WHEREAS the Housing Act (hereafter referred to as “the Act”) provides that a management body may annually requisition municipalities for which the management body provides lodge accommodation for the amount of the management body’s annual deficit for the previous fiscal year, and any amounts necessary to establish or continue a reserve fund for the management body; and
WHEREAS the Act provides that the management body shall supply a copy of its calculation of the requisitioned amount to the municipality; and
WHEREAS the Act provides that if a municipality agrees to contribute to the operating costs of any housing accommodation, other than lodge accommodation, provided by a management body, it shall make the contribution agreed to within 90 days after the mailing of the invoice by the management body; and
WHEREAS the Management Body Operation and Administration Regulation (hereafter referred to as “the Regulation”) provides that each year, a management body must prepare and submit to the Minister a business plan that includes the operating budget for the upcoming three-fiscal-year period, a capital plan for the upcoming five-fiscal-year period, and any other information required by the Minister; and
WHEREAS the Regulation places limits on reserve funds, including a requirement for ministerial approval to establish reserves and limits on the amount of reserves in relation to the management body’s estimated capital and operational costs; and
WHEREAS the current Act and Regulation lacks clarity regarding the scope of housing management body requisitions, specifically relating to capital project costs; and
WHEREAS this lack of clarity has resulted in situations in which housing management bodies have attempted to requisition municipalities for capital costs, expenses based on the current year’s budget, and to contribute to reserve funds not approved by members, all of which do not align with the intent of the Act and Regulation;
THEREFORE, BE IT RESOLVED that the Rural Municipalities of Alberta (RMA) request the Government of Alberta to engage municipalities, and membership associations such the Alberta Seniors and Community Housing Association in a review of the Alberta Housing Act to provide clarity on requisitioning for capital assets, associated interest costs and debenture payment obligations for member municipalities;
FURTHER BE IT RESOLVED that the RMA request the Government of Alberta to review the oversight of the Ministry of Seniors and Housing over housing management bodies (HMBs) to ensure that all HMBs are correctly and consistently requisitioning municipalities under the requirements of the Housing Act;
FURTHER BE IT RESOLVED that RMA request that the Government of Alberta provide enhanced training and education, including a training guide to municipal councils and HMBs on the Housing Act and the Management Body Operation and Administration Regulation to ensure they have a clear understanding of their financial powers, limitations and responsibilities, including related to requisitioning and reserve creation;
FURTHER BE IT RESOLVED that RMA request the Government of Alberta to amend the Housing Act to clearly state the ability of municipalities to approve or deny requests for capital projects.
The Housing Act provides parameters for how housing management bodies may requisition member municipalities for operating deficits and reserve funds. It is the general understanding that housing management bodies may requisition funds for the operating deficit of the previous year as well as any reserve funds, both capital and operating, as agreed upon between the management body and the member municipalities. There are some housing management bodies across the province that have been requisitioning municipalities for capital funds outside of any agreement that creates an operating or capital reserve between member municipalities and the housing management body.
The discrepancies between housing management bodies’ understanding of their requisitioning abilities may be due to a lack of oversight and clarity in the Act and Regulation from Alberta Seniors and Housing. While many housing management bodies appear to be following the correct process in working with their municipal partners to raise capital funds through official agreements for reserve contributions and operating deficits, there are other housing bodies that are not following the proper process and approaching capital projects as a requisition, to which the municipality has no ability to deny.
Further, some housing management bodies have been requisitioning municipalities based on the current year’s operational budget. The Act states that the operating requisition must be based on the previous year’s operating deficit. This discrepancy should also be rectified under the oversight of Alberta Seniors and Housing or clarified in the Act and Regulation.
RMA has no active resolutions directly related to this issue.
Alberta Seniors and Housing
Government of Alberta Response: Requisitions are based on the net operating lodge deficit before requisitions and capital asset amortization, and include the principal portion of long-term debt. Operating and capital reserves, as agreed to by the municipality, are in addition to the net operating requisitions.
Implementation on Stronger Foundations: Alberta’s 10-year strategy to improve and expand affordable housing, released in November 2021, has started. The strategy includes ongoing engagement with municipalities, housing management bodies, and membership associations to support key strategy actions, which will include examination of the Seniors’ Lodge Program.
Government of Alberta Response: Section 7 of the Alberta Housing Act enables the municipalities requisitioned to determine the basis on which the requisitions are to be shared. Therefore, it may be challenging to identify if a HMB is requisitioning incorrectly, unless the municipalities raise that as an issue. However, the ministry does receive annual audited financial statements and various quarterly reporting from all HMBs and, before the COVID-19 pandemic, performed on-site operational reviews. Operational reviews will re-commence once it is safe to do so.
Government of Alberta Response: Seniors and Housing provides training and education opportunities for all HMBs through the ministry’s HMB Housing Advisors. Training may include reviewing the Alberta Housing Act and its regulations, processes, and specific requirements for programs, and HMB board roles and responsibilities. HMBs may contact their Housing Advisor at any time to schedule training sessions, including information sessions for municipalities. Included with this letter is a HMB and Municipality Relationship document that will provide additional clarity. Ministry staff will also share your request with the Alberta Seniors & Community Housing Association, as it also assists with education for HMB administrators and board members. As part of the implementation of Stronger Foundations, Seniors and Housing will provide further guidance on competency-based governance.
Government of Alberta Response: Thank you for this suggestion; we will consider adding this information in future amendments. Seniors and Housing’s current process, although not defined in regulations, requires motions from each member municipality approving the addition of any facilities to the Seniors’ Lodge Program. Our partnership with municipalities is vital to the Seniors’ Lodge Program, and my ministry will not add a new lodge, or substantial addition to an existing lodge, without the member municipality’s agreement to be requisitioned for that facility.
The Government of Alberta response is broken down by their comments on each operative clause. The first clause asks for a review of the Housing Act. The response indicates upcoming consultations on a 10-year plan (which is now complete and has resulted in the publication of a 10-year affordable housing strategy). However, the response does not indicate a willingness to open the Housing Act itself for review.
The second operative clause asks for Ministry oversight of housing management body requisitions. The Government response states that municipalities have the power to request details on requisitions. Additionally, the response indicates a plan to resume provincial government operational reviews when it is safe to do so following the Covid-19 pandemic.
The third operative clause asks for more training for housing management body members. The response highlights existing training programs available. As part of the 10-year affordable housing strategy there is a shift towards developing “competency based boards” for HMBs. Competency based boards would see a matrix used to ensure certain skills are present on a board, such as legal, governance, and finance skills. While there is concern about how this may impact participation in HMBs, RMA has learned the intent of this move is to ensure certain skills are available to an HMB, rather than ensuring that each HMB specifically has a lawyer or accountant. RMA will continue to monitor for training programs available to board members to help them gain these skills. If properly implemented, this approach may help address then intent of the third operative clause related to ensuring HMBs are aware of their powers and responsibilities.
The final operative clause asks for the ability of municipalities to approve or deny capital project requests. The response indicates that this power is already in place as Seniors and Housing requires a motion from all requisitioned municipalities supporting a large capital project, however, this is not explicit in the regulations. There is a commitment to consider adding this in the next round of regulation amendments.
Based on the Government of Alberta response to the four asks of the resolution, RMA assigns this resolution a status of Accepted in Part, and will watch for additional updates that may address this resolution.