equity contribution from the City. Since last reported to City Council, CHC has been working towards securing additional funding necessary to meet the current budget requirement.

Ontario Priorities Housing Initiatives (OPHI)

On December 4, 2019, City Council approved report S224/2019 which provided CHC with an allocation of $997,234 under the OPHI program as recommended by the RFP evaluation committee.

Canada Mortgage and Housing Corporation

CHC is working towards securing additional funding under the National Co-Investment Fund. CMHC has advised that additional funding, through an increase to both the non-repayable and repayable loans is possible subject to finalization of terms and agreements.

With the additional loans from CMHC no additional funding will be required from the City. However, the additional funding will require City Council to authorize CHC to increase the level that can be applied for as a repayable loan, previously approved at a maximum of $15.5 million, to approximately $20.5 million. This repayable loan, which will be considered debt, is expected to be repaid through the annual rent and other revenues generated by the development.

As a condition of the increased funding CMHC has requested that the City provide assurance, in the form of a guarantee. This guarantee would represent CHC’s performance for the project development in the establish timeline and within the approved budget.

Details of the additional funding and guarantee requirements have been included in a confidential memo to Council.

Financial Reporting Implications for the City

As indicated above, with the additional funding received from CMHC, there will be no further equity contribution over the committed $12 million required from the City.

CHC is a wholly owned subsidiary of the City. Its core operations, with regards to public housing, are substantially reliant upon annual municipal subsidies. Therefore, for financial reporting purposes, CHC is fully consolidated into the City’s annual financial statements. Full consolidation, by definition, means that all of the assets, liabilities, revenue and expenses are added on a line by line basis to the City’s consolidated financial statements. Upon completion of the project, the total amount received from CMHC, which is considered to be repayable (estimated maximum value of $20.5 million), will be included as long term debt on the City’s financial statements. There will be added note disclosure, similar to what is currently provided, explaining that this long term debt directly relates to the operations of CHC and further that this debt is expected to be repaid from revenues of the development and not from the City’s property tax base. As it relates to this development, CHC has provided ongoing operating projections that demonstrate its ability to be and remain a self-sustaining project. In