Minutes - May 16, 2024 - Finance and Facilities Committee Meeting 

Members Present:

Michael Steele (Chair)
Matthew Newton-Reid
Selomon Menghsha
Michael McGuire
Howard Shears
Dr. Alexander Summers, Medical Officer of Health (ex-officio)

Regrets:

Emily Williams, Chief Executive Officer (ex-officio)

Others Present:

Stephanie Egelton, Executive Assistant to the Board of Health (recorder)
Dr. Joanne Kearon, Associate Medical Officer of Health
David Jansseune, Associate Director Finance and Operations/Chief Financial Officer
Morgan Lobzun, Communications Coordinator (entered at 6:43 p.m.)
Angela Armstrong, Program Assistant, Communications (entered at 6:43 p.m.)

At 6 p.m., Chair Michael (Mike) Steele called the meeting to order.

It was noted that Secretary and Treasurer/Chief Executive Officer, Emily Williams would be absent from this meeting. The Committee will need to appoint a Secretary and Treasurer for the meeting per the Board of Health By-law No. 3 - Proceedings of the Board of Health.

It was moved by M. McGuire, seconded by M. Newton-Reid, that the Finance and Facilities Committee appoint Alexander Summers as Acting Secretary for the duration of the May 16, 2024 Finance and Facilities Committee meeting per the Middlesex-London Board of Health – By-law No. 3 - Proceedings of the Board of Health.
Carried

It was moved by M. McGuire, seconded by M. Newton-Reid, that the Finance and Facilities Committee appoint Alexander Summers as Acting Treasurer for the duration of the May 16, 2024 Finance and Facilities Committee meeting per the Middlesex-London Board of Health – By-law No. 3 - Proceedings of the Board of Health.
Carried

Disclosures of Conflict of Interest

Chair Steele inquired if there were any disclosures of conflicts of interest. None were declared.

Approval of Agenda

It was moved by H. Shears, seconded by M. Newton-Reid, that the AGENDA for the May 16, 2024 Finance and Facilities Committee meeting be approved.
Carried

Approval of Minutes 

It was moved by M. McGuire, seconded by S. Menghsha, that the MINUTES of the February 15, 2024 Finance and Facilities Committee meeting be approved.
Carried

New Business

2024 Q1 Financial Update, Borrowing Update and Factual Certificate (Report No. 09-24FFC)

David Jansseune, Associate Director, Finance and Operations/Chief Financial Officer presented the Q1 2024 Financial Update, Borrowing Update and Factual Certificate to the Committee.

D. Jansseune noted that these were non-consolidated results for Q1 (MLHU) and Q4 (MLHU2) and reminded the Committee that the Health Unit has two (2) reporting companies with three (3) financial segments:
• MLHU: Shared Funded Programs
• MLHU: Three (3) 100% Funded Programs
• MLHU2: Four (4) 100% Funded Programs

D. Jansseune noted that the bulk of the Health Unit’s budget is under the main company (MLHU) and include both shared funded programs (funded by the Ministry of Health, County of Middlesex and City of London) and three (3) 100% discrete funding for specific program purposes. MLHU2 has four 100% discrete funding programs for specific program purposes. Fiscal reporting for MLHU is from January to December and fiscal reporting for MLHU2 is from April to March. Both companies are audited by KPMG annually.

Committee Member Matthew Newton-Reid inquired if the Health Unit would consider consolidating the two companies into one company in the future for cost saving purposes, particularly related to the auditing process. D. Jansseune noted that the Health Unit is currently undergoing analysis on financial systems (Great Plains) and re-writing accounts to flow better. D. Jansseune explained that one way of analysis is to review the necessity of the second company. For example, the main funder of MLHU2 is the Ministry of Children, Community and Social Services and funds most of the company (approximately $2.5 million). The Ministry (of Children, Community and Social Services) requires a separate audit of their financial statements, and there is a potential at re-adjusting to segmented financial statements in the future.

Chair Steele inquired how much it costs the Health Unit to have two separate financial companies. D. Jansseune noted that from a full time equivalent (FTE) perspective, it is approximately 0.2 FTE to support intercompany journal entries.

