Title
Meridian Housing Foundation
Proposed Motion
1. That Council reject the Meridian Housing Foundation 2020 capital funding request.
2. That Administration proceed with terminating the agreement with all applicable parties, giving adequate notice as required, with the intent to renegotiate terms.
Body
Administration Recommendation
Administration supports the proposed motions.
Purpose
This allows Parkland County to comply with the interpretation of the applicable legislation and mandate from the Ministry of Seniors and Housing. This will also allow Parkland County to protect its interests.
Giving formal notice is the first step in renegotiating terms of a new agreement.
Summary
A 2019 governance review was conducted by Meridian Housing Foundation (MHF) that raised several concerns for Parkland County:
Parkland County has been significantly impacted by external parties in the past number of years. To ensure the balance sheet remains strong, that long term liabilities are managed accordingly, and that its residents and business have the ability to recover from a long standing recession, Parkland has undertook three consecutive years of pairing down the business, including a recent layoff of 30 staff. This was to align our income statement costs to the revenue, to ensure the balance sheet stays strong. This is all about ensuring that we stay competitive and not burden our residents with undue pressures from taxation. Parkland was doing red tape reduction long before the provincial election in 2019 due to necessity and the vision of council to be lean, agile, nimble and customer focused. There are numerous different ways to fund housing, but the current methodology the MHF is proposing is fraught with risk and against the policy of Parkland County. There appears to be a significant disconnect in the understanding of the available capacity of the region to fund new capital, and the impact it will have on the sustainability of its residents. The ask of MHF in 2020 would put a further 2% burden on our taxpayers, all at a time when they have one project on the go, and have not secured all of the funding required for that project, let alone the business case for new capital. It is not prudent planning for this money to sit in a reserve without a plan. The current contractual deal in place is not balanced, reasonable, and respectful of the fact this is a people business. It is time for a new deal.
Parkland County also put forward a capital cost share policy that must be followed for any outside party looking to use Parkland County residents resources for capital monies outside of Parkland County. Parkland County has been very clear with all of its cost share partners that the request for any monies must follow a process of due diligence and that it is the policy of council.
There are a number of concerns Parkland County administration has related to the governance review and ongoing operations at the MHF:
1) The governance structure including representation of the board relative to current funding formula.
2) The funding formulas, which although defined in legislation, does not restrict other methods that may be utilized. Housing is a people business and should not be tied at such a significant level to assessment. In the case of Parkland County, 1/3 of our assessment has been under appeal for close to 4 years. There are better ways to ensure no one party is impacted in an unproportioned manner.
3) There has been no business case presented that shows the need for capital funding requirements. There are a multitude of questions raised without this business case.
4) There has been no definitive plan showing what role the private sector is and can provide in this market. As of today there are a number of proposed private sector housing facilities being discussed in the region.
5) There are significant risks that the foundation is taking on relative to affordable housing, detailed in pages 17 to 22 of the governance review document of the foundation.
6) The affordable housing project identifies $1.5 million of fundraising which is a very substantial ask for a region of this size. The document also states the plan to go into debt, which may affect the ability of the foundation to carry out it's core mandate.
Strategic Plan/Policy/Legal/Staff Implications:
Responsible Leadership: Maintain the public's trust through transparent and fair decision-making
Financial Impact:
Cost: $1.1 million ($555,474 -2020 operating requisition; $548,500 - 2020 capital requisition)
Source of Funding: Senior's Foundation Tax Requisition