Building and Investment Committee (BIC) Meeting - March 22, 2012

Public Agenda

Chair’s Poll re: Conflict of Interest

Confirmation of Building & Investment Committee Public Minutes – January 27, 2012

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. Q4 2011 Building and Investment Committee Performance and Progress Reports
2. Reducing the Number of Stand-alone Units Proposed for Sale                

For Information

3. Financial Performance Report Q3 and Q4 2011

In Camera Agenda

A. Confirmation of Building & Investment Committee In Camera Minutes – January 27, 2012 and February 29, 2012

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

F. Confidential item respecting the business of the corporation (New Agenda Item)

For Information

E. Confidential item respecting the business of the corporation

Public Meeting Minutes

The Building and Investment Committee of Toronto Community Housing Corporation met on March 22, 2012, in the Main Floor Conference Room, 931 Yonge Street, commencing at 12:03 p.m.

Committee Directors present:

Ms. Audrey Wubbenhorst, Chair

Zahir Bhaidani by telephone conference

Regrets:

Councillor Norm Kelly

Additional Directors present:

Ms. Catherine Wilkinson – by telephone conference

Also present:

Marta Asturi, Assistant Corporate Secretary and Legal Counsel

Tom Burr, Director Regent Park

Michelle Haney-Kileeg, General Manager

Philip Jeung, Director, Smart Buildings and Energy Management

Len Koroneos, Chief Executive Officer (Interim)

Hugh Lawson, Director, Strategic Planning & Stakeholder Relations

Deborah Simon, Chief Operating Officer

Frank Sutton, Director, Construction

Bill Ward, Director, Property Management

Bora Zekavica, Director, Budget and Financial Services

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.

Deputations

The Committee Chair polled for any deputations to be heard at the meeting and explained the deputation process. The Committee Chair noted that one deputant, Dan King, wished to provide verbal deputations on agenda items 1 and 2.

Minutes – Confirmation of Building and Investment Committee Minutes - January 27, 2012

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 with the following amendment and recommended that the above-captioned minutes be forwarded to the Board of Directors for information.

• Page 2 of 5, second paragraph from the bottom of the page be amended as follows:
  • “…On the contrary, the City cut off $6 million in 2012 from the subsidy base.”

Item 1 – Q4 2011 Building and Investment Committee Performance and Progress Reports, BIC:2012-15

Motion carried

The Building and Investment Committee had before it the above-captioned report (BIC:2012-15) from the Interim Chief Executive Officer.

The Committee Chair raised a question with respect to deficiencies resulting from MLS orders being solved quicker or easier. The Committee Chair noted that while the chart is still in red, there is a 22% improvement in performance in Q4 2011 compared to Q3 2011. In response, Ms. Deborah Simon informed the Committee that 33% of the deficiencies created in Q4 2011 were resolved within the same quarter, compared to 11% in Q3 2011. Most outstanding MLS orders are for capital deficiencies, while the bulk of all outstanding deficiencies resolved in Q4 2011 were smaller deficiencies, such as wall repair work (e.g. plastering) and doors/locks. The numbers will fluctuate in each quarter due to the nature of the types of orders, which is not on a decreasing trend. Ms. Deborah Simon further informed the Committee that a new report on railings will be presented at a future meeting, containing much more detail in presenting the information and the impact on the Capital Plan.

In response to a question raised by the Committee Chair with respect to the origin of the 3 audits performed in Q4 2011, Ms. Deborah Simon explained to the Committee that the 3 audits were conducted through MLS. There is no particular list of the buildings selected to be audited. The audited buildings were selected randomly, based on a monthly schedule provided by the Corporation. Staff will provide more detailed information on audits at the next meeting.

The Committee raised a question with respect to the numbers that do not add up, presented in the “MLS Orders & Deficiencies” table at the bottom of the second page of the Performance Report. In response, Ms. Deborah Simon noted that there might be an adding error or some additional MLS orders missing. There are 518 deficiencies created in the quarter and 173 deficiencies created and closed in quarter. The difference is 345 of outstanding deficiencies created in the quarter that does not match the total number of 442 outstanding orders at the end of the quarter. The accumulation of outstanding deficiencies increases every quarter. Mr. Hugh Lawson informed the Committee that the number of deficiencies carried forward from the previous quarter (Q3 2011) is not shown in the number of deficiencies reported in Q4 2011. Management will improve the way of reporting as the information presented is not helpful to understand the process.

In response to a question raised by the Committee with respect to the strategies to be used to decrease numbers and improve performance, Ms. Deborah Simon informed the Committee that not all strategies are funding related. Smaller deficiencies cannot be solved within the quarter and they will be carried forward in the next quarter. One of the largest (capital) deficiencies are railings. The strategy applied is to bring the chart from red to green when large (capital) deficiencies are solved. Management is working on improving smaller deficiencies, so numbers will be easier to understand in future reports.

The Committee Chair raised questions with respect to the reasons for higher debt service costs in a lower interest environment and ways of decreasing the costs (page 6 of the Performance Report). In response, Mr. Hugh Lawson explained that debt service costs are based on completion of developments. Higher interest rates mean a longer period of time and increased debts. Money allocated to capital deficiencies is interest bearing. The net operating income was higher than budget by 6.5%, which means $10.2 million. The calculation of results was made on the assumption that it does not include investments and debt payments (mortgages and loans).

Catherine Wilkinson joined the meeting by telephone conference at 12:26 p.m.

The Committee raised a question with respect to how the net operating income of $192 million is linked to section 3 Improved Financial Discipline of the Performance Report. Mr. Hugh Lawson explained that the net operating income is a particular performance measure that originates in section 3, but cannot be found in section 3. Mr. Bora Zekavica informed the Committee that the mortgages and debt services will be added back into the table and they will add up to $192 million.

