Saturday, November 5, 2016 Important Notice Notes from the Kitec Town Hall meeting Dear unit owners: On Thursday, October 27, 2016, at 7 PM in the Essex Lounge at the Ramada Plaza hotel at 300 Jarvis Street, the Board met with owners to discuss the replacement of Kitec pipes and fittings in the domestic water supply system here at TSCC 1524 (Phase II, Blocks 500-800). The Board extends its sincere thanks to the owners who could attend. Many pertinent questions were offered, and, we hope, answered well. In Appendix I you will find the Board s notes from the meeting. It was a busy 70-minute session and our best efforts were made to take clear notes while also facilitating the discussion. This cannot be considered an official transcript of the meeting but we provide these notes for the benefit of all, in particular, owners who were not able to attend on October 27. Please note that going forward, all questions related to the Kitec replacement project can be directed by email to: kitec@415jarvis.com As mentioned at the meeting, this account is monitored by a paid administrative assistant, contracted to TSCC 1524 by Trace Engineering. The Board is confident that this arrangement will allow the project to be facilitated in a professional manner with timely and clear responses to questions from owners and tenants. Sincerely, Russell Gordon Colin Longman Danijel Margetic TSCC 1524 Board of Directors 1 of 8
Appendix I Questions and answers from the meeting Why can t the reserve fund by used to cover part of the cost of this project? The most recent reserve fund study for TSCC 1524 was completed in 2014. The domestic water supply system was not identified as an item requiring attention in the study. As a result, if the Board had made the decision to use the reserve fund to cover costs for replacement of Kitec pipes and fittings, condominium law would oblige the Corporation to replenish the fund by the end of the current fiscal year. Given that the end of the current fiscal year will occur before the start date of construction for this project, it did not make sense to use capital from the reserve fund. Why was the presence of Kitec pipes and fittings, and obvious related problems, not identified in the 2014 reserve fund study? The Board is obtaining legal advice to determine whether there are grounds for action, for error(s) or omission(s), against the engineer who authored the report. The Board will report back to owners once advice has been received and a decision about next steps has been made. Does completing this project separately from TSCC 1440 / Phase I have any impact on the cost to TSCC 1524 owners? No. 2 of 8
Why is TSCC 1524 / Phase II completing the project separately from TSCC 1440 / Phase I? The units in TSCC 1440 / Phase I (units south of the central laneway) are approximately two years older than the units in TSCC 1524 / Phase II (units north of the central laneway). The two condominium corporations are separate legal entities. Given that the difference in the age of the plumbing infrastructure, the need for replacement of pipes and fittings in TSCC 1524 / Phase II, while clear, is not as pressing as in TSCC 1440 / Phase I. The TSCC 1524 Board of Directors thought it advantageous to strike a balance between the timeline for replacement, and allowing owners a longer period of time to make payments to cover the project. The same company, Southern Cross Plumbing, is completing the work for both Corporations. Will any possible delay in the work for TSCC 1440 have an impact on the timelines for our project? No. Work on TSCC 1440 will be complete by January / February 2017. Work for our Corporation will not begin until August 2017. The significant gap in time allows for a sufficient buffer, should there be any delay in completion of the work for TSCC 1440. Can pipes be replaced within a given unit sooner than August 2017? Yes, but a separate permit from the City of Toronto is required. See details provided in the pricing and timelines letter, sent to owners by the Board, dated Wednesday, October 19, 2016. What parts of the plumbing system are being replaced? Only the water supply piping must be replaced. Drainage piping does not require replacement. Is there a financing option available to owners for payment of special assessment fees? No. 3 of 8
Could you give us a general overview of why pipes need to be replaced? Kitec is a plastic pipe introduced in 1995. By contrast to copper pipes, Kitec is flexible, and can be fished easily through small holes in walls. This means it was easier to install than copper and can be installed at a lower cost. The composition of Kitec pipes is the problem. The types of metals used within the pipe causes a reaction that, over time, leads to failure of the pipe. Kitec is a defective product that needs to be replaced. This is documented by the settlement of the class action lawsuit against the company that manufactured Kitec. The lawsuit was settled in Ontario on November 29, 2011. TSCC 1524 / Phase II was built in the early 2000 s, before Kitec was identified as a defective product. What locations within a unit will be impacted by replacement work? Primarily in the HVAC closet, behind the toilet(s), and under sinks. Since Uponor pipes being used for replacement are also a flexible plastic, fewer cuts to drywall would be needed, compared to replacement with copper. Every effort will be made to minimize disruption within a unit. Why are water supply pipes not being replaced with copper? The cost for replacement with copper is 40 to 50% higher than the costs are facing to replace with Uponor. Further, additional cuts to walls would be required to install copper, leading to longer installation times, and more disruption within a unit. Water can also flow through Uponor pipes at a higher pressure level. The interior of Uponor pipes is significantly smoother than copper. Is Uponor a reliable material? Yes. Uponor pipes have been used reliably in Europe for more than 30 years. Uponor has been used regularly in North America in more recent years. The company that manufactures Uponor pipes has literally been stress testing an installation of the pipes continuously at their manufacturing plant for the past 30 years. No problems have been encountered. Uponor pipes come with a 25 year warranty and 2 million dollars of per-incident insurance. 4 of 8
