Board of Directors Meeting - November 14, 2016

Agenda

1. Chair’s remarks 

Action: Information 

Pre-read: Verbal report 

Presenter: Chair 

2. Consent agenda 

2. a) Approval of Public Meeting Agenda 

Action: Approval 

Pre-read: Agenda 

Presenter: Chair 

2. b) Chair’s Poll re: Conflict of Interest 

Action: Declaration 

Pre-read: Agenda and Conflict of Interest Policy 

Presenter: Chair 

2. c) Confirmation of Board of Directors’ Public Meeting Minutes of ​October 14, 2016 

Action: Approval 

Pre-read: Minutes 

Presenter: Chair 

2. d) Business Arising from the Public Meeting Minutes and Action Items Update 

Action: Information 

Pre-read: Action item list 

Presenter: Chair 

2. e) City and TCHC Staff – Strategic and Operational Meetings 

Action: Information 

Pre-read: TCHC:2016-48 

Presenter: Interim President and CEO 

2. f) Internal Audit Report: Contract Managed Buildings Audits 

Action: Approval 

Pre-read: TCHC:2016-51 

Presenter: Chair, BIFAC 

3. Emergency Response Plan Presentation 

Action: Information 

Pre-read: Presentation 

Presenter: Director, Risk Management & Insurance 

4. RSC Chair’s report 

Action: Information 

Pre-read: Verbal report 

Presenter: Chair, RSC 

5. GCHRCC Chair’s report 

Action: Information 

Pre-read: Verbal report 

Presenter: Chair, GCHRCC 

6. BIFAC Chair’s Report 

Action: Information 

Pre-read: Verbal report 

Presenter: Chair, BIFAC 

6. a) Infrastructure Ontario Financing *Deferred from October 14, 2016 Meeting* 

Action: Information 

Pre-read: Presentation

Presenter: Chief Financial Officer & Treasurer (Interim) 

6. b) 2016 Mortgage Re-financing/Renewal *Deferred from October 14, 2016 Meeting* 

Action: Approval 

Pre-read: TCHC:2016-52 

Presenter: Chief Financial Officer & Treasurer (Interim) 

6. c) Financing for 180 Sackville Street, Regent Park *Deferred from October 14, 2016 Meeting* 

Action: Approval 

Pre-read: TCHC:2016-53 

Presenter: Chief Financial Officer & Treasurer (Interim) 

7. Vacancy Management Update 

Action: Information 

Pre-read: TCHC:2016-47 

Presenter: VP, Asset Management 

8. Interim President and Chief Executive Officer’s Remarks 

Action: Information 

Pre-read: Verbal Report 

Presenter: Interim President and CEO 

8. a) Monthly President’s Report 

Action: Information 

Pre-read: TCHC:2016-50 

Presenter: Interim President and CEO 

TERMINATION

Minutes

The Board of Directors of the Toronto Community Housing Corporation held a public meeting on November 14, 2016 at 9:04 a.m. in in the Main Floor Conference Room at 931 Yonge Street, Toronto and via teleconference. 

Directors in Attendance: 

Bud Purves (Chair) 

Councillor Ana Bailão 

Councillor Joe Cressy (arrived 10:15 a.m.) 

Councillor Frank Di Giorgio 

Vincent Gasparro 

Linda Jackson (arrived 9:30 a.m.) 

Joseph Kennedy 

Kevin Marshman (Vice Chair) (via teleconference) 

Pamela Taylor 

Catherine Wilkinson 

Directors Absent: 

Robert Carlo 

Colin Lynch 

Management present: 

Cathy Barker, Vice President, Human Resources 

Angela Cooke, Vice President, Resident and Community Services  

Leslie Gash, Chief Development Officer 

Rose-Ann Lee, Chief Financial Officer & Treasurer (Interim) 

Mark Johnson, General Counsel & Corporate Secretary 

Hugh Lawson, Director, Strategic Planning and Stakeholder  Relations 

Graham Leah, Vice President, Asset Management 

Bruce Malloch, Director, Strategic Communications 

Mark McDonald, Vice President, IT 

Ted Millward, Legal Counsel, Corporate 

Lisa Murray, Manager, Media and Public Relations 

Sheila Penny, Vice President, Facilities Management 

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

Helen Trajanos, Director, Risk & Management Insurance 

Wayne Tuck, Chief Operating Officer (Interim) 

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

Item 1 - Chair's Remarks

The Chair welcomed everyone to today’s Board meeting and advised that the meeting will begin with the public session and then the Board will proceed with the confidential session.    

