The board s role in capital repairs
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1 The board s role in capital repairs CHF Canada 2017 AGM Facilitator: Jamie Eyers 1. Why plan? 2. What is a capital reserve plan? 3. What is a capital repair project 4. Process for capital repairs 5. Board s Role 6. Professional s Role 7. Questions/Comments CHF Canada Workshop 1
2 The Board s Role in Capital Repairs Write one fear you have about completing a capital project in your co-operative on the post-it notes provided! We will come back to this at the end of the presentation. Why plan? Planning Identifies a timeline for capital repairs and life expectancies for replacements allows the co-op to set realistic goals for funding capital repairs is an on-going process CHF Canada Workshop 2
3 What is a Capital Reserve Plan? Every capital reserve plan has two parts: Building Condition Assessment (BCA) Reserve Fund Forecast Building Condition Assessment (BCA) Building s condition today List of capital items that will need to replaced in the building s lifetime Estimates when items need to be replaced Estimates how much it will cost for each item 6 CHF Canada Workshop 3
4 Reserve Fund Forecast Tells you how much you will need to spend yearly Uses today s replacement costs to estimate future Tells you how different rates of return on investment will affect your fund Tells you how much you should be putting in your reserves each year What is a capital project? Repair or replacement of major building element or system Usually considered a structural component doors, windows, roof, decking, ventilation system Cost in excess of $10, Life expectancy in excess of 5 years CHF Canada Workshop 4
5 Capital repair phases Phase 1 Determining repair needs and financial implication Phase 2 Determining roles and hiring consultants Phase 3 Capital Repair Management Phase 4 Post construction Phase 1 determining repair needs and financial implication CHF Canada Workshop 5
6 Phase 1 - determining repair needs and financial implication The board should: Review the Building Condition Assessment and develop a list of the current priorities Review the options for financing a capital project (i.e. Replacement reserve savings, refinancing) Phase 2 determining roles and hiring a consultant (project manager, engineer) CHF Canada Workshop 6
7 Phase 2 determining roles and hiring a consultant (project manager, engineer) When and why should you hire a consultant (project manager): WHEN Complex capital repairs Takes more than 3 days More than $10,000 Requires building permits WHY Experts in preparing scope of work Hire and supervise contractors Phase 2 determining roles and hiring a consultant (project manager, engineer) The board: Prepares a request for proposal to hire a project manager Hires the consultant once bids have been received and reviewed Signs the contract for project management Reviews the property management contract and discusses their role with them Appoints a liaison person for the project that corresponds with the project manager and reports to the board CHF Canada Workshop 7
8 Phase 3 Capital repair project Phase 3 Capital Repair Project The board should: Approve final scope of work for tendering Review tender documents Accept and approve recommended contractors for work Approve recommended change orders Approve draw requests and invoices for payment Sign off on deficiencies CHF Canada Workshop 8
9 Phase 3 Capital Repair Project The project manager should: Prepare tender documents for the approved scope of work Tender for work Review change orders and submit to the board Review invoices for payment Prepare draw requests for payment Prepare a deficiency list and ensure deficiencies are fixed Phase 4 Post Construction CHF Canada Workshop 9
10 Phase 4 Post Construction The board should: Remember to ensure that warranties are kept in a safe place Read to ensure compliance with any regulations or requirements Comments or questions CHF Canada Workshop 10
11 Getting workshop materials CHF Canada Website AGM Conference App Time for Evaluation Evaluations on Conference App Paper copies also available in the workshop room! CHF Canada Workshop 11
12 Be not afraid.. Did this workshop help to alleviate your fear(s)? Review your post-it note from the start! Your evaluations, please! CHF Canada Workshop 12
13 C O - O P E R A T I V E H O U S I N G F E D E R A T I O N O F C A N A D A The Board s Role in Capital Repairs Building Condition Assessment: tells you what condition your buildings are in today lists the capital items that will need to be replaced at some point estimates when those items will likely need to be replaced estimates how much it will cost for each item The BCA should be updated every 3 5 years or after major capital repair projects Reserve Fund Forecast: tells you how much you will need to spend each year uses today s replacement costs to estimate future costs tells you how different rates of return on investments will affect your reserve fund in the future tells you how much you should be putting into your capital reserve each year A capital project is a repair or replacement of a major building element or system (structural doors, windows, roofs, siding, bathrooms and kitchens) costs more than $10,000 and has a life expectancy of more than 5years. The Board s Job: - Capital Reserve Planning Guide approve the hiring of consultants approve the scope of work to be done approve the contract that is put in place for the job observe the co-op s Conflict of Interest, Spending and Investment policies to determine who does what - what needs Board approval, who will be the main contact person for the consultant or contractor, what decisions can staff make on their own, how will we keep members apprised of what s happening regarding any scheduled interruptions or inspections etc. Board s role in capital repairs CHF Canada workshop
14 C O - O P E R A T I V E H O U S I N G F E D E R A T I O N O F C A N A D A Hiring a Consultant: prepare a request for proposal - CHF can help with this collect a list of qualified firms send out the RFP to those firms receive and rank the proposals check references hire the consultant by signing a contract make sure you understand each other (obligations) Make sure that the consultant provides you with a copy of their liability and errors & omissions insurance. If it is a trade or construction firm, also get a copy of the Worker s Compensation details. The Bid Process: the consultant (engineer, project manager) will be writing the specifications based on what you tell him the co-op wants : o reasonable quality o good energy efficiency and green value o several product options (2 types of similar styles i.e.: r value of windows) o products that have good warranties o products that match your building profile or enhance it invite bidders to the co-op to look at the scope of work once the bids have been returned, the consultant will bring the results, and a recommendation to the Board for their approval a formal Board motion needs to be made to hire the winning bidder The Pre-Construction Meeting: review the scope of work share contact phone #s (regular, after hours) establish a meeting schedule for updates (keep minutes!) what is the construction schedule establish a protocol for change orders payment schedules and protocol for authorization and approval final inspections - deficiencies, funds can be held back from final payments ensure that warranties are kept in a safe place and read them to ensure compliance with any regulations or requirements! Board s role in capital repairs CHF Canada workshop
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