The manager of finance at the Middlesex-London Health Unit (MLHU) confirms the organization had to borrow $400,000 from its line of credit to ensure it had enough “cash flow” buffer to meet May commitments, including payroll.

Brian Glasspoole stated in a meeting of the MLHU’s finance committee Thursday the problem has been created by a number of factors, including the multi-million dollar cost of the new health unit offices at Citi Plaza and the COVID-19 pandemic.

The difficulties began with the depletion of cash reserves, which Glasspoole says dropped considerably between 2018 and 2019 as the MLHU made the move from 50 King St. to new offices at Citi Plaza.

“[Reserves] went from $4.5 million to $1.4 million."

The expected expenditure was approved by the Board of Health. What wasn’t expected were the costs associated with the pandemic.

Glasspoole says some staff of the MLHU, including nurses, have been working heavy amounts of overtime to respond to the threat of the virus.

Those additional costs, coupled with three pay periods in May and significant payments to Citi Plaza contractors, put the MLHU in a “tighter cash flow position."

As a result, a $400,000 line of credit withdrawal was made in early June.

Glasspoole says the money will be repaid by current funding later this year.

Further, in a report, he made it clear the borrowed cash would not be applied to the long-term debt the health unit already has from its “fit-up” of the new Citi Plaza location.

Board of Health member for the City of London, Councillor Maureen Cassidy, says she accepts the direction taken, adding she supports staff decisions made in a difficult time.

“I’m sure there may be health units that are not in this position, who haven’t gone through a major construction project at the same time. So it’s scary to see the numbers, and see especially how much they’ve changed”, Cassidy initially stated, later adding, “But I think, if staff had not put us in this very stable and strong position going into this, it would’ve been a lot worse, even without construction."

One positive on the financial sheets for the health unit has been fast cash from the province to pay its essential front-line workers $4 an hour more.

Glasspoole confirmed $200,000 has already been received to help with the top-up, although it was acknowledged by staff and the board that there is a significant administrative cost to process the pay raise.