BOARD OF DIRECTORS MEETING AGENDA

Transcription

1 BOARD OF DIRECTORS MEETING AGENDA PUBLIC SESSION Date: November 14, 2016 Time: 9:00 to 11:00 a.m. Location: Ground floor boardroom, 931 Yonge Street Agenda Item Description Action Pre-read Presenter 1) Chair s remarks Information Verbal report 5 minutes Chair 2) Consent agenda Chair 2 a) Approval of Public Meeting Agenda Approval Agenda Chair 2 b) Chair s Poll re: Conflict of Interest Declaration Agenda and Conflict of Interest Policy Chair 2 c) Confirmation of Board of Directors Public Meeting Minutes of October 14, 2016 Approval Minutes Chair 2 d) Business Arising from the Public Meeting Minutes and Action Items Update Information Action item list Chair

2 PUBLIC AGENDA BOARD OF DIRECTORS November 14, 2016 Page 2 of 3 Item Description Action Pre-read Presenter 2 e) City and TCHC Staff Strategic and Operational Meetings 2 f) Internal Audit Report: Contract Managed Buildings Audits Information TCHC: Interim President and CEO Approval TCHC: Chair, BIFAC 3) Emergency Response Plan Presentation Information Presentation 20 minutes Director, Risk Management & Insurance 4) RSC Chair s report Information Verbal report 5 minutes Chair, RSC 5) GCHRCC Chair s report Information Verbal report 5 minutes Chair, GCHRCC 6) BIFAC Chair s Report Information Verbal report 5 minutes Chair, BIFAC 6) a Infrastructure Ontario Financing *Deferred from October 14, 2016 Meeting* Information Presentation 10 minutes Chief Financial Officer & Treasurer (Interim) 6 b) 2016 Mortgage Refinancing/Renewal *Deferred from October 14, 2016 Meeting* 6 c) Financing for 180 Sackville Street, Regent Park *Deferred from October 14, 2016 Meeting* Approval TCHC: Chief Financial Officer & Treasurer (Interim) Approval TCHC: Chief Financial Officer & Treasurer (Interim)

3 PUBLIC AGENDA BOARD OF DIRECTORS November 14, 2016 Page 3 of 3 Item Description Action Pre-read Presenter 7 Vacancy Management Update Information TCHC: minutes VP, Asset Management 8 Interim President and Chief Executive Officer s Remarks Information Verbal Report Interim President and CEO 8 a) Monthly President s Report Information TCHC: minutes Termination

4 Public Minutes October 14, 2016 Board of Directors 931 Yonge Street, Toronto, M4W 2H2 Page 1 of 11 The Board of Directors of the Toronto Community Housing Corporation held a public meeting on October 14, 2016 at 9:17 a.m. in in the Main Floor Conference Room at 931 Yonge Street, Toronto and via teleconference. Directors in Attendance: Directors Absent: Management present: Bud Purves (Chair) Councillor Ana Bailão Robert Carlo Councillor Joe Cressy (left at 11:00 a.m.) Councillor Frank Di Giorgio Vincent Gasparro Linda Jackson (left at 10:57 a.m.) Colin Lynch (via teleconference) Pamela Taylor Catherine Wilkinson Joseph Kennedy Kevin Marshman (Vice Chair) Cathy Barker, Vice President, Human Resources Angela Cooke, Vice President, Resident and Community Services Leslie Gash, Chief Development Officer (Interim) 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 Wayne Tuck, Chief Operating Officer

5 Public Minutes October 14, 2016 Board of Directors Page 2 of 11 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 the meeting and advised that the meeting will begin with the public session and then the Board will proceed with the confidential session. Items approved during the closed session will be reported out on TCHC s website after the meeting. The Chair welcomed Mark McDonald, TCHC s new Vice President of Information Technology and Information Services. Mark joined TCHC on October 3. Mark is an experienced business and technology executive who has more than 25 years' experience in the private and public sectors. Mark will lead the transformation process to refresh TCHC s information technology strategy, which is critical to the success of the company. Additionally, the Chair provided a brief update on the CEO search. As mentioned at the September 14th Board meeting, the Board of Directors have commenced a process to hire for the position of President and Chief Executive Officer. Boyden Canada, a global executive search firm has been retained to conduct a national and international search. The selection from the list of candidates is anticipated to take place by the end of November with interviews beginning by mid-january The Chair identified the following items to be discussed in the public session: Chair s Reports. The Chairs of the Board committees will each provide a verbal report of their committee s activities. Resident Services Committee. A report on the Human Rights, Harassment and Fair Access Policy for Tenants will be brought forward for the Board s approval. The current policy has not been updated since 2003 and the updated policy reflects changes made to the Ontario Human Rights Code, and is aligned to the City s Human Rights and Anti-Harassment policy. New content added to the policy reflects resident input that was provided through a consultation process that took place earlier this year. Building Investment, Finance and Audit Committee. A report on TCHC s 2017 budget process that will include a presentation by TCHC s Chief Financial Officer (Interim), Ms. Rose-Ann Lee. Work continues on the 2017 budget. A draft operating budget strategy reviewed by the Board was sent to the City Manager on October 7, as had been requested by the City. President s Monthly Report. Mr. Spearn will present the President s Monthly Report for August 2016, which describes how the company is doing in meeting its

6 Public Minutes October 14, 2016 Board of Directors Page 3 of 11 public commitments and organizational priorities. DEPUTATIONS The Chair polled for any deputations to be heard at the meeting. deputations were presented: The following Item 2E City and TCHC Staff Strategic and Operational Meetings (Deputed by Clive Williams); Item 3A Human Rights Harassment Fair Access Policy for Tenants (Deputed by Cathy Birch); and Item 5A TCHC 2017 Budget Process (Deputed by Rebecca Keenean and Idil Abukar). CONSENT AGENDA ITEMS ITEM 2A APPROVAL OF CONSENT AGENDA ITEMS The agenda was approved with the following consent agenda items approved and not held for discussion: Item 2C Confirmation of Previous Board of Directors Public Meeting Minutes of September 14, 2016; Item 2F Q OCHE Quarterly Performance Report; and Item 2G Corporate Insurance Program Renewal. Motion carried ON MOTION DULY MADE by Councillor Cressy, seconded by Councillor Bailᾶo and carried, the Board of Directors approved the consent agenda and those items not held for discussions (Items 2C, 2F and 2G). 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.

7 Public Minutes October 14, 2016 Board of Directors Page 4 of 11 ITEM 2C CONFIRMATION OF BOARD OF DIRECTORS PUBLIC MEETING MINUTES OF SEPTEMBER 14, 2016 The Board of Directors had before it the draft Board minutes for September 14, Motion carried ITEM 2D Motion carried ON MOTION DULY MADE by Councillor Cressy, seconded by Councillor Bailᾶo and carried, the Board of Directors confirmed the above-captioned minutes without amendments. BUSINESS ARISING FROM THE PUBLIC MEETING MINUTES AND ACTION ITEMS UPDATE ON MOTION DULY MADE by Councillor Cressy, seconded by Councillor Bailᾶo and carried, the Board of Directors received the report for information with following amendments: Page 1 of 4: July 6, 2016 Public Meeting Minutes Description Column: Management to report back on how the $635, 000 rebate money provided by Enbridge will be used. Action Items: Management to: Provide an update on the status of whether committee meetings can be webcast. Arrange for the Board to receive AODA training. ITEM 2E CITY AND TCHC STAFF STRATEGIC AND OPERATIONAL MEETINGS TCHC: The Board of Directors had before it the above-captioned report (TCHC: ) from the President and Chief Executive Officer (Interim). Motion carried ON MOTION DULY MADE by Councillor Cressy, seconded by Ms. Jackson and carried, the Board of Directors received the report for information. ITEM 2F Q OCHE QUARTERLY PERFORMANCE REPORT TCHC: The Board of Directors had before it the above-captioned report (TCHC: ) from the RSC Chair.

8 Public Minutes October 14, 2016 Board of Directors Page 5 of 11 Motion carried ON MOTION DULY MADE by Councillor Cressy, seconded by Councillor Bailᾶo and carried, the Board of Directors received the report for information. ITEM 2G CORPORATE INSURANCE PROGRAM RENEWAL TCHC: The Board of Directors had before it the above-captioned report (TCHC: ) from the GCHRCC Chair. Motion carried ON MOTION DULY MADE by Councillor Cressy, seconded by Councillor Bailᾶo and carried, the Board of Directors unanimously approved the following resolution: Approve the renewal of the Insurance Program, including all additional coverage as outlined in the attached report, which reflects total insurance cost of $4,902,437 before PST. ITEM 2H TCHC SUBSIDIARY REVIEW PROCESS TCHC: The Board of Directors had before it the above-captioned report (TCHC: ) from the General Counsel and Corporate Secretary. The Board and Management discussed the report and Mr. Johnson answered questions from the Board. Some issues raised by the Board were the following: Subsidiary reporting to the Board; Spending commitments by subsidiaries flowing up to TCHC, where approvals are obtained and what items need to come to the Board for information/approval; and Creation of subsidiaries and minimizing the creation of new subsidiaries. Mr. Johnson advised the Board that there will be a quarterly subsidiary report that will be brought to the Board. In addition, a new protocol has been implemented for the creation of subsidiaries which requires Board and Shareholder approval. Motion carried ON MOTION DULY MADE by Ms. Taylor, seconded by Mr. Gasparro and carried, the Board of Directors received the report for information.

9 Public Minutes October 14, 2016 Board of Directors Page 6 of 11 ITEM 3 RESIDENT SERVICES COMMITTEE (RSC) CHAIR S REPORT The Chair of the RSC provided a verbal update to the Board on the work at RSC, including the following: Resident Charter: significant discussion took place at the last meeting and good progress has been made, however, the Charter will be refined further before it is brought to the Board. RPATH: Ms. Jackson was invited to attend an RPATH meeting and was impressed with the collaborative, respectful approach taken by the group and its positive approach to conflict resolution. ITEM 3A HUMAN RIGHTS HARASSMENT FAIR ACCESS POLICY FOR TENANTS TCHC: The Board of Directors had before it the above-captioned report (TCHC: ) from the RSC Chair. Ms. Hashmani presented to the Board, advising that four (4) tenant consultations were conducted with approximately 100 tenants. Due to the policy being tenant focused, tenant feedback was incorporated in this newly created policy. New sections added are the following: How to Request an Accommodation; Hate activity; How to file a complaint; and Responsibilities. In Q1 2017, a communication plan will be implemented in TCHC communities to create awareness of the policy and procedures and to ensure staff are aware of the complaints procedure. The Board and Management discussed the report and Ms. Hashmani and Mr. Johnson answered questions raised by the Board. Ms. Wilkinson abstained from the motion due to the fact that there is no reference to service timelines in the new policy to hold TCHC accountable.

10 Public Minutes October 14, 2016 Board of Directors Page 7 of 11 Motion carried ON MOTION DULY MADE by Councillor Cressy, seconded by Ms. Jackson and carried, the Board of Directors approved the recommendations in this report with the following amendments: Attachment 1 to the Report Human Rights, Harassment and Fair Access Policy Tenants (the Policy ) Page 2 of the Policy: Accommodation Definition: An individualized process to improve equality and remove disadvantages barriers experienced by a person or groups relating to a prohibited ground, to the point of undue hardship. Page 2-3 of the Policy: Discrimination: A practice or behaviour that treats people unequally or creates a distinction based on a prohibited ground under the Code resulting in an obligation, burden, or other disadvantage barriers by perpetuating prejudice or stereotyping. Board Report Page 1 of 4 (Purpose Section): To provide the Board of Directors with an updated a new Human Rights Harassment and Fair Access Policy for approval. ITEM 4 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 at GCHRCC, including discussions on the following: Corporate insurance program renewal. Ongoing work on the subsidiary review process. Collective bargaining approved mandate for CUPE Local 79 and Carpenters and Allied Workers Local 27. Ongoing work on TCHC s compensation philosophy. TCHC s succession planning relating to hiring of senior management.

