The Town of Fort Frances was denied a request to be released from a long-standing agreement whereby it pays La Verendrye Hospital money annually for capital projects.
But from now on, town administration wants to know exactly how Riverside Health Care Facilities, Inc. is spending the money.
Fort Frances CAO Mark McCaig noted Monday night that during the 2004 budget process, administration found that the town has been paying $62,400 annually to Riverside due to an old agreement involving La Verendrye Hospital—and wondered if the agreement was still necessary.
McCaig said the agreement stems back to 1941, when it was struck between the Sisters of Charity and the town. The purpose of this agreement was to provide electricity and telephone service without charge to facilitate in the construction of the hospital here.
In 1975, the agreement was re-worded to specify La Verendrye Hospital and not Sisters of Charity. It was tweaked again in 1983, when the amount paid was increased to account for rising water, sewer, and electricity costs.
The agreement doesn’t expire until 2016.
McCaig said council decided administration should engage in talks with Riverside to see “how pertinent this [agreement] is in this day and age.”
McCaig also noted he spoke with Riverside CEO Wayne Woods on “releasing us from this obligation, given the fact the town’s been a very generous benefactor to the hospital over the last few years to the tune of significant dollars to the Riverside Foundation for the Health Care and the dispersal of lands.”
“While the board was not totally opposed to the options, we encountered difficulty in trying to find a way to balance our budget due to high operating expenses incurred from the town,” Woods replied in a letter to McCaig, which council received Monday night.
“Specifically, we have added an additional $66,000 to our operations in water and sewer rates from Fort Frances,” Woods noted. “This 265 percent increase would make the contribution per the agreement from the town as a wash, and we cannot see any gain in your proposal to the hospital.
“Unless the town has a further proposal that makes fiscal sense to our budget, we would propose continuance of the agreement.”
But McCaig informed council the annual payment to Riverside has to be put in a “La Verendrye Capital Fund,” which according to the agreement is to be used “for capital projects for the direct benefit of hospital facilities in Fort Frances.”
“I hope there’s no misconception to the fact it’s being used to offset any operational increases,” he added. “We have no position that says we can be released. We’re obligated to pay it.
“But they are obligated to put it into this segregated fund, this La Verendrye Capital Fund,” McCaig stressed.
McCaig also noted that while he’s sure the funding is being put to good use, the town should start getting reports as to how it’s being spent.
“I feel that’s fair,” he said, mentioning the town asks the same of other groups that receive funding from it, whether it be “Meals on Wheels” or “Communities in Bloom.”
He said the town would like to work with Riverside in the future for other ways to achieve “mutual gains,” but that decision would have to be up to Riverside’s board of directors.
Fort Frances Times
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