Kneehill County council heard a detailed presentation about how underfunding, vacancy, inflation and other factors have left a seniors lodge foundation with serious money concerns. The presentation was made at the May 28 regular meeting of council.

Councillors heard a presentation by Kneehill Housing Corporation (KHC) Chief Executive Officer (CEO) Julie Miller describing how several factors have left a facility owned by the corporation with a funding crunch.

As part of the presentation two staff, Phillip Henke and Barb Panich, from the Government of Alberta’s seniors and housing department attended virtually.

Miller began her presentation by noting KHC owns and operates one facility, Golden Hills Seniors Lodge, while it also manages provincially-owned facilities elsewhere in Kneehill’s region.

She explained KHC has a board of directors, two of which are Kneehill County councillors, which also oversee Golden Hills and have the authority to set rental rates for that building’s suites. 

The lodge gets funding three ways: rental revenue, provincial subsidy and municipal requisition.

Rental revenue is charged directly to residents, but Miller stated KHC has struggled with vacancy in Golden Hills, and it’s not alone with this problem. 

“Many rural lodges…are struggling with vacancies,” said Miller, who noted the effect COVID had on this issue.

As well, stated Miller, a problem has arisen with low-income resident provincial subsidy: even with provincial money, the cost of offering a suite to a low income senior exceeds the suite’s revenue. 

It was stated a few times during the presentation “low income” represents a senior with an annual income of $30,000 or less.

At this point Henke also pointed out a low-income subsidy calculated daily from the provincial government is paid on occupied rooms, not vacant ones while Panich stated that rental rates in Golden Hills Lodge are set by the KHC board of directors.

Miller expanded on that by explaining why municipal requisition is vital to KHC’s Golden Hills facility. The requisition is a fee charged to property owners to further subsidize seniors housing foundations like KHC. However, she pointed out historically KHC has received less, and in some cases far less, requisition revenue than seniors housing foundations in other parts of Alberta. 

Additionally, Miller stated requisition in the Kneehill region is capped and doesn’t actually represent the actual costs of owning and operating Golden Hills Lodge.

Miller went on to explain what for all intents and purposes was years of underfunding to the KHC when it comes to municipal requisitioning. “…the requisitioning. has been extremely low,” she said. 

The CEO explained KHC management and staff coped with this underfunding by being very frugal and putting off certain projects it couldn’t afford, including major maintenance work or the creation of a capital reserve. Miller used as an anecdote a Carbon-area resident who claimed to be paying only about four dollars a year for KHC requisition.

Readers should note a capital reserve is essentially a savings account which an organization can use for major upgrades or unexpected expenses such as an emergency or a very pricey vehicle like a fire truck. The philosophy behind capital reserves is that such a fund prevents the taxpayers from facing huge expenses without warning.

Miller noted KHC faces the same financial pressures all Albertans face, such as inflation, while also some unique challenges. For example, she pointed out KHC pays tens of thousands of dollars every year in federal carbon tax, but receives no rebates: the rebates go directly to KHC tenants.

During discussion, several points were expanded upon such as the KHC board committing to reducing vacancy rates, KHC’s recognition of the importance of a reserve and need for long-term planning when it comes to aging facilities.

Councillors also recognized that while the KHC board sets Golden Hills rental rates, the board wants that rate to be affordable for seniors.

Reeve Ken King noted Kneehill County included in its 2024 budget a substantially higher requisition to KHC.

Councillors unanimously accepted Miller’s presentation as information.

By Stu Salkeld, Local Journalism Initiative Reporter

Original Published on Jun 12, 2024 at 09:29

This item reprinted with permission from   East Central Alberta Review   Coronation, Alberta

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