The financial statements presented by the Board at the 2017 AGM of Spadina Corporation, included many inaccuracies and misleading information. The following includes comments intended to suggest the many amendments required in order to provide an accurate statement of the Corporation’s financial status…

STATEMENT OF FINANCIAL POSITION

-Current Assets

1. The $106,500 reimbursed by the commercial owner (Note #8) subsequent to June 30, 2017 was as of June 30^th, an account receivable by the Corporation. It is a current asset and an amendment adding this to current assets is required.

-Current Liabilities

1. As of June 30^th, 2017, an account payable in the amount of $95,175 was not recognized. The obligation for this amount was outstanding as of June 30^th, and should have been included in current liabilities.
2. As of June 30^th, 2017, an account payable representing outstanding commitments “under the contracts” of $168,451 was not recognized in current liabilities as it should have been.

This results in a further amendment to effectively increase current liabilities by $263,626.

3. Note 4 states the $94,927 was expended from the Reserve Fund, yet note 8 advises that $95,175 in “additional expenses” were to be paid out of the Reserve Fund subsequent to year end. A further correction and amendment is required.

3. A further account receivable as of June 30^th requires a further amending adjustment for unpaid contributions by the commercial, as follows:

$5013 Fobs on 4^th floor doors

2360 Bike Racks

1068 Carts

2000 Fobs-door unit #1 (est)

10,442  x .4431 commercial share=  $4626.85 plus $7000 of unit owner funds used to pay for commercial condo renovations as revealed in a resident review of invoices. This equates to $11,625.85 receivable from the commercial owner plus whatever unknown amount is found upon a further review of invoices.

After recognizing the above amendments as per accrual accounting standards, the Reserve Fund balance at June 30th, is actually some $186,101 and NOT the $343,227 reported on the balance sheet. After receiving the account receivable of $11,625 PLUS from the commercial owner, the correct net reserve fund balance would increase accordingly.

ACCRUAL ACCOUNTING PRACTISE is defined as follows: 

A method where revenues are recorded when they are earned, even if money has not yet been received, and expenses when they are incurred, even if payment has not yet been made. The Canadian Institute of Chartered Accountants requires that this method be used so as to yield statements that accurately measure the company’s operations and state of obligation with others. The Board has clearly neglected this required standard practise.

STATEMENT OF OPERATIONS

Expenses which are very troubling within the Statement of Operations, include:

1. Repairs and maintenance

-2013  $54,630

-2014    72,625

-2015    43,059

–2016  101,377

-2017  107,240

Maintenance expense has approximately doubled in the past two years. An explanation from the Board is necessary. What has happened to cause this dramatic increase? With the addition of a “highly efficient” heating system and new elevators, the promised savings in maintenance and energy savings were supposedly to be substantial. Net energy costs continue to escalate substantially, with no “dramatic decrease” as was promised with the new heating system. Further, the new heating system and elevators were to result in a substantial reduction in maintenance costs, yet these failed promises have resulted in a doubling of these costs. Residents of course are entitled to a breakdown of the these excessive repair and maintenance costs.

2. Professional fees:

– Rather than respect their obligations as per Section 10.1 Maintenance and Repair “The Corporation shall keep in a state of good and serviceable repair and property maintain the common property” the Board challenged a claim by Dennis Tofin against the Corporation for refusing to respect this fundamental Bylaw of the Corporation. The claim was for the cost of responsible address of maintenance deficiencies. Rather than make any attempt to settle or arbitrate the claim of $12,000, the Board chose to spend $48,000 in unit owner funds to challenge this very basic claim. The Board refuse to file an insurance claim for these most unreasonable legal costs (charged by the McClocklin’s own lawyer), and chose to simply spend unit owner funds. The question is of course, just why would any responsibly minded party, even consider paying some $48,000 to challenge a claim of $12,000 which could have been settled for even much less through a reasonable negotiation process which was offered to them. The Board refused negotiation and even an arbitration process which could have been conducted at minimal cost! Why did the Appeals Court refuse Spadina of their requested submissions to have all of their legal fees paid? THE COURT RULED THAT DENNIS TOFIN WAS IN FACT NOT RESPONSBILE FOR THESE COSTS! 

