Foyer Richelieu loaned $7.5M

Funds coming from city reserves and will earn interest

Foyer Richelieu will add 10 hospice beds and increase its number of long-term-care beds to 128 from 62 at its Tanguay Avenue facility with a $7.5-million loan from the City of Welland.

The non-profit long-term-care home in April had sought the same funds but over a 33-year period instead of the five-year term approved by council last week.

Steven Fairweather, the city’s chief financial officer, said the loan is secured against the property and Foyer Richelieu will pay a 4.5 per cent interest rate.

“In this one, the interest accrues for the first three years with a lumpsum payment in 2025 of the interest for the deferral on three years,” said Fairweather. “Within years four and five the loan converts to monthly pay interest only. It matures in the fifth year and Foyer Richelieu pays back the $7.5 million to the city at the end of the term.”

Chief administrative officer Steve Zorbas said he is confident and comfortable with the recommendation to support Foyer Richelieu.

Fairweather said the city will be getting a higher rate of return on the loan than if it invested in guaranteed investment certificates.

But the move irked Ward 4 Coun. Tony DiMarco, who suggested giving a loan to Foyer Richelieu could open the floodgates, with other non-profit groups coming to seek funds.

“Since when did the city become a financial institution?”

Fairweather said provisions in the Municipal Act allow it to entertain loan arrangements.

He also said it’s a decision of council as to whether it approves of any loans.

Ward 6 Coun. Bonnie Fokkens said the beds are needed in the community, but she doesn’t want moneylending to become a habit.

DiMarco asked why the city was approached for the funds.

“I don’t have an explanation for that,” said Fairweather.

“They are seeking financial assistance because of the escalation in construction costs and the delay in the project.”

He said the loan will be drawn from two sources, one of which is the Young Sportsplex sustainability reserve fund for $2 million and $5.5 million from the infrastructure renewal reserve fund.

“The reserve funds will receive interest over that time (of the loan),” Fairweather said.

Ward 2 Coun. David McLeod said it’s a great opportunity to make an investment in health care in the community.

“We have the $7.5 million and it could sit in a bank account and earn 4.5 per cent per year, which is $337,500 and that could be used to pay for things or we can take that money, we can loan it to Richelieu, get $337,550, which is the same amount as if it just sat in the bank and they can deliver 10 hospice beds as well 66 new long-term-care beds,” said McLeod. “I think if we don’t do this, this doesn’t happen. And it’s needed.”

Fairweather said the loan will not affect city operations in any way.

“You’re investing in your city, you’re investing in our parents and our grandparents,” said Ward 1 Coun. Adam Moote.

“I don’t understand how anyone could vote this down or vote against it. This is the opportunity that people are always saying. ‘What does the government do for me?’ Well, guess what, today the City of Welland has the opportunity to give back to our community,” he said.

Ward 2 Coun. Leo Van Vliet was in favour of the loan but said his difficulty was the fact the rooms were OK’d four years ago by the province but no shovel was put in the ground.

Ward 6 Jim Larouche said it was the right move to invest in the community and that it was a bit disappointing the beds were not up and running sooner.

“This will seal the deal and get them going,” he said.

Mayor Frank Campion said it’s a worthwhile cause.

“We are community partners. We are all trying to take care of our community and residents, all of them.

“It’s very important for us to demonstrate that by assisting our partners when we can because they often assist us when they can,” he said.