that's you know, that that only builds the mistrust, which we talked about before, right? The next part is besides the owner's own, you know, financial kind of account and their ledger, then it would be sharing with the owners some basic financial information. And this would be financial reports that have been reconciled to the bank statements, like I talked about before, where, you know, they line up with each other, and so those are you should be getting on a monthly basis, and you're not sharing the entire financial report packet with the homeowners, because that, again, is sharing. You don't want to share some of that information, like homeowner, you know, in delinquency. The next thing I would say is that is typically done in some I have some customers that do this quarterly, some semi annually, some annually, you know, some, some could be more than that, but they will take the balance sheet, which shows the assets and liabilities of the association, so how much is in the bank accounts, and they'll have the comparative income and expense report that shows how they're doing versus, you know, budget for the month and year to date, like we spoke about earlier, those two reports are shared with homeowners. They can see that they've got money in the bank, that their money is safe, that's there. They can also see that they're on budget, and they see that the board, that or and who is in charge of their community, are good stewards of their community.

Robert Nordlund: 32:08

Yeah, I like that, showing that having openness, yeah. And you use, I think you use the word transparency, yes, quarterly meetings, whatever it is. So people could come in and ask questions and say, Gee, our assessments are high. I talked to someone down the street that's assessments are less. And you can say, well, we just got our insurance bill, and we looked around, we shopped around, and these costs are what they are. The landscaper, you notice the new plants out in the front, those cost money, but it's the good things that we've been done doing to take care of the association, so you can be responsive to that, and then, so I, I like that

Russell Munz: 32:46

there can be a narrative around that, because then you can have a discussion. And you can welcome the owners to come out, to the to the to the meetings, to ask their questions. You can encourage owners if, if they have, you know, interest in some acumen, to be on a finance committee. If that's something that you're doing at your communities, that they're involved, you can also encourage them to run for the board if they want more information. And if you're providing some basic baseline information, which I would say the majority of communities are not, they're not providing that to their owners, right? It's sort of a little bit of a black box. And that's also what kind of creates, you know, the some some mistrust and the chatter amongst the grapevine, right? And so you want to get ahead of that by just being open and transparent. There's nothing to hide. But again, you need some good systems. You need financial reports that are timely in order to do that. That

Robert Nordlund: 33:38

may be the key don't operate in vacuum. Nature abhors a vacuum, and the rumor mill loves a vacuum. Yeah. Okay, last question mid year here, do you have any insights for what boards should be thinking or starting to communicate to their homeowners about assessment increases for next year? It

Russell Munz: 33:59

really made me laugh a little bit because of the name the homeowner that says the community and so and so has lower rates than we do. Lower common charges are the first one that's going to get the association in trouble is if they are not complying with all of the recommendations of the insurance carriers. And so if you're not complying with those things, one, your insurance is going to go up. Two, it might be canceled, and you have to go to excess lines, which means you have to pay 234, times what the normal rates are. And so your board may have filed claims right in the last couple of years. So your insurance is going up, versus the neighbors across the street have been doing preventative maintenance, and they haven't had these claims, or their documents are written differently, and the homeowners have liability for leaky hot water heaters or whatnot. So anyway, you can't really tell so much just by a number. There's a lot more there. So insurance is still going to be an issue where things are going to go up. I say. Your insurance, you know, typically you're going to have budgets go up, you know, maybe five or 7% but your your insurance could go up more than that. And then, if you're working on capital improvement projects, you know, those are probably going to be going up, whether, if it's tariff related, there could be some increased costs. I'm doing a I'm replacing a HVAC unit at my house. They said as of May 1 2025 the price of the equipment and everything's going up 12% so if you can take that for like a community association, you can see that that's going up. And maybe 12% is not the number. Maybe in your area, it's 20% but it could be additional costs that you then have to kind of adjust for, and maybe that's your capital improvement projects are going to be higher. And in some cases, maybe you have to adjust your budget mid year. Maybe there's a special assessment to make up the difference between what you budgeted for and you're collecting now versus what the actual costs are going to be, and you do it while these things are ongoing. Thank

Robert Nordlund: 36:05

you for that preview. We have a lot of board members here. They're trying to make smart decisions, but I think you've clarified a whole lot for them today. So Russell, thank you very much. It was great talking with you and having you on the program. Any closing thoughts to add at this time? Appreciate

Russell Munz: 36:20

the opportunity Robert and I hope that boards, you know, if they if they need help and assist, you know if they're not getting good numbers, that they ask questions and they try and get good numbers, because it's the only way that you're going to be able to do a good job as a board member with your Fiat fiduciary responsibility. There's a lot of good information out there. If they're tuned into this podcast, they're already kind of getting getting into that. But you they don't have to suffer with bad financial information. You know lack of financial information, poor systems. You know that lack of transparency. There are lots of resources available for them to have a better experience for both the board and make their jobs easier as board members. Also help them attract board members onto the board by making the board's role easier and be able to fend, you know, reduce the amount of questions that homeowners have, which makes the board's job easier by doing things in a transparent way, using systems. I know that they'll, they'll, they'll be able to make a do a better job making a better circumstance for their their homeowners.

Robert Nordlund: 37:29

Yeah, I like that. Tom, if you don't have good financials, you have two problems. You have financial problems and you will have political problems. So stay on top of that. So I just want to close by saying, if you'd like to get in touch with Russell, you can visit their company's website at community financials.com and just as a reminder, Russell, you serve associations all across the country, right? Yes, that's right, fantastic. Well, we hope you learned some HOA insights from our discussion today that helps you bring common sense to your common areas. We look forward to having you join us for another great episode next week,

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