Chapter 9
Managing Reports and Insurance

Role of Informational Reports

l   Primary function is to provide information sufficient to make decisions.

l   Provide data for future planning

l   Public relations to owner

Operating reports

l   Income and Expense Report

l   Current report

l   Comparative report

Income Items

l   Gross Potential Income

l   Adjustments

–   Vacancy for administrative support

–   Vacancy reserved for repairs

–   Vacancy due to market forces

l   Service and repair charged to tenants

l   Late rental fees

l   Forfeited deposits

Income Items (Continued)

l   Vending machine income

l   Parking fees

l   Miscellaneous income

Operational and maintenance (routine)

l   Cleaning

l   HVAC

l   Elevator

l   Administrative

l   Snow removal

l   Fuel (coal, oil)

l   Legal

Expenses (Continued)

l   Electricity

l   Refuse removal

l   Water

l   Cable TV

l   Telephone

l   Gas

Expenses (Continued)
Alterations, decorating, and repairs

l   Tenant related

l   Non-tenant

–   Management office or project at large

–   Holiday, thematic decorating

Expenses (Continued)
Fixed costs

l   Insurance

l   Taxes

l   Accounting

Employment records

Employee information file

l    Employer Identification Number (EIN)

l    I-9

l    W-4

l    Employer’s Quarterly Tax Return (941, W-2 and W-3)

l    FICA Insurance

l    Disability and Worker’s Compensation

l    Unemployment Taxes (FUTA)

l    Statement of Miscellaneous Income (1099) 

Personal information (computer file helpful)

l   Name, address, phone

l   Notification in case of emergency

l   Birthday

l   Family names and birthdays

l   Medical information

Personnel File

l   Personnel evaluations

–   Initial review (3 to 6 months)

–   First annual review

–   Continuing annual reviews

–   Contents of performance review

l  Begin with accentuating the positive

l  Review of preceding period's performance goals and objectives

l  Opportunities for improvement

l  Upcoming period's goals and objectives (mutually agreed upon--done in dialogue!)

l   Disciplinary documentation

Tax Records

l   Income tax withholding

l   Free rent, automobiles, etc.  (If required to be used by employer, the market value of the benefit may not be taxable.  However, it still may be subject to social security tax.)

l   Social security taxes

l   Medicare

Tax Records
Employee (Continued)

l    State and Federal unemployment taxes--required for employees who work (or are expected to work for 20 weeks during the year [even part-time] or who earn more than $1500 during the year.)

l    Form 1099 is required for any independent contractors who earn more than $600 in one year.  (For purposes of this calculation, the year is a calendar year, not necessarily a fiscal year.)

Tax Records
Company tax records

l   Social security contributions for employees.

l   Depreciation records

–   Initial basis

–   Accrued depreciation

–   Upgrade expense (not ordinary maintenance)

l   Investment tax credits

l   Employment tax credits

l   Quarterly returns

Risk Management and Insurance

Principles of Risk Management

l    Control the risk with safety programs and loss reduction plans.

l    Avoid the risk or discontinue the risky activity

l    Retain the risk and internally fund loss consequences

l    Transfer the risk to insurers or other third parties (including the tenants).

l    Risk monitoring programs

Categories of risk

l   Loss caused to other persons (liability insurance)

l   Loss of user value (business interruption insurance)

l   Loss of property (hazard insurance)

l   Personnel losses (health, injury, key person life)

Risk questions

l   What can hurt me?

l   What can be done about it?

l   Can I shift the risk?

l   What is the likelihood of the loss?

l   What is the cost/benefit of risk control?

Types of Insurance

l   Owner's policies

–   Standard hazard (fire) insurance

–   Machinery and Equipment insurance

–   Consequential loss, use, and occupancy (business interruption)

–   Liability insurance

–   Automobile insurance

–   Employer Liability

–   Third-party-over lawsuits

–   Private workman's compensation

–   Errors and omissions insurance

–   Pollution liability

l   Tenant policies