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  • #72799
    sydney1501
    Flatchatter

      Where do I begin….

      I recently purchased a unit in Sydney CBD and joined the Strata committee as they had a vacancy.

      Its chaos, no one apart from 2-3 people do anything. Our admin fund levy has increased by 20% and they’ve reduced our CWF levy by 15% to balance out the overall levy but this means there is no money for major works in the coming years. Then we have a seperate fund for our car stacker which is in surplus but not all units contribute to this as they don’t have a space.

      Would love to get your thoughts on the below points:

      Use of capital works fund for big maintenance items like fire maintenance contract, yet there is a separate line in admin fund for fire repairs. My understanding is CWF is for one off repairs, replacement, not ongoing maintenance. So the maintenance contract should be in admin and the repairs budget could go into CWF?

      2. Use of capital works fund for NCAT / legal fees relating to illegal short term tenancy?

      3. The admin fund levy proposed has increased by 20% but clearly the budget was not tracked through the year so rather than realising early and looking for savings to introduce this year, we’re only going to look at it now for next year’s budget. Apparently the same thing happened last year so guess what is or isn’t going to happen?

      4. The proposed CWF is in deficit and there is a loan with special levy for a large project which recently completed. However, they have included a huge amount of contigency. Rather than hopefully not having to use that and then get out of deficit, they want to then use that money to pay off part of the loan to save interest. I get it, but the loan is a known cost and it would be better to keep the money in the fund and get out of deficit, especially if something big comes up later rather than needing to get yet another loan, even if the other has just been paid off. Good business and accounting should mean you’re not in deficit and ideally have some funds in the bank even if there is a loan. Very shortsighted approach to finance in my opinion and its risky to not have funds in the bank.

      5. Noticed that there costs associated with the stacker that have been lumped into the admin and/or CWF. This is for last year and I need to check the supplier contract to see if its the same for this year’s budget.

      6. I did a lot of work recently reviewing and coming up with suggestions for the budget. Then at our last committee meeting, where the person who did the budget presented it, had made huge changes at the last minute with the Strata manager and sent it to use a few hours before the meeting. This meant we all only had time on the call to review and discuss but thats not enough time for a budget review but most members agreed to the budget but I stated I would need to go away and relook at everything again given the new figures. At no point in the meeting did they talk about a deficit, the risks these budgets had on our future fund balances, the risk of the 10 year plan, nothing.
      Then the AGM pack went out with the 2 ‘approved’ budgets and when I suggested an alternative, I was told no its too late. Yet the Strata Manager had told me I can and she can just send out the new one. But it requires a meeting and these people don’t want to put in the effort or have hard conversations.

      7. The chair is constantly stating “We agreed on…..” and whilst that might be correct, if new information comes to light, I don’t understand how it is responsible to not readdress things? We’re in deficit and items are not in the correct budget – I feel this puts the committee at risk for negligence.

      8. The budgets are drawn up in isolation without looking at future years and the Capital work plan. I’ve build a spreadhseet to show the bottom line over the next 10 years, but no one wants to do anything about it now. Too hard. Easier to just go with what we’ve got and then sort it later – which won’t happen.

      I’m sure there’s more and lots of left out, but really would love to hear your thoughts.

      Also, if anyone is in Sydney CBD, I’d love to find a way to work with other Strata committees to help understand other’s costs and plans but also, potentially come together to work with the same suppliers and perhaps negotiate bigger discounts for all using the same people.

      • This topic was modified 2 months ago by .
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    • #72806
      Jimmy-T
      Keymaster

        Also, if anyone is in Sydney CBD, I’d love to find a way to work with other Strata committees to help understand other’s costs and plans but also, potentially come together to work with the same suppliers and perhaps negotiate bigger discounts for all using the same people.

        The OCN (ocn.org.au) would be a good place to start.

        The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
        #72840
        sydney1501
        Flatchatter
        Chat-starter

          Also, when can and can’t the chair vote?
          I’ve read information that they can vote as an ordinary voter, other places say they only get to vote if there is a tie?

          #72842
          Jimmy-T
          Keymaster

            other places say they only get to vote if there is a tie

            That’s a new one on me. As far as I know, the chair in NSW has a vote, which they can cast at any time, but only one.

            It doesn’t make a lot of difference unless the chair’s vote would create a tie which, in NSW would effectively be a veto since a tied vote means the status quo prevails (one good reason for having odd numbers on the committee).

            In Victoria, the chair has an extra vote, but only in the event of a tie. For instance, if the vote is 3 v 4  the chair can’t use their extra vote to make it  4 v4  and block the motion.  But if the vote is 3 v 3 with their vote, they can use their casting vote for or against the motion.

            The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
            #72973
            JulieMcLean
            Strataguru

              Hi Sydney1501,

              I was inspired by your post to ask a panel of committee members their experience and thought I would share some of their practices:

              1. They start the budgeting process by the 3rd quarter (even sooner if possible) of the financial year.
              2. They ask the SM for excel output of the financials and to extrapolate the last quarter for budget purposes.
              3. In Vic there is not an office bearer called “Treasurer” but those on the call have appointed one.
              4. They then do essentially as you have done, check contracts for CPI adjustments, insurance outlooks, for admin fund, review contractors recommendations.
              5. They review the Maintenace Plan, Reserve fund, capital works or sinking fund for both anticipated work in the budget year and the balance of the fund.
              6. Once financial year end occurs, they confirm the actual figures of the last quarter.
              7. Proposed budget circulated and feedback from owners reviewed for both funds.
              8. Everything is finalised about a month out from the date of the AGM.

              With respect to the deficit they all supported your position, absolutely fund the deficit and leave the loan as is.

              Unfortunately, we ran out of time to discuss the governance aspect of how agreement is reached. But they all agreed it is a very important discussion and it is to be continued 🙂

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