Innovative Ways to Plan, Fund, and Approve Community Amenity Projects
By William P. McMahon and Jeff Evans
This article first appeared in The Communicator, Spring 2021. To read more, click here.
Amenities for any community are important as they define a community’s purpose, its mission and what residents it is attempting to attract. If a community is trying to appeal to families, seniors, etc., it will offer a variety of amenities, such as dining, recreation, health care access, social programs, etc. For most communities, maintaining and continually updating facilities and programs is a never-ending challenge.
The original developer of a community will freely invest in amenities that will attract first-time homeowners. And, the marketplace demands highend amenities to be successful. The trouble is that in 10 or 20 years these amenities deteriorate and consequently depreciate. Few residents get excited about spending money on worn out amenities. So the value of properties begins to decline as the amenities themselves age and decline. This is the time when it is important to recognize that society itself is changing as next-generation homeowners want different things. If an association board does not monitor its residents, especially those families who have moved in within the last five years, the community will see property values decline as amenities age.
Communities must continually maintain and improve amenities and the facilities that house them. The big question is how to continually do this and, of course, the big challenge is how to fund such ongoing improvements? Yes, most communities do partially fund reserves based on asset reserve studies, but this funding is always looking in the rear-view mirror on maintaining community assets. Associations have monies set aside for the maintenance of depreciable physical assets. And while asset reserve studies help a community to have some funding for maintaining the status quo, they are not funding the continual upgrades in amenities that keep a community viable. Oftentimes, these reserve funds maintain the past and ignore the future. However, every community needs to keep itself viable and attractive to its next generation of homeowners.
HOW TO POSITION FOR FUTURE SUCCESS
A major responsibility of an association’s board is the strategic planning for its community and the education of its homeowners so they understand the need to continually reinvest in their association. The mission of the original developer was to build a successful community, sell the housing and move to a new development, not take on the board’s future investment. The actual operations of the community, its governance and its management were not the developer’s responsibility. It always falls to the property owners themselves to ultimately transition into a self-governing community at the turnover phase.
HOW TO PLAN ONGOING FACILITY ASSOCIATION PROJECTS
The first step in this planning is recognizing the needs of the community and then developing the process to actually address those demands in successful ways. Of course, a community should have an asset reserve study in place to understand its ongoing responsibility for funding the care of worn-out facilities from yesteryear. But in communities more than 10 years old, the real challenge is to understand future amenity needs. The community must do more than just maintain the status quo of a 20-, 30-, or 40-year-old community.
The process of also keeping a community viable for its future, as well as its present, requires the association board to have a basic strategic plan in place. This is not rocket science, but rather simply monitoring the community’s purpose of knowing:
- who it serves
- what it should be providing;
- what quality it strives for; and
- what makes the community unique and thus successful in its marketplace.
With a strategic plan in place and future guided decision-making in governing and managing, it becomes very clear when a community needs updating, when the community’s offering is getting stale, when facilities need to be replaced and when new trends like pickleball need to be included in a community’s amenities.
This is when strategic planning at board and management levels is an essential first step back to viability. When it is evident amenities are in need of upgrades, the association needs to survey the homeowners to learn from them what they like or dislike about their community. This is also the time when it is appropriate to test the adequacy of existing facilities, the members’ support to improve them, and their willingness to pay for improving them. From a short homeowners’ survey, the association board, manager, and members will learn what the community will support in strategic changes and in facility improvements.
WHO DOES THE FACILITY PLANNING OF AMENITIES?
Recognizing the needs of the community for facilities, the association board would appoint a planning committee of homeowners and board members to work with a facility planning moderator to guide the facility planning process. The composition of any association planning committee is very important for achieving successful projects. But as planning begins, recognize that the committee is a planning committee, not a construction committee. What this means is that a group such as a planning committee must study the community’s current strategic plan, the membership survey results, and the existing facility conditions so it can recommend feasible and needed improvements. The committee must work with an outside facility planner to develop architectural concepts, funding strategies, and how to get members to approve the project before hiring final architects, engineers, and contractors. Planning and approving a project is the association planning committee’s responsibility. Building the project after members have approved it is the responsibility of a design and construction committee.
A typical association facility planning committee utilizes an "Association Strategic Plan" and membership survey to work with the outside facility planner to:
- Develop the criteria for facility planning, which will create an overall conceptual master plan and a prioritized list of projects with a funding strategy to establish a first phase budget.
- Present a recommended facility improvement program to the association board for its input and approval.
- Develop an improvement proposal for presentation to the community and homeowner members so they can understand it and provide input.
- Get approval by moving forward with the improvement program. The program is then voted on in a straw-poll survey and/or a community-wide vote.
- Achieve approval of the program and appoint a design and construction committee to take over the final design with the manager. This committee will then complete the project in the design and construction phase.
TIME REQUIREMENTS FOR IMPROVING COMMUNITY FACILITIES
Moving forward with a significant association program from its conception to the construction phase takes about 12 months to do properly. The planning process begins with a community having a current strategic plan in place that shows why facility improvements are needed. The strategic plan must justify and show what a community needs and why. If the strategic plan can’t justify improvements, they should not be done. Knowing there is a need for improvements, a typical timeline of events is as follows:
WHY IT PAYS TO DO FACILITY PLANNING THE RIGHT WAY
All communities have to change with the times and continually reinvest in their physical infrastructure and amenities. It is the responsibility of the association board and management to do this; and it is important to keep all homeowners educated on the important issues affecting their community’s success, including those of facilities.
The strategic and facility planning process explained here is a good way to keep a community vibrant and its facilities supporting a community’s mission. Good planning and membership involvement avoids controversies coming from a lack of knowledge and poor board leadership. It also allows managers to better lead and do their jobs because members understand why things have to be done.
In successfully developing and approving community facility projects, it is infinitely easier to recommend and approve those projects members understand and want. It is always difficult to recommend projects that may well be needed, but members do not understand and in which support has not been achieved beforehand.
It is the responsibility of the association board to properly educate its community before springing large capital projects on residents. And, while the entire process can take some time to do, it all but assures approval of properly designed projects.
William P. McMahon, AIA, is chairman and founder of McMahon Community Consultants and McMahon Group, serving residential communities and clubs by providing strategic, business, and facility planning services to identify and win approval of major capital improvement projects across North America. He is an architect in 45 U.S. states and in Ontario, Canada, and the firm serves 2,000 communities and clubs with strategic facility planning expertise.