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HomeMy WebLinkAboutKit Housing - 2007-09-26Aye~~ua Fern ,~t4 KITCHENER HOUSING INC MINUTES OF THE MEETING OF THE BOARD OF DIRECTORS HELD: Schmalz Room, City Hall, 200 King Street, Kitchener DATE: Sept 26. ?007 TIME: 4:00 p.m. PRESENT: Denny Cybalski, John Gazzola, Birgit Heilig, Loraine Rowan, Jerry Finnen RESOURCE STAFF:. Karen Kwiatkowski, Ann Eckert, Christine Wilson,' Cathy Shafe, Susan Campbell-Emans ABSENT: Christina Weylie, Carl Zehr, Andrew Head, Jamie Hill 1. Opening Remarks Denny Cybalski called the meeting to order at 4:00 p.m. The notice of the meeting was submitted with the information that the notice had been mailed to the Directors in terms of the By-laws. 2. Conflict of Interest -nil 3. Approval of Agenda On a motion by J. Finnen, seconded by L. Rowan, and CARRIED, the agenda be approved. 4. Approval of the Board Minutes - August 26, 2007 The minutes of the Board of Directors Meeting of August 26, 2007, had been circulated with the agenda. On a motion by L. Rowan, seconded by J. Gazzola, and CARRIED, it was resolved that the minutes of the Board Meeting of August 26, 2007 be accepted as a true and correct record of the meeting. To ensure there was quorum, items that needed to be approved were moved to the beginning of the meeting. 5.2 Lease Compliance Poiicv-Insurance and Utilities The Lease Compliance Policy is a document to support staff in the request that tenants are in good standing with insurance and,utilities. Recommendation 1. All ICHI and KNPPMI tenants having signed Lease Agreements must provide annual documentation to support the following: Sections 1.4 Utilities and Section 7.0 Liability & Contents Insurance. 2, Annually, all KHI and KNPPMI tenants provide documentation to support that their insurance, as described in Section 7.0 of the lease, is in good standing. 3. Annually, all KHI and KNPPMI tenants provide documentation to support that their utilities, as described, in Section 1.4 of the lease, are connected and being utilized and are in good standing. On a motion by J. Gazzola, seconded by J. Finnen and CARRIED, the Lease Compliance Policy be approved. 6.1 Financial Statement - August 2007; Cedar View - Au; ust 2007 The Financial Statements for August 2007 were circulated with the agenda. Ann Eckert gave ~an overview. On a motion by J. Gazzola, seconded by L. Rowan and CARRIED, the August statements be approved. 7. General Manager's Report - (handout portion) 2008 Budget details The 2008 budget detail was circulated as a handout at the meeting. Karen Kwiatkowski gave an overview of the report. The Budget submission for 2008 to the Region of Waterloo will reflect the board approval of expenses of $6,750,211 and revenues of $6,805,711. The income surplus of $55,500 is to be shared with the Service Manager at 50%. This reflects the Regulation changes to the SIIRA 2000 benchmarks. On a motion by L. Rowan, seconded by J. Finnen and CARRIED, the budget submission for 2008 to the Region of Waterloo showing expenses of $6,750,21 1 and revenues of $6,80,711 with the surplus of $~~,500 to be shared with the Service Manager at 50% was approved. John Gazzola left the meeting at this time. 5. Property Business 5.1 Tenant Placement Report The Tenant Placement Report was circulated as a handout at the meeting. Christine Wilson gave an overview of the report. Christine reported that for the period between August 31 to November 1, 2007 there are a total of 23 notices to vacate. Of these, 17 have been rented. Advertising in the Renters News and Viewit.ca was discontinued for September because we are over the market target and all available units are RGI. Advertising will likely resume in October and November. Opportunity to Comment and Request for Review - As of this date, there is no Request for Review and no outstanding Opportunity to Comment letters. Annual Income Vez•ification (AIV~ This process is proceeding for Victoria School Village, Waldau Woods, Cedar Hill Crt, Gage Green, Linden Terrace, The Charles and Shantz Terrace. 5.3 Property Maintenance Report Victoria School RJC has completed their inspection of the balconies and EIFS system. It appears from the findings that the majority of the water infiltration is happening on the fifth floor. We are awaiting their report. Lancaster Maples Staff met with Chris Tuck to examine the stucco system. Most of the cracks are cosmetic and of minimum concern. Mr. Tuck provided contacts of Sales Reps for the product used. Birgit Heilig provided staff with information from CMHC regarding stucco. Grann. Can Am Roofing has completed the roof replacement at 231 Weber St. Last winter the water pipes froze and broke as a result of poor insulation. Canadian Home Renovations will be insulating under the home, running a heat duct and installing a vinyl skirt around the house. This will prevent further problems as well as provide a warmer home for our tenant. Retaining Walls/Dividing Walls Work on the walls has been completed at Gage Green and The Charles. Still waiting on quotes for Linden Manor. v Other Staff have been working with Stan, our new Facility Technician, on reorganizing storage in the basement to provide better space and storage of supplies. 