Strauss reflects on his 24 years as a Board member

Posted on Tue, 03/01/2016 - 11:30am

By Neil Warner

Richard StraussWhen Richard Strauss first ran for the Malibu East Board of Directors in 1991, little did he know what he was getting into. Immediately after being elected, he discovered during the new Board’s election of officers that there was a “cabal” determined to unseat the incumbent treasurer. He was nominated for the office, and when the vote resulted in a tie, someone suggested that Richard be named the assistant treasurer for the first year and then switch positions with the treasurer a year later.

That was an auspicious beginning of a 24-year tenure on the Board that came to an end in 2015, when Richard chose not to run for re-election.

The Board honored Strauss for his service to the Association at a special meeting of unit owners on Feb. 16 in the Windjammer Room, presenting him with a framed certificate of appreciation that reads as follows:

“Malibu East Condominium recognizes and thanks Richard Alan Strauss for his sense of fairness, his dedication, his tireless work on construction projects and the budget and for his many contributions to the financial stability and overall betterment of our community during the last 24 years as a director and an officer of our Board of Directors.

“Presented with unanimous agreement by the Board of Directors, September 8, 2015.”

Strauss is proud of the special recognition and recently had the certificate displayed in his living room.

What prompted Richard to run for the Board in the first place, just two years after becoming an owner at Malibu East?

“I had been to several meetings and I wanted to help Marcel (Board president Marcel Molins) continue to do the things he wanted to accomplish,” Richard recalled.

Did he ever have any ambition to become Board president?

“Jackee (Richard’s wife of 30 years, Jackee Ames) told me becoming president would be a perfect cause for divorce,” Richard said with a smile.

Instead, Strauss served as assistant treasurer, treasurer, second vice president and first vice president during his long tenure on the Board.

One of Richard’s first accomplishments as a Board member was establishing an investment policy, whereby one-third of the Association’s reserve funds would be invested in short-term Treasury instruments, one-third in bank CDs and one-third with brokerage houses. Strauss was well-qualified to devise the investment policy, as he spent most of his professional career as an independent investment adviser, at one point managing $70-80 million before retiring in 2011. The investment policy proved to be a successful one, which the Board followed faithfully for years, until the rates of return on Treasury investments became so low that they were no longer a prudent option.

“Everything was to be insured,” Strauss said of the investment policy. “Previously, we weren’t earning much on our investments.”

Richard, who has lived in the building with Jackee for 26½ years, was asked how the Board typically reached a decision during his tenure.

“Until years 23 and 24, we would typically come to an overall consensus, rather than have a 7-5 vote or a decision imposed by the president. It was by consensus. We had very few Board members who had an agenda of their own.”

How did that process work with regard to ensuring an adequate reserve fund?

“There was agreement among the whole Board that we follow the concept of increasing the amount being contributed to the reserve fund a little bit each year – as a means of avoiding special assessments. The Board just didn’t have a procedure for doing it.”

But how can a Board balance the desire to build up reserves with the owners’ wish to keep assessments as low as possible?

“By compromising between the two (objectives) and having a small increase (in assessments) every year, not because you’re necessarily going to spend it now but you’ll eventually need it.”

The argument is sometimes made that a property such as Malibu East will be more attractive to potential buyers if the assessments are kept low relative to neighboring buildings. Yet, others argue that having an ample reserve fund is a more important selling point. Strauss was asked which school of thought he subscribes to.

“I belong to both schools. There are a whole series of buyers who buy based on what they can afford. Those with ample resources are more concerned with what’s in the reserves. They’re not worried about a 1, 2 or 3% increase, but something big happening, because that could upset their applecart.”

The Board accomplished a lot during Strauss’ tenure, and he was asked which accomplishment stood out.

“The building got 24 years older, and yet we improved the condition of the building. I think the building is in much better shape than when we started, despite it being 24 years older.”

Strauss earned a master’s degree in chemical engineering at MIT and was the general manager for a textile company in Massachusetts before becoming an investment adviser. Because of his engineering and financial background, plus his attention to detail, Richard was tasked as the Board’s point man for a number of major projects. What approach did he and the Board take when they undertook these projects?

“We had frequent meetings – for example, with the painting of the garage – with all the people involved, the Board, the staff, the contractors. We kept the costs low by paying attention to detail and not skipping over things…. We tried to get guarantees for the work and we took advantage of the guarantees, in some cases. For example, a contractor used the wrong type of cement, and we got an extended warranty (as a result of the mistake). We had to get guarantees in writing.

“You have to be careful with engineers. They’re supposed to be your representatives, but you have to watch that the engineers aren’t taking the easy way out. The more experienced they are, the less likely they are to take the easy way out.

“(Regarding the balcony/facade project) we actually took down some balconies and put up new ones where they had poured concrete in the winter and used salt in it (to enable them to pour the concrete in cold temperatures). We also had to watch the engineers because (former director Allan Eckardt) had a better way of repairing the balcony railing imbedments.… He found a cheaper way of accomplishing what we wanted to, and he saved us a tremendous amount of money.”

Was there a project that Richard found particularly satisfying?

“One of the projects I enjoyed the most was repairing the garage facade with (former director) Larry Creter, doing the bricks so that the facade didn’t look like it was patched. (The bricks were removed at the start of the project and then relaid after the repairs to the wall underneath had been completed.) We went through every pallet of bricks, and now it’s hard to tell it was patched.”

Strauss said that the replacement of the HVAC system in the Captain’s Walk mall (one of the two units was completed on his watch) and the construction of handicapped-accessible entrances to both the tower and the mall, which longtime Board president Marcel Molins spearheaded, were other noteworthy Board accomplishments during his tenure.

Richard was asked whether there was any project or improvement that needed to be undertaken in the near future.

“I tried to say that using the green color on the (fourth-floor) deck would lead to a patchwork appearance. I’ve always thought that the best color was that of concrete, or else you will have a patchwork appearance. That’s not to say you have to have gray everywhere. You could use a different color by the pools.

“I don’t think there are any big projects that haven’t been addressed.”

Does Strauss see any issues or problems the Board might face in the future?

Finding enough owners who are well-qualified to serve on the Board and willing to do so, Richard says, as well as finding a worthy successor to president Molins – whenever that time comes.

Does Strauss have any advice for an owner who may consider running for the Board?

“Running for the Board is a good thing if it’s the building you’re interested in – not that you’re trying to ‘get’ somebody or trying to further your personal ambitions. We’ve been very fortunate to have someone like Marcel who was always willing to put in the time and never was after anything for himself.

“I think it has been a happy experience for owners living here, and that’s what counts. It’s not only the owners, but the employees, and we’ve had a fantastic group of employees. I’ve cared about the employees and still care about them. If we make the owners happy and the employees happy… that’s measured by how long they stay here.”

Well said, Richard. Well said.