It appears that there are some “interesting” developments in the horizon. The current property manager at HW issued a notice for the annual general meeting for the community to be held (Monday) February 27, 2017 at 7:00 pm.
On the agenda, five (5) major motions will require consensus (majority vote). Of these motions, items 3, 4, and 5 would require capital expenditures. In essence, anything that has to do with infrastructures, regardless of sources of funding, always receives great amount of care, attention, and disagreement – before, during, and after deliberations.
Having been a critic of prior councils, I didn’t think I could be so complementary to the hard and complex work the present council has carried out to commence the process of positive change at HW. However, it is a “guarded optimism” as history will bare that major changes are not always embraced with open arms at HW.
Nonetheless, it would be a travesty not to recognize that “unpaid council volunteers” have done their best to come up with well researched and recommended changes.
ABOUT THE DEPRECIATION REPORT
We have a lot of talented residents here at HW, but I am not sure we have qualified professional geo-thermal engineers and geotechnical engineering experts with Building Science Specialist accreditations to assist in expertly evaluating our waterway system and other infrastructures to offer us guidance. Hence, the Depreciation Report.
By the way, let us not be overly confident and significantly solely reliant on the Normac Depreciation Report moving forward.
Let’s face it. Read the covering letter of the DR which I hereby quote verbatim:
“The purpose of the Report is to provide the Strata with a planning tool to help them make informed decisions about managing the renewal of common property assets and facilitate funding predictable capital replacement. The Report is not intended to accurately predict the failure of building systems.”
If this were an independent Auditing or Accounting Report, it would be of very little value since it is “qualified”.
While the authors of the report have accreditations as Certified Reserve Planners and Chartered Business Valuators, they admitted at their presentation that they prepared their evaluation based on “visual observation” of the assets. (Refer also to each one of the attachments in the DR under “VISUAL REVIEW”.)
Hence, they “cover their butts” so to speak by way of the “qualified” statement (above) and protect themselves through their company’s Errors and Omissions Insurance.
WHY IS THIS A CRITICAL CONSIDERATION?
What does this mean to the layman? In effect, they are saying (through the DR) that they have obediently “complied with (the minimum requirements) of Sec 94 of the Strata Property Act” (put into effect in 2010 in BC). There is nothing wrong with that!
The problem of course, is that when the council uses the “presented recommendations” of the DR as the sole basis for recommending changes (motions #3-#5), strata owners are presented with a limited perspective. Granted, there is a lot of merit in favor of a positive consensus for all of them.
However, if proper evaluation of the present state of HW infrastructures was prepared by highly qualified geothermal and geotechnical engineers, several things could change: life span of assets; date of replacement; estimated costs; and most importantly, CRF funding projections, and strata maintenance fees.
So what are we supposed to do now? In spite of the DR’s inadequacy in this regard, there are many good reasons to support the motions:
- The contemplated upgrading of amenities can boost the value of HW and its units.
- The life span of these assets is greatly improved
- Enjoyment of the facilities by residents is greatly increased
- Social interaction is enhanced
- Proposed expenditure relating to ponds, streams, fences, is in line with proper maintenance and efficient management of assets
- The current yearly allocation to CRF is $52,000; it means that in about 4 years the estimated funding (from CRF) of $200,000 is replenished, or exceeded (if a surplus from budget is recorded)
- Due to the global uncertainty about trade (with the US President’s focus on realigning and renegotiating foreign trade agreements), maintenance or future capital expenditures could rise.
- Therefore, it is prudent not to delay asset improvement projects
At the eve of the AGM 2017, there is a chance that in considering the proposed motions, some owners may be seeing an “old woman” in the picture above. Others could be looking at a gorgeous young lady. Yet it is the same image.
Others will look at the picture above and decide that A’s color is dark grey and B’s color is off white. (Look at it again and cover the line dividing the images horizontally to determine the actual colors.)
As you all prepare for a “wisdom sharing” exchange at the AGM, consider that while you could be looking at exactly the same picture, individual idiosyncrasies may sway you to see different “perspectives”.
It is time to set aside personal feelings and to embrace a “global perspective” of changes proposed with the objective of coming out of the AGM with a WIN/WIN perspective for HW and (hopefully) its glowing community.