Committee Member Howard Shears inquired if the Health Unit completes consolidated statement of companies. D. Jansseune confirmed that the Health Unit conducts annual financial audits and added that auditors are currently working on the Health Unit’s audit. The Board of Health will review these draft financial statements in the summer. H. Shears followed up to confirm that the Health Unit had two different financial year ends, which D. Jansseune confirmed. D. Jansseune added that due to the different financial years, that Finance must coordinate accounts for each of the companies at the end of the quarters.

Dr. Summers noted that the funding calendar is different due to the Ministry funders having a fiscal year of March to April, and public health units having a fiscal year of January to December pursuant to the Municipal Act, 2001. Dr. Summers noted that public health units struggle with this discrepancy, and it has been noted for the Province.

Committee Member M. Newton-Reid noted that the Board of Health may need to have a broader conversation regarding the financial companies in the future and to discuss funding years as it relates to the Health Unit’s operations. Dr. Summers added that at times, the Health Unit is not aware of funding until August of the year, or with not much notice. The Province of Ontario has signaled a review of the public health funding timelines and will announce in the future.

D. Jansseune added that the Seniors Dental program is funded 100% under MLHU.

MLHU Q1 Results from January to March 2024

D. Jansseune reviewed the Q1 financial information with the Committee and reminded the Committee of the Health Unit’s $36 million Annual Budget which includes the shared funded programs at $32 million and three (3) 100% funded programs at $4 million. D. Jansseune noted that the Health Unit has the most flexibility with the shared funding programs, as the Senior Leadership team can move funds where it best makes sense for their programs. This cannot be done with discrete funding or 100% funded programs. D. Jansseune added that overall in Q1, the Health Unit is financially doing well with an approximately $306,000 in favourability and a $106,000 surplus.

D. Jansseune highlighted the approximately $556,000 favourability for salaries, overtime and benefits, and that this favourability will decrease over time. The favourability is high due to the organizational restructuring effective January 1, 2024 and current vacancies that have not been filled. As of January 1, there were 20 vacancies and as of March 31, there were 14. D. Jansseune noted that this favourability will offset the gap.

D. Jansseune noted that general expenses were flat at $1.6 million, as the timing of expenditures vs timing of budget are different. To finish Q1 reporting, the gap is at approximately $253,000 and is an estimate of vacancies, time to fill and pay step differences from April to December. The forecast is flat to budget and salaries will need to maintain an estimated 3.75 FTE vacancy rate from April to December. D. Jansseune concluded that at this time, no reserve entries have been budgeted for 2024.

Committee Member H. Shears inquired on staff impacts if the Health Unit is running 3.75 FTE under budget, and if staff can maintain work levels without more stress or overtime hours. Dr. Summers noted that it is anticipated that some vacancies occur organically through recruitment delays and resignations. The Health Unit anticipates minimal immediate impact on overtime, given how the Health Unit can prioritize different types of work. The restructuring of the Health Unit has resulted in re-prioritization, and the Health Unit is currently managing vacancies by reducing how much work is completed. Dr. Summers noted that overtime is being periodically seen in business lines where work is being conducted reactively as opposed to proactively, such as a case and contact management within the Infectious Disease Control team. The Health Unit is tolerating the 3.75 FTE under budget operationally, but globally are stretched. Teams are collectively feeling strained operationally as the restructuring was the best estimate for the resources required for the work at the time. Dr. Summers concluded that when the Health Unit is preparing for 2025 budget planning, fine tuning will occur with the support of the Senior Leadership Team.

Chair Steele inquired how many staff the Health Unit currently has. D. Jansseune noted that there are approximately 288 FTE.

D. Jansseune reviewed the MLHU 100% Funded Programs. D. Jansseune reminded the Committee that the budget is under $4 million and any surplus needs to be returned to the funders (Ministry of Health and City of London).

COVID-19 Vaccine funding was originally ending on December 31, 2023, however the Health Unit received $100,000 on March 28, 2024 for COVID-19 Vaccine funding to be used by March 31, 2024. Due to the timing of the funding being received, the Health Unit could not extend contracts and could not utilize money very well. D. Jansseune noted that $37,000 was able to be used and $63,000 will be returned to the Ministry of Health.

The Ontario Seniors’ Dental Care funding is budgeted at $3.5 million, with a potential risk of overspending due to additional staffing to support the expanded dental clinic at CitiPlaza.

