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Do Your Keystone Resort Cleaners Use a Mop and a Broom?

Cleaning quality and consistency is one of the top issues we are asked about when we are speaking to owners who are considering changing management companies. In some cases we have been asked if our cleaning staff uses a mop and a broom. The answer is yes and we use several other tools to assist with the cleaning process.

Many other Keystone management companies pay their cleaners more if the cleaning is performed faster. For example, a cleaner may be paid $30 for the first cleaning of the day and $5 more for each subsequent cleaning in the same day. So by the time the cleaning gets to the sixth cleaning of the day, they are making twice as much as they did for the first cleaning. This is a very big incentive to work fast and miss the details.

SCMR has implemented several procedures that we believe dramatically improves cleaning quality. Our cleaners are divided into competitive groups. The groups that perform higher quality cleanings are allocated more cleanings than those who only do an average job. If any cleaner does not perform to our minimum standards they are dismissed.

The second quality control procedure SCMR has implemented is a financial penalty for any major mistakes or errors in the cleaning process. For example, if a cleaner misses a dirty toilet bowl, they are fined for the mistake. There is never a good reason to miss something like this and we know it can have a significant impact on your guests stay.

The third quality control procedure is a cleaning checklist that must be filled out during each cleaning. This checklist is a helpful reminder to the cleaners of what each individual property needs. It also allows our inspectors to check the work performed.

Finally, we have two inspection procedures in place. First, all units are checked by a cleaning inspector that is part of the cleaning staff. Secondly, independent of the regular cleaning inspector, one of our regular staff spot checks units randomly. If mistakes are found the cleaners are required to immediately return to the unit and rectify the error. This process assists with training and is an incentive to do it right the first time.

You and your Keystone rental guest deserve the best experience possible in your high-end condo. Whether your condo is ski-in / ski-out or in the River Village, everyone deserves the same high standard of cleaning.

Comparing Keystone Property Management Companies and Summit County Mountain Retreats

When Summit County Mountain Retreats entered the property management business in Keystone in 2008 there were many naysayers. We were told it is impossible to run this type of business with such a low management fee. We were told that our marketing strategy was low end and would not produce revenue for owners.

I would like to give a real world example of exactly what we have done for a typical 3 bedroom unit on our program. We have had Lone Eagle 3042 on our rental program since July 2009. That is a mere 8 months. In that 8 months we have grossed this unit over $62,000 and the owner has made over $54,000. This unit was on another company’s rental program before. This company has the highest management fee of all the competition and they claim their fee is justified based on the great service and marketing they perform. Well…lets compare. In the previous 12 month period that this unit was on our competitor’s management program it grossed about $68,000. The owner netted about $30,000 after all fees and expenses.

Again just in case you missed my point. In 8 months we netted our client $54,000 and our competitor netted him $30,000 in 12 months. Which one sounds better to you? Let me also add that SCMR did this for our client during a major recession and during one of the worst snow seasons on record. Our competitor made its numbers during a good ski season and during good economic times.

Also, if our marketing is low end, then how is it that we are on track to gross our client even more than our competitor with all its great marketing? Sounds to me like our competitor really just does not have an answer to our value proposition and therefore can only resort to scare tactics.

One more thing, in order for our competitor to net an owner $54,000 they would have to gross the owner about $110,000. To our knowledge this has never happened with any 3 bedroom condos in Keystone.

New Marketing for Summit County Mountain Retreats

In addition to the extensive marketing SCMR performs for its clients we are expanding our marketing presence into Craig’s List. This is a major undertaking and an experiment we hope will produce excellent results. Based on our preliminary research we believe this new marketing mechanism will significantly increase bookings for both ski season and off season. As always we are looking for new and innovative ways to market our clients’ properties and maximize rentals. Thanks for Tom and Dottie, for recommending this marketing mechanism for our Keystone Condos.

