Halton Region will undertake a review of its owned and operated long-term care facilities to see whether it’s time to sell them or continue to operate them.
Burlington Councillor Jack Dennison initially wanted Halton to ask the Province for permission to test the market for such a sale.
But with no support from other budget committee members, Dennison decided to support the review route, urged by Oakville Councillor Tom Adams, which passed unanimously during Monday’s meeting.
Dennison has been advocating selling Halton’s three municipally-operated facilities for several years, but his idea has always been rejected.
On Monday he insisted such a sale would save the Region $17 million annually by divesting itself from Allendale in Milton, Post Inn Village in Oakville and Creek Way Village in Burlington.
But at least the pending review will finally give councillors precise figures as to whether it makes sense to sell or retain the facilities or own them, but have somebody else operate them.
Councillors expect the review will provide a comprehensive business plan so they can make a well-informed decision as to which direction they should take for the benefit of all Halton residents.
“We need to stop spinning our wheels on this at every budget,” Councillor Meed Ward said, supporting the need for accurate pros and cons of such a divesture.
In making his pitch for selling, Dennison said “If it’s found in the Yellow Pages we shouldn’t be involved in it.”
Several councillors agreed that Dennison made a compelling financial argument in that, by selling the three facilities, Halton would not only reap a financial benefit, but it would also result in the private sector paying property taxes for the homes.
However they wanted staff to ensure his figures were accurate and what the long-term effects would be on Halton residents should they eventually decide to sell all three or just one of their homes or keep the status quo.
Halton currently has 2,736 long-term care beds of which 21 per cent are operated by the Region, Dennison told budget committee members Monday.
A sale of the three municipally-owned homes would result in a cash infusion of about $125 million, and reduce annual operating costs by more than $17 million, according to Dennison.
He argued such a sale would increase the Region’s taxable assessment, providing about $2.5 million in property tax revenue.
“We also have $20 million in our reserves for repairs and renewal of these facilities so this could potentially free up close to $150 million,” Dennison said.
Sheldon Wolfson, Halton’s social services and community commissioner, said Regions are provincially mandated to operate at least one long-term care facility.
Several other Ontario municipalities have looked at the same issue over the years, including Toronto and Hamilton, but in the end they decided to maintain the status quo.
In deciding whether to sell or retain, municipalities had to consider several ramifications such a community and labour relations, and various cost issues, Wolfson said.
There is also a risk of losing beds.
“Licenced beds (in private nursing homes) have a value. They can be bought and sold,” Wolfson said. “Municipally-approved beds cannot be bought and sold.”
Budget committee members were told municipally-operated homes have higher operating costs than privately-operate homes primarily because of higher wages and past arbitration awards.
Because residents don’t necessarily get to choose the home they want to live in unless they can wait for an opening, Dennison said it makes no sense for taxpayers to continually foot the bill for homes that can be served by the private sector.
“They (privately-operated homes) are income-producing assets,” Dennison said.
Dennison suggested it made more sense for the Region to use the money from a sale, its reserves and the annual costs for operating the homes and use it for social housing and homeless issues, areas the Region is required to fund.
Wolfson said the Region currently operates 200 beds less than it needs and the need will become greater in the future. It’s projected Halton will need 400 more beds by the Year 2021.