General Fall and 3rd Quarter Updates


November 20, 2017

To: AAR Board of Directors
From: Jeremy Walker, Chief Executive Officer  
Re: General Fall and 3rd Quarter Updates


Dear Board of Directors,

We hope everyone is off to a great fall. Here are several updates on Association business and upcoming events:

Membership: Membership numbers have continued to increase and have crossed 14,000 for the first time since 2009. As of October 31, 2017, our membership currently stands at 14,783. With dues collected, we’re at 99.5% of budget, and our costs are in line with budget projections 10 months into the year.



General Fund: Financially, the health of our organization continues to improve. Through October 31, 2017, we’re on track for a general fund surplus of approximately $600,000.


General Fund Reserves: General fund reserves currently stand at $1,288,686 after the surplus from 2016 was applied. This represents 6.4 months of operating expenses. (As of the second quarter update to the BOD, our operating reserve balance was $1,007,171 and represented a little more than five months of reserves.)


Audited Net Assets: The 2016 Audit was presented by Aldridge Borden to the Board of Directors at Annual Convention, and AAR received a good report. The audit takes into account the organization’s total financial picture and net assets. Last year, we had an increase in net assets of approximately $220,000, bringing our total net assets to $6,176,937.


Assets and Investments: As reported in the second quarter update and Annual Directors meeting, investment advisor UBS has been hired to manage the Association’s financial resources and assets. Certificates of deposit that have been held in banks across the state have been withdrawn and are being transferred to UBS. Transfers should be complete by the end of November.

Approximately $3,000,000 in Association assets will be managed by UBS at the completion of this process. The Investment Advisory Group selected a 100% CD portfolio with an estimated annual rate of return of 1.3 to 1.4 percent. All of the funds are FDIC insured, and there are no management fees for a CD-only portfolio.


Building & Assets:

Waterproofing. Summit Waterproofing is in the second month of waterproofing the exterior of the building. Work is ongoing to remove and replace the existing caulk at the doors, windows, and stone joints. Once the caulk is replaced, the building will be sealed with a waterproofing agent. This project will take 3-4 months to complete.

Roof Leak. Repair work has begun on roof leak issues around both metal penthouses on the roof.  The existing metal sheeting has been removed and will be replaced with a stronger and more durable waterproof barrier. This project should take 2-3 weeks to complete. Hixson Consulting is managing this project on behalf of the Association. Original building general contractor Jesco Inc. and architect Goodwyn, Mills, and Cawood have assisted throughout this project.

Interior Finishes. Once the roofing and water-proofing repairs are complete, interior sheetrock, paint, and ceiling tiles will need to be repaired and/or replaced.

Costs. The costs to date are approximately $313,270.92. As reported at the Annual Directors meeting, by the end of all repairs and deferred maintenance, costs may range as low as $400,000 and as high as $500,000.

Building Mortgage Update:

Current Balance: $4,162,507
TERM: 9 years with a 20-year amortization
Interest: Fixed rate of 3.75%
Payment: $18,920 principal plus interest. November payment is $32,409
Maturity: Balloon payment of $2,289,379 at maturity on March 11, 2026


NAR Annual Convention: The National Association of REALTORS® Annual Convention was November 1-6, 2017 in Chicago, IL. A summary of business passed by the NAR Board of Directors can be found here.  Significantly, NAR codified our long-held custom and practice of the three-way agreement in our advocacy and public policy arena - to speak with one voice as an organization at the local, state, and national levels. The second major proposal was MLS of Choice, which will give brokers and agents greater choice in joining more than one MLS.

AAR Annual Convention: The Alabama REALTORS® Annual Convention was held October 1-3. Fifty-three (53) amendments to Policies & Procedures and six (6) amendments to Bylaws were passed. A summary of those governance proposals can be found here.  

NAR Core Standards: So far, 26 of 28 boards have submitted their Core Standards Certification. Sixteen of those have already been certified. The state Association has been certified by NAR for the 2017 Core Standards Compliance Cycle.


Fundraising. ARPAC fundraising and investments have been outstanding so far in 2017, continuing an upward trend the last three years. As of October 31, 2017, total state fundraising stands at $717,815.97 or 120% of goal, surpassing last year’s mark of $639,305.  Major investor numbers have also surpassed last year’s mark of 182 and currently stand at 210.

PAC Legal Compliance: The PAC is working with the Secretary of State’s Office to correct historical discrepancies in the PAC filings. These discrepancies go back over an extended period of time over the past 12 years, including the last four state election cycles. This process should be complete in the next 60-90 days.

Public Policy: Preparations are underway for the 2018 Legislative session. Following the 2017 Public Policy Forum, several proposals will be considered including a First Time Homebuyer’s Savings Account proposal that would allow individuals to save and grow funds for homeownership. AAR is seeking an NAR Issues Mobilization Grant to help the effort in Alabama.

Professionalism: Plans are underway for the release of the spring Fair Housing for All Course schedule, as well as 2018 GRI and REBAC offerings. Leadership AAR will also return in 2018!

Legal Helpdesk: Utilization of the Legal Helpdesk has increased each month since its launch. If you have not taken the time to use the feature, please do. Each week, new articles and information are published in Real Estate Alabama. Plus, you can view previously published articles on our website here. More and more brokers continue to provide feedback and information that is invaluable to helping improve and shape this service - thank you!


2018: What’s ahead?

2018 Regular Legislative Session: Begins on Tuesday January 9 and will end by April 23.
Region 5 Summit: January 16-18 in San Juan, Puerto Rico.
Capitol Conference: February 5-6 at Renaissance Hotel in Montgomery. REALTOR® Day will be the afternoon of the 6th. Leadership training will return to Capitol Conference in partnership with NAR and will offer a three-part training opportunity with Adorna Carroll and Bruce Aydt. A description of the leadership training can be found here.
NAR Tech Edge in Alabama: March 20. Alabama was awarded a Tech Edge event for 2018, which will be at the Robert Trent Jones, Capitol Hill Convention Center in Prattville. The advance registration fee for this event will be approximately $49. A description of this event can be found here.
NAR Mid-Year Meetings: May 15-19 in Washington D.C.
Alabama Primary Elections: Tuesday, June 5.
Alabama Primary Run Off Elections: Tuesday, July 17.
AAR Public Policy Forum: August 7-8 in Montgomery, AL.
NAR Leadership Summit: August 19-21 in Chicago, IL.
AAR Annual Convention: October 14-16 in Montgomery, AL.
NAR Annual Convention: November 1-5 in Boston, MA.
Alabama General Election: Tuesday, November 6.

Please reach out if you have any questions. Have a great Thanksgiving.