Taxation levied on properties across the THRD will cover the remaining $17.4 million of the hospital’s district’s share of the project’s $386-million cost. A ground breaking was held in July last year, and the cancer centre is expected to open its doors in 2028.
Potts says this new funding plan – which is being presented at Thursday’s (March 26) THRD meeting for approval – was drawn up following a recommendation from the TNRD’s auditors, who suggested that money in reserves be used to “offset the relatively higher cost of borrowing.”
“The feedback that our auditors and I gave after a review of our financial statements was that we have a lot of money in reserves and its unlikely that our investments will beat out the cost of debt,” Potts added. “So we made the decision to draw down our reserves a bit and put it towards the cancer care project to reduce the amount of borrowing we have to do even further.”
Potts also noted that a previously approved plan to increase hospital district taxes by five per cent a year until 2028 has been extended to 2030.
“What that allows us to do is on the cusp of the overall cancer care project ending in 2029, we’ll be able to re-contribute to reserves in anticipation of large future capital projects such as Phase 3 of the Patient Care Tower,” Potts said.
“It would allow us to take a similar approach in the future where we draw down a little bit of the reserves and help offset the cost of that project.”