Independent Living BC Phase 1. Guide for Non-Profit Operators

Transcription

1 Independent Living BC Phase 1 Guide for Non-Profit Operators

2 Table of Contents CHAPTER 1 ~ INTRODUCTION TO INDEPENDENT LIVING BC 3 ILBC Overview 3 Assisted Living Registrar 4 What's in this Guide? 5 Frequently Asked Questions: 6 CHAPTER 2 ~ ILBC PARTNERS 9 Each Partner s Role 9 BC Housing 9 Health Authorities 9 Non-Profit Operators 10 Private Operators 11 CHAPTER 3 ~ TENANTS 12 Tenant Selection 12 Occupancy Standards 12 Residency Agreements 13 CHAPTER 4 ~ ILBC NON-PROFIT SUBSIDY PAYMENTS 14 Tenant Shelter Contributions 14 Health Authority Hospitality and Personal Care Subsidy Calculation 15 Subsidy Payments for Vacant Units 17 CHAPTER 5 ~ FINANCIAL OPERATIONS 18 Non-Profit Operating Budgets 18 Reporting Requirements 25 Operational Review 27 GLOSSARY 28 APPENDIX 30 Appendix A: Sample Non-Profit ILBC Operating Agreement 31 Appendix B: Sample Operating Budget 69 Appendix C: Example - Operating Costs Allocated to Shelter & Support Services 70 Appendix D: ILBC Building and Unit Information Form Non-Profit 71 Appendix E: ILBC Direct Deposit Form 74 Appendix F: SAFER Information Sheet and Cancellation Form 75 Appendix G: Rent Calculation Guide 76 This publication was produced by BC Housing October

3 CHAPTER 1 ~ INTRODUCTION TO INDEPENDENT LIVING BC BC Housing developed this guide to explain how the Independent Living BC (ILBC) Phase 1 program works, and to outline the responsibilities of: Non-profit operators who manage ILBC developments with independent and assisted living units. BC Housing representatives who provide financial and technical assistance for ILBC units. Health authority case managers who place tenants in these units. In addition, some private operators make units in their assisted living buildings available for ILBC rent supplements. Another guidebook, called the ILBC Phase 1 Guide for Private Operators, outlines their responsibilities. Most ILBC non-profit operators sign a standard operating agreement with BC Housing. However, some individual arrangements are in place with particular operators, and some of the information in this guide may not apply in these situations. PLEASE NOTE: This guide applies only to ILBC Phase 1 Projects. While most of the information in this guide is relevant for both phases, there are important differences between ILBC Phase 1 and Phase 2 projects that are not addressed in this guide. Most importantly, hospitality services are funded by the local Health Authorities in Phase 1, but are funded by BC Housing in Phase 2. The information in this guide only applies to Phase 1 Projects. For detailed information on Phase 2 projects, please contact BC Housing. ILBC Overview As seniors age, their health needs change and many need help with activities of daily living, but may not require 24-hour facility care. The provincial government designed the Independent Living BC program for people who can live independently with some support, as a middle option to bridge the gap between home care and residential care. The ILBC program has created 3,500 independent housing units with some support services, and assisted living units for people who need a greater level of care. 3

4 Independent Living Independent Living BC Program Facility Living Home Care Independent Housing Assisted Living Long Term Care Personal care provided in individuals existing homes Independent housing Meals Housekeeping Emergency Response Social Activities Scheduled personal care Registered Independent housing Meals Housekeeping Emergency Response Social Activities Scheduled & Unscheduled personal care Registered Full time professional care Licensed. Seniors with lower incomes and people with disabilities living in ILBC units pay 70% of their after tax income, which goes toward the cost of their accommodation, hospitality services and personal care. Hospitality services include two meals daily, housekeeping, laundry, recreational opportunities and 24-hour emergency response. Personal care services include assistance with grooming, mobility and medications. Both BC Housing and the regional health authorities provide subsidies to non-profit operators to cover the difference between what tenants pay for rent and support services, and the cost of delivering these services. Assisted Living Registrar B.C. is the first province in Canada to regulate assisted living residences. All assisted living residences must be registered under the Community Care and Assisted Living Act. A registrar has been appointed to protect the health and safety of seniors and people with disabilities living in these developments. The registrar s role includes: Ensuring timely, effective resolution of complaints about the health and safety of assisted living tenants. Creating and managing a register of assisted living residences in B.C. Establishing and regularly reviewing health and safety standards for assisted living residences. The registrar has developed health and safety standards for assisted living, which describe the outcomes operators are expected to achieve. The standards state that registrants must: 4

