NEWSLETTER    ISSUE 8   July 2012

Thank you for  all the feedback it  really helps us to  ensure our newsletter contains useful and relevant information. In line  with this, we thought  we  would  cover some other aspects of strata management  that create frequent queries from you.

Admin and sinking  funds – what fund  for which expense?   We are often asked what expenses  are administration fund and which are sinking.   If  you have attended an  AGM,  it  is  often  put  as  follows:   think of the admin fund as your own cheque book.  You use  this to  pay for  day-to-day expenses, e.g.  electricity and water bills, a cleaner,  insurance policies and small repairs to  your own property.    The sinking fund is for  larger expenses  and  more “capital” type items as they rarely come up.  That is why the sum paid  into the sinking  fund each year is generally smaller than that  paid into the admin fund.  You save up for  sinking fund expenses over  a much longer period.

For instance: the replacement of guttering and downpipes  probably  needs to be done every 25 odd years and costs,  let’s  say,  $20k.  As  a  scheme you have to  put  less  than $1k a  year into the  sinking fund so  the  money will be there to do the job when necessary.   Other  expenses  would include  painting, new roof or sewer,  TV  equipment and re-pointing  of the external brickwork.  Just as you may save up for a holiday  in a separate  bank account over a long period, so the scheme does for each of these long-term items.

At PSS we review the sums in your sinking fund in January and July each year (i.e. every 2 quarters) to invest surplus  funds.  This means  that the banks  are contributing  to your  funds, because  you  are achieving  a better rate of return.

Ways our schemes are saving money:   A  number of our newsletters last year touched on increases  to water and electricity bills.  Whilst the reality of carbon  tax for each of us is yet to be realised,  more schemes are taking steps  to  change electricity providers  by  visiting the  Go  Switch website. One  block of  73 units  will save just  over $4k a year by doing this alone.   Some schemes have  changed light globes  (don’t leave this for  your cleaner to work  out  –  we  can  assist  based  on  information  from  consultants)  but  there  are  more  energy-efficient  options.    We encourage  our committees  to  investigate these options as costs  will only continue to  increase.   Doing something sooner rather than later will allow you to pay as little as possible - for as long as possible.

Some schemes have  taken steps to further reduce  their  amount  of rubbish  for disposal.  This can be done by being  more vigilant  with recycling,  using  other options  which  Councils  provide  for disposing  of unwanted  items or even dropping  reusable  items off to places like the Salvo’s. Pre and post-campaign  audits of rubbish bins being put out can be organised  with local Council  –  if rubbish  disposal  needs are reduced, so then Council  can lower owners’  rates.  Council  have found  that by reminding  residents  about  recycling  (e.g. notices  on the board  or in letterboxes every few months) people are more vigilant in their actions.

One idea  for increasing  recycling  is a swap shelf in the rubbish  area (e.g. outside  the bin room door) where things like unwanted books or clothes can be left for  a  week as they may be useful to  others.   If  it is not claimed after a week it can be placed out for Council collection.

A  scheme  of  80  units,  which  is  only  a  few  years  old  and  was  fitted  with  dual-flushing  toilets,  etc.,  is  looking  at arranging  for a plumber  to visit units who report leaking taps and toilets  as a one-off exercise  to minimise possible  excess  water costs.  It  is felt that tenants may not be reporting these issues to their owner/agent  or owners  may simply not take steps to rectify these things.   Not  fixing  such  leaks  is  false  economy  because  water costs over a long period are high and are only increasing.

The  block  of  217 units we manage at  Randwick has reduced costs,  by  having almost half its  owners receiving meeting  and other notices via email  – saving on photocopying  charges  and mandating  the destruction of fewer trees at the same time.   The motion to have such  information  served via email  is on each scheme’s  AGM this year. However, it is up to each owner to contact us (reception@prostrata.com.au)  and advise  that they wish to receive notices by email and to what email address,  after the meeting.

By taking these few steps owners are able to reduce  their impact on the environment  and save money.    There are not many ways these days to reduce  costs without giving  something  up.   These suggestions do not require owners to lose out on a service  to leave  a bit more  in the account.  Most don’t  take a lot of time or much effort to implement, so if any of these are something  you wish to investigate  for your scheme, get yourself elected to the Executive Committee at the  AGM and take the opportunity to make a difference.

Docmaxupdate:   This is now up and running.   In May 2012 we commenced  posting  Building  Status Reports on-line  so  ALL  EXECUTIVE COMMITTEE  MEMBERS can now view these, not just the treasurer and secretary.  For those not familiar, this report includes  details of invoices  paid, income, balances  in the admin and sinking fund accounts and a copy of the bank statement each month.

Further,  as of  July we have placed copies of  all work orders, quotes, and correspondence  received or sent  for the scheme on your webpage.    All of the Executive can view  this information  so that more members are aware of what PSS is doing for the scheme throughout the year.

We  are  also  starting  to  place  such  things  as  engineer’s  reports,  Council  fire  orders,  progress  reports  on  work (e.g. defect claims, painting,  etc.) sinking  fund assessments, and energy saving reports some schemes have obtained,  including  any updates from your Executive Committee on the web so  ALL  OWNERS can view these online.

This information can be found by visiting our website  – Google “Progressive Strata”  and on our home page on the bottom left corner is “Client Log-in”.  Use the password  you have been provided  with, either when you became  a client of PSS or, if you purchased  your unit after that, it was sent to you when  we updated  the strata roll.  Note that if your levy goes to your agent they will have received the password, and they should have it in their file.  It’s yours, so retrieve it from them.

Remember  that  you  will  also  find  your  lot  statement  information  on  the  webpage,  allowing  you  to  print off one page for  the year for  your accountant (yes,  it’s  tax  time again).    Seek their advice regarding  any special levies for  improvement  of  the  property  you may  be able to  claim:  our motions are worded such that  some owners, depending  on their circumstances, will be able to  claim  these extra payments.   You may need to  give the minutes of the meeting  to the accountant as well, so save them.  If  you are now receiving  meeting information via email it will be much easier for you to retrieve. Point these out to  your tax  adviser and enquire  if you are entitled to claim them.

We remind you that all our newsletters are posted on  our website  (see the home page). So far they have covered meeting processes, the scheme’s  obligations  regarding  maintenance  and other possible ways to  save money.