Minutes Confirmed on July 27, 2020

This meeting of the Board of Directors of the Toronto Atmospheric Fund took place during the Declared Emergency in the City of Toronto and was conducted by electronic means. Directors, staff, and the public participated remotely in this meeting.

These measures were necessary to comply with physical distancing requirements and a Provincial Order that limits public gatherings.

The proceedings of the Board of Directors of the Toronto Atmospheric Fund were conducted publicly and the video of this meeting can be viewed at http://app.toronto.ca/tmmis/video.do?id=18708

The Board of Directors of Toronto Atmospheric Fund confirmed:

1.  The annual general meeting of the members of Toronto Atmospheric Fund shall be held on Thursday, May 21, 2020 at 9:45 a.m. or immediately following the conclusion of the meeting of the Board of Directors of the Toronto Atmospheric Fund.

2.  The calling of the annual general meeting by the Chair by notice given on May 8, 2020 is ratified and approved.

3.  The meeting will be conducted with members participating by electronic means, as authorized by City Council on April 30, 2020.

The meeting of the Members of the Toronto Atmospheric Fund (TAF) scheduled for April 28, 2020 could not be held as a result of COVID-19 restrictions on in-person meetings.  At its meeting on April 30, 2020, City Council authorized the Board of Directors of the Toronto Atmospheric Fund to meet virtually during this emergency period.  The purpose of this report is to confirm the decision of the Chair to call a meeting of the Members of the Toronto Atmospheric Fund for May 21, 2020.

The Board of Directors of the Toronto Atmospheric Fund:

1.  Approved transfers of $3,004,823 to the Toronto Stabilization Fund and $1,814,782 to the Ontario Stabilization Fund.

2.  Approved the 2019 Audited Consolidated Financial Statements.

The Chief Executive Officer and the Director, Finance, Toronto Atmospheric Fund gave an overview of the Draft Consolidated Financial Statements for Toronto Atmospheric Fund for the year ended December 31, 2019 and the Draft Auditors' Report.

The 2019 Audited Consolidated Financial Statements and Report have been prepared by Welch LLP and are presented to the Board of Directors of Toronto Atmospheric Fund for approval. These statements provide separate fund accounting for both the City of Toronto and the Province of Ontario endowment funds.

The Board of Directors of the Toronto Atmospheric Fund received the item for information.

The Chief Executive Officer and the Vice President, Strategy and Partnerships gave an overview of the Chief Executive Officer's Report.

This report provides an update on Toronto Atmospheric Fund initiatives with regard to Governance and Organizational Matters and Strategic Programs.

The Board of Directors of the Toronto Atmospheric Fund:

1.  Received the report (May 7, 2020) from the Director, Strategy and Grants for information.

The Director, Strategy and Grants gave an overview on Risk Register.

Staff have prepared a Risk Register to support monitoring of Toronto Atmospheric Fund (TAF)’s priority risks and ensure that they are mitigated and balanced against opportunities to inform deliberate decision-making in service of TAF’s mandate. The draft Risk Register is attached to this report for the Board's review and comment.

The Board of Directors of the Toronto Atmospheric Fund received the item for information.

The Chief Executive Officer gave an overview on Unaudited Financial Reports for the Fourth Quarter of 2019 and the First Quarter of 2020.

The unaudited financial results for the fourth quarter of 2019 and the first quarter of 2020 periods are provided in Attachment 1.

The Board of Directors of the Toronto Atmospheric Fund:

1.  Received the item for information.

Minutes from the Investment Committee Meeting held on January 30, 2020.

The Board of Directors of the Toronto Atmospheric Fund:

1.  Approved investment of up to $1,500,000 subject to the terms and conditions outlined by the Investment Committee and as set out in Confidential Attachment 1 to the report (April 20, 2020) from the Chair, Investment Committee.

 
2.  Directed the Vice President, Impact Investing to implement the investment to the satisfaction of Toronto Atmospheric Fund’s Solicitor.

 
3.  Directed that the confidential information contained in Confidential Attachment 1 to the report (April 20, 2020) from the Chair, Investment Committee remain confidential in its entirety, as it contains commercial and financial information, supplied in confidence to The Atmospheric Fund, which, if disclosed, could reasonably be expected to prejudice significantly the competitive position or interfere significantly with the contractual or other negotiations of a person, group of persons, or organization.

