Trochu seniors project needs interest rate adjustment from Kneehill County

Written by Stu Salkeld

Kneehill County council approved altering an agreement with stakeholders for a new seniors living facility after it was revealed inflation has affected the project. The resolution to alter the agreement was passed at the Feb. 27 regular meeting of council.

Councillors heard a presentation from Trochu Housing Corporation President Sam Smalldon and Covenant Health representative Scott Baerg regarding the $41 million Trochu seniors supportive living facility project.

Smalldon noted it’s been two and a half years since the corporation, Town of Trochu and Kneehill County agreed to proceed with this project.

It was pointed out in the presentation this project has a number of stakeholders, including the provincial and federal governments, Kneehill County, the Town of Trochu, the housing corporation, Covenant Health and a number of other communities, committees and agencies.

Smalldon explained the economy impelled him to make some new requests of council; specifically, he asked that the existing agreement be given more robust lending abilities as the $20 million borrowing ability at up to four per cent for four years doesn’t seem realistic anymore given the state of the Alberta economy.

Smalldon asked that Kneehill County boost that borrowing ability to $20 million at up to 5.5 per cent for up to five years.

Smalldon explained it’s estimated five per cent interest should be adequate for the project, but the extra half a per cent is included as a safety cushion.

He discussed the grant conditions this project is bound by, which included a certain level of grant money, pre-sold units, public consultations with ratepayers which incidentally came back positive and including Kneehill County representatives on the corporation board.

Smalldon further updated the project’s progress, which seemed positive and implied the project will move ahead. It’s proposed to be built on 12 acres of serviced property on the north side of the Town of Trochu east of Hwy. #21; it’ll include 80 housing units of varying type depending on the health needs of the resident.

Smalldon stated the estimated project total is $41 million from grants, loans, unit sales and fundraising.

Baerg interjected that resident needs, including the type of living unit, won’t affect the final project cost.

Smalldon stated inflation has affected the project by increasing estimates by about $9 million; however, he noted inflation appears to be “stabilizing.”

The loan part of the project will be, in effect, a mortgage he noted. Covenant Health will be the facility operator and service provider.

Smalldon noted a federal government grant for this project has not been received yet.

Currently, the project is in the design stage with intentions to go to tender in summer of 2024 with construction to begin in October, 2024.

Later, councillors debated the requests. County Chief Administrative Officer (CAO) Mike Haugen noted that essentially a request was made to change or replace Kneehill County’s loan guarantee bylaw for this project. The Town of Trochu will take on the project’s debt with Kneehill’s guarantee in case of default.

Haugen noted it’s not surprising inflation became a factor.

“I think everyone is well aware that interest rates have changed since 2021, when we made this agreement,” said Haugen.

The CAO pointed out the Municipal Government Act (MGA) requires a bylaw for something like a loan guarantee, so to accommodate the corporation’s request the current bylaw will have to be changed or replaced, which includes the three readings process and public consultation including public comment which could include opposition.

“It is a possibility that it might happen,” said Haugen, who noted though that the public previously seemed supportive of this project.

Councillors unanimously passed a resolution to have county staff draft the changes requested by the Trochu Housing Corporation and bring it back for discussion at a future meeting.

Stu Salkeld
Local Journalism Initiative reporter
ECA Review

About the author

Stu Salkeld

Stu Salkeld, who has upwards of 28 years of experience in the Alberta community newspaper industry, is now covering councils and other news in the Stettler region and has experience working in the area as well.

He has joined the ECA Review as a Local Journalism Initiative Journalist.

Stu earned his two-year diploma in print journalism from SAIT in Calgary from 1993 to ’95 and was raised in Oyen, Alta., one of the communities within the ECA Review’s coverage area.