Keystone Resort Issues that Affect All Homeowners

Preface

I am William Fuller, owner of Dakota 8540, and I am also one of the shareholders of Summit County Mountain Retreats, a property management company that manages about 47 condos in River Run. I am writing this letter to you both from the perspective of a homeowner and a property manager. Below I will outline and describe some of the more significant problems that exist in Keystone. I will also clearly state if I am speaking as a homeowner or as a property manager. My goal is to create awareness amongst the River Run community which are germane to us all. I realize that you may be unaware of these issues. However, lack of awareness of these issues costs every owner money in terms of higher HOA dues, reduced security, and frustrated guests that may choose not to spend their money at Keystone in the future.

I have a strong interest in Keystone being the best place possible and I have no desire to see services reduced or anything of the sort. My company is not in the “building management business,” and therefore, has no ulterior motives when I comment about what is happening with some HOA’s and the way the buildings are being managed. My company only manages individual units. It is easy to write off this letter as coming from someone with a nefarious agenda. I fully admit that I have an agenda. However, my agenda is clearly stated and is based on equality, fairness and openness. I admit that my company would like to continue to grow, and we are always interested in speaking with homeowners looking for a change. However, this is not the purpose of this letter

Homeowner Issues

I am a member of the Buffalo/Dakota finance committee. I do not speak for the committee. I only speak for myself as a concerned homeowner. I have carefully reviewed the Buffalo / Dakota budget and developed a list of 31 areas that are questionable. After more than 2 months of effort I was granted a meeting with KRPM to address these concerns. Some of these concerns were adequately answered, but many were not.

Labor for Services Rendered

Areas that I would strongly suggest each HOA look at very carefully are the actual amounts of labor being performed in any particular area. Good examples include Salaries and Wages, Repair and Maintenance, Spa and Pool. I specifically asked KRPM to provide records such as timesheets or proof that the number of hours budgeted for employees were indeed accurate. I also asked for the rationale behind the apparent need for so many hours of work in these areas. I was not satisfied with these answers. As far as the Buffalo / Dakota association is concerned, I believe it is possible that we are being overcharged by KRPM by tens of thousands of dollars.

It is my firm belief that KRPM should be held accountable and be required to be transparent to every member of every association it works for.

Pool & Spa Example

There is a line item in the Buffalo / Dakota budget for pool supplies. I have also seen several budgets from several other associations and looked at this specific line item. In all cases these numbers appear to be astronomical. If I am correct about the Buffalo / Dakota association, it is quite possible the same situation exists in your association. Regarding Buffalo / Dakota we are being charged $7380 per year for chemicals in just two eight person hot tubs. Let me be clear. The pool and spa next to Dakota are owned and operated by KNC, not Buffalo / Dakota. Buffalo / Dakota have two small private hot tubs. I performed some research and concluded that normal chemicals such as Bromine (the industry standard) would cost no more than about $350 per year to maintain these hot tubs. Let me say it again, I am only discussing chemicals, not labor, not repairs, nothing else, just chemicals. When KRPM was asked about this charge they said that they do not use Bromine, they use Hydrogen Peroxide, which is many times more expensive and they said this chemical is preferable in “commercial applications.”

After hearing this, I called five commercial pool companies and asked them about Hydrogen Peroxide vs. Bromine. Four of the commercial pool companies had never heard of using Hydrogen Peroxide. One commercial pool company did know of this method, but they said it was “outlawed” in the Midwest. They did not know anything about Colorado law specifically. I asked each company what was the “industry standard” for pool chemicals in a commercial application. All five commercial pool companies said that Chlorine and Bromine were the industry standards.

So here is the big question. Why is KRPM charging the associations it manages such high prices. I dare say if these pools were in your backyard, you would not allow someone to charge you such extreme amounts.

Colorado Common Interest Ownership Act (CCIOA) & Colorado Non-Profit Act

These two laws along with some other more specific laws are the overriding documents that must be adhered to by our associations and KRPM. The Board of Directors of each association are vested with the stewardship of our associations and being knowledgeable about these laws and the articles, covenants and bylaws of your particular association. I am sure all of the various boards of directors are well intended. However, it has been my experience that some directors simply look to KRPM for answers to questions. Directors need to be educated on these laws and not rely on KRPM. Asking for answers from KRPM is akin to having the fox guard the hen house.

