Halton Community Housing Corporation

Transcription

1 Report To: From: President and Members of the Board of Directors Sheldon Wolfson, General Manager Date: July 2, 2013 Report No. - Re: HC Public Housing Rationalization, Feasibility and Assessment Study RECOMMENDATION REPORT Purpose THAT Report No. HC re: Public Housing Rationalization, Feasibility and Assessment Study be received for information. The purpose of this Report is to present an update on (HCHC) Public Housing Assets including Oakville Senior Citizens Residence (OSCR) 2012 Rationalization, Feasibility & Assessment Study which was completed for HCHC Public Housing (PH) Assets. This report informs the Board about the results in terms of the immediate state of our PH assets and if the stock can be cost effectively sustained for the next 25 years. Background Since 1988 Halton Region has played a role in assisted housing, by operating Regionally owned housing stock and adopting planning policies to encourage a mix of homes for all incomes and household types. In 2001 the Provincial Government transferred to the Region the responsibility of delivering and administering social and assisted housing programs in the Region. HCHC, with the Region as the Shareholder, was created in part for the purpose of owning and operating the PH assets. Within this mandate is the responsibility to manage HCHC s physical housing assets through an effective asset management model based on industry best practices that can be tangibly measured and provides for consistent deliverable levels of service excellence. The Region s Asset Management division, on behalf of HCHC, engaged the consultative services of the Altus Group Limited in the fall of 2012 to conduct the Rationalization, Feasibility & Assessment Study (Study) on 16 PH Assets including OSCR representing a total of 1404 units in Burlington, Oakville, Milton and Halton Hills. The property mix includes apartments, townhomes, semi-detached and detached homes constructed between 1968 and

2 This is the first phase of HCHC s overall review of its housing portfolio and will be used in conjunction with a Non-profit Housing portfolio review scheduled in 2013 as well as HCHC s ongoing Building Condition Assessments (BCA) program to chart strategies to meet the immediate, medium and long-term needs of HCHC properties. The subject properties reviewed are identified as follows: Halton ID No. Property Name Property Address 4001 Holmesway Place Holmesway Place, Acton 4002 John Armstrong Terrace 8 Durham Street, Georgetown 4003 Margaret Drive Margaret Drive, Oakville 4004 Sargent Court 11 Sargent Road, Georgetown 4005 Bruce Apartments 40 Ontario Street South, Milton 4006 Longmoor Avenue 4100 Longmoor Drive, Burlington 4007 John R. Rhodes Residence 271 Kerr Street, Oakville 4008 Harmony Court 111 Ontario Street North, Milton 4009 Maurice Drive Maurice Drive, Oakville 4010 Burloak Drive Burloak Drive, Burlington 4013 Braeside 46 Holmesway Place, Acton 4014 Pinedale Avenue 5250 Pinedale Avenue, Burlington 4016 Lakeview Villa 17 Elizabeth Drive, Acton 4022 Elm Road Elm Road, Oakville 4023 Kin Court 3 Hyde Park Drive, Georgetown 4030 Oakville Senior Citizens Residence (OSCR) Lakeshore Road W., Oakville The review of HCHC PH Assets involved strategic decisions about the ongoing operations, replacement, or up-grading of the properties. Recommendations are based on the current physical condition of the properties, components/systems, and are influenced by the design, construction and original condition of the building as well as subsequent asset maintenance decisions. HCHC & OSCR Condition Index Estimated expenditures were examined using the Facility Condition Index (FCI) formula. FCI is an industry standard asset management tool which measures the constructed asset s condition at a specific point in time. It is a functional indicator resulting from an analysis of different but related operational indicators such as building repair needs to obtain an overview of a building s condition as a numerical value. FCI is obtained by aggregating the total cost of any needed or outstanding repairs, renewal or upgrade requirements at a building compared to the current replacement value of the building components. It is the ratio of the repair needs to the replacement value expressed in percentage terms. 2

