Building Investment, Finance and Audit Committee (BIFAC) Public Session - June 17, 2020

Public Agenda

1:30 - Chair’s Remarks

Action: Information

Pre-read: Verbal Report

Presenter: Chair

1:35 - Consent agenda

Approval of Public Meeting Agenda

Action: BIFAC Approval

Pre-read: Agenda

Presenter: Chair

Chair’s Poll re: Conflict of Interest

Action: Declaration

Pre-read: Agenda and Conflict of Interest Policy

Presenter: Chair

Confirmation of the Public Meeting Minutes of: 

• January 24, 2020

• May 20, 2020

Action: BIFAC Approval

Pre-read: Minutes

Presenter: Chair

1:40 - Leslie Nymark: Rental Construction Budget Update

Action: BIFAC & Board Approval

Pre-read: BIFAC:2020-18

Presenter: Chief Development Officer

1:50 - August 2020 Mortgage Renewal with Canada Mortgage and Housing Corporation

Action: BIFAC & Board Approval

Pre-read: BIFAC:2020-25

Presenter: Chief Financial Officer & Treasurer

Facilities Management Reports

2:00 - A) Direct Award: Schindler Elevators Maintenance Services for 10 TCHC Buildings

Action: Approval

Pre-read: BIFAC:2020-20

Presenter: Acting Vice President, Facilities Management 

2:10 - B) Contract Award: Combined Heat and Power (“CHP”) at 16 Locations (RFP 19453)

Action: BIFAC & Board Approval

Pre-read: BIFAC:2020-21

Presenter: Acting Vice President, Facilities Management

2:20 - C) Approval of Fifty (50) Year Lease: 389 Church Street

Action: BIFAC & Board Approval

Pre-read: BIFAC:2020-22

Presenter: Acting Vice President, Facilities Management

2:30 - Contract Award: Termite Treatment Services

Action: BIFAC & Board Approval

Pre-read: BIFAC:2020-23

Presenter: Chief Operating Officer

2:40 -  Review of Charters of:

• Building Investment, Finance and Audit Committee; and

• Procurement Award Committee

Action: BIFAC & Board Approval

Pre-read: BIFAC:2020-24

Presenter: General Counsel & Corporate Secretary

TERMINATION

Public Meeting Minutes

The Building Investment, Finance and Audit Committee (“BIFAC”) of Toronto Community Housing Corporation (“TCHC”) held a Public meeting on June 17, 2020, in Conference Room 7A, 931 Yonge Street, Toronto, and via WebEx, commencing at 1:42 p.m.

BIFAC Directors Present:

Adele Imrie, Chair 

Amanda Coombs

Nick Macrae

Councillor Ana Bailão

Brian Smith 

BIFAC Directors Absent:

N/A

Management Present:

Kevin Marshman, President and Chief Executive Officer

Sheila Penny, Chief Operating Officer

Rose-Ann Lee, Chief Financial Officer

Vincent Tong, Chief Development Officer

Allen Murray, Vice President, Facilities Management

Boyd Dyer, Director, Smart Buildings & Energy Management

Tyler Baker, Senior Development Manager

Grant Coffey, Interim General Manager, Seniors Housing Unit

Darragh Meagher, General Counsel and Corporate Secretary

Ceilidh Wilson, Assistant Corporate Secretary (Acting)

Sonia Fung, Committee Secretary

The Chair called the meeting to order and Ms. Ceilidh Wilson served as recording secretary.

Item 1 - Chair's Remarks

The Chair welcomed everyone to the meeting. The Chair noted the Acknowledgement of the Land and notified everyone that due to the need for social distancing to limit the spread of COVID-19, TCHC is holding this meeting online.

Virtual Meeting

This meeting is being conducted virtually using an online platform that provides for continued effective governance and decision making. None of the Committee members are in the same room.

Today’s meeting is the first live streamed meeting and while we did not have any deputation requests, today would have been the first meeting to allow for live deputations. 

COVID-19

The Chair reiterated the Board’s support for TCHC’s frontline staff who are in our buildings, offices and communities across the city, working under challenging conditions to provide essential services and needed supports to tenants, as well as our employees who continue to work from home to keep the business running.

Voting

The Chair noted that voting will take place by show of hands so asked that Directors ensure their cameras are on and staff’s cameras are turned off during the voting process. Where requested, items will be recorded votes. 

Consent Agenda Items

Item 2A - Approval of Consent Agenda Items

The following items were not held for discussion: 

• Item 2A – Approval of In Camera Meeting Agenda
• Item 2B – Chair’s Poll re: Conflict of Interest
• Item 3C – Confirmation of the Public Meeting Minutes of January 24, 2020 and May 20, 2020

Motion carried 

ON MOTION DULY MADE by Mr. Smith, seconded by Deputy Mayor Bailão and carried, BIFAC approved the Public meeting consent agenda.

