Board of Directors Meeting - December 3, 2015

Agenda

1. Approval of Public Meeting Agenda

Action: Approval

Pre-read: Public Meeting Agenda

Presenter: Chair

2. Confirmation of Board of Directors’ Public Meeting Minutes of October 29, 2015.

Action: Approval

Pre-read: Minutes

Presenter: Chair

3. Business Arising from the Public Meeting Minutes and Action Items Update

Action: Information

Pre-read: Action Item List

Presenter: Chair

4. Chair’s Remarks

Action: Information

Pre-read: Verbal Report

Presenter: Chair, Board of Directors

5. Chair’s Poll re: Conflict of Interest

Action: Declaration

Pre-read: Agenda and Conflict of Interest Policy

Presenter: Chair, Board of Directors

6. President and Chief Executive Officer’s (Interim) Remarks

Action: Information

Pre-read: Verbal Report

Presenter: President and Chief Executive Officer (Interim)

Reports from Building Investment, Finance and Audit Committee (BIFAC):

7. BIFAC Chair’s Report

Action: Information

Pre-read: Verbal Report

Presenter: Chair, BIFAC

8. Accessibility in the Built Environment Policy

Action: Approval

Pre-read: TCHC:2015-69

Presenter: Chair, BIFAC

9. Terms of Reference – Office Of the Commissioner of Housing Equity

Action: Approval

Pre-read: TCHC:2015-65

Presenter: Chair, BIFAC

10. OCHE – 2016 Work Plan

Action: Approval

Pre-read: TCHC:2015-66

Presenter: Chair, BIFAC

11. Internal Audit: 2016 Budget

Action: Approval

Pre-read: TCHC:2015-67

Presenter: Chair, BIFAC

12. Internal Audit: 2016 Work Plans

Action: Approval

Pre-read: TCHC:2015-68

Presenter: Chair, BIFAC

13. 2016 Operating and Capital Budget *Report to Follow*

Action: Approval

Pre-read: TCHC:2015-74 *Report to Follow*

Presenter: Chair, BIFAC

14. Report on Changes to Revised IPS

Action: Approval

Pre-read: TCHC:2015-72

Presenter: Chair, BIFAC

15. External Audit Work Planning for the Year Ending December 31, 2015

Action: Approval

Pre-read: TCHC:2015-73

Presenter: Chair, BIFAC

Reports from the Governance, Communication, Human Resources and Compensation Committee (GCHRCC):

16 GCHRCC Chair’s Report

Action: Information

Pre-read: Verbal Report

Presenter: Chair, GCHRCC

17 Policy Approval – Code of Conduct

Action: Approval

Pre-read: TCHC:2015-64

Presenter: Chair, GCHRCC

Reports from the Resident Services Committee (RSC):

19. RSC Chair’s Report

Action: Information

Pre-read: Verbal Report

Presenter: Chair, RSC

Reports from Management:

20. Q3 2015 Quarterly Performance Report

Action: Information

Pre-read: TCHC:2015-70

Presenter: Director Strategic Planning & Stakeholder Relations

TERMINATION

Minutes

The Board of Directors of the Toronto Community Housing Corporation held a public meeting on December 3, 2015 at 11:37 a.m. in in the Main Floor Conference Room at 931 Yonge Street, Toronto and via teleconference.

Directors in Attendance:

Norman (Bud) Purves (Chair)

Councillor Ana Bailão

Robert Carlo

Councillor Joe Cressy (left at 1:17 pm)

Councillor Frank Di Giorgio

Brian Kwan (via teleconference)

Catherine Wilkinson

Directors Absent:

Councillor Raymond Cho

Karen Newman

Management present:

Marta Asturi, Legal Counsel & Assistant Corporate Secretary

Simone Atungo, Vice President, Resident and Community Services (Interim)

Cathy Barker, Vice President, Human Resources

Jason Gorel, Chief Financial Officer & Treasurer

Ismail Ibrahim, General Counsel & Corporate Secretary (Interim)/ Director, Compliance and Legal Counsel

Hugh Lawson, Director, Strategic Planning and Stakeholder Relations

Graham Leah, Vice President, Asset Management

Bruce Malloch, Director, Strategic Communications

Sheila Penny, Vice President, Facilities Management

Liz Reid, Vice President, Information and Technology Services

Sam Petralito, Senior Director, Strategic Procurement (Interim)

Greg Spearn, President & Chief Executive Officer (CEO) (Interim)/ Chief Development Officer

Cynthia Summers, Commissioner of Housing Equity

Michael Vear, Chief Internal Auditor

A quorum being present, the Chair called the meeting to order and Ms. Charmaine Zina served as recording secretary.

Item 1 - Approval of the Public Agenda and Review of Agenda Order

The agenda was approved with the following changes to the agenda order:

• Item 13 – moved to after Item 8.

