Ottawa Community Housing provides and manages affordable housing for low and moderate income households in Ottawa.
OCH is controlled by the City of Ottawa. The housing Group had revenue of $131 Million in 2009. Specifically, $62 Million was from tenant rents, $65 Million from the taxpayers of Ottawa and the balance was comprised of miscellaneous revenue.
To put it another way, Ottawa Community Housing spent $131 Million in 2009 and had earned revenue from rents of $67 Million. The annual shortfall of $65 Million was contributed by the property taxpayers of Ottawa.
Perhaps that is not so bad, considering the benefits from assisting those in need.
However, in this election year resident taxpayers should take issue with a few noteworthy items.
1) As of Sept 18, 2010, OCH has not published its 2010 budget on their web site. The year is almost over. Is there something wrong at OCH?
2) The 2011 OCH Budget must be consolidated with the overall City of Ottawa 2011 Budget. The financial results of OCH are included in the annual audited statements of the City, but are not included in the annual City Budget. This is just unacceptable.
3) The Mayor and Councillors that sit on the Board of OCH must explain to the electorate why OCH had $42 Million in marketable securities on its balance sheet in 2008 with an audited “Fair Market Value” of only $35 Million. That was a write-down of $7 Million dollars.
So let’s take a look at the investments. 1 and 2 can be resolved quickly by a Council directive.
Investments comprised the following:
Liquid assets, Government of Canada fixed income, provincial fixed income, municipal fixed income and corporate fixed income totaled $7,303,223 of the $42 Million in investments. For the most part, these are conservative investments.
The Auditors noted that OCH is subject to market risk, foreign currency risk, and interest rate risk. This should not be.
The remaining investments are in this category, namely:
Canadian common equities ($2,522,528- year end value of $2,584,920):
Foreign common equities ($16,455,320- year end value of $11,866,647)
Mutual Funds ($15,551,865- year end value of $12,778,978)
Why is OCH involved in these investments? OCH had to buy these risky investments, so it is presumed that somebody made commission on the sale to OCH. Who made the commission? What was the idea of putting funds into these risky investments and ignoring necessary repair of rental units?
In 2009, $20 Million of these investments were sold. That is good, but at what cost?
Council has an obligation to put in place preventative measures that would restrict this type of investment in the future. Council must also let the electorate know the details behind the reason for these purchases rather than investments in rental housing repairs.
There is no good reason for OCH to do anything other than provide and keep rental units in good repair. They must keep their nose out of these irresponsible investments.
Bill O’Malley
