Long-term care homes financing up in air
Province’s Bill 108 changes how development charges are allocated
A report on funding plans for redevelopment of long-term care homes in Niagara says changes in provincial policy have created additional risk for the Region.
The region plans to use development charges to fund about $25 million of the $170-million project, wrote Helen Chamberlain, the region’s director of financial management and planning, in a report to the corporate services committee.
Under the project, two of the region’s flagship homes — Linhaven in St. Catharines and Gilmore Lodge in Fort Erie — will be demolished and rebuilt to modern standards.
Development charges are collected from developers to help pay for the cost of municipal infrastructure needed to service their projects. The services often include roads, transit, water and sewer infrastructure, community centres and fire and police facilities.
The account that contains funds from development charges for the redevelopment of longterm care homes is in good shape right now, the report said. The year-end reserve has a balance of $4.2 million with an additional $3.3 million projected for 2020.
That leaves a balance of $17.5 million in development charges still to be collected.
The Ford government’s Bill 108 — the More Choices, More Homes Act — was passed on June 6 and changed the way funds are allocated.
Under the new act, long-term care funding can no longer be added to development charges.
Money for long-term care will now have to come from a general Community Benefit Charge that will cover a multitude of “soft services” such as parks, libraries, and recreational facilities.
However, regulations spelling out exactly how the new system will work still aren’t available.
“Therefore, the magnitude of the risk cannot be quantified at this time,” Chamberlain wrote. “The worst-case scenario, should developer payments only provide for $7.5 million of the $25 million projected, additional debenture of $17.5 million may be required with an annual servicing cost of $1 million.”
The report said there are no capital reserves for the projects. The balance of financing will come from debentures that will match the province’s per diem long-term care funding.