City of Red Deer questions its own administrative costs

Red Deer city council raised questions on Monday over why administrative costs of $151,000 are so high to implement affordable housing projects.

Red Deer city council raised questions on Monday over why administrative costs of $151,000 are so high to implement affordable housing projects.

Council received a report from the Community Housing Board that recommended how to distribute $615,000 in provincial dollars to six programs from Sept. 1, 2012, to June 30, 2013. Council approved the dollars, but administrative expenses being sought by the City of Red Deer raised eyebrows among several city councillors.

The City of Red Deer is the Community Based Organization (CBO) for housing and homelessness dollars received from the province.

“As a citizen looking at this and if I was one of the other organizations, I’d wonder what the city does for its receipt,” said Coun. Chris Stephan.

Matthew Cornall, chairman for the Community Housing Advisory Board, said the expense looks high because it’s trying to address an issue that’s been around for a few years.

He said the city has been very generous over the last several years, providing administrative expenses at three per cent regarding the delivery of provincial dollars to local organizations.

“Typically the major cities in Alberta provide administrative expenses (for affordable housing projects) at 10 per cent,” Cornall said. “We’ve been far the lowest.”

The cost of $151,000 will bring the two-year rate to eight per cent, which still makes Red Deer the lowest, he added.

The expenses pay for staff time, including followup work with these organizations, he said.

“So the $151,000 out of the $615,000 is way more than 10 per cent, but that’s just because of the catch-up — is that right?” asked Stephan.

Cornall replied that was the case.

Stephan recognized that in future years, out of $615,000, the city’s administrative share will be at eight per cent.

“Ultimately we want to deliver the funds in the most efficient way to the end user, so I think the lower we can do the administration, that’s better,” said Stephan. “I think that’s the expectation for the other organizations. What’s the purpose of these funds? It’s not to be used for administration.”

If the city can do this at less than eight per cent, then it should, Stephan said.

Cornall said the committee had a long discussion about this as well.

“How do we explain this to the public?” said Coun. Paul Harris. “They’re going to take a look at this and say, ‘That’s weird.’ ”

Community Services director Greg Scott said the city’s involvement in the affordable housing program is quite extensive. “We were absorbing those costs through city tax funds,” Scott said.

“Because the work that we’re doing goes directly towards the housing program, we’re coming back through the grant at a higher percentage to offset those costs.”

The city is still nowhere near what other cities are recovering, he added.

Harris asked if the Community Based Organization could be administrated by an organization other than the city.

There may be some restrictions on who can be the community administrator, said Mayor Morris Flewwelling.

Social Planning manager Scott Cameron said there are four cities in Alberta that act as the Community Based Organization for these affordable housing programs, but Calgary and Edmonton have housing organizations that do the administrative work.

“In our case, the (funding) comes to the city for holding, dispensing and reporting, but the actual recommendations on how it’s spent is a community based organization,” said Flewwelling.

Cameron said later the city has always tried to maintain its administrative costs at a very low level.

“But given our budget constraints, we were asked (by senior management) to take another look,” he said. “While we are permitted to take up to 10 per cent of the grant for the purposes of administration, we have moved towards eight per cent, which has brought us closer to other municipalities in the province.”

The change will be done incrementally, he added.

The other projects that were approved are:

• Canadian Mental Health Association working with Safe Harbour Society and Women’s Outreach on helping individuals find and maintain housing (just over $185,000).

• Central Alberta Safe Harbour Society will do a “shelter triage” project to hire additional staff for a more in-depth intake and triage system for those accessing the emergency shelter ($80,000).

• Red Deer Youth and Volunteer Centre will hire a part-time youth connections housing support worker ($61,080).

• Central Alberta Safe Harbour Society will receive $98,000 for its winter inn program.

• A 1.63 per cent cost of living increase for already funded programs (Buffalo Housing First, Harbour House, Red Deer Housing Team, Red Deer Native Friendship Society, New Beginnings) to the tune of just over $39,000.