We have now completed three years of operation with the new hot water heating system. Sadly to say, not only did the total capital cost of the system far exceed the number provided to residents, but energy costs have increased dramatically and continue to escalate.

THE TOTAL ACCUMULATED INCREASE IN ENERGY COSTS FOR 2011-2013  versus the year of completion of installation, 2010, ARE $82,317.00 OVER 2010 when installation of the new system was completed. 

This includes reflection of the adjustments required for reduction in natural gas rates and increases in electrical rates (approximately $31,702.10 net savings due to rate reductions). In other words, $82,317.00 is the total additional and accumulated cost of energy (2011-2013) had rates not changed and therefore provides a direct and more accurate comparison to 2010.  The only reason actual NET CASH COSTS during this period have only increased $50,614.90 is because natural gas rates dropped substantially in 2011, 2012 and 2013. Again, had it not been for a reduction in ENERGY RATES, the amount of the accumulated increase in net energy costs would be $82,317.00.

Residents were informed by our Board of Directors, prior to the purchase of the new system, that energy costs would DECREASE substantially, and that there would be more than a $10,000 annual saving in chemical costs as NO water treatment would be required. Well, the fact is, water treatment IS required and there is no such saving. It was further stated that this system would last 40 to 50 years and that the dramatic reduction in energy costs would result in a payback period of approximately 7 years!.

These of course, are very irresponsible and misleading statements made to residents who are expected to have trust in their Board members. Residents were advised that those considering the sale of their unit would find that this system would be a “very strong selling point, as fees should continue to go down”. This is of course seriously challenged by residents who have, most unfortunately realized the negative impact of the new heating system project, upon the market value of their unit. Approximately 80% of residents voted AGAINST approval of this system and expressed their strong preference for simply a direct steam for steam replacement of the two steam boilers that have performed extremely well for over 30 years. Their preferred option would have SAVED MORE THAN HALF A MILLION DOLLARS in capital costs, and more importantly, would have resulted in a substantial DECREASE in energy costs and a reduction in monthly fees. A responsible review of comparative technical data, clearly supports the benefits of this preferred option. 

Yet the board proceeded without the required special resolution of our unit owners as is required in our bylaws. The commercial owners were strong advocates of this new hot water system and along with the support of only a few residents, declared approval of this system and proceeded with its decision to install the new system.

Unfortanately, residents have been forced to pay the majority of not only the unnecessary capital cost of approximately ONE MILLION DOLLARS,  but also, the dramatic increase in energy costs since the installation, and of course the ongoing increasing energy costs going forward.

NONE of the above promises have been realized. At the current rate of energy consumption, within seven years, these accumulated cost INCREASES will be approximately $200,000 versus the promised savings or DECREASES of a similar amount! Residents must reaIize that the promised energy cost savings did not happen and never will. Residents will never get their money back over 7 years through energy cost savings as promised. Further, they will be subject to much higher monthly fees required to pay for this most unneccessary and irresponsible adventure on the part of the Board.  

A contingent liability now exists where the thousands of dollars received in grants based upon the inaccurate submission of the Corporation projecting substantial energy SAVINGS may very well be subject to a return of these funds to the government. Residents would then of course be asked for additional fees in the form of a special assessment to fund this.

In terms of property values, the lack of transparency to this entire project has had a very negative impact upon property values in this building and has certainly proven NOT TO BE THE BIG “selling point” as was repeatedly touted by board members.

These dramatic cost increases to residents are obviously of great concern. This has of course contributed to the tremendous increase in electrical consumption and in turn costs, since installation of the new heating system.

Clearly, an opportunity has been lost where we could have had a much more reliable heating system with a substantially lower capital cost, along with improved efficiency and in turn, substantially lower energy costs. From this point on, residents must be prepared to challenge these poor decisions made on their behalf by the Board, and ensure that any and all major projects are reviewed with the participation of residents and approved only following approval by a special resolution.

A detailed report and analysis supporting the energy cost analysis noted above, is available to any unit owner, subject to prior receipt of a formal analysis presented by the Board of Directors for the same period.

***When this issue was heard in Provincial Court in April of 2012, the court was advised that the Spadina Condominium Corporation SAVED $44,329 in total energy costs including rate adjustments for the first year of operation of the new heating system. The court was further advised that the Corporation stated on the grant application that there would be an estimated annual saving of $46,000 per year in energy costs with the new hot water heating system! What will the auditor of this grant program have to say about this submission today?

The facts clearly demonstrate, that these amounts submitted with the support of our own President, were very simply, UNTRUE! Our Corporation was represented during the trial by Board President Ben Goldstein and a team of lawyers from the McPherson, Leslie & Tyerman law firm. A fellow provincial court judge of Mr. Goldstein accepted his submission that there were SAVINGS of $44,329 in energy costs in the first year! The judge, surprisingly, refused to even look at the prepared report of a factual and accurate energy cost analysis which was fully supported by actual invoices and other documentation! Lawyers who have reviewed this matter since, find this behavior of both the judge and those representing the Spadina Condominium Corporation, to be very disturbing.

It is clear that the court was deceived by those representing the Spadina Condominium Corporation. Mr. Goldstein, who yet remains a board member, is requested to respond to this issue by providing that analysis of energy costs of 2011, 2012 and 2013 relative to 2010 that he acknowledged and in turn presented as evidence to the court.

Upon receipt of Mr. Goldstein’s report, the details of the energy analysis report referenced above along with comparatives to years prior to this report, will be disclosed to all unit owners.