The Chair identified the following items that were approved in the confidential session at the October 14, 2016 Board meeting: 

Building Investment, Finance and Audit Committee 

The Board approved the following:  

• a direct award for emergency containment services and property restoration services to a pre-qualified vendor, FirstOnSite. The award adds a second vendor to Toronto Community Housing’s roster for these services. FirstOnSite will do the work at the rates established in the existing contract. 
• a recommendation to begin marketing and sales for the third market condominium building in Allenbury Gardens with the developer partner on the revitalization, FRAM Building Group. This decision follows the very successful pre-sales of the first two market buildings in Allenbury Gardens.   
• the transfer of Block 16 South and Block 17 South to the Regent Park developer partner, The Daniels Corporation. Daniels will develop market condominiums on these lands. Board approval of the land transfer is a requirement of the provincial government. 

Additionally, the Chair provided a brief update on the President and Chief Executive Officer (CEO) search.  As mentioned at the October 14th Board meeting, the Board of Directors have commenced a process to recruit for the President and Chief Executive Officer.  During this morning’s in-camera session the Board discussed matters pertaining to the interim executive leadership team structure and made decisions which will provide continuity while the CEO recruitment process continues. 

The Chair identified the following items to be discussed in the public session: 

• Emergency Response Plan. Ms. Trajanos, Director of Risk Management and Insurance will provide a presentation to the Board. A great deal of work has been done to refine and update the plan, including consultations with tenants earlier this year. Staff have been trained on their roles in an emergency response through exercises led by the City of Toronto’s Office of Emergency Management. 
• Chair’s Reports. The Chairs of the Board committees will each provide a verbal report of their committee’s activities.  
• Vacancy Report.  Mr. Leah will provide the Board with an update on vacancy management.  
• President’s Monthly Report. Mr. Spearn will present the President’s Monthly Report for September 2016, which describes how the company is doing in meeting its public commitments and organization priorities.  
• Financings. Three proposed mortgage refinancing transactions with Infrastructure Ontario which require Board approval and City approval. These transactions would generate significant funds for capital repairs, enabling TCHC to continue the 10-year capital repair plan into 2017. 

Lastly, the Chair noted the Board continues to work closely with Management on TCHC’s 2017 budget. The Board has directed Management to post a line-by-line version of the draft 2017 Budget on TCHC’s website 10 days prior to the December 8 Board meeting, to enable the public to review the budget in advance of it being brought to the Board for approval.

Deputations

The Chair polled for any deputations to be heard at the meeting.  The Chair advised all deputants that when deputing to be respectful and highlighted some important details cited in the Deputation Policy. 

The following deputations were presented: 

• Item 2D – Business Arising from Public Meeting Minutes and Action Items Update (Deputed by Clive Williams). 

Consent Agenda Items

Item 2 - Approval of Consent Agenda Items

The agenda was approved with the following changes: 

Item held: 

• Item 2D – Business Arising from Public Meeting Minutes and Action Items Update. (Deputed by Clive Williams)  

Other Business: 

The Board requested that Management provide Board member agendas in a 14 point font size. 

Motion carried 

ON MOTION DULY MADE by Ms. Wilkinson, seconded by Councillor Di Giorgio and carried, the Board of Directors approved the revised consent agenda items and those items not held for discussions (Items 2A, 2B, 2C and 2F). 

Item 2B - 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 2C - Confirmation of Board of Directors' Public Meeting Minutes of October 14, 2016

The Board of Directors had before it the draft Board minutes for October 14, 2016. 

