Building and Investment Committee (BIC) Meeting - November 8, 2012

Public Agenda

Chair’s Poll re: Conflict of Interest

Confirmation of Building & Investment Committee Public Minutes – September 28, 2012

Approval of Agenda and Review of Agenda Order

Business Arising from the Minutes and Action Item List

Review of Agenda (all items not held will be voted together without discussion)

For Information

1. Q3 2012 BIC Quarterly Performance Report
2. Contract Management Manager - Update (verbal)
3. Emerging Development & Real Estate Strategy  - presentation and handouts at the meeting

Closed Meeting Agenda

Chair's Poll re: Conflict of Interest

A. Confirmation of Building & Investment Committee In Camera Minutes – September 28, 2012

Approval of Agenda and Review of Agenda Order

Business Arising from the In Camera Minutes and Action Item List

Review of Agenda (all items not held will be voted together without discussion)

B. Confidential item respecting the business of the corporation (verbal)

For Approval

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

J. Confidential item respecting the business of the corporation

For Information

F. Confidential item respecting the business of the corporation (report and verbal)

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

TERMINATION

Public Meeting Minutes

The Building and Investment Committee of Toronto Community Housing Corporation met on November 8, 2012, in the Main Floor Conference Room, 931 Yonge Street, commencing at 12:07 p.m.

Committee Directors present:

Audrey Wubbenhorst, Chair

Zahir Bhaidani

Councillor Norm Kelly

Regrets:

none

Additional Directors present:

Catherine Wilkinson

Also present:

Marta Asturi, Legal Counsel and Assistant Corporate Secretary

Tom Burr, Director Regent Park

Chuck Dowdall, Vice-President, Operations (Interim)

Jason Gorel, Chief Financial Officer

Hugh Lawson, Director, Strategic Planning & Stakeholder Relations

Janice Lewkoski, Board Secretary

Greg Spearn, Chief Development Officer

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.

Confirmation of Agenda

Motion carried

ON MOTION DULY MADE by Councillor Norm Kelly, seconded by Mr. Zahir Bhaidani, the Building and Investment Committee unanimously approved the agenda as presented.

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.

Deputations

The Committee Chair polled for any deputations to be heard at the meeting and explained the deputation process. None were declared.

Minutes – Confirmation of Building and Investment Committee Minutes - September 28, 2012

Motion carried

ON MOTION DULY MADE by Mr. Zahir Bhaidani, seconded by Councillor Norm Kelly, 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.

Business Arising from the Minutes and Action Item List

The Committee discussed the sale of the stand alone houses and requested that management present a strategy to the Committee that should include what was approved by the City and an action plan to outline the next steps for implementation with completion timelines. Management provided a verbal update to the Committee with actions completed to date, including the RFP process to select real estate broker.

Item 1 – Q3 2012 BIC Quarterly Performance Report, BIC:2012-51

The Building and Investment Committee had before it the above-captioned report (BIC:2012-51) from the President and Chief Executive Officer.

The Committee and management thoroughly discussed the report, and the following discussion ensured:

• Status of MLS deficiencies, priorities and tracking the funds allocated for remedial work required.
  • Discussions are taking place between management and MLS Branch, City of Toronto, to review all the items on the MLS deficiencies list and their level of urgency to be addressed. The MLS Branch will follow up with the Vice President Operations (Interim), with respect to estimated timelines and amounts needed for repair work. The estimates will be included in the 2013 budget process.
  • Accelerating some of the MLS orders, such as railings, due to lack of compliance with the safety code.
  • The Committee requested that management remove the MLS orders from the quarterly performance report and submit a report on the status of MLS orders as a separate agenda item for the Committee to address, outlining each deficiency issue accompanied by a plan of action, based on priority reasons.
• Net operating income before debt.
  • The net operating income was higher than budget by 17.2% for Q3 2012 or by $13.7 million for the year to date.
  • Rent revenues net of vacancy losses were 0.8% ($800K) higher than expected.
  • Anticipated savings from lower than budget manageable costs, property taxes and utilities. Property tax savings ($3.3 million) will largely be eliminated at the end of the year by matching them with the City’s subsidies and / or retroactive tax exemptions.
  • The Committee noted an error on page 5 of 5 of the quarterly performance report regarding reference to utility costs increases which should be deleted.
• Utility usage – hydro, gas and water.
  • Utility savings will eventually reach a plateau. The Committee discussed whether this measure should be further reviewed by management with objective to achieve greater savings. It was further suggested that staff work in partnership with residents to have them engaged in this process.

