The citizen members of the Toronto Community Housing Corporation board issued a statement Tuesday afternoon highlighting their accomplishments and refusing to heed the mayor's call for them to resign.

While staff members of the TCHC enjoyed expensive chocolates, massages and lavish Christmas parties the agency’s tenants waited for much needed repairs and action on pest infestations.

A big shakeup is expected at the social housing agency following an explosive set of reports released Monday by the city’s auditor general, Jeff Griffiths, which detail inappropriate spending and squandered opportunities to save millions of dollars in the procurement process.

Shortly after the auditor general’s findings were made public on Monday Mayor Rob Ford called on citizen members of TCHC’s board of directors to resign, including chair David Mitchell. Ford met with the agency’s CEO, Keiko Nakamura, in a meeting that reportedly lasted less than a minute.  Details of that encounter haven't been revealed by either side.

The mayor also has some questions for Nakamura’s predecessor, Derek Ballantyne, who now serves as the chief operating officer at Build Toronto.

The TCHC citizen board members issued a defiant statement Tuesday.

“The Mayor has asked us through the media to resign. We would ask the Mayor to document his reasons why private citizens who have volunteered their time because they believe in giving back should be replaced,” the statement said.

The citizen board members justified procurements noted in the audit that didn’t follow policy in its statement Tuesday. One instance involves TCHC purchasing plumbing equipment from a Chinese supplier without tender.

“When the direct purchase decision was made by staff, the prices were compared to unit prices paid by TCHC to a supplier that had previously won a local tender. The resulting contract with the Chinese supplier has resulted in savings of over $550,000,” the statement issued by director Ron Struys said.

The members go on to state that when TCHC was established in 2002 it inherited three provincial and municipal housing portfolios in a “terrible state of repair and which were operating badly.” The board says it’s improved customer service and delivery of services over the past eight years and said the Regent Park redevelopment project is an example of the good work it's doing.

Ford and his brother, Coun. Doug Ford, have expressed support for a privatized system for housing assistance, which could include rent subsidies for private apartments.

Doug Ford stated Tuesday that the auditor general will have his hands full in the future, insinuating that the TCHC audit is just one of many to come as they seek to stamp out inappropriate spending.

"Yes he's going to be doing ongoing investigations right across the city and he will be going from department to department," he told CityNews.

In the meantime residents in TCHC buildings continue to express their anger with the findings of the report.

Dean Smith, a tenant in a TCHC highrise at 200 Wellesley St., which was the site of a six-alarm fire in September, said many of his fellow residents don’t want to be living in the building but don’t have a choice “because they’re on a low income.”

“I find it really disturbing that they would be spending this kind of money when things need to be done in these buildings that are more important,” he said Monday.

Smith said while he’s happy to be back in his unit with his family after the fire last fall, there are still issues in his home that haven’t been fixed, including damage to his floors, walls and other areas.

Many TCHC tenants are dealing with infestations of rodents, bed bugs and cockroaches.

The audit report will be discussed at a TCHC board of directors meeting Thursday, which is open to the public at the housing office on Yonge St, next to Rosedale subway station.

This audit represents another black eye for the agency that was told to review its eviction policies following the death of 82-year-old tenant Al Gosling.

With files from Melanie Ng, CityNews.

---

Here's the full statement issued by the Toronto Community Housing Corporation's citizen board members:

The Auditor General has released his report on TCHC. The report does the job of highlighting areas where TCHC requires improvement, most of which he acknowledges we have started work on before the publication of his report.

As the citizen board members appointed by City Council, we were appointed because we have private sector experience and knowledge to provide to the Board. Among us, we have over 150 years’ experience in real estate development and finance, property management, security, risk management and non-profit organizations. We volunteered because we because we care about affordable housing.

The Board and executive were aware of the need for improved financial controls prior to the
AG report. The record shows (as the AG confirms) that:

• We have good policies in place and put in place better management of staff expenses and procurement
• Since her appointment as CEO, Keiko Nakamura has been working with her team to improve the adherence to the above policies. We have full confidence in our executive team.
• Where there has been violations of the staff expenses policies, the CEO has taken corrective action including:
• Termination of employment where appropriate
• Repayment of improper expense claims
• On the matter of procurement, we acknowledge that some of the Board’s policies were not followed, which is not acceptable. We however note the following:
  -One example was the direct purchase of plumbing supplies from China without a tender. When the direct purchase decision was made by staff, the prices were compared to unit prices paid by TCHC to a supplier that had previously won a local tender. The resulting contract with the Chinese supplier has resulted in savings of over $550,000.
  -The AG also notes the sole source contract for $25,000,000. This contract was approved by the Board for the following reasons:
  
  • The unit prices for work was similar or lower than the prices awarded as a result of tenders;
  • The supplier has proprietary software to manage renovations to vacant apartments that reduced the time for the typical renovation substantially. This is crucial to our need to reduce our vacancy losses.
    

The Auditor General does not however comment on the accomplishments of TCHC:

• We were set up in 2002 to improve housing for the 164,000 residents who live in public housing in Toronto
• We are the result of the amalgamation of three separate City and Provincial housing portfolios, which were given to TCHC in a terrible state of repair and which were operating badly.
• Over the course of the past 8 years we have improved our delivery of services, our customer service and the satisfaction rating among our residents. We have completed hundreds of millions of dollars of renovations to housing that had been neglected for upwards of 30 years. The complaints of our residents should be put in the context of what we and they inherited.
• We have consistently been recognized by our tenants, governments, other housing agencies and the public for being leaders in Canada:
  -The redevelopment of Regent Park is a shining example of a private-public partnership that is held out across North America as the way to deliver regeneration.
  -We are leader in introducing cost saving measures to live within our means. As an example:
  
• The City water rate has increased by 28% since 2007. If we did not act, our bill in 2010 would have been $26.75 million. We have renovated our buildings and worked with our tenants to reduce our 2010 water bill to$24.50 million which is annual savings of $2.25 million.
• When the supplier of our laundry equipment was taking advantage oftheir monopoly, we worked with private sector landlords to create a competing business that provides better service to our tenants and greater return for TCHC;
  

• Our 1,400 employees work extremely hard and care deeply about TCHC’s residents.
• Many of our employees worked tirelessly, without additional pay, making displaced residents of 200 Wellesley Street as comfortable as possible.
• We were appointed by City Council for a term that expires on December 31, 2011. As TCHC directors, we have a fidicuary responsibility to the Corporation i.e. we cannot simply walk away from our responsibilities.
  

We are concerned with the Auditor General’s findings and request a full and frank discussion with the City’s Audit Committee to explore and identify strategies to be pursued by the Board to achieve TCHC’s corporate goals. This is fundamental to the audit process and consistent with accountability and good governance set up by the City.

The Auditor General has no fault with TCHC’s policies which is the primary responsibility of the Board. As noted above, our new executive team has taken steps to ensure compliance with these policies prior to the AG report. The Mayor has asked us through the media to resign. We would ask the Mayor to document his reasons why private citizens who have volunteered their time because they believe in giving back should be replaced.

If City Council wishes to nominate directors to replace us, we will of course abide by the wishes of Council.

In the meantime, we have 164,000 constituents that we will continue to serve.