Sub-metering

By the start of 2009—two years after Channel became the management company and after taking on two very large loans—the corporation remained a financial basket case.

Resignation
At the February 2009 board meeting, Hamed Baloutch tendered his resignation as a director. Mr. Baloutch agreed to continue to perform his duties until after the planned AGM. (However, there would not be an AGM.)

Who is accountable?
During this meeting, Said Duale asked Manzoor Khan for all bank statements and for information on how the money from the loans has been spent.

Mr. Khan replied that Channel has no involvement as to how the money was spent; he stated that the person who is accountable is the person who has signed all the cheques.

Where was the money going?
The board asked Pawan Gupta, Channel's property manager, to list the monthly expenses. He described them as:
Expense
Description
$72,000
loan payments
50,000
utilities
8,000
staff
6,800
Channel Property Management
5,000
shared facilities
2,000
Carmichael (HVAC)
1,500
Trident (elevators)
2,000
landscaping & snow removal
200
property taxes
28,000
insurance premium (once a year)

The board remarked that there was nothing left to maintain the building as the loans were taking almost 50% of the corporation's income.

2010 budget
The corporation had been running a deficit for over six years and had an accumulated operating deficit of over $489,000 that had been hidden by robbing money from the Reserve Funds.

The corporation’s auditor qualified his report for the period ending 31 August 2008 as follows:

MTCC 710 has not paid numerous outstanding bills and, as of January 31, 2010 it owed over $411,000.00 in unpaid invoices to various creditors, $238,000.00 of which is over 90 days in arrears and over $203,000.00 owing to the City of Toronto on account of municipal services (water).

Yet a total of 59 units owed $36,000 in unpaid common expense fees and the variety store, that was part of the shared facilities, hadn’t paid their rent for a couple of years.

While Channel was the property manager at  MTCC # 710, $350,000 was spent on new hallway carpeting despite the corporation being in terrible financial shape. (There is no evidence showing that the board passed a motion to buy new hallway carpet.)

The common expenses had not been raised in the previous three years.

Sub-meters


When Channel and the board decided on the budget, for the 2010 fiscal year starting on 01 September 2009, the board made two decisions:
1.
 They decided to raise the common expense fees by 5%.
2.
 The board would install electrical sub-meters to download most of the electricity costs to the individual owners.

On 01 September 2009, the board informed the owners of a 5% increase in maintenance fees and that the board was going to introduce electrical sub-meters.

Owners' reaction
The owners were furious. They agreed with the need for the first loan but were caught by surprise by the second one. They were convinced that the second loan was not necessary and that it was passed as a by-law only by the use of false proxies.

Now to have sub-meters imposed on them, on top of a 5% fee increase, when they had strong suspicions of corruption was too much.

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