Building and Investment Committee (BIC) Meeting - January 27, 2012

Agenda

PUBLIC AGENDA ITEMS

Chair’s Poll re: Conflict of Interest
Confirmation of Building & Investment Committee Public Minutes – November 28, 2011
Business Arising from the Minutes and Action Item List
Approval of Agenda and Review of Agenda Order
Review of Agenda (all items not held will be voted together without discussion)

For Approval 
1. Five Year Capital Plan 2012-2016

For Information
2. Renewable Energy Implementation Plan Progress Update

IN CAMERA

A. Confirmation of Building & Investment Committee In Camera Minutes – November 28, 2011 and December 5, 2011
Business Arising from the In Camera Minutes and Action Item List

For Approval:
B. Confidential item respecting the business of the corporation
C. Confidential item respecting the business of the corporation
D. Confidential item respecting the business of the corporation
E. Confidential item respecting the business of the corporation
F. Confidential item respecting the business of the corporation
G. Confidential item respecting the business of the corporation
H. Confidential item respecting the business of the corporation
I. Confidential item respecting the business of the corporation
J. Confidential item respecting the business of the corporation
K. Confidential item respecting the business of the corporation

For Information:
L. Confidential item respecting the business of the corporation
M. Confidential item respecting the business of the corporation

Minutes

The Building and Investment Committee of Toronto Community Housing Corporation met on January 27, 2012, in the Main Floor Conference Room, 931 Yonge Street, commencing at 12:29 p.m.

Committee Directors present:    
Ms. Audrey Wubbenhorst, Chair 
Zahir Bhaidani 

Regrets:
Councillor Norm Kelly  

Additional Directors present:
Ms. Catherine Wilkinson

Also present:
Marta Asturi, Assistant Corporate Secretary and Legal Counsel
Valesa Faria, Manager, Commercial Business Unit
Heather Grey-Wolf, Housing Development Manager
Philip Jeung, Director, Smart Buildings and Energy Management
Len Koroneos, Chief Executive Officer (Interim) 
Hugh Lawson, Director, Strategic Planning & Stakeholder Relations 
Ahmed Samater, Director, Asset Planning and Investment
Frank Sutton, Director, Construction
Bill Ward, Director, Property Management
Lizette Zuniga, Director, Development and Real Estate

Ms. Audrey Wubbenhorst, the Chair, called the meeting to order and Ms. Mirela Bolentiru served as recording secretary.

DECLARATION OF CONFLICT OF INTEREST

The Chair requested members of the Building and Investment Committee to indicate any agenda item in which they had a conflict of interest, together with the nature of the interest. None were declared.

CONFIRMATION OF AGENDA

Motion carried

ON MOTION DULY MADE by Ms. Audrey Wubbenhorst, seconded by Mr. Zahir Bhaidani, the Building and Investment Committee unanimously approved the agenda.

MINUTES    

CONFIRMATION OF BUILDING AND INVESTMENT COMMITTEE MINUTES – NOVEMBER 28, 2011 

Motion carried    
ON MOTION DULY MADE by Ms. Audrey Wubbenhorst, seconded by Mr. Zahir Bhaidani, the Building and Investment Committee confirmed the above-captioned minutes and recommended that the above-captioned minutes be forwarded to the Board of Directors for information.

ITEM 1    

FIVE YEAR CAPITAL PLAN 2012-2016 BIC:2012-01

Motion carried    

The Building and Investment Committee had before it the above-captioned report (BIC:2012-01) from the Interim Chief Executive Officer.  
In response to a question raised by the Committee with respect to the difference between the proposed five-year Capital Plan versus the current two-year Capital Plan, Mr. Len Koroneos informed the Committee that the proposed five-year plan is a better process that improves the procurement process by using more efficiently the scarce resources. Management distributes the limited funds available to first priority projects. $53 million per year will be allocated from rent collection, which will provide about $270 million over five years. This amount is separate from the repair backlog that increased in the last year from $650 million to $750 million (a steady increase of $100 million each year if not addressed in due time). The proceeds from the sale of the stand-alone units are not included in the proposed Capital Plan. 

The Committee recommended that due to vacancy loss generated by the 2,000 units hard-to-rent, management commence lobbying for funding from other sources different from the City rather than the sale of the houses.

Mr. Len Koroneos informed the Committee that there is no indication from the City that it has funds available for the Corporation. On the contrary, the City cut off $6 million from the original $10 million funding. Mr. Len Koroneos met with the mayor yesterday to tour one of the buildings of the Corporation’s portfolio. A summary of the building’s capital repair needs was issued covering a five-year period.

Mr. Ahmed Samater informed the Committee that there is a building condition assessment process in place that is the framework for engineers to produce technical reports with recommendations for remedial action.
The Committee raised a question with respect to the long-term consequences that the Corporation may face if management does not implement a remedial action plan to address the capital repairs. In response, Mr. Len Koroneos informed the Committee that without the addition of supplementary funding to the portfolio, the existing buildings will fall apart and become vacant, and the Corporation will run into a large deficit.