5 Provide a safe, secure and sanitary environment for residents. Ensure hospitality services do not place the health or safety of residents at risk. Ensure sufficient staff members are available to meet the service needs of residents, and have the knowledge and ability to perform their assigned tasks. Ensure residents are safely accommodated in their assisted living residence, given its design and available hospitality and prescribed personal care services. Develop and maintain personal service plans that reflect each resident s needs, risks, service requests and service plan. Ensure personal assistance services are provided in a manner that does not place the health or safety of residents at risk. Operators are encouraged to adopt innovative approaches and procedures to achieve these desired outcomes. The registrar has also adopted the Ministry of Health s personal assistance guidelines as the standard for delivering personal care services. More information on complying with the health and safety standards, assisted living registration, resolving complaints, and the registrar s role is available on the Office of the Assisted Living Registrar website, at What's in this Guide? In this first chapter, we list the most frequently asked questions about the Independent Living BC program for quick reference. In chapter two, we explain the role of each partner, including BC Housing, the regional health authorities and non-profit and private operators. Chapter three outlines the tenant selection process, occupancy standards, and the terms required in your residency agreements. Chapter four describes the shelter and support service subsidies for non-profit ILBC developments. In chapter five, we explain financial operations, including the operating budget, the economic shelter cost, the reserve fund, the shelter subsidy, insurance coverage, reporting requirements and the operational review process. Please refer to the glossary for a definition of any unfamiliar terms. 5

6 Frequently Asked Questions: What is assisted living? Assisted living residences provide housing and a range of supportive services for seniors and people with disabilities, who are no longer able to manage at home with home support services, but do not require complex/residential care. Here s an overview: Housing Assisted living accommodation varies from private, lockable rooms to self-contained suites with bathrooms (some may have private cooking facilities as well). Residences contain common dining and recreational space and amenities to assist tenants with daily living. Hospitality Services Assisted living accommodation includes hospitality services that include meals, housekeeping, laundry, social and recreational opportunities, and a 24-hour emergency response system. Personal Care Services Personal care services are designed to promote dignity and independence for tenants, be respectful of and responsive to their preferences, needs and values, and involve family and friends. Some personalized assistance offered by assisted living operators can be routine, such as help with dressing, or more intensive, such as administering medications. Some examples include: Help with daily living activities, such as eating, dressing, bathing, grooming or mobility. Assistance with medications, such as reminders or help taking prescription drugs. Support to maintain healthy eating by providing nutritious meals or modified diets. Operators need to follow the registrar s requirements: ensure you do not provide more than two prescribed services, as more will not be funded. For more information on prescribed services, please refer to the following document on the Assisted Living Registrar s Website: Assisted Living - Should I Register My Residence? Available at: 6

7 What is the maximum amount of rent an ILBC tenant will pay in a Non-profit setting? Tenants will pay 70% of their after tax income, up to the maximum rent, plus a hydro surcharge. The maximum rent is based on a survey of market prices for assisted living accommodation and hospitality in different regions, plus an amount for personal care, which is determined by each health authority. In practice, most tenants pay either: 70% of income, calculated using the income tax return from the previous year, plus the hydro surcharge, or A flat rent amount that includes the hydro surcharge, if a tenant receives income assistance, or has a very low income and 70% of it is less than the flat rent amount. (See the ILBC Rent Calculation Guide in Appendix J for more information on flat rents.) What is the Hydro Surcharge? When the Assisted Living (AL) Client Rates policy was established during the development of ILBC, it was based on the premise that tenants would be responsible for their own electricity costs in addition to the monthly rate calculated based on 70% of after-tax income. However, early in 2006 BC Housing became aware of a number of concerns and inconsistencies surrounding this practice (e.g. not all ILBC settings have individually metered units). To address these issues, BC Housing in consultation with the Health Authorities have agreed to implement a flat $15.00 Hydro Surcharge for all Health Authority funded assisted living tenants effective October 1, Please refer to Chapter 4 for examples on how to include the Hydro Surcharge in rent calculations. If you have any further questions, please contact BC Housing. Are ILBC tenants eligible to apply for the Shelter Aid for Elderly Renters (SAFER) program? Tenants living in a non-profit ILBC development are not eligible for SAFER. How do we find out how much subsidy we ll receive? BC Housing will send a summary report to non-profit operators, with the following information for each ILBC tenant: The tenant rent contribution, with the portions allocated to shelter and support services. 7

8 The monthly shelter subsidy BC Housing pays. When are the subsidies paid? ILBC Phase 1 Guide for Non-Profit Operators Both BC Housing and the regional health authorities pay subsidies at the end of each month for the following month. Each quarter, BC Housing reviews the amount of shelter subsidy calculated and the amount paid, and makes any adjustments required due to tenant changes. Please contact your health authority to determine how it makes subsidy adjustments. How much subsidy is paid if a tenant moves in mid-month? If a tenant moves in between the first and the 15 th of the month, BC Housing will pay the full subsidy for that month. If a tenant moves in between the 16 th and the end of the month, the subsidy payment will begin the following month. The operator may charge a prorated portion of the tenant s rent contribution, based on the number of days the tenant lived in the unit that month. How do we know what the maximum rent is? For non profits, this depends on the location of each development and the health authority it is located in. Please check the BC Housing website or call the BC Housing Rent Desk for more information. Please note: The Personal Care amount used to calculate the maximum rent has no relation to your subsidy. It is based on an average cost of care across all settings in the applicable Health Authority. If you deliver personal care services to tenants, the subsidy provided by the Health Authority will be based on the actual cost of delivering the care, minus any portion of the Tenant Rent Contribution that may be allocated to personal care. What happens if a tenant is hospitalized for a while? Under the ILBC program, tenants units are considered their home. If hospitalized, tenants are responsible for the rent until they return home, and BC Housing continues to provide a subsidy for the unit. If a decision is made that a tenant will not return to the development, the unit is vacated and made available to a new tenant. Is subsidy paid if a unit is vacant while waiting for another referral? Non-profit ILBC developments include a contingency amount for vacancy loss in the operating budget to cover unanticipated, short term vacancy costs. 8