11 Public Minutes October 14, 2016 Board of Directors Page 8 of 11 ITEM 5 BUILDING INVESTMENT, FINANCE AND AUDIT COMMITTEE (BIFAC) CHAIR S REPORT The Chair of the BIFAC provided a verbal update to the Board on the activity at BIFAC and advised that the most significant item has been the budget process. Mr. Lynch communicated that thorough discussions took place over the summer and in September on the budget process and that this process has had to take place earlier than previous years given the change to the City`s process. Lastly, Mr. Lynch noted that the capital budget still needs to be addressed and the operating budget is still in draft and subject to finalization. The final budget will be presented at the December Board meeting. OTHER BUSINESS Councillor Cho was in attendance and advised the Board and Management that he will be speaking on the Affordable Housing Act bill next Thursday October 20 th and requested to speak with Mr. Spearn and the Board Chair on such subject matter prior to next Thursday. ITEM 5A TCHC 2017 BUDGET PROCESS Presentation The Board of Directors had before it the above-mentioned presentation from the Chief Financial Officer & Treasurer (Interim). Ms. Lee presented an overview on the previous budget process versus this year s budget process and answered questions raised by the Board. A brief discussion ensued. Ms. Lee confirmed that a line-by-line budget will be posted on the external website after November 17 th in order for the public to have sufficient time to review prior to approval of the budget at the December 8, 2016 Board meeting. The Board requested that Management keep them apprised as to whether the City will be inviting TCHC Management to give a Budget presentation to the City again this year. Motion carried ON MOTION DULY MADE by Ms. Taylor, seconded by Councillor Bailᾶo and carried, the Board of Directors received the report for information.

12 Public Minutes October 14, 2016 Board of Directors Page 9 of 11 ITEM 6 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 September 14, 2016, including the following: Limitless Heights Scholarship Program Toronto Community Housing wins a 2016 Ombudsman Award TCHC s - 99 Special Constable designations All staff meetings/united Way staff BBQ Alexandra Park celebration Gyms opened in eight communities Housing grants confirmation / Toronto Housing Summit Mr. Spearn advised that the Deputy City Manager wrote to Mr. Spearn confirming that over the next two (2) years, TCHC will receive $91.6 million in grants for capital repair and energy retrofit programs announced in the 2016 federal and provincial budgets. About $53 million must be spent in 2017, and Mr. Spearn indicated TCHC is well-positioned to deliver as there are many shovel-ready projects that can begin right away. Generous donation from Starkey Canada Through TCHC s relationship with Jays Care Foundation, TCHC partnered this summer with Starkey Canada to provide some 40 senior tenants with free customized digital hearing aids a tremendous gift that would be well beyond their financial means and will make a world of difference in their lives. The seniors received their hearing aids at a clinic hosted by Starkey Canada at the Rogers Centre on September 29, after which they enjoyed the Jays game. ITEM 6A MONTHLY PRESIDENT S REPORT TCHC: The Board had before it the above-captioned report (TCHC: ) from the President & Chief Executive Officer (Interim). Mr. Spearn presented the report and advised the Board that performance has improved in August. Of TCHC s 39 scorecard metrics with targets, the majority are showing improvement over July levels. Mr. Spearn addressed the following results/trends in the Monthly President s Report: Excess of Revenue over Expenses: year-to-date, TCHC has 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 $20.2 million in credits received

13 Public Minutes October 14, 2016 Board of Directors Page 10 of 11 to August 31 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 is steadily advancing, with $108 million spent to August 31 on more than 8,000 projects. TCHC s within 10 per cent of its Q3 target of $120 million in capital repairs spending. Community Safety: the Community Safety Unit conducted 53 joint patrols with the Toronto Police Service in August, a 36-per-cent increase over July. TCHC has also held nine (9) community safety education sessions with tenants and conducted nine community safety audits. Customer Service: tenants made almost 35,000 calls to the Client Care Centre in August, TCHC s busiest month of the year so far. Despite these high volumes, most service levels improved slightly over July levels and met the target of closing 80 per cent of administrative service requests within two days. TCHC again exceeded the target of containing 90 per cent of emergency maintenance requests within four hours. Service levels for routine maintenance requests closed within five days, declining slightly to 70 per cent, from 72 per cent in July. The Board noted that in past years staffing issues have been identified with the client care centre. The Board emphasized the need to ensure that the client care centre is adequately staffed over vacation periods and at times when there are high call volumes. Vacancy: vacancy rates for rent geared-to-income (RGI) units continue to remain above the target of 2 per cent. The RGI vacancy rate increased to 2.68 per cent in August, compared with 2.57 per cent in July. However, it is lower than it was in August Asset Management Division continues to focus on implementing planned and in-progress vacancy management strategies in order to lower RGI vacancies to the target level. The Board and Management discussed the issues with the hard to rent portfolio and the 180 day average that units remain vacant. Management referred to the vacancy report provided at the last Board meeting and noted the request at the last meeting to bring a report forward with an in-depth analysis of the types of hard to rent units. Arrears: the amount of rent-related and parking-related arrears decreased by 5 per cent in August. The majority of this balance is less than 60 days old (i.e., owing only this month and/or last month s rent). The Board expressed the need to ensure there is sufficient focus on seniors in arrears of rent.

14 Public Minutes October 14, 2016 Board of Directors Page 11 of 11 Requests were made that Management report back on the following relating to the $250M capital spend: Projects completed; Projects that were planned but will not be completed; Project budget amounts versus the actual project spend amounts; and An in-time comparison of spending relative to what the capital plan intended and whether the Facility Condition Index measures are on target. Motion carried ON MOTION DULY MADE by Councillor Bailão, seconded by Councillor DiGiorgio and carried, the Board of Directors received the report for information. Action item: Relating to the $250M capital spend Management to report back on: Projects completed; Projects that were planned but will not be completed; Project budget amounts versus the actual project spend amounts; and An in-time comparison of capital spending relative to what the capital plan intended and whether the Facility Condition Index measures are on target. TERMINATION The public meeting terminated at 11:13 a.m. Secretary Chair, Board of Directors

15 Toronto Community Housing Corporation Board of Directors 931 Yonge Street, Ground Floor Conference Room Report on Business Arising from Public Meeting Minutes (New Items) Report No. and Meeting Date TCHC: Monthly President s Report October 14, 2016 Description Status Target Date Relating to the $250M capital spend Management to report back on: Projects completed; Projects that were planned but will not be completed; Project budget amounts versus the actual project spend amounts; and An in-time comparison of capital spending relative to what the capital plan intended and whether the Facility Condition Index measures are on target. In progress. This information will be reported to BIFAC at its November 17th meeting. BIFAC November 17, 2016 Assigned To VP, Facilities Management TCHC: Report on Vacancy Management September 14, 2016 Management to report back to the Board with the following: an in-depth analysis of the types of rentable units Strategies being implemented to address vacant units In progress. Target date for report is the November Board meeting. Board November 14, 2016 VP, Asset Management July 6, 2016 Public Meeting Minutes September 14, 2016 Management to report back on how the $635,000 rebate money provided by Enbridge will be used. Information on the use of the Enbridge funds will be included in a broader report on THCH s energy management strategy targeted to be brought to BIFAC on November 17. BIFAC, November 17, 2016 VP Facilities Management 1

16 Report No. and Meeting Date Description Status Target Date Assigned To TCHC: Update on RGI Calculations July 6, 2016 Management to report back to the RSC with: -Information and recommendations related to simplifying the RGI process -An update on a potential IT tool to assist with the RGI process Report on RGI calculations and staff resourcing brought to RSC on September 23 rd and forwarded to BIFAC for October 19 th meeting. Changes to the RGI process require legislative changes and are a component of the People s First Report. Q VP, Asset Management An IT tool to optimize RGI processes is included in the enterprise software solution currently being scoped. Updates to potential changes in the RGI process and an IT enterprise solution are targeted for Q TCHC: April 27, 2016 Annual Restructuring Review of Internally Restricted Reserves. Management to report back to the Board on plan to address gaps in reserves. In progress. Initial report provided to IAC on May 19, Issue to be addressed further at IAC in December. IAC Dec, Chief Financial Officer (Interim) 2

17 Report on Business Arising from Public Meeting Minutes (Older Items) Report No. and Meeting Date TCHC: October 22, 2012 Description Internal Transfer Policy Revisions A Board member requested that the report on changes to the policy include information from management on alternatives considered, what will be achieved as a result of the changes to the policy and include metrics. A Board member requested that staff review the consultation process noted at the bottom of page 4 of the report which indicates that councillors will be invited to comment on the revised policy after the policy is approved. Status Added to the work plan for the Resident Services Committee. Staff will take into consideration as part of the review process. This item will be addressed in 2017 as determined by the Corporate work plan prioritization process. Target Date TBD 2017 Assigned To VP, Asset Management The Board requested that extensive tenant consultation take place and that all consultation (including consultation with Housing Connections) be noted in the next report. February 6, 2013 September 14, 2016 The Board requested Management report back on potential unit swaps as part of the review process of the revisions to the Internal Transfer Policy. The Board requested that a report with information on the potential for unit swaps be brought to the RSC before the Internal Transfer Policy review. Report including this information targeted for the January RSC meeting. RSC January 2017 (potential for unit swaps) 3

18 Report No. and Meeting Date TCHC:2013 Item 15 December 11, 2013 Description Charitable Foundation The Board directed Management to report back on an implementation plan for the Charitable Foundation infrastructure with its charitable objects and its approach to fundraising. Status Qualified Donee Status provided at the October 19, 2015 GCHRCC meeting. The Canada Revenue Agency (CRA) provided TCHC with a notice of refusal of registration as a qualified donee. Report sent to GCHRCC on April 18 on next steps and a motion was passed for management to file an appeal of the CRA decision. Target Date GCHRCC TBD Assigned To General Counsel & Corporate Secretary Appeal submitted to CRA. Awaiting a response and will report back to GCHRCC subsequent to receipt. CRA has indicated that they are delayed in responding to appeals. TCHC: July 28, 2015 Accessibility Policy Management to report back to the Board on progress of training on the Accessibility Policy. As at September 1st, 2016, there have been 1,314 employees trained to date (81%) on Accessibility For Ontarians With Disabilities Act (AODA). To ensure all remaining staff participate, contingency sessions will be offered over the course of Q and Q1 2017, and an update will be provided upon completion of these sessions. In the General Orientation for new hires, AODA highlights have been incorporated and a copy of the complete AODA training presentation is provided. Tenant Representatives GCHRCC Q (final update when all training complete) General Counsel & Corporate Secretary 4

19 Report No. and Meeting Date Description Status will be trained on AODA by a qualified resident volunteer in Q Target Date Assigned To October14, 2016 Management to arrange for Board members to receive AODA training. Management is reviewing potential dates for Board training in Q Q General Counsel & Corporate Secretary TCHC: February 22, 2016 Board Procedures Management to report back to the Board on cost of having all committee meetings available via live webcast Implementation of webcast of committee meetings continues to be delayed due to a technical issue with capturing audio that may be cost prohibitive to resolve. IT continues to work to determine if there is a cost effective solution. Further updates will be provided over Q Q General Counsel & Corporate Secretary 5

20 Page 1 of 2 City Staff and TCHC Staff Strategic and Operational Meetings (September 2016) Item 2E November 14, 2016 Board of Directors Report: To: TCHC: Board of Directors From: President and Chief Executive Officer (Interim) Date: October 21, 2016 Corporate Goals: Business Foundations: Financial sustainability An empowered, skilled and engaged workforce Proactive approaches to communication and planning PURPOSE: This report provides the Board of Directors with information about the types of meetings Toronto Community Housing (TCHC) staff have with City staff. RECOMMENDATIONS: It is recommended that the Board of Directors receive this report for information. REASONS FOR RECOMMENDATIONS: Decision History Early 2016: The Board of Directors asked for recommendations about how they should be involved in meetings between staff of TCHC and the City. June 2016, GCHRCC mtg: The report entitled City/TCHC Operational Tables responded to that request. At that meeting, staff were asked to report back on the nature of the meetings held between the City and TCHC. July 2016 GCHRCC mtg: The Board then requested a regular monthly report on all meetings between TCHC staff and City staff. Management then implemented a new organization-wide monthly data collection process for