Item 2B - Chair's Poll re: Conflict of Interest

The Chair requested members of the BIFAC to indicate any agenda item in which they had a conflict of interest, together with the nature of the interest. No conflicts were declared.

Item 3 - Leslie Nymark: Rental Construction Budget Update, BIFAC:2020-18

The above-captioned report was circulated to BIFAC members prior to the meeting. The Chief Development Officer presented the report. 

Highlights of the presentation include:

• Management are seeking approval of the updated Leslie Nymark business plan with sources of funds at $33M and costs of $64M. This is a cost increase of $9.4M from the previously approved Anchor Business Plan in 2018.
• This revitalization is anticipated to be complete in 2022.
• There is still approximately $850K left in the contingency fund for this project, and an additional $340K contingency added due to COVID-19.

Mr. Tong answered questions raised by BIFAC. Topics discussed include:

• 94% of contracts have been tendered. The risk of costs increasing further has been mitigated by locking in the prices for the majority of the work.
• When the Anchor Business Plan was brought to the Board in 2018, the $5M in development charges was identified as a risk. A Member’s Motion was presented at City Council that requested that TCHC be reimbursed for the development charges, which passed. The funds will be reimbursed to TCHC through the 2021 budgeting process. 
• It is understood that development funding is not at risk as a result of the impact of COVID-19 on the City’s finances.
• There is not a significant delay to construction on-site as a result of COVID-19. It is still too early to tell whether there will be change orders resulting from the impact of COVID-19.
• Management are working with developer partners to put together projections of what the costs attributable to COVID-19 will be for the portfolio of revitalizations. Management will also work with partners to identify who is responsible for any additional costs.

​​​​​Motion carried

ON MOTION DULY MADE by Mr. Smith, seconded by Mr. Macrae, the BIFAC voted as follows:

In Favour:

Amanda Coombs
Adele Imrie
Deputy Mayor Bailão
Nick Macrae
Brian Smith

The motion below passed unanimously with 5 votes in favour. 

BIFAC moved to approve and forward to the Board of Directors for approval the following:

1. approve the updated Leslie Nymark Business Plan with sources of funds of $37.3M and costs of $60.4M as outlined in Table 1 below; and
2. authorize the appropriate staff to take the necessary actions, incur capital commitments, and execute any and all documents as may be necessary, including negotiation and execution of such documents as may be required to give effect to the above recommendation.

Item 4 - August 2020 Mortgage Renewal With Canada Mortgage and Housing Corporation, BIFAC:2020-25

The above-captioned report was circulated to BIFAC members prior to the meeting. The Chief Financial Officer was available to answer questions raised by BIFAC.

Motion Carried

ON MOTION DULY MADE by Deputy Mayor Bailão, seconded by Mr. Macrae, the BIFAC voted as follows: 

In Favour:

Amanda Coombs
Adele Imrie
Deputy Mayor Bailão
Nick Macrae
Brian Smith

The motion below passed unanimously with 5 votes in favour.

BIFAC moved to approve and forward to the Board for approval the following:

1. approve transactions totaling a maximum of $11.3 million with Canada Mortgage and Housing Corporation, in connection with the mortgage due for renewal on August 1, 2020; and 
2. authorize the President and Chief Executive Officer or the Chief Financial Officer & Treasurer to take necessary actions, including negotiation and execution of such documentation as may be required, in order to give effect to the above recommendation.

Item 5A - Direct Award: Schindler Elevators Maintenance Services for 10 TCHC Buildings, BIFAC:2020-20

The above-captioned report was circulated to BIFAC members prior to the meeting. The Vice President, Facilities Management presented the report.

Highlights of the presentation include:

• This is a direct award to Schindler for $892,500.00 for elevator maintenance services for 16 elevators at 10 locations.
• The award is for a five-year term for preventative and demand maintenance. 
• The elevator equipment is proprietary so only Schindler can perform the work. 
• Schindler is the current elevator service provider for these buildings. Management have worked with Schindler to address any performance issues, which have now been resolved. 

Mr. Murray answered questions raised by BIFAC. Topics discussed include:

• Through a review of the various vendors providing elevator service across the portfolio, Management have confirmed the pricing for this contract is reasonable.
• Management currently receive a report of all elevator service calls and are looking at implementing elevator monitoring software.
• There is approximately $6,000 in savings resulting from consolidating the Schindler contracts.

Motion Carried

ON MOTION DULY MADE by Mr. Smith, seconded by Mr. Macrae, the BIFAC voted as follows:

In Favour:

Amanda Coombs
Adele Imrie
Deputy Mayor Bailão
Nick Macrae
Brian Smith

The motion below passed unanimously with 5 votes in favour.  

