NIPISSING DISTRICT HOUSING CORPORATION . ORGANIZATIONAL ASSESSMENT

1. NIPISSING DISTRICT HOUSING CORPORATION.ORGANIZATIONAL ASSESSMENT Joint DNSSAB/NDHC Board Session Sept 19th 2013

2. AGENDA • Introductions • Purpose of Joint Board Meeting • Overview of Organizational Assessment • Summary of Threshold Report and Recommendations • Discussion of Recommendations • Next Steps

3. INTRODUCTIONS • DNSSAB Board Members • NDHC Board Members • DNSSAB Staff • NDHC Staff • Consulting Team

4. PURPOSE OF JOINT BOARD MEETING • To give direction on threshold issues fundamental to the future roles, responsibilities and governance of NDHC

5. OVERVIEW OF ORGANIZATIONAL ASSESSMENT OVERALL GOAL Provide an appraisal of, and recommendations for improving, NDHC’s performance, enabling environment, Board, staff and resident capacity and organizational purpose

6. OVERVIEW OF ORGANIZATIONAL ASSESSMENT OBJECTIVES To ensure that: • effective investment choices are being made • there is organizational capacity to meet changing legislative and economic circumstances • stronger relationships are established between NDHC and DNSSAB • there is solid alignment between NDHC’s organizational and service delivery goals with those of the DNSSAB and its 2011-2014 Strategic Plan

7. OVERVIEW OF ORGANIZATIONAL ASSESSMENT PROCESS • Surveys of Board members and staff • Review of corporate policy documents, internal data, Board minutes, financial statements, organizational studies, etc. • Environmental scan of relevant external data and literature • Interviews/focus groups with all staff of NDHC, senior staff of DNSSAB, Tenant Advisory Committee • Tours of buildings • Interviews with NDHC and DNSSAB Board members • Review of Best Practices Elsewhere • Development of Thresholds Report • Preparation of Final Report and Recommendations • Ongoing meetings/discussion with Steering Committee

8. THE OPPORTUNITY Message from DNSSAB CAO • Important crossroad for NDHC • Properly designed and implemented, the next generation NDHC can best: • Meet changing housing needs • Build capacity for developing business cases for renewal • Build capacity to undertake capital works • Anticipate and deal effectively with aging housing stock with replacement value in excess of $100 million • Consider entrepreneurial-based approaches that involve private sector funding • Achieve role clarity between DNSSAB and NDHC Boards • Save money by sharing DNSSAB’s corporate and other resources • Support the DNSSAB’s 10 Year Housing and Homelessness Plan

9. SUMMARY OF THRESHOLD REPORT AND RECOMMENDATIONS Purpose of Report: To give direction on threshold issues fundamental to the future roles, responsibilities and governance of NDHC

10. THRESHOLD ISSUES There are three issues fundamental to the future direction of NDHC: • Should the governance model remain as an autonomous, self-governed business entity, or should it be a service entity operating as part of Shareholder’s organization? • Should NDHC focus activities entirely on management of existing portfolio, or expand activities to include development of new housing supply, regeneration of existing properties, other potential businesses? • Should current composition of the NDHC Board remain or should it move towards a more “skills-based” Board

11. PROCESS FOR PREPARATION OF THRESHOLD REPORT • Conducted interviews with Board members and senior staff of NDHC and DNSSAB • Reviewed Shareholder Declarations of similar Service Managers elsewhere in Ontario • Reviewed LHC organizational studies conducted by other similar Service Managers • Reviewed relevant background documentation provided by DNSSAB and NDHC • Discussed with Steering Committee

12. 1. CORPORATE STRUCTURE AND GOVERNANCE • NDHC currently operates as autonomous business with independent Board of Directors appointed by DNSSAB, who is sole shareholder of NDHC • Board is responsible for supervising management of business affairs of NDHC and for establishing policies to develop and maintain a prudent financial operation • Board members and staff widely agreed that this model was preferred, as it was effective in enabling NDHC to operate the business in an efficient and responsive manner without undue restrictions from DNSSAB

13. 1. CORPORATE STRUCTURE AND GOVERNANCE • As an independent business corporation, NDHC has greater flexibility than DNSSAB to undertake activities such as developing housing or accessing funds under government housing programs • Enables clear distinction between DNSSAB’s two roles as shareholder of NDHC and Service Manager • It was felt DNSSAB could protect its interest in NDHC through strong accountability framework and reporting protocol • Two organizations should work hand-in-hand to achieve strategic plans that support the 10 Year Housing and Homelessness Plan

14. 1. CORPORATE STRUCTURE AND GOVERNANCE • Numerous other Service Managers maintain similar relationships with Local Housing Corporations (LHC’s) • They reported that maintaining a separate LHC: • Encourages inclusion of resources • Enhances risk management • Supports service excellence • Encourages flexibility and innovation • Enhances stakeholder/partner relationships • Improves efficiency • Enhances accountability • Clarifies strategic alignment of organizations

15. 1. CORPORATE STRUCTURE AND GOVERNANCE Recommendation One It is recommended that the corporate structure of NDHC remain an autonomous Local Housing Corporation with an independent Board of Directors, with a clearly defined accountability relationship between NDHC and the DNSSAB.

16. 1. CORPORATE STRUCTURE AND GOVERNANCE • Governance model is also a key threshold issue • Four potential options: Working Board, Advisory Board, Governance Board, Policy Governance Board • Working Boards aremost suited to volunteer organizations with little or no staff • Advisory Boards have no independent decision-making authority • Governance Boards (as NDHC) provide oversight to organization and have decision-making authority • Policy Governance Boards direct an organization through policy and delegate oversight to the CEO

17. 1. CORPORATE STRUCTURE AND GOVERNANCE • Governance model of oversight and policy direction best suits NDHC and mirrors model for most LHC’s in Ontario Recommendation Two It is recommended that the Governance Model remain a Governance Board which provides oversight and policy direction for NDHC.