9 CHAPTER 2 ~ ILBC PARTNERS Each Partner s Role Independent Living BC is a partnership between BC Housing, the five regional health authorities in British Columbia, non-profit housing providers and the private sector. Non-profit operators sign separate agreements with BC Housing and the local health authority. The Operating Agreement with BC Housing covers the provision of shelter subsidies. The Health Agreement with the health authority defines how personal care will be provided and the amount of support service subsidy. BC Housing BC Housing is the provincial government agency responsible for social housing programs in B.C. We develop, manage and administer a range of subsidized housing across the province. Through the ILBC program, we provide housing and health options to help vulnerable tenants achieve greater independence. BC Housing acts as a resource and monitoring agency for Independent Living BC to: Provide shelter subsidies for non-profit ILBC developments, and rent supplements in some private market assisted living units. Monitor operations to ensure that public funds are spent prudently and responsibly. Provide technical and financial advice and other services. Work cooperatively with housing provider boards and private sector operators. Health Authorities Five health authorities in B.C. govern, plan and coordinate health services within their geographic regions: Vancouver Coastal Health Authority (VCH) Fraser Health Authority (FHA) Vancouver Island Health Authority (VIHA) Interior Health Authority (IHA) Northern Health Authority (NHA) Under the ILBC program, health authorities: 9

10 Provide funding for personal care services for ILBC tenants when operators deliver these services, and top-up hospitality costs not covered by tenants rent contributions. In some areas, the health authority delivers the personal care services. Refer ILBC tenants to non-profit societies and private operators who run assisted living developments. Work with operators to ensure strong links with home and community care services. Establish a process to resolve disputes between the health authority and an operator. Non-Profit Operators Non-profit societies are responsible for operating ILBC developments in accordance with the program s operating standards for: Corporate Organization: Establish a well organized corporate structure to ensure the development is well managed by: Defining responsibilities for the board, committees and staff. Writing policies and procedures. Maintaining the organization in good standing with the registrar. Conducting business in an ethical manner. Meeting all statutory and corporate obligations. Maintenance: Maintain the development in a state of good repair by: Keeping units well maintained. Obtaining sufficient insurance on the development. Informing tenants of the contacts and process for getting regular and emergency work done. Implementing a planned maintenance program. Complying with applicable health, safety and fire regulations. Finances: Establish policies and procedures to effectively control finances by: Preparing a yearly operating budget and a regular review of financial affairs. Ensuring sound financial operating policies and procedures are in place for: - Clearly defined spending authority. - Record keeping in accordance with generally accepted accounting practices. - Arrears, purchasing and investing reserve funds. Tenants: Establish policies and procedures for: 10

11 Ensuring tenants are selected in an open, fair, non-discriminatory way, in accordance with your Health Agreement with the regional health authority. Serving tenants promptly and courteously, with clear and informative communication. Providing access to information concerning individual tenants and protecting the privacy of tenants. Operating standards are defined in the Operating Agreement between a non-profit society and BC Housing. A sample agreement is included as Appendix A. For more information on governance, maintenance, financial management and resident relations, refer to our Housing Provider Kit, available online at or call to obtain a copy. Private Operators ILBC private operators are generally for-profit organizations that allocate some of the units in their assisted living buildings for seniors and people with disabilities, through referrals from their local health authority. The cost of private market assisted living varies, based on the size of the accommodation and services provided, and the price is more than seniors with low incomes can afford. BC Housing provides rent supplements and the health authorities provide hospitality subsidies to make some of these units affordable. Private operators own and manage the developments, BC Housing subsidizes the rent for designated ILBC units, and regional health authorities subsidize the cost of hospitality services and fund personal care services. This partnership works especially well in rural areas where fewer subsidized units are needed and in communities with demand to open units quickly. Please note this Guide provides information specifically for non-profit operators. For more information regarding private operators, please refer to the ILBC Guide for Private Operators. 11

12 CHAPTER 3 ~ TENANTS Tenant Selection Individuals cannot directly apply to independent and assisted living developments. Instead, the regional health authorities select tenants who are eligible for assisted living under the Ministry of Health s Home and Community Care Policy and the Community Care and Assisted Living Act, as interpreted by the assisted living registrar. Tenants should be referred in a timely manner to minimize vacancy loss. Seniors and adults with disabilities are referred to available units using criteria that include: Clients are currently eligible for health services in B.C. Clients health will be better maintained with support and care in a community setting rather than a medical facility. Both hospitality and personal care services are required to maintain independence, but the need for medical support will be relatively predictable and can be managed in a non-medical environment. Clients are at significant risk in their current living environment. Clients do not meet the admission criteria for a residential care facility. Clients with low to moderate incomes have limited housing options without an ILBC subsidy. A case manager works with each client to determine whether assisted living is the best option to meet their needs. Health authority employees determine if tenants meet the ILBC program criteria, and the nature and amount of support services required. Please note that discrimination is not allowed against any applicant or tenant for reasons of race, colour, ancestry, place of origin, religion, marital status, gender, sexual orientation or age, or any reason prohibited by law. However, the prohibition against age discrimination does not apply to units in a building reserved for seniors. Occupancy Standards The following guidelines ensure ILBC tenants are accommodated in suitable units for their household size: No more than two and no less than one person per bedroom. 12