21 Page 2 of 2 capturing all strategic and operational meetings between staff of TCHC and the City. September, 2016 Board mtg: the Board had an opportunity to comment on the list provided and recognized the extensive scope and volume of meetings TCHC staff have had with City staff in a month. As such, the Board asked that the report be revised to include substantive meetings only. September Report In response to the Board s request, management has revised its monthly data collection process and is only reporting meetings held between TCHC Executive Leadership Team and Councillors; City Manager's office (CMO); Deputy City Manager's office (DCM); The Shelter, Support and Housing Administration Divison (SSHA); and/or, The Executive Director of the Social Development, Finance and Administration Division (SDFA). A table showing the nature of the staff meetings held in September, 2016 is attached. A number of the meetings were held multiple times during the reporting month. SIGNATURE: Greg Spearn Greg Spearn President and Chief Executive Officer (Interim) ATTACHMENT: 1. City/TCHC Staff Meetings during September, 2016 STAFF CONTACT: Hugh Lawson, Director, Strategic Planning & Stakeholder Relations hugh.lawson@torontohousing.ca

22 Item 2E City and TCHC Staff - Strategic and Operational Meetings TCHC November 14, 2016 Public Board Meeting TCHC: Attachment 1: City/TCHC Staff Meetings during September, 2016 Purpose and Description City Staff TCHC Staff 1. Budget Discussions CMO - Peter Wallace CEO 2. City -TCHC Finance Meeting: Budget Overview DCM - Giuliana Carbone, Executive Director SDFA - Chris Brillinger, SSHA Division CEO, COO, CFO, Director(s) 3. Discuss Implementation of Tenants First: TCHC/ City Staff Meeting Executive Director SDFA - Chris Brillinger, SSHA Division CEO, COO, Director(s) 4. Mayor s Task Force Recommendations - Action Plan Progress Councillor(s) CEO 5. Rivertowne Meeting DCM - Giuliana Carbone, Executive, Councillor(s), Director SDFA - Chris Brillinger COO 6. Shelter Housing & Support - Funding for Energy Programs SSHA Division VP(s), Director(s) 7. Subsidy Follow - Up Meeting SSHA Division CFO, Director(s) 8. Winchester Park Residents Association (Rooming Houses) Councillor(s) COO 1

23 Item 2E City and TCHC Staff - Strategic and Operational Meetings TCHC November 14, 2016 Public Board Meeting TCHC: Attachment 1: City/TCHC Staff Meetings during September,

24 Page 1 of 4 Internal Audit Report: Contract Managed Buildings Audit Item 2F November 14, 2016 Board of Directors Report: To: TCHC: Board of Directors From: Building Investment, Finance and Audit Committee (BIFAC) Date: October 19, 2016 PURPOSE: To provide the Board of Directors with the Internal Audit report Contract Managed Buildings Audit. RECOMMENDATIONS: That the Board of Directors receive the Internal Audit report Contract Managed Buildings Audit for information. REASONS FOR RECOMMENDATIONS: Background Subsequent to a public Request for Proposal (RFP) process, in 2012 TCHC entered into contracts with third party property managers to subcontract property management of 12,017 units in 58 communities, including 2 seniors buildings 1. This was the continuation of a property management subcontract program from prior years. These buildings are known throughout TCHC as the contract managed buildings (CM buildings). Prior to TCHC issuing the next RFP for contract managed buildings, management asked Internal Audit to do a review of the contract managed buildings. The signed contract (CM contract) for each of the four vendors (the CM vendors) selected includes a right-of-audit as well as full access to the premises. This is the first time TCHC exercised the right-of-audit. 1 In 2012, via a RFP, 427 additional units were added to the CM building portfolio to bring the number of units in the CM building portfolio to 12,444.

25 Page 2 of 4 Findings Vendor Performance We found that the CM vendors: Were not in compliance with the Key Performance Indicators (KPIs) that we reviewed; and Consistently exceeded annual operating budgets. Key Performance Indicators With respect to the KPIs we reviewed we found that: Some of the KPI targets for the CM vendors were unrealistic and generally unachievable; We also found that some KPI targets for direct managed buildings were not met by TCHC; There were KPIs not included in the CM contract that should possibly be included in the next RFP process for CM buildings; and The KPIs set out for the CM buildings were not necessarily in alignment with the KPIs used for direct managed buildings. Some of these observations are in alignment with the findings contained in the final report from the Mayor s Task Force on Toronto Community Housing 2, in particular Recommendation 26: That (TCHC) review current private sector management contracts adopting clear performance standards to ensure equity in tenant services, adequate small capital repairs and fair wages for staff... Vendor Operating Budgets CM vendor budgets did not include a budget for capital expenditures as TCHC is responsible for capital expenditures. More importantly, there was no clear direction from TCHC to the CM vendors on the delineation between operating expenses and capital expenses. As such, there is an incentive for CM vendors to delay making operating repairs so that operating repairs turn into a capital expenditure. TCHC Administration, Monitoring, and Performance Assessment of the CM Contracts We found that there was insufficient monitoring and review by TCHC over the course of the CM contracts of: CM vendors not achieving KPI targets; and CM vendor budget over spending. 2 Transformative Change for TCHC, A Report From the Mayor s Task Force on Toronto Community Housing January 26, 2016

26 Page 3 of 4 In addition, to our knowledge, over the course of the CM contracts there has been no effective reporting about the savings that have been achieved by using CM vendors. There is a cost in staff resources to effectively administer, monitor, and assess the performance of the CM vendors. We are not convinced that this function has been adequately resourced. The Value Proposition in Having Contract Managed Buildings The value proposition with respect to having CM buildings must take into consideration not only the financial aspects of the contracts (including the cost of administering the contracts), but also other things such as the quality of customer service provided, and the level of customer satisfaction upon receiving those services. We have recommended that a thorough review of the CM building value proposition be made prior to issuing the next RFP for CM buildings. Recommendations We have made six Recommendations in this report to address the matters noted above. More importantly, the Recommendations in this report address issues relating to (i) The development, structure and oversight of the current CM contract for the purpose of strengthening the accountability of a future contract, as well as (ii) Addressing the value for money and strategic implications of the CM building initiative. Management s Action Plan with respect to our Recommendations is attached to this report as Appendix A. IMPLICATIONS AND RISKS: In the contract managed buildings program there is a risk that public funds are not being used economically or effectively, resulting in a negative impact on the public s perception of the contract vendors, TCHC, and their reputations. SIGNATURE: Michael Vear Michael Vear, CPA, CA, CPA (Illinois) Chief Internal Auditor

27 Page 4 of 4 ATTACHMENT: 1. Internal Audit Report: Contract Managed Buildings Audit STAFF CONTACT: Michael Vear, Chief Internal Auditor michael.vear@torontohousing.ca Genevieve Ségu, Manager Internal Audit genevieve.segu@torontohousing.ca

28 Toronto Community Housing Corporation Internal Audit Department 1700 Finch Avenue East, Toronto ON M2J 4X8 Contract Managed Buildings Audit REPORT October 6, 2016

29 Contract Managed Buildings Audit October 6, 2016 Page 1 Table of Contents EXECUTIVE SUMMARY Background Audit Objectives Methodology and Scope Findings OPERATIONAL KEY PERFORMANCE INDICATORS Vendors compliance with Key Performance Indicators Key Performance Indicators (KPI) RECORDS RETENTION CONTRACT MANAGED VENDOR BUDGETS Annual Budgets Operating vs. Capital Expenses Monitoring Budget Variances Periodic Assessment of Savings Realized TCHC RESOURCES REQUIRED TO ADMINISTER CM CONTRACTS CONTRACT MANAGED BUILDINGS THE VALUE PROPOSITION APPENDIX A: MANAGEMENT S ACTION PLAN

30 Contract Managed Buildings Audit October 6, 2016 Page 2 EXECUTIVE SUMMARY Background Subsequent to a public Request for Proposal (RFP) process, in 2012 TCHC entered into contracts with third party property managers to subcontract property management of 12,017 units in 58 communities, including 2 seniors buildings 1. This was the continuation of a property management subcontract program from prior years. These buildings are known throughout TCHC as the contract managed buildings (CM buildings). Prior to TCHC issuing the next RFP for contract managed buildings, management asked Internal Audit to do a review of the contract managed buildings. The signed contract (CM contract) for each of the four vendors (the CM vendors) selected includes a right-of-audit as well as full access to the premises. This is the first time TCHC exercised the right-of-audit. All agreements are for three years, plus two oneyear renewals. As at the date of this report, the agreements with the CM vendors are in the last one-year renewal period. The CM buildings contracts are administered and monitored by the TCHC Contract, Compliance & Delivery Unit (CM Unit) of the Asset Management Department. Audit Objectives The objectives of this assignment were to provide CM vendors and TCHC management with an objective and independent assessment of the vendor s compliance with the terms of the contract in the following areas: Rent Geared to Income (RGI) calculations; Finance; Work orders; and Daily operations of the buildings. In addition, we looked at the content and effectiveness of the following during the course of our review: The Corporation s RFP and CM contracts; and Key Performance Indicators. Resources did not permit us to review arrears, vacancy management, and annual unit inspections of the CM buildings. Methodology and Scope Our methodology included, but was not limited to: Reviewing policies, procedures and forms relevant to the process; Interviewing staff; Examining documents; and Performing analytical work. 1 In 2012, via a RFP, 427 additional units were added to the CM building portfolio to bring the number of units in the CM building portfolio to 12,444.

31 Contract Managed Buildings Audit October 6, 2016 Page 3 Sample sizes for work order and RGI calculations assessment were identical for each vendor. Samples were chosen randomly. Sample sizes were chosen to provide an indication of a vendor's (i) compliance or noncompliance with certain terms of the contract and (ii) ability to meet certain performance measurements. As such, we caution the reader that there are inherent limitations in the results set out in this document. Findings Vendor Performance We found that the CM vendors: Were not in compliance with the Key Performance Indicators (KPIs) that we reviewed; and Consistently exceeded annual operating budgets. Key Performance Indicators With respect to the KPIs we reviewed we found that: Some of the KPI targets for the CM vendors were unrealistic and generally unachievable; We also found that some KPI targets for direct managed buildings were not met by TCHC; There were KPIs not included in the CM contract that should possibly be included in the next RFP process for CM buildings; and The KPIs set out for the CM buildings were not necessarily in alignment with the KPIs used for direct managed buildings. Some of these observations are in alignment with the findings contained in the final report from the Mayor s Task Force on Toronto Community Housing 2, in particular Recommendation 26: That (TCHC) review current private sector management contracts adopting clear performance standards to ensure equity in tenant services, adequate small capital repairs and fair wages for staff... Vendor Operating Budgets CM vendor budgets did not include a budget for capital expenditures as TCHC is responsible for capital expenditures. More importantly, there was no clear direction from TCHC to the CM vendors on the delineation between operating expenses and capital expenses. As such, there is an incentive for CM vendors to delay making operating repairs so that operating repairs turn into a capital expenditure. TCHC Administration, Monitoring, and Performance Assessment of the CM Contracts We found that there was insufficient monitoring and review by TCHC over the course of the CM contracts of: 2 Transformative Change for TCHC, A Report From the Mayor s Task Force on Toronto Community Housing January 26, 2016

32 Contract Managed Buildings Audit October 6, 2016 Page 4 CM vendors not achieving KPI targets; and CM vendor budget over spending. In addition, to our knowledge, over the course of the CM contracts there has been no effective reporting about the savings that have been achieved by using CM vendors. There is a cost in staff resources to effectively administer, monitor, and assess the performance of the CM vendors. We are not convinced that this function has been adequately resourced. The Value Proposition in Having Contract Managed Buildings The value proposition with respect to having CM buildings must take into consideration not only the financial aspects of the contracts (including the cost of administering the contracts), but also other things such as the quality of customer service provided, and the level of customer satisfaction upon receiving those services. We have recommended that a thorough review of the CM building value proposition be made prior to issuing the next RFP for CM buildings. Recommendations We have made six Recommendations in this report to address the matters noted above. More importantly, the Recommendations in this report address issues relating to (i) The development, structure and oversight of the current CM contract for the purpose of strengthening the accountability of a future contract, as well as (ii) Addressing the value for money and strategic implications of the CM building initiative. Management s Action Plan with respect to our Recommendations is attached to this report as Appendix A. As well, the CM vendors have acknowledged our detailed findings, and the CM Unit has indicated that improvements have been ongoing. We would like to take this opportunity to thank the staff and management of the TCHC Asset Management Department, particularly the CM unit, and the Finance Department for their cooperation and assistance during this audit. The same appreciation is extended to the CM vendors site staff and Head Office staff. Prepared by: Genevieve Segu, CPA, CMA CIA CRMA CISA Manager, Internal Audit Approved by: Michael Vear, CPA, CA, CPA (Illinois) Chief Internal Auditor, Internal Audit Department

33 Contract Managed Buildings Audit October 6, 2016 Page OPERATIONAL KEY PERFORMANCE INDICATORS 1.1 Vendors compliance with Key Performance Indicators We reviewed three KPIs for all CM vendors: Work Order Completion; Building Condition; and RGI Calculation. The Work Order and Building Condition KPIs are important because they mitigate the risk that the building could further deteriorate, causing potential injury or damage to occupants, staff or visitors. The RGI calculation KPI is important to mitigate the reputational risk that tenants are not treated in a fair and consistent manner. There is also a financial risk that the RGI revenue is not properly calculated. As summarized in Table 1 below, the CM vendors, for the most part, have difficulties achieving the KPIs as set out in the contract, although their performance varies across the KPIs examined. Notably, we found one company standing out as being the best performer across all 3 KPIs, and one, at the other end of the spectrum, standing out as being the weakest performer across the 3 KPIs reviewed. We identified significant weaknesses in two areas: Work Order Completion and RGI Calculations and we have provided our detailed findings to each vendor for their resolution. Work Orders Building Condition Table1: CM Vendors compliance with KPIs Definition KPI Result % of the 50 work orders sampled for each vendor that were compliant with the timelines for resolution of the work orders: 24 hours for essential repairs; and 5 days for other categories of repairs. % of the 158 items on the TCHC CM Unit building assessment checklist that are completed (observed by IAD and a Community Housing Supervisor for two buildings for each vendor). The items related to the buildings exterior and interior (though not the tenant units). 80% Only one vendor was compliant. The others ranged between 64% and 72%. 100% None of the vendors met the required KPI for building conditions (100%). The compliance rates ranged from 81% to 95%.