3. Site Manager and Caretaker Costs

Caretaker duties have been dramatically reduced over the past few years:

-Contractors have been hired for grounds maintenance

-Contractors have been hired for many mechanical maintenance duties (in unit mechanical and plumbing) no maintenance of Enercons or other in unit mechanical components

-Contractors have been hired for shampooing of hallways (we have shampooing equipment) This duty was conducted by all previous caretakers. Resident requests to the caretaker to shampoo serious hallway carpet stains, have been advised in response, that residents on their floor will have to “chip-in” to pay for the expense of getting their hallway carpet cleaned.

-Contractors have been hired to wash the garage floor. This was previously conducted at least every 60 days by our past caretakers. The current practise of washing only twice per year, has resulted in caking of dirt upon the surface which will now require a very expensive means to remove this.

Residents live in this building and care much more about tracking of this filth into their units versus Commercial tenants who have much less concern, as this is not their home.

-Contractors have been hired for painting of areas that could easily be done by the caretaker

-Contractors have been hired to replace thermostats, zone valves and other “in unit” heating components which could easily be conducted by the caretaker

-Residents have been subjected to unnecessary abuse when requesting assistance for personal “in unit assistance”. Example: a fee of $25 has been demanded of elderly residents to simply hang a framed picture. A payment of $25 to change Enercon filters has also been demanded of residents. This is obviously part of common area maintenance where no fee is at all appropriate..

-Both the caretaker and his wife have actually shouted at residents advising them to return to the vestibule and clean their shoes prior to entering the lobby. They have verbally assaulted a number of residents for various reasons including residents and those helping them in both moving into and out of the building.

-The caretakers have removed resident posts to the lobby bulletin board

-The caretakers have removed the waste basket from the mail box area, as this seems to be an Inconvenience to them and they are not being compensated enough for this major task.

-The caretaker in the past fiscal year, left the building on a Friday afternoon for the weekend, when an elderly resident had a serious drainage line backup. Fellow residents remained present during the visit of the contractor due to the absence of both management and the caretaker.

-The above list can well be extended much further.

-The caretakers wife, has received great appreciation for her efforts and contribution to the annual Christmas party. What residents do not realize, is that she has collected compensation for her “volunteer” efforts, in the amount of $500 plus reimbursement for her most “generous” contribution of her wonderful baking.

-Residents do not realize that the “caretakers” serve a great deal of time serving the commercial owner in the commercial units. The one and only resident review of conducted in 2015, revealed that the couple were compensated by our Corporation for their services provided to the commercial owner. Yet, residents have often been advised by management that the caretaker is not available because he is “too busy with his very important duties”. They receive payment (or do they?) from the commercial owner or have residents been paying for these commercial services in their fees?

-Residents do not realize that the caretaker and his wife are regularly compensated for “extra work” they do in the building. The review of invoices in 2015, revealed numerous invoices made by the caretakers to the Corporation, for which they received payment above and beyond their monthly contractual compensation. Their salary and benefits exceed $80,000 which is obviously ludicrous. On top of this, the commercial owner has a “live in” caretaker available at any time to provide their units with services.

The list goes on and on. Yet, any resident who dares questioning of the Board with concerns related to the caretakers, are immediately informed that they are not entitled to any relevant information.

The current caretaker was hired immediately after Mark Schreiner, our previous caretaker was fired by Colliers McClocklin management. Wendy Larmond was not contracted at the time for just reasons.

Unfortunately, the demands of Colliers upon Mr. Schreiner were well beyond reason.  (He was responsible for acting as building operations engineer at two other condominium properties AT THE SAME TIME and ON 24/7 CALL ON DEMAND BASIS at all properties. Yes, Mr. Schreiner was responsible for several properties 24/7 at $3000 per month. He paid for cleaning at Spadina Towers out of his $3000).

This versus the current $5000 per month plus benefits paid to the Larmonds. And yet, the required duties of the Larmonds have been reduced substantially!

There are qualified candidates available for the caretaker position at Spadina Towers, who would be very interested in a caretaker position with ONE PROPERTY at $3000 per month plus benefits currently provided to the Larmonds. That is a savings of $24,000 per year plus the additional fees that the Larmonds have been charging our Corporation.

RESERVE FUND BUDGET 

Unfortunately, what has been presented as a “RESERVE FUND BUDGET” in the financial statements, is NOT A RESERVE FUND BUDGET AT ALL. First of all, residents must be reminded of just what constitutes a legitimate RESERVE FUND BUDGET.

