Funding for the Edmonton City Centre Church Corporation (ECCCC) under the Low Income Housing Capital Assistance Program (LIHCAP)
Recommendation:That an allocation of $128,000 from the Low Income Housing Capital Assistance Program to the Edmonton City Centre Church Corporation for its 12-unit affordable housing apartment project for low-income individuals be approved, subject to the agency receiving funding from the Province’s Affordable Housing Partnerships Initiative.
Report Summary
This report recommends funding from the Low Income Housing Capital Assistance Program (LIHCAP) for the construction of a 12-unit apartment building by the Edmonton City Centre Church Corporation (ECCCC).
Previous Council/Committee Action
At the December 2002 Special City Council Budget meeting, the LIHCAP component of the 2003 Capital Budget was approved.
Report
- Under the terms of the LIHCAP Capital Project XX-21-5500 approved by City Council, “Recommendations for funding assistance for each project are submitted to Community Services Committee for final approval.”
- The mission of the ECCCC is to “respond to the needs of disadvantaged people through program delivery, co-ordination and advocacy in partnership with other individuals and organizations in order to create healthier communities for all. The agency’s programs focus on food, emergency shelter, housing, early intervention, youth outreach and employment training.”
- The highlights of the ECCCC’s housing proposal are outlined in Attachment 1. The major aspects of the project are as follows:
The ECCCC proposes to construct a two and a half storey apartment building in the Boyle Street neighbourhood. Targeted to low-income, high-risk client groups, this 6,000 sq. ft. building will accommodate 12 bachelor suites to address the shortage of affordable, suitable and safe housing in the inner-city area.
The ECCCC intends to maintain a rental rate that is set well below the average market rent. The agency’s primary focus will be individuals who currently use emergency shelters, transitional housing and/or shared living arrangements for accommodation. The target population includes both low-income singles that are working and those in receipt of government supplements and pensions.
The total capital cost of the project is estimated to be $854,842. The Province is currently considering a funding application from the ECCCC for a grant of $600,000 from the Affordable Housing Partnerships Initiative (AHPI). The ECCCC will partly finance the project through a mortgage for $100,000. The ECCCC will submit an application to the Edmonton Housing Trust Fund (EHTF) for a grant of $26,842. In the event the EHTF is unable to fund the project, the ECCCC will contribute $26,842 from its own resources. The City’s contribution of $128,000 from the LIHCAP will make up 15% of the capital cost.
The LIHCAP funding is contingent upon the agency receiving funding from the AHPI. Upon receipt of the confirmation of the AHPI funding for the ECCCC, the Administration will initiate the process to forward the City’s contribution from the LIHCAP to the agency.
A Letter of Understanding will be signed between the City and the ECCCC. This document will specify that the funding is one-time only and will request documentation of project completion.
Budget / Financial Implications
The proposed amount of $128,000 is available in the LIHCAP Capital Budget. The Corporate Services Department has reviewed the ECCCC’s proposal and has concluded that the financial information and documentation are sound, the project is financially viable and the agency is capable of managing the project on a go-forward basis. Highlights of the financial review are provided in Attachment 2.
Justification of Recommendation
The proposal conforms to the objectives of the LIHCAP and needs identified in the Interim Edmonton Community Plan on Homelessness (2003-06). It also demonstrates the City’s active participation with the community, and other agencies, to achieve its housing requirements for special need groups.
Background Information Attached
- Highlights of the Edmonton City Centre Church Corporation’s Housing Project
- Highlights of the Financial Review
Background Information Available on Request
- The Edmonton City centre Church Corporation’s LIHCAP Application
Others Approving this Report
J. Tustian, General Manager, Corporate Services Department
(Page 1 of 2)
Attachment 1
Highlights of the Edmonton City Centre Church Corporation’s Housing Project
The Edmonton City Centre Church Corporation (ECCCC):
The Edmonton City Centre Church Corporation (ECCCC) is a non-profit, charitable organization owned by its member churches: All Saints’ Anglican Cathedral, Augusta Lutheran Church, First Baptist Church, McDougall United Church, St. Joseph’s Roman Catholic Basilica and the Anglican Parish of Christ Church. The ECCCC has an independent board of directors.
The ECCCC provides services responding to the needs of disadvantaged people through delivery of a wide range of programs. The agency promotes and fosters the vision and belief that people who have safe, decent housing, good food and a sense of security will become more stable and contribute to build a healthier community. The ECCCC has provided services in the inner city since 1970.
The ECCCC meets a wide variety of housing needs, providing sheltered supervised and independent living situations for hard-to-house people in the inner city. All programs seek to treat people with respect and enable them to live with dignity and maximum independence. The Women’s Emergency Accommodation Centre provides emergency shelter, food, support and referral services, while Elizabeth House and Our Place offer short-term and long-term housing respectively. The ECCCC also provides housing for the handicapped and hard-to-house persons in partnership with the Handicapped Housing Society of Alberta (HHSA) and the Capital Health Authority (CHA).
Other initiatives of the ECCCC include the Early Head Start, the Nutrition Snack Program, Edmonton’s School Lunch Program, The Inner-Agency Head Start Committee, the ArtStart program, the Crossroads Outreach Program and the Kids in the Hall program.
The Housing Project:
The ECCCC intends to develop a 12-suite walk-up apartment building at 9355 – 103 Avenue in the neighbourhood of Boyle Street. The project will have an area of approximately 6,000 sq. ft. and include 12 bachelor suites.
The project will provide affordable, secure, suitable and safe rental accommodation for low-income individuals including those receiving social assistance and pension benefits.
