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City Council Item I6-1 for September 12, 2012

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City Council Item I6-1 for September 12, 2012 BRAMPTON ""'-' „J22 bmmpton.ca FlOWef City The Corporation of the City of Brampton Date: August 27,2012 BRAMPTON CITY COUNCIL File: M25-PMH DATEiSephuMr i2( fog Subject: Agreement for the Use of a Municipal Grant for the New Peel Memorial Centre for Integrated Health and Wellness at 20 Lynch Street, Brampton, Ontario (Formerly Peel Memorial Hospital) Contact: Mo Lewis, Commissioner of Financial and Information Services (Tel: 905­ 874-2250) Dennis Cutajar, Commissioner of Economic Development and Communications (Tel: 905-874-2698) OVERVIEW • At their meeting of August 8, 2012 City Council directed staff to undertake a number of activities in relation to the new Peel Memorial Centre for Integrated Health and Wellness ("Centre") proposed by the William Osier Health System ("Osier"). These activities have been completed and the results are contained in this report. • On Tuesday August 14, 2012, City staff met with management staff from OSLER to discuss the principles of a grant Agreement between the City and OSLER and to discuss process, timelines/milestones. • Following this meeting, City and Osier staff worked together to prepare a draft Agreement directing the use of a S60 million municipal grant towards the local share commitment associated with the proposed Centre. • This report recommends that the Mayor and City Clerk be authorized to execute the Agreement in a form that is satisfactory to the City Solicitor and content of the Agreement satisfactory to the respective Commissioners. A copy of the draft Agreement can be found in Appendix 1 for Council consideration. RECOMMENDATIONS 1. That the report from the Commissioner of Financial and Information Services and the Commissioner of Economic Development and Communications dated August 27, 2012, to the Council meeting of September 12, 2012, re: Agreement For the Use of a Municipal Grant for the New Peel Memorial Centre for Integrated £6-1-2 Health and Wellness at 20 Lynch Street, Brampton, Ontario (Formerly Peel Memorial Hospital) - Ward 3 (File M25-PMH), be received; and 2. That, the Mayor and City Clerk execute an Agreement For the Use of a Municipal Grant towards the local share contribution of Phases One and Two of the new Peel Memorial Centre for Integrated Health and Wellness, located at 20 Lynch Street, Brampton, Ontario, and that such an Agreement be in a form satisfactory to the City Solicitorand the final content be satisfactory to the Commissioner of Financial and Information Services and Commissioner of Economic Development and Communications, substantially in accordance with Appendix 1. BACKGROUND City staff has fulfilled the directions it received in the motion approved by Council on August 8, 2012. "Whereas during the Council meeting of March 31, 2010, the Council of the City of Brampton approved a motion to commit $60 million towards the "local share" of hospital funding for the redevelopment of the Peel Memorial Hospital Facility to construct a new Peel Memorial Centre for Integrated Health and Wellness, and Whereas the motion was forwarded to Premier McGuinty on April 9, 2010 and acknowledged in writing by the Premier on April 23, 2012, and Whereas the Peel Memorial Centre for Integrated Health and Wellness project is moving forward, and Whereas the Peel Memorial Centre for Integrated Health and Wellness will be constructed in two phases, with Phase 1 requiring a $40 million City commitment of the $60 million "local share" contribution and the second phase requiring a $20 million City commitment of the $60 million "local share" contribution, Therefore, be it resolved: 1. That during the week of August 13,2012 the Commissioner of Finance and staff identified by the Commissioner meet with Mr. Matt Anderson, CEO of William Osier Health Centre and staff identified by Mr. Anderson to clarify all required project milestones and timelines, timing and amounts connected with the payment of "local share" for Phase 1 and Phase II of the Peel Memorial Centre for Integrated Health and Wellness project, and 2. That a draft Memorandum of Understanding that Identifies the local share commitment, and the timing and amount of the required payment of "local share" for each phase of the approved two-phase Peel Memorial Centre for Integrated Health and Wellness project, be completedon the agenda fordebate and approvalat the City of Brampton Council meeting of September 12,2012, and 3. That staff add the funding of the "local share" commitment to the 2013 budget discussions. Moved by: Mayor Susan Fennell Seconded by: Regional Councillor Paul Palleschi" CURRENT SITUATION On August 14,2012, the Commissioner of Financial and Information Services, the Commissioner of Economic Development and Communications and the Director of Financial Planning and Budgets met with the President and CEO of the William Osier Health System and the Chief Financial Officer of the William Osier Health System. The purpose of this meeting was to discuss the principles of a memorandum of understanding ("Agreement"), and the