Finances

March 25, 2026 Published by South Alberta Chapter - By Grand Abbott

Lock in Your Operating Costs

From the Winter 2026 issue of the CCI South Alberta CCI Review

I’m the president of our condo board at Prestwick Place. Our complex has 276 apartment units and 23 townhomes. We have an operating budget of $1.5 million. During the past several years we have been working hard to find the right contractors to deliver the best value for the services needed in our community. By value I mean the best combination of cost and quality of service, not the lowest bidder, as you get what you pay for.

When we found the right contractors for specific services, we asked if they were interested in negotiating a long-term contract with us, generally we were looking for 3-5 years. By securing a long-term deal, our community gets excellent services and the board locks in our operating costs for several years, protecting our budget against condo fee increases.

During initial discussions, some contractors were reticent to lock in their prices, as they knew the risk factors for their business and how their costs may increase and their profit margin may decline in the future. But we explained to them there would be a greater loss of profit if they lost us as a customer after 1 year.

If, after 1 year, we go to market for bids for the service, and another contractor comes in with an aggressive price to win our business, we may select this new contractor, and our existing vendor will lose us as a customer. It is likely our old vendor won’t replace us with a new customer for a few months, and they will have lost all that revenue from us. If they lock in their price with us for several years, they don’t risk losing their revenue stream from our business.

Of course, the contract terms include exit clauses for the condo board to cancel the agreement if the quality of vendor service declines and does not meet our scope of work.

Currently, we have the following services under long-term contract:

• Property management – 3 years
• Landscape and snow clearing – 3 years
• Janitorial – 3 years
• Waste management – 5 years
• Mechanical (HVAC) services – 5 years
• Electricity – 5 years
• Natural gas – 5 years

Having these costs locked in for several years, substantially reduces the pressure on our operating budget to raise condominium fees, and in fact, we have kept our fees unchanged for the past 3 years.

Grand Abbott
Prestwick Place