General Winter and Capitol Conference Updates
February 26, 2018
February 27, 2018
To: AAR Board of Directors
From: Jeremy Walker, Chief Executive Officer
Re: General Winter and Capitol Conference Updates
Dear Board of Directors,
We hope everyone is off to a great new year. We’d like to share with you a brief recap of Capitol Conference, some updates on Association business shared with the Board of Directors at Capitol Conference, and a preview of upcoming events:
Membership: Membership numbers have continued to increase, and surpassed 14,000 for the first time since 2009. As of December 31, 2017, our membership reached 14,912.
General Fund: The financial health of our organization continues to improve. At the end of 2017, we have an (unaudited) general fund surplus of $643,776, with total revenues exceeding the budget by 5%, and expenses at 92% of budget.
General Fund Reserves: General fund reserves currently stand at $1,289,196 after the surplus from 2016 was applied. This represents 6.4 months of operating expenses.
Audited Net Assets: The 2017 Audit is underway with the audit firm of Aldridge Borden presently on site at the Association. The audit takes into account the organization’s total financial picture and net assets. In 2016, we had an increase in net assets of approximately $220,000 bringing our total net assets to $6,176,937. The preliminary audit should be completed near the end of May and will be presented to the Board of Directors at the Annual Directors Meeting.
Assets and Investments: Approximately $2,412,545 in Association assets have been transferred to our Association’s investment advisor, UBS, for management in a 100% CD portfolio with an estimated annual rate of return of 1.33 to 1.41%. 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 fifth month of waterproofing the exterior of the building. Summit has completely removed and replaced the existing caulk at the doors, windows, and stone joints and has moved on to sealing the building with a waterproofing agent. This project is estimated to take another couple of months to complete.
Roof Leak: Repair work of the roof leaks is ongoing. Recent water bar testing and heavy rains revealed several additional water intrusion points. Hixson Consulting, who is managing this project on behalf of the Association, met this week with the original building general contractor, Jesco Inc., and Summit Waterproofing to review and finalize plans to address these last intrusion areas, with next steps scheduled to begin next week.
Interior Finishes: Once the roofing and waterproofing repairs are complete, interior sheetrock, paint, and ceiling tiles will need to be repaired and/or replaced.
Costs: Mitigation, maintenance, and repair expenditures as of February 5, 2018 total approximately $300,000. Estimates still show the expected final costs for all repairs and deferred maintenance to range from $400,000 to $500,000.
Building Mortgage Update:
Current Balance: $4,105,746
TERM: 9 years with a 20-year amortization
Interest: Fixed rate of 3.75%
Payment: $18,920 principal plus interest. February payment was $32,234
Maturity: Balloon payment of $2,289,379 on March 11, 2026.
Capitol Conference 2018:
Governance: A notable outcome from the Board of Directors meeting was passage of a motion to amend our Policies and Procedures Manual Section 2.10, requiring all Directors to attend annual Board of Director and leadership training as provided by the state Association prior to being seated as a Director and/or voting on issues before the Board of Directors. This policy change is effective January 1, 2019. Annual training will give our Directors the chance to train, learn, and grow together at the beginning of each new year. Every effort will be made to avoid duplication offered locally, with the training focused on state leadership and to respect the time commitment for our directors.
Disaster Relief Fund: Prior to the start of Capitol Conference, a clay shoot was held benefitting the Alabama REALTORS® Disaster Relief Fund, which is our own 501(c)3 charitable organization. We raised $1,595 to support the Fund’s efforts on behalf of our local communities and to be able to provide assistance to our REALTOR® colleagues around the country when man-made or natural disasters strike. All told, in 2017, the Fund provided $59,250 in disbursements to those impacted by wildfires, tornadoes, and hurricanes.
REALTOR® Day: Our annual visits to the state legislature were a huge success, with over 300 REALTORS® participating, followed by our legislative reception, which was well attended by our state legislators and members.
Public Policy: The 2018 Legislative session is underway. While our Public Policy Committee is tracking a number of bills this year, monitoring all developments for any legislative initiatives that would harm our members or their businesses. As an industry, this is one of the most important roles we play. We are also advancing several proposals to further the interests of our members.
