Friday, December 18, 2009

Our Greatest Asset?

If you were to ask our incoming President, Dave Moeller, what is OKCMAR's greatest asset, he would most likely reply "the membership". I would say its our "human capital" which includes staff too. However, OKCMAR also has a tremendous asset in its holdings: our building and our reserves.

Due to the foresight of previous leaders, OKCMAR has invested in its physical assets. In addition to a wonderful building, OKCMAR also has invested wisely in its various reserve funds. One of the comments I often answer is why are we cutting back on spending (we have greatly reduced variable operating expenses), or not decreasing dues/fees if there is funding available to maintain and/or upgrade the building. OKCMAR has kept its dues at a minimum for decades. Members are still paying the same $125 in OKCMAR dues while receiving more services, even though the cost of fixed operating expenses have risen steadily. OKCMAR has kept its dues very low and stable for decades,while the state and national associations have had significant increases and additional assessments over the last 10 years.

MLS in 2007 increased its MLS fees by $20 monthly and kept its lockbox Supra Key fee the same. This increase went directly towards implementing technology, systems and tech personnel to bring MLS to not only a functioning level but to put its users at the forefront of technology-positioning our members in the center of the real estate transaction. Also the tools net each brokerage a significant savings through replacing tools that many were paying for directly which are now included in the basic MLS package.

Last year MLSOK reduced its MLS fees 10% for those members using MLS and the MLSOK lockbox service. MLS then reduced its Supra Key Fees by 10%. MLSOK continued to reduce its fees by another 10% through its early payment plan. While other associations are raising their dues or cutting services, your association and MLS are increasing services while reducing fees and keeping dues the same.

However, back to the burning question, why is OKCMAR choosing to upgrade and maintain its building when potentially fees or dues could be decreased. Well, that itsn't exactly the case! As a corporate association we have a Financial Legal Responsibility to PROTECT the assets of the corporation and a fiscal responsibility to ensure the continuance of the corporation in down times. Our corporation bylaws, as well as board policies, put controls over how the reserves may be used.

OKCMAR & MLS has several reserve funds designated for certain uses. First both corporations have an operating reserve. This reserve is 6 months operating expenses for OKCMAR and 12 months operating expenses for MLS. This makes sure that in the event of a major catastrophe or cataclysmic shift in the economy both the association and its MLS can continue to operate long enough to wrap up business and pay off contractual obligations should the corporations be required to dissolve.

The association and MLSOK both have a small research and development restricted reserve fund. These funds may only be used for research and development of programs, services and technologies and the request for use of the funds must be submitted by a committee and be approved by both the Executive Committee and the full Board of Directors.

Finally OKCMAR has a building reserve and MLSOK a leasehold improvement reserve. These funds may only be spent on maintaining/updating/upgrading the building. Being in the real estate industry, this probably doesn't need to be stated but I will do so for those non-industry readers, in order for a building to hold its value it must not only be maintained but periodically updated.

The building maintenance activity you may have recently witnessed is not being accomplished or paid for with current dues and fees. OKCMAR and MLSOK are both operating at "to the bone " expense and income levels. The maintenance and updates are being paid for out of the building reserve funds- exactly what these funds were set aside for so many years ago and which a very small portion of current fees are applied to. In the last few years, OKCMAR has operated at a deficit tapping into the operating reserve. $0 of your current dues dollars are being allocated to the building fund. In MLS $7.50 of your annual fees (less than 1%) is allocated to the leasehold improvement fund.

The MLSOK operates the R-Store due to IRS constraints on Unrelated Business Income Activity. MLSOK is expanding its R-Store, using a small portion of the reserve, for two reasons: The R-Store has been generating a profit which has been used to help pay for the early payment discounts and to give even more of the building back to its members- making the R-Store a networking spot for its members. By focusing on an area where we are collecting NON-DUES revenue and revenue from Non-Members and other associations we can continue to generate profits which hold MLS fees down. The expansion will allow OKCMAR & MLSOK to open up its building complete with a cyber-cafe to members. Members will soon be able to meet clients at the store for coffee on a Saturday, sit down and access wireless from their laptop, print out a contract (or buy one off the shelf) have it signed, pick up a few open house signs and be off to the next deal.

We have worked very hard on giving members as much access as possible to their greatest asset: YOUR BUILDING. Members can use the computer labs on the third floor or rent the large classrooms for events. On the first floor we have an entire office off the lobby which is specifically for member use; As a meeting room/office space if a member wishes to meet a client/customer in the middle of our sales market territory, and this office also holds two computer and printer stations for members to use. Soon we will have a weekend facility for members to work and enjoy a snack or to meet clients, check email etc.

Please be watching in February for our Annual Report which will give great detail into how your dues and fees are spent by program cost center.


Anonymous said...

Amiable brief and this mail helped me alot in my college assignement. Gratefulness you on your information.

Anonymous said...

Brim over I to but I dream the collection should acquire more info then it has.