It  has been stated that Vector Construction was engaged in about 2000, to repair cracks on the driveway. The work was in fact successful and more than 90 percent of their crack filling remains intact today. At the time, Vector made it very clear that the driveway surface was to be monitored and maintained on an annual basis. If there was such great concern with Vector’s work, why was there no concern or effort made to address THESE RECOMMENDATIONS?. Why was another contractor not brought in if there was such great concern?

From 2003 to 2008, a few proactive Board members, did take the initiative to act upon this deferred maintenance. They directed the caretaker to immediately attend to the matter but additional maintenance was required. The property manager was directed to obtain a quote to perform additional sealing work. No such quote was obtained.

Another year later in 2009, Tony Boryski, the Building Committee chairman, prepared a report which included a very strong message that immediate action was required to address the continuing deferral of the driveway maintenance and the neglect of leakage onto vehicles in the parkade. The chairman refused to hear this report for several consecutive meetings. Mr. Boryski directed the caretaker once again, to immediately conduct maintenance work on the driveway. CCD Western was also asked to do some maintenance work. In the October 9, 2009 Board minutes, it was stated that “CCD Western came in to do some caulking. They finished half the job and have not yet returned”.

Yet another year later in 2010, the Board advised: “Last fall surface cracks over a portion of the parkade were filled which resulted in a significant reduction in the overall water seepage. A permanent long term solution will likely require a much more extensive fix and is still being determined.” Later in 2010, the Board advised: “A permanent fix for the parkade is a monumental job. The work has been investigated but no costs have been estimated – this will be costly. We have been filling the cracks in the parkade in an attempt to stop the leaks. This is a temporary solution.” Given the above history, it is clear that when the regular annual maintenance procedure recommended by Vector was followed, “significant reduction in seepage was experienced”.

Again, more than a yet another year later, in 2011, a report was obtained from Kenyon Engineering with a cost estimate of $650,000 plus engineering fees and taxes. This did not include any recommendation for repair or replacement, or address of any delaminated or deteriorated concrete which might be discovered in the structural slab. CLEARLY, RESIDENTS  HAVE BEEN PROVIDED WITHIN THIS REPORT, WITH NO EVIDENCE THAT ANY SUCH STRUCTURAL DAMAGE EVEN EXISTS! Given the evidence submitted to date, THERE HAS YET TO BE ANY CONVINCING EVIDENCE OF STRUCTURAL DAMAGE, thus permitting serious consideration of measures outlined in the Foster Report.

It is most unfortunate that the measures recommended within the Foster Report, receive no recognition, where at the same time, no evidence of structural damage has been demonstrated to exist at Spadina Towers.

I would very strongly suggest, that before the Board feels empowered to proceed with replacment the parkade topping, that they reconsider their position as per their required adherence to provincial and federal legislation. It is clearly unjust on the part of the Board, to misrepresent any such support for a major reserve fund expenditure, where insufficient support has been provided, whether it be technical or financial.

More than two further years later in 2013, yet another engineer was engaged to review the matter. Finally, in 2013, after many years of maintenance neglect and failure to act on the matter, a proposal was made to the Board by concerned residents who were anxious to see some prompt and serious effort to address the matter (See the Foster report). Given the failure of the Board to act, the proposal was intended to initiate immediate attention to the matter and make a sincere effort to extend the life of the existing structure until such time as there would be sufficient reason to address any legitimate concerns as to structural damage.

Before any suggestion of an entire replacement of the parkade topping is to be considered, a stamped structural engineering report (which requires destructive testing and analysis) must be provided that clearly demonstrates sufficient structural damage to warrant replacement of the topping. Residents should be provided with this report and any related information to ensure that they are fully informed before they approve of any such reserve fund (and Capital Expenditure) project.

There are a number of very qualified local contractors that might be considered for this project (IF INDEED THE PROJECT IS REQUIRED), and should this project actually need to take place, residents must be provided upon request, a copy of all relevant tender documents including the details of the invitations to tender.

It is now into the second half of 2014, and the Board has advised that we still do not know what the cost will be to remove and replace the surface area. As well, the neglect of effective ongoing maintenance continues. Again, yet another year has been neglected as to the annual required maintenance of the parkade surface.

With the uncertainty of costs and the inability of the Board to provide such information, it is clear that residents must be provided with all information both technical and financial, before any definitive decisions are made.

CAPITAL COST VS. CURRENT EXPENSE

Unfortunately, the neglect of required annual maintenance relating to the parkade for many years, has now reached a point where an entire removal and replacement of the surface area is being contemplated. This is obviously a Capital expenditure and not simply a current operating expense. The cost of the necessary annual maintenance which was neglected for many years would have been a current expense in the year the maintenance was conducted.

