memo and policy changes

Via USPS and electronic mail MEMORANDUM TO: OAR BOARD OF DIRECTORS LOCAL ASSOCIATION PRESIDENTS LOCAL ASSOCIATION EXECUTIVES FROM: JOHN WALLACE DATE: AUGUST 6, 2014 SUBJECT: BOD MEETING PACKET First off, I look forward to seeing all of you at the OAR Convention, as well as the Fall Governance Meetings – culminating with the Board of Directors meeting on Friday, September 12 beginning at 9:00 a.m. The Board meeting was originally scheduled to begin at 8:30 a.m., but we have pushed the time back an hour in order to have an open Q&A session on the new NAR Core Standards – which will begin at 8:00 a.m. Attached is your supporting documentation for the Board meeting. There will be a supplemental packet distributed via email – and at the door – for anything that comes out of the September 4 Executive committee meeting, including the August Financial Statements. There are a number of items requiring your attention and possible action on the Agenda for this meeting. Not only will you be presented with the 2015-16 Strategic Plan and 2015 Budget, you are also being presented with the 2015-16 Legislative Polices and revisions to the Bylaws and Policy Manual. In order to help you prepare for the BoD Conference Call at 10 a.m. on Thursday, August 28 and the Board meeting on September 12, I have put together a summary of changes I would have questions on if I were in your shoes. Proposed 2015 Budget (attached)

1. First off, the membership target for 2015 is 14,000 members. The Budget Committee looked at several pieces of data to come to this conclusion, including: 1) OAR membership numbers for June 2012, December 2012, June 2013, December 2013, and June 2014… and found the following:

From June 2013 to June 2014, membership increased 3.5% and 5.1% respectively. (July membership those same years increased 4.6% both

DIRECTORS PACKET MEMO AUGUST 6, 2014 of 7

years.)

The Dec to June to Dec increase was 1.9% Dec ’12 to Jun ’13, 2.9% Jun ’13 to Dec ‘13 2.2% Dec ’13 to Jun '14 As such, if we take an average increase of 2% for Jun to Dec, we should have the following: Jun ’14 + 2% = 13,464 members Dec ‘14 Dec ’14 + 2% = 13,733 members Jun ‘15 Jun ’14 + 2% = 14,008 members Dec ‘15 Hence, our 14,000 member target for FY2015. This also seems to be validated by the OREA licensee and exam data. While Active Brokers and Principal Brokers only increased 1.4% from June 2012 to June 2013, there was a 4.3% increase from June 2013 to June 14. In addition, again using June to June data, there was 37% increase in folks taking the licensee exams from 2012 to 2013 BUT a 93% increase from June 2013 to June 2014.

2. The 2015 Budget also includes a sizeable increase in the staff expense (11%), this is due, primarily to a new position coming on board – Board Services Manager – to manage the local association compliance with the new NAR Core Standards. We will receive a $70,000 grant from NAR to cover this cost initially. The 2016 Budget Committee will then be tasked with the issue of whether we keep this position, and if we do how do we cover the sustaining cost.

Another increase in the budget is for state-wide real estate activity reports from a company called 10k Research and Marketing (http://10kresearch.com). $20,000 has been budgeted to this company to begin compiling state-wide market and activity reports to be used for OAR to better comply with the NAR Standards:

III. Consumer Outreach A. Every Association will demonstrate engagement in not less than four meaningful consumer engagement activities annually, reflected by:

http://10kresearch.com/


1. Being the “Voice for Real Estate” - promoting market statistics and/or real estate trends and issues (e.g., release through press releases, interviews, etc. of MLS statistics, local market statistics, NAR research reports, local/state analysis of NAR statistics, etc.);

2. And, in case you’re wondering, state associations have to comply with

the new standards as well. This will not only provide state-wide statistics to comply, but will also – and more importantly, fill a need in the Government Advocacy program for state-wide market information we can provide on a regular basis to members of the State Legislature and Congress.

3. The 2015 Budget also brings the Dues Allocation to HOME Foundation back to $2 per member. This had been decreased to $1.50 a few years ago because of the Budget issues.