13 Spouses and couples share a bedroom. For medical reasons supported by a physician, spouses and couples may have separate bedrooms. People sharing living quarters in a non-spousal relationship can have separate bedrooms. Residency Agreements Non-profit operators need to sign a Residency Agreement with each tenant, defining both the occupant and operator's obligations for accommodation and hospitality services, as ILBC units are not governed by the Residential Tenancy Act. The registrar has the authority to investigate health and safety complaints about publicly funded and private assisted living residences. However, the registrar does not address complaints about hospitality services, including meals, laundry, housekeeping, social and recreational opportunities, and 24-hour emergency response, unless they concern health and safety issues under the Community Care and Assisted Living Act. Your operating agreement with BC Housing requires each Residency Agreement to include the following terms: Occupancy is on a month-to-month basis. The tenant rent contribution will change if the tenant s income changes. Only the people named in the agreement can occupy the unit. The income from all occupants will be included in determining tenants household income. Failure to disclose or misrepresent income entitles the operator to end the residency agreement, and BC Housing to recover any shelter subsidies paid. Subletting the unit is not allowed. Tenants agree to let BC Housing verify personal information, as defined in the Freedom of Information and Protection of Privacy Act, to carry out our audit function. Your health authority also needs to review and approve the Residency Agreement, as it may have additional criteria for this contract. Except for paying the shelter subsidy, a landlord-tenant relationship exists between the non-profit operator and residents. Consequently, BC Housing is not liable to societies if tenants breach the terms of a Residency Agreement. In addition, your health authority will review and approve your residency agreements to ensure all the necessary conditions are included. 13

14 CHAPTER 4 ~ ILBC NON-PROFIT SUBSIDY PAYMENTS Please note that this chapter is provided for your information only, to outline how BC Housing calculates subsidy payments. Non-profit operators are not responsible for the calculations outlined in this chapter. Non-profit ILBC operators provide shelter, hospitality and personal care services to tenants. BC housing provides a shelter subsidy toward the cost of providing housing, while the local health authorities provide a subsidy towards the cost of hospitality and personal care services.. Tenant Shelter Contributions Tenants pay 70% of after tax income as a Tenant Rent Contribution (TRC), plus a hydro surcharge ($15.00 as of October 1, 2007), to add up to their total monthly payment.. (Please refer to the ILBC Rent Calculation Guide in Appendix G for information on calculating the tenant rent contribution.) BC Housing calculates how much of the tenant rent contribution goes to shelter costs, in order to determine the amount of shelter subsidy. This tenant shelter contribution (TSC) is based on 30% of a tenant s gross monthly income, and is capped at 50% of the maximum rent. Shelter costs include the residential accommodation, parking, laundry rooms and amenity space for tenants, but do not include the electricity in each unit (except for heat), telephone, cable television or transportation costs. BC Housing calculates the tenant shelter contribution using gross income from line 150 of a tenant s income tax return. Always include the gross income from line 150 on the ILBC Application Form for tenants moving into a non-profit ILBC development. Otherwise, forms submitted without this information may experience a processing delay while the information is obtained. In the following example, the total tenant rent contribution of $813 is split, with $375 applied to shelter costs, and $438 applied to hospitality and personal care services: 14

15 Tenant Rent Contribution 1. $1,140 (monthly net income) x 70% = $ Plus Hydro Surcharge ($15.00) (TRC) = $ Breakdown into Tenant Shelter Contribution and Personal Care Amount This is for illustration purposes BC Housing will calculate the Tenant Shelter Contribution (TSC) 1.$1,200 (monthly gross income) x 30% = $ Plus Hydro Surcharge ($15.00) = Tenant Shelter Contribution (TSC) =$ (TRC) (TSC) = Hospitality/Personal Care Contribution = $ $813 - $375 = $438 BC Housing Shelter Subsidy Calculation BC Housing s shelter subsidy equals the difference between the monthly housing cost from the operating budget and the tenant shelter contribution. Sample BC Housing shelter subsidy calculation Housing cost (from the operating budget) $ Tenant shelter contribution $ BC Housing subsidy (housing cost minus TSC) $ $800 - $375 = $425 Health Authority Hospitality and Personal Care Subsidy Calculation There are two ways to calculate the health authority subsidy for hospitality and personal care: One calculation is used when the health authority provides personal care. Another calculation is used when the operator provides personal care. When the operator provides the personal care services, the health authority subsidy is calculated as follows: 1) Total operating costs 2) Less the tenant rent contribution 3) Less the BC Housing subsidy 4) Equals the health authority subsidy 15