34 Contract Managed Buildings Audit October 6, 2016 Page 6 RGI calculations % of 15 files for each vendor that were in compliance with the requirements for RGI calculations and documentation. 100% Only one vendor was compliant. The others ranged between 73% and 93%. At the time of this report, the TCHC CM Unit is actively following up with the CM vendors on the resolution of our detailed findings for Building Operations and RGI Calculations. 1.2 Key Performance Indicators (KPI) As part of the scope of the review, and in order to understand the vendors noncompliance, we then looked at some of the KPIs contained in the RFP. Developing realistic and achievable KPIs As noted in Table1 above, with respect to the three KPIs we reviewed: Only one CM vendor was compliant with the Work Order completion KPI of 80% work orders completed within the requisite timelines; and Only one CM vendor was compliant with the RGI calculation KPI of 100% accuracy. For buildings that are directly managed by TCHC, there were also difficulties in meeting the following KPI targets: Work Order completion: in August 2015 none of the direct managed operating units met the KPI of 80% work orders being completed within 5 business days; and RGI Calculations: for the year ending December 31, 2015, none of the direct managed operating units reached the KPI of 100% RGI calculation accuracy 3. These findings are an indication that the evaluation of the performance of both direct managed buildings and CM buildings might not be based on realistic and/or achievable targets. Establishing all relevant KPIs We found that TCHC did not establish performance indicators, reporting frequencies and targets to measure some other CM Contract items, such as: Measuring vendor s performance e.g. o number and type of tenant complaints; o length of time to respond to tenant complaints (monthly); o tenant satisfaction; o % of repairs completed on time; and average # of days to complete repairs; and 3 During the external audit of TCHC s 2015 financial statements, the external auditors found that there was inaccuracy in the RGI calculation process (though within an acceptable level with respect to materiality on TCHC s financial statements).

35 Contract Managed Buildings Audit October 6, 2016 Page 7 Meeting TCHC s Green Plan goals for energy and water conservation, waste reduction and diversion as set out in the 2012 RFP. Periodic monitoring of KPIs Out of the three KPIs that we reviewed, we found that TCHC does not monitor them equally, as follows: Work Orders are monitored and their completion status are discussed monthly with each CM vendor; The building inspections are performed once a year; and RGI calculations are not reviewed. Recommendation #1 TCHC Asset Management: a) Review currently used operating unit KPIs to ensure that they are adequate and relevant for performance monitoring purposes, and achievable. Develop new KPIs as required; b) Align KPIs for CM vendors with those of direct managed buildings; c) Review the KPIs periodically to ensure they are remain adequate and relevant; and d) Periodically monitor performance results of KPIs for CM vendors. 2.0 RECORDS RETENTION In order to establish that the proposed cost saving targets for the 2012 CM contract awards were reasonable, we sought to review the supporting documentation of the information that was presented to, and approved by, the TCHC Board of Directors (the Board) when they approved the 2012 CM contract awards to the four vendors. Other than the documents that were presented to the Board, TCHC Management was not able to provide us with: A business case or other information that outlined the objectives, background, and rationale for the decision to continue to contract out the management of some of TCHC s properties; and Information to support the basis on which the net savings identified in the report to the Board were developed. As such, we were unable to ascertain the reasonableness of the net cost savings that were estimated to be achievable by using CM vendors. We have no reason to believe that the aforementioned documents, information, and analysis do not exist. Simply, management could not find it. We were able to establish that this stems from a lack of succession planning with respect to institutional knowledge and records retention, as follows: The staff who performed the requisite analysis, developed the 2012 RFP, analysed and recommended the CM contract awards, and implemented the CM vendor contracts are no longer with the organization; and

36 Contract Managed Buildings Audit October 6, 2016 Page 8 The individuals who have administered, or who are now currently administering, the CM Vendor contracts were/are not in possession of the information necessary to support the 2012 business case(s) related to the contract. Recommendation # 2 For future CM contract awards TCHC Management establish a central repository ensure that, at a minimum, the following information and documentation is properly stored and/or archived: a) The rationale and justification for the contract, documented in an approved business case. The documentation should include the assumptions, data and information used to identify any savings or benefits; b) Benchmarks and processes to monitor, assess and report on whether the benefits/savings are being achieved; and c) Key documents and related supporting documents that must be retained; their format (paper and/or electronic) and retention periods. Such repository should have restricted (i) access to its contents and (ii) ability to delete records from it. 3.0 CONTRACT MANAGED VENDOR BUDGETS 3.1 Annual Budgets Each CM vendor submits an annual operating budget that is approved by TCHC management. The budgets include such items as maintenance and repairs, supplies, and such other operating expenses. With the exception of one vendor in the first year of the contract, all of the vendors exceeded their budget in each of the contract years. 3.2 Operating vs. Capital Expenses TCHC is responsible for capital expenses in CM buildings. The CM vendor budgets include only operational expenditures. A difficulty arises because the CM vendor contracts and budgets do not include a clear policy, guidelines or other criteria to enable the CM vendor to determine when an expenditure is to be classified as a capital item. In fact, it was determined from discussions with the CM vendors, some capital expenses were being charged to the CM vendors operating budgets, which resulted in overspending of the annual budget. Though since the audit commenced TCHC provided capital expense guidelines to the CM vendors, throughout most of the contract the CM vendors were using their own capital policy. This lack of distinction between operating and capital expenditures leaves TCHC open to potential budget manipulation, erosion of potential cost savings, and ineffective use of public funds. In particular, the structure of the CM vendor contracts is such that it incentivises CM vendors not to complete maintenance repairs, which would come out of their operating budgets, but rather convert said expenditures into capital expenses,

37 Contract Managed Buildings Audit October 6, 2016 Page 9 Recommendation # 3 For future CM contract awards TCHC Management, in developing the budget requirements for the CM vendors: a) Update the Internal Capital Expense framework to include clear policies, guidelines, and thresholds and provide the updated document to each vendor; and b) Ensure that the operating budget and capital plan takes into consideration the work that will be required to maintain and/or refurbish the aging buildings in the vendors portfolio. 3.3 Monitoring Budget Variances The CM vendors property accountant prepares monthly financial reports on the significant budget variances and forwards them to TCHC CM Unit Manager. During the course of the contract, however: TCHC did not enforce the CM vendors compliance with their respective budgets. That is, any over-budget spending was not actively resolved by management; and TCHC did not exactly know the source of the overspending. It was represented to us that during the term of the contract, the CM unit s corrective actions were to identify and report to the CM Vendors their concerns with their overspending and attempt to resolve financial issues relating to capital as they came up. We could not obtain supporting documents for such analysis or whether the vendors were asked for an explanation of their variance. Senior Management acknowledges that the cross functional nature of contract management and finance, along with the lack of proper and/or adequate staffing complement, are contributing factors of the break down in the accountability for the financial aspects of the contract. 3.4 Periodic Assessment of Savings Realized Throughout the term of the current CM vendor contracts, we are not aware of any meaningful assessment by management of the savings realised, or not, by using CM vendors to operate the CM buildings. Recommendation # 4 With respect to the CM vendor contracts, TCHC Management develop a process to, periodically throughout the year, report on: a) The CM vendors financial performance (e.g. budget to actual expenses, capital vs. operating expenditures, etc.); and b) The savings realised by TCHC through using CM vendors to operate the CM buildings.

38 Contract Managed Buildings Audit October 6, 2016 Page TCHC RESOURCES REQUIRED TO ADMINISTER CM CONTRACTS In this report we have noted that: All KPIs necessary to assess the performance of the CM vendors are not necessarily being monitored; There is no internal review of RGI calculations made by the CM vendors; Budget overspending is not being reviewed nor resolved in a meaningful way to determine root-cause reasons behind the overspending; There has been no determination of any savings realised through the use of CM vendors to manage the CM buildings; and There does not appear to be a true cross functional relationship between the CM Unit and Finance staff, which would provide for more meaningful and effective administration, monitoring, and assessment of the CM contracts. We do recognize that at the time of this audit, the CM unit did not have its full complement of staff in place. We do, however, question whether the complement of staff assigned to properly administer, monitor, and assess performance of the CM contracts (as noted above) is sufficient. There is a risk that public funds are not being used economically or effectively, resulting in a negative impact on the public s perception of the vendors, TCHC and their reputations. Recommendation # 5 With respect to CM vendor contracts, TCHC Management a) Formally align responsibility for all aspects of the CM vendor contracts (administration, monitoring, performance assessment, RGI calculation reviews, financial performance, etc.) under one unit; and b) Assess the staffing complement required to properly and adequately administer, monitor, and assess performance of the CM vendor contracts, and staff accordingly. 5.0 CONTRACT MANAGED BUILDINGS THE VALUE PROPOSITION A key purpose of entering into contracts with third party vendors to operate a portfolio of TCHC buildings was to realise cost savings, which could then be used towards operational and capital repairs on its buildings. We have noted in this report the challenges experienced by TCHC with respect to this program. What has not been addressed is the value proposition of entering into these third party contracts. There are two parts of this value proposition: Financial Has money actually been saved? To our knowledge there has been no meaningful reporting on what has been saved by using the CM vendors.

39 Contract Managed Buildings Audit October 6, 2016 Page 11 Does the required internal cost of monitoring CM contract performance take away from any savings realised? Customer Service and Satisfaction The value of the CM initiative must be assessed in tandem with the quality of customer service provided, and the customer satisfaction with the services provided. Simply what was the value of the initiative compared to the money spent? Though we have not reviewed these items in this engagement, we note that TCHC Client Satisfaction surveys conducted in both 2012 and in 2015 indicated an inequitable service delivery between CM buildings and direct managed buildings, where CM clients rated their satisfaction as lower than direct managed clients. TCHC management has indicated that they are currently reviewing both financial information over the life of the contract as well as more detailed customer satisfaction ratios. Lastly, from a purely strategic standpoint, TCHC, over the years, has built its operations to increase its competency to directly service its tenants. This competency was subcontracted to CM vendors who were globally not compliant and over budget. This might pose an operational and reputational risk to TCHC. TCHC should strive to use leading practices in order to reduce operational, financial and reputational risk with respect to utilizing CM vendors to operate and maintain the CM units. Recommendation # 6 TCHC Management consider the value for money proposition and strategic implications of the CM buildings initiative prior to issuing the next RFP for CM vendors.

