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Let it Snow, Let it Snow, Let it Snow....
Published November 20, 2004 as
Weather not yet frightful, but have snow plan ready
As we begin to stare upward and shake our fist at the sky, I wish to impart 28 years of experience on this complex topic. Remember, no two snowflakes look alike.
What boards of directors often overlook in hiring a snow removal contractor:
1. For a business, it is not profitable to do just snow removal exclusively. It may work out as a sideline for someone to plow some driveways, but a large property needs a contractor with sufficient equipment who can absorb seasonal losses by offsetting them with another profit center, such as landscaping.
2. If you negotiate too good a deal, they will not show up; if you think you are paying too much, you will drive the contractor crazy trying to get your money’s worth (you get what you pay for?) What boards and owners frequently overlook is the fact that their contractors are in business to make a profit.
Here’s an anecdote – 1978-79 was the record setter for Chicago snowfalls. My first association client retained the developer’s chosen snow and landscaping contractor after the first board was elected. The new board soon felt they were overpaying and decided to fire the contractor and hire the maintenance man to do all snow removal. He bought a brand new Blazer with a plow. On New Year’s Eve, it snowed 19 inches in 12 hours. (This was after several heavy snowfalls during the prior month already.)
At 11:59 p.m. the plows and end-loaders for the old contractor lifted up their buckets and drove off as their contract expired. They were no longer employed. The maintenance man sat in shock watching the snow fall, as he now had 14 cul-de-sacs and entrances in addition to 400 plus driveways to clear plus the sidewalks (I think he finished by June!).
Once again, it comes down to thinking about the services an association needs and making sure first, that everyone is aware of what is provided and second, contracting for only what you need.
3. What is the economic impact of a heavy snow season? Townhouse-style associations have miles of sidewalks and walkways which are the most labor intense and as a result, the most expensive service on a cost benefit basis. (After all, snow does melt . . .eventually!) If the community has a disproportionate number of seniors, then walks are a high priority. However, does the association then need to be first in line to have their entrances plowed at 5 a.m. if most people are retired and no longer commuting? Ergo, you may have to pay a premium for one service, but maybe you can negotiate a better price to be second or third in line and have a 6:00 or 7:00 a.m. plow instead.
For that matter, what is the definition of a snowfall; is it an inch, two inches or three? What if it starts snowing, stops and then starts again? These definitions need to be clearly spelled out in the contract. One ambiguity can cost tens of thousands of dollars.
What about ice control? Salt, calcium carbonate and other chemicals all have negative properties which extend beyond snow melting. Is this discretionary for the contractor as it is needed?
Do you pay a flat fee per month, time and materials or some type of hybrid?
Anecdote #2 – In 1978-1979, since most contractors were being paid monthly installments for the total annual contract price, they got killed! Nobody could possibly be satisfied with anyone’s effort during a disaster level snow fall (99 inches for the season; three times the norm). No matter how they tried to please, no one was happy.
The following year, they all switched to time and materials. A lot less snow fell, the contractors made money, but the associations paid a fortune and did not know how to budget. It too was a mess.
1980-81, still time and materials…and no snow! The associations rejoiced and the contractors starved because with time and materials contracts, you eat what you kill. Luckily, many of them had landscaping to fall back on.
After that winter, everyone finally figured out how to get it right with a hybrid of a low flat fee guaranteed and a lower time and materials rates for extraordinary services (end-loaders, dump trucks, extra plows, etc.).
4. If there is a blizzard and extremely heavy snowfall, after the snow is plowed and shoveled, what do you do with it? Is there sufficient storage space on the site or do you need to have it hauled away? Perhaps everyone shovel some into their car and take it to work with them?
It is amazing how many associations experiencing a rapidly increasing maintenance budget because of aging amenities fail to take into consideration the actual services they need and blindly sign a one-page proposal that contains no contractual terminology and for a specified fee. Snow plowing is no exception. They are not getting what they really need and overpaying for what they do not.
As readers of this column know, you are not in this alone. The board experience requires a team mentality; owners supporting the board; directors cooperating with each other and the board and its service providers all working together for the common good. This will prevent these types of situations from happening.
Last anecdote – An association used the same snow plowing contractor for years, automatically renewing the same form year in and year out, which neither the manager nor the board looked at carefully. One day they discovered that they paid X dollars per year for shoveling sidewalks. The problem was, they had no sidewalks.
Remember, contract for what your property needs, not what is standard to the contract form.