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

35 Provide Information. BC Housing will provide the information required by the Society to enable the Society to carry out its responsibilities under this agreement, and will provide that information in a timely manner. ONGOING PROVISION OF NON-MARKET HOUSING Society s Acknowledgements. The Society confirms as follows: the Society is entering into this agreement to own and operate the Development for the Specific Purpose in accordance with this agreement and that its fundamental purpose in doing so is to benefit the public interest; and BC Housing s rights and remedies under this agreement are not to be construed as a penalty or forfeiture. Restrictions on Disposition. The Society will not transfer or encumber all or part of the Development, or enter into any agreement to transfer or encumber all or part of the Development except with the approval of BC Housing. Such approval may be arbitrarily withheld. Society Restrictions. During the Term, the Society will remain a corporation in good standing under the applicable statute in British Columbia and will: have as a main purpose and activity the provision of housing for low income or low and moderate income households; operate as a non-profit entity; have directors and officers who serve without payment or benefit, direct or indirect, except for payment of reasonable expenses incurred in carrying out their duties; use substantially all its income, gains and accretions to promote its main purposes and activities; and on dissolution, distribute its remaining assets to one or more corporations which meet the restrictions of this Section 0 and are approved by BC Housing. Constating Documents. The Society will not alter its Constating Documents in any way that would make them inconsistent with the terms of this agreement or that would render the Society unable to fulfil its obligations under this agreement. Appendix A 35

36 TENANTS Selection Procedures. The Health Authority will select and refer all Tenants for the Development under the terms of the Health Agreement. Throughout the Term of this agreement, the Society, in cooperation with the Health Authority, will use its best efforts to ensure Tenants selected for the Units have low or moderate incomes. Change in Health Selection. If at any time during the Term the Health Authority declines to continue to select Tenants for any or all Units in the Development, then the Society will select Tenants in accordance with the selection criteria set out in Schedule J. Occupancy Standards. Units in the Development will be occupied by Tenants with household sizes suitable for the Units as set out in the Occupancy Standards in Schedule B. Discrimination. The Society will not discriminate against any applicant or Tenant by reason of race, colour, ancestry, place of origin, religion, marital status, gender, sexual orientation or age of that applicant or Tenant or for any reason otherwise prohibited by statute. The prohibition against discrimination by reason of age does not apply to a Unit in a building or part of a building reserved for Seniors. The Society will comply with the laws of British Columbia and Canada relating to human rights. Membership in Society. The Society will not require a Tenant to be a member of the Society. Residency Agreements. The Society will enter into a Residency Agreement with each Tenant. The Residency Agreement will contain additional provisions as set out in Schedule C as amended by BC Housing from time to time after consultation with the Society. Landlord and Tenant Relationship. Except for payment of the Shelter Subsidy, the full normal relationship of landlord and tenant exists between Society and Tenant. BC Housing is not liable to the Society for any breach by a Tenant of a Residency Agreement. FINANCIAL OPERATIONS Proof of Income. The Society will obtain an Application Form and supporting documentation as evidence of the Income and the Annual Income for Calculation Purposes of that Tenant, from each Tenant at the time of initial occupancy, and from each Tenant at least annually, or as may be otherwise directed by BC Housing, which declaration will be in a form approved by BC Housing as amended from time to time. The following apply: Appendix A 36

37 for each Tenant the Society will keep on file a copy of supporting documentation and a copy of each Application Form, signed by each Tenant and other occupants, as required; the Society will assist each Tenant in completing the Application Form in an accurate manner; and if there is an error either by omission or commission in the Application Form, the Society will take such action as required to recover from the Tenant any amount credited from the Shelter Subsidy to which that Tenant was not entitled, or at BC Housing's option, will assist BC Housing to recover from the Tenant any amount credited to that Tenant to which that Tenant was not entitled. Tenant Rent Contribution and Tenant Shelter Contribution. The Society will review each Tenant s Application Form together with any documentation in support, and use that information to determine: (a) the amount a Tenant will pay as the Tenant Rent Contribution for a Unit; and (b) the amount of Tenant Shelter Contribution for a Unit. The following apply: the Tenant Rent Contribution will be based on the application of the Independent Living Rent Scale, and is the actual amount the Society is required to collect from the Tenant; the Tenant Rent Contribution will not exceed the Maximum Rent, but may exceed the actual cost of shelter, hospitality and personal care services for the Unit; the Tenant Shelter Contribution will be based on the application of the Independent Living Shelter Contribution Scale and is that portion of the Tenant Rent Contribution used to determine the amount of Shelter Subsidy, and the Tenant Shelter Contribution will not exceed 50% of the Maximum Rent, but may exceed the Economic Shelter Cost. Appendix A 37

38 The Society will submit copies of the Application Form to BC Housing who will confirm the amount of Tenant Rent Contribution and Tenant Shelter Contribution. The Society will submit other records in support of the Application Form to BC Housing as requested by BC Housing. Change in Health Participation. The Independent Living Rent Scale only applies to Units for which the Health Authority provides support. If at any time during the Term the Health Authority declines to continue to select Tenants for some, but not all, Units in the Development and declines to participate in providing support for such Units, then the Tenants in such Units will pay a rent contribution as set out in the BC Rent Scale (with necessary wording changes to effect this agreement) as determined by BC Housing from time to time. Tenants in such Units will be completely responsible for payment for any additional services supplied by the Society. BC Housing may require a different form of declaration of income than that described in Section 0. Operating Budget. The Society will prepare an Operating Budget in a form acceptable to BC Housing. The Operating Budget will list expenses and revenues separately for the Shelter Component, Non-Shelter Component and Support Services Component, plus a combined amount. The Society will send the Operating Budget to BC Housing for its review and approval according to the following schedule: 12 months prior to the Start Date; 3 months prior to the end of the first Fiscal Year after the Start Date that represents 12 full months of operations; 3 months prior to the end of each Fiscal Year ending on the 5th, 10th, 15th, 20th, 25th, and 30th anniversary of the first Fiscal Year after the Start Date. In its review, BC Housing will take into account the operating realities of the Development and standards across the Independent Living BC portfolio. BC Housing will consult with the Society before approving and/or revising the Shelter Component portion of the Operating Budget, but BC Housing s decision is conclusive and binds the Society. The Society will operate within the approved Shelter Component portion of the Operating Budget. The Shelter Component of the Operating Budget will be limited to an amount equal to only those costs that have been or will be incurred by the Society in order to ensure proper management of the Shelter Component of the Development in accordance with this agreement, including debt service charges relating to the Loan, but exclusive of any expenditures for which other financial assistance has been received or is receivable by the Society or the Tenant other than the Shelter Subsidy paid pursuant to this agreement. For greater clarity the following apply: the Shelter Component of the Operating Budget will not include costs related to the Support Services Component; Appendix A 38

39 where there is a Non-Shelter Component or the Development is part of a larger building complex, common costs and revenues not clearly attributable to the Shelter Component, Non-Shelter Component, or remainder of the building complex will be received or expensed to the applicable component according to a schedule in the format set out in Schedule I, as agreed by the parties from time to time, both acting reasonably. The first such schedule must be completed and agreed upon not less than 12 months prior to the Start Date. Economic Shelter Cost. Once the Shelter Component portion of the Operating Budget is approved, BC Housing will set the Economic Shelter Cost for each Unit for the Fiscal Year and the Economic Shelter Cost will be the same for all Units of similar size. Calculation of Economic Shelter Cost Between Review Years. For the purpose of calculating the Economic Shelter Cost in any Fiscal Year other than for those Fiscal Years referred to in Section 0, the following apply: the Economic Shelter Cost will be deemed to be the amount determined in accordance with the following formula: ((CPI2/CPI1) multiplied by the (Economic Shelter Cost for previous Fiscal Year less any debt service charges relating to the Loan)), plus debt service charges related to the Loan. where CPI2 = CPI for the most recently published annual period; CPI1 = CPI for the annual period ending 1 year prior to the annual period used for CPI2 Renewal of Loan. The Economic Shelter Cost will be recalculated on the renewal of a Loan to take into account the new payments for the Loan. Shelter Subsidies from BC Housing. Subject to Section 0, BC Housing will pay to the Society a Shelter Subsidy equal to the difference between the aggregate of the Economic Shelter Costs for the Units and the aggregate of the Tenant Shelter Contribution for the Tenants. Payment of Shelter Subsidy. BC Housing will pay the Shelter Subsidy to the Society, on behalf of the Tenants, monthly in advance starting on the Start Date. Appendix A 39

