The City of Guelph is terminating a Wellington Terrace agreement with Wellington, leaving the county with an annual funding shortfall of $1.3-million.
The agreement for the long-term care facility in Aboyne, which the county owns and for which the city helps cover operating costs, stipulates the city can terminate the agreement with six months’ notice, Terrace administrator Peter Barnes told the Advertiser.
He added the agreement will end on Jan. 31, 2015.
Guelph will move its funding to The Elliot Long-Term Care Home in the city, after the Minister of Health and Long-Term Care recently approved the move.
“As a result of this change in long-term support, Guelph taxpayer’s funding will now be directed towards The Elliott Long-Term Care Home in Guelph," MPP Liz Sandals said in a July 31 announcement.
Barnes said under the current agreement Guelph pays 20 per cent of the Terrace’s net operating costs, based on the percentage of 176 residents at the home that come from Guelph.
“We knew they were looking at The Elliot,” Barnes said. “We will abide by the agreement (termination provision).”
County treasurer Ken DeHart explained, “The city funds $1.3 million of the net costs of the Wellington Terrace … That represents a 1.6% impact on our tax levy.
In an email to the Advertiser, DeHart said the county will seek "mitigation funding" from the province.
"We have been planning for the potential loss of this funding since the agreement was signed back in 2012," DeHart stated. " In addition to pursuing the province for funding, the plan could include a reduction in reserve funding, or looking at potential savings in other areas.
"Any recommendations for how this might be handled in the budget will come forward with the five-year plan in November.”
Warden Chris White said the county has been setting aside money to cushion the transition after the termination of the agreement.
White stressed the county had “no choice” but to accept the termination, as spelled out the agreement.
“We will abide by the agreement,” he said. “We have no obligation, but to fund the home.”
White too remains hopeful the county “gets compensated" by the province for the $1.3-million "loss."
But even if that does not materialize, he believes the county is in good shape to handle the shortfall without impacting county taxpayers.
“We’re not looking at any significant change in the tax [rate],” White said.
DeHart said the impact on taxpayers would vary depending on assessment, but taken solely from taxes, the shortfall would cost "about $35 per average residence."
"As mentioned, that’s the worst case scenario," he said.
Barnes said termination of the agreement should have no affect on Wellington Terrace operations or its residents.
