Finances 
“You know those movies where the people in the audience are screaming, 'Don't go in that door!' because you know the killer is there? Well, it is the same thing with this debt. We know how this ends.”
—Marco Rubio

By 2002, the condo was facing serious financial problems and it just got worse.

Operating deficit
The utility bills were killing the condo corporation.

2005	Budget	$2,120,100
	Actual	$2,779,418
	Difference	$  659,318

By 2006, the corporation’s annual operating deficit reached $660,000 due to raising utility costs and the previous boards repeated refusal to raise the fees to keep up with these increased costs.

(The boards also did nothing about the overcrowded units which added huge extra costs to the costs of the utilities, waste disposal and maintenance costs.)

Fee increase
In 1996 the board increased fees by 14% which would have paid the current utility bills but did nothing to cover the previous years' operating deficits.

Work orders
The garage work covered the concrete repairs and was estimated at $6,000,000. The work was to be split into four separate phases with each phase costing $1.5 million.

Special assessment
The board levied a special assessment to cover the $6,000,000. The yearly $1.5 million special assessment expired at the end of 2005 and was not extended.

However, the original estimate did not include the required painting, sprinkler systems or electrical work. This additional work added a further $2,000,000 to the costs.

The board refused to increase the special assessment to pay for this increase
in costs, which meant that the corporation faced a $300,000 shortage after
each phase. The corporation took $150,000 out of the reserve fund and then drew money from the next phase’s account to pay the contractor for work he was doing on the present phase.

Due to late payments, the contractor repeatedly threatened to stop work.

Hallway carpeting
In the middle of this mess, the property manager talked the board in taking $300,000 from the special assessment to buy new hallway carpets.

Other work orders
Don’t forget that the corporation needed to spend a further $4,000,000 to repair the brickwork and to install window latches.

Paying the bills
By 2006, YCC #42 was paying its monthly bills late and in rotation; paying just enough to keep the lights on and to keep the construction moving along.

Operating deficit
By the summer of 2006, the total operating deficit reached $1,800,000 and was growing.

Reserve Fund
In 2002 the corporation had $260,000 in its Reserve Fund and in the summer of 2006 it had fallen to $116,000.

Creditors
The corporation’s creditors were losing their patience.

1.	The bank was expressing concern about the overdraft amount on the general account.
2.	The security company had threatened to quit.
3.	The utility companies threatened to cut off services.
4.	The corporation did not have the money to continue paying for the required construction work.

Property values
The values of the corporation’s units were significantly lower than similar units next door at YCC # 60. The values had dropped from the previous year and were continuing to fall.

Blacklisted
By 2006, the banks refused to mortgage any units in YCC #42 or to renew any renewals due to the large number of bankruptcies and power of sales.

One of the owners distributed a flyer throughout the condo and called for a meeting to discuss the blacklist. The manager would not rent them a room on the property, so an owner called their city councillor and Rob Ford got them a room at a local school. A total of 30 owners attended.

Clearly this could not continue for much longer.


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