40 Limit of Obligation. BC Housing s payment to the Society pursuant to this agreement is limited to payment of the Shelter Subsidy. Any funding required by the Society to augment the difference between the Tenant Rent Contribution less Tenant Shelter Contribution, and the cost of providing support services to the Tenant, is the responsibility of the Society and/or the Health Authority pursuant to the Health Agreement. Overpayment or Underpayment of Shelter Subsidy. If BC Housing in any Fiscal Year pays the Society more or less than what BC Housing subsequently establishes is payable to the Society as the Shelter Subsidy for that Fiscal Year, the Society will repay any overpayment to BC Housing or BC Housing will pay the underpayment to the Society. (For greater clarity, this refers to calculation of the Shelter Subsidy only, not to any operating surplus or deficit of the Society). Accumulated Operating Surplus. The Society may retain the Accumulated Operating Surplus from any operating surplus for the Shelter Component portion of the Development for each Fiscal Year, and the following apply: the Society will first pay from the Accumulated Operating Surplus an amount to remedy any deficit in the Shelter Component operations for a previous Fiscal Year; the Society may make other payments out of the Accumulated Operating Surplus as follows: payments for capital renovations or improvements within the design standards for Independent Living BC; and other payments approved by BC Housing. Loans. The Society will make payments on the Loan on the due dates and notify BC Housing immediately if the Society cannot make any payment, and: the Society will not reduce the amortization period of the Loan or prepay a Loan without BC Housing approval; and the Society will, on the expiry of the term of the Loan, enter into further security agreements required to secure the outstanding balance of the Loan in accordance with BC Housing s requirements. Reserve Fund. The Society will create a Reserve Fund for capital repairs, replacements and improvements based on the items and life in years set out in the Schedule of Capital Items attached as Schedule E as may be amended from time to time by BC Housing, and the following apply: Appendix A 40

41 the Society will fund the Reserve Fund in the amount of per unit per annum, or such other amount as the Society may be directed by BC Housing from time to time, at least annually and credit all interest earned on money in the Reserve Fund to the Reserve Fund; and the Society will use or dispose of the Reserve Fund only for capital repairs and replacements to the Improvements on the Land in accordance with the Schedule of Capital Items; if the Society must replace items listed in the Schedule of Capital Items more than 2 years prior to the estimated life as set out in the Schedule of Capital Items, then the Society will notify BC Housing, identifying the cause; and the Reserve Fund may not be used for repair or replacement of items not listed in the Schedule of Capital Items, including for example: dining room furniture, serving and eating utensils, cooking utensils, table linens, furniture, bed linens, housekeeping equipment, etc. Only items provided at the time of completion of construction/ renovation and/or approved by BC Housing may be covered by the Schedule of Capital Items. Investment of Funds. The Society will deposit and keep the Reserve Fund and the Accumulated Operating Surplus and accumulated interest in accounts or instruments as follows: in an account insured by the Canadian Deposit Insurance Corporation or by the Credit Union Deposit Insurance Corporation; in an investment in accordance with the Society Act or the Local Government Act; in an investment guaranteed by a Canadian government; or in other investment instruments as BC Housing approves. Non-Shelter Support. Where non-subsidized hospitality or other non-shelter services are provided to Tenants for a mandatory fee, the Society must ensure that such fees do not pose a barrier to occupancy for applicants that meet all other occupancy criteria. Auditor. The Society will appoint an auditor of the Society in compliance with Section 42 of the Society Act. The auditor will be in good standing in the Province of British Columbia and will not be a member of the Society. The Society will cause the auditor to: Appendix A 41

42 audit the financial statements of the Society and the following apply: financial statements will be prepared in accordance with Generally Accepted Accounting Principles (GAAP), unless otherwise stipulated herein or from time to time by BC Housing; the statements will 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, Schedule of Surplus Accounts; and capital assets will be amortized over the economic life of the asset unless BC Housing stipulates otherwise; provide a letter or notes with the financial statements indicating that: the Tenant Rent Contributions are or are not being correctly charged to the Tenants; that assessment may be done on a sample basis; Accumulated Operating Surplus is being spent and accounted for as provided in this agreement; and the Society has properly funded and maintained the Reserve Fund, and that all interest accruing to the Reserve Fund has been recorded. provide a report in a form approved by BC Housing, as may be revised from time to time by BC Housing, summarizing the Shelter Component portion of the financial statements according to the revenue and expense item cost descriptions, replacement reserve and surplus items prescribed by BC Housing from time to time. Audited Financial Statements to be Submitted. The Society will submit audited financial statements, the letter or notes referred to in Section 0 and a copy of the related auditor's management letter, if any, to BC Housing within 4 months after the end of each Fiscal Year. Unauthorized Expenditures and Acts. With regard to its ownership and operation of the Development, the Society will not, without the approval of BC Housing: borrow money other than the Loan; guarantee or underwrite the repayment of any obligation assumed by a third party; Appendix A 42

43 pay to a person or organization any amount for the purpose of supporting activities the objective of which is to make representations to any government body on any subject matter not directly related to the operation of the Development. This provision does not apply to annual membership fees to sector organizations; or release, compromise, assign or transfer any claim, right or benefit of the Society in connection with or arising out of the Society s interest in the Development. GENERAL OPERATIONS Operational Review. In accordance with its obligation to monitor operations as set out in Section 0, BC Housing will from time to time, as determined by BC Housing, perform a full review of the Society s operation of the Development to determine conformance with the terms of this agreement. The Society will comply with all reasonable requests from BC Housing to enable BC Housing to complete the review, including providing access to the Development at any reasonable time. Non-Shelter Component. The Society will use the Shelter Subsidy only for operating expenses for the Shelter Component. Records. The Society will maintain adequate operational records for the Development as described in the Operating Standards and the following apply: the Society will retain all documents, vouchers, records and accounts that pertain to the Development for not less than 7 years following the date of receipt or production of those records; BC Housing or its agents may inspect all records maintained by the Society for the Development, after giving reasonable notice, at any time during regular business hours and may make extracts from and take photocopies of those records; and in accordance with BC Housing's obligations pursuant to the Freedom of Information and Protection of Privacy Act, the Society will, upon request: Appendix A 43

44 disclose to a Tenant the Society s file for the Tenant, subject to removing information to protect third parties according to the principles of that Act; and disclose to third parties only that information that BC Housing would be compelled to disclose according to the principles of that Act. Statistical Information. The Society will supply to BC Housing for statistical purposes, in a format requested by BC Housing, information concerning the Development that BC Housing may request from time to time. Insurance. The Society will, throughout the Term, obtain and maintain sufficient insurance on the Development as set out in Schedule F and the following apply: if the Society at any time does not maintain those policies in good standing, BC Housing may, at the Society s expense, obtain and maintain insurance on terms, in amounts, with deductibles and for periods of time that BC Housing reasonably deems advisable; and if BC Housing does not terminate this agreement upon damage or destruction pursuant to Section 0, the Society, subject to any requirements of any mortgage lender or the landlord of the Land, if any, will repair or rebuild the Development. It will use and pay all insurance proceeds in accordance with BC Housing s requirements. Damage or Destruction. If, in the opinion of a professional engineer or architect appointed by the Society or BC Housing, the Development is damaged or destroyed in excess of 25% of its insurable value, BC Housing may terminate this agreement by delivering written notice of termination to the Society within 30 days after the date of that damage or destruction. Publicity. Where applicable, the Society will clearly identify in all books of account, public or distributed statements or other relevant material that the Canada-BC Housing Affordable Housing Agreement provided a capital contribution and BC Housing provides ongoing funding to the Development. LIABILITY Indemnity. The Society will indemnify and save harmless BC Housing, Provincial Rental Housing Corporation and the Provincial Government, and each of their ministers, board members, officers, directors, employees and agents, and their heirs, executors, administrators, personal representatives, successors and assigns, from all claims and costs which they may be liable for or incur arising out of any act or omission of the Society or its officers, directors, employees, agents, contractors or other persons for whom at law the Society is responsible, or the Society s Appendix A 44

45 ownership, lease, operation, management or financing of the Development, except to the extent that it is caused by the negligence of BC Housing or its employees, agents or contractors. Release. The Society releases BC Housing, Provincial Rental Housing Corporation and the Provincial Government, and each of their ministers, board members, officers, directors, employees and agents, and their heirs, executors, administrators, personal representatives, successors and assigns, from all claims arising out of advice or direction respecting the ownership, lease, operation or management of the Development given to the Society by any of them, except to the extent that advice or direction is given negligently. Survival. The obligations of the Society set out in Sections 0 and 0 survive termination of this agreement. GENERAL PROVISIONS Defaults, Intervention and Remedies. If and whenever the Society is in Default, the Intervention Procedure will apply. The Intervention Procedure and the rights and remedies BC Housing may exercise in these circumstances are set out in Schedule G. Determination by BC Housing Binding. Wherever in this agreement BC Housing s approval is required for a decision or action of the Society, BC Housing s determination, designation or decision with regard to that approval is conclusive and binds the Society. Mediation. Except as set out in Section 0, if BC Housing and the Society have a dispute arising out of or in connection with this agreement, or in respect of any defined legal relationship associated with it or from it, the parties agree to try to resolve the dispute by participating in a structured negotiation conference with a mediator agreed upon by the parties or, failing agreement, under the Commercial Mediation Rules of the British Columbia International Commercial Arbitration Centre, in which case the appointing authority is the British Columbia International Commercial Arbitration Centre. Arbitration. If BC Housing and the Society cannot or do not resolve their dispute through the mediation process referred to in Section 0, the parties will submit that dispute to arbitration, as set out in Schedule H. Termination of Shelter Subsidy. Neither BC Housing nor the Provincial Government is obliged to pay Shelter Subsidy or to make any other financial contributions to the Society after the termination of this agreement. Appendix A 45

