Reserve Funds

June 5, 2025 Published by Toronto and Area Chapter - By Sophia Rojenko, Stewart Handrahan

Window Shopping is Exhausting!

From the Spring 2025 issue of CCI Toronto Condovoice Magazine.

Site Description

The site consists of a 25-storey tower, with 300 units built around 1980. At the time of the 2016 reserve fund study, the building contained the original windows, which consisted of large operable sliding units and fixed IGUs, all in aluminum frames.

Reserve Fund Assumptions

At the time of the 2016 reserve fund study, the windows were approaching 40 years old. Aside from aesthetic concerns, such as faded frames, there were many performance issues including cold drafts and condensation , increased rate of failed IGUs, and deflection of the mullions due to the large span at the sliders, causing operability issues. In 2016, the board wanted to consider what options were available. As such, they engaged the corporation’s restoration engineer to complete a window evaluation concurrently with the reserve fund study. The evaluation provided two options: retrofitting the existing windows, or wholesale replacement. The reserve fund study modeled both options for the board’s consideration.

The Reality

The retrofit option was less expensive than wholesale replacement and would help address some of the performance issues. However, retrofitting the windows was still quite expensive and the evaluation determined that retrofitting the existing windows may only help defer window replacement by 10 years or so. As such, the board opted for the wholesale replacement strategy.

Unfortunately, around the time that the board decided to embark on this project, the COVID-19 pandemic struck, and the budgets for window replacement increased sharply. Funding options were explored in depth including increasing the reserve fund contributions, levying a special assessment, and borrowing. With support from the restoration engineer and reserve fund planner, the board was able to pass a borrowing by-law and secure financing ahead of the tender phase.

The restoration engineering team led the project during the design phase with support from the reserve fund planner as the work progressed. To ensure the corporation’s priorities for window design were met and to ensure the corporation was obtaining fair value, certain quality control and risk management measures were implemented. These included detailed specifications with stringent testing requirements for air, water, and structural capacity and full-scale testing in the manufacturer’s plant.

Once the design was approved by the board a competitive tender process was completed, the reserve fund study was updated to reflect the tendered costs, which in total surpassed $15 million. The cash flow was carefully planned, incorporating a combination of regular contribution increases and a loan. Prior to the first phase of construction, a mock-up at one suite was completed to ensure the aesthetic elements of the design were achieved and to complete performance testing, this time in the field.

Lessons Learned for Reserve Fund Planners

When major projects (e.g. window replacement) are imminent, component evaluations should be recommended to the board to ensure all options are considered. This provides the board with the information needed to make an informed decision and helps them effectively communicate the strategy to unit owners.

Reserve fund planners should be prepared to provide support to their clients and restoration engineering peers when major projects are implemented, particularly when cash is tight or alternative funding such as loans and special assessments are required. Boards may depend on reserve fund planners to help communicate to unit owners when these major projects come due.

Takeaways for Board of Directors and Property Managers

Window replacement is a multi-stage journey that requires careful planning and thoughtful execution. • When it comes to the reserve fund study, providers will reflect the most likely course of action that current and future boards will take on projects. An evaluation can offer various strategies, which can then be incorporated into the reserve fund plan. When major work is anticipated in the near term, it is advisable to complete component evaluations in advance of the reserve fund study so that the renewal strategies can be considered and reflected in the study. • Consider all options when it comes to major projects. In some cases, a retrofit may make sense, but in others full replacement may be the preferred strategy. Your reserve fund planner, together with your restoration engineer, can provide valuable guidance in making the right choice. • Regular and transparent communications with unit owners is critical to a successful major project. Be prepared to answer tough questions and rely on professionals where necessary.

Sophia Rojenko, Synergy Partners
Stewart Handrahan, Synergy Partners