Last Updated:
June 4, 2020
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Matt Dolf
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Financial D. Operating Surpluses
- Once the Capital Maintenance Reserve has been fully funded, any remaining operating surplus will be used as follows:
- first, to top up the Capital Maintenance Reserve by an additional $20 per unit per month, or by any additional amount determined to be required as a result of a future capital maintenance reserve study; and
- second, to fund the Co-op Operating Reserve, to a maximum of an amount equivalent:
- in the first year of the Term, to the annual Operating Budget for that year (exclusive of Leasehold Mortgage costs and Capital Maintenance Reserve contributions); and
- thereafter, to the total operating costs for the Fiscal Year most recently completed based on the Co-op's audited statements (exclusive of Leasehold Mortgage costs and Capital Maintenance Reserve contributions), with any balance remaining thereafter to be used as follows:
- in accordance with a plan, to be agreed upon between the Co-op and the City concurrent with the annual Operating Budget review and approval process, that balances the objective of increasing the percentage of units in the Development occupied by Below Market Occupants (up to 50%), and the operational and financial feasibility of the Co-op implementing the plan. Any surplus funds available for use pursuant to this Clause D.1.c, not used for such purposes within twenty-four (24) months of the date when the plan approving use of the subject surplus was approved by the City, will be used in accordance with Clause D.1.d below; and
- promptly following the end of such twenty-four (24) month period, any Clause D.1.c funds not by then used to increase Below Market housing units in the Development, will be divided on a 50%/50% basis between the CHF BC and the City, with the CHF BC's portion to be used to create new non-market co-op housing in Vancouver.
- Transfer of Surpluses Upon Termination. At the termination of this Agreement, regardless of cause, any unexpended surplus accrued pursuant to Clause D.1.c above, including all accumulated interest:
- will be used to increase affordability in the Development as contemplated by Clause D.1.c above, if the rights and obligations of the Co-op hereunder are then assumed by another Operator or the City; or
- will be divided and used in accordance with Clause D.1.d above, if the City's objective of increasing the percentage of units in the Development occupied by Below Market Occupants to 50% has already been met, or termination results from the Development ceasing to be operated to provide housing to Occupants as contemplated by this Agreement.
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