CityHousing Hamilton Board Meeting Wednesday November 24, 2010 2011 Budget

1. CityHousing HamiltonBoard MeetingWednesday November 24, 20102011 Budget

2. MISSION STATEMENT We provide affordable housing that is safe, well-maintained, cost effective and supports the diverse needs of our many communities

3. OPERATIONAL PLAN • Create financial sustainability • Maintain and improve building conditions • Create healthy, secure communities • Reinvest in communities and increase affordable housing • Leadership: Influence and adapt social housing reform

4. CityHousing Hamilton Division CHIEF EXECUTIVE OFFICER Administrative Assistant (1.0) Manager Business/Strategic Serv **. (11.0) Manager Tenant Support Services (11.5) Manager, Housing Operations (62.85) Manager, Asset Renewal/Maintenance (8.0)

5. Current Financial Status (as of October 2010)

6. 2011 Operating Budget Process • Alignment with timing of City Budget process • Property Managers prepared maintenance expense budget proposals by account line by building. Maintenance expense budget created in conjunction with Capital budget • Finance staff populated balance of templates • Review budget by property with each property manager and operations manager Budget Assumptions • Revenues were estimated based on current year forecast • Administration utilizes the City’s budget process for determining Salary & Benefit costs • Other Administration expenses based on forecasted 2010 YTD expenditures • Utilities expenditure based on current trending and guidelines issued by SHSC and the City of Hamilton guidelines • Property tax expense assumed a 2% increase over current year • Mortgage/debenture costs based on amortization schedules

7. SWOT analysis OPPORTUNITIES -Operational review directives -new SHRA legislation THREATS -poor economic conditions -bed bug infestations -increased complexity of tenant issues/needs -expiration of debentures -legislative changes INTERNAL FACTORS STRENGTHS WEAKNESSES -supportive Board of Directors -well-trained, dedicated staff (intellectual capital) -community partnerships -aging workforce -vacancies -financial reporting software -culture shift for changes will not be overnight EXTERNAL FACTORS

8. Challenges - 2011 • Managing bed bug infestations • Aging housing stock • Implementing Operational Review directives • Expiration of debentures • Our aging workforce • Implementation of new property management software • Growing need for on-site presence within the housing portfolio e.g., superintendents • Vacancies

9. Challenges - 2011 (continued) • Arrears management • Portfolio mix - market/RGI • Limited statistical information on tenant characteristics, needs and assets • Increased insurance costs [flooding in July09 incurred $3.6M in claims]

10. Challenges-Actions

11. Challenges-Actions

12. Expiration of debentures – Public Housing

13. 2011 Pressures • Bad debts [current write off for July09-June10 is $510K] • Revenues – increasing & maintaining occupancy and improving unit turn over times • Operational Review • Updated legislation - SHRA • Staff transition [new PMA pods] • Portfolio Mix – Market vs RGI [@ Dec09, 74 units over target; represents $600K in revenue]

14. Proposed 2011 Operating Budget

15. 2010 Expenditures Controllable vs. Fixed

16. 2011 Cost Drivers • Operating Revenues • Rent Revenue *Bridgewater Court [full rent up] $430,000 *SHH rental revenue for First Place $126,000

17. 2011 Cost Drivers • Other Administration • Bad Debt $(80,000) • Estimate based oncurrent trend and current level of arrears • Insurance $93,000

18. 2011 Cost Drivers • Maintenance $802,000 • More realistic based on needs identified by front line staff • With superintendent model, we will see a reduction of maintenance expenses, specifically in cleaning costs, electrical, plumbing

19. 2011 Cost Drivers • Utilities • SHRA benchmarks for benchmarked portfolios [Municipal, Dundas, Portuguese, and First Place *Electricity 8.99% increase *Fuel 6.49% increase *Water 6.13% increase • City guidelines used for other portfolios [Public Housing, 100% market]

20. 2011 Cost Drivers • Service Manager Subsidy • Public Housing $421K • Municipal (Hamilton) Non-Profit 131k • Dundas Valley Non-Profit 32K • Portuguese Community Homes 16k • First Place – 185/206 Jackson 20k • First Place – 405 York 15k • 100% Market 0k

21. Social Housing Provider Funding • Applicable for the former Municipal (Hamilton) Non- Profit, Dundas Valley Non-Profit, Portuguese Community Homes • Based on Benchmark increases / decreases established by the Province • 2011 Benchmarks are as follows: • Administration / Maintenance / Capital Reserve 1.9% • Insurance 14.1% • Electricity 8.99% • Water 6.13% • Natural Gas (Fuel) 6.49% • Additional adjustments for mortgage renewals based on actual and property taxes at 2%

22. Public Housing Funding • The following funding formula applies: • Revenues from Operations • Less: Expenditures (Administration, Maintenance, Utilities, Capital Reserve, Debentures, Property Taxes) • Equals Subsidy Required from Service Manager • Increases / decreases are at the discretion of the Service Manager, generally a mix of City Guidelines and Provincial Benchmarks • 2011 Subsidy Increase – 2.0% or $421K

23. Capital ReserveForecast Balance for 2010

24. Capital Reserve2011 Budget

25. Conclusion • From board directive, staff are now regularly reporting on KPIs • Improved financial reporting due to accrual actg • Strong involvement from front line staff in budget process • Continue to work on improving the current budget process for future years • Greater accountability and awareness at all staff levels for revenues and expenditures

26. QUESTIONS ?