46 New Agreement. Should this agreement terminate as a result of the termination of the Health Agreement, the parties agree in principle to enter into an agreement to provide ongoing shelter subsidies to the Tenants. Such agreement will be in substantially the same terms and conditions as BC Housing enters into with similar Developments that do not have a Health Agreement, and will not extend beyond 35 years from and including the Start Date. Notices. All notices, demands or requests of any kind, which the Society or BC Housing may be required or permitted to serve on the other in connection with this agreement, will be in writing and may be served on the parties by registered mail, by telecopied transmission, or by personal service, to the addresses set out on page one. Service of that notice, demand or request is deemed complete: if made by registered mail, 72 hours after the time of mailing, except where there is a postal service disruption during that period; if made by telecopy, on the first business day after the date when that telecopy is transmitted; and if made by personal service, upon that personal service being effected. Change of Address. Either party from time to time, by notice in writing served upon the other party, may designate a different address or different or additional personnel to which all those notices, demands or requests are thereafter to be addressed. Assignment. The Society will not assign its rights or obligations under this agreement without BC Housing s prior approval. Whole Agreement. There are no warranties, representations, conditions or collateral agreements that pertain to this agreement, except as set forth in this agreement. Enuring Effect. This agreement enures to the benefit of and binds each of BC Housing and the Society and their respective successors and permitted assigns. INTERPRETATION Definitions. The meanings of terms used in this agreement are set out in Schedule A. Schedules. Attached to this agreement are Schedules A through J. The Schedules are an integral part of this agreement. Time. Time is of the essence of this agreement. If either party expressly or impliedly waives this requirement, that party may reinstate it by delivering notice to the other party. Any time specified in this agreement for observing or performing an obligation is local time in Vancouver, British Columbia. Appendix A 46

47 Governing Law. This agreement is to be governed by and construed and enforced in accordance with the laws of British Columbia. References. If the singular, masculine, feminine or neuter is used in this agreement, the reference is to the plural, masculine, feminine or body corporate according to the context in which it is used. Construction. The division of this agreement into sections and the use of headings are for convenience of reference only and are not intended to govern, limit or aid in the construction of any provision. In all cases, the language in this agreement is to be construed simply, according to its fair meaning and not strictly for or against either party. No Limitation. The word "including" when following any general statement, term or matter is not to be construed to limit that general statement, term or matter to the specific items set forth immediately following that word or to similar items. That general statement, term or matter is to be construed to refer to all other items that could reasonably fall within the broadest possible scope of that general statement, term or matter. Document Written in Present Tense. The word "will" where the subject is either or both of the parties denotes a present obligation. Validity of Provisions. If a court of competent jurisdiction finds that any part of this agreement is invalid, illegal or unenforceable, that invalidity, illegality or unenforceability does not affect any other provisions of this agreement. The balance of the agreement is to be construed as if that invalid, illegal or unenforceable provision had never been included and is enforceable to the fullest extent permitted at law or at equity. Waiver. No consent or waiver, expressed or implied, by a party of any default by the other party in observing or performing its obligations under this agreement is effective unless given in writing, nor is it a consent or waiver of any other default. Failure on the part of either party to complain of any act or failure to act by the other party or to declare the other party in default, irrespective of how long that failure continues, is not a waiver by that party of its rights under this agreement or at law or at equity. Consents and Approvals. Except as otherwise expressly set out in this agreement, where this agreement provides for any approval, consent or agreement with respect to any matter: it will be obtained before any action is taken on it; it will be requested and responded to in writing; and Appendix A 47

48 it will not be unreasonably withheld, except if this agreement otherwise expressly stipulates, or delayed. Extent of Obligations and Costs. Every obligation of each party in this agreement extends throughout the Term. To the extent an obligation ought to have been observed or performed before or upon the expiry or earlier termination of the Term, that obligation, including any indemnity, survives the expiry or earlier termination of the Term until it has been observed or performed. Financial Terms. All accounting terms not otherwise defined in this agreement have the meanings assigned to them, and all calculations to be made under this agreement are to be made in accordance with Canadian generally accepted accounting principles consistently applied. Statutes. Any reference in this agreement to a provincial or federal statute includes the statute as it exists on the reference date of this agreement and any subsequent amendments or replacements. IN WITNESS OF WHICH the duly authorized signatories of each of the Society and BC Housing have executed this agreement effective as of the reference date of this agreement. Per: Authorized Signatory Per: Authorized Signatory BRITISH COLUMBIA HOUSING MANAGEMENT COMMISSION Per: Authorized Signatory Per: Authorized Signatory Appendix A 48

49 SCHEDULE A OPERATING AGREEMENT INDEPENDENT LIVING BC PROGRAM DEFINITIONS 1. "Abandoned Unit" means a Unit abandoned by the Tenant or a Unit where, despite the timely payment of Tenant Rent Contribution, the Tenant is absent for 3 consecutive months or longer without the Society s prior written approval. 2. "Accumulated Operating Surplus" means the balance of retained funds from operating surplus of the Development. 3. "Annual Income for Calculation Purposes" means an amount determined in accordance with Schedule D, the Independent Living Rent Scale, under the heading Tenant Rent Contribution. 4. "Application Form" means the declaration to be completed by a Tenant attesting to the Income and Annual Income for Calculation Purposes of that Tenant. 5. BC Rent Scale means a rent to income scale established by BC Housing from time to time at its sole discretion. 6. Constating Documents" means the constitution and bylaws of a society or memorandum and articles of a public housing corporation or the memorandum and rules of association of a co-operative as approved by BC Housing as of the date of this agreement. 7. "CPI" means the Consumer Price Index for British Columbia for All Items, as prepared from time to time by Statistics Canada or a successor organization. 8. "Default" means default by the Society as defined in Schedule G. 9. "Development" means the Units eligible for Shelter Subsidy at on the Land, including all ancillary space included in the definition of Shelter Component. 10. "Economic Shelter Cost" means the estimated monthly amount, on a per Unit basis, that would be required to be charged in order that the revenues for the Shelter Component equal expenses for the Shelter Component as set out in Sections 0 and "Extraordinary Circumstances" means a Default allowing BC Housing to intervene at any level of the Intervention Procedure as set out in Schedule G. 12. "Fiscal Year" means the fiscal year of the Society as of the reference date of this agreement, as revised after agreement between BC Housing and the Society. Appendix A 49

50 13. Health Agreement means an agreement between the Society and the Health Authority as set out in Section D. 14. Health Authority means. 15. Improvements means those improvements, structures, buildings, fixtures and systems which exist on the Land from time to time including the heating, ventilating, air-conditioning, plumbing, electrical and mechanical systems and equipment. 16. "Income" of a Tenant means an amount determined in accordance with Schedule D under the heading Tenant Shelter Contribution. 17. "Independent Living Rent Scale" means the rent scale attached as Schedule D as amended by BC Housing from time to time. 18. "Intervention Procedure" means the intervention procedure in the event of a Default by the Society as set out in Schedule G. 19. "Land" means those lands and premises situated in, British Columbia and legally described as PID#. 20. "Loan" means a mortgage loan insured pursuant to the National Housing Act of Canada, obtained by or on behalf of the Society from time to time, with BC Housing s prior written approval, to finance the capital cost of acquiring, developing or renovating the Development, or any other loan with respect to the Development for which the Society has obtained BC Housing s prior written approval. 21. "Maximum Rent" is the maximum monthly amount that can be charged as a Tenant Rent Contribution as may be determined from time to time by BC Housing. 22. "Non-Shelter Component" means the commercial or non-residential space within the Development, if any, including all space or facilities not expressly included in the definition of "Shelter Component". 23. "Occupancy Standards" means the standards for household sizes of a Tenant relative to the number of bedrooms in a Unit set out in Schedule B. 24. "Operating Budget" means the budget for the Development prepared by the Society, in accordance with Section "Operating Standards" means those standards for operation of the Development set out in Sections 0 to "Person with a Disability" means a person who, in the written opinion of a medical doctor or registered psychologist, has a significant permanent disability that cannot be significantly improved by medical treatment, and that produces a loss or impairment of physical or mental ability. Appendix A 50

51 27. "Provincial Government" means Her Majesty the Queen in Right of the Province of British Columbia. 28. "Receiver" means a receiver or receiver-manager. 29. "Reserve Fund" means the amounts the Society is required to hold in reserve in accordance with Section "Residency Agreement" means an agreement, tenancy agreement, lease, license or other right of a Tenant to occupy a Unit. 31. "Schedule of Capital Items" means the list of approved capital maintenance and replacement items and expected life in use as set out in Schedule E. 32. "Senior" means a person who is at least 55 years of age, and includes a person who resides with a person who is at least 55 years of age. 33. "Shelter Component" means space or facilities in the Development comprising residential accommodation used for living, sleeping, private eating, food preparation and sanitation, either shared or otherwise, together with parking, laundry rooms, amenity space, office space required for services to the Tenants, common eating areas, or food preparation areas or a proportionate amount of it shared with other Tenants of the building. 34. "Shelter Subsidy" means the amount paid by BC Housing to the Society as described in Section "Specific Purpose" means the operation of: 35.1 the Development to provide residential accommodation for eligible Tenants who are Seniors or Persons with a Disability in accordance with this agreement; and 35.2 only that Non-Shelter Component as is approved by BC Housing as ancillary to the Shelter Component. 36. "Start Date" means the first day of the month following the date upon which the project architect or engineer certifies that construction of the Improvements on the Land is substantially complete. 37. Support Services Component means services provided by the Society for social or recreational services, services or facilities related to mental or physical health care, education, corrections, food services, social support of public recreation, housekeeping, laundry or other services that relate to the non-shelter support of a Tenant, or other similar costs that BC Housing determines is not related to the Society s operation of the Shelter Component. Appendix A 51

