Capital Works Fund Analysis

It is mandatory for an Owners Corporation to have a 10 year capital works fund on file and must review the plan at least every 5 years. In November 2016, a document titled: SINKING FUND ANALYSIS REPORT For the property known as ‘PACIFIC HARBOUR' was prepared by a consulting firm. In the past 18 months, the Strata Committee (SC) has regarded that document as misaligned with Strata Plan 1986 Owners Corporation (OC) priorities; misguided in some recommendations; and inadequate as a basis for setting strata levies. The SC sites the following examples:

• major expenditures undertaken not consistent with the plan in the document (e.g. new balustrades and lift upgrade;
• recommendations that masks underlying deleterious conditions (e.g. drip pans to capture water penetration through the garage ceiling);
• overlooking evidence of significantly poor conditions (e.g. degradation of rendered surfaces due to garden beds leaking); and
• insufficient consideration of fire safety measures.

It is unreasonable to expect a consulting firm on a fixed, low-price contract to produce an adequate analysis without a thorough insightful briefing from the OC. It is also unreasonable to expect the Strata Manager (Bright & Duggan) to provide such a briefing. Over the past 18 months, the SC has embarked on a thorough assessment of a range of existing conditions, relevant statutory requirements, practical solutions, and costing by speaking with a range of relevant experts such as aesthetics consultant; remedial builders; specialist engineers; tradesmen; suppliers; Northern Beaches Council; and our strata manager (Bright & Duggan). For these reasons, the SC has elected to prepare this analysis themselves with oversight by our strata manager.

In early 2020, the World began to learn of an emerging COVID-19 pandemic. Our government took decisive actions, yet there was great uncertainty for our social and economic norms. As such, the SC put the SP34151 Annual General Meeting (AGM) on hold with the commitment to keep strata levies unchanged. The SC focus was to thoroughly prepare engineering requirements and costing for some majors works to be presented to the OC while undertaking a wide range of minor works.

The SC has had individual and group discussions with most of the OC members. It is clear that OC members wish for significant improvements to the external entryway and internal hallways; and to meet the statutory requirements for fire safety. It is also clear that the OC members are polarised with regard to the funding of desired improvements and requirements. As such, the SC is crafting this Capital Works Fund Analysis in a manner that would allow an interactive consideration in real time with the Owners Corporation at an AGM. The SC aims to have this document prepared by sometime in December 2020.