Health unit approves new facility reserves

At its Jan. 7 meeting, the Wellington Dufferin Guelph Public Health (WDGPH) board amended a bylaw regarding reserve funds for two new buildings the organization now owns.

In 2014, new medical facilities in Guelph and Orangeville were completed. They are the first buildings the health unit has ever owned, secretary-treasurer Keith Perron said at the meeting.

There was some confusion while the new board tried to sort out decisions regarding reserve funds.

In December the executive board, consisting of chair Amanda Rayburn-Fines, vice-chair Doug Auld and Perron, met to discuss a reserve funds report because there was not going to be another board meeting before the Dec. 31 deadline for setting up new reserve funds.

The executive committee approved the transfer of funds from the previous reserve fund to two new facility reserves. The money is for long-term care and maintenance of the building, said David Kennedy, director of finance and corporate operations.

The reserves will accumulate for 35 years, the buildings’ predicted useful life, he said.

The report from Altus Group Limited suggested that WDGPH start out with $300,000 in the Guelph facilities reserve and $200,000 in the Orangeville facilities reserve.

These values were known and worked into the 2014 budget, Kennedy noted, in addition to an extra $171,287 transferred into the Guelph reserve and $106,00 into the Orangeville reserve.

The study recommends that, in 2015, $253,715 be transferred into the Guelph reserve and $116,000 into the Orangeville reserve.

From 2016 to 2044, the report suggests the health unit increase the transfer amount by one per cent per year (and 1.25% annually from 2033 to 2044 for Guelph).

The reserve fund covers costs for major expenses such as roof replacement and elevator replacement but not regular maintenance like mechanical and electrical equipment servicing and landscaping.   

“The purpose of setting up a reserve fund for major repairs is to ‘save up for’ these costs, rather than having huge budget increases in the years that these expenditures occur,” the report states.

The executive committee approved the transfers in December and the new board accepted the decision at its first meeting last week.

Upon closing the existing single reserve, after the required funds were transferred to both the Guelph and Orangeville facilities reserves, any left over funds were returned to municipal partners.

“So we’ve already made a partial payment to all three municipal partners and then once we conclude what the balance that was left in that reserve we will refund that balance back to our funding partners as part of our loan repayment,” Kennedy clarified.

Nicola Mercer, medical officer of health and chief executive officer of WDGPH, said any asset or debt goes back to the municipalities.

The board also approved the bylaw amendment allowing WDGPH staff to transfer money from the Guelph reserve to the Orangeville reserve, and vice versa, without board approval if an emergency requiring work occurs before the next board meeting.

The bylaw was amended based on the recommendations of the executive committee.

“This allows … flexibility; they don’t have to amend the bylaw in order to use money from the Orangeville reserve to do something in Guelph,” said Robin-Lee Norris, WDGPH lawyer.

Comments