52 38. "Tenant" means the person or persons residing in a Unit pursuant to a Residency Agreement, including any person residing in a Unit who is not named in the Residency Agreement. 39. "Tenant Rent Contribution" means the monthly amount a Tenant must contribute towards the Maximum Rent as set out in Section "Tenant Shelter Contribution" means that portion of the Tenant Rent Contribution allocated as the Tenant's contribution towards the Economic Shelter Cost. 41. "Term" means the earlier of the period of years from and including the Start Date, or the period from and including the Start Date until the final date of termination of the Health Agreement (including any subsequent renewals of the Health Agreement). 42. "Unit" means a dwelling unit within the Shelter Component of the Development. Appendix A 52

53 SCHEDULE B OPERATING AGREEMENT INDEPENDENT LIVING BC PROGRAM OCCUPANCY STANDARDS Tenants will be accommodated in Units suitable to their household size in accordance with the following guidelines unless otherwise agreed by BC Housing: 1. No more than 2 and no fewer than 1 person per bedroom. 2. Spouses and couples share a bedroom. 3. For medical reasons (supported by a medical doctor), spouses and couples may have separate bedrooms. 4. Persons sharing living quarters in a non-spousal relationship may have separate bedrooms. Appendix A 53

54 SCHEDULE C OPERATING AGREEMENT INDEPENDENT LIVING BC PROGRAM RESIDENCY AGREEMENT The following provisions will be included in the Residency Agreement between the Society and the Tenant: 1. The occupancy is on a month-to-month basis and not for a fixed term. 2. The Tenant Rent Contribution will change if the Tenant s Income changes. 3. Only the persons named in the Residency Agreement have a right to occupy the Unit. 4. The income of any person occupying a Unit as his or her principal residence, regardless of whether or not that person is named in the Residency Agreement, will be included for the purpose of determining the Tenant s Income. 5. Assignment of the Residency Agreement or subletting or otherwise parting with possession of the whole or part of the Unit for the whole or any part of the term of the Residency Agreement is prohibited. 6. The Tenant consents to BC Housing verifying personal information, as defined in the Freedom of Information and Protection of Privacy Act, which consent is required by that Act to enable BC Housing to carry out its audit function. 7. The Tenant agrees to provide such information as is requested by the Landlord and/or BC Housing for calculation of the Tenant Rent Contribution and for auditing purposes. If the Tenant fails to disclose or misrepresents any information requested in the Application Form, BC Housing may withhold the Shelter Subsidy and such failure to disclose or misrepresentation will be deemed to be a material breach of the Residency Agreement and the following will apply: 7.1 BC Housing is entitled to recover from the Tenant in contract or otherwise the Shelter Subsidies paid by BC Housing under or in connection with the Residency Agreement to which the Tenant would not otherwise have been entitled and this remedy is not exclusive and may be exercised by BC Housing in addition to any other remedies available to BC Housing in law or equity and in addition to any remedies of the Landlord as set out in the Residency Agreement; 7.2 money owing by the Tenant to the Landlord and/or BC Housing under the Residency Agreement pursuant to a court order or arbitrator's order or otherwise will bear interest at the prime rate of the Royal Bank of Canada from and including the time such money becomes payable, calculated and payable monthly until repayment both before and after judgment; and Appendix A 54

55 7.3 such failure to disclose or misrepresentation of Income or assets by a Tenant entitles the Landlord to end the Residency Agreement. Appendix A 55

56 SCHEDULE D OPERATING AGREEMENT INDEPENDENT LIVING BC PROGRAM INDEPENDENT LIVING RENT SCALE Tenant Rent Contribution The Tenant Rent Contribution will not exceed a set percentage, as determined from time to time by BC Housing (currently 70%) of one twelfth of the Annual Income for Calculation Purposes of the Tenants, including any person residing in a Unit who is not named in the Residency Agreement and the following will apply: Annual Income for Calculation Purposes means the annual amount of net income (currently line 236), less income tax paid (currently line 435), as set out in the Canada Revenue Agency personal income tax return (T1); if the Tenant does not file a T1, declares no income, has an Income below a level set from time to time by BC Housing, or is receiving income assistance under the Employment and Assistance Act, the Employment and Assistance for Persons with Disabilities Act, or successor legislation; then the amount of Tenant Rent Contribution will be set at an amount determined from time to time by BC Housing. Tenant Shelter Contribution The amount of TRC contributed to the Shelter Component ( Tenant Shelter Contribution ) will not exceed a set percentage, as determined from time to time by BC Housing, (currently 30%) of one twelfth of the Income of the Tenants, including any person residing in a Unit who is not named in the Residency Agreement and the following will apply: 1. Income means the annual amount of gross income (currently line 150), as set out in the Canada Revenue Agency personal income tax return (T1); 2. if the Tenant does not file a T1, declares no income, has an Income below a level set from time to time by BC Housing, or is receiving income assistance under the Employment and Assistance act, the Employment and Assistance for Persons with Disabilities Act, or successor legislation; then the amount of Tenant Shelter Contribution will be set at an amount determined from time to time by BC Housing. BC Housing may, at its sole discretion, change all or part of this scale at any time. Appendix A 56

57 APPLIANCES FLOORING HEATING ILBC Phase 1 Guide for Non-Profit Operators SCHEDULE E OPERATING AGREEMENT INDEPENDENT LIVING BC PROGRAM SCHEDULE OF CAPITAL ITEMS SAMPLE FORMAT Category Item Life in Years 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 Areas 20 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 COVERINGS Blinds 11 Drapes 10 Awning 7 EXTERIOR STRUCTURE Balcony Coverings 15 Deck and Deck Coverings 10 Fencing 10 OTHER Security Gate 20 Fresh Water Pump 12 Sewage/ Pressure/ Relay 20 Appendix A 57

58 SCHEDULE F OPERATING AGREEMENT INDEPENDENT LIVING BC PROGRAM Insurance INSURANCE 1. The Society will, throughout the Term, obtain and maintain: 1.1 insurance protecting the Society, (including the Society s employees and agents, without any rights of cross-claim or subrogation, against BC Housing or its employees or agents) against claims for personal injury, death, property damage and loss or third party or other public liability claims arising from any accident or occurrence in, on or about the Development to an amount of at least $3,000,000 inclusive for any one occurrence or such other amount that BC Housing, from time to time, reasonably so requires; 1.2 insurance, calculated on a replacement cost basis, upon the full insurable value of the Improvements in the joint names of the Society and any mortgage lender, as their interests may appear, and protecting all of them from loss or damage caused by fire and other perils, including earthquake and flood, as is from time to time included in the standard form All Risks insurance policy generally available in British Columbia. The policy must include bylaw insurance covering required material changes and demolition of any undamaged portion of the Improvements; 1.3 if applicable, broad comprehensive boiler and machinery insurance, in the joint names of the Society and any mortgage lender, as their interests may appear, covering all boilers and pressure vessels in the Development, and also covering loss or damage caused by rupture of steam pipes, in such amount as a prudent owner of a similar development would obtain or in a greater amount if BC Housing, from time to time, reasonably so requires; 1.4 if requested by BC Housing, business interruption insurance, on terms that BC Housing requires; and 1.5 other insurance that BC Housing reasonably requires from time to time or as any mortgage lender requires. Insurance Requirements 2. The Society will ensure that the following provisions will govern the insurance and will comply with them: Appendix A 58

59 2.1 the policies must provide that they cannot be cancelled, terminated or materially amended, except if the insurer delivers to BC Housing at least 30 days' prior written notice; 2.2 the policies must insure the interests of and protect any mortgage lender and BC Housing notwithstanding any act, omission or negligence of the mortgage lender or BC Housing or any third party which is not within the knowledge or control of the insured, which might otherwise result in the forfeiture or invalidity of any of the policies; 2.3 policies of public liability insurance will be written to cover the Society and any mortgage lender and BC Housing as additional insureds and will provide that each person insured is insured in the same manner and to the same extent as if individual policies had been issued to each; 2.4 the policies must be written by insurers, and on terms reasonably satisfactory to BC Housing; 2.5 the policies must be primary and not call into contribution or be in excess of any other insurance available to the named or additional named insured(s), and must not include a co-insurance clause; 2.6 the Society will deliver to BC Housing, on request, a certificate of insurance providing evidence of the required insurance or, on request, certified copies of the policies or renewals of them; 2.7 the Society will notify BC Housing immediately of any circumstance known to the Society which might materially affect the coverage under the policies; and 2.8 the policies may provide that the amount payable in the event of any loss will be reduced by a deductible in an amount approved by BC Housing. The Society will be a co-insurer only to the extent of the amount so deducted from the insurance proceeds paid in the event of any loss. Workers Compensation 3. The Society will obtain and maintain, or cause to be obtained and maintained, workers compensation coverage in respect of all workers, employees and other persons engaged in any work in or upon the Development required by the Workers Compensation Act. No Representation 4. Any requirement as to the amount or type of coverage under any policy of insurance does not constitute a representation by BC Housing that the amount or type required is adequate. Appendix A 59