Motion carried

ON MOTION DULY MADE by Ms. Audrey Wubbenhorst, seconded by Mr. Zahir Bhaidani, the Building and Investment Committee received the report and moved to forward the report with performance measures that are below target to the Board of Directors for information.

Item 2 – Reducing the Number of Stand-alone Units Proposed for Sale, BIC:2012-16

Motion carried

The Building and Investment Committee had before it the above-captioned report (BIC:2012-16) from the Interim Chief Executive Officer.

Mr. Dan King provided a verbal deputation in relation to this item.

The Committee Chair raised a question as to whether reducing the list of stand-alone units proposed for sale is a formality since the decision has already been made. Mr. Hugh Lawson informed the Committee that the Board of Directors is being asked by the City to reconsider reviewing the list of 18 units that are under legal agreements with supportive housing agencies and respectively the list of 168 properties listed in Appendix D of the January 10, 2012 report from the City Manager and General Manager, Shelter, Support and Housing Administration, as per the City Council’s recommendation.

The Committee was not comfortable with changing what the Board of Directors has already approved.

To provide further clarification, Mr. Len Koroneos explained to the Committee that the Corporation worked together with the City’s Executive Committee to prepare the lists for City Council’s approval. The Corporation is trying to obtain all approvals now to avoid coming back to the Board of Directors at a later date. 56 units, currently vacant, which require Ministerial Consent under the Housing Services Act, 2011, were approved for sale by the City Council. The difference between 872 stand-alone units in total and 675 houses that were approved for sale by the City Council consists of the 18 units used by agencies providing supportive housing and the 168 units listed in Appendix D of the January 10, 2012 report from the City Manager and General Manager, Shelter, Support and Housing Administration. The City expects that the Corporation will revisit its decision regarding the 18 agency houses and the 168 houses.

Mr. Len Koroneos informed the Committee that an interim report is expected in May and a final report will be provided in September 2012. A question was raised with respect to the status of the 10 houses that are still awaiting Ministry’s approval. In response, Mr. Len Koroneos explained to the Committee that there is a normal bureaucratic process in place. 9 out of 10 houses are vacant while one house is subject to an ant infestation. The process is stalled until the issuance of the interim May report.

A question was raised with respect to the disclosure of the houses listed in Attachment 1 of the January 10, 2012 report from the City Manager and the General Manager of Shelter, Support and Housing Administration. In response, Mr. Hugh Lawson informed the Committee that management keeps that information confidential at this moment for vandalism reasons and concerns for the security of those properties. Once the houses are approved for sale, then their coordinates will become public information and will be released. 675 properties are now on a public list, while 56 properties are not yet disclosed. The list containing the 56 undisclosed properties can be provided in the meantime to the Board of Directors as a confidential item.

The Committee Chair recommended that management keep the list of houses confidential until the Ministry approves them. The Ministry’s approval process is usually 6 to 8 months.

Management will provide the Board of Directors with the confidential list of the 56 undisclosed properties, for discussion and decision at its April 27, 2012 meeting, as to whether it should be kept confidential until the Ministry approves the sale of those properties.

Motion carried

ON MOTION DULY MADE by Ms. Audrey Wubbenhorst, seconded by Mr. Zahir Bhaidani, the Building and Investment Committee adopted the report and moved to forward the report to the Board of Directors with the recommendations to:

1. Reduce the list of stand-alone units proposed for sale by removing those units that are used at this point in time by agencies providing supportive housing.
2. Reduce the list of stand-alone units proposed for sale by removing those units that are listed in Appendix D of the January 10, 2012 report by the City Manager to the City’s Executive Committee.
3. Pending approval from the Ministry of Municipal Affairs and Housing for the sale of stand alone properties solicit interest for the purchase of the properties listed in Appendix A of the report (January 10, 2012) from the City Manager and General Manager, Shelter, Support and Housing Administration, at market value from social housing providers, charitable, non-profit and community agencies that deliver housing to low-income and vulnerable populations within Toronto.

Item 3 – Financial Performance Report Q3 and Q4 2011, BIC:2012-17

Motion carried

The Building and Investment Committee had before it the above-captioned report (BIC:2012-17) from the Interim Chief Executive Officer.

In response to a question raised by the Committee with respect to the variance on subsidies and the net cash flow, Mr. Hugh Lawson informed the Committee that the report did not include the property tax reduction coming into effect commencing January 1, 2012. When the property taxes are reduced, then the program subsidies will be reduced as well. In general, the net cash flow is reported on separately. The building retrofit program has 50% variance as it relies on funding from grants.

In response to a question raised by the Committee with respect to grants for funding investments, Mr. Bora Zekavica informed the Committee that grant funding in the amount of $21 million was carried forward in Q1 2012.

In response to a question raised by the Committee Chair with respect to whether there is a time issue, Mr. Bora Zekavica explained to the Committee that the work is not funded (grants are not received) unless the work is completed. The Corporation coordinates with City on the completed jobs.

The Committee requested that Mr. Hugh Lawson provide an analysis of grant variances at a future meeting.

In response to a question raised with respect to the Appliance Program, Mr. Bora Zekavica informed the Committee that the Appliance Program is rolling out and appliances are being acquired, but they are billed under a different account.

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, with the recommendation that management provide the Committee with better notes on the cash-flow statement at future meetings.

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 12:58 p.m. to consider items A to E.

Public Proceedings

Motion carried

At 1:30 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 1:30 p.m.