And while we have completed most major projects – including officially opening the new Meridian Community Centre – some important financial and land transactions that will need to wrap up during the new Council term.
I liken it to having the table set and the meal ready to be served. Now the Town is waiting to see what the new Council will do. Will they follow the menu and serve the meal as prepared? Will they scale it back? Will they add to it? Or, will they rip out the table cloth and watch the glasses smash on the floor?
So, what is on the menu and has been prepared? What is in place for the financing for the new Meridian Community Centre and for the Town of Pelham?
You will recall that the financing plan for the $35.5 million Community Centre budget included a number of elements:
Tax Levy Debenture:
The Town took out a $9.1 million 30-year debenture in 2016. This is like a mortgage that you might have on your house, but with two major differences: 1) it’s for a very low rate (3.34%) and 2) it’s the same amount for 30 years. That means that as interest rates increase the Town continues to pay the historically low, locked-in rate. The Town already included the $47 increase for the average home (valued at $309,200 in 2016) in your 2016 property taxes. Your future taxes do not have to be increased any more for this debenture.
This is the only part of the financing for the new Community Centre that is being funded by your property taxes.
Development Charges:
The outgoing Council also set in place the process for new growth in the Town to pay $12.1 million of the new Community Centre via Development Charges (DCs). DCs are charged on each new unit or home built in the Town. A portion of these charges cover the capital costs for “indoor recreational facilities” – in our case for the new Community Centre. Council updated the entire DC Bylaw in 2018 to capture even more funds to cover growth related projects. And, while the DC Bylaw has to be renewed at least every five-years, the financial plan is initiate a “scoped” update – just for “indoor recreational” capital costs – either each year or, at minimum, every two years. At no cost to existing tax payers, an annual update could help to pay down this Centre’s DC component even quicker.
Donations:
You will recall that our initial financing budget hoped for $3 million from community fundraising. Because of a very generous community we actually raised more than $3.3 million in gifts and pledges to date! And, the new Council could promote more fundraising opportunities -- like completing the community seat campaign, for example.
Land Sales:
The initial budget also called for $12 million to be raised by sale of lands. I am pleased to report that we have generated $11.7 million from land sales so far. These are firm offers, but they are conditional.
This calculation includes the $3.0 million offer of a portion of the former Arena property for a development that will follow the plan generated by the local community. (That community plan calls for selling about 55% of the Haist Street property for single family homes and townhouses, and keeping about 45% in public ownership.)
Some of these land transactions close before the end of 2018, with the rest closing in early-2019. And, the Town still owns approximately 4 acres of lands surrounding the new Community Centre that should be sold in 2019 to generate more revenue.
Costs Under Budget / Revenue Exceeds Costs:
As reported by the Community Centre Oversight Committee, the overall project actually came in at $35.4 million – that’s more than $785,000 under budget. (That’s thanks to the amazing efforts of the Ball Construction, Petroff Architects, the Oversight Committee, and Town Staff!)
If you add up each of the elements above, the revenue comes to $36.1 million and exceeds costs by $700,000.
Now, a few folks might argue that some of the revenue comes in over time – called “deferred revenue” in Municipal Financing parlance. Some of the fundraising, for example, includes multi-year pledges. And, as mentioned, the current land sales will close in 2018 and during the second quarter of 2019.
For the fundraising, this means that the new Council should “steward” the donors – be sure to continue to thank them and honour their agreements – so that their support continues. And, the new Council can continue promoting seat sales in the Accipiter Arena.
As mentioned already, the new Council can continue to sell the additional lands in East Fonthill – and this should more than cover any financing costs for the deferred revenue.
New Revenue from New Development:
While some people don't like the new homes and businesses in the Town, that growth was inevitable. Why? Because the "urban boundaries" -- the areas where new homes and businesses could be built -- was added to the Town in 1990 for Fenwick and in 2000 for East Fonthill.
Our job as a Council was to work with you to plan the development in the best possible way to add to the Town.
And, the hundreds of millions of dollars in the value of those new homes and new businesses, means that the Town will receive millions of dollars of new property tax revenue. Our Council planned on using that revenue to pay down debt and build up reserves.
Impact by the New Council:
Obviously, the new Council will need to get up-to-speed on all elements of this financing plan – how the table has been set and ready to go.
Yet, there is a risk for our community. The new Council could alter these arrangements.
For example, many recently elected Councillors have said that they don’t want to follow the plan that was developed by the local residents for the former Arena site; some said that they either want to develop another plan or keep the entire site for parkland. If they try to follow through with those statements and stop the land sale, they would hit the community with a multi-million loss of revenue in 2018.
Or, if they decide not to follow legal advice and do something to jeopardize the land-deal closings in East Fonthill, they could cause additional multi-million impacts in 2019.
Whose Issues? Each of Ours:
While I know in my head that after November 30 these are not the problems of myself and the current Council. Yet, I feel in my heart the deep care we each share about the Town’s future.
As a private citizen starting December 1, I will hope that the new Council will accept how the table has been set and follow this financial plan for the benefit of our entire Town.
