The national office of Habitat for Humanity has terminated the membership of its Upper Fraser Valley (UFV) affiliate, bringing its activities to a halt and resulting in the closure this Saturday of the ReStore locations in Abbotsford and Chilliwack.
David Morris, acting CEO of the local affiliate, said the national board reached the decision last week based on several factors, including that the branch had “overextended” itself financially to the tune of about $500,000.
But a source, who asked to remain anonymous, says the real reason for the closure is because ReStore employees had joined the Christian Labour Association of Canada (CLAC) and Morris was brought in to “break the union.”
The UFV branch is based in Abbotsford but also covers Mission, Chilliwack and Hope, helping to build homes in partnership with families in need. The homes are sold to the families with no down payment and no-interest mortgages.
The ReStore locations sell donated and used building materials, furniture and appliances to support Habitat’s administration costs.
Morris said although affiliates are run independently from the national organization, they operate under a service agreement that requires them to meet certain standards.
This includes paying a fee to Habitat Canada and having proper policies and procedures in place, including with the mortgages given to families who receive a Habitat for Humanity home.
Morris said the national office also likes to see one home being built every two years, but the UFV affiliate had built only four homes in its 17 years of existence.
He said “various issues” began cropping up about five years ago, and by last July, Habitat Canada placed the UFV branch in a probationary period, hoping the problems could be resolved.
The board terminated the UFV branch’s membership with Habitat Canada last week.
“Every attempt has been made to turn around the situation,” said Morris, who was appointed acting CEO of the local branch and defines himself as a “management trouble-shooter.”
“A decision to terminate a local organization is not taken lightly.”
Meanwhile, the source said Habitat UFV was making money – he said the Abbotsford ReStore made almost $1 million in each of the last two years – and the problems arose when former CEO Doug Rempel was fired last November. (See separate story.)
The source said one of the temporary CEOs who was brought in “caused a lot of ruckus,” including bringing in a team from the Greater Vancouver affiliate to pressure the UFV branch to amalgamate with them.
He said the team “took over” the Abbotsford ReStore, including changing email passwords and the locks on doors.
The source said the employees felt their jobs were in jeopardy and they voted about six weeks ago in favour of joining CLAC. That’s when Morris was brought in, the source said.
Morris said he was not brought in to break up the union, and even had a meeting with union reps to explain the national office’s position. He said they “seemed to understand” the circumstances of the affiliate’s membership being terminated, although they weren’t happy about employees losing work.
Morris said he will continue to work with the UFV branch until all the issues are settled – including selling all assets and paying creditors – and the affiliate is fully dissolved. The process could take up to two years, he said.
He said he is confident all creditors will be paid, and there could even be leftover funds, which the Canada Revenue Agency (CRA) requires be transferred to another registered charity.
He said one of the biggest financial issues with the branch was opening the ReStore in Chilliwack in October 2016, which “further overextended” the organization, although he added that the location recently began turning a profit.
A total of 16 ReStore employees – 12 in Abbotsford and four in Chilliwack – will be paid in full, he said.
Meanwhile, the only property currently owned by the affiliate for housing is for a 17-unit townhouse complex located on the Cedar Valley Connector in Mission, Morris said.
He said that property was made available to Habitat by the district, conditional on the construction of affordable housing. It will now be transferred to Habitat Greater Vancouver to undertake the construction.
The organization also owns the ReStore building on South Fraser Way, and Morris said that will soon be listed for sale.
Tax statements filed by Habitat for Humanity UFV from the years 2012 to 2015 indicate that the organization essentially broke even each year. In 2016, the agency declared almost $3.5 million in revenue versus $1.5 million in expenses. (Last year’s statement is not yet available.)
But Morris said there could be mistakes in how the returns were filed, and he has asked for an independent overview of the accounting. He said, at this point, he could not comment on what the 2017 numbers show.
Morris attributed the local issues, in part, to the difficulties in running a Habitat for Humanity affiliate, including acquiring land, constructing homes, managing retail operations and administering mortgages.
“Sometimes the complexity becomes too much,” he said.
Among the fundraisers that the UFV affiliate held was a 2015 gala event at Abbotsford Centre in which Canadian astronaut Chris Hadfield was the keynote speaker.