60 Events of Default ILBC Phase 1 Guide for Non-Profit Operators SCHEDULE G OPERATING AGREEMENT INDEPENDENT LIVING BC PROGRAM DEFAULT, INTERVENTION PROCEDURE AND REMEDIES 1. The following events shall constitute default by the Society under this agreement: 1.1 breach of any covenant on the part of the Society under this agreement and in particular consistent failure to operate, maintain and manage the Development in accordance with the Operating Standards; 1.2 if the Society fails to pay its debts as they become due or becomes insolvent or commits an act of bankruptcy or if a Receiver should be appointed to manage any of the assets of the Society; 1.3 if the Society fails to remain in good standing under the Society Act; 1.4 if the Society is in default under a Loan; 1.5 if the Society is in breach of any agreement with BC Housing or the Provincial Rental Housing Corporation in respect of the Development and/or the Land; 1.6 if the Society is in default under the lease for the Land, if any; 1.7 if the Society is in default under the Health Agreement; 1.8 if the Society disposes of all or substantially all of its assets; and 1.9 if the Society is in breach of or fails to comply with any applicable law, bylaw or regulation. Intervention Procedure for Default 2. The following is the procedure for intervention by BC Housing in the event of Default by the Society: 2.1 Communication. BC Housing will give the Society written notice of the Default, which notice will provide for a reasonable time for the Society to respond to the notice of Default by providing further information concerning the Default. Appendix A 60

61 2.2 Action Plan. BC Housing and the Society will agree on an action plan to cure the Default, including a schedule for implementation of the action plan, identification of the resources available to the Society to implement the action plan, and the dates on which BC Housing will review progress on implementation of the action plan. 2.3 On Watch. If the Society does not cure the Default within a reasonable time, BC Housing may place the Society On Watch, which means that: this is a warning that BC Housing will intervene further if the Default is not cured; BC Housing will monitor the operation of the Development by the Society more often and in more depth, including a management audit and increased operational reviews as set out in Section 0 of this agreement; and if the Society makes progress in curing the Default, BC Housing will lessen the monitoring of the Society and the On Watch status may be withdrawn. 2.4 Co-management. BC Housing may appoint a manager to work with and supervise the Society in operating the Development and in curing the Default, in order to: improve the Society s management of the Development and return operation of the Development to the Society at some future date; and provide education, training and other necessary resources to the Society to cure the Default. 2.5 Take-over. BC Housing may appoint a Receiver in accordance with Sections 7 to 9 of this Schedule or may require that the Society assign its interest in the Development to BC Housing or a nominee of BC Housing. Extraordinary Circumstances 3. Although the steps of the Intervention Procedure will normally be taken in sequence, BC Housing, at its sole discretion, may intervene at any level of the Intervention Procedure in Extraordinary Circumstances, which are: 3.1 fraud or criminal behaviour of a representative of the Society affecting the Development; 3.2 breach of 0 of this agreement; 3.3 danger to the health and safety of the Tenants; Appendix A 61

62 3.4 default under a Loan or on a charge in favour of BC Housing or the Provincial Rental Housing Corporation registered on title to the Land and the Society fails to remedy such default on the terms and within the time allowed as set out in the conditions of the Loan or the conditions in the charge, as the case may be; 3.5 consistent failure to participate in the Intervention Procedure; and 3.6 the determination by BC Housing of an Extraordinary Circumstance is conclusive and binds the Society. Other Rights and Remedies 4. If BC Housing elects to proceed under Section 2.5 of this Schedule, then in addition to any other rights or remedies available to BC Housing at law or at equity, BC Housing may exercise any one or more of the following rights or remedies, singly or in combination: Survival 4.1 terminate this agreement, in which case BC Housing will deliver to the Society written notice of termination; 4.2 cease paying Shelter Subsidy or reduce the amount thereof, either permanently or for such period as BC Housing may determine; 4.3 demand payment from the Society of all principal and interest in the Reserve Fund in partial satisfaction of repayment or overpayment of Shelter Subsidy; 4.4 take an assignment of the Society s rights in every Residency Agreement and in all amounts payable to the Society as Tenant Rent Contribution or otherwise pursuant to a Residency Agreement, subject to any prior assignment to a mortgagee for a mortgage securing a Loan; and 4.5 take whatever steps BC Housing deems necessary to rectify any Default by the Society. 5. The remedies set out in this Schedule survive termination of this agreement by BC Housing. Costs 6. BC Housing may recover from the Society on demand all its costs of exercising its rights or remedies under this agreement. Appointment of Receiver Appendix A 62

63 7. Upon the occurrence of any event of Default and in addition to any other rights or remedies of BC Housing, BC Housing may appoint, or request a court of competent jurisdiction to appoint, a Receiver, with or without bond as BC Housing or the court may determine, and, from time to time, may remove any Receiver so appointed and appoint another in its place, or request the court to do so. A Receiver so appointed is an officer of the Society, and not an officer or agent of BC Housing, and has all the necessary and exclusive power to deal with the Development, including the power to: 7.1 take control, possession and direction of the Development and the Society s assets in connection with the Development, and carry on the business of the Society in operating, managing and maintaining the Development in accordance with the Operating Standards; 7.2 demand and recover all the income of the Development by direct action, distress or otherwise, in the name of either the Society or BC Housing; 7.3 observe or perform, on behalf of the Society, all the Society s obligations under this agreement and any other contracts pertaining to the Development; 7.4 give receipts, on behalf of the Society, for any money received; and 7.5 carry out such other powers as the court may authorize or instruct. Application of Revenue 8. The Receiver has the right and duty to apply the gross revenue from the Development, which it recovers or receives from time to time, as follows: 8.1 firstly, in payment of all costs, charges and expenses of or incidental to the appointment of the Receiver and the exercise by it of all or any of its powers, including the reasonable remuneration of the Receiver which is deemed to be an amount approved by BC Housing, and all outgoings properly payable by the Receiver, together with all legal costs in respect thereof on a solicitor and client basis; 8.2 secondly, in payment of all operating expenses under an Operating Budget; 8.3 thirdly, if required by BC Housing, in repayment of the Shelter Subsidy; and 8.4 lastly, to pay the balance to BC Housing. BC Housing's Liability to Receiver 9. BC Housing will be under no liability to the Receiver for its remuneration, costs, charges, expenses or otherwise. Appendix A 63

64 SCHEDULE H OPERATING AGREEMENT INDEPENDENT LIVING BC PROGRAM ARBITRATION PROCESS 1. Either party may deliver notice to the other party setting out the nature of the dispute, and naming an arbitrator. 2. Within 10 days after receipt of that notice, the other party will deliver notice to the first party naming a second arbitrator. 3. Each party will instruct the arbitrator appointed by it to agree with the other arbitrator on a third arbitrator, and to appoint that third arbitrator, within 15 days after receipt by the first party of the notice referred to in Section 1 of this Schedule. 4. The three arbitrators are governed by the Commercial Arbitration Act of British Columbia and, within 30 days after the date of appointment of the third arbitrator, will reach a decision on the dispute and will deliver notice of that decision to the Society and BC Housing. 5. If the second party does not appoint an arbitrator within the time limited by Section 2 of this Schedule, the arbitrator appointed pursuant to Section 1, within 30 days after the date of appointment, will reach a decision on the dispute and will deliver notice of that decision to the Society and BC Housing. 6. If the two arbitrators do not appoint a third arbitrator within the time limited by Section 3 of this Schedule, each of the Society and BC Housing will dismiss the arbitrator appointed by it and will immediately submit the dispute to arbitration under the Commercial Arbitration Act. 7. Each of the Society and BC Housing will appoint an arbitrator who is at arm s length from it. They irrevocably authorize and instruct those arbitrators to reach a decision fairly and without bias toward or against either party. 8. The decision of the majority of the three arbitrators or any single arbitrator, as the case may be, is conclusive and binds the Society and BC Housing. 9. The Society and BC Housing will bear the costs of arbitration equally. Appendix A 64