BIFAC moved to:

1. approve a direct award to Schindler Elevator Canada (“Schindler”) totaling $892,500.00 (exclusive of taxes) for elevator preventative maintenance services and demand repairs for 16 elevators at 10 buildings for a five-year term (2020-2025) as follows
   • $592,500.00 for preventative maintenance services; and
   • up to $300,000.00 for demand repairs on an as-needed basis; and 
2. authorize the appropriate staff to take the necessary actions to give effect to the above recommendation.

Item 5B - Contract Award: Combined Heat and Power ("CHP") at 16 Locations (RFP 19453), BIFAC:2020-21

The above-captioned report was circulated to BIFAC members prior to the meeting. The Vice President, Facilities Management presented the report.

Highlights of the presentation include:

• BIFAC and the Board previously approved a CHP contract for 24 locations; this award is for the remaining 16 locations. 
• CHP allows for sustainable occupancy. In the event of a power outage, these buildings would still operate and tenants would be able to remain in place with electricity, running water, heat, etc.
• CHP uses waste heat to heat the building, which offsets costs. TCHC will save $23.3M in utility costs over a 20-year period.
• TCHC received a loan of $30M from the City to cover the capital costs for this work, which was approved by the Board in September 2019.
• The Process and Systems Upgrade (“PSUI”) Program ends December 31, 2020. If the vendor is able to install the CHP systems by the program’s deadline, they are entitled to 50% of the incentives TCHC would receive. 
• TCHC has applied for an extension to the PSUI Program, but even without the incentive, the internal rate of return (“IRR”) is projected to be 11%, which exceeds the 10% target approved by BIFAC on April 11, 2019.

Mr. Murray answered questions raised by BIFAC. Topics discussed include:

• The other 24 CHP locations are on track.
• If able to take advantage of the PSUI incentive, the vendor would receive almost $4.5M, even if the extension is granted. This was built into the RFP to attract bidders to this contract. 
• To change the incentive amount the vendor would be eligible for, TCHC would have to issue a new tender.
• This work is budgeted.

Motion Carried

ON MOTION DULY MADE by Ms. Coombs, seconded by Mr. Macrae, the BIFAC voted as follows:

In Favour:

Amanda Coombs
Adele Imrie
Deputy Mayor Bailão
Nick Macrae
Brian Smith

The motion below passed unanimously with 5 votes in favour.  

BIFAC moved to approve and forward to the Board for approval the following:

1. 1.    approve the award of the work to JTS Mechanical Systems Inc. totaling $18,264,051.66 (exclusive of taxes) for design, build, operate and maintain of CHP and emergency generator systems for Group 1 (8 locations) based on the outcome of RFP 19453 as follows and as further detailed in Public Attachment 2:
   • $11,137,668.16 for design-build and seven years of operations and maintenance; 
   • $4,029,442.60 for an additional seven years of operations and maintenance at TCHC management’s discretion;
   • $3,096,940.90 for an additional six years of operations and maintenance at TCHC management’s discretion; 
2. approve the award of the work to JTS Mechanical Systems Inc. totaling $18,482,700.11 (exclusive of taxes) for design, build, operate and maintain of CHP and emergency generator systems from Group 3 (8 locations) based on the outcome of RFP 19453 as follows and as further detailed in Public Attachment 2:
   • $11,356,316.61 for design-build and seven years of operations and maintenance;
   • $4,029,442.60 for an additional seven years of operations and maintenance at TCHC management’s discretions;
   • $3,096,940.90 for an additional six years of operations and maintenance at TCHC management’s discretion; and
3. authorize the appropriate staff to take the necessary actions to give effect to the above recommendations.

Item 5C - Approval of Fifty (50) Year Lease: 389 Church Street, BIFAC:2020-22

The above-captioned report was circulated to BIFAC members prior to the meeting. The Vice President, Facilities Management presented the report.

Highlights of the presentation include:

• This property was intended to be transferred to the City, but they asked TCHC to perform extensive renovations first, which was approved by the Board in 2017.
• The City then asked that the transfer be changed to a 50 year lease, less a day. 
• The City has issued an RFP to find a service provider.
• Tenants will be selected by the City.
• Homes for Good will cover the mortgage payments and the contribution agreement with be assigned the non-profit housing provider on the lease’s execution date.

Mr. Murray answered questions raised by BIFAC. Topics discussed include:

• The renovations are targeted to be complete in October 2020.
• The City agreed to fund the entire cost of renovations. 
• The City’s intention is to find a service provider that serves women experiencing homelessness.
• TCHC maintains ownership of the building, but it will be managed by another service provider.
• The terms for approval for this report are built into the RFP document. The service providers who submit a proposal through the RFP process would be agreeing to these terms.

