To all owners: March 22, 2023
Further to our recent notice to hold the date, regarding an Owners Information Meeting, the board is providing some background and context to the agenda items that will be discussed at that meeting, as well as to provide additional information regarding the recently approved 2023/24 Operating Budget and Reserve Fund Study as per attached to this notice (sp.centralerin.com or www.hcc78.com and click on the Log in to the Web Portal button at the top of the page).
Attic Investigation & Mould Remediation
The board was first notified of mould in the attic of a unit, during a third party home inspection.
PuroClean Restoration was engaged by the board to remediate the attic, which was successfully completed in the same day. Of note – Attics are a common element
The board undertook to investigate a small number of other units to determine if this issue was isolated or if there may be a larger number of units affected. In total, 6 out of 9 units were confirmed to have mould in the attic. These units were treated.
It should be noted that PuroClean has confirmed that the mould in the attics inspected is not active.
The board sought an opinion from our Auditor, Engineer (WSP) who was conducting the Reserve Fund Study update, and the corporation solicitor, to confirm that the expense would be paid for out of the reserve account. As noted - Attics are a common element at HCC 78.
The corporation’s solicitor also emphasized that any alterations to an attic, such as venting for exhaust fans in bathrooms, must be brought to the attention of the board of directors, through property management, before any work is done. Additionally, attics are not to be used for storage or for any other purpose.
For the purposes of the Reserve Fund Study, the board has made an assumption about the number of potential units which may require mould remediation and/or other repairs to address noted deficiencies. The average cost per unit to address mould remediation ranges between $2,200 and $2,600 depending on the size of the attic and the extent of the mould.
The board has also engaged WSP to assist and create an inspection checklist which will include the evaluation of the attic insulation and ventilation conditions and requirements to assist in the decision making, planning and implementation of repairs where needed.
An inspection will be required for every attic, to determine if there is mould, as well to identify deficiencies as part of the WSP checklist. The board sourced three contractors to undertake this inspection and found PuroClean to be the most cost effective. Additional information will be sent shortly on how you can schedule your inspection with PuroClean.
The goal is to ensure that all mould is remediated, and any deficiencies are addressed to minimize a recurrence in the future.
For those who are unable to attend in person, minutes will be provided shortly after the meeting. Should you have any questions prior to the meeting, please feel free to email them to Central Erin Property Management (reflectionbay@centralerin.com).
Budget
The board recently approved the 2023/24 Operating Budget. The majority of this years increase, of 13.99% was attributed to three categories, Insurance, Reserve Fund Contribution and Contingency.
Insurance premiums are primarily a function of replacement valuation and claims. The recent replacement valuation, conducted by Suncorp Valuations, saw a year over year increase in replacement, from $15,208,000 to $19,451,000, due in large part to inflationary pressures in the construction sector. This $4,243,000 increase in valuation (27.9% increase) will translate into a higher premium
Reserve Fund Contribution has increased to be in line with the recently approved study. This year’s contribution of $112,128, is $13,588 (13.79%) more than the previous year’s contribution. It should be noted that while the study is a guide, the reality is that there will be a sustained requirement for increased funds which will be required to address the various capital projects
Contingency is a new line item that the board felt was prudent, given the uncertainty of inflationary pressures.
Reserve Fund Study
Every condo corporation is legally required every three years to update a Reserve Fund Study (RFS). The RFS is done by a qualified engineering firm and estimates expenses to maintain the corporation’s assets over a multi-year horizon. A RFS can occur more frequently than three years, if desired.
Reflective of inflation and significant increases in construction and material costs since the previous study, our condo’s 2023 RFS increased the expenditures we collectively may face in the future as owners. The RFS gives rise to the need to allocate a significant portion of your monthly condo fees to the reserve fund, to proactively prepare for these future expenditures.
The RFS is provided and the board of directors and property management will answer your questions at the April 6 meeting.