Summary of Submitted 2015 Budget From Rates

Transcription

1 London & Middlesex Housing Corporation Summary of Submitted 2015 Budget From Rates Service Expense Revised Budget Draft Budget Non Tax Revenue Net Tax Supported Expense Non Tax Revenue Increase / (Decrease) Over Previous Year Net Tax Supported Expense Non Tax Revenue Net Tax Supported Tax Supported (%) London & Middlesex Housing Corporation Total to Maintain Existing Service Level 17,911,557 (9,956,700) 7,954,857 18,704,712 (10,163,302) 8,541, ,155 (206,602) 586, % 17,911,557 (9,956,700) 7,954,857 18,704,712 (10,163,302) 8,541, ,155 (206,602) 586, % Service Adjustments Submitted % 2015 LONDON & MIDDLESEX HOUSING CORPORATION AS SUBMITTED 8,541, , % Note: All figures are subject to rounding Budget Highlights: $ % Maintaining Existing Service: Cost pressures for 2015 include significant increases in property taxes, insurance and utilities. Overall property tax expense expected to 561, % increase by 7.2% over the 2014 budget due to MPAC assessments. Insurance rate increase of 6.8% expected and an increase in utilities of 5.1%. These cost increases represent 96% of the total increase required to maintain existing service levels. Increases in building maintenance and administrative costs represent 4% of the total increase required to maintain existing service levels. The above amounts are mitigated by increased revenue primarily in rental revenue due to decreased vacancy rates, stabilized tenancies, and more efficient vacant unit management. 25, % Increase/ (Decrease) over prior year budget 586, % 2015 Draft Budget for the City of London - December 8, 2014 Page 459

2 Business Plan: London & Middlesex Housing Corporation (LMHC) How does this service contribute to the results identified in the City of London Strategic Plan? A Sustainable Infrastructure A Caring Community The City of London is the sole Shareholder of LMHC as well as the Service Manager under the Housing Services Act. Ownership on title of the various properties is registered to LMHC. LMHC provides ongoing stewardship of these assets, ensuring their continued viability to provide affordable homes. Focusing on long term sustainability, many of our capital projects have enhanced existing property values. This past year LMHC has focused on reducing our environmental footprint and energy costs through energy-saving water, electricity, and natural gas initiatives, external building improvements, roof replacements, and building envelope upgrades. LMHC provides homes to families and individuals living with moderate to very low income. We believe that housing is the foundation that stabilizes lives, and that every individual has the right to live in safe, stable and adequate housing. We accomplish this by working with our community partners to ensure that our tenants find the supports they need, not only to find housing, but to sustain a home. Name the main activities done to provide this service: Name The Activities Done To Provide This Service How Much Did We Do? (optional) Is The City Mandated To Provide This Service? Can The Level Of Service Be Changed? 1. Management of the rent-geared-to-income (RGI) program within the public housing portfolio, which includes maintaining and creating new tenancies, LMHC provided over 3200 homes for people living in poverty during the past Yes No 2015 Draft Budget for the City of London - December 8, 2014 Page 460

3 Name The Activities Done To Provide This Service How Much Did We Do? (optional) Is The City Mandated To Provide This Service? Can The Level Of Service Be Changed? rent collections, and vacancy management. year. We transitioned 522 new residents into homes and maintained a 3% vacancy rate, which aligns with the industry standard in the private sector. 2. Community / tenant relations and development to ensure sustainable housing and supports for tenants LMHC partners with many community agencies and the City of London to provide wraparound supports for all our tenants, including the most high-needs and hard-to-house. Through partnership programs, our tenants have access to addiction services, primary health care clinics, summer day camps, supportive living programs and chaplaincy services. LMHC also partners with London Police Service, London Majors Baseball and a number of corporate partners every summer to run a baseball league for children from our family communities. The league fosters leadership, community, responsibility and healthy lifestyles for these young people. No Yes 3. Maintaining the public housing stock in a good state of repair. Through our capital and operational maintenance programs, LMHC contracts Yes Yes 2015 Draft Budget for the City of London - December 8, 2014 Page 461

4 Name The Activities Done To Provide This Service How Much Did We Do? (optional) Is The City Mandated To Provide This Service? Can The Level Of Service Be Changed? or tenders a number of local service providers in the trades or service sector. In the past year LMHC has performed over 17,000 repair or service work orders, many focusing on environmental sustainability. What is the current state of this service? Current Objectives / Milestones In 2013, LMHC s Board of Directors ratified a new strategic plan for , with 20 objectives and a balanced scorecard for measuring results. 1. We operate within a balanced budget. 2. We efficiently allocate, utilize and diversify our funding and resources. 3. We manage and control organizational risks. 4. We protect and sustain our physical infrastructure. 5. Employees work in a learning culture. 6. Employees are engaged and committed to go the extra mile. 7. Employees have the right skills and knowledge. 8. Teams are motivated and empowered to achieve LMHC goals. 9. Employees are equipped with mobile tools and technology solutions that help them excel. 10. We foster customer service excellence Draft Budget for the City of London - December 8, 2014 Page 462