As has been clearly demonstrated by the Board over the past few years, there is not simply suggestion, but they in fact DEMAND that our major Capital projects be treated as current expenses rather than as a Capital expenditure. Residents ask, why is the Board making this DEMAND in such an adamant manner? First of all, our Bylaws and the Condominium Property Act do require a particular procedure for Reserve Fund projects including a Reserve Fund Budget. It is the unit owners, not the Board who approve of that Budget and the amounts required. Further, any Capital Expenditures must be approved by a special resolution of unit owners requiring two thirds support. It has been suggested many times that the Board has DEMANDED current expensing of these major Capital projects for two primary reasons:

1. The Board does not want the participation of residents in approving these projects. If they are Reserve Fund related, sufficient funding of the Reserve fund and approval of a budget including proposed expenditures, must be approved by the unit owners. If they are Capital expenditures, then participation of unit owners goes one step further, and a special resolution requiring two thirds support is required. In the Boards mind, they feel that they can circumvent this requirement by declaring the cost of the project to be simply a current expense (repair and maintenance).  With an expenditure such as the parkade or elevators, the nature of the proposed expenditure is well beyond simply repair and maintenance and is very much Capital in nature. The definition of a Capital expenditure vs. current expenditure has been provided in previous posts to this site.
2. Our Board includes unit owners who own units in the building that are rental revenue units. These include the commercial owner (44.31%) and a residential unit owner who owns  (5.07%). They have a combined interest of 50.07% of the building. In other words, they are able to control not only Board decisions but also decisions made by the unit owners at a General Meeting. The exception to this is if a special resolution is required. Considering potential conflict of interest issues, numerous requests of the Board over the past several years has been requested of them to provide on record, an Ethics Disclosure Statement in a format that is commonly used and respected by members of the CCI (Canadian Condominium Institute). This provision would certainly provide a very much needed and formal response  to the many serious concerns of residents relating to such matters. The Board has adamantly rejected any such provision. Why? It has been suggested that there is in fact very good reason on the part of Board members for this adamant refusal to sign on to such a statement, as there is in fact reason on their part for concern. In any event, residents must demand these ETHICS DISCLOSURE  STATEMENTS before the next Annual General Meeting.

These suggestions have further advised, that owners of revenue units, obviously want to reduce taxes on their income from these units by claiming these major Capital projects as current operating expenses which can then be deducted in full in the current taxation year. If they are approved as Capital Expenditures as they should be, they are not able to write the total expense off in the current year, but over a number of years. This, they do not want to see.

Generally Accepted Accounting Principles clearly define such projects to be Capital in nature and not simply a current expense. Canada Revenue Agency has also reviewed this matter as it specifically relates to projects in our building (heating system, parkade resurfacing project and the elevator project). In addition to their respect for GAAP, they have found these projects to be Capital in nature.

As a result, a special resolution of unit owner approval is required before any such project takes place. There continues to be a great amount of confusion and uncertainty. Today, we still don’t know what the cost will be. Now of all times, the Board has allowed themselves to be convinced that the elevators require immediate replacement.

 AN ALREADY MADE DECISION BY THE BOARD WITHOUT THE REQUIRED APPROVAL OF RESIDENTS TO REPLACE THE ENTIRE TOPPING OF THE PARKADE HAS BEEN MADE LONG AGO. Yet no definitive structural engineering assessment report, has been provided and stamped by a structural engineer, and provided to residents. Such a report must include a thorough investigation, including the results of destructive testing and investigation procedures required in a professional submitted structural engineering report. As with the provincial elevator inspection report, ALL REQUESTS FOR SUCH REPORTS HAVE BEEN REJECTED BY THE BOARD! Residents must be clearly provided with sufficient evidence and supporting information, that there is in fact structural damage relating to the parkade and further, a confirming report by the provincial inspector, directing immediate major expenditures on the elevators. This project cannot proceed without the appropriate participation of residents and their approval which is of course subject to their review of this information that has been requested.

It is very unreasonable of the Board to request any payment toward these projects, until residents have have been sufficiently informed and the required protocol of our Bylaws and the Condominium Act are respected. The resale price of condominiums in this building over the last few years has been negatively impacted because of this confusion and uncertainty in this building.

Provision of the required Reserve Fund budget was rejected by the Board at the last AGM for the reason that “there would be no reserve fund expenditures”. Yet at the same time, they have approved on their own, expenditures that may in fact approach two million dollars. What is a prospective purchaser of a condo in this building to think? All of this confusion and uncertainty can only negatively impact our property values. This cannot be allowed to continue.

Finally, residents have long requested financing options of such Capital Expenditures if they do in fact take place. With currently very low interest rates, a financing arrangement on behalf of residents can easily be arranged by the Board. A $100,000 cash call could be financed and repaid at approximately $100 per month. A number of current Board members have, on numerous occasions, both in the past and very recently, provided a most disrespectful response and comment to such resident requests, by stating, if you can’t afford the fees your are being charged, you shouldn’t be living here!  Why does there continue to be such demonstration  of lack of respect to our residents? It is these board members who shouldn’t be living here, as they are not welcome by their neigbors. Residents are entitled to a demonstration of responsible financial management from their Board. The required respect of residents, does in fact require the Boards sincere effort to respect and accommodate finance options for their unit owners as is done in many condominiums.

I joined the Board of Directors in 1995, and remained on the Board for fourteen years. Over much of that of time, the Board respected democracy and encouraged the views and participation of residents, particularly regarding major expenditures. In fact, there was always unit owner consensus on Reserve Fund expenditures which of course required their participation and approval. Hopefully, our Board will become much more transparent with the Corporations business. Further, we can only remain hopeful that someday, we can return to the era of democracy that we all enjoyed at one time.