City of North Bay could take over Cassellholme in latest proposal to move redevelopment forward

When a municipal body that has been clearly divided on a high-profile topic suddenly comes together to approve a new proposal, one should, as a general rule, take notice.

The long journey of the Cassellholme redevelopment has seen many twists and turns along the way. Infighting, board resignations, finger-pointing — and that only covers last summer.

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So, when the members of North Bay City Council emerged from a closed-door session, Wednesday, sharing a way forward for the contentious $122-million long-term care project — and were eager to talk about it publicly — it qualified as the most positive turn of events from the municipality's point of view in months, if not years, of the decade-plus Cassellholme saga.

Council passed the motion unanimously, Coun. George Maroosis was absent.

There had been rumblings of a move to try to place Cassellholme under the municipal umbrella and this proposal from North Bay City Council would do just that, while also incorporating an agreement to approve the project's financing.

Coun. Scott Robertson noted, "This involves looking into the governing structure of Cassellholme and reconsidering how the governance works but all that happening concurrently with the redevelopment going forward."

There are several moving parts to the agreement. The partner municipalities, in exchange for their support for the financing agreement, would have their way out of the consortium and the future operating costs of Cassellholme, as several of the eight are seeking already.

The City of North Bay would be left to solely own Cassellholme as a municipal asset, instead of paying into Cassellholme and having nothing to show for it on the municipal books, as a debt liability.

Before Wednesday's breakthrough, a motion directing the City of North Bay to accept the terms of the financing deal from Infrastructure Ontario so the Cassellholme redevelopment could proceed — while still needing the unanimous approval of all the other partner municipalities — loomed on the agenda for Tuesday's next regular meeting in North Bay.

Coun. Dave Mendicino, a recently appointed Cassellholme board director, said following the in-camera session, "I certainly feel this helps move the project forward with financing and it gives staff direction about beginning discussions with Cassellholme about transitioning to a municipal home."

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Behind the scenes, the senior staff of the City of North Bay, faced with an 80 per cent share of the municipal portion of the project, have been working on potential solutions to mitigate debt loads and credit ratings.

"What people don't see is the sheer amount of work that goes on in the background," noted Deputy Mayor Tanya Vrebosch, a sentiment echoed by Coun. Mac Bain. "The Mayor, the CAO, and the CFO have been working tirelessly to find a way to move the project forward.

"The word 'levy' isn't in there. I will strongly say the City of North Bay has an invoice for January 10th, to pay the bill to Cassellholme...The impacts are very severe on our budget. So, I would hope when Cassellholme receives this motion, I would certainly hope they would pause the levy."

The Cassellholme Board of Management will examine the City's play and will also vote on the proposal — which includes the City of North Bay possibly taking control of that very group down the line. Three board members are also North Bay councillors. Councillors Mark King, Mendicino, and Chris Mayne all voted in favour of the agreement in their roles representing the City.

"I'm pleased to support this," said Mayne, who has seen the inner workings of both municipal bodies from his position as Chair. "We are the first municipality to bring forward support allowing Cassellholme to borrow from Infrastructure Ontario, the preferred financing option."

Mayne thanked Mayor Al McDonald for his work in bringing the municipalities together and said "it sounds like they are receptive to moving forward, as well. We are hoping, in the next week or two, all nine municipalities will approve Cassellholme's ability to borrow because that is the only circumstance under which we can borrow through Infrastructure Ontario."

King, who also serves as Cassellholme Board vice-chair, observed the project's failure would have a "tremendous impact on the City of North Bay. There's no question the IO financing is the best method to move forward. I look forward to seeing if the outlying municipalities follow along the lines of the City of North Bay. I will suggest to the Cassellholme Board that we move forward on this file."

Cassellholme CEO Jamie Lowery is not dismissing the plan outright but does have some questions. Lowery works closely with the board and will have some influence in any decision.

Corresponding with BayToday Thursday about the City's proposal, Lowery admits "it’s an interesting idea but we are not sure about the legality."

The "unconditional" aspect of the plan also does not sit quite right with Lowery. Any agreement would also have to address existing financial surpluses and contributions received from charities.

Lowery has a few other concerns that will have to be addressed. Are North Bay taxpayers prepared to take on 350 more unionized jobs without the contributions of the other eight municipalities? Does the municipality have the expertise to run a highly-regulated operation such as Cassellholme? Will that lead to reduced levels of care to meet financial obligations?

"The reality is, the contractor has been hired, the levy is in place, and bridge financing is being secured should a municipality default on a payment — once anyone defaults, we automatically can borrow and set the terms for repayment including legal costs," Lowery advises.

"We will take our time and conduct a fulsome legal review."