16 Sample health authority subsidy calculation (personal care provided by operator) ILBC Phase 1 Guide for Non-Profit Operators Housing costs (from the operating budget) $ Hospitality costs (from the operating budget) $ Personal care $ Total operating costs $2, Tenant rent contribution (TRC) (based on 70% of income plus $ hydro surcharge) Subsidy required $1, BC Housing portion (see Sample BC Housing Shelter Subsidy Calculation) Health portion Subsidy required minus BC Housing portion $1,687 $425 = $1,262 Note: This example uses $950 as the personal care cost. $ $1, When health authority employees provide the personal care services, the health subsidy does not include an extra amount for personal care. In this case, the health subsidy is calculated as follows: 1) Housing and hospitality costs 2) Less the tenant rent contribution 3) Less the BC Housing subsidy 4) Equals health authority subsidy Sample health authority subsidy calculation (personal care provided by health authority) Housing costs (from the operating budget) $ Hospitality costs (from the operating budget) $ Total operating costs $1, Tenant rent contribution (TRC) (based on 70% of income plus $ hydro surcharge) Subsidy required $ (Operating costs TRC) BC Housing portion (see Sample BC Housing Shelter Subsidy Calculation) Health portion Subsidy required minus BC Housing portion ($737 $425 = $312) $ $

17 Subsidy Payments for Vacant Units ILBC Phase 1 Guide for Non-Profit Operators Non-profit societies include a contingency for vacancy loss in the operating budget to cover costs when short term vacancies occur. BC Housing will review the vacancy loss at initial rent up and on-going months. Please contact your local Health Authority to determine how vacancy payments resulting from delayed referrals are handled. 17

18 Non-Profit Operating Budgets CHAPTER 5 ~ FINANCIAL OPERATIONS Non-profit ILBC operators prepare an annual operating budget that lists expenses and revenues separately for the shelter, non-shelter, and support service components, plus a combined amount. The housing portion of your operating budget is called the shelter budget, and is reviewed and approved by BC Housing before we sign your operating agreement. Please note that the shelter component should not include costs related to the support services. You ll find a sample budget in Appendix B, and an example of operating costs allocated to shelter and support services in Appendix C. Shelter Budget Guidelines To keep costs manageable, we set budget guidelines for non-profit ILBC developments in each of the health authorities, based on actual costs for seniors developments in these locations. Under these guidelines, you are allowed the following per unit per month (PUPM) amounts in your operating budget for shelter-related costs: 18

19 For Shelter Budgets Approved Effective September 1, 2007 FOR ILBC SHELTER COSTS (PER UNIT PER MONTH) VCHA FHA VIHA IHA NHA Administration Maintenance Utilities Property Tax Insurance Audit/Legal Replacement Reserves Total Costs Manageable Cost Baseline FOR ILBC REMOTE SHELTER COSTS (PER UNIT PER MONTH) VCHA FHA VIHA IHA NHA Administration Maintenance Utilities Property Tax Insurance Audit/Legal Replacement Reserves Total Costs Manageable Cost Baseline Definitions Administration: Maintenance: Utilities: Insurance: Audit / Legal: Replacement Reserves: Remote: Includes all costs - salaries, benefits, overhead, etc. related to the housing component includes all maintenance - staff, contracts, grounds, etc. includes all heating, lighting, hot water, garbage, water and sewer based on BC Housing's standard insurance requirements (not costs related to care); very small projects will have higher pupm as minimum amount applies. pupm should be decreased for larger projects to reflect reasonable costs per project; any amount over $4,000 per project is questionable. fixed amount as established and set out in the operating agreement community with population less than 6,000 which is more than 250 km from major centre; all communities north of 100 Mile House except Prince George and Prince Rupert are considered remote 19

20 Please note that very small projects are individually reviewed, as the per unit per month cost may not apply. For example, insurance for a six-unit project is unlikely to be available for a maximum cost of $48 (six units x $8 PUPM). Economic Shelter Cost Your initial operating budget is approved when BC Housing provides the project commitment. We may adjust the shelter budget at occupancy, once the final mortgage amount is confirmed. After 6 months of operations, the Housing Provider may request the Property Portfolio Manager to review the operating budget and adjust to actual. After we approve the shelter component of your operating budget, we use that amount to set the economic shelter cost for each unit for that fiscal year. The economic shelter cost is the break even amount required, per unit per month, to operate the development, and is the same for all units of similar size. Sample economic shelter cost calculation Annual operating budget for a 40-unit development Shelter cost Per month cost $360,000 $360, months 40 units $ per unit Five-year Budget Cycle ILBC developments have a five-year budget cycle. The first budget review occurs after your first year of operation. During this review, we will work with you to evaluate the initial shelter budget, and increase or decrease budget categories when the actual costs are known. Subsequently, we review and approve budgets at the beginning of every five-year cycle. In between review years, we adjust budgeted shelter costs to reflect changes in the Consumer Price Index (CPI), using the following formula: Economic shelter cost for the previous year, less any debt service charges on the mortgage Multiplied by the percentage change in the CPI (as published by Statistics Canada) Calculating economic shelter cost between review years 20

