A report titled “THE PARKADE TOPPING” dated July 26, 2013 was recently distributed to residents. As residents are aware, there is concern among many as to the review conducted on this matter.
The report begins with an admission of the board that they reached a “conclusion resulting in the letter to the owners giving notice that a cash call would be required at some time in the future, when this work would be done. It would likely be 2-3 years from now”.
We have received notice that a conclusion of the board was reached prior to giving notice to unit owners of a cash call. There have been several requests of the board to consider very viable alternatives but it appears they wish to stand by their final decision made long before submission of alternatives. These options have not received any reasonable consideration.
The report states that the work will likely be completed 2-3 years from now. This obviously raises the question, why has the board made a final decision on such a major capital project where there appears to be no interest in commencing such a project for several years? We now apparently have yet another capital project with many serious questions and concerns of residents being approved by the board without appropriate review, particularly with a board admission of a decision to proceed prior to responsible assessment of viable options.
How can such a capital project be considered, let alone be approved, where there is clearly uncertainty and unpredictability as to costs one, two and three years down the road? Of very serious concern to residents, is the fact that these concerns have established a dark cloud and uncertainty over the market value of their property and the clear impact on resale values of residential units
A statement was made in the report to “continue with cleaning out and caulking of cracks”. It is further stated that this has been done over the last few years. Ongoing observation has found it to be very obvious that there has been no such maintenance over the past few years. This whole issue is simply one of deferred maintenance as has been acknowledged by qualified contractors. A question as to specifically where there has been any such maintenance has been clearly avoided by management and the board. Our weather this summer has been, as was last year as well, very conducive to conducting this maintenance. However, no such maintenance has taken place and we will now defer this maintenance for yet another year.
A most viable option provided by Vector Construction Ltd., probably the most qualified contractor in Saskatchewan providing this required service, did provide a very accurate cost estimate and has advised the board that all products and workmanship provided is in fact guaranteed. It is important to note, that the Vector proposal, given proper annual maintenance, would provide up to ten years of service without the need for major expenditure. This as with any reasonable option, is subject to appropriate annual maintenance.
The report states “The board has concluded that the action selected initially, to replace the topping, is the correct one and in the best interest of the building and its long term life.”
As we all know by now and stated in the conclusion of this report, any expenditure that is in fact “in the best interest of the building and its long term life”, is clearly a capital expenditure. As per the bylaws of the Corporation, such expenditures require approval of unit owners by way of a special resolution.
The resolution of the board regarding this project is obviously inappropriate and contrary to the bylaws of the Corporation. Should the board wish to propose such a project, they must present this proposal to all unit owners at a duly convened meeting of the Corporation. Approval is of course subject to the support of a special resolution.
Residents over the last few years have experienced similar ill-fated projects. The heating system project not only resulted in realized capital costs exceeding those as promised by approximately 50%, but further have resulted in a discrepancy of over $150,000 in promised energy cost reductions as of June 30, 2013. The promise of no need for an increase in condo fees for the foreseeable future because of the promised savings has proven to be totally inaccurate. The projected balance of our reserve fund has unfortunately been severely impacted with a reduction of approximately $150,000. We have received no reserve fund statements for many months, but its balance at year end can only be expected to be pretty much depleted.
The estimate provided by the board for this proposed project exceeds $700,000 given current estimates.The board seems to be rather uncertain as to a proposed date of commencement. A responsible assessment of this matter would lead one to assume the ultimate total capital cost may very well increase by 50% as did happen with the new heating system. It must be further noted, that residents have never been advised of the actual total cost of the new heating system.
Finally, an audited financial report to unit owners will help address these concerns and provide unit owners with much needed clarification and confirmation.