From our 2015 conference.

1. Expiry of Operating Agreements
May 2015

2. Outline for the day
• Overview of Federal and Provincial Statistics
• Operating differences before and after Expiry
• Provincial Property Tax Exemption
• Open discussion on best practices to be well prepared
• Importance of the Replacement Reserve
• Access to Other Housing Programs after Expiry
• Role of NBNPHA
• Results of the assessments to date
• Reminder about the EOA Tool

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. 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. 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. Things to Consider
Continue to:
- Be Affordable - Targeting low to moderate income clients
- Be Viable - Ensuring sufficient revenues for maintenance & repairs
(Replacement Reserve)
- Be Accountable – Tenants, communities, lenders
- Operate as a Non Profit – Provincial Property Tax Exemption

7. Provincial Property Tax Exemption
$3.12 million in 2015
Non Profit Housing projects will have the option to continue benefiting
from the exemption
- Confirmation of Non-Profit status
- Annual Financial Statements
- Attestation of rents being charged
- SD will advise of particulars / deadlines by letter

8. Example of Exemption Benefits
Property Taxes
Project Provincial Municipal Total
20 unit in Grand Manan $7,965.24 $7,210.06 $15,176.30
1 single-dwelling in F’ton $1,891.68 $2,133.38 $4,025.06

9. Example of Letters Patent

10. Supplementary Letter Patent
(Dissolution Clause)
Deleting the following:
e.g. « That in the event the Corporation should at any time be wound up
or dissolved, the remaining assets after payment of all debts and
liabilities, shall be distributed to another recognized charitable
organization in the Province of New Brunswick, or elsewhere in Canada. »
and substituting therefore the following:
« Upon the dissolution of the corporation and after the payment of all
debts and liabilities, its remaining property shall be distributed to or
disposed of non-for-profit organizations having similar objectives, being
bound by similar restrictions and which carryon their work solely in New
Brunswick.»

11. Best Practices
- Governance
* Renew the Board/ Engage youth
* Recruit people with the right skills
* Distribute the tasks
* Regular Board meetings with minutes
- Finance Committee
* Replacement Reserve Planning
* Increase rents yearly
* Amalgamation of non profit housing projects
* Avoid mismanagement and theft
* Prepare budget and forecast cash flows

12. Best Practices (Continued)
- Maintenance Committee
* Yearly inspection of the building and units
* Conserve energy
* Classify degree of emergency
* Modernization, replacement, improvements, recycling
* Extend useful life of capital items
* Emergency and evacuation plans
- Tenants Committee
* Good relationships/ Dialogue
* Specific criteria of selection
* Bad Debts / vacancies
* Damages
* Importance of a lease
* Inspection (move-in and move-out)
* Waiting list

13. Best Practices (Continued)
- Social Engagement
* Networking
* Engage municipalities (taxes, services)
* Engage local MLAs and MPs
* Open houses
* Fundraising
* Be innovative
- After Expiry ONLY
* Less Income testing
* Rent spaces-Commercial

14. 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

15. AFTER EXPIRY ONLY:
Rental Residential Rehabilitation Assistance
Program (Rental RRAP)
• Financial assistance to owners/landlords for mandatory
repairs for:
– self-contained units :
• substandard and
• rented to low-income households.
• Type of Assistance
– forgivable loan;
– maximum assistance - $24,000 per eligible unit.

16. Rental RRAP Eligibility Criteria
 Property owned by a non-profit corporation, or 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.

17. 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
For more information:
http://www2.gnb.ca/content/gnb/en/services/services_renderer.8795.html

18. New Brunswick Non-Profit
Housing Association
Member Support
Program
Expiry of Operating Agreements

19. About
The New Brunswick Non Profit
Housing Association offers
individualized support to help
housing groups plan for the expiry
of their operating agreements.

20. Program Activities
• Obtain financial statement sheet(s) from your
PMO at the Department of Social Development
for each project under your group.
• Complete a copy of the planning for Expiry of
Agreements (EOA) Tool.
• Complete a copy of the Replacement Reserve
Assessment Tool.

21. EOA Tool

22. Program Activities cont…
• Ensure that your housing group has applied
for 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
assessment.
• Explore multiple possible solutions.

23. Result Indicators
• Non-Profit and Co-operative Housing units remain
affordable and 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 the expiry of their
operating agreements.

24. 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 and of
the Association’s advocacy plan.

25. Results

26. What the information tells us
We’ve completed 102 assessments to date:
• 25% of those assessed will be viable without receiving
subsidies and they have a sufficient reserve.
• 44% will be viable but the reserve is insufficient. It will be
necessary to work on a plan for when a major capital
investment/replacement is required.
• 11% will not be viable after expiry and must review their
operations; their replacement reserve is adequate.
• 20% will not be viable and must review their operations.
Their reserves are insufficient; it will be necessary to
work on a plan for when a major capital investment /
replacement is required.

27. Results by Region

28. What the information tells us…
When we meet with MLAs, MPs, municipal councillors
and the members of our local communities, we’ll be able
to give them facts such as:
• Of the assessments completed in the Moncton region,
only 25% are viable without subsidies, assuming that
they won’t need more than one capital investment at a
time.
• In the Fredericton region, 52% of the assessments that
have been completed indicate they will not be viable
and must review their operations. Their reserves are
insufficient; it will be necessary to work on a plan for
when a major capital investment / replacement is
required.

29. Results by Agreement

30. Year in review
• Invitations have been extended in three stages
(2014-2017, 2018-2020, and 2021-2023).
• We have 72 members in the program representing
138 agreements
• We have completed 102 Assessments
• We’re waiting to hear back from 57 groups on
whether they are planning to join the program or
not
• We’ve been working to complete the “Options
Document” which will serve as an expiry planning
guide for our groups

31. 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)