Motion carried

ON MOTION DULY MADE by Mr. Zahir Bhaidani, seconded by Councillor Norm Kelly, the Building and Investment Committee received the report for information.

Item 2 – Contract Management Manager - Update, Verbal

Deferred

The Building and Investment Committee resolved to defer the verbal report.

Item 3 – Emerging Development & Real Estate Strategy, Presentation

Management circulated to the Committee a presentation on the proposed development and real estate strategy, with the objective of seeking direction from the Committee on the strategic direction over the next 5 years.

The following discussion ensued:

• Portfolio Strategy – Asset Regeneration:
  • Financial Challenge:
    • 2012 Capital Backlog: $751M. Every year it will continue to grow. Without significant additional cash infusion by 2021, the 10 years unfunded liability will grow to $1.75B.
    • The current estimate of annual repair investment will only allow TCHC to keep an average portfolio Facility Condition Index at 12% (fair condition) until 2014.
    • After 2015, without additional investment capital or portfolio renewal the FCI condition grows exponentially to critical status.
• What we are working on now – Revitalization and Development:
  • Completed: Don Mount Court that started in 2004.
  • Implementation Phase: Regent Park, West Donlands and Railway Lands.
  • Planning Phase: Alexandra Park, Leslie Nymark, Allenbury Gardens and Lawrence Heights.
• Revitalization Costs and Funding Sources.
  • Market conditions with appropriate density are key to a project’s financial viability.
    • A healthy financial ratio is 4-8 units of new for sale market housing per each rental unit to be replaced.
• Status of TCHC’s current activities:
  • Current projects, starting in 2009 with Regent Park:
    • Build-Replace or Refurbish 2,597 TCHC Units.
    • Build 5,113 market units that will generate $1.9 billion in market sales and generate $685M TCHC Investment Capital.
• Looking Ahead – all revitalizations or phases underway are reducing approximately $104million of the 10-year capital repair backlog.
• TCHC’s real estate asset investment strategy goals for 2013-17:
  • Reduce the backlog and future capital repair need by $200 million over the next 5 years.
  • Lower maintenance cost of buildings in poor condition through Asset Regeneration, Infill and Revitalization.
  • Establish a Capital Reserve for all new buildings.
  • Align development equity and cash flow requirements with consolidated corporate cash flow.
  • Foster healthy communities and broad support for city building.
• The Committee and management discussed future potential revitalization sites.
• Management will provide this presentation to the Board of Directors for information, and the Committee further requested that hard copies of the presentation be provided to the Committee members as well as to all Board members.

Motion carried

ON MOTION DULY MADE by Councillor Norm Kelly, seconded by Mr. Zahir Bhaidani, the Building and Investment Committee received the presentation for information.

Motion carried

ON MOTION DULY MADE by Councillor Norm Kelly, seconded by Mr. Zahir Bhaidani, the Building and Investment Committee requested that management provide hard copies of the presentation to the Committee and Board members, prior to the December 7, 2012 Board of Directors meeting.

Public Meeting Proceedings

Motion carried

ON MOTION DULY MADE by Mr. Zahir Bhaidani, seconded by Councillor Norm Kelly, the Building and Investment Committee adjourned the public meeting at 1:28 p.m.

Closed Meeting 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 closed meeting at 1:30 p.m. to consider items A to J.

Public Proceedings

At 2:08 p.m. the Chair announced the resumption of the public proceedings and the public meeting reconvened at that time.

Motion carried

ON MOTION DULY MADE by Ms. Audrey Wubbenhorst, seconded by Councillor Norm Kelly, the Building and Investment Committee ratified the actions authorized during the closed meeting.

Termination

ON MOTION DULY MADE by Ms. Audrey Wubbenhorst, seconded by Councillor Norm Kelly, the meeting of the Building and Investment Committee terminated at 2:08 p.m.