Muskoka District Council has approved a motion to move forward with the Fairvern Nursing Home construction despite the large price tag.
District Council approved a motion on Monday which directed staff to formalize capital funding allocations and to move forward with the Provincial construction approval process. The development of the Fairvern facility will cost $94 million dollars, with $87.9 million dollars being provided by the Provincial government. The provincial funding is from a new government construction subsidy which was unveiled in the fall for municipalities to create new long-term care beds.
A key part of the subsidy is that the municipality will have to pay the full sum upfront, and the government will reimburse over the next 25 years. This means that the municipalities will face increased borrowing costs.
Councillor Guy Burry highlighted that despite the large sums from the provincial government, the District was still on the hook for significant payments. According to Burry, the home, which would have 160 beds, would cost an extra $2.4 million dollars per year. Burry stated that he wanted to ensure that this extra cost on local taxpayers was understood by councillors.
“No matter how we spend this $94 million the home will cost more to build and operate than the government funding model provides,” Burry said.
The District is under time constraints to begin construction on Fairvern. Further delays could result in the District losing the provincial subsidy and being on the hook for up to $51.1 million dollars. Burry also reminded council that this was another key concern.
“If we don’t deliver on time, we’re probably putting the district at risk of about $51 million,” Burry said.
Councillor Peter Kelley agreed with Burry that the extra costs were significant but wanted to ensure that council remembered who the real stakeholders were in this case.
“The stakeholders here are 900 some-odd people who are on what I heard is a seven-year waiting list to get into long-term care. Those are the stakeholders here,” Kelley said.
However, Kelley did highlight that design decisions made by council had contributed to the large costs of the project and limited the amount of potential new beds.
“We’ve made some design decisions, which essentially means that we are spending $94 million to house 160 residents. Had we stuck to the more modest standard approach as I understand it is the standard across the rest of Ontario, that money would have housed another 50 or 60 people beds,” Kelley said.
District Chair Jeff Lehman highlighted that a reason for the increased costs is that the Fairvern design is a result of lessons learned from the Coronavirus pandemic. Lehman also stated that the larger costs on the taxpayer were a result of the abnormal funding system used for the provincial subsidy.
Councillor Ruth-Ellen Nishikawa criticized the funding scheme which put the debt and interest payment burdens on the municipality as opposed to the province.
“I think this is quite a hardship to municipalities,” Nishikawa said.
District staff acknowledged that the $2.4 million figure used by Burry is a result of recent increases in interest rates. According to staff, a combination of large reserves as well as internal debt financing will allow for changes in interest rate in the future to potentially bring down borrowing costs for the project.
District council passed the motion, clearing a hurdle for the Fairvern project to move forward.
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Going FAR over budget is typical at the District.
Why does the District of Muskoka exist again?
To borrow, and waste FAR more than any town or township could on their own.
The madness needs to stop.
Why are taxes here so high when Muskoka has the huge cash cow of cottagers?
Drunken sailors spend far less.
Pretty sure Lake of Bays, Muskoka Lakes and Georgian Bay would vote for dissolving the wasteful District of Muskoka.
Just like Peel.
$620 million!!! on water and sewer services for example.
https://doppleronline.ca/huntsville/municipal-water-and-sewer-rates-on-the-rise/
Another $65 million being blown in Huntsville right now.
Harding and Firman were laughing about the cost. Laughing!!
Finance at the District said they “don’t know” where the $65 million will come from when the feds and the province refused to pony up 2/3.
Taxpayers know.
Taxpayers also know where Fairvern’s budget busting is coming from.
Going FAR over budget is typical at the District.
Baysville water and sewer ballooned 4X+!! compared to the initial estimate.
Services charges to residents also ballooned 4X+!! compared to the initial estimate.
Highest in Ontario.
$2,400/year is typical. Including costs shown/hidden on our property taxes.
While the multitude of District councillors gorge themselves at the public trough.
https://doppleronline.ca/huntsville/district-council-defeats-attempt-to-reduce-proposed-increase-to-councillor-pay/
Toronto with 3 million people has 25 councillors.
Muskoka with 60,000 has 23. Do the math. Ridiculous.
I question the long term financial impact of this project. No doubt there will be a need for such a facility in our area but a capital expenditure of this magnitude requires more public input. Why incur massive borrowing and construction costs at a time when both are (and will remain) at historic levels? Who made the costly design decisions? And why choose a design with fewer beds? Reading between the lines, Mr. Goyer is telling us that future taxpayers will rue Council’s purblind approach and he is right!