;
Building
Pete Fowler
Xactimate vs. “Real Estimating”

Introduction

Wow. This is fun for me to read. It's a January 2004 letter that I wrote to a client, when he asked why we didn't use Xactimate. Xactimate was a good program then. And it's even better now. Some people on the staff here at Pete Fowler Construction are even certified to use Xactimate. But it's still not REAL estimating.

We have been using this letter in our estimating training courses ever since it was written. I am sure we have put this letter in our project files more than 100 times, when we have been hired as construction cost estimating experts and others have used Xactimate to perform their work.

The letter has prompted a lot of good (and a couple heated) conversations. I hope it keeps working!

Business
Pete Fowler
Our Work is Often Difficult

When I have done my best work as an expert witness, I have gone over and over and over and over my report and conclusions, refining, improving, and ultimately perfecting the work through an excruciating process that is at least 95% elbow-grease, and at most 5% “experience,” native gift, or divine inspiration. 

Our Work is Often Difficult
Building
Pete Fowler
Construction Quality Management Resources

Contents

  1. The "Definition of Quality"

  2. Managing Construction Quality

  3. Construction Quality Management

  4. Lean Construction

  5. Punchlist Management Software

  6. The Cost of Quality

  7. "Really, Really Good Reading"

Article of the Week
Guest User
Article of the Week: How to Celebrate Your ...

Our goal at PFCS is to do AWESOME work for our clients, but not have to beat the hell out of everyone to get it.  All employees want to feel appreciated and that they are an important piece of the puzzle.  Providing tools to complete our tasks is important, but providing respect and appreciation is vital and is the foundation of PFCS.

Article of the Week: How to Celebrate Your Mistakes
Business
Pete Fowler
The One Minute Manager

“The One Minute Manager” is a parable about a young man who searches the world over to find a good manager to mentor him and finally finds "The One Minute Manager" who teaches him three secrets: One Minute Goals, One Minute Praising, and One Minute Reprimands.

Paul Stanley's Soul Station 2/26/2016

When

On Friday, February 26th, Pete Fowler and friends had a suite at The Coach House in San Juan Capistrano to enjoy a night of music by Paul Stanley's Soul Station.

Summary

For more than 30 years, Paul Stanley has reigned supreme as one of the single-most recognizable front men in the history of rock and roll. Although preferring to live his off stage life out of the media spotlight he continues to be the chief songwriter, driving force and unwavering voice of KISS. A visionary and trendsetter since the early 1970s, Stanley’s passion for both the musical and visual arts has perhaps been the key to the astonishing ongoing worldwide phenomenon known as KISS.

Paul has begun a surprising new gig: soul singer. His new side group, Soul Station, plays a mix of sixties and seventies soul classics, "I don't play guitar in the band and we don't do a single Kiss song," Stanley said in a statement. "That's not what this is about."

The Kiss vocalist's nine-person Soul Station backing band consists of musicians who have played with artists ranging from Christina Aguilera to Bobby Brown. Its drummer, Eric Singer, also plays with Stanley in Kiss. The group will play a mix of songs by the Stylistics, Dramatics, Temptations, Smokey and the Miracles and Blue Magic, among others. Their repertoire includes the Miracles' "Ooo Baby Baby," the Temptations' "Just My Imagination" and the Stylistics' "You Are My Everything."

Over the last 30 years Stanley has channeled his musical vision designing and developing signature musical instruments including guitars that continue to be marketed by numerous musical instrument companies with sales now standing at well over $20 million.

Pictures from the Show

SoulStation1.jpg
SoulStation2.jpg
 

2016 International Builders Show

What Is It?

The NAHB International Builders Show (IBS) is the largest annual light construction show in the world, attracting more than 50,000 visitors from more than one hundred countries.

  • Dates: January 19-21

  • Location: Las Vegas Convention Center

Why?

Key Questions

My Key Questions for the 2016 International Builders Show in Vegas:

  • Who has come the closest to a 6D BIM project? (see PFCS blog on BIM)

  • Who has the best off the shelf details and specifications for standard building assemblies like roofs, rain screen exterior walls, and decks?

  • Who has the best technical support for product specifications for roofing, waterproofing, and paint?

  • Who do I compete with, that is doing awesome work, that I should learn from?

  • Who do I NOT compete with, that is doing awesome work, that I should learn from?

  • Net zero? Really? Who is the smartest guy in the room on this one?

 

Who Needs a Contractors License? Everyone, It Appears... Well, not quite.

Surprise! You're a contractor!!

Yes, you Mr. Interior Designer. And you too Ms. Community Manager... Wait... The community managers were saved by an exclusion added after the fact. 

In 2012 California Assembly Bill 2237 turned anyone who oversees bids for construction, on behalf of homeowners, is a contractor, and requires them to obtain a license with the CA Contractors State License Board. Then, in 2013 CA Senate Bill No. 822 clarified the term "Contractor" and "Consultant" to NOT include community managers. But the language of California Business & Professions Code Section 7026.1 remains pretty broad. 

The Law

CA B&B Code Section 7026.1.

(a) The term "contractor" includes all of the following:

...

 (2) (A) Any person, consultant to an owner-builder, firm,
association, organization, partnership, business trust, corporation,
or company, who or which undertakes, offers to undertake, purports to
have the capacity to undertake, or submits a bid to construct any
building or home improvement project, or part thereof.
 (B) For purposes of this paragraph, a consultant is a person,
other than a public agency or an owner of privately owned real
property to be improved, who meets either of the following criteria
as it relates to work performed pursuant to a home improvement
contract as defined in Section 7151.2:
 (i) Provides or oversees a bid for a construction project.
 (ii) Arranges for and sets up work schedules for contractors and
subcontractors and maintains oversight of a construction project.

...

 (b) The term "contractor" or "consultant" does not include a
common interest development manager, as defined in Section 11501, and
a common interest development manager is not required to have a
contractor's license when performing management services, as defined
in subdivision (d) of Section 11500.

Why We Care


Lots of people engage in activities related to contracting. Many are nice people with good intentions, just trying to make a living. But because they are not educated, licensed or registered and regulated after having undergone a rigorous process of verifying they have the appropriate professional knowledge and level of skill, they inadvertently cause harm to their clients. 

Construction management is hard and it’s complex. Construction management is a professional discipline that should be regulated like architecture, engineering, or even cosmetology; but it’s not. This lack of recognition, that there is a set of well-defined construction management principles, leads property owners and managers to try to save money by managing complex projects themselves. Our experience is that for maintenance, improvement or repair projects that cost $50,000 or more, our professional construction management services are cost-neutral. For projects of $100,000 or more, well-executed construction management services are a cost saver. So technically, these services can be FREE, plus a profit (I'm only half-joking)! In addition to the economics, these services create the closest thing to a guarantee of success that the construction industry can offer. 

 

Super Diamond 4/1/2016

What!? 

On April Fool's Day, PFCS and friends will be rocking to Super Diamond — The World Famous Neil Diamond Tribute Band, at The Coach House in San Juan Capistano, CA.

Check out their promotional video here. 

Why

Super Diamond delivers a glittering, smoke-filled show performing Neil Diamond’s power ballads and up-tempo hits with unrestrained enthusiasm. The show is pure entertainment - classic music combined with fun, energy and passion - creating nostalgia for the good old days and excitement for today's generation.

Super Diamond has generated an exuberant audience response previously unheard of for a tribute band. Many would say that Super Diamond has transcended the label of "tribute band" by passionately immersing themselves in Neil Diamond's huge repertoire and delivering a high-octane show of unforgettable classics such as Cracklin’ Rosie, Sweet Caroline, Forever in Blue Jeans and many others.

Front man The Surreal Neil, Randy Cordeiro, astonishes audiences with his live interpretation of the "Real Neil". Randy created the charismatic character when he discovered he had the uncanny ability to capture not only Neil Diamond's voice, but also his mannerisms and performance style.

