Capital reserve requirements
24. (1) A housing provider that receives a subsidy under the Act shall establish and maintain a capital reserve for its housing projects in a service area that includes the following amounts: 1. The amount of the capital reserve the housing provider was required to maintain for those housing projects under an operating agreement immediately before the operating agreement was terminated under section 91 of the Act. 2. Contributions made by the housing provider to the capital reserve. 3. Income earned from the investment of funds in the capital reserve. O. Reg. 339/01, s. 24 (1); O. Reg. 408/01, s. 3; O. Reg. 86/02, s. 5. (2) The housing provider shall contribute all amounts each of which is its contribution for a fiscal year, as determined under subsection (3), to its capital reserve for its housing projects in a service area. O. Reg. 339/01, s. 24 (2). (2.1) The amount of a housing provider’s contribution for a fiscal year to its capital reserve for its housing projects in a service area is the sum of, (a) the amount determined under the rules set out in subsection (3); and (b) any additional amounts that the service manager approves. O. Reg. 310/07, s. 7 (1). (3) The amount referred to in clause (2.1) (a) is determined under the following rules: 1. If the fiscal year ends before the fiscal year referred to in paragraph 2, the amount of the housing provider’s contribution is the amount determined by the Minister. 2. If the fiscal year is the first fiscal year beginning after the Minister determines the benchmark annual contribution for the housing provider, the amount of the housing provider’s contribution is the amount of the benchmark annual contribution. 3. If the fiscal year ends after the fiscal year referred to in paragraph 2, the amount of the housing provider’s contribution is the amount determined by multiplying the amount of the housing provider’s contribution for the previous fiscal year by the cost index applicable to those housing projects for the fiscal year, as determined by the Minister. O. Reg. 339/01, s. 24 (3); O. Reg. 310/07, s. 7 (2). (4) Despite subsection (3), a housing provider shall not contribute an amount to its capital reserve fund for a fiscal year for its housing projects in a service area in excess of the amount by which its surplus for the fiscal year in respect of those housing projects, as determined for the purposes of Part VI of the Act, exceeds, (a) the amount of “E” for that fiscal year under subsection 103 (2) of the Act, if the housing provider is entitled for that year to a subsidy calculated under that subsection; or (b) the amount of “E” for that fiscal year under subsection 106 (2) of the Act, if the housing provider is entitled for that year to a subsidy calculated under that subsection. O. Reg. 339/01, s. 24 (4). (5) At the option of a housing provider, contributions made by it to its capital reserve within five months after the end of a fiscal year may be considered to be contributions made during the fiscal year. O. Reg. 339/01, s. 24 (5); O. Reg. 453/01, s. 2 (1). (6) A housing provider shall account for the funds and property in its capital reserve and the income and expenses of the capital reserve separately from its other property, income and expenses. O. Reg. 339/01, s. 24 (6). (7) A housing provider may use its capital reserve for its housing projects in a service area only for the following purposes: 1. To fund eligible capital expenditures related to those housing projects. 2. To make investments permitted under the Act or this Part. O. Reg. 339/01, s. 24 (7); O. Reg. 453/01, s. 2 (2). (8) Despite subsection (7), a housing provider shall use funds in its capital reserve that were provided by a service manager in accordance with any conditions or requirements imposed by the service manager at the time the funds were provided. O. Reg. 339/01, s. 24 (8).