18. 2. NATURE OF BUSINESS ACTIVITIES • Previous Local Housing Authorities strictly responsible for managing public housing portfolio of OHC • Since its inception, NDHC has continued along same path • Shareholder Declaration defines Business of NDHC as: • Being local housing provider in accordance with Social Housing Reform Act • Using effectively the assets of the Corporation and renting, selling or maintaining housing and its premises, equipment and appliances

19. 2. NATURE OF BUSINESS ACTIVITIES • Interviews with Board, staff and tenants found that NDHC is highly experienced and comfortable as property managers • Buildings are well maintained, vacancies quickly filled, budgets met, future capital repair and replacement well planned, tenant requests quickly acted upon • Yet, most expressed the view that this role falls short of contribution NDHC should be making to meeting the housing needs of the community in view of its skills, experience and resources

20. 2. NATURE OF BUSINESS ACTIVITIES • Particularly keen interest in NDHC expanding/regenerating its portfolio to help meet housing needs of Nipissing District • Manitou Mulligan seen as a start • Many see NDHC as vehicle with great potential for implementing key elements of DNSSAB’s strategic plan in this regard • Shareholder Declarations of numerous Service Managers support a role of this nature for LHC’s. • Many LHC’s have been highly active in this regard, working hand-in-hand with Service Managers to plan and develop housing

21. 2. NATURE OF BUSINESS ACTIVITIES • Other LHC’s also assisting Service Managers in delivering program-related services and in taking on revenue-generating activities for which they are qualified (as NDHC is already doing through property management contracts with outside Boards) • By working hand-in-hand with DNSSAB to identify community needs and develop strategies for meeting these needs, NDHC can become a much more valuable vehicle for positive change in Nipissing District

22. 2. NATURE OF BUSINESS ACTIVITIES Recommendation Three It is recommended that the nature of the Business in which NDHC is engaged be more broadly defined, as follows: • Own, operate or have ownership interest in affordable rental housing, social housing, affordable ownership housing, vacant land and commercial properties ancillary to the foregoing and provide related services • Develop new housing projects • Redevelop existing housing projects

23. 2. NATURE OF BUSINESS ACTIVITIES • Deliver program-related services on behalf of Service Manager, such as Rent Supplement programs • Deliver program-related services on behalf of other agencies, boards and commissions • Enter into partnership agreements or other agreements that promote or increase availability of affordable housing in the service area • Provide housing-related services to third parties

24. 3. BOARD COMPOSITION AND QUALIFICATIONS • Third key threshold issue is Board composition and qualifications • Shareholder Declaration basically silent on this issue • Background documentation indicates that Board to be comprised of maximum of 9 Directors, including 4 members of DNSSAB Board (a “fair distribution from North Bay, West Nipissing, Mattawa), 4 municipally-elected or citizen/consumer members, one member from one of remaining member municipalities within Service Area • Can be termed a “geographical representation” model • In practice, Board has tended to include primarily elected municipal officials, with small number of citizens at large

25. 3. BOARD COMPOSITION AND QUALIFICATIONS • Interviews with NDHC/DNSSAB Board members and senior staff found some preferred this model, as it ensures representation from all areas of Nipissing and gives Shareholder strong presence on Board to help protect its interests • Majority, however, expressed the view that, given that this is a major business entity with asset replacement value of $100 million, it was critical to ensure necessary skills were present on Board to offer effective guidance and oversight and that a geographical model did not guarantee the presence of such skills

26. 3. BOARD COMPOSITION AND QUALIFICATIONS • A further concern was potential short-term nature of some elected officials, which can negatively impact continuity on Board • Citizen members also felt they do not have equal access to information as elected officials on Board • Concerns expressed that some elected officials “wore several hats” and may have conflicts in decision making from time-to-time

27. 3. BOARD COMPOSITION AND QUALIFICATIONS • Shareholder Declarations of numerous other Service Managers all addressed qualifications of Board members. • Virtually all placed strong emphasis on skills, experience and qualifications as important criteria in composition of Board members • All were combinations of elected officials and citizens at large, with most requiring few (or some even none) elected officials, as interests of Shareholder well protected by accountability and reporting protocols

28. 3. BOARD COMPOSITION AND QUALIFICATIONS • In view of above, it is concluded that the effectiveness of the Board would be enhanced by amending Shareholder Declaration to move towards a more “skills based” Board that places a greater emphasis on skills, experience and qualifications of Board members, given the size and complexity of the NDHC operation and its growing range of responsibilities • The Tenant Advisory Committee provides an effective vehicle to represent tenant views, so it does not appear necessary to appoint a tenant representative to the Board

29. 3. BOARD COMPOSITION AND QUALIFICATIONS Recommendation Four It is recommended that Article 4 of the Shareholder Declaration (and any related DNSSAB and NDHC regulatory documentation) be revised to require that the Board collectively possess a range of relevant expertise in such areas as: • Social housing • Community development • Business and financial management • Corporate governance • Organizational development • Labour relations

30. 3. BOARD COMPOSITION AND QUALIFICATIONS • Legal and/or legal aid experience • Landlord and tenant matters • Political experience • Further, consideration should be given to reducing the number of elected officials on the NDHC Board – perhaps a maximum of three elected officials representing communities where the NDHC portfolio has a presence (one each from North Bay, West Nipissing and Mattawa).

31. DISCUSSION OF RECOMMENDATIONS • Boards to consider and discuss recommendations

32. NEXT STEPS • Decision on Threshold Report recommendations • Completion of Draft Final Report by Consultants (October) • Review by staff • Completion of any required revisions • Delivery of Final Report and Recommendations