Super Diamond has caught the attention of major media publications such as Rolling Stone Magazine, Spin Magazine, New York Times, San Francisco Chronicle, Washington Post and LA Times. The band has been featured on CNN, Fox News, MSNBC, Comedy Central and interviewed for VH1's Behind the Music-Neil Diamond Episode. 

 

California's 2015 SB 655 Housing Standards: Mold

Summary

California's SB 655, passed in 2015, is an act to add Section 1941.7 to the Civil Code, and to amend Sections 17920 and 17920.3 of the Health and Safety Code, relating to housing standards, specifically dealing with the presence of mold in buildings.

Ranjan Lahiri of Wood, Smith, Henning & Berman is a great lawyer and a client who wrote an excellent summary and analysis of SB 655: GOVERNOR APPROVES BILL THAT ADDS MOLD TO LIST OF UNINHABITABLE CONDITIONS by Ranjan Lahiri. Ranjan writes:

"... the bill adds mold to the list of substandard housing conditions and gives local enforcement agencies specific authority to address mold complaints...

... a landlord does not have a duty to inspect or repair conditions of mold until he or she receives notice...

...a building is deemed substandard if there exists "visible mold" ... gives a code enforcement officer the authority to declare a rental unit substandard based on the existence of mold...

... the addition of mold to the list of substandard conditions will make it easier for claimants to establish a prima facia habitability claim based on conditions of mold. However, SB-655 does provide some benefits for defense counsel who defend landlord/tenant mold claims. In many instances, tenants fail to report conditions of mold to their landlord and retain possession of their units while their legal counsel investigate and test the unit to prove up a mold exposure claim. SB-655 clarifies that a landlord's duty to inspect or repair conditions of mold does not arise until the landlord is given notice of the condition by the tenant or the landlord has notice that the tenant is not maintaining the unit. Furthermore, by clarifying that mold can be considered an uninhabitable condition, landlords will be able to better understand their potential liability for visible mold in a unit and be able to take proactive steps to inspect and repair any such conditions."

Resources

(Search "ca sb 655 2015")

  1. Legislative Info

  2. Text of the Law

  3. Text of the Law

  4. Analysis & Comments

  5. Bill Documents

  6. Senate and Assembly Voting History

  7. CA Healthy Housing Coalition

  8. Legislative Tracking

  9. Solano Public Health - Includes A Good Quick Summary:
    Summary: Provides that a building lessor is not obligated to repair a dilapidation relating to mold until he or she has notice of it, or the tenant is in violation. Authorizes a landlord to enter a dwelling to repair dilapidation under specified conditions. Specifies visible or otherwise demonstrable mold growth, excepting mold that is minor and found on surfaces that can accumulate moisture as part of their proper and intended use, is a type of inadequate sanitation and a substandard condition. Defines mold.

  10. San Diego Apartment Association Update

 

The Best Books I Read in 2015 by Bill Gates

Article of the Week

In a December 2015 posting of Gatesnotes; The Blog of Bill Gates, he personally summarized the six books that he considered the best he read during the year. And there's even a video! 

One Minute Summary

The Road to Character by David Brooks. This New York Times columnist examines the contrasting values that motivate all of us; the traits that lead to external success and the traits that lead to internal peace of mind.

The Explainer: Complicated Stuff in Simple Words by Randall Monroe. Using only the 1,000 most common words in the English language, Mr. Monroe explains various subjects. This is a brilliant concept, because if you can’t explain something simply, you don’t really understand it.

Being Nixon: A Man Divided by Evan Thomas. Journalist Evan Thomas writes a more balanced account of Richard Nixon and gives you a sharp insight into the inner workings of a brilliant, flawed and conflicted man.

Sustainable Materials With Both Eyes Open by Julian M. Allwood, Jonathan M. Cullen, et al. These authors look closely at the materials that humans use most, with particular emphasis on steel and aluminum, and show how we could cut emissions by up to 50% without asking people to make big sacrifices.

Eradication: Ridding the World of Diseases Forever? by Nancy Leys Stepan. Stepan’s history of eradication efforts provide a clearer sense of how we can use the lessons of the past to guide future efforts to save lives.

Mindset: The New Psychology of Success by Carol S. Dweck. Through clever research studies and engaging writing, Dweck illuminates how our beliefs about our capabilities exert tremendous influence on how we learn and which paths we take in life. 

Why We Care

Bill Gates is (A.) one of the richest and most successful men in the world and (B.) known to be a voracious reader. So when he takes his valuable time to summarize the books he says are the best he read all year, everyone with a brain should sit up and listen. These books touch on “how things work,” the physical world, and offer insight into the human condition. And these are all things we are interested in. 

 

What To Do When You Have A Building Leak

What To Do

With the passage of California's 2015 SB 655 "Housing Standards: Mold" it's become more important than ever that when you have a building leak, you should always apply the  Mold Management Method.

If you don't have time or feel like you might not have the expertise for this, just contact us. We can implement this for you.

What It Is

The Mold Management Method was developed from 2002-2004 at the height of the "mold is gold" craze. The Mold Management Method is a quality control checklist for situations where building leakage has caused, or has the potential to cause, mold growth. This checklist was put together and used in multiple technical symposia, sponsored by the National Institute of Building Sciences (NIBS), as a framework to teach the nation's building professionals how to deal with water damage situations where mold was present or possible.

Why Use It

If you have an active leak, the actions you take can either solve the problem permanently and for a reasonable price, or make it even worse and more expensive. The goal is to operate at the highest level of professionalism. Using the Mold Management Method as a checklist will allow you to avoid liability if there is a "PHASE V - DISPUTE RESOLUTION," by (1.) not causing more problems, (2.) solving the problem as quickly and inexpensively as possible, and (3.) professionally documenting your process. As we all know, sometimes expensive building leaks are caused by someone other than the property owner. Applying the steps in Phases I-IV of the Mold Management Method will naturally create a collection of evidence that will aid in proving a case against the responsible parties. That way, those responsible parties (or their insurance companies) will more readily accept responsibility for the economic damages incurred. 

How To Use It

When the phone rings (this is your "Phase I item A. Notice"), start taking notes. Get all of the key information (8 W's): Who, what, when, where, why, how, how much, how many... Does the occupant or person notifying you have photos? If No, then why not!? Then, start down the checklist to make sure you operate at the highest level of professionalism. And keep some kind of journal that shows you hit all the points in the method.

The Mold Management Method: Summary

Phase I - Event

  • A. Notice

  • B. Emergency Repairs

  • C. Initial Investigation

  • D. Documentation of Conditions and Activities

  • E. Report Generation - Initial

Phase II - Detailed Investigation

  • A. Notification of / Communication with Applicable Parties

  • B. Testing / Sampling

  • C. Identify Source(s)

  • D. Analysis & Report Generation (Repair Plans)

  • E. Analysis & Report Generation (Abatement Plans)

Phase III - Remediation

  • A. Planning and Coordination of Remediation (Budget, Schedule, & Contract)

  • B. Notification of Applicable Parties

  • C. Relocation

  • D. Repair of Source

  • E. Abatement

  • F. Clearance & Testing

  • G. Restoration of Construction Assemblies

  • H. Re-Occupy Space

Phase IV - Evaluation

  • A. Updated Reports

  • B. Updated Cost Summaries

  • C. Subrogation Analysis

  • D. Maintenance Recommendations

Phase V - Dispute Resolution

Pre-Litigation

  • A. Evaluate Bodily Injury

  • B. Analyze Insurance

  • C. Allocate Responsibility

  • D. Negotiation

Litigation

  • E. Expert Meetings

  • F. Allocate Responsibility (again)

  • G. Mediation

  • H. Deposition Preparation

  • I. Depositions

  • J. Trial Preparation

  • K. Trial

  • L. Appeals

  • M. Settlement

PFCS Mold Management Resources

Other Moisture and Mold Resources

 

2016 Webinar Topics

"You guys without a doubt are the best in the biz with these webinars. Truly professional presentations that I can apply what I learn." -Senior Claims Technical Specialist for a Major Insurance Company

2016 Webinar Topics.jpg

The Winners Are! 2016 Webinar Calendar

Also see our PFCS Events page for a list of our 2016 webinars with registration instructions. 