21 The economic shelter cost is recalculated when your mortgage is renewed to take into account your new loan payments. Shelter Subsidy BC Housing contributes a monthly subsidy payment toward the shelter costs at each ILBC development. The shelter subsidy equals the difference between the total shelter costs from the operating budget and the tenants shelter contributions. Shelter subsidy for a 40-unit development Per unit Monthly (40 units) Annually (40 units) Shelter costs $750 $30,000 $360,000 Less tenants $360 $14,400 $172,800 shelter contribution Equals shelter subsidy $390 $15,600 $187,200 Operating Surpluses and Deficits Groups operating non-profit ILBC developments retain and manage any operating surpluses or deficits for the shelter portion of the operating budget. An operating surplus occurs when operating revenues for the year exceed operating expenses. Accumulated surplus operating funds are used to: Pay any outstanding deficit on the shelter component from a previous year, as the first priority. Pay for capital renovations or improvements. Other payments approved by BC Housing. If you develop a deficit, you can: Review your budget to identify areas where savings can be achieved, if expenses exceed projections. Take appropriate management action to address arrears or vacancies, if applicable. Use surplus funds to offset the deficit in operating costs. If you experience a deficit and have not accumulated any surplus in previous years to pay it down, your Property Portfolio Manager will work with you to resolve the problem. 21

22 Operating surpluses and deficits differ from shelter subsidy overpayments and underpayments. If our financial statement review of tenant rent contributions shows the amount of subsidy has been underpaid, BC Housing will make up this difference. And if the subsidy has been overpaid, your organization returns this amount to BC Housing. Reserve Fund ILBC developments are required to set up a reserve fund to cover the future costs of capital repairs, replacements and improvements for the following items and their expected life spans: 22

23 Category Item Life in Years APPLIANCES FLOORING HEATING INTERIOR STRUCTURE PAINTING Commercial dishwasher 15 Commercial fridge 20 Commercial stove 20 Apartment fridge 17 Apartment stoves 15 Microwave 15 Apartment stove top 15 Commercial washer 20 Commercial dryer 20 Standard washer 16 Standard dryer 16 Carpet suite 10 Carpet common areas 10 Linoleum 20 Furnace 16 Boiler 20 Electric heat 20 Hot water tanks 10 Water/oil pumps 20 Air Conditioning 14 Central air conditioning common 20 areas Countertops 20 Exterior paint 8 Exterior trim painting 8 Interior painting common areas 7 Interior painting 7 PAVING Driveway paving 15 ROOFING Roof 22 WINDOW Blinds 11 COVERINGS Drapes 10 Awning 7 EXTERIOR Balcony coverings 15 STRUCTURE Deck and deck coverings 10 Fencing 10 Security gate 20 OTHER Fresh water pump Sewage/pressure/relay

24 Allocate a flat amount of $60 per unit per month to the reserve fund in your operating budget, which works out to $720 per unit per year. For example, for a 40-unit development, include $720 x 40 units = $28,800 for the reserve fund in your operating budget. Credit all interest earned on money in the reserve fund to the reserve fund. And keep your reserve fund, accumulated operating surplus and accumulated interest in the following types of accounts or investment instruments: Savings and chequing accounts, term deposits and guaranteed investment certificates of a bank, credit union or other financial institution authorized under Canadian or provincial laws to carry on trust or deposit business. Money market securities issued by Canadian, provincial or U.S. governments, or agencies created by government statue and backed by the government. Government bonds with a minimum quality standard of BBB from a recognized rating agency. National Housing Act approved mortgages rated AAA and insured by CMHC. Housing Investment Programs sponsored by the BC Non-Profit Housing Association and Co-operative Housing Federation of BC and approved by BC Housing. Individual holdings of corporate bonds, common or preferred stocks and mutual funds are not permitted for reserve funds, under this policy. For more information on investing reserve funds, you can refer to page 41 of the Financial Management Guide in our Housing Provider Kit, which is available online at If you have to replace items in the replacement reserve list more than two years before the estimated life, contact BC Housing. The reserve fund cannot be used to repair or replace items that are not included in this list, such as dining room furniture, serving and eating utensils, cooking utensils, table linens, furniture, bed linens and housekeeping equipment. Contact your health authority for information on replacement funding for these items. Insurance Schedule F of your Operating Agreement details the insurance requirements for your ILBC development. In addition, you need to obtain workers compensation coverage for all employees and workers at the development, as required by the Workers Compensation Act. 24