4. This budget also plans for $506,200 in excess revenue that you – the OAR Board of Directors – can reallocate to the Issues Mobilization Fund in April 2016.

Explanation of Proposed Revisions to the OAR Bylaws

1. First off, don’t worry about the Table of Contents. It will be updated after any changes are approved.

2. “Executive Officer” changed to “Association Executive” throughout – current NAR term

3. Article III, Sections 9 and 10: These sections deal with the Legal Action Fund (Section 9) and the Issues Mobilization Fund (Section 10). The verbiage was revised to present tense, to take out “start-up” wording, and to make the wording consistent for both.

4. Also, the target amount and dues allocation triggers for those two restricted funds were increased to $500,000 and $300,000, respectively, to better reflect the current OAR focus on issues and legal advocacy.

5. Article IV, Section 1: Selection process for DVP’s if there is an initial tie vote was changed to match the tie-breaker process currently in place for NAR Directors (“…shall be determined by lot.”) Also, verbiage to DVP section was changed to present tense and to take out “start-up” wording. Verbiage was also added to state when DVP’s are elected


and when each term begins (whether odd or even year) – same change to Article VII, Section 3.

6. Removed “Commercial” from District 1, as it no longer exists. 7. Article V, Section 2: Added members of the Finance Review

Committee as state directors. This has been an issue on a few occasions over the years, as the FRC chair and/or the other two members were not state directors. And while the FRC Chair gives the financial report to the BoD, they can’t vote on it.

8. Article VII, Section 4: Revised verbiage to replace “Portland Metropolitan Association of REALTORS®” – here and in Sections 6 and 7 - with wording that pertains to all local associations with more than 2000 members. Otherwise, should another local association hit that number, and be entitled to a NAR Director, our Bylaws would be out of compliance with NAR.

9. Article X, Section 6: Changed verbiage to present tense and removed “start-up” language.

Explanation of Proposed Revisions to the OAR Policy Manual (While there were grammatical and terminology issues on many pages, I have provided just the pages with substantive changes in the printed packet. You will receive a link to Dropbox for the entire Policy Manual with revision showing, as well as a link to an online reader of the Manual. But I will make you aware in the following summary what those changes are.)

1. The first issue is that of incongruence between official policy and application forms. The qualifications for President-elect and District Vice President are fairly simple (see Qualifications of PE and DVP – as per Policy Manual document). However, the Applications that have been used for several years (not sure how many) go above and beyond what the official qualifications are. This was brought to my attention last year when a local AE called to ask about how many of the qualifications needed to be met to be qualified to run. When I looked at the Policy Manual, the current form (see President Elect Application-Current and District Vice President Application-Current – applications found on the OAR website) made no sense. Applications based on the official Policy, and allowing for additional information would look much different (see Revised PresElect Application_14-Draft and Revised District Vice Pres Application_14-Draft documents). The problem is that forms and/or applications cannot usurp the authority of an approved Policy, which itself cannot usurp the Bylaws. The Bylaws are quiet on the


qualifications, other than referring to the Policies. As such, the Task Review chose not to revise the Qualification and requested, and the Executive Committee agreed, that new forms/applications will be used that mirror the Qualification prescribed in the Policy manual.

2. As with the Bylaws, disregard the Table of Contents and the Section

headings. These will be updated with any changes you approve. 3. Section 1.1: Number of members and local associations updated, and

last revision date noted. 4. Section 1.2 et. al: All verbiage referencing the former policies “(old

policy #1)” have been deleted throughout. New format has been approved by BoD and in effect since 2011, so keeping the reference to old policy numbers may be confusing.

5. Section 1.4: As in Bylaws, “Executive Officer” has been replaced by “Association Executive” throughout.

6. Section 1.5 et. al: Footnotes removed and information referenced in the body.

7. Sections referencing the “MEMORANDUM OF UNDERSTANDING OF EXPECTATIONS” for each elected position approved by BoD last September are now referenced to the Appendix at end of document.

8. Section 1.5 (p. 10 - attached) Authority of the Board of Directors referenced to the Bylaws.

9. Section 1.5 et. al: “determine mission, vision, values, goals, and programs on the broadest scale.” Values added as anew standard throughout when referencing Vision and Mission.

