Town hospital donation won’t be funded by property taxes

Council to approve final funding of local share payment agreement in 2015

Town hospital donation won’t be funded by property taxes
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Gisele Shaw

Gisele Shaw

Gisele Shaw is the Manager of Corporate Communication for the town of Oakville since 2002. Prior to working for the town she worked for Halton Region as a communications specialist. She is a graduate of Humber College.

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The Town of Oakville’s contribution of up to $130 million towards the local share of the New Oakville Hospital will be able to be done without property taxes. This was outlined in a report received at Town Council last night authored by Mayor Burton and CAO Ray Green.

“We’ve made history today,” Mayor Rob Burton told the Council meeting. “No municipality has ever been able to make such a donation without putting it on taxes. And we won’t be affecting our other capital projects. We owe a great vote of thanks to Oakville Hydro for so successfully rising to the challenge I set for them four years ago.”

The town will be in a position to finance its local share commitment of up to $130 million without using property taxes by applying the $40 million special dividend it received from Oakville Hydro from the sale of Blink Communication in 2009. The balance of up to $90 million will be debentured, with the carrying costs funded by annual special dividends from Oakville Hydro’s successful portfolio of companies in green energy projects and other utility related services. The report from the Mayor and the Chief Administrative Officer said Oakville Hydro will provide the town with additional special dividends of between $6.5 million and $8.5 million a year by 2020.

Based on forecasted growth and interest rates for 2015, the town will be able to borrow up to $90 million and stay within Council’s existing policy limits of 6.25 per cent of revenues for tax- supported debt charges, and 12 per cent for total debt charges. Provincial law limits the town’s total debt charges to 25 per cent of revenues but Council has adopted a lower and more conservative policy.

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In addition, Council endorsed the key principles of an agreement between the town and Halton Healthcare Services for the transfer of the existing hospital site at 327 Reynolds Street to the town. March 31, 2016 has been established as the vacant possession date to provide sufficient time for the Oakville-Trafalgar Memorial Hospital to operate until the new hospital is ready for occupancy and the exiting site has been decommissioned (i.e. remove furniture and equipment, decommission gas and oxygen lines, remove underground diesel storage tank and aboveground oxygen tanks).

The new hospital will replace Oakville-Trafalgar Memorial Hospital, which no longer has the capacity to expand in its current location. The Province of Ontario donated the land at Third Line and Dundas Street for the new hospital. It will be one of the first facilities in Ontario built to new provincial government standards. Information on the new Oakville hospital can be found at www.newoakvillehospital.com.

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Readers Comments (2)

  1. That $90 million “debenture” will actually cost up to $175 million over the 30 year amortization period – and will push Oakville + Oakville Hydro total debt close to $500 million dollars – so the Mayor certainly has “made history today”.

  2. John P. McLaughlin says:

    So, the $90 million debenture will actually have to be re-paid in 30 years at a cost of about $175 million to Oakville residents?

    But what about Oakville Hydro (i.e. Town owned) footing the “financing” bill from 2015 all the way to 2045? What exactly is that 30 year cost. It has to be over $100 million dollars! It is in addition to the $90 million. There are 3 sets of payments here, principal, interest & charges.

    if Oakville Hyrdo’s projected “special dividends” from 2015 to 2045 don’t pan out (i.e. these are guesses into the future — that may not happen), then Oakville residents have to bail this out. If they can’t, Halton residents would be on the hook — it’s their debentured debt.


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