The Haines Senior Village is made up of 13 individual apartments that currently house 15 seniors. (Emily Files)

The Haines Senior Village is made up of 13 individual apartments that currently house 15 seniors. (Emily Files)

The Haines Senior Village is worried about its future. The non-profit housing complex is straining under the weight of two mortgages – one of which fell under the radar until this year. The village proposed a solution to its financial problems this month. They’re asking the Haines Borough for a $350,000 low-interest loan.

This is a story about two oversights. One has to do with the senior village’s second mortgage.

“It’s kind of like when you’re a kid playing the game of telephone and it doesn’t necessarily 100 percent of the information make its way through a 20-year period,” said senior village manager Valery McCandless.

There have been many managers and boards overseeing the village through its 20-year history. Board treasurer Bob Adkins says the managers often had 10-hour-a-week contracts at relatively low pay.

“So some things fell by the wayside,” Adkins said. “And that particular second mortgage, the payment depended on the village showing a profit, which as a non-profit it rarely does, so it slipped away from peoples’ attention. And when Valery took over, she was going through the files.”

She discovered the details of the second mortgage, at the end of 2015. As Adkins said, it required payments based on the village’s profit. Since the village rarely makes a profit, there had only been a few payments. But what many didn’t realize is that the village’s sparse income didn’t excuse it from paying the rest of the mortgage. A balloon payment of $185,000 would be due in 2026.

“[I felt] shock and distress, because that’s a big debt,” McCandless said. “That’s a big debt for anyone to have. And when you work with people who live on a fixed income, you understand exactly what that’s gonna mean to them. And how do you solve that?”

The village started raising money, selling chocolate bars and holding fundraisers. But they knew that candy bar profits would not cover the entire debt. The village had been chipping away at the first mortgage, which now stands at $127,000. But how could they afford this additional cost?

“So that’s the reason that we’re asking the borough to loan us $350,000,” Adkins said. “So that we can pay off both mortgages and only have the one payment to the borough for 10 years.”

Adkins says, if the borough were to loan the village $350,000 with one percent interest, the village would save close to $200,000 in interest over the next ten years.

In their case to the borough, the village brought up another past oversight. For years, the borough charged the village property tax, even though as a non-profit, it’s tax exempt. In 2006, the borough discovered the mistake. The village had paid about $60,000 in property taxes.

“When the repayment was made, the borough only repaid the village approximately half of that,” Adkins said. “The borough said, ‘we don’t have any more money at the time’ and the village said ‘we don’t need to money right now.’ Both of which were not correct.”

Adkins went before the borough assembly this month to explain the situation.

“The borough is not anxious to repay $30,000 plus interest, and I don’t blame them,” Adkins said. “On the other hand, we have two mortgages to repay.”

He says if the borough were to loan the village the money, both parties would benefit. The borough would earn interest, and the village would have manageable monthly payments. The $350,000 would pay off both mortgages and fund a remodel needed in one of the village’s apartments.

If the borough doesn’t agree to the loan, Adkins says the village may need to refinance its second mortgage or raise rents for its 15 residents, many of whom live on fixed incomes. McCandless says this is about protecting quality of life for the growing number of senior citizens in Haines.

“If this village remains strong, if we can financially meet our debts, we can then look towards considering whether the community wanted to have more senior housing,” McCandless said. “Because having seniors in your community strengthens the community.”

McCandless and Adkins may soon get an indication of whether the assembly agrees with the plan. The finance committee meets Thursday at 6:30 p.m. to discuss the loan proposal.