An Easy $3,430 Savings For the Elizabeth Condominium

Fellow Elizabethans --
Below is a memo I just sent the Board suggesting a way they can save us $3,430. If you think this is a worthy action for them to take, you might want to let them know your feelings. Thanks. Molly

June 17, 2009

To: Board of Directors
Elizabeth Condominium

From: Molly Frantz
Apartment #1007

Subject: An Easy $3,430 Savings For the Elizabeth Condominium

Recommendation: The Board of Directors Require All Owners to Pay Their Condominium Fees via EFT

About 170 owners already use electronic funds transfer (EFT) to pay their condominium fee. It is fair to assumed that they will want to immediately continue using this condo fee payment method, thereby saving the Elizabeth Condominium $2,975. A timely decision by the Board requiring all Elizabeth owners to begin paying their condominium fees via EFT will result in an additional $3,430 in savings to the Condominium. Overall, the Elizabeth Condominium would save $6,405.
I base this statement on comments by Ms. Patricia DuBuque, L&N’s Executive VP for Community Management. Ms. DuBuque, at last night’s Board meeting, indicated that L&N would waive the $17.50 EFT set-up fee for any EFT established in the first three months of the contract. Each EFT established after this time period will obligate the Elizabeth Condominium to pay L&N $17.50. As the Elizabeth Condominium has 353 residential and 13 commercial paying owners, the potential savings from requiring all condominium fee payments via EFT is $6,405 (or 366 paying owners times $17.50). The Elizabeth Condominium will realize $2,975 (170 paying owners times $17.50) without the Board taking any action. It could save an addition $3,430 with Board action.
Paying Condominium fees via EFT has many advantages. I.e., payments to the Elizabeth are assured of both being made and being timely; there would be fewer delinquencies and associated collection costs; there would be less bank fees involved; the opportunity for accounting errors would be reduced; and individuals would not have to pay for postage each month. Drawing from Mr. Axelrad’s "Comments on Professional Management", one of the reasons for going to outside management was to replace our "antiquated" financial system. "Legum & Norman can operate our financial systems in a more modern manner that actually costs less than our present system." Certainly replacing the processing of condominium fee checks by hand with an electronic system would be a case in point. I expect that this Board (or a successor Board) will make this change at some point in time. I would argue "Why not now?" when we can realize savings.
I think it is safe to say that most -- if not all -- owners would like to keep their condominium fees as low as possible. These are real -- not paper -- savings. Money that would otherwise be paid to L&N will be freed up for other necessary and unavoidable Condominium expenses. For instance, $3,430 would pay for nearly a quarter of the $13,913 unbudgeted, but necessary expenditure the Board approved last night to pay the Densel Company to repair the main chiller.