The Survey

We host a monthly one-hour webinar series covering a wide variety of construction, insurance and legal industry topics. This year, we conducted a survey to find out your favorites from the past, interest for future programs we planned, and suggestions for programs that we haven't thought of yet.

Below is a complete list of all our presentations, broken into five categories. Below that is a list of "Old Favorites" (most popular), Key Learning (most important to us), and the list potential topics we considered covering this year.

The results are in! We published the webinar schedule for 2016 in January, and we are really excited about the content. Thank you all for the help in deciding. 

PFCS Complete Seminar List

Building Inspection & Evaluation

  • Building Inspection & Evaluation (Property Condition Assessment w- E2018)

  • Building Leakage Evaluation (Evaluating Water Leakage of Buildings ASTM E2128)

  • Building Lifecycle Management

  • Building Performance Evaluation & Budgeting 101 - Analyzing and Monetizing Defects

  • Building Performance, Inspection & Testing

  • Building Wall Inspection & Testing

  • Mold Management

  • Prioritizing Maintenance & Repairs on a Limited Budget was Deferred Maintenance

  • Quality Control for Construction Maintenance, Repairs & Improvements

  • Specifying Building Construction, Maintenance, Repairs & Improvements

Construction Claims

  • Construction Claims Management

  • Expert Witness Success

  • Managing Expert Work and Costs

  • Slip, Trip & Fall Analysis

  • Trial Presentations

Construction Defect Litigation

  • Allocation of Responsibility of Construction Defects

  • Analyzing Construction Defects

  • CD from the Plaintiff Perspective

  • CD from the Developer & GC Perspective

  • CD from the Cross-Defendant & Third-Party Perspective

  • Common Construction Defects

  • Construction Defect Life-Cycle

  • Fire Resistive Assemblies

  • Management of Construction Defect Claims (CALPASC)

  • Random Selection & Extrapolation

  • SB800 - CA Builders Right to Repair

Construction Fundamentals

  • Building Codes & Standards

  • Building Wall Design and Construction

  • Building Walls - Stucco, Siding & Masonry

  • Construction 101

  • Construction Document Literacy

  • Foundation Construction and Defects was Residential Foundation Systems

  • Masonry Veneer

  • Plan Reading

  • Reading Plat Maps

  • Roof Construction & Defects

  • Structural Wood Framing and Defects was Residential Wood Framing

  • Tile & Stone Installation

  • Window & Door Installation

Construction Management

  • Budgeting & Estimating Construction, Building and Property Maintenance, Repairs & Improvements

  • Contracting 101

  • Construction Contracts, Risks & Insurance

  • Management 101

  • Managing Construction, Building and Property Maintenance, Repair & Improvements

  • Project Planning & Management

Special Collection: Building Lifecycle Management (BLM) Series

All of these programs are also in the section above.

  • Budgeting & Estimating Building Maintenance, Repairs & Improvements

  • Building Inspection & Evaluation (Property Condition Assessment w- E2018)

  • Building Leakage Evaluation (Evaluating Water Leakage of Buildings ASTM E2128)

  • Building Lifecycle Management

  • Building Performance Evaluation & Budgeting 101

  • Managing Construction, Building and Property Maintenance, Repair & Improvements

  • Prioritizing Maintenance & Repairs on a Limited Budget was Deferred Maintenance

  • Quality Control for Construction Maintenance, Repairs & Improvements

  • Specifying Building Construction, Maintenance, Repairs & Improvements

Old Favorites (Most Popular Programs Ever)

  1. Allocation of Responsibility of Construction Defects

  2. Analyzing Construction Defects

  3. Building Leakage Evaluation

  4. Common Construction Defects

  5. Construction Claims Management

  6. Construction Contracts, Risks, & Insurance

  7. Contracting 101

  8. Random Selection and Extrapolation of Construction Defects

  9. Roof Construction & Defects

  10. Window & Door Installation

Potential New Seminar/Webinar List

  • Adjacent Property Disputes

  • Building Insurance, Inspections and Quality: Closing the Loop

  • Construction Site Safety/Accidents

  • Document Management for Construction & Claims

  • Expert Qualification, Designation, & Declarations

  • Flooring Issues

  • "Open Source" Contracts for Construction, Maintenance, Repairs & Improvements: Contracting with Architects, Engineers, Construction Managers, General Contractors, Trade or Subcontractors, and Suppliers

  • Terminating a Construction Project Before Completion: Dos, Don'ts, Claims & Litigation

  • Understanding & Evaluating Construction Estimates

Key Learning

  1. Building Performance Evaluation & Budgeting 101 - Analyzing and Monetizing Defects

  2. Building Inspection & Evaluation (Property Condition Assessment w- E2018)

  3. Project Planning & Management

  4. Building Leakage Evaluation (Evaluating Water Leakage of Buildings ASTM E2128)

  5. Analyzing Construction Defects

  6. Budgeting & Estimating Building Maintenance, Repairs & Improvements

  7. Managing Construction, Building and Property Maintenance, Repair & Improvements

  8. Contracting 101

  9. Allocation of Responsibility of Construction Defects

  10. Building Lifecycle Management

  11. Construction Document Literacy

  12. SB800 - CA Builders Right to Repair

  13. Random Selection & Extrapolation

  14. Expert Witness Success

 

Happy Holidays!

2015 has been a spectacular year.  We've grown our team of experts and staff, we've worked hard on your projects and case work and we've made great strides in improving the processes and systems that we use to deliver that work to you.  From all of us at PFCS, we offer you a little holiday tribute.

We'd love to hear from you about what you're up to this holiday, either what you're drinking, your toasts to the new year, or where you'll be enjoying the festivities. Comment on this blog for more holiday happenings.

A Toast to You...

Get started now for a round of Sun Liquor Egg Nog, which our Information Technology department (Dylan Markow works remotely from Dallas, Texas) prepares around Thanksgiving (the Seattle Times recipe suggests aging the holiday cocktail one month in advance), to enjoy on Christmas.

Then move onto one of Pete's favorite drinks, the Manhattan:

3/4 oz sweet vermouth
2 1/2 oz bourbon whiskey
1 dash Angostura® bitters
1 maraschino cherry
1 twist orange peel

Combine the vermouth, bourbon whiskey, and bitters with 2 - 3 ice cubes in a mixing glass. Stir gently, don't bruise the spirits and cloud the drink. Place the cherry in a chilled cocktail glass and strain the whiskey mixture over the cherry. Rub the cut edge of the orange peel over the rim of the glass and twist it over the drink to release the oils but don't drop it in.

Under the Tree

"I will be literally “Rocking around the Christmas Tree” this year.  Santa is bringing my daughter a mini Torino Red Stratocaster guitar and Daddy a new amp.  We’ll be cranking it up! Wishing you all a Merry Christmas and Happy Boxing Day. Go Spurs!"

Paul Kushner - Architect

Cheers and Be Merry!

May your troubles be less,
And your blessing be more.
And nothing but happiness,
Come through your door.


"An Irish Toast – don’t have any Irish in me but I love their toasts."
- Gabriella Wittenberg - Project Manager

"Gratitude shouldn’t be an occasional incident but a continuous attitude."
- Sheila Comparan - Information Gatekeeper

O'er the hills we go!

