NBNPHA 2014 Conference Saint John Workshop D - Expiry of operating agreements


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The expiry of social housing operating agreements presents both opportunities and challenges. Join us for an update on the “big picture” analysis of the issue in New Brunswick along with practical advice and resources on planning for expiry to help ensure viability of your organization.

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NBNPHA 2014 Conference Saint John Workshop D - Expiry of operating agreements

  1. 1. Expiry of Operating Agreements May 2014
  2. 2. Outline for the day Expiry of Operating Agreement - Overview of Federal and Provincial Statistics - Operating differences before and after Expiry - Role of NBNPHA - Quick Reminder about the EOA Tool - Financial and Technical Preparation to Expiry - Importance of the Replacement Reserve - Open discussion on best practices - Access to Other Housing Programs after Expiry
  3. 3. As cited by Steve Pomeroy, Is Emperor Nero Fiddling as Rome Burns? Assessing Risk when Federal Subsidies End (2011) On the National Level
  4. 4. On the Provincial Level 19 10 32 23 60 36 63 74 57 21 2000-2012 2013-2014 2015-2016 2017-2018 2019-2020 2021-2022 2023-2024 2025-2026 2027-2028 2029-2030 Number of Expired Agreements 130 110 428 547 971 726 663 1140 461 158 2000-2012 2013-2014 2015-2016 2017-2018 2019-2020 2021-2022 2023-2024 2025-2026 2027-2028 2029-2030 Number of units involved * Includes Non-profits, Co-ops and Skigin-Elnoog Projects only
  5. 5. What Does EXPIRY Mean? – After Expiry, Projects no longer have: - Federal & Provincial Agreements (Sections 26, 27, 95) - Subsidies - Mortgage Payments – After Expiry, Projects continue to be governed by: - Rules of Operations - Letter Patents - By Laws, Policies - Other Agreements, Obligations
  6. 6. Provincial Property Tax Exemption Our proposal… The exemption will remain available after Expiry conditional upon projects providing the following… - Confirmation of non-profit status - Annual Financial Statements - Attestation of rents being charged - SD will advise at Expiry (particulars / deadlines)
  7. 7. Things to Consider Continue to: - Operate as a Non Profit – Provincial Property Tax Exemption - Be Affordable - Targeting low to moderate income clients - Be Viable - Ensuring sufficient revenues for maintenance & repairs (Replacement Reserve) - Be Accountable – Tenants, communities, lenders
  8. 8. Challenges after Expiry - Limited ability to house Low Income Seniors / Families - Financial Expertise - Technical Support - Access to programs such as Projects in Difficulty
  9. 9. About NBNPHA The New Brunswick Non Profit Housing Association offers individualized support to help our housing groups plan for the expiry of their operating agreements.
  10. 10. Program Activities • Obtain financial statement worksheet from your PMO at the Department of Social Development. • Complete a copy of the planning for Expiry of Agreements (EOA) Tool. • Complete a copy of the Replacement Reserve Assessment Tool.
  11. 11. EOA Tool Results
  12. 12. Program Activities cont… • Ensure that the Housing Group has applied for and is in receipt of both the Municipal Designation GST/HST rebate and the Provincial Property tax rebate. • Work with Housing Groups to create an Action Plan based on the results from their EOA tool. • Explore multiple possible RGI rent solutions.
  13. 13. Result Indicators • Non-Profit and Co-operative Housing units remain affordable and the units are sustained in good condition. • The NBNPHA gathers data and evidence required to develop a strong advocacy plan and policy in support of our members’ interests. • Develop case studies to be used as templates for future groups approaching expiry of their operating agreements.
  14. 14. Information Collection • Individual member information will be stored securely and remain confidential and will only be used with permission. • As the groups work through the expiry of their agreements, data will be aggregated to summarize the overall health of the non profit housing and co-operative housing sectors in New Brunswick. • This data will aid in the development of the Association’s advocacy plan.
  15. 15. Resources available to groups • Staff at the New Brunswick Non Profit Housing Association (NBNPHA) – Dave Shalala dshalala@nbnpha-alsblnb.ca • (506) 206-3795 • Social Development • NBNPHA guide sheets (How to sheets)
  16. 16. Where to find the Tools… Replacement Reserve Planning and Expiry of Operating Agreements Assessment Tools… http://www.nbnpha-alsblnb.ca/en/index.php/member- resources
  17. 17. Suggestions to Remain Viable • Increase rent • Less Income testing • Rent spaces – Commercial • Rethink Clients’ needs (looking at aging in place) • Amalgamate several small projects (cut operating costs) • Engage municipalities – possibility of lowering taxes or service costs • Engage Local MPs and MLAs • Evaluate the Replacement Reserve • Engage Staff and Tenants • Engage Youth • Open Houses
  18. 18. Financial & Technical Preparation Checklist: - Financial capacities * Heat & Lights * Maintenance/Repairs * Vacant units/Bad debts - Physical condition of the building and the units * Replacement Reserve Planning - Review the needs of the project on a regular basis - Management capabilities - Allocation to Replacement Reserve (Post-85 projects)
  19. 19. Replacement Reserve Before Expiry After Expiry Current Process Capital Item Fails:  Determine Need for Replacement (Inspection)  Obtain 3 Quotes  Submit Request to PM Officer  Receive Written Approval  Purchase Item Recommended Practice Adopt Policy to maintain RR that includes: • List of items • # of quotes to obtain • Board approval / discussion Develop Replacement Reserve Plan
  20. 20. Tips about Maintenance
  21. 21. Rental RRAP Residential Rehabilitation Assistance Program May 10, 2014 Leanne Smith Housing & Homelessness / Logement et itinérance Social Development / Dévelopement sociale Leanne.smith@gnb.ca
  22. 22. Rental RRAP • Rental Residential Rehabilitation Assistance Program • Provides financial assistance to owners/landlords for mandatory repairs to self- contained units that are substandard and rented to low-income households. • Assistance is in the form of a forgivable loan & the maximum assistance is $24,000 per eligible unit.
  23. 23. Rental RRAP Eligibility • Property must be owned by a non-profit corporation, or a housing cooperative that is not receiving any government housing assistance. • Must contain 1 or more self-contained units, rented or intended to be rented to low income households. • Post RRAP rents will be at or below levels established by SD & CMHC
  24. 24. Eligibility - Continued  Property must lack basic facilities or require major repairs in one of the following areas:  Structural  Heating  Electric  Plumbing  Fire Safety  Health Safety
  25. 25. HOW DOES IT WORK? • The amount you may recieve is based on the cost of madatory repairs and the number of self-contained units within the project. • The forgivable loan is earned over a period of years ranging from 7 to 12, depending on the number of units and the cost of eligible mandatory repairs
  26. 26. For Program Information: • http://www2.gnb.ca/content/gnb/en/servic es/services_renderer.8795.html