5.4 Follow-up -nil 6. Finance & Administration Business • 6.2 Rental Arrears Report - August 2007 The Rental Arrears Report for August had been circulated with the agenda. Susan Campbell-Emans gave the report. The arrears for August were 4%. There was a vacancy loss of 5 and we were over the market target by 12. 6.3 2007 Capital Reserve Breakdown & Budget The 2007 Capital Reserve Breakdown & Budget had been circulated with the agenda for information only. 6.4 Follow-up- nil 8. General Manager's Report 1. Chan es to Fundin Model under the Social Housin T Reform Act SH1iA Since 2005, a range of social housing stakeholders have raised the sustainability of funding formulas under the SHRA as a concern. Stakeholders have indicated that non- profit housing providers funded under the SHRA are at risk of being in a deficit position over the next one to three years due to the combination of: • The calculation of the subsidy formula • Current economic conditions around the province (communities experiencing flat or declining rents combined with rising water, electricity, natural gas, insurance and maintenance costs) A Benchmarking Advisory Team (GMAT) comprised of 12 service managers, two housing providers and three sector organizations was charged with reviewing the current funding formula and indices. The BMAT reported to the Ministry that a revised formula was needed to keep step with current economic conditions and made their recommendations into three groups: A. Mixed non-profit projects (applicable to KHI) 1. That all service managers (SM) be designated to use an alternate subsidy calculation for the mixed non-profit projects. 2. Revised formula is Total Subsidy =Operating subsidy +RGI subsidy + Property tax subsidy -surplus sharing. Surplus sharing is defined as: until a housing provider has obtained a $300/unit operating surplus, the housing provider may keep 100% of operating surplus realized through efficient management. Once the housing provider reaches the $300/unit operating surplus limit, the housing provider may keep the first 50% of operating surplus generated in a fiscal year. The service manager has discretion over the remaining 50% of the operating surplus, and may opt to retain up to 50% of the housing provider's annual surplus. 3. The biggest change affects providers with mixed units such as our organization. The initial formula for mixed projects was designed at a , time when rent revenues had been able to cover operating costs. There was also the belief that the relationship between revenues and operating costs would always be the same, however with the reality of economic conditions since the funding formula was first implemented, such as higher insurance costs, higher utility costs, flat and declining rents, it became clear to everyone that the current formula would not work (the original formula created a ratio between benchmark operating costs and benchmark revenues. This ratio was to stay in play forever. This ratio was then used to determine the mandatory payment representing any unused portion of indexed benclunark revenues once the ration had been taken into account.....very complicated formula). The revised formula: • is less complex and introduces indices for the operating costs benchmarks • removes the mandatory payment but surplus sharing remains as part of the formula. Property taxes continue to be a pass through and RGI calculation remains the same • is designed to keep the financial operations of housing providers in a neutral state (benchmark revenues equal benchmark costs) • means a form of financial assurance knowing that when costs exceed rent revenues that the provider will receive a subsidy to mitigate the situation. Providers must still operate in as efficient a manner as possible by making sure proper rents are charged, non- rent revenue sources are explored and cost efficiency strategies are in place • uses cost indices tracked by the Consumer Price Index (CPI) which is produced by Statistics Canada and kept up to date with current economic conditions • goes into effect on January 1, 2008 B. 100% RGI non-profit projects (not applicable to KHI) C. Capital Reserves (applicable to KHI) Capital reserves will be indexed by the "Ontario CPI all-items" as reported by Statistics Canada. On September 6, 2007, the Minister of Municipal Affairs and Housing, John Gerretsen, signed a new regulation that alters the funding formula under the SHRA. Identified goals of the new fimdin~ formula: 1. Will help preserve existing social housing stock. The financial viability of 756 social housing projects (or approx. 