"In New Year's Eve's past, I've been in Times Square for the big ball-drop. And I've danced in the new year at the Nines Hotel in Portland. And this year I'll be rockin' the Hard Rock Hotel in downtown San Diego. Maybe I'll see you there. Cheers and all the best for 2016."

Pete Fowler - President

"For the Holidays, I will be heading up to Redding, California to visit my family. Friday we will celebrate Christmas morning at my parent's house and proceed to house hopping / crashing other Christmas parties until we end up at my grandparents' house for dinner. On Saturday, I believe we are going out to dinner to celebrate all of our birthdays (myself, my brother, and my dad all have the same birthday and my mom the following day). On Sunday, I will sadly depart back to Southern California where Monday morning shenanigans at PFCS will be waiting for me.  No New Year's Eve plans just yet!" 

Chase Henry - Project Coordinator

"Gather up your imperial forces, Christmas comes early this year for fans of the George Lucas mega-franchise that is Star Wars.  For any science fiction fan, nerd or child of the 70s/80s, the anticipation is exciting to say the least.  I'll be filling my flask with whiskey and lining up for the Star Wars movie marathon (7 films) punctuated with the new release of The Force Awakens.  I'll be dusting my action figure collection with glee this holiday, and maybe heading back to the theater for repeat viewings."

Whitney Woolf - Operations Manager

Gridiron Greetings

Project Coordinator Carolyn Des Jardin has had a stranglehold on the PFCS League of Awesome since Week 1 of the fantasy football season.  As we cruise into the playoffs will she emerge the victor?  For those partaking in the pigskin this season, good luck to your team, and we're all tuned in to see what happens in the NFL this holiday and into the post-season.

 

Sherlock Holmes Quotes For Our Business

Sherlock-Holmes-Quotes-For-Our-Bu.jpg

I was putting together a new webinar called Slip, Trip & Fall Analysis for delivery on 12/17/2015, and thought a couple Sherlock Holmes quotes would be nice. So, as I often do, I turned to "The Google." Google led me to another one of my favorites, Wikipedia, which had a great Sherlock Holmes page with a bunch of great quotes. So many of these quotes are remarkably applicable to the work that we do, including the building inspection and construction management services that we call Building Lifecycle Management (BLM), as well as our Construction Claims & Litigation work. 

Here are the 7 quotes that landed on the section-transition slides in our Slip, Trip & Fall Analysis seminar: 

  • 1. INTRODUCTION: "Things must be done decently and in order." - Sherlock Holmes

  • 2. METHOD: “To the logician all things should be seen exactly as they are, and to underestimate oneself is as much a departure from truth as to exaggerate one’s own powers.” - The Memoirs of Sherlock Holmes by Sir Arthur Conan Doyle

  • 3. INVESTIGATION: “We approached the case, you remember, with an absolutely blank mind, which is always an advantage. We had formed no theories. We were simply there to observe and to draw inferences from our observations.” - Sherlock Holmes in The Adventure of The Cardboard Box

  • 4. ANALYSIS: “It is a capital mistake to theorize before one has data. Insensibly one begins to twist facts to suit theories, instead of theories to suit facts.” - Sherlock Holmes

  • 5. CONCLUSIONS: “It is of the highest importance in the art of detection to be able to recognize, out of a number of facts, which are incidental and which vital. Otherwise your energy and attention must be dissipated instead of being concentrated.” - Sherlock Holmes in The Reigate Puzzle, 1893

  • 6. PRESENTATION: "Nothing clears up a case so much as stating it to another person." - Sherlock Holmes

  • 7. CONCLUSION: “There is nothing more stimulating than a case where everything goes against you.” - Sherlock Holmes in The Hound of the Baskervilles

There were too many applicable and awesome Sherlock Holmes Quotes to use, so here's some more: 

  • It is a capital mistake to theorize before you have all the evidence. It biases the judgment.

  • It is a capital mistake to theorize in advance of the facts.

  • Work is the best antidote to sorrow.

  • One should always look for a possible alternative, and provide against it.

  • In solving a problem of this sort, the grand thing is to be able to reason backward. That is a very useful accomplishment, and a very easy one, but people do not practice it much. In the everyday affairs of life it is more useful to reason forward, and so the other comes to be neglected. There are fifty who can reason synthetically for one who can reason analytically.

  • I never guess. It is a shocking habit — destructive to the logical faculty.

  • You know my methods. Apply them.

  • How often have I said to you that when you have eliminated the impossible, whatever remains, however improbable, must be the truth?

  • You see, but you do not observe. The distinction is clear.

  • The little things are infinitely the most important.

  • Never trust to general impressions, my boy, but concentrate yourself upon details.

  • There is nothing more deceptive than an obvious fact.

  • What one man can invent another can discover.

  • We must look for consistency. Where there is a want of it we must suspect deception.

  • We must not let him think that this agency is a home for the weak-minded.

 

Portland Metro HOA Lawyers

The generous community association industry speaks out! We work with a lot of homeowner associations, and we get people asking us for referrals regularly. So we asked the experts: Our clients and contacts. 

We sent the following e-mail out to our past and current clients in the Portland area: 

My HOA clients keep asking me for lawyer referrals so, similar to my email and "List of Statisticians" blog post from 2013, I am now asking for referrals to lawyers who have experience and interest in working with HOAs. I will gather the list and their contact information, and share it with everyone who contributes. Of course, I will identify those lawyers who were referred most often. 

These HOA clients of mine seem to be most interested in having a lawyer who is willing to think outside of a one-size-fits-all approach, is willing to push back against a "this is just how we do it around here" attitude, and helps by thinking about spending the HOAs hard-earned money as carefully as she would her own. Most of these HOA's are WAY past the time for construction defect litigation, so that expertise or specialty is of limited benefit to them. 

Thanks in advance for the help. 

The results were outstanding. Our clients & contacts responded with personal referrals to great attorneys they had worked with in the past. 

Here's a brief breakdown of our results: 

  • 1,736 e-mails sent to our clients

  • 35 responses

  • 27 referrals

  • 36 attorneys

  • 13 with two or more recommendations

  • 9 law firms

The most referred attorneys!

  • Kathleen Profitt - Profitt Law (T: 503-908-1229 E: kathleen@profittlaw.com)

  • Kenneth Kaufmann - Lovinger Kaufmann LLP (T: 503-595-1867 E: kaufmann@lklaw.com)

These attorneys received several referrals each: 

  • Angela Bagby - Bagby Law Firm, LLC (T: 503-621-2774 E: angie@bagbylegal.com)

  • Stuart Cohen - Landye Bennett Blumstein, LLP (T: 503-224-4100 E: scohen@lbblawyers.com)

  • Kevin Eike - Aldrich Eike P.C. (T: 503-226-7045 E: kevin@aldrich-eike.com)

  • Anthony Rafel - Rafel Law Group (T: 503-808-9960 E: arafel@rafellawgroup.com)

  • Damon Henrie - Henrie & Smith, LLP (T: 503-593-8548 E: dhenrie@henriesmith.com)

These attorneys received more than one referral: 

  • Dean Aldrich - Aldrich Eike P.C. (T: 503-226-7045 E: dean@aldrich-eike.com)

  • David Bennett - Landye Bennett Blumstein, LLP (T: 503 224-4100 E: dbennett@lbblawyers.com)

  • Frank Elsasser - Elsasser Law Office (T: 503-477-9116 E: frankelsasser@comcast.net)

  • Jason Grosz - Vial Fotheringham, LLP (T: 503-684-4111 E: jlg@vf-law.com)

  • James Guse - Barker Martin (T: 503-796-9806 E: jguse@barkermartin.com)

  • Karna Gustafson - Landye Bennett Blumstein, LLP (T: 503 224-4100 E: kgustaf@lbblawyers.com)

These attorneys were referred by our contacts:

  • Amanda Anderson - Barker Martin (T: 503-796-9806 E: aanderson@barkermartin.com)