40 Contract Managed Buildings Audit October 6, 2016 Page 12 APPENDIX A: MANAGEMENT S ACTION PLAN # Recommendation Agree/Disagree Management s Action Plan Timeline 1 TCHC Asset Management: a) Review currently used operating unit KPIs to ensure that they are adequate and relevant for performance monitoring purposes, and achievable. Develop new KPIs as required; b) Align KPIs for CM vendors with those of direct managed buildings; c) Review the KPIs periodically to ensure they are remain adequate and relevant; d) Periodically monitor performance results of KPIs for CM vendors. Agree New realistic KPIs, aligned with TCHC direct-management operations, will be included as part of new RFP. Vendors will be evaluated on their performance against the KPIs, with incentives for exceeding the KPI targets and liquidated damages for not meeting the targets. Issuance of RFP (Prior to December 31, 2016) 2 For future CM contract awards TCHC Management establish a central repository ensure that, at a minimum, the following information and documentation is properly stored and/or archived: a) The rationale and justification for the contract, documented in an approved business case. The documentation should include the assumptions, data and information used to identify any savings or benefits; b) Benchmarks and processes to monitor, assess and report on whether the benefits/savings are being achieved; and Agree Business case for contract management to be provided to the Business, Investment, Finance, and Audit Committee on October 19, Benchmarks and KPIs to monitor CM vendors to be included a part of new RFP to be issued in Repository for documents, with restricted access, completed. October 19, 2016 for repository and business case. December 31, 2016 for Benchmarks and KPIs (as part of new RFP).

41 Contract Managed Buildings Audit October 6, 2016 Page 13 # Recommendation Agree/Disagree Management s Action Plan Timeline c) Key documents and related supporting documents that must be retained; their format (paper and/or electronic) and retention periods. Such repository should have restricted (i) access to its contents and (ii) ability to delete records from it. 3 For future CM contract awards TCHC Management, in developing the budget requirements for the CM vendors: Agree New Capital Repair Guidelines developed and provided to all CM vendors. Completed. a) Update the Internal Capital Expense framework to include clear policies, guidelines, and thresholds and provide the updated document to each vendor; and b) Provide the successful candidates with a detailed operating budget and capital plan that takes into consideration the work that will be required to maintain and/or refurbish the aging buildings in the vendors portfolio. Structure of new RFP will ensure that future operating and capital budgets align with operational needs. December 31, 2016 for Benchmarks and KPIs (as part of new RFP). 4 With respect to the CM vendor contracts, TCHC Management develop a process to, periodically throughout the year, report on: a) The CM vendors financial performance (e.g. budget to actual expenses, capital vs. operating expenditures, etc.); and Agree New reporting protocols to be developed to report on contractmanagement performance to the Board of Directors. The reports will include: - Financial performance of CM vendors relative to budget; and June 30, 2017

42 Contract Managed Buildings Audit October 6, 2016 Page 14 # Recommendation Agree/Disagree Management s Action Plan Timeline b) The savings realized to TCHC by using CM vendors to operate certain TCHC buildings. Financial performance of CM vendors relative to direct-managed properties. 5 With respect to CM vendor contracts, TCHC Management a) Formally align responsibility for all aspects of the CM vendor contracts (administration, monitoring, performance assessment, RGI calculation reviews, financial performance, etc.) under one unit; b) Assess the staffing complement required to properly and adequately administer, monitor, and assess performance of the CM vendor contracts, and staff accordingly. 6 TCHC Management consider the value for money proposition and strategic implications of the CM buildings initiative prior to issuing the next RFP for CM vendors. Agree Agree Assessment of requirements to monitor CM vendor contracts is ongoing. The assessment involves evaluating resources to monitor the CM vendors under the framework of the new contracts. Action is completed and business case for contract management to be provided to the Business, Investment, Finance, and Audit Committee on October 19, May 1, 2017 October 19, 2016

43 Infrastructure Ontario Financing November

44 Overview 1. $62.2M CMHC Early Renewal penalty waived mortgages (10 Properties) 2. $310M Refinancing of Existing Loans (32 Properties) 3. $10.0M 180 Sackville (Regent Park 2015 new building) 2

45 CMHC Early Renewal penalty waived mortgages Federal Government providing $150M over 4 years Canada wide ($50M 2016, $50M 2017, $25M 2018, and $25M 2019) Amount of Loan: $62.2M Purpose of Loan: 1. $23.1 M - Repay 10 mortgages with CMHC (current average interest rate = 9.50%) 2. $39.1M - Additional Funds for Capital Expenditures Estimated prepayment penalty waived: $14.5M 3

46 IO Refinancing of Existing Loans Amount of Loan: $310M Purpose of Loan: 1. $94M - Repay 32 mortgages with CMHC/ BNS/TD/RBC (current average interest rate = 4.3%) 2. $216M - Additional Funds for Capital Expenditures 4

47 Future IO refinancing Mortgages Refinanced Mortgage Amount ($ millions) Expired Mortgage Amount ($ millions) Net New Money ($millions) IO 2016 $ 310 $ 94 $216 IO Current amount to be financed IO IO IO IO IO IO IO IO Total $ 594 $ 194 $400 Completed : $325M of new money from 2013 to 2015 (Refinanced Amount $436M) 5

48 180 Sackville (Regent Park 2015 new building) Amount of Loan: $10M Purpose of Loan: 1. $10M - Additional Funds for Capital Expenditures MPAC Value for this property: $28.2M Debt to Equity = 35% (below industry average) 6

49 Terms and Conditions similar to 2013, 2014 and 2015 IO Financing Requires City of Toronto guarantee Interest Rate: TBD at time of closing (at Sept 27, 2016 approx. 3.11% ) Term: 30 years Amortization: 30 years Basis of loan: 10 CMHC Properties = Maintain same Principal + Interest Payments 32 Properties = Based on Net Operating Income (NOI) capped at 6% multiplied by 75%. 7

50 Financial Overview Under the TCHC Master Covenant Agreement with its primarily lenders, required to maintain a 30% debt to secured asset limit. Debt Balance at June 30, 2016 = $939M After Refinancing: Debt Balance = $1.19B (maximum Debt based on MCA = $2.0B with MPAC value of properties = $6.75B) Company continues to repay at least $45M of debt principal annually Debt to Secured asset = 17.6% (below 30% limit) Refinancing is a short-term solution Company needs to move away from funding its way out of the current state and towards long-term sustainability. 8

51 Page 1 of Mortgage Re-financing/Renewal Item 6B November 14, 2016 Board of Directors Report: To: TCHC: Board of Directors From: Chief Financial Officer & Treasurer (Interim) Date: October 19, 2016 PURPOSE: To seek approval from the Board of Directors to refinance certain mortgages that are maturing in RECOMMENDATIONS: It is recommended that the Board of Directors: 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

52 Page 2 of 4 substituting of Properties secured by IO, negotiating and executing such documents as may be necessary, to give effect to the above recommendation. REASONS FOR RECOMMENDATIONS: The City Manager has directed Management to pursue this financing in the absence of funding from the federal and provincial levels of government to sustain funding for the continuance of the ten year capital financing plan. Management seeks approval of these mortgage transactions from the TCHC Board of Directors. If this approval is obtained, to advance the request to the City of Toronto as sole Shareholder and Service Manager under the Housing Services Act, 2011, through its Executive Committee and City Council for approval. If these approvals are obtained, finalization of the transaction with the lender is targeted for Q Financial Underwriting The net operating income of the properties, including subsidies is underwritten at $24.4 Million. The lender is using a 6% capitalization rate, yielding a value of $406.4 Million and capping the loan at a 75% loan to value which yields $304.8 Million. The deal size is $310 Million, and on this basis, the underwriting allows for a buffer between the $300 Million and $310 Million so that as we proceed towards final transaction close, there is contingency room. Furthermore, the projected debt service coverage is 1.53 (NOI divided by estimated annual principal plus interest payments of $15.9 Million). The proposed interest rate is approximately 3.00% % for a 30 year term at the time of this report. The rate is subject to change by the lender. Comparison of Current Annual Principal and Interest Payments vs. Proposed Currently, on the expiring TCHC mortgages, total principal and interest payments are $14.1 Million per annum. The proposed transaction would yield principal and interest payments of $15.9 Million. The differential of $1.8 Million is due to TCHC s proposal to borrow at maximum capacity on this transaction, and the size of the transaction is significant at $310 Million. Also, TCHC has established an internal restricted reserve for debt service coverage of approximately $20 Million in the event that cash flow from operations is insufficient to cover debt service costs. The risk of having to use this reserve is assessed as lower than average by Management.

53 Page 3 of 4 Furthermore, with the established CapEx reserve for the properties to be re-financed, management believes that net operating income performance of the properties will improve over the 30 years in the form of reduced operating and maintenance costs. In addition, TCHC continues to repay approximately $45 Million of debt per year in principal repayment. On this basis, it continues to deleverage, while at the same time leveraging up its balance sheet to address capital repairs. Lastly, Management confirms that an additional $310 Million in debt will still allow for TCHC to be within its financial leverage covenant of 30%. TCHC anticipates its financial leverage, as calculated under its Master Covenant Agreement with its primary lenders, will be approximately 17% - 18% as a result of this transaction. This leverage is low relative to private sector benchmarks, and ultimately, financial leverage risk is traded off with capital risk (less borrowings implies less money to fund capital expenditures, which increases capital risk). Key Financial Advantages of the Proposed Financing Term Sheet The key financial advantages of refinancing with IO are as follows: a) Ability to lock-in at historically low interest rates on both terms to maturity, and equivalent amortization periods, of 30 years; interest rate is 3.11% (as at Sept. 27, 2016); b) 30 year term is generally not available in the private markets, making Infrastructure Ontario a unique lender for TCHC; c) The ability to extend the financing term to 30 years is the key driver allowing TCHC to benefit through obtaining substantial funds to address its capital backlog; and d) Improved financial discipline. The way in which these mortgages are being refinanced is typical of industry practices. It forces a process where each individual asset is evaluated to determine how much debt it can support, and ensures that the basis of the financing is sound at the individual asset level. Furthermore, by securing the debt against the actual properties of TCHC, rather than the general assets of the Corporation, this introduces financial discipline by asset for the longer term. IMPLICATIONS AND RISKS: 1) This transaction will allow TCHC to address mortgages that are maturing and generate net new incremental funds to address TCHC s capital repair expenditures. TCHC s legal counsel will provide support to ensure TCHC s rights and obligations are appropriately protected, managed and risk mitigated. External legal counsel will be retained upon Management receiving all requisite approvals

54 Page 4 of 4 to proceed, including TCHC Board of Directors approval and City of Toronto approval. SIGNATURE: Rose-Ann Lee Rose-Ann Lee CFO & Treasurer (Interim) ATTACHMENTS: 1: Term Sheet Infrastructure Ontario 2: 2016 Mortgage Renewals STAFF CONTACT: ROSE-ANN LEE. (416) CFO & Treasurer (Interim) rose-ann.lee@torontohousing.ca Joy Arellano-Chua...(416) Director, Treasury joy.arellano-chua@torontohousing.ca

55 Provide Provide OILC Credit Application: Toronto Community Housing Corporation September 7th, 2016 Appendix 6 - Term Sheet 1. Borrower: Toronto Community Housing Corporation (the Borrower ) 2. Lender: Ontario Infrastructure and Lands Corporation (the Lender ) 3. Committed $310,000,000 (the Committed Amount ) Amount: 4. Credit Facilities: Term Loan: Non-revolving fixed interest rate loan in the aggregate maximum principal amount of the Committed Amount. 5. Purpose: b) Term Loan: The advance of funds from the Term Loan will be used as follows: i. Existing Loans on Title financing in repayment of the existing CMHC, TD, RBC and Bank of Nova Scotia 1st mortgages of approximately $93.6 million, against the subject properties (collectively, the Properties and individually as Property ) as detailed in Appendix 1; ii. Capital Expenditure Reserve Funds funds of approximately $72.2 million allocated for the repair and maintenance work at the Properties as detailed in Appendices 2 and 3; iii. Equity Withdrawal - Provide the Borrower with an equity withdrawal in the approximate amount of $144.2 million solely for the purpose of repair and maintenance work at the Borrower s portfolio of residential properties in general (which, for greater certainty, includes multiresidential properties) (the purposes associated with the loan Advances under ii. and iii. above are collectively referred to as the Project ). 6. Maturity Dates of Term Loan: the Credit a) Thirty (30) year term amortized over thirty (30) years, subject to acceleration by Facilities: the Lender in accordance with the Standard Terms (the Term Loan Maturity Date ). Any and all amounts owing under the Term Loan must be repaid in full no later than the Term Loan Maturity Date. mm