68,000 units) across Ontario will be better supported because the formula will be responsive to economic changes. 2. Will be easier to understand, administer and analyse (more transparent for councils, municipalities and housing providers). 3: Predictable subsidy formula will support, the effectiveness of the municipal budgeting process by minimizing the need for in-year finding requests to council. 4. Will support better matching of each municipality's subsidy payment with economic conditions (not over-paying or under-paying). Province-wide Subsidy Costs: 1. Under current economic conditions, the new formula could increase subsidy costs by $11 million to $28 million province-wide in year one. Province-wide Subsid• SY avings: 1. Mortgage costs are approximately 60% of the subsidy for an individual housing provider. 2. Province-wide an estimated $143 million in cost savings has been realized due to declining mortgage costs between January 2002 and August 2006. In summary, the SHRA changes fulfill the principles held by BMAT members by: • Ensuring a sustainable funding level. • Ensuring that the subsidy sufficiently responds to a variety of economic conditions. • Bnsuring that the subsidy calculation is optimal (i.e. finds housing providers to a break-even level without producing excessive surplus or deficit). • Achieving the principles, incentives and business practices understood by BMAT members as intended in the design of the SHRA. • Providing incentives (surplus sharing) for housing providers to operate effectively through maximizing rents and minimizing costs. • Being transparent and predictable for housing providers and service managers. • Having mechanism for housing provider and service manager accountability. The formula changes to the Act are a huge improvement to the cumbersome original formula. Although Karen still believes that benchmark data was flawed when KHI budgets where populated with the old financial statement data, the new formula will improve KHI's long term viability. 2008 Budgets -Increases Prior Year Inc. (dec) Benchmark in CPI Administration 554, 249 1.047 Maintenance 636,398 1.047 Hydro 223,233 1.049 Fuel -natural gas 108,683 1.087 Water 181,791 1.164 Capital reserve 442,527 1.047 Insurance 75,630 1.085 Bad debts -Market & RGI ~ 22,265 1.010 Total increase in above expenses .133,314 1.059 2. Staffing ' There has been another change to our staff complement as Sally Kieswetter has left. Staff is currently reviewing new applicants for the position of Account Analyst/Administrative Assistant. Welcome to Stan Harrison. Stan was awarded the new senior handyman position effective September 17, 2007. An ad will be placed in the newspaper for the junior handyman position. 3. Service Manager Administrative Review There is another compliance issue that will soon be part of the administrative review according to the housing sector. Emergency Preparedness, Pandemic Planning and Business Continuity Planning documents are already being requested in other Service Manager areas and Karen is sure that our SM will include these documents in time for the next Review. Staff has yet to accomplish all the compliance requirements that were drafted by the SM in last year's administrative review, so with the announcement of the new compliance documents, Karen was pleased to hear that the Social Housing Services Corporation (SHSC) has ah-eady been working on various manuals, templates and workshops to address the three new requirements. The SHSC will rollout the workshops early in 2008. 8 8. Other 8.1 Smart Metering -information Smart Metering -SHSC Report had been circulated with the agenda for the Board's information. 8.2 SHSC Financial -information SHSC Financial -rates of return June 30, 2007 had been circulated with the agenda for the Board's information. 8.3 SHSC Financial -information SHSC Financial -rates of return August 31, 2007 had been circulated with the agenda for the Board's information. 8.4 Phillips Hader & North -information Phillips Hager & North - KHI/KHPPIvII investment balance of Sept 6, 2007 had been circulated with the agenda for the Board's information. ~ , 9. Open Forum -nil 10. Caucus -nil 1 L Adjournment On a motion by J. Finnen, seconded by L. Rowan, and CARRIED, the meeting adjourned at 5:10 p.m. ACCEPTANCE OF MINUTES _._..~ _~ :~ c- -- ~ ~ ~ .~-~ ,- Chairman ~ Secretar 1 `'~~ 1 t_--- --_