Residents must again be provided with yet another stunning revelation that should be of grave concern to them. This involves the major RESERVE FUND/CAPITAL EXPENDITURE DECLARED by the Board of Directors, that being the elevators. This comes with no surprise to many residents, but others should be finding this DECLARATION OF EXPENDITURE BY THE BOARD, to be very alarming following a review of the facts. Board members should be the first ones to recognize the very damning evidence that now faces them and their conduct in this most questionable debacle. Residents have been advised at past Annual General Meetings by Tom McClocklin Sr., that in his opinion, the elevators should be replaced. A sequence of relevant events should be examined very closely:

July 9, 2013: The elevators are inspected by the Provincial Inspector. As is done on an annual basis, the inspector provided a report instructing the Corporation of what measures are required by the building to ensure adherence to any code requirements and ensure that the elevators are in optimal condition. Based on the inspection report provided, the building is directed to replace the steel components in the pits and clean several component areas. NO INSTRUCTION FOR REPAIR OR REPLACEMENT OF MECANICAL COMPONENTS OR ELECTRICAL COMPONENTS WERE ADVISED AS NONE WERE NECESSARY.

• March 1, 2014: The condo newsletter, states “ongoing study using consultants and building experts on our two major building requirements (elevators and parkade) continues.” It is further stated, “your board plans to hold an information meeting, probably in mid year”. 
• March 31, 2014: The board minutes state “Bob Kowalishin moved to accept the Otis tender to replace the mechanical system and controls of the two elevators at a cost of $304,000 plus taxes, to be shared 50/50 between residential and commercial unit owners”. Tom McClockin, CA, seconded. Carried. 
• May 18, 2014: The condo newsletter, states in reference to the BOARD APPROVED replacement of the elevators, “the savings in energy costs and maintenance are significant”. 
• July 7, 2014: Management distributes notice of an ELEVATOR CASH CALL, with the first installment due by July 31^st, the second installment by September 30^th, and a third installment due in early spring, “when the actual work starts in the building”.

A review of industry fees for the required work following the July 9, 2013 inspection, can very easily be determined and in fact this cost has recently been confirmed but remains concealed by the Board. Within days of this inspection, a request by the Board was made for a quotation to conduct all necessary work to ensure that both elevators were in optimum condition. All of the required work to ensure adherence to code requirements was quoted at a total cost of less than $40,000 for both elevators. Completion of this work would place both elevators in optimal condition.

 This is of course very damning evidence in that the Board has stated that the elevators no longer meet the required Code and the $300,000 plus expenditure was absolutely necessary. NO SUCH NOTICE WAS EVER RECEIVED THAT THE ELEVATORS DID NOT MEET THE REQUIRED CODE! Of course the inspection report stated something dramatically different. The Board has refused all requests to date to provide to residents a copy of this provincial inspection report.

Further, the Board has concealed the quotation obtained for services required in order to comply with the recommendations required in the inspection reports. IT CAN THEREFORE BE CONCLUDED, THAT THE $300,000 PLUS EXPENDITURE DECLARED BY THE BOARD IS TOTALLY UNNECCESSARY AND RESIDENTS HAVE CLEARLY BEEN MISINFORMED.

Contrary to a “planned information meeting” regarding the elevators “probably in mid year” as the Board advised, such meeting only took place following the many demands of residents. When this meeting finally did take place, the Board allowed discussion of the parkade project but refused to permit any questions or discussion of the elevator project which had already been DECLARED AND APPROVED by the Board. Many questions, no answers. We now of course know why.

As is the case with the DECLARATION BY THE BOARD for replacement of the parkade topping, residents have not been provided with any opportunity to participate in the review and approval process of the elevator project DECLARED by the Board. This is of course in contravention of both the Bylaws of the Corporation and the Condominium Property Act. As noted above, the Board accepted the “Otis tender”. Who was invited to tender and what were their tenders? Was a quotation obtained by the Board to simply address the requirements of the 2013 inspection report? What were the particulars of any such quotations?

The Board states that “the savings in energy costs and maintenance are significant”. The fact is, elevator energy costs are typically no more than 5% of building electrical costs which would suggest a cost of $6000 per year. A 10% energy saving (if in fact achieved) would be approximately $600 per year, hardly enough to justify a $300,000 plus expenditure. Fees for a maintenance service contract will always be required so considering a reasonable estimate of energy and maintenance cost reductions, they certainly do no justify this major expenditure. As was the case with the new heating system, “significant” energy cost reductions were promised yet it was proven that a “significant” INCREASE in these costs was actually realized.

It appears that a number of directors on our Board have once again been unduly influenced into the making of a most irresponsible decision, that being to unnecessarily spend well over $300,000 on the elevators. Hundreds of thousands of dollars were spent unnecessarily and well beyond estimates provided by the Board when the heating system was installed. This careless and unnecessary spending of residents money cannot be permitted. Should the commercial owner wish to spend this money on the elevators, let them spend their own money on the commercial elevator at their sole expense. Allow common sense to prevail and ensure that at least spending of resident funds is managed in a responsible manner.

For a Condominium Corporation that did not even have a Reserve Fund Budget for this past fiscal year, it is rather frightening to see the Board of Directors approve Reserve Fund projects without resident review and participation, and yet may very well cost some $1.5 TO $2. MILLION DOLLARS!  Immediate attention must be given to responsible budgeting and funding of the Reserve Fund. Priority projects must be completed as soon as possible. At this point, the facts suggest that neither the elevators or the parkade topping are priorities. The practice of major projects being declared by the Board and in turn announcing cash calls out of the blue demonstrates very questionable financial management. This cannot be permitted by residents.

Residents must demand immediate and responsible attention to the Corporation’s finances and ensure that their participation is respected as is required by our Bylaws and the Condominium Act. What is required immediately is, once and for all, establishment of a reasonable and responsible Reserve Fund Budget so that residents have some idea of just where they stand as to not only the near but long term obligations they may face.  Information provided by the Board to date on the parkade and elevator projects has been very minimal with much information being concealed from residents.

It is recommended that a vote for approval of the Reserve Fund Budget to be presented at the Annual General Meeting, be deferred until such time as residents have been provided with sufficient information to allow them to make an informed decision on any of the proposed expenditures and of course, those already DECLARED BY THE BOARD.