56 Funds OILC Credit Application: Toronto Community Housing Corporation September 7th, Interest Rates Tenn Loan: and Repayment: i. Interest on the Advance shall be calculated at a fixed interest rate per annum based on the indicative fixed interest rate as posted on the Lender s website (www. infrastructureontario.ca) under Lending Rates: Municipalities Amortizer as confirmed by the Lender to the Borrower under the Term Loan. Such fixed interest rate shall be based on the Lender s cost of funds plus the Lender s prevailing spread assigned to the Borrower s sector for program delivery costs and risks. ii. Blended payments of principal and interest to be paid monthly over a 30 year amortization period. iii. The Term Loan is a non-revolving facility and no amounts repaid under the Term Loan may be re-borrowed. 8. Drawdown: a) Term Loan: Total Lender Advances shall be made for all Credit Facilities and for each Property pursuant to Appendix 1 in a single Advance to the Lender s solicitor in trust, as set forth below, subject to the discharge of existing prior encumbrance(s) in order to provide the Lender with a 1st charge/mortgage over all of the Properties, subject only to Permitted Liens. A Promissory Note shall be required to be executed by the Borrower at the time of the Advance to evidence the terms for repayment of the Term Loan. i. Existing Loans Pursuant to direction of funds in repayment of matured Borrower loans on specific Properties as detailed and upon maturity dates as noted in Appendix 1. Should the Borrower provide evidence to the Lender of repayment in full of existing loans as detailed in Appendix 1 from its own resources (excluding any of the Credit Facilities), the Lender will advance the relevant funds directly to the account of the Borrower; ii. Capital Expenditure Reserve Funds to be held in trust by the Lender invested for the Borrower within three separate accounts (together, called the Capital Expenditure Investment Accounts ), a) $72.2 million for release to pay costs of major repairs and maintenance on a specific group of properties as allocated by the Lender in Appendices 2 and 3, (the Cap-Ex Reserve Funds ), b) $144.2 million to fund the Borrower s State of Good Repair Loan Fund (as defined in Section 18 below), (the ( Equity Withdrawal Funds ), and c) annual contribution based on the gross income (including all subsidies) realized on the subject Properties, a 4.0% allocation will be added to the monthly payment obligation of the Borrower (the ( Gross Income Capex Funds ). The Capital Expenditure Investment Accounts shall be under the control and direction of the Lender pursuant to a Capital Expenditure Investment Account Agreement dated the date of the Advance hereunder. With respect to the Cap-Ex Reserve Funds, upon completion of the agreed upon work at the specific subject Property as evidenced by a Borrower declaration of completion and subject to the requirements of the Capital Expenditure Investment Account Agreement, the funds in relation to the subject Property shall be released from the Cap-Ex Reserve Funds to the Borrower in accordance with the Capital Expenditure Investment Account Agreement; nn

57 the OILC Credit Appilcation: Toronto Community Housing Corporation September 7th, 2016 iii. Equity Withdrawal Funds Advance of Equity Withdrawal Funds from the Term Loan shall be deposited first into a Capital Expenditure Investment Account (separate and segregated from the Cap-Ex Funds), and, as set out in Section 18 below, second into the Borrower s State of Good Repair Loan Fund (subject to conditions in Section 18 below) with ongoing quarterly reporting of usage of funds in residential infrastructure projects and principal balance; and iv. A Borrower internal project management cost equivalent to 5.0% of the funds drawdown from the Cap-Ex Reserve Funds and the Equity Withdrawal funds per Section 8 (a) (ii) and (iii) will be considered eligible additional drawdown under the Financing Agreement. Periodic drawdown requests and reporting will include the internal project management costs in addition to the actual drawdown of funds per Section 8 (a) (ii) and (iii). 9. Security: The following security shall be provided to support all present and future indebtedness and liability of the Borrower under the Credit Facilities, and shall be registered in first position unless otherwise noted below, and shall be on the Lender s standard form: a) Promissory Note; 1st b) Charge/Mortgage registered at closing in the amount of $310,000,000 as a blanket first charge/mortgage over the Properties together with all supportive collateral security in favour of the Lender; c) Pt Assignment of Rents and Leases registered site specific over the Properties on title and under the PPSA for the duration of the Term Loan; 1st d) General Security Agreement specific to the assets used solely in connection with the Properties for the duration of the Term Loan; e) Triparty Agreement in form and substance acceptable to the Lender executed by the Shareholder (the City of Toronto), the Lender and the Borrower, amending the existing Triparty Agreement dated November 6thi, 2015, to include inter alia the subject Term Loan et al., relating to the Shareholder Guarantee and the Indebtedness under the Credit Facilities; f) Creditor Acknowledgement Agreement for the term loan be executed by all creditors identified within the Master Covenant Agreement made as of May 11, 2007 (the Master Covenant Agreement ), in substantially the same form as the agreed upon acknowledgment agreement provided in connection with the Prior OILC Loan Agreement; g) Shareholder s Agreement as amended and restated, executed by the Borrower, Shareholder (City of Toronto) and the Lender, in substantially the same form as the agreed upon shareholder s agreement provided in connection with the Prior OILC Loan Agreement with the Borrower with the inclusion of a Shareholder loan guarantee including monthly principal and interest payments; h) Assignment of Specific Account(s) and Set-off Agreement in respect of Capital Expenditure investment Accounts; i) Title Insurance: Title insurance acceptable to the Lender site specific to the subject Properties and for the full amount of the Loan noted on each Property; 00

58 OILC Credit Application: Toronto Community Housing Corporation September 7th, 2016 j) Certificate of Property Insurance with Lender shown as 1st loss payee to the satisfaction of the Lender site specific to the Properties; k) Capital Expenditure Investment Account Agreement between the Borrower and the Lender. I) all other security documentation as may be required from time to time in the reasonable discretion of the Lender to protect the interests of the Lender. All of the above documents and security shall be referred to collectively in this Agreement as the Lender Security. 10. Conditions In addition to the Lender s standard conditions precedent, the Borrower shall provide Precedent: to the satisfaction of the Lender prior to Term Loan advance with respect to each Property as applicable, the following: a) Building Condition Reports: for the Properties to the Lender s satisfaction b) Current Deferred Maintenance Update: on the deferred maintenance costs of the Borrower s portfolio of properties; c) Financial Statements: Borrower s audited FYE December 31, 2015 financial statements on a best efforts basis or their drafts to the Lender s satisfaction; d) Commercial Leases: copies of all leases at the Properties to the Lender s satisfaction; e) Discharge Statements: The Borrower shall provide discharge statements of existing financing no less than 7 days prior to the date (or such later date as may be agreed to by the Lender) on which funds are requested from the Lender; f) Building and Zoning By-laws: The Borrower shall have provided to the satisfaction of the Lender evidence that the premises and Properties comply and will comply in all respects with all municipal and provincial by-laws and statutes; such evidence may consist of evidence that the interests of the Lender are to be protected through title insurance; g) Property Taxes: The Borrower shall have provided to the satisfaction of the Lender evidence of payment in full of all property taxes due and payable on the Properties; pp h) Partial and Full Property Taxes Exemptions: The Borrower shall have provided to the satisfaction of the Lender evidence of all property tax exemptions for the Properties; i) Fire Inspection Report: The Borrower shall have provided a report by the municipal fire department confirming that all pre-existing units at the Properties have met all necessary fire code standards and such report shall be to the satisfaction of the Lender; j) Court Ordered Judgments: Any and all court ordered judgments greater than $100,000 outstanding against the Borrower shall be shown to be satisfied from the Borrower s own financial resources (other than relating to the Credit Facilities and other than those where the Borrower is appealing such judgment in good faith) to the satisfaction of the Lender; and k) Title Insurance: The Borrower shall obtain title insurance in favour of the Lender. As in the case of the 2013, 2014 and 2015 refinances, the title insurer for this

59 OILC Credit Application: Toronto Community Housing Corporation September 7th, 2016 transaction shall be First Canadian Title. 11. Expenses: The BolTower agrees to remit directly or by way of deduction from initial and subsequent advances, all fees and charges associated with the financing provided under this Agreement. This includes but is not limited to: registration costs, legal fees and disbursement charges, title insurance costs, municipal fire code inspection fees, specific Property reports as agreed to by the Borrower and the Lender. 12. Evidence of The Lender shall record the principal amount of any advance, the payment of Indebtedness: principal and interest on account of the advance, and all other amounts becoming due to the Lender under this Agreement. The Lender s accounts and records shall constitute, in absence of manifest error, prima facie evidence of the indebtedness of the Borrower under the Credit Facilities. For the Term Loan advance, the Borrower shall provide a promissory note in favour of the Lender which shall include the scheduled dates for principal repayment and interest payments. 13. Representations The Borrower shall and is deemed to make the Lender s standard Representations and Warranties : and Warranties. 14. Events of The Lender may accelerate the payment of principal and interest under any Default: committed Credit Facility hereunder and/or terminate any undrawn portion of any committed Credit Facility hereunder, at any time after the occurrence of any Event of Default. 15. Positive The Borrower shall observe the Lender s standard Positive Covenants set out in Covenants: Schedule A and those set out below: a) The Borrower shall maintain each of the Properties, where applicable, in accordance with the Residential Tenancies Act (Ontario); b) The Lender may require that a Building Condition Assessment ( BCA ) be completed for any Property at the cost of the Borrower, seven (7) years after the Advance Date or at any other time (not more frequently than annually) if Lender is of the opinion following completion of its Annual Review assessments of the Property that a BCA is desirable; c) The Borrower shall comply with its procurement directives and policies in the matter of capital expenditures from Equity Withdrawal and the Cap-Ex Reserve Accounts; d) By no later than twelve (12) months after the date of the Advance, the Borrower shall have completed the following major repair and maintenance work in respect of the Properties: (i) the work identified as the Urgent items in the aggregate amount of $6,710,426 and (ii) the work identified as the High priority items in the aggregate amount of $5,230,609, in each case as set out in the Summary Report by Urgency of Needs (the Summary Report ) attached hereto as Appendix 3, and shall have provided the Lender with evidence of such completion by delivering to the Lender a Borrower declaration of completion as contemplated by, and otherwise in accordance with, the requirements of the Capital Expenditure Investment Account Agreement. 16. Negative The Borrower shall observe the Lender s standard Negative Covenants set out in Covenants: Schedule A and shall not: a) make any payment to any creditor that may have any past, present or future qq

60 in in in in OLC Credit Appflcation: Toronto Community Housing Corporation September 7th, 2016 financial claims against any of the Properties if the Borrower is in breach of the Financial Covenants set out in paragraph 19 below and remains indebted to the Lender under the terms of this Agreement; b) permit any cross default provisions to be included with any other loan documentation related to the Properties; and c) issue further corporate debt instruments that could reasonably be expected to reduce the Borrower s ability to maintain its Financial Covenants set out in paragraph 19 below without the Lender s prior written consent. 17. Security The following conditions may require the Borrower to replace specific Lender Substitution: Security in substitution of an existing secured Property at the Lender s reasonable discretion. The Lender will consider at its reasonable discretion the partial discharge of the blanket mortgage to discharge a specific Property on the basis that the Borrower pledges replacement security of same or similar age and characteristics so as to provide equal or greater value in substitution as a result of any of the following: a) Property Sale the event the Borrower enters into an agreement to sell a Property held as Lender Security; b) Environmental Concern the event a Property within the Lender Security is detennined, at the sole discretion of the Lender, to contain an environmental concern; c) Property Condition the event a Property within the Lender Security is determined, at the sole discretion of the Lender, not to be maintained in an acceptable condition to the Lender where there is a reasonable expectation that such condition will negatively affect the generation of rental income that ultimately services the debt allocated on that Property; and d) Property Redevelopment the event the Borrower enters into an agreement to redevelop a Property held as Lender Security. For purposes of determining the value of Property to be substituted as contemplated herein and assisting the Lender in the valuation of such property in the Lender s reasonable discretion, i. The Borrower agrees to supply the Lender with additional information on both the Property being considered or requested by the Lender for partial discharge of the blanket mortgage to discharge the relevant Property along with information on the proposed replacement property. ii. iii. The Borrower may provide the Lender with a then current AACI Property valuation report(s) acceptable to the Lender, should the Borrower request reconsideration of Lender assessed Property valuation. The final assessment of value shall be determined by the Lender. The Borrower will be permitted a 90-day curing period to address the Lender s concerns in correcting identified deficiencies to propose another replacement property. Should the Borrower not address such concerns to the satisfaction of the Lender, the subject Property will be discharged from the Lender s security with a proportionate principal reduction to the loan(s) determined by the Lender with applicable loan breakage fees required. rr

