Toronto Community Housing moves funding to address budget gap

How to finance remaining $1.73 billion in repairs backlog remains uncertain with recommended draw on reserves

Thestar.com
Dec. 8, 2016
By Jennifer Pagliaro

The Toronto Community Housing board voted Thursday to amend its 2017 budget, taking $19 million in recently identified surplus funds in order to reduce a $35.2-million shortfall.

That change takes some pressure off Mayor John Tory and the budget committee, who are looking to close a $91-million gap in the city’s overall operating budget.

Having used most of the surplus to cut the shortfall, TCHC will likely use money from a different source to boost its spending to fix crumbling buildings. It's expected that the board will draw $22 million from special reserve funds specifically for capital repairs - further burdening the city's finances in 2018. But it helps TCHC to fund a total of $250 million in repairs next year.

Choosing to use the surplus in this way, which is ultimately up to the board, contradicts advice from interim CEO Greg Spearn that the priority for any additional funds should be capital repairs and residents' homes.

“Toronto Community Housing does not have the money to maintain our residents’ units at a proper state of repair today and we certainly don’t have the money to improve them properly for the future,” Councillor Joe Cressy, who sits on the board, told the Star. “The City of Toronto should take a stand in repair of good, decent housing for residents of TCHC and unfortunately we let the city off the hook today.”

Cressy requested all surplus funds be directed toward capital repairs. He was overruled by the board, which instead approved a motion from Councillor Ana Bailao, the city’s advocate for affordable housing and a member of Tory’s executive committee.

Bailao moved that $19 million in surplus go toward the corporation’s operating shortfall and any remainder be directed to capital repairs.

Without additional funds, TCH has budgeted to spend less next year on repairs than it did in 2016. While $250 million was spent this year, only $228 million was budgeted for next year.

By the end of 2017, the city will have spent some $870 million on repairs - or a third of the total $2.6-billion repairs backlog. There is currently not funding available to fund the rest of the repairs.

Cressy said the board should not be decreasing its request from the city to balance the books with quality of life for tenants at stake.

Bailao said she thought it was important that the city understand the shortfall of $35.2 million and that it’s in front of them.

“What we’re doing here is basically telling staff we’re going to be prudent,” she told the board.

TCH spokesperson Lisa Murray said the final surplus total will be determined in the New Year and that it is mostly made up of one-time revenues from the sale of stand-alone homes owned by TCH and $21 million in Ontario Clean Energy and water credits.

City staff are to report back in the first quarter of 2017 about how to implement recommendations from the mayor’s community housing task force. That body advised council to break up TCH and create a new mix of subsidized-to-affordable homes to increase revenues.