65 SCHEDULE I OPERATING AGREEMENT INDEPENDENT LIVING BC PROGRAM DIVISION OF REVENUE AND EXPENDITURES Where revenue and expenditure items are directly attributable to the Shelter Component, Non-Shelter Component or remainder of the building complex, they will be received or expensed to each component accordingly. Where revenue and expenditure items are not directly attributable to the Shelter Component, Non-Shelter Component or remainder of the building complex, then they will be received or expensed to each component according to the following: Shelter Component Non-Shelter or Other Component REVENUE Rents as received as received Parking 100% Other % of non attributable earnings % of non attributable earnings Comments interest on funds to each component, credited accordingly EXPENSES Taxes % % sq. ft. basis as % Insurance Utilities Heat % % sq. ft. basis as % Electricity % % sq. ft. basis as % Water/Sewer % % sq. ft. basis as % Garbage % % sq. ft. basis as % Maintenance Maintenance Staff % % Ground % % Maintenance % % Building Repairs % % Supplies % % Elevator % % Service Contracts % % Administration Property Management on a per unit basis per budget Overhead on a per unit basis per budget Accounting on a per unit basis per Audit Legal Other Replacement Reserve budget on a per unit basis per budget contribution as per budget expenditures as attributable to each components on a % as attributable to each component maximum budget amounts may apply to the Shelter Component common expenses such as roof (use sq. ft. basis as %) Appendix A 65

66 basis Mortgage % % gross cost to build basis or % sq. ft. basis Appendix A 66

67 SCHEDULE J OPERATING AGREEMENT INDEPENDENT LIVING BC PROGRAM TENANT SELECTION PROCESS IF TENANTS NOT SELECTED BY HEALTH AUTHORITY 1. The Society will maintain an applicant list for prospective Tenants for the Development. It will select Tenants from that list in accordance with the Operating Standards set out in Section 0 of this agreement. The following will apply: 1.1 the Society will send a copy of the method and priority criteria for selecting Tenants to BC Housing and will inform BC Housing of any subsequent change to the selection procedure 3 months before implementation. 1.2 eligible applicants for the Development are Seniors or Persons with a Disability who have an income at or below the Core Need Income Threshold as set by BC Housing from time to time (or such other successor income criteria as set from time to time by BC Housing), and comply with the Occupancy Standards as set out in Section 4.3 and Schedule B of this agreement; and 1.3 if the Society is unable to find Tenants that meet the above criteria, the Society will determine an appropriate selection method which must be approved by BC Housing. Appendix A 67

68 Appendix B: Sample Operating Budget ILBC New Units (Phase 1) Number of Units: 14 BC Housing Management Commission Operational Budget (SAMPLE) For the year April 01 of 2007 to March 31 of BA Cost Per Unit Month Revenues Total Revenues Expenses Mortgage Payments 162, Administration Salaries 5, Miscellaneous Grounds Maintenance 1, Miscellaneous Int Bldg Maintenance 14, Replacement Reserve Provision 10, Service Contracts 2, Electricity 5, Heating Fuel 9, Water & Sewer 2, Insurance Premiums 1, Vacancy Allowance 2, Grants for Property Taxes 5, Audit General Administration 1, Memberships & Dues 2, Total Expenses 228, Extraordinary Expenses Total Extraordinary Expenses Appendix B 68

69 Appendix C: Example - Operating Costs Allocated to Shelter & Support Services Total Budget BC Housing OA Hospitality Services Per Unit Monthly Per Unit Monthly Per Unit Monthly Yearly Yearly Yearly Supplies: Raw Food Costs $23,960 $143 $23,960 $143 Supplies - Housekeeping/Laundry $1,500 $9 $1,500 $9 Supplies - Kitchen $1,500 $9 $1,500 $9 Misc. Supplies $1,400 $8 $1,400 $8 Tenant Involvement Fund [*1] $1,400 $8 $1,400 $8 Total supplies costs: $29,760 $177 $29,760 $177 Health Authority OA Yearly Per unit Monthly Housing Expenses: Mortgage (P&I) $136,923 $815 $136,923 $815 Property Taxes $5,880 $35 $5,880 $35 Building and Maintenance/Repair $14,144 $84 $84 Grounds Maintenance, Materials/Repair $1,300 $8 $8 Service Contracts - Maintenance $5,000 $30 $20,444 $30 Heating and Domestic Hot Water $12,080 $72 $72 Electricity other than Heat $6,000 $36 $36 Water, Sewer and Garbage Removal $2,200 $13 $20,280 $13 Insurance $5,880 $35 $5,880 $35 Replacement Reserves Hospitality [*2] $2,500 $15 $2,500 $15 Replacement Reserves - BC Housing $10,920 $65 $10,920 $65 Contingency for Vacancy Loss $2,500 $15 $2,500 $15 Total Housing Expenses $205,327 $1,222 $202,827 $1,222 $2,500 $15 Administration (Non-staffing costs): Office Overhead $1,200 $7 $1,200 $7 Telephone/Fax/Internet $1,000 $6 $1,000 $6 Purchased Services (Non-Labour) $0 $0 $0 $0 Audit and Legal $2,520 $15 $2,520 $15 Other - Advertising $84 $0.50 $84 $0.50 Total Administration: $4,804 $29 $4,804 $29 Total Expenditures: $472,157 $2,810 $218,971 $1,303 $107,040 $637 $146,146 $870 NOTES [*1] Tenant Involvement Fund includes craft supplies, tenant activities, special events (birthday cakes, tenant meetings) [*2] Replacement reserve for kitchen items/personal care items, food warmers, brooms, mops, etc. Appendix C 69

70 Appendix D: ILBC Building and Unit Information Form Non-Profit ILBC NON-PROFIT BUILDING AND UNIT INFORMATION FORM BC Housing File # : Operator Name: Fiscal Year End: Street Address: City: Operator Contact: Postal Code: Phone: Health Authority: Health Authority Contact: Phone: Title: Anticipated Date of Occupancy of First Tenant: Anticipated Interest Adjustment Date: Questions: 1. (a) Have you signed the Health Authority ILBC Operating Agreement? (b) Date of Health Authority/Operator Agreement: 2. (a) Average Cost of Personal Care (b) What is the additional charge for units occupied by Hospitality Personal Care couples (if applicable)? $ $ Appendix D 70

71 BC Housing Use Only Estate # Block # Block Type Housing Area Housing Assistant Operations Clerk Entered in Central Database by Property/Block Usage Property Sub Type Property Type Heat Type Heat included in Rent ILBC Market Rent Date BUILDING INFORMATION Building Name: Building Address: Total No. of Units: No. of ILBC Units: Heating System: Electric Gas Other Damage Deposit: Yes No Pets Allowed: Yes No Amenities Included In Building? Parking Underground Yes No Parking Open Yes No Elevator Yes No Laundry Facilities Yes No Storage Locker Yes No Guest Suites Yes No Appendix D 71

72 Physical Unit Type (Check One) Hi-Rise Apartment Low - Rise Apartment Other (Specify) No. of Floors UNIT INFORMATION Amenities Parking Included in Rent Not Included in Rent Surcharge $ Heat Bulk Individual Meter Heat Allowance Applies Electricity Bulk Surcharge $ Individual Meter Cable Bulk Surcharge $ Individual Meter Other (Specify) ILBC Units Unit # BCH Use Apt # Address Unit Type (eg. 1 BR, Studio) Square Feet Appendix D 72

73 Appendix E: ILBC Direct Deposit Form DID YOU KNOW YOU DON T HAVE TO TAKE YOUR CHEQUE TO THE BANK If you complete and sign this form to have the monthly Shelter Subsidy cheque DEPOSITED DIRECTLY INTO YOUR ACCOUNT, payment will be transferred on the last working day of each month. All we need from you is a blank cheque with VOID written across it. The voided cheque gives us your bank transit and account numbers that we need for the automatic direct deposit. All information supplied on these forms will be kept confidential and does not permit BC Housing to have access to other banking information. Name: Address: Thank You. Postal Code: Name of Bank: or Trust Company: or Credit Union: Account Number: BC Housing file number: Signature: Attach VOIDED cheque with this completed form Date: Please return this form to: British Columbia Housing Management Commission Kingsway Burnaby, BC V5H 4V8 ATTN: Subsidy & Budgets, Program Operations Phone: (604) Fax: (604) Appendix E 73

74 Appendix F: SAFER Information Sheet and Cancellation Form SAFER INFORMATION SHEET AND CANCELLATION FORM The SAFER Program provides direct cash assistance to eligible residents of British Columbia who are age 60 or over and who pay rent for their homes. If eligible, seniors pay more than 30% of their total income for rent, and are not receiving income assistance, SAFER may reimburse them for a portion of the rent that is over 30% of their income. The SAFER program is administered under the Shelter Aid for Elderly Renters Act to ensure the equitable expenditure of government funds for low to moderate income seniors while assisting them with their rent. Under the SAFER Regulations, section 4 Eligibility states a senior is eligible if he/she: 4 (c) does not reside in: (i) a facility licensed under the Community Care Facility Act, or (ii) an unlicensed facility, the rent for which is paid or subsidized under any program administered by any ministry of the Province. Based on the above regulation, seniors residing in units subsidized through the ILBC Program are not eligible to receive the SAFER rent subsidy. Therefore, seniors receiving SAFER in a private market rental unit, must cancel SAFER upon moving into an ILBC subsidized assisted living unit SAFER CANCELLATION NOTICE Please complete this form when a SAFER client moves into a subsidized ILBC unit. Completion of this form, will prompt BC Housing to cancel the SAFER subsidy for the individual named below. To avoid possible overpayments, please fax this form promptly to: BC Housing SAFER Name of SAFER client: Social Insurance Number: Date of Birth: Occupancy Date in ILBC Unit: ILBC Operator Name: BC Housing File No. (if known) ILBC Building Name: Building Address: Appendix F 74

