Looming Cassellholme financial liability puts freeze on unrelated capital projects

East Ferris council is “taking a breather” on the plan to build a new fire hall and municipal office, says Mayor Pauline Rochefort.

Cost estimates came in over the $ 6 million estimated at the same time the municipality may have to take on debt for its share to expand and refurbish Cassellhome Home for the Aged. Uncertainty about the economic impact of the COVID-19 pandemic on taxpayers was also cited as part of the rationale.

“The municipality was mindful of the fact that its target budget of $ 6 million for a fire hall and municipal office might be difficult to meet,” Rochefort said Thursday.

Despite having four supplemental options to choose less expensive alternatives, Rochefort said construction cost estimates were beyond expectations at this time.

“The municipality is hopeful it will find an alternative design option aligned to its budget,” she said, adding there were too many unknowns to go forward.

“Based on the advice of the East Ferris New Fire Hall / Municipal Office Technical Advisory Committee,” Rochefort said, “council decided best to wait until it has a better understanding of the Cassellholme redevelopment and its financing plan as well as more clarity regarding the impacts of the pandemic on our citizens.”

The Cassellhollme project has been in the works for more than a decade but the financing model has held it up. Legislation was changed in 2017 to allow Cassellholme to put the debt on its books and municipalities committed to paying an annual share based on per capita formula.

But they found out this spring private lenders wouldn’t touch it because nobody wants to foreclose on a long-term care facility.

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And this fall, they found out Infrastructure Ontario, which manages lending for provincial infrastructure, indicated they also would require municipalities to guarantee the debt, which also reduces credit availability. Ontario, following a delay to the COVID pandemic, approved the project and agreed only to put a portion of its share up front.

The issue came to light in early December with the latest guestimates for the project going north of $ 90 million.

Councillor Terry Kelly, a member of the Cassellholme board of directors, told council Tuesday evening that renewed efforts to get the province to take on the debt instead of the municipalities is not looking good.



“It’s not looking fortuitous,” Kelly said.

Dave Dale is a Local Journalism Reporter with BayToday.ca. LJI is funded by the Government of Canada.