10. Section 1.15 (p. 19-20 - attached) – Wording changes to make this section more to the point.

11. Section 1.19 (pp. 24-27 - attached) – Duties and Responsibilities of CEO revised to reflect changes in past three years.

12. Section 2.3 (pp. 33-38 - attached) – Standing Rules for Committees and Task Forces: Rule IV – new Section, “Chairs of Committees are encouraged to be an RPAC investor for at least the NAR Fair Share level” to reflect our building RPAC culture.

13. Section 2.4 (pp. 38-39 – attached) Selection Criteria for Chair: New bullet added referencing RPAC investment.

14. Section 2.13 (pp. 46-47 – attached) Government Affairs Key Committee: Verbiage referencing “legislative/congressional contact system” removed and added to Political Affairs Key Committee.

15. Section 2.14 (pp. 47-48 – attached) Political Affairs Key Committee: Term of office for Chair, Vice Chair and members changed from one-


year to two-years to mirror Government Affairs Key Committee, and verbiage added to better specify role of Key Constituent program.

16. Section 2.22 (pp. 53-54) State Professional Standards Committee: changes made to reflect current committee needs and activities.

17. Section 3.4 (pp. 65-68 – attached) Internal Financial Controls: “Whenever possible” all funds shall be placed in interest bearing account. Change made to reflect new reality that this may not always be possible.

18. Section 3.5 (68-71 – attached) Stipends & Travel Expenses for Elected/Appointed Positions: Biggest change here is in the TRAVEL REIMBURSEMENTS section. One-way distance traveled before lodging provided changed from 120 miles to 50. Also allows President and CEO to approve lodging reimbursement for certain circumstances. This has been an issue for volunteers for some time, especially when they have early morning meetings or meeting over several days (as with the Executive Committee.)

19. Section 4.19 (p. 84 – attached) Vacancy of national Director Position: Portland Metropolitan Association of REALTORS® changed to large local association, to mirror verbiage change in Bylaws.

20. Section 4.21 (p. 84 – attached) Minimum Standards Certification: NAR Minimum Standards replaced by new Core Standards. We will come back with verbiage for this section when NAR finalizes the certification process.

21. Appendix 1.7 (pp. 90-91 – attached) Board of Director’s Compliance code: RPAC investment verbiage added.

22. App 1.17 (pp. 97-98) Memorandum of Understanding of Expectations for Committee Chairs and Vice Chairs of the Oregon Association of REALTORS® - Stated expectations added for Chairs and Vice Chairs added, to join same for elected positions.

A lot of changes I know! But the Task force was very thorough and did a good job of getting in-depth in the Policy Manual, and then making the easy as well as the more controversial changes they felt are needed. After you have had time to peruse your materials and have questions before the Conference Call, please let me know and I will get back to you as soon as possible. But please know that I will be sharing your questions, and respective answers, with the Board as a whole (removing your name of course.) Because if it’s important to you, I’m sure it will be important to others as well! As a reminder, the Conference Call information is scheduled for Thursday, August 28 at 10 a.m. Instructions follow:


Please go to your Board/Association office to participate. Your local Association Executive will place the conference call on speakerphone to allow all interested parties to participate. An RSVP is REQUIRED to reserve a phone line, even for the local Board/Association. You will then receive an email “link” with dial-in information. Please reserve your line with Stephanie Gutierrez at the Association office (1-800-252-9115 or [email protected]) by 4:00 p.m. August 22. If, for whatever reason, you are unable to get to your local Board/Association office to participate and want to call from another location, please use the instructions above to reserve a line. Your Association Executive will use the following instructions for the conference call: Phone-In Instructions: 1. Set your phone on “speaker.” 2. Dial-in information is covered in the “link” provided following your RSVP. 3. The program officially starts at 10:00 a.m. Pacific Time and the lines will be connected at that time. Question Instructions: 1. The Operator will provide instructions during the Question and Answer period. 2. The Call will proceed until all questions are answered.

All the best… jw

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memo and policy changes

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