Plan on Maintenance Expenditure

Team Pragati’s plan on Maintenance Expenditure

Team Pragati goal is to reduce monthly per square feet maintenance by 50 paise per square feet,  team members have already done some analysis of high expenditure items on our monthly maintenance listed below:

Expenditure Per Square Feet / Month (Rupees) Team Pragati Plan
Security 0.80 Reduce Security cost by minimum 30% by way of better contract negotiations,  automation, better deployment
Housekeeping 0.50 Housekeeping is one important area for maintenance of apartment, team will analyse the contract and check the possibility of reduction in cost
JLL (Management Team + Management Fees) 0.33 Team Pragati recommends to renegotiate the contract or look for alternative agencies to reduce the management cost by 40%
Landscaping 0.08 As per data available for June 2017, we spend around 2 Lacs per month on Landscaping. Team Pragati is planning to reduce the cost by 30% by engaging Residents for supervision of gardening and landscaping
Lift AMC 0.15 Lift is indispensable part of Apartment, Team Pragati will continue to Engage OEM for the lift maintenance.
Water 0.36 Conservation is the only way to save Water cost.  Team Pragati recommends to use aerators, create awareness on water conservation, explore options to use terrace water and in long term we propose to use IoT based water flow meters.
Other Expenditure   Team will ensure that all the expenditures are validated and contracts are renegotiated. Team Pragati believes in transparency, will ensure that all the transactions are transparent to owners.  Team Pragati will publish the Monthly Maintenance expenditure to all the owners in transparent manner.

 

Team Pragati plans to reduce monthly maintenance cost by 0.50 rupee per square feet for benefit of all owners.

 

Team Pragati’s plan on Collection of Corpus Fund

It is important to build corpus fund for Capital Expenditure like Replacement of Lifts, Replacement of DG, Building Painting, Asphalting Roads, major infrastructure expenditure….  Team Pragati proposes collection of Corpus fund based on goals considering below facts:

  1. Plan collection of the funds based on the goals for expenditure. More details about the goals are in table below.
  2. Plan collection of funds considering GST applicability. As per current provisions of GST, any payment to RWA towards maintenance expenditure or any other future expenditure attracts GST if monthly collection is above Rs. 7500 per member. Team pragati will plan collection of Corpus fund towards capital expenditure in such a way so as members don’t have to pay GST.
  3. Any accumulation of fund with Association will earn interest; income will lead to tax liability for the association at MMR. We need to have balance between funds, available funds and tax liability.
  4. Collection of Funds:
    1. Plan monthly collection of funds to minimize GST liability of owners
    2. A policy for provisioning of Apartment complex income (advertisement, charges and fees collected from Residents/owners) to Corpus Fund
  5. Funds collected for specific purpose will be invested in instruments like Fixed Deposits, Low Risk Mutual Funds to build the corpus.
  6. Any expenditure will hit pockets of all the owners, Team Pragati will plan a special Meeting of all Owners to discuss on the Corpus fund requirement and  collection of Corpus for appropriate decision of General Meeting.
  7. Team Pragati will also announce a policy for any expenditure above Rupees 1 Lac for better transparency and competitive procurement.

Above are few critical aspects in collection of funds for all future expenditure:

Goals Team Pragati Plan
Lift Fund Generally lifts life can be considered around 20 years, Team Pragati will consult the vendor for Upgrades / replacement cost of the lifts and establish funds for replacements of Lifts
DG Fund Diesel Generators are critical components for apartment complex, based on the inputs we have from industry, life of a well maintained DG set can be considered 15 years.  After considering the power requirement, an estimate for the replacement cost for DG will be arrived to plan DG Fund
Painting Fund With good quality weather quote, building repainting can be considered after 10 years. Considering the current paint condition, we estimate that external painting may be required after  5 years from today.  Team Pragati will arrange estimate for painting to plan fund for painting.
Roads Fund Roads are important infrastructure inside the apartment complex. Roads are damaged with over weight vehicles, Team Pragati will plan a policy for vehicles movement inside the apartment complex for prevent  any damage to roads.

Considering the usage of the roads, we may need to consider asphalting of roads in 5 years. Team Pragati will explore options of replacing roads with Paver Blocks for better durability.  A fund will be planned for Roads based o cost benefit analysis for asphalting vs paver blocks.

 

Miscellaneous  Capital Expenditure Team Pragati will analyse all miscellaneous capital expenditure requirement like enhancing CCTV system, Improvisation of Rain Water Harvesting System,  Automatic   Change  over  switch for DG power….  Such expenditure can be discussed in General Meeting. Being small expenditure, Team Pragati recommends to spend from available funds and replenish the funds as per the decision of AGM.