61 based based OILC Credit Application: Toronto Community Housing Corporation September 7, Capital The Capital Expenditure Investment Account Agreement is an extension of the Expenditures and Financing Agreement. Such agreement serves as supplementary security that details Reserve Funds: the manner in which funds reserved in the Capital Expenditure Investment Accounts are (i) in the case of the Cap-Ex Reserve Funds allocated as Cap-Ex Funds (i.e., approximately $72.2 million) in Appendices 2 and 3, allocated for capital improvements and repairs for the secured Properties, (ii) in the case of the Equity Withdrawal Funds allocated as Equity Withdrawal (i.e., approximately $144.2 million) allocated for use in residential infrastructure projects within the Borrower s portfolio of residential properties, and (iii) Gross Income Capex Funds (see Section 18 b) below). The deposits in the Capital Expenditure Investment Accounts are to be utilized only for the respective purposes set out in Section 5 above. The funds in the Capital Expenditure Investment Accounts ( Capex Funds ) will be invested by the Lender or such investment management firm as the Lender may select with the approval of the Borrower in accordance with the Capital Expenditure Investment Account Agreement, it being agreed that Phillips, Hager & North Investment Funds Ltd. is an approved investment management finu. The Capex funds shall be accumulated in the following manner: a) Capital Expenditure Fund Holdback on the Borrower supplied BCA reports, the Lender will allocate as detailed within Appendix 3, specific holdbacks for capital expenditure purposes from the Lender advances (a portion of which is comprised of holdbacks in the aggregate amount of $6,710,426 for work identified as Urgent items in the Summary Report attached hereto as Appendix 3, and a portion of which is comprised of holdbacks in the aggregate amount of $5,230,609 for work identified as High priority items in the Summary Report attached hereto as Appendix 3; b) Gross Income Capex Funds on the gross income (including all subsidies) realized on the subject Properties, a 4.0% allocation will be added to the monthly payment obligation of the Borrower. The Capital Expenditure Investment Account Agreement will detail the manner in which the Capex Funds are accessible to the Borrower including reporting requirements. The Equity Withdrawal Funds from the Term Loan that are deposited into a Capital Expenditure Investment Account as per Sections 8 (ii) and 8 (iii) shall remain in such Capital Expenditure Investment Account until the balance of the Borrower s bank account into which the equity withdrawal component of the Prior OILC Loan Agreement was deposited (the State of Good Repair Loan Fund ) is reduced to $16.5 million from actual project expenses and/or committed project costs, at which point all such funds (including principal and interest comprised in the Equity Withdrawal Funds) will be released to the Borrower for deposit into a separate bank account of the Borrower. 19. Financial a) Debt Service Coverage Ratio: The Borrower shall maintain a minimum Debt Covenants: Service Coverage Ratio (DSCR) of not less than 1.10 to 1.00 on the secured Properties listed in Appendix 1, such ratio to be tested and calculated for the Properties as a whole as of the end of each Fiscal Year. b) Permitted Distributions: Distributions to Shareholder will only be allowed if all the financial covenants are satisfied before and immediately after giving effect to such distribution. ss

62 OILC Credit Appilcation: Toronto Community Housing Corporation September 7th, 2016 DSCR is defined as gross earnings from the Properties (rent, subsidies, parking, laundry, commercial income etc.) less vacancy and bad debt, less all Properties specific expenses excluding extraordinary items and capital reserve funds divided by the sum of principal and interest payments made on the Term Loan during the applicable fiscal year of the Borrower. 20. Reporting: The Borrower shall have the following reporting obligations to the Lender: a) The Borrower shall provide to the Lender audited financial statements of the Borrower within 120 days of the Fiscal Year end of the Borrower; b) The Borrower shall report within 60 days of the end of each Fiscal Quarter to the Lender specific to the funds allocated as an Equity Withdrawal in confirmation of the use of these funds to finance repairs, maintenance and upgrades to the residential assets of the Borrower and in accordance with its procurement directives. The quarterly equity withdrawal report shall include an executed Officer s Certificate providing confirmation to the Lender that the Borrower has complied with its procurement directives. An updated cash flow disclosing the capital expenditures anticipated by the Borrower for the next Fiscal Year shall be provided annually to the Lender within 120 days of each Fiscal Year end of the Borrower; c) The Borrower as part of its year-end audit, shall request its external auditor to review the previous year s capital projects funded by Lender loans as documented in the quarterly equity withdrawal reports and provide a letter to the Lender confirming the loan funds were spent as per the reports. d) The Borrower shall provide evidence to the Lender within 30 days of the end of each Fiscal Year of the Borrower that any and all annual property taxes due and payable for each Property have been paid; e) The Borrower shall within 120 days of each Fiscal Year end of the Borrower provide Property Income and Expense Rent Rolls as requested by the Lender for its annual review; f) The Borrower shall provide copies of insurance policies maintained for the Properties to the Lender as requested by the Lender; and g) The Borrower shall furnish to the Lender as soon as practicable with any other Borrower reporting information related to the Properties to assist in the completion of the Lender s annual review. 21. Permitted Liens: Permitted Liens are listed in Schedule A and also include: a) Any Liens in connection with existing lines of credit of the Borrower not to exceed $200,000,000 in the aggregate; b) Multiple loan facilities site specific as arranged in the normal course of business by the Borrower; and c) Liens permitted under the Master Covenant Agreement entered into by the Borrower. tt

63 143 Canada Monthly OILC Credit Application: Toronto Community Housing Corporation September 7th 2016 APPENDIX I Toronto Community Housing Corporation Property Listing, Anticipated Lender Advances and Allocation of Funds Re-payment - All interest rates are subject to change without notice, please review for interest rate updates. The table below is based on information provided by the Borrower for mortgages maturing/matured in 2016 and potential Lender Advances: Dev. ID Property Address No. of Res. Previous Lenders Mortgage Renewal Existing Borrower Units Date Loan Amt Donlands Ave. 254 Scotia Bank 1-Apr-16 4,335, Weston Rd. 176 CMHC - Monthly 1-Oct-16 2,079, Neilson Rd. 126 CMHC - Monthly 1-Jun-16 6,993, Jarvis Street 212 TD - Canada Trust 1-Sep-16 10,523, Rogers Road 207 Scotia Bank 1-May-16 11,722, , 77 Rankin Cres. 297 Royal Bank of Canada 1-Jun-16 18,823, Delaware Ave. et. al. (6 addresses) 6 TD - Trust 1-Nov , Asquith Ave. 192 TD - Canada Trust 1-Nov , Jones Ave. 15 CMHC - Monthly 1-Jun , Stephenson Ave. 151 CMHC - Monthly 1-Jun , Kingston Rd. 90 Scotia Bank 1-Apr-16 4,211, Kingston Rd. 108 Scotia Bank 1-Apr-16 7,711, Elm Ridge Dr. 14 CMHC - Monthly 1-Jun , , Huron St. 22 CMHC - Monthly 1-Oct , Vanauley St. (20 Vanauley St.) 135 Scotia Bank 1-May-16 3,512, Davenport Rd. 9 CMHC - Monthly 1-Jun , Sullivan St. 17 CMI-IC - Monthly 1-Oct , Wales Ave. 14 CMHC - Monthly 1-Jun-16 86, St. Clair Ave. W. 6 TD - Canada Trust 1-Nov , Caning Ave. 9 Scotia Bank 1-Apr , Larch St. (15 Larch St.) 42 CMHC - Monthly 1-Jun-16 3,802, Asquith Ave. 192 CMHC - Monthly 1-Oct-16 1,578, Elm Street 101 CMHC - Monthly 1-Jun-16 1,779, Yonge St. 113 TD - Canada Trust 1-Nov-16 5,824, Broadway Ave. 52 TD-Canada Trust 1-Nov-16 2,303, Broadway Ave. 75 TD - Canada Trust 1-Nov-16 3,397, Danforth Ave. 109 CMHC - 1-May , Hastings Ave 5 TD - Canada Trust 1-Nov , Grant St. 5 Scotia Bank 1-May , Redwood 5 Scotia Bank 1-May , Woodbine 5 Scotia Bank 1-May , Barrington Ave. 4 Scotia Bank 1-May , au I Total Units I 2768 I ITotal Amount I 93,600,465.37

64 vv Ave. Ave. Ave. Ave. 261 Hastings Ave Hastings Ave Neilson Hall Neilson Rd ) Ave. et. al. (7 21) Carling Irene Elm ridge Elm Ridge Rd. W. 25 Elm Street Elm Street St. 32 Larch St Larch St. ( Carling Ave Stephenson Silverthorn Place Rogers Road Rankin Apartments , 77 Rankin Wellesley\Jarvis Jarvis Street Ave. Blair Court Donlands Asset Name Dev. ID Address # of Units Millions) Amount (in CapEx Funds by Property 7Jones Jones Ave OILC Application: Toronto Community Housing Corporation September 7th, 2016 APPENDIX 2 Weston Towers Weston Rd Credit Total j SHOP Houses CHU Grant St SHOP Houses CHU Redwood SHOP Houses CHU Woodbine SHOP Houses CHU Barrington Danforth Danforth Broadway Broadway Ave. 133 Broadway Broadway Yonge St.( ) Yonge Asguith Park(40) Asguith Ave Larch St.) 909 St. Clair St. Clair Ave Wales(61) Wales Sullivan(11) Sullivan St Davenport(1087) Davenport Queen Vanauley Vanauley Huron St. Huron Madison , Dr. Kingston Rd. (530) kingston Rd Kingston Rd. (520) Kingston Rd Ave. l39stephenson Scattered Units (CHU Ashwick Ave addresses) Scattered Units (CHU Delaware Cres.

65 V V V V building V building - that V OILC Credit Application: Toronto Community Housing Corporation September 7th, 2016 APPENDIX 3 Summary Report by Urgency of Needs (With Description) Address Urgent High Medium Low Grand Total 266 Donlands Ave. $122,500 $1,375,500 $2,634,348 $5,639,736 $9,772, Weston Rd. $728,000 $870,609 $684,600 $6,479,390 $8,762, Neilson Rd. $50,000 $911,566 $1,865,354 $2,826, Jaris Street $24,000 $100,000 $539,500 $2,203,025 $2,866, Rogers Road $89,000 $104,500 $526,557 $2,551,914 $3,271,971 55, 77 Rankin Cres. $740,409 $427,000 $282,532 $6,218,978 $7,668, Delaware Ave. et. al. (7 addresses) $70,531 $5,000 $7,000 $316,481 $399, Ashwick Ave. $1,000 $3,000 $4,000 7 Jones Ave. $25,000 $174,802 $362,511 $562, Stephenson Ave. $346,694 $207,917 $4,354,456 $4,909, Kingston Rd. $873,000 $133,000 $200,000 $449,809 $1,655, Kingston Rd. $15,000 $273,735 $90,000 $2,640,910 $3,019, Elm Ridge Dr. $7,500 $186,765 $76,351 $270, , Huron St. $45,000 $15,000 $200,500 $285,818 $546, Vanauley St. (20 Vanauley St.) $1,137,936 $724,940 $416,600 $950,002 $3,229, Davenport Rd. $9,000 $71,800 $150,451 $231, Sullivan St. $159,700 $11,000 $201,200 $563,097 $934, Wales Ave. $2,000 $26,200 $619,781 $647, St. Clair Ave. W. $16,500 $480 $22,700 $116,460 $156, CarHng Ave. $10,750 $2,000 $325,617 $338, Larch St. (15 Larch St.) $3,000 $27,270 $2,180,865 $2,211, Asquith Ave. $514,793 $242,681 $2,799,303 $2,386,623 $5,943, Elm Street $40,000 $7,000 $1,420,564 $1,467, Yonge St. $1,599,591 $395,000 $2,036,694 $2,578,589 $6,609, Broadway Ave. $74,715 $52,294 $110,235 $1,003,668 $1,240, Broadway Ave. $80,000 $30,426 $840,805 $744,204 $1,695, Danrth Ave. $204,000 $64,000 $110,000 $353,968 $731, Hastings Ave $750 $3,500 $6,000 $10, Grant St. $103,500 $1,000 $8,300 $4,050 $116, Redwood $3,000 $16,500 $16,800 $250 $36, Woodbine $4,500 $0 $4, Barrington Ave. $1,500 $700 $14,500 $16,700 Grand Total $6,710,426 $5,230,609 $13,351,693 $46,866,422 $72,159,151 dium Urgency iobs High Urgency jobs Low Urgency jobs that cou Id if Urgent jobs that could that could moderately currently do not V. unattended in the long affect building affect building seriously affect.. term could affect operation, tenant operation, tenant. operation, operation, quality of life and quality of life and. tenant quality of life tenant quality of life safety - Should be safety - Should be and safety - Should... and safety - Should done as soon as considered w thin 2... be considered if.. be considered w thin... possible years of the Capital sufficient funding is the 5 year Capitai Ffogram available Fogram ww