For owners that have had pipes already replaced within their unit why does that work need to be inspected? This is a requirement to ensure that the work completed meets the same specifications and quality level that will be carried out in other units as part of the shared project. When pipes are replaced within a unit, can other improvements be carried out by Southern Cross Plumbing? For example, replacement of a water heater? Sinks? Yes. The contract for work completed within a unit is between the unit owner and Southern Cross Plumbing. You can accept the standard contract (replacement of pipes only at the cost described) or negotiate additional items to be completed with Southern Cross Plumbing. Are tankless water heaters an option? Based on the experience of other owners, yes. Circumstances may vary within an individual unit. Southern Cross Plumbing would need to visit your unit for an on-site review to give a definitive answer. How long will it take to replace the pipes within a unit? Replacement will take place over a five-day span. Roughly: Day 1: Opening walls Day 2: Removal of old riser pipes and installation of new riser pipes (common element). Day 3: Removal of old pipes within unit and installation of new pipes within unit. Day 4: Close walls with drywall and patch gaps. Day 5: Prime walls, and if paint matching existing paint on walls is made available to SCP, paint walls as well. For how long will a unit be without water? On days 2 and 3 (see prior question and answer) during periods of time between 9 AM and 5 PM. Water will always be made available again within a unit after 5 PM on any given day. 5 of 8
Can I have another contractor replace the pipes within my unit? Yes. A $1300 fee, payable to Trace Engineering Limited, for authoring of specification documents to be provided to your contractor, is due on December 15, 2016. This fee provides the specifications that any contractor providing a quote on work within your unit will need. The specifications are also required so that you can obtain a construction permit from the City of Toronto for work within your unit. Work done by other contractors will not be covered under the construction permit of the shared project that is being completed by Southern Cross Plumbing. Note that a letter of intent would need be received by the Board from your contractor, indicating the construction timeline within your unit, by February 6, 2017. Replacement of Kitec pipes and fittings within your unit must be complete (including inspection of work completed, to be conducted by Trace Engineering Limited) by July 15, 2017. Can a unit owner recover funds from the Kitec class action lawsuit settlement? Potentially. A sample of the Kitec pipes replaced needs to be included with your application. Southern Cross Plumbing will ensure that every owner is left with a sample of the pipes removed from their unit. The Corporation will provide a short letter documenting the work done within your unit to aid in the application process for funds from the lawsuit settlement. Can the Corporation recover funds from the Kitec class action lawsuit settlement? Potentially. Should any funds be awarded to the Corporation, per Ontario condominium law, there will be no refunds given directly to owners. Proceeds would be directed into the reserve fund for the Corporation. Will interest earned on special assessment fees paid to the Corporation be applied toward the cost of the common-element construction work? How to account for interest earned is being examined. A definitive answer will be available at the Annual General Meeting on November 22. 6 of 8
If funds are left over in the contingency for this project when complete, will capital be refunded to owners? No. Per advice from the Corporation s legal counsel, who represents all owners, this is not permitted under Ontario condominium law. Any surplus in the contingency line item will be directed into the reserve fund of the Corporation. Can our Corporation use Advantage Contracting to provide on-site support and security during the project? This option was considered by the Board. The Board ultimately decided to award the contract for administrative support and security to Trace Engineering, based on the exceptional level of service the company has provided to the Corporation during the bidding process for the Kitec replacement project. The $1500 fee for the deposit to Southern Cross for work within individual units exceeds 10% of the total cost of replacement. Why? Sam Soltani, our consulting engineer, noted that Southern Cross Plumbing has allowed us to secure the pricing noted while still delaying the start of the project until August 2017. This is a rare offer from a contractor, and it was felt that a larger deposit was required to secure supplies sooner rather than later (costs generally go up with time) and to arrange for and ensure that adequate staffing to complete the project will be available in August. Ultimately contracts for work done within individual suites are between the unit owner and Southern Cross Plumbing owners can negotiate items such as the size of the deposit required. What form of payment is required for the deposit to be paid to Southern Cross Plumbing for work done within a unit? The $1500 deposit can be paid through certified cheque to Southern Cross Plumbing Inc. Interac e-transfers are also accepted. e-transfers should be sent to kathy.scp@gmail.com, with a security question of Project name? and an answer of Jarvis2. Credit cards are also accepted with a 4% administration fee per transaction. There is no HST on the administration fee. So for example the $1500 will have a $60 administration fee. The card is charged for a total of $1560. 7 of 8
How will payment of the special assessment fee occur? The special assessment fee will be paid through the same method currently used to pay your regular monthly fee for common element maintenance. What if I sell my unit before the project is completed? You can of course do this, but the Status Certificate for our condominium corporation has been updated to reflect the need for the replacement of the domestic water supply pipes. Commonly, the cost of replacement for items like this project will be a negotiable item in an Agreement of Purchase and Sale. What if I choose not to have the work completed within my unit? As you are an owner of property within a condominium corporation, the Corporation has a legal obligation to protect other owners when failure to correct a known problem within your unit might damage the property of other owners. Continued use of Kitec pipes and fittings is a known and well documented problem. Besides the obvious risk of floods due to ruptured pipes, cleanup and insurance costs will continue to rise if this problem with our domestic water supply system is not addressed. On February 15, 2017, the Corporation will commence a lien process against unit owners that have missed the December 15 deadline. Missing the December 15 deadline means the owner will be opted in to the shared project. The lien will be for the full cost of the work to be done in the unit. Richard Hoffman, legal counsel for the Corporation, indicates that refusal to clear the lien by a unit owner would ultimately afford the Corporation the ability to force a Power of Sale process for a unit. 8 of 8