5 11. We optimize communication and engagement. 12. We strengthen partnerships with community service providers and agencies that support our tenants. 13. We revitalize how we manage our properties. 14. We foster tenant retention and stability. 15. We enhance community awareness and the reputation of LMHC. 16. Tenants live in clean and well-maintained buildings. 17. Tenants experience stable, successful tenancies with LMHC. 18. Tenants are empowered. 19. Tenants have access to the community resources, services and supports they need. 20. London and Middlesex Housing Corporation is the preferred housing choice for people in need. What Is Driving This Service (i.e. master plan, Council direction, etc.) LMHC s service is legislated by the Housing Services Act, with oversight of the Service Manager (City of London Housing Division) and the Sole Shareholder (the City of London) through direction via the Declaration of the Sole Shareholder & Accountability Rules, Challenges and Pressure Points Tenant Support Services: Due to local rules that regulate the prioritization of the subsidized housing wait list, LMHC s tenants continue to be a diverse group with complex needs. Our tenants include individuals and families challenged by poverty, physical and mental disabilities, addictions, and other life stressors such as settlement in a new country, or employment instability. With the organization s renewed focus on property management, it has sought to reach out to social service providers and other partners in the larger community with the goal of supporting and promoting services that provide vital stability to tenants lives. Budgetary Pressures: As a landlord, LMHC s first source of revenue is tenant rents; however, because 100% of LMHC s units are rent-geared-to-income, the rent that the organization collects is insufficient to meet all of its expenses as a landlord. Since the devolution of social housing from the Province in 2001, Ontario municipalities have been responsible for subsidizing the rent-gearedto-income units in each community. LMHC is committed to providing the communities of London and Middlesex with good value for their investment, and has been working diligently to assess and adjust its budget where necessary in order to meet the City s 2015 Draft Budget for the City of London - December 8, 2014 Page 463

6 financial targets. Purchasing and cost-sharing opportunities with the organization s Sole Shareholder (the City of London) have been, and continue to be, explored with assistance from the Service Manager, and through a PwC review. Tenant Safety and Security: A recent LMHC tenant survey has indicated that security is the most important issue for many tenants, especially in family communities. As the organization moves towards greater stability in its communities, it is aware of the need for enhanced security at LMHC properties. Site security will continue to be one of our key areas of organizational focus in 2015; LMHC will continue to strive to provide innovative and effective solutions to this ever-increasing pressure. Recent Achievements (completed achievements in 2014 and achievements that are likely to be completed by the end of 2014) Vacancy Rates: LMHC has had significant success at improving its rental vacancy management program, maintaining a vacancy rate of 3%, which is considered the benchmark for property management companies in the private sector. The reduced vacancy rate has had a positive impact on the other key functions. Fewer vacancies ensure that LMHC is maximizing its capacity to provide homes for individuals and families at risk of homelessness. Fewer empty units also translate into optimized rental revenue and favourable impacts on LMHC s asset management and vacancy restoration expenses, which allow for more effective budget management. Strategic Projects: The organization has endeavoured to complete three strategic projects by the end of 2014 that align with LMHC s strategy map and balanced scorecard. There has been a renewed corporate emphasis on inculcating our mission, vision and strategy throughout the organization, with the goal of establishing LMHC as a true expert in our industry. These projects meaningfully engage staff to enhance the corporate culture, improve staff morale, and to provide outstanding customer service to our tenants and community stakeholders. The three staff-led strategic projects will have the following outcomes: Developing a corporate-wide procedural and best-practice manual to provide all employees with the information and materials necessary to achieve and excel in their roles. Exploring and implementing new technologies to find efficiencies in workflow, and to provide tenants with client-friendly solutions that allow for easier access to our services. Socially revitalizing how LMHC manages its properties, including a SWOT and needs analysis, research into best practices in social housing property management to serve high-needs tenants, and the development of an action plan for social revitalization Draft Budget for the City of London - December 8, 2014 Page 464

7 What has been done to manage the budget? The service area has been actively managing its budget by implementing management-led initiatives aimed at creating efficiencies, avoiding costs, and generating revenue. These include the following: Efficiencies / Costs Avoided Shared services with the City have allowed LMHC to find annual cost savings of approximately $300,000 annually. Energy-saving capital projects have offset large increases in utility rates, mitigating cost increases. Revenue Generation / User Fee Increases Vacancy management has allowed for continual year-over-year increases in rental revenues since In 2013, rental revenue increased over the prior year by more than $300,000. Current projections show additional increases over the 2014 budgeted amount, which has been reflected in the 2015 budget figures. What is the future direction of this service? What future initiatives can be contained within the maintain existing service level budget? 2015 Budget Most initiatives that will be explored in 2015 through to 2018 will be through partnership initiatives in order to maintain existing service levels while projecting no increases to the budget outside of normal inflation rates. Continue to explore further cost-saving work with the Service Manager to partner in more shared services. Engage in more community partnerships to bring additional supports to our tenants. Develop innovative solutions to address tenant security issues Look to explore newer technologies to increase efficiencies and streamline workflows, working within budgetary constraints. What service adjustments do you plan to make? 2015 Budget LMHC does not have any service adjustments planned for Draft Budget for the City of London - December 8, 2014 Page 465