Committee Member M. Newton-Reid inquired on the funding amounts and logistics for funding regarding the Seniors’ Dental Care Program at CitiPlaza. Dr. Summers noted that similarly to the Strathroy Dental Clinic, the Health Unit received capital funding for the build of the clinic but did not receive operational funding until after all staff were hired. Dr. Summers added that the Health Unit has received reassuring messages from the Ministry of Health that operational funding will flow to public health units. The Ministry has been signaled that the Health Unit has a waitlist for dental services, and the risk for not receiving funding is low. M. Newton-Reid inquired if municipal funders (County of Middlesex and City of London) could support funding if there was a provincial shortfall. Dr. Summers noted that if funding did not come through, operations of the clinic should be shuttered for a period until funding is provided, but there is a low likelihood that this would need to occur.

Committee Member H. Shears inquired if the dentists at the clinic were employed by the Health Unit. Dr. Summers noted that the dentists at the clinic are hired as staff at the Health Unit.

D. Jansseune reviewed that the City of London Cannabis Legislation (CLIF) funding tends to fluctuate year over year. The program is budgeted at $200,000 and funds may be carried over to following years for future spending.

D. Jansseune reminded the Committee that the School Focused Nurses Initiative funding was discontinued in June 2023 by the Ministry of Health.

D. Jansseune reviewed the Ontario Seniors’ Dental Care capital funding. The Ministry of Health approved $408,900 for the expansion of operatories at CitiPlaza to be used by March 31, 2024. The Health Unit were not able to use all the funding but showed progress of spending to the Ministry of Health. CitiPlaza (as the landlord) has approved construction, and the construction was awarded to CCS Construction following the Request for Proposal (RFP) process. Two (2) existing operatories have been retrofitted to increase patient comfort and address staff ergonomics, along with new doors and windows being added to the two (2) new operatories. Equipment for the new operatories has been ordered and is waiting for pick-up, and the London Fire Department has assessed sprinklers, sensors and emergency strobe lighting. The City of London has approved building permits for construction this week. D. Jansseune added that the forecasted expenses range from approximately $320,000 to $375,000 for the project, and there has been a request made to the Ministry of Health for new funding for the remainder of the unpaid project costs after March 31.

Committee Member M. Newton-Reid inquired if based on funding and need, if there is a piece of equipment that the Health Unit could purchase with the funding to meet timeline spending (approximately $35,000). D. Jansseune noted that the deadline for the approval of $408,900 in funding for the dental clinic ended on March 31, and the Health Unit would need to attest to any money spent after. D. Jansseune added that at this time, less than $408,900 has been spent. Dr. Summers noted that there are still outstanding items to be purchased for the dental clinic. At this time, a portion of construction costs to CCS Construction have been paid, and further updates will be provided to the Committee and Board. Dr. Summers concluded that the timing of funding has put the Health Unit in a difficult position. Committee Member H. Shears confirmed for clarity if the Health Unit received approval for spending but not the actual funding. Dr. Summers confirmed this is correct and added that the Health Unit is comfortable forging ahead based on previous experience.

Committee Member H. Shears inquired if the 50% deposit towards the dental clinic construction fixes the contract costs. D. Jansseune noted that that 50% deposit was for construction only costs, and does not include equipment, electrical and subcontractors.

MLHU2 Q4 Results from April 2023 to March 2024

D. Jansseune reviewed the Q4 financial information for the 100% funded programs and are non audited at the time of this meeting. The budget for the 100% funded programs is approximately $3 million, and programs are funded through Public Health Agency of Canada (Smart Start for Babies and FoodNet), Public Health Ontario (Library Shared Services) and the Ministry of Children, Community and Social Services (Best Beginnings). There is a $0 surplus and deficit as it is based on audited expenditure, and that unused funds are returned to the funders.

D. Jansseune noted that programs that share funds between the companies (MLHU and MLHU2) are required to segregate the 100% funded portion. D. Jansseune provided the financial information for these programs:

• Smart Start for Babies (Public Health Agency of Canada) has a budget of approximately $152,000 and shares expenses with Nurse Family Partnership and Early Years Group Programs. Funding has been fully utilized for the year.
• Best Beginnings (Ministry of Children, Community and Social Services) has a larger budget of approximately $2,483,000 and shares funding with Healthy Babies, Healthy Children. Funding has been fully utilized for the year.
• Library Shared Services (Public Health Ontario) has a budget of approximately $108,000 and shares expenses with Library Services under Shared Funded Programs. Funding has also been fully utilized for the year.
• FoodNet Canada (Public Health Agency of Canada) has a budget of approximately $116,000 that is not shared with other programs. There was $15,000 that was unused and will be returned to the funder. The reason for the surplus is lower salary costs and lower travel costs.