Approval of a Direct Investment is recommended which demonstrates the potential for appropriate risk-adjusted return and strong alignment with Toronto Atmospheric Fund’s mandate. The proposed investment of up to $1.5 million is in compliance with the maximum allocation (60 percent) for Direct Investments set out in Toronto Atmospheric Fund’s investment policy.

The Board of Directors of the Toronto Atmospheric Fund:

1.  Approved raising up to $2,500,000 by selling and/or borrowing against five (5) Direct Investments outlined in Confidential Attachment 1 to the report (May 4, 2020) from the Vice President, Impact Investing, which shall be:

a. subject and conditional to the Investment Committee’s satisfaction with the final terms and conditions, and

b. if borrowing, subject to City Council approval.

2.  Directed the Vice President, Impact Investing to implement the transaction to the satisfaction of Toronto Atmospheric Fund’s Solicitor.

3.  Directed that the confidential information contained in Confidential Attachment 1 to the report (May 4, 2020) from the Vice President, Impact Investing remain confidential in its entirety, as is about a plan to be applied to any negotiations carried on or to be carried on by or on behalf of the Board of Directors of the Toronto Atmospheric Fund. 

The Chief Executive Officer gave an overview on Cashflow Analysis and Options for Liquidity.

The Board of Directors of the Toronto Atmospheric Fund recessed its public meeting to meet in closed session to consider the item as it is about a plan to be applied to any negotiations carried on or to be carried on by or on behalf of the Board of Directors of the Toronto Atmospheric Fund.

The financial forecast indicates Toronto Atmospheric Fund has adequate cash availability to fund its operations until the end of the third quarter by managing expenses and using the available Line of Credit. This position changes in the fourth quarter when additional cash is needed for both normal operating expenses and significant Direct Investment advances. On the assumption that it will still not be prudent to get cash by making redemptions from the investment portfolio, given the downward valuation of equities markets as a result of the COVID-19 crisis, and our fixed income being at minimum limits, staff have explored various options. One option is recommended at this time.

The Board of Directors of the Toronto Atmospheric Fund:

1.  Directed that the confidential information contained in Confidential Attachment 1 to the report (May 4, 2020) from the Vice President, Impact Investing remain confidential in its entirety, as it is about a plan to be applied to any negotiations carried on or to be carried on by or on behalf of the Board of Directors of the Toronto Atmospheric Fund.

The Vice President, Impact Investing gave an overview on Direct Investment Risk Analysis Approach and Stress Test.

The Board of Directors of the Toronto Atmospheric Fund recessed its public meeting to meet in closed session to consider the item as it is about a plan to be applied to any negotiations carried on or to be carried on by or on behalf of the Board of Directors of the Toronto Atmospheric Fund.

Toronto Atmospheric Fund (TAF) currently has twelve investments in its Direct Investment portfolio and two investments in Private (pooled) Equities, totalling approximately $8 million. TAF also operates two financing lines for ESPAs, totalling $8 million. An additional $8.8 million has been approved but not advanced for five Direct Investments and one Private (pooled) Equity Fund. 

Given the change in business circumstances due to the COVID-19 crisis, staff stress tested each of these using risk weighting matrix and identified reserve percentages for each risk category (Confidential Attachment 1). This will be improved as appropriate in consultation with the Investment Committee and used to continue monitoring the portfolio. There are no areas of immediate concern.

Staff will update and present the analysis in advance of each quarterly Investment Committee meeting, and any negative change will be brought immediately to the attention of the Investment Committee (or Direct Investment Subcommittee once that is established). Any new investment proposed for approval will include analysis of the COVID-19 implications.

The Board of Directors of Toronto Atmospheric Fund:

1.  Approved the Investment Committee Terms of Reference, as amended and set out in Attachment 1 to the report (May 5, 2020) from the Chief Executive Officer; subject to City Council approval of the delegation of authority for the Investment Committee to approve certain Direct Investments.

2.  Directed the Chief Executive Officer, to work with the City Manager's office, to arrange for the Terms of Reference to be submitted to City Council for approval, together with the proposed revisions to the Statement of Investment Objectives and Principles (SIOP).