8 Key Performance Indicators How Much? Description of measure Rental Revenue $9,702,028 $9,654,000 $9,890,465 $9,890,465 $9,890,465 $9,890, Rental Arrears as a percentage of rental revenue 13.8% 13% 12.8% 12.4% 12.2% 12% How Well? Description of measure We manage and control financial risks, and one of the ways we measure this is by our vacancy rate. 3% 3% 3% 3% 3% 3% Is Anyone Better Off? Description of measure We foster tenant retention and stability through helping tenants manage arrears. We measure this by the percentage of tenants in arrears who have negotiated repayment plans, thus ensuring continued tenancies. 5. We support a healthy continuum of housing that benefits the community by reducing the number of exiting LMHC tenants accessing shelter care or more expensive interventions. We measure this by tracking positive move-outs as a percentage of all move-outs. 20% 33% 35% 37% 39% 40% 80% 83% 85% 87% 89% 90% 2015 Draft Budget for the City of London - December 8, 2014 Page 466

9 London & Middlesex Housing Corporation 2015 Budget As Submitted From Rates Explanation of Adjustments 2015 Maintain Revised Service Requested Actual Existing Budget Adjustments Budget Service Object Expenditures $ % Personnel Costs 4,142,975 4,404,462 26, ,430,900 26, % Maintenance, Materials and Services 4,197,695 3,774, , ,931, , % Utilities 3,789,798 3,682, , ,869, , % Property Taxes, Insurance and Mortgage 4,902,697 5,302, , ,677, , % Administration 956, ,995 48, ,616 48, % Fire, Wind and Ice Expenses 70,657 15, , % Total Expenditures 18,060,588 17,911, , ,704, , % Revenue Net Rental Revenues (9,702,028) (9,654,000) (236,465) 0 (9,890,465) (236,465) 2.4% Other Municipal Revenues (302,832) (302,700) 29,863 0 (272,837) 29,863 (9.9%) One-Time Funding (481,200) % Sub-total - Non Property Tax Revenue (10,486,060) (9,956,700) (206,602) 0 (10,163,302) (206,602) 2.1% Net Budget 7,574,528 7,954, , ,541, , % Additional Information / Commentary With Respect To The 2015 Draft Budget Maintaining Existing Service Levels (Flow through from prior years, inflation, contractual obligations, efficiencies) Personnel Costs: contractual obligations with current staffing complement. Maintenance, Materials and Services: contractual obligations for maintenance agreements offset by cost efficiencies. Utilities: Natural gas expected to fall by 0.5% due to energy saving initiatives. Projected rate increases for electricity and water of 8.1% and 6.8% respectively. Property Taxes, Insurance and Mortgage: projected combined property tax rate and insurance increase of over 7.1% from 2014, or $375,000, is the one of the main cost drivers of the 2015 operating budget. Administration: inflationary cost increases, plus added costs for increased mobile computing. Increase/ (Decrease) Over 2014 Revenues: significantly increased rental revenue (highest since 2005) due to decreased vacancy rates, stabilized tenancies and more efficient vacant unit management Draft Budget for the City of London - December 8, 2014 Page 467

10 Net Property Tax Supported London & Middlesex Housing Corporation 2015 Budget and From Rates 2014 Revised 2015 Requested to 2018 Projected Increase Budget Budget Prior Year Budget 7,954,857 8,541,410 9,173,410 9,402,745 Maintain Existing Service Levels Increase / (Decrease) 586, , , ,069 Maintain Existing Service Levels Budget 7,954,857 8,541,410 9,173,410 9,402,745 9,637,814 1,096,404 Increase / (Decrease) Over Prior Year % 7.4% 7.4% 2.5% 2.5% 12.8% Total 2015 Service Adjustments Budget / 7,954,857 8,541,410 9,173,410 9,402,745 9,637,814 1,096,404 Increase / (Decrease) Over Prior Year 586, , , ,069 1,096,404 Increase / (Decrease) Over Prior Year % 7.4% 7.4% 2.5% 2.5% 12.8% Annual Average Increase: 4.1% Additional Information / Commentary With Respect To The : Maintain Existing Service Levels : An increase of 7.4% in 2016 due primarily to anticipated increases in property taxes and utilities. Property tax stabilization in 2017 is anticipated with a 2.5 % inflationary increase forecasted for 2017 and Draft Budget for the City of London - December 8, 2014 Page 468

11 London & Middlesex Housing Corporation Staffing 2014 Revised Budget 2015 Requested Budget Maintain Existing Service Levels Full-Time Equivalents # Full-Time Employees # Service Adjustments Full-Time Equivalents # Full-Time Employees # Total Staffing Full-Time Equivalents # Increase / (Decrease) Over Previous Year Full-Time Employees # Increase / (Decrease) Over Previous Year Additional Staffing Information / Commentary: 2015 Draft Budget for the City of London - December 8, 2014 Page 469