  • Lori DeDobbelaere - Heinson & DeDobbelaere, LLC (T: 503-479-6223 E: lori@heinsonlaw.com)

  • Wallace Glausi - Ater Wynne, LLP (T: 503-226-1191 E: wag@aterwynne.com)

  • Susan Glen - Dunn Carney Allen Higgins & Tongue, LLP (T: 503-224-6440 E: sglen@dunncarney.com)

  • Andrew Hahs - Bittner & Hahs, P.C. (T: 503-445-4302 E: ahahs@bittner-hahs.com)

  • Roger Harris - Harris Berne Christensen, LLP (T: 503-968-1475 E: roger@hbclawyers.com)

  • Jason Hirshon - Slinde Nelson Stanford (T: 503-417-7777 E: jason@slindenelson.com)

  • Darin Honn - Sussman Shank, LLP (T: 503-227-1111 E: dhonn@sussmanshank.com)

  • Tom Johnson - Vial Fotheringham, LLP (T: 503-684-4111 E: tmj@vf-law.com)

  • Crystal Lewis - Marsh, Higgins, Beaty & Hatch, P.C. (T: 360-695-7909 E: crystal_lewis@marsh-higgins.com)

  • Matthew Lowe - Jordan Ramis, P.C., Attorneys at Law (T: 503-598-7070 E: matt.lowe@jordanramis.com)

  • George Mead - Mead Smith Law Firm (T: 503-656-4550 E: Not Available)

  • Robert Muth - Kilmer Voorhees & Laurick, P.C. (T: 503-224-0055 E: rmuth@kilmerlaw.com)

  • Jim Prichard - Ball Janik, LLP (T: 503-228-2525 E: jprichard@balljanik.com)

  • Stephen Russell - Landye Bennett Blumstein, LLP (T: 503 224-4100 E: srussell@lbblawyers.com)

  • Melinda Samis - Arbor Vista (T: Not Available E: Not Available)

  • Kyle Sturm - Ball Janik, LLP (T: 503-228-2525 E: ksturm@balljanik.com) - NOTE: Kyle has a specialty in insurance claims, so if you have any questions about whether or not your HOA issues or damage is (or should be) covered, give him a ring.

  • Dan Thenell - Thenell Law Group (T: 503-372-6450 E: dan@thenelllawgroup.com)

  • Joseph Tripi - Law Office of Joseph Tripi (T: 503-546-1505 E: joe@tripilaw.com)

  • Michael Vial - Vial Fotheringham, LLP (T: 503-684-4111 E: mjv@vf-law.com)

  • Peter Viteznik - Kilmer Voorhees & Laurick, P.C. (T: 503-224-0055 E: pviteznik@kilmerlaw.com)

  • Dan Webert - Barker Martin (T: 503-796-9806 E: dwebert@barkermartin.com)

  • Jacob Zahniser - Jordan Ramis, P.C., Attorneys at Law (T: 503-598-7070 E: jacob.zahniser@jordanramis.com)

  • Dan Zimberoff - Barker Martin (T: 503-796-9806 E: dzimberoff@barkermartin.com)

The full list of law firm referrals:

CAI

OWCAM

BOTH

INTERESTING CONVERSATIONS

Of course, any time one sends a message like this, interesting conversations are bound to happen. Here is the text of one of my exchanges that I liked:

If you will allow me a minute on my soapbox- Your email mentions a certain mentality that your HOA clients are looking to overcome. Some of the problem with the “this is how we always do it” mentality is that this same mentality is also pervasive among the attorneys who practice HOA law. There is a broad spectrum of legal, reasonable and effective HOA management and governance practices, but boards are often told it has to be done in a very narrow or specific way. 

I also believe the reason for this mentality is that for years and years very few owners have challenged HOAs in court. It’s expensive, and there has been a void of HOA attorneys who are willing to accept individual owners as clients. As a result, there is a feeling of invincibility that is pervasive in the Community Association trade. I represent individual owners as well as the Associations and I see it in every single case: I will send a demand letter or call the HOA’s attorney to make some reasonable requests (usually as simple as “please follow the law”) and the Board and the HOA always entrench because there is no way they could be doing anything wrong. And I believe they think this way because their attorneys are telling them they are untouchable. For example, some of these attorneys publish marketing materials and instructions for how to run an HOA in compliance with the law. Then, with a straight face these same attorneys will tell me their clients aren’t breaking the law when they fail to do even the most basic of Association functions – in direct contravention of the language of these marketing materials and instructions. Once they entrench, a discussion that should end with these attorneys saying, “you are right- my client should have a reserve study because that’s a legal requirement” turns into a protracted fight that ultimately runs the little guy out of the Association or out of money- which ever happens first. 

Finding an attorney who can help these communities- or individuals- for less than 300 dollars an hour, who understands HOA law and also has an appreciation of the financial, building science, non-profit corporation and political realities of HOA management and governance is difficult. But there are a handful of us out there. 

For what it’s worth. And, thanks. 

And my reply: 

You know the movies where there is a Pentecostal church and the parishioners are jumping up and down and sweating and screaming "Haliejua!" and "You preach it brother! Preach it!!"? Well I was one of the parishioners while reading your message ;-) 

Regards, 
Pete Fowler

 

2015 Construction Defects Seminar & Holiday Reception For ASCDC & CDCMA

On December 3rd, 2015, PFCS will be exhibiting at the 2015 Construction Defects Seminar for ASCDC & CDCMA in Costa Mesa, CA from 1:30-5:30 p.m.  Come visit our booth and get some face-to-face time with two of our consultants, Mike Villalba and Paul Kushner, and learn more about our construction defect litigation services!  Register now before it's too late!

 

Building Information Modeling: B.I.M. and Building Lifecycle Management (BLM)

Welcome to the third post in our series on Building Information Modeling (B.I.M.)! If you haven't read the first two posts, I encourage you to read them! The first post in this series introduces the concept of B.I.M., and the second post explains why everyone needs to care about B.I.M. For those that just need a refresher, here’s a recap of what we covered in the last post:

"B.I.M. is beneficial to everyone who deals with buildings needs to care about B.I.M.:

  1. A three-dimensional (3D) computer model provides a central place for all parties to contribute to and pull from;

  2. Data about each of the physical building elements can be used during all phases, from construction through building maintenance;

  3. Information related to time (4D) can be used for scheduling during construction, communicating changes, and incorporating maintenance intervals and maintenance plans;

  4. Information related to cost (5D) will help produce lifecycle cost data as well as set reasonable service-life expectations and maintenance costs;

  5. And all aspects of the project lifecycle (6D). Need to know who designed the buildings being worked on? Or who applied the peeling paint on the exterior doors? And what the expected service life of that paint was, who made it, and how much did it originally cost? B.I.M. helps answer all of these questions."

Today I’d like to discuss the profound impact that BIM will have on all phases of Building Lifecycle Management, from planning and design up to and including decommissioning a building project.

  1. Plan/Design:

    • All designers will work in the same model (database). This way, any coordination issues can be worked out in the design phase rather than interrupting the construction phase.

    • Total Quality Management (TQM) can only be fully implemented when it begins in the design phase.

    • Project Management and planning data (scope, budget, and schedule) are integral to BIM.

    • Cost-benefit, if-then scenarios can be considered cost effectively. For example: Comparing a more durable and expensive deck assembly against a less expensive alternative that will require more frequent maintenance.

  2. Build/construction:

    • Clarifications (RFIs) and changes in the field will (1.) be reduced significantly by planning and designing using BIM, and (2.) be updated in the model (database) as the project progresses.

    • Because the scope, budget, and schedule were coordinated during the planning phase, and will be updated in real time, coordination and “Just-In-Time” delivery will, for the first time, come to construction projects with the kind of regularity that we see in manufacturing.

