Fall Update – Budgets and More

44 views

Budget Considerations – Most Strata Corporations have year-ends that occur in the months of November, December and January which is by far the busiest time of year for our firm when it comes to Annual General Meeting and budget preparation.  While we have written a great deal about the COVID-19 related challenges to AGMs themselves, we feel it important to point out some general budget considerations as well.

Insurance is of course the headline here with premium increases anywhere from 40-100% to be expected as the norm (with outliers on either side).  Back in June, minimum wage was increased by a further $0.85 to $14.65 (with another increase to $15.20 set to occur in June 2021). This will impact all line items directly tied to minimum wage and you should expect that labour costs at your property will continue to increase, in particular staffing and janitorial.  While BC Hydro reduced rates slightly this year, rates are expected to go up again next year. Fortis is still selling natural gas at historically low prices, the cost of gas itself is increasing and on October 1st rates were increased again after a similar increase in August.  The impact of COVID-19 on contractors has been mixed- while some have increased rates (notably plumbing firms and others who work in-suite, to account for extra PPE requirements, the difficulty of retaining qualified personnel, etc.) others have seen rates hold or even provide small reductions (window cleaning, dryer ducts, etc.) due to the “hunger” for more work after a very slow spring/summer.

We recognize that these are challenging times, and that budgeting is likely to receive more attention than ever before and your Property Manager will assist you with guidance while you prepare for your AGM.

Snow Removal – Some Strata Corporations are working hard to reduce costs to mitigate against the increases required for other line items.  One seemingly easy win is snow removal which can sometimes be off-loaded as a chore to interested volunteers, particularly at townhouse complexes. Your insurance policy likely provides coverage for volunteer accidents in the event of an injury incurred while providing unpaid services to your Strata Corporation, and this coverage extends to Owners and occupants.  If you intend to arrange for volunteers to perform this work at your property, we would suggest at a minimum the following:

  • Arrange a backup plan, in the event that one or more volunteers are unavailable before, during or after a snowy period.
  • Ensure that adequate salt/ice melt is kept on site for those volunteers to use and that it is placed on sidewalks/walkways/driveways in advance of any snow or freezing temperatures.
  • Keep a logbook of who performs the work, and when it is performed.
  • Be aware of the downsides- if a snow removal contract is in place with a third party company, that company should have insurance coverage which would off load some of the liability to them in the event of a slip and fall incident;
  • Some insurers are requesting that buildings have a snow removal contract in place, as the number of slip and fall injuries during the winter months is certainly an area of concern for them. Check with your insurers to make sure that they don’t require a third party contract in place.

Electronic Payments – We are nearing completion of a months-long project to migrate most of the payments we make on your behalf to service providers, utilities, and contractors to Electronic Fund Transfers (EFT).  This will do away with cheques as a means of payment for your Strata Corporation.  COVID-19 forced our firm, like many, to invest in electronic measures to guard against the risk of a full office shutdown and our number one accounting priority has been ensuring the timely and prompt payment for services rendered.  This will help ensure that in the event of a worsening of the pandemic, any postal disruptions, any office shutdowns or any other unforeseen consequences, your suppliers, vendors and service providers will get paid and continue to perform work on your behalf.  This investment and many others (measured in the tens of thousands of dollars) are being made without government assistance but we continue to invest capital to improve flexibility and efficiency.  We have other accounting department upgrades planned and will continue to keep you abreast of those developments as we move forward.

Cold, Flu and COVID-19 Season – Finally, with cold and flu season upon us once more, and COVID-19 continuing to be a threat to public health, we take this opportunity to remind you of these important Cold and Flu (and COVID-19) prevention tips:

  • Wash Hands by washing with soap and warm water for at least 20 seconds, or use hand sanitizer if soap and water isn’t available;
  • Maintain social distance by staying at least 6 feet (2 meters) from others;
  • Don’t touch your face with unwashed hands, it’s the easiest way for germs to enter your body;
  • Cover your mouth and nose with a mask when in public; sneeze or cough in a tissue or your elbow;
  • Eat healthy and balanced meals to strengthen your immune system;
  • Exercise also boosts your immune system and speeds recovery from illness;
  • Stay home if you feel unwell. If you have a fever, cough and/or difficulty breathing, seek the advice of public health.