- Alabama First-Time Home Buyers Savings Accounts (FHSA). HB 248 is legislation that would establish First-Time Home Buyers Savings Accounts to help first time homebuyers save money toward the purchase of their first home. The FHSA Bill creates tax-free savings accounts that a first-time buyer can use on the down payment and closing costs of a residence. These savings accounts will allow more people to experience the American dream of home ownership.
- HB 248 has passed the House, is through the Senate Committee, and is eligible to move to the floor of the Senate for final passage.
- Alabama Assistance and Service Animal Integrity in Housing Act. HB 198 will help combat the misrepresentation and undocumented presentation of pets as service and/or assistance animals. The aim of this REALTOR® bill is to deter fraudulent activity, while protecting those with a medically documented need of a service or assistance animal, and provide clear guidance for real estate professionals in working with consumers in this important area of real estate.
- HB198 has passed the House, has cleared its Senate committee, and is scheduled for full Senate consideration next week.
- Right of Redemption Clarification. Act 2018-126 provides a technical amendment to the statutory redemption law to clarify certain timelines during and following the foreclosure process. The aim of the proposal was to make clear certain notice requirements required by law and does not change any existing timelines in the current law.
- The Right of Redemption Clarification bill has been signed into law by Governor Kay Ivey as Act No. 2018-126.
- Please watch for updates in our weekly e-newsletter Real Estate Alabama.
Fundraising: ARPAC fundraising and investments had a record year in 2017. We closed the year having raised $802,147.05, which was 134% of our state goal. We surpassed last year’s record ARPAC fundraising mark by almost $163,000. We closed out the year with another record year for Major Investors – finishing with 214.
PAC Legal Compliance: As reported in great detail at the February 5, 2018 Board meeting, the PAC is working with the Secretary of State’s Office to correct historical discrepancies in our PAC filings going back many years. This process should be complete by the end of March.
- Fair Housing for All. In recognition of April being Fair Housing Month, the spring American Dream for All- Fair Housing in Today’s Market course is being offered in 6 locations across the state during the months of March and April. To find the course closest to you, click here.
- GRI Program. Over 25 Graduate, REALTOR® Institute courses are being offered this year with more still being added. Check out the scheduled dates here.
- All Course Offerings. For a full list of other courses being offered, including REBAC courses, click here.
- Leadership AAR. Leadership AAR is returning in 2018 with a newly re-designed curriculum aligning our Association’s mission with each session’s focus. More information and the application can be found here.
Legal Helpdesk:Utilization of the Legal Helpdesk has increased each month since its launch. Each week, new articles and information are published in Real Estate Alabama. Plus, you can view previously published articles on our website here.
NAR Core Standards: Every local board making up the Alabama REALTORS®, plus the state Association, were certified as having met NAR’s Third Cycle of Core Standards. The Core Standards Fourth Compliance Cycle has begun and boards should be able to begin using the NAR compliance database to track their events, activities, and progress by the end of February.
Local Board Mergers: At the end of 2017, two local Alabama boards made the decision to merge with other boards – the Bessemer board merged with the Birmingham Area Association and the Selma board merged with the Montgomery Area Association. The Alabama Association of REALTORS® now has 26 local boards/associations.
2018: What’s ahead?
2018 Regular Legislative Session: The Regular Session must end by April 23. Expectations are the session may early as soon as the end of March due to it being an election year.
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 $49. A description of Tech Edge can be found here. Space is limited so please register here as soon as possible if you’d like to attend.
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.
NAR Leadership Summit: August 6-7 in Chicago, IL.
AAR Public Policy Forum: August 21-22 in Montgomery, AL.
AAR Annual Convention: October 14-15 in Montgomery, AL.
NAR Annual Convention: November 2-5 in Boston, MA.
Alabama NAR Core Standards Deadline: November 1, 2018.
Alabama General Election: Tuesday, November 6.
Please reach out if you have any questions. Hope to see you at Tech Edge!