The following agenda items were not held for discussion:

• Items 2, 3, 7, 10, 11, 14, 15, 16, and 19.

Motion carried

ON MOTION DULY MADE by Ms. Wilkinson, seconded by Mr. Carlo and carried, the Board of Directors approved the agenda as amended and the agenda items not held for discussion (Items 2, 3, 7, 10, 11, 14, 15, 16, and 19).

Item 2 - Confirmation of Board of Directors' Public Meeting Minutes of October 29, 2015

The Board had before it the draft Board public minutes for October 29, 2015.

Motion carried

ON MOTION DULY MADE by Ms. Wilkinson, seconded by Mr. Carlo and carried, the Board of Directors confirmed the above-captioned minutes without amendments.

Item 3 - Business Arising from the Public Meeting Minutes and Action Items Update

Motion carried

ON MOTION DULY MADE by Ms. Wilkinson, seconded by Mr. Carlo and carried, the Board of Directors received the report for information.

Item 4 - Chair's Remarks

The Chair welcomed everyone to today’s Board meeting and acknowledged this being the final public Board meeting of 2015. The Chair thanked the Board members who have left the TCHC Board in 2015 for their contributions and service to TCHC.

The Chair reported the following motion that was approved during this morning’s closed meeting:

• Allenbury Gardens Soul Condos Construction Financing Terms - The Board approved the financing terms for the construction of Soul Condos, the first market condominium in the Allenbury Gardens revitalization.

Also approved were a number of Contract Awards:

1. Regent Park Energy Inc. (RPEI) Asset Plant Manager: The Board approved a contract award for an external firm to manage the community energy system owned and operated by RPEI;
2. Preventative maintenance contracts for fire alarm/suppression systems: The Board approved contract awards for preventative maintenance and demand repairs to ensure fire alarm and fire suppression systems such as sprinklers in our buildings are working properly.
3. Demand maintenance contracts for mechanical services: The Board approved contract awards under TCHC’s demand maintenance program to a number of firms that are the successful bidders in an RFP issued in April 2015. The purpose of the RFP was to create five vendor rosters and assign them to predetermined groups of Operating Units. The vendors will provide plumbing, heating, ventilation and air conditioning system repairs, and drains and water main repairs, on as as-needed basis.

Deputations

The Chair polled for any deputations to be heard at the meeting. The following deputations were presented:

• Item 8 – Accessibility in the Built Environment Policy (Deputed by Cathy Birch)
• Item 9 – Terms of Reference – OCHE (Deputed by Robert Frederickson and Susan Gapka)
• Item 13 – 2016 Operating and Capital Budget (Deputed by Phil Gillies and Bonnie Booth)
• Item 17 – Policy Approval – Code of Conduct (Deputed by Bonnie Booth)

Item 5 - Chair's Poll re: Conflict of Interest

The Chair requested members of the Board of Directors to indicate any agenda item in which they have a conflict of interest, together with the nature of the interest. No conflicts were declared.

Item 6 - Interim President and Chief Executive Officer's Remarks

Mr. Spearn thanked the Board Chair and advised everyone in attendance that his remarks will be brief due to the 2016 Operating and Capital Budget presentation taking place later in the meeting.

Mr. Spearn informed the Board of the TCHC partnership with Jays Care Foundation for the Rookie League program and that the Jays Care Foundation will be making a significant new investment in the Rookie League program, which will enable TCHC to add both a fall session and a winter session in 2016. The fall and winter sessions will focus on teaching children life skills such as leadership and self-esteem development, while providing an opportunity to enhance their baseball skills. This will also provide job opportunities for residents and expect to hire about 30 youth on a part-time basis to support the expanded

Item 7 - Building Investment, Finance and Audit Committee (BIFAC) Chair's Report

No comments or remarks from the Chair of BIFAC were received at this time.

Item 8 - Accessibility in the Built Environment Policy, TCHC:2015-69

The Board of Directors had before it the above-captioned report (TCHC:2015-69) from the BIFAC.

Ms. Cathy Birch, the Chair of the R-PATH Committee, and her colleagues at R-PATH donated a refurbished wheelchair to TCHC which will be kept at 931 Yonge Street and made available to anyone who needs it while visiting the building.

Motion carried

ON MOTION DULY MADE by Ms. Wilkinson, seconded by Councillor Cressy and carried, the Board of Directors unanimously resolved to approve the following recommendations in this report:

1. Adopt the report and approve the Accessibility in the Built Environment Policy (“the Policy”) appended to this report (Attachment 1); and
    
2. Accept for information the Building Standards for Accessibility (“the Standards”) appended to this report (Attachment 2).

Item 9 - Terms of Reference – Office of the Commissioner of Housing Equity, TCHC:2015-65

The Board of Directors had before it the above-captioned report (TCHC:2015-65) from the BIFAC.

