December 2016
Condo corporations manage annual budgets in the millions of dollars. Condo boards seeking to reduce condo fees must tackle those areas where significant money is spent to impact on these fees.
The accompanying graph shows how a typical condo budget can be viewed.
Utilities, accounting for an estimated 40% of a condo budget, present substantial opportunities for cost reduction. With electricity being the most dominant expenditure in this largest of categories, reducing electricity consumption should be a primary goal.
Contracts, accounting for an estimated 20% of the condo budget, can include property management, security and concierge, cleaning and cable. With the exception of cable, other expenditures represent manpower. Finding ways to reduce staffing provide a direct and significant savings to the condo corporation. This can often be achieved by changing the way the corporation is managed and services are delivered without compromising on services provided to residents.
Reserve funds, accounting for an estimated 25% of the condo budget, are for anticipated future repair and replacement. Cutting back on these costs is unwise as it rarely provides long-term value.
