Council approves $67.1 million lowest tender for new long-term care home

Administrator | Nov 25, 2024 | Comments 0

UPDATED: Council approved a $67.1 million tender to Matheson Constructors Limited, during Tuesday night’s meeting, to build a new long-term care home near the current H.J. McFarland Home, off County Road 49.

Matheson’s was the lowest of four bids received (ranging from $67 to $79 million), stated Kyle Cotton, Director of Long-Term Care, in his report to council. The estimated $97 million project was approved in this year’s budget, contingent on government funding, for the 160-bed facility.

“The fully executed Development Agreement binds the Ministry of Health and the municipality and outlines the eligibility, payment terms, and amounts. This project was approved by council in the 2024 budget, conditional on receiving the Construction Funding Subsidy (CFS) and the Top-Up Funding, which eased the municipality’s financial pressure and made the project financially feasible.”

The capital costs for the build are estimated at $94,700,000 ($83M construction and $11.7M furniture, fixtures and equipment). The municipality was successful in its loan application with Infrastructure Ontario and, on Oct. 24 obtained credit approval for the loan request of $80,432,765.27 for the redevelopment project.

Cotton explained the budget considerations.

“The County will receive a per diem amount totaling $56.53 per bed for 25 years, or $82.6 M. This figure combines the original $21.53 ($20.78 + $0.75 extra for a medium-sized rural home) plus the $35 top-up per diem. The municipality will take the provincial option to convert $15 per bed (or $12.9 million) of the CFS funding to an upfront CFS Construction Grant to assist with upfront costs.

“This option reduces the overall amount required to debenture, making the total funding from the province needed over 25 years to $60.6 million. These provincial grant revenues are estimates calculated as of today, pending a review of the Approval to Construct package.

“The County will also be able to allocate approximately $2.3 million from Development Charges (DCs) as per the Development Charge By-Law 40-2023 for services related to Long-Term Care to support the long-term debt repayment and mitigate the impact on the tax levy.”

A fundraising goal of up to $1 million has been set and will provide an opportunity for naming rights of the new long-term care home. Other fundraising targets are landscaping, equipment, program spaces, activity or treatment rooms, and equipment. Staff have begun preparing a fundraising campaign and, working with the Family Council, will determine a launch date in 2025.

The County has been seeking more long-term care beds since 2012 when 78 beds were lost with the closure of Picton Manor Nursing Home. Five years later, in 2019, the province promised to allow 76 more beds to the current allocation of 84 beds at the municipally-owned home.

The HJ McFarland home was constructed in 1976, with an addition in 2006. Though well-maintained, it no longer meets provincial requirements to be a nursing home. The province not only demands every municipality operate a long term care home, it also requires it be kept to standards.

Should council support the recommendation to award the tender, staff will begin preparations for the project’s start. Staff have engaged Colliers Project Leaders to provide project management services, manage costs, ensure adherence to the construction timelines and minimize the risks associated with the project. This will augment staff engagement on this project during the construction phase.

Given the high visibility of the project and the communication received from the ministry, the municipality will engage the communications team to prepare a groundbreaking ceremony. Staff are also building a new approach to public communications for major infrastructure projects (over $50 million), which is to be
launched in early 2025 “to better support timely information sharing and public engagement, given the sizeable investment of public funds.”