Motion Carried

ON MOTION DULY MADE by Deputy Mayor Bailão, seconded by Mr. Smith, the BIFAC voted as follows:

In Favour:

Amanda Coombs
Adele Imrie
Deputy Mayor Bailão
Nick Macrae
Brian Smith

The motion below passed unanimously with 5 votes in favour.  

BIFAC moved to approve and forward to the Board of Directors the following:

1. authorize TCHC to execute:
   • a lease agreement for 389 Church Street with a non-profit housing provider (Tenant), for a term of fifty (50) years less a day for rent in the amount of $25,000,000 payable on the Commencement Date and in accordance with the following term conditions:
     • the Tenant will be selected by the City through a Request for Proposal (“RFP”) process issued on May 29, 2020;
     • the Tenant will be responsible for all realty taxes, maintenance, insurance and capital repairs for the length of the term;
     • a reserve fund will be established by the Tenant, based on a building condition assessment or if no building assessment is available, 5% of all rents, for the purpose of ensuring capital repairs are made to the building as required; and
     • receive consent to proceed with the lease by the Canada Mortgage and Housing Corporation, pursuant to the National Co-Investment Fund agreement negotiated in 2019;
     • an Assignment of the Contribution Agreement between TCHC and the City of Toronto regarding 389 Church Street to the Tenant; and
2. approve and authorize the appropriate staff to execute all agreements and take all actions necessary or advisable to give effect to the above recommendations. 

Item 6 - Contract Award: Termite Treatment Services, BIFAC:2020-23

The above-captioned report was circulated to BIFAC members prior to the meeting. The Chief Operating Officer presented the report.

Highlights of the presentation include:

• This award is for termite treatment services for prevention, elimination and monitoring on TCHC properties, for a five-year term with the possibility of two one-year extensions.
• The $6,000,000.00 value of the award is based on unit pricing and the estimated amount of service required over that timeframe. 

Ms. Penny answered questions raised by BIFAC. Topics discussed include:

• Pricing and the approach outlined in the report is based on TCHC’s past experience and some forecasting based on what is happening with termites in Toronto. 
• TCHC has worked with this vendor before and took their past performance into consideration when evaluating for this award.
• The public RFP was issued in July 2019 and closed in August 2019. It took some time to review the submissions as a result of the corporate restructuring and COVID-19. This type of delay is not common.
• The prices submitted through the RFP process have not changed as a result of the delay in approval. 

Motion Carried

ON MOTION DULY MADE by Ms. Coombs, seconded by Mr. Smith, the BIFAC voted as follows:

In Favour:

Amanda Coombs
Adele Imrie
Deputy Mayor Bailão
Nick Macrae
Brian Smith

The motion below passed unanimously with 5 votes in favour.

BIFAC moved to approve and forward to the Board for approval the following:

1. approve the award to Termi Guard 24/7 (“Termi Guard”) for up to $6,000,000.00 (exclusive of taxes) for termite management services at TCHC buildings that have termite issues or are at-risk of having termite issues, based on the outcome of Request for Proposal (RFP) 19173 for a term of up to five years (three years with the possibility of two one-year extensions at TCHC management’s discretion); and 
2. authorize the appropriate staff to take the necessary actions to give effect to the above recommendation.

Item 7 - Review of Charters of Building investment, Finance and Audit Committee and Procurement Award Committee, BIFAC:2020-24

The above-captioned report was circulated to BIFAC members prior to the meeting. The General Counsel & Corporate Secretary presented the report.

Highlights of the presentation include:

• This report was approved by the Governance, Communications and Human Resources Committee (“GCHRC”) at their meeting in January 2020. 
• By the time the GCHRC reviewed this report, BIFAC had already met for that cycle of meetings, so this is the first opportunity for BIFAC to review since the onset of COVID-19.
• There are no significant changes to the BIFAC Charter.
• The changes proposed to the PAC Charter provide greater clarification of the scope of PAC’s existing authority and greater clarity for how PAC is authorized to approve awards on behalf of TCHC. There is no increase to PAC’s authority.

Mr. Meagher answered questions raised by BIFAC. Topics discussed include:

• Management looked at proposing an increase to PAC’s financial approval authority, but determined that the existing approval authorities are appropriate for TCHC’s operations.

Motion Carried

ON MOTION DULY MADE by Mr. Smith, seconded by Mr. Macrae, the BIFAC voted as follows:

In Favour:

Amanda Coombs
Adele Imrie
Deputy Mayor Bailão
Nick Macrae
Brian Smith

The motion below passed unanimously with 5 votes in favour.

BIFAC moved to approve the Building Investment, Finance and Audit Committee Charter (Attachment 1) and the Procurement Award Committee Charter (Attachment 2), and forward them to the Board for its approval. 
 

TERMINATION OF IN-CAMERA MEETING
BIFAC resolved to terminate the In Camera meeting at 2:38 p.m.