City Council has taken the next step in Cassellholme’s potential transition to becoming an independent not-for-profit corporation.
The majority of the politicians voted in favour of authorizing Mayor Al McDonald to sign a non-binding letter of intent on Monday night, allowing the city to take a closer look at the municipal long-term care facility’s finances and governance.
The home for the aged is currently owned by the board of management, a combination of member municipalities who fund the project alongside provincial governance.
The redevelopment of the property has been on the executive board’s list of objectives for quite some time now and the team seems set on moving forward with a $60-million redevelopment as soon as possible.
As part of the process, the board hired KPMG advisory services to carry out a $30,000 financial and governance analysis report last summer, which indicated that moving to a non-profit model would be financially cheaper for the partnering municipalities in the long term.
As the Mayor clarified, the letter is non-binding and financially obligation-free. Instead, the sole purpose of signing the document, he said, is to continue investigating the possibility of the home making the transition to an independent corporation.
“It’s very clear […] it is really a non-disclosure,” said McDonald. “Although I did express my concern as it being stated as a letter of intent, I’ve been reassured that it’s really just a matter of getting the information confidentially to bring back to council.”
Four of the present funding partners have asked to leave Cassellholme and put their funding towards a separate redevelopment proposal in Mattawa. However, unanimous approval is required by all of the funding partners, as well as provincial approval, before any changes can be made to the Cassellholme governance.
As the consultants’ report identified, the letter of intent from the each municipality is a necessary component of the process moving forward and is designed for the corporation to get the confidential information contained in the report back to council.
Once a municipality signs the letter of intent, Cassellholme provides a copy of the financial analysis regarding the possible transition and, subject to their own independent reviews, asked to pass a motion in support of the proposal or not.
“The recommendation that came from that report, which was supported by the board, is that the best proposal moving forward is to consider changing from a district home [...] to a non-profit model,” said Cassellholme chairman Chris Mayne. “In the long-term there will be substantial savings for the community.”
The home, which has been in operation since 1925, is designed for up to 240 residents and the demand of their services continues to increase. Part of the forthcoming renovation could see the number of beds increase to closer to 300.
The board unanimously agreed to stick with the current site on Olive Street for the redevelopment, keeping the renovation price tag to an estimated $60 million, all of which has to be financed.
Council originally supported the redevelopment project back in 2012 on the condition that the home would borrow the required funding themselves, not the city.
“I firmly believe that we’re going down the right road,” said Coun. Mark King, one of Cassellholme’s directors. “I think it’s a huge advantage to the city to have this basically moved into a not-for-profit. For a period of years, it will actually give the city the ability to not be involved in this ongoing, very costly process.”
The Local Health Integration Network (LHIN) and Ministry of Health and Long Term Care have expressed their support for the project, but their financial contribution is conditional on the board solving the governance problem.
The municipalities are given an interim period ending late February to do their own due diligence and provide a formal response to the proposal, which the city has recommended acquiring experienced third-party assistance for.
Ultimately, the transition would require a new board of directors to be formed and all participating municipalities would need to kick in a one-time operating and capital financial contribution.
Beyond that though, the report states no further municipal funding would be required.
If the not-for-profit model is not unanimously accepted by all of the funding partners though, the existing district long-term care model would continue.
The only dissenting vote on Monday came form Coun. Daryl Vaillancourt, who was worried about the strong meaning behind the letter.
“The word intent has such a strong meaning for me,” he said. “It’s an awfully strong word for a project that is very much, I don’t think, even in its infancy yet.
“I do believe there’s an opportunity to sell Cassellholme to the private sector,” he added. “It doesn’t mean it would close - there’s plenty of legislation that takes care of how a long-term care facility or a home for the aged is to be run; there are standards and whether it’s the private sector or public sector, they are still the same standards. I’m just worried that we’re handcuffing ourselves at such an early stage.”
However, under current legistlation, the home's sale would not be permitted.
As the city is the largest municipal funding member, Coun. George Maroosis, the former chair of the Cassllholme board, said it was crucial for the city to show some leadership and move the process along, as their stalling would ultimately delay the entire process.
“As the government hasn’t been as agreeable to move things along over the last number of years, conditions for our seniors and the number of seniors who are in need of Cassellholme services continues to grow,” he said.
With council’s vote on Monday, the target for the formal agreement is the end of September 2016.
