Since the time of new heating system installed in 2010, unnecessary and excessive spending on Reserve Fund expenditures has totalled approximately $1,000,000. With unnecessary over spending of some $500,000 on new hot water boilers versus a more efficient replacement with new steam boilers, along with a further approximately $500,000 in unnecessary overspending in the parkade resurfacing project because of “claimed structural damage” which was found not to exist, unit owners have contributed over $1,000,000 in unnecessary funding using primarily ILLICIT cash calls. The boiler project was not supported by a required special resolution nor were the resurfacing and elevator projects legally approved by unit owners. The Board simply proceeded with these projects on their own and continue to refuse to provide to his day, a copy of the required resolutions approving these projects and the means of funding as is required by our Bylaws. Residents were permitted no say in the matter. If you attended AGM’s over the past number of years, you will recall that those residents who would attempt to speak to such unnecessary spending, were immediately criticized by the Board and deemed by them to be troublemakers. Most residents failed to question such Board conduct and simply sat like silent lambs waiting for what would come next.

What did in fact come next, was a serious and continuing deterioration of our financial position. Yet, the lambs remain silent. Our current financial position is in a very serious predicament and should be of great concern to all residents. The Board had an opportunity to propose a responsible budget to address this dire situation at the October, 2018 AGM, but chose to avoid and conceal the severity of the situation. Residents were left with no idea as to where our deficient current financial plan is taking them other than the inference of the Board that more (illicit) CASH CALLS would be coming. Cash calls would of course only enable continuing concealment of the Board’s financial practises at the expense of residents.

First of all, the Corporation cannot afford to proceed with the Reserve Fund expenditures the Board has proposed until such time as funds are available as per funding resolutions provided with support of residents. To proceed with such expenditures without resident participation in approval of such expenditures and their means of funding, will certainly represent financial negligence on the part of the Board in contravention of Sections 10.4, 10.5, and 11.8 of the Bylaws and further provisions of the Act. We have a very serious problem here, and the Board cannot be allowed to continue acting in contravention of our Bylaws and the Act.

A General Meeting of unit owners must be held in the next 45 days where residents are entitled to vote on a budget that would consider a full reassessment of our current and projected financial position and ensure a legitimate unit owners approval of any Reserve Fund expenditures including any of those “suggested” at the AGM. Unnecessary expenditures such as roof anchors must be removed from the budget entirely as they have been proven to be totally unnecessary as confirmed by the Saskatchewan Occupational Health & Safety branch. Hopefully the Board has as per requests of residents at the AGM, obtained more accurate estimates of proposed expenditures so that unit owners can approve such expenditures which will be subject to appropriate tender procedures, and NOT simply left to the Board’s discretion. Tenders are simply a standard and responsible procurement procedure. This General Meeting must also provide residents an opportunity to voice their opinion on a number of issues where time did not permit or which the Board refused to consider at the AGM. These are urgent matters as well.

An analysis of our current financial status as it relates to our Reserve Fund is attached for your review. As you can see, the Board’s proposed (not yet approved) Reserve Fund budget will result in a total depletion of our Reserve Fund and leave the Corporation in a deficit equity position of more than $100,000 within three years UNLESS RESIDENTS ARE PREPARED TO ACT IMMEDIATELY. This is obviously a most troubling matter and requires the immediate attention of both the Board and residents. Should any resident question the contents of this memo and the need for urgent attention, it is suggested that they consult with their financial advisor or accountant who I can assure will agree with the urgency of this matter and express support for options of address including the following proposal:

SPADINA TOWERS Reserve Fund Proposal 2018-12-01

Until there has been responsible address to our serious financial issues, any prospective purchaser of a condominium at Spadina Towers who conducts due diligence, will immediately be troubled by what they see. What they will want to see is confirmation of responsible Board governance which includes responsible financial management, FULLY INDEPENDENT property management, and Board member ethics disclosure. Until responsible address to these issues is taken serious and are acted upon, residents will continue to find that the value of their investment in this building is left with very serious question of concern including perception within the condo resale market where such financial considerations are taken very seriously.