Homeowners’ meeting

• JMB is seeking to make service charges clearer and more fair, not higher or lower overall

• No cross-subsidy between leaseholders and tenants: fair charges to reflect services used

Summary of proposals:• Current position: costs allocated across the JMB estate, as

a proportion of the costs for works that benefit both home owners and tenants

• Proposal: one management fee and repairs completed by an in-house team, charged on a ‘by repair’ basis, to more accurately reflect work done to benefit your home.

• Service charges: operational (as oppose to major works) – planned increase in line with inflation

• Largest increases outside JMB control e.g. block repairs/ fuel costs

• Rents: Inflation, plus 0.5%, plus £2 per week

Business Plan

Context

• Having a mixture of tenants and leaseholders living in the same block makes cost allocation complicated

• We are consulting with you on proposals we believe will make charges more clear and fair

• Why now? Still have to follow the law/ best practice, but self finance gives us chance to deal with these two issues differently

• Council may offer fixed service charges- not sure how this will work

Principles

• JMB emphasis on shared interest of tenants and leaseholders. Shared interest in living in well-managed and maintained blocks

• Home owners should be charged accurately: if there is an actual cost associated with a block it should be used. Example the cost of a roof repair at Alleyn House

• Where costs are incurred more generally (estate cleaning) the way the cost is apportioned should be reasonable

• The time spent calculating the cost should be proportionate to the size of the cost.

‘Direct’ Costs

Relatively easy to quantify costs are:

• Block/ estate repairs done by a contractor (un-itemised repair/ section 20 repair) structure, inc front doors, windows and main services)

• District heating- fuel and repair• Lifts– electricity and repair• Estate electricity• Cleaning (JMB cleaners)• Gardening (JMB gardeners)

• Support costs for those on previous page (management/ office/ HR)• Contract management & checking• Enforcing rights and obligations of the lease (challenging anti-social

behaviour)• Inter-connected repair problems• Repair advice to home owners• Resident self management (cost and benefit)• Consultation with home owners• Preparing financial information for charging & resolving queries

(JMB in-house repair team- we’ll come back to this)

Associated costs

Associated costs

Time recording exercise (sample 2 weeks). How much time do staff spend on work that:

• Exclusively benefits leaseholders (eg work on your home): 100% is chargeable to you

• Benefits tenants and leaseholders (eg work on communal areas): 29% of the cost is chargeable to you (ie the proportion of leaseholder properties)

• Exclusively benefits tenants (0% is charged to you – leaseholders do not subsidise tenants)

Proposal 1

• Associated costs clearly identified on bills as a management fee

• Current position: Associated costs shown as an addition to direct costs

• Proposal has no effect on how much you are charged

JMB in-house repair team

Work benefiting home owners:

• Estate lighting• Decorating communal areas • Balcony drain clearance• Make safe work inside home owners’ property• Renew or repair front doors• Repair windows• Diagnose & check roof repairs• Diagnose inter–flat problems• Communal water supply repairs• Foul water pipe/ internal rain pipe repairs inside block• Assisting with main service failure: water, electricity, heating

Current position

We estimate that 15% of the Repair’s Team’s time spent on repairs that would benefit both homeowners and tenants, so homeowners should pay their share of this

So 29% of the 15% of their costs are charged to home owners

(The same applies to cleaning and gardening).

In any year, some blocks get more work than others. Some will have more work done by an external contractor than the (usually cheaper) JMB team.

New proposal

• The proposal is that charges reflect the work done on your block or estate, rather than being calculated across the JMB area as a whole.

• As part of our repair contract with an external contractor (Elkins) we have a schedule of rates, like a menu that gives a cost for every job. We allocated the cost that an external contractor would charge to our own team - it allows a value for money comparison. This means we can charge on per job basis. However, this is still a ‘notional’ charge.

• Over a year we compare the cost of our team (wages, materials, vehicles) with how much the work would have cost from an external contractor

• In 2013/14 our team were 17% cheaper than the external contractor. So the charge to you would be the schedule of rates charge minus 17%. But productivity could drop and you could pay the schedule of rates plus an added on percentage

You decide

• Management cost or associated cost?

• General re-charge for in-house repair team or by the job to more accurately reflect the work done?