75 Appendix G: Rent Calculation Guide Independent Living BC Phase 1 Rent Calculation Guide Appendix F 75

76 ILBC Phase 1 Rent Calculation Guide Table of Contents INTRODUCTION 2 Frequently Asked Questions 2 Do residents have to fill out an application form every year? 2 Why do residents have to provide a social insurance number? 2 What if last year s tax return is not reflective of this year s income? 3 Does proof of income need to be obtained? 3 What if residents do not file an income tax return? 3 What if there is a couple and only one person requires personal care? 3 CALCULATING TENANT RENT CONTRIBUTIONS 5 Tenant Rent Contributions 5 Minimum Rent 5 Maximum Rent 5 The Hydro Surcharge 6 Calculating Tenant Rent Contributions 7 Tenant Rent Contribution Based on Income Tax Return 7 Tenant Rent Contribution Based on the Flat Rent 10 Forms Required 12 Independent Living BC Application Form and Notification of Tenancy Change 12 Completing the ILBC Application Form 13 Part I: Building Information 13 Part II: Personal Information 13 Part III: Financial Information 14 Part IV: Declaration/Agreement 16 Signature 16 Annual Review Process 16 Need More Help? 18 This publication was produced by BC Housing October 2007 Appendix G 1

77 ILBC Phase 1 Rent Calculation Guide INTRODUCTION BC Housing developed this guide to explain how tenant rent contributions are calculated for residents in non-profit Independent Living BC (ILBC) developments and private market ILBC rent supplement units. What's in this Guide? In the introduction, we list frequently asked questions about rent calculation for the Independent Living BC program. The second section of the guide explains the minimum and maximum rents for ILBC residents, how to calculate tenant rent contributions, and how to complete the ILBC Application Form. Frequently Asked Questions Do residents have to fill out an application form every year? An ILBC Application Form is required when: A new tenant moves into an ILBC development An existing tenant experiences a change in family size, such as a spouse moving in or out A tenant has a permanent change in income As requested by BC Housing The tenant rent contribution is recalculated annually based on the tenant s income tax return from the previous year. The Canada Revenue Agency (CRA) provides this information to the health authorities and BC Housing. The annual rent is recalculated, and the new rates come into effect on or before January 1. Tenants receive a notification of rent increase about two months beforehand. Why do residents have to provide a social insurance number? The social insurance number is used to obtain income tax information from Canada Revenue Agency, which is needed to complete the ILBC Application Form and subsequent rent changes. With this information, income levels and rent contributions can be automatically verified each year, so residents don t have to complete annual application forms, unless someone is late in filing a return. Appendix G 2

78 ILBC Phase 1 Rent Calculation Guide Failure to provide a social insurance number and consent to release information from CRA will make a tenant ineligible for subsidy and responsible for paying the maximum rent. What if last year s tax return is not reflective of this year s income? If an income source has stopped or been significantly reduced, it may be exempted from the tenant rent calculation to prevent undue hardship for the resident. Supporting documentation showing the change is required. If this applies please provide the supporting documents to the tenant s case manager at the health authority, who will determine if they are eligible for an adjustment. If they are eligible, the case manager will re-calculate the tenant rent contribution and submit a new ILBC form. Please contact BC Housing s rent calculation HelpDesk, at , toll free at , local 4167, or by at [email protected], for assistance and approval. Does proof of income need to be obtained? When each tenant moves into an ILBC development, income must be verified by obtaining a copy of the previous year s income tax return. Keep a copy of the income tax return in the tenant file, along with a copy of the ILBC Application Form. This requirement is waived when the case manager referring a tenant has signed the form, because the health authority has already obtained income verification. What if residents do not file an income tax return? Residents who do not file an income tax return may not be eligible for subsidy and could be required to pay the maximum rent for the unit. The health authority s case manager will assess the circumstances and determine the appropriate rent amount. What if there is a couple and only one person requires personal care? The tenant rent contribution is calculated based on the combined income for couples living together in ILBC units. Appendix G 3

79 ILBC Phase 1 Rent Calculation Guide The maximum rent is set based on the full housing and hospitality costs, an additional charge for a second hospitality package, and the personal care costs. If only one person requires personal care, this amount is only added once. If both people require personal care, the maximum rent will include two personal care amounts. (See page 8 for sample calculations.) Appendix G 4

80 ILBC Phase 1 Rent Calculation Guide CALCULATING TENANT RENT CONTRIBUTIONS Tenant Rent Contributions Most ILBC tenants will pay either: 70% of after tax income, subject to maximum rent, which is 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 has a very low income, or receives income assistance. Minimum Rent The minimum rent is the least amount an ILBC resident will pay for rent. ILBC residents are expected to apply for any income benefits they are eligible for, including income assistance from the provincial government, and the Old Age Security (OAS) pension and Guaranteed Income Supplement (GIS) from the federal government. In addition, residents with very low incomes will not pay less than the amount paid by tenants receiving income assistance. See page 10 for more on flat rents. Maximum Rent The maximum rent is the most an ILBC resident 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. To determine the maximum rent: The amount for hospitality and shelter are determined as follows: In non-profit settings, the maximum rent for hospitality and shelter is based on a survey of market prices for assisted living accommodation and hospitality in different regions. In private (rent supplement) units, the maximum rent for shelter and hospitality is the actual market rent outlined in your operating agreement with BC Housing. Appendix G 5

81 ILBC Phase 1 Rent Calculation Guide For both private and non-profit settings, the personal care amount is added to make up the total maximum rent. The hydro surcharge is paid in addition to the maximum rent. 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 residents, 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. Please contact BC Housing for more information on the maximum rent in your setting. Sample maximum rent calculation for non-profit units Shelter and hospitality (set by BC Housing) $1, Personal care (set by health authority) $ Maximum rent* $2, *If the unit is occupied by two people, an amount will be added to the maximum rent for a second hospitality package and a second personal care charge. 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 aftertax 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, has agreed to implement a flat $15.00 Hydro Surcharge for all Health Authority funded assisted living tenants effective October 1, If you have any further questions, please contact BC Housing. Appendix G 6

82 Calculating Tenant Rent Contributions Tenant Rent Contribution Based on Income Tax Return ILBC Phase 1 Rent Calculation Guide Tenants who don t receive income assistance pay 70% of their after tax income toward the cost of rent, hospitality services and personal care. After tax income is determined by the tenant s income tax return from the previous year. Canada Revenue Agency sends out a Notice of Assessment confirming an income tax return has been reviewed. The notice contains the information needed to calculate the tenant rent contribution. (The Notice of Assessment does not include the amounts for people receiving income assistance. See page 10 for information on calculating the tenant rent contribution for people with income assistance.) Three amounts are needed from the income tax return to calculate the tenant s contribution for shelter, hospitality and personal care: Line 150 Gross income (non-profit setting only) Line 236 Net income Line 435 Income tax paid The steps for calculating the tenant rent contribution are: 1) Line 236 Net income 2) Subtract line 435 Income tax paid 3) Equals annual income for this calculation 4) Divide by 12 to get the monthly income 5) Multiply by 70% (and round this amount to the nearest dollar) 6) Compare 70% of income to the maximum rent, and charge the lesser of the two amounts 7) Add the $15.00 Hydro surcharge. Residents who do not receive income assistance and do not file an income tax return are not eligible for subsidy, and pay the maximum rent. If unusual circumstances prevent someone from filing an income tax return, and paying the maximum rent would create hardship, refer the tenant to the case manager at the health authority, who will determine the tenant rent contribution. Appendix G 7

83 Sample calculations based on the income tax return Example #1: Single senior private rent supplement unit Rent and hospitality = $2, Personal care = $ Maximum rent = $2, ILBC Phase 1 Rent Calculation Guide Part III: Financial Information* Tenant Sharer Combined Gross annual income (Line 150: Income Tax Return) $ 15, $ $ Income year: ) Net income (Line 236: Income Tax Return) 15, ) Deduct income tax paid (Line 435: Income Tax Return) 1, ) Annual income for calculation purposes (Line 1 subtract Line 2) 13, ) Divide by 12 equals monthly income (Line 3 12) 1, ) Multiply line 4 by 70% Equals Tenant Rent Contribution (TRC) TRC subject to flat rent set by BC Housing TRC cannot exceed Maximum Rent 6)Add Hydro Surcharge $ )Total Monthly Payment $ *Excerpt from the ILBC Application Form $ $ $ In this example, the TRC amount is less than the maximum rent, so the tenant would pay the TRC of $798.00, plus the $15.00 hydro surcharge, for a Total Monthly Payment of $ Appendix G 8