D. Jansseune briefly reviewed the Health Unit’s cashflow. On January 1, the bank balance was $1.5 million positive and on March 31, the bank balance was $4.4 million positive. Accelerated payments have been made on the bank loans during the quarter. The line of credit was also used for 14 days, with $8,000 in net interest. The Health Unit also received $5.8 million in February for 2023 COVID-19 expenses.

D. Jansseune provided updates from the provincial Ministry of Health. In Q1, the following one-time funding approvals for the Health Unit were received on March 28:
• Capital funding for Seniors Dental Expansion at Citi Plaza for $408,900
• COVID-19 Vaccine Program Enhancement for $100,000
• Respiratory Syncytial Virus (RSV) Adult Prevention Program for $22,000

Dr. Summers noted that the intention of the RSV funds is to be determined, but most likely were for the anticipatory work associated with the RSV vaccination and rollout to long term care homes in the region.

Committee Member M. Newton-Reid inquired if there is a timeline for the Health Unit to pay back the variable bank loan. D. Jansseune noted that he would provide the date to the Committee at a later date. M. Newton-Reid noted the Board’s desire to pay the variable loan down. D. Jansseune noted that through the budget process, there would be a review on payments made as minimum payments vs. budgeted through multi-year budgeting. Dr. Summers added that the Senior Leadership Team would be reviewing multi-year budget assumptions, and that the Board would be receiving updates on this matter in the near future.

Committee Member H. Shears inquired on the purpose of the variable loan and if it was for operating purposes. D. Jansseune noted that the purpose of the variable loan was for the move of offices (from King Street to CitiPlaza).

D. Jansseune indicated that the Factual Certificate was enclosed in the agenda package for the Committee’s review.

Committee Member Selomon Menghsha inquired what an example of internally generated revenue is, referring to the 2% internally generated revenue within the Health Unit. D. Jansseune noted that the $1.1 million includes approximately $441,000 of funding for the relatively new Infection, Prevention and Control (IPAC) Hub, and approximately $700,000 is COVID-19 vaccination recovery. It is estimated that the remainder is revenue from Sexual Health clinics and user fees. D. Jansseune committed to the Committee that he would provide more information on internally generated revenue. Dr. Summers added that the Health Unit has very few user fees. Fees within the Sexual Health clinics are offset by physician billing through the Ontario Health Insurance Plan (OHIP) and there is a smaller number of birth control sales. The Health Unit used to have a more robust paid vaccine program and travel clinic, but those programs have been stopped.

Committee Member H. Shears inquired if restaurant inspections are a paid service. Dr. Summers confirmed that restaurants do not pay for inspections.

Committee Member M. Newton-Reid inquired if dentists within the Seniors’ Dental Program can bill for services (such as how physicians in the Sexual Health clinic can bill to OHIP). Dr. Summers noted that operational funding received from the Ministry of Health includes hiring dentists to work in the dental clinic. Dentists have never had the ability to charge their services to OHIP, however with the introduction of the Canadian Dental Care Plan, dentists will be able to bill their services as applicable to the federal government.

Chair Steele inquired on the reason for the variance on corporate services administration (Schedule A3). D. Jansseune noted that this was most likely offsetting of the gap and flowed through corporate services administration for the Associate Medical Officer of Health’s salary.

It was moved by H. Shears, seconded by M. Newton-Reid, that the Finance & Facilities Committee recommend to the Board of Health to receive Report No. 09-24FFC re: “2024 Q1 Financial Update, Borrowing Update and Factual Certificate” for information.
Carried

Other Business

The next meeting of the Middlesex-London Board of Health (Finance and Facilities Committee) is on Thursday, September 19, 2024 at 6 p.m.

Adjournment 

At 6:50 p.m., it was moved by M. Newton-Reid, seconded by S. Menghsha, that the meeting be adjourned.
Carried

Michael Steele
Committee Chair

Alexander Summers for Emily Williams
Acting Secretary