  3. Use:

    • The model will pass from the construction team to the facility management team during the commissioning process.

    • Significant configuration of interiors for use will be updated in the model. Details such as communications cabling will sometimes be included in the model. The model may even include information on who is sitting where, so that the space can be optimized.

  4. Maintain:

    • What was originally the Construction Progress Schedule will become the Maintenance Schedule.

    • All operation and maintenance (O&M) documentation for each and every element will be available in, or referenced from, the model.

    • Building maintenance, both planned and unexpected, will be updated in the model. “Best Practices” for maintaining structures and contracting for maintenance services will be applied by integrating data into the model, and owners of multiple projects will share these best practices from model-to-model. This will include who, what, when, where, how, how much, and how many.

    • Contracts for maintenance should be maintained element-by-element, location-by-location, and player-by-player (contacts) in the model.

  5. Repair & Improvement:

    • All repairs and improvements should be updated into the model. This will include who, what, when, where, how, how much, and how many.

    • If it is found that some element or elements were constructed in a way that is not consistent with the applicable standards, and the building is not performing as expected, the model will include information from construction about who designed, approved, supervised, executed, inspected and approved the assemblies, so that any disputes should only address the applicable elements, locations, and players.

  6. Learn:

    • Over time, since that data is structured, it will become information that smart people can use to make smart, informed decisions.

    • Not only will the decision makers have the structured information for the project at hand, they will also have the data from other, similar projects to aid in decision making across projects. This metadata (a set of data that describes and gives information about other data) can be created to further inform best practices.

    • See PFCS’ publications on Building Lifecycle Management, which argue the position that collecting and organizing building data such that it becomes actionable information is the only way to make smart decisions about building projects. Therefore, a central database of all building related data (BIM), searchable and able to output by building element, location, person/company, or timeline, is an amazing decision-making resource.

    • See a sample PFCS Building Lifecycle Management Matrix (BLMX).

  7. Decommission:

    • The decision to update or demolish is a tough one. But it will be made much easier when we can do multiple, cost-effective, A to Z, what-if analysis.

PFCS Building Lifecycle Maintenance Matrix (BLMX

PFCS Building Lifecycle Maintenance Matrix (BLMX

Decisions, Decisions...

There are many aspects of B.I.M. that seem small, but will have a profound impact:

  • For the first time in the history of building construction, all parties from design to decommissioning will use common names for all of the physical elements and locations of the project.

  • We will be able to finally know what the physical elements cost to design, build, use, maintain, repair, improve and decommission, since we will have a central repository for all information about each of the physical elements. And the actual history of costs associated with each phase in the lifecycle will be readily available.

  • Naturally, financial accounting will need to evolve to make costs associated with the respective physical elements available through the lifecycle, but this will be easy once the data has a home and its use begins to save building owners and users money over time.

  • The implications for the science and profession of construction Project Management are profound. The key fundamentals for all management of all projects are scope, time and cost management. BIM has these aspects of the "building information" built in as part of the "model" so project management software tools should be interacting with the model (BIM database) in a way that is very similar to the way all of the designers are interacting with it.

  • Financial management of the building lifecycle will become integral with building information modeling. Electronic financial tools (like the almost ubiquitous financial software Quickbooks) will eventually communicate directly with the model, with data that flowing out of, and back into a project's BIM. Periodic reports as well as permanently stored historical financial information should be integral to the model, even moving from owner to owner when the property is sold. Therefore the entire, uninterrupted economic history of the project will be able to be known. This will be similar to the record keeping of a fastidious automobile owner, who maintains records and receipts of every service appointment.

  • Naturally, changes to the scope of work will be limited when projects are fully modeled in 3D due to all of the physical elements being fit together in the virtual model before actual construction begins.

  • The simple avoidance of re-typing the same information over and over and over will save many thousands of dollars over the lifetime of the building.

This series on Building Information Modeling continues: 

  1. Building Information Modeling: What is B.I.M.?

  2. Building Information Modeling: Why Everyone Who Deals with Buildings Should Care about B.I.M.

  3. (This post) Building Information Modeling: B.I.M. and Building Lifecycle Management (BLM)

  4. Building Information Management & Modeling

To learn more about how PFCS leverages B.I.M., browse our services or give us a call at our Southern California Office (949) 240-9971 or Portland Office (503) 660-8670.

 

Building Information Modeling: Why Everyone Who Deals with Buildings Should Care about B.I.M.

Who should care?

  • Property Owners & Managers

  • Developers & Contractors

  • Product Manufacturers & Suppliers

  • Attorneys and Insurers

Welcome to the second post in our series on Building Information Modeling (B.I.M.)! If you don’t know what the heck we’re talking about, I encourage you to read the first post in this series which introduces the concept of B.I.M., talks through an industry definition, shows the opportunity for expansion, and even includes a fun video to help break it down.

For those that just need a refresher, here’s a recap of what we covered in the last post:

"B.I.M. is a sharable collection of building data, including:

  1. A three-dimensional (3D) computer model of the entire project;

  2. Data about each of the physical building elements including their location, number, and size;

  3. Information related to time (4D);

  4. Information related to cost (5D);

  5. And all aspects of the project lifecycle (6D).”

6d-bim.jpg

"So what?"

Now that you know what B.I.M. is, you’re probably asking, “So what?” Why should you care about B.I.M.?

The truth is that B.I.M. introduces a transformation in the way we think about, document, and share information related to building projects – and the results have serious implications and unrealized benefits for users across every industry that deals professionally with buildings (not just the construction industry).

We’ll illustrate this with an example. As you probably know, buildings are traditionally designed graphically, even when using three-dimensional computer aided design (CAD). It’s common for an architect to design a building project using 3D CAD, then print the contract documents but not share the electronic files. Contractors offering proposals then have to manually measure the scaled drawings and input their own interpreted data in order to develop their estimates and proposals.

As you can imagine, this traditional methodology is inherently inaccurate and inconsistent. Even two estimators in the same office will have different datasets. And this messy process is repeated for each and every contractor involved, which is terribly wasteful when you consider that large projects can have hundreds of players involved.

B.I.M. presents an alternative to this inaccurate and inconsistent approach.

Accurate, Consistent Information with B.I.M.

At its core, B.I.M. is a methodology that transforms the underlying design of a building into data that can be shared with all stakeholders, without interpretation, for reuse throughout the building lifecycle.

Recall our flooring contractor from the first post: Having one dataset about the building, that can be easily shared throughout the building lifecycle, will decrease historic inefficiencies associated with parties needing to create and re-create data over and over.  These savings will naturally lower the total building lifecycle costs. Those who participate by using this data will be at an advantage over those who continue to operate in the older, less efficient way. In addition, this data will make smart decisions easier, so in addition to lower costs, the performance will be better and more durable. Better and more durable building performance usually means “longer lasting,” so the cost over time is lowered ($/year).

Let’s discuss how each of our B.I.M. components becomes a living data set to be used virtually by all key players in a building project's lifecycle:

  1. A three-dimensional (3D) computer model of the entire project:

    • Build a true 3D model of the building project, representing the elements (floors, walls, roof, windows, doors, etc.) that will make up the real building in three-dimensional space. This is in contrast to 3D CAD (computer aided drafting), which is a purely graphical rendition requiring interpretation (which often leaves chances for error).

    • Create a “home base” model from which all players in the design of the building project contribute to and pull data from.

    • Leverage your 3D B.I.M. as a sophisticated database to output building information in various forms, including all elements in "one dimension" like Excel spreadsheets, two dimensions like traditional construction drawings, or three dimensions from any vantage.

    • Eliminate costly errors in dimensions and conflicts in physical space associated with the traditional methodology.

  2. Data about each of the physical elements including their location, number, and size:

    • Incorporate all physical elements of your project in your 3D model, accounting for the way that manufactured products are actually put into a real building.