Section 10.4 Reserve Funds 

1. a) The Corporation shall establish separate reserve funds for the Residential Property and the Commercial Property, providing for the payment of:

1. i) any unforeseen common expenses; and
2. ii) for any major repairs or replacement of common facilities, common property or assets of the Corporation, including roofs, exteriors of buildings, roads, sidewalks, sewer, heating, electrical and plumbing systems, elevators and recreational and parking facilities;
3. b) The amount required for the reserve funds shall be determined by the ordinary vote of the units owners at the annual general meeting, by taking into account anticipated repair and replacement costs and life expectancy of the things mentioned in subsection (a), or as otherwise permitted or directed by the Act. The amount required for the reserve funds shall then be apportioned among the owners in accordance the scheme of apportionment set out in Bylaw No. 3. Owner’s contributions to the reserve funds are then payable in the amounts and at the times as determined by the board.
4. c) The reserve fund which has been designated for the Residential Property shall be used only for the reserve fund expenses allocated to the Residential Owners as set out in Bylaw No. 3. When such application will or may result in a shortfall in the reserve fund for the Residential Property, the board may submit a revised budget or special assessment to the unit owners, and in accordance with Bylaw No. 3, allocate the increase to the Residential Owners.
5. d) The reserve fund which has been designated for the Commercial Property shall be used only for the reserve fund expenses allocated to the Commercial Owner as set out in Bylaw No. 3. When such application will or may result in a shortfall in the reserve fund expenses fund for the Commercial Property, the board may submit a revised budget or special assessment to the unit owners, and in accordance with Bylaw No. 3, allocate the increase to the Commercial Owner.
6. e) In no event shall the unit owners approve an amount required for each of the reserve funds which is less than that required for the anticipated repair and replacement costs and life expectancy of the things mentioned in subsection (a), unless otherwise permitted or directed by the Act. In making their decision, the unit owners may rely upon the recommendation of the board as to the amounts required.

Section 10.5 Budgets

The board shall from time to time and at least annually prepare a budget for the common expenses funds and a budget for the reserve funds, in accordance with Bylaw No. 3, and determine by estimate the amounts necessary for the next ensuing fiscal year or remainder of the current fiscal year, as the case may be. The board shall then submit the reserve funds budget for approval of the unit owners, pursuant to section 10.4(b) above. The board shall advise all unit owners promptly in writing of the amount payable by each of them respectively, and shall deliver copies of each final budget on which such levy is based, to all unit owners shown on the unit register. 

Section 11.8 Capital Expenditures

Where expenditures are contemplated by the Corporation which are for the purpose of improving or adding to the common property, or common facilities, but are not for repair, renovation, maintenance, or replacement of the common property or common facilities, such expenditures may be included in the budget and collected for in the contributions for common expenses, if the same are first approved by a special resolution of unit owners and first mortgagees or other persons entitled to vote.

The Board has blatantly disregarded the above Bylaws and proceeded at their own discretion, approval of expenditures and their means of funding without the required consent of unit owners. This is obviously illegal conduct on the part of the Board.

The following are comments responding to what has been presented as a “Reserve Fund Budget”. This presentation is OBVIOUSLY NOT A LEGITIMATE RESERVE FUND BUDGET AT ALL but simply some general commentary on THOSE RESERVE FUND EXPENDITURES, THAT MIGHT BE CONSIDERED IN A FORMAL RESERVE FUND BUDGET. 

ROOF ANCHORS– Current regulations and legislation, including that of the Section 116.3 Anchor Points and Anchor Plates, clearly provides AS IT HAS FOR MANY YEARS, that,

1. Where a worker uses a personal fall arrest system or a travel restraint system, an employer, contractor or owner shall ensure that an anchor point or anchor plate that meets the requirements of this section is used as part of that system.
2. As an employee, contractor or owner shall ensure that a temporary anchor point used in a travel restraint system (meets the required conditions of the ACT)

There are currently no legal requirements beyond what is clearly expressed in the Occupational Health and Safety Act as outlined above. Why is the Commercial Owner insisting that residents be deprived of common area window cleaning and address of leakage of windows at the same time?

REINSULATE and REPLACE MATERIAL ABOVE BALCONY DOORS AND WINDOWS- An accurate assessment of the necessary work and quoted pricing to conduct this work must be obtained and presented to unit owners for their approval.