Motion carried 

ON MOTION DULY MADE by Ms. Taylor, seconded by Councillor Di Giorgio and carried, the Board of Directors confirmed the above-captioned minutes without amendments. 

Item 2D - Business Arising from the Public Meeting Minutes and Action Items Update

The Board requested that Management bring back for discussion at the GCHRCC the possibility of having Committee meeting broadcast via webcast. 

Motion carried 

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

Item 2E - City and TCHC Staff – Strategic and Operational Meetings, TCHC:2016-48

The Board of Directors had before it the above-captioned report (TCHC:2016-48) from the President and Chief Executive Officer (Interim). 

Motion carried 

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

Item 2F - Internal Audit Report: Contract Managed Buildings Audits, TCHC:2016-51

The Board of Directors had before it the above-captioned report (TCHC:2016-51) from the Chief Internal Auditor.   

Motion carried 

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

Item 3 - Emergency Response Plan Presentation (Presentation)

Ms. Trajanos delivered the presentation that was included in the meeting materials.  

The presentation provided information on the purpose of the Emergency Response Plan (ERP), the activation of the ERP, the structure of the Emergency Response Team, how TCHC works with the City during emergencies, how tenants are supported during emergencies, as well as the actions taken during 2016 and the next steps for the coming year.   

Ms. Trajanos demonstrated the emergency kits developed for the Operating Units and for Resident and Community Services Staff.  

The Board and Management discussed the contents of the presentation and Ms. Trajanos answered questions raised by the Board.  Matters raised during the discussion included the following: 

• Annual training of staff on Emergency Planning and confirmation of attendance; 
• The protocol of when the Board and local City Councillor is contacted; 
• The emergency levels when TCHC works with the City; 
• The timing for the CEO to designate the Emergency Operations Centre Director and the communications process beforehand; 
• The individuals in the organization with emergency management expertise; 
• Consideration of a policy on service disruptions for incidents impacting tenants that are not emergencies under the ERP; 
• Consideration of providing tenants with emergency kits which will empower them to assist others in an emergency; and 
• Keeping the RSC apprised of ongoing tenant engagement activity for emergency preparedness/response. 

Motion carried 

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

Item 4 - Resident Services Committee (RSC) Chair's Report

No comments or remarks from the Chair of RSC were received at this time due to the next meeting taking place on November 21, 2016. 

Item 5 - Governance, Communications, Human Resources and Compensation Committee (GCHRCC) Chair's Report

The Chair of the GCHRCC provided a verbal update to the Board on the activity of the GCHRCC, including the following: 

• Rationalization of the Board/Committee meeting schedule (frequency of Board and committee meetings); 
• Continuation of collective bargaining process; 
• The re-creation of Chief Operating Officer position; and 
• The development of a compensation philosophy and pay for performance model for the coming year. 

Item 6 - Building Investment, Finance and Audit Committee (BIFAC) Chair's Report

In the Chair of BIFAC’s absence, Mr. Gasparro provided a verbal update to the Board on the activity at BIFAC, with the key work items being the following: 

• Approval of three tranches of financing (totalling to just over $380M); 
• Investment Advisory Committee - RFP process to select a firm to manage investments, and review of reserves; and 
• RPEI subcommittee: assessing strategic alternatives for the asset. 

Item 6A - Infrastructure Ontario Financing (Presentation)

The Board of Directors had before it the above-mentioned presentation from the Chief Financial Officer & Treasurer (Interim).   

Ms. Lee delivered the presentation included in the meeting documents and answered questions.  Points of note included the following: 

• $62M in CMHC financing (on 10 properties) approved at the last Board and BIFAC meetings, which has also been approved by City Council. 
• $310M – Infrastructure Ontario refinancing of existing loans (on 32 properties). 
• $10M – financing on 180 Sackville (Regent Park 2015 new building). 
• The requirement under TCHC’s Master Covenant Agreement with its lenders to maintain a 30% debt to secured asset limit. 
• The Debt to secured asset ratio of 17.6%, which is less than the 30% limit. 
• Debt balance at June 30, 2016 was $939M and after refinancing the debt balance is $1.19B 
• TCHC continues to repay at least $45M annual of the debt principal. 