The Chief Executive Officer gave an overview on Investment Committee Terms of Reference.

This report recommends amendment of the Terms of Reference for TAF’s Investment Committee.  In addition to some housekeeping, a new Direct Investment Subcommittee is proposed for the purpose of providing the specialized and responsive guidance needed to significantly increase the Direct Investments portfolio as TAF’s endowment is increased and in keeping with the Target Portfolio recommended by the Investment Committee.

The Board of Directors of the Toronto Atmospheric Fund:

1.  Approved the following grant requests to be funded jointly from the Ontario and City of Toronto endowments except where otherwise indicated:

 
a. $195,890 over 24 months to Durham Region Transit to develop a scaling-up strategy to electrify its bus fleet, and to finalize recommendations for the construction of Ontario’s first dedicated zero-emission mass transit charging depot (funded from the Ontario endowment only). Approval to be subject to the following conditions:

- develop an impact assessment report to identify project activities and timelines that have been affected by COVID-19, and propose strategies to overcome these challenges;

- seek federal funding for the activities contemplated in the grant proposal and subsequent implementation of electric bus fleets;

- develop an agreement in principle to offset Toronto Atmospheric Fund grant funds, up to the full value of the Toronto Atmospheric Fund grant, should relevant funding be successfully secured.

 
b.  $175,000 over 24 months to Pembina Institute to convene stakeholders, produce research, and engage the federal government to ensure that strong regulations are included in the Clean Fuel Standard so that it delivers on its potential to reduce emissions and grow the clean economy.  Approval to be subject to the following conditions:

- develop an impact assessment report to identify project activities and timelines that have been affected by COVID-19, and propose strategies to overcome these challenges, particularly as they relate to convening partners and stakeholders;

- with the support of a Developmental Evaluation coach, prepare a Developmental Evaluation plan for approval by Toronto Atmospheric Fund staff, use the plan to assess progress against objectives on an ongoing basis, and report against the plan in interim reports.
 

c.  $40,000 to Passive House Canada over eight months to develop a concept plan for a Zero Emissions Buildings Exchange in the Greater Toronto and Hamilton Area, which will seek to rapidly increase building industry capacity to meet growing demand for energy efficiency retrofits and near net-zero new construction practices.  Approval to be subject to the following conditions:

- develop an impact assessment report to identify project activities and timelines that have been affected by COVID-19, and propose strategies to overcome these challenges, particularly as they relate to convening partners and stakeholders;

- present the business plan to at least three potential funders to support the next phases of implementing the Centre of Excellence.

 
2.  Referred the following funding requests to the Grants and Programs Committee for review and a recommendation to the Board for its meeting scheduled on November 6, 2020:  

a.  $121,700 over 24 months to QUEST Canada to develop and disseminate a toolkit to support Electric Vehicle (EV) charging in existing multi-unit residential buildings, consisting of practical guidance for stakeholders to overcome challenges of installing Electric Vehicle chargers.  

b.  $114,824 over 12 months to Sustainable Buildings Canada to create a software tool that will enable municipal staff to implement and enforce energy performance requirements within their municipal green development standards.
 
c.  $122,000 over one year to Clean Air Partnership to support the adoption of new building code requirements for Electric Vehicle charging infrastructure by leading a costing study of installing "Electric Vehicle Ready" requirements in new multi-unit residential buildings.

3.  Declined the following grant requests:

 
a.  $100,000 over two years to Ontario Clean Air Alliance to lead a public communications and aware-raising campaign with the goal of phasing out natural gas-powered electricity generation by 2030 in Ontario. This recommendation is due to concerns about the efficacy of the proposed strategy, and the lack of coordination with other stakeholders leading complementary initiatives in the Greater Toronto and Hamilton Area.

 
b.  $19,500 over six months to Toronto and Region Conservation Authority to assess the socio-economic impacts of zero emissions vehicle (ZEV) adoption, which will inform strategies and actions in the Region of Peel ZEV Strategy. This recommendation is due to concerns about the efficacy of the proposed communications activities, and the limited scope of knowledge transfer activities to scale-up the potential impact and mobilize lessons from this project.

The Grants Manager gave an overview on Grants Recommendations.

