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.
The Minister of Health and Long-Term Care recently approved the move, which takes effect on Jan. 31.
“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 following the termination of the agreement.
White stressed the county had “no choice” but to accept the termination, as spelled out in 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.
The 2012 agreement ended a legal dispute between Guelph and the county for alleged non-payment of Wellington Terrace operating costs. Between 2006 and 2011, the county invoiced Guelph $5.3 million and had received a payment of $996,000, according to DeHart.
The lawsuit was withdrawn with the signing of the 2012 agreement.
Jade Surgeoner, Guelph’s manager of financial reporting and accounting, said the designation of the Elliot as the city’s long-term care facility should provide some cost savings for Guelph.
“The city is estimating that we could reduce our long-term care costs by $50,000 per year, and the Elliott is expected to see cost reductions as the city’s support will help alleviate their need to rely on debt which will in turn lower their operating costs,” Surgeoner told the Advertiser in an email.
Guelph Mayor Karen Farbridge said, “The ministry’s approval of the designation of the Elliott as Guelph’s municipal long-term care facility is ground breaking.
“This is something the city has been working on for over a decade,” Farbridge added.
The announcement of the Elliott being approved for long-term care was delayed by the provincial election and was announced by Sandals after the Liberals won a majority.
“Liz Sandals was able to get it in front of the new minister,” Farbridge said of the quick decision.
Barnes said termination of the agreement will have no impact on Wellington Terrace operations or its residents.
