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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
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As cited by Steve Pomeroy, Is Emperor Nero Fiddling as Rome Burns? Assessing Risk when Federal Subsidies End (2011)
On the National Level
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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
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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
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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)
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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
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Challenges after Expiry
- Limited ability to house Low Income Seniors / Families
- Financial Expertise
- Technical Support
- Access to programs such as Projects in Difficulty
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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.
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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.
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EOA Tool Results
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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.
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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.
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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.
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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)
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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
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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
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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)
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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
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Tips about Maintenance
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Rental RRAPResidential Rehabilitation Assistance Program
May 10, 2014 Leanne Smith
Housing & Homelessness / Logement et itinérance
Social Development / Dévelopement sociale
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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.
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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
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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
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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
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For Program Information:
• http://www2.gnb.ca/content/gnb/en/services/services_renderer.8795.html