In response to a question raised by the Committee Chair with respect to the amount of $4 million that is carried forward for the planned and recurring elements of the building capital program, Mr. Ahmed Samater explained to the Committee that the amount is from last year’s capital plan, which was much larger ($100 million). 

Mr. Len Koroneos further explained that in 2012 all the grants and funding dried up. In 2012, there is one-year plan for energy programs. For any debt portion of the energy programs, there are corresponding savings through utilities in the operating budget. The implementation of the energy programs made the Corporation the leader in green initiatives while generating $4 million per year in water and energy savings. Those savings will be used for repayment of debt. Management is comfortable with the 2012 borrowed funds, but it is not comfortable with the next period starting with 2013 onwards. An amount of $7 million from 2011 grants has yet to be collected. The grants allocated for energy projects cannot be used for any purpose other than for the energy projects.

In response to a question raised by the Committee with respect to the deficit of Regent Park Energy Inc. (RPEI), Mr. Len Koroneos informed the Committee that the deficit is $1-2 million per year. The Corporation has acquired total control over RPEI and it will become profitable over the next 10 years. In 2022, RPEI is expected to break-even.

The Committee requested that management provide a list of the buildings that are part of the five-year Capital Plan before it is presented to the Board of Directors for approval at its February 23, 2012 meeting.

Motion carried    

ON MOTION DULY MADE by Ms. Audrey Wubbenhorst, seconded by   Mr. Zahir Bhaidani, the Building and Investment Committee reviewed the report and recommended that the report be forwarded to the Board of Directors to:

1. Approve the five year rolling Capital Plan for 2012 to 2016 with the Capital Repair Budget in the amount of $271,725,000 over the five years and a 2012 budget of $51,400,000 for 2012 Energy Programs to be updated annually from 2013 to 2016.
2.  Authorize the CEO or his designate to contract directly or with Housing Services Inc. for the work included in this 5 year rolling budget up to a maximum of $323,125,000 for Capital Repairs and the 2012 Energy Program.
3. Authorize the appropriate Toronto Community Housing officials to take the necessary action to give effect to the above recommendations to implement the 5 year capital budgets for the years 2012 to 2016. 

ITEM 2    

RENEWABLE ENERGY IMPLEMENTATION PLAN PROGRESS UPDATE BIC:2012-02

Motion carried

The Building and Investment Committee had before it the above-captioned report (BIC:2012-02) from the Interim Chief Executive Officer.  
Philip Jeung presented the Committee with a summary of the report, including the following highlights:

• The Corporation received the conditional approval of a provincial grant of $22.9 million in 2010 from the Ministry of Municipal Affairs and Housing for the installation of renewable energy technologies across our portfolio.
• Some of the proposed technologies to be implemented include:
  • solar photovoltaic (electricity generated by the solar radiation);
  • solar thermal (water pre-heating using the sun rays);
  • solar air preheat (air is preheated using the sun rays); and
  • geothermal (ground source heating and cooling).
• With this injection of a provincial grant, an estimated annual revenue and savings of around $1.2 million can be achieved and reinvested into the aging housing stock for capital repairs and maintenance.
• All of the capital funds are provided under the provincial Social Housing Repairs and Retrofit Program (stimulus package).
• The financial and project risk are low, but the corresponding benefits are high.
• The renewable energy systems consist of photovoltaic panels and wind turbines to capture the solar energy;
• The energy produced in a building by using the renewable energy technologies is partially used for the needs of the building while the excess of energy is sold.
• There is a 20-year contract that covers many future projects; 30 new projects are now on hold pending review.

Mr. Len Koroneos informed the Committee that the expenditures are covered by grant money as shown in the operating cash-flow in the Utilities line.
Motion carried    ON MOTION DULY MADE by Ms. Audrey Wubbenhorst, seconded by Mr. Zahir Bhaidani, the Building and Investment Committee received this report for information.

IN CAMERA PROCEEDINGS

Motion carried    

ON MOTION DULY MADE by Ms. Audrey Wubbenhorst, seconded by Mr. Zahir Bhaidani, the Building and Investment Committee resolved to meet in camera at 1:21 p.m. to consider items A to M. 

PUBLIC PROCEEDINGS

Motion carried

At 2:30 p.m. the Chair announced the resumption of the public proceedings and the public meeting reconvened at that time.

ON MOTION DULY MADE by Ms. Audrey Wubbenhorst, seconded by Mr. Zahir Bhaidani, the Building and Investment Committee ratified the actions authorized during the in camera meeting.

ADJOURNMENT

ON MOTION DULY MADE by Ms. Audrey Wubbenhorst, seconded by Mr. Zahir Bhaidani, the meeting of the Building and Investment Committee was adjourned at 2:30 p.m.