Wellington North councillors had a bitter pill to swallow as they considered the best means to support Mount Forest’s Louise Marshall Hospital’s current capital campaign.
The campaign committee had requested a $1 million corporate donation – something councillors have mulled over for the past few months.
The resolution council finally endorsed stated that Wellington North fully recognizes the significant capital contribution made by the county towards health care and further acknowledged Southgate Township’s contribution to the Louise Marshall capital campaign.
Further, council acknowledged the importance of Louise Marshall Hospital to the community.
On March 9 council authorized a $250,000 contribution to the campaign to be funded through a special charge to the tax bills of every residential property for the years 2015 to 2018.
Any funding shortfall would come through the working capital reserves in 2018.
Council’s hour-long discussion offered many viewpoints.
The issue of funding arose in another review of a Jan. 26 report from chief administrative officer Mike Givens.He said Wellington North had been approached on a number of occasions by the capital campaign committee of the Louise Marshall Hospital about making a capital contribution to support the needed renovations and expansion at the Louise Marshall Hospital.
“To date, indications are that the capital campaign committee has raised approximately $4 million of their $5 million dollar goal.”
Included in that is a commitment from Wellington County. It agreed to give $2.2 million to the hospital with that contribution to be split, with $1 million going for an automated dispensing system, with the remaining $1.2 million for the renovation and expansion project.
The capital campaign indicated that Southgate had also agreed to contribute $200,000.
Louise Marshall Hospital accounts for 75% of patient visits, while 21% go to Groves Memorial Community Hospital in Fergus, and the remaining 4% go to the Palmerston hospital.
Givens said, “Staff are not in a position to recommend an amount of a donation to the hospital project; this is a council decision.”
He said, “Council has a responsibility to the taxpayers to be good stewards of township tax dollars,” and said any budget increase of $65,000 is the equivalent to about a 1% increase in the township tax levy.
Givens said, “For simplicity, council could direct staff to proceed with a $650,000 donation to the hospital project in 2015. This would then be captured in the 2015 budget resulting in a roughly 10% increase in the levy.”
That would equate to about a $100 tax increase for an average residential property.
Other funding options were also presented.
Utilization of Reserves
Currently, the township has approximately $950,000 in its working capital reserve. That generally encompasses operating surpluses that have been accumulated over a number of years. Those funds are generally used to offset operations deficits, one-off operational projects, and as a tax rate stabilization reserve.
Using reserves for a donation to the hospital would have the least impact on the current taxpayers and current budget.
At the same time, the report indicated reducing the reserve would have a detrimental impact of the township’s ability to deal with the possibility of future downloads from the province or reduced future funding from the province.
Special levy
Council could request that staff explore implementing a special levy on all or a specific property class (such as residential) within the township. The levy could show as a separate amount on the tax bills, similar to streetlights.
That approach would affect property owners who had already made financial contributions to support the hospital.
In addition, Wellington County had already committed funds to the project and the county levy already affects property owners in Wellington North.
So, some property owners could be contributing three times to the project.
Commercial and industrial properties are generally assessed at higher values than others. Unless they are exempted from the special levy they would be paying a higher percentage of the donation.
Borrow or debenture for any donation
The township has borrowing capacity, and a donation could be funded in that manner.
While borrowing would be spread over a number of years, the township would incur additional costs associated with issuing a debenture (interest, issuing and administration costs).
Additionally, borrowing for the donation could limit the amount the township can comfortably borrow for other, larger infrastructure projects in the future.
Defer capital projects
The final option cited in the report was council could determine the hospital project and associated township donation takes precedence over existing township capital projects.
Although health care is not in the mandate of municipalities, unlike roads, bridges, water and sewer and their associated infrastructure, council has the authority to determine its priorities for spending and taxing, but that potentially only adds to existing infrastructure deficits that Wellington North has already.
Mayor Andy Lennox said “it is time tonight to have our final discussion and bring this matter to a conclusion.
“I think we can all agree that maintaining and developing our local hospital is an issue of highest importance to our community and represents a long term investment in its future. The question we face tonight as elected leaders is to represent all of the people in Wellington North … and what role council should play in that effort.”
“I suspect that given the chance for any one of us to make the decision – it would result in five different approaches around this table.”
Councillor Dan Yake spoke of North Wellington Health Care’s commitment to patient care being recognized – which put it in the top 10% provincially for acute care experience – based on overall patient satisfaction and perceptions.
“We’ve been asked to make a substantial investment in our community – an investment in Wellington North – not Mount Forest, not Arthur village, not West Luther and not Arthur Township.”
He said Wellington North is being asked for help “and this council must decide if it wants to make a long-term investment for our hospital.”
Yake said the province has spent millions of dollars but is asking the community to generate funds as part of that commitment.
“The residents, businesses, service clubs and even a neighbouring township [Southgate] have risen to the occasion.”
He stressed not all spending in Wellington North directly benefits all residents.
Councillor Sherry Burke said, “The big question when we talk about this is in a roundabout way is, ‘What can we financially afford?’ The $1-million request from the Louise Marshall Hospital capital campaign is just out of the township’s reach.”
She agreed that township residents deserve the best health care that can be provided locally.
Burke said she could support a one-time donation of $500,000.
After considerable thought, she suggested funds be borrowed through Wellington County, rather than take cash from reserves.
In order to pay it back, she recommended a special levy on the tax bill and once the donation debt is paid, the levy would be removed from it.
Councillor Steve McCabe said “It’s a devil – it is hard to say no and it is hard to say yes. I’m not convinced [making a donation] is the best use of municipal tax dollars.”
McCabe said supporting health care is not part of the municipal mandate.
He said having Wellington North make a donation is the equivalent of asking residents to pay a third time – through provincial taxes, county taxes and now municipal taxes.
McCabe said he is willing to donate funds privately.
He understood the need to support the township, “but I can’t see this as the most appropriate use of tax dollars.”
Councillor Mark Goetz said the issue has weighed heavily on him. He did not dispute the need for funds.
“We’re definitely going to have to take from somewhere else in order to do this.”
He said a donation of that amount could take from other township priority projects.
“We want to help them out – but to what extent is a tough decision.”
Lennox said for him the issue is the appropriateness of the contribution.
“For me this is not a standard corporate contribution and this is not an issue of good corporate citizenship.”
He explained his dilemma. “What we are doing here is essentially forcing taxpayers to make their contribution in the community.”
Lennox said Wellington County has already made a large commitment to the project, which represents 2.5% of county taxes for the next five years. “Municipal government has already clearly demonstrated its willingness to invest in the community – whether upper or lower tier – it is still municipal government.”
Initial options include a potential donation of $700,000 using a combination of reserves and tax levies. Another option included a donation equivalent to all township fees associated with the project – to a maximum of $50,000. A final option included a $100 fee to be applied to the tax bill of every occupied residence in the township for one year only.
By the end of the discussion, council’s resolution of lowering the donation to $250,000 and spreading it over four years means the special charge on residential tax bills may amount only to about $10 per year – although that final figure has yet to be determined.