    • Pull precise specifications and information related to physical elements that are not pre-manufactured.

    • Automatically account for every element, a process that traditionally requires calculations and scaling.

    • Incorporate service-life and maintenance information associated with each discrete building element (walls, windows, roof, mechanical equipment, etc.).

  3. Information related to time (4D):

    • Associate progress schedule and sequencing information with each discrete element, combining and associating with other interrelated elements that will be combined during construction.

    • Efficiently and effectively communicate changes to the construction schedule with a sophisticated B.I.M. scheduling mechanism.

    • Incorporate maintenance intervals for each element, and output maintenance plans for those elements that require periodic attention.

  4. Information related to cost (5D):

    • Include the cost of each physical element in the model.

    • Associate each discrete element with service-life expectations and maintenance costs, and manage throughout the building lifecycle.

    • Integrate lifecycle cost analysis data, including that for reserve studies.

    • Accurately evaluate the performance of the building against the expectation, as described in your model.

  5. And all aspects of the project lifecycle (6D):

    • Do we know who designed all of the buildings we worked on? This is an easy question if you have a complete Building Information Model.

    • How about trying to figure out who applied the paint that is peeling off the exterior doors?

    • How long did we expect that paint to last anyway? And who made it? And what color is it?

This series on Building Information Modeling continues: 

  1. Building Information Modeling: What is B.I.M.?

  2. (This post) Building Information Modeling: Why Everyone Who Deals with Buildings Should Care about B.I.M.

  3. Building Information Modeling: B.I.M. and Building Lifecycle Management (BLM)

  4. Building Information Management & Modeling

To learn more about how PFCS leverages B.I.M., browse our services or give us a call at our Southern California Office (949) 240-9971 or Portland Office (503) 660-8670.

 

Building Information Modeling: What is B.I.M.?

Welcome to the first post in our series on Building Information Modeling! I invite you to take a few minutes (3.5 to be exact) to watch this introductory video from Graphisoft on Building Information Modeling – just keep in mind, they are selling software to designers.

What is B.I.M.?

According to Wikipedia:

Building information modeling (B.I.M.) is a process involving the generation and management of digital representations of physical and functional characteristics of a facility. The resulting building information models become shared knowledge resources to support decision-making about a facility from earliest conceptual stages, through design and construction, through its operational life and eventual demolition.

Translated into English, B.I.M. is a sharable collection of building data, including a three-dimensional (3D) computer model of the entire project. This model includes data about each of the physical building elements (foundation, windows, plumbing system, site lighting, etc.) that make up the project, including the location, number, and size of those elements.

The model can also include information related to time (adding a 4th dimension to the B.I.M.), cost (a fifth dimension), and all aspects of managing the project lifecycle (a 6th dimension).

Levels of B.I.M.

  • 3D B.I.M.: Building Information Models in 3 Dimensions

  • 4D B.I.M.: 3D + Time (Think Einstein’s Space-Time Continuum)

  • 5D B.I.M.: 4D + Cost (Think Project Management’s Scope-Budget-Schedule. All 3 are now covered.)

  • 6D B.I.M.: 5D + all aspects of project life-cycle management information

Picture2.png

Benefits of “6D B.I.M.”

Imagine a flooring contractor preparing a proposal for a project. If the project was designed using B.I.M., the contractor would simply search the B.I.M. database for all of the flooring types, their locations and exact quantities. A perfectly accurate list could be generated along with links to all applicable specifications.

This method is far more accurate and efficient than the traditional method – which involves reviewing a set of paper drawings and specification manuals, making hand measurements, calculations and notes (which are never perfectly accurate). Just think how many times the floor area of a public building gets measured over the course of its service life. With today’s technology, this is a silly waste of time.

When B.I.M. is fully executed, it will save contractors unimaginable hours performing tasks that have no lasting value to the building owners.

And in a full 6D B.I.M. implementation, the flooring contractor would also have access to bidding and contracting information including the progress schedule. The general contractor (GC) would accept proposals electronically, and all of this information would be forever stored in the B.I.M. model for easy reference.

This series on Building Information Modeling continues: 

  1. (This post) Building Information Modeling: What is B.I.M.?

  2. Building Information Modeling: Why Everyone Who Deals with Buildings Should Care about B.I.M.

  3. Building Information Modeling: B.I.M. and Building Lifecycle Management (BLM )

  4. Building Information Management & Modeling

To learn more about how PFCS leverages B.I.M., browse our services or give us a call at our Southern California Office (949) 240-9971 or Portland Office (503) 660-8670.

 

Reserve Funding & Risk Mitigation: The Bottom Line

Last month we featured two powerful blog posts from CPA and credentialed reserve funding provider, David T. Schwindt. For those of you who read David’s insights on reserve funding and risk mitigation, I trust you found the information helpful!

In today’s post, I’ll recap the main takeaways from David’s content, as well as provide some added context for what his insights mean for how you manage property maintenance and repair.

Three Key Takeaways from Dave’s Posts…

1. A reserve study has two main components.

They are: (1.) the physical analysis and (2.) the funding (financial) analysis.

The physical analysis is the foundation of the funding analysis, and its accuracy dictates whether the money stored in your reserve funds is an appropriate (or wasteful) amount.

The bottom line: Proper physical analysis of property is a specialized professional discipline, involving a robust approach and industry standards for assessing the condition of your building.

2. Reserve Funding Philosophies range from 0% to 100% contingency.

In his first blog post, David outlined three reserve funding models to illustrate the vast spectrum of funding philosophies:

  1. Baseline Funding – funds only expected costs, and does not account for any contingency funding to cover surprises along the way.

  2. Threshold Funding – funds all expected costs (like the baseline model) plus a threshold contingency amount to cover unexpected costs that arise.

  3. Full Funding – allows funding for twice the amount of expected costs, providing a very large (100%) threshold contingency.

Reserve-Funding-&-Risk-Mitigation--The-Bottom-Line-figure1-methods-of-funding_b.jpg

The bottom line: Greater energy, discipline, and professionalism in how you manage property maintenance and repair can reduce the risk of expensive surprises, allow for a lower contingency, and free up capital that would otherwise be tied up in reserve accounts.

3. Best practices can lower the risk of special assessment.

It’s common to hear risk of special assessment correlated with contingency amount:

“If I maintain a larger contingency, there’s less risk of dealing with a lack of funds and, therefore, lower potential for a special assessment.”

But, this correlative relationship leaves out the primary causal portion of the equation: risk of surprises. The greater the risk of surprises (i.e. unexpected costs), the higher the risk of a special assessment. This, in turn, stipulates a larger contingency in the reserve account (i.e. money out of your pocket) to mitigate against special assessment. As you can see, it’s a vicious cycle!

In his second blog post, David shared 7 best practices that increase the effectiveness of a property owner’s building management, mitigate risks associated with saving too little money, reduce the probability of surprises and lower the required contingency. You’ll see them in Figure 2, which shows each best practice correlated with a reduction in contingency funding.

figure2-risk-mitigation-matrix_b.jpg

David’s best practices for risk mitigation are fundamental steps in the management of any building project, especially one with communal ownership like a Homeowner’s Association.

The involvement of a specialized construction professional is essential for:

  1. Properly evaluating your building elements (components), especially the weather resisting exterior envelope, in conformance with the highest standards (like ASTM E2018 and E2128);

  2. Writing a maintenance plan and budget to help building elements last longer with fewer repairs, and structuring it in a way so you can compare your plan and budget to what really gets spent;

  3. Performing ongoing inspections to catch issues before they become worse or cost more to repair, and structuring the information so you can track the performance of critical building elements over time;

  4. Incorporating all building elements into the reserve study to account all future repairs;

  5. Updating the reserve study periodically to account for increase in prices, changes in cash reserves, application of adjusted inflation;

  6. Specifying maintenance and repair work professionally to ensure it will last as long as you expect it to, and getting better quality that will last longer, thereby decreasing the total cost of ownership (TCO), and putting those specifications out to bid so that you get the lowest price the market will bear;

  7. Apply professional construction management discipline to protect your legal rights and manage the work, and, inspecting to verify the high quality work that was contracted for is being installed.