66 Attachment 2 Toronto Community Housing Corporation Property Listing, Anticipated Lender Advances and Allocation of Funds Re-payment - All interest rates are subject ot change without notice, please review for interest rate updates. The table below is based on information provided by the Borrower for mortgages maturing/matured in 2016 and potential Lender Advances: Dev. ID Property Address No. of Res. Units Previous Lenders Original 2016 Mortgage Renewal Date Existing Borrower Loan Amt Donlands Ave. 254 Scotia Bank 1-Feb-16 4,335, Weston Rd. 176 CMHC - Monthly 1-Apr-16 2,079, Neilson Rd. 126 CMHC - Monthly 1-Jun-16 6,993, Jarvis Street 212 TD - Canada Trust 1-Sep-16 10,523, Rogers Road 207 Scotia Bank 1-May-16 11,722, , 77 Rankin Cres. 297 Royal Bank of Canada 1-Jun-16 18,823, Delaware Ave. et. al. (6 addresses) 6 TD - Canada Trust 1-Apr , Asquith Ave. 192 TD - Canada Trust 1-Apr , Jones Ave. 15 CMHC - Monthly 1-Jun , Stephenson Ave. 151 CMHC - Monthly 1-Jun , Kingston Rd. 90 Scotia Bank 1-Apr-16 4,211, Kingston Rd. 108 Scotia Bank 1-Apr-16 7,711, Elm Ridge Dr. 14 CMHC - Monthly 1-Jun , , Huron St. 22 CMHC - Monthly 1-Apr , Vanauley St. (20 Vanauley St.) 135 Scotia Bank 1-May-16 3,512, Davenport Rd. 9 CMHC - Monthly 1-Jun , Sullivan St. 17 CMHC - Monthly 1-Apr , Wales Ave. 14 CMHC - Monthly 1-Jun-16 86, St. Clair Ave. W. 6 TD - Canada Trust 1-May , Carling Ave. 9 Scotia Bank 1-Feb , Larch St. (15 Larch St.) 42 CMHC - Monthly 1-Jun-16 3,802, Asquith Ave. 192 CMHC - Monthly 1-Apr-16 1,578, Elm Street 101 CMHC - Monthly 1-Jun-16 1,779, Yonge St. 113 TD - Canada Trust 1-Apr-16 5,824, Broadway Ave. 52 TD - Canada Trust 1-Apr-16 2,303, Broadway Ave. 75 TD - Canada Trust 1-Apr-16 3,397, Danforth Ave. 109 CMHC - Monthly #N/A 298, Hastings Ave 5 TD - Canada Trust 1-Apr , Grant St. 5 Scotia Bank 1-Apr , Redwood 5 Scotia Bank 1-May , Woodbine 5 Scotia Bank 1-May , Barrington Ave. 4 Scotia Bank 1-May , Note 1: Total Units 2768 Total Amount 93,600,465.37

67 Page 1 of 2 Financing for 180 Sackville Street, Regent Park Item 6C November 14, 2016 Board of Directors Report: To: TCHC: Board of Directors From: Chief Financial Officer & Treasurer (Interim) Date: October 19, 2016 PURPOSE: To seek approval from the Board of Directors to obtain financing from Infrastructure Ontario for the property located at 180 Sackville Street, Toronto. RECOMMENDATIONS: It is recommended that the Board of Directors: 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.

68 Page 2 of 2 REASONS FOR RECOMMENDATIONS: At present there is no debt on this property. This is a viable opportunity to obtain funding that can be used for the capital requirement of this property which will prevent the property from getting into a rundown state due to lack of funds. FINANCIAL UNDERWRITING The net operating income of the property including subsidies is underwritten at $800K. The lender is using a 6% capitalization rate, yielding a value of $13.3 Million. The lender is capping the loan at a 75% loan to value which yields $10 Million. The deal size is $10 Million. Furthermore, the projected debt service coverage is 1.56 (NOI divided by estimated annual principal plus interest payments of $512 K). The proposed interest rate is approximately 3.00% % for a 30 year term at the time of this report. The rate is subject to change by the lender, IO. IMPLICATIONS AND RISKS: Similar to other financing transactions, TCHC is taking up the liability of debt service payments during the term of the financing. The assessed value of this property as per MPAC is $28.2 Million. $10 Million financing makes the Debt to Equity ratio at 35% which is well below the industry average. SIGNATURE: Rose-Ann Lee Rose-Ann Lee CFO & Treasurer (Interim) ATTACHMENT: Term Sheet Infrastructure Ontario STAFF CONTACT: Rose-Ann Lee. (416) CFO & Treasurer (Interim) rose-ann.lee@torontohousing.ca Joy Arellano-Chua... (416) Director, Treasury joy.arellano-chua@torontohousing.ca

69 Term Sheet Summary Re: Block 22 at 180 Sackville St., Regent Park, Phase 2 Borrower Toronto Community Housing Corporation (TCHC) Lender Ontario Infrastructure and Lands Corporation (OILC) Credit Facility $10,000,000 Non-revolving Fixed Interest Rate Term Loan Purpose To provide permanent/long term financing of a mid-rise building and town houses known as Block 22 (the Property ) in Regent Park. Term/Amortization 30 years term and amortization period; principal and interest payable on the first day of each month and in arrears. Interest Rate As per Infrastructure Ontario rate for 30-year loans (currently 3.50%). Drawdown Total Lender Advances for the full amount of the Credit Facility shall be made to the Borrower s solicitor in trust, subject to solicitor s undertaking that all Conditions Precedent and all required documentation have been met and completed. The Property Block 22 is an 11-storey building with 86 mid-rise units, 32 rental town houses and one level of underground parking. Out of the total of 118 units, 78 are RGI units while the remaining 40 are affordable rental units. Based on approved budgets, total construction cost is $32.4 million. As per cost consultant s report, actual costs as of Nov 2014 stood at $25.8 mil or 80% of the total budgeted cost. Security & Documentation Financing Agreement The following security shall be provided to support all present and future indebtedness and liability of the Borrower under the Credit Facility and shall be registered in first position unless otherwise note below, and shall be on the Lender s standard form as modified to be consistent with the security agreed upon in connection with the loan Financing Agreement dated October 18, 2013 (the Prior OILC Loan Agreement ), supported by resolutions and legal opinion, all acceptable to the Lender acting reasonably: a) Financing Agreement b) Promissory Note(s) c) 1 st Charge/Mortgage registered on the Property d) 1 st Assignment of rents and leases registered site specific over the Property on title and under the PPSA for the duration of the loan. e) 1 st General Security Agreement f) Creditor Acknowledgement Agreement executed by all creditors identified with the Master Covenant Agreement dated May 11, g) Assignment of Specific Account(s) and Set-Off Agreement in respect of Capital Expenditures Reserve Account. h) Title Insurance acceptable to the Lender site specific to the Property and shall be based on 75% of the Lender s estimated value of the Project to reflect the 75% loan to value for the financing. i) Certificate of Property Insurance with Lender showing as 1 st loss payee to the satisfaction of the Lender

70 j) Capital Expenditure Investment Account Agreement between the Borrower and the Lender This transaction will be secured by a guarantee from the City of Toronto. Conditions Precedent In addition to the Lender s standard conditions precedent, the Borrower shall provide to the satisfaction of the Lender prior to the loan drawdown the following: a) Building and Zoning By-laws. The Borrower shall have provided to the satisfaction of the Lender evidence that the Property comply and will comply in all respects with all municipal and provincial by-laws and statutes. b) Occupancy Permit. The Borrower shall have provided to the satisfaction of the Lender a certified true copy of Occupancy Permit for the Property as issued by the City of Toronto. Solicitor s Report Other Representations and Warranties Events of Default Covenants Security Substitution All necessary legal documentation and relevant legal opinions customary for this type of transaction shall have been executed and registered. All other security documentation as may be required from time to time in the sole discretion of the Lender to protect the interests of the Lender. Lender s standard form. Lender s standard form. Lender s standard covenants plus: a) Properties to be maintained in accordance with the Residential Tenancies Act (where applicable); b) Building Condition Assessment may be required seven years after advance date; c) No cross-default provisions with any other loan documentation related to the Properties; d) No further corporate debt instruments that could reduce Borrower s ability to achieve financial covenants without Lender consent; e) Compliance with Property specific Debt Service Coverage Ratios; and f) Distributions to Shareholder only permitted if all covenants are satisfied before and immediately after distribution. At the Lender s reasonable discretion, substitution of property of same or similar age and characteristics so as to provide equal or greater value permitted/required in order to maintain the principal loan balance unaffected without the necessity of a principal pay down in the event of a Property sale, environmental concern, Property condition concern or redevelopment.

71 Page 1 of 8 Vacancy Management Update Item 7 November 14, 2016 Board of Directors Report: To: From: TCHC: Board of Directors Vice President, Asset Management Date: November 3 rd, 2016 PURPOSE: To provide the Board of Directors with requested information related to the types of rentable units that are presently vacant as well as the strategies being implemented to address occupying them. RECOMMENDATIONS: It is recommended that the Board of Directors receive the report for information and discussion. REASONS FOR RECOMMENDATIONS: The information contained within the following report provides the Board with the requisite details necessary to meet its responsibilities as set out in its terms of reference.

72 Page 2 of 8 BACKGROUND: Management has been working to sub-categorize vacancies towards reflecting their status at various stages of the process, including: Vacancy Stage Hold for Internal Transfer Leased On Offer Pending Unit Turnover Description The units that are being held at the local level for the purpose of an internal transfer. The units that have been leased but are awaiting a move-in to occur. The units that have been offered to prospective Tenants for which responses are pending. The units that are undergoing interior repairs to render them ready to lease (following a move out). Vacancy by Unit Size 58% of the vacancies are actively within the leasing process (Unit Turn, On Offer or Leased, pending move-in) while another 5% are being held to accommodate an internal transfer. 61% of vacancy is among Bachelors and 1 Bedrooms which are in relatively low demand on both internal and external waiting lists. 50% of Bachelor vacancies are within the senior s portfolio where the rate of offered units being declined is high.

73 Page 3 of 8 Vacancy by Operating Unit 29% of vacancy is within the Seniors Portfolio where a concentration of bachelor units (60% of the vacant units) are routinely declined in the offer process as non-preferential to seniors. Vacancy in the Scattered Home portfolio (OSS) is driven by poor unit conditions. Each of the vacancies is presently being assessed for capital repair improvement (half of which are already complete). Low rates of Lease and Offer in the Contract managed portfolio are incorrectly reported due to administrative disconnections between IT systems (i.e. Offer, Leasing and Unit Turn rates are higher).

74 Page 4 of 8 Bachelor Units by Development (Abbreviated) 33% of vacancy is among Bachelors (portfolio wide); 60% of which are in the senior s portfolio. 66% of Bachelor vacancies are actively within the leasing process (Leased, On Offer or Unit Turnover). Several outside the senior s portfolio are within buildings with difficult social dynamics related to the concentration of singles (many of whom are seniors living within outside the senior s portfolio).

75 Page 5 of 8 Vacancy Concentrations (Abbreviated) 25% of vacancy is within buildings that are deemed hard-to-rent as they are located in communities with difficult social dynamics, geographical proximity challenges and/or unit condition issues. These units require a significant volume of offers (all of which are open for 5 days) before acceptance. Multiple Offer Example: Lawrence Heights presently has 14 units vacant on Flemington Rd. Community Safety concerns are most frequently cited as the reason an offer was declined. Number of Days an Offer remains open for consideration = 5 Average Number of Offers required to secure a Tenant = 18 Time required to identify an accepting tenant = 90 days Additional time required to occupy vacancy = days (often required to accommodate tenant notice to a current landlord).