Sunday, January 12, 2014
The Wish List
The co-op distributed a proposed budget for 2014-2015. Administration costs are projected to be $113,350. Maintenance costs are projected to be $157,100.
Although not stated in this budget, our deficit for the year ended March 31, 2013 was $144,314. Therefore, any surplus for the following years should go to pay down this large deficit. This year our surplus as at October, 2013 in the amount of $68,047. will (or should) be applied to pay down the deficit. Nothing is budgeted in the year 2014-2015 to bring our deficit down to zero.
The Replacement Reserve Contribution is set at $70,417. and a Special Reserve Contribution is set at $43,948. for a total of $114,365.
Many things in the proposed budget are strikingly odd, such as the measly sum of $2,400. for Unit Maintenance & Repair and $4,500. for Paving, Grounds & Landscaping (we have LOTS of potholes!). Tree Removal and Trimming scored much higher at $22,700.
As no quorum was reached for our All Members Meeting held on January 7, 2014, a new Agenda was distributed to members, along with a Co-op Priority Chart which outlines proposed spending in 2014-15.
This Priority Chart is based on a Dotmocracy planning session. Windows garnered the most votes (27). Next came Furnaces, By-law Review, Lighting, Fences (back decks) and Balconies.
The Chart states that 3 out of 60 back decks in Phase 1 were completed. The co-op only has 9 back decks in Phase 1. Nevertheless, $10,000. is slated for repair of these non-existent back decks.
The total cost of the projected work in 2014 rounds off to $100,000. Our Replacement Reserve and Special Reserve contributions as of October, 2013 total $45,707. In order to pay for all this work to be done in 2014, we would need to raid our Capital Reserves to the tune of $100,000., leaving nothing for roof repairs, for example.
This dream list seems to be off the chart.
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You're right. Some of figures listed for unit repairs etc are absurdly low. At least you have budget for landscaping etc. We don't because it's expected that all members will take care of that. And since they don't, you can imagine result.
ReplyDeleteSurpluses should be used, at least in part, to pay down deficits. However my experience with co-op financial statements are that expenses (capital or not) and uses of surplus can be obscured or hidden. Reserves, for example, can only be used for major capital expenses, not routine or annual expenses.
As for back decks, do you mean that so many were planned but never built? Using your figures, they're spending $10K to fix 3 decks?
As for priority list, if you listed items in order of votes, I'm surprised By-Law Review scored high. My experience is that 95% Members (inc. directors) have never read co-op by-laws. Unless the "review" is designed to make them even more obscure and favourable to Co-op in terms of "interpretation."
That's exactly right - the by-laws will be rewritten to make sure that it favours the BOD. This is absolutely atrocious and with Bill 14 underfoot, evictions will be a dime a dozen.
ReplyDeleteWhen I mentioned at the MM that Phase I does not have 60 back decks - only 9 - there was a quick backtracking by the PM - er-r-r, back steps then, they're sinking.
Yup, many costs can be buried in big budgeted lines such as Capital Expenditures. In fact, our $4,500. maintenance budget line is actually a phantom line - the money is just there floating around - a diversion if you will. Forensic audits should be done on a regular basis in co-ops, not a random audit.