Strata Manager Olivia Kim is reviewing the year-end financial statements for Strata Plan VIS5555 in Victoria. She identifies that the operating fund ended with an unexpected deficit of $20,000 due to unforeseen utility cost increases. The strata corporation's bylaws are silent on how to address an operating fund deficit. What is the most appropriate action for Olivia to recommend to the strata council?

Question: Strata Manager Olivia Kim is reviewing the year-end financial statements for Strata Plan VIS5555 in Victoria. She identifies that the operating fund ended with an unexpected deficit of $20,000 due to unforeseen utility cost increases. The strata corporation's bylaws are silent on how to address an operating fund deficit. What is the most appropriate action for Olivia to recommend to the strata council?

Answer options:

• Automatically transfer funds from the contingency reserve fund to cover the deficit.
• Propose a special levy to cover the deficit, requiring a 3/4 vote by owners. ✅ Include the deficit in the next fiscal year's operating budget, potentially increasing strata fees, or address through a special levy.
• Request that the owners responsible for the increased utility usage pay the difference.

Correct answer: Include the deficit in the next fiscal year's operating budget, potentially increasing strata fees, or address through a special levy.

Explanation: Standard Bylaw 6(2) states that an operating fund deficit at the end of the fiscal year must be included in the operating expenses for the next fiscal year, or be raised by a special levy, as decided by the strata council.