The Board and Management discussed the report.

Motion carried

ON MOTION DULY MADE by Councillor Di Giorgio, seconded by Ms. Wilkinson and carried, the Board of Directors unanimously resolved to approve the amended Terms of Reference of the OCHE appended in this report and authorized the submission of the amended Terms of Reference of the OCHE to the City Manager to report back to the City’s Executive Committee in January 2016.

Item 10 - OCHE – 2016 Work Plan, TCHC:2015-66

The Board of Directors had before it the above-captioned report (TCHC:2015-66) from the BIFAC.

Motion carried

ON MOTION DULY MADE by Ms. Wilkinson, seconded by Mr. Carlo and carried, the Board of Directors unanimously resolved to approve the the 2016 Work Plan of the OCHE.

Item 11 - Internal Audit: 2016 Budget, TCHC:2015-67

The Board of Directors had before it the above-captioned report (TCHC:2015-67) from the BIFAC.

Motion carried

ON MOTION DULY MADE by Ms. Wilkinson, seconded by Mr. Carlo and carried, the Board of Directors unanimously resolved to approve the the 2016 Internal Audit Department Budget.

Item 12 - Internal Audit: 2016 Work Plans, TCHC:2015-68

The Board of Directors had before it the above-captioned report (TCHC:2015-68) from the BIFAC.

The Board and Management discussed the report, and Mr. Vear, Chief Internal Auditor, responded to questions from the Board with respect to the development of deliverables on the work plan.

Motion carried

ON MOTION DULY MADE by Ms. Wilkinson, seconded by Councillor Bailão and carried, the Board of Directors unanimously resolved to approve the 2016 Internal Audit Work Plan appended to this report, subject to quarterly updates to BIFAC by Mr. Vear on the status of the work plan.

Item 13 - 2016 Operating and Capital Budget, TCHC:2015-74

The Board of Directors had before it the above-captioned report (TCHC:2015-74) from the BIFAC.

The President and CEO (Interim), Mr. Spearn, and the Chief Financial Officer, Mr. Gorel, presented the 2016 operating and capital budget to the Board

Mr. Spearn informed the Board that the 2016 budget increases TCHC’s investment in capital repairs by 35 per cent over 2015 to help preserve the 60,000 homes, a $9 billion public asset. The increased capital investment in the 2016 budget will be funded through mortgage refinancing, reserves and TCHC’s line of credit. The 2016 operating budget holds the line on discretionary expenses, with a zero per cent increase. TCHC will do this by redeploying resources to focus on both the front line and capital repairs.

An additional $13.7 million is embedded in the budget as both subsidy and expenses. TCHC will be requesting its Shareholder for the additional $13.7 million in order to deliver improvements identified in the Getting it done report in response to the recommendations of the Mayor’s Task Force.

Mr. Gorel noted that TCHC continues to face challenges from the rising costs of non- discretionary expenses. Utility costs, for example, will increase by $5.6 million from $136.8 million in 2015 to $142.4 million in 2016, driven by significant increases in utility rates. This one factor alone is greater than our increase in rents and subsidies combined. As a matter of comparison, in 2012 utility costs were $104 million which means that utility costs will have increased by 37 per cent in a matter of five years.

Furthermore, building capital expenses have increased from $180 million in 2015 to $250 million in 2016 and development capital expenses have also increased, from $127 million in 2015 to $170 million in 2016. TCHC is targeting to raise approximately $200 million net through mortgage refinancing, shown here as a contribution to reserves. This will substantially fund the 2017 building capital budget.

TCHC’s 2016 capital budget totals $432 million which is a 35 per cent increase over the 2015 capital budget of $319 million keeping in mind this includes $250 million for capital repairs to our buildings, in line with the 10-year capital financing plan approved by the City.

Additionally, the 2016 capital budget also includes $170 million for new and previously approved development capital projects in six active Revitalization communities. In 2016, TCHC’s Development team will oversee the completion of major building improvements for 588 units, while delivering 62 new rental replacement homes and 271 new market units.

Motion #1 

Motion carried

ON MOTION DULY MADE by Councillor Cressy, seconded by Councillor Bailão and carried, the Board of Directors resolved to approve the following recommendations in this report with the understanding that Management report back to the Board for re-evaluation if TCHC’s Shareholder does not approve the $13.7 million funding increase:

1. Approve the 2016 operating budget as per slide 19 of Attachment 1.
2. Approve the 2016 Capital Budget of $432.3 Million on slide 14 of Attachment 1 subject to the following provisions for the $250 Million new capital repair spend:
   1. Approve budget authorization for each Capital Envelope category based on the “2016 Budget” column as per Attachment 2;
   2. For multi-year projects starting in 2016 that are projected to continue into 2017, Management must phase the work and commitments beyond 2016 to be dependent on future year approvals by the Board of Directors; and
   3. Management may only reallocate funds in the Capital Envelopes and seek approval from the Board of Directors for individual capital projects in accordance with the Financial Control By-law No. 3.
3. Approve the drawdown of up to $44.97 Million from the internally restricted reserve – “Development Risk Reserve Fund” that was approved by the TCHC Board of Directors as part of its approval of the Investment Policy Statement, to assist in fully funding the 2016 Development Capital Budget of $169.8 Million.

