Grey Gables long-term care home in Markdale, Grey Highlands. (image supplied by Grey County)
Grey County council is going to be voting on putting redevelopment plans for Grey Gables long-term care home in Markdale on hold after receiving a report showing a staggering increase in anticipated costs.
Owen Sound deputy mayor and county councillor Brian O’Leary gave formal notice he intends to introduce a motion at the next Grey County council meeting on Sept. 9 or at any earlier special meeting called for the county to proceed with redevelopment of Rockwood Terrace long-term care home in Durham, but suspend redevelopment of Grey Gables until such time county council decides otherwise.
O’Leary’s notice of motion came after county council received a long-term corporate capital overview report from staff, which showed a 42 per cent increase in the anticipated per bed costs for the construction of the two new long-term care facilities.
The county’s previous preliminary estimates for the construction of the two 128-bed homes was pegged at just under $72-million — or $280,000 per bed — and has now risen to over $108-million, or about $400,000 per bed.
The long term corporate capital overview report prepared by Grey County’s director of finance Mary Lou Spicer says the projects would require the county to borrow nearly $90-million on a 25-year term. A $2.29-million annual levy increase — or a 4 per cent hike at current spending levels — would be required specifically to fund the Grey Gables build.
Grey County CAO Kim Wingrove told county councillors this information was provided by Colliers Project Leaders, which was selected by the county to help lead the two long-term care development projects.
“Those are the numbers they provided to us, based on the experience they’re having right now,” Wingrove says.
Spicer’s report explains the county has a debt management policy to limit annual repayment amounts to 10 per cent of its own source revenue. The two long-term care redevelopments, as well as $245.7-million in spending already planned in the county’s 10-year capital forecast on many other projects, would leave the county within $1.79-million of its internal debt repayment limit policy.
The report also explains other potential future budget impacts have not been costed for, including several priorities such as addressing the waitlist for affordable housing, continuing and expanding Grey Transit Route, road improvements, and more.
“I think this comes down to a pretty simple decision. Are we going to admit that we made a mistake on January 24, 2019, in going ahead with two projects without looking at the financial implications?” O’Leary asks, referring to county council’s decision to rescind its previous plan to sell Grey Gables to a private operator and build one new facility in Durham.
“Or are we going to spend $108-million, and cripple and handcuff the next six councils? Because that’s what it’s going to do,” O’Leary continues. “When I watch that video on January 24, it was Coun. (Paul) McQueen’s motion and he got the last word. And the last thing he said, was ‘this is about our future.’ And you know what, he’s right. This is about our future. And we can’t afford to spend $108-million. There’s nothing wrong with Grey Gables … we have to replace Rockwood (Terrace). That’s where our focus should be. That’s what we can afford. And that’s what we should be doing.”
Rockwood Terrace in Durham must be redeveloped to meet ‘Class A’ standards in accordance with the Ontario Long Term Care Homes Act by 2025.
Wingrove told county council the Ministry of Long-Term Care has indicated a willingness to allow the county to pause the Grey Gables project and extend the timeline so it would not need to be completed by 2025, as it is not in the same licensing situation as Rockwood Terrace.
County councillor and Grey Highlands Mayor Paul McQueen says the whole intent of moving forward with long-term care in Grey County is to invest and meet demand for the service. He spoke about the current low-interest rate environment as the right time to do it.
“I feel we’re at that juncture in our history that investment is needed and it’s a time where the opportunities for borrowing are sort of aligning,” McQueen says.
Grey County received approval from the Ontario government in Nov. 2020 for the development of 62 new long-term care beds at Grey Gables, and 66 redeveloped beds for a new 128-bed long-term care facility in Markdale.
In 2019, the provincial government approved the county’s application for 28 new and 100 redeveloped beds for Rockwood Terrace in Durham.
County councillor and Chatsworth Mayor Scott Mackey reminded his colleagues Colliers (the county’s consultants on the project) determined there would be some cost-savings to rebuild both Grey Gables and Rockwood Terrace simultaneously. He acknowledged some of the “staggering numbers” in the report, but says it has been a decision of county council that long-term care is a priority and hundreds of people are on a waitlist for service.
“We’re going to need these beds,” Mackey says. “We need them now. We’re going to need them in the future.”
Grey county councillor and Owen Sound Mayor Ian Boddy expressed concern about the county’s future ability to spend on new services and projects moving forward if it commits to both long-term care builds.
“I don’t think we can continue to afford to do this if we want to do other things,” Boddy says. “I think it’s more the ability to not be able to spend anything. What are we going to have to give up in order to do this? I don’t see how I support it going forward when it handcuffs us and future councils.”
Spicer’s report says barring significant revenue increases, the county would only be able to borrow an additional $21-million to $31-million within the next 15 to 25 years — depending on interest rates and loan term — to stay within its internal annual debt repayment policy limit.