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OAKVILLE BEAVER Wednesday, November 4, 2009 · 4 Mayor calls hospital's $200-M request reasonable Continued from page 1 The Town's share is an essential element of financing the new facility, he said. "Every municipality that has a big project like this going in has to have a municipal component -- that's the only way to make them affordable," Oliver said. Burton said the $200-million figure is reasonable for a new, state-of-the-art facility. He said that Town staff will present the councillors with a financial plan before council votes on Dec. 14. He added that $200 million divided over 30 years for a tax wouldn't have too large of an impact on residents. "I believe that this is necessary and I'm confident that we can structure it in such a way that it won't be a burden on anybody," he said. Burton said he is going to ensure that all funds raised through the hospital tax will go directly to that cause. "I believe that the vast majority (of residents) are going to believe that it is the best money they will spend," Burton said. "I plan to accompany the measure with a guarantee that the money raised through this special tax will go only to the hospital for the local share and it will end when that amount is reached." Oliver said he is also confident that the community will be receptive to a tax increase in exchange for a new hospital. He bases this belief on a Community Attitude Survey conducted by HHS in March 2009 to gage community support for municipal fund- Conceptual drawing of new hospital/ ing. The survey showed that 82 per cent of Oakville residents agreed it was necessary to relocate and expand the Oakville Hospital and 80 per cent of those surveyed supported the municipal government funding the new Oakville Hospital. "Support is there and I think people see the need for the project," Oliver said. "We're doing a lot of messaging around the benefits and quality of this hospital compared to what they have today." The new hospital, which is expected to open in late 2014 or early 2015, will be funded through the provincial government's Alternative Financing and Procurement Model (AFP). This is an updated, and according to the provincial government, improved version of the public-private partnership model known as P3, which was used to build the Brampton Civic Hospital. The AFP model means that the private sector is responsible for the design, construction, financing and maintenance of the project. The private investors will be paid back over a 30-year-term, similar to paying a mortgage. The final cost of the project will not be revealed until spring of 2011, when contracts to the private sector have been awarded. However, HHS will know the payment schedule ahead of time, as it is part of the bidding process. "All the time it is being built, it is being financed by the consortia that is doing the bidding," Oliver said. "What the consortia has to bring with them is a 30-year financing arrangement for us, with a guaranteed interest rate at the outset, so part of the bid document is what their interest rate is for 30 years that allows us to pay for a hospital." Oliver stressed that despite the private sector involvement, the new Oakville Hospital will be a public hospital. "The day it is finished being built, we take over and we have to make our payments at that point in time, so we buy the building back," he said. "It is publicly owned, publicly controlled and publicly accountable from when we go into it." The local share is an important element of the AFP model and refers to the portion of the project that is not funded by the provincial government and must come from the community. The local share will consist of $200 million from the Town of Oakville, $270 million from Halton Healthcare Services (to be raised through parking revenue, patient services revenue such as premium accommodation, and other retail revenue) and $60 million from the New Oakville Hospital Capital Campaign, led by the Oakville Hospital Foundation. All costs are estimates and could go up or down 15 per cent, according to HHS. Brampton faced many challenges with the construction of its hospital, which opened in October 2007 with 479 beds. The provincial auditor recently reported the P3 facility cost $200 million more than it should have, with a final price tag of $614 million. The community share was initially $100 million, but ballooned to $248 million. Oliver said HHS monitored the construction and subsequent problems surrounding the Brampton Civic Hospital, learning many lessons. He said that the financial problems that plagued that facility will not happen to the new Oakville Hospital. Oliver said the private sector is fiscally responsible for building the facility on a previously agreed upon price. However, if HHS requests for changes after construction starts, it will have to pay. "All of the (financial) risk during construction, like if there's a strike, is transferred to them," he said. "The responsibility for management of this project sits with them during con See Hospital page 5 Wilson Counselling Associates PATTI'S BACK! 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