The latest development in Toronto Mayor Rob Ford’s campaign to derail the gravy train raises some useful thoughts for condo corporations.
While the cost of the consultant’s work won’t become known for some time, there’s a good argument that the expense was worthwhile. If the experts have found no low-hanging fruit for cost-cutting, taxpayers can at least have some assurance about the value they receive for their dollars and would then have a better opportunity to judge what new projects are sensible and whether additional taxes or fees are necessary to pay for them. More important, however, is that once the specter of wasted money goes away, decision-makers can get back to work and focus on delivering necessary services for good value.
Condominiums operate much like cities do, in that most condo board elections showcase the usual rhetoric about wasteful spending and gravy trains and so on. The fact is, however, that newly-elected cost-cutters are often surprised to find that the operation is already fairly lean. The idea of cutting essential services, while maybe attractive at first, is quickly dismissed after considering that the entire purpose of condominium living would defeated in the end. In addition, the folly of cutting back excessively on necessary maintenance and repair was illustrated by a recent news story about Toronto condominiums under administration.
The real challenge for municipal politicos and condo boards is to find ways to minimize the cost to provide current services and to maintain and repair existing infrastructure while planning, budgeting and saving for future projects. This is easier said than done.
Could most condos stand to tighten their belts? Probably, but getting a fancy-schmancy consultant’s report is probably overkill. That said, obtaining a second opinion from a condominium manager may be a useful exercise and provide a fresh perspective and new ideas to help balance the budget. Once the hunt for wasted spending is completed, it’s time to look at existing services and consider using time-tested methods like:
- Hiring a professional manager to negotiate the pitfalls
- Putting new projects and purchases out to competitive tender
- Researching and implementing emerging technologies to enhance service
- Outsourcing tasks to reduce staffing needs
- Establishing and charging equitable tariffs, user fees and tolls
- Exploring revenue-generating opportunities
- Collecting receivables promptly and efficiently
- Soliciting input and suggestions from the community
No matter what method(s) are used, difficult choices and discipline will be needed.
What are you doing at your condos? What’s working?
We will be watching the developments at Toronto City Hall. You should, too, and watch for the parallels between municipal affairs and the finances at your condo.