The Board expressed the need to ensure the appropriate choice of wording when presenting material.  Specifically, the Board commented on the wording on page 8 of the presentation that refinancing was a short-term solution.  The Board noted that refinancing has been an appropriate part of the solution to address capital repair shortfalls, and from that perspective it can’t be said that it was a short-term solution. Instead it was noted that it is a solution that will expire at a future point.  

The Board raised the following matters during the discussion, which Management indicated will be addressed in the budget materials to be presented to BIFAC on November 17th: 

• funding that TCHC is aware it will be receiving; 
• where TCHC will be with no new sources of funding; 
• the 10 year capital plan which includes assumptions being made to lay out the plan; and 
• TCHC’s future debt capacity and a projection of when TCHC’s income to debt service ratio will fall below 1.0% (the point that the corporation can no longer afford to service its debt). 

Motion carried 

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

Item 6B - 2016 Mortgage Refinancing/Renewal, TCHC:2016-52

The Board of Directors had before it the above-captioned report (TCHC:2016-52) from the Chief Financial Officer & Treasurer (Interim).   

Motion carried 

ON MOTION DULY MADE by Mr. Gasparro, seconded by Ms. Taylor and carried, the Board of Directors unanimously approved the recommendations in this report:  

1. Approve a transaction totaling a maximum of $310 Million with Infrastructure Ontario (IO, the lender) in connection with mortgages maturing in 2016, substantially upon the terms particularized in Attachment 1 (the “Term Sheet”).  Of the $310 Million, $93.6 Million will be used to repay mortgage principal balances and the remaining amount will be allocated to Capital Expenditure reserves.  Capital Expenditure reserve in connection with properties associated with the renewing mortgages (the “Properties”) and the balance of the funds will be utilized for long-term capital repairs (30 year weighted average useful life or greater) for all other properties in the TCHC portfolio.   
2. Authorize the President and Chief Executive Officer (Interim) and/or the Chief Financial Officer ( Interim) of TCHC to take necessary actions, including substituting of Properties secured by IO, negotiating and executing such documents as may be necessary, to give effect to the above recommendation. 

Item 6C - Financing for 180 Sackville Street, Regent Park, TCHC:2016-53

The Board of Directors had before it the above-captioned report (TCHC:2016-53) from the Chief Financial Officer & Treasurer (Interim).

Motion carried 

ON MOTION DULY MADE by Mr. Gasparro, seconded by Ms. Taylor and carried, the Board of Directors unanimously approved the recommendations in this report: 

1. Approve a transaction up to a maximum of $10 Million with Infrastructure Ontario (IO) towards the ongoing operations and the capital maintenance of 180 Sackville, substantially upon the terms particularized in Attachment 1 (the “Term Sheet”).  
2. Authorize the President and Chief Executive Officer (Interim) and/or the Chief Financial Officer (Interim) of TCHC to take a necessary actions, including negotiating and executing such documents as may be necessary, to give effect to the above recommendation. 

Item 7 - Vacancy Management Update, TCHC:2016-47

The Board of Directors had before it the above-captioned report (TCHC:2016-47) from the Vice-President, Asset Management.   

Mr. Leah provided an overview of the contents of the report. Points of discussion between the Board and Management included the following: 

• Conversion of bachelor units to larger units and initial steps to explore in which buildings this might be feasible; 
• The possibility of special projects for bachelor units;  
• Looking at opportunities with service providers for programs in seniors buildings with many vacancies; 
• Effects of a reduction in acceptance time in the unit offer process; 
• Which  buildings optimize deployment of capital to repair vacant units to re-designate them as market rent units; 
• Allocation of RGI and market rent units throughout the portfolio and effect on tenants and communities; and 
• The City’s IT solution for unit offers.  