3 The study indicates that the HCHC and OSCR portfolios fall within the good range indicating that if HCHC follows its identified lifecycle costing analysis, HCHC and OSCR can maintain the asset within the good range of the FCI. Given the age of the sixteen (16) properties and based on the current and annual FCI ratings, the HCHC Public Housing Stock and OSCR can be sustained for the next 25 years provided on-going preventative and corrective maintenance, repair and replacement to components, as well as life cycle upgrades, continue to be carried out within the recommended time frames. 25 Year Expenditure Estimates Based on the consultant s findings for the next 25-years, the average annual capital expenditure per each of the 16 PH communities is approximately $1,458,084. With the current annual FCI ratings, HCHC and OSCR properties are positioned to provide rental accommodations and are expected to function successfully. These expenditures are estimates and are assumed based on continued maintenance efforts, unit inspections, as well as effective management through our capital management planning efforts. The costs presented are based on existing asset requirements and do not include changes in the existing PH program delivery. Various factors can and will influence future needs, but based on assumptions made in this review, the current funding reserves efforts will have to be revisited to support future funding requirements. Any changes to the current funding program will need to be looked upon in isolation of existing funding reserves. Redevelopment The properties are located in well-established residential areas with good access to local amenities, public transit and area highways. Redevelopment of any of the properties at this time would not be an effective approach due to the costs associated with development/construction, resident relocation efforts, vacancy losses, and the impact on existing residents in relocation. Based on the 2013 Non-Profit study, a report will be provided to the Board dealing with the complete Housing portfolio. Recommendations from the Study Recommendations from this review to sustain the value and the physical condition of the existing infrastructure of the Public Housing properties for the future include: Continue to carry out life safety issues immediately and with future upgrades, bring grandfathered components up to current building code standards. Continue to update and provide maintenance programs that will help extend the normal life expectancies for major components. Continue to perform Building Condition Assessments (BCA) on all properties on a 5-year cycle to reflect any building condition changes. Review annually and update. 3

4 Look to improve the visibility and integration of HCHC properties into the communities. Seek to maintain or improve upon funding of the capital reserves to maintain capital funding capabilities. Costs are not inclusive of changes in program but reflect ongoing existing program requirements. Any changes to the program need to be looked upon in isolation of this report although will be influenced if changes occur. CONCLUSION Social Housing is a cornerstone of a healthy community and represents a significant human as well as capital investment in our community. The commissioning of the Rationalization, Feasibility & Assessment Study was the first step in understanding what is required to maintain the Public Housing assets in a fiscally responsible manner. It is important to develop an overall plan, which will continue to be reviewed and updated on a regular basis, which includes the Public Housing properties to ensure our assets are maintained in a cost effective and consistent manner. This study along with the 2013 Non-Profit review and ongoing BCA efforts will serve as a planning tool and will assist HCHC in determining suitable levels of budget funds associated with the rehabilitation and maintenance of the PH properties as well as other HCHC properties and support the annual Capital Reserve contributions that are required. With this, as well as other sources of information, HCHC can chart strategies to meet the immediate, medium and long-term needs of its Public Housing and other HCHC properties. FINANCIAL/PROGRAM IMPLICATIONS HCHC staff will continue to work with the Service Manager to consider opportunities that will provide appropriate funding to the HCHC capital program. HCHC will continue to discuss with the Service Manager opportunities to have the funding policy changed so that any operating surplus, in excess of the $300/unit required to be retained in an operating reserve, can be transferred to HCHC s Capital reserve. HCHC owns the land and the building in which OSCR provides its programs. OSCR staff are directly responsible for the day-to-day management, program delivery and minor maintenance and repair of the property. To date, the OSCR capital program has been funded through operating surpluses realized by OSCR and forwarded to HCHC. The OSCR has not realized an operating surplus for several years and the capital reserve has been drawn down to a projected 2012 year-end balance of $178,000. This is inadequate to fund major capital repair and replacement work required in 2013 and future years. In 2013 the capital budget approved funding from the Service Manager for OSCR. Discussions with the Service Manager on how the Region manages this funding shortfall will be undertaken to support the development of a 2014 capital budget program that will support the needs of OSCR. 4

5 RELATIONSHIP TO HALTON REGION S ACTION PLAN The subject of this report is not directly referenced in Halton Region s Action Plan. Respectfully submitted, Shawn Crawford Chief Building Officer Approved by Sheldon Wolfson General Manager If you have any questions on the content of this report, please contact: Shawn Crawford Tel. # 7656 Attachments: None 5