CONCERNS OF WILLIAM FULLER AS IT PERTAINS TO KRPM’s TREATMENT OF OTHER MANAGEMENT COMPANIES

All the statements below are made from the perspective of William Fuller as a principal of Summit County Mountain Retreats.

General Policies

KRPM as a business has a right to operate its business in any way it sees fit, as long as these operations are within the scope of the law. This concept applies to many areas. However, it does not have the right to make policies for the associations it manages. The power lies in the Board of Directors and the general membership of the association. KRPM, as it relates to HOA’s is vested with carrying out the directives of The Board of Directors and the laws of Colorado and the HOA documents.

Co-mmingling of Duties

KRPM wears many hats, some of which have the potential of conflicting with each other. In this situation I am discussing KRPM’s role as HOA manager and its separate role as Condo/Unit Manager. In principal, these duties can be managed with proper oversight and restrictions placed on KRPM in order to prevent abuse of power. However, this has not been the case. KRPM as a normal course of business inappropriately imposes its power as HOA manager on other management companies that competes with it to manage individual condo units. This is unfair, unethical, and possibly illegal. No duty or power given to KRPM as it pertains to managing HOA’s should be used to further its completely separate business as condo manager.

Room Use

Every building in River Run has several rooms that are designated for use by the HOA manager. I have read the Buffalo / Dakota HOA management contract, and it says that KRPM can use these rooms for any purposes it sees fit. However, this must be construed within the context of its role as HOA manager. It certainly does not have the right to use these rooms to create new condos and rent them out for a profit. That would be ridiculous. Why? Because that is a different business use. Similarly, KRPM does not have the right to use these rooms throughout the resort to run its business as a condo manager. It would be appropriate for each HOA to charge for the use of these rooms and to be fair, these rooms should be made available on the open market and other property management companies should be given the opportunity to rent these spaces. This would net the HOA’s fair market value for these spaces. As it stands now KRPM has an unfair competitive advantage.

Keycards

Issue # 1. All of River Run uses a keycard system that accesses the common areas and the units themselves. KRPM controls all of the common area door locks, and they are paid by each association to maintain those door locks. These door locks are owned by the HOA. That means that each owner has partial ownership of these locks and each owners is entitled to the same ease of access to the building as any other owner. However, this is not how things actually work. KRPM has implemented its own arbitrary policies to encumber other management companies and the owners they represent. Let me give you one example. Up until a few months ago, outside management companies were given small supplies of keycards that do not expire. Companies like SCMR would keep these cards in reserve, in the event an owner called and forgot their keycard or lost their keycard. Keep in mind this is exactly what KRPM does for the condo owners who choose to use KRPM as its manager. As of a few months ago, KRPM decided, without any approval of any Board of Directors, that it would no longer provide these key cards to outside management companies. The only way one of these owners could get an owners level card that he/she was entitled to was to call KRPM and request that they send them cards. This may not seem like a huge deal, but SCMR represents several owners that have encountered significant problems with this arbitrary policy.

Issue # 2 KRPM has made the arbitrary policy to charge outside management companies for encoding keycards to the common areas. In the case of SCMR we have our own keycards. All we need from KRPM is for them to put the coding on the magnetic strip. They do this for free for all of its guests, but they charge other management companies $1 for every card they put in their machine. At first glance you may think “what’s the big deal?” The big deal is that KRPM can encode these cards at a rate of about 1500 per hour. This creates an effective hourly rate of $1500 per hour they are charging companies like SCMR. This once again is an unfair business practice and is not authorized by any Board of Directors or any HOA in general. KRPM simply instituted this policy to penalize owners who do not use its services and to create an unfair and anti-competitive business environment with other management companies. The bottom line is that everyone should be treated equally.

General Disregard for Guests Who Do Not Rent Through KRPM

I want to start out by saying there are many KRPM employees who treat all guests in the resort with respect and courtesy. This is how it should be. We are all part of the same community, and we want everyone to have a great time here and come back over and over again. However, there have been instances when a guest of an owner that uses an outside management company has been treated differently than a KRPM guest.