The capital cost of the project is estimated to be $854,842. The ECCCC will contribute $100,000 towards the capital cost in the form of a mortgage. The ECCCC will apply to the Edmonton Housing Trust Fund (EHTF) for a grant of $26,842. In the event the EHTF is unable to contribute, the ECCCC will be responsible to fund this amount. The Province is currently considering an application from the ECCCC for a grant for $600,000 from the Affordable Housing Partnerships Initiative (AHPI). The City’s contribution of $128,000 from the LIHCAP will make up 15% of the capital cost.
Attachment 1 - Page 1 of 1
Attachment 2
Highlights of the Financial Review
The Financial Services Section of Corporate Services was requested to evaluate the financial viability of the ECCCC project. The organization has submitted a request to the City to obtain LIHCAP funding in the amount of $128,000 which represents approximately 15% of the project costs associated with the construction of a new 12-unit apartment building.
Scope of Review:
- The review of project capital costs was limited to ensuring that there was an independent review of the proposal by the project consultant to identify the construction costs related to the 12-unit apartment building. The Capital Budget was prepared by Anna D’Agostini (Housing Development Consultant) with building cost information provided by Delnor Construction (Schedule 1).
- The review of project financing was limited to ascertaining that all other sources of financing were in place. To date, the following secured funding sources are in place as provided by the Consultant or requested in the case of the AHPI, EHTF and LIHCAP funding:
Affordable Housing Partnerships Initiative funding request $ 600,000
Edmonton Housing Trust Fund funding request$ 26,842
Capital City Savings Mortgage (Approved)$ 100,000
Low Income Housing Capital Assistance Program
(LIHCAP) funding request$ 128,000
Total$ 854,842
- A review of the proposed project Operating Budget for five years as prepared by the organization (Schedule 2). Consistency is expected with CPI at 2% being factored in for future years. Should utility costs increase at a higher rate than this, surplus funds generated within the project or other funds supplied by the organization will be used to offset the additional costs.
- The audited financial statements of the organization for the year ended December 31, 2002, as prepared by Deloitte & Touche were reviewed.
- A general review of the CRHC application was done including their Certificate of Incorporation.
SCHEDULE 1
Edmonton City Centre Church Corporation
Capital Budget
ESTIMATED PROJECT COSTS
Land
Acquisition$ 68,500
Appraisal/Legal Fees$ 5,000
Local Improvements During Construction$ 6,500
Property Tax During Construction$ 561
Survey/Title/Recording Fees$ 5,000
DC2 Development Application$ 50,000
Total Land Costs$ 135,561
Building
Construction Contract/Services (Delnor Construction)$ 546,673
Contingency – 5%$ 27,000
Total Building Costs$ 573,673
Site Improvements
Landscaping $ 3,500
Total Site Improvements Costs$ 3,500
Administration
Architects Fees (inc. all professional designations)$ 35,500
Audit/Legal Fees$ 3,500
Consultant/Inspection Fees$ 25,000
Contingency$ 5,000
Interest Incurred During Construction$ 5,000
Marketing and Rent Up$ 1,500
Market Rental Appraisal (inc. mortgage application)$ 2,000
Municipal Fees$ 7,200
Signage/Grand Opening$ 2,500
Risk Construction Insurance$ 26,000
Total Administration Costs$ 113,200
______
Subtotal$ 825,934
Net GST Paid (after 50% rebate)$ 28,908
Total Estimated Project Cost$ 854,842
SCHEDULE 1 - Continued
FUNDING SOURCES
Affordable Housing Partnerships Initiative$ 600,000
Edmonton Housing Trust Fund$ 26,842
Low Income Housing Capital Assistance Program (LIHCAP)$ 128,000
Capital City Savings – Mortgage$ 100,000
Total Funding Sources$ 854,842
SCHEDULE 2
Edmonton City Centre Church Corporation
Proposed Budget – Five Year Forecast
YEAR 1YEAR 2YEAR 3YEAR 4 YEAR 5
Revenue
Rent 48,888 49,866 50,863 51,88052,918
Total Revenue 48,888 49,866 50,863 51,88052,918
Expenses
Accounting/Legal 1,500 1,530 1,561 1,592 1,624
Advertising 300 306 312 318 325
Office Supply/Postage 200 204 208 212 216
Rent Up Expenses 500 510 520 531 541
Salaries/Benefits 10,000 10,200 10,404 10,612 10,824
Telecommunications 300 306 312 318 325
Total Administration 12,800 13,056 13,317 13,58313,855
Gas 3,600 3,672 3,745 3,820 3,897
Electricity 4,600 4,692 4,786 4,882 4,979
Waste Removal 500 510 520 531 541
Water and Sewer 2,500 2,550 2,601 2,653 2,706
Total Operating 11,200 11,424 11,652 11,88612,123
Maintenance 1,500 1,530 1,561 1,592 1,624
Repairs 1,500 1,530 1,561 1,592 1,624
Contract Labour 3,000 3,060 3,121 3,184 3,247
Total Maintenance 6,000 6,120 6,243 6,368 6,495
Debt Servicing 8,037 8,037 8,037 8,037 8,037
Insurance 3,000 3,060 3,121 3,184 3,247
Replacement Reserve 3,500 3,570 3,641 3,714 3,789
Total Fixed 14,537 14,667 14,799 14,93515,073
Total Expenses 44,537 45,267 46,011 46,77247,546
Annual Surplus/(Deficit) 4,351 4,599 4,852 5,108 5,372
Note: Rent Revenue also includes an anticipated 3% vacancy allowance.
Attachment 2 - Page 1 of 4