84 ILBC Phase 1 Rent Calculation Guide Example #2: Senior couple This is an example for a couple living together, where both are receiving personal care. Private rent supplement unit Rent and hospitality (as per operating agreement) $2,000 Personal care - two people (set by Health Authority) $1,900 Additional hospitality package $ 500 Maximum rent $4,400 Non-profit unit Rent and hospitality (as per survey: ROBC, one bed) $2,000 Personal care - two people (set by Health Authority) $1,900 Additional hospitality package $ 500 Maximum rent $4,400 Part III: Financial Information Tenant Sharer Combined Gross annual income (Line 150: Income Tax Return) Income year: 2005 $ 15, $ 40, $ 55, ) Net income (Line 236: Income Tax Return) 15, , , ) Deduct income tax paid (Line 435: Income Tax Return) 1, , , ) Annual income for calculation purposes (Line 1 subtract Line 2) 41, ) Divide by 12 equals monthly income (Line 3 12) 3, ) Multiply line 4 by 70% Equals Tenant Rent Contribution (TRC) TRC subject to flat rent set by BC Housing TRC can not exceed Maximum Rent $2, )Add Hydro Surcharge (per unit) $ )Total Monthly Payment $2, In this example, the TRC amount is less than the maximum rent, so the couple would pay the TRC of $2,445.00, plus the $15.00 surcharge, for a Total Monthly Payment of $2, For more information, contact the BC Housing rent calculation HelpDesk at , or toll free at , local Appendix G 9

85 ILBC Phase 1 Rent Calculation Guide Tenant Rent Contribution Based on the Flat Rent ILBC tenants receiving income assistance are charged a flat rent, which is slightly less than 70% of total income thereby giving tenants sufficient residual income during the month. Charging a flat rent based on household size is consistent with all other housing programs that BC Housing administers. When setting the tenant rent contribution for those on income assistance, obtain their income level from their financial aid worker in the provincial government. Determine the correct category for that tenant, and record the flat rent charge in Part III of the ILBC Application Form. The table below shows the categories of income assistance ILBC tenants may receive, the corresponding support and shelter amounts, and the ILBC flat rent charge for each category: Singles: Income Type Assisted Living Charge Hydro Surcharge Total Charge PWD = Support Shelter = $ ($ rent + $ hospitality + $15.00 hydro + $ residual income.) PPMB= Support Shelter = $ ($ rent + $48.00 hospitality + $15.00 hydro + $ residual income) $ $ $ $ Couples: Income Type One person with PWD status: Support Shelter = $ ($ rent + $15.00 hydro + $ hospitality + $ residual income) Both people with PWD status: Support Shelter = $ ($ rent + $15.00 hydro + $ hospitality + $ residual income.) Assisted Living Charge Hydro Surcharge Total Charge $ $ $ $ Appendix G 10

86 ILBC Phase 1 Rent Calculation Guide Sample calculation based on income assistance (Single PWD) Part III: Financial Information Tenant Sharer Combined Gross annual income (Line 150: Income Tax Return) N/A $ $ Income Year: ) Net income (Line 236: Income Tax Return) N/A 2) Deduct income tax paid (Line 435: Income Tax Return) N/A 3) Annual income for calculation purposes (Line 1 subtract Line 2) N/A 4) Divide by 12 equals monthly income (Line 3 12) N/A 5) Tenant Rent Contribution (TRC) TRC subject to flat rent set by BC Housing Flat Rent $ )Add Hydro Surcharge (per unit) $15.00 $ $ 7)Total Monthly Payment $ Appendix G 11

87 ILBC Phase 1 Rent Calculation Guide The flat rent amounts also apply to ILBC tenants who have very low incomes. For example, the lowest flat rent is $348 per month, which is 70% of $497. Individuals with a monthly income of $497 or less would be charged the flat rent. Sample calculation for tenants with very low incomes Part III: Financial Information Tenant Sharer Combined Gross annual income (Line 150: Income Tax Return) $ 4,800 $ $ Income Year: ) Net income (Line 236: Income Tax Return) $4,800 2) Deduct income tax paid (Line 435: Income Tax Return) 3) Annual income for calculation purposes (Line 1 subtract Line 2) 0 $4,800 4) Divide by 12 equals monthly income (Line 3 12) $400 5)Tenant Rent Contribution (TRC) Multiply line 4 by 70% TRC subject to flat rent set by BC Housing $280 $ )Add Hydro Surcharge (per unit) $15.00 $ $ 7)Total Monthly Payment $ Forms Required Independent Living BC Application Form and Notification of Tenancy Change The ILBC Application Form and a Notification of Tenancy Change form are used to calculate each tenant s rent contribution, and to set the subsidy level required from both BC Housing and the health authority. Completing this form begins the flow of subsidies to the operator. Appendix G 12

88 ILBC Phase 1 Rent Calculation Guide Submit the forms to BC Housing when: A new tenant moves into an ILBC unit. A tenant moves out of an ILBC unit. There s a change in family composition for existing ILBC tenants. For example, one person from a couple moves to extended care. A tenant experiences a permanent change in income. For example, an income source the tenant previously received, such as alimony, has stopped. An existing tenant transfers to a different unit. Please contact BC Housing for copies of the ILBC Application Form and Notice of Tenancy Change Form. Completing the ILBC Application Form The ILBC Application Form can be completed by: The case manager from the health authority who referred the tenant to the development, or The operator of the development. Here is a step-by-step guide to completing the ILBC Application Form: Part I: Building Information Record the date the tenant moved into the unit or the date an adjustment is required (not the date on which the application was filled), the building name and the BC Housing file number. Part II: Personal Information Record the tenant s name, date of birth, and the address of the unit in the ILBC development (not the tenant s current address if they are a new tenant, or are applying to move into a different unit). Specify if the tenant is living alone or sharing the unit. If sharing, enter the full name and date of birth of the person sharing the unit. Record the maximum rent, which includes the cost of renting the unit, the hospitality package and the personal care services. When a unit is shared, the maximum rent will include an additional hospitality package and an additional Appendix G 13

89 ILBC Phase 1 Rent Calculation Guide charge for personal care, where applicable. Please refer to this guide, or contact BC Housing, for information on the Maximum Rent in your setting. Part III: Financial Information To complete this section of the form, verify the tenant s income using a copy of the tenant s income tax return from the previous year. Retain a copy of the income tax return in the tenant file, with a copy of the ILBC Application Form. This requirement to obtain a copy of the income tax return is waived when the case manager referring a tenant has signed the form, because the health authority has already obtained income verification. The client needs to bring a copy of the tax return to the pre-occupancy meeting. (If the tenant is receiving income assistance, or has not filed an income tax return, go to step six; steps one to five do not have to be completed.) Appendix G 14

90 ILBC Phase 1 Rent Calculation Guide Gross annual income Required for Non-Profit settings only. Step 1 Net income Step 2 Income tax paid Step 3 Annual income Step 4 Monthly income Step 5 Tenant Rent Contribution Record the income year from the Income Tax Return. Enter the amount from line 150 on the Income Tax Return. Enter the amount from line 236 of the Income Tax Return. Enter the amount from line 435 of the Income Tax Return. Subtract line 435 from line 236. This amount equals the annual income for calculating the TRC. Divide the annual income by 12. This amount equals the monthly income for calculating the TRC. Multiply the monthly income by 70%. Compare this amount to the maximum rent and charge the lower of the two amounts. If the tenant contribution is less than the flat rent amount, indicate that the minimum flat rent applies. If a tenant is receiving income assistance, the tenant contribution will be the flat rent charge, not 70% of income. (See page 10 for information on flat rent charges.) Step 6 Hydro Surcharge Step 7 Total Monthly Payment If the tenant is not receiving income assistance and has not filed an income tax return, indicate that the maximum rent applies. Add $15.00 Hydro Surcharge Total monthly payment equals Tenant Rent Contribution plus Hydro surcharge. Appendix G 15

91 ILBC Phase 1 Rent Calculation Guide Part IV: Declaration/Agreement Have the tenant or legal representative read and sign this section. If someone is sharing the unit, that person must sign as well. Both the tenant and sharer must also provide their social insurance numbers (SIN) and consent for the Canada Revenue Agency (CRA) and the health authority to release their income tax information, which is needed to complete the application form. Failure to sign the declaration or consent to release taxpayer information will result in the tenant and/or sharer being ineligible for subsidy and responsible for paying the maximum rent. Signature Either the operator or health authority case manager must sign the form to confirm the tenant s income has been verified. If the case manager signs, please note the health authority (i.e., VCH, IHA, VIHA) beside the signature to show the form was completed by a health authority representative. Please note that unsigned applications will be returned for signature before processing and provision of subsidy. Annual Review Process The health ministry automatically verifies tenants income levels and rent contributions each year, using their social insurance numbers to obtain annual income tax information from CRA. As a result, you don t need to complete annual application forms, unless someone is late in filing their Income Tax Return. You should receive the new tenant rent contribution information from your regional health authority in late October or November of each year, and the new rates are effective January 1. Appendix G 16

92 ILBC Phase 1 Rent Calculation Guide Please inform tenants that their rent contribution will change on January 1 st each year, if their income level or family composition has changed. Appendix G 17

93 ILBC Phase 1 Rent Calculation Guide Need More Help? If this guide does not answer all of your questions about calculating tenant rent contributions, please call BC Housing at: Housing Services Rent Calculation Help Desk Phone: Toll Free: , local 4167 (outside the Lower Mainland) Fax: [email protected] Kingsway Burnaby, B.C. V5H 2A5 Appendix G 18

94 ILBC Phase 1 Rent Calculation Guide Appendix G 19