Boldly going

Shire Hall moves a step closer to building a new long-term care home in Picton

Shire Hall is nearly ready to award a construction contract for a new longterm care home near the existing H.J. McFarland Memorial Home. The 126,000 s.f. facility will comprise 160 beds across five wings—approximately double the size of the existing home.

Current estimates put the cost of the new home at $94.7 million. To fund it, Shire Hall will borrow about $80 million. The province may eventually come up with about $60 million, but it will do so over time—monthly over 25 years. In the meantime, County taxpayers will fund the interest and the balance of the cost, plus any construction cost overruns.

As of last week, the impact of this borrowing is estimated to add $3 million to the tax levy—every year. That works out to a roughly six per cent levy increase before the next budget book is opened.

BIG PLANS COME WITH BIG RISK
There are significant risks to a project of this size and complexity. The scale is unlike anything undertaken—not counting the waterworks expansion currently contemplated— in Prince Edward County. Plenty can go wrong when building a 126,000 s.f. home with complex specifications. Safety. Security. Transportation. Plumbing. Electrical. Communications. HVAC. And when things go wrong, it will be up to County taxpayers to make it right. It is how modern provincial downloading works.

Shire Hall currently has a few projects on the go measured in the hundredss of millions of dollars, so it is easy to forget that it has never financed anything on this scale before. The amount of debt—more than $80 million—is enormous for this taxpayer base. Interest rate risk will be borne entirely by taxpayers for the entire 25 years of the provincial funding agreement. Any increase or decrease in this rate will directly impact property taxpayers.

Cost overruns also represent a serious risk. Shire Hall uses templates provided by the province, but the risk of execution failures, missed deadlines, and unexpected cost increases rests exclusively on the backs of County taxpayers.

Finally, the province hasn’t yet committed its share of funds. Queen’s Park has set out a series of milestones for its funding, and so far, Shire Hall leadership believes it is on track to meet the deadlines.

So, it was with some interest that the Wellington councillor wanted to see the backup plan in the event the province pulled away from this project. Or reduce the amount on offer.

“Everything we are doing right now is on track to meet those milestones and to deliver a shovelready package to the ministry for approval to construct by November 8,” explained Kyle Cotton, the County’s Director of Long Term Care. “We are on target.”

Councillor Corey Engelsdorfer repeated his question. “Is there a fallback plan? A worst-case scenario? If we don’t meet the targets, what do we do then?

Cotton answered, “We have a number of parallel projects happening—site plan approval, building permit applications—we are meeting with the Ministry on a regular basis and reviewing the plans that have been submitted. We have no indication from the Ministry or from our consultants that we are going to fail or not meet those milestones.”

County manager Marcia Wallace jumped in to assure the councillor that he and his colleagues would get at least one more off-ramp before a hole is dug.

“We will not issue the final tender for construction until we come back to Council; that will also afford us the opportunity to demonstrate that we have met all the milestones,” said Chief Administrative Officer Wallace.

SO BE IT
Another councillor was okay with the annual $3 million hit to taxpayers as long as it didn’t impact spending on roads.

“I am hoping staff is going to bring back something that recognizes we have core responsibilities in our other infrastructure,” pressed Ameliasburgh councillor Janice Maynard. “And if it means we have to have a tax increase to maintain our core infrastructure and [pay for] a new long-term care home, then so be it. To me, it’s not one or the other.”

What to do with the existing home

With shovels in the ground expected this winter for a new long-term care home, Shire Hall has begun to focus on disposing of the existing H.J. Mc- Farland home.

It is a task made a bit more sensitive by the fact that famed architect Ron Thom designed the current structure. Thom is best known for designing Trent University in Peterborough and Massey College in Toronto. Described as a creative modernist, Thom’s work was the subject of a major retrospective exhibition in 2013 and 2014. Thom was made an Officer of the Order of Canada in 1980.

With such an esteemed pedigree, the municipality is looking to preserve the building’s heritage while generating sales proceeds to help offset the cost of the new building. As such, the municipality will not entertain notions of tearing it down.

Housing director Adam Goheen recommends a call for Expressions of Interest (EOI) for the structure. He is hoping to keep the scope of the EOI broad to elicit a wide array of curiosity and potential attention.

“Let’s go out to the private sector or non-profit,” suggested Goheen. “Let’s see what kind of creativity can be found.”

He suggests that potential purchasers may include private owners, other levels of government or possibly an educational institution. But he was clear about his direction.

“The ultimate goal is to sell the property and recoup those funds and put it toward the build,” said Goheen.

An appraisal of the building completed earlier this month pegs the current value of the property at $4.2 million.

Council had ideas. So did the CAO.

Councillor Janice Maynard said she prefers municipal staff to focus on housing, ideally through the municipal housing corporation. Councillors Sam Branderhorst and Kate McNaughton want to retain the greenspace as municipal property. McNaughton liked the idea of housing municipal staff in the facility.

“I think it could, down the road, potentially save money,” said Mac- Naughton.

CAO Wallace suggested accommodating stable daycare options might be an attractive prospect. Wallace also noted that the building could be easily segregated to meet a variety of needs in the community.

Goheen explained that the property is zoned as open space and, as such, may not be developed or built upon—that it will remain greenspace under different ownership.

CAO Wallace reminded Council that this report was produced as a result of its concerns over the cost of the new building and its impact on the tax levy and debt.

“This report was an attempt to hear that and to think of ways we could try to generate some revenue to defray some of those costs,” said Wallace. “The director and I agreed [consolidating municipal staff at this location] wasn’t the highest and best use for this facility given the pressures on our budget.”

Council approved moving to issue an EOI for the property.