nbnpha 2014 conference saint john workshop d - expiry of operating agreements
Post on 15-Jun-2015
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DESCRIPTION
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.TRANSCRIPT
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
As cited by Steve Pomeroy, Is Emperor Nero Fiddling as Rome Burns? Assessing Risk when Federal Subsidies End (2011)
On the National Level
On the Provincial Level
2000-2012 2013-2014 2015-2016 2017-2018 2019-2020 2021-2022 2023-2024 2025-2026 2027-2028 2029-2030
1910
3223
60
36
63
74
57
21
Number of Expired Agreements
2000-2012 2013-2014 2015-2016 2017-2018 2019-2020 2021-2022 2023-2024 2025-2026 2027-2028 2029-2030
130 110
428
547
971
726
663
1140
461
158
Number of units involved
* Includes Non-profits, Co-ops and Skigin-Elnoog Projects only
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
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)
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
Challenges after Expiry
- Limited ability to house Low Income Seniors / Families
- Financial Expertise
- Technical Support
- Access to programs such as Projects in Difficulty
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.
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.
EOA Tool Results
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.
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.
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.
Resources available to groups
• Staff at the New Brunswick Non Profit Housing Association (NBNPHA) – Dave Shalala [email protected]
• (506) 206-3795
• Social Development• NBNPHA guide sheets (How to sheets)
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
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
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)
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
Tips about Maintenance
Rental RRAPResidential Rehabilitation Assistance Program
May 10, 2014 Leanne Smith
Housing & Homelessness / Logement et itinérance
Social Development / Dévelopement sociale
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.
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
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
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
For Program Information:
• http://www2.gnb.ca/content/gnb/en/services/services_renderer.8795.html