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PRHC Seeking Court Ruling on County Funding By-law for New Hospital

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PRHC Seeking Court Ruling on County Funding By-law for New Hospital

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Published: 11/30/2012 9:20 PM by  PRHC1

In 2001, the County of Peterborough created and passed a by-law (#53-2001) to support a special assessment to fund its commitment to the new hospital, provincial government, patients and its taxpayers. The hospital secured a bank loan to fund the building of the new hospital based on the County’s commitment and the by-law.

The County has paid approximately 11 years of this commitment, essentially a $1.2m per year mortgage over 25 years, with 14 years still outstanding. The special assessment remains in effect.

PRHC cannot walk away from its bank loan commitment and is unable to get funding from other sources to compensate for the County’s intent to default.

In light of the County’s notice that it will cease and default on its remaining payments, the hospital regrets but has no other choice than to seek a legal ruling on the by-law on behalf of our patients, staff, physicians, and communities.

As this issue is currently before the Courts, no further comment is contemplated.

Key Facts:

  • The County committed $1.215 million annually over 25 years to fund their commitment to the building of the new hospital. To fund this commitment, they created a special assessment through a public and legal by-law.

  • Based on this legal commitment, the hospital entered into a bank loan and funding agreement with the Ministry of Health and Long-term Care. • Until recently, the County’s commitment was disclosed in its financial statements.

  • In late 2011, the County advised the hospital of its intent to cease its payments – leaving approximately 14 years outstanding.

  • A number of meetings and detailed correspondence between hospital and County officials have taken place in 2011 and throughout 2012 to attempt to resolve the issue.

  • The hospital has sought a legal opinion which highlights similar cases where the municipality was required to meet its legal obligations and agreement.

  • In light of the County’s continued stated intention to default on its payments, and in order to minimize legal costs to taxpayers and the hospital, PRHC is seeking a directed judgment from the courts.

  • The filing was made in a Kitchener court to minimize delay and cost. Court timelines are lower and the specialist legal counsel retained by the hospital has an office in this area.

  • It is hoped that this will settle financial responsibility and eliminate the risks of patient care and staffing impacts.

 

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