A proposal to significantly boost Banff Housing Corporation administration fees to cover the cost of service levels to existing housing developments is being met with mixed reaction.
Many homeowners are outright opposed to a proposal to increase the annual administration fee from $80 per unit to $246 per unit, while others say an increase of some sort is justified.
But, that said, many want more details outlining the actual costs associated with the administrative work of the existing 183 homes to justify such a big increase.
They made their positions known to council – who were acting as shareholders of the Banff Housing Corporation – at a public hearing, Monday (June 13).
Homeowner Ladd Snowsell said it’s quite reasonable for administration fees to increase, noting it is probably an error that they’ve not gone up before.
But, he said, he would suggest making the increase more nominal in the beginning, perhaps based on inflation over the past decade, rather than such a dramatic increase.
“The proposed fee may be appropriate, but I think more work needs to be done,” said Snowsell. “We need to really develop a clear definition of how the fees are related to expenses of the current homes.”
BHC has a home ownership portfolio of 183 units and each homeowner has a leasehold interest in the property through a sublease agreement.
Under that agreement, homeowners pay an annual administrative fee related to the actual cost of servicing the existing developments.
The fee, which has not been reviewed or increased since the developments were built, is not intended to cover things like negotiating for land or managing building projects.
The board of directors estimated the total administrative costs by creating a hypothetical scenario in which BHC would have no activities, other than administering existing developments.
It estimates the total cost to administer the existing portfolio is around $45,000 – the equivalent cost of 60 per cent of a full-time position.
When the total costs were divided among the existing 183 units, the annual administration fee came to $246 per year – approximately $20 per month.
“It’s the belief of the board that his represents a fair determination,” said Councillor Leslie Taylor, a council member on the board of directors.
Many homeowners argued they are already paying administrative fees when they sell their home, or if there is a change on title, such as a mortgage change.
Linda Chisholm said many homeowners believe there are no services being offered now to justify the current annual fee, let alone any increase.
She said she understands there are costs associated with the resale of a unit, but there is already a fee of $2,500 to pay for those administrative costs.
“The BHC reports lists cost items of legal, insurance, audit, office supplies etc., totalling $13,700, but almost all of these costs should be covered by the resale fees charged to the homeowner,” she said.
“Until we decide to sell our unit, what exactly are our fees paying for? What are the actual costs of administration for my development for this past year, not including resale costs?” she added.
“Since my development was completed 12 years ago, it is unclear what administrative costs can still possibly remain.”
Kathy McNeil said she finds the extent of the increase a “little hard to swallow”.
“I’ve owned my home for 13 years, and I agree they do have to go up, and I’ve actually been surprised there’s never been an increase when everything else in my life is going up,” she said.
“I’m not saying at some point we shouldn’t be paying $246, but give us a chance to budget for that.”
Stephanie Kuxdorf was opposed.
“I feel the BHC already collects enough fees from homeowners for specific services such as re-financing, selling etc.,” she wrote in a letter.
“There really is very little that the BHC does for homeowners on an annual basis to warrant this fee in the first place.”
The shareholders will make a decision on the issue at a later date.
“We will take all of your information into account and we will be moving forward to make a decision at a future shareholders meeting,” said Mayor Karen Sorensen.