Recently there were approximately 2000 college students brought into Keystone by KRPM. Now that is good for business and makes everyone a lot of money. I have no problem with that. What I do have a problem with is KRPM allowing its guests to “party” all night and ruin other guest’s stays. SCMR had guests that were kept up all night over and over again and other guests who had to evacuate several different buildings on several different nights when these college students were at Keystone and out of control. KRPM made the statement to an SCMR guest that since you did not rent through us, there is nothing we can do for you. KRPM seems to be unable to take responsibility for its guests and enforce the policies of the HOA. This is unacceptable and gives Keystone a poor reputation. I think we are all aware of the 10 p.m. quite hours policy. It is the duty of KRPM and its affiliates to enforce this policy.

Anti-Trust & Abuse of Monopoly Power

In many of the above sited instances and many others that have not been mentioned, I believe KRPM is dabbling in the realm of Anti-trust activities. I know that none of the HOA’s intend for this to be the case, but at some point the finger could get pointed to the HOA’s as the bad actor. The argument would go something like this. KRPM manages HOA’s and only performs duties and implement policies that the HOA’s have directed. It has been done this way for many years and nobody has told us to stop. The XYZ law says that Board of Directors and HOA bodies as a whole are directly in charge. Therefore, if there has been any Anti-trust behavior it was with the consent and behest of the various Board of Directors and HOA’s. This of course is a hypothetical example and should only be construed as an exemplar of the problem.

Commingling of Advertising

Did you read the “newsletter” that was included in your last HOA statement. There was a beautiful advertisement for KRPM and some of the great reasons for allowing them to manage your condo. One part of this advertisement said you will get the KRPM owners discount if your property is managed through KRPM or not managed at all, but if you choose to use another management company, then you will not get the discount. Basically every owner gets the discount accept the 30% to 40% of owners that use other property management companies. Please see the section above regarding anti-trust.

Before you right me off as a guy with a chip on his shoulder or a raving lunatic, please read the following excerpt from The Colorado Common Interest Ownership Act (CCIOA), which is one of the primary governing document for HOA’s like yours.

38-33.3-317 Association records.

(b) (I) Notwithstanding paragraph (a) of this subsection (2), a membership list or

any part thereof may not be obtained or used by any person for any

purpose unrelated to a unit owner’s interest as a unit owner without

consent of the executive board.

(II) Without limiting the generality of subparagraph (I) of this paragraph (b),

without the consent of the executive board, a membership list of any part

thereof may not be:

(A) Used to solicit money or property unless such money or property

will be used solely to solicit the votes of the unit owners in an

election to be held by the association;

(B) Used or any commercial purpose; or

(C) Sold to or purchased by any person.

Please take special note of (B) two lines above. You decide. Was a line crossed?

What Should Be Done?

1. KRPM should be held accountable by the various Board of Directors and the general ownership of River Run. Specific policies should be put in place to address and eliminate KRPM’s various abuses of power.

2. KRPM should be required to pay for the use of the spaces it uses for its condo management business.

3. KRPM should be reminded that it is in everyones’ best interest to treat all guests with the highest level of hospitality.

4. The rule of law should be followed in order to create a fair environment for all owners and companies that compete for business. In the long run, allowing the status quo will reduce competition and services.

I am sending this e-mail to get feedback from the various Board of Directors. I have attempted to deal with KRPM on a business to business level, and we have been unable to achieve any level of agreement on many issues.

I would like to close by saying that I only have interest in fairness and equality. This is my primary concern. I am also concerned that my HOA and the other communities in River Run may be getting overcharged by KRPM and it is in the entire resorts best interest to pay fees that are commensurate with services. Anything less and River Run will be devalued. Please accept this letter as a genuine attempt at providing information that you may otherwise not be aware.

Sincerely,

William Fuller

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The Best Value in Keystone Rentals

Recent Blog Postings

Do Your Keystone Resort Cleaners Use a Mop and a Broom?

Comparing Keystone Property Management Companies and Summit County Mountain Retreats

New Marketing for Summit County Mountain Retreats

Keystone Resort Issues that Affect All Homeowners