Eight grant applications were reviewed by staff and members of the Grants and Programs Committee and six were identified as worthy of consideration for Toronto Atmospheric Fund (TAF) funding. In addition to their alignment with TAF’s granting criteria and priorities, staff was asked to assess the extent to which the current COVID-19 pandemic is likely to help and/or hinder the achievement of project outcomes and wider economic recovery. With consideration to TAF’s financial situation, the Chair of the Grants and Programs Committee recommends approval of three grant requests with a combined value of $410,890, declining two grant requests totalling $119,500, and deferring consideration of three grant requests totalling $358,524

The Board of Directors of the Toronto Atmospheric Fund:  

1.  Approved the recommendations from the Executive Compensation and Performance Review Committee, with respect to Chief Executive Officer Compensation, contained in Confidential Attachment 1 to the report (May 7, 2020) from the Board Chair.

2.  Requested the Chief Executive Officer to investigate the cost to retain a consultant or company to conduct a benchmark review study for Toronto Atmospheric Fund staff, consistent with City Council's Guiding Principles for Executive Compensation at City Agencies and Corporations, and report back to the Board for consideration through the 2021 budget process.

3.  Directed that the confidential information contained in Confidential Attachment 1 to the report (May 7, 2020) from the Board Chair remain confidential in its entirety, as it deals with personal matters about an identifiable person.

The Board of Directors of the Toronto Atmospheric Fund recessed its public meeting to meet in closed session to consider the item as it deals with personal matters about an identifiable person.

This report summarizes the performance review of Toronto Atmospheric Fund’s Chief Executive Officer and recommends base and performance-based compensation.

The Board of Directors of the Toronto Atmospheric Fund:

1.  Reappointed the following Officers of the Corporation to hold office at the pleasure of the Board, and until their successors are appointed:

Vice-Chair - Councillor Mike Layton
Secretary - Councillor Jennifer McKelvie
Treasurer - Kimberly Marshall.

Toronto Atmospheric Fund By-law No. 1, Section 5.1. states that the Officers of the Corporation shall be appointed annually by and shall hold their appointments at the pleasure of the Board or until successors are duly appointed. This report recommends appointment of Officers of the Corporation.

Announcements

The Chair acknowledged that the Board of Directors of the Toronto Atmospheric Fund was meeting on the traditional territory of many nations including the Mississaugas of the Credit, the Anishnabeg, the Chippewa, the Haudenosaunee and the Wendat peoples and is now home to many diverse First Nations, Inuit and Métis peoples. The Chair also acknowledged that Toronto is covered by Treaty 13 with the Mississaugas of the Credit.

The Chief Executive Officer announced that Board member Laurel Atkinson is moving out of Greater Toronto and Hamilton Area, and today is her last Board meeting. The Chief Executive Officer thanked Laurel for her services and contributions and wished her all the best.

The Directors of the Board of Directors of the Toronto Atmospheric Fund listed in the attendance for this meeting participated remotely and were counted for the purposes of quorum, as permitted by the Municipal Emergency Act, 2020 and the Board of Directors of the Toronto Atmospheric Fund By-law No. 1.

Also Present - Non-Members:

Julia Langer, Chief Executive Officer, Toronto Atmospheric Fund

Ian Klesmer, Director, Strategy and Grants, Toronto Atmospheric Fund

Jaime Klein, Operations Lead, Toronto Atmospheric Fund

Tim Stoate, Vice President, Impact Investing, Toronto Atmospheric Fund

Fatima Crerar, Vice President, Strategy and Partnerships, Toronto Atmospheric Fund

Bryan Purcell, Vice President, Policy and Programs, Toronto Atmospheric Fund

Rob Wotten, Director, Finance, Toronto Atmospheric Fund

Ryan O'Connor, Grant Manager, Toronto Atmospheric Fund

Maggie Chi, Senior Advisor, Councillor Carroll's Office

Kathy Steffan, Partner, Welch LLP, Auditor

Derek Chu, Welch LLP, Auditor

Cliff Goldfarb, Lawyer, Gardiner Roberts LLP

Heather Keachie, Lawyer, Gardiner Roberts LLP

Lorraine Searles-Kelly, Solicitor, Legal Services, City of Toronto