Grey County council has approved an increase to the estimated price of the redevelopment of the Rockwood Terrace long-term care home in Durham.
At its meeting on July 13, county council voted in favour of increasing the upset limit for the Rockwood project from $92 million to $96.7 million. Earlier in the year, council voted to scale back the project in Durham from a price tag of over $140 million (which would have required borrowing of $108 million) by reducing the scope of the work by eliminating an assisted living component, village square and seniors apartment complex.
County CAO Kim Wingrove told council that the earlier $92 million target was a “stretch” that they had hoped to reach. The final amount of $96.7 million falls within five per cent of that initial goal. Wingrove said county staff are hopeful early tendering will provide the county with a break on the final price when bids are submitted.
“We’re in a solid place, this is a significant reduction from where we were,” said Wingrove.
The Blue Mountains Mayor Andrea Matrosovs, who chairs the county’s long-term care redevelopment planning task force, said the committee and staff made major changes to lower costs on the project.
“We were careful about our spending. We parsed it down to the absolute minimum,” said Matrovsovs.
The change to the price tag did not pass unanimously. Councillors Terry Mckay, Grant Pringle, Paul McQueen and Scott Greig voted against the move in two separate recorded votes. The change ultimately carried 74-22 in the county’s weighted voting system.
County Treasurer Mary Lou Spicer explained that the project will require the county to borrow a total of $77.6 million. The project will be financed through a construction loan initially and then be converted to a 25-year debt. The annual repayment has been estimated at $5.3 million per year, however the province will provide approximately $1 million annually for 25 years to assist with the payments lowering the annual amount for the county to $4.3 million.
The repayment estimates are based on a 25-year debt at 4.75 per cent interest. Currently, in the tax levy, the county is putting away just over $1.3 million per year for long-term care redevelopment. That amount will be increasing over the next several budgets to prepare for the new debt repayments.
“That will need to ramp up,” said Spicer.
The county is also hopeful there will be more provincial funding available. The Ford government has set up a subsidy fund to help spur the building of long-term care beds across the province. The problem the county faces is that the deadline to access the funds is August 2023. The Rockwood Terrace project will likely narrowly miss that deadline.
The county plans to lobby the province at the upcoming Association of Municipalities (AMO) conference to extend that fund.
“It would strengthen our hand at AMO if we can demonstrate council is firmly behind this project,” Warden Brian Milne said during the course of the debate.
Spicer estimated the additional funds would add more than $33 million, both upfront and annually, to the county’s coffers for the project, further reducing the debenture.
“That is certainly significant. That is not chump change,” said Chatsworth Mayor Scott Mackey. “That would make a huge difference on the overall debt the county is going to incur.”
Operational costs at the facility will also increase after the new home is completed. Rockwood Terrace opened in 1984. The province requires that it be upgraded from its current class C status to class A. The project would see a new 128-bed home built in Durham.
The county hopes to have the final tender in place by the end of 2023, with construction to start in 2024.