The bottom line: When properly executed, integrated, and delivered, these risk management best practices generate savings that far outweigh the cost of implementation.

Please note: This highly analytical approach to building lifecycle management does come with a price tag. So be prudent, and move forward in a way that is commensurate with the value of your property.

Three Deep Thoughts with Pete Fowler

  1. Three common strategies for managing property maintenance and repair include hope, prayer, and abdication. These are a far cry from the scientific, logical, disciplined and professional process that we recommend, and they will end up costing you significant time, money, and heartache.

  2. A large contingency is an alternative to good management. This is true in almost all aspects of human endeavor, especially business and property management. In fact, a large contingency is appropriate when your physical analysis is inaccurate, blurring the lines between expected costs and expensive surprises. So if you can’t develop managerial discipline and professionalism, then you should maintain a large contingency.

  3. Most people don’t realize how important historical building information is to making great, informed, cost-effective decisions long-term. Owners with organized project, maintenance and repair documentation including plans, construction specifications, inspection reports, bids, contracts, inspection documentation, etc, are in a far better position to make smart decisions, since they know where they have been. With today’s technology, including virtually free electronic storage “in the cloud,” there are no more excuses. And guess what? PFCS has an online, cloud-based, password protected Client Access system to organize and store all your documents and make them easily available and searchable, indefinitely.

Why Lawyers Should Care…

What I told you is that a robust, analytical reserve study can be leveraged for a total cost of ownership (TCO) analysis for the period being studied (usually 30 years). Be sure to check back next week for our blog post on why lawyers should care about reserve funding and risk management!

Ready to Eliminate Surprises and Overfunding?

Pete Fowler Construction Services (PFCS) can help get you there. Our team of expert consultants specializes in creating real, practical solutions for owners, associations and managers. We help you make intelligent decisions by examining your property, diagnosing problems, specifying the right maintenance and repairs, and applying construction management discipline to your project (including bidding and writing contracts to protect the owners, performing quality control inspections, managing change orders and processing invoices). We provide actionable insight and expertise to right your project, and clear up any messes that others may have created along the way.

To learn more, visit our website or give us a call at our Southern California Office (949) 240-9971 or Portland Office (503) 660-8670.

 

THE RESERVE FUNDING SERIES

 

Part II: Best Practices in Reserve Funding & Risk Mitigation

PART-II--BEST-PRACTICES-IN-RESERVE-FUNDING-&-RISK-MITIGATION.jpg

In Part I of this blog series, we “got a grip” on reserve funding with the help of our guest contributor, David Schwindt. David covered what reserve studies are, how they’re developed, and what it means for your finances.

As you know, homeowners and community associations absolutely need to put money aside for future expenditures and repairs. But the fact is, funding a 100% contingency is a conservative approach and, in many cases, can be wasteful.

In this post, David dives further into best practices for reducing the risk of “surprises” and painful special assessments to ensure that you’re not overfunding your contingency.

This concludes David’s contribution to our blog series on reserve funding & risk mitigation. Feel free to post any questions in the comments section below, and be sure to check back for my follow up post, where I’ll add my two cents and discuss the importance of comprehensive physical analysis in striking and maintaining a sensible contingency balance.

Thanks for reading!

-- Pete Fowler, PFCS President

Reserve Funding and Risk Mitigation, Part II: Best Practices

By David T. Schwindt, CPA RS PRA, Guest Blogger

Risk of Special Assessment

Many reserve study professionals present statistics that show the risk of a special assessment based on the percent funded. For instance, if an association is 50% funded, these statistics indicate there would be an 11.6% chance of a special assessment. The higher the percent funded, the lower the potential for a special assessment.

Please be aware that these statistics have been compiled by a reserve study provider and not vetted by CAI. However, if the contention is that the more extra cash an association has in the bank, the less likely the association will be to special assess due to surprises, then the underlying theory appears reasonable.

Best Practices

If our funding goal is to fund for all expected expenditures and to allow funding for surprises, how can we mitigate the risk of surprises thus lowering the contingency amount?

Many reserve study providers recommend a percent funded of at least 70%. Figure 2 shows that if associations follow a set of best practices in maintaining common area components, the percent funded could be much lower because the likelihood of a surprise is diminished. Note that this matrix addresses the fully-funded percentage but can also be used as a tool to determine the required threshold using the threshold method.

Let’s revisit Figure 2, which illustrates the relationship between a number of reserve study best practices and the probability of surprises.

figure2-risk-mitigation-matrix_b.jpg

Let’s examine these best practices through the lens of some of the surprises that associations experience. The following list includes but is not limited to events that may require additional cash:

  1. The design, materials or workmanship on original construction is not adequate thus requiring repairs, remediation or this may result in a significant reduction in the estimated useful life of components. A complete building envelope inspection by a construction professional may catch issues early on that may reduce the cost of repairs and may allow the association to bring an action against the developer or contractor. This investigation may include intrusive openings around decks, windows, roofs and siding.

  2. The association does not adequately maintain the components which may lead to unexpected repairs or significantly reduced estimated useful lives. A written maintenance plan consistently followed by the association may help components last longer with fewer repairs.

  3. The association does not perform ongoing inspections of components. Ongoing inspections may catch issues before they become worse and cost more to repair.

  4. The reserve study does not include all components that need to be funded. Missing components may include plumbing and irrigation systems, water/sewer lines, rot, windows and doors, deck assemblies, asphalt, major landscaping projects, concrete issues including spalling/rusted rebar and replacement of siding and trim. Failure to include all components in the reserve study will likely lead to a special assessment to pay for unbudgeted repairs.

  5. The reserve study is not updated annually to account for increase in prices, changes in cash reserves, application of adjusted inflation in funding model and/or change in estimated useful lives. Failure to update the reserve study on an annual basis may lead to unbudgeted expenditures.

  6. The RFP (request for proposal) for repair and replacement projects is not written correctly resulting in specifications that are either inadequate or do not address issues. Using a construction professional to assist with RFPs can help assure that repair/replacement projects are performed by qualified professionals and includes all needed costs and procedures.

  7. The association does not use a construction consultant on major projects to assure that work is performed properly. The danger of not using a consultant increases the chance of substandard materials and workmanship and the possibility of requiring re-repairing/replacing the components or may significantly reduce estimated useful lives.

The Bottom Line

Associations that adopt best practice procedures and spend a little more each year on maintenance, inspections, reserve study updates and construction oversight can reduce the amount that is assessed to overfund the replacement reserve bank account to pay for unexpected costs.

As always, associations should look to the credentialed reserve study provider for guidance.

David T. Schwindt is a CPA and credentialed reserve study provider and is the owner of Schwindt & Co. Schwindt & Co provides accounting, tax and reserve study services to over 500 Associations in the Pacific Northwest. To learn more, visit www.schwindtco.com

Ready to eliminate surprises and overfunding?

Pete Fowler Construction Services (PFCS) can help get you there. Our team of expert consultants specializes in creating real, practical solutions for owners, associations and managers. We help you make intelligent decisions by examining your property, diagnosing problems, specifying the right maintenance and repairs, and applying construction management discipline to your project (including bidding and writing contracts to protect the owners, performing quality control inspections, managing change orders and processing invoices). We provide actionable insight and expertise to right your project, and clear up any messes that others may have created along the way.

To learn more, visit our website or give us a call at our Southern California Office (949) 240-9971 or Portland Office (503) 660-8670.

 

THE RESERVE FUNDING SERIES

 

Contact Us: 866-706-7327