25 The BC Non Profit Housing Association (BCNPHA) offers a bulk insurance program with coverage at lower premiums for: Property, including rental income, extra expenses and business interruption Boiler and machinery Crime Commercial general liability, including directors and officers liability Participation is not mandatory, but we use these premiums as the standard for insurance coverage. If you want to use another insurance broker, you still need to get a quote from the BCNPHA s bulk insurance provider. This quote is the maximum amount BC Housing will fund for insurance. Compare this amount to the quote from your agent. If your quote is higher, you have to raise additional funds to cover the difference. In addition, we may require a Certificate of Insurance from your broker guaranteeing you have the same insurance coverage available through the group insurance program. When you submit your budget for approval to BC Housing, please include a copy of the bulk insurance quote, even if you ve used another broker. Contact your health authority for information on any additional insurance coverage it requires. Residents Insurance Your building insurance does not cover tenants' belongings. Please advise people to buy contents insurance, so replacement costs are covered in case of theft, fire or disaster. Tenants receiving income assistance may be eligible for help with insurance costs, through their shelter payment. Tenants can contact their financial aid worker for information. Reporting Requirements Start-up Package We send a start-up package to non-profit operators opening new Independent Living BC developments, with the following forms: ILBC Building and Unit Information Form This form asks for specific information on the building, including the average cost of personal care set out in your agreement with the health authority. If you are not 25

26 providing the personal care services, the health authority will set this amount. A copy is included as Appendix D ILBC Direct Deposit Form This form gives BC Housing authorization to electronically transfer the shelter subsidy payments each month to your bank account. A voided blank cheque must be attached. A copy is included as Appendix E SAFER Information Sheet and Cancellation Form Give this information sheet to all new ILBC tenants, as it explains the requirement to cancel any SAFER subsidy they receive. A copy is included as Appendix F We also include a supply of ILBC application forms in the start-up package. Summary Reports BC Housing will send you a summary report with the following information for each ILBC tenant: The tenant rent contribution, with the portions allocated to shelter and support services. The monthly shelter subsidy BC Housing pays. You need to review this report and notify us if you find any discrepancies. Two sample summary reports are included with this Guide: Audited Financial Statements Non-profit operators receiving shelter subsidies for ILBC developments are required to submit audited financial statements to BC Housing, within four months of the end of each fiscal year. Your financial statements should be prepared in accordance with Generally Accepted Accounting Principles, and include a Statement of Financial Position, Statement of Operations and Changes in Fund Balances, Statement of Cash Flow, Statement of Changes in Replacement Reserve Fund, Schedule of Shelter Operations for each building, and a Schedule of Surplus Accounts. 26

27 We review the audited financial statements to: Verify the amount of shelter subsidy provided was paid correctly. Determine if any subsidy adjustment is needed. Evaluate your adherence to the financial management terms of the Operating Agreement. Operational Review Every three to five years, BC Housing will review the operations and management of ILBC developments. We will meet with you to ensure you have: Achieved the operating standards for corporate organization, maintenance, finances and tenants. Met statutory requirements. Invested and used surplus and reserve funds appropriately. The regional health authorities may also conduct operational reviews to ensure health and safety requirements are being met. If either BC Housing or your health authority identifies any outstanding issues during an operational review, we will work with you to address these concerns. 27

28 GLOSSARY BC Housing: Canada Revenue Agency (CRA): Flat rent: Health authority: Hospitality services: Income assistance: Maximum rent BC Housing is the provincial government agency that develops, manages and administers social housing across the province, in partnership with non-profit housing providers, the private sector, other levels of government, health authorities and community agencies. The Canada Revenue Agency (CRA) administers tax laws for the federal government and most provinces. ILBC tenants receiving income assistance are charged a flat rent based on the amount of assistance they receive. The flat rent charge is slightly less than 70% of income to give tenants sufficient residual income during the month. Five health authorities in B.C. mange health services in their geographic region: Vancouver Coastal, Fraser, Vancouver Island, Interior and Northern Health Authorities. These health authorities select tenants for ILBC units. Hospitality support services include meals, housekeeping, laundry, recreational opportunities and emergency response. B.C. government income assistance programs provide income support to those in need. There are two categories: persons with disabilities and persons with multiple barriers, which receive different assistance rates. Employable people receiving income assistance must either be searching for employment, or participating in a job placement or job training program. The maximum rent is the most an ILBC tenant will pay for housing, hospitality and personal care costs. If 70% of a tenant's after tax income exceeds the maximum rent, the tenant pays the maximum rent. The maximum rent is based on a survey of market prices for assisted living accommodation and hospitality in different regions, plus an amount for personal care which is determined by each health authority. Please refer to the Rent Calculation Guide in Appendix G for more information.. 28

29 Notice of assessment: Personal care services: Rent supplement: Sharer: Shelter subsidy: Support services subsidy: Tenant rent contribution: Tenant shelter contribution: Canada Revenue Agency sends out a Notice of Assessment confirming an income tax return has been reviewed. This notice is needed to calculate the tenant rent contribution for people with income. Personal care services include assistance with daily activities such as grooming, mobility and medications. An operator of a private market development receives rent supplement payments to cover the difference between the cost of providing the housing and the amount collected in tenant rent contributions for units allocated to ILBC tenants. A second tenant who shares an ILBC unit, and may or may not be related to the first tenant. Non-profit operators receive shelter subsidy payments from BC Housing to cover the difference between the cost of providing the housing and the amount collected in tenant shelter contributions. Regional health authorities provide subsidies to non-profit and private operators for support services in ILBC units. Support services include hospitality and personal care services. The calculation varies, depending whether the health authority or operator provides the personal care. Tenants pay 70% of their after tax income towards the cost of the rent, hospitality and personal care services, or a maximum rent, whichever is less. Tenants receiving income assistance will pay a flat rent, based on the amount of assistance they receive. While the tenant pays 70% of after tax income as the tenant rent contribution, BC Housing also calculates the portion that goes to shelter costs. This calculation is called the tenant shelter contribution, and is based on 30% of a tenant s gross income. 29

