To reiterate, a Special Levy is determined in precisely the same way as any other Levy; by a simple majority vote by Owners present in person and by proxy at a General Meeting.
“mattb” is correct by advising that as an alternative to a Special Levy, the Owners Corporation (O/C) could raise funds equal to those required to reimburse the Sinking Fund by raising a loan. That mechanism does indeed provide the O/C with an ability to make the necessary reimbursement in total, and to stagger the repayments over time with interest.
However depending upon the circumstances, the NSW Strata Schemes Management Act (the Act) provides some similar benefits as it only prescribes the time frame for the O/C resolving a repayment structure, and is silent about the repayment term.
In my opinion, the priorities for “basjan27” are to ensure that a General Meeting is convened to resolve the means by which the reimbursement to the Sinking Fund will be made (e.g. a Special Levy), to resolve the structure of that (e.g. the $ & the term), and to resolve to place some restrictions on the E/C’s ability to approve spending in the absence of a prior endorsement by the O/C.