timelines and milestones that guides such an Agreement. Following this meeting, Osier and City staff worked together to prepare the Agreement presented in this report. The following principles formed the structure and content of the Agreement. Description of Project The new Centre will be developed in two phases, known as Phase One and Phase Two. The Project shall be delivered by an Alternative Financing and Procurement (AFP) model under the Infrastructure Ontario mandate. The Government of Ontario has provided fiscal approval for Phase One of the Centre to begin construction in the 2013/2014 provincial fiscal year using a design, build, finance, maintain alternative financing and procurement approach. The scope of work related to Phase One is based on the August 2010 Planning Submission by Osier to the Government of Ontario which includes specialized health E&-I-4 care services in a patient-centred environment, namely: urgent care, ambulatory care, outpatient surgical care, and administrative services at 20 Lynch Street, Brampton, Ontario. Phase Two has been loosely defined to mean the future expansion of the Centre subject to Government approval of the Phase Two Functional Plan including approval of scope of programs and services included in Phase Two of the Centre. Osier advised staff that the final appropriation of funds, and final approvals for the Centre had been completed by the Government of Ontario at this time. However, fiscal approvals for Phase Two were not granted at the time of this report. Local Share Funding Formula 1. Local Share means that approximately 30% of the project cost is generated by the community through various sources including: municipal contributions, donations to foundations, business/clinical partnerships, ancillary revenue, hospital owned funds, and other community based fund-raising sources. The Local Share for the Centre has been estimated by Osier at $120 million. The project budget, over two phases, is approximately $420 million. 2. The City of Brampton contribution towards the LocalShare is $60 million, or approximately 50% of the total Local Share commitment to the Project of $120 million. This also translates to approximately 14% of the total project budget of $420 million (Phases One and Two). 3. Osier has requested that the Citycontribute a maximum of $40 million towards the Local Share in Phase One and a maximum of $20 million towards the Local Share in Phase Two. Should the Phase One payment be less than $40 million, based on the City's 50% contribution to Local Share, the difference to a maximum of $60 million shall be paid by the City in Phase Two. Time of Payment 1. The Local Share contribution is payable by the City of Brampton to Osier approximately3-months priorto Substantial Performance of Phase One and Phase Two, respectively. In other words when the building is nearing occupancy, confirmed by a Certificate of Completion, the Treasurer shall be authorized to release the Grant payment in one payment for Phase One and again in one payment for Phase Two. 2. Osier informed staff that Phase One shall be completed in 2016 and Phase Two estimated two-years later. The Agreement has been structured to expire with Payment of Phase Two, or in 2030 with an OSLER option to request Council to consider a 24-month extension. 3. Osier through its fund-raising campaigns and other sources shall also contribute approximately 3-months prior to Substantial Performance of each Phase. 4. OSLER acknowledges Provincial financing is available upon Substantial Performance for each Phase of the Centre. Accountability and Reporting 1. Each Year until substantial completion of Phases One and Two, a status report shall be presented to Council by the CEO or his/her designate including the following: (1) General update of construction progress; (2) Status of Centre development, programming and fund raising activities associated with the balance of the local share for the Centre, (3) Progress of this Agreement, (4) Other related activity to the Centre, including awards, successes, and accolades, and (5) Response to questions and answers. 2. Osier is required to provide to the City an audited financial statement related to the Grant within 90 days of Substantial Completion of Phase One and within 90 days of substantial completion of Phase Two. Administrative Office Space The Agreement is structured to ensure that Osier establishes a staff leadership presence at the Centre for a period of thirty (30) years starting at Substantial Completion of Phase One. Currently, Osier offices are distributed between an Airport Road industrial location and Brampton Civic Hospital. Community Recognition Osier agreed to recognize, at its expense, the City on behalf of property taxpayers as a community funding partner of the Centre on all related communication materials prepared by Osier. IT6-I-6 CORPORATE IMPLICATIONS Approvals and Governance of Agreement With Council approval of the Agreement included in this report, the Mayor and Clerk shall be authorized to sign it in a form that is satisfactory to the City Solicitor and the content satisfactory to the respective Commissioners.
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