30 APPENDIX The following documents are included as appendices: A) Sample Non-Profit ILBC Operating Agreement B) Sample Operating Budget C) Allocating Operating Costs to Shelter and Support Services D) ILBC Building and Unit Information Form Non-Profit E) ILBC Direct Deposit Form F) SAFER Information Sheet and Cancellation Form G) Rent Calculation Guide 30

31 Appendix A: Sample Non-Profit ILBC Operating Agreement File: -02/ INDEPENDENT LIVING BC Phase 1 NON-PROFIT SOCIETY OPERATING AGREEMENT between and BRITISH COLUMBIA HOUSING MANAGEMENT COMMISSION with respect to a Housing Development at, British Columbia

32 INDEPENDENT LIVING BC PROGRAM NON-PROFIT SOCIETY OPERATING AGREEMENT THIS OPERATING AGREEMENT dated for reference. BETWEEN: AND:, British Columbia (the "Society") BRITISH COLUMBIA HOUSING MANAGEMENT COMMISSION Suite # Kingsway, Burnaby, British Columbia V5H 4V8 ("BC Housing") with respect to a housing development at, British Columbia. BACKGROUND A. The Society will operate the Development under Independent Living BC, a housing program funded by the Government of British Columbia acting through its agent, BC Housing. B. Independent Living BC encompasses two types of housing: independent housing with some support services, and assisted living for those who need a greater level of personal care. Independent Living BC offers a middle option between home care and residential care. C. The common goal of the parties in making this agreement is to provide stable, affordable and well-managed non-market subsidized housing and a range of other services, to low and moderate income Tenants that are Seniors or Persons with a Disability, in order to facilitate such Tenants to remain independent for as long as they are able. For this purpose, the Society will own and operate the Development, and BC Housing will provide Shelter Subsidies under the terms of Independent Living BC. D. Under a separate agreement with the Society (the "Health Agreement"), the Health Authority will select and refer all Tenants for the Units and will also provide for some non-shelter services to the Tenants. Appendix A 32

33 AGREEMENT The parties agree as follows for the Term of this agreement: ROLES AND RESPONSIBILITIES OF THE SOCIETY Role of the Society. The Society will operate, maintain and manage the Development in a proper, efficient and timely manner as would a prudent owner of similar property and in accordance with the following Operating Standards. Operating Standards Corporate Organization. The Society will establish a well organized corporate structure, and policies and procedures that ensure that the Development is well managed, and in particular will: recruit and maintain its board of directors and its membership in such a way as to ensure continuing ability to manage effectively; conduct business in an ethical manner that does not permit personal gain, directly or indirectly, by any director, officer, member or employee of the Society or any of their associates or family members; meet all statutory and corporate obligations, including the requirements of the Personal Information Protection Act and associated Regulations and obligations under all contracts the Society enters into in connection with the Development and the requirements of any insurer of the Development; comply with the Society s lease for the Land, if any; and maintain accurate and complete records of all aspects of its operations. Maintenance. The Society will maintain the Development in a state of good repair for the benefit of the Tenants and the community in which the Development is located, and in particular will: establish maintenance procedures to maintain the value of the Development and prolong the life of the Improvements; ensure that the necessary skills and tools are available to clean and maintain the Development adequately; ensure that the Development complies with all applicable statutory health and safety standards; Appendix A 33

34 ensure that fire regulations are observed and that fire inspections are carried out regularly by the appropriate authorities; and obtain sufficient insurance on the Development in accordance with Section 0. Finances. The Society will establish policies and procedures for effective control of finances for the Development, and in particular will: prepare an Operating Budget for the Development for each Fiscal Year and regularly review the financial affairs of the Development in accordance with 0; and ensure that sound financial operating policies and procedures are in place, including: clearly defined spending authority; record keeping in accordance with generally accepted accounting principles; and policies and procedures for arrears, purchasing and investment of reserve funds. The Tenants. The Society will establish policies and procedures to: ensure Tenants are selected in an open, fair, consistent and non-discriminatory way and in accordance with the Health Agreement; serve Tenants promptly and courteously, with clear and informative communication; and provide each Tenant with access to information concerning that Tenant and protect the privacy of Tenants. ROLES AND RESPONSIBILITIES OF BC HOUSING Pay Shelter Subsidy. BC Housing will pay the Shelter Subsidy to the Society in a timely manner in accordance with Section 0 during the Term of this agreement. Limit. Except for the Shelter Subsidy, BC Housing will not be required to pay any operating subsidy, any operating deficit, or make any other payments to the Society. Monitor Operations. BC Housing will monitor the operation of the Development and the Society s use of the Shelter Subsidy in accordance with this agreement to ensure that the Operating Standards and the objectives of Independent Living BC are met. Appendix A 34