Motion carried 

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

Item 8 - Interim President and Chief Executive Officer's Remarks

Mr. Spearn highlighted activities TCHC has been engaged in throughout its communities since the last Board meeting on October 14, 2016, including the following: 

• Long Service Awards Breakfast; 
• Information Technology and Information Services (ITS) – New Office Space; and  
• Official pre-sales starting at AYC Condos and Vivo Condos. 

TCHC Staff Recognition 

• David Quigley, the Central District Manager of the Community Safety Unit, has won a Toronto Police Service Community Member Award. The award recognizes the invaluable assistance that David provided to 12 Division officers who were investigating a shooting that happened off our property.   
• Special Constable Derek Anderson, has been nominated by the Toronto Paramedic Services for an award in recognition of his quick action to help save a man’s life.  Derek provided CPR to an individual who had collapsed at one of our buildings.   
• Sherri Hanley, TCHC’s Manager of Stakeholder Relations has been elected to the Board of Directors of the Ontario Non-Profit Housing Association. Sherri will serve for a three-year term.   

Item 8A - Monthly President's Report, TCHC:2016-50

The Board had before it the above-captioned report (TCHC:2016-50) from the President & Chief Executive Officer (Interim).   

Mr. Spearn presented the report and advised the Board that performance has improved in September.  Of TCHC’s 39 scorecard metrics with targets, two-thirds either stayed the same or got better in September compared with August levels. 

Mr. Spearn advised of the following results/trends in the Monthly President’s Report (MPR): 

• Excess of Revenue over Expenses: year-to-date, TCHC continues to have a $49-million excess of revenue over expenses. This is in contrast to the projected loss of $25 million which is a result of the timing of non-recurring items, such as gains on the sale of lands and the sale of standalone homes.  In addition to the $21 million in credits received to September 30 under the Ontario Clean Energy Benefit program. This trend is expected to continue for the remainder of 2016, with a resulting cash surplus. It is not expected to continue in future years. 
• Capital Repairs: capital repair program exceeded its third quarter target of $120 million, with $153.9 million spent as of September 30, on more than 10,000 projects. TCHC expects that by year end, at least 88 per cent ($220 million) of the $250 million in capital repair projects budgeted for this year will have been completed, with the balance authorized and underway. 
• Community Safety: the Community Safety Unit conducted 62 joint patrols with the Toronto Police Service in September, a 17-per-cent increase over August.  Also noted, a 12-per-cent decrease in the number of crimes against persons in September and a 20-per-cent decrease in the number of crimes against properties.  
• Customer Service: call volumes returned to average levels in September, with just over 33,000 calls made to the Client Care Centre.  Service levels improved over August levels, with the average speed of answer for elevator calls improving to 18 seconds, the best result year-to-date. 
  
  Service levels for community safety calls declined as a result of an unanticipated shortage of Community Safety Unit dispatch staff. This shortage has since been resolved and service levels are expected to return to normal levels going forward.  
• Service Requests: TCHC exceeded its target of closing 80-per-cent of administrative service requests within two days.  Again this month, TCHC exceeded targets of containing 90 per cent of emergency maintenance requests within four hours.  
• Days to Re-Occupy Vacated Units: the number of days between when a unit is vacated and when it is re-occupied decreased by 9 per cent in September. As requested by the Board at last month’s meeting, Management is working to break out this measure into the various phases of vacancy to better illustrate the drivers of increases and decreases in this category. In addition, Management is working to present the disproportionate impact on this measure derived from units returning to the rentable stock after being held for relocation. 
• Vacancy: vacancy rates for rent geared-to-income (RGI) units increased to 2.89 per cent in September, compared with 2.68 per cent in August, and the market vacancy rate increased to 3.25 percent, from 2.92 per cent in August.  Asset Management is continuing to focus on planned and in-progress vacancy management strategies in order to lower the vacancy rate. 

In addition to the important information it provides to the Board, Mr. Spearn emphasized that the Monthly President’s Report has also proven to be a helpful management tool for staff. 

Motion carried 

ON MOTION DULY MADE by Councillor Bailão, seconded by Mr. Gasparro and carried, the Board of Directors received the report for information. 

TERMINATION 

The public meeting terminated at 10:57 a.m.