Ms. Wilkinson and Mr. Carlo opposed the motion and did not support the budget as they believe it lacks transparency and felt they could not make an informed decision as the Board did not receive reports or a business case in advance of the budget requests.

Motion #2

That Management increase 2016 Participatory Budget by $3 million and Management to review the Participatory Budget process with a report back to the Board in Q1 2016.

Motion failed    

ON MOTION DULY MADE by Councillor Cressy, seconded by Councillor Bailão. The majority of the Board did not support this motion.

Motion #3

That Management provide the Board and post the detailed line-by-line 2016 capital and operating budgets online for public access. In addition, Management to provide in 2017, and on a go forward basis, a detailed line-by-line capital and operating budgets to the Board and accessible to the public.

Motion carried

ON MOTION DULY MADE by Councillor Cressy, seconded by Councillor Bailão and carried, the Board of Directors unanimously approved the motion.

Motion #4

That Management discontinue the Participatory Budget beyond 2016 until such time that consultation with tenants have taken place on the Participatory Budget process.

Motion carried

ON MOTION DULY MADE by Ms. Wilkinson, seconded by Mr. Carlo and carried, the Board of Directors unanimously approved the motion.

Councillor Cressy left the meeting at 1:17 pm.

Item 14 - Report on Changes to Revised IPS, TCHC:2015-72

The Board of Directors had before it the above-captioned report (TCHC:2015-72) from the BIFAC.

Motion carried

ON MOTION DULY MADE by Ms. Wilkinson, seconded by Mr. Carlo and carried, the Board of Directors unanimously resolved to approve the the amendments to the revised Investment Policy Statement (“IPS”) as noted in this report.

Item 15 - External Audit Work Planning for the Year Ending December 31, 2015, TCHC:2015-73

The Board of Directors had before it the above-captioned report (TCHC:2015-73) from the BIFAC.

Motion carried

ON MOTION DULY MADE by Ms. Wilkinson, seconded by Mr. Carlo and carried, the Board of Directors unanimously resolved to approve the following recommendations in this report:

1. approve PWC as lead external auditor for the year ended December 31, 2015, and approve the audit and review engagement and compilation fees for all external auditors (“Assurance Services”), as well as non-assurance services, totaling $294,300, as per Appendix 1, which is a reduction of $95,780 or 24.6% as compared to 2014;
2. receive the listing of assurance and non-assurance services for information as included in Appendix 1; and
3. receive the Audit Planning report from PWC (lead auditor) for information as presented in Appendix 2.

Item 16 - Governance, Communications, Human Resources and Compensation Committee (GCHRCC) Chair's Report

No comments or remarks from the Vice Chair of GCHRCC were received at this time.

Item 17 - Policy Approval – Code of Conduct, TCHC:2015-64

The Board of Directors had before it the above-captioned report (TCHC: 2015-64) from the GCHRCC.

The Board and Management discussed the report and the Board suggested to wait to retrain TCHC staff on the Code of Conduct policy until the retraining occurs on the Conflict of Interest policy in the upcoming new year.

Motion carried

ON MOTION DULY MADE by Ms. Wilkinson, seconded by Mr. Carlo and carried, the Board of Directors unanimously resolved to approve the in the updated TCHC Code of Conduct (the “Revised Code”) appended as Attachment 1 to this report.

Item 19 - Resident Services Committee (RSC) Chair's Report

No comments or remarks from the Vice Chair of RSC were received at this time.

Item 20 - Q3 2015 Quarterly Performance Report, TCHC:2015-70

The Board of Directors had before it the above-captioned report (TCHC:2015-70) from the Director, Strategic Planning & Stakeholder Relations.

The Board and Management discussed the report and Mr. Lawson responded to questions from the Board. The Board provided feedback to Management on the sections relating to the State of Good Repair (“SOGR”), Section 37 funding, and arrears collection.

Motion carried

ON MOTION DULY MADE by Ms. Wilkinson, seconded by Councillor Di Giorgio and carried, the Board of Directors received the report for information.

Action Item:

Management to report back to the Board of following:

1. Review of SOGR as a mandatory or optional program with feedback from residents through resident consultation;
2. Provide details on the use of Section 37 funding; and
3. Results of pilot to address the 60 day timeframe with respect to arrears collection.

TERMINATION

The Board of Directors resolved to terminate the public meeting at 2:04 p.m.