BALCONY SUPPORTS- Again, a detailed assessment of this project is required including quoted pricing and presented to a General Meeting for unit owner approval.

POOL DECK and CONCRETE-detailed assessment including quoted pricing is required     

REDECORATION OF RESIDENTIAL COMMON AREAS-The last project was for the hallway carpets. It has been a disaster. Qualified comments have questioned why residents would have ever approved of such a carpet, obviously not intended for common hallway use. Project #1 unfortunately requires replacement of the current carpeting. No further hallway improvements should be permitted by residents until such time as the carpet has been replaced. 

RESIDENTIAL HALLWAY AIR CONDITIONING AND CHILLER 

Detailed assessment of this project is required including quoted pricing. As with any such CAPITAL EXPENDITURE (capital repair, addition or replacement as defined by law), unit resident consultation is mandatory. Resident interests require that the previously well functioning residential humidifier be installed. No commercial owner objection is appropriate. 

EXTERIOR CAULKING 

Caulking was done less than ten years ago. The north and west side of the building is most is most susceptible to caulking failure. At present, there have only been reports of leakage to a few residential units on these sides of the building. Repair to the currently leaking windows can easily be addressed with window caulking when our windows are being cleaned. The Board has prevented address to this problem, with the false position that window cleaning and window leakage repair cannot be completed until roof anchors are installed. This Board position has been proven to be false and misleading.

HOUSE COMMITTEE REPORT

1. Completed plaza -Where is structural damage? With no evidence, we have wasted some $700,000, that could have been saved following a well respected professional’s submission of a $50,000 remedy.
2. Front landscaping-This is a capital expenditure that requires approval of unit owners via special resolution. No such approval was ever sought. Board members face liability for this illicit conduct. Board members are advised to review the Boily case vs. Carleton Condominium Corporation. This matter will be pursued.
3. Parkade vestibule and stairwells have been redecorated. A copy of tenders for this project is requested. The ludicrous estimate provided, must not be accepted by residents. Residents must be consulted.
4. Parkade power wash- Residents are deserving of much better. This is primarily a residential builing where clean floors demand a much greater standard than commercial tenants.
5. Sewer line replaced. Why is a common area sewer line shared with the commercial units attended to where residential sewer lines are neglected?
6. New building signage. A motion was passed at an AGM in 2014 approving new building signage identifying the building as Spadina Towers. Residents were to be consulted and participate prior to any final decision.The Board however falsely declared the motion was defeated as per an audio recording of the meeting. The required unit owner approval of the signage expenditure currently being installed, was not permitted. This is in contravention of our Bylaws.

TENDERS ARE AN ABSOLUTE NECESSITY PARTICULARLY WHEN OUR CORPORATION’S FINANCES ARE IN A VERY PRECARIOUS POSTION AND SPENDING PRACTISES ARE OUT OF CONTROL!

Requests of residents for disclosure of tender documents have constantly been rejected by our Board. Requests have been made to the Board for copies of tender submissions for recent CAPITAL projects, including the elevators and parkade CAPITAL PROJECTS. A copy of any tender documents are hereby requested of the Board..

The Board is hereby advised that in response to their insistence that all CAPITAL EXPENDITURES referenced in our Corporations financial reports be declared as OPERATING EXPENSES, by doing so, they are obviously misrepresenting legally required financial reporting requirements that are explicitly required in Canadian Auditing Standards.

    REQUESTS TO THE BOARD

1. The Board has made the statement that “THE ORGANIZATION has approved a $950,000 cash call”. The Board is hereby requested to inform residents in writing as to WHO is in fact “THE ORGANIZATION”? NO RESIDENTS have participated in any such ‘ORGANIZATION APPROVAL” Obviously, this clearly demonstrates a most serious contravention of both our Bylaws and the Condominium Property Act on the part of the Board.

3. The Board is requested to provide written confirmation to the writer, of all past tender and invoice documents for all ‘CAPITAL REPAIRS”  or ‘CAPITAL EXPENDITURES” including those for the elevator, the parkade, and any other such projects. 

4. Please provide written authorization to enable, myself and/or other interested residents,to their entitled access and review of all invoices and other source documents including those previously reviewed by myself in early 2015 AND in addition, all invoices and other source documents, prepared subsequent to that review.